[ Page 4797 ]

CONTENTS

Routine Proceedings

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

On vote 40: minister's office –– 4797

Mr. Gabelmann

Mr. Miller

Mr. Bruce

Mr. Jacobsen

The House met at 10:08 a.m.

Prayers.

MR. BRUCE: It is indeed a pleasure for me today to make an introduction for a number of people who are here from the great constituency of Mackenzie. My colleague is not able to make it, so on his behalf I would like the House to welcome 33 grade 7 students from the James Thomson Elementary School. They are here with their teacher, Mr. Lauren Exter. Would you please make them feel welcome.

MR. GUNO: I am pleased today to introduce four visitors from the riding of Atlin who are in Victoria on business. We have Mr. Jake McKay, the chairman of the Nisgha School District, and accompanying him are: Mrs. Anita Morven, a representative from Aiyansh on the school board; Mr. Alvin McKay, the district superintendent; and Alvin Azak, the administrator. Will the House bid them welcome.

Orders of the Day

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

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

ESTIMATES: MINISTRY OF
FORESTS AND LANDS
(continued)

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

MR. GABELMANN: I have two brief issues that I want to raise with the minister and I will do them separately.

The first is the question of a proposed manufacturing plant in and around Port Hardy. The minister and I have had conversations about a proposal, at least one, to develop a wood processing plant in Port Hardy, hopefully employing somewhere in the order of 130 people. The minister has, I believe, on his desk reports from his ministry concerning availability of wood supply for such a facility. I wonder if the minister would give us some comments about the status of this particular proposal, and where we should go from here.

HON. MR. PARKER: Mr. Chairman, in reply to the member for North Island, the day before yesterday I received information on the availability of opportunity timber in the Port Hardy area. But because we are into estimates, I haven't had a chance to discuss it with him. I promised him that as soon as I have the information, we'd have a discussion. I have the information, and I would be pleased to have that discussion once we get finished with the House business.

It looks like there could be a 15-year licence offered for some 112,000 cubic metres. But I think I should discuss this further with the member for North Island to get an idea of what he would be interested in seeing precisely happen, in view of the timber information we now have, and the concerns his constituents have in the area.

MR. GABELMANN: I'm trying to decide whether to pursue it further here and now. I think I'll leave it at this point.

I might say to the minister that the mayor of Port Hardy is coming to Victoria today on other business, and it might be appropriate for us to see if we might have a few minutes with him as well to discuss some of these issues. I'll leave it, and we'll discuss it later.

The other issue I want to raise is the question of the small business program and stumpage rates. I have had a fair amount of correspondence and even more oral presentations from small business operators in the North Island concerning stumpage rates. I've shared some of the correspondence with ministry officials in terms of getting answers to questions that constituents have raised with me. I don't want to raise the letters I have from last fall, because the numbers are dated. I had indicated to those constituents that I would raise it in estimates, but I don't think I'll do that, given the dated nature of those numbers.

I received a letter just a few days ago which went to the ministry regional office in Port McNeill — a copy to the minister as well — from a contractor who raises some questions that I find difficult to understand. He says:

"I am writing this letter in hope of some relief on the stumpage rate on cypress on the above TSL.... Enclosed is a copy of scale and invoice dated April 28, 1988. The value of our low-grade cypress, which is average for our locality, is far below the $103.21 per cubic metre that this sale is appraised at. In the April 28, 1988, shipment there were 5.9 cubic metres of cypress."

Stumpage was $103.21 per cubic metre, total of $608-something. Selling price was $151.50. His loss on stumpage was $457 for this small cypress sale. "On top of this," he says, "we have other costs." Roads were approximately $10 a cubic metre; logging is approximately $26.50 a cubic metre; barging $3.25 a cubic metre. The total per cubic metre is $39.75. That's his rough cost of doing logging. There is a total there of $234 for this small sale. His loss on stumpage, which I mentioned earlier, is $457; his loss on production is $234 and change; his total loss on 5.9 cubic metres of cypress is $631.96. The numbers are here: the invoices and the scale and the whole thing.

[10:15]

This is obviously an extreme example, but from all of the comments I've had from people in the small business program, there are obviously a lot of problems with the way in which stumpage appraisal is being done. The minister has a copy of his letter; I'm just not using the constituent's name in the House. This constituent says he cannot understand how the $103.21 per cubic metre rate is arrived at, and I can't understand it either. I wonder if the minister might help.

HON. MR. PARKER: The author of the letter is taking the proper approach in writing those that have prepared those numbers for the stumpage rate on that particular licence. I didn't do it, so he is following the proper procedure. He has used good numbers, and the ministry staff will respond accordingly.

Just as a little bit of background, the stumpage appraisals are based on average market value information at the time the calculation is actually done. When the calculation was done and when the scale took place, and following the scaling, in the billing, circumstances may have changed.

It is the low-grade sector of the cypress; I think that is what was mentioned earlier. Yes, that particular segment was probably a loss. It would be interesting to know how well it

[ Page 4798 ]

was done on the higher grades of the cypress. In one particular segment it may have been a loss situation, but it's unlikely it was a loss overall, especially with cypress, which is yellow cedar.

MR. MILLER: Just to go back and cover some of the points raised yesterday by the second member for Cariboo (Mr. Vant) with regard to the program, I'll deal particularly with the program of the Vancouver Island and Sunshine Coast mayors. When I asked a question in the House with regard to that program, I believe the minister indicated that it was under consideration. Could the minister advise if that consideration has been dealt with?

HON. MR. PARKER: We have had those proposals under consideration as to how we may be able to fund them without using JobTrac or a similar program. With the budgets that we have, we'd be dealing with basic silviculture to a free-to-grow state. The proposals are for more than basic silviculture; they are for what we commonly call intensive forest management: thinning, weeding and other stand-tending measures. It appears that we are not able to fund it from the Forests and Lands ministry other than what we've done in the past in being able to provide regular employees to assist with the supervision of the job from a consultative point of view with the various agencies that have instituted these community initiatives.

The Vancouver Island mayors' program was funded out of JobTrac, and that program is not available this year.

MR. MILLER: I was just curious. I think the elimination of JobTrac was well known when the budget documents came out; the references to JobTrac were removed, and perhaps the minister responsible had also made statements. But the mayors were still under the impression that the minister could possibly fund it.

I attended the conference that they had here and have read the reports on the program that they have produced through the consultant, Sterling Wood. I would hope the minister agrees that the program went beyond the opportunities that the minister talked about yesterday being available simply because of the increased expenditures in silviculture. Clearly there was a far greater social benefit in terms of training. The part that particularly appealed to me was taking young people who did not have skills and who had been on social assistance, and through the program giving them the skills that enable them to find work in the rapidly expanding silviculture business, and giving them what I think is a much more positive attitude. I know that in my relationships with young people, when they have the opportunities given to them in terms of acquiring those skills and getting out of a rotten system of welfare, they certainly feel a lot better about it and become more productive citizens as a result.

