[ Page 4747 ]

CONTENTS

Routine Proceedings

Tabling Documents –– 4747

Oral Questions

Electoral reform committee. Mr. Harcourt –– 4747

Bus transportation for handicapped preschool children. Mr. Cashore –– 4748

Funding for child care. Ms. Marzari –– 4748

Municipalities Enabling and Validating Amendment Act, 1988 (Bill 26).

Hon. Mrs. Johnston

Introduction and first reading –– 4749

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

On vote 40: minister's office –– 4749

Mr. Miller

Mr. Kempf

Mr. Bruce

Mr. Jacobsen

Mr. Williams

The House met at 2:08 p.m.

HON. MR. VEITCH: We have a very distinguished guest in the members' gallery today. I would ask the House to please welcome His Excellency Mahmoud Kassem, Ambassador of the Arab Republic of Egypt.

HON. MR. BRUMMET: Mr. Speaker, in your gallery today is a group of constituents of mine from Fort St. John, members of the Stage North Theatre Society. They won an award at the Dawson Creek festival which entitled them to come here and put on their play, The Actor's Nightmare, at the McPherson Playhouse as part of Mainstage '88. In the group are Linda Scarfo, June Ainsworth, Kevin Truscott, Marian Truscott, Joanne Kirschner, Shawn Jones, and also a member of the cast and a great ambassador for Fort St. John, the recently selected Miss Fort St. John, Lily Pagdilao. I would like the House to give them a North Peace welcome.

HON. MR. DUECK: On behalf of the second member for the Central Fraser Valley (Mr. De Jong) and myself, I would like this House to welcome some constituents from the Central Fraser Valley: Gabriel Shaves and her two young children, Laura and Anthony. Would the House please make them welcome.

MRS. GRAN: Visiting the gallery today is Doris Blair from Langley. Doris is the widow of the late mayor of Langley, Bill Blair, whom I served under as alderman for five years. With Doris are Cyril and Marjorie Cartwright from Timaru, New Zealand. Would the House please make them welcome.

MR. RABBITT: Today in the gallery are two very good, close friends of my wife and mine whom I'd like to introduce to the House: Bob and Gloria Wood. Would the House please make them welcome.

Hon. Mr. Parker tabled the annual report of the Ministry of Forests and Lands for the year 1986-87.

Oral Questions

ELECTORAL REFORM COMMITTEE

MR. HARCOURT: Mr. Speaker, I have a question for the Premier. The government has accepted a legislative committee on the Fisher report on the basis of the comments from the first member for Victoria (Mr. G. Hanson). These comments were designed to ensure that electoral reform would not favour one party over the other; hence his proposal for equal representation on the committee. Is the Premier prepared to accept the request in the spirit in which it was intended and agree to equal representation on the committee?

HON. MR. VANDER ZALM: Well, Mr. Speaker, yes. I hear it called across the way, do I believe in fairness? I think that's really the process that we've outlined, and certainly we've recognized that from time to time the NDP opposition raises certain proposals, and we've now responded in full. I've often worried about whether it really was sincere, whether you meant what you were saying in some of these proposals. I'll defer to the Provincial Secretary.

HON. MR. VEITCH: As I remember the proposal from the hon. first member for Victoria, he talked about a unanimous decision. If there's unanimity, I would suggest that it would matter little how many members there might be from either side. It's long been an outstanding rule in this House that legislative committees, under the NDP or under Social Credit, have been made up proportionately representative of the number of members sitting in the House at that time, and I would expect this committee would follow that particular precedent.

MR. HARCOURT: A supplementary, Mr. Speaker. Does the Premier not agree that by rejecting equal representation for each party, his party will be able to readjust the proposal to suit its own electoral purposes?

HON. MR. VANDER ZALM: Mr. Speaker, what I understand from the Provincial Secretary's recommendation, and what we've adopted to go with. is exactly as it was put by the first member for Victoria, that we're in fact really pursuing exactly what the NDP proposed. How are we to know that in an instance like this you don't really mean what you've put to us?

MR. HARCOURT: Mr. Speaker, a supplementary. We asked for equal representation and you're denying it. That's we have heard from both the Premier and the Provincial Secretary. Well, Mr. Premier, I trust that you agree that the process to date has been a fair one. I'm sure you will listen to that point. In order to ensure the integrity of that process, will the Premier ensure that the House order establishing the committee will respect the underlying principles contained in the Fisher report, namely: 75 seats; secondly, a 25 percent variance; and thirdly. elimination of the dual-member seats?

[2:15]

HON. MR. VANDER ZALM: As I recall, the first member for Victoria wanted to have this committee and have further hearings held so that there was ample opportunity for public input so that the decision would be a fair and good one. The fact that the committees are constituted as they are.... The people of the province constituted it by electing the representatives as they did. The Leader of the Opposition is asking that we forget what the people of British Columbia wanted and the outcome of the election and their representation in the House. He is further asking that we make the decisions in advance of these public hearings and that we destroy the democratic process.

MR. HARCOURT: We ask for equal representation. You are saying no to that. Those hearings have been held. Mr. Justice Fisher has concluded, after hearing from the people of British Columbia, that there should be 75 seats and no more than a 25 percent variance, and you have asked him to eliminate dual-member ridings. You are now saying you won't include those in the terms of reference of the committee. If you are not saying no, I would like a very I will ask the question again, because I did not get an answer. Will the Premier ensure that the House order establishing the committee will respect the conclusions so far in Mr. Justice Fisher's interim report, namely: 75 seats, 25 percent maximum variance and establishment of single-member ridings?

HON. MR. VANDER ZALM: If we do as the opposition leader is suggesting, we're doing three things wrong. Number one, we're ignoring a recommendation put forth by one of his own members which we believed was a good one

[ Page 4748 ]

and a fair one. Secondly, we're saying that regardless of what the people decided in the last election and the representation in the House, we'll ignore the people's wish and the representation in the House and we'll respond instead to the wish of the NDP. Thirdly, if we accept the recommendations, as the Leader of the Opposition is suggesting we do, then why have committees and why have public hearings and why have democracy if you're going to destroy it?

MR. HARCOURT: Supplementary, Mr. Speaker. If the government is not prepared to accept equal representation and is not prepared to accept these principles from the Fisher commission, then the committee is an excuse to redraw the map to the government's liking. Will the Premier now admit that the reference to the legislative committee is solely to redraw the map in favour of his party?

HON. MR. VANDER ZALM: I must point out that the evidence is obviously much the other way. The recommendation that we've put forth, and which we're prepared to and have said we would accept, is the one which was initiated by the member from the NDP, the opposition, responsible for that area of activity. So how the Leader of the Opposition can say those things I can't understand. If you want to do away with representative government and how it functions and how the people are fairly represented on committees by the way they elect people to the House, then why do we need political parties? We may as well go to a Russian system.

BUS TRANSPORTATION FOR
HANDICAPPED PRESCHOOL CHILDREN

MR. CASHORE: Now that we have a quiet moment in the House, I have a question for the Minister of Social Services and Housing. It's a very appropriate question in view of this being National Access Awareness Week for the disabled. The Vancouver Regional Transit Commission's plan to provide bus transportation for handicapped preschool children has been refused funding through B.C. Transit and the Ministry of Municipal Affairs. This will mean that many of the children will not get a preschool education. As his ministry is responsible for helping those in need, will the minister now assure this House that the necessary funds will be provided?

HON. MR. RICHMOND: I'm unaware of the decision of which the member speaks, so I'll have to take that portion of the question as notice. But I would like to add that we always look after those who are unable to look after themselves. In fact, I'm very proud of the record of this government in dealing with the disabled. As I said, I'll have to take the first part of his question as notice.

MR. CASHORE: A supplementary to the minister. It's in the spirit of what the minister has said that I'm putting the question, knowing that he will want to be able to fulfill this need for these children who, for want of a half a million dollars, are not able to have this service. I would remind the minister that his government is sitting on $20 million that the Premier has earmarked for supporting the family and for providing adequate transportation for disabled preschool children in an area where families definitely need support. I would ask the minister if he will agree to meet with the Premier to urge him to invest money from that $20 million to ensure that this valuable service is provided.

HON. MR. RICHMOND: Again, Mr. Speaker, that would come under future policy and how we're going to fund a given program. Once I've had a look at the program of which the member speaks, then we will make that decision.

I am pleased to announce to this House — although I did put out a press release, it didn't get wide circulation — that through the ministry I have entered into a contract with Joanne Neubauer of Victoria, who is doing a study for me on the needs and wants and requirements of the disabled, just so that we can make absolutely sure that we cover all the needs of those less fortunate than ourselves.

FUNDING FOR CHILD CARE

MS. MARZARI: I have before me another press release from the Minister of Social Services having to do with the day care subsidy increases. We notice that for infant care, subsidies have increased from zero to 18 months. We also notice that these subsidies do not begin to cover the cost of really safe, licensed care in day care centres.

The question is about this new category of care-giving that the minister has invented called "in own home." In other words, I am assuming that this subsidizes, up to $270 a month, a mother for the care of her child in her own home. I would like the minister to inform this House as to who qualifies for that subsidy. Is it unwed mothers only? Is it teenage mothers only? Is it mothers in two-parent families? Is it working mothers? Is it mothers on welfare?

HON. MR. RICHMOND: We will be publishing a list of the criteria for those who are eligible for the infant day care subsidy. I don't have it with me. Rather than trying to go from memory, I will wait until we publish the list. We are exploring the possibilities, as I said during my estimates, of having the extended family — the grandmothers of children — look after the day care for these single mothers. It will all be spelled out in the criteria when they're published very shortly.

MS. MARZARI: I'm judging from that response that we're basically dealing with unwed mothers or single mothers, and that the grandmother of the child will be coming into the house to tend to the child's needs. Has the minister received federal approval for this program under the Canada Assistance Plan, or is this province going to be spending our own 100-cent dollars — not cost-shared — on a program to encourage young girls to keep their babies?

HON. MR. RICHMOND: I would remind the member that while there may be four levels of government in this country — federal, provincial, municipal and regional — there is only one level of taxpayer. I think we always have to bear that in mind. So whether the funds come 50 percent from the federal government or 50 percent from us, the program will be funded as needed.

MS. MARZARI: This government constantly tells us of how proud they are of being able to retrieve some dollars from the federal government. They go around bashing the federal government every second day, saying that the feds don't give us enough. I'm asking you if you are going to the federal government to get your 50-cent dollars on this one; that's where we're going to save some money. The minister has promised that he will bring to this House the negotiating package that we are taking to the federal government. I have

[ Page 4749 ]

found out from Ottawa that they are expecting us, and all provinces, to sign an agreement on the new day care package by the end of June. When is the minister going to bring that package to this House?

HON. MR. RICHMOND: There seem to be two or three questions there. Let me assure this House that we extract all of the 50-cent dollars we possibly can from Ottawa. Some we are still negotiating, such as parents looking after their severely handicapped children in their home. We haven't managed to get that past the federal government yet, but we're still working on it.

Yes, the new child care act is to be introduced into the federal Parliament shortly. I know the minister wants to pass that legislation before the federal House recesses for the summer. When we conclude our negotiations with the federal government, then we will make the terms of that negotiation public.

MR. BARNES: What was that bell? I have a question for the Minister of Education,

MR. SPEAKER: Question period is over.

MR. BARNES: That's what I thought, too.

Introduction of Bills

MUNICIPALITIES ENABLING AND
VALIDATING AMENDMENT ACT, 1988

Hon. Mrs. Johnston presented a message from His Honour the Lieutenant-Governor: a bill intituled Municipalities Enabling and Validating Amendment Act, 1988.

HON. MRS. JOHNSTON: Bill 26 contains measures to validate the official community plan of the corporation of the district of Burnaby; validate borrowing by the city of Revelstoke to pay dredging costs incurred in flood prevention; enable the Greater Vancouver Regional District to provide an emergency telephone system to municipalities outside its boundaries; validate Prince George's Blackburn Airport Hill specified area bylaw; validate letters patent for the Fort Nelson and Peace River Regional Districts; and enable the council of the district of Esquimalt to amend the district's 1987 tax rate.

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

Bill 26 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.

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

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

ESTIMATES: MINISTRY OF
FORESTS AND LANDS
(continued)

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

MR. MILLER: Previous to the House adjourning for lunch, I had asked the minister about the increased use of contractors in forest administration, basically doing the work normally done by the Ministry of Forests personnel, and the pitfalls inherent in that approach to managing. On more than one occasion I received the response that the minister felt that there was a great deal of expertise in the contracting or consulting community, that they were quite able to do this kind of work, and that he had no fears about increasingly using consultants.

[2:30]

I wanted to get the minister to respond to that, particularly in light of the T.M. Thomson report on the situation in the Queen Charlotte Islands. Clearly, if the confidence the minister has in the private sector is to be borne out, he should pay attention to the recommendations contained in the report. One of the significant recommendations, of course, was that the Ministry of Forests did not have staffing levels or adequate training to do their work and to carry out the kind of performance audits and monitoring that's really required to make sure that the people who've been given access to Crown timber fulfill the obligations they have.

So if we could go back to that, perhaps the minister would advise us why he doesn't see the need for more trained staff at the district level, given the Thomson report stressing that that was a serious deficiency.

HON. MR. PARKER: The question was put this morning; it was answered this morning. It doesn't change. We have confidence in the report of the consultant, T.M. Thomson and Associates, and we are taking their advice to heart. We are undertaking to train our staff so that they can per-form their audit function appropriately. We have the staff to do it, because we are transferring staff internally; also as a result of having transferred to the licensees the responsibility for forest renewal — a free-to-grow state.

The question and the replies are in the Blues from this morning if the member cares to take a moment and read them.

MR. MILLER: I would ask the minister then whether he agrees that it's important for the ministry to have that ability, that expertise, within the ministry to conduct the functions that are so essential to the successful implementation of the changes in the Forest Act; whether, with the responsibility for reforestation and silviculture being transferred to the licensees, the minister feels it's important to maintain an adequate level of trained staff to do that auditing and monitoring of the work done by the licensees.

HON. MR. PARKER: Mr. Chairman, I wonder if the member would repeat the first part of his question. I couldn't hear him over the noise in the background on this side.

MR. CHAIRMAN: Would the member repeat the question, please.

MR. MILLER: I had a bit of difficulty with some noise, too.

The question I asked the minister was whether he feels it's critical to maintain within the ministry the expertise and the ability to do the auditing and monitoring that will be required. I guess he heard the last part of the question — whether or not that's of critical importance to you as a minister.

