[ Page 7247 ]

CONTENTS

Routine Proceedings

Oral Questions

Sale of Westwood land. Mr. Williams –– 7247

Knight Street pub investigation. Mr. Sihota –– 7248

E&N Railway. Mr. Bruce –– 7248

Knight Street pub investigation. Mr. Sihota –– 7249

Sulphur dioxide emissions. Mr. Jones –– 7249

Pollution control objectives for petrochemical industry. Mr. Jones –– 7249

Committee of Supply: Ministry of Agriculture and Fisheries estimates.

(Hon. Mr. Savage)

On vote 8: minister's office –– 7250

Mr. G. Hanson

Mr. Guno

Mr. Miller

Hon. Mr. Vander Zalm

Mr. Clark

Mr. Rose

Mr. Williams

Committee of Supply: Ministry of Finance and Corporate Relations estimates.

(Hon. Mr. Couvelier)

On vote 25: minister's office –– 7275

Hon. Mr. Couvelier

Mr. Miller

The House met at 2:06 p.m.

[Mr. Pelton in the chair.]

HON. MR. REID: I'm glad the opposition has arrived, because I wanted to make a special introduction today and certainly didn't want to do it in their absence. Colleagues, today we have the opportunity to have with us in the House the Ambassador of France, His Excellency Franqois Bujon de l'Estang. With him is the consul-general of France in Vancouver, Mr. René Delille. This year France is celebrating the bicentennial of the revolution, and on this occasion I'd like to give the ambassador, consul-general and all French citizens our best wishes, and I would ask this House to give them both a very warm welcome.

MR. ROSE: I apologize to the Chair for our caucus being late. We would have been here earlier, but I was having lunch with the ambassador and consul-general from France, and we welcome them.

MR. SERWA: Today I'd like to make an introduction on behalf of the second member for Okanagan South (Mr. Chalmers) and myself. I would like to introduce to the House Mrs. Vicki Livingstone, the president of the Canadian Home Educators' Association of B.C. She made a presentation to the Social Credit caucus on home education. Accompanying Vicki are her husband Lawrie Livingstone and her sons Timothy and David. Would the House please make them welcome.

MR. G. HANSON: I just wanted to make the members aware of the first community-based project coming out of the Commonwealth Games here in Victoria. It's called Sportpool, and the children and people of School District 61 are being asked, over the next three days, to donate a piece of sporting equipment — soccer ball, basketball, boxing gloves for members of this House, etc. — to a school in their area. These donations are going to be sent to a number of African and South Pacific countries to try to extend the level of understanding and awareness of Commonwealth countries, and I urge members to participate.

MR. MOWAT: I'm pleased to introduce to the House today three persons: Michael Kohut, Steven Kohut and Ted Paxton. Mike and Steven Kohut are the owners of the Princeton Hotel in downtown Vancouver and have done a great deal to assist their clientele, the patrons of the hotel, and many of the disabled persons in our community. Ted Paxton is a former past-president of the British Columbia Automobile Association. Would the House please make them welcome.

MR. WILLIAMS: I too, along with the member for Vancouver-Little Mountain, would like to welcome Mr. Kohut. Please give our regards to the PH Club and thank them for all the good work they do. I'd like to note that the Princeton Hotel is in fact in Vancouver East.

MR. JACOBSEN: On behalf of you, Mr. Speaker, and myself, I'd like to ask the House to welcome Mr. Owen Hughes from Mission.

MR. R. FRASER: In the members' gallery today is a friend of mine by the name of Wayne McClelland, a young businessman who is working on the lower half of the Island and still active in sports. Would the House please join me in extending him a welcome.

Oral Questions

SALE OF WESTWOOD LAND

MR. WILLIAMS: To the Premier, regarding the Westwood land: did you not tell the Minister Responsible for Crown Lands (Hon. Mr. Dirks) that you wanted an all-cash deal for Westwood?

HON. MR. VANDER ZALM: We wanted the best deal for Westwood.

MR. WILLIAMS: The reality is, isn't it, Mr. Premier, that you got burned on the Li Ka-shing deal and the Expo lands, and in typical fashion it was a boomerang response. You said: "No payments over time. Cash on the barrelhead." That was the problem, wasn't it, Mr. Premier?

HON. MR. VANDER ZALM: We wanted the best deal for the people of the province; obviously we had to consider as well the need for housing in the lower mainland. We feel sincerely that these additional lands will certainly assist in providing more accommodation for a whole lot of people who are recognizing and realizing daily the quality of life and the wonderful things happening in this province, and moving from many parts of Canada to participate in the good things that we are providing for the people.

MR. WILLIAMS: If there weren't these kinds of constraints in terms of insisting on an all-cash deal, Mr. Premier, can you explain why there was no consultation with the other bidders that actually gave firm backup prices but with profit-sharing? Can you explain why there was no discussion with those people?

HON. MR. VANDER ZALM: Perhaps I should compare it to an earlier action which led to the sale of these lands, which was the expropriation by a previous NDP government, and frankly I don't think too many people were informed about the expropriation. But this is a very different situation, Mr. Speaker. We sought proposals from as many people as wanted to become involved, and many people did become involved in picking up the necessary documentation and assessing it carefully and then preparing their

[ Page 7248 ]

bid proposals along with a bond, knowing full well that the process would permit us to select those bids that were the best of the range and then make a decision through the committee process involving people with all of the necessary expertise to determine which bid was best for the people of the province. I am very pleased with the way the process has gone, and I am also very pleased that it certainly is complementary to the Coquitlam plan. We worked very closely with the municipalities and we will continue to do that. We will always seek what is best for the people.

MR. WILLIAMS: Mr. Premier, if you're so pleased with the process, if you're so pleased with the analysis, then will you make it all available to the public and the people of this Legislature?

[2:15]

HON. MR. VANDER ZALM: Well, Mr. Speaker, I know that the member asking the question has been involved in numerous land dealings. As a matter of fact, he had a bit of a reputation for that once upon a time, so I am sure that he would be familiar with what's involved in this type of process. The people making these bids oftentimes will joint-venture this with someone else. Perhaps they will be seeking financing from various sources. One may possibly be turned down by one particular source, while another may be accepted by that particular source. There's a lot of information that these people, in their bid proposal, would expect to be kept fairly confidential, and that's how business is often done. These people do expect that much of the information as to who is financing might be of a confidential nature. I understand full well that the NDP socialists don't understand this type of business approach.

I would certainly defer to the minister as to how this information might be made available.

MR. WILLIAMS: Again to the Premier: this is the public's business, and the public deserves the answers. Could you explain, Mr. Premier, why you couldn't then call them company A, company B company C and give the details of each offer? And could you explain why it's you who asked for the confidentiality agreement and you who wanted it signed by the companies?

HON. MR. VANDER ZALM: Mr. Speaker, this information will become available. I understand that obviously the member was listening to comments I might have made in response to questions from the media. If the information can be made available without infringing upon the rights of those who seek some degree of confidentiality in the process, I agree that this be done. We're certainly seeking counsel on this right now, and it's something we'll be reporting on very quickly.

I think we owe it to make this information available whenever possible, naturally, and I don't disagree with the member on that. I also think, however, that we have to protect the rights of the individual. I think we have to protect and recognize the rights of the individual when they make proposals with a degree of confidentiality.

KNIGHT STREET PUB INVESTIGATION

MR. SIHOTA: A question to the Minister of Labour. Has he now talked to Mr. Doney with respect to his knowledge of a conversation between Mr. Hick and Mr. Poole dealing with Delta Media Services being provided status to do pub referendums?

HON. L. HANSON: Mr. Speaker, I believe that to be out of order. I took that question on notice.

MR. SIHOTA: The Minister of Labour is only being asked to talk to his deputy minister to find out when he gathered some information. Could the minister tell this House when we can expect a response?

The minister has conceded that he knew of the conversation between Mr. Hick and Mr. Poole. Was he advised of that conversation by Mr. Hick or by Mr. Doney?

HON. L. HANSON: It appears that socialism affects the hearing. I have stated a number of times — and I will repeat it — that the subject has been investigated by almost every agency that we can think of. It has been well canvassed in this House, and it's history.

MR. SIHOTA: Was Mr. Doney present when the minister was advised of the conversation between Mr. Hick and Mr. Poole?

HON. L. HANSON: Mr. Speaker, I don't know what the number is now, but it must be about 121 times that I have said that it is history. It has been well canvassed.

MR. SIHOTA: Mr. Speaker, the minister has an obligation to answer questions put to him with respect to these matters. A simple question again to the minister: was Mr. Doney present when the minister was advised of the conversation between Mr. Hick and Mr. Poole? Was Mr. Doney there?

HON. L. HANSON: Again, the ombudsman has canvassed this issue, the RCMP have investigated the issue, and there have been people charged. I refer the member to that report. I would be pleased to provide a gratis copy to the member opposite.

E&N RAILWAY

MR. BRUCE: I have a new and very urgent question for the Minister of State for Vancouver Island-Coast and North Coast. The E&N Railway has always been vitally important to Vancouver Island's economic development. Given our government's efforts to promote regionally balanced growth, I am sure the minister will acknowledge the importance of not only maintaining but improving day liner service

[ Page 7249 ]

to fully realize its potential as a catalyst for economic growth on the Island. Therefore will the minister consider conducting an in-depth assessment of the day liner’s present and potential economic impact and recommend realistic options for cabinet's consideration of how this service might be maintained and perhaps even expanded?

HON. MR. HUBERTS: There is a transportation committee reporting to me at the end of June. In my visits with municipalities and regional districts, there's always been a real demand to continue the E&N Railway.

In the budget cuts from the federal government, that was an initiative that concerned me. We have, in the process, drafted a letter to the Minister of Transport in the federal government. We've also discussed this issue with the provincial Minister of Transportation (Hon. Mr. Vant). As soon as the report comes out from my transportation committee, we will definitely look at all of the options for the E&N Railway, recognizing its importance for Vancouver Island.

KNIGHT STREET PUB INVESTIGATION

MR. SIHOTA: Mr. Speaker, the Minister of Labour should understand that stonewalling invites suspicion. I want to ask the Minister of Labour a different question and see if he can answer this one: was Mr. Hick fired by the Minister of Labour?

HON. L. HANSON: Mr. Speaker, suffice it to say that the member mentioned is no longer with us, and it is a personnel matter.

SULPHUR DIOXIDE EMISSIONS

MR. JONES: Mr. Speaker, I have a question for the Minister of Environment. The minister is probably aware that a recent study by Dr. David Bates, professor emeritus at UBC and an internationally renowned pollution expert, disclosed that high levels of sulphur dioxide emissions from oil refineries and cement plants can be directly related to hospital admissions for respiratory illnesses. Is the minister aware of this study? If so, what studies is the province undertaking to determine whether the health of people in the lower mainland is being endangered by this form of air pollution?

HON. MR. STRACHAN: From my perspective, I'll have to take the question on notice and give it further examination and investigation, but inasmuch as the question deals with human health, it would be better posed to the Minister of Health (Hon. Mr. Dueck).

POLLUTION CONTROL OBJECTIVES
FOR PETROCHEMICAL INDUSTRY

MR. JONES: New question to the minister: has the minister decided to update the outdated pollution control objectives for these industries, which are over 15 years old, in order to give the GVRD decent standards to work with?

HON. MR. STRACHAN: First of all, let me point out that the NDP was opposed to the last amendments to the Waste Management Act, but that's just peripheral to the question. When you say "update regulations for industries," what industries do you mean?

MR. JONES: Perhaps I should be asking the questions of the minister, rather than the other way round, but to inform the minister — who should know — of the 1974 pollution control objectives for the chemical and petrochemical industry, the home of which is in my riding, has the minister decided to update those outdated provisions?

HON. MR. STRACHAN: Again I'd ask the member to be more specific. Are you speaking of air discharges, air emissions or what? You don't know very much about the science of environment, so please be more specific about what emissions or discharges you're speaking about.

HON. MRS. JOHNSTON: Mr. Speaker, I seek leave to make an introduction.

Leave granted.

HON. MRS. JOHNSTON: In the gallery this afternoon, we have 60 grade 5 students from Simon Cunningham Elementary School in Surrey. They are accompanied by several adults, including their teacher, Ms. B. Wallace, and I would ask the House to please make them welcome.

MR. BARNES: May I have leave to make an introduction?

Leave granted.

MR. BARNES: I'd just like to ask the House to join me in welcoming Prof. Marko Haggard, along with two of his interns, Roman Lupinek and Julie Jacobs, from the state of Oregon. Would the House please make them welcome.

MS. A. HAGEN: I observe in the gallery some special guests to the House today, and I'd like leave to introduce them, please.

Leave granted.

MS. A. HAGEN: We have visiting with us a number of interns from the Oregon state legislature and their professor. I'm sorry I don't have all their names with me today, but I would like, on behalf of the House, to welcome them to the observation of our session today.

[ Page 7250 ]

Orders of the Day

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

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

ESTIMATES: MINISTRY OF
AGRICULTURE AND FISHERIES

On vote 8: minister's office, $249,374 (continued).

MR. G. HANSON: Before we broke for lunch we were discussing the neglected fisheries of British Columbia, neglected both by the federal government and by the province, and the issue of the high-seas driftnet fishery, where Canada did not stand up and be counted when dealing with the Taiwanese, Koreans and Japanese. Our fish stocks are being stolen on the high seas, and Canada is not doing enough to put an end to the high-seas driftnet fishery.

We talked about the lack of response of the province of British Columbia when we had the Grays Harbor oil spill that ended up on the beaches of Long Beach, and I'm looking forward to responses from the minister on that.

[2:30]

The province neglected to take a stronger position when the free trade agreement was being negotiated. The east coast fishery was grandfathered in, and the west coast fishery was left, now subject to a situation that neither the federal nor provincial government says it likes but could involve the devastation of our coastal maritime communities based on fishing in this province, because of the job losses that may be incurred through lack of processing here. Our position is that B.C. fish should be caught by B.C. fishermen and processed in B.C. plants.

We have serious concerns about the lack of firm landing requirements that would ensure value-added activity around our premium fish products. We heard earlier on the minister talking about the value added to agricultural products. We have some of the best salmon and herring resources in the world. They're desired by European nations as well as the Pacific Rim nations. The value is added offshore to those. Even though there's a premium on a high-grade fresh product, much of the canning is done now in Singapore and Taiwan.

There are court cases in the United States about salmon rerouted from the high-seas driftnet fishery. Japan has regulations that perhaps some members are not aware of, but Japan will only purchase salmon from countries that have salmon streams. But certain elements within countries such as Singapore and Taiwan have decided that they can circumvent those rules by routing fish caught on the high seas through American or Canadian destinations to take a Canadian label, which would then be available for the market in Japan. Those court cases are going to be watched very carefully by all sectors of the fishing community and certainly by this side of the House.

In my remarks I've tried to indicate that we have a serious situation in British Columbia. The marine habitat is being degraded by lack of proper enforcement of pollution into our maritime waters, and we don't have the capability to respond to accidents and so on.

I have a very grave concern, which is that the native people of British Columbia are increasingly being cast in the equation and being scapegoated for the conditions and the status of the fishing industry. I see the minister nodding his head. He understands, or if he does understand, I would like him to explain his remarks in the Vancouver Sun of Monday, June 5, when he indicated that aboriginal fishing rights were somehow a threat to the fishing status within the province. He will have the opportunity to explain his remarks, because I cannot believe that he would see aboriginal fishing rights as a threat, scapegoating the native people. What is required instead, Mr. Minister, is more involvement and participation of native people in the co-management of fisheries in this province. We would have better habitat protection, stream enhancement, fishing regulations and assessments of inventory and stocks if the native people had their place at the table to discuss matters along with provincial and federal authorities, the gill-net and seine fleets and sports fishermen, so that they could have a voice.

We do not adopt or accept the approach that native people are responsible for the depletion of our fish stocks, nor do we see their desire to have a share in the co-management of that resource as a negative thing; we see it as a positive thing. We see that as the only way it will come about. It will come about certainly if the New Democratic Party is elected as the government of this province. We'll have more participation of the user groups in the management and policy development around the protection of our fish resources. Right now it's too fragmented.

I have made a number of introductory remarks, and I would like to give the minister an opportunity to respond to some of my points. Perhaps I would like to hear first what representation his office has made with respect to the high-seas driftnet fishery and whether he's satisfied with the present situation.

