1974 Legislative Session: 4th Session, 30th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, MAY 10, 1974

Morning Sitting

[ Page

3017 ]

CONTENTS

Privilege

Clarification of previous remarks. Mr. Schroeder — 3017

Hon. Mr. Macdonald — 3017

Mr. Schroeder — 3017

Mr. Speaker — 3017

Withdrawal of imputations of corruption. Hon. Mr. Hall — 3017

Mr. Speaker — 3017

Mr. Smith, — 3018

Mr. Speaker — 3018

Mrs. Jordan — 3018

Hon. Mr. Hall — 3018

Mr. Speaker — 3019

Mr. D.A. Anderson — 3019

Routine proceedings

Land Registry Amendment Act, 1974 (Bill 121). Hon. Mr. Hall.

Introduction and first reading — 3019

Committee of Supply: Department of Lands, Forests and Water Resources estimates

Amendment to vote 137.

Mr. Bennett — 3020

Mr. Cummings — 3026

Mr. Gibson — 3028

Mr. D.A. Anderson — 3031

Mr. Smith — 3033

Mr. Wallace — 3038

Mr. Gardom — 3040

Mr. Phillips — 3041

APPENDIX — 3042

FRIDAY, MAY 10, 1974

The House met at 10 a.m.

Prayers.

MR. H.W. SCHROEDER (Chilliwack): A point of privilege, please, Mr. Speaker.

MR. SPEAKER: Would the Hon. Member state his point of privilege?

MR. SCHROEDER: I would like to clarify for the Members' sake

attitudes attributed to me in this House in a speech made last Tuesday,

which I thought were clearly understood immediately following those

remarks. But they apparently have remained alive both between Members

of the House and with the press. I'd like to make a brief statement.

MR. SPEAKER: Would the Hon. Member proceed?

MR. SCHROEDER: I have been charged with an attitude of bigotry arising out of the remarks of that speech that I mentioned just a moment ago.

I have reviewed not only my attitudes, but I have reviewed also the

words that were spoken. I have made approaches to the Jewish community,

and they have been very happy with the explanation I have given them

based on the words that were spoken.

I think that it can be easily assumed by reviewing the speech that

nothing deprecative was intended towards those people of the Jewish

community. If anything, their competence was elevated, in my opinion,

because a comparison was made with the competence of the Minister being

discussed at the time, and it would have elevated the Minister's

competence if bigotry indeed did exist.

I dissociate myself from an attitude of bigotry toward these people.

I have indeed committed my life to the basic tenets to which these

people subscribe. As I've stated to the press, I don't believe that

those who know me and who know my attitudes would find an anti-Semitic

attitude anywhere existing.

The person who wrote the article, I'm sorry to say, did not make any

approach to me, did not check with me regarding any statements or

attitudes. As a result, I would like the Members of this House to know,

and I want it to be perfectly clear today, that the attitude first

attributed to me is, in my basis, unfounded, and I believed after the

withdrawal of the remark by the Hon. Minister that the thing had been

cleared up. That's basically it.

HON. A.B. MACDONALD (Attorney-General): Mr. Speaker, the Member has

expressed his good intentions, but I must say that I regret that he did not

withdraw or apologize for the actual words used.

MR. SCHROEDER: I am not aware of an apology that's necessary.

If there was a misdemeanour, I would be happy to apologize. However, in

the case that there was just a misdemeanour of which I am unaware, I

will apologize just in case.

MR. SPEAKER: May I point out to the Hon. Member that any

insults or affronts that may be offered to the community at large are

not a question of privilege? Therefore, there is no, requirement to

apologize so far as a Member's words are concerned unless they affect

the privileges of another Member within this House. As to whether a

Member apologizes to the community concerned is, of course, a matter

for his own conscience, and is a matter really of courtesy that one

would expect from any Member of the House.

HON. E. HALL (Provincial Secretary): Mr. Speaker, towards the

adjournment yesterday afternoon I rose on a point of order to ask the

Member for North Okanagan (Mrs. Jordan) to withdraw some words which I

considered to be offensive. She clearly stated that she was of the

opinion that there was corruption in government.

Following some points of order and Chairman's explanations, there

was not an unqualified withdrawal of the charge. I availed myself of

standing order 129 (5) and I received from you, Mr. Speaker, a verified

copy of the Member's words.

I wish now to state to you that I clearly demand an unqualified

withdrawal of her words in which she says: "....corruption within the

government." I would ask you so to rule.

MR. R.H. McCLELLAND (Langley): What are you quoting from?

MR. SPEAKER: Order, please. May I first make it absolutely

clear to this House that any Member may request of the Speaker a

verified copy of the transcript under subparagraph 5 of standing order

129. That is done by signing, as you must, in writing such a request.

If it relates to a question of privilege, a statement itself that

relates to a question will be supplied by the Speaker duly verified by

him. That is my duty under that standing order.

That is what the Hon. Provincial Secretary is referring to: a verified copy of the transcript.

MR. D.E. SMITH (North Peace River): Mr. Speaker, I believe the transcript is limited to 25 lines. Is that not correct?

MR. SPEAKER: In normal cases. Where the question is one of privilege, the whole question of

[ Page 3018 ]

privilege must be before the House. That, in this

particular instance, is the whole question of what the Hon. Member

said, what was then said in reply and what was said after that by the

Hon. Member concerned.

Both the complainant and the complainee are in the transcript, duly

verified, as they should be. That applies whether it be your complaint,

the complaint of the Member for Chilliwack or the complaint from any

other aspect of this House — verified by the Speaker under standing

order 129.

I listened and compared the transcript that was supplied with the

actual verbal statements made on the tape, and I made the necessary

corrections, where the editors had left out repetitions because of

reading or scanning, and made it precisely as it was on the tape.

MR. McCLELLAND: Did you have the Member who was speaking in attendance at the time?

MR. SPEAKER: No, I am not required to do that. If the Hon.

Members doubt the Speaker and doubt the Speaker's word, I invite you at

any time to sit with me and verify the tape with me. It's an imputation

against the Speaker.

MR. McCLELLAND: You should do that in the first place.

MR. SPEAKER: The Hon. Member for Langley does not make the rules in this House. The House makes them.

MR. SMITH: Mr. Speaker, am I to understand, then, that when a

question of privilege is raised in the House, the full transcript, if

that was required, would be available to any Member of the House?

MR. SPEAKER: Dealing with the point at issue only. In other

words, I would not in fairness to the Hon. Member for North Okanagan

(Mrs. Jordan) simply give her statement originally in the House, but

what transpired later when she made other remarks that in effect amount

to a denial or amount to, indeed, a withdrawal.

If such happens — I said if such happens — in fairness to the

Members concerned it would be wrong of the Speaker to limit it to 25

words. We must deal with the transaction in which the privilege is

raised.

MR. SMITH: Well then, Mr. Speaker, would it not be fair to

all parties concerned, when a matter of this type comes before the

House, that not only the person who is alleging an offence or a charge

by the one who is to be charged would have the advantage of seeing the

transcript at one and the same time?

MR. SPEAKER: Well, if the House would want that to be a rule,

then I propose that you change standing orders to put that into effect.

I do the best I can, and I say this: if any Member doubts for one

second that I would accurately and carefully and most judiciously

listen to the tape and make sure that the transcript was accurate, then

I can only take that as a want of confidence in my judgment or my

intelligence.

MR. SMITH: I respect your judgment and the position that you

occupy, Mr. Speaker. But I would think that a Member who is being

charged of anything which is a result of things that were said on the

floor of this House should not be required to reply in any manner until

they have had the same privilege of reviewing and seeing the

information that the person who is making the charge has had.

MR. SPEAKER: I agree with you that under our rules in May ,

where a Member is caught unaware, it is a general policy — and one that

I would approve — that the Member be entitled to make himself informed

and that a future date be set for the matter to be gone into.

With that in mind I would suggest that unless the Hon. Member for

North Okanagan wishes to make a statement now, I would urge her to

reserve her rights in this matter as to her statement until she has had

the opportunity I invite her to have — before, say, Monday — to examine

the transcript and to examine her words on the tape and then determine

her course of action on Monday. Would she be prepared to take that

course?

MRS. P.J. JORDAN (North Okanagan): Thank you, Mr. Speaker. I accept the course and would like to avail myself of it.

HON. MR. HALL: Mr. Speaker, speaking to that point: it's 'all

very well and good having debates like this stretching over days, but

the Member herself said she would wait for the Blues. She's had an

opportunity at the Blues; so what we have now is a typical thing where

smears of corruption and innuendo last for four days. The Member knows

full well what she said — full well!

I made no charges. I asked for complete withdrawal of what the

Member knows she said; and she knows she said it, as she confirmed to

me this morning that she knew she said it. What a scurrilous

performance!

MRS. JORDAN: Mr. Speaker, I would ask the Minister to withdraw the statement that I confirmed to him this morning that I said it.

HON. MR. HALL: I will not.

[ Page 3019 ]

MR. SPEAKER: Order, please! Hon. Members, I realize that it

leaves something hanging in the air for four days. I regret that. But

the Hon. Member for North Okanagan has not seen the correct version of

the tapes. There were alterations in the tapes. I don't know that they

effect in the least the very gravamen of her charge.

Nonetheless, I think that in fairness to rules of this House she

should have the opportunity. I therefore appoint Monday at 2 o'clock

for further discussion of this matter of privilege.

HON. D.G. COCKE (Minister of Health): Mr. Speaker, just to

keep the record straight, I'm sure you didn't mean the tapes; you meant

the transcript when you were saying that there were corrections.

MR. SPEAKER: I'm sorry, not in the tapes, in the transcripts. The transcripts have repetitions....

Interjections.

MR. SPEAKER: Order, please! The transcripts had repetitions crossed out.... Order, please!

AN HON. MEMBER: Oh, oh!

MR. SPEAKER: May I point out to the Members that in the presence of editors of Hansard

last night I listened to the tapes. The tapes are in the custody of the

editors and in no one else's custody. In their presence I listened to

the tapes and added to the transcripts words that had been deleted from

the transcripts by the editors for the sake of clarity.

They had words like the Chairman saying "Order" several times and

various hesitations that occurred as a result of the interchange. They

had cut those out. I put everything back in that was audible on the

tape — that was adding to and in no way subtracting from the tape.

MR. D.A. ANDERSON (Victoria): Mr. Speaker, in the light of

the fact that much of our difficulty seems to stem from a lack of a

record, I would like to move that until such time as the Speaker and

his committee report on the distribution of the Blues.... I would ask

the unanimous consent at this time to move that until the Speaker's

committee reports, the distribution of the blues to MLAs be restored.

MR. SPEAKER: There's no way that you can move that without a notice.

MR. D.A. ANDERSON: Mr. Speaker, I would like to ask the unanimous consent that this be moved at this time.

MR. SPEAKER: May I point out to you that on two occasions

Members have taken Blues out of the chamber here, and they have been

apparently...? I do not know this for sure. But, at any rate,

transcripts appear to have been used in the newspapers; and they are

doing a disservice to Hon. Members, including, I would point out, the

Hon. Member for Chilliwack (Mr. Schroeder).

MR. D.A. ANDERSON: Mr. Speaker, on that very point. If the

Blues are being circulated to the press, and I believe you're correct

in your statement.... I believe they have been circulated by a

government Member, but that's beside the point. If they are being

circulated to the press, the people who are put in the worst position

of all happen to be the ordinary Members of the Legislative Assembly. I

have in my hand, for example....

Interjections.

MR. D.A. ANDERSON: Could I ask...?

MR. SPEAKER: The answer is no.

Interjections.

MR. SPEAKER: May we get on with the business of the House? There's no appointed time for debate on this subject.

Interjections.

