[ Page 8639 ]

CONTENTS

Routine Proceedings

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

On vote 27: minister's office –– 8639

Ms. Edwards

Mr. Miller

Mr. Kempf

The House met at 10:04 a.m.

Prayers.

MR. LOVICK: Mr. Speaker, in the gallery today are three very dear friends from Nanaimo. I would like the House to join me in welcoming Ms. Pat Spring and her two children, Kel and Nicole.

HON. MR. REID: It's with pleasure that I introduce Gail Taylor from Bowen Island to the House today and have the House show her our interest in her being here.

Orders of the Day

HON. MR. RICHMOND: I call Committee of Supply.

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

ESTIMATES: MINISTRY OF FORESTS

On vote 27: minister's office, $327,244 (continued).

MS. EDWARDS: Mr. Chairman, it's my pleasure to add a bit of diversity to the Committee.

I want to question the minister on the issue of the control of pine beetle in our area and what particular....

Interjection.

MS. EDWARDS: I can't hear the minister. Mountain pine beetle. Not cats, Mr. Minister. No cougars, no house cats. Just mountain pine beetle.

There is an amount of logging going on in the Elk Valley, as you are aware, that is making very ugly scars on the landscape. It is being done on very steep slopes and has therefore created sloughing and damage to the topsoil — what there is of it, and there is very little topsoil in that kind of terrain, as the minister knows. It has even created a situation where there can be some sloughing into creeks and streams and interference with the fishery.

This logging is going on mainly on private land right now. The minister has said that he doesn't have any control over what goes on on private land. That is an issue itself, Mr. Chairman. There are a number of people who believe that the minister and the government should take some control of logging as it goes on on private land for a number of reasons; I want pursue that in a minute. But even though the minister at present has no legislation under which he can manage in an extensive way the logging that goes on on private land, he can in fact do some very strong management moves related to the control of the mountain pine beetle.

The excuse by the company that is logging — which is Crestbrook Forest Industries — is that they are doing it extensively in order to control the mountain pine beetle. The minister has a part in that function of controlling the mountain pine beetle. The citizens of the Fernie and surrounding areas and the part of the Elk Valley that is affected by this cut, which will be up to more than 5,000 acres in the next two years — and I'm sorry to use acres; I haven't translated it, Mr. Minister, but that's the measurement in acres — are upset about this, and they have put forward their concerns. I think the most succinct description of those concerns is in this list, which I will put to the minister.

Their first concern is that there are no regulations governing logging practices on private land; their second concern is that no impact studies have been undertaken to determine the effect of that logging on the number of things on which they impact. That hasn't been done at all, and they have determined that. There was no avenue for public input on that logging whatsoever until a meeting on June 15, which the Elk Valley Conservation Society called. They're calling it a pine beetle infestation, but as yet there is no indication that all the trees that they're logging have yet been infested by pine beetle. In fact, the member of the company who is dealing with this issue with the society was quoted in May as saying, along with the forestry association — and that's the professional organization of foresters — that there's no great pine beetle problem in the Elk Valley.

They object to the fact that state-of-the-art technology has not been utilized, and that there's been no investigation whatsoever of alternative ways of controlling the mountain pine beetle except for straight clear cutting. Those objections they have put to the minister and various people. They have put the petition that I brought yesterday, and the same petition went to the presidents of the companies: the one who owns the land and the other who is doing the logging.

My question to the minister is: would you respond with how you see the ministry's job in this kind of situation, where although the logging is on private land it has a strong impact on the surrounding area, and it is said to be done for mountain pine beetle? The minister has a say in that. Could the minister elaborate?

HON. MR. PARKER: As I've reiterated a number of times in these estimates, our mandate does not include management of private property. The only private property we do get involved with is that in schedule A of tree-farm licence contracts where the licensee has dedicated it to part of the productive base of the tree-farm licence.

The situation in the Elk Valley, as the member for Kootenay has stated, is that the proposed harvest is on private land. I think it's land held by the Shell corporation. The forest management is looked after by Crestbrook Forest Industries. The area does have substantial mountain pine beetle infestation. In trying to curb the spread of pine beetles, one of the approaches is to move in advance of the prevailing winds and the manner in which the beetle would

[ Page 8640 ]

spread and remove the stands ahead of them to reduce their proliferation.

What the exact plans are between Shell, the landowner, and Crestbrook, the operator I don't know. As I said before, the Ministry of Forests does not get involved in the management of private land. It is very appropriate for the community to speak to the landowner and the operator and try to come to some common ground, but by mandate I have no authority to interfere. We are interested in what's taking place on private lands when it comes to forest protection issues, and mountain pine beetle control is a forest protection issue. If we find that landowners aren't prepared to do what needs to be done from a forest protection standpoint, we can take steps. It sounds to me like the operator is trying to control the pine beetle problem, and they're taking what appear to be appropriate steps. But it's an issue that we'll be raising with Crestbrook in the very near future. As a matter of fact, I have a meeting with them at noon today, right after the morning session, Mr. Chairman. I'll be looking for further information at that time.

From a forest protection standpoint, we want to move in advance of the beetle; we don't want to be chasing behind it all the time. If people are expecting that operations should only take place in what we call grey attack or red attack areas, that is no way to control it; that's the way you salvage. What you have to do is catch the green attack, when the beetles are first going in — the trees are still green — and get ahead of it, removing the material that the beetles can flourish in.

[10:15]

MS. EDWARDS: The minister may be aware that the Elk Valley is a very special tourist area. In fact, it is one of three major tourist routes through the Rockies into British Columbia, and tourists and visitors and hometown people visiting their Aunt Sally come through there in great numbers. They come at the rate of approximately 4,000 cars a day, we are told by surveys. We have the kind of tourist industry that has 140,000 skiers a year, for example, at the resort in Fernie — that's the one resort, and that's only one that we're counting. In other words, the landscape is important; even that has been tested. When you ask tourists what they come for — this is very specific to the Elk Valley area — they say they that the most preferred reasons for being there are sightseeing, passing through, outdoor and sporting activities Those things require that there not be great visible, ugly scars on the side of hills that are not only uglier than what you would have if you actually did get to a point where you were salvaging red pine, but show major damage to the environment. The main purpose for visits is touring; after that, the second highest percentage of people come to go to resorts and for outdoor trips.

The minister must recognize that the associated Kootenay and Boundary municipalities have asked on a regular basis for government control of logging on private lands and again this year have made a resolution to ask the government to control logging on private lands. It's the same idea as zoning. There's no possible way that anybody can do anything within a municipality or a region that deals with zoning or any of the planning that's done unless it's already agreed to for the interests of the greater good. In this case you have a very specific example of how the greater good is not being served. I think the minister may want to go beyond simply standing there and saying he does not control logging practice on private lands and look to the case that can well be made for basic controls on private land.