Part of the funding of the program came through the forest stand management fund. Again, I have to go back and say that though we knew JobTrac wasn't there, the minister still indicated that some consideration would be given to continued funding for the Vancouver Island mayors' program. When I heard the minister yesterday say, "Well, we couldn't really make any announcements as to programs because the budget had not been approved through the estimate proposal," I thought there was still a possibility that the minister could find sufficient funds to continue that program.

Is the minister really saying that the decision was made some time ago not to continue funding the Vancouver Island mayors' program?

HON. MR. PARKER: The Ministry of Forests and Lands is responsible for the forest management and the lands management of Crown lands in British Columbia. We're not in the social services game. Job training is the mandate of the Ministry of Advanced Education and Job Training, and social services is the mandate of the Ministry of Social Services and Housing.

We were trying to assist the Vancouver Island mayors and other communities that have some ideas on job training programs by trying to determine from these other line ministries whether there could be any funding directed into silviculture activities. As a matter of fact, that's still under discussion. But out of our ministry, we don't have funding for social services and job training. We have funding for basic silviculture activities to a free-to-grow state. That is largely expanded this year. There's a substantial commitment by the Ministry of Forests and Lands in that field, and we have every licensee of a renewable tenure responsible for forest renewal in the province. So we see quite an expansion in the silviculture worker field, and the opportunities are substantially greater this year than in the past.

Those employment opportunities are there in the normal course of events, Mr. Chairman, and the folks in those communities are in good stead to take advantage of them.

MR. MILLER: Finally, just for clarification, did the minister say that other ministries are looking for funds and some consideration is still being given to funding for the Vancouver Island and Sunshine Coast mayors' program?

HON. MR. PARKER: JobTrac was funded out of the Ministry of Social Services and Housing in the last fiscal year. We have been talking with both that ministry and Advanced Education and Job Training as to whether or not there would be any funding in their budgets that could be diverted to such programs as the Vancouver Island mayors' program. That hasn't been concluded as yet. All we are doing is acting in a proactive way to try to assist the groups that have come forth with such programs. What's taking place in those ministries I don't know. I have asked the questions and we are waiting for some answers. As to what process is happening within those ministries, we would have to determine from those individuals.

MR. MILLER: The minister is taking a proactive position and I appreciate that, because the value of the program, it seems to me, is quite evident in that it goes much beyond simply saying that there are more funds available for silviculture and therefore all of the concerns that I previously talked about in terms of taking those young people and giving them those skills will be dealt with. I don't want to continue much further on it, but I want to be clear in terms of being able to respond to those mayors, who have invested a considerable amount of time and energy into launching the program and making sure that it has been a success. By all accounts it has been a success. The study done by Sterling Wood shows, I believe, about a $21 million benefit to the forest lands that were treated under the program.

I appreciate the minister's being proactive, and I would hope that the government and the minister would give serious

[ Page 4799 ]

consideration to these kinds of programs, not just in limited geographical areas but right around the province. There's immense value in doing that. Again, to my mind, the most significant — although maybe not so much in straight dollar terms — is taking young people and giving them the skills that they can use in honest employment. That's immeasurable, as I'm sure the minister is well aware.

I don't know if my colleague from Cowichan-Malahat had some questions, but if he has at this point, perhaps he would like to....

MR. BRUCE: I'd like to touch on a couple of things, both what has just been mentioned here and a few other things.

First of all, I would like to go back a bit and talk about Botanical Beach. I would like to thank the minister and the ministry for their involvement in bringing the upland area as part of the Botanical Beach park. Certainly it has unique qualities. Although it is smaller than some of the major issues that face us from time to time, be it the Queen Charlottes, the Stein or what have you, it goes a long way to showing the interaction between members of the opposition, the Ministries of Environment and Forests and Lands and others in trying to reach an acceptable solution to something that would be very valuable to a community. Although the Botanical Beach area does not rest within the political confines, or geographical confines if you like, of Cowichan-Malahat, certainly many who live in that part of Vancouver Island have enjoyed and take others out to that area. For the long term, it is a good thing indeed.

[10:30]

Often we get all caught up in the major political items of the day and forget some of the smaller issues that are resolved. I was very appreciative of the manner in which the Minister of Forests and Lands and the Minister of Environment (Hon. Mr. Strachan) dealt with that issue. We had several meetings and brought the principals into play, and there seemed to be a great crevasse, if you like, between the position that the individual landowner had and where we were going. But in the final analysis, an agreement was reached which is good for everybody. That's only one; there have been a number of others that have taken place over the course of the year, as we go through a very difficult time — and always will, I suppose, as the community of the province of British Columbia vies for different uses within that forestry base, while at the same time trying to maintain a strong and viable forestry base.

Another issue that causes me some concern — I know the minister is concerned as well, and I think it lies along the lines of the mayors' strategy and farming the forests and these types of community events — is the FRDA agreement, or FRDA II as some people call it. Again, it is very important that the issue be raised. I know it's been mentioned in the House here and that we, as a total Legislature, continue to assist the ministry in gaining the public awareness and concurrence that's necessary to convince the federal government of the need for a FRDA II agreement. It's still a year and a half or two years off, but as the last one took a great deal of pushing and shoving, so will this one. I think that we in British Columbia can show the results of the first FRDA agreement.

All too often what happens after a great deal of work has been done and people reach an agreement is that they sit back and figure that the job is complete, but we need FRDA II, and more than likely we'll need FRDA III and perhaps even others. There is definitely a need for the federal government to look this way, and it's our role in this Legislature to draw to the attention of the general public of British Columbia how important FRDA I has been to us.

It's had a sizable impact on the community of British Columbia. Certainly within the area of Vancouver Island we have felt the impact. I know that all members in this House will go and do what they can to convince their constituents to write the odd letter to our respective MPs and others throughout the federal government on the need for an ongoing FRDA operation of some sort.

That brings me to the discussion that's been held here in the opening few minutes about the mayor's strategy, which I had a little to do with. and also some of the other community proposals that have come forward, such as farm-the-forests and so on. They have considerable merit.

I would like to point out that when we first took the thrust with the mayors' proposal on Vancouver Island, it was not so much to increase investments through the Ministry of Forests for forestry work but was more with a view to two things: to raise public awareness of the need for greater forestry within the province, and to provide an economic stimulus, in our instance, to the Vancouver Island area. All too often we found ourselves fighting the normal thrust of plugging it back into forestry. Indeed, it was a forestry initiative, but it could have been mining or fishing or any other type of initiative.

As others have mentioned, it has been very successful. Although we talk about the social side to it, which is very important, there were several initiatives within it that made it somewhat unique: the fact that we were able, in part, to develop some production levels and scales, which has proven to many that this, as a job-skill, job-training initiative, was very successful. From the point of view of actually putting people into the workforce, it proved very successful.