HON. W.L. HARTLEY (Minister of Public Works): Mr. Speaker, I

would like to turn to something more beautiful. I'd like to introduce

10 beautiful tour guide girls who will be working and serving all of us

this summer, starting on May 18. The tour guides will be on duty all

weekend and I'd like to ask you to welcome them. I'm sure they'll be

serving us all well this summer.

Introduction of bills.

LAND REGISTRY

AMENDMENT ACT, 1974

On a motion by Hon. Mr. Hall, Bill 121, Land Registry, Amendment Act, 1974 ,

read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

Orders of the day.

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

[ Page 3020 ]

ESTIMATES: DEPARTMENT OF LANDS,

FORESTS AND WATER RESOURCES

(continued)

On vote 137: Minister's office, $105,352.

On the amendment to vote 137.

MR. W.R. BENNETT (Leader of the Opposition): Mr. Chairman, in

just reviewing some of the questions that were asked and haven't been

answered by the Minister, I think what we've been discussing is a

series of incidents in the takeover of the forest industry that would

indicate an attitude of nationalization or provincialization that

originally was our intent in bringing forth a series of incidents in

taking over mills, clearly required a statement from the Minister on

his intention with his department on the future of the private forest

industry in British Columbia: whether the government is going to be

partially involved; whether they're setting up a major complex in each

region; whether the intent of the government after they set up these

complexes is a continuing expansion until the industry is completely

taken over.

I believe it's in the interest of this House to know the intention

of the Minister for the forest industry. This industry represents over

50 per cent of the income, and jobs in this province are directly

related to it. I believe that a statement of his philosophy is

necessary at this time to clear the air.

I'd like to say that since the takeover of Ocean Falls and the

takeover of Columbia Cellulose, the takeover of Plateau Mills and then

Kootenay Forest Products, we have a pattern emerging where the Minister

is involving the taxpayers' money in activities that were normally

reserved for the private sector.

Now I think what we have here is a philosophical statement that's

required. What is the intention? Is there a timetable? Is there a

schedule for this Minister in his takeover of the forest industry?

The big questions is: can the Minister adjudicate fairly over all

the industries while he has a specific interest of maintaining a high

performance of a government mill in an area where you have surrounding

private mills? Is there not a conflict of interest in adjudicating and

in allocating timber supplies, or in allocating how chips are moved and

the price of those chips?

This is the point we've been trying to make. Secondly, is the

Minister's preoccupation in taking over industry contravening or

misusing the power of his office to achieve the takeovers that cannot

be achieved under normal bargaining conditions? Indeed, can normal

bargaining conditions ever exist when any industry or any company he

wishes to take over continues to operate at the pleasure of the

Minister and at the pleasure of this government?

I think the question we are discussing here is very broad, and it

concerns whether this Minister can so separate his interests in proving

his performance as a major business entrepreneur with public funds and

also remain free to allocate that timber surrounding that mill to other

complexes that may make his management or the management he selects and

directs look weak indeed. And does not the survival of his government

office then start to depend on how well he runs these complexes in

competition with the complexes and the manufacturing complex of wood

products surrounding that area?

The point is bigger than any one mill or any one takeover, but these

form part of the pattern we are concerned about. This Minister

apparently has used powers and suggestions in his office to take over

these companies that are not available in the normal buying or selling

of a company if they existed between private individuals, whether they

existed with private citizens or corporate citizens in this province —

the same clout and the same club and the same advantage to direct the

sale and force the sale and demand that at the government's price.

These aren't available on a normal market. These are powers that are

given to the Minister not so he can take over the industry but so he

can manage it wisely and fairly and allocate the timber not for

government business or private businesses but for the benefit of all

the people of the province, for their benefit through taxation, for

their benefit through employment, and for the corporate benefit of

small timber mills and large timber mills to operate under the

conditions and rules set down by this Minister.

But we have an unfortunate series of events that have been

questioned, not necessarily by me in any personal vendetta with this

Minister, as was suggested by the Hon. Minister of Transport and

Communications (Hon. Mr. Strachan), but in the interests of clarifying

a situation while we have this Minister's estimates and a chance to

question him fully on the whole series of takeovers for the first time

in this Legislature.

Some of these takeovers were taking place during the session of 1973

and we had no estimates in the fall of 1973. Surely it is our duty and

our responsibility as Members of the opposition to question in detail

what he did during these takeovers, whether these allegations from

people involved are true and what intent he has for the future of these

operations and expanding them. They are not built; they are bought.

They are taken over with the public's money and the public has a right

to know.

In the defence of this Minister we've seen not one question answered

as to whether he was right or wrong in his attitudes which are under

question, whether he misused the power in taking over Plateau Mills,

whether the government can be accused of

[ Page 3021 ]

sloppy handling in the case of taking over Columbia

Cellulose and his interference or the changing of the contract and the

allocating of a contract for the sale of newsprint from Ocean Falls.

All of these things must be explained to the Legislature.

We're here to find out for the public, who, through no choice of

their own, now find themselves in ownership of most of these

enterprises. These enterprises weren't listed or detailed in any

platform or policy that I saw. There was no mandate given for the

takeover of these. We would like to know what the intent is, how they

were taken over, to what purpose and what plan, and if it is going to

be the gradual and complete takeover of the industry.

The defence by the Minister himself and the defence by the Hon.

Minister of Transport and Communications (Hon. Mr. Strachan) took great

glee in listing directors of private companies, showing that they had

foreign connections. And this is fine. They are responsible to their

shareholders, but they are also responsible as corporate citizens for

how they cut, and with the rights to manufacture our timber resources

in this province. This Minister and this government has the power to

make these corporate citizens cooperate and operate in the best

interests of British Columbia. Their shareholders have a right to know

beyond that how they are managing their affairs reflecting their equity

investment.

This Minister has a double responsibility in this Legislature. The

taxpayers, through no choice of their own, now are the equity owners of

these enterprises. He also has to explain, on behalf of the equity

owners, his stewardship of these companies and how he took them over.

He also has to explain, as Minister of Lands, Forests and Water

Resources, how he is enforcing the rules that this company operates on.

He has a dual role: one to the investors in equity ownership and the

other to the citizens of this province as to the fairness and his

attitudes in making sure they are being fairly dealt with and dealt

with under the same conditions as all companies are dealt with.

There is a difference between the private sector and the public

sector. Particularly for a government which talks about open

government, there should be no hesitation in tabling documents in this

Legislature to the citizens of this province as equity owners of this

enterprise relating the details of a newsprint contract that has been

questioned in the newspaper and been questioned in this Legislature

since last fall. We only have to bring up the type of discussion we've

had because this Minister has right now on the order paper, out of 72

questions left unanswered, over a third of the questions which are

directly the responsibility of this Minister in not providing

information to this Legislature.

In question period this same Minister has a history of taking as notice and

not providing answers to this Legislature. This is not the open government that

other Ministers talk about. I am not condemning the whole government because

there are other Ministers who volunteer information in advance before, it is

requested. I respect them for it, and I respect them in meeting their responsibilities

for the type of government they said they were going to be operating.

But this Minister feels he is above the Legislature. We do not get

answers to our questions, either orally or on the order paper. We have

not had answers to any of the many questions relating to the forest

industry and the takeover of these companies that were asked last

Tuesday evening. This is what this debate is all about and this

amendment. It is an attitude of irresponsibility in meeting the

commitment to manage this department and this resource to the benefit

of the people. If we can't get the answers we must assume the worst.

We must assume, then, that the Ocean Falls newsprint contract is not

favourable to British Columbia. In fact, we have the statement of Mr

Vesak, the manager and director of Ocean Falls, at various times in the

newspapers stating that the new contract with Gottesman company and Mr.

Wallach had a fixed term going to 1976. We have further statements from

Mr. Vesak in the newspapers that perhaps the return is conservative by

today's standards but they had the security of a fixed agreement, a

fixed price. These are statements from the manager of Ocean Falls;

these are statements from a director of Ocean Falls.

We must assume that this director and manager knows what he is

talking about. We have a right to question it, with the mystery and

with the conjecture and with the detailing of this contract — which the

Minister admits was a bad contract because he has said he has

renegotiated it. You don't renegotiate a good contract; you renegotiate

a bad contract. I think, then, if we renegotiated it and the Minister

is worried about a competitive aspect which doesn't exist in the

newsprint market, the only reason for keeping this contract hidden is

to protect Mr. Wallach and Gottesman national in their selling

arrangements with other corporations.

That's the excuse Mr. Wallach gave for not making it public. His

reason was that it didn't make any difference to the government that he

might have various agreements with different newsprint companies in the

sale of newsprint, and it was to his advantage not to make this

document public — not to the citizens of British Columbia.

Newsprint is in short supply. Newsprint is in heavy demand.

Newsprint has a projected increasing price over the next three years.

That's no time to go for a conservative agreement — we won't get quite

the market price. That's not the time to go for a fixed agreement to

1976 and get less than market. That's

[ Page 3022 ]

the time that the actual management skill in

negotiating contracts comes in. That's where the astuteness and the

ability of the directors and the managers and the people that are

directing the affairs of this company for British Columbia comes in, in

maximizing the sale price on an open and fair market for the people of

British Columbia. That was the reason for taking it over.

But we have to concern ourselves with Ocean Falls. We have to

concern ourselves that it may be that the whole future of this complex

is in doubt. We have to be concerned that we have just had a major

study done by Sandwell. I think that in the interests of this

Legislature, in clarifying the situation, that that study, which I

understand has now been completed, should be tabled in the Legislature.

I am concerned that that study may recommend such things as: "Run Ocean

Falls while this high newspaper market continues, and when it falls

below a certain price, close it forever."

There is concern in the Ocean Falls community that there is no

permanency to this company, that there is no permanency to the

newsprint plant. I think the workers there and the legislators here

should have the benefit of the knowledge of the Sandwell report, as it

relates to the future of the operations of Ocean Falls, such marketing

agreements as this Minister and this corporation have entered into, and

whether indeed there is a future for the employees there. Was it a good

deal for British Columbia? Is it a good deal? Are we being taken on a

poor contract? Indeed, does this contract specify, when it is sold at a

fixed price, and when it has a terminal date going to 1976, that it

can't be sold? No B.C. newsprint can be sold on what is called the

black market.

Is this a condition in the contract? If it isn't why isn't it? These

questions were asked the other night. Instead of answers we have had

attacks on the former government. We have even had attacks on myself,

which I don't mind. But really, what we are trying to get to here is

the operation of Ocean Falls, the operation of the whole Lands, Forests

and Water Resources department, the conduct of this Minister in setting

up a mini-empire and putting the people of British Columbia into equity

ownership, and as to whether he knows the difference in adjudicating

fairly between two companies where he is operating both for the

government in the enforcement of the rules and the equity ownership of

the people on the other hand, in competition and in conjunction with

the equity ownership of private citizens, corporate citizens, small and

large.

Although the natural target is the large forestry complex, many

small companies in this province and many individuals earn their living

in the forestry industry. Many would like to find out if it is the

intention of this Minister to make them civil servants in his takeover

bids. Many would like a statement from this Minister on his intentions.

It all goes back to a history of when he started Ocean Falls,

Columbia Cellulose, and then that controversial one, Plateau Mills.

Plateau Mills, if we go back, wasn't a big forestry giant. It was a

series of shareholders from our province and a collection of small

shareholders from the United States. It turns out that some of the

local shareholders in Canada wanted to sell, and they offered it to

IT&T, and that's fine. I think if he said that that company is too

large, there is a written policy that this government actually doesn't

want any investment from outside our province, if there is a written

policy that this government doesn't want specifically U.S. Investment,

or if this government doesn't want specifically, Japanese investment,

that's fine. But we have seen the rules changed from time to time.