HON. MR. SAVAGE: My hon. fisheries critic has certainly raised a number of concerns in his discussions, and across to us on this side. I'd like to say that this government has taken the lead. The Premier of this province took the lead on the driftnet fishery and continues to take the lead. In fact, as of May 30, a press release was sent out relative to our concern that we wanted to conduct a conference as quickly as we possibly could. We have set mid-July as the date for that conference to deal with what we deem to be a potential decimation of the Pacific fishery. I think we have shown responsibility as quickly as we could possibly do anything with it. We have relayed our concerns directly through to the federal government. We are very much concerned. There isn't any doubt in my mind that we're acting extremely responsibly on behalf of the fishing industry, the people of

[ Page 7251 ]

Canada and, specifically, the people of the province of British Columbia, including our native people. I think it's important that we have a responsibility to that resource to all. The fact that we have pushed and pushed on this issue, through the commitment of the Premier through this government to have an international conference take place, shows very clearly that we in fact do care and we're very conscious of those concerns.

He mentions a number of things of concern relative to what happens in the GATT discussions, or where B.C. or Canada have been in the discussions that have taken place around GATT and herring cases that we're trying to resolve: the landing requirements; how it impacts on jobs. You use a lot of references there. I guess I don't have to tell you that when you're discussing GATT things among the 95 countries, you do not use jobs as a case in point to argue your case. You use the fact that we should be landing those fish for conservation purposes. And we are fighting extremely hard to insist that that be the case, that the fish must be landed.

As you well know — because the east coast was grandfathered, and I'm sure you know — the reason the west coast was not grandfathered was, in fact, because there was a GATT case underway, That's why it could not be grandfathered. There was a case already lodged by Icicle Seafoods in Seattle. Obviously Canada could not impose the same conditions on the west coast. On the east coast, that may well still be challenged. There's nothing in the world to stop a GATT challenge. For them to sit across there.... They know better. So do you. If you understand GATT rules, then you know that any one of those decisions could be challenged. It's obvious that when there's a case before a tribunal, or a hearing, then you can't inflict a rule and regulation before that is adjusted to whatever the particular case is.

You referred to a number of issues on the native fishery. What I said in the June 5 paper was that it will affect everyone, including our aboriginal fishing rights for our native people. It will impact on everyone. What I said is that we needed some cooperation And we have had the opportunity. I'm not speaking solely with the native people; I'm saying that we need cooperation among everybody — the very point you made — to make sure the fishery is there for everybody. We have had occasion to meet with the native people in committees of cabinet. So what we're really saying is that there's an involvement required of everybody, and I think I respect that, as does this government. There has to be the cooperation that will see something happen, so we do have in fact a future for the fishery in British Columbia.

You made some comment about the juvenile salmon that are being taken, some originating from the Asian side of the Pacific Ocean, some from the North American side of the Pacific Ocean. We're well aware of that, and are extremely concerned about the fact that a lot of that salmon may well be from our own rivers. We have raised that issue time and time again in the discussions on the driftnet. We will continue to lobby very strongly and urge an immediate moratorium. We have done so before. We will continue to do so, to fight strongly for what we believe are our rights as a province and for what this country should obviously be doing as a country to preserve the west coast fishery.

MR. GUNO: I want to pick up on the theme that has been established by my colleague the member from Victoria with regard to the serious situation that exists within our fisheries industry. I do agree with his identifying some of the major culprits in terms of why this particular situation exists today. I think he mentioned things like the high-seas driftnet fisheries; the incredible amount of pollution that we're allowing to enter our major rivers and streams; the fact that many of our industrial activities — the logging, the pulp mill operations — are some of the major contributors to the destruction of many of our spawning grounds; the fact that we're allowing an incredible amount of over fishing; the high capital that exists within the industry. All these are some of the things to which most experts will attribute the fact that we are having a very serious crisis within the industry.

Yet it seems to me that the most convenient scapegoat that is often identified is the native people. That's why I'm very concerned about the remarks the minister made to the Pacific Alliance group, who have been set up solely to fight and to stonewall, to sandbag any efforts on the part of the native people to try to reach some kind of just resolution to their aboriginal rights to this important resource.

I want to tell the minister that I come from a family that has been involved over several generations in this particular industry. It was the native people who were very much involved in the infancy of this industry, since way back in the early 1800s. I have seen many native fishermen who have been taken advantage of by many companies because of the fact that they didn't know anything about business, the fact that they had to go to companies to finance their capital and were often almost slave bound in their relationship. So I really find the fact that the continuing role of the native people in the industry is being questioned as somehow being a threat to the industry.... I don't think there is any group of people more concerned about the continuation arid, indeed, the enhancement of the stock.

Something I wanted to canvass with the minister is just exactly what he meant when he told this group that's opposed to aboriginal fishing rights that their concerns are genuine and that the B.C. government is behind them all the way. You say you're generally concerned that these fish stocks may be threatened. We've said the major contributors to the destruction or diminishment of this stock are the industrial use or the single use of much of our forest resource, which threatens many of the spawning streams, and that there are pulp mills spilling major amounts of dioxins into our streams. In spite of that, can the minister still seriously say he agrees with this group on the native people's effort to reach some kind of arrangement so that they can have some say in how this resource can be protected and enhanced?

[ Page 7252 ]

One of the biggest problems we have in the fishing industry is that the decision-making has been highly centralized. There has been very little consultation with some of the people who know exactly what the conditions are in these various watersheds. I think the future in management is to localize the decision-making, yet you sit down with a group that just can't see beyond their racist attitude and that point fingers at the native people as the main threat to this fishing situation we are in. You talk about a cooperative approach and say it's going to require the total cooperation of all parties if we're to resolve this land claim In a just way, and I agree with you. At the same time, you say the government does not intend to cooperate. Which is it? What are you saying? What kind of cooperation do you think it requires?

[2:45]

It's one thing to make these kinds of airy-fairy confirmations about the approach that's required, but when it comes down to concrete action, it seems to me this government is simply not able to do it because of their connection with big business. I think the problem here is that there's just too much concentration in terms of economic and political power There's simply no opportunity for fishermen, for the people who are engaged in the industry, to have any say in the management of the resource. It's not so much the land claims that this government is afraid of, but the prospect of decentralizing decision-making so that the people who are involved, who are affected, can have a real say.

I want to hear what the minister has to say about the kind of cooperative approach he talks about.

HON. MR. SAVAGE: I guess I have to reiterate the point that I'm one member who is very cognizant of the fact that we have some issues to deal with in the fishery. I've made that very clear.

Referring back to some of the things that were said which you asked me about, I said there needed to be cooperation. Whether the jurisdiction lies solely with the province or with the federal government, that's where either we have jurisdiction or we don't, and it has to be cleared. It's very important that we do. It does require cooperation to try to resolve the issue of the fishery. To say that I'm pitting one against the other is wrong; I wouldn't have said cooperation if that had been the case. I'm saying the concern is for both. There is a genuine concern. I think from both points of view we need cooperation out there to try to resolve the issues. That's the important thing.

Let's get on with the management of the rivers, the streams — that's very important; you raised the issue yourself — and the fishery itself. We all have to work towards that. That's a responsibility we have to bear.

MR. GUNO: That's interesting. It's really, I guess, the difference between what you say and what you do that concerns me. On the one hand you talk about being pleased with the apparent progress of the talks between the Nisga'a Tribal Council and the federal government to try to reach some kind of arrangement in terms of co-management, in terms of recognition of certain rights that the Nisga'a people have with regard to the salmon resource from the Nass River.

On the other hand, your government intervened in a court case that was launched by the Pacific Alliance committee last year to try to stop those talks. Which is it? You say you don't know why the A-G got involved, yet at the same time you say: "Yes, I think we should get involved. I think we should cooperate. I think we should recognize that the native people should be part of the solution." Have you talked to the A-G and determined why they were intervening in this kind of case? On the one hand you talk about establishing this kind of cooperative process, yet you have the Attorney-General busily intervening and trying to stall that kind of cooperative approach. Now which is it?

HON. MR. SAVAGE: I will not comment on why. It would be up to the Attorney-General to respond to the legal interpretation of why the intervention took place.

I still come back to the point that the whole fishery is extremely important to this province. It does make an awful difference to the economy and to the future of the native people as well as all our fishermen. Fish for food is extremely important to our native people. We want to make sure that resource prevails. Nothing can be more sacred than that, in my opinion. As far as the pollution is concerned, you mentioned a number of things. I think our Minister of Environment (Hon. Mr. Strachan) has recognized that; this government has recognized it. The Premier has recognized it, and we have taken the leadership and are continuing to do so.

MR. CHAIRMAN: The Minister of Regional Development requests leave to make an introduction. Shall leave be granted?

Leave granted.

HON. MR. VEITCH: I believe this is the group in the gallery now. Grade 5 students from Nelson Elementary School in Burnaby are visiting the Legislature today. The teacher's name is Mr. Corrin, and I would ask the House to bid them welcome.

MR. G. HANSON: This is an extremely important subject that we're on at the moment, and I think it behooves all members of the House to put their thinking caps on and try to resolve this. As my colleague from Atlin says, section 35(l) of the constitution includes the aboriginal right to fish. But we have court cases that are constantly harassing native people — logjams; I don't know how many fishing and hunting cases are jamming the courts. We need more participation by native people in the decisionmaking that my colleague from Atlin is talking about.

Here you have statements in the newspaper which give the sense that you see native people as a part of the problem, or you are siding with this group that

[ Page 7253 ]

sees native people as a part of the problem, which is certainly anything but the case.

The aboriginal right to fish is of paramount cultural, historical, social and economic importance to native people and communities. These resources have been depleted and alienated from them. In order to promote justice for both native and non-native people, the provincial government must recognize the need for increased native involvement in all aspects of fisheries in the context of increased stock production based on improved management enhancement, habitat protection and improvement.

The bottom line really is negotiating land claims, and I know the minister sends mixed signals here. He says "I don't know why we don't participate," or "I don't know why the province has intervened in other cases." That's the fundamental problem. We must negotiate the land claims.

The province is a party to it. The province must be at the table as well. The province and the federal government in many respects share jurisdiction over fisheries and other aspects, and the province must be at the table. The province is the stumbling block, and the minister knows that. The province is the impediment to the resolution of land claims.

I would like to ask the minister for his views on co-management involving native people, both in the coastal estuaries and upstream in rivers. What are his views, as minister, of the native participation in our fishery?

HON. MR. SAVAGE: I keep repeating the cooperation that is required. As I have said before, we have had native people participate in presentations to committees of cabinet as it relates to fishing, how important the resource is not only to the native people, but to all kinds of people in this province and to the economy of this province. Whatever is necessary to make sure that resource remains for all of us in the future — including the native people and all those who rely on the resource — is there. The management of the resource is extremely important.

It takes the cooperation, as I said in that news article, of all to resolve the future of that industry and make sure it is there for future generations. That is extremely important, and I have no problem with participation. Cooperation is necessary, but I think it will take some time, and I am quite willing to listen to presentations. We've done it before.

MR. GUNO: I just want to pick up on that particular issue. We have a consensus that we have to share the resources. The message comes loud and clear that that is an essential principle that we have to continue to use in dealing with this situation.

I want to canvass from the minister the principle of decentralizing decision-making. I know we are encroaching on largely a federal matter in terms of management, but I think the province can take some leadership in trying to re-evaluate the whole jurisdictional problem, in terms of trying to get a proper referral system to protect our major spawning grounds to ensure that new economic activities — such as fish-farming — has a minimal impact on the wild stock.

In view of all these new developments, is there not an opportunity for this government to start identifying some new approaches and new arrangements with the federal government so that we can decentralize decision-making, and so we can include not only native people — but non-native people who are directly affected — in decisions that are often made in Ottawa, which is so far removed from our province, from our coast. That's a principle that I think we really want to see this government undertake. I just wonder if the minister has any thoughts on that.

HON. MR. SAVAGE: I hope the member is aware that there is a federal task group in progress that will be discussing co-management of the resource, and I think the report goes to cabinet this fall. At that point, we will have some discussions as a province. I have no problem with your last point about having some more control over or say in the resource, in conjunction with dialogue with the people who are reliant on it. I would think, hon. member, that everybody who is affected by it should clearly have some input into it.

If you talk about how we deal with free trade issues, one of the possibilities is a marketing board. There's an example of one of the things you could manage the resource with, but it's not being considered at this stage until those discussions are tabled in Ottawa.

Those are issues being considered, as far as I understand from a response from the federal trade department.

MR. G. HANSON: Mr. Chairman, I know my colleague from Prince Rupert wants to ask a few questions, but I would like to direct a specific question to the minister. On southern Vancouver Island, treaties have been signed with the native people: the Douglas treaties, the Fort Victoria treaties. The Goldstream fishery at the lower end of the Saanich Inlet, in the view of south Island Salish people.... The excess chum are really viewed by them as part of their fishery.

They put a proposal to the federal government, because there is an excess of chum salmon that come to Goldstream for spawning purposes, that they capture some of the fish. They would be willing to do it in such a way that they would do a set, pick through and make sure that they just took what they required. They would have an industry, whether it be smoking or some value-added jarring of salmon. This would be an indigenous, local commercial fishery based on excess chum salmon coming into the Goldstream.

I'm sure your officials are aware of the confrontation that has occurred in the past over who gets those excess chum. The native people here have said: "Let us have a share." They would have a commercial operation. They would take 40 percent of any profit they made from the commercial enterprise and return

[ Page 7254 ]

it to the federal government for enhancement of federal fisheries. They were turned down. That excess harvest was let to a private consortium.

Here we have a treaty area where there is a dispute about what aboriginal rights mean in terms of their own future. If that kind of question cannot be negotiated satisfactorily and amicably, to the mutual satisfaction of the people who signed treaties in good faith and now want to define precisely what their aboriginal fishing rights mean, and whether they can have a share in it for their own needs and for the commercial possibilities that could exist around the excess chum, and it's deflected away and given to another group.... I'd like to hear the minister’s views on that.

[3:00]

HON. MR. SAVAGE: Mr. Chairman, I am not aware of the details of the reasoning for that being turned down, but I would hope that through due process we could have cooperation. I find it hard to believe that it would be forever and a day, if that were the case. It may have been a decision that I'm not aware of. I certainly don't have the details of the particular question you asked, but it sounds to me like there needs to be a little more cooperation, from my interpretation of what you're saying. Possibly we could find out the details of why the federal government did not accept the proposal.

MR. G. HANSON: Further to that, Mr. Chairman, I would just like to ask the minister whether, if the facts as I am relating them to him are substantiated — that in fact the south Island people made a proposal to Fisheries so they could capture the excess chum for a commercial enterprise, and they would then plow back 40 percent of any profit for enhancement, hatchery capacity or whatever — he would be willing to support such a proposal, so the native people in this region could have their own indigenous, commercial, value-added industry around a fishery which they feel is partly theirs.

HON. MR. SAVAGE: I wouldn't want to comment until I see the details of the reasoning for its being turned down. I'm not aware of it at all, quite frankly, and once we find the details, I'll be more prepared to answer the question. At this stage I'm not at liberty to make a decision on something I'm totally unaware of, other than that I know it's been turned down.

MR. MILLER: I read the story, and perhaps the minister might want to comment on the accuracy of what appeared in the Vancouver Sun on Monday, June 5. If he wants to, that's fine, but I want to ask a number of questions about statements attributed to you. We'll find out first of all whether they're correct and secondly what you might have meant by some of the statements.

First of all, you're quoted as saying: "This government will not stand by and watch while a three-quarters-of-a-billion-dollar industry is placed in jeopardy...you are not alone." Could the minister explain just what he meant by that statement?

HON. MR. SAVAGE: We were referring to the driftnet fishery, and I think it's important to recognize that we have a very real concern. I'm sure lots of biological reports will come forward about the impact after we have these observers make some comment, but what we're really concerned with is that we cannot have the Pacific fishery — and it's right; it is worth three-quarters of a billion dollars — jeopardized by the high-seas driftnet fishery. In fact, we've asked time and again for a moratorium or closure because we don't know the exact impact, but we don't want it to be responded to when it's too late. We need some action now. If the fishery is decimated, that doesn't do anybody any good. So we want action as soon as we can get it.

