1981 Legislative Session: 3rd Session, 32nd 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)

TUESDAY, MARCH 24, 1981

Morning Sitting

[ Page

4717 ]

CONTENTS

Routine Proceedings

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

On vote 98: minister's office –– 4717

TUESDAY, MARCH 24, 1981

The House met at 10 a.m.

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

(continued)

On vote 98: minister's office, $160,231.

MR. LOCKSTEAD:

Yesterday it was brought to the attention of the minister that the

government had involved itself in the land transaction involving

Pacific Logging and the CPR. It is no use going through the details of

that again. But the minister, in answering the questions of my

colleague for Vancouver East (Mr. Macdonald) and the member for

Shuswap-Revelstoke (Mr. King), did say that he would table the

agreements. I was shocked to learn, Mr. Chairman, that the minister

apparently signed that agreement without a proper appraisal of the

property or timber contained thereon — fee-simple ownership to Pacific

Logging.

Last but not least, I noticed that the minister, in his reply yesterday to

the second member for Vancouver East, said there was nothing secret about the

deal. Mr. Chairman, I want it on record that that transaction was carried on

in entire secrecy. Nobody on the Sunshine Coast, nobody living in the communities in that area and none of the people involved in the industry were aware

of this transaction until it was leaked from the minister's office or from

somewhere. I'd like the minister to now tell this House if he's prepared

to table that agreement signed between himself, the Minister of Lands, Parks

and Housing (Hon. Mr. Chabot) and Pacific Logging Co. Ltd. Is the minister prepared

to table that agreement now? Is he prepared to give us some information'?

MR. MACDONALD: I yield to the minister. The minister undertook to let us see this agreement this morning, and I'm sure he will do that.

HON. MR. WATERLAND:

Yes. I have advised the House that I see no reason why the agreement

cannot be tabled in the House. Out of courtesy I think that I'm

obligated to advise the other party to the agreement and also to advise

various people who at this time are leasing parts of the land that are

presently owned by Pacific Logging Co. Ltd. Once these people have been

advised, they'll know at least as early as the general public as to

what is happening, and I'll be very happy to table the document.

MR. MACDONALD: That answer isn't satisfactory at all. This is a

government document made by the government. Why shouldn't it be tabled?

Why do you have to advise...? Why do you have to get the consent of somebody

who's leasing part of the old CPR logging lands? You don't need their

consent. It's a public transaction. You're under scrutiny now in the

Legislature. Why won't you table what you've done on behalf of the public?

You're the minister. Are you ashamed of what's happened? We want

it at the time of your estimates so we can question you about it. All the indications

are, Mr. Minister, that this is the hidden consideration for the exchange of

the CPR lands which the government acquired in False Creek and that the true

consideration includes this swap. It sounds absolutely ridiculous to me that

logged-off land around Comox — prime recreational land — was given up by the

CPR so they wouldn't have to reseed and restock it. It was of no value to

them until perhaps 40 or 50 years down the way. So they dumped that back on

the public and they say that's fine and receive an exchange of commercially

valuable timber land and the fee simple thereof, and, I suppose, the right to

subdivide the waterfront in the future and make a killing which would run

into who knows how many million dollars — $50 million or $60 million.

HON. MR. FRASER: Tell us about Grizzly Valley.

MR. MACDONALD:

Oh. you want to divert the subject matter to Grizzly Valley. That's

another story. Can I reply on that point, or would I be out of order?

MR. CHAIRMAN:

Order, please. Hon. members, the second member for Vancouver East has

the floor. We're on vote 98, the administrative responsibility of the

Ministry of Forests. If I could just ask the hon. member to address the

Chair, and other members to afford him the courtesy of being able to

speak uninterrupted. we'll proceed.

MR. MACDONALD: I just have these three matters to go into: the Marguerite, Grizzly Valley and this question of the exchange of lands to the CPR.

Mr.

Minister, as the member for Mackenzie (Mr. Lockstead) has pointed out,

you kept this matter very much in your back pocket. There was no public

announcement. You and the Minister of Lands, Parks and Housing (Hon.

Mr. Chabot), who is also a signatory to that agreement and has graced

the House with his presence this morning....

HON. MR. CHABOT: I'll take it up in my estimates.

MR. MACDONALD:

Old stonewall. Yes, wouldn't be it great, eh. Oh, boy, that'll be the

day. You could make the Minister of Industry and Small Business

Development (Hon. Mr. Phillips) look like a real forthcoming chap.

Mr.

Minister. we're asking that the agreement be tabled under your

estimates so you can be questioned about it, because I don't think you

should have affixed your signature to that exchange. I think the public

lost on it, and the CPR had you in an unbearable bargaining position

and was able to exact its price out of the people of British Columbia,

having got the original lands of Pacific Logging for nothing — for

building a railway and then discontinuing the passenger service. We

took it from the Indians, gave it to CPR, and now they exchange this

chunk of it and make a tremendous fortune.