This mill, this sale, was turned down because the Minister said he

didn't want the company bought and furthered by American interests. Yet

in other complexes, in other forestry ventures since then, we have

American investment much greater than the $7 million. The American

investment in other aspects of our economy certainly is greater than $7

million. Yet he said that he didn't want American investment.

If that is the policy of the government, set the policy and make it

for all companies, in all industries. But don't pick and choose as the

mood sits just because you want to use it as a reason to block a sale

to take over a company.

Don't say, in the case of Kootenay Forest Products, that you don't

want Japanese investment in the forestry industry when Crestbrook

wanted to take over Kootenay Forest Products, and almost simultaneously

have the Minister of Industrial Development (Hon. Mr. Lauk) announcing

that he has got a trade trip to Japan to encourage investment in this

province. If you don't want Japanese investment, then say so. But don't

use it as a reason to block the sale of a forestry company just because

you want to take it over yourself.

Come clean with the people. Tell us the motives. Let us adjudicate

on this matter and judge it, with all of the information of your

intention, and why you are taking these steps. Why is it necessary to

use this type of pressure? Indeed, there is pressure — there's pressure

in Kootenay Forest Products and there's pressure in Plateau Mills.

It doesn't mean threatening, or using pressure — the Minister

doesn't have to call them into his office, and say he's going to kick

the censored out of them. All he has to do is say: "You are operating

here at the pleasure of the government. Your very economic future

depends on you being cooperative with us. Your very economic future and

right of survival depends on whether I want you to continue, because

you are cutting under licence to the Province of

[ Page 3023 ]

British Columbia. We, the people, own the

resources, as we always have. You have a right to cut. If you don't

meet our conditions, if you don't sell to me, then of course your days

in this province are numbered. Get out now while the going's good. Get

your price because next year we might not be so generous. We might not

offer you as much."

[Mr. Dent in the chair.]

Make an offer they can't refuse, because when you set the rules,

control the resource and can block any free sale on the free market of

a corporation or a company or a small individual mill, then this person

has no other alternative but to take the offer you make.

When you use excuses like the Minister did in his office in Victoria

when he was talking to the negotiators from Plateau Mills.... The

Minister said that he didn't want the company sold to any American —

not just IT&T but any American. The Minister would say that they

can sell to a Canadian company, but he intimates that the company could

anticipate difficulties that they had not heretofore experienced in the

operation of the mill if they didn't meet his dictates in how he wanted

that mill. Is that a threat? Certainly it is a threat. It is the only

threat that's needed when you have the control and the responsibility

for controlling fairly the management of this resource in our province.

The management of that resource shouldn't just be to the benefit of

acquiring companies. It is supposed to be to the total benefit of all

the citizens. If the Minister is making this choice in his own mind

between public and private ownership, then the public should be privy

to the information he has in making these judgments before he used

these types of tactics to start his slow — maybe not so slow — but

gradual take over of the industry.

Really, is he meeting his commitment to the office when he uses that

office for the purpose of taking over the industry? The province has

the timber. They have collective stumpage. We set the manner in which

it can be cut. We set the ecological controls. We do everything but own

it. We do everything but own the manufacturing facilities.

With that manufacturing facility, they have two rights — the right to make a profit and the right to lose money.

The province collects their stumpage regardless. The Province of

British Columbia collects their stumpage. The Province of British

Columbia has the right to direct how that wood should be cut and to

what recovery rate.

Do we need the additional responsibility or the additional job of

actually running the manufacturing facility? Can we fairly run it where

we have other facilities next door doing the same type of work,

depending on that same Minister who is running this one, to allocate

the timber on a fair basis to allow them economic survival, and on the

fact that he won't favour the mill that now becomes his pet project? He

clearly place himself in conflict of interest.

Interjections.

MR. BENNETT: That 's what I said — the people of the province as the owner of the resources and the collector of taxes.

When he also gets to equal responsibility of equity ownership, he's operating on two different responsibilities.

Interjections.

MR. BENNETT: Mr. Attorney-General, you miss a very major

point here. The very major point is that the preoccupation of an

politician from any party in proving that his managerial I kills are

better than those around him is to favour his own.

I say that when you get into these corporations that is natural. But

because people have only one person to sell to now, when the Minister

uses such types of methods — that you can anticipate difficulties that

you have not heretofore experienced if you do not meet the conditions —

in fact, if you do not sell to the Government of British Columbia....

You don't have the right of free sale of your timber and manufacturing

facility. You don't have any security. The Minister can veto any sale;

there can be only one buyer, so any threat, the implied threat and the

threats that wreched in the case of Plateau Mills....

Interjections

MR. BENNETT: Well does the Minister deny them? I'm asking

question. I'm re-asking questions that were asked the other day,

questions that you've never answered in this House. There are questions

left on the order paper; there are questions left unanswered in all

question periods; there are questions here in the estimates that you

don't answer.

Many other Ministers, Mr. Chairman, answer questions; they volunteer

information. They treat this House with the respect it deserves; they

treat it with the open government they talk about.

But from this department, this important department covering B.C.'s

major resource, we can't get any answers — not only answers to the

management of the resource now that the Minister has embarked on being

an entrepreneur on our behalf — not necessarily by our choice but by

his — but we can't get any answers on how he acquired these

corporations, these companies. By what methods?

[ Page 3024 ]

Methods that are up to question by the very people

he dealt with. Questions and charges that were initiated with them, not

in this House, but with the very people who were forced to deal with

this Minister, people who were offered no other choice when they sold

their mill.

I've asked him: in the charges from the directors of Plateau Mills

who sold the mill and who said that the Minister used pressure to force

them to sell to the government, does he deny that?

In his very office, he said that they could anticipate difficulties

that they had not heretofore experienced. He doesn't have to use the

crudity of saying he's going to kick the censored out of them, which

has been mentioned in other places. His threats can be more subtle,

equally as heavy. It's an offer they can't refuse; they have no other

choice.

We have those American directors who are small individuals. This

wasn't MacMillan Bloedel; this wasn't the white knight charging off to

tackle J.V. Clyne, beard him in his den, or tackle the forestry giants.

This was a little firm made up of many small investors — 90 per cent of

it was owned in the United States.

HON. G.R. LEA (Minister of Highways): IT&T.

MR. BENNETT: He wasn't talking to IT&T here, that was the

buyer he turned down. I'm talking about the way he dealt with the

people who were selling. These are the people who did not initiate that

sale. These people were selling to accommodate the Canadian

shareholders, a group of them, who wished to sell out. This wasn't

dealing with IT&T; this is talking to a group of small individual

investors, people like Mr. Goodwin from just across the line, people

like the American directors who I can list — there's Mr. Brown, Mr.

Goodwin....

These people aren't any mysterious corporate giants; they're people

like you and I. They're concerned about living next door to a country

that may have anti-American attitudes. It was their wish that if the

local vendors, the people who initiated the sale, the people in the

Vanderhoof area, if it didn't sell to IT&T, they wanted to retain

ownership of this company. They wanted to retain ownership.

When it was turned down to IT&T, they would just as gladly have

owned. But why would you want to continue to own in a province that

tells you that you can anticipate difficulties that you haven't

heretofore experienced?

That gives you an idea of the direction which this government is

going: if you aren't taken over today, you might be taken over at a

lower price tomorrow — it's an offer you can't refuse. Next year it's

lower; the next year it's lower. There's only one buyer; sell to us now

when we're in a good mood. Sell to us because we don't want any

American owners. No American owners.

These are the attitudes of takeover. To what purpose? A clear purpose that

has never been defined o this House by this Minister.

Equity ownership for the citizens of British Columbia — and we can't

find out how, why and what is the master plan for taking over these

companies. It's a little embarrassing for us that a Minister

representing the Province of British Columbia would feel he had to use

pressure and threats to take over a company when he won't even tell us

why or to what purpose.

The final deal in this company, Mr. Chairman, was not between any

giants. The giants were gone. It was a group of small shareholders in

the United States and Canada selling out and a couple of small

shareholders or individuals who were trying to arrange financing to buy

in Canada because they understood that it could be sold to Canadian

content.

Now if, as the Minister said, they couldn't sell to them because he

doubted their ability to finance, even though they guaranteed the

financing, it means again that he'll deal only with bigness, that the

individual still hasn't got the opportunity to take a chance and buy a

mill in this province with the hope of achieving some sort of economic

success. But he will sell or guarantee a sale only to a major company.

What sort of doubletalk is this? What sort of doubletalk is it when

the excuse of no American ownership is used in one case, yet you go

ahead and encourage American participation to a much greater degree

somewhere else? What sort of doubletalk is it when you won't allow

Japanese ownership in one case because you really want to take over the

mill, yet other departments of this government are encouraging it

somewhere else?

This whole Plateau Mills situation all on its own — forgetting the

same type of tactics that were suggested in Kootenay Forest Products,

suggesting the unusual circumstances surrounding Columbia Cellulose,

suggesting the fact that....

This Minister even questions that we have the right to find out

reasons why he appoints certain directors to the company. In Can-Cel,

he says: "Why wouldn't I employ the largest envelope maker in Kansas

City?" That's fine, but if envelope making is a criteria, what was the

criteria for being a director? What are the qualifications? If it's

making envelopes, we'd like to find out why the Canadian envelope

makers weren't included, why we had to go to four people from outside

Canada with a lot of experience that, in fact, control this company.

And on what recommendation?

I'm concerned again when we're talking about Mr. Wallach. The

Minister who appointed him as a director said: "When he was made a

director, I hadn't even met him." Well, what mysterious person told him

he had to appoint Mr. Wallach if he hadn't already met him? How was Mr.

Wallach's name plucked out of the hat or out of thin air? I'd rather

[ Page 3025 ]

he said he knew him. At least we'd know there'd be

some connection, that he had high confidence in his ability because he

knew him for many years. But he said in the Legislature here the other

day: "I've never met the gentleman." But he's met him since, I'm glad

of that. But he said he'd never met him at that time. He said he's met

him since. Well, with the deal we've got at Ocean Falls, a lot of us

wish he hadn't met him since either.

Going back to Plateau Mills: forgetting all of the other activities,

all the concerns and all the other mystery and all the other concerns

surrounding all of these other areas, what about Plateau? What about a

Minister that would threaten anybody that if they didn't sell to this

government they would experience difficulties they hadn't heretofore

experienced in the operation of the mill in British Columbia?

I'd like to read a letter from one of those negotiating people who

met with this Minister in his office. It's from Mr. B.R. Goodwin, 1065

East Walker Street, Blackfoot, Idaho. It's addressed to Mr. Bill

Bennett, Leader of the Opposition. He says, regarding this deal:

"The proposal to sell Plateau Mills arose from an unsolicited offer from IT&T to purchase our mill at Vanderhoof, B.C.

"The U.S. partners did not want to sell the mill at

all, but agreed to cooperate with the Canadian partners who initiated

the discussion regarding selling the mill. It was agreed by both

Canadian and U.S. partners that if the IT&T sale failed to

materialize, Plateau Mills would no longer be for sale.

"An offer of approximately $8.6 million was made by

IT&T in 1972, and after some months of negotiation in which

IT&T and ourselves spent thousands of dollars in auditing fees, we

obtained approval to sell to IT&T from the Canadian federal

government.

"We then sought approval of the sale to IT&T from

the British Columbia government, but were told by the Hon. Robert

Williams that we could not sell the firm to the IT&T, or to any

American, period.

"In view of B.C.'s encouragement of Japanese

investment, as well as the fact that the government is seeking

investment from other countries, we found this objection from the

Minister in regard to American investment very surprising."

Interjection.

MR. BENNETT: It is surprising. It wasn't because IT&T was

too big; it was because they were American. It was not because they

were a corporate giant but because they were Americans. The Minister of

Highways (Hon. Mr. Lea) applauded because he doesn't want them as

tourists — he said that. He doesn't want them as investors, and he

doesn't want any cooperation between the two countries at all.