Tying in the production code, I can give you examples of my former experience as the mayor of North Cowichan, where we had work crews that had come in through programs like this to work in the forests of North Cowichan. Because we had tied in production scales, they were hired by other silviculture crews, and we lost whole crews. Ten- and 12-men crews were taken and put into the private sector and, I believe, are still enjoying employment today.

All these initiatives do not solely fall — as the minister has quite rightly brought to the House today — within the framework of the Ministry of Forests, but are expanded to fall into other ministries as well, as a way of job training, job development, forestry enhancement and so on. Certainly a major part of the forestry initiative developed because of these initiatives, be it the mayor's proposal, farm-the-forest or what have you, having a forestry sector base, but it is much greater than just the Ministry of Forests.

I'm encouraged and pleased and know that the Ministry of Forests and the minister in particular are working with others in cabinet and in other ministries to find ways and means of keeping these particular initiatives up and running.

I guess I found myself in a funny position in that initially, when we developed the mayors' strategy, we were looking for a greater public awareness, greater investments in forestry and more job opportunities. That's not to say that you want to put it to rest, but there has been greater public awareness, in part as a result of that initiative. There have been greater investments within the forestry sector, again as part of that initiative. There had been a FRDA agreement signed and brought into play, again in small part by a considerable

[ Page 4800 ]

number of letters written in support of it by municipalities and so on while those negotiations were taking place. There certainly were and have been increased job opportunities within the forestry sector.

What I'm saying, on the one hand, is that I am pleased that the government of the day saw the need for and the merit of these initiatives in bringing them about, and in saying my two bits' worth now, I'm hopeful that we will continue to work in that vein. It seems that that will be the course. It is an expanded role besides that of just being a forestry initiative. Really much more than that, it's an overall government initiative for the people of British Columbia.

I certainly appreciate the comments and support of the member for Prince Rupert and likewise the Ministry of Forests. It's this type of global approach which will greatly increase the economic activity in the province and very much strengthen the public understanding of the increased and continued investments in the forestry sector.

HON. MR. PARKER: The accomplishments by the Vancouver Island mayors' program, which was spark plugged right across this nation by the member for Cowichan-Malahat, is probably the best testimony we have in seeking a second FRDA agreement with the federal government. The Sterling Wood report that the Vancouver Island mayors have on the benefits of the program, the intensive forestry management and the stand-tending portion of silviculture treatments is going to be very useful in discussions with the federal government as we go into negotiation on a second FRDA agreement. I'm grateful to the Vancouver Island mayors for what they've accomplished, and we will be seeing more activity in this field as a result of their efforts.

MR. MILLER: I wanted to ask the minister some questions on silviculture, in terms of trying to identify what type of work needs to be done over what areas in British Columbia.

First of all, I'll ask the minister how much NSR we are dealing with. Yesterday or the day before, the minister talked about 600,000 to 700,000 hectares. I have an article by John Doyle from the April-May 1988 issue of the truck loggers' magazine dealing with silviculture. Appropriately enough, it's entitled "Silviculture Solutions." Mr. Doyle quotes Dirk Brinkman as saying that the current NSR is about 1.7 million hectares. In backing up that figure, he goes on to say that this is roughly the same number that UBC's Peter Pearse reported at the school's forest, economic and policy analysis resource unit.

The latest annual report of the ministry on page 9 under "Silviculture Review" quotes the 1984 forest and range resource analysis as indicating there are 738,000 hectares classified as good and medium sites which are NSR. When I go to page 44, table 4 of the annual report — if I'm reading it correctly — under the two categories "NSR2" and "NC Brush," we're looking at roughly 3.7 million hectares. Could the minister advise the House just what we are dealing with in terms of the NSR in this province?

HON. MR. PARKER: Referring to table 4 on page 44 of the 1986-87 annual report, the two figures the member for Prince Rupert quoted are in two columns under a heading that has as its nomenclature "NSR" and "NC Brush" — NSR being "not sufficiently restocked," and NC brush meaning "non-commercial brush." There's a lot of land in British Columbia where the natural cover is non-commercial brush. In the uplands you see a lot of buck brush and snowbrush. In the rockslide areas, you see a lot of alder and vine maple, and in wet seepage areas you see a lot of willow and some alder. Those are all considered to be non-commercial brush.

In those two columns that appear under this one heading, one says: "Natural Stocking Expected" and identifies some two million hectares. A good portion of these areas has been affected by wildfire and other forest problems such as disease and insects. As a matter of fact, we lose more to disease and insects than we do to fire on an annual basis. But the 1.6 million hectares in "Natural Stocking Doubtful" includes all classes of forest land from low site capability through poor site capability to the medium, good and high site. The numbers I have been referring to are for areas of medium or better sites in which basic silviculture will make significant returns to the province.

On the poor and low sites, often it's left for natural restocking. In tree-farm licences, however, these areas are treated by the licensee in conjunction with the other lands on the licence. As far as the poor and low productivity sectors are concerned, we see a higher level of intensive forest management on the tree-farm licence. On the provincewide basis, there are substantial areas scattered all over the province. Most of them are difficult to support logistically. We concentrate on sites that will provide a reasonable return to the province, which are medium and better sites.

[10:45]

The number I think the member needs is on page 9 of the annual report. The 1984 forest and range resource analysis indicated that there are 738,000 hectares classified as good and medium sites which are not sufficiently restocked with trees. It was four years ago, and we've caught up some 70,000 hectares — not quite 10 percent — through the FRDA program.

In 1984, poplar stands were considered to be NSR. A poplar was considered a weed at the time, and most of the poplar stands occurred in the Peace River country. Now we have a great deal of interest from waferboard manufacturers and pulp manufacturers who want to use poplar, so we have to reclassify what is commercial species and what is noncommercial species, what is NSR and what is satisfactorily restocked.

The numbers quoted here on page 9 of the 1986-87 annual report are four years old, and there's a catch-up. I used the figure of approximately 600,000 hectares of NSR medium and better sites in the province. That's a guesstimate. That's all I can provide at this time until we have a final assessment of all the deciduous stands, which in the past were considered NSR from a coniferous management standpoint.

MR. MILLER: Of the total of 3.6 million or 3.7 million, the minister says that roughly two million are expected to restock naturally; I think that's what he said. "Natural Stocking Expected" is the heading, and under that is two million hectares. Are expenditures foreseen on those sites? Obviously, I would think there must be — if natural stocking is expected — a fair amount of medium to good or good to medium sites. Are silvicultural expenditures going to take place on those lands out of the public purse to either improve the chances of natural restocking or improve the growth and yield in terms of incremental silviculture?

HON. MR. PARKER: Forest land in the province includes a lot of the grazing areas in the province — grazing

[ Page 4801 ]

for domestic stock and grazing for wildlife. We see large areas in the north where the fish and wildlife branch undertake substantial broadcast range burns for improvement of forage for wildlife. But that happens on forest lands.