Mr. Minister,

will you file the agreement? Secondly, will you get up in your place

and tell us just what this deal involved? How many acres for parks? Was

it the recreational land? Is it mountainous land? Had it already been

logged, and if so to what extent? Had there been any reseeding done by

Pacific Logging before the exchange took place? You have never told the

public — let alone filed the agreement — just what this exchange

involved. Will you get up now and describe it, because surely you

wouldn't set your signature to something when you didn't know how much

timber was involved.

[ Page 4718 ]

HON. MR. WATERLAND:

Mr. Chairman, if the member would refer to the Blues, I am sure he

would find that I explained yesterday basically what the agreement

involved. The member is seldom in the House, so he probably didn't hear

me; but he certainly can read the Blues — I assume he can read.

Some

of the lands which are being received by the government have been

logged and have been regenerated, others have not been logged and

contain immature timber, and all of the lands have very good

recreational value with actual recreational facilities in place. There

are some leases held by individuals right now on some of these lands,

which would have to be a part of the consideration of the value of the

land. I told the member that as a matter of courtesy to these people,

we would advise them prior to tabling the documents in the House.

The

documents provide that there will be an independent evaluation of the

lands by appraisers. If there is a difference, if the Crown lands are

of more value than the nine parcels of Pacific Logging land, then the

difference will be paid to the government. If the reverse is true, no

difference will be paid to Pacific Logging. It will go on a value

basis, evaluating all of the uses that the lands can be put to, and

using the highest possible values for both pieces of land.

is a good deal for the government. We will receive twice the acreage

that Pacific Logging will receive. There are timber values on it. The

lands are widely scattered. Those values that can be harvested in the

near future will be put into a small business program. We have a

difficult time on Vancouver Island providing sufficient timber for that

program, so the small business sector on Vancouver Island will benefit

from this trade, as will the general public in the recreational uses to

which this land can be put. The member can read the details in the

document when it is tabled. It will be tabled, once I have done the

courtesy of advising the people who hold leases.

MR. LOCKSTEAD:

I don't want to belabour one single topic, but this is becoming a great

deal more serious as we go along. First of all, the minister did say

that there was no secrecy involved in this transaction, and it was a

totally secret transaction. It is peculiar that that transaction took

place at the same time as Marathon was negotiating with the government

for property for B.C. Place. More to the point, the timber values on

this property — the minister now admits the agreement was signed

without appraisal.... I'm told there could be at least $60 million

worth of timber alone on these 5,000 acres. That's not including the $5

per foot for water frontage — the going price for waterfront in that

area at the present time. You can imagine how much 5,000 acres is worth

in real estate value on theSunshine Coast at the present time.

We're

very curious about the whole transaction. We want those documents

tabled in this House under this minister's estimates today. As the

member for Vancouver East pointed out, the minister's estimates are up

now. The minister does not have to consult with anybody else on this

transaction. Yesterday we found that the Minister of Lands, Parks and

Housing was involved. Because they couldn't utilize a

section of the

Forest Act, they had to utilize that minister's. So obviously there was

consultation prior to the negotiations taking place.

I'm not

satisfied with the answers that we have received from the minister on

this matter. It's a very serious issue. I want the minister to rise in

his place right now and tell us that he is sending out for those

documents and they will be tabled in this House today.

MR. KING: If the minister wishes to answer, I'll yield the floor, Mr. Chairman. There's the document. I presume he's going to table it.

just want to make a couple of points to the minister. He talks about a

courtesy to the parties to the contract. As a courtesy to them he is

consulting them before he'll table the documents in this House. The

minister gave a commitment yesterday to table the documents. I say what

about a courtesy to the people of British Columbia who own the

resource. What about the courtesy of open dealing so the people of this

province can understand and make some judgment on the secret deal that

the minister is consummating with Pacific Logging?

It's

ironic. We hear a great deal about public involvement in the forest

industry of the province today. I have here a press release from the

Ministry of Forests: "Public Involvement Sought for Forest Decisions.

'If British Columbia's forest resource is to remain healthy, the public

must get involved in decisions about forest use, ' said Bill Young,

British Columbia's chief forester." How on earth is the public to get

involved in decisions regarding the forests in this province if the

minister sits on secret deals that were made without the benefit of any

appraisal of the value of the forest resource on the lands being traded

off to Pacific Logging? It looks serious and it looks suspicious.

know that this government was in a bind in terms of making a public

commitment to an international association to host Transpo '86 when

they had not yet acquired the site necessary to hold the function on.