MR. MILLER: I see the Premier wants to get into it, and I don't want to keep him out of it. In fact, I welcome his involvement, because I've got several questions that he might be able to answer too.

But before I continue with this newspaper article — because quite clearly it's not the context it's delivered in, and I want to question you further on that — let's deal specifically with the driftnet fishery. Certainly it's of concern to all people who have any concern about the fishing and fish-processing industry in British Columbia and the tremendous economic value that it brings to this province: the jobs, etc.

Would the minister be prepared to take a position that this government should not deal with the government of Taiwan in terms of a steel mill as long as they are participating in the driftnet fishery? Let's get down to brass tacks. Are you prepared to take that kind of position?

HON. MR. SAVAGE: I will not comment at this stage on future actions that may be necessary. We'll go through the process, then we'll adjust and make decisions accordingly.

MR. MILLER: It seems to me that the minister is prepared to talk, but he's not prepared to do anything. We've seen the sad and sorry history. If I was in charge of some of the federal departments that got involved in this GATT thing, heads would roll. This is the biggest boondoggle, the biggest mess, ever created by a government that I've ever seen.

If this government is truly concerned about the impact of the driftnet fishery, what specific measures...? You can talk till the cows come home — maybe you've heard that expression, since you're a farmer — but sometimes you have to, as they say in the industry, fish or cut bait. What specifically are you going to do beyond talking? Surely there is a coercive power in terms of dealing with our trading partners.

HON. MR. SAVAGE: Did you say coercive? Is that what I heard?

[ Page 7255 ]

MR. MILLER: That's right. Coercive.

HON. MR. SAVAGE: I think you ought to reconsider that statement. We will go through the proper procedures of discussions with them. The impact may revert the other way. How coercive could you be? I think we ought to really raise the concerns and go through the proper process — as we are doing. I'll say time and again that this province is leading the way. We are working very strongly. The Premier raised the issue strongly on behalf of the people of this province, and we're following it up as a ministry with the Premier's office to push as quickly as we possibly can for a complete moratorium or closure, and at least have a discussion or conference on how to handle this serious issue.

HON. MR. VANDER ZALM: I just want to make a couple of comments, since we've been talking a great deal about fisheries, and I agree that it's a very important industry for the province. I think what we've heard the minister say and what we ought to all agree with in the House is that we manage this resource efficiently and effectively and that we do not see a situation where people will do things that might deplete a part or the whole of that resource. Hopefully it's here to serve the people for many centuries to come. It's not just an industry for today or tomorrow; it's to be with us for many years.

I object to the driftnet fishing taking place in the Pacific now. I think it's a horrendous crime, where they put out nets that are 35 to 50 kilometres in length. There are enough ships out there that we could put all that netting around the globe twice or two and a half times, and they catch anything and everything from whales, dolphins, squid, salmon, herring, you name it, indiscriminately. It's a horrendous crime, and I agree that we must protest vigorously and that we must petition the federal government by whatever means is necessary to take some action in that regard. It may be that if we can't come together with the parties involved, they need to take some fairly radical action. I don't argue that.

I similarly object to, frankly, fish-nets at the mouth of a river. I don't think that's a part of managing the system. I object to the fish-nets in the ocean. I object to the fish-nets at the mouth of a river, because that too is interfering with the resource in a way it was never intended and in a way that shouldn't be allowed.

[Mr. Rogers in the chair.]

I believe, as the minister said, that all of us whether an NDP member or Social Credit — regardless of what group of society we're with in British Columbia — need to work together to assure that we efficiently and effectively manage this resource.

MR. CLARK: Are you going to work with the native community?

HON. MR. VANDER ZALM: Intervention from the second member for Vancouver East — a real fisherman. Tell me about it.

AN HON. MEMBER: And a farmer — a fish farmer.

HON. MR. VANDER ZALM: And a farmer — the whole thing. I think his question was: "What about the native people." I agree that obviously there are many natives in this land that see the fish as a resource for sustenance, and we need to respect that. I don't have any argument with this at all. I don't think you've heard argument from this side of the House on that point. It's been made, and it's been made effectively.

Interjection.

HON. MR. VANDER ZALM: That doesn't mean we put up nets across the mouth of a river. I don't think the people, regardless of what group they're with or where they're from in the province, would agree with that approach, because that interferes terribly with the management of a resource. This resource can serve the people for a long, long time. It's appropriately dealt with by agriculture, just as agriculture has to deal with other forms of farming. I'm very pleased that there is a greater consciousness developing in the province for the management of the resource.

Just briefly, I'd like to mention as well that we certainly should fight for a fair share from Ottawa. I don't believe that we're getting a fair share when it comes to industrial milk. I'm not saying this because it will somehow provide jobs — and it will — for the people in creating new industries in many communities throughout the province. I'm not saying this because I think that with a fair share we'll see a better utilization of agricultural lands. I'm not saying this because I think it will make our job easier in assuring that we maintain a good supply of agricultural lands — although I do agree that agricultural land used is far easier to save than agricultural land left to waste.

I'm saying this too, Mr. Minister, because I believe if we can get a fair share from Ottawa on the industrial milk, we'll see many new young people getting involved in dairy farming. It's a wonderful industry, one that I'm very proud of. I came as a youngster from a country which was built on that very industry. I think it's of tremendous value to every nation — and to our province and every province in the country — that we have a strong agricultural base. Dairy farming is much a part of that strong agricultural base.

We have in this province many young farmers who would like to get into dairying, but they can't simply because we've not been allotted a fair share of that available quota. As a matter of fact, as I understand it, we receive only about 6.3 percent or thereabouts — you can correct me if I'm wrong — of the national quota, while just by comparison, for example, Quebec

[ Page 7256 ]

receives about 47 percent of the industrial milk quota. That's not fair. That must be addressed.

Our young people should have the opportunity to get into dairy farming just as much as someone in Quebec or Ontario. They have as much right living in British Columbia as if they were living in Ontario or Quebec. Similarly, when you drive through the Fraser Valley there are thousands of acres of land going to weed — sword ferns and thistles. It's not being utilized as it ought to be or could be, just because we don't have the opportunity to produce that industrial milk for our own use.

MR. CLARK: Let them produce it illegally.

MR. CHAIRMAN: Order, please. There will be ample opportunity during these estimates.

HON. MR. VANDER ZALM: The second member says: "Let them produce illegally." He thinks that's okay. I disagree with you. I think if it's illegal it shouldn't be allowed, and whatever the authority, they ought to pursue that — not you or I, perhaps, but certainly the authority responsible ought to pursue that. I don't think that's so much a question as to whether they produce legally or illegally. If it's illegal, it shouldn't be done.

[3:15]

I do think, however, that there's an opportunity for them to overproduce. If they can find a market for the milk they submit — I believe it's about 75 percent back to the national marketing board, which then distributes it among the provinces with most of it going to Quebec or Ontario. So the system is wrong; it needs to be changed. There's an opportunity here for young people to get into farming, an opportunity for us to use the land and for us to create new industries and thousands of jobs. Mr. Minister, I hope you will continue to press this aggressively.

I'm also pleased to see that we basically have a very healthy agriculture industry. I guess all things are relative. Some people might compare it to other activities and say, "Well, it isn't what it could be or should be," and I suppose based on such a comparison we might agree. But generally speaking, our agriculture industry, compared to what it is across the country, the continent or elsewhere in the world, is doing fairly well. I'm very pleased about this, and I'm hoping that we might see greater diversity in that industry.

I'm very pleased to see that our greenhouse operators are doing very well. As a matter of fact, I visited a greenhouse operation in Langley only recently. It's a 16-acre ultra-modern operation, and they produce peppers and lettuce. The peppers are shipped to California, Oregon, Washington and New York — those are some of their best markets. We can compete if it's done properly, and these people are doing an excellent job.

All of this greenhouse produce — certainly in these more modern plants — is produced biologically; I believe that's the term for it. They have little bugs that are produced and imported from Vancouver Island, the United States and Europe, and these are introduced to the greenhouse to eat the aphids, red spiders and the thrips. That's an excellent approach, because certainly I'm sure that I can speak for everyone here when I say we have a tremendous concern about chemicals on food. I believe we're going in the right direction. I would ask, Mr. Minister, that we encourage this.

I think perhaps there's more we can do in extension services to assist people in industry. I would much prefer that we give our farmers, be they dairy farmers, cattle ranchers, greenhouse growers or field croppers, information and assistance through the extension services rather than to be out there giving them grants, because we want to assist them through the process of grants. If we can work on the extension services as opposed to the grant system, I think that would be a move in the right direction.

Mr. Minister, I'm sure other members will wish to speak to this as well, but I can say that I'm very pleased with the direction I see developing. There's still much more that can be done, particularly in getting equity from Ottawa and particularly too in diversifying the industry a little bit more. Possibly there are some things we might do differently from the way they've been done in the past, but generally the industry is strong. It's very important to the province and we should do everything possible as a government — you as minister representing that community too — to encourage more people to get into industry and to do a still better job at farming.

MR. MILLER: At the risk of offending the rules, I'm tempted to ask the Premier how to keep the slugs off my wife's geraniums.

MR. CHAIRMAN: The Premier could probably answer that question, and I could also answer that question, but the rules are not going to be offended while I'm in the chair. Advice on such matters can be solicited privately in the corridors.

MR. MILLER: Right on.

I'm pleased that the Premier feels that we need to manage our fisheries efficiently and effectively and that he objects to the driftnet fishery. I don't know when he first became aware of the problem of the driftnet fishery, and perhaps the Minister of Agriculture might advise us when he first became aware of the problem, because certainly it's been around for a long time prior to the Premier making his statement.

The Premier objects to fish-nets at river mouths. I'm glad to hear that as well, and I hope he has conveyed that feeling to his Minister of Environment (Hon. Mr. Strachan), who made an absolutely outrageous statement last year at 100 Mile House to a tourist group that he would like to do away with a commercial fishing fleet and put nets at river mouths. I hope that you managed to get that little paradox straightened out.

HON. MR. BRUMMET: One thing about our party: we allow different views.

[ Page 7257 ]

MR. MILLER: You certainly do contain differing views, Mr. Minister of Education. It's very difficult — if we go back to the Premier's desire to manage efficiently and effectively — if we get these differing views being uttered publicly by cabinet ministers. It's extremely difficult to develop an efficient and effective management system under those conditions.

HON. MR. BRUMMET: We allow our people to think as individuals.

MR. MILLER: Well, I'm glad you allow them to think, but some of them you shouldn't allow to think out loud.

MR. CHAIRMAN: For the sake of Hansard, and for the sake of the Chair, I'd ask the Minister of Education to restrain himself or perhaps enter this debate a little later on. Perhaps if you would address the Chair, Mr. Member, we could have a more orderly debate.

MR. MILLER: Thank you, Mr. Chairman, for your protection against the vicious assault by the Minister of Education.

I'd like to go back to the line of questioning I started with in terms of this newspaper article. The minister responded to my direct question when he was talking about the driftnet fishery, and yet the context is completely wrong. I'm going to read it, because I want to canvass the issue again. The article that I'm referring to is in the Vancouver Sun of Monday, June 5, and very briefly it says:

"B.C. Fisheries Minister John Savage has told a controversial group opposed to aboriginal fishing rights that their concerns are genuine and the B.C. government is behind them all the way. 'You are genuinely concerned that these fish stocks that you really rely on may be threatened,' Savage said, 'Let me assure you, you are not alone.'

"Referring to 'special interest groups,' Savage told a weekend meeting of the industry-supported Pacific Fishermen's Alliance, which has been condemned as racist by several native Indian organizations: 'This government will not stand by and watch while a three-quarters-of-a-billion-dollar industry is placed in jeopardy...you are not alone.'"

Quite clearly, Mr. Minister, the context of that and you are quite free to stand up and say it's all out of whack — leads me and anybody else who reads this article to believe that you are, in fact, supporting the alliance's objection to the negotiations that are currently taking place between the federal government and the Nisga'as with regard to quotas on the Nass River. I will again put my question to you: is this article wrong?

HON. MR. SAVAGE: I guess you could say that the article is wrong; it is taken out of context, because my reference at that time to the jeopardy of the three-quarter-billion-dollar industry was that of the driftnet fishery.

MR. MILLER: Conversely, Mr. Minister, you obviously are not concerned — or maybe that's not the correct way to put it. You have no concern, then, or don't feel that the current negotiations in fact are jeopardizing the fish stocks.

HON. MR. SAVAGE: What I said was that we need cooperation so that we make sure we have the longevity of the industry, the Pacific coast fisheries. I didn't say that it would necessarily jeopardize it, but we need the cooperation of all to make sure we solve It so that there is a future for the industry. That's the point I was trying to make.

MR. MILLER: There are negotiations currently taking place. They are limited in this respect, that the federal government only has jurisdiction over the fishery, and obviously that's something that's on the table. I repeat my question. Are you of the opinion that the negotiations in fact are not a threat to fish stocks?

HON. MR. SAVAGE: I don't believe that I have all the details of the negotiation, nor do I know the full extent of what is being put on the table in negotiation. What I am concerned about — and I keep repeating it — is the future of the fishing industry in this province, on the Pacific coast, and if the negotiating process involves cooperation, then, as I said, if we have to sit down, let's do it. If there is any jeopardy relative to the talks that are going on, whether it's of a federal nature with our native people or whether we talk about the whole Pacific coast fishery with the federal Fisheries and Oceans people, I think we need to have more cooperation.

MR. GUNO: I just want to follow up on my colleague's line of questioning to the minister; I think it's important to canvass further what he means by cooperation.

First of all, I just wanted to make a brief comment on the Premier's reference to certain groups putting up nets across the river. I don't think that any of us are in doubt as to who he is talking about, and that is some of the native tribes that do practise this. I think that if the minister were to refer to any statistics showing the amount of fish that are being caught by different users — and I think maybe he should refer to his experts — he would see that by and large the commercial fishery, the sports fishery and other users like that take the majority of the stock, really, that is being caught.

If you compare that, you will see, if it is put on a graph, that the amount caught by the native food fishery is really minimal. It's something like 1 percent. For the Premier to compare the high-seas driftnet fishery with people putting nets across the river as somehow being equal, I think, is really to trivialize the problem that we have and the serious risk that these high-seas driftnet fisheries are presenting to our fish stock.

It reconfirms my earlier contention that when we need a scapegoat, we trot out the native people, who are only trying to exercise a historic right that is recognized by the constitution.

[ Page 7258 ]

If we are going to undertake this cooperative approach that you are saying.... And I agree with you. I think that a cooperative approach means a willingness to sit down, a willingness to negotiate. Given that you feel that this is a very important approach and that it's the only way that we are going to deal with the serious problems we are facing in the whole fishing industry, can you assure us that you are going to try and convince your colleagues that the adversarial legal harassment that has been going on in terms of denying the native people that simple, fundamental right which has been recognized by the courts and confirmed and entrenched by the constitution will not go on.

As long as that is going on, what you say about cooperation just simply rings hollow, Mr. Minister.

HON. MR. SAVAGE: I've never considered cooperation, discussion or dialogue to be hollow if you've got a purpose in mind and a goal and objective to obtain. Certainly I have some concern about your assuming, I presume, that the Premier's comments were directed at the native fishery. I did not take that to be directed at the native fishery at all; I think he had a concern about nets at the mouths of rivers. I think the overall concern we should have is the conservation and management of the fishery, no matter what river it is, and that entails cooperation — and I'll stick with that word — between all the users of the fishery. I well appreciate how important the native rights are to the food fishery, but I think it behooves us all to cooperate in an effort to maintain it not only for the native people but for the whole group of people involved.

MR. MILLER: Going back to the topic I was discussing before, the minister says in response, first of all, that he was talking about the driftnet fishery; he wasn't talking about the concerns the alliance had So I asked him whether or not, if that was the case, he had concerns, and he said he didn't have enough details; he didn't really know. Yet he went and spoke to a meeting of the alliance, and said that their concerns were genuine and that the B.C. government is behind them all the way.

[3:30]

Did the minister make that statement because he didn't know all the details? Is that the kind of statement you make when you don't know all the details? Do you say, as you said to the alliance, that you are genuinely concerned: "Let me assure you, you are not alone." Is that the kind of statement you make when you don't know all of the details, Mr. Minister? Do you know the details or not? Are you concerned or not? Do you think these negotiations are a threat or not? Let's not be ambiguous here; let's say it like it is.