It's considered to be forest land, because we're under an integrated resource management program. It falls under our purview. It is not bearing trees because of some other treatment that maybe took place recently. Of course, there's the range management we have for the domestic areas too, where grasslands are promoted, and encroachment by timber crops in some areas is not the highest economic use of that particular area, but it is still forest land. When you look at it from the standpoint of whether it carries trees or not, it's classified as not being restocked with trees — NSR.

We have numbers here all right, but you really have to dig into the background if you want to understand the various elements that make up the final summary figures that are presented here.

MR. MILLER: That was useful information, Mr. Minister, but when I read the report and the title, it's called "NSR." Underneath that it says: "Natural Stocking Expected." There is a "2" beside the NSR. When I read note 2 it says: "Not satisfactorily restocked. Areas on which forest stands have been disturbed over 75 percent by fire, harvesting or other causes, and have not restocked with sufficient trees of commercial species."

The minister talked about grazing areas, and my question really related to this two million hectares of forest land as described in the report, areas on which forest stands have been disturbed by fire, etc., or harvesting. I'd simply ask the minister whether expenditures are going to be made out of the public purse on those lands to assist in terms of growing a crop of trees. There is nothing to indicate that there are range areas in this table. Presumably this is good forest land that has been depleted either by fire, harvest or disease and requires some attention in terms of getting a new crop of forests back on it.

HON. MR. PARKER: The key words in the statement are "with sufficient trees of commercial species"; what is a commercial species depends on the classification at the time.

The answer is yes, there will be public funds spent on reforestation, forest renewal, on lands of medium and better growing sites, providing, of course, that we can get to them. There are some parts of the province that are still inaccessible but have been devastated by fire, and we are unable to get to them. The numbers here, as I said earlier, include substantial stands of deciduous species that were considered non-commercial and have just started to be reclassified as being commercial. Those numbers will probably show up in the 1987-88 annual report if we have all the data together. There may be an interim report.

MR. MILLER: We're perhaps taking a little too much time on this, but I am trying to understand it. In answer to previous questions, the minister dealt with the next column, "Natural Stocking Doubtful, " and it's under that column that the minister said there was non-commercial brush that is going to be reclassified as a result of new production procedures and new uses for the fibre. The minister is now saying that exists in both columns, and it's extremely difficult for us and others, I suppose, to get a comprehensive handle on just what kind of NSR we're dealing with and what kind of public expenditures will be required to deal with these lands.

Do the commercial species — the minister can nod if he likes — that he referred to as now having value also exist on the areas of land under the heading "Natural Stocking Expected"? Is that what the minister is saying? Previously it was in the other column.

HON. MR. PARKER: The member is clearly confused. Anyone who cares to take a look at the Ministry of Forests and Lands annual report, 1986-87, page 44, table 4, will find that there are several columns of figures. The first one is entitled, "Stocked with Mature Timber"; the second one, "Stocked with Immature Timber." The next heading is "NSR and NC Brush," and that is underlined. Under the underlinement are two columns: one says "Natural Stocking Expected"; the other says "Natural Stocking Doubtful."

Those two sets of figures total almost 33,700,000 hectares. It includes non-commercial brush, not satisfactorily restocked, and stands which are deciduous species which have not been considered commercial until the last two years or so as we got into a deciduous utilization industry, particularly in the Peace River country. It's only been a couple of years since the oriented strand board plant went in in Dawson Creek. It's only been a few months since we received bids on other deciduous stands in the area.

[Mr. Weisgerber in the chair.]

The determination of what's commercial within the deciduous species is taking place now. These numbers we see in the report are the best estimates of the ministry at the time the report was prepared. The levels of NSR land and NC brush in the province Non-commercial brush is exactly that: it's non-commercial. But as I said earlier, NSR — not satisfactorily restocked — is classified on the basis of a coniferous forest management approach, not a deciduous one. So the numbers will be somewhat changed because of the reclassification of what's commercial. The footnote to NSR says: "Not satisfactorily restocked. Areas on which forest stands have been disturbed over 75 percent by fire, harvesting or other causes, and have not been restocked with sufficient trees of commercial species."

As I've said through these estimates, Mr. Chairman, commercial species have changed over the last few years and continue to change as utilization opportunities expand. We now have utilization opportunities in deciduous species, so that we can consider the poplar species, for example, in the Peace River country to be commercial species — which means the NSR areas have to he re-determined. So it's a smaller number than that shown in this annual report from two years ago.

MR. MILLER: If at this point in time the minister is getting information and is prepared to issue an interim report on the situation, I think it would be advisable. If I'm confused, it's because either I haven't got the answers from you or the answers aren't available in the annual report. All I see is two columns totalling three million hectares of land that obviously needs some attention because it's been harvested, or in the other category, because it's been invaded and covered by brush — the invasion of the brush. So I think those new statistics would be most welcome.

Briefly, in terms of FRDA II, could the minister advise what he's going for with the federal government for the second stage of that program?

[ Page 4802 ]

HON. MR. PARKER: Final numbers for FRDA II are still being determined by our ministry. But we are convinced that between $600 million and $700 million will be necessary on a five-year FRDA II program. The FRDA programs have been five-year programs, so we're considering the next one to be a five-year program. The FRDA programs, of course, are jointly funded by the provincial and federal governments on a 50-50 basis.

[11:00]

MR. MILLER: In terms of separation of the categories.... That's a significant split — half that money coming from the province and half from the federal government. It's a significant amount of tax dollars to go back, repair, restock, replant and apply silviculture to lands, some of which, of course, may be lands that have suffered fires or pests — but obviously lands that have been logged and not restocked.

With regard to the new silvicultural regulations, just a couple of points on the process. First of all, there is a public viewing period, I understand, for the preharvest silvicultural plans that licensees have to submit to the government. There's also a process for the public to object. Just a quick question on that. Generally, when you allow the public the opportunity — and it seems to me the ombudsman dealt with this in his report No. 11 — there has to be a sort of defined process so that interested parties know that something is done, that there's a laid-out procedure. It's not enough to simply write a letter to the proponent of the plan and forget it; there has to be some kind of laid-out reporting procedure so that concerned individuals or groups who do object know that there is a mechanism whereby their objections are going to be dealt with.

As I understand my notes on this, proponents simply have to attach those objections to the plans they submit and also indicate in the plan how they intend to either deal with the objections or presumably comment on whether the objections have any merit. Is any reporting back required under the new regulations?

HON. MR. PARKER: By reporting back, does the member mean reporting to the people who lodged objections? They are absolutely entitled to the courtesy of a reply.