I get correspondence by the bushel about logging practice and how it affects people in our area. I have a letter here that's very typical. It says: "One's observations on logging on private land in the Elk Valley lead to only one conclusion. Member firms" — this is the group that's putting out the "Forests Forever" stuff — "throughout the forest industry are committed to one thing only, profit above all else, and not to the welfare of the community." That is being put very regularly, in many ways, to the minister and to me.

The idea of watersheds, Mr. Minister, is something that needs protection. The Association of Kootenay and Boundary Municipalities has put forward resolutions asking for control of logging within watersheds — in fact, asking very specifically that control be taken away from the Minister of Forests and put in the hands of the Ministry of Environment and prime water licence holders jointly. We have situations where individual owners can log — and have logged — on their property in such a way as to have extremely negative impacts on the people next door. There's a case on Hosmer Creek and Thorne Creek where we have half a dozen water licences, and these people's water, which they take for drinking water, is being affected by the logging that's gone on. The last time the same person did some logging in that area they used a couple of old oil barrels with the ends cut out as a culvert and in fact created a considerable amount of contamination of the water around there.

I notice the ministry tried in the West Kootenay just this spring to stop some logging practice on private lands and was prevented from doing so. They weren't there just because they thought they had nothing to do that day; they were there because the logging practice needed some attention.

I would like the minister to respond as to how he expects an individual landowner to respond when logging on a private property next door is impacting on their water supply and they hold a water licence. Is the ministry willing to do anything about it in that kind of case?

HON. MR. PARKER: I know socialists don't believe in private property, and I know they believe in absolute control of everybody. We don't, and the legislation, as I pointed out today....

MR. ROSE: That's tedious and repetitious.

HON. MR. PARKER: But it is the truth. It's important to understand that that's the way it is.

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As far as private property is concerned, it is not within the purview of this ministry. Crown provincial lands that are in the provincial forests are in the purview of this ministry.

The matter of water quality is one with the Ministry of Environment, regardless of whether it's private land, Crown provincial land or Crown federal land. The maintenance of water quality rests with the water rights branch, which at one time was part of Lands, Forests and Water Resources. Now it's with Environment — Lands is separate and Forests is separate. So when it comes to management on Crown provincial lands, we work with the Ministry of Environment and protect the water quality.

First off, everybody has to understand that every piece of land in the world is part of a watershed. Some of these watersheds in British Columbia have water licences on them for the supply of potable water for domestic use.

A water licence does not give the individual exclusive rights over the natural resource. He has the right to use a certain quantity of water. It's government responsibility on Crown provincial lands to ensure that the resource that is being provided under licence to various licensees — whether it's water, lands, grazing, hay meadows, whatever — is in a usable state. So we work with the Ministry of Environment in the planning process, and it's a highly involved process, wherever there's a watershed that has potable licences on it.

For example, the Ladysmith issue. The small business forest enterprise program in the Duncan forest district is slated for part of that area — the Ladysmith watershed area. That planning process has been going on for some five years now and involved the municipal council as well as their employees, our staff, the Ministry of Environment and other government agencies. The Ministry of Environment includes water resources and the fish and wildlife branch.

But the particular operations taking place in the Ladysmith watershed right now.... It's an 18-hectare block; it's about 50 acres. It has several watercourses in it, but they are dry at this time. They do not drain into the Stocking Lake reservoir. They do not drain into the Ladysmith watershed; they drain into another watershed. However, those stream beds are dry. So the claims that operations there are causing pollution are unfounded. The whole exercise really is a politically motivated exercise in that particular corner, because the instigator has made that abundantly clear to my district manager. So it's no conjecture on our part; it's an absolute statement by an alderman of Ladysmith.

The concern about clearcuts being ugly is pretty standard fare. There's nothing pretty about a clearcut, whether you just clearcut your grain field, your Christmas tree farm or a natural stand; there is an interim period. But even Roderick Haig-Brown in his books has acknowledged that the area greens up. If you leave it to nature, it even greens up. But in most of these instances today, it's not left to nature. Certainly on lands that we are responsible for in theMinistry of Forests, we make sure the forest renewal is dealt with in a prompt and efficient manner. There is a place for natural regeneration, and it probably accounts for about one-third of the land area that's harvested. From my travels in Scandinavia I've learned that this is basically the same ratio they operate under: about one-third natural and two-thirds artificial. So the approach in the northern boreal forests, regardless of which half of the globe you're in, is very similar. About two-thirds of the area is artificially regenerated; one-third is naturally regenerated.

All through the process we deal with the other agencies that are concerned with the land base. It's the fish and wildlife habitat; it's water purity; it's land concerns, grazing concerns, recreational concerns. We have a very involved public process at every level to make sure everybody has an opportunity to be heard and have their input on the management of the land base for which we are responsible.

MS. EDWARDS: Of course, what the minister says about private lands is beside the point. The point is: who's protecting the public interest? It's pretty clear that the only answer I have to take back to my constituents is that the minister is abandoning any interest at all in what happens for the general public. This government has no problem accepting bylaws that don't allow people to build houses a certain number of feet from the front property line; they don't have any problem insisting that municipalities get a permit from the Minister of Energy, Mines and Petroleum Resources — it's written into their legislation — before they can move a stone of gravel; but they've got some problem worrying about saying anything to anybody who's out there strip-mining a piece of land, because it's private land. That's simply not the answer my constituents wanted.

I have one other question for the minister, and it deals with range management. The proposed range management plan was supposed to be in order by now. Could the minister tell me whether or not he is ready to launch a new range management plan from his ministry, and could he describe it a bit and tell us how the public gets input into the range management process?

HON. MR. PARKER: We can expect the range review report just about anytime.

MR. MILLER: I want to deal briefly with the question of stumpage and related activities in terms of the price paid for residuals and the price paid for pulp quality logs. We have seen a significant increase in the stumpage regime. Without quoting specific industry people, this has led generally to the situation where the integrated companies have been able to absorb these increases and, in the face of rising commodity prices, continue to do quite well. We see a bit of a dampening in terms of newsprint, and possibly we'll see one in pulp, but on balance the large integrated companies have done reasonably well even with the increases in these costs. That has not been the case — and will not be the case — for the

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unintegrated lumber manufacturers in British Columbia.

We have had discussions on the system before. Statements were made previously which were not followed through on in terms of relief for the non-integrateds. Has the ministry done any analysis of the impact of increased stumpage on the sectors that I outlined and their ability to pay that stumpage and to remain profitable? Has consideration been given to adjusting the system so that the integrateds pick up a larger cost?

[10:30]

HON. MR. PARKER: We've had a number of analyses done that cover all sectors, and the determination is that some are having difficulty meeting their stumpage obligations. For the most part, the stumpage program seems to be a reasonable one. The comparative value pricing system is basically a stand-as-a-whole system: the better the operating conditions, the better the timber, the closer the timber to a conversion plant, the higher the price; the lower the quality, the tougher the conditions, the further away it is, the lower the price.