HON. MR. PARKER: Absolutely. We are concerned about the expertise of our staff, and we hire carefully. We

[ Page 4750 ]

provide for in-service training and we encourage continuing education. We hope that our staff will avail themselves of those opportunities. We have no problem at all maintaining confidence in the staff in place who are carrying out their duties as they evolve. They have our support and our assistance.

MR. MILLER: I wonder, then, if the minister could advise how we got to this state, given the report and the recommendations. The minister hasn't accepted the one for increased staff, but he seems to have accepted a number of the others made there, including the need to have better trained staff at the district level. How did we get to that position? Despite the changes and all the emphasis now being placed on the licensees having this responsibility, clearly there were responsibilities that existed prior to the changes brought into the Forest Act last year. They've been there. Certainly there's a different method of payment. We've abandoned section 88, but nonetheless the requirements for reforestation were there. How did we get to such a poor state in the ministry?

HON. MR. PARKER: I wonder if the member opposite could elaborate on whether he's talking about a waste assessment or a regeneration assessment.

MR. MILLER: In this particular case, we're talking about a waste assessment. But it seems to me that we're talking about and have been dealing this morning with the capability of the ministry to conduct some pretty essential functions in this province. That is primarily to make sure the licensees are complying with whatever requirements are placed on the licence-holder — whether it's reforestation or waste levels.

HON. MR. PARKER: The member knows full well that the assessment of waste covered an area and a period in time that was under an administration philosophy known as a sympathetic administration to reflect the economic conditions of the times. The levels of waste were identified as being in the lowest spectrum of merchantable logs — that is, those that were marginally economic in good times and certainly not economic in bad times. The operators were given the go-ahead by the Ministry of Forests and Lands to operate a little more leniently as far as the cutting specifications were concerned. That happened all over the province, and it kept a lot of businesses viable. It made it possible for a number of people to stay employed.

What we've determined subsequently — and it's always easy to do things in hindsight; that's basically what the opposition does best — was that a small volume probably should have been taken out but was missed at a particular point in time. Under the circumstances of the day, it was moot whether it was advisable to remove it. What was important at that time was to keep the people of Port Clements and environs gainfully working in a business that could meet their payroll. That was done.

We've received a report from a recognized industry expert, and we have taken the recommendations to heart. We are moving in-house to provide in-service training to bring all of our staff up to a level of expertise to be effective in the audit function as it now falls upon them as a result of the move in forest policy.

MR. MILLER: I guess it is easier to operate in hindsight, but the purpose of this exercise is to go through the operations of his ministry with the minister to see whether he's learned anything. Now I'll go back to the questions, and they're serious questions concerning the ability of the ministry to conduct its function on behalf of the people of this province, so that licensees live up to the obligations that they should — whether that's reforestation or whatever other obligation the Crown chooses to impose.

I asked the minister why we got to this sorry state. The minister says that in hindsight, they basically allowed sympathetic administration to continue too long. Is it because you didn't have the staff in the field to advise you, Mr. Minister? Is that why you allowed it go carry on too long?

HON. MR. PARKER: Sympathetic administration was not in effect under my term in office as Minister of Forests and Lands.

MR. MILLER: Well, that's classic. I don't know whether that's a good thing or a bad thing. I guess we're not blessed with foresight; maybe time will tell. I want to stick to this, because I have raised the point and you have responded and, it seems to me, touched on an essential point that I have been trying to get across, and that's the ability of the ministry.

You wanted to mix sympathetic administration in with the argument. I didn't particularly, if what you are trying to say is that it's not a problem of the Ministry of Forests because we just let them do it: "It's sympathetic administration and that explains everything, and yes, we needed to maintain those jobs in Port Clements."

The report deals with sympathetic administration and with the ability of your ministry, and they are two separate things.

HON. MR. PARKER: You didn't want that.

MR. MILLER: I wanted to maintain jobs in Port Clements. There are a lot of things I want for Port Clements. Whether we get them out of this government or not, we'll see. I also wanted some delays on the management of a working plan, which I got a little of but not enough. This thing perhaps could have been dealt with a little more fully if the minister had acceded to the request I made at that time, but nonetheless, let's go back to the report.

I see the member for Shuswap-Revelstoke (Mr. Michael) speaking out. He got a lot of support from those loggers on the Queen Charlotte Islands when he was running for leader of that party. I've got the clippings from the Prince Rupert Daily News of what he and the Premier said about the forests — how we should cut them down as quickly as possible. But we don't want to get into that just now.

The point I'm trying to get at here in terms of this Thomson report, its recommendations and its impact on the ministry, is that, despite sympathetic administration, the fourth conclusion on page D-2 says: "The Ministry of Forests and Lands has poorly defined and/or explained the policies and procedures for utilization control. It also has inadequate staff and trained personnel to effectively manage the forest industry operation."

Now that has nothing to do with sympathetic administration, unless the minister is prepared to stand up and say the poorly explained policies and procedures are the responsibility of the minister. If you want to claim that credit, then you can stand up and do it, I guess; but the essential point is that the ministry was lacking. We know about sympathetic administration, that perhaps it shouldn't have been carried on as long as it was. Was it required in 1985 and 1986?

[ Page 4751 ]

The question really does lead us back into something the minister said before lunch when we talked about utilization. If I interpret this correctly — I will finally get the Blues and we'll see precisely what the words were, but I think I recall the impact of the meaning of the words uttered by the minister before lunch. We were talking about the issue of utilization of types of timber, and the question was put by the member for Omineca (Mr. Kempf) of using sawlogs for chips for a pulp mill. The minister responded that if somebody wanted to use high-priced timber for firewood or any other purpose, that's a private decision, it has nothing to do with him, and seemed to suggest that the only job that the ministry has is to charge the right price for the timber. I'll ask the minister if he wants to maintain that position. Maybe I'll leave it at that so we can save ourselves some trouble.

HON. MR. PARKER: We took the recommendations of the Thomson report very seriously and we have been moving within the service to improve the abilities of our staff to perform in the new audit function which has evolved to their mandate as a result of recent legislation. We take the consultant's report seriously. He helped identify some shortcomings. We have identified them as well and we are dealing with them. I don't know what more the member opposite could expect when you receive a comprehensive report by an industry expert with good solid recommendations. We take them seriously. We are dealing with them, and I don't think he could expect much more. I don't see how he can criticize that response, nor do I see how he could criticize that procedure. It's very thorough, open and appropriate.

[2:45]

MR. MILLER: The minister didn't respond to the last part of my question as to his position on the use of wood.

HON. MR. PARKER: The member from Prince Rupert was referring to a question from the member from Omineca in which the member from Omineca said, and it's in the Blues: "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?" My reply was: "Mr. Chairman, no, I'm not telling this House that I'm not concerned."

MR. MILLER: So the minister is concerned.

HON. MR. PARKER: Yes. The minister, the ministry and this government are concerned about what goes on in the forests and with the products of the forest industry. But we do not climb into people's day-to-day business; that sort of interference is done by totalitarian governments in different parts of the world, but fortunately not here in British Columbia.

MR. MILLER: Well, Mr. Chairman, that's a pretty foolish statement, but we'll let it pass, I guess. It stands on its own.

I want to go back to just previous in that same debate. It seems to me that there's a fairly fundamental point here that the Crown not only has a responsibility to get the best possible price it can for the resource on behalf of the people of British Columbia, in addition to some other considerations, but also has a responsibility to ensure that the resource is used to the optimum degree for the maximum benefit of the people of British Columbia. Therefore it would be patently foolish, for example, to allow fibre, such as good sawlogs, to be used for chipping, or alternatively, fibre that would be useful for a lesser purpose.

It seems to be fairly fundamental that the Crown would have an obligation to achieve the best possible use of the timber. Surely that goes to the heart of what the minister has been talking about when he says value-added: that we want to extract the maximum value for the citizens of this province in terms of tax revenue, jobs, etc.; and that we have a greater obligation than simply to make sure that we're getting a return on the resource. We actually haven't been doing that for a few years.

Yet the minister had this to say. I hate to quote Hansard — they're going to have to print it again — but I think it's important, because you covered a lot of ground. You were a little more open than the simple one-word answer we've now got your interpretation on. You said:

"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 of great economic value, that's a business decision. Those business decisions have to be made based on the opportunities...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...."

Does the minister want to cast a new interpretation on that answer?

HON. MR. PARKER: No. I think we've heard the explanation of my answer quite adequately, Mr. Chairman. There's no point in belabouring the issue.

MR. MILLER: I might take the opportunity to repeat these words somewhere else. It may be worth belabouring this, Mr. Minister, because it is fundamental.

You retracted, or seemed to retract, your one-word answer of "no" to one question.

HON. MR. PARKER: No, I never retracted it.

MR. MILLER: Oh, you didn't retract. You just said it means something different. In other words, I believe you said no means yes.

HON. MR. PARKER: It's right in front of you.

MR. MILLER: So the minister is sticking by his position, then.

HON. MR. PARKER: Try and get it straight. We told you.

MR. MILLER: The minister is taking the position that the government has no responsibility for directing that that timber be used for its optimum value.

HON. MR. PARKER: Mr. Chairman, I don't think the member for Prince Rupert or the member for Omineca (Mr.

[ Page 4752 ]

Kempf) can at any time say what is optimum without having a full knowledge of the business at hand for which the raw material is being converted. We don't presume to do it on the government side, but I gather that my critics presume to do so. It's amazing that they have that kind of wisdom now, because the NDP certainly didn't have it when they were in government and I don't see any vestige of it in my office by my predecessor.

MR. MILLER: I wasn't attempting to be as comprehensive as trying to define "optimum" in every situation. That would be rather foolish to try and attempt that from this position right here today. However, at first glance it might strike some people who see logs that could be made into lumber being chipped up. Somebody might say that it doesn't seem to be a very good use of that material. Be that as it may, the question I put to you was whether you felt you had an obligation to ensure that timber was used to its optimum degree. Never mind definitions, and never mind casting aspersions or whatever.

HON. MR. PARKER: The timber-pricing process takes into account all the potential products which that raw material may be made into. On that basis, you use current market information and you determine a value for the timber. That's what we do. We've substantially increased the price of Crown timber, and if converters see fit to use high-value, high-cost raw material for something of less than economic value, it's clearly their decision. What we have done as the Forest Service and as the Ministry of Forests and Lands is ensure that the people of British Columbia have a fair price for the raw material.

Through a number of programs, we encourage higher utilization, greater secondary manufacture in the province, and those programs have been in place with this government and previous Social Credit governments. We encourage the private sector to use the resource to the best of its ability and as the market dictates. If you think you can sit here and determine where wood should go and what it should be at any given point in time, I think you're sadly mistaken as to your role. The marketplace in any type of business is really what determines what the product should be, the level of service should be, the quantity should be, the level of employment should be. The members opposite should by now understand that.

MR. KEMPF: It's been a very interesting conversation here this afternoon, and I'd just like to continue the discussion with respect to materials used in a pulp mill, and just bring the minister back to a situation that happened very recently with respect to the export of logs from this province when an order-in-council was allowed to lapse putting 250 woodworkers out of work in the Prince Rupert forest district alone, stopping the usage of standing-green export permits. I think it relates to the discussion that's at hand, in that some of those logs seen by the Select Standing Committee on Forests and Lands which were going into the wood room of Skeena Cellulose still had export tags on them.

Given the fact that there is a greater return to the province of British Columbia for wood sold to export than certainly there is for wood going into a pulp mill, do you still think and are you still telling this House that prime sawlogs going into a pulp mill is their best usage?

HON. MR. PARKER: The member for Omineca mentions the fact there were tags on these logs. Frequently, export logs are individually tagged for record keeping purposes. But the member for Omineca did not mention the fact that certain grades of logs are not permitted for export, and they are: Douglas fir, D and better; spruce logs, H and better; yellow cedar; and red cedar. All the lower-grade logs, including pulp logs, are available for export.

In the north coast area, a substantial volume of logs is sold for export, the pulp log component particularly. Some of it is going to the Alaska panhandle mills and some of it goes over to Korea, I believe, and I think some have gone to mainland China. Those export pulp logs would have had tags on them too. Without knowing specifically which batch, which timber mark, what source we're talking about, it's hard to say whether or not they were pulp logs. And as I've said before, if the utilizing plant determines that they can afford to use that wood, they will use that wood and produce whatever products they see fit to produce. It's the market that drives them; it's the business that drives them; and it's a business decision. I'm glad to hear that some of these logs that apparently had been designated for export were actually utilized in a British Columbia plant.

[3:00]

MR. KEMPF: I really can't believe what I'm hearing coming from a minister responsible for this province's largest industry — the forest industry.

HON. MR. PARKER: I am not a log exporter.

MR. KEMPF: I know you're not a logger. That is very evident by the policy now enunciated from the Ministry of Forests. There's no doubt about that whatsoever.

Interjection.

MR. KEMPF: If you're trying to tell me that I don't know what a high-quality hemlock log is, after having in excess of 20 years in the industry.... Well, it goes along with the rest of the rhetoric coming from that minister.

If you've changed your mind from what was said this morning, if you are concerned about the quality of wood going through pulp mills in British Columbia, all the more reason to audit. Just take that one mill to audit. Allow your staff a continual audit for a six- or 12-month period to really find out what's being utilized through wood rooms in pulp mills in this province. When are you going to authorize your staff to audit the wood that's going through Skeena Cellulose?

HON. MR. PARKER: I guess we'll authorize it when we deem it necessary.

MR. KEMPF: I'm not speaking just for myself. There are other members, members of that minister's own party, who stood on that log deck and watched prime saw log material going into the wood room and being used for chips. Is that not reason enough to do an audit now?

HON. MR. PARKER: I suppose I could consider that.

MR. MILLER: I want to go back to the question of utilization because I think it's important for B.C. I sort of gather that the minister feels the market determines, that basically, when he refers to business decisions, businessmen will make the right decisions based on the marketplace, and that somehow there's a correctness to that which should not

[ Page 4753 ]

be tampered with — or if it is, albeit reluctantly. Yet if a pulp mill is chipping logs that are suitable for production into lumber, or if fibre is being used to a lower level than its potential, it seems to me that is wrong. We all lose if those kinds of things happen. There could be much more benefit to the province through higher utilization. Is it the minister's view that that happens because the price of the raw material is too low?

MR. MICHAEL: I'm not sure of the rules of the House or what the numbers are for a quorum, but with an important debate like this on forestry, is only one member of the New Democratic Party being present an official amount to be in the House?