I go on:

"In the meeting held in the Minister's office in

Victoria where the 'no American' statement was made, the Hon. R.

Williams gave our firm three alternatives following his veto of the

IT&T sale. One was to sell to the government. Secondly, we could

sell to a Canadian firm or individual. Thirdly, we could maintain to

operate ourselves.

"In the second and third propositions, the future

success of Plateau Mills seemed questionable — questionable when the

Minister intimated that we could anticipate difficulties that we had

not heretofore experienced in the operation of the mill."

Who would want to continue under a situation like that?

"Knowing that every mill operates in B.C. at the

government's pleasure, and that timber quota and supply is at the will

of the government, we realized that anything other than selling out to

the government itself would be difficult — this in spite of the fact

that we had planned to stay on if the IT&T deal fell through.

"In the same meeting Mr. Williams referred to the NDP

government in Saskatchewan and wanted to make it clear to us that the

B.C. NDP government would not be embarking on a like programme of

starting up businesses, which he referred to as a mistake. Rather their

idea was to take over established businesses such as Plateau.

"Another remark made by the Minister confirmed our

decision to sell out to the government. After the Minister said that he

personally would prefer to take Plateau Mills. over in the same manner

as Allende confiscated industry in Chile, we began to feel that we have

little choice between retaining the business or selling out at that

time, in spite of our original desire to keep the company together and

operate it.

"We were very happy with our association in B.C. The

partners never took a dividend from the company, but continued to

reinvest in the company, building it into one of the soundest and most

successful lumber operations in the province.

"This will give you some idea of how the sale ever

came about to the B.C. government. As one of the U.S. partners, I can

assure you that we enjoyed our association with the Canadians and

appreciated being a part of a pioneering northwest forestry operation,

[ Page 3026 ]

Plateau Mills.

"Yours truly,

"B.R. Goodwin."

This is not any charge from inside the House. This is a letter sent

to me repeating some of the statements made by these directors and

shareholders when this company was taken over.

HON. MR. LEA: An unbiased report.

MR. BENNETT: Certainly it would be unbiased. This man is

gone. He's no longer in Canada. He offered this letter only on an

informational basis.

At the time that some of the directors were questioned — and it

might be wise to question them again — they hadn't received their

cheque. Who's going to say anything till they've got their money and

gone when they are now dealing with a country that operates like a

banana republic?

I think that that conduct in office is indefensible. I think that

the citizens, when they elect their public representatives and when

they're given additional responsibilities in the cabinet, have a

responsibility of behaviour. Over and above that, their directions on

where they're taking a department as important as forestry in the

Province of British Columbia....

Interjections.

MR. BENNETT: The Highways Minister, Mr. Chairman, is quite

free to discuss his department when his estimates are up. We're here

trying to get answers from a Minister who hasn't provided answers in

this House. This department is important.

You may think it's smart and funny to use some sort of old attack,

and you can do that because politicking is allowable outside the House,

but inside, in committee now....

AN HON. MEMBER: No politics in here, though.

MR. BENNETT: ...we're trying to find some answers about the

direction of this department. We're trying to find answers on where the

department is going and why certain events took place. We are trying to

find clarification on charges that were initiated outside this House.

Interjections

MR. BENNETT: I didn't know the mail stopped at the border now. That might be the next....

MR. A.V. FRASER (Cariboo): How is the research coming into the potholes?

MR. BENNETT: I think that it's important enough, and it may

be that some of those Ministers over there, Mr. Chairman, are

insensitive enough not o spot the conflict of area and management and

responsibility. Some of them may be insensitive enough that they don't

realize the responsibility of office to ethical behaviour of no threats

and of not utilizing any pressure, and that indeed they're more than

individuals on a power trip trying to be major lumber barons. They're

here to serve the people of British Columbia.

There's information regarding all of these deals which causes

concern in British Columbia. There's information regarding Ocean Falls

that isn't presented in this Legislature. There is the Sandwell study.

There's the agreement with Gottesman and Company. There's the fact that

this director of Can-Cel can be the president of a company now that he

has an inner connection with this government to make an agreement that

isn't being shown to this House. There's even the reason the Minister

gave that it's for competitive reasons, which is not a valid reason in

the marketing of newsprint. If, as he states, he has negotiated this

contract and filed the one that existed before- the one he just

negotiated, let the people be the judge.

MR. R.T. CUMMINGS (Vancouver–Little Mountain): The Leader of

the Opposition (Mr. Bennett) seems to have obsession with the word

"takeover," probably with good reason because he knows how to takeover.

Do you remember November 17? Does the Hon. Member for Langley (Mr.

McClelland) remember November 17? Did you think ability was enough?

MR. CHAIRMAN: Order, please!

MR. BENNETT: Point of order. In keeping with the whole

defence of some silly little attack from this government, they have now

got the Member almost capable of doing that type of attack on his feet,

inasmuch as it's hard to read in the Blues afterwards. Nobody knows

what he says.

That has nothing to do with the estimates of this Minister; it's in

keeping with the speech made by the Minister of Transport and

Communications (Hon. Mr. Strachan) in this debate and others, who

rather than answer and defend the department are using attacks of

situations not relating to this department.

MR. CHAIRMAN: Order, please! On the point of order....

MR. BENNETT: Mr. Chairman, you should call it before I have to bring it to your attention.

MR. CHAIRMAN: Order, please! On the point of order raised by the Hon.....

[ Page 3027 ]

Interjections.

MR. BENNETT: If You were any good you'd still be Leader.

Interjections.

MR. CHAIRMAN: Order, please! I would appeal to Members on both sides of the House....

Interjections.

MR. CHAIRMAN: Order!

Interjections.

MR. CHAIRMAN: Would the Hon. Member for Vancouver–Little Mountain (Mr. Cummings) remain in his seat, please?

Interjections.

MR. CHAIRMAN: Order, please!

Interjections.

MR. CHAIRMAN: Would the Hon. Members...? Order, please! Do the Hon. Members wish to proceed with the business of the committee or not?

AN HON. MEMBER: I never heard the Chairman move to rise to report progress. Maybe it can be done.

Interjections.

MR. CHAIRMAN: Would the Hon. Member for Vancouver–Little Mountain be seated for a moment?

Interjections.

MR. CHAIRMAN: If the Hon. Members are ready to proceed with

the business of the committee, on the point of order made by the Leader

of the Opposition, the point is well taken. The Hon. Member for

Vancouver–Little Mountain (Mr. Cummings) was clearly proceeding in a

direction which was not directly relevant to the Minister's estimates.

I would ask him to relate his remarks to the Minister's estimates

before us and to the amendment.

MR. CUMMINGS: Can I use the work "takeover" — just like the Leader of the Opposition?

MR. CHAIRMAN: Order, please. In regard to the point of order

we are dealing with an amendment that the Minister's salary be reduced

by $1 because of a lack of confidence in his administrative

responsibilities. You are to speak to that amendment.

MR. CUMMINGS: Well, let's talk about Plateau Mills. The

citizens are very, very happy. They are making lots of money. There was

a red herring here — lots of red herrings. In fact, one of the worst

red herrings was the phony offer from Smithers. It was backed by the

Household Finance in the Social Credit Party. You know, those

backers....

MR. BENNETT: On a point of order, Mr. Chairman, this Member

said that there was an offer made in the private industry to buy a

mill, and he said that it was backed by the Social Credit Party. At no

time, either through the private industry or through any elected

office, will this party be part of takeovers. Would you ask him to

withdraw it?

MR. CHAIRMAN: Order, please. It is not a point of order. The

Hon. Leader of the Opposition may correct the statement when he again

takes his place

MR. D.M. PHILLIPS (South Peace River): Ask him to withdraw.

MR. CHAIRMAN: Order, please! I would ask the Leader of the Opposition to state under what standing order he is making his request.

MR. BENNETT: I'm asking him to withdraw an untrue statement. There have been withdrawals demanded in this House.

MR. CHAIRMAN: Order, please! The Leader of the Opposition may rise on a point of order and correct this statement. It is left at that.

MR. BENNETT: On what basis, Mr. Chairman, can I ask someone to withdraw?

MRS. P.J. JORDAN (North Okanagan): Mr Chairman, come out of the clouds! You read through Hansard and the bias of the Chair is sickening!

MR. CHAIRMAN: Order, please! The occasion for asking an Hon,

Member to withdraw his remark is if it is an offensive remark under

standing order 43 (2), If it is an incorrect statement it may be that

the Hon Member could be mistaken. It is quite permissible then for

another Hon. Member to rise and make a point of order to correct the

statement, preferably after he has completed his remarks. But it is not

necessary to ask him to withdraw it. It is just a matter of correcting

the record on an incorrect statement.

MR. BENNETT: Mr. Chairman, on a point of information, do you

mean this Member can continue on that basis without my having the right

to ask him

[ Page 3028 ]

to withdraw where I consider that he is...?

MR. CHAIRMAN: Order, please! Where there is disagreement

about the facts of a situation it is permissible for a Member on a

point of order to correct the statement but not to ask him to withdraw

it unless the remarks are offensive under standing order 43 (2). I

would ask the Hon. Second Member for Vancouver–Little Mountain to

continue.

MR. CUMMINGS: We were talking about Plateau Mills. This phony

offer that came from Smithers — they couldn't even get their financing

from Household Finance. This isn't a real offer, yet the papers made a

big deal of it. When you really want to talk about takeovers, ask the

Hon. Member for Columbia River (Mr. Chabot) what it is like to be taken

over by sheer money.

MR. CHAIRMAN: Order, please! I would ask the Hon. Second

Member for Vancouver–Little Mountain to keep his remarks strictly

relevant to the amendment before us.

MR. CUMMINGS: A real takeover is done this way....

MR. BENNETT: On a point of order, I think you should direct

quite clearly that this Member does not have any information on the

forest 'industry. His whole presentation is mischievous. I wish you

would direct him as to what estimate we are on, just so that he may

know. We are on the Department of Lands, Forests and Water Resources

and we are on the amendment to the Minister's salary.

MR. CHAIRMAN: Order, please! The Hon. Second Member for

Vancouver–Little Mountain may proceed. Keep your remarks strictly

relevant to the amendment before us, please.

MR. CUMMINGS: Between the Chairman and the Leader of the

Opposition I feel like I am being hammered down here pretty badly.

There seems to be a lack of free speech.

SOME HON. MEMBERS: Oh, oh!

MR. CUMMINGS: I can hardly open my mouth without them hollering.

Interjections.

MR. PHILLIPS: You are embarrassing the Deputy Premier even.

MR. BENNETT: Roy, you'll never make the cabinet now.

MR. CUMMINGS: He'd only be an office boy in IT&T if it weren't for being born into a noble family.

MR. CHAIRMAN: Order, please! I would ask the Hon. Member not to make personal references but to keep his remarks strictly relevant.

MR. CUMMINGS: Do you know who I am meaning? This is ridiculous. You won't let me speak so let's call the question.

MR. BENNETT: Are you proud of him, Jim?

MR. G.F. GIBSON (North Vancouver–Capilano): This didn't

exactly start out as a jolly and productive day and it has been going

downhill ever since. We have spent three days rattling around in one

little corner of the Minister's vast empire.

Interjection.

MR. GIBSON: That's right. That was exactly what I was going

to say, Mr. Minister. We were put there in the first place by the

amendment moved by the Leader of the Opposition. We have unfortunately

been kept there for three days by the intransigence of the Minister in

his unwillingness to reply.

I would very much hope that we can get off this subject this morning

and deal with the amendment and then get on to some of the other

concerns of this Minister like, for example, the whole taxation

structure of the forest industry and the Pearse commission and things

like the Columbia River and nuclear energy and....