MR. MILLER: I think everybody's entitled to the courtesy of a reply, but there's clearly nothing laid out in the regulations as I see them, or at least in the analysis I am following. There is no requirement for the courtesy of a reply. The ombudsman dealt with the whole question of appeals to the board in terms of the application of pesticides and herbicides. He has clearly laid out that there has to be a process and people have to have confidence in the process, so that they know they're not sending a letter into the great maw, and that's the last they're ever going to hear about it.

If the minister is simply saying that the proponent should be courteous and respond, I don't think that's good enough. The ministry may end up having complaints about that section. Are you prepared to lay down or add regulations that there has to be a defined process so that people who register complaints or opposition know that consideration is going to be given, and they will be reported to in terms of what action may be taken as a result of their interventions?

HON. MR. PARKER: That's a good point, and we'll take that under advisement, and see whether or not we really need to cut regulations to conduct the business of the ministry as to responding to members of the public and their concerns.

What the licensees have to do is append to their preharvest plan any objections to what they are proposing to undertake. They have to advise us how they're dealing with it, and if we're not satisfied, it goes back to them and they have to rework their plan and come back to us again. We can certainly advise the objectors as to what's taking place.

MR. MILLER: I appreciate the minister's consideration of that point.

Further on, in terms of the regulations that have now been put in place to deal with silviculture prescriptions, basically the preharvest plan has to be submitted prior to cutting. It has to be approved. Once a cutting has taken place and the plan put into action, the companies have to submit a report each year on the progress of their prescription. At the end of the period — in other words, when they have arrived at that free-to-grow stage — they have to submit a final report testifying to that effect. Then there are some other options. If it appears they are failing to establish a free-growing crop, then they have to send a plan to rectify the error.

Obviously there are going to be a great many of these plans that the ministry has to deal with. I don't know if the minister has an estimation in his own mind of how many will be submitted in a given year, but I would suggest a considerable number. As we talked previously about privatization, it appears that a lot of this work can be done simply by a report being submitted to the ministry by an RPF, and the ministry will presumably accept that.

Can the minister advise, in terms of his ministry, what kind of auditing procedure he anticipates? This is vital to the program. I believe when we talked originally about the bill.... Bills are okay as far as they go. They could have the best intentions, but if in their application you don't have the process in place to effectively carry out what you intended in the first place, then it doesn't really work. So how are you going to really ensure that the silviculture work envisaged under the new regulations is actually going to be carried out effectively, given the massive number of plans you will be dealing with?

HON. MR. PARKER: Over the years, from the time of the inception of the timber sale harvesting licence, which was about '67 or '68, licensees have been required to submit annual reports on how they performed according to the operational plans they submitted for cutting permits. The preharvest silvicultural prescription is a much more comprehensive plan than the operating plans for cutting permits in the past. It's very thorough, with a great deal of homework done and public input sought and the plan signed off by a professional forester.

The input of paperwork doesn't change, but the amount of information in the paperwork does change. The Forest Service has a great deal more to go on, so there's a lot less detective work necessary by the ministry. The people we have in place in the various districts in the province are now capable of reviewing those plans, commenting appropriately and making the necessary approvals.

From the standpoint of determining whether or not what was supposed to take place in the plan actually took place, that is the responsibility of the district personnel as well. In the normal course of their duties, very much included is the performance of the licensees in the areas for which the

[ Page 4803 ]

Ministry of Forests personnel are responsible. They are constantly in contact with the licensee, and in many communities, away from the workplace as well, there's some opportunity to meet socially. There's a constant contact situation.

If during that contact there appears to be something amiss or something needs to be changed, Forest Service personnel meet with the licensee personnel and identify and deal with the situation. If for some reason things seem to be amiss to any great extent, we can run a full audit. We may run that audit with ministry personnel, or it may be so sensitive.... The situation may be such that it is better to go to an outside agency. Then maybe we'll pull in some outside agency to do that audit. Maybe it is an audit to be run on a particular soils matter or silviculture item — some unique aspect where outside expertise would be most useful and would tend to be more objective. That's the way audits can come about.

Then there has to be a regular auditing process. While the annual report is a regular auditing process, we will have to establish how, where and what we're going to audit; that's a policy that's being established. We're only five, six or seven months into the program, and it takes a little while to get that together. That input is coming from the folks who work in the field in our various districts. We will be building the audit policy from their input and from the licensees' input.

MR. MILLER: I would have hoped that the ministry would have developed better than that internally. People might get together socially, but it's hardly the basis for regional or district staff of the ministry to find out if things are going wrong in their district because they happen to run into somebody at a party or a curling bonspiel.

Interjection.

MR. MILLER: Well, you're the guy that raised the question. You said that people get together socially. That's how they learn that things are wrong; that's what you said. You don't run a ministry on the basis of social contacts. The work that's going to be done.... As the minister is well aware, final results will not be seen for some time, long after the minister is Minister of Forests.

With regard to the bonding level required by the licensees, I don't believe there has been a change, first of all, in the bonding levels for some time. Could the minister advise just how high the levels will be in relation to the work as a percentage? How does he perceive that being met and are there any plans within the ministry to increase bonding levels?

Currently, as I understand it, bonds are posted for various activities so that the ministry can ensure compliance. If the minister could advise the House in terms of what levels of bonding will be required by the proponents to satisfy the ministry that.... Presumably bonds are posted because it is some incentive for people to do the work that they promised to do.

[11:15]

HON. MR. PARKER: When the member talks about bonding, he is talking about deposit for performance on a particular licence. The deposit for renewable tenures, just going by memory.... I'm not previously apprised of what the questions are going to be, so I don't have the same papers in the House at the same time as members are putting questions to me, and I'm going by memory, but it seems to me that something like 50 cents a cubic metre is required on a continuous deposit basis. By continuous deposit I mean that is placed with the government in either a letter of credit or some other negotiable instrument, so that should there be non-performance by a licensee on any particular aspect, you can draw down on it. The licenser can draw down on it and the licensee must immediately replace the amount that is drawn down or cease operations. So it has to be a continuous deposit level. As I said earlier, 50 cents a cubic metre is the level of deposit.

On other items, whatever they may be — it may be a contract of some sort — it depends on the nature of the contract as to what the deposit level is. That contract may be bridge cleaning, replacing bridge decking on a Forest Service bridge, road construction, cleaning ditches, spacing, or it may be some planting. There are different schedules and I don't have that from memory.

MR. MILLER: Just going back briefly to the auditing process, is it the intention of the ministry to devise a regular — or perhaps it would be done irregularly in terms of monitoring and auditing that people can expect to see on the site. But is it the intention to develop a silviculture auditing policy that would see Ministry of Forests personnel on site to ensure that the work that was promised in the preharvest silvicultural plan has in fact been done and is progressing satisfactorily?

It seems that the rate of survival, if you like, of planting depends on a variety of things — the type of soil, the way it was planted — and I would think that, as always or as normal, people would tend to try to do the job as quickly and as cheaply as possible.

