[ Page 4809 ]

CONTENTS

Routine Proceedings

Oral Questions

Lunch programs in schools. Mr. Cashore –– 4809

Social assistance rates. Mr. Cashore –– 4809

Privatization of university libraries. Ms. Marzari –– 4809

Adult ESL programs. Mr. Barnes –– 4810

Economic development regions. Mr. Blencoe –– 4810

Transit fare increases. Mr. Rose –– 4811

Ministerial Statement

Access Awareness Week. Hon. Mr. Veitch –– 4811

Mr. D’Arcy

Hon. Mr. Reid

Mr. Rose

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

On vote 40: minister's office –– 4812

Mr. Miller

Mrs. Boone

Mr. Williams

Mr. Michael

Mr. Guno

Mr. Rose

On vote 44: North Coast development region –– 4820

Mr. Blencoe

Mr. Michael

Committee of Supply: Ministry of Agriculture and Fisheries estimates.

(Hon. Mr. Savage)

On vote 9: minister's office –– 4823

Hon. Mr. Savage

Mr. Rose

Mr. Guno

Ms. Smallwood

Mr. R. Fraser

The House met at 2: 10 p.m.

HON. MR. REID: Mr. Speaker, I'd like the House to welcome today the Council of B.C. Regional Tourist Associations representatives, who are in the members' gallery. We have with us Garry Sharpe, the chairman; Jean Anderson, the vice-chairman; Trudy Bennett, one of the directors; Mike Smith, a director; and Don McIntosh, a consultant. Would the House give these people a very special welcome.

HON. S. HAGEN: It's my pleasure today to introduce from the Comox riding Bruce and Georgia Thompson. Bruce is the superintendent of schools for School District 71; he's here with the secretary-treasurer, Mr. Bill Burns.

I also have in the House today as a guest Mr. George Hobson, a former mayor of the city of Courtenay, a great community worker. Would the House please assist me in bidding him welcome.

MR. SIHOTA: I'm pleased to say that in my riding sits the Royal Roads Military College, which this year, interestingly, for the first time actually graduated women. In any event, in the gallery today are a number of students from Royal Roads. I wonder if the members of the House would join me in welcoming them here today.

HON. MR. BRUMMET: We have some very special guests in the gallery today, at least in my estimation. We have Mrs. Dixon from London, England, who is visiting the south end of Vancouver Island, and with us in the members' gallery; and with her, her daughter Susan Anderson from Vancouver. Hosting them and joining them is my wife, Lois, who also has a second purpose for being here: since I'm so seldom home, she wanted to ascertain that I am actually here. I'd like the House to make them very welcome.

MR. JANSEN: We have some great grade 9 students from a great community that you know, Mr. Speaker, from Timothy Christian School. They're here with Theo Vandeweg, Mr. and Mrs. Chris Neels, Mr. Bill Boesterd and Miss Cathy Vroegindewey. Would you please make them welcome.

MR. PELTON: Hon. members, our Speaker has a number of guests in the House today, and I would like to mention them to you: Mr. Issa Fahel from Vancouver; Mr. and Mrs. Awarnin Dahar from London, England; Mrs. Mimi Costa from Victoria; Mr. T.K. and Mrs. Pauline Campbell, Mrs. Alvina Heath and our Speaker's wife, Yvonne Reynolds. Would you welcome them please.

MR. SIHOTA: I've just been handed a note, and in furtherance of my introduction I should indicate to the House the names of the six student officer cadets who are here from Royal Roads. Actually they're from the College Militaire at St. Jean, but they're taking an English-language training program at Royal Roads. In attendance are Officer Cadet Ainsley, Officer Cadet Fortin, Officer Cadet Graveline, Officer Cadet Larose, Officer Cadet L'Italien and Officer Cadet Therien. Joining them is Merry Connor, their instructor.

Oral Questions

LUNCH PROGRAMS IN SCHOOLS

MR. CASHORE: Mr. Speaker, my question is to the Minister of Social Services and Housing. The Vancouver doctors have recognized the need to feed hungry school-children and have donated $10,000 towards this. Will the minister now quit his rhetoric and own up to his moral and legal obligations to feed hungry kids?

HON. MR. RICHMOND: The member opposite and I have canvassed this subject at length in this House, both in question period and during my estimates. He knows full well that the philosophy of this government is to make sure that all children in the province are fed — not just a few selected by the Vancouver School Board. However, should the Vancouver School Board and others feel it necessary to enter into a school lunch or breakfast program, then I commend them for that. I commend the doctors for their decision, if they wish to help out in that,

[2:15]

SOCIAL ASSISTANCE RATES

MR. CASHORE: A supplementary question, Mr. Speaker, The minister knows that the philosophy isn't working. The recently released SPARC report uses the ministry's own figures, which show that many families on income assistance must use part of their food money to pay for their shelter. Will the minister. in the name of strengthening the family, now raise income assistance rates to meet the basic needs — not frills — such as food, clothing and shelter for people on income assistance.

HON. MR. RICHMOND: I too have read the SPARC report, which arrived in my office yesterday. It reads very much like the SPARC report of last year and the year before that. Nonetheless, we go to great lengths to make sure that we are in the median of services and payments when it comes to welfare or GAIN. When we compare our numbers with the provinces across Canada, in most categories we are almost exactly in the middle. There are some categories such as GAIN for the Handicapped where we are far out in front of the rest of the provinces. There are some categories where we may be slightly lower than the median; I'm thinking of those who are employable. But for the most part, we are about in the centre of payments being made across the country.

MR. CASHORE: Supplementary, Mr. Speaker. The minister says he has read the SPARC report for the last three years. Obviously he is a slow learner and he doesn't have very good reading comprehension. One has to wonder what in God's name the minister's justification is for keeping income assistance rates below subsistence. I would like to ask the minister: would he not agree that it is not the parents of hungry children who are guilty of child abuse, but his own ministry?

HON. MR. RICHMOND: That was more in the form of a political speech than a question, Mr. Speaker, but I would urge that member to not only listen to advocacy groups such as SPARC, End Legislated Poverty and those who are always advocating on behalf of people on GAIN. I would urge him to get out into the community sometime and talk to some of the people around this province, and to hold a town hall meeting or two and see what the people in the province think, rather than just listening to advocacy groups all the time.

PRIVATIZATION OF UNIVERSITY LIBRARIES

MS. MARZARI: I have a question for the Minister of Advanced Education. Because of the general underfunding of universities in this province and in this country, we have

[ Page 4810 ]

discovered that universities are looking at selling their library collections — their libraries — and leasing them back. We know that this is happening in B.C. as well. Simon Fraser seems to be well on the path. Will the minister state categorically that this government will not allow B.C. universities to sell off their public libraries in order to raise cash?

HON. S. HAGEN: I'm pleased to address that issue. As a matter of fact, I'm sure the hon. member opposite is aware that this government just announced one of the largest capital funding programs ever to be announced in this country. We announced a six-year program of $110 million to be matched by the private sector, which will increase the amount of money spent on capital construction over the next six years by $220 million, in addition to the regular annually budgeted amount for capital construction. There is no other province in Canada that can match this record.

MS. MARZARI: What is the minister going to say when the universities come to him to lobby for them to the federal government for this particular program: selling off the W.A.C. Bennett Library at Simon Fraser University — privatizing that library? What are you going to say when the universities come to you and ask for your assistance in selling off the library so that they can lease it back?

HON. S. HAGEN: I have had no correspondence or verbal discussion with the universities on that question.

ADULT ESL PROGRAMS

MR. BARNES: I have a question to the Minister of Advanced Education. It's very distressing to learn that the Ministry of Education has announced that in September 1989, adult English-as-a-second-language programs will be transferred to Advanced Education to be delivered by community colleges. Adult ESL programs offered by school districts in the lower mainland area are overwhelmingly successful at reaching mothers with small children and senior citizens. Can the minister clarify how this move has improved the situation with respect to delivery of this service to these needy individuals?

HON. S. HAGEN: Could I ask for the question again? The speaker stated that the program was being transferred from the Ministry of Education to my ministry. Is that what you said?

MR. BARNES: Yes.

HON. S. HAGEN: Okay. We not only have programs in our colleges that deal with this, we have many joint programs with high schools in various communities — Haney is one that I can think of — where these programs are operating very successfully.

MR. BARNES: It may be true that the programs are available at the present time to the ordinary person who is interested in English as a second language, but the concern here is that these are families, mothers quite often. Most of them are females who have young children, senior citizens, new Canadians, people who do not have the dollars and are now going to have to travel to a community college facility, of which you know there are not that many compared to the 38 or so outlets presently available in the community — schools and community centres. So there is quite a difference. As well, there's a cost factor involved.

I'm wondering if this is an example of the government's future multicultural policy in terms of making a vital service, such as English as a second language, available to people who need it; or is it going to be on the basis of those who can afford to pay, as is the case with community colleges?

HON. S. HAGEN: The member asked a question with regard to multicultural policy, and I'm not the minister in charge of multicultural policy.

MR. BARNES: I'm asking the minister: is this going to improve the situation? Will this make the program better for those people in need of English as a second language? That's what I'm asking you, because at the present time the program is doing very well as it is. Are you improving the situation by making it more expensive for those people in need by going to the community colleges with it?

HON. S. HAGEN: Our desire as a government is to make these programs as available as possible to the people who need them. I recognize the importance of offering these programs to all of the individuals who come here who need English-as-a-second-language training. Our job is to make sure that they can get that training.

MR. BARNES: I'll just say that this is a backward step and it's unfortunate. I think you will find your experience will be that there will be many people who will no longer be able to travel those distances, as will be the case.

ECONOMIC DEVELOPMENT REGIONS

MR. BLENCOE: I have a question for the Minister of Advanced Education, in his other role as the governor of Vancouver Island. Yesterday the Premier, in his tirade, dismissed the mayor of Kelowna's comments about decentralization, dismissed the mayor's concern about tension and confrontation being continued in the province of British Columbia. Yet Jim Matkin has said it's hard to understand what this program is supposed to do. The mayor of Kamloops has said: "I think there's a hidden agenda with decentralization."

The question to the governor of Vancouver Island: unlike the Premier, are you prepared to listen? Are you prepared to recommend and respect British Columbians and recommend that this undemocratic experiment in confrontation once and for all come to an end in the province of British Columbia?

HON. S. HAGEN: I'm very pleased to address that question, because only three short weeks ago, we had a meeting of representatives from the entire minister of state region one — the number one region in the province — and the only person who wasn't there was the hon. member, who had been invited and didn't show up to represent the people he represents. I want to tell you that we had mayors, aldermen, regional district people, labour people, chambers of commerce and people from all over this region there to discuss the issues they wanted to discuss.

We set up committees. Every one of these 80 people is very happy; they're thrilled to be in this group. We had representation from south of the Malahat, north of the Malahat, the Bella Coola area, Bella Bella, northern Vancouver Island, the east and west coast of Vancouver Island. I want to

[ Page 4811 ]

tell you, Mr. Speaker, that these people are very happy with the system that's been laid out and very happy to play a role and take part.

MR. BLENCOE: That was my next question — the 80 people that attended in Campbell River. My understanding and the information I have received is that 80 people came away frustrated with that meeting. There was no money for programs. When they asked about specific programs, the minister referred them to line ministries, and they were told there was no program through this minister of state system.

Mr. Speaker, to this governor of Vancouver Island, when are we going to end this red tape, this frustrating business in the province of British Columbia and get back to normalcy in terms of governing the province of British Columbia?

HON. S. HAGEN: Mr. Speaker, I have no idea how the hon. member opposite would even know what happened at the meeting, because he wasn't there. He was invited but he didn't show up. I can tell you that every one of the people who were at that meeting is serving on one of the subcommittees and very anxious to play a role. The grass roots in this province have come alive, and people are really anxious to take part in the governing of this province. I tell you that he is really missing out on something by not playing a role.

TRANSIT FARE INCREASES

MR. ROSE: Perhaps we could leave the governor of Vancouver Island for a minute; I'd like to address my question to the lord of the lower mainland. As one MLA who represents Vancouver suburbia, I'd like to ask the government how it can justify the transit fare increases that took effect yesterday at a time when the Transit Commission is expecting B.C. Transit to earn a pretty good profit next year.

HON. MR. VEITCH: I am very pleased that the hon. member asked that question, and I am so sure that he will want to receive an answer that I will take it on notice for the hon. minister responsible for transportation.

Ministerial Statement

ACCESS AWARENESS WEEK

HON. MR. VEITCH: I rise to make a ministerial statement. This week is Access Awareness Week in British Columbia, an opportunity to celebrate what we have accomplished in providing services and facilities for the disabled. It's also a time to assess what remains to be done and to set goals for removing barriers that isolate disabled people, and thereby improve their quality of life.

[2:30]

The idea for an access awareness week sprang from Rick Hansen's Man in Motion tour, which ended in Vancouver in May 1987 with an emotional gathering in British Columbia Place. Mr. Hansen felt very strongly that the momentum created by his epic journey should be maintained. This was done in several ways.

The first was by designating a special week each year, at the end of May, to allow Canadians to take stock of the status of those with disabilities. Another was to establish local mayors or municipal committees to represent the interests of the disabled. The third was setting up a special Premier's advisory council for the disabled.

I would like to take this occasion to report to you and the House on initiatives this government has taken in all three areas, First of all, there is National Access Awareness Week. My ministry has provided financial support for a B.C. group working on stimulating activities for the week. We had a representative of this committee, which had members from various levels of government and disabled organizations. I would like to congratulate that British Columbia group and all those involved for a job well done.

Contacts have been made, and Access Awareness Week activities were organized in 95 British Columbia communities. Earlier this week, the government released a video presentation called, "A Shared Experience," which was produced as our contribution to the week. The purpose of this video, which has been widely circulated, is to show what has been accomplished in British Columbia in terms of removing barriers that isolate those with disabilities and help them improve their quality of life.

Most of the projects featured in the video were financed in part by the British Columbia Lottery Fund. They included a Maple Ridge preschool which mixed children with disabilities and so-called typical children; a group of disabled who use specially equipped ultra light aircraft and all-terrain vehicles to gain a feeling of independence; a special transit service in Prince George which allows those with disabilities to leave their homes and join in community activities; computers and special equipment which help a group of people with disabilities at Vancouver Pearson Hospital express their musical talents.

These are just a few examples used in the video to illustrate what can be done with the cooperation of government, charitable organizations and community groups to improve the quality of life for the disabled in the province of British Columbia.

My ministry was given the responsibility for setting up the Premier's Advisory Council for Persons with Disabilities. That process is well underway. In conjunction with that activity, we have also been working to establish local, municipal advisory committees which will provide a grassroots network for the council. We now have more than 70 of those local groups organized in cities, towns and villages around the province. As far as the council itself, last summer I established a steering committee chaired by the hon. second member for Vancouver-Little Mountain (Mr. Mowat).

When I think of advocacy, I think of Rick Hansen, I think of Fonyo and sometimes the late Terry Fox. But the greatest advocate that we have for the disabled is here in this House, the second member for Vancouver-Little Mountain.

That six-member government committee recently completed a tour of 11 British Columbia communities to receive input on such issues as the role, membership and operational structure of the Premier's council. About 250 written or oral presentations were received from nearly 800 people who attended the meetings in Nanaimo, Chilliwack, Prince George, Kamloops, Terrace, Kelowna, Dawson Creek, Vancouver, Smithers, Castlegar and Victoria.