MR. CHAIRMAN: Order, please! I would ask the Hon. Member to confine his remarks to the amendment, please.

MR. GIBSON: Mr. Chairman, since the amendment relates, as you

stated, to the Minister's administrative responsibility, I presume it

is not out of order to enumerate some of his administrative

responsibilities, which is what I was doing.

I'll return to the narrow terms of reference of the points made by

the Leader of the Opposition. He elaborated somewhat today on charges

concerning the takeover of Plateau Mills. He raised a couple of

questions which I think the Minister must answer.

Did the Minister really, in his office, confirm a refusal to approve

the sale of Plateau Mills to any American — any American whatsoever? A

very simple question. Could the Minister respond to it and could he

then describe where he gets his legislative authority for that kind of

stand, if that was indeed his stand? To the best of my knowledge this

Legislature has not, as yet, adopted a policy on foreign ownership. I

have strong views on foreign

[ Page 3029 ]

ownership. Many other Members of this assembly do.

But the point that must concern any of us is the unilateral executive

exercise of such power without legislative authority in debate.

Secondly, did he tell the then owners of Plateau Mills that they

would run into unforeseen difficulties if they didn't do what the

Minister wanted them to do — namely to sell out to the government? If

he did indeed do that, what did he have in the back of his mind? Was

this more backroom muscle which we have seen used before in this

government?

That is the essence, as I see it, of the two charges on Plateau

Mills. This Minister can, I think, stand up and deal with those pretty

quickly this morning.

We move on to the matter of Ocean Falls on which much more time has

been spent. The charges from the opposition so far have been pretty

thin. I'll go over them briefly.

The charge is, first of all, that the Minister has allowed Ocean

Falls to deal with a large international organization. I think that is

undoubted. "Gottesman is a Giant" is a headline in the Province this morning. This brokerage firm is a large international organization, but that is not, of itself, wrong.

The Leader of the Opposition has gone on to imply and I say only

"imply" because I have been unable to find a specific statement on this

— that the Minister has been condoning the sale of Ocean Falls

newsprint on the black market of the world and specifically of the

third world.

Ah, but it is the phrase "black market," Mr. Member. That is what it is called.

The Minister can very simply stand up and reply to that.

The Leader of the Opposition has also said the contract held by the

government with Gottesman is a bad contract and he has made some

statements which disagree with the Minister's

interpretation of that

contract. For example, is it fixed price or not? If the charges from

the opposition have been pretty vague and pretty unsupported, the

Minister's answers have been no better and have caused the continuation

of this debate.

The Minister, for example, in reply to the charges that the contract

was not a good one, has said the contract provided that prices would be

better than the west-coast price. Mr. Chairman, when you are dealing on

an international market that is booming, when the demand all over the

world is very high, when the west-coast price is basically fixed by

long-term arrangements between established sellers and established

buyers, that price is naturally going to be lower than the

international price. Naturally the spot market price will be better.

Any company that chooses to high-grade the international market and

chooses to get all that the traffic will bear at a time of scarcity is

going to make more money. That same company, at a time of growing

capacity, is going to find those markets dry up because the established

producers with excess capacity will start selling their excess capacity

more cheaply than a high-cost producer like Ocean Falls.

It is no defence against this contract being a bad contract that the

base price is higher than the west-coast price. It should not only be

higher under the circumstances of this company's trading, it should be

tremendously higher. The Minister hasn't made anything specific there

at all.

Next, he is hiding behind the argument of corporate secrecy on the

grounds that disclosure of this agreement would hurt what the Minister

refers to as this little British Columbian company in this giant world

of international trading companies. I suggest the Minister isn't hiding

behind corporate secrecy because it would hurt the company; I suggest

he is hiding corporate secrecy because it would hurt the government if

the deals of this contract were revealed.

The contract has not been tabled and it must be tabled. There have

been too many suspicions raised. The Minister has raised some of those

suspicions himself by saying that the original contract had to be

renegotiated and it is under renegotiation again. I think this House

might well be tolerant of that sort of procedure if we knew the details

of the original contract and the current contract, and if we knew the

government's targets in going ahead with its renegotiation. We

appreciate that you make the best deal you can at the time. Then times

change and you try to make a better deal. That is why it is very

dangerous in this day's world to enter into long-term, fixed-price

arrangements unless you get an awfully good deal on the other side.

But as much as the government might dislike it and as much as they

might want to keep these things secret, I suggest to them that it is an

inevitable outcome of the extension of the government into an

operational role in the economy. It is a well-established principle of

government that, wherever there is authority, there must be

responsibility. That's the opposite side of the coin. Very specifically

there must be responsibility to this Legislature.

The NDP has talked about the virtues of decentralization. I hope the

Minister of Industrial Development, Trade and Commerce (Hon. Mr. Lauk)

is listening to this because he surely will approve. The ultimate

decentralization in business terms is private enterprise. The Minister

of Industrial Development knows that. He has to suffer in a cabinet

that thinks otherwise.

Interjections

MR. GIBSON: The Minister of Health wants to talk about GM, but I didn't know they were in the

[ Page 3030 ]

forest business, Mr. Chairman.

Interjection.

MR. CHAIRMAN: Order, please! Would the Hon. Member please proceed with his remarks on the amendment?

MR. GIBSON: I suggest the bigger business units get, the less

real decentralization there is, to answer that Minister. When the

biggest unit of all gets into business, which is the government, then

your decentralization is completely lost. Government should regulate

industry, not run industry. When the government gets into that joint

set of responsibilities, it gets into a conflict of interest inevitably.

MR. CHAIRMAN: Order, please! I would ask the Hon. Member to

confine his remarks to reasons why he would support or not support the

amendment before us, rather than getting into a discussion on the

philosophy of the forest industry. Would he relate his remarks to the

amendment?

MR. GIBSON: Mr. Chairman, I am just suggesting that this

conflict of interest is the one that makes it obligatory on this

government to make public the information that this Legislature and the

people of British Columbia need to judge whether these conflicting

responsibilities are being properly exercised.

If the government simply wants the authority to know what is going

on in a business so they can properly regulate it — so the forest

service can make sure the cut is done properly every year so the

necessary taxation can go properly forward — that is one thing. That is

one authority with a commensurate degree of responsibility on the other

side.

If the government wants authority to subsidize in some areas, then

it starts spending the public's money on business enterprises and its

degree of responsibility for the operation of those enterprises goes up.

But if it wants to go all the way and take unto itself the authority

to operate a business — and there can be no question that this Minister

on the board and with his power to issue instructions to Ocean Falls

and Cen-Cel has authority to operate — it seems to me that operational

details must be made available to this Legislature. One of the most

important operational details and, indeed, the centre-piece of this

whole amendment debate is the contract.

The Minister can very simply do two things. He can table the

contract and he can give us an assurance, first making his own

definition of "black market" in any way he might wish, that none of the

Ocean Falls newsprint is finding its way into newsprint black markets

of the world.

Alternatively, he can say that it is and give reasons why it should

and why this is for the benefit of the people of British Columbia. Mr.

Wallach, president of Gottesman, is quoted in the Vancouver Province as saying:

"In answer to your question about whether I have any

comment on that, I will say that we are not selling newsprint at any

gouging price."

He then repeated that Gottesman sells at the standard Canadian newsprint price.

AN HON. MEMBER: What is the standard Canadian newsprint price?

MR. GIBSON: Exactly. The Member says: "What is the standard Canadian newsprint price?" The Province says they were unable to find what a standard Canadian newsprint price is, particularly in the markets of the world.

Interjection.

MR. GIBSON: Would you ask that Minister to pave a pot hole, Mr. Chairman?

What is the standard Canadian price that the Minister's contractor,

Mr. Wallach, feels he sells at? Could the Minister just give us those

details? Who's right: the Leader of the Opposition or Mr. Wallach? Is

this contract a fixed price or not? We have heard repeated charges from

the Leader of the Opposition that it is a fixed-price contract. We have

heard Mr. Wallach say it is not a fixed-price contract. We have heard

the Leader of the Opposition say it is a black market. We have heard

Mr. Wallach say he is not selling anything at any gouging price. Could

the Minister clarify that for Members of this House before we vote on

this amendment which, as I say, Mr. Chairman, I hope will be soon?

Could the Minister also answer another very specific question about

the relationship between Gottesman and the British Columbia government

and, in this case, Can-Cel? In an interview here with Mr. Wallach, Mr.

Wallach is reported to have stated that he didn't believe that there

was any conflict in his firm having the Ocean Falls contract while he

is a Can-Cel director.

Well, that is an interesting statement which we might go into at

greater length later. But I would ask the Minister very specifically:

does Can-Cel have any business dealings with Mr. Wallach through

Gottesman International or in any other way? Does Mr. Wallach have

relationships with Can-Cel of a business nature other than his simple

presence on the board of directors? That is an important question in

this matter of conflict of interest.

Finally, Mr. Chairman, while the Minister is considering what

matters he might table, I would suggest that the public has paid a good

deal of money in recent months for an in-depth study on Ocean

[ Page 3031 ]

Falls done by Sandwell. The public has paid for this study. The government has received that report.

The Minister has agreed that it has received that report. I asked

the Minister in this House if he would table that report. He said that

he would not.

Mr. Chairman, I ask him again to table that report. If he refuses

to, I ask him how he possibly justifies a so-called open government,

having got a report of this kind critical to the future of one of the

enterprises now owned by the people of British Columbia, critical to

the future of the people of Ocean Falls who are very concerned about

it. How can he justify not tabling that report, allowing that concern

to continue and not allowing this Legislature — to which I hope this

government is still responsible — to have the facts to decide whether

the arrangements the government is making on Ocean Falls are good ones

or not?

MR. D.A. ANDERSON (Victoria): Mr. Chairman, the claim that

Ocean Falls newsprint is being sold internationally and that we are

losing out up to $20 million — I say "we," being the people of British

Columbia — occurs on tape 308-1 of the draft Hansard .

I am looking at that at the moment. First effective line says: "If

we were selling...we would get" so much. "In some sales the price has

gone" up to so much. "It is...unlikely.... If we take it to $

500...there can be an excessive...profit...." The countries that would

be buying newsprint on the black market...if the price was $213...if

Gottesman International...et cetera. Turning over: "These people are

probably buying Canadian newsprint...and so on, ad infinitum.

The whole tenor of the claim has not been researched properly and is

based on speculation. It was, as the Member for West Vancouver–Howe

Sound (Mr. L.A. Williams) pointed out, a tenuous argument, saying that

if this was done something else might happen, therefore if those two

things took place, a third thing might have happened. And this goes on

and on and on throughout the charges made. It is poorly researched; it

is not based on factual knowledge. At least, if there is information,

it has not yet been released.

The reason I raise this is that we are much in the position of those

with hindsight. In this Legislature we are looking back at the efforts

of the Minister, and back of the efforts of the company. And you know,

when he made the original deal, prices were different, circumstances

were different. There may well be excellent justification for the deal

that he made.

It may well be that this type of approach of taking the very highest

market in the world.... I don't know where it may be — it may be 10

rolls of newsprint, 10 tons out of a world production of many, many,

many millions — saying, "Aha, if we sold everything at that price, we

would be millionaires." That's the same type of thing as those people

who run around kicking themselves for not buying IBM stock 25 years ago

because if they spent $5,000 on it, they would now have $500 million in

the bank — things of that nature.

It is a type of construction based on the iffy propositions of

market which is very difficult, as the Member for West Vancouver–Howe

Sound, pointed out for us to accept. It is not a good case.

The claims made and the figures given are based on no affidavits or

any information whatsoever. They are not based on anything but

speculation.