MR. CHAIRMAN: We have a quorum according to standing orders, hon. member.

MR. MILLER: The questions I posed are serious questions. They go to the heart of forest policy in this province and utilization of the resource, which we hopefully will prosper by. These petty interferences by the member for Shuswap-Revelstoke do nothing to add to the debate.

HON. MR. PARKER: We pay very close attention to utilization levels. By definition, the utilization levels are the extraction of raw material to the specifications of the contract between us and the licensees. We pay close attention to utilization levels.

As to the means of conversion, that is basically determined by the economics of the time, the business of the time. We don't presume to get involved in day-to-day, minute-to minute business decisions by operators in the province who have paid fair market value or greater prices for raw materials, as to how to convert it. We do have policies from a number of our ministries that encourage business development and employment opportunities in the province, and they include wood conversion plants. We are going to great lengths to encourage value-added productivity, especially in the wood industries. When it comes to the use of logs, regardless of quality, it is the economics and the opportunities at that particular point in time that dictate the best end use for the wood in question.

MR. MILLER: I was trying to get at how this market system works. I thought you might be a little bit of an expert on it, because you talk about it a lot. Is it because the raw resource is priced too low that an operator will use it for a lower use? Is that why those so-called business decisions are made?

HON. MR. PARKER: As I've said before during our discussions today, we have a fair pricing system for the raw materials of the province. The members opposite should, by now, be able to figure that out. They've been provided with the information and the means of information by which we determine the market values of the raw material in the forest industry.

[Mr. Rabbitt in the chair.]

The market forces are really what determine what business you are in and what products you'll make in what quantities and what costs you can bear. They move from time to time. Opportunities come up from time to time. Perhaps that's what occurred at the particular point in time members opposite, as members of the Select Standing Committee on Forests and Lands. visited a particular pulp mill. I would think that to be able to make a more meaningful assessment of what takes place, they'd spend a little more time there.

I'm surprised that the member for Prince Rupert sees fit to consider that the mill at which he was working before being elected here continues to chip up nothing but sawlogs. I've been in that plant at the same time he's been in that plant, and that certainly wasn't the case. It was clearly pulp-grade material, some of it so teredo-infested that you could hardly stand the smell in the wood room. I don't think it's a common occurrence. Definitely the member for Prince Rupert knows all he's doing is using up time in the House to belabour a point that's really of very little importance at this point in the debate and discussion. It's very much the exception rather than the rule. He knows that from having had a career with that particular pulp mill.

MR. MILLER: I indeed spent almost 20 years of my life in that pulp mill, and most of it in the wood room, both as an operator and as a maintenance man. I can tell you that having witnessed that operation over that length of time, through three separate wood rooms, three different types of taking the bark off and putting them through the chipper.... Not once, except in the very early days, did they have anything else. They used to have a band-saw, a trimmer and an edger, and they could cut some planks which they used around the mill to build decking. That was good quality timber. As the operator, I put blue-ribbon spruce logs through the chipper in No. 2 wood room. You don't have any choice when you're sitting on the machine. I've seen all kinds of good timber go through there that should have been made into lumber, Mr. Minister, so don't be surprised. Don't tell me what I've seen with my own eyes for 20 years.

I'm not picking on one particular pulp mill. Does the minister have knowledge that this is a widespread thing? I never said it was widespread. We're talking about, in general terms. the use of fibre and the best use of it to get the maximum return for the people of this province.

The question still holds. If the minister were to discover that this did take place, whether it was common practice to the point of.... Whether you want to put a percent on it in terms of the logs that are described as logs that lumber could be extracted from going into chippers and into making pulp.... I'm trying to get at an essential point here. Maybe the minister could advise if he knows it's happening or if he doesn't know it's happening, one or the other. If that were happening as a result of the resource being too low-priced.... After all, if you get something for nothing, where's the incentive to do more with it? Is that the reason those kinds of activities take place?

HON. MR. PARKER: The British Columbia Forest Service does not run any conversion plants. We are responsible for administering forest management in the province; we do that. As a government, we're concerned about employment levels, manufacturing opportunities. The marketplace will determine what the business will be, what the opportunities are, and what the quantities, products, prices, amounts and levels of employment will be.

We in the Forest Service continue to be of the opinion — I've repeated this a number of times today — that we have a fair pricing system for the raw material of the province in the forest products field. That, in my opinion and in our ministry's opinion, is a good number. It's determined by the

[ Page 4754 ]

marketplace. It's the best information; it's current information. It's done by people with substantial credibility and good credentials. If manufacturers see fit to use high-value, high cost wood for something other than a high-value end product, that's their decision. They have determined that they can afford to do that at that particular point in time.

The reason I use that term is that in processing there are times when there is a shortfall or an influx of wood that may not normally fit the profile of what the plant considering it may use as a normal supply. It may be a volume of lower quality wood or higher-quality wood, but there is generally a reason why something like that has happened.

Having some familiarity with the Prince Rupert harbour.... If the logs in the question raised by the member for Omineca (Mr. Kempf) had been stored in that harbour for a period of time — say, three months or so — there is a good chance there was an infestation of teredos, in which case the log buyer may not have wanted them. They may have been mis-manufactured to a shorter length, or they may have been pulp logs destined for some other part of the world that were an overload for a particular ship and were picked up by that plant, or that were found to have some defects that were missed in the earlier grading process. That happens frequently in the north coast and the north Kallum areas. Rotten knots are missed in the log-grading process, but both ends of the log look great.

There could be any number of situations, and it's a little presumptuous of the opposition to think that these things happen on an ongoing basis. I know that the member opposite in the NDP doesn't follow that, because in the last five years he has seen very little high-grade spruce go through the mill. He is citing examples of the days when the sulphite plant was running and required a certain type of wood fibre, which he and his colleagues were most grateful to receive, because it meant gainful employment.

Time and circumstance change, and that's the whole point of my discussion here. You really have to know what's happening before you criticize. As far as we're concerned in the Ministry of Forests and Lands, we are getting good value for the assets sold to the industry and good value for the people of British Columbia. In our opinion, the wood is being used to its best end purpose.

[3:15]

MR. MILLER: I was probably talking about the time when that pulp mill was run by the B.C. Resources Investment Corporation, the worst time for any worker who ever worked in that place. Believe me, it was the worst-managed.... Things are looking up a little bit now.

I am trying to talk about the market. The minister seems to talk as though the government is not a player in the marketplace and somehow doesn't have anything to do with what happens in the marketplace. Indeed, we are an essential player. I don't know why the minister is so reluctant to comment on these things, but I guess we will go back again in terms of some of these questions.

Is the minister aware or is he unaware...? Does he or does he not know overall, in terms of the coastal pulp mills, whether there are logs going into chippers in pulp mills which more properly could be used to extract lumber? If he is aware, could he tell us the extent to which this might be taking place or to which it's not taking place? Could he advise us on that?

HON. MR. PARKER: If there is inappropriate use of raw material, we would have a defunct industry instead of a flourishing one. We see over $2 billion invested this year in this industry. As we meet with the various industry groups, we see the opportunities they see in the next year, two years and five years and in some cases ten years and the vision they have and the investment they have budgeted for this industry and the confidence they have in Canada, in British Columbia and in the administration by the Social Credit government.

If there was misuse of the raw material, we would not have a healthy industry. We have an extremely efficient industry. As a matter of fact, the sawmill industry in the interior is a world-class industry. We shared that in discussion with representatives of that manufacturing sector just yesterday. We were happy to be able to meet with them again. We've been meeting with them on several occasions in the last few months, as they help us refine the comparative-value pricing system to make it more equitable across the province. We've had representations from everybody from woodlot owners right on through to the major international corporations.

Speaking of international corporations, it's amazing that the members opposite like to see commerce, business, the export of finished products and worldwide markets to deal with, but they don't want the worldwide markets in their back yards. In other words, they don't want to see foreign investment in this province or this country. I think that's pretty farfetched, because as we approach the twenty-first century, we're seeing a global community more and more. We see philosophies espoused by members of the opposition where they talk about a global community, but not in their backyard. I think that's two-faced.

MR. MILLER: I don't know what you think is two-faced, and I don't know which you were talking about — the front or the back end.

We're trying to get some answers here in terms of forest policy, and the minister won't answer the question, which is pretty fundamental and basic. Is he aware of the level at which...? Maybe it doesn't take place; maybe it takes place a little tiny bit, maybe a lot. Is the minister aware of the level of utilization — or mis-utilization, if you like — of logs that could more properly be used to make lumber, and that are instead being used to make chips and pulp?

HON. MR. PARKER: Mr. Chairman, we are aware of a very healthy forest industry clearly using the resource in the best interest of the province of British Columbia, which is a healthy and vigorous forest industry.

MR. BRUCE: I'd just like to make a comment or two here, in that there were more than two members on that particular trip through that pulp mill operation. Although I'm not a log grader, I do have a little bit of an eye for what possibly could be used to make lumber, and that which would be suitable for chipping purposes. Again, I want to stress my lack of qualification in that particular matter — something that perhaps more of us should do in this House. But it would seem to me that on that mill tour, when I saw the timber coming through.... Sure, some of it could have been used for lumber purposes. But by far, what I saw and what I believe the majority saw was that most of the timber going through the system would be best used for pulp purposes.

I offer that only as a comment by one who was there, because there's been much to-do today about that particular mill tour. It almost sounds like on that tour, every single log going through there was a class A — or whatever the grading

[ Page 4755 ]

is for logs going through there — being used for chipping purposes, when it should in fact have been for lumber.

That was clearly not the case on that particular tour. Clearly, it is understood that in the main, the timber that went through there would have been best utilized for chipping purposes. If in fact there are other situations where timber should be used for lumber purposes, then by all means, I'm sure everybody in this province would like to see the best utilization of that timber. But I wouldn't want it left on the record that we as a committee toured that milling operation and saw nothing but class A logs — or whatever the letter is — going through that milling operation and being used for chips when perhaps they should have been used for lumber.

I think in fairness, gentlemen, that you saw what I saw, and perhaps basically you should come back to that.

MR. MILLER: Thank you to the junior forest warden from Cowichan-Malahat. I agree. I'm sorry. The minister's been sniping a bit, and maybe I'm just picking up the habit. I don't normally do it.

I agree. But we shouldn't use just that one instance. It would be really irresponsible to use that one instance and try to extrapolate and say that that is happening throughout the coast. Certainly that's not my intent. I don't think that if you searched the Blues you will anywhere see that 1 have said that has happened. I have asked the minister three or four times whether he is aware, as the Minister of Forests, the minister responsible for what happens with the trees in this province and the employment generated by processing.... I've asked the minister three times.

Maybe I'll appeal to the member for Cowichan-Malahat, if he wants to get up and ask the question. Maybe this minister sees you a little less suspiciously, as a little more friendly. I would beg the member for Cowichan-Malahat to stand up and ask the same questions I've asked.

MR. CHAIRMAN: I would ask that the member address the Chair.

MR. MILLER: Mr. Chairman, the questions seem patently reasonable. We're asking the Minister of Forests for this province about his knowledge of how timber in this province is used. You only have to come to a couple of conclusions after three times asking a pretty reasonable question: (a) the minister doesn't know and he doesn't want to say he doesn't know; or (b) he knows and maybe the information isn't good information. Maybe it's not good news.

It's a serious question. We've had respected academics and others in this province, people from industry who have talked to me privately, people from even — dare I say — the multinationals who have talked to me privately and have told me that they have concerns about the level of cut in this province, about the rate at which we are depleting the old growth forests on the coast of British Columbia, and about the possible implications of a falldown.

It seems to me proper and right to ask questions about how timber is being utilized. That's part of the whole range of information that we have to have to make intelligent decisions in this province about the use of timber. And utilization is not just what you take out of the bush but what you do with it after you take it out of the bush. I'm going to give the minister another opportunity. Can he answer? Can he advise the House? Is he aware or is he unaware? If you are unaware, why don't you just say so? If you do know, why don't you just share that information with us? Is timber being misused to any appreciable extent in terms that I've asked now three times? We're really talking about logs that could be used to extract wood from that are now instead being chipped to make pulp. Is the minister aware or is he not?

HON. MR. PARKER: In response to the new question put forth by the member for Prince Rupert as to whether there's any appreciable misuse of the resource, the ministry has no reason to believe that there is. The forest industry is healthy, the returns to the province are strong, and the business of forest products in British Columbia is doing very well. In response to his recent rephrased question: in the estimation of the ministry, no, there is no gross misuse or any appreciable misuse.

MR. MILLER: Logically flowing from that, I would ask the minister to advise the House what that estimation is based on, what concrete means of evaluation have been used to come up with that statement, and perhaps for a little closer definition of "appreciable." I don't want to be too fussy, really. I'm not asking for any kind of precision in terms of that. Perhaps, as I said, the minister would advise what criteria or what evaluation processes were used to arrive at that statement that there is no appreciable or gross misuse of the timber.

HON. MR. PARKER: We rely on advice and feedback from the managers and staff of some 45 forest districts around the province. As to what's taking place in each of those districts , we get that on a regular basis, and there are no reports of misuse of the forest resource that I'm aware of. The British Columbia Forest Service has been a decentralized agency of this government since its inception in 1912, and we have a good handle on what's taking place around the province. We have a very efficient system of reporting and a very competent staff.

[3:30]

MR. MILLER: The advice comes from the 45 districts. Then it is, I assume. someone's responsibility in the district to do the kind of checking that would allow them to come up with that conclusion. Is that part of a defined process that takes place at the district level? Do they check the operations of the mills to determine whether or not there is misuse of timber — in other words, a lower use than could be applied? Is it done regularly? Are reports filed on that situation by the districts to the headquarters?

HON. MR. PARKER: Mr. Chairman, we don't place staff on the log feeds of every conversion plant in the province, if that's the question.

MR. KEMPF: That's very interesting, Mr. Chairman. The people in the field in the B.C. Forest Service really do know what's going on out there. There was a management review called for, which made it very clear — I saw most of the responses to that management review — what is going on in our primary resource in British Columbia. Seeing as how the minister has brought that up, where are those responses? Where is the management review?

HON. MR. PARKER: Well, well, well! One day the member for Omineca will wake up and smell the coffee.

The forest policies announced last fall arise largely out of the forest management review, and the comparative pricing system arises mainly out of the forest management review.

[ Page 4756 ]

That's a matter of record. If the member for Omineca cares to do his homework, he can determine that for himself. If he wants to grandstand, I will be pleased to answer any further questions.