HON. MR. SAVAGE: I suppose I'd be a very poor Fisheries minister if I didn't concern myself with the future of the industry and the stocks. The driftnet fishery, in my opinion, could jeopardize the three-quarters-of-a-billion-dollar industry, and I think that has to be made very clear. That's what I'm saying: there is jeopardy, in my opinion, if we don't come to grips with the issue of the driftnet fishery. The management of the stocks that go up the river.... I stated very clearly that we need cooperation on the future of the Pacific coast fishery.

MR. MILLER: Did any of the minister's remarks at the meeting — and I think this is fundamental — have to do with the primary purpose, and really the only raison d'être, of the alliance, which was formed as a result of opposition to the federal government undertaking negotiations? We know that the previous Attorney-General took a position in that regard by trying to get an injunction to derail those negotiations. Is the minister saying that he did not address that issue at all and that these remarks do not concern those fundamental issues, which are of vital importance to the alliance? Do you mean you weren't talking about their concerns when you made these statements?

HON. MR. SAVAGE: It does not just fall on the Pacific fishery. When I was addressing the group, I said that the pressures fall on a finite and fragile resource: our fish stocks. It doesn't mean it's just the B.C. situation; we talked about the whole driftnet fishery, the Pacific Ocean, what happens out there, how many come back to British Columbia. All of these things were considered in my discussions with them.

MR. MILLER: I think we're drifting, Mr. Minister.

You also said that the resolution of outstanding title "will necessitate the full cooperation of all the parties." Is the minister giving at least some tacit admission that aboriginal title exists?

HON. MR. SAVAGE: What I am saying is that no matter what the issue, we need to cooperate. I'm not saying one thing or the other. Some are federal issues with land claims, as you are saying — or as others have said. And if that's the case with the federal government, as the minister responsible for the province and in charge of fisheries, I think we have to look at the fishery that exists on the Pacific coast. That's my major concern, and I hope we get cooperation.

MR. MILLER: Mr. Minister, you were asked later.... Again, you are quite free to refute any of the statements I quote from this newspaper article.

HON. MR. BRUMMET: Research in depth.

MR. MILLER: Look, if I had been at the meeting, I would have asked the questions from firsthand knowledge. Not having been at the meeting, it's incumbent upon me, and perhaps upon the minister.... If he feels the story is inaccurate, he might wish to correct it. This is a perfect opportunity for him to do so. The Minister of Education should not be too critical of my research. The minister is free to stand up and respond to any question I put to him on

[ Page 7259 ]

this matter, and the record will be in Hansard. I think that's probably preferable.

I'm quoting from the article: "Asked later what he meant by 'full cooperation' in the settlement of land claims, Savage said he didn't mean that the B.C. government would cooperate...." Does that not strike you as a fundamental contradiction, Mr. Minister?

HON. MR. SAVAGE: What was meant by that statement is that in some cases it's a federal native claim issue; it's not the jurisdiction of this government. That was what I meant by that statement.

MR. MILLER: Do we, Mr. Minister, to your knowledge, maintain observer status at those negotiations?

HON. MR. SAVAGE: I could find that answer out for sure. I'm not positive on that one.

MR. MILLER: I'll wait for your response on that but if the answer is yes, it would be realistic to assume that the B.C. government is fully apprised of every detail that is being negotiated and the implications of those negotiations for the fishery. I assume that would be the case if the answer is yes.

The article goes on to state that you thought continuation of the negotiations is a positive sign. It then says: "Savage said he didn't know why his government wouldn't participate in land claims talks and wasn't sure why the B.C. government has attempted to halt the Ottawa-Nisga'a negotiations." Is that an accurate statement, Mr. Minister?

HON. MR. SAVAGE: What I stated was that I wasn't clear what the legal ramifications were of why they did not participate in it.

MR. MILLER: Forgive me, Mr. Minister, if I have some difficulty. Having seen this topic discussed on numerous occasions in this House, knowing that your government has expressed its position publicly on a number of occasions, it's quite surprising that as a minister of this government you would be unaware of your government's position. I really have some difficulty understanding that position on your part As the minister involved and responsible for fisheries, surely you would be better versed on this issue than some of your colleagues. That comes as quite a surprise. I only hope you've been briefed on the issue since the meeting — since your public statements.

If I have a criticism as a result of the questions I've now asked and the answers I've received, it's that surely this is a very sensitive issue in this province, and one on which there is a fundamental debate. There's nothing wrong with that. But it's not an issue that needs to be fanned. The flames don't need to be fanned in terms of the negotiations and the desire — and I think quite a legitimate desire — of native people in this province to become more involved in the economic life of this province. From my vantage point, I think they have in many instances been effectively shut out of those opportunities. It certainly does not need to be fanned, Mr. Minister.

I would highly recommend that in order to set the record straight publicly.... If I were misquoted as often as you say this article misquotes you and puts your comments in contexts that you say are not accurate, I would want to correct the record by writing a letter to the newspaper in question and setting down my position quite clearly in terms of these remarks. As you are well aware, it could be quite dangerous having those misinterpretations out there.

As the minister may have seen from across the floor, I'm wearing a button. It's a salmon with a maple leaf in the background, and it reads: "Our country, our fish, our communities." This button is being distributed by all groups who are now working to preserve the processing industry on the west coast of British Columbia. I tend to get quite angry when I review the history of this particular dispute, and I'm really talking about what was originally an unfair trade practice complaint filed by U.S. processors.

The Prince Rupert fishermen's co-op went up to Alaska and purchased a very small quantity of herring. I forget what it was — 200 or 300 tonnes. It wasn't that much. It wasn't really of significant value. The processors in Alaska got mad about that and filed an unfair trade complaint under section 301 of the U.S. legislation. From that very small beginning.... The value of the product was, in some estimations, $3 million. I have a brief that was produced in December '87. I think the minister has acknowledged that it certainly was less than $9 million. We're talking about a minor amount of fish. From 1986 or 1987 until the present time, that little dispute has grown to the extent that our west coast processing industry is severely threatened. I don't know the number to use in talking about the threats to processing jobs. I don't know what's accurate; maybe nobody knows at this point. But certainly it's significant.

As I said earlier in the debate, I think this issue was as badly bungled and as badly handled as any issue I have ever seen dealt with by government. I don't think the provincial government was the primary culprit; I think it was the federal government, those incompetents who dealt with this issue. I suspect that in this country we're suffering from that sort of Pearsonian image of the great conciliatories or conciliatators.... Maybe Hansard will correct the word, but everybody knows what I meant.

MR. CHAIRMAN: Feel free to tell Hansard what you actually did mean.

MR. MILLER: Conciliators.

MR. CHAIRMAN: Conciliators would be an easier word for them to spell.

MR. MILLER: I think we're suffering sometimes because of that, and it disturbs me as a Canadian, because I think we have a lot to stand up and be

[ Page 7260 ]

proud of and fight for. When we take this "we'll find the common ground; we'll always negotiate," we end up losing.

I was struck one night last December watching "The Journal," a panel of three people across Canada dealing with some of the trade issues. I believe it was a banker who said, quite rightly, that there are times when a country — and let's talk about our relationship with the United States — knowing it's in the weaker position, nonetheless has to be prepared to take a strong position, even if the retaliation hurts. It's somewhat akin to something probably every one of us went through when we were kids: running into a bully in the schoolyard. If you let him get away with it every day, he will never let up on you. If he knows it's going to cost him something — "Sure, you can beat me up, but I'm going to get in my licks too" — then he starts to back off.

Quite often I talk to my trade union friends about their position in terms of negotiating contracts and the history of the trade union movement, of people banding together to negotiate collective agreements against quite a lot of adversity. I was pleased to read about the member for Cowichan-Malahat (Mr. Bruce) standing up on Friday and extolling the virtues of the IWA and the struggle that they had. I'm on topic, Mr. Chairman; I'm getting to it. In the face of some adversity there was common cause, there was the feeling of rightness on their side, and they ultimately prevailed. Yet in Canada we've seen.... I've put together all the Hansards on the referral of this fish dispute problem to GATT. On July 9, 1987, I raised the issue with the minister in his estimates and cautioned that this was going to grow into a larger issue, and asked if we were on top of it, and if the federal government was on top of it.

I sense the frustration when I talk to people in the industry who have fought for two years to make sense of this issue. They understand in a very common way that these resources belong to this nation, and they don't understand why the resources should not be processed by people who live in this country, by British Columbians. It hits the button: our fish, our communities.

I was at a dance. The people in my community have been fund-raising for the last two weeks so that they can send a delegation of working people back to Ottawa to prevail upon the federal politicians to take a good, honest, tough position in protecting the resources of this country. I'm proud of those people. They've raised $10,000 in the last two weeks by having tag days, dances and barbecues. I get a feeling inside when I go to those things and see those people working together, hand in hand, regardless of whether they're native Indian or East Indian people, regardless of their ancestry. They're working together and fighting for a common cause. I think we have an obligation to carry that cause forward.

[3:45]

I want to ask the minister, particularly.... I know there's a committee, and I know there have been meetings. But I also sense the very high level of frustration from people in the fishing industry when they go to these endless meetings, and we beat around the bush in terms of what we can do and what the possibilities are. I want to ask the minister to respond to what I've had to say and to advise this House just what the options are. I don't want to tip anybody's hand in terms of that. If the minister feels that there is a danger there, don't talk about it. But I want to know what we're going to do in the final analysis. I don't want to see this thing trickle away like water over a dam so that next year we're gathered here in this House again and, oh, it's too bad; we'll add a few more dozen pages to Hansard; and there goes our industry. I'm quite serious about this, Mr. Minister, perhaps because I come from a community that has relied on the fishing industry really since its inception. I would like you to advise me on just where your ministry is going, what the options are, etc.

HON. MR. SAVAGE: I appreciate the member's dialogue. A good part of what you were concerned about was relative to the GATT issue. We have had numerous discussions. We have had the Premier's advisory group. We have had the fishing industry involved. The UFAWU have expressed their concerns, which you have identified. They're worried about their future, their communities, the resource and their jobs — all of which the government has supported their position on. We have steadfastly stood our ground to say that the resource belongs to British Columbia. For conservation purposes, we require that the fish be landed in British Columbia, and I think that is very clear. It's a matter of record, and we have not changed that. Contrary to what some might think, our position still remains very strong. We have supported the industry and we are insisting that the federal government bring in the landing requirements necessary for that. That's where we are as a government today. We have not changed that.

MR. MILLER: The minister is aware that the issue has been referred to a panel under the FTA. If I may just take a moment to be critical, I think there really was, in relation to GATT and the FTA, a complete lack of understanding of the implications. I know that many British Columbians were concerned about this. I recall the statements of the federal Minister of Fisheries, and the minister must recall them as well. The minister said that this was not a free trade issue. Now the dispute has been referred to a dispute settlement panel under the free trade agreement, leaving us with the only conclusion we can possibly draw: it is indeed a free trade issue, because the free trade agreement made GATT rulings binding.

We had some room to move in terms of GATT. The east coast processors are going to find out.... I think they're next on the agenda, because I think the U.S. has a larger agenda.

It's going to a panel. Has the minister looked at the possibility of using a device similar to the Magnuson Act and similar to that section of our Forest Act — in other words, a surplus test?

[ Page 7261 ]

HON. MR. SAVAGE: I do not agree with the member that the results are binding. In my opinion, Canada does not have to accept that decision. I don't believe that under.... I think it was on May 23 they agreed to go to the dispute settlement panel, but the FTA was already in place. Any disputes between the two countries.... Even though the dispute was first launched under GATT, once the FTA is in place any disputes between the two countries have to be under the FTA. That's the reason it is going to that panel. Two Canadians and two Americans will be chosen to hear that, and I think we will have some resolution at some point. But that does not mean it's binding; I do not think Canada has to accept that.

MR. MILLER: If Canada does not have to accept, what is the difference between the penalties that could have been imposed under GATT and the penalties that could be imposed under the FTA, if there is any?

HON. MR. SAVAGE: I don't think there'd be any doubt that any penalties imposed would have to be of a GATT-consistent nature. Obviously we don't know the details of what those penalties will be, but what we're saying.... Your point was made earlier, hon. member, that the dollar value in question is something in the range of $3 million upwards; some would argue up to as high as $11 million. I would probably tend to agree with you that it's more likely between $3 million and $9 million. Just maybe we will have to say that we'll accept the retaliation, but we're going to keep the industry going.

MR. MILLER: Those are indeed welcome words, Mr. Minister. I certainly hope it doesn't have to come to that. But if it does, I would be prepared to support you wholeheartedly, without any equivocation in terms of maintaining the capability and nature of our processing industry here in British Columbia.

Very quickly, a couple of other questions. With regard to floating processors, I'm a bit unclear as to what exactly the ministry's position is. I don't mind advising you what mine is: I'm opposed to them. I don't seem to have it right in front of me, but I've got the policy document from the ministry. I believe that when I asked the minister at some previous point, he said: "We're not issuing licences for floating processors." Nonetheless, there is the possibility that that could happen. I guess we can't guarantee things into the future, but in light of the discussion we just had and the perils that exist in terms of floating processors operating in our waters, would the minister be prepared to be very unequivocal about it — that we will simply not entertain, at any point, the notion of floating processors in our waters?

HON. MR. SAVAGE: As you know, and I think you raised the issue very clearly, we do not at this point accept floating processing licences. What happens in the future I cannot speak for, nor for another person who may come forward. No matter who comes forward with a proposal, as a minister I am obligated to look at proposals. I have always had an open-door policy, and I am sure you are well aware of that, no matter what proposal may come forward, whether it's from a floating processor or a fisheries concern of any kind. But we have not to this day allowed a floating processor licence.

MR. MILLER: I want to turn finally to an issue that is of some concern in one part of my riding and to ask the minister what his involvement may be. It's the whole conflict that is currently taking place between, for lack of a better term, the recreational or sports fishery... I really don't like to use that term; I think there should be some clearer definitions. I think it is clear that there are probably two or three categories on the recreational side. There is the Sunday fisherman: you or me or our neighbour who likes to go out and take advantage of the opportunities that exist in this province. I never get a chance myself; maybe this summer, but....

Interjections.

MR. MILLER: Why don't I go home? The government side is asking me to go home. In any event, you know what I'm talking about. We're talking about our neighbours, who like to go out and throw a line in the water and who like to catch something. If you're like me, most of the time you come back empty-handed, but you're the better for it, because you've spent a day outside or on the water, and....

Interjection.

MR. MILLER: Believe me, Mr. Minister, I am no threat to the fish of this province, absolutely none.

We have that group of so-called sports fishermen. We've got, I think, a modest-sized commercial operation, in terms of some of the people I know in Prince Rupert, friends of mine who have a boat and in the summertime take people out on fishing charters. Some of those people come from outside the province, and there is a kind of small industry there; I don't know how I would characterize it. And then there is the larger category of really commercial sports fishermen. In contrast to that — and we're really talking, up in my region, about Chinook — are the trollers, the commercial fishermen who have traditionally made a living catching those Chinook and the higher-quality fish which are sold on the fresh market.

Essentially, the allocation issue is a federal one. It is the federal government that allocates various sizes or the sizes of the fishery that go to these components, although it appears to me that there is some deficiency in the allocation on the sports side because of our licensing arrangement. It is quite easy to say to the commercial trollers: "Look, you've reached your quota; the fishery is over." More and more of those fisheries are of very short duration. We see that in halibut, for example. The halibut fishery is now down to a very small number of days. Yet on the sports side, individuals are licensed and they are

[ Page 7262 ]

restricted on a daily basis to what they can catch. I have been informed that in the Charlottes, over 80 percent of the fish that are taken by the recreational side are good-sized fish; they are over 30 pounds. Clearly they are in there and they have access to those choice fish in terms of maintaining that industry.

This issue is growing in concern. The Minister of Crown Lands (Hon. Mr. Dirks) became involved in a brief moratorium that was put on further fishing lodges on Graham Island. There were two. The study was done, and they recommended that that be increased by one; so there are now three. I note in the local paper that there is an application to the lands branch to apply for a lease. So here we have increased by half the number of commercial-recreational fishing lodges, and the issue is growing.