The Minister's estimates are up, and we have said this — the Member

for West Vancouver–Howe Sound made this point. The point was made by

the Member for North Vancouver-Capilano who just sat down. I would like

to repeat it: the fact is, the charges which the Minister has to answer

are pretty strange.

But then you get onto some other statements made, and this worries us a lot more. I quote again:

"...because of their close relationship with this

Minister" — that is the Minister of Lands, Forests and Water Resources,

Mr. Chairman — "because of their close relationship with this Minister

and this government — the relationship and the directorship of Can-Cel

— they have made themselves a favourable arrangement..."

Now, it is a claim there that because of special influence and

special position there were selling arrangements made and influence

used which led to massive profits. Well, the massive profits have been

totally unproven, but the charge has been made. I, like the other

Members of my party who have spoken, regret that we have not had from

the Minister information which deals with this charge.

Is there a question of special interests? How did Mr. Wallach get on

the board? Is his position on the board in some way prejudicial to his

position as a sales agent for the Ocean Falls corporation? Perhaps I

should reverse that and ask: is his position as a sales agent from

Ocean Falls something that would, should preclude him from being on the

board? I am not sure that it should. After all, you want on your board

information on world prices and selling arrangements. But again, the

charge to be made of special influence and: "...the relationship with

this Minister and this government which has led to massive profits on

the black market." The black market, I might add, which has never been

defined by anyone who has put it forward in this House.

I don't quite know what you meant by a black market in newsprint,

because certainly no one yet has defined it. It is clear that there are

varying prices around the world, depending on supply contracts. But

whether a black market or illegal market really exists has not been

stated, and certainly not proven.

So I trust that the Minister, when he speaks, will

[ Page 3032 ]

discuss the issue of conflict of interest. Should

that man be where he is? Is he taking advantage of a special position

to make special profit? Finally, the other question: was the agreement

between the company and his sales corporation a good one from the point

of view of the people of British Columbia?

There is another aspect which I trust the Minister could make public. I can see no reason for him not to make this public.

Mr. Vesak of Ocean Falls made statements regarding destinations of

paper from his mill — or from our mill, the government's mill at Ocean

Falls. He named a number of countries. He talked of Argentina; he

talked of other countries of the world where the production was going

to. So quite clearly, if the mill manager knows where it is going to,

he probably also knows the amounts. Why is it that the Minister will

not make this information public? He must have it or can certainly

obtain it very easily, and which certainly any member of the press — or

ourselves, I guess we could say — could obtain by sending someone or

having a person in Ocean Falls simply check with the guy who puts the

stencils on the side of the rolls of paper. This is not confidential

information. Surely, this type of information, which has been

requested, which could deal with some of the issues raised could

certainly be made public by the Minister.

I raise these points because we have here a company which the

Minister is constantly trying to portray as just a company like the

private companies. But that is not the case. Public money has been used

to purchase it. Public money has been used in its operation. It is

owned by the public, and the shareholders are represented by us in this

House, by Members of the opposition in particular.

A public corporation is not in the same position as the private

company in the industry. The Minister knows this full well. The

arguments that somehow or another because they are in competition with

other companies, therefore, information need not be made public, is

pretty fallacious.

This is a tremendously convenient argument. But it obviously does

not hold water because public moneys are involved. That is a whole

distinction which I think the Minister should address himself to. It is

a good indication of why public companies should not be formed in areas

where they are in competition with private enterprise.

We have here a company whose success or failure, as the last few

days have shown, is clearly tied to the Minister's reputation. They're

meant to be in competition with the private sector. Who knows? They

might be doing fairly well in competition with the private sector. But

the Minister's reputation is involved and it therefore becomes

incumbent upon him in the House to give some sort of accounting of his

stewardship of that particular company; and we haven't had it.

It's a very good example of why, when a government gets involved in

business, you have conflicts of interest; you have the possibility of

special favours from the government to that particular company; you

have the possibility of others being placed at a disadvantage as the

government tries to protect its own reputation as well as, of course,

the public interest. It's a clear indication of how the regulatory

function of government collapses under the strain of having public

companies competing with the private.

The regulatory function simply doesn't exist when it comes to the

public company — and I'm glad the Minister of Mines (Hon. Mr. Nimsick)

is listening, because he also is going to have this problem with a

vengeance if he gets into the mining field.

Now what were the terms of the original contract? Surely the

original contract can be made public. Surely the claim of Mr. Wallach,

who flatly denied that there were any black market dealings, who said

that all the newsprint that his company obtained from Ocean Falls is

sold under contract at "the standard Canadian export price" — it may

not be an absolute, fixed, dollars-and-cents price precisely, Mr.

Chairman, but probably that means within a certain range — who said

that this price fluctuates according to the importing country and this

is well known in the industry, who said: "We sell it at exactly the

same price charged by MacMillan Bleodel, Crown Zellerbach, or anybody

else," who said that this applied to every kind of newsprint from Ocean

Falls and none was put aside for any other kind of deal, and who

further said: "We happen to be a very reputable organization;" and

finally he said that he couldn't discuss the terms of his contract with

Ocean Falls because he deals with other suppliers in Canada.... These

are all reasonable statements from this man, all statements which could

be confirmed by the Minister in two or three minutes in this House.

I cannot understand the reluctance of the government to at least

give the minimal information to the people's representatives — to the

shareholders' representatives in this instance. Charges have been made

of a close relationship with this Minister and this government which

has led to "a favourable arrangement" for Gottesman and, of course,

Wallach.

Now this is a pretty serious charge, and the Minister really cannot

ignore it by simply saying that it's unproven — which is true. He

cannot ignore it by saying that it should act as a private company, and

private companies wouldn't have to answer such a question. It's not a

private company; it's a public corporation, and we represent the public

interest- at least in regard to the questioning.

I don't wish to proceed at great length on this but I would like to

point out that we are reaching a situation where private companies are

becoming

[ Page 3033 ]

infinitely more responsive to public pressure,

public concern, awareness of the public on issues such as the

environment and others than are the Crown corporations or public

companies.

We have examples even in Japan of people attending shareholders'

meetings, getting up and questioning the largest corporations in the

world as to their dealings in war supplies, napalm, things of that

nature, and getting results vis-à-vis the management of these companies.

We have a situation in the United States where the same thing takes

place, where private corporations have become responsive to the public

will and the public concern. We see in British Columbia, I think, a

dangerous development which is that under the guise of protecting the

competitive position of public corporations, no information will be

made available to people who ask questions which are legitimate. Let me

repeat: I do not feel the case has been proven. I feel it's very

tenuous; I feel it's tenuous because, of course, they've taken

hypothetical major markets in a very, very small area of the world in

terms of the market for pulp and paper and this has been interpolated

into potential losses of up to $20 million — in other words, an

assumption that this price prevails in many other markets as well. This

is obviously fallacious. The Minister knows this, I know this and I'm

sure that the person who put it forward now knows that.

We've talked about a black market — again totally undefined. There

is no illegal market ever mentioned that I know of. We've talked of

this relationship between Wallach and the government — I think without

evidence — without anything more than has been put forward. Really and

truly, there isn't much proof of that; in fact, there is virtually none

at all except the claim.

At the same time we're faced by a government attitude which gives

credence to these charges because they refuse to take what are

reasonable steps to deal with reasonable requests for information. If

the government wished to prove that they had given, as has been

claimed, a special deal to our friend Wallach because of his close

connection to the Hon. Minister of Lands, Forests and Water Resources

and the government, they could do nothing better than what they are

doing now: namely, refusing to answer reasonable questions and adopting

instead an arrogant attitude, which is that there is no need to provide

information of any sort to the opposition,

I agree with the Minister in his statement that fixed-price

contracts such as the Columbia River, such as the deal on the Skagit,

agreements such as the Wenner-Gren, are pretty poor examples of

business skill. There's no question that I agree with him there, and

our Members have discussed that and I won't go on to it. But that

really is not relevant to the charge, or claim, made on the question of

Ocean Falls.

Ocean Falls was not a public corporation during the administration

of the previous government. It was not. It is now under the

administration of this government. There are legitimate questions which

have been asked as well as some wild claims.

I can only ask the Minister, when he gets up to speak — as I trust

he will — to deal with some of these, because this constant refusal to

answer only suggests there is something to hide.

It the answers are given in good faith and there are areas where the

Minister explains why secrecy is necessary, probably public opinion and

good sense will prevail and he will escape criticism for making such

statements. But when he refuses both the illegitimate questions as well

as the legitimate, when he refuses totally to make any information

public of any sort, he risks having people believe that he does not

wish to answer good questions, that he does not wish to answer

legitimate questions and he does not wish to answer illegitimate

questions — and the reason is identical: because he's got something to

hide.

I urge the Minister, prior to passage or defeat of this amendment,

to get up and tell what he can in the most frank and candid manner.

Sure, there may be things which he feels he cannot reveal, but so far

we've had nothing except a total refusal to answer. That's a type of

thing which leaves a certain ring of truth, a certain cloak of truth,

around many statements which I feel to be thoroughly unproven,

unresearched and, indeed, unfair.

MR. D.E. SMITH (North Peace River): It's obvious that the

Minister has decided that the best defence of his position is to sit in

his place and reveal nothing to the Members of this Legislature, in

much the same manner as he had revealed nothing to the people of the

Province of British Columbia concerning the operations of his

department. For a Member of this Legislature that was so vocal as a

Member of the opposition, it's strange how silent he has become since

being appointed the Minister of Lands, Forests and Water Resources.

We've asked a number of important points. Regardless of how the

Members of the Liberal Party have tried in one way or another to

discredit the arguments that we have made and then turn around and say:

"Unfortunately, because the Minister does not answer any of the

charges, we feel that the Minister is not fulfilling his duty," there

are specific charges to be answered, Mr. Chairman.

We made a case on the basis of documented evidence. It's a case that

was carefully researched, and the people of British Columbia are

entitled to answers. They've not received any answers from the Minister

outside of this House. As long as that Minister decides to maintain a

veil of silence in the House, the people of British Columbia will never

[ Page 3034 ]

really know what is going on within the Department of Lands, Forests and Water Resources.

It's not an attitude or a manner which happened overnight; it's an

attitude and a manner that was adopted by the Minister right after his

appointment to the position he now occupies.

Yes, we've said it before and we'll say it again: the only defence

he seems to have is to ridicule and then sit in his place in this House

and say nothing to the charges that have been made.

There has been a great reluctance by the Minister to not only answer

the charges that we have posed but there has been a great reluctance on

his part to answer any of the questions which have been placed upon the

order paper, questions which are of importance. The people of this

province should certainly have the benefit of those answers. There are

too many uncomforting and disturbing reports from northwestern British

Columbia concerning the preferential position of the Crown corporation

Can-Cel with respect to the deals and the manner in which they are

treated when you compare it with the manner that other private

companies are treated by this Minister. There have been suggestions of

intimidation of companies and threats towards them by suggestion that

the right to harvest timber, which is the lifeblood of any company,

might be removed.

The Minister, if he wishes to come clean with the people of this

province, must rise in this debate and say publicly and in view of all

the Members of this Legislature what his position is with respect to

the office that he holds and the portfolio which is under his

jurisdiction.

At the present time, Mr. Chairman, there are 73 questions still on

the order paper and 25 of those are directed to the Minister of Lands,

Forests and Water Resources. If the Minister is not prepared to give

the Members of this House the benefit of answers to those questions

when they're on the order paper, then before this vote goes through he

should give us the answers in person when he rises in this debate.

The matter of intervention by the Government of British Columbia

into the business sector is one of record. There is a great deal of

difference, Mr. Chairman, between a Member of the cabinet and a

Minister of the Crown serving as a director for a corporation such as

B.C. Hydro or perhaps, in some cases, even B.C. Railway and those same

Members of cabinet serving as directors for Crown corporations or Crown

companies that operate in direct competition to all the others in the

business sector in British Columbia.