The program brings in a targeted revenue each year. The people of British Columbia receive a fair number — a good number — for their resource. The dispersion around the average reflects the opportunity there from timber quality, from operating conditions, from transportation.

As far as amending the system is concerned at this point, while we work with the federal government to get rid of this softwood lumber tax, we're not contemplating any changes in the near future. Whether or not there will be any changes subsequent to removal of the softwood lumber tax remains to be seen — that's future policy and I can't comment on that. But our immediate objective is working with the federal government to get rid of the softwood lumber tax, and we'll go on from there as far as forest management in the province is concerned.

MR. MILLER: Perhaps the minister would outline. Anything that I've read on the issue of the removal of the MOU has been negative. The most recent statements by Carla Hills, the U.S. trade representative, have been extremely negative. What would lead the minister to conclude that there is a reasonable chance of getting rid of the MOU?

HON. MR. PARKER: This province, together with other provinces, is working with the federal government to achieve that. For example, Alberta is moving towards a replacement arrangement that they should have in place in the next couple of months. Ontario has been slow to move, but Ontario only accounts for about 6 percent of the lumber sales from Canada into the United States; Quebec, Ontario, Alberta and British Columbia that are the key players here.

Once we have substantially replaced the softwood lumber tax with other pricing and responsibility measures, by the terms of the memorandum of understanding we can declare substantial compliance and serve 30 days' notice. That doesn't stop the trading partner from trying to establish some tariff against some of our products, in which case we'd pursue that issue through the free trade agreement.

MR. MILLER: I didn't hear part of the minister's response with regard to Alberta. Perhaps he could repeat that.

HON. MR. PARKER: Alberta is working on a replacement for the softwood lumber tax provincially. It's probably going to be a partial replacement and it will include not only timber pricing but management responsibilities not unlike we've demonstrated.

MR. MILLER: Within the existing constraints, if you like, of the MOU.... For example, I understand you had an industry committee. I talked to a few people on that committee, representatives from COFI , looking at how the B.C. government could get out from underneath the MOU. That's one. But within the constraints of the MOU, I'm talking about shifting responsibility for stumpage to those who can pay more. What have you done in that regard?

HON. MR. PARKER: We price the resource at its value. Some of it is higher value than others, and those who play in the game are going to take good timber with an easy logging chance and are going to pay a higher number. We don't tailor it to the player; we tailor it to the resource, and that's entirely appropriate and in my view correct.

The committee that the member for Prince Rupert is talking about I think is the joint committee between industry and the Forest Service on reviewing the comparative value pricing system and looking at alternatives to that type of system for pricing forest resource. It's not one of trying to determine how we get out from under the MOU. It's quite clear how you get out from under the MOU; that's stated in the terms of the agreement. It's just a matter of those provinces that are affected actually effecting substantial compliance under the terms of that agreement, and then 30 days' notice can be served by Canada.

MR. MILLER: It was described to me by a member of that committee as trying to find out ways to get out from under the MOU, and maybe they're labouring under a misapprehension. It could be. But are you saying that there's no opportunity within the constraints — this tailoring to resource, not the players? What about Quebec? Do they not have a slightly different arrangement? I know they've got some legislation in terms of pulp versus lumber; lumber gets first call. Does their system allow for more of the cost to be borne by the sector that's more able to pay?

I don't think you can simply dismiss it in terms of tailoring it to the resource, not the player. Here we have an extremely profitable industry in British Columbia, the pulp industry, which has seen dramatic increases in the price of the commodity that

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they produce, from a low of below $400 a tonne in the early eighties. They certainly had a rough period, but it's gone to a dramatic high. The price of that commodity in the market has more than doubled. Yet we see this extremely profitable, integrated industry — there are other avenues here; I'll try to categorize them and keep them separate — that is in many ways effectively controlling the industry in this province. It's not really bearing the cost or the price, if you like, for the raw material that I would think would be preferable. I don't think it's preferable to have the weak sector pay the lion's share of the stumpage, while the integrated, profitable sector — and many of these integrated companies are controlled from outside of Canada — is in fact paying a pretty low value for their raw materials. In any kind of economic world, that's not a realistic situation. Surely it would be one that the minister would want to address.

The costs of raw materials for our pulp sector are really low compared with our competitors. This opens up a whole field in terms of our taking advantage of our natural advantage, the timber that was there that really no expenditures were put into. But that's going to change. We see the minister's bias in terms of paper — paper, paper, paper, reconstituted wood products. Look just comparatively at some of our competitors in terms of the cost of their raw material. We operate generally in Canada, and I think the same figures are true for British Columbia.... In terms of the cost of the final product, if we take a low cost we are talking about $120 a metre and a high to $180. That's the Canadian average. B.C. is actually lower than that with around $115 in the interior and $135 on the coast. Yet if we look at Finland, for example, we see that their costs range almost up to $300. Sweden ranges up to about $280.

We do have this imbalance in terms of the two sectors. To compound that we have the immense control exercised by very few corporations who seem to me, in terms of this issue, to be getting a relatively free ride. As I said, surely the minister would want to address that imbalance.

HON. MR. PARKER: The round wood — logs, standing timber — is priced according to the comparative value pricing system. Whether you take that log and put it through a pulp mill or whether you take it and put it through any other conversion plant, you pay the same price for it. When it comes to pricing residuals such as wood chips and hog fuel, it's the marketplace that's going to set the price. We set the price for the round wood. When the end users take the round wood, they know what the price is and what their logging costs are. They'll have to determine the most effective use of that timber to sustain their business.

Just to drop back to a comment the member for Kootenay (Ms. Edwards) made earlier about how operators like Crestbrook are just interested in profit and not interested in land and forest management, it might interest the House to know that Crestbrook first started operating right after the turn of the century and has a long, established record of responsible forest management and forest protection in the Kootenays. Some 80 years later, the reason they're still going is stewardship: stewardship of the land and stewardship of their business. They have provided careers for several generations in the southeast Kootenay country. I think you'll find that they've moved with the times from a small box mill to today where they're producing a pulp product and looking at expansion and getting to paper, so it would be the whole gamut of forest products offered.

When they get their round wood, they pay the same price whether it's for pulp furnish or for plywood furnish or lumber furnish. We don't get involved, as I've said time and time again, in the business aspect of the forest industries. People who are involved in that, corporately and individually, are better suited. It's no place for government.

We hear talk about Finland having to pay so much more for their fibre than our operators here in British Columbia. When you stand in Helsinki and look across the gulf, you can see the smog rising from their marketplace, a very short barge-ride away. We're halfway around the world from that same market, we compete in that same market, and we sell in that same market. They may have higher operating and higher raw-material costs in Finland, but they have very low transportation costs to market. We have a fair price for timber, we have an efficient industry, and we have a very substantial transportation bill to get to market. So we seem to be pretty significant players in the world pulp and paper markets and lumber markets. I believe that's because there's a reasonable balance between government charges and industry efficiencies that make it possible to be that substantive a player in the world economy.