Would the minister advise whether or not he has been involved to any extent in the issue, through meetings with his federal counterpart or maybe at the ministry level, in terms of trying to come to some kind of resolution on this issue?

[4:00]

HON. MR. SAVAGE: I think about 1962 was the last time I was on the salt chuck, and I guess I was a little luckier; I caught two Coho. But it's been a long time, like you, since I have had the opportunity to go fishing on our waters.

You asked about what process we are going through. I would like to say that from the sport-fishery point of view.... I guess I have to come back to: how can we cooperate to share our concerns and our regard for all aspects of the fishery? We have been having some discussions in conjunction with the industry and, of course, the Ministry of Environment and federal Fisheries, all of which will be players in future policy. I think that's very important. Our staff have participated. Once those discussions are finished, we provide that information and advice to Mr. Siddon's office at Fisheries and Oceans, Ottawa.

MR. CHAIRMAN: Both members could perhaps approach the Chair a little later, and I could help you with your weekend problem.

MR. MILLER: Mr. Chairman, it's not through lack of offers; it's the onerous duties of being an MLA in British Columbia that have kept the rod from my hands.

Just to follow up on that, there's a meeting this Sunday on the Queen Charlotte Islands, and it involves the local advisory commission. They're trying to come to grips with the issue. I wonder if the minister could either prevail upon one of his officials or have a consultation with one of his colleagues, perhaps the Minister Responsible for Crown Lands, who was involved in the decision in terms of the moratorium. It was, after all, the Minister Responsible for Crown Lands who initially announced the moratorium on Graham. Perhaps the minister could make a commitment to try to have a representative of the provincial government at that meeting. I could provide a contact person and details on the time. I fear this issue will only get worse, and I think it's in the best interests of both the recreational — again differentiating between the various sectors — and the commercial to get it resolved.

HON. MR. SAVAGE: I would be pleased If the hon. member would provide me with those details, and I will discuss it with my staff.

MR. MILLER: I know that my colleagues have other issues they want to pursue with the minister, I think in terms of that GATT issue, and also the driftnet fishery. The driftnet was one of the first issues I dealt with. I took a rather strong position, and I don't want to back off from that position. I think we should be prepared to say to our trading partners that we have some criteria, some conditions we're prepared to take very strong measures on in terms of resolving this.

The minister took the position that he wants to see the process work. just what is the process, and where does he see it going, at least in the short term?

HON. MR. SAVAGE: I'd like to advise the member, as I did the member for Victoria, that we are certainly concerned. There is no doubt about the fact that the province is very concerned and taking the lead. What we have done in the process is to ask for a conference. In fact, it's scheduled, as I have stated, for mid-July. Representatives from British Columbia, Canada, Alaska, Washington, Oregon and other parts of the U.S. will be involved in discussions about our next possible form. of action. Elected officials from our province and government will be involved. We hope to have an international discussion in the very near future, probably in October or maybe even November.

I can also say we're not unique in this. Several other countries have shared our concern. In fact, hon. member, New Zealand and Australia are having a conference, in the latter part of this month, I believe, whereby they are showing their concern not only for the squid fishery but for the impact it has on the tuna. One of our staff people is going to be in attendance at that conference, and we will, I assume, gain quite a considerable knowledge of what the plans are for some of those other countries, If we coordinate this, I think we can come to grips more quickly with what action is necessary.

MR. G. HANSON: My colleague from Prince Rupert talked, as I did earlier, about the importance of stabilizing the coastal communities in terms of the fishing industry and so on. I want to ask a specific question regarding the status of applications for offshore processing in British Columbia. Are there proposals before the minister to undertake floating processing plants within Canadian territorial waters?

HON. MR. SAVAGE: Yes, we had one proposal before us that I'm aware of, and it was turned down.

[ Page 7263 ]

MR. G. HANSON: When it was raised earlier, I think the minister responded that he would examine proposals as they came in, based on their features and so on. I wonder if he would give the House his views on the relative merits of offshore processing plants — floating processing.

HON. MR. SAVAGE: I'm not so sure that I could identify any particular merits. I suppose if you had a look at the quality of the product being talked about, or the particular application.... I think that's the only way you could judge whether in fact there is any merit. What is being proposed in the application? I think, from the point of view of whether it has anything to do with the quality of fish or whatever, you'd have to look at that particular instance. But the policy has been that we do not support the licensing of floating processing vessels.

MR. G. HANSON: We certainly would concur with that assessment, because we don't see any advantages whatsoever. Certainly in terms of having a good handle on conservation, and understanding clearly what catches are, the labour relations and all of those aspects, we don't really see any advantage at all. In fact, the emphasis we'd like to see is stabilizing and ensuring that our shore-based processing jobs are secured, and that we look to add value, as the Europeans and the Scandinavians have done very successfully with their products.

I'd like to say a few things about aquaculture. We see the primary responsibility as safeguarding the wild stocks, not doing anything at all that would have a deleterious impact on the wild stocks. We have a lot of concerns about what is occurring in British Columbia. We don't feel there's sufficient research and development behind this industry.

I wonder if the minister could tell us what resources are there for R and D in aquaculture in the province. I might point out to him that Norway has put a substantial responsibility into the allocation of resources for research and development, disease control, parasite control, regulations with respect to the siting of pen-reared fish-farms, rotation of farms, the whole question of how waste is handled, how morts are handled, feedbags, etc. There are a lot of problems in British Columbia in this industry. Can you tell us how much money is expended here on R and D?

HON. MR. SAVAGE: We have been cooperating. The responsibility lies with the federal government, but I'm happy to say that we'll be announcing very shortly that we will be putting about $250,000 towards research and development, to address the very issues you're concerned about. I think it is a growth industry, and the points you raise are a valid concern not only to the aquaculturists but to us and the ministry staff. I think the fact that everybody is cooperating in a positive manner to try and make sure that the point you raise about disease, morts, feces, and so on.... All the issues, as they relate to the environment as well, are a concern, and we're trying to address them. We're having good cooperation in the process, and I appreciate that.

MR. G. HANSON: What are the regulations presently in place regarding pen-reared fish that die, which are called morts, and the disposal of those fish? What regulations are currently in place and enforced in the province?

HON. MR. SAVAGE: I believe, Mr. Chairman, that's covered under the Ministry of Environment and waste management. We've obviously encouraged the collection and appropriate disposal of morts, not dumping them in the water, if that's your concern. We think they should all be collected at every station, wherever possible.

MR. G. HANSON: Is the Minister of Fisheries telling the House that it is currently illegal to dump morts in the ocean?

HON. MR. SAVAGE: Yes, that is correct.

MR. G. HANSON: Is that regulation enforced? Have there been violations? Have there been any penalties imposed by the province for dumping morts into the ocean?

HON. MR. SAVAGE: I'm not aware of any penalties having been levied, but it's being watched relatively closely. We have to have people attend these, and I guess the major concern — and I think rightfully so — is that we make sure they do not dump them in the ocean. We want to make sure that they're handled properly, by regulation.

MR. G. HANSON: Another major concern around the aquaculture industry is the use of antibiotics. I know the minister will say: "Well, there's supposed to be a veterinarian involved." But what regulations currently exist and are enforced regarding the use of antibiotics in fish-farms?

HON. MR. SAVAGE: Any use of antibiotics must be prescribed by a veterinarian, and that's by regulation also.

MR. G. HANSON: I'd like to ask the minister what regulations exist regarding the rotation of fish-farms from location to location and how those sites are determined.

[4:15]

[Mr. Rabbitt in the chair.]

HON. MR. SAVAGE: Site selection is done in conjunction with the Ministry of Crown Lands. For site location and determining what sites are available, a coastal resources study is undertaken to establish not only the location but also what other uses are involved. Farms that are sited are generally not required to rotate — not that I'm aware of — but environmental sensitivity is certainly involved before

[ Page 7264 ]

establishing the location of a proposed fish-farm. I think it's important that the Ministry of Crown Lands.... They survey the proposals, but they have to comply with the coastal resources studies that have been done in the specific areas.

MR. CHAIRMAN: The Minister of Government Management Services requests leave to make an introduction. Shall leave be granted?

Leave granted.

HON. MR. MICHAEL: It gives me a great deal of pleasure to introduce to the House today 18 students from Grindrod Elementary School in my constituency. They have with them today the principal, Mr. Smeaton, and several of the parents. Would the House please make them welcome.

MR. G. HANSON: I'd like to ask the minister what regulations exist regarding density, the proximity of one fish-farm to the next.

HON. MR. SAVAGE: As you know, there was a study done when the moratorium was put on at, I believe, the end of October 1987. The study was undertaken to identify some commitments from the industry, and there were discussions with several users of the waters. When Mr. Gillespie brought in his report, the recommendations contained therein said that they should be no closer than three kilometres. We have now accepted that as the policy in establishing future fish-farm sites.

MR. G. HANSON: So it's three kilometres between fish-farms. Are there regulations about proximity to estuaries, to river mouths? Norway apparently has distance regulations regarding proximity to any fish bearing rivers.

HON. MR. SAVAGE: Yes, there are for parks, estuaries and Indian reserves. All of those have been identified.

MR. G. HANSON: Could the minister tell me what the regulation is in terms of distance between an estuary and the establishment of a pen?

HON. MR. SAVAGE: It's not determined particularly, but more defined by the type of tributary or estuary system it is. It depends on the size of it. Then those guidelines are figured out according to the estuary itself.

MR. G. HANSON: I'd like to ask the minister what controls there are with respect to the use of eggs — testing of eggs — for salmon farms? For example, Norway has had some great difficulties regarding parasites that have been introduced into fish-farms by the purchase of smolts and stock that has been used as rearing-stock for the pens. What sort of clearance is there to make sure that these animals are disease-free or parasite-free when they are purchased for the stock?

HON. MR. SAVAGE: Before the eggs are sold, they must meet Canada fish health regulations.

MR. G. HANSON: We have called for the labelling of aquaculture- or pen-reared salmon so that consumers know, when they are purchasing salmon in the shop, if any products are non-wild stock — in other words, for a labelling program. What is the minister's view on that?

HON. MR. SAVAGE: We have not made that a policy at this stage. When you are looking at species identified as the same species.... We don't do it for any other commodity that I'm aware of in the province, whether it's raised from a pen.... It's the same with milk produced from a farm. We don't identify it that way. I know there has been some concern about it. We have discussed it, but no policy has been established at this time.

MR. G. HANSON: In the Norwegian experience — they have a long history in it, and I know your officials have probably looked at Norway — there were some serious problems with parasites that were introduced from the purchase of, I think, Scottish smolts that brought in an organism. The result was that the Norwegian government simply had to kill off entire rivers, using rotenone or something, so that they could then try and re-establish farms in those river systems.

Parasitology is a very important part of aquaculture and fish-farming. Our claim that insufficient research and development in this whole industry.... At one point it was described as a sort of gold rush. Some of the bloom is going off that, because there are problems and difficulties.

I'd like to ask the minister what he views as the rights of the upland owners, above high water. What process does he see being a fair and effective for people living along the coast, vis-à-vis their rights with respect to fish-farms and how that whole process is occurring? It seems to be very unsatisfactory.

HON. MR. SAVAGE: In any application for establishment of a site, if it's in front of privately owned land, notification has to be given, and whether it's a municipality, regional district or whatever, it has to go through the hearing process.

MR. G. HANSON: Doesn't the minister feel that there could be a more open planning process, a coastal zone management process that would not catch the community unawares of the possibilities of aquaculture— in other words, more of a designation scheme? First of all, I might point out that we don't feel that more licences should be issued. The difficulties are so large at the moment that we feel that there has to be a process of catch-up before the issuing of more licences and expanding the difficulties. What about a coastal zone management plan, comprehen-

[ Page 7265 ]

sive in nature, where areas are designated, and then it's fully put into the public domain that it could be an aquaculture site? Some of the northern Gulf Islands, I understand, are undertaking that at their own local level. They are conducting studies of their foreshore and identifying only those areas which will be allowed, so that there will be no surprises which may have a negative impact on the marine habitat and also on the upland owners. What are the minister's views on that?

HON. MR. SAVAGE: I think you have some valid concerns. We've encouraged regional districts and municipalities to prepare plans, and I think it's important that they do so. If they identify what might be future problems and prepare before they have it on them, then I think they'll be able to better respond to it.

As you know, hon. member, we have also completed four coastal resources studies, and are going to undertake two more, which will identify the different types of uses that will be applicable in those regions. It takes the cooperation of a lot of people to become involved in this and to look at the implications of the establishment of these types of farms.

MR. G. HANSON: I would like to shift into another area for a moment. We're very concerned about dioxins and furans. I mentioned that in my introductory remarks. Do you feel that your ministry has got a handle on these numbers and the fact that, as I mentioned earlier, assessments of what the consumer can ingest safely...? The native people's consumption of fish far exceeds that of the non-native population, and that means there could be a higher accumulation of these toxic materials in their bodies than would occur in the non-native population.

I'd like to ask the minister about the relationship he has with the people who are doing the research on dioxins and furans, and whether he's confident. Many of the fish species utilized by native people are being taken near pulp-mill discharge outfalls. What are his views on that relationship? It appears to be inadequate.

HON. MR. SAVAGE: We have encouraged the Ministry of Environment, the Ministry of Health and certainly the federal Departments of the Environment and of National Health and Welfare to make sure that.... In fact, our own Ministry of Environment has undertaken control of some of these toxins that are entering the water system. I think your concern is valid. We obviously want to make sure that fish caught to be consumed are in fact safe and healthy.

MR. GUNO: Sorry, Mr. Chairman, I just got in. I hope I don't repeat what has been said, but it is a matter of concern for me as a person from a culture that depends very much on salmon not only for sustenance but for cultural reasons. I certainly appreciate the concern of the tribal groups which have now instructed their people not to eat salmon on the scale that they have, because of the fear of the spread of various forms of cancer. It brings up the prospect of what is going to be done to meet a crisis. In some areas, because of the economic situation that these people are in, because most of them are on welfare and have to resort to food fishing to augment their meagre economic resources, I'm just wondering if the minister has contemplated some form of program to try and deal with this situation, which could result in severe economic deprivation for the people involved.

HON. MR. SAVAGE: Generally speaking, I share the concerns that have been expressed. We do recognize that salmon migrate and go back and forth between the ocean and the river. When they go up to spawn, I don't think they're likely to take on a great deal of toxins. I think the Ministry of Health has done yeoman service in trying to advise the people whether the fish are safe. What we really want to be concerned about is fish that might well be resident in the rivers. Those are the ones we have to make sure that continued testing is undertaken on. I don't think we ought to jeopardize anyone due to the health and safety of the food they're consuming.

[4:30]

MR. GUNO: I come from an area where the only fish we catch are salmon and oolichan during the early spring weeks. But the resident fish, as I understand it, are the white fish that some of the aboriginal groups from the upper part of the Fraser partake in. Is there going to be a joint effort on the part of the federal and provincial governments in retrying to get a handle on the extent of the problem with regard to the — as you call it — resident fish?

HON. MR. SAVAGE: Although I could stand corrected, I believe the Departments of the Environment, Fisheries and Oceans and certainly National Health and Welfare are all looking at the problem and will continue to monitor it. I guess I have to say that we'll continue to take tests. I think that's the only way you're going to resolve whether it is safe to consume the fish. There's no possible way that I know of to drag all the fish out of the river, but we ought to be well aware that we have a concern about its safety and the health of the individuals consuming it.

MR. GUNO: In the Solicitor-General's (Hon. Mr. Ree's) estimates debate, it became quite clear that this government has very little in place in terms of meeting fairly major natural and man-made disasters, including such things as oil spills. I wouldn't put this in as major a category as an oil spill, but I think the process is more insidious, because the dimensions of its impact are really not known. It seems to me that it would be incumbent on the minister to at least come up with some kind of coordinated action to, first, research the problem, and second, start ensuring that future incidents are minimized.

In that light, can the minister tell the House whether there's any coordinated approach contem-

[ Page 7266 ]

plated to really try to get a full measure of this very insidious problem, which I don't think we really have a handle on? I don't think we should wait until we have a situation like the one in the northern Cree group, where after years of ingesting contaminated fish at Grassy Narrows.... I think we should learn lessons from that particular tragic experience and see how the government can coordinate its approach in trying to get a full measure of the problem.

HON. MR. SAVAGE: I don't differ with the concern that the hon. member has. I think we need to have as quick a response as we possibly can.