As a result of locking themselves in and committing themselves to

acquisition of that land, CPR had the whip hand. This government had to

go before them cap in hand, begging for a deal on False Creek so that

B.C. Place and Transpo '86 could go ahead. There's a dark suspicion in

the public mind that CPR and their subsidiaries exacted a tremendous

price from the people of B.C. for the clumsy bargaining posture of that

government.

The minister gets up in answer to my colleague

and he says: "Well, some of the land has been logged and some has not."

What a pathetic response from a minister of the Crown! That's insulting

to this institution. The minister should know — he's been here long

enough now — that when his estimates are before the House it is the one

time during the year, traditionally and historically in all parliaments

in the British Commonwealth, that a minister is obliged by tradition to

account precisely for the administration of the affairs of that

ministry over the past year. We don't need those bland, anemic and

foolish statements that some of it has been logged and that some of it

has not. That's obvious even to the Minister of Industry and Small

Business Development (Hon. Mr. Phillips) as he flies over it in his

government jet. He can look down and he can determine that some has

been logged and some has not.

What we want is more precise

information. We want to know how much has been logged. Has it been

clearcut? Has it been restocked? If not, what will be the cost of

restocking that land? What is the acreage involved, and what will be

the rotation period on that new crop?

All of these factors

and specifics must be weighed if the public of British Columbia is to

have an opportunity for any intelligent assessment as to whether the

deal was a good or

[ Page

4719 ]

bad one for the people of this province. His own

chief forester says, as I indicated before, that the public must be

involved in decisions about forests. The professional foresters stress

public help and involvement. The headlines — the minister commits

himself to a similar policy in a similar direction. The Sierra Club

said a short time ago in their background paper number 11: "Barriers to

public involvement and public understanding must be removed." Yesterday

I quoted a letter from the Minister of Transportation and Highways

(Hon. Mr. Fraser), who had this to say: "The time is long past of

industries and government taking action that affects the general public

without justifying the need for such action." That's a good statement

by your colleague, Mr. Minister.

We're not prepared to pay the minister's office vote, Mr. Chairman,

until he starts becoming candid, frank and open with this committee and

starts providing the public of the province with some information on

why the deal happened at all. Who requested the land swap? Was it

Pacific Logging, or did the Minister of Lands, Parks and Housing

initiate the negotiations? Was it the Minister of Forests or the

deputy? We have no information whatsoever, and as my colleague for

Mackenzie (Mr. Lockstead) has pointed out, had it not been for someone

in the Forest Service alerting the public, we would still have a

completely secret deal on our hands. Lord knows the history and

background of the Forests ministry in this province should tell the

public and the legislators that we've had enough secret deals in the

past from the Minister of Forests' office. The minister has given a

commitment. and I ask him with all sincerity and as persuasively as I

can to fulfil the commitment he gave yesterday and to table that

contract in the Legislature today so that we can study it and fulfill

our responsibilities as all opposition to make judgments as to whether

or not the public is getting a fair deal on this transaction and see

whether it should be reviewed and have any amendments made to the

proposed contract. That's not too much to ask, Mr. Chairman, if the

minister has respect for this institution and has any basic

understanding of his responsibilities as a minister of the Crown. I ask

that he table it immediately.

MR. BARRETT: Mr. Chairman. I read the Blues as the minister advised, and I quote back to the minister:

"HON. MR. WATERLAND: The agreement was signed. I can't

give the member the date. I can look it up. I don't even see any reason

why that agreement shouldn't be tabled in the House. I don't happen to

have it with me, but I'm sure there is no reason why it can't be tabled

here."

You asked us to read the Blues, through you, Mr. Chairman. We read

the Blues and we believed you. Now what has happened between yesterday

afternoon and this morning that has become a reason why you can't table

those? If you say as a courtesy you want to contact the company, just

write a little memo and hand it to your staff. Call over to the company

and say: "Do you have any objection to the people knowing what's going

on with their own property?" If the company says no, stand up in the

House and say that uou'd like to but the company has more power than

the minister. They can say whether or not documents should be tabled.

AN HON. MEMBER: Does CPR want this kept secret?

MR. BARRETT: Who's running this province, the CPR or the government

of British Columbia? I remember the brave statements of the Premier saying

that B.C. is not for sale. The CPR is to stay out of British Columbia. But here

we have a minister, Mr. Chairman, who said yesterday that he would table the

documents, and today he said that he'd have to check with the CPR. Did

you mean what you said yesterday or were you just telling the House something that

wasn’t true?

want to know from the minister, Mr. Chairman: are you prepared to table

those documents in this House this morning? Yes or no. Did you mean

what you said yesterday or were you fibbing? Yes or no. Who's running

British Columbia? Are you the minister, or is the CPR telling you what

to do? Let's have it straight. Are you going to waste any more time

with this nonsense? Fair enough. But if you're not running the show,

say so and we can get on to something else. We'll know that the CPR is

running British Columbia. You said this yesterday. You told us to read Hansard . So we read Hansard;

we read what you said. Why aren't you doing it? Why aren't you tabling

these documents? Have you got a reason? I'd like to hear it.