[10:45]

MR. MILLER: Once again we hear the statement from the minister about business decisions: if a company wants to put a high-value log to a low-value end use, that's a business decision. That's a simplistic notion in itself and begs the question about value. Business decisions are made, I presume, on the basis of economic considerations. If an integrated company can afford to put a saw log into a pulp mill, then there's something wrong. There's something terribly wrong if that is the case, and that appears to be the case.

The minister washes his hands of it. He says: "I don't care what they do." He said again, "What business decides is their business; it has nothing to do with us, " ignoring the fact that we are major players because it's our timber. But the minister confirms that he could care less if pulp mills chip up sawlogs — he has said that on previous occasions; he's repeating it today — and refuses to deal with the question of pricing, which, it would seem to me, would tend to deal with the situation.

He talks about markets. I don't know how you can have a market in terms of that. We have regional markets. They are controlled; there is no open market in that sense. They're regional, and they are dictated

[ Page 8644 ]

by those regional considerations — transportation, etc. In addition to that, the pulp mills, the integrateds, have independent sources of raw material, and they're prepared to pay handsomely for it to maintain that raw material base. So the non-integrateds are constantly going to be in a position of being captive to the integrateds.

To cite one example: Canfor buying out Balfour. There's a good example of where Canfor, with considerable holdings in this province and with quotas of about three million cubic metres a year, paid in excess of $95 million to buy out Balfour Forest Products, with quotas of just under two million cubic metres a year, to secure a chip supply. One of the articles that I read on that issue had an economic analyst suggest that Canfor did that in anticipation that there might be some movement on residual pricing.

So the minister's answers do not satisfy the independents, the non-integrated companies. It's surprising that the minister would wash his hands of the whole affair, given the fact that sawlogs, or logs from which solid wood could be extracted, are being put into pulp mills. That can only come about for one reason. If that's a business decision, then it means a company can afford to do it. It means integrated resource companies are making so much money and they're getting their fibre so cheap that they can afford to chip logs from which solid-wood products could be made.

As far as delivery costs are concerned, from the table that I have from Widman's latest forecast, the delivery costs on softwood bleached kraft pulp are: for the B.C. coast, $47; B.C. interior, $60; eastern Canada, $50; U.S. west $51; U.S. south, $44; Sweden, $44; Finland, $39. There is not a great discrepancy. There is not a wide difference between those delivery costs. I think it's a weak argument, that they can pay more for their fibre because they have cheaper delivery costs. At least it's not borne out by Widman's analysis. So the minister really should offer some better explanation for his refusal to deal with the situation.

HON. MR. PARKER: It's easy to kick out a bunch of statistics without justifying precisely what we are talking about. When we are talking delivery costs, are they out of the interior of British Columbia into the midwest, or into Asian markets or European markets? Are we comparing apples with apples?

However, the House should remember that in international trade we not only deal with all the rigours of the business place, but also with international monetary matters and exchange rates. The member for Prince Rupert complains in one breath that stumpages are too high and we should offer relief, and in the next breath says that stumpages are too low because these people can afford to run them through a pulp mill.

We price the resource on the basis of a comparative value pricing system, and the end user can determine whether he can afford to put it through a solid-wood plant or reconstituted-wood plant, whether that's a pulp mill, oriented strand board mill, particle board mill or whatever it may be.

The number of people employed per cubic metre in a pulp and paper mill, where paper is the end product, is equivalent to the number of people employed in a sawmill per cubic metre of throughput. If the lumber prices are at a point where an integrated operator can take certain grades of what have been used for sawmill furnish and put them into pulp and paper production, it will be the marketplace that determines that.

It works back to equivalency. If it's so much a tonne in the marketplace for lumber and so much more a tonne for paper, the attraction is to go with paper. When the markets swing the other way, you have the ability to swing the other way. It's one of the advantages of being integrated, and that's why things have evolved as they have since the Industrial Revolution. They will continue to evolve.

The member has concern for multinational ownership, and we've heard from the member for Omineca (Mr. Kempf) time and time again about the big bad multinationals. Then when a British Columbia firm consolidates in the Prince George area, such as took place with Canfor and Balfour.... Balfour, remember, was an English-owned corporation that was repatriated, so to speak, by the employees at Balfour who lived in British Columbia. Now the Balfour operation has been acquired by Canfor, a British Columbia operation. I guess that's bad now in everybody's eyes.

Canfor has done an admirable job in forest management, business development and support of a number of amenities in British Columbia such as symphonies, art galleries, universities, colleges and even right down to local schools. Why the member for Prince Rupert sees fit to beat on the private sector, I think, is because, as I've said time and again, it comes back to strictly political philosophy where the state should reign supreme and there is no place for private enterprise.

MR. KEMPF: It's really interesting to listen to this debate. You know, that is exactly the philosophy of that minister. He really doesn't care what goes through a pulp mill in British Columbia. He really has no concern in a province where the resource is dwindling. We no longer have a resource that's overabundant in the province, and he stated here again this morning that he couldn't care less what grade of log goes through the wood room of a pulp mill.

That's absolutely and totally unacceptable on behalf of the people of British Columbia who really own that resource out there — not the multinational integrated companies as the minister would like, but the people of British Columbia. The minister has no concern about sawlogs and veneer logs, because those who have power over government set the price and can put what they like through their chippers.

The minister talked earlier about arriving at a value. In the system in British Columbia which we operate under, how can you arrive at a true value for a log? That too is an absolute impossibility. Unless

[ Page 8645 ]

you put that commodity on the auction block, you have no idea what it's worth. In a free enterprise system — and the government opposite likes to talk a great deal about free enterprise — the value of a commodity is what the user will pay for it. That's what's wrong with the system in British Columbia. That's why it has cost the taxpayers of this province $30 billion in the last five decades.

That $30 billion should have gone into the coffers of the province but did not, because those who can afford to pay and have the ability to pay.... That has nothing to do with the buying of wood in British Columbia. The minister says it doesn't matter that they have the ability to pay, and it doesn't matter that they're paying the people of British Columbia $21 for the raw material to make $900 worth of pulp. He calls that a fair return and a business decision. I'd love to be in the position of making some of those business decisions, and I'm sure many small business people in British Columbia would love to be in that position as well. The ability to pay!

The minister has a lot of concern about the industry meeting their stumpage obligations. What about the small business enterprise program? Why hasn't he as much concern about the small business person meeting their stumpage obligations, rather than going broke and down the tube?

Then the minister talked about people employed in the pulp industry in British Columbia, and that's a reason that the multinational integrated companies should get their material for nothing. What about Quebec, that employs at least three times — it's more than three; it's about three and a half — the number of people per cubic metre than does British Columbia?