MR. G. HANSON: The minister has the responsibility at the provincial side for fisheries, shellfish, etc. Would he consider recommending to his colleague in Health that a pilot project be undertaken to test, on a voluntary basis, native people who are living in close proximity to pulp mills in British Columbia to see what levels of toxic materials might be present in their tissue and hair — in other words, for their own benefit, to determine if native people, because of dietary habits, are accumulating unacceptable levels of toxins within their bodies? Would you be prepared to recommend that? You know from the tests on dioxin and furans that they are present around pulp-mill sites. Would you be prepared to recommend to your colleagues that tests be undertaken for the health of native people in the province?

HON. MR. SAVAGE: I am prepared to discuss it with him. Certainly I'm not being against the native people; I think anybody who lives around those — not just native people.... While I have that very grave concern that you're talking about, I think it should include anyone — native, Caucasian or whatever their ancestral background may be. If the concern is for the people in the area, I will certainly bring that concern forward to the minister.

MR. G. HANSON: The reasoning of the minister is defective in that native people eat more seafood. The human body concentrates those toxins in certain tissues and organs. It sounds very egalitarian to say that everybody around the pulp mill should be tested, but the fact of the matter is that the people who do the tests indicate that the average consumption of fish — so many ounces per week — does not apply to native people.

On the west coast of Vancouver Island, the people who are concerned about contaminated shellfish and so on.... Many of these are posted, but many of the people collecting shellfish do not speak English, or English is clearly a difficulty. They ask what the contaminants are, and they get the bureaucratic runaround, either at the federal or provincial level, saying: "We don't know precisely; it's just closed." I think it would be important to do a target testing on native people. I'm sure you would find groups willing to volunteer around pulp mills, just to ensure that they are not harming their own health and so on as a result of diet. I think the minister should rethink his position on that.

HON. MR. SAVAGE: I certainly can't speak for the Minister of Health (Hon. Mr. Dueck). As I stated, I will take those concerns forward to him. I don't think anything else could be expected of me.

MR. GUNO: I just wanted to shift the focus to an earlier discussion on the floating processing plant. I'm not too satisfied with the minister's response. I don't think it was an unequivocal no to the question of whether or not he would allow the development of this kind of processing. He uses words like, "To date we have not accepted any application from anyone regarding this processing facility." Does that mean there is really no policy, no research, no baseline data that would give us some assurance that the minister is speaking on a basis of some sound, well-researched policy considerations?

HON. MR. SAVAGE: I stated that we have not accepted that as a policy at this stage. Certainly, I suppose I could ask the obvious question: what if the native people applied? What if they had a legitimate reason for requiring a floating processing plant? I think what I have said is: no matter who it would be, my door would be open. I would look at any proposal.

I'm reiterating what the policy is: we have not accepted floating processing vessels. It doesn't mean to say we shouldn't be looking at whatever comes forward. We can't close our doors to proposals. I think you have to have an open mind. I'm not saying that they necessarily would be accepted in any way, but I'm also saying that I'm not closing the door on anything that may come forward for presentation through our office.

MR. G. HANSON: Another area that the minister didn't respond on earlier is the threat to our entire marine environment from oil spills; and having a joint office to be the first line of response, to advise both federally and provincially so there would be no miscommunication, as in the kind of thing we saw out of Washington State. It's like two fielders going for a pop-up in centre field: you got it, I got it, you got it, I got it. Bang! Nobody's got it, and then we all suffer. What do you think about the proposal?

HON. MR. SAVAGE: I hope we're not on a collision course. I concur with your concerns. All of us — if we have any respect for the ecological damage that can occur from any kind of disaster — ought to be able to coordinate all our efforts as best we can. We would encourage that, to ensure the most immediate response possible through good communications and cooperation, and that the necessary response teams and emergency bases be notified as quickly as possible. I have no difficulty with what you're saying; but it takes better coordination, I believe.

[ Page 7267 ]

MR. G. HANSON: I will give you a hypothetical case. For example, say — heaven forbid — that a ship ran up on Race Rocks today. What would you do? What would your response be? Who is in charge? What happens?

HON. MR. SAVAGE: I think it would be directly under emergency responses, not only from a provincial point of view, but by the Ministry of Environment and the Ministry of Agriculture and Fisheries — all those who have anything to do with waters and any natural disasters. I believe it's important that they all be tied in very closely, and that the communication be immediate, rather than somebody pointing a finger and saying: "It's your responsibility." It's the responsibility of everybody to cooperate on that; that's what I'm saying. If that happened, then we all have to respond immediately.

MR. G. HANSON: That response was a very hypothetical one. I'm just wondering — you as the Minister of Fisheries having that responsibility — when you would know. Who would advise you? If an accident occurred out there today, when would you find out? Who would advise you?

HON. MR. SAVAGE: I assume the member knows that the Coast Guard is generally the first line of response, and the provincial emergency program should immediately respond. The ministries responsible should be tied in directly with that.

MR. G. HANSON: The Minister of State for Mainland-Southwest (Hon. Mr. Veitch) says that the Solicitor-General (Hon. Mr. Ree) is in charge. Talk to the Solicitor-General?

Mr. Chairman, we've raised — all jocularity aside — some pretty important issues here in the last few hours. We've talked about the high-seas driftnet fishery, and how Canada seems to be rolling back on its round heels with its junior partner, the province, sort of rolling back at a higher torque level. We raised the lack of immediate response that seems to be in existence within the province, in terms of the real crises that the marine environment faces.

In any kind of accident in the Strait of Georgia or Juan de Fuca Strait, obviously the response must be virtually immediate in terms of assessment and containment. I'm not confident that is in place at all, given the experience of Grays Harbor.

We've talked about our concerns about aquaculture. The research and development is not in place, and the Norwegian example clearly points out the deficiencies in that area. There are problems beyond imagination — parasites and bacteria — that are really very serious and pose a threat to the wild stocks.

[4:45]

We've talked about our position in opposing the high-seas driftnet fishery. It should be stopped. There should be a moratorium on the issuance of any further aquaculture licences until the impact is fully understood, and the research is in place to ensure that no destruction of wild stock occurs. We've made concrete proposals about joint proposals for responses to oil spills. We've made specific proposals that really should be conducted in consultation with the Minister of Health (Hon. Mr. Dueck) to test people with a large volume of seafood in their diet to see if they are building up unacceptable concentrations of toxins and so on, which all points to the degradation of our marine environment. We've also talked about the importance of not allowing any group to scapegoat native people in response to the increased competition for an increasingly scarce resource.

We've touched on some very important points. We'll be very carefully watching the court cases in the United States around the high-seas fishery and bootleg salmon through Canada and the United States. We're also very concerned about Canadian salmon being processed in Singapore and Taiwan, as a result of the high-seas driftnet fishery. We're also very concerned about ensuring that shore-based processing continues in the province of British Columbia, and that the citizens here in this province are given the opportunity to add value and to process these premium God-given resources that we must exercise proper stewardship over. We must certainly not relinquish that under the guise of some international agreement that other countries may come and take away our resources, like raw log exports.

Mr. Chairman, I'm going to conclude my remarks on that point. Unless any of my colleagues have other comments, we look forward to moving into Finance with our young, bright Finance critic from Commercial Drive and Hastings.

HON. MR. SAVAGE: Mr. Chairman, before leaving the comments that were made, I think it's important to recognize — and I respect what has been said by my hon. critic — that we do not have proof that there isn't transmission of disease the other way. In fact, most of the research done shows that the disease inflicted into the pen-raised salmon comes from the wild stock. We have no proof of how many fish fall to the bottom of the ocean, because we do not know. There is research underway, but we don't know how many diseased fish might be in the wild stock and could well have gone to the bottom of the ocean. So it's obviously a concern both ways, and I share your concern with that.

I think it's important to recognize that there's a responsibility borne both ways, and we'll work towards that in research.

MR. CLARK: Mr. Chairman, I have no desire to delay these estimates — maybe just a couple more days, and then we can get through them, or maybe a couple of more hours, hopefully. I was fascinated by the discussion of the second member for Central Fraser Valley (Mr. De Jong). As someone who has no dairy cattle in Vancouver East, except for 17 days a year during the PNE....

Interjection.

[ Page 7268 ]

MR. CLARK: The member asks what other kind of cattle we have. Oh, that's true, we have the Avalon Dairy; that's a bottling plant. But we have no dairy cattle, except for 17 days a year at the PNE. Of course, as a young person in east Vancouver, we made that annual trip to the PNE to view them.

I have an economic background, so I try to apply that when I look at these questions. I noticed....

MR. MOWAT: That's your first mistake.

MR. CLARK: We know it's the dismal science, but I'll try not to be too dismal.

I wanted to canvass with the minister the question of milk and some of the points that the second member for Central Fraser Valley raised. He raised several concerns which I'd like to understand. For example, he said that he can't go into his constituency without people complaining about the government's handling of milk quotas. But I didn't understand some of the jargon. So I thought we might canvass some of it here, before we let the minister's estimates pass.

The minister has been responsible for agriculture in the province for more than two and a half years now. From what I gleaned from the statements of your colleague, there have been some changes in the quota system for milk in those two and a half years Maybe the minister could briefly explain the changes that have transpired: for example, the cottage industry changes. I'd like to understand those and their value. I wonder if the minister could explain the changes he's made — I think in the last year.

HON. MR. SAVAGE: Mr. Chairman, I'm not sure I can cover all the gleaning of what is referred to there if you're looking for exact numbers in the MSQ — or market share quotas — from British Columbia's perspective, as a global quota from all the provinces across Canada.... If I remember the figures correctly, I believe British Columbia has 6,248,000 kilograms of butterfat out of approximately 170 million kilograms in Canada. If you calculate that through, it's about 3.67 percent of the total global quota, and I'm referring to all the provinces across Canada when I say that. I think the Premier made the point earlier that Quebec has about 47.6 percent of that. We are referring to that 3.67 percent, and God knows what the right formula is. We would like to have a greater share of the global quota for British Columbia. We have approximately 11.6 percent or 8 percent — whatever it is — of the population; we would like to see more of an alignment along those boundaries.

The implications are that we presently have cheese, butter and a number of products shipped here from Ontario, Alberta or wherever on the industrial side. Since B.C. produces only 3.67 percent, we do not have enough to supply our own market.

On the fluid side, the market adjusts automatically according to fluid demand. Each province is given the right to produce its own fluid requirements. I don't know if that's any help to you.

You asked a question relative to cottage industries. Cottage industries were established by the board some four or five years back. I'm not positive, but I think there are approximately three cottage industry operations. There are others called producer vendors, and there are several categories that are allowed, whether you are shipping for purposes of fluid or purposes of industrial manufacture.

MR. CLARK: So on the fluid side there is no problem. We are adjusted according to our consumption; we produce the amount that British Columbia consumes. The 3.6 percent of the global quota — is that a fluid quota?

HON. MR. SAVAGE: No, it is not.

MR. CLARK: So the only problem the government has with the national quota scheme is on the industrial side. Is that correct?

HON. MR. SAVAGE: That is basically correct. Our share of the industrial quota in Canada is very small; that's the concern we have.

MR. CLARK: I was told that any producer who has a fluid quota can produce 10 percent more than their fluid quota and sell that as industrial. Is that correct?

HON. MR. SAVAGE: When allocations are given on fluid quota per hectolitre — there are 34 kilograms of butterfat in a hectolitre of milk.

MR. CLARK: The government has decided that the industrial quota is too small relative to our consumption, so that's what precipitated the announcement, I think, about a year ago, that B.C. might pull out of the national milk marketing board. Is that correct?

HON. MR. SAVAGE: The decision was to discuss whether we would make a subsequent decision in the negotiating process as to whether we would pull out of the national system. Those negotiations are still going on.

MR. CLARK: The consequences of pulling out of the national milk marketing board would mean that the fluid side also would be open to competition from outside B.C., unlike currently. Is that correct?

HON. MR. SAVAGE: That is possible.

MR. CLARK: Can you inform me what the value of the industrial quota is? Presumably, like all things the government regulates, if there is a very restricted quota that can be allocated, it trades at a fairly significant volume. Is there a price for the quota? Can it be traded on the open market? What is the range of prices that the quota fetches?

[ Page 7269 ]

HON. MR. SAVAGE: The industrial quota is not transferable. It is tied to the fluid at 34 kilograms per hundred litres, which is a hectolitre.

MR. CLARK: Are you saying that there has not been an increased allocation in the last year? You said there were three cottage industries in British Columbia. Is this a new phenomenon, or has that existed for some time?

HON. MR. SAVAGE: I believe the three cottage industries that I know of were established — I'm not positive on this — in 1985 and 1986. I don't know if you call that a new phenomenon or not, but it's an issue that I am sure the Milk Board, in its decisions relative to future policy and how they could adjust for on-farm production, etc....

MR. CLARK: I'm just wondering how three new cottage industries could have been established in '85-86, given the rather rigid formula you talked about earlier. Could you explain how someone could increase the size of their herd and the quantity of industrial milk they produce, which appears to have been the case in '85-86 when the new cottage industries were created, given the very rigid formula you described to me previously?

HON. MR. SAVAGE: Mr. Chairman, I hope the member realizes that each year, as quotas are transferred from a fluid basis, 10 percent is held back to put into the system.

MR. CLARK: Is that a new phenomenon, the 10 percent withholding?

HON. MR. SAVAGE: There again, would you describe for me what you mean by "new phenomenon"? I think it's a policy that's been around for some time, and it's not unique to milk. It's a policy that's been adhered to in a number of agricultural commodities. That way we can start out new producers.

MR. CLARK: Was this created at the same time? This '85-86 period — is that when the 10 percent withholding took place?

HON. MR. SAVAGE: I'm not too sure of the exact time-frame, but I could find that out for you.

MR. CLARK: So these are not decisions made by you in your capacity as minister, or that you concurred with, or that you had discussions with the Milk Board on?

HON. MR. SAVAGE: No, that was the policy of the Milk Board.

MR. CLARK: And that policy of the Milk Board is in keeping with the national scheme. There is no problem with the national milk marketing board with respect to these changes that have been made in the last two or three years.

HON. MR. SAVAGE: Not that I'm aware of.

MR. CLARK: So the cottage industry question is not part of the fight that you're currently undertaking with the national board on behalf of the government?

HON. MR. SAVAGE: The negotiations we're undertaking with the Canadian Milk Supply Management Committee through the Canadian Dairy Commission are on the allocation of industrial quota. It does not have anything to do with the policy established for industrial use relative to each province.

MR. CLARK: Maybe you could explain that to me. You're saying the policies with respect to the use of that industrial milk are up to the provincial government and the size of the quota is up to the national government. Is that what you're saying?

[5:00]

HON. MR. SAVAGE: The use of the industrial quota is established by provincial policy. The industrial quota allocation is decided by the federal participants, the Canadian Milk Supply Management Committee. It's the producers from every province who make decisions on milk policy.

MR. CLARK: So who decides on who gets the quota? Who decides which industry or cottage industry or dairy gets any new quota that is allocated?

HON. MR. SAVAGE: As far as I understand, the board decides on who gets quotas.

MR. CLARK: Previously the member from Central Fraser Valley indicated there were 500 people on a waiting-list trying to get new quota. There must be some system. A bidding system would clearly be the smartest way. I'm sure the Minister of Energy (Hon. Mr. Davis) would agree that if the government is to increase a valuable commodity — which this is — by decree or by policy, essentially by government declaration, even if it's delegated to a board, one way of doing it would be to have people bid on it. What's the process in terms of people getting access to any increased quota? If, as you have described it, the fluid consumption varies every year depending on consumption in the province, then the industrial consumption varies somewhat as well, it seems to me. Therefore there are constantly decisions about allocation with respect to that industrial quota, which presumably is quite valuable.

I wonder if you could explain the process to me. If the government doesn't decide on allocation, if that's delegated to the board — which you seem to be implying — what is the process to decide who gets that?

HON. MR. SAVAGE: I would advise the member not to confuse fluid milk with industrial milk, because that's exactly what he's doing. If on a Canada wide basis consumption of industrial product reduces, each province bears that share even if fluid

[ Page 7270 ]

milk consumption goes up. When the 65-35 formula kicks in, it overrides the reduction, whatever it may be on a Canada-wide basis.