Mr. Chairman, the minister is struck dumb now. First of all he uses his

defence: "Read Hansard ." So we read Hansard , and he said he was going to

table the documents. He didn't see any reason why he shouldn't. So I'm

asking him: are you prepared to table those documents today, right now? Are

you prepared to answer? If you want the floor just indicate that you're

prepared to answer. Does the minister wish to answer now?

Mr. Chairman, I believe the minister was lying to the House yesterday when he said that he was going to table these documents.

MR. CHAIRMAN:

Order, please. Please be seated, hon. member. Hon. member, you have

been in this House long enough to know that that is an unparliamentary

word which under no circumstances call be tolerated by any chairman. I

would ask the member, in keeping with the parliamentary traditions

which this House must represent, to withdraw the unparliamentary term

"lying."

MR. BARRETT: Mr. Chairman, I withdraw the words "the

minister was lying." I am under the belief that the minister was not

telling the truth yesterday when he said he'd table these documents.

MR. CHAIRMAN:

Again, the hon. member has been here long enough to know that one

cannot say one way what one cannot say the other. As I asked

previously, I must ask again that the member withdraw the term that the

member was not telling the truth. In the interest of parliamentary

tradition, hon. member, I so request.

MR. BARRETT:

Mr. Chairman. I did not say that he was not telling the truth; I just

said I do not believe he was telling the truth. I'm expressing an

opinion that I hope the minister will prove wrong. I withdraw, Mr.

Chairman.

AN HON. MEMBER: You want to get thrown out. It's the only stunt you've got left

MR. BARRETT: Mr. Chairman, would you tell members that if they wish to interrupt they must do that from their own chair.

May

I, in the best of parliamentary tradition, quote back the minister's

words to himself again, when he said he sees no reason why he cannot

table the documents in the House, and

[ Page 4720 ]

humbly

ask the minister if he is prepared to back up his words. Will you be

tabling these documents in the House during your estimates? Well, could

you tell me what the signal means when you pick your nose? Does that

mean yes or no? What does it mean?

MR. CHAIRMAN: Order, please, hon. member.

MR. BARRETT: Well, Mr. Chairman, as a member of the House I don't like being treated this way.

MR. CHAIRMAN:

Notwithstanding the feelings of the member regarding the answers which

may or may not be forthcoming — over which the Chair has no control —

the reference by the hon. member to the minister is hardly one of

parliamentary leanings. Again, I would caution the member that we must,

no matter what our feelings, maintain our parliamentary decorum over

all else.

MR. BARRETT: Mr. Chairman, I withdraw the

statement that the minister was lying to the House. I withdraw the

statement that I am of the opinion he is not telling the truth. I

withdraw the statement that he's picking his nose. Now can I ask the

minister, plainly, through you: is he prepared to follow up on his

commitment to table these documents in the House during his estimates?

Yes or no. Would you like the floor to answer the question, Mr.

Minister? All you have to do, Mr. Minister, is say yes, you're prepared

to answer the question. Are you prepared to answer the question now? Do

you wish the floor, Mr. Minister? Fine, thank you.

HON. MR. WATERLAND: I see the member finally remembered that only one member at a time can have the floor and has taken his seat.

Mr.

Chairman, I rather resent the implication — which the member has

withdrawn — that I was lying to the House. I think there's only one

member that's ever been proven to have lied to this House, and that's

the member who's just taken his seat. That's a matter of record in the

courts.

MR. CHAIRMAN: Order, please. Hon. members and

hon. minister, I must ask that the minister withdraw the remark.

Clearly members of this House have an obligation to follow

parliamentary procedure — and that, as all members know, was not

parliamentary. I would ask the minister to withdraw the reference that

he just made to another hon. member.

HON. MR. WATERLAND: Mr. Chairma,. I was simply referring to the records of the House, but if the Chairman so wishes I will withdraw.

have told the member that I will be tabling the documents in the House;

I have not told him specifically when. The member does not, perhaps,

understand the meaning of the word "courtesy." I will do the other

signatory to the document the courtesy of advising him first and will

advise those people who presently hold leases with the present

landholder as well; then the documents will be tabled in the House. The

member may or may not wish to believe that — that's up to him — but

that is my intent.

MR. BARRETT: Then may I ask the minister if he is prepared to extend

the same courtesy to this House that he is to these private corporations and

individuals. Would he inform these people today that it is his intention to

table the documents during his estimates?

HON. MR. WATERLAND:

I will advise them as soon as I possibly can when they can be reached.