[11:00]

The minister talks this morning as if nobody else in this chamber knows anything about the forest industry of British Columbia and Canada, and he's the only one in this chamber who knows anything about the forest industry. If what he said this morning in reply to the member for Prince Rupert is true, he's got a lot to learn about the forest industry of British Columbia. What he doesn't realize is that the people of British Columbia are learning very quickly. It's almost too late, but the people of British Columbia are beginning to understand what has gone on in their primary resource industry for five decades. They've been taken to the cleaners, and they're still being taken to the cleaners. That's why we have a deficit in this province — a deficit in the country's richest province, in a province that clearly has at least 35 percent of the forest resource in Canada.

The minister gets up and says he doesn't care what quality of log goes through the wood room of our pulp mills in this province. Absolutely and totally unacceptable! A minister who would tell that to this House should resign as minister responsible for this province's primary resource. There should be no other avenue. Whose resource is it? Does it belong to a multinational integrated company from New Zealand? Does it belong to a multinational integrated company from Ontario or the United States? Who does the resource belong to, Mr. Chairman?

The minister says that the marketplace dictates the price. What marketplace is dictating the price paid for our resource in British Columbia? Clearly the pulp companies are getting their material for nothing, compared with the selling price in that marketplace that the minister likes to talk about. So how, I ask the minister, does the marketplace dictate the price, when $21 is being paid the Crown for two bone-dry units of chips, which is what it takes to make one metric tonne of pulp, which sells for $900 in that marketplace?

Mr. Chairman, it has gone on for five decades. It has gone on for five decades too long. Whether or not that minister has guts enough to stop it, and it would appear that he does not.... His strings are pulled by the multinational corporations, the same as those of the person sitting in the corner office, so it's not going to happen under this administration. Perhaps it's not going to happen under the next, but it has got to happen. Perhaps it will happen when it's too late, when there is no longer the fibre in this province to support the industry as we have grown to know it. But it has got to stop, if it means driving these large corporations from this province. They've filled their pockets enough with the profit that should have gone into the coffers of the province. It's time the people of British Columbia saw a return for their resource. It's time the people got a bit of that profit from a resource that they own, rather than those integrated companies taking it from our boundaries.

With that attitude, we go into the next decade. I read from the very latest MacMillan Bloedel journal, June '89, which makes it quite clear in a report done by Woodbridge Reed and Associates that in the next decade there will be a much greater need for printing and writing papers in the world. In fact, the need could, it says, leap by 150 percent. We have the attitude in this province that the status quo can continue, that we can continue as the people of British Columbia to give to those multinational, integrated companies that resource for nothing, which is going to do nothing but rise from an already high price in that marketplace that the minister talks about. We're going to continue the philosophy of giving that product to those companies for nothing. It's sad. I say to any Forests minister that has that attitude, that philosophy, in the province of British Columbia: resign.

HON. MR. PARKER: I'm afraid the member for Omineca is allowing the frustration of his own shortcomings to overrun into this House — his hatred for the corner office and for this office.

He mentioned something about the level of employment per cubic metre in Quebec being three times what it is in British Columbia. The information we have from the Canadian Forestry Service's economic report E-X-39 indicates 4.8 per thousand cubic metres in Quebec and 2.6 per thousand cubic metres in British Columbia. If the member for Omineca is so knowledgeable, he then would understand that Quebec

[ Page 8646 ]

is a long way down the road out of the solid wood industry and into the pulp and paper industry. It's a reflection of the fact that Quebec is very much a pulp and paper industry and not a solid wood industry.

British Columbia is a commodity manufacturer in solid-wood products, to mention lumber and studs primarily, and has been trending in the last couple of years away from commodities and more into value-added products, looking to serve the Asia-Pacific markets and specialty markets in the Middle East as well as Europe. We see a growing industry in the value-added sector as a result of policies of this government, including the timber-pricing policies.

It certainly is the marketplace that will determine how well your business goes. The member for Omineca has been actively involved in the log export business, and may still be for all I know. He knows that to be able to have the business, including a log export business, at least to break even you have to be, preferably, in a profitable position — if you're going to have a going concern and if you're going to offer employment. The marketplace very much dictates any sort of business, whether it's commodity lumber or whether it's pulp or fine papers, whether it's printing papers or whether it's logs. The marketplace determines what you are going to get for those logs. You have to work back from there to whether or not you've got a going concern to provide the employment and returns to the people.

The member for Omineca likes to harp about stumpage. He tells us that he knows all about the industry. What about all of the other taxes that the business pays as it pumps out a tonne of pulp. It's not just the stumpage price of timber, but they have to pay water licences; they have to pay taxes on their real property and on their physical plant and on all the components they buy. They pay taxes on automotive supplies, they pay corporation taxes and they pay logging taxes over and above stumpage. Then, of course, there's payroll which is a big item in any undertaking, whether it's government or private enterprise. Out of payroll arises income tax.

MR. KEMPF: Take the taxes off the backs of the people. That's all you people know over there.

HON. MR. PARKER: Listen to the babble from the member on taking taxes off the backs of the people. The only way they pay tax is if they're receiving gainful employment and their income is in excess of base limits so that they have a taxable income. You only pay taxes if you have sufficient income to support taxation, and you only get the income if there is an ongoing enterprise. Everybody plays a part, all right? But the only place the payroll comes from is the marketplace, and it's too bad the member for Omineca never got that sorted out or he'd probably still be in business.

MR. MILLER: I'll try to get back to the discussion. It is extremely difficult to get some kind of discussion here, because the minister either doesn't recognize what I'm trying to say or deliberately chooses to go off on some spurious tangent.

I just listened to the last part of the debate in terms of value-added, and it's clear that Quebec provides more jobs per cubic metre of fibre or timber than we do. It is clear, whatever the difference is, that there is more, and the minister previously cited the fact that the same levels of employment could be obtained. He used the example of newsprint and then went on to say that we're more into value-added. If you follow that conclusion, we should have more than Quebec. Using the minister's own logic we should have more employment per cubic metre than we do.

[11:15]

To get back to it, I don't recall at any time when I was discussing the Canfor-Balfour buyout that I attacked Canfor or Balfour or any other company. For the minister to stand up and say they support the arts.... Don't bring their name up: is that what you're suggesting? I'm trying to get at a point here. Certainly the market plays a role, but you play a role in the market.

Look what's happening in terms of the independents. I didn't argue for lower stumpage overall; I talked about trying to shift to those high profit areas that were paying extremely low prices for their raw material. Everybody that I have read in industry agrees with what I'm saying. If you look at Crestbrook themselves, Jack Croll, Crestbrook's vice-president of finance and chief financial officer, in a Sun article on April 13, says the lumber sector and the sawmills are being hammered, "The sawmills are being hammered," but Crestbrook can weather the storm because "it is an integrated company." If you look at Canfor's bio in terms of the argument I was trying to make that really we're setting the stage for major integrated companies to buy out the sawmills.... Canfor bought out Balfour, according to Canfor's own words in a Province article on April 25, "to secure the chip supply, to become more self-sufficient in chips." They don't pay a lot for chips. They don't want to buy them on an open marketplace, on a real marketplace; they want to control and sew up.