I note that in the privatization documents for the nurseries, there is a quote to the effect that there exists concern that while nursery technology is sufficiently advanced to produce 300 million seedlings annually by 1990, the quality of planting, which is still very labour intensive, may not meet a satisfactory standard to ensure high tree survival in plantations.

It seems to me that is a critical question. It's critical that the ministry develop an auditing procedure that will satisfy themselves and therefore the people of this province that, indeed, silvicultural work is being done and is being done effectively, and we will see a new crop of trees established on lands that have been harvested.

HON. MR. PARKER: Part of the forest renewal program includes survival studies, and that's part of the responsibility to a free-to-grow state of the licensee; and yes, the audit function will include checks of those types of surveys. The audit is a spot-check function and that's what it will be. Just within our ministry, of course, we have to do the same thing, and we conduct survival studies as well. That's part of the program. Other studies included are region surveys.

MR. MILLER: Depending on which land you're on, it takes a fair amount of time to grow a seedling to that free-to-grow state. If the original preharvest plan called for the planting of so many seedlings and the eventual production of so many trees per hectare in a free-to-grow state, and little mistakes are made every year, at the end of that period — maybe it's ten years or, who knows, nine, ten, 11 or 12 years — you wind up with half of what you originally intended. It seems to me that that's a critical factor in terms of the

[ Page 4804 ]

ministry's plans. Otherwise we may be going for FRDA XXV, so that we can keep drawing on the public purse to replenish lands that have been harvested.

Therefore, if there is not a very clear and rigorous auditing and monitoring policy established within the ministry, if it's simply left to the private sector to send in reports by RPFs that, yes, everything is good, everything is rosy, maybe we'll be in trouble down the road. I tell you, it could be long after this minister is sitting across the floor here. In fact, it could be the other way: he could be across the floor on this side, complaining that we're not doing enough in silviculture.

The auditing policy, it seems to me, is critical to the success of the program, and there has been no indication as yet that the minister envisages anything more than just a cursory, once-in-a-while look. That's hardly sufficient in my book — and I'm sure, in a lot of other people's books — to ensure that those forest lands are being managed and dealt with in the way they should be, so that we're not facing further drains on the public purse.

I'll go back and repeat some of the questions I asked in terms of the type of auditing procedure that the minister thinks should be put in place. How many silvicultural prescriptions per year do you think the ministry will be dealing with? How many of those do you think the ministry staff will be able to go out and view on site to make sure that the work is being done?

HON. MR. PARKER: Mr. Chairman, the purpose of the preharvest silviculture plan is to have professionals prepare the plans with a great deal of care. We have passed that responsibility to licensees. They are to complete that obligation and present a plan that is signed-off by a professional forester operating under the terms of the Foresters Act, the statutes of this House. Those plans will come down the same way a request for cutting authority has in the past. They will be reviewed by the forest district staff, and they will be checked by forest district staff, but all of the preparatory work will have been done by trained personnel, skilled personnel, under the responsibility and, finally, under the authority of a registered professional forester, operating under the statutes of this province; and then, as the works progress, our staff will continue to fill their field functions of supervising what's taking place. That doesn't mean doing it, Mr. Chairman; it means supervising what takes place in their district. As I said earlier, if anything seems amiss during the normal course of their duties, then further study and audit will take place.

Apart from that, the audit program for different phases of forest management is in the process of being developed. We have just transferred all this forest renewal responsibility to the licensees in the last few months, transferring duties of our staff and preparing the in-service training process so that they're able to conduct effective audits. It will be determined over the next few months what that policy will be, and we'll be happy to share it with this House at that time.

MR. CHAIRMAN: The second member for Okanagan South requests leave to make an introduction.

Leave granted.

MR. CHALMERS: Today I'm pleased to say that there are 48 of the brightest minds in Okanagan South, from Lakeview Elementary School, visiting the precincts today to watch the proceedings. With them are their teachers, Stu Dale and Robin Jarman, and chaperones Celia Jarman and Marilyn Willms. I would ask all the members present to give them a very warm welcome.

MR. JACOBSEN: The day before yesterday I spoke about the bidding practices on small business sales, and I think the response from the minister was that he did not know how that could be happening. I would ask if the minister would make a commitment to look into the bidding practices on small business sales to make certain that they do in fact achieve their purpose and provide opportunity for the small, independent logger.

While I have the floor, I'd like to talk a little bit about the stumpage policy. I think that when the minister was responding to the member for Cariboo yesterday he talked about the stumpage system becoming more sensitive to the market or to the industry. I want to say that I fully support that. I think the province needs to have a flexible stumpage policy that is sensitive to the industry, because as a province we're so dependent on the forest industry that we have to keep that operating and healthy at all times.

I know the minister is going to be accused either way. If he does not come in with a system that is sensitive to the market and flexible, at the downturn of the industry he will be accused of destroying it, putting people out of work, and so on. If he does come in with a policy that recognizes the cyclical trends in the forest industry, he will then be accused of sympathetic administration, as is said here very often.

Regardless of the criticisms, it's important that the stumpage system be sensitive to the market. In my view, stumpage is the third call against the products of the forest industry. The first two calls — I think they're equal in status — are the right of the people operating in this industry to make a reasonable return on their investment.... The second one is that the people who work in this industry are entitled to a fair return for their labour. They are some of the best and most productive forest workers in the world, and they are entitled to that. Those two entitlements come first. After those two entitlements have been met, there's the opportunity for the province to gain revenue from the resource.

The third thing I'd like to comment on, since I have the floor — I think this is the biggest challenge that faces the minister, and I want to support him here; support will be necessary, because I think the challenges will be very strong in the months and years to come — is protecting the forest land base for growing trees.

I'm not against recreational and public use of the forests; far from it. I think recreation is very important. I think tourism is important. I know we have a great many first-class parks — probably some of the best parkland that can be found anywhere in the world. But in addition to those parks — because I believe in tourism and the public's right to use the forest land — I support the multi-use principle, where we do not take trees out of the growing cycle but we use them between the growing cycles for other uses, and let other people participate in the forest.

[11:30]

There has been evidence recently that shows that there's a great thrust against maintaining the forest land base for growing timber. I think the classic one is South Moresby Park. It wasn't good enough just to have all of Moresby — and I think that's something the public needs to realize — as a park; we had to include some of the prime growing areas on

[ Page 4805 ]

the adjacent islands as well, even though that was against the recommendations of the committee that had examined it. There are similar challenges. We now look at the Stein. There's a lot of controversy surrounding that one. There will certainly be other areas that we will be following which are already being talked about.