The committee is now preparing a report based on what the members heard. That report will be made public and will form the basis of recommendations to the government on the role of the council and how it should operate. Sometime soon after the release of that report, Mr. Speaker, legislation authorizing the establishment of the council will be introduced to this House, as was indicated in the Speech from the Throne which opened this session.

[ Page 4812 ]

In summary, Mr. Speaker, I think the government can be proud of its initiatives in this area. We are working to keep alive that spark of awareness and enthusiasm generated by Rick Hansen's wheelchair tour around the world. We hope, through activities like this and subsequent access awareness weeks, as well as eventually through the work of the Premier's advisory council, that British Columbia will become a great place for the disabled to live and a model community for others to imitate.

Thank you, Mr. Speaker. I enjoyed bringing this to the House.

MR. D'ARCY: First of all, I want to thank the minister for making a copy available before his statement.

In reply, I have to say that any initiative on the part of the government to assist the disabled is welcome on this side of the House. I have to make a couple of comments, though. At this stage it has all the appearances of a top-down program, when it's quite clear to all of us, from all of our communities, that the primary problems disabled people have in the province of British Columbia, or indeed anywhere.... First of all, a great many of them live in deep poverty. We all know that the provincial government's track record on deducting federal pension increases from provincial assistance is unblemished. It's consistent: whenever the federal government — usually before an election — increases the amount of money it makes available to the disabled, without exception the province simply deducts it from GAIN payments.

Secondly, a major problem throughout the province is transportation. As the minister has stated, there are some transit services and societies providing transportation for the disabled in some of the larger centres. The fact is that those services are still, shall we say, rather crude, and need to be expanded in a major way if disabled people are indeed going to have transportation, and provide the ability for them to get out and use their talents, which are considerable in most cases, for the betterment not only of themselves but society at large.

These initiatives are welcome. I have to repeat that, but we have a very long way to go in this country, and the awareness of government is greatly appreciated. We will all hope to work together in seeing that this awareness actually filters down into real benefits for the increased number of people who are disabled out there and who could live much more satisfactorily and have a much higher quality of life, particularly those who live in a great deal of poverty.

MR. SPEAKER: I would like to advise members, apropos the minister's statement and the opposition's response, that two members of this House and the Speaker attended Ottawa last weekend regarding national awareness for the disabled and attended a committee hearing all day Monday. I will make sure that the Hansards from that committee hearing are made available to all members. It was very impressive and the British Columbia members participated actively in those hearings.

HON. MR. REID: I'd like to commend the minister for his announcement of Access Awareness Week, but also pay a special tribute to a community in British Columbia. In the tourism component of physically challenged access, the Powell River Kinsmen Club commenced in 1987, and are just completing this year a physically challenged campsite and trail development program for physically challenged tours from around North America. It certainly is commendable that we mention that today in recognition of a community that has in the past developed this program, but it is certainly a tribute to that community to be mentioned in the context of Access Awareness Week today.

MR. ROSE: As a former Kinsman I'd like to respond to that and add my congratulations to those of the minister, and they are sincere.

I would just like, though, to remind the House and perhaps to ask the Speaker — although I don't know what vehicle I can use to do that from this position — whether or not statements by ministers welcome multi-responses. In some Houses they do and in others they don't. A little guidance from the Chair through an announcement at some future time might be helpful; but my information on this particular point of order is that they are for conveying information on government policy and that they should be brief, precise and non-argumentative. I think the minister's statement faltered on at least a couple of those guidelines.

Orders of the Day

HON. MR. STRACHAN: If I could respond as well to my hon. colleague opposite, I think the way the ministers' statements today were handled was appropriate. The Provincial Secretary made a statement which was responded to; the Minister of Tourism made a statement which was also responded to. Those are the guidelines: one and one.

With that, 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: Before we adjourned we had been discussing the stumpage system, and I had posed a question to the minister which I assume he may now be in a position to answer. Just to quickly cover the ground, the minister admitted that despite the announcement of the major change in the way that we collect stumpage in this province and the reaction to that change that's been made known in the province by the people in the industry in terms of the question of market sensitivity and the assurances given by the minister on numerous occasions that the system is market-sensitive, that it's based on adjustments and based on a quarterly review.... The minister admitted that no quarterly review was done. For whatever reason, the ministry was unable to conduct a key component of the stumpage system.

My next question was whether or not, when they do get around to conducting that review, any changes to the system based on it will be retroactive.

HON. MR. PARKER: The first quarter under the CVP system was considered for adjustment. The information we had from the StatsCan source.... The index excluded a portion attributable to the softwood lumber tax. This has since been corrected and we're in a position to make adjustments, but the indication of the price fluctuations in that first quarter.... The staff advised me that it did not make it necessary to make an adjustment, so we were fortunate in the

[ Page 4813 ]

circumstances. Of course, the softwood lumber index we're looking at here is all softwood lumber sales, not just U.S. rail sales. We believe that for the second quarter any adjustment will be relatively small and any retroactivity that may be indicated is probably going to be unnecessary.

MR. MILLER: In any event, retroactivity would be applicable in the event that adjustments were made.

MR. CHAIRMAN: The minister.

HON. MR. PARKER: Thank you, Mr. Chairman, and I thank you for not calling the vote while I was conferring with my deputy.

The procedure is one where if things are improperly collected, then retroactivity may be indicated. If it's indicated to be necessary, we'll consider it and most likely implement it.

[2:45]

MR. MILLER: That's a good, straightforward answer.

The minister is of course aware of the Prince George situation. I assume that most people in the province are aware of it, through the submissions that have been made, but more particularly the minister and people in his ministry. Certainly the Premier commented that he thought that they should get a break.

There are previous comments by the deputy minister that the ministry is not in a position to offer stumpage breaks on a regional basis and that to do so in one area would require an increase in another area; there is no flexibility within the system to make those kinds of adjustments; and further, if we did that, we would be in violation of our agreement with the United States with respect to the new stumpage system. Given that and given that the Prince George situation is under review, I'm wondering if the minister could advise just what options may be available to the government if what has been reported is correct. I quote the minister from the Prince George Citizen of April 14. Responding to the Thomson report, he says: "It tells us they" — northern interior sawmills — "are making considerably less than they were before new timber-cutting fees were brought in last October, and it wouldn't take much of a downturn in the market to put them in a loss position."

That suggests a potentially serious situation. I'm wondering what flexibility the minister has, given what I've previously stated and I believe is correct — it's been confirmed by the minister — in terms of the options to move by the ministry.

HON. MR. PARKER: We have an agreement made with market partners in the United States based on a process. We won't make any fundamental changes to that process. Two parties made the agreement; we made the agreement with the other party. So there won't be any fundamental changes to that without destroying the agreement to determine that there will be replacement for the softwood lumber tax on shipments out of British Columbia into the United States.

But there are minor refinements that need to be dealt with, and we deal with them as the information base improves. Those are the sorts of changes we can make. The market-sensitivity of the system is one of the items that has to be fine-tuned. We have to fine-tune it on the basis of the Statistics Canada indices that we receive, and we're working with the people involved to come up with that information. Those are the sorts of modifications that can be made.

MR. MILLER: There can be some minor refinements. as the minister refers to them, but there cannot be any major adjustments in the system even though that system may result in — to quote the minister — the operators in that region being put in a loss position. It would seem to me that the new stumpage system, although it does increase revenue, tends to put the government in a box in terms of responding to the economic situations in this province and on the markets we sell to.

I do take exception to the minister referring to the U.S. lumber lobby as our market partners. Quite frankly, we're not partners with the Americans in terms of competition for the products we produce out of this province; we're not partners but competitors. Maybe it's viewing the people in the United States as partners that led this government — at least in terms of their atrocious record in collecting rents — to allow the U.S. to get the upper hand and set in motion the wheels that resulted in this current stumpage system.

My colleague from Prince George may want to come in at this point with some particular questions about that region.

MRS. BOONE: On the same issue, obviously it's of concern to just about anybody who depends a great deal on the forest industry, and without the forest industry my community would be non-existent.

I want to make it clear that we all acknowledge — and, I think, the industry acknowledges as well — that there had to be some changes in the stumpage rates, and we've certainly been calling for these for a long time. But it appears that this has gone beyond what is acceptable. The deputy minister said in an article in the Prince George Citizen in May that it is a matter of trial and error to see if the figure is suitable. Some firms are saying that they will be in the red shortly, and the minister acknowledged this when he was in Prince George. I guess my question to you is, how many companies have to go bankrupt before that area is termed not suitable?

HON. MR. PARKER: There will be no bankruptcies due to the CVP system. But it's interesting that the member is concerned about the pricing of timber, when her colleague the first member for Vancouver East (Mr. Williams) says we're not charging enough. There's a hell of a paradox from the opposition benches.

MRS. BOONE: The minister said there will be no bankruptcies. When the minister was in Prince George he was on a television show. They asked you specifically whether some companies would be going into the red in a short time, and you indicated at that time that that was a possibility. What has changed your mind, and what indications do you have now that there are going to be no bankruptcies in the forest industry as a result of the stumpage issues? What has changed your mind since you were in Prince George a month and a half or two months ago?

HON. MR. PARKER: The member talks about being in the red and talks about bankruptcy. There's a substantial difference between having a loss in a certain fiscal period and bankruptcy. She summed up by saying "bankruptcies." I said that bankruptcies will not occur as a result of the comparative value pricing system.

MRS. BOONE: I find this really a little hard to understand. The minister is saying that some people may be in the red, but that doesn't mean they're going to be bankrupt. If

[ Page 4814 ]

they're consistently in the red for several years, they are going to go bankrupt. I have asked the minister what information he has had from the industry to indicate that these stumpage rates are not going to put them consistently in the red — I guess that's the word you're looking for — so that they will not go bankrupt. What has changed so that you are now saying that some of these companies won't be folding?

HON. MR. PARKER: The comparative value pricing system for stumpage appraisal will not force bankruptcies.

MRS. BOONE: It's all very well and good for the minister to stand there and say that comparative value.... What is it then that's going to create bankruptcies? Our mills are efficient. We have the most efficient mills in the province. We have some top-notch mills up there. If our sawmills go bankrupt, if our sawmills go in the red, it is not because of inefficiencies or any of those things; it is because of the stumpage rates that have been imposed upon them within the last few months.

Can the minister tell me, please, what has changed to indicate there will be no problems with the financial aspect of companies in our area? Have the companies told you this, Mr. Minister? Have they indicated to you that their finances are okay and that they will not be in a deficit situation?

HON. MR. PARKER: We've had a number of meetings with different operators in the area, and they are paying a great deal more for their timber. The member for Prince George North tells us that they're going to be either in the red or going bankrupt. She uses the terms interchangeably. I think there is a significant difference there for most people, and the House would most likely agree. The comparative value pricing system for stumpage appraisal will not force bankruptcies, although forest bankruptcy is one of a number of circumstances — they are variable. But we will not be a contributing factor to bankruptcies.

MR. MILLER: The problem with asking this minister questions is that you always get the same answers — and they're not all that enlightening.

With regard to the issue of the Prince George region in terms of stumpage and its impact on the producers there, clearly some producers are in a better position than others. If you look at the profits and gross sales of the major companies in British Columbia, with some very few exceptions it's been a pretty good year in terms of the market. They have made some good profits, and they should pay their fair share of rent.

The problem seems to be, however, with the unintegrated producers who, in selling their residuals, are at the mercy of the major companies. I note that in December of last year the deputy minister, Mr. Marr, indicated that the government is considering changes in the way chips are sold to pulp mills, in terms of increasing the value. I believe I asked the minister during some debate last year what position he was taking on that question of undervaluing chips, which was outlined most significantly in the Nilsson report. Has the minister acted on the recommendations or considerations of the deputy minister with regard to the price of chips from the unintegrated companies to the pulp mills — quite apart from the rather meagre increase announced in the middle of May?

HON. MR. PARKER: Residual chip purchasing by the pulp producers is normally through a long-term contract entered into by the residual chip supplier. Both parties negotiate the contract, and that's the case today. It was the case last year, and it's the case today. What we have done is to try to determine from the industry — both the suppliers and the consumers — how the formulas work. I guess all of them are tied to the market, to mill nets realized either as a group in some instances, as reported by StatsCan, or in other instances by individual mills. We haven't interfered in the contractual arrangements between the parties.

MR. MILLER: It seems to me that the mills would be quite interested in the solutions the ministry may offer. Your deputy clearly indicated that the government is considering changes in the way the chips are sold to pulp mills, in terms of evaluation.

Interjection.

MR. MILLER: Is the minister saying that they do not intend to do anything, that the deputy was wrong in indicating to the public, through the press, that they were looking at that? Is that what the minister is saying — that they have no intention? That's what you told me last year during debate — that you had no intention of looking at it. What is it to be?

HON. MR. PARKER: We haven't interfered in the contractual arrangements and we are not now interfering. As to what the future policy will be, we'll deal with it when the time comes.

MR. MILLER: It's cold comfort, if you like, to the nonintegrated mills in the Prince George region and other regions. Does the minister believe that there's a fair market in terms of setting those prices and in terms of the negotiations that take place between the unintegrated and integrated companies?

HON. MR. PARKER: There's been no indication to me that any of those contracts should be broken.

[3:00]

MR. MILLER: Can the minister advise if there's a significant difference between the offshore market for those residuals and the domestic market?

HON. MR. PARKER: Does the member opposite recognize the difference between regular supply and incremental supply? That's what is reflected in offshore markets.

MR. MILLER: Is the minister saying that because there is a limited supply in the offshore markets the price is higher? Is that what the minister is saying — that the offshore price is not a true market value, because there is such a limited supply? Is that what the minister is implying by his answer?

HON. MR. PARKER: The chips that are bought by offshore purchasers are incremental supply to those purchasers of the particular fibre that those chips offer.

MR. WILLIAMS: Just look at the chip prices in the Pacific Northwest. Don't talk about increments; don't talk about offshore. Just talk about the Puget Sound area, the American northwest, versus British Columbia. What's the difference in chip pricing?

HON. MR. PARKER: I don't have those figures at hand.

[ Page 4815 ]

MR. WILLIAMS: A minute ago you're an expert on incremental supply, and the next minute, when you are asked a specific question, it's ignorance that's behind it all. It's just fundamental and grotesque dealing with this minister.

The difference is something like this.

HON. MR. PARKER: Keep trying.

MR. WILLIAMS: Mr. Smug over there, dealing with the question of the Prince George region, is smug....

Interjection.

MR. WILLIAMS: Do you want the floor? Are you going to calm down? Are you going to settle down? The fact of the matter is that if you did your homework and looked at the question of the integrated companies — that is, the companies that own a pulp mill versus the companies that don't — you'd find a significant difference in profitability. Right?

That's the problem in the Prince George area and other areas, where the companies that don't own a pulp mill are not as profitable, because they don't get a full, true market value for the chips. If the company is an integrated company that owns the pulp mill and the sawmill, then they can transfer price, but the profits remain in the company. That's the game. The minister knows that, and he turns a blind eye to the discrimination that goes on with respect to the independent sawmillers in this province.

At the same time, those independent sawmillers have to pay Crown dues or stumpage for the timber — the same price as the integrateds. They get hosed when it comes to the chips they send to the pulp mill, because they're not getting full value or full price. That is presumably why the deputy said to the press in Prince George in December that the whole area was being reviewed. There is a basic inequity in the system, clear and simple.