MR. CLARK: Could you explain the 65-35 formula?

HON. MR. SAVAGE: It's basically the utilization formula for fluid and industrial.

MR. CLARK: That's 65 fluid and 35 industrial?

HON. MR. SAVAGE: In that approximation.

MR. CLARK: If the national quota is reduced because consumption has gone down, it still can't be reduced below 65-35. Is that what you are saying?

HON. MR. SAVAGE: If it eventually goes along and triggers the 65-35 formula, depending on the reduction, that is correct. Once you get that cross on the graph where you have a reduction and an increase in consumption, then the 65-35 kicks in.

MR. CLARK: If there is a reduction, is it borne across the board by all the quota-holders?

HON. MR. SAVAGE: I could stand corrected, but If I understand that correctly, all fluid milk quota holders would face the reduction.

MR. CLARK: If there is a consequent industrial quota reduction, is that spread out across the board as well?

HON. MR. SAVAGE: I don't believe so.

MR. CLARK: Could the minister explain how decisions are made as to which industries face reductions in their industrial milk quota and which do not?

HON. MR. SAVAGE: It's a contractual arrangement between the Canadian Milk Supply Management Committee and the province. The policy of establishing a cottage industry is that of the Milk Board of the province.

MR. CLARK: You're saying it's the policy of the Milk Board of the province to establish a cottage industry. There are currently three cottage industries. They are then somehow immune from reductions in their industrial quota? I see your staff shaking their heads. I'm just trying to get a handle on how these things are allocated and, of course, how they are reduced, because clearly the quota is extremely valuable. Perhaps he could explain, if there's a policy decision that was made in '85-86 or '86-87 to create a cottage industry in British Columbia, whether they suffer any reduction as a result of the global trend, so to speak.

HON. MR. SAVAGE: I find it amazing that you're assuming that there's a value to a cottage industry and its quota. It's not transferable. Why are you saying that?

MR. CLARK: You're saying that because it's not transferable, it carries no value. Presumably the person who holds the quota is earning a living off that quota. It therefore has a value. You are saying that it can't be sold as a cottage industry. Is that what you're saying? If I had a cottage industry with a quota, what is the policy of the government or the Milk Board with respect to the selling of that business? Are you saying that it can't be sold, period?

HON. MR. SAVAGE: I'm not saying that at all. If the business is sold, the transfer of that amount of quota would be subject to the Milk Board transferring it.

MR. CLARK: Have they ever turned down a transfer of a milk quota?

HON. MR. SAVAGE: I believe the question.... If you are relating to cottage industry, I'm not aware of a transfer.

MR. WILLIAMS: Because they haven't tried to lately.

HON. MR. SAVAGE: I haven't seen anybody buy one, hon. member.

MR. CLARK: That's precisely the point. It's a new formula, so presumably there haven't been any sales yet. If I listened correctly to the member for Central Fraser Valley, he said: "Hundreds of people want access to this quota." Yet three people were chosen to get access to it. That's what I'm trying to come to grips with. The member for Central Fraser Valley said that he cannot walk in his riding without complaints from dairy people about the way the government is approaching it. I'm trying to get from the minister some understanding of the system, to see what those complaints are. I ask the minister's patience in taking us through what those decisions are.

Can you tell me whether the fluid quota is transferable?

HON. MR. SAVAGE: Yes, it is. The numbers you are referring to that are waiting to get in are not in the cottage industry. Those numbers are waiting to enter the fluid industry.

MR. WILLIAMS: Oh, well, now. Did you canvass them?

HON. MR. SAVAGE: The list is a matter of record.

MR. CLARK: Are you saying that there is no other individual who wanted to get access to this cottage industry?

HON. MR. SAVAGE: I hope you didn't read that into what I said. I never said any such thing. I said

[ Page 7271 ]

there are over 500 people who would like to be producing milk, and that's on the fluid side. I have no idea how many applicants there are for the cottage industry.

MR. CLARK: Your staff are right here. Perhaps they know how many applicants there were for the cottage industry, which presumably is a very valuable, new form of quota which has been established in the last two years.

HON. MR. SAVAGE: I'm not aware of any value for the cottage industry quota. I don't know how you're coming about that figure. I don't know where it is.

MR. ROSE: I wonder if I could be helpful in terms of asking questions....

MR. CHAIRMAN: The opposition House Leader on a point of order.

MR. ROSE: No, I just want to get on the program, if my hon. friend yields to me graciously, as he usually does.

MR. CHAIRMAN: Please proceed.

MR. ROSE: I think the point we're trying to get to here.... The minister knows; we've canvassed this before. There's a lot of controversy over the mavericks or buccaneers — and he knows their names as well I do — who sold their quotas for up to $3 million.

MR. CLARK: That's a different issue.

MR. ROSE: I know. We're getting back to this in a minute. They sold their quotas, but they were allowed to buy in a hundred litres, which cost them roughly $300 a litre. Which means that if you want to get into the milk business on a reasonable scale now, it'll cost you between $250,000 to $300,000, because you need 1,000 litres to 1,200 litres to make it pay. So we know that at least the fluid-milk quota carries a tremendous value. We haven't established a value for the other, but obviously, if it's a quota, it's going to have a value somewhat in relation to that.

I'm wondering if the minister could tell us if the three that are operating in the cottage industries, without naming names....

Interjection.

MR. ROSE: You can do that; just wait a minute. How much do each of these people have in terms of the number of litres per quota? There are only three of them. The industry total must be well known. What do each of them have?

HON. MR. SAVAGE: I have no idea what each one of them has. That would be on record with the marketing board.

MR. WILLIAMS: What's the total in the industry?

HON. MR. SAVAGE: The B.C. Milk Board would have those numbers.

MR. ROSE: Well, obviously there has to be some total in the industry. The total cottage industry must amount, in terms of capacity, to a known number of litres or hectolitres or however you would care to measure it, and I'd like to find out what it is. Then we could find out what the share is. If we knew the share and compared it with the fluid quotas and industrial quotas, we'd know the approximate value if there were a transfer. These things, if they're in a marketing board and are sheltered like a taxi licence or anything else, are bound to attract value.

HON. MR. SAVAGE: I wouldn't mind finding out those numbers for you, but, as I stated, I don't have any record of how many litres are involved. We're talking industrial product only, not fluid. It's for industrial purposes; that's what the cottage industry is. If you get into fluid, you're into a producer-vendor licence, which is totally different.

MR. CLARK: Does the fluid quota transfer require approval of the Milk Board?

HON. MR. SAVAGE: Yes, it does.

MR. CLARK: That's precisely the point then. You said that the cottage industry can't be traded without approval from the Milk Board, assuming that it wouldn't then be traded. But we've just heard the evidence and heard the minister agree that the fluid milk quota is traded at excessive value. They still need approval, and approval has been given every time. Is that correct? Approval is always given to people who buy quota.

HON. MR. SAVAGE: That I couldn't tell you. It depends on the contractual arrangements between the seller and the buyer. I'm not aware of that. To get me to say that it always happens.... I wouldn't know for sure. That's between the Milk Board, which is administering it, and the buyer and the seller.

MR. CLARK: Are you aware of any instance where the Milk Board turned down a purchase of a fluid quota?

HON. MR. SAVAGE: Not that I'm aware of, but I don't know. I'd have to check the record to confirm that.

MR. WILLIAMS: It's very clear that there was a lineup for quota on the fluid side. There were 500 lined up waiting. A decision was made with respect to a new opening in the industry in terms of the industrial side when this cottage category was established. Were the 500 people who were waiting in the other lineup advised of this new window and this new opportunity?

[ Page 7272 ]

[Mr. Pelton in the chair.]

HON. MR. SAVAGE: I could not answer that question. It was done before I was the minister.

MR. WILLIAMS: It would seem to be of passing interest, and I'm sure the staff might have some idea in terms of the exercise. Do your staff know how that was handled and whether the 500 were canvassed?

HON. MR. SAVAGE: No, my staff who are right here do not know. We'd have to find out from the Milk Board. That's the administrative body that does it. As I understand it, the 500 applications were for fluid milk production.

MR. ROSE: There's another point here that people are very unhappy about. The five — we'll call them five; they're now four — mavericks sold their quota. How come they were leapfrogged ahead of the other 500 who were on the waiting-list — some of them for many years — and allowed to buy at least 100 litres, which allows them at least 100 litres of fluid and to sell the rest of it through Scardillo and another company, which has taken their excess...? That industrial milk is non-quota milk, because they're not part of.... Except for the percentage of the 100 litres.

[5:15]

Would you explain to us how that works? How are they able to do that? Are they operating illegally? Is it outside the quota, outside the rules and regulations of the Milk Board?

HON. MR. SAVAGE: I think I explained all that yesterday. A number of those things are sub judice, under challenge in the courts. But I can tell you that any one of those 500 that are sitting on the building program.... Every year we start ten new producers out at no cost. Anybody or any one of those 500 could come forward and purchase the right to produce milk. That is not prevented. There is nothing stopping them. Anyone can do that.

MR. ROSE: Did they purchase this 100 litres, which adds up to 400 litres on the open market, from another producer, or did they get it from somebody else such as the Milk Board?

HON. MR. SAVAGE: As far as I understand, the production they got, the 100 litres each, was purchased on the open market and the transfers were approved by the Milk Board.

MR. ROSE: The Milk Board approved this purchase.

Interjection.

MR. ROSE: While they were legal, but that doesn't make any difference in this case. They were operating that way for a long time and that's what infuriates the rest of the dairy industry. There seem to be special favours awarded to these guys who are constantly taking people to the court, costing thousands of dollars in court fees — I've heard as much as $200,000 — but they're still in business. A lot of people are very angry about this, and I can't say that I blame them. The whole thing is, of course, a protected industry and that's another story. I'd like to know if the minister, through his good offices, could go to the Milk Board and find out the source of purchase. Who sold them that 100 litres they got — I think four of them bought that. Would the minister agree to find this out for us?

HON. MR. VEITCH: Do you like marketing boards?

MR. ROSE: Marketing boards? I love them. They're the farmers union.

HON. MR. SAVAGE: I think the opposition House Leader knows that the minimum qualifying amount of quota that you can purchase is 100 litres to get a production licence. They have to be able to purchase 100 litres or have 100 litres of fluid quota. That's the only way they can get a licence to ship.

On the issue of whether they ship several thousand litres after that is subject to all the rules and regulations that are established by the board. If they're overproducing, they're required to pay levies. That is the part of the litigation that is underway, and in fact I will not interfere in the due process of the courts. No one should expect me to. I duly respect that there's a heck of a lot of frustration out there, and I agree with you, but you have to let the court proceedings go through the interpretation of the law.

MR. ROSE: With all due respect to the minister and sub judice and all those Latin terms that are very familiar to the Druids sitting in front of us here.... I don't always understand things like mea culpas and these other interesting words because I didn't go to school very long; I've been disadvantaged for most of my life. But we're not asking questions that are before the court, I submit. We're asking questions about how they achieved this production quota and how various other cottage industry quotas were divided, assigned and all the rest of it. I don't think we're dealing with the court case, which deals with something entirely different.

MR. CLARK: The minister said that the four renegade farmers were producing milk illegally and subsequently bought on the open market a 100-litre quota. Can he explain why the Milk Board approved the transfer of 100 litres of quota that they purchased? It has to be approved by the Milk Board. Can he tell me why they would approve it, in light of the fact that they had been flagrantly violating the Milk Board rules?

HON. MR. SAVAGE: I can't understand why anybody would ask that question. I just explained it to the hon. opposition House Leader. It was stated that the minimum qualifying level to start a farm is to

[ Page 7273 ]

have 100 litres. If he meets all the criteria of dairy inspection, it's pretty difficult for the board to turn it down. If he overproduces beyond that, then it's a matter that I'm reluctant to comment on. Those are the terms over which the industry is somewhat upset. It is before the courts, to adjudicate on that.

MR. ROSE: I think that the Minister of Agriculture is far too modest about the role of the government in all this. He coughs modestly into his handkerchief.

Somebody just called me the "House litre," and I don't accept that.

Isn't it a fact that the government offered these people low-interest or no-interest loans to buy some of these quotas at one point, and they turned the government down?

HON. MR. SAVAGE: I'm not sure of the details of the offer, but they did not accept whatever we had offered them. They said — and I think rightfully so — that it was not acceptable to them. We tried to get them to come into the industry, comply.... As you stated earlier, hon. member, they went out of the industry, sold their quota and put the money in their pocket, I presume, or maybe paid off debt — whatever they happened to do with it. The point is, they were complying; they understood it when they went out. And when they come back in, it's required that they comply as well. If they don't, then it's a matter for the board to take the proceedings that they have.

MR. ROSE: My recollection of this is a little bit hazy, and I don't want to milk it much longer. But I will say that, first of all, they got out when the government did just what it's threatening to do now — when it got out of the national scheme, That's when they got out. If you get out again, I think you'll find some more of that happening.

So they got out; then they wanted back in, and then at least some of them were operating illegally for a while. Then there were a lot of court cases. In order to get this thing all smoothed out, the government made them this offer. They were most anxious to get them back in, even if it meant, after they took $3 million.... They sold their quotas for a total of $3 million, and then they wanted to get back in, and they got the first opportunity, over the heads of people that were waiting to get into the industry Those people who are waiting to get into the industry are not as well financed as the others. They may not have been able to go out and buy quotas.

Just leaving that for a moment, I think that what you're doing here with the national quotas.... There's no doubt that B.C. needs more quota for industrial milk. We're about 11 percent of the population. I don't know what our industrial share is right now, but it seems to be about 7 percent. Is it that high?

HON. MR. SAVAGE: It's 3.67 percent.

MR. ROSE: It's 3.67 percent. That's obviously unfair.

The reason we're in this spot is that we didn't give a damn about industrial milk 10 or 15 years ago. It wasn't worth anything. The people who were creating the surpluses were the province of Quebec. They had all the cheese factories, and they had the excesses. So when the legislation first came in to buy up industrial milk, the bulk of it went to the people who were undisciplined in Ontario and Quebec. Because we had managed our own production earlier, we suffered, and we're still suffering.

Whether you want to take the risk of pulling out all the chicken-pluckers, the turkey farmers and all these other people in order to make your case stronger, I think it's a reckless move. I really think it is. I was on the committee that brought in the natural products marketing act federally. It was a jungle out there before you had that thing. People were dumping product in here from all over the place: eggs from Manitoba, poultry and broilers from Quebec. The whole thing of the national scheme, as the minister well knows, was to stabilize the market and have the kind of production that we could handle locally with some sort of orderly marketing scheme. We risk all that if you're really serious. If you're just playing a little game, a little pressure tactics, that's something else.

This whole thing is not very satisfactory, and it hasn't been very satisfactorily handled. A lot of anger is out there. A lot of it is directed at the government. There seems to be a favouritism — not only a recklessness, but a favouritism — to about four producers who broke the law repeatedly.

MR. CLARK: The minister confirmed that a low interest loan or government package was offered. Could he inform the House whether your ministry was the one that organized this attempt to convince these renegade producers to come into the scheme through some government incentives? Was it the Ministry of Agriculture?

HON. MR. SAVAGE: Yes, if I recollect properly, it was our ministry that made the proposal.

MR. CLARK: Were you directed by the Premier or anybody in the Premier's office to assist the four or five renegade farmers and to arrange this package to try and convince them to come back into the scheme?

HON. MR. SAVAGE: The discussions took place among staff within our ministry on how we could get those people to comply and come back in and be part and parcel of the stability of the industry.

MR. CLARK: Are you saying, then, that no one in the Premier's office had any conversations with your staff regarding this problem and how it might be solved?

HON. MR. SAVAGE: I reiterate, Mr. Chairman, that the issue of the proposal was developed in our own ministry and presented to the industry.

[ Page 7274 ]

MR. CLARK: That's not the question I asked. I said: "Did anyone in the Premier's office contact your ministry or ministry officials and suggest that you work on a package to solve this problem through financial incentives or otherwise?"

HON. MR. SAVAGE: Well, not that I am aware of, Mr. Chairman.

MR. CLARK: Has the Premier at any time talked to you personally about the four or five renegade farmers and how you might solve this problem?

I didn't see the minister answer. Can you tell me whether the Premier has directed you personally or talked to you personally about solving the problems of these four or five renegade farmers?