I think it's agreed that B.C. Hydro is a utility serving all of the people

of the Province of British Columbia and there may be good reason for a cabinet

Minister or perhaps even more than one cabinet Minister to be a director of

that particular corporation, working on behalf of the people of British Columbia.

There is really no conflict or competition there. But even at that, the affairs

of even a corporation like B.C. Hydro should be brought into public view through

this Legislative Assembly.

But that's one thing, Mr. Chairman. It's a completely different

matter for the cabinet Ministers to sit in this House and occupy

positions of responsibility and at one and the same time be of Crown

corporations such as Ocean Falls and B.C. Cellulose. That's exactly the

position of the Minister of Lands, Forests and Water Resources at the

present time. He not only sits in this House as Minister of the

portfolio of Lands, Forests and Water Resources but he also sits on the

board of directors of Ocean Falls and B.C. Cellulose — definite

conflict of interest.

If he is to serve the corporations on whose boards of directors he

sits as a member, he must divorce himself completely from the

Legislature and act in what he considers to be the best interests of

that company. On the other hand, when he sits in this House or acts as

a Minister of the Crown, his responsibility is not to any one

corporation; his responsibility is to all the people in the Province of

British Columbia and to act on their best behalf. In that respect, I

submit, there is a definite conflict of interest. The Minister cannot

serve two masters. If it is his choice to act as a Minister of the

Crown, then there's no excuse and no viable reason why he should sit

on, the directorship of Crown corporations which are in competition to

other businesses in the province.

We have a situation with respect to Gottesman-Central National

Corporation where the president of that company, Mr. Wallach, also

serves as a director of Can-Cel. But compared to the position of this

Minister, that conflict of interest loses its importance. The greater

conflict of interest occurs, in my opinion, when a Minister of the

Crown serves not only as a Minister for a very important portfolio —

the most important in this province — but also serves as a director of

Crown corporations.

We are also aware of the fact that, for one reason or another, the

position of some of our senior civil servants has been compromised by

appointing them as directors of Crown corporations. That's an

unfortunate position because if anyone should be free from the

influence and the extreme pressure of politics, it's the people who are

responsible to the Ministers for carrying out policy — the top civil

servants of our province.

I don't imagine any one of them ever asked to be appointed as a

director of Plateau Mills or B.C. Cellulose. The unfortunate thing is

that they are directors of those corporations whether they asked to be

or not. I would think there's another example of conflict of interest.

They wish with all their heart to do a good job for the people of British Columbia in the position they

[ Page 3035 ]

happen to hold at the present time. These are top

positions within the civil service and within the Department of Lands,

Forests, and Water Resources. Yet they're asked at one and the same

time to sit as directors of Crown corporations.

If these people are there only as a requirement of the Companies Act ,

then the Minister should say so. But if that's the only requirement

then certainly there must be other people in British Columbia who are

not in top positions within the civil service who could be appointed as

directors of those corporations, to remove once and for all those

people from the political arena and from the position of potential

conflict of interest.

Any Crown corporation through its management and directors must try

to operate in a competitive market and show a profit. Actually, if it

doesn't show a profit, then in the eyes of the public it's a failure.

All we have to do is look back to the failure of some of the Crown

corporations in the Province of Saskatchewan to realize what can happen

when the government enters into that field of private business.

So there'll be a great reluctance for any director or any person in

a position of management to show anything but a profitable picture to

the public. I submit that this is the exact position of the Minister of

Lands, Forests and Water Resources. In his desire to make the Crown

corporations appear to be profitable, he could, even unintentionally,

be swayed in the decisions that he makes to the detriment of all the

people in the Province of British Columbia. The sad part about that is

the fact that none of us will ever know if the decisions he made were

beneficial in the long run to everyone in the province or if the

decisions he made were only beneficial in the short run to the Crown

corporation which must appear above all costs to be profitable.

There was a great deal of mystery surrounding the purchase of one of

the corporations — Plateau Mills. There was a great deal of publicity

concerning the purchase of that corporation by the Province of British

Columbia. It was suggested one of the reasons that IT&T was not

looked at too favourably was that they were short of cash. Now, that

might be a reasonable suggestion if they had failed to sign a firm

agreement with the Province of British Columbia or somebody had a great

deal of knowledge about their ability to arrange finance with the

banking concerns of either British Columbia or the United States,

wherever they chose to raise their money. But one of the facts we do

know is that IT&T set forth in a formal agreement to Plateau Mills

their offer to purchase.

I think we should read into the record at this point in time the

actual offer that they made, just so we can get it on the record. The

directors and the owners who signed this document, which I have a copy

of, said this:

"We hereby offer to purchase all of the issued and

outstanding shares of Plateau Mills from the shareholders for a

consideration of $10 million. The consideration shall be paid as

follows: a cheque made payable to you in trust for the shareholders in

the amount of $1,000 which accompanies this offer."

There was a great deal of static made over the fact that the only

valid thing that was enforced at the present time was a cheque for

$1,000 which was not even certified.

Tell me, Mr. Chairman, in ordinary business dealings with large

corporations, is it necessary to certify the deposit cheque? Really,

does it matter what amount is paid, whether it be $1 or $10,000 at that

particular point in time? I don't think it matters one whit. What you

are entering into is a signed contract between a purchaser and a seller

to provide, according to the terms of the contract, the purchase price

on a specified basis. That cheque could easily have been for $1 and it

would have still been legal and binding upon both parties at that

particular point in time.

But the interesting

part is the other terms which they apparently

included with the original of this document, a cheque for $1,000:

"$8,999,000 payable in cash as follows: $999,000 on closing

as hereafter defined; $3 million on the seventh banking day following the closing;

$5 million the six months following closing.

"We shall cause Synco Holdings Ltd. to issue at

closing to the shareholders or their nominees or Brigham Young

University, whomsoever you may direct, $1 million worth of fully-paid,

non-assessable, 6 per cent redeemable, convertible, preferred shares of

Synco.

"The closing shall mean August 1, 1973, at such time

of day and at such office in Vancouver, B.C. as we shall agree or at

such other time and place before or after August 1, 1973 as we may

mutually agree to."

I would suggest that that was a firm offer made by a company to buy a business in British Columbia.

The interesting part of that is the fact that the American

shareholders were not really interested in selling Plateau Mills. But

guess who was interested in negotiating the sale even before the

provincial government became involved? Guess who was interested? It was

the Canadian shareholders who were really interested in selling their

assets.

The American shareholders yielded to the wishes of their directors

in Canada and said, "Okay, we'll look at the offer from Synco." They

didn't say they would accept it but they said they would look at it.

Prior to that time it is documented that they were really not even

thinking of selling Plateau Mills.

Under that situation we certainly can't say it was

[ Page 3036 ]

the Americans who wished to sell it, even though

the Minister, in statements to the press, said he was not interested in

this company going to American shareholders. There were already

American shareholders in Plateau Mills. As a matter of fact, we have

American directors in Can-Cel, so I can see very little difference in

that respect.

MR. CHAIRMAN: Order, please! I would ask the Hon. Member to relate his remarks to the amendment before us, please.

MR. SMITH: The amendment, Mr. Chairman, is to reduce the

Minister's salary by $1. It's a motion of non-confidence in the

administration of the Minister of Lands, Forests and Water Resources.

I'm trying to document a case with respect to this Minister and the

manner in which he conducts the department. I'm not just talking about

just any corporation or one in which the Province of British Columbia

has no interest. I'm talking about a corporation that the government of

British Columbia decided to purchase. Once they did, it came under the

direct responsibility of the Minister of Lands, Forests and Water

Resources.

He's answerable to this assembly for the operation of that company

and he's answerable to the statements made by one Mr. B.R. Goodwin, a

former shareholder of Plateau Mills, who in recent days forwarded a

letter to the Hon. Leader of the Opposition (Mr. Bennett). It seems the

import of that letter has either escaped the Minister or he refuses to

answer any of the matters raised.

I think it's well to realize that this man, who is now completely

free — they've been paid free of any undue pressure or influence from

any source, was interested enough to forward a letter concerning his

recollection of and comments on the deal surrounding Plateau Mills. And

he said:

"The proposal to sell Plateau Mills arose from an unsolicited offer from IT&T to purchase our mill at Vanderhoof.

"The U.S. partners did not want to sell the mill, but

agreed to cooperate with Canadian partners who initiated the

discussions regarding selling the mill.

"It was agreed by both Canadian and U.S. partners that

if the IT&T sale failed to materialize, Plateau Mills would no

longer be for sale."

I think that's a very enlightening statement: "If the agreement did not materialize Plateau Mills would no longer be for sale,"

"An offer of approximately $8.6 million was made by

IT&T in 1972. After some months of negotiation in which IT&T

and ourselves spent thousands of dollars in auditing fees, which would

be customary at that point in time, we obtained approval to sell

IT&T from the Canadian federal government.

"We then sought approval for of the sale from British

Columbia, but we were told by the Hon. Robert Williams that we could

not sell the firm to IT&T or to any American."

That is strange, in view of the circumstances surrounding the

directorship of Can-Cel and in view of the negotiated contract to sell

newsprint from Ocean Falls. That's very strange.

It is incumbent upon the Minister, Mr. Chairman, to enlighten this

Legislature and say why he would make such a statement. Was it because

he is anti-American? I don't think so. I think it was because of the

final conclusion of that particular deal that he had in mind all the

time — that here was a private company which he would like to add to

the portfolio of business enterprises in this province.

It was a profitable venture, a firm that was making money. They were

happy with their arrangements and they had no intention of selling. But

all of a sudden, the Minister intervenes. It's a strange view,

particularly when we consider the other side of the coin.

This is the double standard that we talked about since this debate

began — the double standard employed by the Minister. It is okay to

sell newsprint from Ocean Falls to an American firm. It is okay to have

Americans on the board of directors of Can-Cel Corporation. It is fine

for the Minister of Industrial Development, Trade and Commerce to

openly solicit more business with the Japanese people, the Japanese

interests. It is fine to encourage development capital from other parts

of the world but it's not in the best interests of British Columbia for

a firm who originally has no intentions of selling to accept an offer

from IT&T.

But if it so happens that after conversations with the Minister the

directors of Plateau Mills realized that there was only one buyer, and

that had to be the Province of British Columbia, they really didn't

have too many alternatives, did they? As a matter of fact, it is

documented in the letter from Mr. Goodwin. It says:

"Our alternatives were as follows: One was to sell to

the government at the same price offered by IT&T. Secondly, we

could sell to a Canadian firm or individual" — as implied by the

Minister. "Thirdly, we could continue to operate ourselves." The

interesting

part is that he goes on to say:

"In the second and third propositions, the future

success of Plateau Mills seemed questionable when the Minister

intimated that we could anticipate difficulties that we had not

heretofore experienced in the operation of the Mills.

"Knowing that every mill that operates in

[ Page 3037 ]

B.C. at the government's pleasure, and that timber quota

and supply is at the will of the government, we realized that anything other

than selling out to the government itself would be difficult — this in spite

of the fact that we had planned to stay on if the IT&T deal fell through."

Is that not substantive evidence concerning a Minister wielding

undue and unnecessary force upon a company in the Province of British

Columbia? I suggest to you that it is, Mr. Chairman.

Certainly, any corporation knowing that their livelihood depended

upon the perpetuation of cutting rights and timber quotas in the

province knew that the one person who could either deal fairly with

them or, if he desired, make it impossible for them to continue was the

Minister of Lands, Forests and Water Resources.

MR. CHAIRMAN: Order, please, I would point out to the Hon.