I know that this is going to be a very difficult situation for the minister to deal with, because he is going to come under severe criticism from many people. He's going to come under criticism from the selfish users who want to have the right for one use of this forest land. He's going to come under criticism from the special interest groups throughout this province who want this land set aside for only their particular purpose — a single-use policy. You wouldn't think so from listening to the debate here of the last couple of days, when you hear all the detailed questions that have been asked about forestry. He will come under criticism from the opposition here too in trying to protect the land base, because recent history has shown that the opposition's interest in the forest land base is, unfortunately, very closely attached to a political scale. When it becomes apparent that there are more voters supporting the other use of the forest land base, they are then prepared, sadly, to switch their allegiance away from the forest industry and the people who work there and support those other users.

The minister will receive criticism from a great many sources, but on behalf of the thousands of people in British Columbia who cannot come here to speak for themselves and perhaps never write letters to the editor, the elderly people who require social services, the children who need the education and a host of people throughout this province who depend on the resources of this province for a living, I urge the minister to do all in his power to support and protect that land base for growing our trees. That's what the future of British Columbia is really going to depend on.

HON. MR. PARKER: I concur in the member's remarks. The matter of the bidding processes for small business timber sales concerns me, as I mentioned earlier in the House. We are undertaking to determine means to ensure that the small business forest enterprise is supported and is supplied with raw material through our policies.

MR. MILLER: Just to supply some information to the House on the alienation of land.... I want to get into this in terms of the preharvest plan. If we look at the alienation or the deletion of land from provincial forests in the last year in British Columbia we find some pretty significant deletions for agriculture, industry and transportation and settlement.

To suggest, as the minister seems to, that the only time land is alienated from the forest base is for parks and recreation is pretty short-sighted. Coming from the larger urban region of the province, the member should be well aware that in terms of land usage you only have to look at what has happened and follow current debates on the Terra Nova lands to know that there has been far more pressure to remove lands from forestry and agricultural purposes. We all too often seem to forget that if it's a major industrial enterprise that wants to take some land, I am sure the member would be in favour of it. Don't be too short-sighted.

To return to the preharvest silvicultural plans, it seems to me that there may be an opportunity to do the kind of planning....

MR. S.D. SMITH: Do you support multi-use or not?

MR. MILLER: If the member for Kamloops would hold his tongue, we could get into this a little deeper.

It's clear that various applications to forest land can produce much higher benefits. The minister has recognized that, because under the new act there is provision for what is termed "incremental silviculture." There is all kinds of talk about how we can increase the yield we're currently getting from some of the better forest lands in British Columbia. Certainly other countries have recognized the wisdom of moving in that direction, so that the conflicts between the wilderness or wild lands and forest use has abated somewhat, because we manage and get more out of the lands that can produce more.

Is that a consideration? What other considerations — maybe the minister will run through them all — will be contained in preharvest silvicultural plans? Is it the minister's view that those plans should encompass more than just how many trees are going to be planted? Should they not also be looking at the land in terms of what it's capable of producing, how intensive or incremental silviculture could be applied to increase yields, where the land is analyzed and looked at, yes, in terms of integrated use? Some lands may be more suitable for other purposes. Are those kinds of plans going to be included in the preharvest silviculture plans? Does the minister think that's a wise thing to do in terms of planning the land use of British Columbia?

HON. MR. PARKER: Mr. Chairman, there's a multi-page document here which is the silviculture regulation arising out of the Forest Act as amended recently. It's quite detailed. I don't think it's in the best interests of the House to read it into the record. It is available; it's a public document available to everybody in the province of British Columbia, including the member opposite. It clearly provides for responsible forest management of the forest lands of British Columbia. As far as incremental forestry is concerned, that's always assessed by licensees, professional foresters and those other land managers that are concerned about the wellbeing of the prime resource of this province. Intensive forest management opportunities are seized where the opportunities exist and where the funds permit.

MR. MILLER: Can the minister advise whether considerations other than the planting of trees will be included in the preharvest silviculture plans?

HON. MR. PARKER: Certainly, Mr. Chairman. The preharvest plan provides for natural regeneration, and it provides for surveys and for assessment to determine whether any in-planting has to take place; whether it's natural regeneration that has missed a certain area and some planting has to take place in that particular area within an overall block; and it takes into account those areas that have been planted and perhaps devastated by insects or maybe frost heaving or some other kill. They have to pick that up. There again, that prescription provides for those types of surveys. The preharvest silviculture prescription deals with forest renewal to a free-to-grow state.

MR. MILLER: Are any considerations being given in the preharvest silviculture plans to any other things such as wildlife, water management or recreational values? Are any of those kinds of considerations going to be contained in the preharvest silvicultural plans?

[ Page 4806 ]

HON. MR. PARKER: Those concerns from an integrated resource management standpoint are taken into account in the management and working plans.

MR. MILLER: The answer is no, then. There's no real analysis of the land in terms of the silvicultural plan, the plan that deals with how we're going to deal with this land that is going to be denuded through logging. There is no analysis of the land, its capabilities, potential for other uses, potential for higher uses — any of that kind of thing. It's simply a basic plan that would identify whether natural region will occur and, if not, how much reforestation or application of pesticides or herbicides to control brush or insects will have to be done. That's going to be the basic consideration, and there are no other considerations in the silviculture or the preharvest plan.

HON. MR. PARKER: Mr. Chairman, the preharvest silvicultural plan is a silvicultural plan. The management and working plan, from which the preharvest plan will emanate, covers integrated resource management and all the other uses of that particular licence area. So it's well accounted for. But the preharvest silvicultural plan is exactly that: it provides for forest renewal to a free-to-grow state.

MR. MILLER: I think it's somewhat short-sighted not to try to do that kind of planning. Certainly when you look at land and its potential, it's a little more.... I don't think farmers do that, do they — say that they're just going to go plant X number of whatever it is they plant — in terms of the area? They look at the productive capacity of the land and where they can achieve better and more results and where they can use some of the land for various purposes.

Moving right along into the incremental silviculture, it has been suggested that the incentive for incremental silviculture is not there. I would think that in terms of that lack of incentive as the major licensees see it, they have no way of knowing whether they'll be able to recapture the value if they engage in incremental silviculture. There is a study, I understand, done by an individual named Luckert to back that up. Has the minister looked at the study? Does it have anything to say in terms of that question? Has it caused the minister or the ministry any concern that the incremental silviculture that really needs to be practised in order to increase yield on some forest lands will not really be practised because the incentive to do it simply isn't there?

HON. MR. PARKER: We're looking to an increased number of tree-farm licences in the province where the licensees invest in intensive forest management on those area-based tenures. They reap the benefits of their investment. Of course they would be concerned about recovering their investment. On volume-based tenures, like forest licences for example, there is no provision for licensees to go into intensive forest management unless they can recover the benefit of their investment.

Where intensive forest management is possible in areas that are not in tree-farm licences, where the funds are available from the Crown, we would undertake to do that. One of the reasons we're going for a second agreement under the forest resource development agreement is to provide the funding. FRDA II will be stand-tending; it's not a backlog agreement. Stand-tending is intensive forest management.