MR. KEMPF: If you call wanting to get answers on questions of the forest industry for the people of British Columbia grandstanding, I guess you can. I guess you can do anything you want when you are a minister — except properly manage the resource, it would appear from the actions of this minister.

I don't wish to argue the expertise of the member for Cowichan-Malahat (Mr. Bruce), but if you really want to know what was going through that wood room, not only on that particular visit but also what was boomed in front of the mill to be utilized, not that day or the next day but the next week and maybe the week thereafter, I have photographs of that wood, thanks to another gentleman in this room.

I really wonder about a remark that was made. I think it's indicative of what's going on in the forest industry today from this administration. I don't remember the exact remark, but it signified to this House that the minister really couldn't care less as to the usage of fibre in the forest industry of British Columbia as long as there was employment. He can read the Blues and I'll do the same, because that's the way I read it: he couldn't care less what use the wood was put to as long as there was employment. I wonder if that minister has ever thought that just maybe if the fibre.... I'm talking fibre, whether it be the fibre which makes up the highest-grade fir log or the fibre which makes up the thousands and millions of cubic metres of waste that we leave in the bush of this province. Whether it falls in those categories or not, if put to its proper use it would probably create more employment than it does today. Has the minister ever thought of that?

I think we have belaboured. this usage long enough. I want to get on another subject. The minister talks a lot, and has done today, about a fair pricing system. I just want to get into that for a minute. We talked this morning about the small business enterprise program, and the minister said — he can correct me if he thinks I read him wrong — that the same upset price procedure is used for the small business enterprise program as is used for the rest of the industry in the province. Mr. Chairman, that is not the case. If it is the case, there are some gross mistakes being made somewhere. I have evidence that I'm going to read into the record here today to prove that that remark is absolutely untrue; to prove that there is no fairness and equity in the way the pricing system is worked in British Columbia. The only thing that matters is whether you're large or small in British Columbia, as to how you pay for your own resource.

I'd like to read from a letter. This is not an isolated case; I could bring example after example after example to this House. The letter reads as follows:

"Please find enclosed the appraisals for timber sale licence Nos. A-30349 and A-27505. I feel that the upset stumpage figures on these sales are so high that it borders on insanity."

Those aren't my words, Mr. Minister; those are the words of a small business person trying to eke out a living under the small business enterprise program. These sales are so high that it borders on insanity. I read on:

"Upon examining the final appraisals of weighted selling price and weighted operating costs, I found that if added to the stumpage and royalty, the figures showed a substantial loss."

In other words, if you took into consideration the upset price — which we talked about this morning and which the minister said was fair — plus the cost of production, this small business person would be in the hole in selling his end product. Now that's fair?

I'm not going to read this whole letter; I'll table it, if the House so wishes. These are not my figures; this is based on the figures coming from the B.C. Forest Service — from the regional manager of the B.C. Forest Service in that particular area. If you take the upset price and add the Forest Service's own figures on cost of production, before you even get the product on the market he's losing money. That's fairness and equity? That's why you asked me whether I should be here tomorrow or out in my constituency, talking to people like this who are going broke because they're a little guy in the forest industry. Well, Mr. Minister, I don't think so. I think we have our priorities a little mixed up. We're talking about people's livelihoods. We're talking about a fellow who's spent his whole life in the forest industry and knows nothing else. What are you going to do with him when you break him? Put him on welfare? Is that the wish of this administration?

Don't give me any of your gobbledegook, Mr. Minister — through you, Mr. Chairman. I just want facts. I just want straight answers for the people of British Columbia. Why do we have this situation where you stand in this House and say there's fairness and equity in the forest industry of British Columbia and fairness for the small business person under the small business enterprise program? How do you figure it? How do you come to that deduction? Because I'm damned if I can figure it out.

MR. CRANDALL: They sold out. That's why.

MR. KEMPF: I'll talk to this fellow tomorrow night and find out how much he sold out and who he sold out to, because this fellow never had a quota. Don't talk to me about quotas, because I was around when they were. I went through the whole transition period. That's where I have a little more knowledge than maybe you and the minister. I've been through that gamut.

Interjections.

MR. CHAIRMAN: Hon. members, one at a time, please. Please continue.

MR. KEMPF: I guess we've hit a little quick; the sheep are braying. Let the minister answer my questions. Let him tell me why he condones this system, why he calls it fair and equitable, when it would put a guy in the hole after he's paid the upset price. He talked about "same upset procedures." Tell me why then, Mr. Minister, in the very same community, the small business enterprise program was asking to pay an upset price of $22.98 to the Northwoods of this world, the Norandas, the multinational monopoly that I like to talk about, and for good reason, who get their wood for $8. Why, if it's the same system? Why — if it's so damned fair and equitable — is there that much difference? You tell me that, Mr. Minister.

HON. MR. PARKER: The comparative value pricing system is the same one used for both renewable and nonrenewable tenures. In the small business program, we determine the upset and add in the cost of access and forest

[ Page 4757 ]

renewal. That's clear on the tender sheets. If an operator feels that he cannot operate at those levels, then he doesn't bid. Nobody drives him to bid on non-renewable or non-replaceable tenures. That's his opportunity, and he assesses it in terms of the economics and business situation of the day. If he has determined that he cannot operate effectively and make a reasonable return on his business enterprise, then he's quite correct to back off. That's a sound business decision.

When it comes to comparing one appraisal to another, you have to take into account all the factors that go into the appraisal: access, slope, aspect, soil and other considerations, such as fish and wildlife, soil conditions, domestic watersheds and grazing rights. It goes on and on to the timber parameters themselves: length, form, condition. When you're trying to compare one appraisal with another, you want to make sure that you are comparing on exactly the same basis.

The isolated incidents brought forth by the member for Omineca, one of which he has offered to table, we'll have the staff look at. I'm interested in knowing just what is behind the assessment by the small business operator, because we value the input from all our clients — big, small, multinational and individual. I'm pleased that the member has seen fit to table that particular letter in the House, and we will share it with our staff, ask for an analysis and reply back. We'd be more than pleased to provide a written reply to the member for Omineca.

[3:45]

MR. KEMPF: You know, the minister suggests that if the small operator isn't happy with the upset price, he should not go to the auction. He should just pack it in and go broke. That's what the minister has just said, in effect. If he doesn't like it, let him move on. Why don't you say that to the multinationals? They're paying eight bucks; the small operator's is paying $23. Why don't you say to the multinational in the same community, in the same timber: "You pay $23, and if you don't like it move on"? You speak glowingly about raising it to $8. Big deal! Why didn't you use those kinds of figures then? I've got the letter from your regional manager in my hand, and the figures he used. I'm not using mine or my constituents'; I'm using yours. Why didn't you do what you just suggested should be done? You haven't done that. I've got them right here in black and white, and I'll table them if that's what you want done. When you add up all the figures.... Why don't you ensure that it's done out in the field — either that or set a minimum price in this province?

That poor little guy out there not only has trouble getting timber to cut; after he's cut it, he's a captive audience. He only has one place to sell it. Where's that? To the forest giant who sets the price. This great supporter of free enterprise over there.... They have a great free market system in the forest industry in British Columbia. You get it in the neck coming or going if you're a little guy. There's no choice. You've got nowhere to go. If you don't want to pay that for the raw material, you go elsewhere. Where? If you don't want to sell it for that price, you go elsewhere. Where? There's nowhere to go.

This minister speaks glowingly about what's happening in the forest industry of British Columbia. What's happening in the forest industry of British Columbia is that the giants have 95 percent of it and they want the other 5. These are your own figures, Mr. Minister, so don't give me that gobbledegook about what should or should not be. These are the figures that came out of your ministry and show quite conclusively that if he accepted this sale at the upset price, that guy would lose $4.09 a cubic metre. How long would he last losing that? The multinational might last losing it for a little while under sympathetic administration whereby he's given all the breaks.

Where's the sympathetic administration when it comes to the little guy in the forest industry of British Columbia? Where are the breaks for him? Nowhere. And if we let it go, which we won’t....

Interjection.

MR. KEMPF: Yes, I'll go and debate among those small operators in Burns Lake tomorrow night. I wish you would come along. Mr. Minister. I wish you, for a change, would start listening to the real people in the forest industry of British Columbia, the people who really built this industry -not bought and paid for a government, but built the industry. I wish you'd come and listen to them for a while.

MR. MILLER: Where was I when I was so rudely interrupted. I know I was trying to drag something reluctantly out of the minister, and it had to do with the ....

Interjections.

MR. MILLER: The member for Omineca is moving to the left. I hope he doesn't move too far - depending on which way you face.

The minister expressed some degree of confidence in knowing there was no appreciable misuse or misallocation — or whichever term you would like to apply — in terms of fibre. He said he got that information from the 45 districts in the province, and I asked whether or not it was a defined job or mandate of the districts to do that kind of checking and monitoring on that question in order to satisfy the minister. Was it done on a regular or irregular basis? Were reports filed on the issue? I believe the minister's response was that he didn't have ministry officials stationed at the top of every jack ladder. It seemed to me somewhat shy of a reasonable answer to the question. I would ask the minister to respond to the question that was put.

HON. MR. PARKER: I said earlier that we do not assign staff to the log decks of all the conversion plants of the province.

MR. MILLER: Yet the staff must visit there periodically — or somebody does. Where do they get their information? How do they arrive at the conclusions that the minister so confidently expresses in the House, which he says he gets from the districts? What kind of process do they go through to arrive at those decisions?

HON. MR. PARKER: Contact from time to time with their clients, Mr. Chairman.

MR. MILLER: So we're not now, in the minister's or the ministry's opinion, in a situation where there is misuse. I believe the minister also said that if there was misuse of raw material, we would not have a healthy system; in other words, the market takes care of the problem.

But we've seen — I'll refer as an example to the north coast only because I'm a bit more familiar with it — for years where there really was no processing into wood products

[ Page 4758 ]

other than pulp. There used to be a sawmill at one time. The minister and I were fortunate enough to be at the opening of a new sawmill. That's great; that's good. I think we share the view that it's better, it's preferable, that the resource be processed — I prefer it to be processed locally, obviously, for my community — in British Columbia. The benefit measured on the other end is much greater than if we simply continue, for example, to export the resource unprocessed. Certainly the price on an unprocessed log that goes to the export market is quite a bit higher than they will get on the domestic market. But when you look at the benefit overall to British Columbia, it's much preferable that it be processed.

I wonder if the minister would comment on the application of that same principle, if you like, to the question of utilization. Would it not be preferable, despite the minister's reliance on the market, prior to logs being used for chipping — and there are processing technologies that have been developed that aren't bad; they're pretty good — as a policy objective to try to get that maximum production out of a log?

I can think, for example.... I don't know whether this will happen or not. I really have to congratulate Repap Enterprises in terms of their operation of that pulp mill thus far. They've done, in my opinion, a good job, certainly in terms of the labour-management relations and in that they seem to be a company with a lot of entrepreneurial spirit and hustle. I think some confidence flows to the employees and the people in that community as a result of that.

Would it not be preferable that that extraction take place prior to these logs going in? Certainly one could argue that markets exist, that the benefit would be greater for British Columbia and for the workers and the companies in that region. If that's true, does the minister have any opportunity to...? I know you've talked about wanting to encourage value-added, but what opportunities exist now for the minister to encourage companies to do that, to make the maximum or optimum use of the timber that comes their way? What can the minister do now to stimulate that kind of processing and employment?

HON. MR. PARKER: The policies of this ministry and indeed of this government encourage value-added industry, greater employment opportunities and greater market participation in the forest products industry.

Interjection.

HON. MR. PARKER: I'm glad to hear that the member for Omineca (Mr. Kempf) is pleased with the performance of Repap and the accomplishments they have made in the Skeena cellulose mill — the pulp mill at Port Edward, to be precise, on Porpoise Harbour on the CNR, just across from Ridley Island. Is that precise enough, Mr. Member? Certainly that operation is doing very well, and the same corporation has just completed a new sawmill in Terrace. They are undertaking now to crew it up and to learn to work with the new technology in that plant. It is to add value to the resource and to provide pulp chips and hog fuel to the pulp mill.

They did that without government interference on the log deck or in their business. They did that because they had confidence in this government, in British Columbia, in the resource, in their own business acumen and in the opportunities that exist in the world markets — because they are a world market player. That's exactly what will develop the forest industry to a greater and more efficient extent as time goes on.

It is the market forces and the business abilities; it's the capital availability and, above all else, it's the crew that makes it happen. It is not government interference in the day-to-day business of the enterprise. But those who do their business are able to carry it out in an effective manner. It's all levels of operators, Mr. Chairman. They are the ones who have to react to the realities of the day or the instant, and they have to make the judgment calls to carry on with an effective business. It's not our place to interfere with their day-to-day life and their minute-to-minute decisions.

MR. MILLER: I would loosely classify that as doggerel. My colleague from Nanaimo isn't here to advise me, but I think it is. I keep asking you straightforward questions. What opportunities does the minister have to encourage further process?

MR. ROSE: Doggerel is poetry.

MR. MILLER: Oh, doggerel is poetry. Well, that certainly wasn't poetry.

Interjection.

MR. MILLER: Flip-flap or gobbledegook.

I appreciate that Repap Enterprises bought — here's a tribute to the wisdom of Social Credit administrations — a pulp mill. I think they might have paid $75 million. Most of that was financed by the government. It's interesting to note that very shortly after they bought it, they re-evaluated the asset considerably — I think up to as high as $200 million. We bought it at one time, Mr. Member from Shuswap-Revelstoke (Mr. Michael), and we actually did a reasonably good job of running it. We actually made some money for the coffers of British Columbia. We had some people working there. Go ask the workers in Prince Rupert; they remember. I remember; I was there.

[4:00]

I don't want to detract from their ability to operate as a company, but I can understand how Repap got a pretty good deal. You guys sold a pulp mill for $75 million at a time when the market was going like that. One could argue about the business acumen. No wonder you like to leave things to the marketplace, because it's clear that some of the deals you've made for the people in this province have not been very good.

The minister gives me this gobbledegook — flip-flap or whatever — about "we don't want to interfere in the market." I wish you would cast aside those narrow blinkers you've got on about what your job is and try to broaden your horizons somewhat.

The minister — not this minister but the Minister of Forests way back in 1985 — offered....

Interjection.

MR. MILLER: Back in the old days. It was the Social Credit administration, I believe. You're not characterizing that Social Credit administration as the bad old days, are you?