That's the problem. There is discrimination against the independent sawmillers in this province. They're getting belted with new, higher stumpage rates — fair enough. They haven't been paying enough consistently — any of these companies — over time. But now it's an unfair game, because the integrated companies are able to do in these people and not pay full value for the chips. That's a serious problem for them.

So the first outfits to go into the red — which the member for Prince George is concerned about — will be the unintegrateds. Even though they're efficient — and many of them are more efficient than the integrateds — they're getting hosed on chip prices; it's as simple as that. One wonders at times how simple it has to be to get through to this minister.

You know, you've got a serious problem here in terms of this whole business of residuals and the whole question of fairness within the system. It's a serious problem of fairness in the system, and it is still unresolved.

Mr. Widman's management firm, in a recent report, said: "The average cost of logging on the coast, before stumpage, was $41.50 per cubic metre, whereas the price of both chips and pulp logs was around $32.50.... This would indicate that the pulp industry was subsidized by the sawmilling sector for about $9 a cubic metre." What we have are chip prices that are unrealistically low. It is causing reverberations through the wood economy of the province, causing distortions and consistently creating problems in terms of marketing pulp logs in the downturns.

That's part of the reason we get the kind of waste we have in British Columbia. That's part of the reason we get these incredibly high levels of waste. If there are chips being sold for less than what a pulp log is, then of course they'll go for the chips. Then in turn, with the integrated companies, they have it made because they get all of that difference between what the integrateds get and how they are able to transfer price internally.

So it's a serious problem. It is one of the major things that twists the whole provincial forest economy, and it's a bias against the independent sawmillers. It's an unfair, twisted bias against them. The numbers in terms of chip prices — the numbers I have here are 1987 numbers in the U.S. northwest — come out to $94.87 per bone-dry unit versus B.C. at around $75. Then you throw the exchange rate of 30 percent on top of that, which would add another $28 on to the American number. That gets us up to $123 in the U.S. per bone-dry unit and $75 per bone-dry unit in British Columbia. That's a 60 percent difference. That 60 percent is a free ride for the pulp industry. That load gets carried by the unintegrated companies when you start pushing in terms of the stumpage rate. That's the problem.

You're the purist, and you say: "Oh well, these are negotiated in the marketplace between rabbits and elephants" — the rabbit being the small, unintegrated company, and the elephant being the pulp buyer. That's not a free system at all. You get into transportation costs, and there are monopoly advantages that these pulp companies have. They use it to discriminate. The pulp companies have never in their history in this province been so profitable — never. Never have there been so many quarters where they were able to increase pulp prices in this province and in the recent history of this industry. They have consistently been able to make the now price levels stick internationally,

It's been an incredibly profitable period for these pulp companies. It's reasonable that the unintegrated companies should get the benefit of these circumstances. You can say: "Well, they're tied in, in a sense." But they're tied in from a low base. It's the base that has to change. If that doesn't change, then in Prince George and places like that where the unintegrateds face the discrimination, they will indeed be in trouble. That area has to be rectified, and that requires you and the ministry to deal with it.

HON. MR. PARKER: Mr. Chairman, the first member for Vancouver East talks about prices in the American northwest for wood chips, and then he talks about the $75 rate for wood chips in the interior. If he wants to compare wood chips on the northwest coast of the States, then he should compare them with the southwest coast of British Columbia. He'll find that the prices are very much the same, and the difference in exchange would be about the cost of moving the chips from British Columbia into the consuming areas of the Pacific Northwest. That evens it up and discredits his whole statement.

The agreements between suppliers and purchasers of chips in the interior are negotiated by both parties, and the suppliers have the option of not supplying chips to a particular plant and of looking elsewhere.

Interjections.

HON. MR. PARKER: Oh, yes, they most certainly do. As a matter of fact, some operators in the interior have opted to ship their chips elsewhere. Some chips from the interior come down to coastal mills, some go through to offshore markets and some actually go into the Pacific Northwest of

[ Page 4816 ]

the United States. So there is some commerce and opportunity around. The intention of this government is not to get involved in the contractual arrangements between the two parties.

MR. MICHAEL: I have a question to the minister; it centres around accounts payable. I know there has been discussion over the years since I've been an MLA about certain accounts not being paid within a period of time, but generally it's been with the Ministry of Finance. But this time, Mr. Minister, I can say that there's a case in Revelstoke, where apparently a system had been set up where people working for the Ministry of Forests were paid out of Revelstoke. I'm assuming that if it was done in the city of Revelstoke, it must have been done in other forest districts as well. This year the policy has been changed again from the way it used to be, and now the private entrepreneurs who do work for the Ministry of Forests are having to submit their bills, which then go on to Victoria.

Having worked in the private sector for many years, Mr. Minister, I can say that it's a very common practice among us all that once you get a bill, you pay it within 30 days. We're finding that that is not the case with people submitting bills now from the Revelstoke forest district, who are working in the private sector. They're lucky if they get paid.... In fact, they don't get paid within 60 days, and oftentimes it's longer. This is creating quite a hardship. Does the minister have any comments on that problem, or is perhaps the situation in Revelstoke unique to what's going on in other areas of British Columbia?

HON. MR. PARKER: Mr. Chairman, our policy is to try to have these accounts settled between 30 and 60 days. Of course, a number of things come into play: processing the documents at the field office and then bringing them through the system to where they can be paid by the Ministry of Finance. Delays do happen. But when each of these issues has been brought to my attention, I have asked our staff to pay particular attention to processing the accounts. As a government employee, regardless of whether you get the paper processed today or tomorrow, you are still employed; whereas for the contractor, it may mean the difference between making it and not making it if the paper isn't processed in a timely fashion. Once in a while we have to remind staff that it's most important to deal with these accounts payable and get them addressed in a timely manner.

[3:15]

MR. MICHAEL: To the minister, perhaps I should have given the name of the firm. It's City Transfer in Revelstoke. It's my understanding that they have current invoices totalling in the neighbourhood. of $10,000 to $12,000.

Turning now to a new subject, I'd like to cover very briefly the beetle-harvesting plan in the Penticton forest district. I certainly appreciate the intention, strategy and plans of the ministry in attempting to get as many companies and directing as many companies as possible into that region in order to harvest this infested area.

However, I'm somewhat concerned about the equity of the directives from your ministry, because one of the plants in my constituency — and I'll name the firm: it's Federated Cooperatives — has been directed to lay out a logging plan to log some 40,000 cubic metres in the Penticton forest district. That totals in the neighbourhood of 36 days of production, operating on two shifts. The hardships that they are expressing sing to me, Mr. Minister — and I understand, to your ministry — are that these particular types of logs don't fit in with their cutting pattern. They're very small pine logs. It does not lead to the type of production that they're used to.

The other inequity, as I understand it, Mr. Minister — and I would appreciate your comments — is that they are not being given an equitable allowance for hauling. As I understand it, there are no hauling allowances whatsoever between Kelowna and Salmon Arm, and that doesn't sit right with me. I don't understand why that would be the case, and it would be an example to me, Mr. Minister, of where perhaps we haven't looked at the equity of the hauling distances for those mills that have been directed to harvest in that area.

I also understand that there are stud allowances given to some of the southern mills, where those mills in the northern part of the Okanagan normally would not qualify for stud allowances, meaning that some firms can go in and log this beetle-infested area and indeed get the timber for as low as 25 cents, where a mill in my area, such as Federated, would have to pay about $8.

What I'm saying in a nutshell, Mr. Minister, is that I am concerned about the equity. I'm not sure whether you have been briefed on it up to now. If you haven't, perhaps we can wait and get the answer later, but it's of grave concern because it is certainly placing that particular firm in a position where they are not going to be able to be competitive with their counterparts, and that's just not fair. I'd like your comments, Mr. Minister.

HON. MR. PARKER: As I recall, there has been a requirement by the regional manager in the Kamloops forest region for licensees in the Okanagan TSA to concentrate on a beetle infestation area. If there are inequities, the operators, in having to deal with this emergent situation, will have to deal with them and I will follow it up with my ministry.

MR. MILLER: I just wanted to briefly canvass with the minister his views on the question of corporate concentration, which is of some concern to a fair number of people in this province. The information that we have currently indicates that there is an increasing level of concentration among the major companies with buyouts and mergers, and I want to briefly outline the situation.

On the coast, one firm — MacMillan Bloedel — owns 28.2 percent of the total allocated annual cut. This was a study done by Bill Wagner — a thesis. The largest four on the coast — four major licensees — control 57 percent of the total cut; the largest eight own 82.5 percent; the top 20 own 96.8 percent. Obviously that has implications in terms of the question that we were just talking about — markets for the residuals. It has been the subject of some discussion of the Vancouver log market — whether or not a true market exists. The consensus that I've been able to determine is that it doesn't.

Does the minister have any concern about this continuing and seemingly ongoing level of concentration that is taking place, with existing firms being purchased from both outside the country and outside British Columbia? Is there a level at which that kind of concentration is bad for British Columbia? If there is one, does the minister have any thoughts on that? At what particular level would he like to see this kind of thing continue? Are there options for the government in terms of dissuading this level of concentration in the industry? Just generally I would like to know the minister's views on that subject.

[ Page 4817 ]

HON. MR. PARKER: I guess we're all concerned about corporate concentration, so whenever acquisition opportunity is presented and we are asked for our consideration and approval, we take it under close consideration and deal with it accordingly. You have to deal with each case on its own merit.

MR. MILLER: There appears to be a fair degree of concentration now. I presume if the minister or the ministry has had input into that figure, they are comfortable with it. Would the minister see that level of concentration increasing? Would the minister have any concern about the level that currently exists increasing?

HON. MR. PARKER: It is very difficult to say what the future may bring.

MR. MILLER: I certainly agree with this minister in places; it's very difficult to know what the future will bring.

I want to canvass just very quickly a couple of local issues, but I believe my colleague for Atlin wants to ask some questions of the minister.

[Mr. Weisgerber in the chair.]

MR. GUNO: I really have only a few questions to pose to the minister pertaining to some particular developments in the Kalum timber supply area. Within the last few months, the ministry has printed a notice inviting bids for a forest licence in the Kalum timber supply area. As I understand it, this licence is worth 50,000 cubic metres and is for an initial 15-year period, extendible upon, as I understand it, determination of the regional manager.

The initial notice had a requirement that the bidders commit to building a processing facility within two years of getting that particular licence. I read the particular requirement in the notice inviting applications for the forest licence. It states: "The successful applicant will be required to construct and commence operating a timber processing facility in the Nass River valley on a location approved by the local regulatory authority, where applicable, within two years of award of the licence." That requirement, as I understand it, was subsequently removed when the notice was reprinted. I just want to ask the minister why the requirement for a timber processing facility was removed.

HON. MR. PARKER: We had several forest licences advertised in the province at that particular time which suggested that processing facilities would have to be erected. In our discussions in getting the replacement to the softwood lumber tax, it was considered by the other side of the table to be an indirect subsidy, so we withdrew that requirement from those forest licences that were out. It was on advice that we were jeopardizing our memorandum of understanding that we withdrew those requirements.

MR. GUNO: I'm still not sure whether it was the source of that particular legal opinion or the fact that this requirement would jeopardize the memorandum of understanding. Would the minister elaborate on the source of that particular opinion?

HON. MR. PARKER: That advice came from Ministry staff, which includes several types of professionals, including legal professionals.

MR. GUNO: Am I to understand that the freedom of our government to meet some very serious socio-economic situations in the Nass has been hampered by this kind of an agreement? Will the minister admit that in the Nass area there is chronic unemployment, reaching up to 90 percent in each of the four communities that are located in that area? Surely a response in terms of providing that any harvesting of timber should have the requirement that the processing facility be placed in that area so that people that live in that area are not witnessing dozens and dozens of trucks rolling out of the valley every day and yet having that chronic unemployment going on.... Surely we have a right to meet and deal with those kinds of situations.

HON. MR. PARKER: No, I'm not aware of the levels of unemployment in the member's constituency. but I imagine it's high. The forest licence called for bid proposals. The criteria for bid proposals adjudication include the social and economic impacts of the bid proposals, so if a party in the Nass valley is interested in bidding on such a forest licence, then their bid proposal will have to reflect the sort of impact that their purporting to undertake would have in the valley and have for the province. If it's a good, sound proposal, it would probably be successful. That's the purpose of taking bid proposals.

MR. GUNO: Can the minister advise just what the response is to this application notice?

HON. MR. PARKER: I don't know at this time, Mr. Chairman. That adjudication has to be dealt with by the regional manager. I imagine I'll be apprised in due course.

MR. GUNO: As I understand it, three liquidation forest licences were awarded in the Kalum TSA in 1986. At least one of these licences was awarded partly on the basis of a promise to build a processing facility in the area to handle the timber cut. The facility has not been built. Why has the ministry not required the tenure-holder to fulfill the promises made in the bid for the licence? I am referring to at least three licences that were awarded in that period.

HON. MR. PARKER: I'll have to check into that and get back to the member.

MR. GUNO: Another very short question. This relates to an order-in-council for Kalum that was issued in 1985 and allowed for free export of logs from the Kalum TSA. I understand that it's still in effect, in spite of the fact that other similar orders-in-council have expired. Can the minister update us as to the status of that particular order-in-council pertaining to Kalum?

HON. MR. PARKER: As I recall, that order-in-council was for a five-year period.

MR. MILLER: I note that, according to a release put out on May 27, the ministry has advised of a decision by June 30 on the 50,000 cubic metres in the Kalum TSA.

[3:30]

I want to go back and deal with the issue raised regarding the public notice that the timber was available. Maybe I didn't try hard enough, but we pursued this issue when it came to our attention that the original notice as published, I believe, in January of this year was withdrawn and a new notice issued

[ Page 4818 ]

in March. The initial information we received was that it was a violation of the memorandum of understanding. I want to confirm with the minister that it is now a violation of the memorandum of understanding with the United States for the province of British Columbia to advertise public timber for bid and put in that advertisement that we require a processing facility to be built in a certain location — that we are prevented from doing that.

HON. MR. PARKER: Mr. Chairman, the situation was one more of perception than anything else. It was felt by our staff that direction of wood to any specific point and a certain type of processing plant could be construed to be an indirect subsidy. At that point we had just got replacement and we didn't want to jeopardize what we had achieved. The advice was that we should not show that sort of advertising, but that we should certainly look in the bid proposal for local processing. So that's what we're doing. It's that simple.

MR. MILLER: It's obvious by the release of May 27 that we may be able to do through the back door what we can't do through the front door, and that is just as disturbing to me, even though we may be able to accomplish a socially desirable objective. If the minister has legal opinions — or even non-legal opinions — as to the decision taken by the ministry, I would appreciate being given copies of any he might have, because to me, it strikes at the issue of sovereignty. British Columbia is prevented, according to the minister's interpretation of the memorandum of understanding, from saying that we deem it desirable to have wood directed towards a certain end; that's considered by the Americans to be a subsidy, and we do not have the right to do that. If the minister has that legal opinion available, I would appreciate his making it available to me or members of the opposition. That's fairly fundamental, and to this point we had certainly not been award that the United States was able to impose those kinds of constraints on forest policy in British Columbia.

MR. CHAIRMAN: Shall vote 40 pass?

MR. MILLER: No.

The minister did not respond. Or is the minister not prepared to make opinions available to members of the opposition?