[11:45]

MR. MILLER: Is the minister saying that public money will be going into incremental silviculture? The recipient of that benefit is surely not the licence-holder; it should be the Crown.

HON. MR. PARKER: Any public funds expended on public lands that result in incremental cut — that is, extra cut over and above the annual allowable cut level.... It is the Crown's to dispose of. What I'm telling the member opposite is that public funds expended on public lands indeed accrue to the public, and the benefits are that we have additional volume to dispose of. However, money spent by licensees on tree-farm licences for intensive forest management.... The benefits of that intensive forest management accrue to the licensee. Where he's spent his own money, he's entitled to a return on the investment. If there's any public money used on a tree-farm licence, the increased cut attributable to the Crown's input is ours to dispose of as we see fit.

MR. MILLER: If private moneys are expended on TFLs, and land or cut is deleted from the TFL as a result of new policies, will the companies be compensated for the money expended on incremental silviculture?

HON. MR. PARKER: That's a "what if." Whatever takes place, we'll deal with each case on its own merit.

MR. MILLER: With regard to marginal lands, it would seem obvious that in terms of applying or going back in reforestation, silviculture and all the rest of it, the costs may be higher on the marginal land than they will be on the good land. In other words, the basic cost of silviculture will be higher. Probably the value of the timber taken off the marginal land will be less. I wonder if there's not a bit of inequity built in. If so, is there any system to deal with that? The people I've talked to indicate that in some instances reforestation is simply not the thing to do, or that even with reforestation the rotation period is extremely long. Is there not a bit of inequity in terms of requiring all licence-holders to reforest and apply silviculture to lands that they have harvested? It will obviously cost the holders of the good lands less to comply with that. They'll receive a greater value in terms of the timber taken off those lands. Does the minister see that as an inequitable situation?

HON. MR. PARKER: As you harvest a block of timber, there's variability in the land capability on that block. That block may be 100 hectares, or it may be 40 hectares, but there's variability. There are some prime growing sites, some very poor growing sites and everything in between. We require the harvested area to be replanted. For denuded areas that are poor or low growing sites, there isn't sufficient economic advantage to deal with that in an artificial reforestation program. As far as harvested areas are concerned, those areas that are harvested must be regenerated with a new forest to a free-to-grow state.

On the low site area, it may be very expensive to try to establish a crop from the standpoint of getting the seedling to survive on its own. But in a high site, the other problems are there — the brushing in and the weed species coming in that have to be controlled. There's quite a bit of cost established with the high site as well, but the returns are greater.

MR. MILLER: Is it conceivable then, under a preharvest silvicultural plan, that a licensee may simply say that

[ Page 4807 ]

in the opinion of their forester, it is not worth trying to establish a free-to-grow crop on a piece of forest land?

HON. MR. PARKER: No, Mr. Chairman. If it's to be harvested, it will be reforested.

MR. MILLER: There has been a great deal of controversy since the implementation of the new stumpage system. Various studies were undertaken by the minister in terms of the application of that new system; and, at least according to the study mentioned in the release of March 23, the ministry is saying that the new timber-pricing system has been implemented satisfactorily. Despite that, various people, including the Premier, have been speaking out about the system and its application, and the implications for producers in various parts of British Columbia.

I just want to quote from a story in the Prince George Citizen of March 14, 1988, an article by Ken Bernsohn, staff reporter for the newspaper, in which the Premier is quoted:

"Timber cutting fees in the Prince George area are 'a bad scene and some adjustments will be made,' Premier Bill Vander Zalm told the Citizen Saturday. 'We've had no complaints' — about new higher timber-cutting fees — 'aside from the Prince George area,' he said in an interview following a $75-per person fund-raising dinner at the civic centre which attracted... 230 people' — that's not bad. 'It will be coming to cabinet next week and some changes will be made,' he said."

As a result of those statements by the Premier, has the minister taken any action with regard to the new stumpage system and its application?

HON. MR. PARKER: The member didn't see fit to carry on all of my comments.

MR. MILLER: I didn't quote you.

HON. MR. PARKER: I thought you quoted my comments in a speech I gave, in which we said that the comparative value pricing system is the system that will be used for stumpage appraisal in the province — it's here to stay. It has been implemented satisfactorily.

There are a number of anomalies that have cropped up as we introduce a new system. If you introduce anything new, you have to debug it. We've been working with people all over the province. They have their concerns. Some of those concerns have been aired by members of the opposition and the government in the last couple of days, and those are the things we deal with.

There are times when there are arithmetical errors or oversights and when the information used wasn't the best, and better information has come to hand as a result of dialogue with interested parties. We are constantly trying to improve the system. We've been doing that, and we will continue to do that. We are a proactive government.

MR. MILLER: I assume that as a result of the statements by the Premier, obviously since March you've had a chance to review that. Have there been any fundamental changes in the application of the stumpage system, primarily to the Prince George area? That, in the Premier's words, is the only area in B.C. where there really were complaints about its application. Are there going to be or have there been changes to the system as a result of those complaints?

HON. MR. PARKER: There have been no fundamental changes. There is always some fine-tuning to take place on different things from time to time. We're not changing the fundamentals of the program, because if we do, we jeopardize our replacement agreement.

MR. MILLER: In fact, the system can't really be fundamentally changed; otherwise we'd be in non-compliance with the U.S. producers.

With regard to the function within the ministry, the system calls for a periodic review based on information from Statistics Canada. The minister mentioned yesterday, I believe, that there was some problem getting that information quickly enough or in a good form so that that review could be conducted.

That's a quarterly review, as I understand it. Have we gone past the period of time, the quarter? Has there been a review? Has there been any change? What's the analysis of the ministry with regard to the application of those quarterly statistics to the stumpage system?

HON. MR. PARKER: No. not in the first quarter. There will be reviews in the second quarter because the StatsCan information has not been in a format we could use.

MR. MILLER: Just in terms of the market, have there been any changes since the stumpage system was introduced. One of the major complaints, if not the major complaint, about the system that I've heard from the industry is that they claim it's not market-sensitive. The minister has claimed on the other side that it is indeed market-sensitive, that you have the capacity to make these alterations based on the information. We now know that, at least for the first quarter of its application, we have to agree with the industry that it's not market-sensitive, I guess, because for whatever reason, whether it's StatsCan's fault or the ministry's fault, they have been unable to conduct the review that is so essential to the application of the system. It goes right to the heart of the industry's claim that the system is not market sensitive.

Have there been changes in the industry, and what is the impact of this lack of review? Will changes, if made in the second quarter, be applicable to the industry retroactively if it's discovered that there should have been changes as a result of a first-quarter review?

MR. CHAIRMAN: Shall vote 40 pass?

MR. MILLER: The minister is discussing with his staff, trying to get answers to the questions I raised, Mr. Chairman. In view of the time, I would move the committee rise, report progress and ask leave to sit again.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 12 noon.