Interjection.

MR. MILLER: No, just the old days. Okay.

Nonetheless, back in those days not that far back, the Ministry of Forests advertised that they had some Crown timber — a resource owned by the people of this province. They were prepared to let it go to the operator who con-

[ Page 4759 ]

structed. a mill. Over time — a little bit longer than we anticipated, but over time — that happened. The minister and I attended the opening of that mill. In exchange for the right to use the Crown's — the people's — assets, we demanded from the company that was successful that they construct a sawmill. It follows that they employ workers and that they produce a product. And isn't that great! It's good for the people who have jobs there; it's good for the community, and it's a good utilization of the resource. Maybe it could be better, but it's better than what we had — nothing. I would ask the minister, given his preceding answer: is that interference in private business?

HON. MR. PARKER: Mr. Chairman, to go back to the earlier discussion, the member was trying to determine whether or not we had staff on the infeed deck of every mill in the province. The reply was we do not. Of course, if he pays attention to what's going on around him, he'll remember that there have been several pulpwood agreements advertised in the northeast section of the province by the current government and by my ministry in particular requiring conversion in the province and fostering the forest industry in utilization of the resource.

That's exactly my point. If he had been listening earlier today, he would have picked up by now the fact that our position as government is to create the climate and opportunities, but not to get into minute-to-minute decisions by business managers in enterprise.

MR. JACOBSEN: Just a couple of short questions, Mr. Minister.

One thing I was wondering about: can you give me the average price received for sales under the small business program for last year? How many cubic metres are you anticipating selling through the small business program, and what is your anticipated revenue for that?

While you're looking that up, the other question I'd like to ask you is this. This morning there was discussion about the extra amount of timber that is now going to be placed in TFLs from the forest licences. As I'm sure you're aware, the Forest Act provides that all timber within the TFLs is subject to the 50 percent contracting clause. I assume that when these forest licences are rolled over into tree-farm licences, they too will be subject to the legislation for tree-farm licences, so they will be required to have a 50 percent contracting clause. I'm asking for confirmation of that.

HON. MR. PARKER: The new tree-farm licences, as they come into being, will be subject to the legislation and regulations of the day. It's a long process; how quickly we're able to achieve the 67 percent level of the provincial cut under tree-farm licences remains to be seen. It's not our intention and hasn't been our intention to change anything on the contractor clauses. What happens in the future I don't know; it depends on incumbents at the time. But it's not my intention to change it.

As for the questions on the volume to be sold in the small business program this year and the revenues to he derived therefrom, and what was derived from the small business program.... I presume that the nature of the question was provincewide. We are seeking that in this pile of material we have at hand. I'll be pleased to report it to the House just as soon as it is available.

MR. JACOBSEN: Mr. Minister, I know that you can't predict what actions will be taken in the future, and I'm not expecting that, but I assume from your answer that the status quo will be maintained, and whatever the legislation specifies at this time is what will be applied as these forest licences become TFLs.

The other issue I'd like to present to you is a concern about the small business program. I know it's had a fair bit of discussion here today, and we've heard about the export of logs. We all know there are really two economies in logging: logging for the domestic market and logging for the export market, which is an entirely different economy. It's impossible for someone who is logging for the domestic market to compete against somebody who is logging for the export market. In the small business sales, it appears that there are people who are not loggers, but they have some way of being able to accurately predict the destiny of their logs. That's of interest to many people involved in the industry, because I'm not aware of any method by which any legitimate logger can go to a sale and be sure that the logs he bids on are going to be sold anyplace other than the domestic market. There's quite a local demand at this time, and we would expect that the sales would be blocked. If you go to a sale and obey the law of the land, which is the Forest Act in this case, and you stay within the spirit and intent of the legislation, you bid and come away with a clear conscience but no timber. That happens over and over again.

I think it's necessary, Mr. Minister, that we make some provision.... I don't know how it's done. I would like to see the logs kept on the local market, because I think the best interest of British Columbia is to have the timber as much as possible manufactured into the ultimate product here, and I know you agree with that. I also think it would be very beneficial for the province to have 15 percent, when it gets to that, of the logs on the open market as a commodity. That would do a lot for the Forest Service, I think, in that it would establish a market price.

I would encourage the logs to be used here, but I recognize that there may well be situations where export is the desired thing or perhaps the necessary thing. I don't profess to know all the situations. There may be cases when it would be necessary or best to export the small business logs. I would hope there would be some way the ministry could establish a policy that would spell out before the sale whether the logs were going to be eligible for export or not; whether they were domestic or export logs. The reason I think it's necessary to do that is that it's important that everyone that plays the game plays by the same rules. That does not appear to be the case at this time, because as I said earlier, there are people who seem to have some way of determining the destiny of their logs onto the export market before the sale ever takes place. It's literally impossible for the legitimate contractor, the small business person, for whom this legislation was set up for the very purpose of providing an opportunity to participate.

[Mr. Pelton in the chair.]

MR. CHAIRMAN: Just before I recognize the minister, the second member for Cariboo has asked leave to make an introduction.

Leave granted.

MR. VANT: I'm glad that even the second member for Victoria (Mr. Blencoe) conceded that I could introduce some special people. We have 13 grade 6 and 7 students from the

[ Page 4760 ]

Strathnaver Elementary School. Strathnaver is at the extreme northern boundary of the great Cariboo constituency. These students and their teacher, ML Siemens, have come a long way to visit the capital, so I know that my colleagues in the House would like to extend a warm welcome to them.

HON. MR. PARKER: To get back to the discussion on log export, I am not aware of how anybody on the lower coast may predetermine whether or not his logs will be exportable, unless they're from lands that were deeded prior to March 12, 1906, or from federal lands such as Indian reserve lands. As far as timber sales are concerned, there are some instances in the middle, upper and lower coast where, for economic reasons, an application for a standing green export permit has been received and considered by the district manager, the regional manager and the Timber Export Advisory Committee — all of whom recommended that a standing green permit be issued. In that case, once that permit was issued a person would know that he could export those logs before he harvested them, but not before he acquired the sale. So I don't know how anyone could predetermine that they have exportable timber from a timber sale under the small business program.

The bulk of log exports in the province are a result of licensees applying for an export permit, having offered the timber on the local market and having received a less-than cost offer on the logs, or no offer whatsoever, in which case they would be determined to be surplus to the needs of British Columbia. Then the district manager and his staff review the situation and the application, and so does the regional manager and his staff, and then the Timber Export Advisory Committee reviews the application. When they've made their recommendations, we consider the OIC. It doesn't always come into being.

So it's a surplus system. Logs that are surplus to our needs in British Columbia are exported. For the most part, it's less than 3 percent. Last year we saw about 4 percent in a very high-cut year and in a high cycle in all of the industry, which did a great deal for the north coast; in particular, the constituency of Prince Rupert benefited to a great extent by that activity.

First and foremost, what any of us in this House would like to see is raw materials processed in this province as far as we can take them economically, and brought into the marketplace. That's certainly my feeling. I know it's the philosophy of this government; it's certainly the philosophy of our Premier At every opportunity I try to encourage provincial conversion of our assets.

Just to touch on the numbers asked for earlier by the second member for Dewdney (Mr. Jacobsen), we expect our volume to be just in excess of 12 million cubic metres. We hope to achieve that by the end of this fiscal year, which will be the first quarter of '89. We'll have that in place and ready to go. I expect all those licences will be in licensees' hands by the end of '89. We hope to see some $123 million emanate from that program. In the previous fiscal period, '87-88, the revenues were some $48 million.

[4:15]

MR. MILLER: Because we were talking about utilization, I want to just turn briefly — and I'll deal with it in more depth later — to the concept of planning through what will inevitably be another downturn. The minister talked about the cyclical nature of the industry, and there's no question that will happen. One of the things the government did during the last downturn, in order to save the jobs not only in Port Clements but also, I suppose, in other places, was practise sympathetic administration. The government said: "Look, times are tough. We've got to make allowances for that, and the way we're going to do it is let utilization standards be relaxed or lowered; let a certain amount of high-grading take place, and other practices that would normally not be allowed. " Earlier today we talked about — again, very briefly — the increase in the amount of timber that was cut. I don't think the annual allowable cut is set that high.

Are we not setting ourselves up so that we're simply going to have to repeat what happened starting in 1981 with sympathetic administration? What happens when the next downturn comes, when forest firms have been allowed to take advantage of price increases to drastically increase the cut? Are we not then putting ourselves back in that same situation? When the downturn comes and the timber's hard to get at, and we've capitalized or cashed in on the good times, the temptation will certainly be to allow those same kinds of breaks in order to do the same thing — to give into the pressure in terms of continuing employment.

HON. MR. PARKER: Mr. Chairman, when markets are strong and conditions are good, you take advantage of the situation and move ahead within the terms of your licence — which is what has taken place in the last year. If we look over a five-year period ending last year, we find that we've undercut across the province. You have to take into account that there was a substantial downturn in the first four years of that five-year period ending in 1987. Under those circumstances, activities were reduced, harvesting was reduced, and the allowable annual cut was basically left in the bank for better times. Better times are here, and you start to withdraw from the account. You take advantage of that because it benefits everybody in British Columbia. That's the purpose of resource management.

MR. MILLER: Again, I have to go back.... If we practise this management, why then do we have to get into sympathetic administration? If we'd been doing our job properly, then I assume we wouldn't have had to do that. Surely that's a comment on poor administration. If, when the cycle was down, we had to give all these breaks to the industry in order that they could keep running, then somehow we did something wrong previous to that, did we not? If we'd been running the thing properly — and I don't think it's quite like banking, but....

Again, I'm trying to tie the two issues together — the question of utilization, the question that came up about the Queen Charlotte Islands and other areas, such as the Nass Valley, where utilization levels have been low.... The amount of timber or usable fibre left in the bush has been high. We have gone in and logged some of the easiest ground to get at, some of the best timber. We are setting ourselves up; it seems to me, for another sympathetic administration in the next cyclical downturn of the industry.

What evidence can the minister show that there's been any retention of the capital? If the times are good and you take advantage of that, has it been retained by government so that they can smooth out the wrinkles? Has it been retained by industry so that they can ride through the rough times that may come along? Where has that capital been retained to smooth out the bumps over the next downturn? What evidence can the minister give that we are not going to be in exactly the same situation the next time as we were in 1981 ?

[ Page 4761 ]

HON. MR. PARKER: I guess I can't tell you how well off the world is going to be or how well off it is not going to be sometime in the future, but I can tell you that we will continue as a government to provide a climate that fosters a good, healthy forest industry regardless of the outside conditions, so that we maintain employment in this province and so that we're able to maintain the services that people in this province have come to enjoy and expect.

Different levels of utilization in different parts of the province, depending on the resource at the time of our recession — and that was a world-felt recession — were determined necessary to foster employment and business at a very difficult time. I'm certainly glad that we have had a government in place at that time that understands the business and understands the need for making sure that the forest industry continues in British Columbia and is flexible enough to adjust with the economic times to maintain a reasonable level of employment and to seize the opportunity, such as we've seen in the last year when markets are strong, to take advantage of those opportunities. As a result of that, we see substantial returns to the licensees and substantial reinvestment — some $2 billion — in our forest industry to help us become efficient and effective and better able to ride out the next downturn.

We are competing in world markets, in all different types of fibre, with people from all different parts of the world and all different political and economic regimes. We have to be world-competitive. Our industry is doing that. It's seizing the opportunity in strong markets to reinvest. It's doing that — it's a matter of record — and the employment caused by the reinvestment in our industry.... The technology that we gain from that reinvestment is also an item that we deal in in world markets.

I believe that we have dealt with the resource responsibly and fostered the proper climates in British Columbia for continuing forest industry and reinvestment in that industry.

MR. WILLIAMS: It's like watching somebody with a slow teleprompter, watching this minister.

He excuses that period when they violated the statutes of British Columbia, when the former minister, who's now a lobbyist for the mining industry, had a deputy who's now a lobbyist for the forest industry. Just think about that. In the United States of America, there would be grand juries looking at those birds right now. You bet there would. Throughout that period, this lobbyist deputy and his minister lobbyist went through this whole exercise of allowing these corporations to violate the terms of their agreements and contracts and to violate the statutes of British Columbia. I don't like the term "sympathetic administration"; it was simply outright law-breaking. This government and its predecessor lived happily with it.

You say this was all worthwhile because it provided employment. Well, my friend, it did not. These companies were not cutting. It was unemployment. I don't know where you got the history of the evolution of the tenures of this province. I don't know if they even teach it in that MacMillan university building over there in Point Grey.

The story is that we let go of this king's ransom of a land of ours, in terms of the licences, in order to maintain steady employment throughout the province. That was the primary trade-off that Chief Justice Sloan bought when he enunciated the tree-farm licence idea. But through that downturn period company after company after company violated that intent and the whole purpose of the trade-off of the public lands, and they violated the statute, and the lobbyist deputy said: "It doesn't matter. We'll doctor the books. We'll pretend that they actually cut more than they did through the five-year period. We'll simply write a nice number in the book."

If the administration had really been on their toes, they would have looked at the violation of contract and they would have said: "Okay, you've violated the contract. The woods are returned to the Crown." If you really wanted to stimulate industry in this province, then you would have taken up that cut that they did not use. the unemployment that they created violating the agreements, and you would have made it available to the smaller operators and others in this province on an open-bid basis. That's what an honest administration should have done.

I think that you had an opportunity, coming in after these two lobbyists were in power for yea, ten years. Imagine the lobbyists writing the statutes of British Columbia. That's what happened.

Interjection.

MR. WILLIAMS: That's right. In the United States, I'll tell you, those guys would be deep-sixed by now. But you stand up here and say it's all wonderful because it provides employment and so on, and you don't understand the classic trade-off that it all represents.

You say you've been to Scandinavia, and they're jealous about these big areas of land that we have. That's understandable. Our latitude, our opportunity, our natural forests — my God, we should be so much wealthier than they, given the circumstances. But that's too simple. You talk to bureaucrats and administrators, and I have a lot of time for the good ones. It's natural that everybody would like an easier solution. The Swedes and the Finns would probably like easier solutions in terms of the multiplicity of ownership and small-scale pieces of land. But at the same time, they get a caring attitude because of the smallness.

I wonder if anybody has ever thought about the simple question of big versus small. In some areas we have to have big. The pulp mills are very demanding. Technology is changing, though maybe there are even new opportunities there. But in terms of bigness, we should think about it. I think there's a problem with the kind of General Bullmoose attitude that this minister tends to represents all too often, that bigness is right and bigness is good and because these people are so powerful that's the only and the right way to go.