There are quite a number of people who presently hold leases, and they

will be advised at the earliest possible time.

MR. MACDONALD: Why? They're not parties to the agreement. What nonsense that is!

MR. CHAIRMAN: Order, please, hon. members. Until members are recognized by the Chair, it would be courteous of them to wait.

MR. BARRETT:

The minister is extending a courtesy to the leaseholders, who are not

parties to the agreement. If that indeed is the scope that he wishes to

expand it to, would the minister, in doing his duty to the people of

B.C., accept the argument that we step down from his estimates and go

on to some other estimates until we can get to these agreements in the

House? You know, Mr. Chairman, I'm not included in the group, but there

may be some citizens who suspect that the minister is going to try to

wait until his estimates are over before he tables the documents. Would

that be an undue suspicion? I ask the minister: will he make an effort

to contact those people today and table those documents during his

estimates?

HON. MR. WATERLAND: I have already

instructed my staff to contact the people involved. As soon as that is

done, the documents will be tabled. I can't say it any more plainly

than that.

MR. BARRETT: I have just learned at this

moment that there are now instructions to his staff to notify the

people. Thank you very much. Can the minister tell us how long he

thinks it will take to contact the people? A week? Two hours? Five

minutes? You don't know. Would the minister then accept the proposal

that we move on to other estimates?

HON. MR. McCLELLAND: No.

MR. BARRETT:

I thought I heard a voice before leave was even asked. You see, there

is a suspicion that you're hiding something, What I think will happen,

as I've seen this government operate, is that we will go off your

estimates, and maybe a day before the House adjourns the documents will

be tabled in the House — and you're off the hook. Now if you've nothing

to hide in this deal, then the courtesy calls could be made by phone.

The principals are, of course, the CPR. The leaseholders are irrelevant

in terms of being notified. That's just an excuse. Are the leaseholders

signatories to the agreement? They're not. There's just one call that

has to be made and that's to the CPR — to Pacific Logging. Mr.

Minister. is it correct to say that the other signatory in the

agreements is Pacific Logging, that they're the only other party to the

legal agreements?

HON. MR. WATERLAND: No.

MR. BARRETT: There are others. Could you tell me who the others are?

[ Page 4721 ]

HON. MR. WATERLAND:

I advised the House yesterday that there are three signatures on the

agreement — that of the Minister of Lands, Parks and Housing (Hon. Mr.

Chabot), that of a representative of Pacific Logging, and mine.

MR. BARRETT: To the minister's knowledge, does the Minister of Lands, Parks and Housing have any objection to the agreements being tabled?

Interjection.

MR. BARRETT:

None. That goes on record. You were on record as not being opposed to

being tabled. You're indicating that the minister is not opposed. So

there's only one person left, and that's Pacific Logging. Thank you for

the information.

MR. MACDONALD: The minister could

very easily enable the House to scrutinize the transaction in the

democratic way by standing down his vote, but he makes this very

picayune point that we need the consent of Pacific Logging to file a

public agreement. If it was the sale of a house or a commercial lease,

it would be registered in the land registry office and everybody would

see it. The suggestion of the minister that we must also consult

lessees, who presumably are leasing parcels to log on the old Pacific

Logging lands, is absurd. There's no reason why they should object to

an agreement being filed to which they were not party.

The

minister has been absolutely unhelpful in terms of describing this

transaction to the Legislature and the people of the province. We have

no idea whatsoever how much merchantable timber the CPR got, and how

much they relinquished on Vancouver Island. Do you mean to say that the

Forest Service signed an agreement prior to appraisals and didn't have

any idea how much of the merchantable timber of British Columbia they

were giving to the CPR? Roughly what do your surveys show? How many

acres were logged? How many needed to be restocked? Give us the

breakdown as you saw it when you affixed your signature to that

agreement. Give us the date of the agreement, Mr. Minister. If you

signed it completely in the dark as to the timber that was being

exchanged, you are surely guilty of dereliction of your duty as a

minister. If you do know, give us what you did know at the time of this

agreement. Send to your office if necessary.

This is

important. We're not talking about a few dollars here and there. We're

talking about a government whose record in terms of giveaways has been

far from clean, which has given 5,000 acres of fee-simple land to the

CPR. That's not a little thing we're debating here this morning. Does

the minister have no answers as to what the exchange amounted to? Quite

apart from the agreement, you should be able to stand up and say: "This

was the recreational land." You should be able to tell us, if you can,

how you evaluate that land. Frankly, I don't know how appraisers do

that. You tell us, I'd like to know what the principles are. I didn't

sign the agreement. The minister did. So did the other minister.