In Quebec the pulp companies control 75 percent of the wood chip supply. Where is the market when 75 percent of supply is controlled by integrated companies? Mr. Minister, tell me where the marketplace is. Tell me where that great marketplace is that you talk about. How can the marketplace work when the major integrated companies control 75 percent of the supply?

Another article suggests that the only reason Canfor bought Balfour was to secure the chip supply. They paid a premium price; they paid in excess of what the company was worth, by their own admission and by independent sources stating that, in order to secure the chip supply. An article from the Financial Post on April 12, 1989, said: "Canfor has made the deal to nail down the supply of chips...." They want to avoid the market, Mr. Minister. Don't you understand that these major companies like to avoid the market? They like to have everything neat

[ Page 8647 ]

and tidy and sewn up so they control costs, so they're not subject to the vagaries of the marketplace.

From the Prince George region independent sawmill owners.... I don't have a date on this story for Hansard, but I'll get it later. An article by Malcolm Curtis in the Prince George Citizen said: "Meanwhile, independent lumbermen in Prince George warn that their companies will be targets for more takeovers unless the lumber market improves dramatically" — or there's a shift in stumpage.

It seems to me that it's a simple, fundamental point. You have some impact on that marketplace. You determine who pays what, and you're setting the stage where the integrated companies with their enormous financial resources will do in British Columbia what they have done in Quebec and are probably doing elsewhere: that is, to buy up, to lock up, the independents. That has, I think, some negative ramifications.

It's important that we have an independent, healthy operating forest sector in this province. I don't think it's a good thing that the game is controlled by too few players. It seems to me, if you subscribe to the principles of the marketplace, that you would agree with that. The United States of America, which in many respects must be held up as a bastion of free enterprise, has far more rigorous standards in terms of concentration and control. They don't blink; they don't think it's doom and gloom or some socialist plot to say to major corporations: "Break up; you're too big. " It has been a fundamental tenet of the marketplace, at least in terms of regulation in the United States, that they have done those kinds of things. You only have a marketplace if you have competing players in the marketplace.

The independent operators in British Columbia, because of the system that this government has put in place, are now in the position where they will be takeover targets. The major companies will buy them up. If we follow your logic, if we follow the statements you have made in terms of the marketplace and what that dictates in terms of the commodities we produce, why would a major keep a sawmill running which doesn't make any money? If we have to look anywhere for proof, we look at your refusal, your inability, to deal with Fletcher Challenge. Although the minister has the power and the authority and, I would hope — as many British Columbians would hope — the responsibility to deal with this, you won't deal with it.

Where you had an opportunity to deal with this in terms of a major player moving into British Columbia, you didn't. You made a secret deal to allow that company to shut mills down. You tell me what the difference is, when and if the lumber market hits the skids and the trend seems to be that it's declining.... What on earth would possess a major company, whether it's Fletcher Challenge or any one of the major companies in this province, to maintain an operation that is not profitable? By the laws of the marketplace that you subscribe to, they should shut it down.

HON. MR. PARKER: That's right.

MR. MILLER: "That's right," he says. Let the record show that the minister says: "That's right." I suppose that's cold comfort to any of those people who are now working in the solid-wood sector — in the sawmilling sector — that the Minister of Forests would say: "That's the natural evolution of things. That's been going on since the Industrial Revolution. Sorry, fellows, don't look to me for any kind of assistance." Yet he's in a critical position to determine what happens in terms of that marketplace, because he decides how the pricing system is set.

It amazes me: this blind adherence to the principles of the marketplace which the minister stands up and espouses every time he manages to put his shoes on the floor, and yet he doesn't follow it. There's been no indication from this minister that he either understands the marketplace or understands his role in the marketplace or understands his responsibility to the people who live and work in this province. Are you content to allow this situation to exist?

I presume you're going to rubber-stamp every buy-out that comes across your desk regardless of the future consequences, and regardless of the fact that those major integrated companies will presumably say in the future when the sawmill sector becomes unprofitable: "Well, we'll shut it down." I don't want to hear about Canfor's contribution to the arts, Mr. Minister. I'm sure they do wonderful things with the arts. I want to hear about your responsibility in terms of this marketplace and these jobs and industries In this province.

HON. MR. PARKER: I can't help but be amazed, but then I really shouldn't be, because the socialist philosophy is so different from the private enterprise philosophy. Certainly the industry doesn't control the marketplace. What they can control are their own costs. It's entirely appropriate for them to control their own costs.

We've heard several references this morning about levels of employment per thousand cubic metres of wood converted in Quebec versus British Columbia. Quebec has a long history of pulp production and a shorter history of paper production, but it has been in pulp and paper production a lot longer than British Columbia. British Columbia, because of the size of wood, has long been a producer of solid-wood products. As we all know, the eastern Canadian forests have much smaller trees that are more readily handled mechanically. The predominant species, black spruce, has a very high yield in fibre and is a very desirable furnish for the pulp and paper industry. For example, the banknote paper that we are all familiar with has been produced in Quebec for years, pretty well since it's been produced in Canada. That's the extent to which their industry has evolved. Our population has moved westward; everybody understands Canadian history. The industry has evolved a little further in eastern Canada than it has in western Canada. We see a mature forest industry in eastern

[ Page 8648 ]

Canada that's reflected very much in reconstituted wood products.

Industries in eastern Canada as well as western Canada are always concerned about adequate wood supplies and about the cost of their wood supplies. The best way they can deal with those is to acquire cutting rights. When they acquire cutting rights in British Columbia, whether they're going into reconstituted wood or solid wood, they have to pay our stumpage rates, which reflect fair value for the timber resource, and whether or not that wood is best utilized in producing paper — and we use lots of it — pencils, furniture or dimension commodity items like dimension lumber and construction lumber, that's very much a function of the marketplace. What the producer deals with are the things that he can control: that is, wood supply and cost of production. The marketplace is a worldwide market — an international market. Even a large corporation in British Columbia doesn't control the world market.

We've heard some comments about dealing with corporate concentration. The federal government deals quite adequately with corporate concentrations. One of the examples is the Esso Canada-Texaco acquisition, where a number of the assets have to be disposed of to avoid the concentration in that particular industry. Where it is perceived by both provincial and federal governments to be a problem, it is addressed.

In the meantime, in British Columbia we have a forest industry that we as a government are developing, which reflects not only the small operators but the major operators. We have no less than 15 percent of the provincial annual allowable cut dedicated to small business. It's a percentage; it's not a number fixed at 10 million or 12 million cubic metres. As our management of the forest resource increases the provincial annual allowable cut, that means there is a greater volume available for the small business operator, because no less than 15 percent is committed to the small business operator. So we have a diversity in our industry as a result of government policies, and the opportunities are many, particularly in the value-added end of the industry.