HON. MR. SAVAGE: The answer was clear before, Mr. Chairman, and I think it's very clear that producers come in to several of our offices and make proposals, whether to the Premier's office, my office, or any other MLA`s office in this province. It certainly is the right of any individual to come in and offer suggestions to us.

MR. CLARK: At this point I haven't suggested any impropriety or anything wrong with that. I'm simply asking whether the Premier made any representations to you regarding attempting to solve this problem and whether he directed you or suggested to you that your staff come up with solutions to dealing with these five renegade farmers.

Interjection.

MR. CLARK: The minister heckled me and said that he has answered it; he has not answered that. Has the Premier personally talked to you or your staff, or directed you in any way to have your staff deal with this question? Did this emanate from the Premier's office in terms of directing you to come up with a solution?

You said that your ministry put forward a package which they ultimately rejected. I'm asking you whether the Premier suggested to you that you solve this problem, whether he had had any conversations with you directly on this question.

[5:30]

HON. MR. SAVAGE: I've already answered the question.

MR. CLARK: You have not answered this question. You're raising suspicions, certainly in my mind, with regard to this question.

Interjections.

MR. CLARK: I am not raising suspicions; I am asking....

MR. CHAIRMAN: Hon. member, I would just remind all hon. members — and I am sure the hon. member is well aware — that there is no compulsion upon the minister to answer any particular question.

You have posed your question a number of times, and may I suggest it might be time to move on to another subject or another question.

MR. CLARK: Mr. Chairman, I will attempt to ask different questions which deal with the same topic. Could the minister tell me whether Mr. Poole contacted you or anybody in your office regarding solving the problems of these five renegade farmers?

The minister doesn't want to answer. Did Mr. Poole contact you — I'll forget about the ministry staff for a minute — or phone you regarding solving the problem of these four or five renegade farmers?

He won't answer whether Mr. Poole talked to his staff, and he won't answer whether he talked to him personally. He won't answer whether the Premier intervened on behalf of these five farmers, and all we can do about that is assume that they did. In the absence of any....

HON. MR. RICHMOND: You're drawing conclusions.

MR. CLARK: I am drawing that conclusion, Mr. Chairman, because the minister refuses to clarify for the House the role of the Premier in presenting an aid package, and he sent the package to friends of his who are breaking the law and trying to get back into producing milk in British Columbia.

MR. CHAIRMAN: On a point of order, the government House Leader.

HON. MR. RICHMOND: I would remind the member, through you, Mr. Chairman, that these are the spending estimates of the Minister of Agriculture. This is not a court of law. The minister is not on trial here, and he is not to be cross-examined. The question has been answered three or four times. It is getting tedious and repetitious and has no bearing on this minister's estimates.

MR. CLARK: Can you tell me the terms of the aid package to these five farmers? Was there a low-interest loan? Was that the aid? Could the minister tell me what the interest rate was that he proposed to the five renegade farmers to assist them in buying back into the milk scheme in British Columbia?

[Mr. Rabbitt in the chair.]

Mr. Chairman, it's one thing for the minister to clam up and not to want to implicate the Premier in having helped his friends. We can all understand that he's trying to play politics with it. It's another thing not to answer specific questions about the details of the loan package and the aid package that the Premier's friends wanted.

It's quite appropriate for the opposition to ask questions about a ministry's attempt to resolve what clearly is a problem. We know from the member for Central Fraser Valley and others that we've talked to in the milk industry that there's a problem with these individuals and there's litigation around them. The ministry attempted to resolve that problem. We don't

[ Page 7275 ]

know who initiated that, but at the same time it seems to me to be legitimate to find out the details of the attempted resolution. Presumably it's public information as to what aid packages.... Were there any grants associated with it? Are we going to give them any public money, or was it just a low-interest loan? Was it a no-interest loan? What were the terms of the package your ministry opted to give those individuals to attempt to settle this problem?

MR. WILLIAMS: I'd just like to follow up on other members' questions, Mr. Chairman. The minister has been asked about the kinds of loans that have been offered. Is that not part of his ministry, his jurisdiction or his activity? Is that why the minister is not answering?

The offer was made. The minister indicated that, but he indicated that he doesn't know what the offer was. Is that the case?

Vote 8 approved.

Vote 9: ministry operations, $68,496,871 — approved.

Vote 10: Milk Board, $378,187 — approved.

Vote 11: Provincial Agricultural Land Commission, $1,330,024 — approved.

Vote 12: agrifood regional development subsidiary agreement (ERDA), $14,000,000 — approved.

ESTIMATES: MINISTRY OF FINANCE
AND CORPORATE RELATIONS

On vote 25: minister's office, $316,724.

HON. MR. COUVELIER: I'd like to make a few opening remarks which will help to summarize, for the benefit of committee members, the '89-90 estimates for the Ministry of Finance and Corporate Relations.

The estimates for the ministry comprise two votes: vote 25 for the operations of the office of the Minister of Finance and Corporate Relations and vote 26 for the operations of the various divisions of the ministry. I'm also responsible for vote 74, management of the public debt; vote 75, contingencies; and vote 76, new programs, all of which are shown at the back of the estimates under "Other Appropriations." The total expenditure requested for ministry operations in votes 25 and 26 amounts to $73.16 million. This represents an increase of 10.3 percent as measured against the comparable '88-89 estimates. Almost one-half of this increase is for negotiated salary adjustments for employees, with the remaining amount for revenue-generating initiatives, the new loans administration program and enhancements to a variety of financial systems.

In keeping with my minister's goal of continuously increasing productivity and maintaining pace with the economic climate, a number of initiatives will be undertaken during '89-90.

Provincial revenues continue to remain a priority; therefore the ministry's revenue division budget has been upwardly adjusted by 13 percent over last year. The main thrust of the expenditure increase is for control initiatives in the homeowner grant program, accelerated consumer tax audits and close-of-business compliance. These enhancements will generate about $21.8 million in additional revenues for a return on expenditure of approximately 20 to one.

The Securities Commission budget has also been strengthened, in keeping with its mandate to increase compliance and enforcement activities, and this increase is fully recovered through a similar increase in fees and licences charged to the securities industry. The commission is self-financing through a $10 vote and is therefore able to adjust its activities and budget in accordance with market conditions.

It should be noted that our estimates include $50,000 for the review of outstanding public sector agreements under the compensation stabilization program. Although controls under the act ceased as of September 30, 1988, the review of a few outstanding public sector agreements during '89-90 will be funded from the ministry operations vote.

Also shown in the estimates are two special accounts for which I have responsibility: the low-interest loan assistance revolving fund and the home acquisitions program. The LILA account had been managed by B.C. Enterprise Corporation on behalf of the Ministry of Regional Development. Many of the loans have been privatized. However, those that were non-saleable will be managed by the new loans administration branch in provincial treasury.

The provincial home acquisition account has also been transferred to the ministry from the Ministry of Social Services and Housing. This account will also be administered by the new loans administration branch in provincial treasury, including the new provincial loan guarantee program on first mortgages.

Mr. Chairman, that concludes my brief overview of the '89-90 estimates. I'll be pleased to answer any questions from committee members.

AN HON. MEMBER: Aye.

MR. MILLER: Did I hear an aye? You jest.

Mr. Chairman, I want to canvass some issues concerning assessments with the minister. First, I would like to thank the minister. In fact, I've sent you a letter which you haven't got yet; I don't even know if I've signed it yet. But I thank you for your prompt response in terms of the issue I was talking about the other day with the rebates to forest industry producers.

We have a peculiar situation — I don't know if it's peculiar to Prince Rupert; it may exist in other communities as well — in terms of the assessed value and the difficulty with appeals to assessed values of some major elements to the tax base, particularly the railways and the pulp mill, which is the single biggest industry in the community. The railways both appealed their original assessed values in 1987, 1988 and 1989 with a substantial reduction. They were

[ Page 7276 ]

reduced from a $13.3 million value in '87 to a $6 million value, with a revenue loss to the municipality of $188,000; in 1988, again, from $13 million to $5.7 million, a $227,000 revenue loss; and estimated in 1989.... The city has to do this in setting its budget; they have to anticipate that the assessment will continue to be appealed and to set sufficient funds aside so that if the appeal is successful, the municipality can rebate the particular enterprise without having to borrow money, which they can't do anyway, I don't think, under the Municipal Act.

Here we have a situation with just the railway, where we can see the cumulative effect over a three-year period — or potential at least in the '89 year — almost coming up to $600,000 or $750,000 in lost revenue to the municipality. The more difficult position is created by the pulp mill and the cap on industrial assessments imposed by the government.

Here again, we've had an industrial complex which was originally valued in 1985 — or assessed value — at $73.7 million. They appealed and were reduced to $34 million. That's just a staggering reduction in terms of the assessed value. In '86, similarly, $73 million, the same assessed value as '85, again reduced to $34. In 1987, an assessed value which was almost $66 million was reduced to $32 million. In '88, and I gather that's still an outstanding issue, an original assessed value of almost $66 million was reduced to $32 million. There's a resultant revenue loss in each of those four years of close to three-quarters of a million dollars.

[5:45]

In addition to the difficulty that that creates for the municipality, simply trying to set down a budget and trying to figure out what public works or capital works they can undertake that year and other provisions of services within the municipality.... You can see that it's extremely difficult. They don't know from one year to the next whether or not these significant generators of tax revenue will be successful in appealing their assessed values down and having that marked influence in terms of municipal budgets.

In addition to that, the anomaly that's created in this year is that the pulp mill is valued at some $83.7 million, and they have not appealed that. I assume that they are content. They may not be content, but at least they've decided not to appeal. By not appealing, I assume the value is correct, or the company felt that an appeal would be useless.

Yet under the 20 percent cap, the municipality is restricted to increasing its tax take, if you like, on that enterprise by 20 percent. They can only collect this year 120 percent of what they collected last year. Yet we have this serious anomaly of the 1988 value being $32 million. If you add your 20 percent on top of that, it gives a value of $36 million. The real value, according to the Assessment Authority, is $83.7 million. So that's a loss of assessed value of almost $45 million that the city cannot collect, even though the company has not appealed their taxes. They are simply caught in this conundrum in terms of the 20 percent cap. As a result, they've in effect had to capture the difference by loading that lost revenue on other properties. We've seen a significant increase, for example, in the utilities and major industry category. The other utilities and major industries in the community are having to pick up the tab because of this situation. I know the minister did meet with the council, and I would ask him to advise the House that he's considered the situation Prince Rupert finds itself in. Indeed, there may be, as I said, other municipalities. I haven't researched the issue particularly.

It seems to me it's a major problem of the government's making, and I wonder what the minister is offering in the way of relief to the municipality.

HON. MR. COUVELIER: This is a very interesting topic and one that's worthy of further discussion, so I am pleased to elaborate to the extent that I'm able.

In recent years — probably the last eight or nine years — the assessments and valuations of industrial properties have been seen as a useful device for many professionals to attack. As a consequence, we've had some appeals which have made the question of allocating the cost of local government extremely difficult for many councils in the province.

The onslaught was led with an appeal in the community of Powell River and was followed by other appeals throughout the province in succeeding years, which had tremendous consequences for the local government attempting to collect the costs of those services they provide. The government of the day at the Powell River instance developed an assistance program which basically was a loan which would be repaid over time. That approach, solution or short-term remedy has been offered to other local governments who have experienced similar problems by virtue of appeals to the Assessment Appeal Board that have worked against their interests. The government has attempted to deal with these problems on a short-term basis in a variety of locations throughout the province.

I think it's important that the government feel a responsibility to treat each of these local jurisdictions equally and apply the remedy in a way that's evenhanded and doesn't create anomalies throughout the province. We have, in fact, provided assistance to Powell River and to Tumbler Ridge.

As it was suggested, I did visit with the Prince Rupert council in the last few weeks to discuss their problem, and we offered Prince Rupert the same solution — that is, bridge borrowings to carry them over the adjustment period. I left those discussions to be carried out at the staff level. I understand that those discussions have taken place and that the Prince Rupert council have decided that they do not wish to pursue that remedy. I can only assume that they must have some other thoughts as to how to deal with their problem. So I'd like the House to know that we did offer the same level of assistance to Prince Rupert as to other communities.

I should point out also that the capping doesn't necessarily have the effect of transferring taxes. The municipalities have the option of a variable mill rate.

[ Page 7277 ]

That measure was brought in as one potential remedy for local governments to deal with some of these lost assessment appeals: the opportunity to alter the mill rate to a class of properties in order to avoid a horrendous tax shift within the municipality. That device has been used by many local governments across the province. The Ministry of Municipal Affairs works closely with local governments in this respect, and my ministry has involvement as required.

I think I've addressed the major points raised by the member. I'm pleased to continue the discussion, however.

MR. MILLER: You might want to elaborate further on the loan, but I don't think it really deals with the fundamental problem; neither does the ability to set a variable rate for different classes of property. I had some skepticism about that when it was introduced, but so far it's proven not to have been as bad as I thought it might be. I thought it might engender some competition between municipalities in terms of trying to attract industry at the expense of residential taxpayers.

I don't really accept that it is a solution, particularly in this case where we're talking about $45 million in assessed value that the municipality cannot tax, simply because of this capping scheme; tax that would normally be raised on that value simply being raised from other classes of property. In fact, that's what the city has decided to do. It has increased its rate in the two categories mentioned — major industry and utilities — in order to be able to make up their budget.

There really are two problems: one is the continuing problem municipalities have facing these massive appeals, so you can't really set budgets from year to year that you're going to be sure of, or you're going to end up in the situation that, again, many of them have found themselves in of a year or two later having to repay a tremendous amount of money. I think I recall the figure in Prince Rupert. It was something like $1.5 million or more that Prince Rupert had to repay to industry, because they successfully appealed their assessed value.

How the heck can you operate or budget in a relatively small municipality? I'm certain the Minister of Finance would not like to have to budget under those circumstances at the provincial level. It becomes even more acute at the local municipal level, when we're dealing with budgets of $10 million, $12 million or $13 million in this case. So there's no real response in terms of the ongoing difficulty.

Secondly, the capping itself has in this instance really compounded it. To repeat: the mill, the company, has not appealed their '89 assessment of some $83.5 million or $83.7 million. Yet the municipality is restricted to that 120 percent cap on the previous year's successfully appealed value, which was $32 million or $34 million. So we've got this tremendous disparity: a $45 million difference between the actual value as defined by the Assessment Authority and the lower value — this $34 million — that the city is able to assess because of your capping program.

It seems to me to be the logical solution — I don't know if the minister has investigated this — that in these kinds of instances you should have the flexibility to remove the cap. You should simply allow that value to come up to the level of its actual value. The cap was put on to protect, I presume, against too high increases year to year. It's a device that's been used.... Okay, maybe the minister might want to explain that. But I do recall previously that the government did use that device in terms of limiting municipal budgets.

If that's not the case, it does seem to me to be the logical way out of the dilemma. The minister might want to respond tomorrow, given the time.

HON. MR. COUVELIER: I'll answer that.

MR. MILLER: Okay, I'll sit down. If you can squeeze that in now, then I'm going to hold you to it in question period from now on.

HON. MR. COUVELIER: Mr. Chairman, this capping philosophy was debated last year when we introduced the legislation, so to some extent it's a repeat of that debate. But I'd like to remind the House that the capping initiative was introduced by virtue of the Assessment Authority significantly moving the goalposts in terms of how valuations were traditionally determined for the heavy industrial sector. Because it was a management decision beyond the control of the taxed entity, the government felt it only fair that we allow a phase-in period, so that they can work up to this new method of valuation. Had we not introduced the capping legislation, there would have been horrendous effects in some industries of the province. The capping was intended purely and simply as a device to ease industry into a new system of taxing their industrial properties. it was enthusiastically embraced by the Union of B.C. Municipalities, I should point out, who are the representative body of the municipalities and local governments in the province. The government, when it introduced these changes, was addressing a concern of the local governments and also, in recognition of a need for change, allowing industry some phase-in period, so that they weren't unnecessarily financially impacted.

Mr. Chairman, I believe that responds to the point raised by the hon. member. I would move that the committee rise, report resolutions and ask leave to sit again.

The House resumed; Mr. Pelton in the chair.

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

Hon. Mr. Richmond moved adjournment of the House.

Motion approved.

The House adjourned at 6:01 p.m.