How do you evaluate? Suppose you get 10,000 acres of recreational

land that's now going to be park, and you trade that for merchantable

timber. That's apples and oranges. I'd like to know how you appraise

those two propositions. It may be that, insofar as the CPR was

concerned, to get rid of these lands and not have the obligation to

restock them under your forestry program and the rest of it may have

been a benefit. Maybe it's just sheer gold for them to get rid of the

Vancouver Island properties, where they had creamed the best timber. I

suppose that goes without saying.

How

do you evaluate prime recreation in terms of merchantable timber? You

go to the bank, Mr. Minister, and say, "I've got prime recreational

land," and raise a mortgage on it. Say: "I'd like to make a little bank

loan." But if you've got merchantable timber, you'll get your bank

loan. They're very different things.

Mr. Minister, I would like to know: if 5,000 acres on the Sunshine Coast was

to be granted to CPR, why didn't you put that up for competitive bidding

according to your obligation under the Forest Act not to relinquish forest lands

without giving all companies a chance to bid? The minister has given

some malarkey explanation about consolidating holdings which makes no sense.

We're dealing with Vancouver Island on the one hand, where you say the Pacific

Logging holdings were kind of split up and a little difficult to log. They've

managed to do it anyway. Presumably they have logged most of it. But they weren't

all adjacent, one to the other, to be logged in a big way, as quarters that

were all in the same place. I presume that's what you're saying. So

you said they should consolidate. To consolidate that situation, what did

you do? You took it off their hands entirely and gave them 5,000 acres that

are miles away across the strait. That's not consolidation. How can you

expect us to believe that you're living up to your obligation as Minister

of Forests when 5,000 acres disappears by fee simple to Pacific Logging with

no competitive bidding, when there may very well be other companies, be they

big companies or small loggers, who wanted to bid for that and could have given

the people of British Columbia a better price than CPR.

You're

the Minister of Forests. Through the Chair, what right have you got to

dispose of forest lands without competitive bidding? You're bound by

the Forest Act. You went outside your Ministry and got rid of these

lands as if it were a Ministry of Lands, Parks and Housing proposition.

But there is merchantable forest there. You're supposed to live up to

your act.

Mr. Minister, I'd like the date of tile agreement.

Do you have to consult big Julie to give us the date? No. Give us the

date of the agreement. What information does your department have as to

the merchantable timber that has been relinquished by Pacific Logging

on Vancouver Island and the merchantable timber they have gained on the

Sunshine Coast'? You say that's subject to final fine-tune appraisal.

Okay. But surely you knew roughly what you were doing when you signed

the agreement in such a hurry last fall. So will you give us those

figures? What did the exchange involve?

HON. MR. WATERLAND:

I'm sure the second member for Vancouver East understands what is

involved in appraisal: the value of the land; the timber on the land

and the other uses to which the land can be put form a part of the

appraisal; whether the land has been logged; whether it has immature

timber on it; whether there is regeneration on it; and whether it has

immature or mature timber on it is a part of the evaluation and goes

into the total value of the land. We are much more short of forest

land, or land that could be used by the public, on Vancouver Island

than we are on the mainland. It makes a great deal of sense to both

rationalize Pacific Logging's ability to harvest and make other lands

available for the small business sector and for recreational use. All

of these things make up a part of the evaluation.

[ Page 4722 ]

MR. MACDONALD: How much timber was relinquished? How much did they gain'?

HON. MR. WATERLAND:

Mr. Member, I've just advised you that that will be a part of the

evaluation — exactly how much timber is on the land they'll be

acquiring and on the land which they'll be turning over to the

government.

MR. MACDONALD: You had no idea when you signed the agreement.

HON. MR. WATERLAND:

Mr. Member, the evaluation determines that, and exchange of land and

moneys.... If the land Pacific Logging will receive is of greater

value, we will receive money in addition to that. If the land which we

receive is of greater value, we'll pay Pacific Logging nothing. I would

assume that the Leader of the Opposition has been talking to Bill Sloan

or someone from Pacific Logging. I have not yet contacted him. I do

think we should extend the courtesy to people who have leases and

advise them as well. The members may or may not agree with me on that.

At the earliest possible opportunity I will table that document in the

House. It is a very straightforward document.

MR. BARRETT:

I was walking down the corridor, and the Minister of Lands, Parks and

Housing (Hon. Mr. Chabot) stopped me in the corridor and said: "Have

you been talking to Pacific Logging?" Now do you think that within the

time I left here and walked down to my office and got back here — all

in ten minutes — I could achieve what the minister couldn't do — that

is, pick up the phone and call Pacific Forest Products Ltd., speak to

Mr. Sloan and say: "Mr. Sloan, do you have any objection to the

agreements being tabled?" And do you think that Mr. Sloan would say no?