[11:30]

Since I've been minister, we've been pushing for a value-added industry in the small business sector as well as in the integrated sector. We see the majors — like MacMillan Bloedel and Canadian Forest Products — getting more and more into the value-added products. We also see them getting more and more into applied research and technology transfer.

We see a growth in our industry that's going to carry us through all the funny little cycles that happen in a natural resource industry. Sure, lumber markets are softening. Pulp markets now appear to be static; they may soften in a year's time or so, the forecasters say. That's the nature of the business. It has always been cyclical. Anybody who's had anything to do with the industry realizes that. What we have to do, as government, is help to provide the opportunities for diversity in the forest industry so that we dampen those cycles as best we can within our own economy. That diversification is being achieved, and it's being achieved because of the policies of this government.

MR. MILLER: There wasn't one answer there to any of the issues I raised. I guess the minister fails to grasp, to understand, what I tried to outline in terms of effective control and the role the government should play in the marketplace.

This government has allowed industry to concentrate to an enormous degree. Limited research shows that just nine corporations or corporate groups in British Columbia control 48 percent of the annual allowable cut. Six corporations or groups out of that nine are foreign-owned and controlled, and they control 30 percent of our annual allowable cut. I'm sure intensive research on the issue would show that the degree of control is even higher.

It's a fact that this government does absolutely no analysis of that issue — absolutely none. They put out a chart. I don't know how often they do it. When I asked the minister at a public information session in Smithers, in front of a bunch of people.... First of all, he tried to tell someone who was up at the mike that you have to go somewhere else to get that information. I finally went up and said: "Well, look, you put out the chart. Would you make that available?" And he sent me a copy. But absolutely none.... They don't have the staffing, and most of all they don't have the inclination. I don't know if the minister really understands the links in terms of corporate power and how that distorts the marketplace. I don't know if he really understands that, but it's a dangerous situation.

British Columbia has a natural advantage right now, because we have these incredibly valuable, enormous forest lands. We have been reaping or taking advantage of that since we first started to develop our forest industry. But it does evolve. It does change. Our policy of converting our old growth in a fairly rapid way without really looking at that pool of fibre that we can convert into a value, if you like, that we as citizens of this province own.... We really haven't looked in any fundamental way at how that pool of wealth will be used on into the future.

As we go through the conversion process and we reduce the amount of old growth — for lack of a better term — that's available, that tight-grain good wood that can be used to make solid wood products, and as that is diminished, and it's diminishing quite rapidly in various parts of this province, we move into the paper production that the minister so glowingly talked about. Paper, paper, paper. Or reconstituted wood. But when we get to that position and then assess our relative position in the world markets and our ability to compete, we find that we start to lose our natural advantage. We find that the southern climates can produce fibre for the pulp industry much faster. There's one instance I read about. I think it was eucalyptus; it can be grown in 12 years.

We exhaust our natural advantage. We do nothing of any substance in the current time in terms of looking at getting solid wood products, value-added

[ Page 8649 ]

products — relatively nothing out of that resource. We allow it to be exhausted. We allow the major companies to dominate the market. I would think that if we forecast down the road, when our fibre supplies become so high, when the cost of silviculture and reforestation.... And it is higher in Canada. In fact, there are academic arguments which suggest that we should not really invest in intensive silviculture, because the return on the investment, using those marketplace dictates, is not as great as it is in other countries.

I suppose that we could foresee a time when even the pulp industry might look to different areas of the world to produce their product. Certainly it's not a major problem for a corporation to simply shut down a pulp mill. It's been done before. It's not a major problem to shut it down and rebuild somewhere else. We see the forays that MacMillan Bloedel, for example, has made. They recently made the decision to invest $79 million in a plant in Minnesota.

Interjection.

MR. MILLER: To make oriented strand board. They decided to go to Minnesota to do that.

MacMillan Bloedel actually has one of the more enviable records in research and development, and my own view is that it's because it was a British Columbia-based company. It had roots, and a feeling for British Columbia. Even the former Premier recognized that when he said, "B.C. is not for sale," and refused to allow Canadian Pacific to take over MacMillan Bloedel. He rode down from the hills in Kamloops, or wherever he's from, and intervened in the marketplace, something that this minister would never do.

If we look at the other forest companies in British Columbia, we see that the record is not that good. Just briefly going through some of the research and development efforts.... These are all tied together — the fact that you have this concentration, the fact that there are branch-plant economies. The "Adjusting to Win" report and all kinds of other reports have pointed out that corporations controlled from outside our borders are less likely to invest in research and development. Statistically that's true. If we look at the kind of research efforts being undertaken by various forest companies in British Columbia, we find them, with the exception of MacMillan Bloedel's, woefully inadequate. Fletcher Challenge Canada's was started under Crown Zellerbach — 17 staff members, and the research is extremely limited, focusing on technical and environmental services. Look at Canadian Forest Products, with a staff of 17 researchers conducting studies on forestry tissue culture, fibre for hardboards and adding value to solid-wood products. Balfour-Canfor: it doesn't state the number of employees, but it's basically research on trees and seedlings. Western Forest Products: ten researchers; Canadian Pacific Forest Products: 20.

That's the kind of research effort being supported by those companies in this province. I recited a lot more facts and figures in terms of that during the Ministry of Advanced Education estimates. It's woefully inadequate. The government is doing something in terms of Forintek, in terms of the new UVic facility; there is government investment in research and development. But there is not a commitment that I can see from most of the major forestry firms in British Columbia to undertake any substantive efforts in research and development. I would think that that is a prerequisite to our advancing the state of the forest industry and allowing us to be healthy and competitive long into the future.

The links are there between the position of the small non-integrated companies.... The scenario is developing that they are attractive opportunities for major companies. It was pointed out to me during the tree-farm licence public information sessions that even that policy would have induced further concentration in fewer hands. One forest licence owner said to me that although he was opposed to the policy of converting his forest licence to a tree-farm licence — he was opposed in principle because he didn't like the concept — he said, "I would be a fool not to apply." And he would have been a fool not to have sold once he received the licence. It simply would not have been worth his while as an independent. It would have been far more attractive, having gained that TFL status, to then sell. That would have, as I said, induced an even greater degree of concentration.

I wonder if the minister could advise the House why there is such a low level of research and development among these major companies. Apart from government investment, what are you doing to get them to do more?

HON. MR. PARKER: The member for Prince Rupert suggests that we should preserve our old growth and that we should get value-added from our old growth. I don't know how you do both. You can't preserve it. You can conserve it; you can use it wisely.

I submit that the industry is doing precisely that: it's using it wisely. The information I have is that our old-growth resources are some 70 years ahead of us throughout the province.