[4:30]

It isn't. Out of Scandinavia, with smallness at the tenure level, somehow they are able to achieve significant things. If you reflect on it, it's because they are like farmers, and farmers know the land they work. That's what they have in Scandinavia. We have these tens of thousands of acres and hectares allocated to corporations that have head offices in God knows where: Auckland, New Zealand, and Toronto, Ontario, and wherever. That's not farming; that's not farming at all. They are simply portfolio managers. The Reichmanns have this grand range of portfolios, and they need a forest sector as well as their urban property sector and manufacturing sector, and it all balances out for them with the business cycle. Very interesting. But what does that mean for British Columbia's central concerns? It means that we are on the margin in terms of decision-making. The Reichmanns don't care a great deal about how our farmland or forest land is going in British Columbia in an in-depth sense. They're simply balancing their portfolio.

[ Page 4762 ]

1 honestly don't think even a home-based outfit in downtown Vancouver can really do the job in terms of tens of thousands of acres of land. It just won't work. We don't get the productivity. You say we're ready to do more of these tenures, the tree-farm licences; that's part of your statement of last fall. The evidence is not encouraging in terms of our getting the most out of that. The Scands like the idea of being able to look at a river basin and think in terms of the river basin and whatever, but they at least get the productivity of a caring small farmer, which we don't get.

If I had to make the choice between the two.... This is a person on this side of the House saying: give me the small caring farmer. But you've farmed it out so that even the bureaucrats aren't involved in this caring exercise to any great extent anymore. We don't have those small ranger stations in the small places around the province. You've made them into more and more paper-shufflers that are monitoring what the industrial structure is doing on a modest scale.

I just think it's a terrible dead end in terms of our basic industry, because we're not opening up opportunities for the small people; we're not developing an entrepreneurial public service. We're just narrowing it again and again and again so that the opportunity for any public creativeness is more and more limited. The scenario is not encouraging at all. If you think in simple, fundamental terms about individuals and the land, productivity of the land and the creativity of individuals, we are setting up a system that is almost doomed to mediocrity or to failure. When we have what you say is competition on an international scale, we may very well need these big outfits when it comes to marketing and other things in some ways, but it doesn't mean we have to have the whole piece. It doesn't mean we have to have a highly integrated system throughout the piece.

The Finns, at an earlier stage, had a law in their country that required that these things not be integrated. They sought in the national interest not to have integration. That's changed, unfortunately, in recent years, but that was the case at an earlier stage. You don't get the biggies with huge land masses like the biggies have in British Columbia. You just don't get that in Finland, at least, so you get that productivity of individuals. It's ironic that we on this side of the House have to lay that on you on that side of the House who espouse individuality and the productivity of individuals. In the end you close the door to them again and again and again.

It's very frightening indeed to think of a future where more and more of our forest lands in British Columbia are these kinds of tenure, where there is a handful of players and it's virtually fee simple ownership in the tree-farm licence tenure system. That's very frightening.

The minister hasn't looked at the United States, where they don't do that. They don't buy this tree-farm licence nonsense. They tried one and it didn't work. It was in Shelton, Washington. One — no more. They have a public service in forestry in the United States that is significant and able to do the job with respect to the public lands. They haven't gone our route at all. I think it would behoove the minister to have a look at what they do down there, to see what the capability of their public service is and why they didn't buy this forest tree-farm licence game that you people have so actively pursued.

HON. MR. PARKER: In the conversations I've had with representatives of the United States Forest Service they have marveled at what we have accomplished, and they've expressed, as forest managers, the desire to emulate what we have accomplished in British Columbia. Also, the bulk of the timberlands in the United States is privately owned. There is not a large amount of public land under forest.

With regard to the matter of Finland — and it is the same with Sweden — there is a resistance by the national governments in both countries to transfer ownership of fee simple lands to corporate ownership. There is an espousal of the family unit by passing it on to the heirs of the landowner, and hence the continuous breaking down. Most of those landowners are urban dwellers, which is one of the frustrations that the officials of both governments expressed to us — my deputy and me — on our trip. The bulk of the management on those small holdings is done by extension foresters from the major industries in both countries. The industries in both countries are substantially forward- integrated, from the stump right through, in some cases, to the printing firms that actually take the papers and print for the customers. They have gone extra steps. One of the advantages, of course, is standing in southern Sweden or Finland on the coast and seeing the smudge across the salt chuck. That's their market, and we are halfway around the world away from that market and are able to compete in that market because we have good products and efficient industry.

The member for Vancouver East says that the previous government, in their sympathetic administration, violated statutes. If he had done his homework, he would know that he was really talking about policy and regulation that arise out of statute and are developed from time to time to meet the circumstances of the day, to make sure that the resources and the business and the welfare of British Columbia are well looked after. That's precisely what took place in the recession years 1981 through 1985. The sympathetic administration offered by the government of the day was offered not only to major multinationals — which apparently is a dirty word in this member's vocabulary — but also to individual operators. That sympathetic administration went across the entire spectrum of the industry and helped keep it alive. Yes, there were layoffs; there certainly were. It was an extremely difficult period. But that was economically generated.

We saw an extremely difficult period in 1972 to 1975 in the forest industry that was generated by the member opposite, and it was sickening. Having worked out there in those years myself, I had firsthand knowledge of what his policies and actions were doing to the forest industry of British Columbia. Fortunately, the people of British Columbia recognized that and changed it at Christmas '75.

MR. KEMPF: It's interesting to hear the minister speak glowingly about automation and about the fact that through sympathetic administration we were able to allow the multinationals to limp through a poor period to where now they can make multimillions of dollars and reinvest that in British Columbia. I've got to tell the minister — and again he would learn these things for himself would he get out there and talk to the real people in the forest industry — that there are millions of dollars being spent on upgrading and automating plants, but don't for one minute believe that that's adding to employment in British Columbia. Literally hundreds of my constituents are jobless because of that kind of automation and upgrading, because every time dollars have been spent on upgrading new or existing plants in British Columbia, woodworkers have been put out of work. That's a fact, Mr.

[ Page 4763 ]

Minister. It happened just recently in one of my communities, Fort St. James, where a great number of people were put out of work just because of this investment. I don't think you, as the minister responsible for this resource, should speak so glowingly about it.

I can't see how anyone can figure that just because industry has gone through a rough time it follows that they should be allowed to make multimillions of dollars in the aftermath of that downturn. Does it not follow that the taxpayer of British Columbia should...? They had some pretty tough downtimes during the same period and through sympathetic administration they gave it to the giants of the industry. Do you not think it follows now that that same industry owes the taxpayer of British Columbia more because they're making more of a profit? Does it not follow that if you have it one way you should, in fact, have it the other? I believe so.

I saw all of the media coverage of the profits made by the industry in this past two years — literally multimillions of dollars. I saw the puppets of the Reichmanns and the Adam Zimmermans of this world speak very highly of that. Now the picture has changed; now they're making 50 percent and 100 percent more profit than they were a few years ago. Does it not follow that the taxpayer of British Columbia is owed some of that profit? I think so.

[4:45]

1 want to get back to TFLs and talk about a particular subject at this time. We'll probably talk a lot about TFLs in these estimates. The minister said that at least in TFLs the province retains the ownership of the land. That's true. Eventually that land will come back to the people of British Columbia. The companies only have the right to cut the timber. Are we going to face the same situation? I have to ask the minister why. Are we going to face the same situation 25 years down the road when that land from those TFLs is given back to the people of British Columbia? Are we going to face the same desert-like situation that we have in the NSR lands that were forgiven last fall in the new forest policy? We forgave all of the ills of the past in one fell swoop. We wiped out that land as a problem for the forest companies in restocking. We brought that land back to the people of British Columbia, who now have to pay for reforestation. Is that what we're going to do with these TFLs as well? Why did we do that, Mr. Minister? Why did we wipe the slate clean, accepting that responsibility on behalf of the taxpayer, not the forest company? We wiped the slate clean last fall, saying: "Fine. From now on, you have to do all of the reforestation, but anything that was done in the past doesn't matter. The taxpayer of British Columbia is going to pick up the tab."

Why did we do that, and what is there to say? You say: "I may not be here 20 years from now, so I can't help what happens." What is there to say that that same thing won't happen with these TFLs?

HON. MR. PARKER: The member for Omineca shows an appalling lack of understanding of the policies for which he was responsible at one time. The obligations of the Crown prior to October 1, by statute and contract, require the Crown to renew the forests of the province. We meet that obligation with the policy we have in place, prior to October 1. From October 1 on, the licensees are responsible for forest renewal on their tenures. As far as the future is concerned. the foresters, forest technicians and those involved in forest renewal in the province, including licensees and multinationals as well as everybody in between, have a responsibility to forest renewal. They take that seriously and are working at it in that vein.

There will be timber crops ahead for successive generations of British Columbians, and they'll be, at this time, renewed on the parameters of what we know today of the species, industry, needs and availability of growing sites.

As to what sort of policies come down the pike, who knows? It depends on the incumbent government. I can't speak for that. All we can do as stewards of forest land is ensure that it is regenerated and renewed to the best of the ability of the experts and technicians in place today. I don't think we could ask for much more than that. It's responsible action, which is what we see in the industry and the ministry today.

The whole context of forest management is one that looks out on an 80- and 100-year horizon. As far as NSR lands go, which was touched on by the member for Omineca, we have in the province what amounts to about three years' total cut. We cut about 220,000 hectares in the province annually. We have between 600,000 and 700,000 hectares of NSR, which, with the policies in place today, will mean that they're totally eliminated within the next 12 years.

MR. MILLER: I want to go back to an area that I was pursuing earlier: the question of how we avoid having to repeat the sympathetic administration, having to give a break to companies. Because when the cyclical downturn comes in the industry — which it inevitably will — we don't have a crystal ball. We can't foresee the future, but we can learn from the past. The minister has been in the industry long enough to understand that those downturns have occurred.

In the mid-seventies, for example, '75-76, there was a downturn. What are we doing now to meet, for example, the question of the logging plans? It seems evident that in many areas, timber is becoming more and more inaccessible or harder to access in terms of distance from existing mills and quality of timber. One thing that came out in the Thomson report was the addition of timber described as "marginally economic." It's not a static thing. I don't subscribe to the notion that there's a fixed and never-changing level of cut; it must change.

Certainly changes in logging and production methods have all contributed to allowing us to take an increasing level of cut, but we are running into some fundamental problems in access, in marginally economic timber and in timber that may exist on slopes difficult to access or environmentally difficult to get to. All those areas are the first to be set aside during a downturn, because the argument comes along that we simply can't afford it. Those are high-cost logging areas and we can't afford to go into them.

What are we doing now in these good times? Is there a conscious policy, for example, saying that now is the time to try to access those difficult and high-cost areas, leaving high quality areas aside to return to at some later date, perhaps when the economy does turn down or the market for the various products that we manufacture in British Columbia does turn down? What are we doing in terms of some conscious strategy to avoid having to go through that same thing we did starting in 1981 and continuing, by the minister's own admission, far too long? If that's planning — the minister says he believes in planning — then it seems to me that's a pretty fundamental kind of planning.

I've already talked about some academic people and some people in industry who firmly believe that we are

[ Page 4764 ]

cutting too much, and we are trying to deplete that very valuable old-growth forest at too rapid a rate. Presumably, that could be slowed through better utilization — what I talked about. It could be slowed through adding value on the other end of the process; presumably a paper machine adds a significant amount of value, instead of just producing pulp. There is a variety of ways that things can be shifted. But if we just continue with the same policies that existed pre-1981, then we're going to run into the same problem again.

Again, I ask the minister what conscious policies have been developed within his ministry to deal with the issues that I've raised and to head off falling into that same trap that we were in in 1981.

HON. MR. PARKER: In the development of management and working plans, prior to public viewing of those plans, there are several years of discussion between the licensee and the licenser on what's going into the management and working plan. Part of that planning process includes the harvesting sequence. The harvesting sequence takes into account the fact that you have to have blocks and areas set aside for an inevitable downturn in the market.

That sort of discussion takes place between the Forest Service and the licensee on an ongoing basis. I've participated in those discussions throughout the province as a representative of the industry and talking with my counterparts in the Forest Service. That's exactly the way that it processes. So when the inevitable downturn occurs, the licensee and the Forest Service discuss whether there should be any changes to that management and working plan in the changing of the cutting sequence — maybe getting into a more economical operating area for the circumstances of the day. That's the way the process works throughout the province; I have firsthand experience with that. I don't have any difficulty explaining that to the House.

The whole purpose of the exercise, both as a licensee and as a Forest Service, is to be sure that you have enough wood ahead to be able to withstand a downturn. A management and working plan really reflects that, to a large extent.

MR. JACOBSEN: Mr. Chairman, I would like to comment on a couple of things that were said, because I think it leaves a false impression with the public of British Columbia, if they pay much attention to the things said here. I'm not sure that they do. If they do, then there's a bit of a false impression.

First of all, I hear critical remarks about our reforestation program. As someone who has been pretty close to the industry, I don't think those comments are justified at all. British Columbia is doing a very creditable job at this point in time on reforestation, and they have been for a number of years. I've been in the industry for about 30 years, and I can tell the people in this House that there is not one acre of land that I have logged — and I've logged quite a few of them — in the past 30 years that has not been properly and well restocked. I've gone back to some of those early areas and had a look at them, and the truth is that they're growing, and they're in much better stock now than they were when I came there to log them. Some of them are just absolutely beautiful areas of regeneration provided through a policy of reforestation that the government has maintained over the years. I'm not responsible. I don't take the credit for the restocking, because that wasn't my job; I was a contract logger. But the areas are restocked, and they're restocked very well.

Another misconception is the suggestion that during tough times, the companies were free to do anything they wanted within the forest management; they could go and harvest any trees that they wished — just pick and choose because it was tough times. That certainly is not what happened. I was there; I was involved. If anything, I think the Forest Service was a little too tough during that time with the market conditions as they were. I spent a lot of that time in some very tough areas logging timber that was of very marginal value, but we had to do it because that was the policy of the Forest Service and we had to honour it and live up to it.

I think the management of the forest is a lot better than it's given credit for in this Legislature.

MR. MILLER: I'm surprised the minister didn't want to get up and take credit for it.