HON. MR. PARKER: Sorry, Mr. Chairman. I was being handed off the House Leader's box and missed the question.

MR. CHAIRMAN: Would the member repeat it, please?

MR. MILLER: I thought I was talking pretty loud. We're trying to get out of here and allow somebody else to do their estimates. I asked the minister if he had a legal opinion and, if he did, whether he would make it available; and if he had a non-legal opinion, whether he would make that available to the members on this side. The minister has confirmed that it is his opinion, or his staff's opinion, that we can no longer advertise a public resource in this province. We can't put an ad in the paper and say we're prepared to dispose of the timber of this province, and that we want it to be used for a certain thing, or that we want a processing facility built in a certain place. We do not have the sovereign right to dispose of the Crown timber of this province as we see fit, because people in the United States would object to it. It seems fairly fundamental. I'd like to see anything the minister has that backs up that interpretation.

HON. MR. PARKER: That advice came in one of my many meetings with my staff. I don't have any written opinions, so I haven't got anything written to share. The matter is one of perception; what the member opposite is working on right now is perception. He's all bent out of shape about perception: what he thinks, what he perceives, what he guesses, and so on.

The whole purpose of the exercise was to remove from the advertisement for timber any situation that might cause some upset in the international agreement that we have. There's no point in upsetting that international agreement. We called for bid proposals. Those bid proposals asked for proposals that consider social and economic benefits, timber utilization, environmental concerns, revenue, employment levels, and so on.

The licensed documents were advertised in the newspapers in the northwest and in the southwest. If you are interested, you can pick up the documents. The documents are quite clear about what has to be included in the bid proposal, and the best social and economic bid proposal will get the licence. That's the way it works.

MR. MILLER: It's not that simple. You've said yourself that it was your opinion, or your staff's opinion, that to advertise that timber with conditions was a violation of the memorandum of understanding. "We don't want to upset the Americans" — those are the words you used. We wouldn't want to take a chance on upsetting the Americans. We wouldn't want to put an ad in the paper and advise people what we want to do with our own timber, because that would somehow upset the Americans. That's quite disturbing.

I don't think most citizens of this province realize that we are hamstrung; that the relationship you so eagerly entered into — which your government in fact caused, if you like — has put those kinds of restrictions on a sovereign province's ability to dispose of timber and to have it utilized in the manner it sees fit. Sure, maybe you can achieve it through the back door. Your press release seems to make it obvious that the Nass Valley is a serious consideration. I commend the minister for that. But the overall policy is quite disturbing. The U.S. dictates what we can do. If the minister is not worried about that, he should be.

Interjection.

MR. MILLER: I'm not telling the Yankee to go home, but I'm telling the Yankee that he doesn't dictate forest policy in the province of British Columbia. We don't dictate their forest policy. Why should they dictate ours?

Having finished, but not completely.... There are many more subjects that need to be canvassed.

MR. ROSE: The size of knotholes in plywood.

MR. MILLER: Yes. I'll have to go back and talk to COM about their position on that.

Nonetheless, there may be other members who wish to canvass issues with the minister.

MR. ROSE: Everyone says, when they stand up: "I'll be brief." I'll be so brief that I think the Minister of Agriculture (Hon. Mr. Savage) should perhaps leave his loft and come

[ Page 4819 ]

down with his fisheries expert, because that's where we're moving very rapidly.

This has been a long session for the Minister of Forests. I would just like to have some clarification of a few little questions concerning the conflicts that may arise in the multiple use of our forest lands by, say, cattle and sheep producers, and forestry.

I met with a group of cattlemen in Smithers last fall, and I've met with some around Kamloops as well. They say it's lots of trouble dealing with forestry. To put it simply, it's very difficult to deal with forestry because of a number of reasons; other people have reported that to me as well. I think that the nature of our province and its forest lands is — or should be — one of multiple use, so we can maximize the benefits of those mostly public lands for a lot of users, whether we're talking about hunters and fishermen or cattle people or sheep grazers or just hikers or whatever. I think there has been an opening up of those lands, because if it were left to the forest companies.... And I know why. They don't want people cluttering up what they regard as their property and their responsibility. I understand that, but nevertheless it's not acceptable any more than it is for us to close our building here to the public. It's a public building; we have to keep it open, although sometimes tripping over large crowds of people gets to be a little problem — for somebody who's short, anyway, and trips rather easily.

I wanted to ask you a number of questions. I don't expect these to take very long if there's clear policy on them.

These cattlemen complained that there's no seeding of forestry lands so that they could use those lands for multiple use — for cattle. When these lands are cut and there's reforestation going on, there usually isn't any seeding along with it. I wonder if it would be possible for you to comment on whether that's true.

HON. MR. PARKER: There are areas where range is seeded, and there are other areas that are not to be used as range; they are planted. Cattle can be devastating on a new plantation until the trees get to a reasonable height. It's correct that some areas are not seeded, but there are areas that are seeded. Some folks think that their neighbourhood is one that should have range seed spread all over it because it's now been logged and we should be growing grass on there. The economic analysis of the area indicates that it should be growing trees as a higher-value product and a higher-value end use, and so we grow trees. There's always a bit of conflict that way.

The advice the member has been getting is that it's difficult to deal with the Forest Service when it comes to grazing issues. I'll take that under advisement and deal with it, because our clients — ranchers and farmers and the general public are as much our clients as the licensees — need to be dealt with properly and with respect and in good order. I appreciate receiving that information.

MR. ROSE: First of all, it isn't just the idle talk of some ranchers. I have some pretty good technical advice from members of the Department of Agriculture. It isn't just an idle rumour of somebody complaining. There's a more earthy word I could use than complaining, but in view of the lofty and dignified nature of this place, I will not do that.

There is some question whether certain animals grazing do ravage newly planted forests. Is that not the case? I visited an area seeded with, I think, white clover. I don't know the varieties, so I won’t go into it. Ladino, I think it was. How's that, Harry? It was apparently saving the trees, because where there*s foraging and forage available, the trees are left alone. This was the case with sheep and cattle.

I'd like to know if there's some prejudice based on nothing more than merely an assumption that cattle-grazing is devastating to young forests. The assertion by people I talked to is that if you seed them, they will not eat the trees. Cows don't like eating trees and chewing wood very much. They would prefer to chew clover or some other suitable forage for ungulates.

HON. MR. PARKER: The difficulty with cattle is the trampling of the plantations. Yes, sheep can be used to help keep brush down in plantations. They have to be watched closely and kept on the move. If you delay too much, they start gnawing on all vegetation, including the plantation. It needs proper foraging management if sheep are to be used effectively. They've been used successfully in several areas of the province.

[3:45]

MR. ROSE: I wonder if the minister could tell me whether or not it's the practice of private corporations to avoid planting grass in clearcuts, or is it just limited to public lands? I'm told that privately held lands — I don't know whether it's privately owned fee-simple land or TFLs or whatever they are; it doesn’t matter, they're in private hands — are generally not seeded even though they may not be anywhere near cattle ranges. Is that the case?

HON. MR. PARKER: I can't answer that at this time; I'll have to take that question under advisement, Mr. Chairman.

MR. ROSE: Finally, I missed most of the deliberations and answers of the second member for Cariboo (Mr. Vant) yesterday. So if this question was answered, I apologize for that, but I'd like to ask the question.

What is the status of range fees? There was a Green Paper out on this. Have they in fact been raised? I've just been looking at the farm income-farm assurance figures for the cattle industry, which indicate that the largest payout for people in trouble — something like $12 million — was in the cattle industry in '86-87. I wondered whether that is contributing to their problems, to their need for assistance — which I imagine they're reluctant to take, given their usual ideological bent; they don't want any government intrusion. I wondered if that's the case. What's the status of the range fees?

HON. MR. PARKER: Mr. Chairman, we've decided to postpone any increase in range fees for one year in view of the drought conditions throughout the interior and the difficulties they have placed on the range resource.

MR. ROSE: I wonder if there are any studies in forestry or agriculture — I can't ask about agriculture because the minister's not here now — indicating the economic value of range compared to forestry, whether perhaps certain lands would be better as ranges than replanted. Is there any information on that at all?

Another concern.... This is not a skill-testing question.

Interjections.

MR. ROSE: Are you ready? Shall you answer that now, or shall I finish my question?

[ Page 4820 ]

Well, first of all, it's a comparative economic advantage on specific lands, one vis-à-vis the other. The other part of it is: what is the...?

Interjections.

MR. ROSE: I think I'll just sit down until the conference ends. Then I'll form my final question.

HON. MR. PARKER: Mr. Chairman, my deputy is just trying to help me out here. I understand that there are site-specific assessments done within districts, but there are too many overall economic assessments of one land use-versus another. Empirically speaking, I don't know of any.

MR. ROSE: That, I think, is a reasonably critical decision for certain kinds of lands — what their future will be. I think it would be worthwhile to not just follow traditions because if you want to look at it that way, everything was bush around here once. Some we cut down; some we didn't. Sometimes it costs more to clear land than it does to go out and buy vacant land.

I wanted to know from the minister what the status is on the department's policy of peddling vacant Crown land, forested or otherwise. Is there an overall policy? What determines whether land is put up for lease or for sale, for TFLs or grazing leases or whatever?

HON. MR. PARKER: The Crown lands available for sale are listed in a quarterly catalogue circulated throughout the province. As often as not, any new lands offered for sale are on the basis of an application by a member of the public.

MR. ROSE: I was just wondering if there was an addendum to the answer, which seemed rather brief and taciturn — or terse. Is there anything else there?

HON. MR. PARKER: Mr. Chairman, the ministry has a number of properties available for sale throughout the province. Some are industrial, some recreational, some residential and some just commercial. We list them in a very comprehensive catalogue and distribute it throughout the province through government agents, Lands offices, the Queen's Printer, real estate and to anybody else on the mailing list who has expressed interest in such a catalogue in the past.

But from time to time, we have an application from somebody in the public who is interested in a particular piece of land. Probably most commonly, it's agricultural lease with a view to proving it up and purchasing it from the Crown through policy established in the Lands branch. That particular piece of land gets a solid assessment by a land inspector who is a person qualified either as an agrologist, an agronomist or a forester to do these assessments. They do a thorough investigation on that particular piece of land and determine whether or not it has a reasonable agricultural chance. When it does, the lease documents are processed and the lessee carries on. As he proves up the land, it becomes an opportunity of purchase. He has that opportunity to purchase — it's a public event; it's advertised — and he pays his money and takes his deed, and that's the way it comes about.

Vote 40 approved.

Vote 41: ministry operations, $366,149,032 — approved.

Vote 42: fire suppression programs, $80 million — approved.

Vote 43: forest resource development subsidiary agreement, $69,403,505 — approved.

On vote 44: North Coast development region, $738,176.

MR. BLENCOE: We want to continue our questions to the various governors of the states of the province of British Columbia. As we know, over the last few weeks there have been a number of people expressing concern with this system that we have placed upon local government, and I just wish to ask the minister responsible for this so-called North Coast development region a number of questions.

First question: could he tell me how much money he has spent thus far out of his first allocation of $1 million?

HON. MR. PARKER: The sum of $122,660.

MR. BLENCOE: Could the minister tell this House what that money was spent upon.

HON. MR. PARKER: That's been spent in part on salaries, travel, courier services, business meetings and data processing.

MR. BLENCOE: My only comment is that, as with a number of these ministers of state, once again we find that this region also did not require the $1 million special warrant, and once again we bring to the attention of this House that there indeed was no emergency for that $1 million — only $120,000 has been spent thus far. There was, in our estimation, abuse of the Financial Administration Act that governs us all in this Legislature. That is certainly not a wise use of taxpayers' money.

I ask another question of the minister. What are the current priorities in your capacity as the governor of this region?

HON. MR. PARKER: The priorities in the northwest are: transportation items, economic development items, communication items, social services items, medical services items and educational items.

MR. BLENCOE: Can the minister give us any specific things you have accomplished in nine months?

HON. MR. PARKER: In early December we called the organizational meeting of the north coast region where we invited senior elected representatives, a number of community groups across the northwest, to join us in forming the economic development group and the social services group for the region. It was received with great enthusiasm throughout the northwest.

We gathered in Kitimat and were well received by the city of Kitimat. We had an attendance of mayors, presidents of tribal councils, chairmen of regional districts, chairmen of hospital boards, chairmen of school boards, presidents of employer councils. We invited the MLAs. The only MLA that showed up, of course, was the government MLA. The labour representatives were invited and they didn't show up.

We also have a couple of situations in the northwest of constituencies that need representation. The presidents of chambers of commerce were invited and so were community

[ Page 4821 ]

association presidents in unorganized areas. So we had a cross-section of people through the northwest who had been elected to their position. There was no attempt to select anybody by political stripe. It was the fact that they were living in the northwest, committed to the northwest to the point where they were prepared to spend their spare time in serving their community and their constituents.

[4:00]

They were considered right and proper to form these groups and deal with the issues we have that are peculiar to our region. They are regional issues; they are not constituency issues but regional district issues. They're municipal issues, regional issues. The MLAs have to do their job, the regional district people have to do their job, and so on. I'm not trying to take that way; I don't want it anyway.

What we need to do as residents in the northwest is get together and determine what's affecting us in common, assess it, and come up with what we consider to be solutions that would work best in the region in which we live. We make these recommendations and I carry them directly to cabinet. It's a pipeline, an excellent pipeline. The people from the northwest are very pleased to participate.

The first thing we decided was that we had to meet again, and quickly, because there was concern over the GATT ruling on fisheries; and there was some concern over the reorganization of CBC in Prince Rupert. I really wanted the groups to focus in on their planning and priorities so we could form our working groups and get on with the task of gleaning northwest input.

The next meeting was in Prince Rupert. I was unable to attend because I had responsibilities to meet with the Western States Legislative Forestry Task Force, because we were trying to work out an arrangement whereby we can get our firefighters paid for undertaking fire protection in neighbouring states and vice versa. I was caught up in that and unable to go. My parliamentary secretary, the member for Cowichan-Malahat (Mr. Bruce), ably chaired the meeting. That's the purpose of the exercise. That's why we have parliamentary secretaries — to take charge and make sure everything flows readily and the concerns of the people in the northwest are heard. That took place.

We were able to get the Minister of Agriculture (Hon. Mr. Savage) and his staff in Prince Rupert to deal with the people that were concerned about the GATT ruling so they could have direct communication with those people responsible and those people with the answers. That was well received.

We had also senior management from CBC able to attend to deal with that issue, and then the group was able to go on to the planning and priority session, which was a good session. Since then the working groups have been appointed and have been dealing with their specific issues, as outlined by the planning and priorities session. We will be meeting June 18, 1988, to discuss the progress that the working groups are making. What we've been able to achieve so far is funding for an airstrip in Masset and confirmation of the construction of the transmission line to Stewart, which is an incredible step forward for the northwest.

The process is working well. What we did do, by the way, in January's meeting, was invite all chief counsellors from the native community, not just the presidents of the tribal councils, because there are a number of villages that are not represented by tribal councils. We felt that the chief counsellors should have the same opportunity to represent their communities as the mayors and the chairmen of regional districts. We were pleased to have the whole group in the northwest represented and providing valuable input to the process.