[11:45]

What we really have to bear in mind when we talk about the fact that other parts of the world are going to replace our fibre supply in the years to come.... They have to realize, particularly if we're going to talk about eucalyptus resources and a 12-year rotation in some parts of the world — certainly that's true — that eucalyptus is grown for pulp furnish. When it comes to creating products out of pulp, such as paper, there are over 600 recipes for paper. There are different types of paper for different applications. Those papers require different types of fibre. Eucalyptus provides a certain type of fibre; it has certain characteristics. Our northern species provide other characteristics which are vital to paper manufacture.

We will always have a place in that category. We will also always have a place in solid-wood manufacture. That is a fact of life, because we are farming the forests of British Columbia — the productive forest

[ Page 8650 ]

land base — to make sure that we have a sustainable yield furnished for a number of manufacturing opportunities. As the future comes upon us, we'll find a growth in technology and in markets that is going to dictate basically what's done with that fibre. But we must always renew the fibre supply, and we're doing precisely that.

The member for Prince Rupert touches on research and cites some statistics about the number of people involved directly in research in certain corporations. If anybody understands research, they understand that what you're after is not numbers of bodies, but quality of research, quality of the product.

He doesn't realize that in Canada the approach in the forest industry has been to work on a lot of projects jointly. We have the Pulp and Paper Research Institute of Canada, which has labs here on the University of British Columbia campus as well as labs in eastern Canada. We have Forintek, which works on solid-wood opportunities — and that's jointly; it has an eastern lab and a western lab. The western lab is right on the University of British Columbia campus, just a stone's throw from PAPRICAN, the Pulp and Paper Research Institute.

From the woods operations standpoint, we have FERIC, the Forest Engineering Research Institute of Canada. That too has an eastern entity and a western entity, and it is jointly funded by the forest industry and the players in the forest industry. Of course, there are the various research contracts to the universities, which are vital for their graduate schools, and those with good solid graduate schools get those contracts. Then of course, there's our own commitment here with our research division in the Forest Service and our facility at the University of Victoria.

There's substantial meaningful research taking place in British Columbia, and what's more significant is the significant amount of technology transfer, because you can have all kinds of research, but if you can't put it into practical use, it is of very little use to you. We have accomplished that, and we continue to accomplish that. Probably one of the best examples is the Parallam product that MacMillan Bloedel brought over with their own research section. It's the type of product they'll be manufacturing in their new plant in the United States — which they located, by the way, in the heart of a furniture-manufacturing area. It will draw its wood supply from that area; a lot of it is wood that's not used today, and it will supply those manufacturers in that area. That was a good market opportunity, and once again British Columbia firms have shown leadership.

As far as tree-farm licence rollovers and replacements are concerned, as was explained at numerous meetings — not just the public information sessions but numerous sessions with members of the British Columbia public and the industrial sector — the whole process is long and involved and uses a substantial amount of public input. For example, when a forest licensee states his interest in replacing his forest licence with a tree-farm licence, that's a letter of intent. That indicates he's interested in replacing his forest licence with a tree-farm licence.

The next step is one where the licensee asks for the public hearing process, at which time the public has an opportunity to comment on whether or not there should be a replacement. Out of that hearing, if everything's in favour, you move on to the process of replacement; but you don't do it without a great deal of public input. It's not done behind closed doors, as the member for Omineca suggests; it is done in a public process. It's in the Forest Act. So for the member for Omineca or the member for Prince Rupert to say otherwise is not factual, because the procedure you have to follow is right in the Forest Act, and it's a very public procedure. Nobody was doing anything behind closed doors.

I am the first Minister of Forests in this province to take the whole issue out to the public and around the province and listen to the concerns of the people. Lots of them didn't want to talk about tree-farm licences; they wanted to talk about other things. We took that information and we've got it all booked. We have a full transcript, because we took the trouble to pay for a recording secretary so that we had every comment and every submission so that we could take that information back to government and act. We continue to listen to the people of British Columbia. It's a democracy, and public opinion or public concern eventually becomes public policy. That's done in democracy. This government has demonstrated it time and again and will continue to do so.

MR. KEMPF: I've sat here for three days and listened to the rhetoric of that minister rather than answers to questions asked from this side of the floor.

Interjection.

MR. KEMPF: No, I don't think the estimate can pass as yet.

I've heard some very interesting things in the last few moments. The member from Prince Rupert suggested that the minister doesn't know, that he doesn't understand. You bet the minister understands. We can fault him for a lot of things, but we can't fault him for not understanding the system in British Columbia. What is more important in B.C. than the corporate concentration with respect to the annual allowable cut or the percentage thereof is the control that the industry, the big boys, the integrated companies, have over the minister. Mr. Member from Prince Rupert, that's 100 percent control. That's where the problem lies. Rather than the government controlling the industry, the industry controls government, and it has been doing it for a number of decades. That's what is really dangerous in British Columbia.

They like to throw the comment across the floor from the other side — I heard the minister do it just a few moments ago — that it's socialist philosophy. I say again, as I've said before in these estimates, I don't think anyone in British Columbia would accuse me of having a socialist philosophy. No one, not even the members on the opposite benches, would accuse me of having a socialist philosophy. It's not a socialist philosophy at all, and that phrase is not going to fly

[ Page 8651 ]

in the next general election in British Columbia, as it has in previous elections. And it's not going to fly in the by-election in Cariboo. Perhaps the minister can accuse people of being socialists, but I just want to read into the record some words of a person who I believe not even the minister would accuse of being a socialist. His name is William Kordyban Sr., and he operates one of those home-grown B.C. operations that the minister was talking about earlier. He wrote a series of articles very recently. I'd like to quote from one of them. Again I say, this is a man that even the minister can't accuse of being a socialist or having any kind of socialist philosophy whatsoever.

"The public has been suspicious for years that our forests are not properly managed nor properly sold. For years we kept electing a political party to power that preached free enterprise, but behind closed doors" — those closed doors you talked about earlier, Mr. Minister — "did the opposite. Instead of challenging the protectionist system, they allowed it to grow to a point where practically all of the timber is disposed of by quota. This makes many people of B.C. angry, and for a justified reason — people expect a government to practise what it preaches and not create a system where the people are denied equal opportunity to buy the timber."

Are those the socialist philosophies that the minister was talking about? It's easy to throw that connotation from that side of the floor to this, but it's very nice to be able to sit in the middle and see both sides of the issue. Is that the kind of socialism that that party over there is going to try and win the next election with? Well, Mr. Chairman, it's not going to work. The people of British Columbia have learned there's something rotten in the forest industry of this province and it's got to be cleaned up; and they're going to change governments until they find one that has guts enough to do it.

Vote 27 approved.

Vote 28: ministry operations, $368,123,785 — approved.

Vote 29: fire suppression program, $50,000,000 — approved.

Vote 30: forest resource development subsidiary agreement (ERDA), $73,143,941 —  approved.

HON. MR. RICHMOND: Mr. Chairman, I move the committee rise, report resolutions and ask leave to sit again.

The House resumed; Mr. Speaker 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 11:59 a.m.