We're currently past the middle of a federal-provincial forestry agreement. We're spending $300 million of the taxpayers' money to reforest and to do other silvicultural work that should have been done. That's hardly testimony to an adequate job. The minister a few moments ago talked about the 600,000 to 700,000 hectares of not sufficiently restocked land in this province. That is hardly testimony to a good job done in that area.

MR. JACOBSEN: It's no different across the border.

MR. MILLER: The fact that it's no different than across the border or anywhere else is hardly justification for doing it. It's clear. You must have been getting the letters that I've been getting and that other people in this assembly have been getting from people who are demanding and pushing that there be a second FRDA agreement. We assume that efforts are going to be made to establish FRDA 2. I think I'm correct in stating that the minister has talked about $600 million or $700 million of taxpayers' money. If you want to add it up, it's $900 million of the taxpayers' money to replenish forest lands, which should have been done at the time.

Well, we've changed the system. We had a system where the Crown did it — or the companies did it and the Crown compensated. I don't care what system; I want a system that works. Spending whatever FRDA 2 comes out at, spending that kind of tax dollar, is hardly testimony to the efficiency or the good business of reforestation or taking care of those lands as it's been practised in this province.

Given all the money that the taxpayers spend on Crown lands that have been given to companies for the opportunity to make a profit on, it's surprising that the companies are putting such a high value on that land now. We might hear more about that when we finally get some details on what's happening on South Moresby.

[5:00]

I want to get back into some of the privatization areas. I appreciate that a bill introduced in the House today deals in some measure with the small business program, and I don't want to usurp any discussions that might take place in second reading or committee on that bill. But can the minister advise whether or not any decisions have been reached with regard to privatization of management functions? We did have some earlier discussion about that, and if the minister is saying that no decision has been reached, then perhaps he could advise the House.

HON. MR. PARKER: Yes, Mr. Chairman. No decision has been reached.

MR. MILLER: I have what's termed a discussion paper on general contracting in the small business enterprise pro-

[ Page 4765 ]

gram, issued by the ministry. It lays out some formats. Just running through them, the main consideration of the paper deals with the question of contracting or privatizing the management function. I quote from the document, page 1 , where it says:

"Presently, forestry services are offered through public tenders for cruising, engineering and silvicultural contracts, with the Forest Service retaining responsibility for administering these contracts and auditing performance. This discussion paper will present a concept whereby the small business enterprise program forestry services will be tendered as a general contract, whereby the individual cruising, engineering and silvicultural operations will be conducted and/or supervised by a general contractor accountable to the Ministry of Forests and Lands."

It then goes on to talk about some of the options inherent in this kind of operation, where the general contractor would assume responsibility for all forest management services, from providing a five-year development plan to establishment of a free-to-grow tree crop. It talks about options available under this full-phase general contract. At least one of the options under consideration is to contract the full phase of operations normally done by this ministry.

It does take some time on page 6 to list some disadvantages of this way of doing business. In fact, they outweigh the advantages listed in the same paper, so we'll have to see what happens.

"Contractors of size sufficient to assume necessary responsibilities may not be available in all districts, thereby resulting in a non-competitive marketplace.

"3. The present limit of one year placed on service contracts will detract from operational continuity over the duration of a five-year plan.

"4. " — strangely enough, an issue I tried to push earlier with the minister and it seemed to be rejected — "The offering of general contracts will remove the 'hands-on' field and administrative experience that ministry staff are presently encountering. A potential training-ground for district field staff and administrators will be removed."

Of course, on the advantages side we have got the old saw: "Present district staff levels can either be reduced or held constant...."

Would the minister confirm that this document, which has as an option the complete contracting...? I'll quote again, under point I under a full-phase general contract: "The general contractor would assume responsibility for all forest management services." Can the minister confirm that this document is under consideration by his ministry?

HON. MR. PARKER: I don't have a copy of that discussion paper. It would be interesting to see it. Therefore I can tell you that I do not have that discussion paper under active consideration. It is not the policy of this ministry. I look forward to seeing a copy of it one day.

MR. MILLER: I find it surprising, Mr. Minister, and I must take you at your word that you have no knowledge of it. No, you didn't say that; you said you hadn't seen a copy of this document. I do find it somewhat surprising, given the changes that are contemplated and that have been introduced today in legislation, given the comments that I clearly heard you say on your favourite radio station, CBC, as I was driving from my apartment to the buildings. I can't recall the exact date, but I suppose that could be checked as well. I clearly heard you say, in response to a very non-confrontational, non-combative question by the CBC reporter on the morning show, that you were planning to contract out all of the additional work that would result from increasing the small business program. When I hear you say that, and then I hear that you have no knowledge at all of a major document, with the Ministry of Forests and Lands cover on it, to all district managers, dated March 10, 1988, from Mr. Irwin, the small business coordinator, I have some difficulty.

[Mr. Rabbitt in the chair.]

Have you had no discussions at all, Mr. Minister? Have you not had discussions on the options that may be available? Is this just something that somebody dreamed up and sent around on his own? Have there been no discussions at the ministerial level of the options that may be available? You haven't talked about using, for example, general contractors to provide all forest management services?

MR. KEMPF: What do you really know about your ministry?

HON. MR. PARKER: More than the member for Omineca ever knew, I can tell you that. Fortunately, Mr. Chairman, I seem to have a much better grasp of the situation.

I have not seen the discussion paper the member for Prince Rupert has raised today. We have not discussed it — when I say we, I mean me and my executive. Discussion papers certainly go out from various departmental head offices of the ministry to the districts and to the regions for discussion. They are not routed through my office. The business of the ministry must go on day by day without routing everything through the minister's office. It's an ongoing, dynamic ministry, and we don't restrict our managers from having ideas and concepts and suggestions.

That's an interesting discussion paper that the member brings forward today. It's certainly one I'd like to discuss with my executive, and he can rest assured that we will be discussing it. The concept of a consultative service to the small business enterprise program has been put forth by several of the more noted forest consultants in the province, but we have received these letters from these various interested parties and have just sort of taken them on advisement. As of yet, I have not dealt with that discussion paper with my executive.

MR. MILLER: I wonder, Mr. Minister: were you, when you were responding to that CBC reporter, just speaking off the top of your head? You are saying that there has been no discussion; you have not been party to any discussion that would involve contracting out the entire forest management on the small business side: you have not discussed that at all; that has not been an option that has gone through your mind in terms of consideration. Is that not an option that is now being considered by the ministry?

HON. MR. PARKER: As we are moving into the legislation that will permit us to expand the small business enterprise program, we will be looking at a discussion paper with the public — which includes small business operators, other people in the forest industry and the general public — on proposed policy and regulations to deal with the expanded

[ Page 4766 ]

small business program. The items raised in that paper have not been the subject of a discussion between me and my executive. There could very well have been discussion among staff that I don't know about, but I have not had those discussions.

MR. MILLER: The minister is not in a position, then, to advise the House.... Maybe that's putting it in a negative vein. Is the minister in a position to advise the House whether he personally accepts the concept of a full-phased general contract and the contracting of all ministry functions, in this case on the small business side?

HON. MR. PARKER: Until I have had an opportunity to discuss the matter fully with my executive, I won't be making any comment.

MR. MILLER: If the minister hasn't discussed it.... He talked about making a document public, and this is a pretty public forum, so maybe the minister could give us an idea about how that would work, and whether he thinks it's a good idea to have a situation where you contract all the ministry functions.

HON. MR. PARKER: Something I learned about 24 hours after being appointed minister was that I reserve my opinions until I have heard all the input that is to be offered by those who are interested in the issue at hand.

MR. MILLER: You must have had a momentary lapse when you were doing that CBC interview, because during that interview you said that you thought it would be appropriate to privatize all of the management functions of the small business enterprise program, a fact you are not prepared to stand up and restate in this House today.

HON. MR. PARKER: The member from Prince Rupert probably has a selective memory. Most of us do. I'd like to hear the clip from that particular conversation. Most likely what he heard was that any incremental volumes would probably be dealt with through a contractual arrangement, because we were talking, as I recall — and I vaguely recall talking with the CBC reporter on this issue — about the expansion of the small business program.

MR. MILLER: Then the minister is prepared to extend that kind of contracting to the increase — basically the kind of questions I was exploring earlier with him — the move from the 7 percent to the 15 percent. The minister seems to be indicating that the 8 percent, at least, would be handled through contractors, including the option, which the minister has not discounted, of full phase, in terms of contracting out the complete operations of the ministry.

[5:15]

HON. MR. PARKER: I think the question that the reporter was pursuing was whether or not we would be enlarging the Forest Service. It is not our intention to enlarge the Forest Service. Where we need assistance in increased workload from time to time, we'll hire forestry consultants or temporary help — whatever the need may be. But it's not our intention to carry a substantial overhead to the detriment of the people of British Columbia.

MR. MILLER: If you follow the Thomson report, of course, they suggested that if the ministry had more and better trained staff, there would have been a capture of much greater rents to the people of British Columbia — not to the detriment of the people of British Columbia but to their benefit. It's a short-sighted view that simply suggests that less is better. Really, you have to look at it in terms of being able to....

Interjection.

MR. MILLER: I didn't say that it was. In any event, we will pursue that, I presume. Maybe the minister will have made up his mind by the time we get into Bill 28, because that's going to be put into operation. The minister has advised that by the end of '89 we will be up to the 15 percent.

I want to turn now to the question of the subsidiary agreements that are being proposed. I'm not certain; maybe the minister can advise what stage of implementation that is at at the present time. As I understand it, both from an article in Forest Planning Canada and from a copy of a letter that I received addressed to the forest licensees, there is going to be a change in the way that the information is gathered in terms of approval of licences.

I will read the letter into Hansard before we get into discussions about it. The letter is dated December 9, 1987, addressed to forest licensees, and it's signed by W.C. Cheston, assistant deputy minister. It reads as follows:

"We would like to inform you that the revised replacement forest licence document will be finalized shortly and that it will be forwarded to you by the regional manager. The forest licence document was revised to reflect input received from industry associations and licensees. The revisions also reflect the ministry's new forest policy.

"While we do not intend to discuss all the revisions to the forest licence document at this time, we would like to advise you that the intent of the letter of understanding (subsidiary agreement) is to be included in the revised forest licence document.

"Essentially this means that the licensee will be responsible for obtaining input from other resource agencies and licensed resource users for five-year development plans prior to submitting them to the ministry for approval. Issues which cannot be resolved between a licensee and a resource agency will be referred to the Ministry of Forests and Lands.

"In addition, the licensee will be responsible and accountable to perform all operations under the licence to the standards approved by the licenser, and to comply with all operating constraints negotiated with and agreed to by licensee with other resource agencies and licensed resource users. 

The licenser will audit the licensee's performance."

The change is fundamental in that the proponent of a particular plan will now be the lead agency, if you like, in terms of getting the input from the other resource agencies that may have things to say about the plan — whether that be environment or parks or whatever — as opposed to the Ministry of Forests being the lead agency in terms of gathering that kind of information. I think it's fundamental, and I don't think it's the way to go. You can cite examples from other jurisdictions, where proponents should be at some arm's length from going to the other agencies for input.

The question of the pub licence came up, for example, in terms of the pub in Vancouver, where the proponent has to go

[ Page 4767 ]

and conduct the referendum. My experience is that the municipal council is the lead agency in terms of carrying a proposal to the public involvement stage. Clearly, it has been the case in British Columbia for many years that the Ministry of Forests has had that role with respect to renewals or management working plans of major licences. I think that the former situation should continue to apply. I'd like to start by asking why there has been this kind of shift, where the proponent of the plan is now the lead agency.

HON. MR. PARKER: The proponent of any plan is the lead agency under the replacement forest licences, because all those agencies have legislation with which that proponent has to deal and to which he is responsible. It's appropriate that he have face-to-face discussion with each agency to make sure he clearly understands what's expected of him under the particular management plan that's being offered. It is most appropriate that the person that's responsible and accountable speak to the agency that has the legislation under which he has to work.

MR. MILLER: I don't think that anything under the previous system disallowed that kind of face-to-face discussion. You could correct me if I'm wrong. I don't think that there was anything that disallowed that kind of interaction between the proponent and a particular agency, whether it be of government at any level. Certainly that was in place.

There's some sensitivity about management and working plans, and I think that's going to increase. The minister in responding to the Thomson report has talked about the need to have a more public system. I identified problems with the approval system for the TFL on the Queen Charlotte Islands, where people — the public, represented by various groups — had a great deal of difficulty in attaining information in order that they could make submissions to the plan. We'll perhaps talk a little more about that.

Does the minister not see any potential for the subtle kinds of, shall I say, manipulation that could take place with having the proponent be the lead agency? After all, they will be dealing separately with each agency and could conceivably compartmentalize each agency, whereas 1 would think, operating under the system where the ministry was the lead, that that wouldn't be the place and that the input from those various other agencies would be going to the ministry and a ministry of government would have the complete picture.

This way we're transferring that complete picture, if you like, over to the licensee, who would then be able, as I said to do the kind of subtle manipulation that could take place with respect to any particular objection coming from any particular source. Does the minister not see a problem in that?

HON. MR. PARKER: No, I don't see any problem. It's quite appropriate for the proponent to carry the concerns and the management plan to the various agencies and discuss them with them. The whole process comes under the Forest Service, and the information is carried to them in the final draft of the plan. I'd be very surprised if there were any correspondence that was not copied to the Forest Service. It's normal protocol to do that within government and between governments. I don't know of any instance at this point where that's not been the case.

I don't see any problem with the process at all. I think it's very efficient and effective, and a responsible way to deal with the mandate that we passed to the forest industry — a responsible forest management — for the licences for which they're responsible.

MR. MILLER: Well, the public, through the people they elect, have to exercise some responsibility as well. This is just a further move in privatization, the shedding of responsibility by government and putting that over to private contractors, to consultants or to the licensees themselves. I think licensees should be responsible; clearly it's our job, and your job as minister, to make sure that they are. You are giving them more responsibility, but without the ability of your own ministry to be in a stand-off position so that you know what's going on. You say to the licensee: "Oh, we know you're responsible. Here, we used to do this on behalf of the public of British Columbia" — presumably to protect the public interest. The licensee's interest is to cut timber; that's their interest. "We used to do this job on behalf of the people of British Columbia; we're now giving it to you. We're now giving you this job that we used to do on behalf of the people of this province."

Interjection.

MR. MILLER: Maybe the second member for Kamloops (Mr. S.D. Smith) might want to enter the debate. I couldn't quite hear what he was saying. I am sure he has a lot of valuable information to add to the debate.