MR. BLENCOE: It appears, other than a few meetings and the Minister of Agriculture (Mr. Savage) visiting, which I presume he would have done without this lovely bureaucracy, that very little has been accomplished. We're nine months into this program. The minister has a fair amount of money in his back pocket. They're talking about regional district issues. I would suggest to the minister that the regional districts are quite capable of dealing with those issues and reporting to various line ministries. You had the line minister up there. Did you need a minister of state to call the Minister of Agriculture up into those communities? Of course not.

The point our side has been making is that this system that we've introduced is bringing the province to a standstill in terms of economic development in British Columbia. We have one big, gigantic hunk of red tape that has been placed over the top of the province.

Interjections.

MR. BLENCOE: It's not a solution, Mr. Chairman. Jim Matkin has said he doesn't understand it. The small business community have said they don't understand it. Various mayors are saying they don't understand it. Now the minister of state reports that on one issue he got the Minister of Agriculture up there anyway. We needed a minister of state to ask the Minister of Agriculture to come up to the community? This whole process becomes a bigger joke every day when we explore it more and more.

In nine months we've had absolutely nothing accomplished. Local government have already assessed their priorities. They could give those priorities to the line ministers. As I said, one line minister has been up there under the minister of state system.

I have a further question to the minister. Can he tell me how many committees he has working in this minister of state system? How many committees have you struck?

HON. MR. PARKER: It seems to me it is six working groups at this time. We can create others as the group itself determines necessary. What we have is a means of bringing together all the senior elected people in the whole region from time to time so they can deal with issues of *common concern. There is no other means for that to happen. I was most pleased when one of the gentlemen from the Nass valley, a hereditary chief, stood and said this is the first time that this province has ever asked the native community to be part of an economic development initiative. He was most pleased to participate and to continue to participate.

I think that's the essence of the thrust of the regionalization program, one of bringing all of the communities together on common ground to deal with regional issues, because it's a very diverse and large province which consists of more than Victoria. But the member opposite doesn't realize that, and too often we find — when I say "we" I mean those of us that live in the north, Mr. Chairman, and you can certainly understand that — a sad lack of understanding of this province beyond the lower Fraser Valley. This regional development initiative is the correct way to go for the participation of the regions in the business of the province.

MR. BLENCOE: Would the minister concur — or put it on the record — that any decision that you make or any

[ Page 4822 ]

priority you come up with in terms of a loan or a policy, you have to get the agreement of the line minister?

HON. MR. PARKER: Mr. Chairman, we don't propose to take on the duties of the line ministry, the regional district, the hospital board or the MLA. We're concerned about regional issues and regional solutions. We take those recommendations from that group — what they think would work best for their region — and carry it to cabinet. We have that discussion around the table, and we deal with it. It's an incredibly good pipeline, especially for the people in the northwest of British Columbia.

MR. BLENCOE: With the small business community and councillors and mayors and all sorts of people, the confusion continues to reign. You've just said you're not taking on certain issues, yet earlier on you said you were interested in health and economic issues. I have to ask the minister: what are you going to take on? Again I ask: if you make a decision.... You just said in your earlier statement.... You were talking economic initiatives, and then you were talking about social, health and education issues. You said you're taking on those issues initially, and then you said you're not taking them on.

Let's assume you are going to take them on. How does that process impact on line ministers? Will they be consulted, or will they have the final say in any project that you come up with? Or will you have no consultation with line ministers? You've already had the Minister of Agriculture up there in your region already. I assume that could have happened without you being there.

MR. MICHAEL: I would like to rise and congratulate the minister and all of the ministers of state in the province of British Columbia on their service to the province. I would like to congratulate the parliamentary secretaries for the extraordinary number of hours they put in serving the ministers of state and trying to make things happen in the province.

The signs of progress as a result of these initiatives are widespread; they're all over the province. There are a lot of good things happening, and a lot of jobs being created. Unfortunately, Mr. Chairman, the problem with the second member for Victoria and many of his colleagues over there is that they've never been involved in economic development. Perhaps the first member for Nanaimo (Mr. Stupich) and the first member for Vancouver East (Mr. Williams) could set them straight on some of the complexities of economic development when you're out there trying to make things happen, and when more than one minister is involved.

That is one of the premises upon which we have ministers of state. They are able to meet with the people, understand the priorities, get involved in planning and then go back to the Victoria area, meet with the ministers involved and pull these projects together. It is an attempt by the government to cut through the maze and the red tape. Anyone who has not been involved in economic development, such as the second member for Victoria, just does not understand what the problems and the complexities are out there.

I would suggest, Mr. Chairman, rather than the members taking up the time of the Legislature ridiculing and picking away, that he get out and get involved in these meetings, be a part of the process, make his positive suggestions to the committees while they're out there working.

Certainly what he says is correct. Certainly there are some mayors and councillors who walk away from these meetings not particularly happy, because there are people in our society — some, Mr. Chairman — who go to meetings looking for quick answers. But answers don't come overnight. It takes involvement, and it takes planning. Planning is hard work. It takes a lot of time and effort, and it's not easy work. It's not welcome work to get involved in the planning process. It's easier to sit back and moan and groan and bellyache and whine and snivel, as we hear from many of the members opposite whenever we get talking about the minister of state's estimates.

I would just like to conclude, once again, by thanking the ministers and the parliamentary secretaries for the hundreds of extra hours I know they put in traveling their region and working on behalf of the citizens of the province.

MR. BLENCOE: Well, that was an incredible attack on line ministers and MLAs. Are you basically saying that line ministers and MLAs haven't been doing the job or are not capable of doing the job, and therefore you're prepared to put a costly bureaucracy on top of cabinet, cabinet committees, MLAs, line ministers and local government to achieve your political ends? That's basically what it's all about, Mr. Chairman. What an attack on line ministers!

I want to ask the minister: what is your role in terms of working with line ministers? You've heard the member for Shuswap-Revelstoke attack line ministers and MLAs. Are you prepared to take over, as minister of state, the work of line ministers, MLAs and local councils?

HON. MR. PARKER: Mr. Chairman, the member is clearly following in the footsteps of his colleagues in that he doesn't listen.

The purpose of the regional development initiative is to gather regional input on regional issues, and we carry that through to cabinet. The process in the working groups includes those representatives from the line ministries with which the topic is concerned. They get input from the agencies and communities involved, and the working groups carry that information and those recommendations to the regional economic development group or the regional social services development group. Out of that come recommendations that the minister of state carries to cabinet.

[4:15]

We work with all the agencies that are brought into play, whether federal, provincial, municipal or otherwise, in determining these solutions. We get a great deal of help from each of the line ministers, and I have no trouble whatsoever working with them on regional development initiatives. There's excellent cooperation between all members of this cabinet, this government and this caucus. We're all working towards the best interests and successful development of this province, for continuing job opportunities and improved commercial opportunities. This initiative is providing those.

The second member for Victoria is invited to participate. He always has been, but he chooses not to. Not having been there, not understanding the process and not being part of the process, he'd much rather stand around and criticize for criticism's sake. That is unproductive, Mr. Chairman.

MR. BLENCOE: I would remind that minister and all the members on the other side that I've just spent a number of days in the regions. I spent two days in Kitimat talking to many of the northern mayors and aldermen who are totally frustrated by this process. We won't participate in a system that has no mandate and no legitimacy in law. We believe in local government.

[ Page 4823 ]

I would suggest to the minister and all the other ministers of state that if you want the priorities and all the issues you're talking about, you could save yourself the $14 million that you've put over for propaganda of these ministries of state and ask, with a 37 cent letter to the regional district and the key mayors in your regions, what their priorities are — 37 cents instead of $14 million.

You don't need another level of bureaucracy to take over control of the agenda of local government. As many have said — not only on this side of the House but in other parts of the province — this system is a political con game, and we are not prepared to participate in such a system. We believe in local government, and we won't endorse any system that weakens its traditions.

The people of this province — ordinary British Columbians — respect local government, and they're tired of Big Brother government coming into local government and dictating what should happen at that level. I've asked the Premier and many other ministers of state in the last few days to end this confrontation and tension and to get back to the normal ways of governing the province, which we've accepted in British Columbia since Confederation. It's another level of bureaucracy. It's costing us millions of dollars. It's not necessary, and we will not endorse it.

Vote 44 approved on division.

ESTIMATES: MINISTRY OF
AGRICULTURE AND FISHERIES

On vote 9: minister's office, $254,982.

HON. MR. SAVAGE: It is indeed a pleasure to rise in the assembly today to start debate on our estimates. I'd like to start out with a bit of background on the importance and the performance of the industry, if I may, Mr. Chairman.

As you can well appreciate, and for the information of the House, B.C.'s agriculture and fisheries industry — or, as we commonly like to refer to it, our food industry — is serving us very well. In my judgment it has been one of the solid performers in recent years and a stabilizing influence on our provincial economy, creating steadily increasing economic activity and more direct and indirect jobs in the line of producing food at relatively stable prices by what I consider to be some of our most efficient farmers and fisheries people and, from the processing point of view, our processors and manufacturers.

We have been contributing beyond B.C. borders, as you can well appreciate, because not all our food or fish products are consumed within our borders. We export a number of food products, and also quite a substantial amount of technology.

I'd like to touch on how the food industry fared during 1987, and it's a general overall indicator. Farm cash receipts for 1987 were in excess of $1 billion, and that marks the fourth straight year. That's up by 3.1 percent over 1986, and I would also like to say that we're expecting very close to a 3 percent increase for 1988. Grain and tree-fruit receipts are still far below acceptable levels. I need not say that; it's probably been referred to on many occasions. It is a fact that they are far below what we consider acceptable levels for farm-gate receipts. Livestock receipts continue to show strong growth. There has been record-high realized net income — estimated for 1987 to be at $279 million, which is an increase of 19.8 percent this year, as a result of operating costs dropping slightly and farm cash receipts being up somewhat.

Primary agriculture is still a leader among all our resource industries in direct employment. In total employment , if you go to the end use of the product, it swells to over 170 .000 when all aspects of the industry, direct and indirect, are considered.

The fisheries sector. I'd like to touch on the commercial fishery and on the aquaculture side. Aquaculture sales for 1987 are estimated to approach $10 million, and that's up from the $6 million we generated in 1986. Landed value in wild fish stock — or the commercial fishery — is estimated to be in the vicinity of $402 million, compared to the 1986 landed value of $382 million. There is strong growth potential, in both the aquaculture sector and the commercial fisheries sector.

Our agriculture, fisheries and food sector is an example of the benefits of economic diversification. The vast diversity within the food industry gives overall stability to our sector and to the provincial economy as a whole, and there has been consistent growth. This industry makes a significant contribution to the provincial economy, and there is strong potential for that growth to be further expanded. The industry offers many strengths, and one of those, of course, is the diversity of products. They can fit, as you can well appreciate, many special market niches. There is a small-scale means for quick adaptation to new markets whereby we can adapt to those opportunities in a relatively quick time-frame.

We have highly respected technology, recognized worldwide, in dairy genetics, range development, pest management and food storage.

I'd like to touch on some of our program successes and achievements. The ministry has cooperated on a number of occasions in providing initiatives for farmers, fisheries people and food processors that have shown positive results. The number one area I'd like to cover is marketing. Food Pacific '88, which we have been promoting for some time, will be held in B.C. Place Stadium from August 30 through to September 2.

If I can refer back to Food Pacific '86, it created an opportunity to market our B.C. products to a large international audience and to see the new processes and products exhibited by other participating countries. It worked out to be a great success, and the overall impact on the Canadian economy of Food Pacific '86 was $122 million. Sales stemming from the show for the Canadian companies were worth more than $45 million, and for British Columbia companies exceeded $30 million for the three months subsequent to the show. Those contracts and opportunities are still growing, Mr. Chairman. We look forward to even better results from Food Pacific '88.

Our ministry staff are involved with industry and export trade development missions and trade shows, all aimed at capturing more of the export market potential that exists on the Pacific Rim. Over the past year we have initiated a number of joint ventures and the development of many agreements regarding dairy production, seafood products, etc., with Thailand, China and other Pacific Rim countries, and we feel there are many more opportunities on the horizon.

The Aquaculture International '88 show, which is being held September 6-9 at the trade and convention centre, will help our aquaculture sector gain deserved international recognition as a good example of a private initiative enhanced by

[ Page 4824 ]

some government support. In productivity and competitiveness, several programs have helped the industry develop more productive technology and improve our competitive strength at home and in outside markets.

The agrifood regional development subsidiary agreement, commonly called ARDSA, a five-year federal-provincial agreement signed in July 1985, has been very beneficial to the farming community. Three programs, productivity enhancement, resource development and commodity development, are part of the ARDSA agreement. As of October 1987 over $11.4 million — and that was to be cost-shared 50-50 with the federal government — has been committed for 84 projects. All have resulted in improved industry productivity or capacity, which will increase our effectiveness in the future.

We've made progress on a national agricultural strategy, and that strategy is designed to address the many challenges that face our industry. We have a commitment to ensure growth and development of the sector and closer cooperation between all those involved within the sector. British Columbia, as you can well appreciate, played a major role in the strategy development. The major components and implications for B.C. are a commitment to review tripartite stabilization programs; these involve the federal and provincial governments as well as producer participation. What British Columbia has long been seeking in those tripartite agreements is a fairer and more equitable share of the federal expenditures in those programs.

We have looked at a review of the national marketing schemes and we encourage greater flexibility. You've heard the issue referred to on a number of occasions, in the way of allocating market share quotas. We have made some gains, as you can well appreciate, but we still feel there is a long way to go. British Columbia stands to gain from the strategy, particularly in the high-value production and value-added processing. The diversity of B.C. products is an asset in our industry, and the capacity to produce high-demand specialty products to meet those needs, not only offshore but of our retail and food service outlets, will continue to be pursued.

Our ministry's food industry development program was begun in 1985 to provide financial assistance for projects aimed at developing new or expanded markets, introducing or improving food processing technology and developing new food products. To the end of the 1987 fiscal year, about $1.5 million in FIDP grants were approved for 82 projects which, those projects indicate, will create 439 man-years of employment and stimulate some $6 million in private sector investment. Each government dollar spent in FIDP stimulates about $3.90 in private investment. It's an excellent return for that money invested by the taxpayer.

[4:30]

I'd like to touch on aquaculture. Aquaculture, as most of you know, is the farming of salmon, and it is one of the more rapidly developing industries in this province. It has a real economic potential and can be a major component in the growth of our B.C. aquaculture sector. In 1984 there were ten operating salmon farms, and by the end of 1986 we had 69 operating farms. Now there are 118 operating salmon farms with another 34 about to begin, a strong sign of optimism for the future. There are also over 380 licensed shellfish producers now operating.

In addition to industry expansion, infrastructure is being established to assist in the orderly development of the industry. During the year, we established the Aquaculture Advisory Council to encourage orderly development and to advise the minister on major issues of concern. We have been developing health programs and brood-stock development programs to improve genetic stock in conjunction with the industry. We are working with industry and educational institutions to develop extension education programs to facilitate the transfer of technology and upgrade the skills of those people who work in the industry.

We have discussed responsibilities — and I'm referring to protocol agreements with other provincial ministers involved and with federal agencies — to ensure coordinated, effective programming to both commercial fishing and aquaculture sectors regarding research, licensing and regulations. The objective is to encourage industry growth and development, with appropriate controls regarding environmental and other issues.

We have a lot of challenges, which we readily recognize. Even though the food-production industry in B.C. is growing steadily, it will continue to face many challenges for years to come.