Member that that particular point has been made a number of times. I

would caution him that it has become repetitious.

MR. SMITH: I am sorry, Mr. Chairman, that we may have to be a

little repetitious, but the fact of the matter is that since this

motion was proposed we have not heard the Minister reply, at any

time....

MR. CHAIRMAN: Order, please. I would also point out to the

Hon. Member that while he may press the Minister with questions, he

cannot demand an answer. The answers are at the discretion of the

Minister.

MR. SMITH: Mr. Chairman, I realize the rules of the House,

and I appreciate them as much as you do. But certainly it is

permissible for Members of the opposition to press for answers. I

realize the Minister does not have to answer, according to the rules of

this assembly, but I would say that if the Minister does not rise in

his place in this House and answer the charges that have been validated

and documented by the Members of the opposition in this House, then he

is derelict in his duty in this province. It is a disgrace to the

Members of this assembly and a disgrace to the people of British

Columbia that a Minister who represents the most important portfolio in

this House refuses to give answers either in this House or outside of

it. That's a disgrace, Mr. Chairman.

He can sit there and bury his head as long as he likes, but the people of British

Columbia have a right to know what is going on in this province — more so now

than they have ever had before.

Whenever we deal with the whole legislative programme that has

unfolded before us in the last 18 months, the people of British

Columbia can have more right than ever before to inquire of the

Ministers of this government about their actions, what they are doing,

and ask for responsibility and statements concerning the operations of

their departments.

It is not good enough to use innuendo and laugh off the charges that

have been laid on the floor of this House, Mr. Chairman. It is not good

enough. Those of us in this House deserve more than that, and we intend

to get more than that before this Minister's estimates are through —

let me tell you that.

Let's take a look at it. I have spent the last few minutes

documenting matters which I consider to be a conflict of interest. I

don't think there is any question that now, more than ever before, it

is incumbent upon Ministers of the Crown to zealously stay away from

the areas where conflict of interest exist — more than ever before,

because of the situation that we have before us now, with more Crown

corporations and the government entering into more business enterprises

than ever before.

I think the Attorney-General realizes more than anyone else, as

chief law enforcement officer in this province, that it is incumbent

upon members of the cabinet to look very closely at their position as

cabinet Ministers and the conflict of interest which can and may occur

if they at one and the same time accept appointments to provincial

corporations or to Crown companies.

Yes, Mr. Chairman, we have a right to inquire or we would be

derelict in our duty. The unfortunate part of it is that inquire as we

may, we certainly have not, to this time, received any answers from the

Minister — not one single, solitary answer to the charges that have

been made.

HON. A.B. MACDONALD (Attorney-General): Was there a conflict of interest when Ray Williston served on Hydro?

MR. SMITH: I discussed that. I'll say it again, repeat it for

the benefit of the Attorney-General. I said that in my opinion it's a

very different situation for a Minister of the Crown to be a director

on a corporation such as B.C. Hydro which is a utility company serving

the total province of British Columbia. Or, perhaps in some cases with

justification to be a director of B.C. Railway which is a form of

transportation for all the people in British Columbia. That's one

thing, because B.C. Hydro does not operate, really, in competition with

other Crown corporations. And as long as they make their reports

available in this province....

Interjections.

MR. SMITH: Only in a small way.

MR. CHAIRMAN: Order, please. I would draw to

[ Page 3038 ]

the attention of the Hon. Member the quote from page 424 of the 19th edition of May

section (1) that: if a Member persists in irrelevance or tedious

repetition either of his own arguments or the arguments used by other

Members of a debate, his attention to this should be called by either

the Chairman or the Speaker. And I would so do.

MR. SMITH: Thank you, Mr. Chairman, I have no intentions of

repeating my remarks. But, the Hon. Attorney-General came back into the

chamber and I asked me what I considered conflict of interest. I'll

tell him what I consider conflict of interest: B.C. Hydro and B.C.

Railway — perhaps it is valid to sit on those boards of directors, but

not in situations like Ocean Falls and Can-Cel which are Crown

corporations or companies owned either entirely or almost entirely by

the Crown and which compete with other companies throughout the

Province of British Columbia. There's a conflict of interest there, Mr.

Attorney-General, I submit to you.

Mr. Chairman, during the course of this debate we have validated a

number of points. This motion is a motion of non-confidence in the

Minister of Lands, Forests and Water Resources. It's also much more

than that.

It shows non-confidence not only in this Minister but also in the

Premier, and in fact, in the whole cabinet of British Columbia. There's

a demonstrated lack of credibility on the part of this government. The

confused, amateurish, bungling manner in which this cabinet conducts

the affairs of this province is open to question.

MR. CHAIRMAN: Order, please. I'd ask the Hon. Member to confine his remarks to the amendment.

MR. SMITH: Oh, I am.

HON. MR. LEA: Is that the way you felt when you were in cabinet, Ed?

MR. J.R. CHABOT (Columbia River): The bungling of that Minister — a dirty, rotten, filthy mess.

MR. CHAIRMAN: Order, please. Would the Hon. Members not speak from their seats, please?

MR. CHABOT: I'm speaking from my seat.

MR. SMITH: There's certainly, in our opinion, ample evidence

to point to the fact that the Ocean Falls corporation has not been

operated in the best interests of the people of British Columbia. In

fact, the ones who are making a profit in this are international

financiers.

There's been a calculated move on the part of this Minister to discourage

investment capital on one hand, then on the other hand turn around and talk

about industrial democracy and need to develop a different relationship in this

province.

The Minister employs a double standard, Mr. Chairman. It's a

standard which could best be summarized by saying: don't do as I do,

just do as I say. It's time for the Members of this Legislature,

including the NDP back bench, to stand up and be counted. They were

elected, as I was, to represent the legitimate and best interests of

the people who gave us the privilege of representing them in this

assembly.

Now is the time for the back-bench Members of the NDP to decide

whether they are going to protect the cabinet benches and perpetuate

themselves in office, or to vote as their conscience dictates.

This amendment has brought into very sharp focus the failure of this

Minister and the government he represents to do the very things they

were given the mandate to do: to govern fairly and equitably in the

best interest of all British Columbians. That is what we're asking for

inside and outside of this House, Mr. Chairman, fair and equitable

treatment for all British Columbians.

In our opinion, a double standard has been employed and is in effect

in the Province of British Columbia through the power that this

Minister has under his control. One standard as Minister of Lands

Forests and Water Resources; another standard as a person who operates

as a director of Crown corporations. It's not possible to divorce the

two and do an effective job of both.

In our submission the people who have lost are the people of British

Columbia, and that is exactly why we voted and moved a motion of

non-confidence in this Minister.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, I'll be brief.

I had not appreciated the length and detail that this debate on the

amendment was to pursue. My earlier comments were brief and related

specifically to the focal point of this amendment which is the

Minister's responsibility in regard to the Ocean Falls situation and

the sale of pulp and newsprint.

I just very briefly want to make the position of this party very clear.

There are many other very important issues in regard to this

Minister's portfolio which must be debated and commented upon and

described back and forth across the chamber, which are not specifically

related to the focal point of this amendment.

At the same time I wouldn't want to neglect to comment upon the

amendment, but making it very clear that I certainly reserve the right

later in this debate under the Minister's vote to get on to a more

general appraisal of the whole problems of his

[ Page 3039 ]

department in relation to many subjects — pollution

control, water resources, damming, northern development, you name it.

We could have a debate lasting six weeks on this Minister's estimates

if you wanted to cover everything. But it's my intention, on behalf of

this party, at least to touch later in the debate on some of these

rather large and important issues.

As for this focal issue — and I say, with respect, that I think the

official opposition have wandered far and wide from the official reason

in the amendment given for introducing it.

I would also say that to me it rings just a little hollow to hear

the Social Credit Members complain about the fact that they are not

getting any answers from the Minister because I sat here in this House

for three years and if there was anyone who became experts at not

giving answers, it was the Ministers of the Social Credit government.

Let me make it plain, Mr. Chairman, I think all Ministers of any

stripe politically should give answers to fair questions asked by the

opposition. I'm not defending this Minister. But I'm just saying....

AN HON. MEMBER: Do you hear that, Bob?

MR. WALLACE: I'm not defending this Minister. We want an answer.

But on the other hand....

Interjections.

MR. CHAIRMAN: Order, please.

Interjections.

MR. WALLACE: Could we have a little order, Mr. Chairman?

MR. CHAIRMAN: I would point out to the Hon. Members of the

House that it is the privilege of each Member to be heard in silence by

the other Members of the House. I would ask all Members to accord this

right to the Hon. Member for Oak Bay.

MR. WALLACE: Thank you, Mr. Chairman. Having made the point

that all Ministers should answer fair and reasonable questions....

Frankly, if the Minister doesn't answer, this is the reason that I will

support this amendment without any reservation. But it comes a little

hollow from the Socreds to make that — point when they were experts at

not answering questions when they were in power.

This question of the Ocean Falls situation is one that gives rise for concern.

I will just go back a moment to October 12 when the decision was

announced that the contract with Crown Zellerbach was to be terminated

and the newsprint would be sold directly to Gottesman-Central. It was

asked at that time, first of all, whether there might not be some

conflict of interest on the part of the president of that organization

who also happened to be a director of Can-Cel. But the other

interesting discrepancy which arose even at that time was the fact that

the Minister made the following statement. I'm quoting the Vancouver Province of October 13, 1973. Williams said:

"The Ocean Falls Corporation was free to make additional

marketing arrangements. We are not obliged to market totally through them. We

have some flexibility. The market offshore will give us a better net return."

On that same day in New York Mr. Wallach said the agreement was for

three years for the full production with options for renewal, but he

declined any other details of the contract. The newspaper goes on to

state that there was no explanation for the difference between his

reference to sales of the full production and Williams' reference to

flexibility of marketing. The Minister declined to elaborate.

The fact is that right at the time that this change of agreement —

the cancellation of the Crown Zellerbach agreement and the switch to

Gottesman-Central — there was a discrepancy. The two stories produced

by the two sides to the agreement did not jive. Since then and in

debates yesterday and today, the Minister said the contract has been

renegotiated and, in fact, is being renegotiated now.

I have to support the opinion expressed by the other two opposition

parties that this is a public company using taxpayers' money. I

personally am not so concerned about the implication of "black market"

sales of newsprint by Gottesman-Central. I don't think this government

or any government can be responsible for the actions of another party

who buys goods from this government or from a private concern and then

chooses to sell it this way or that way. I think it's rather ridiculous

to imply that any Canadian supplier can be responsible for the actions

of subsequent deals by people or companies or concerns who buy from

Canadian producers. I don't think it's a good idea that perhaps we're

selling at one price to Gottesman and they're turning over an enormous

profit. In that case one would certainly feel this was a bad

arrangement.

But the central issue in this debate and this amendment is that

there is reasonable evidence to believe this is the government doing

public business with the taxpayers' money in the particular area — in

this case in the selling of newsprint — and that it is the obligation

of this Minister and this government to tell the public what has

happened in this particular instance without necessarily giving every

detail of the whole negotiation or the agreement. Simply give us

[ Page 3040 ]

the basic outline of what the prices were initially

and what the renegotiated prices are and some complete refutation or

some evidence to disprove the serious charges made by the official

opposition.

The Minister has said it is not customary for two sides to an

agreement to reveal all the details of that agreement in the

marketplace. I only accept that to a point. The point where I cannot

accept it is the fact that this government was elected in large measure

on its platform that it, on behalf of the people, could do a better job

in the marketplace.

The government was critical of Crown Zellerbach for letting the

Ocean Falls site run down and it brought the proposal to take over

Ocean Falls to this House with some social reasons as well as economic.

I'm not about to run away from that fact. This party supported the

government takeover of Ocean Falls on the basis that we felt