Clearly the thrust, both in terms of this issue and in terms of the issue that I canvassed before — which we really didn't get an answer on but we have a document circulated by the Ministry — is more and more to distribute or shed the management functions of the ministry in favour of either the licensee or consultant. Obviously the minister doesn't have any concerns about it or he wouldn't be doing it, but the people of British Columbia have some concerns about it.

With respect to the subsidiary agreements, could the minister advise what is their current state? Are they now in place throughout B.C. with respect to these licences?

HON. MR. PARKER: We're in the process of rolling into the new forest licences. There are no further subsidiary agreements. I think there are only two established in the province prior to us moving into this new forest policy, and it's entirely appropriate to have licensees of the province face up to the individuals that they have to account to for their management practices, and for the representatives of the agencies which have the legislative responsibility for various facets, such as fish and wildlife, fisheries and oceans, water resources, highways, etc., to come face to face with those to whom they are responsible.

If anything goes awry in an operating area, it's the licensee who's responsible, not the Forest Service. It's the licensee who is responsible for what they've done, and it's appropriate that the licensee meet with the agencies to whom he is accountable. The movement towards a greater degree of forest management by the licensees and a greater degree of responsibility in forest renewal means that the licensees are responsible for good forest management practices, which we in the ministry and in the Forest Service oversee to ensure is taking place.

[5:30]

The licensee's job is not, as the member for Prince Rupert states, purely a logging function. It goes much further than that. It's a forest management function, and it's a responsibility to the people of British Columbia for ensuring the

[ Page 4768 ]

forests are renewed, that harvesting is done responsibly, that the utilization standards are met and that the wood is converted effectively and efficiently and in the best interests of British Columbia.

MR. MILLER: Perhaps the minister could advise who imposed those responsibilities on the licensees?

HON. MR. PARKER: The contractual obligations set forth in the forest licences, tree-farm licences, timber-sale licences and other documents that provide for occupation and or use of the forest resource all set forth the responsibilities. Our ministry is responsible for administering that.

MR. MILLER: Those responsibilities were imposed by the Crown because they were deemed to be socially or environmentally or otherwise desirable. Just as they were imposed by the Crown, it seems to me the Crown has an obligation to make sure those conditions that we deem desirable are in fact fulfilled.

When I turn back to the renewal of the management and working plan for TFL 39, block 6, there was some difficulty for the public. I was wondering if the minister could advise what the licensee's responsibility will be under this subsidiary agreement to both notify the public and receive public input with regard to plans?

HON. MR. PARKER: The member for Prince Rupert is referring to the public viewing of management and working plans — I think it was number 6, TFL 39. That's what that process is: a public viewing.

Public hearings are held when there's a rollover to a tree farm licence or a renewal of a tree-farm licence; otherwise, it's public viewing. The material was on public view, and everybody had an opportunity to vet it and to comment. It was not a public hearing process, and I think the member for Prince Rupert missed the whole point. There are no changes to that policy at this time that I'm aware of; nor have I heard of any proposal that it will be changed. There is a public viewing process for management and working plans. There is a public hearing process for rollover to a tree-farm licence or renewal of a tree-farm licence.

[Mr. Pelton in the chair.]

MR. JACOBSEN: I want to comment briefly on the comments of the minister about placing more responsibility on the licensees, allowing them to have the responsibility and seeing that the role that they're required to carry in the industry is looked after. I was thinking about that this morning when we were talking about the number of people required for the Forest Service, what these people would do and so on. It's been an apparent problem for a long time.

There's been a great duplication, in my view, of the role of the Forest Service and the professional, registered foresters within the industry. It's strange to me that in most industries we have professional people who, by their authorization, by signing on the line and certifying that this or that criterion has been met.... We accept that and we base the operations on that premise.

But in forestry, it seems like it has been different. We've duplicated the forest people coming out and having to go over the work done by the professional foresters, down to the point where even for a falling line inside an approved cutting area, the Forest Service had to send people out to verify that, yes, it was in an acceptable location and was what we wanted. They had to approve it before any work could start, often at long delays and, of course, at extra cost.

Why couldn't it have been long ago — I'm pleased to see the minister moving in that direction — where the forester, a professional person after all, simply carries out his work and signs and certifies that the work has been done according to the forest policy of the province of British Columbia? Then the Forest Service can come back periodically and check the work, and the person's licence to operate as a professional is at risk if he has not carried out his responsibility properly. That's the way it should have been done with utilization and recovery to make sure that it was done. It shouldn't have been left to the Forest Service to go back and find out if somebody had violated the utilization standards. The forester or the company should certify that it had been done to a certain standard. If that had happened, the problem would have been lessened a great deal.

MR. JONES: Just trust me.

MR. JACOBSEN: Yes, it works, too. It works in almost everything; it works in scaling.

AN HON. MEMBER: It works for teachers.

MR. JACOBSEN: As my friend says, it works in teaching. It works in a lot of things; it works in everything. He's a professional before he's anything else. Our whole society is based on trust and professionalism, and we have to begin to exercise and respect that in the forest industry. I'm glad to see the minister heading in that direction.

HON. MR. PARKER: The pre-harvest prescription is precisely as the second member for Dewdney was mentioning — that is, a responsibility signed off by a professional for the management plan for a specific licence. But that preharvest plan is one that requires the licensee to endorse as well. The forest management activity is the responsibility of the professional forester who signed off the plan. But the important thing in this is that the licensee has bellied up to the bar too. We've encountered situations in the province where professionals who are employed by licensees have made their recommendations but have been overruled by the licensee — to the detriment of good forest management. With the preharvest plan we think we've overcome that situation. Now we'll see the sort of thing the second member for Dewdney outlined to us. The professionalism will be recognized and responsibility for careful and astute forest management will be under the purview of the professional forester who is accountable to the public through a statute of this House, the Foresters Act.

MR. KEMPF: I certainly hope that when the minister is doing that, he also brings in some legislation that will protect those professional foresters against their employers. I would suggest that a number of things, that are done by professional foresters in this province are done in order that they might retain their employment with that particular employer. That's happened many times in the past.

I want to talk for a little while about value-added products. In the past it's been very difficult for those wanting to get into certain areas of value-added products to obtain the raw materials.

In my constituency a very interesting proposal is being made for a value-added product that requires the material that

[ Page 4769 ]

is left behind after a licensee has logged and is finished with an area. That material would be used to make something along the lines of a fuel. These people have done a very good job — I've seen their proposal and read it over a couple of times — of marketing. The financing they require for their operation can be obtained if they can show that they have the raw material. My question to the minister is: is he prepared to assure these people that they will be allowed to utilize the residue left by licensees in their area to produce the product that they wish to produce?

HON. MR. PARKER: I would be most interested in receiving those types of proposals and prepared to work with the proponents to make it possible for them to get the raw material they need. We'd deal with each of those proposals on its merit.

MR. KEMPF: I'm surprised that the minister isn't in possession of a copy of this proposal. Certainly it has been made to his ministry and to other ministries in that administration on a number of occasions in the past 60 days. For him not to have seen that proposal is rather puzzling to me.

Is the minister saying that if a proposal comes to his desk that requires only the residue from a licensee's logged area, he will direct that licensee to allow those people onto the tenure to obtain the residue?

HON. MR. PARKER: When it comes to salvaging residue on active licences, the proponents of the salvage have to be determined to be responsible individuals, capable of carrying out what they say they're going to carry out; in some cases bondable, but not always; certainly able to carry the liability insurance necessary in the case of property damage or wildfire — forest fire that would be started by the operations — and also whether or not they're prepared to pay a road-use fee.

There are a number of considerations that come into play. I've dealt with this sort of situation in industry. I've come face to face with it, and had to work with it, work out the agreements and the operating arrangements, and make it happen. I've done that in several parts of the province, but it's not as simple as the member for Omineca (Mr. Kempf) would have everybody think. I said earlier that we will take each proposal on its own merit and deal with it accordingly. We're quite open to the prospect of picking up residue. That's a great idea, as long as it's doable and can be done in a responsible manner, to the jeopardy of nobody.

MR. KEMPF: Mr. Chairman, given the fact that the minister has virtually eliminated the obligation that the licensees once had for fires starting on their tenure, would he not advance that same situation to this or any other firm wishing to enter an area that had in fact been, in the eyes of the licensee, completed as far as harvesting is concerned, in order that they might obtain the material necessary to make a value-added product?

HON. MR. PARKER: We haven't extinguished anybody's responsibility for fires that start on their tenures, be it private or otherwise. They're responsible for the extinguishment of such fires; and once we've determined the cause, we determine who pays.

MR. KEMPF: Mr. Chairman, it seems we're getting nowhere on this one, and certainly we'll hear a lot more about it in the near future. However, there's another question — and the time is getting late — that I wish to ask the minister. We talked earlier about the FRDA agreement, and we're halfway through FRDA 1. It is hoped by many — and I'm among them — that a FRDA 11 agreement can be reached.

[5:45]

Can the minister tell this House today: in the last two-plus years of FRDA, how many dollars of that program have been spent on TFLs?

HON. MR. PARKER: At this point in our discussion, Mr. Chairman, I can't tell you specifically what was spent on tree-farm licences. I would be happy to determine that and return to the House with that information.

MR. KEMPF: Is the minister suggesting to this House that money from FRDA has been spent on TFLs?

HON. MR. PARKER: I'll find out what the situation is and advise the House in due course.

MR. KEMPF: Could the minister also tell this House whether I am correct in my understanding that no FRDA money was to be spent on TFLs?

HON. MR. PARKER: I would have to check the FRDA agreement to find out whether or not that was the case. I couldn't say at this point. It would be better to give the member good information.

MR. KEMPF: Is the minister telling me that he has been in that ministry for over a year administering one of the most expensive reforestation agreements in the history of this province, and he doesn't know He can't tell this House — and can he get it from his staff that he has here today? — whether we got that money in British Columbia with the understanding that no moneys would be spent from that agreement on TFLs.

MR. MILLER: In the short time we have remaining today, I want to deal with a couple of other aspects in terms of privatization. It's clear, as I have pointed out through ministry documents, that there is going to be an increased emphasis on privatization and on work being done by consultants, work that would nominally be done by this ministry. That has presented a unique set of problems in that there are only so many contractors. One of the questions that came up.... I want put it to the minister in light of the "Contract Admin. Hotline" notification that I have, issued by his ministry — file 570, dated February 29, 1988. It lays down specific instructions for employees of the ministry with regard to contractors — some of the sticky problems that come up about contractors. As I think I predicted, you're going to have a bunch of people who are paper-pushers in the ministry — maybe every ministry — who will certainly know all the ins and outs of how to write contracts and how to deal with contractors, but might not eventually know too much about the operation of their own ministry.

In regard to conflict-of-interest questions, one of the directives outlined in the document is point 7, entitled: "Conflict of Interest and Employer-Employee Relationship." The question is structured as an example of a typical scenario and what the ministry employee's obligation is in terms of handling that. The question is written this way:

"Question (A). Person A is an employee of a silviculture contractor B.... May the ministry

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award a contract to person A to administrate-inspect silvicultural contractor B's" — this may sound convoluted, but I'm reading it right off your documents — "contract work or any other silvicultural contractor's work? Question (B). A forest district resource officer performing duties of silviculture contract administration or inspection work, etc. May this Ministry employee enter into a silviculture work contract?"

The answer to both those questions, as posed by the document, is: "No."

I go back and again refer to the T.M. Thomson and Associates report on the situation on the Queen Charlotte Islands, and it would appear to me that under the guidelines as laid out by your own ministry, given the nature of the relationship between Thomson and MacMillan Bloedel, the ministry would not be in a position to hire Thomson or any other firm. I'm clearly not singling out Thomson or being in any way derogatory towards T.M. Thomson, but according to the guidelines that the ministry itself has laid out, that option would be removed. We simply wouldn't have it.

I will get the minister's response to that and whether or not he agrees with that interpretation of his bulletin.

HON. MR. PARKER: Not having the benefit of the document that the member opposite is speaking to, I find it very difficult to comprehend what he is trying to arrive at. Is he asking me whether, in the case of a contractor who is doing work for the ministry, we can take an employee of that contractor and, while he still remains an employee of that contractor, give him responsibility for administering the contract to the contractor? No. If that's what he's driving at, certainly not.

MR. MILLER: I have to say that the minister hasn't seen much. I have referred to a number of documents that have been produced by your ministry. They are documents that are central to the thrust of this government and your ministry, yet at every turn the minister says: "I haven't seen it yet."

Who is doing all the work in the ministry, Mr. Minister, if it's not you? Are you not on top of these things? I am sure your staff can get it for you. Somebody in the ministry must have it. It was produced by the ministry. "Hotline," even. A hotline signals something out of the ordinary. February of this year.

The analogy I made, and despite the convoluted wording of the examples that are set forth in terms of what can be done and what cannot be done.... If you apply those restrictions because of former relationships, it is clear that Thomson — at least in my reading, and maybe the minister would comment on that — would not have been.... You would have been prevented, if you accept the logic of your own ministry, from employing Thomson to undertake the work that he did for your ministry.

I'm certain that there will be more and more of these situations presenting themselves to the minister. As you move more and more to privatize, to have work done by private consultants instead of the ministry, given the limited number of forestry consultants in the province — I don't know, maybe you're looking for that as a growth industry — you're going to run into problems, because those relationships are going to be established.

How do you maintain — and you won't advise us how much you're going to privatize — the kind of impartiality that's absolutely essential if the ministry is going to undertake on behalf of the public of British Columbia all the work that's necessary? You've got more experience in the forest industry than I have; you know what it's about. How are you going to maintain that? Would that interpretation of your own document prevent you from using the services of contractors such as Thomson to carry out the work done on the Queen Charlotte Islands?

HON. MR. PARKER: There are pretty stringent guidelines within the Foresters Act for conflict-of-interest issues, and that serves to guide us in how the various contracts are let in forest management undertakings. The T.M. Thomson episode that the member keeps referring to.... We engaged T.M. Thomson to take a look at the level of waste. T.M. Thomson was not the logging operation at all. I can't see any conflict there.

We're concerned about conflict. We pay close attention to it. The "Hotline" is an internal means of field staff asking questions of the executive branch and a means of getting the answers back. It's used as an information process within the ministry itself. I certainly don't see every document that passes through the hands of some 3,800 employees. That's a fact of life. It would be impossible to get anything done for the ministry if I were to vet every piece of paper that passed through, from how to make coffee to the item the member mentioned a little while ago.

I'd like to move that we 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 5:58 p.m.