As you can well recollect, the high interest rates in the 1970s and early 1980s, as well as bad weather, have taken their toll. There is continued economic instability both domestically and externally. There is intense world competition and, lo and behold, as we've often said, continuing subsidy wars between the EEC, the U.S. and others.

We have significant shifts in consumer preferences that the industry has to respond very aggressively to. As the consumer preference changes, the industry must be prepared to adapt, and there are vast arrays of new products being developed. It's this new packaging, etc., that will have to adhere to the changing demand by the great number of consumers in the public.

The grain producers have experienced some of the lowest prices since the Depression. Countries must stop this trade war and reduce international subsidies that have created these many surpluses. We must recognize that excessive export and production subsidies are the cause of many of the disastrous world grain prices that we face.

British Columbia is a strong trading province, and we must develop policies to ensure access to markets. We must guard against the continued wave of protectionism that creates uncertainty about our future trade prospects with many other countries. The free trade agreement is a hopeful sign of a stronger trade prospect with the U.S., and it will remove some of the past barriers to trade, which in the overall is good for British Columbia. Under the free trade agreement B.C. agriculture will face some problems, which we recognize, but will also have many opportunities provided for them.

[Mr. Pelton in the chair.]

As we have heard on a number of occasions, the grape and wine industry will be hurt somewhat, but the federal government must commit to developing adjustment programs to help the producers and the wineries adjust to the realities of that new agreement and concentrate their efforts on developing new products and markets where we are able to compete more effectively.

Generally the free trade agreement creates more secure access to a very large market heading into the twenty-first century. Over the next few years there are many optimistic aspects, but a good many farmers face increased challenges and continued financial stress. They will face increased competition and no doubt uncertain economic times.

[ Page 4825 ]

I'd like to touch a little on areas for potential industry growth. We feel that the B.C. agriculture, fish and food sector does have many opportunities not only at home but also abroad. There are opportunities for the products we presently export and for the development of new products, and I'd like to touch on a few: berries, tree-fruits, nursery stock, greenhouse products, game, specialty foods, etc. There are further agricultural developments in the products and processing services where we can sell the expertise or the technology and the licensing and joint ventures that are taking place in other countries.

We are trying to replace imports that come into the country, and a number of those things are developing in machinery, poultry breeding stock, consulting services, feed and fertilizer. We would love to be able to replace as many products as possible with B.C.-produced products — for example, industrial milk products, HRI products, confections, beef, pork and lamb products, vegetables and specialty foods, etc. We must also obviously be cognizant to exploit new opportunities as they come before us, and a number of them are relatively new, as I touched on a bit: aquaculture, game-farming, greenhouse products and many high valueadded products. Our overall strategy is to provide the framework to make a climate available to help the industry. We must achieve a more level playing-field on the international and the national scene, and as I stated before we must try to get all countries to reduce their international subsidies. Also within our own country we must get the provinces to try and harmonize programs. We also recognize that we must aggressively market our products and encourage our industry people to develop new market opportunities and new market products to meet the increasing demand and competition.

We will do this in four different areas. We will constantly monitor and make our industry aware of the efforts that have to be put forward by our ministry and government relative to being able to be competitive and adapt to the markets that present themselves. We must integrate our food system and approach a more competitive cost of production. We must become more efficient. We feel we must also pursue a fair share of the national programs — a fair treatment for B.C. in quota allocations. I can name chicken, turkey, and certainly from the perspective of the industrial milk, the MSQ, where we are a long way short of having a fair share.

In the 1988-89 budget, given this economic climate, it is imperative that B.C. remains able to establish the kinds of policies and programs that are necessary for the maintenance of these important sectors and programs that encourage sound growth and development of our industry. Let me assure you we are working to reinforce the sound programs and to improve where it is necessary to help our industry meet those challenges. Emphasis will continue to be on helping the ministry achieve a reasonable degree of stability, find and develop new markets, produce new and innovative products that meet the needs of today's consumer, maintain and adopt the use of the latest technology and market and enhance our competitive position to produce those products and technologies.

We will look at a number of programs to address those challenges. The ministry programs are designed for the farmers and processors. I'd like to touch on six major areas. Extension and education, we feel, are very important. Food and industry market development, as I touched on a bit, are also exceptionally important. Financial assistance and incentives to reduce the risk to those investing in the industry — we want them to be encouraged to invest in the industry. Animal and plant health are definitely important. Resource sustainability is also an important part of the thrust of our ministry. Also, of course, a major part is the fish industry development.

Our gross budget allocation of $91.2 million, while down slightly from last year, is not a reduced commitment. But this government and the industry, the net budget — that is, the net producer premiums of FII — is $71.22 million. That is up from $71.12 million in the FII budget. It reflects realistically a better market condition for some sectors — for example, the livestock — and a lower requirement for financial assistance program layouts on the '87 crops. There have been lower input costs, and we have a continuing lower, more stable interest rate than what we had a year or two earlier.

Major federal-provincial initiatives are underway for tripartite funding agreements, and they're being discussed for a number of commodities. We've run the greenhouse technology assistance program, and it was very successful; it has achieved its objective. It will not be offered in '88-89. With a government allocation of about $2 million in three years, more than $17.3 million was generated or invested in substantial improvements in greenhouse operations, and they will reap the benefits for years to come.

Our budget allocation for farm income insurance is reduced to $40 million, and it was at $56 million in '87-88. Fifty percent of that program is recoverable from producers' premiums. So the net FII allocation is in the range of $20 million. There again, it reflects the improved market conditions in some sectors and anticipated lower payouts in 1987.

On the tripartite issue, B.C. is still seeking access to a revised federal red-meat tripartite program, and we have continued to negotiate with the federal government and the other provinces to be participants in that tripartite agreement. We have been successful in arranging for a tripartite agreement for apples.

The free grain assistance program, we have announced, will continue through to July '89 and will be a very valuable program for not only the producer but also the user of grains.

The food industry development program will be increased to $750,000 from $500,000 to help private business develop new markets and products. It will also include aquaculture and fish-processing projects.

In keeping with improved government efficiency, provincial food inspection programs — fish, milk, milk-processing plants, meat and property management functions — have been transferred to those government agencies already equipped and mandated to do those jobs; that is, the Ministry of Health or the Ministry of Forests and Lands.

Mr. Chairman. I now conclude by saying that I am pleased to be the minister representing the portfolio of Agriculture and Fisheries. I will now take the pleasure of answering questions from the members opposite.

MR. ROSE: I thank the minister I would just like to suggest to him, though, that when he's talking about his new programs, he'd better be very careful on how they are developed, because I asked the Minister of Economic Development (Hon. Mrs. McCarthy) the other day whether under free trade it will be legal to give preferential treatment to Canadian companies as an industrial strategy — I presume to Canadian farmers as well. She answered in part, "Any enhancement of those that are established or accepted now," and that our grandfather would not be available after the free

[ Page 4826 ]

trade agreement. So I think the minister's flexibility on those grounds, if the free trade agreement goes through, is going to be severely limited — if they could be described as "preferential" or "subsidy" in any way. Those are some things I think we should keep in mind.

As I indicated to the minister earlier today, I thought we would deal in the latter part of today with the aquaculture side of his ministry. We prepared to do that, and my colleague from Atlin is going to speak on this.

Perhaps, though, the minister would like to introduce his officials for us while they're here.

[4:45]

HON. MR. SAVAGE: Mr. Chairman, to the hon. members, with me today are my acting deputy minister, Mr. Bruce Hackett; the director of our marine branch, Gordon Halsey; and David Davies from policy.

MR. GUNO: Mr. Chairman, I want to thank my colleague the member for Coquitlam-Moody (Mr. Rose) for allowing me to begin today. I suspect that he may be using me as a form of stalking-horse, but that's fine; at least I'll have tomorrow afternoon off. I thank the minister also for the comprehensive overview of his ministry. I must agree with him that there's no doubt that the food industry in British Columbia is vital to our province's economic well-being.

I want to focus my questions on the matter of the new, budding aquacultural industry and more or less express some of my concerns about what you describe as an orderly development. To put it in context.... You quoted some figures, but my figures say that in 1984 there were ten licensed salmon farmers in B.C., and by 1987 there were in the order of 152 licensed farmers and 269 applications being reviewed. There's no doubt that there is a tremendous growth in B.C. aquaculture.

This tremendous growth has occurred in what I would describe as a legal vacuum, with virtually no legislation and no regulations concerning such vital areas as pollution, disease and stock vitality, facility and farming standards, development and conservation of coastal lands and, lastly, investments. I agree with the minister that British Columbians by and large welcome the growth of the aquacultural industry, but I would submit that to invite an industry to develop in the province without setting any real ground rules is pure folly. We're really asking for a lot of problems in the future.

If in the face of this legal vacuum the industry pollutes our environment, destroys our wild stock and exports the profits, I don't think that we can really fault the industry for that. The blame should rest solely on the government because of the lack of leadership in the growth of this industry. I would like to give the analogy that if you invite a group of strangers into your home and do not set any ground rules, then I don't think that you can complain if they subsequently empty the refrigerator and mess up the entire house.

According to your draft paper, the objective of the provincial aquacultural policy is (1) to encourage and facilitate the growth and development of aquaculture in an orderly and responsible manner, and (2) to realize the economic benefits of aquaculture in concert with environmental and social objectives. I think these are laudable objectives, but there seems to be a consensus of people who are intimately knowledgeable about the industry that the government is failing to meet these objectives. I would submit that with a staff of 17 professionals and a budget of something like $2.8 million — the minister can correct me if I'm off on these figures — in the aquaculture and commercial fisheries branch, it's highly questionable that all the needs of the industry are being met and the objectives of the provincial aquaculture policy will be fulfilled.

Turning to the area of pollution, the first area that I talked about, the provincial aquacultural policy environmental objectives, as I understand it, are to be met, according to this government, by ensuring that environmental monitoring is undertaken to (1) evaluate the impact of aquacultural activities on the environment, and (2) ascertain the effects of discharges from other industries and human settlements on aquacultural production.

There has been research on the impact of fish-farms on human settlement and the environment. I read some of the figures: feed loss from dry pellets is up to 15 percent; feces can account for up to 50 percent of the feed consumed; the estimated waste produced from rearing one kilogram of fish is in the order of 0.7 kilograms; mortality makes up to 27 and 30 percent of the smolt harvest. These are disturbing figures.

As an analogy, to convert this into human terms, Prof. John Brookbank of the University of Florida estimates that an acre of fish pens produces waste that is equivalent to the sewage of 4,000 people.

My question is: in light of these figures, what is being done to help fish-farmers today in dealing with these pollution problems?

HON. MR. SAVAGE: I'd like to thank the hon. member for the questions and his observations relative to mortalities, pollution, feces, feed and so on. Just to refer to the 27 to 30 percent mortality rate, in the wild stocks less than 3 percent ever come back to the rivers. Whatever happens to them all? There are obviously mortalities that go to the bottom of the ocean that neither you nor I know anything about.

The other thing is the food you talked about, the flushing systems, the capability of those fish-farms. You referred to 152 licensed operations. Because a person has a licence doesn't mean to say he's operating. I referred to operating fish-farms in the province, not licensed fish-farms. There's a difference.

You also mentioned there could be a pollution problem. The sites that are located are carefully monitored and scrutinized as to the capability of flushing. The person who's going to invest maybe $1 million in a fish-farm is obviously not going to do it at risk. He's going to make sure that he has a capability of flushing, a capability of tidal movement, that the depths are proper, etc.

As you well appreciate, we have gone through a study with Mr. Gillespie where a number of recommendations were brought forward as to how they establish, where they establish, and the guidelines that should be undertaken to site and establish a safe area as it relates not only to pollution but environmental impact. There are hearing processes, etc., that are all undertaken.

MR. ROSE: Speaking of flushing, I happen to have a place near Powell River on Thunder Bay. There was a proposal to put a fish-farm there. I would just like the minister to know that before I could proceed with any flushing, I had to spend something like $4,000 or $5,000 so that my flushing wouldn't enter the ocean. The proposal was to put a fish-farm about a mile from my house and have a

[ Page 4827 ]

living quarters out on a wharf where there would be indiscriminate flushing. Really these are not fish-farms per se, they're feedlots. I think we should be very careful about where they are placed, and I'm not sure they always are.

Incidentally, this one was turned down, so I felt flush with victory. Nevertheless, I don't think that there should be one set of criteria for human sewage and another one for fish.

HON. MR. SAVAGE: I don't think I'll comment much more on what is being said. I'm not saying in any way that there doesn't have to be responsibility borne for environmental sensitivity or any pollution potential that might exist. All those things are taken into consideration before a licence is ever granted.

MR. GUNO: I just want to take the problem of flushing a little further. In the Sechelt Peninsula or in the inlet there are a number of fish-farms, but I understand there are some concerns about the flushing capability in that particular area' Has there been any study as regards the flushing ability of that particular area?

HON. MR. SAVAGE: I'd like to inform the hon. member that there has been a water quality study.

MR. GUNO: I don't think that's quite the same thing. I'm talking about the fact that.... I think you talked about the ability to be able to remove the waste from beneath these pens. I understand that in Sechelt Inlet there is a body of dead water because of the topography of the inlet; it doesn't flush as well. Therefore, there is some concern that the wastes are building up. Has there been any study with regard to that?

HON. MR. SAVAGE: Yes, there has, as far as I understand. The other part of the concern would be that from an operating fish-farmer point of view, he could not afford his investment if he had some sort of reaction to feces on the bottom and it resulted in some problem within his own farm.

MR. GUNO: I'd like to cover the whole concept of enlightened self-interest on the part of the fish-farmers later on, but I'd like to know if you can advise us what studies were made, who made them, and if we can have access to them.

HON. MR. SAVAGE: I'd like to tell the hon. member that the study hasn't been released yet, but we are looking at the study that has been completed as to what their area can stand. Once that is available, we will certainly make it available to you.

MR. GUNO: So the study is still underway, and you really have no findings. You can't say categorically that there is a question or no question right now. In addition to that, can you tell us who is doing the study?

HON. MR. SAVAGE: I'd like to inform the member that the study was started when our staff was directly involved with the Ministry of Environment and Parks. That's when it was commenced.

MS. SMALLWOOD: Am I hearing the minister correctly in that this study was undertaken jointly by the ministries of Environment and Agriculture? So this is an in-house study that has been done.

HON. MR. SAVAGE: The study was started before our marine resources branch was part of agriculture and fisheries.

As you recollect, the portfolio was started as a joint portfolio last year. Prior to that, the staff was in the Ministry of Environment and Parks.

[5:00]

MS. SMALLWOOD: I'd like to follow up this issue of environmental impact. While the minister refers to the interests of the fish farmers and their need for a healthy environment to protect their investment — their fish and their farm — I would suggest that our concerns parallel those of the industry, and that many of the people who express concerns within the community have something in common. By doing the necessary research, by putting the regulations in place and by sharing the available information, it will do for everyone. It will support the industry and the communities, and it certainly will protect the resources of the province. I hope that the minister would agree with that. Rather than taking it as a given that the industry would not hurt itself and therefore would be doing the best thing possible, I hope that the minister would instead make certain that the ministry has the information available and the regulations in place.

Some of the research done around the finfishery.... I would like to emphasize that when we are talking about aquaculture, we are not talking solely about the finfishery and salmon farming. We in B.C. will be seeing and are seeing interest in other aspects of aquaculture on our coast. I would like the minister to talk a little about the work they are doing in the way of gathering information and development of regulations that would affect not only the fin fishery, but also industries such as kelp farming.