If I asked Mr. Sloan, "May I quote you in the Legislature?" do you

think that Mr. Sloan would say, "By all means"? Well, if you think all

that, you're absolutely right. I walked down to my office and I spoke

to Mr. Sloan, and I said: "Do you have any objections the agreements

being tabled?" He said no. I said: "May I quote you as having said

that, Mr. Sloan?" He said: "By all means." The only person who is

ashamed and embarrassed about tabling that agreement is the minister

right over there. The leaseholders have got absolutely nothing to do

with this agreement.

Mr. Minister, I withdrew when I said

you were lying; I withdrew when I said you were picking your nose; but

I still have a private opinion that I withdrew in public here.

Mr.

Chairman, the minister has an opportunity to recover his composure and

a bit of his reputation by tabling that agreement during his estimates.

Why don't you do it? It's got nothing to do with the leaseholders, and

you know it. What are you afraid of'? Pacific Logging isn't afraid.

What are you afraid of? If you're not willing to table those agreements

in this House, then you're not worthy of being Minister of Forests in

this province. You've already nodded that your companion in this

agreement has no objection to the agreement being tabled. You said

that: you spoke for that worthy minister saying that he has no

objection. I can tell by that confident look on his face that if he

were in a position he'd be up throwing those documents right across the

floor. Timid? Frightened? I think the minister is embarrassed by the

deal. What are you hiding?

It took me five minutes to walk

down the corridor and make the phone call. Mr. Chairman, a five-minute

recess would be enough time for him to confirm the phone call and say:

"Yes, the Leader of the Opposition is correct. Mr. Sloan has no

objection, and we will hereforth table the agreements, so that the

people of British Columbia during my estimates can have an opportunity

to read through them." If the minister wishes to submit to the

opposition a complete list of leaseholders.... We'll phone those too,

if that's what you want. We don't have the staff, the battery of phones

or the PR advisers that you've got, but if you can't do the job, we'll

do it. But I think, Mr. Minister, that you have been weak, timid,

frightened and unsure about your whole handling of this agreement. My

colleague, the member from Vancouver has asked you simple questions

about how much timber there is; the member for Mackenzie has pointed

out that there are questions in his region; and the member for

Shuswap-Revelstoke has pointed out that there are unanswered questions.

Mr. Minister, are you now prepared to table those documents? Is that

the agreement in your hand, Mr. Minister?

Mr. Chairman, I

don't want to delay the House, but the minister is now consulting with

the other minister with the agreement in his hand. He's getting close

to wanting to table the document. We should give him a moment to

reflect. Do you want to table the documents now, through you, Mr.

Chairman'? Does the minister wish to table the documents now?

Are

you prepared to confirm that Mr. Sloan has said that he is willing to

have the agreement tabled? Are you prepared to do that? You said you

instructed your staff to contact Mr. Sloan, and I assumed that to be

correct. I didn't ask Mr. Sloan whether or not he's been contacted by

anybody; I wouldn't do anything as discourteous as that. But is the

minister now prepared to confirm this by having someone in his office

phone Mr. Sloan and see if what I reported to this House is correct?

Are you prepared to do that, Mr. Minister?

MR. CHAIRMAN:

Before recognizing the Minister of Forests, I must comment, hon.

members, that when a member has withdrawn a remark that is

unparliamentary, it is equally unparliamentary for that member then to

refer to the remark that he has already withdrawn. I would ask all hon.

members to keep that particular point in mind in the future.

HON. MR. WATERLAND:

Mr. Chairman, there are a number of leases outstanding on the lands

held by Pacific Logging. These people, of course, would be concerned as

to the continuity of the leases they had and there would be a great

deal of uncertainty in their minds as to whether or not the leases

would continue when, in fact, the government takes title to the land.

It is for that reason that courtesy should really be extended to advise

them that the Minister of Lands, Parks and Housing advises me that

there will be no adverse effect on the leases. For example, there are

quite a number of cabins on leasehold property, subleased or leased

from Pacific Logging. There is the Mount Arrowsmith Ski Club and

various other lessees who may be in some doubt.

However, I

have no objection to tabling the document. It's very straightforward.

and how land will be evaluated, much as I have explained to the House.

I am reluctant to table it until such time as the people have been

advised that they don't have to be concerned about the continuity of

their leases. I have just said that. I would hope that by saying that

individually they will know that has been said, rather than hearing

some press report that perhaps they would be in

[ Page 4723 ]

jeopardy.

However, if the members insist, I'm quite willing to table this

document now. I would hope that no distress is caused to the people who

presently have the leases.

[Mr. Strachan in the chair.]

HON. MR. WILLIAMS:

On a point of order, I have been listening with interest to the

discussion which has taken place with respect to this document. The

rules do not permit the tabling of documents in committee.

SOME HON. MEMBERS: By leave.

HON. MR. WILLIAMS:

Not even by leave. I am sure the opposition would like to have the

opportunity of studying the document. I'm sure the document can be

tabled when the committee rises at 12 o'clock.