As far as the regulations go.... I'll ask a few questions all at one time. In Norway, they brought on line the aquaculture industry — the finfishery — because they had, for the most part, devastated their wild stocks. They were not only looking at the development of the aquaculture industry for food purposes, but for employment as well.

They subsequently found that they are running into some very serious problems. Their industry in Norway is far more regulated than the industry here. It has become more regulated because of the concerns of disease and environmental depletion. In addition, they have regulations to do with monopolies and control over the industry. Perhaps the minister could comment on any research that your ministry has undertaken and considerations that you have in regard to those aspects here.

HON. MR. SAVAGE: I'd like to thank the member for a multitude of questions. If I miss them, I'll have to get you to ask them again.

When you talked about the opportunities that exist beyond finfish aquaculture, we well recognize that. There have been coastal resource studies done as to the opportunity not only for finfish, but for mariculture, shellfish and aquaculture operations of many types including kelp, seaweed or a number of other opportunities. That will become available as the markets themselves dictate a viability for somebody to get into that business. At present — as you can well appreciate — a number of the operations in seaweed are held up from being competitive by restrictive import quotas by countries who use it: Korea, Thailand, Japan or a number of those countries.

You talk about the pollution; there are a number of recommendations that were adopted by government from the Gillespie report. There are a number of conditions that have

[ Page 4828 ]

to be met prior to anybody getting a licence. It's not just automatic that a licence is granted when somebody comes in to apply. There are guidelines in place that they have to meet, and a coastal resources study that was done recommends a number of things that should be adhered to before licences are even granted, as did the Gillespie report.

You talked about Norway. There are a number of differences between Norway and British Columbia. You have a tidal movement in Norway.... You talk about the Baltic Sea, where you may have algae bloom or plankton movement. The problem there is that you have a two- to four-foot tidal movement in the water system. You have a population base — domestic pollution, household pollution — that is far greater than I could see ever being anticipated in this province.

The depth of water.... It takes a cycle of up to 25 years to move. In B.C. it moves once or more every year, so there is a substantial difference between an algae bloom toxic poisoning that might take place in Norway and one that might take place in British Columbia. We have a hotline system through which any fish-farmer or any commercial fisherman can contact us and let us know if there is such a movement of plankton or algae bloom. Those facilities are available not only for our commercial fishery but because our farm operators want to know if that is happening.

I think we've advanced somewhat from what the experience has been in Norway, Sweden, Finland or any of those countries. It's the Baltic Sea's lack of movement of water in the tidal system. Sometimes I guess it's best described.... You could almost say it looks soupy, because it doesn't change that often. It takes almost 25 years in a cycle.

MS. SMALLWOOD: I am a little confused about some of the points the minister made, in that he has just informed my colleague that studies are in process — in particular for the Sechelt Peninsula — that those studies have not been made public, and that they deal with water quality and the ability of the peninsula to flush. When the minister makes statements that our water turns over virtually every year.... Every area on the coast is very different. The kinds of work that I have seen in regard to coastal management are for the most part in their infancy stages.

I think it's fairly well agreed by experts that there is a great deal more study needed before we really understand what is happening to the ocean. I am hoping that the minister isn't taking it on faith, and that instead, if he is looking to encourage the aquaculture and mariculture industries on our coast, the government supports the kind of resources needed not only for information to base the regulations on but for enforcement as well.

As for the industry and the information that comes out of the industry with regard to waste management, the indications are that part of the problems in Norway were due to the size of the fish-farms. We have, I understand, no regulations in place to deal with the size of fish-farms, the spacing of fish farms and the collection of contaminants. We are not only talking about the normal flushing of feces but also the control of disease in mort.

The minister referred to the loss of numbers in the wild stock returning to the rivers. In the last few months, we had the opportunity of visiting UVic and talking to a gentleman there who is hoping to put in place a program dealing with the bioengineering of new salmon stock for the fish-farms. I was a little concerned — and I hope the minister can alleviate my concern — in that there didn't seem to be much time and energy spent talking about how the bioengineering of that perfect fish for the salmon fisheries was going to affect our wild stocks.

I am sure the minister would well agree with the concerns that the opposition have, given the statements of the Minister of Environment (Hon. Mr. Strachan) earlier on totally disregarding any value of the wild salmon stocks and the wild fishery. It raises the whole question of whether or not this government has written off the wild stocks and is instead wholeheartedly embracing this industry without regard to the ocean as a habitat, other than support for a feed lot. I hope the minister can provide some more information about the kinds of checks and balances this ministry is considering, and the kind of research and resources they are putting into this new industry in the province.

HON. MR. SAVAGE: We are working jointly with Fisheries and Oceans on genetics — you talk about biogenetics; it could be bio resources, it could be a number of things. There is no attempt whatsoever, and there has never been an intent.... Contrary to what you might assume, we are not saying we're not concerned about the wild fishery. That is a major component of the economy of this province. We well recognize that. We will do everything in our power to make sure that wild fishery continues to be a growing and viable part of the economy of the province.

As far as genetics is concerned, the fish-farmers themselves — the industry itself, the commercial fishery sector — would obviously want to secure the genetics of the fish stock. It works both ways. That's why we're working jointly with the Department of Fisheries and Oceans.

MR. GUNO: I just want to follow up on this whole issue. I guess I listed that as disease and stock vitality. I don't think we should discount the concern in Norway. As I understand it, in 1983 there was an epidemic in the world aquacultural industry which cost approximately $110 million. Much of this was apparently sustained by the Norwegian fish-farmers. As I understand it, the rapid expansion of fish-farming has become a cumulative threat to the fish stock in Norway. This is certainly apparent in the elimination of the commercial salmon industry by the end of 1987. I think one of the biggest problems is the continual escape of farmed fish. Together with young salmon imported from other countries, this has introduced disease and genetic traits previously unknown among fish in Norway's rivers.

I think that would be a similar risk in B.C., regardless of the relative flushing abilities of the two countries. I have two questions. What research, if any, is underway to assess the impact of disease on our wild stocks? You mentioned some kind of joint effort with the Department of Fisheries and Oceans. I'd like to know a little bit more about that. Secondly, what support, if any, has been given to fish-farmers to control the impact of disease on fanned salmon?

HON. MR. SAVAGE: The question relating to the control of disease.... I think what you're really getting at, Mr. Member, is the transfer between wild stock and pen-raised or farm salmon - or vice versa. I don't think we should sit here and assume it all goes one way. I think that's a little dangerous. We have no idea of the type of disease that may be involved in the wild fish stock, because we can't go out and collect all the fish in the wild fishery. We have no idea of the mortality due to some disease on the bottom of the ocean. I

[ Page 4829 ]

don't think it's entirely right to assume it goes one way. It could be transmitted the other way — from the wild stock to the pen-raised fish.

However, we want to be very sure that we have the best available people. Our veterinarians are all trained to be able to respond to disease conditions if they exist within a pen raised-salmon farm. I think it would be in the best interests of the farmer. He could not afford disease. He's obviously going to monitor it very closely. If there is any sign of any kind of disease, he's going to respond as quickly as he can. It's his investment out there. It's no different than the taxpayers as a whole making an investment in the Canadian fishery — take the Pacific coast and the amount of dollars put in it. We are committed as a province, as the Canadian government is, to making sure that Pacific fishery is there.

[5:15]

MR. GUNO: I agree with the minister that we can't make assumptions about the sources of these diseases and how they are being transferred. That's why the question: what definitive research is being carried out, aside from just relying on monitoring by fish-farmers? What kind of lead is this government taking in terms of trying to really establish the biological baseline with regard to diseases that are inherent in this kind of activity?

[Mr. Weisgerber in the chair.]

HON. MR. SAVAGE: I'd like to tell the member that not only do we work in conjunction with Fisheries and Oceans on disease, but we ask that the industry continually monitor. I state again that the industry cannot afford, nor would it want to see, disease within the industry, because it's a monetary loss to them. Nor does the industry want to see disease transmitted to the wild stock. They're very conscientious. We are participating in making sure the monitoring is done to secure a disease-free industry, if it's possible to do. We're doing everything within our power.

MR. GUNO: I want to pursue that whole monitoring process. How is it being done? What sort of staff are you allocating in terms of doing the proper monitoring for this burgeoning number of fish-farms throughout our coast? You talk about monitoring, but I want to know precisely how that's being done.

HON. MR. SAVAGE: I'd like to tell the member that they are required to report to the Department of Fisheries and Oceans, and any diseased stock has to be submitted to a veterinary lab for analysis. I think that's far ahead of what could ever be accomplished in the wild stock. How do you really catch hold of what disease might be in the wild stock if it goes to the bottom of the ocean?

I still come back to say that the industry knows very well that they have to be as disease-free as they possibly can. As I said, working with the Department of Fisheries and Oceans and through the veterinarians and the testing at labs — that's how the monitoring process is done.

I have to emphasize that the industry is not irresponsible. It has to make sure it has a future as well. So it is going to monitor it very closely. It can't afford the financial loss created by disease within the industry.

MR. GUNO: I would take some comfort in your assurances if it weren't for the fact that that's not the case in other jurisdictions. We've seen that there have been some severe disease outbreaks in Norway and other European countries that have fish-farms.

As for this self-monitoring business, that would assume that fish-farmers can recognize even the most subtle advance of a new disease. Wouldn't it be rather dangerous to depend on that kind of ability, given the relative lack of training on the part of many fish-farmers to recognize a disease when it is beyond its advanced state?

HON. MR. SAVAGE: I don't think I have to keep repeating it, but the member for Surrey-Guildford-Whalley (Ms. Smallwood) mentioned the 3 percent return of the wild stock back for spawning in the rivers. We have no idea what was under predator control out there or what mortalities went to the bottom. Really, to compare the wild stock with the domestic fishery, as I call it, or the pen-raised salmon, if you're referring to that species.... They cannot afford to have disease.

Whether you call it advanced or whether they leave it too long.... The fish are fed two or three times a day and are certainly monitored several times a day by staff of the fish farms. I've visited many of them and asked what procedures they use in monitoring any potential disease within those pens. It's in their best interests to monitor that as closely as they possibly can, because they cannot financially afford to have disease come within those pens if they can prevent it.

MR. GUNO: I want to turn now to the efforts on the part of fish-farmers to control disease, but first of all I want to know the mortality figure today, on average, in fish-farms in British Columbia.

HON. MR. SAVAGE: I wouldn't have today's number — the day isn't over yet — but I guess what you're really asking is if we have an estimate of the mortality rate within the industry as far as it has gone. I think the numbers you referred to are fairly close.

MR. GUNO: That was really a rhetorical question. From your answers, I just feel that there is a lot that we don't know; that this industry is still in its infancy in British Columbia, and there is really no hard, baseline data upon which we can say what regulations are effective in terms of spacing, density, size — all those sorts of things. Would you say that's a correct assessment of our ability to set some realistic regulations?

HON. MR. SAVAGE: I'd like to say that the "morts" are, as I understand it, recorded by the farmers when they send samples in to the ministry lab. The veterinarians do visit quite regularly on the salmon farms, so in both cases the farmer and the veterinarians who are visiting those farms are monitoring disease control.

To say that the guidelines aren't working — I believe the guidelines are. Whether you call them regulations — I guess you could debate "regulations" as opposed to "guidelines;" but in both cases, whichever you had, it's in the best interests of the industry that they follow both.

For instance, in the Gillespie report a number of things were set out. There would be three kilometres set apart between existing fish-farm tenures or any superseding applications: that we accepted. Within one kilometre to seaward or to either side of a native reservation, or a park or ecological reserve: we've accepted that. Within one kilometre of the

[ Page 4830 ]

mouth of a salmon-bearing stream: we have accepted that. And we are not granting licences, after that Gillespie report came in, on those bases. Within 125 metres of a commercial or recreational shellfish bed.... And we're not establishing fish-farms near sensitive fish habitats, which include herring spawning areas, rearing or food supply, or migration areas. Also, within areas identified by coastal resource identification — I referred earlier to the studies — other than commercial, recreational or residential uses.

Several things have to be taken into consideration. There are log-booming grounds; there is commercial transport on the seas; there are certainly recreational uses, etc. All of those are taken into consideration.

MR. ROSE: I wonder if the minister wouldn't agree with me that his explanation about the operator being so concerned about disease, , that it was unlikely to rampage very far, is perhaps a little simplistic. You could use the same argument for chicken producers or turkey producers. We all know that sometimes these flocks are just ravaged because they're crowded, and all that sort of thing. I think the concern that we have is not entirely answered by the minister's response.

HON. MR. SAVAGE: If you're talking about densities, whether it's intensive agriculture or whether it's in fish farming, it would be the loss to the person who has invested in that operation in the first place. He's likely the one who's going to lose the money on it, so I don't really believe he wants to purposely crowd, if that's the implication you're making. As you might well appreciate and I'm sure you know, Mr. Member, if disease goes through a flock, depending on the amount of the flock and the disease, it can go through fairly quickly or it can take a long time. In any case the operator, whether it's of a chicken farm, a turkey farm or a salmon farm, would want to monitor that very closely, because I don't believe he can afford to suffer the loss.

MR. ROSE: But the minister will agree that the economics of the operation, whether it's turkeys or chickens, would demand the crowding, and whether or not the fish farmer or the chicken-plucker or whoever he is wants to have a loss, sometimes those things are unavoidable because of overcrowding. The point is that we don't know enough about salmon overcrowding yet to be able to prevent the disease from arising with the same accuracy we can because of our hundreds of years' experience with chickens and turkeys.

HON. MR. SAVAGE: If it's any reassurance to the member opposite, we have purposely told our industry that they would be making a mistake. We tell them not to overcrowd like they have done, for example, in Norway. We're suggesting that that would just create an opportunity for disease to be established.

MR. GUNO: I want to turn to the matter of antibiotics. As I understand it, certain antibiotics are being used in larger and larger quantities, such as in Washington State where fish farmers use 147 pounds of tetracycline per year per acre. The extensive use of these kinds of antibiotics has the risk of producing new more potent strains of disease which present antibiotics cannot fight. My question is: what efforts to investigate the use of antibiotics and their impact on the environment and human health have been made?

HON. MR. SAVAGE: We've checked to see if sulfamerazine is a problem within the environment, and from all the tests we've conducted it does not appear to be any problem whatsoever.

As far as a number of antibiotics, I wouldn't disagree with you for one minute. Objectively, we all should reduce chemical use, whether it's an antibiotic or whether it's in our own bodies. We will obviously try to promote that we use less and less. As more perfected mixtures come forward, we hope the reduction is in antibiotics.

MR. GUNO: There are other biotics being used in increasing quantity. In view of this dependence — or the fact that you have a lot of confidence in the farmers' ability to monitor what's going on — I'm wondering what training and expertise is offered to fish farmers in the use of these antibiotics and drugs.

HON. MR. SAVAGE: A number of courses are provided for our salmon farmers with veterinarians on the use of antibiotics.

MR. GUNO: If you are going to rely on a certain amount of self-policing, is there any certification process to ensure that when a fish farmer says he's a fish farmer, you have some confidence that he has the expertise?

HON. MR. SAVAGE: I'd just like to tell the hon. member that antibiotics have to be prescribed. They can only be authorized by a veterinarian.

MR. GUNO: One to ten salmon in the wild in Norway have either escaped from the breeding plants or originate from smolt that have been put out into Norwegian rivers. The mixing of wild and domestic stocks in Norway is affecting the genetic vitality of the stocks. The domestication of salmon eliminates some of the favourable gene traits — as I understand it — which has many biologists worried. To meet the problem, Norway is setting up gene banks, as I understand it from the research we have done. What research and programs are in place to protect the genetic integrity of the salmon stock in British Columbia?

[5:30]

HON. MR. SAVAGE: We are working with the Department of Fisheries and Oceans to ensure that not only the salmon wild stock, but the genetic improvement of those farm-raised salmon as well. We've got to project the genetics of both. It's important not only for the commercial fishing industry to have the genetics and prevent an escape, if you like, from the fish-farms to the wild stock. We are trying to keep that to a very bare minimum if we possibly can. It's not nearly to the extent, in any way that I'm aware or have been informed, of the problem that exists in Norway.

MR. R. FRASER: I couldn't resist the opportunity to participate in the debate because there are some interesting subjects here. I think we really should be asking the minister to take us way into the future, and not necessarily dwell on the little problems that appear to be coming from the opposition side, who evidently have a bias against fish-farming. The questions are down, down, down as opposed to being up, up; up. I think we should encourage them to think a little bit about what's happened in this country.

For example, it's my understanding that we spend more, money researching salmon than the total value of all the wild salmon caught. So we get a net zero out of wild salmon stock.

[ Page 4831 ]

Now that would have to lead you to the conclusion that we'd do just as well not fishing at all, from a net-cost point of view.

MR. BLENCOE: That's what Strachan said.

MR. R. FRASER: No, that's not what Mr. Strachan said.

Therefore you have to look at what happened in the land based agriculture field, where we shoot, catch and eat wild turkeys, and now we have domestic turkeys, right?

So you would have to come to the conclusion ultimately that if we're spending as much money researching salmon as we are getting a value from the sale of the product, we will have to do something like stimulate a domestic industry in fish — like fish-farming. That would have to be an obvious conclusion. You wonder occasionally whether it's valuable sending people out in boats to catch the fish when in fact they'll swim into the river and you can wait for them; but we have these odd ideas.

The other thing I want to ask the minister is this. We have learned that the Labour government of New Zealand has absolutely demolished the subsidy system for farmers, which brings us to the question of farm subsidies. I gather that in Canada the average farmer's income is 46 percent subsidized, and in Europe it's about 49. The U.S., I know, is tremendously high. One would have to look way into the future and say we have fewer and fewer farmers, we're spending a huge amount of money subsidizing the production of food.... Is it not possible for a farmer to make a living without dipping into the pocket of the taxpayer? Surely we can find a way for farmers to make a living as many other people do, without subsidies. I would like the minister to address that, because it's critical to the agriculture industry.

With those few remarks, I will await another turn.

HON. MR. SAVAGE: I'd like to thank the member for the questions. Certainly from his first observation that more money is spent on research than the industry is worth.... If you look at the salmon industry, it is worth about sevenfold compared to the federal and provincial dollars put in from a monetary point of view.

On the issue of whether agriculture or.... Who knows, maybe down the road it might be aquaculture. About 27 percent of the dollars in Canadian agriculture are expended by provincial and federal treasuries, whereas you can go to in excess of 54 percent in Japan, which is one of the most highly subsidized nations in the world. There is a variation there. I believe it's about 40 percent in the EEC; in the United States it's about 37 percent. How farmers are supported differs in each country. That's a policy decision that is made by governments in those countries.

The member asks how long we have to keep up with this sort of program. It really relates to how committed we have to be to providing our own food base, and I think that's the important thing you have to ask. I don't believe we should ever put our dependency on another nation; consequently we have to be part and parcel of the process.

MR. GUNO: I guess I should have prefaced my questions earlier by saying that I think fish-farming presents a lot of great opportunities for communities on the north coast and all along the British Columbia coast. I'm not in any way downplaying the importance of this industry, but I think there are some serious concerns, and I think it's our responsibility on this side of the House to at least try to address them and hear what the minister has to say about some of them.

Certainly the impact on the wild stock is very serious. I think it's our responsibility to at least address those concerns on behalf of the thousands of people who are directly dependent on the continued vitality of our wild-stock fishery. I think we've canvassed the whole matter of mixing fish-farms and wild stock. I'm not sure if I've really been satisfied with the answers, but perhaps I can canvass that a little more later on.

In terms of facilities and farming standards, as I understand it, fish-farmers are being encouraged to construct fish farms on the coast. Yet I don't think — correct me if I'm wrong — the government has set any real standards as to the construction specifications of these facilities. The major concern is the toxins that can leach out of the construction materials and contaminate the fish. For example, such things as flexible vinyl tubing are about 60 percent DEHP. This DEHP slowly leaches into the water and is accumulated by fish. Anti-oxidants like BHT are commonly used, apparently, in plastics and have been found toxic to aquatic fauna. Things like flame retardants are hazardous to aquatic fauna either because of their toxicity or accumulation.

My question is: what is being done to inform fish-farmers of these dangers and to protect consumers from the possibility of buying contaminated fish as a result of materials that give out these kinds of toxicities?

HON. MR. SAVAGE: As you can well appreciate, you've only touched on a few. TBTs are another that have been of major concern. I don't know if you know international shipping rules, but you'd have one heck of a time, for instance, even though we should do anything within our powers to reduce the use of any of those chemicals. I think that's the mandate we all have to have, that we try to reduce the effect or the impact it would have, not only on the food but, as you say, on the fauna as it grows on the ocean floor.

I would also like to say that in the international movement of shipping, TBTs exist in a number of our freighters; and yet under international shipping rules we can do nothing about it. We should encourage the world to recognize that we should reduce the use of those chemicals so they do not impact negatively on the waterways or the users of the waters, whether it's fish or fauna or even human beings.

MR. GUNO: With regard to the danger of TBT, what other alternative antifoliants are being used or recommended by regulation, if there are any?

HON. MR. SAVAGE: I'd like to say that other alternatives are being sought. We don't have all the answers on that, but let me assure you that research is still continuing for all alternative chemicals or alternative product that can be used to replace those. That's part of research that's ongoing. Obviously, we all have to be committed to that type of research. I don't disagree with you for one minute; I think it behooves us all to make sure we have a safe and clean environment.

MR. GUNO: I want now to turn briefly to the matter of consumer protection. The provincial agricultural policy states that it will meet part of its social objectives by "ensuring provincial standards of product quality for seafood and agricultural products are applied to agricultural products."

The question that I have for the minister is: how is the government protecting the health of the consumer in its present program if it does not require that wild stock is

[ Page 4832 ]

distinguished from farm stock at the point of sale? Is there any kind of labeling that would inform the consumer that he was buying a farm fish as opposed to wild stock?

HON. MR. SAVAGE: I'd like to say that all fish are subject to federal and provincial inspection periodically, as are a heck of a lot of food products, as you can well appreciate. I really believe that continued sampling will continue to take place.

You make the point about determining whether it's farm raised or it's wild stock. Labelling as such is being considered. We have discussed whether we would label wild stocks as opposed to those raised in farms. There's always the risk that the consumer preference may go the opposite to what you might think it would. There may be a preference towards the farm-raised salmon if you label it. I don't see anything wrong with that being considered, and that's under consideration at this time. I can tell you that, for instance, Pacific Trollers have made a submission asking that we consider that.

[Mr. Pelton in the chair.]

MR. GUNO: As I understand it, the provincial government has taken over — and I think you've mentioned that — the federal Department of Fisheries and Oceans' sole responsibility for monitoring aquaculture. It proposes to monitor it through the honour system. You mentioned trusting fish farmers to report discharges of feed and other pollutants and to be able to monitor any advance of diseases. A response that states it is in the farmers' own self-interest to minimize such impacts of pollution and to maintain a healthy growing environment is — as my colleague has pointed out — inadequate. I think the government should take more of a leadership role here. The pollution and related disease problems now apparent in Norway seem to show that the farmers' own vested interests for producing healthy fish is not necessarily a strong enough incentive for them to maintain a pollution-free environment.

In terms of development and conservation of coastal lands, aquaculture involves the jurisdiction of a myriad of ministries with conflicting interests and aims, yet it does not have the benefit of a central and binding set of procedures in the form of an aquaculture act. Can the minister comment on whether we can anticipate — given the growing importance of this industry — legislation that would have a central focus on aquaculture?

[5:45]

HON. MR. SAVAGE: Mr. Chairman, I want to comment on the first point that was raised relative to the monitoring — whether it would be on a voluntary basis. There is a condition of the lease that monitoring has to take place; otherwise, the lease could be cancelled.

On the second point, whether we could anticipate an act with regulation, I wouldn't want to say that wouldn't be possible somewhere down the road as it's required. That could quite well be possible.

MR. GUNO: According to aquaculture policy, the objectives of encouraging and facilitating the growth of aquaculture in an orderly and responsible manner will be met by (1) encouraging the optimal location of aquacultural sites while recognizing the desire to avoid and minimize conflicts with areas of environmental sensitivity; (2) by making terrestrial intertidal Crown land leases available for aquacultural purpose pose in a manner which recognizes the need of both aquaculturalists and other coastal users. In a spirit of provincial aquaculture policy, what is being done to respond to the questions and recommendations of the ombudsman's discussion paper on aquaculture?

HON. MR. SAVAGE: I'd like to tell the hon. member that we are still looking at the ombudsman's paper. We don't have all the statistics in yet, but a number of the concerns that were raised have been addressed, partly within the Gillespie report, and a number of things that are taken for granted that may not be monitored and in fact are: (1) before you can get a licence you have to meet a number of guidelines. If I may explain them to you. I've touched on some of them: it must have coast guard approval; it has to satisfy the Department of Fisheries and Oceans of Canada that sensitive fish habitats, wild stocks and commercial, recreational and native food fisheries will not be affected; it has to advertise the proposal in the manner prescribed by the Land Act; it has to comply with all municipal zoning requirements; it has to have an approved marine fish-farm development plan; it has to post an insurance and performance bond, and it has to have paid all necessary fees and charges for Crown land tenure. So there are a number of procedures that have to be followed before a licence is ever granted.

MR. GUNO: As I understand it, the thrust of the paper was to enhance the fairness of the administration of coastal land tenures and agricultural practice to the benefit of those who use, share and allocate coastal lands and waters. The discussion paper was prompted by the common elements in many of the complaints from throughout the coast, which included allegations that these complainants had little or no meaningful input into the whole decision-making process by which land tenures for agriculture are granted.

Secondly, local communities have insufficient power and inadequate mechanisms to deal with provincial initiatives that may accelerate intrusions by an industry which enjoys the benefits of provincial support and land allocation. This second point was driven home very forcefully to us in our fact-finding trip through the Sunshine Coast last February. It was a fairly common complaint.

Thirdly, the shorelines are being fouled and made unsuitable for recreational activity as a result of effluent and fish feed residue.

Lastly, antibiotics and hormone products used in fish feed will find their way into the food chain, with potentially serious consequences. I am just wondering if the minister would care to comment on those fairly serious complaints or allegations found in the paper.

HON. MR. SAVAGE: As I said just a moment ago to the member, we are going through the reports and will get final documentation of all the things that have been said by the ombudsman's office on what they have shown or what has arisen as concerns — the use of antibiotics, the shoreline, etc. — and the other users of the waterways, their rights and access.

You pinpointed an area, and a fair amount of development had been undertaken prior to the Gillespie report recommendations coming forward. But now that those recommendations have been adopted and are to be followed — which they are being now — the density of those farms within a given area should be substantially reduced, as agreed to by the coastal resources study. I can't give you a full answer on it

[ Page 4833 ]

until we complete the reports that have been sent to us from the ombudsman's office. We are certainly looking at them.

MR. GUNO: I want to turn to the last issue that I initially pointed out, investment. Aquaculture in B.C. represents over $200 million in investment. At present, 40 percent to 60 percent of that investment is foreign investment from Norway. The Canadian Bank Act, as I understand it, does not consider fish-farming to be an agricultural activity and as a result the fish cannot be considered a crop. Canadian investment institutions have been extremely reluctant to finance fish-farms, since the principal asset, which is fish, cannot be seized in the event of default. I'm just wondering if there are any new initiatives by the provincial government to meet this investment problem.

HON. MR. SAVAGE: I'd like to tell the hon. member that we initiated an action many months ago. In fact, we were the first province to undertake the initiative to have amendments to section 178 of the Canadian Banking Act allowing security to be taken for the fish stock itself. As you have mentioned, that has caused a fair amount of investment from Norway and European countries — mainly, of course, Norway. We have been discussing with the federal government if we could expect the amendments within the sitting of the Commons at this session. There is a possibility that amendment may come forward within that time-frame. A long time ago we submitted, not only to the federal Minister of Agriculture but also the federal Minister of Fisheries and Oceans, that it would be an important thing to have the amendment in place so that the livestock itself within those farms could be taken as security.

MR. GUNO: I just have a couple of questions on the matter of the GATT and fisheries. On March 21 of this year, Fisheries and Oceans announced that there would be new conservation and inspection regulations in place for January 1, 1989. These regulations are supposed to be developed in consultation with the ministry and the industry. I understand that there's no draft text of the regulations yet — you can correct me if I'm wrong — and that there are really several options that the federal government faces. The first one, of course, is to do nothing with regard to the GATT ruling. The other one is to impose some form of landing requirements, quality control and legislation similar to the Magnuson Act.

Has the minister contemplated framing a draft of the regulations that he wants to see in place to deal with this important issue that faces our fishing industry?

HON. MR. SAVAGE: I can assure the member that we have undertaken many discussions over the phone and via correspondence as to the importance of having an offsetting measure that relates to the decision of the GATT. As you can well appreciate, I doubt very much that the government will sit and do nothing. You say that's an option. I can't accept that as an option, as the minister responsible, because I believe we have an industry that is a very valuable resource to this province. I intend to make sure that, as we talked about introducing a regulation that requires.... It could be a landing requirement, it could be others as well. We have constantly communicated with the minister that we have to have that in place prior to January 1, 1989. When the draft regulation is in place, we will be reviewing it. We have made very clear points on what has to be in place.

MR. GUNO: A final question. Regardless of how you go, whether it's by way of landing requirements or legislation, what assurance can you give to the people who depend on the fishing industry that, in light of the GATT ruling, those jobs will somehow be intact?

HON. MR. SAVAGE: I remind the member that you do not refer to jobs under the GATT ruling. You refer to a landing requirement for conservation purposes, etc. Those are the assurances I will give you. I've been working very diligently to make sure that we have something equivalent to a landing requirement so the industry does survive in British Columbia.

MR. GUNO: Will that landing requirement survive further pressures from our neighbours to the south.

HON. MR. SAVAGE: I suppose anything would be under pressure from our trading partners, no matter where they are. I think we have a right under conservation purposes to make sure we monitor the harvest of the sea.

MR. ROSE: I think that probably closes the debate on this portion. I'd just like to say, though, in closing, that the free trade agreement has to be consistent with GATT. While GATT at this point is voluntary and does not deal directly with employment, it's very hard to tell those people who are engaged in that industry that it really has nothing to do with employment, because it has everything to do with it as far as they are concerned. Perhaps we could have a motion to rise and report resolutions.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Veitch moved adjournment of the House.

Motion approved.

The House adjourned at 5:58 p.m.