MR. BARRETT:

I move that the rules of the committee be suspended by leave and leave

be granted for the minister to table the document in committee.

MR. CHAIRMAN:

Hon. members, I am not prepared to accept that motion at this time.

Could the debate continue on the minister's estimates, and I'll have an

opinion shortly.

MR. BARRETT: Mr. Chairman, to make

it easier for the Chair, I ask leave of the committee for the minister

to table the report during committee.

HON. MR. WILLIAMS:

Mr. Chairman, the Leader of the Opposition is aware that the Chairman

has declined to accept the motion at this particular time. If the

Chairman wishes the opportunity to consult with the Clerk of the

committee, I would suggest it be permitted.

MR. BARRETT:

Mr. Chairman, I appreciate the anxiety of the Attorney-General about an

attempt to interpret the rules. All I'm asking is that the Chairman put

my request of leave of the committee that the document be tabled.

MR. CHAIRMAN:

The document cannot be tabled in the committee. Leave cannot be given.

The committee is only empowered to debate the estimates of vote 98 —

the vote before us at this point. The committee cannot accept tabling

of this document. The document will be tabled when the House resumes. I

would ask that we return to the debate on vote 98, the estimates of the

Minister of Forests.

MR. BARRETT: Mr. Chairman, would

you cite what House order prohibits a committee member from asking

leave during the committee that the rules be suspended? I want to know

what House rule says that committee cannot grant leave to suspend a

rule.

MR. CHAIRMAN: We'll have a decision momentarily in response to the member's question.

When

the committee rises and reports to the House. the committee can ask

leave that a document be filed at the same time as the report is made

to the House.

The debate continues on vote 98.

MR. BARRETT:

To be correct, I asked the Chair to instruct me as to what standing

order says that a member cannot stand up in committee and ask leave

that the rules be suspended so that some action, whatever it is, can

take place.

MR. CHAIRMAN: The Chair has ruled that

the documents cannot be filed in committee, and it is not up to the

Chair to advise the House on that matter. The document can be tabled in

the House when the House resumes. I would ask all hon. members if we

could return to vote 98, which is what this committee is empowered to

debate, and debate vote 98, the estimates of the Minister of Forests.

MR. BARRETT:

Mr. Chairman. I'm not challenging the Chair. I'm asking the Chair to

refer me to what specific standing order spells out that a member in

this chamber, when the House is in committee, cannot stand up and ask

leave that the rules be suspended for the purpose of any specific

action. I'm asking what standing order of the B.C. Legislature

specifically spells out that you cannot ask for leave in a committee.

MR. CHAIRMAN: Standing order 1.

MR. BARRETT: And what

section of standing order is that, Mr. Chairman?

MR. CHAIRMAN:

The Chair finds that the committee is not empowered to do anything

except that which the House has asked the committee to do, The House

has asked the committee to debate vote 98, the estimates of the

Minister of Forests, and that is all that this committee is allowed to

proceed with at this time. I am of the opinion that there has been

adequate discussion on this point of order.

MR. BARRETT:

Mr. Chairman, I am not disputing the ruling. I'm only asking

instruction. I quote standing order 1: "In all cases not provided for

hereafter or by sessional or other orders. the usages and customs of

the House of Commons of the United Kingdom of Great Britain and

Northern Ireland as in force at the time shall be followed as far as

they may be applicable to this House." Could You tell me what rule

there is in the House of Commons of the United Kingdom of Great Britain

and Northern Ireland that states that the House rules are not

applicable to committee, and specifically that a member cannot get up

and ask leave in committee that the rules be suspended? That is all I'm

asking. I would not dispute the decision. I'm asking the reference and

the standing order of the House of Commons of Great Britain and

Northern Ireland that specifically deals with a request by a member for

leave to have the rules suspended.

MR. CHAIRMAN: Let me quote, hon. member, from B.C. Parliamentary Practice :

"In

summary, when it is desired to suspend standing orders. the motion

being substantive requires two days' notice. Such notice may be waived

by unanimous consent, but only by the House, not by the committee."

That is my citation, and on that point, hon. member, I would ask that

we return to the debate on vote 98.

MR. BARRETT: Mr.

Chairman, I ask for leave in this committee that the requirements for

substantive order generally required by the House before leave is asked

be suspended so that the agreement can be tabled in committee. There is

no citation that I am aware of that specifically states that a member,

at any time — in committee or otherwise — cannot stand up and ask for

leave that the rules be suspended.

[ Page 4724 ]

Otherwise,

Mr. Chairman, you're saying that the committee is not subject to the

standing orders of the House. This has become even more important than

the tabling of the documents. This is an impingement on the rights of

the members to stand up at any time and ask for leave. Leave may be

denied. Lord knows, that has happened on occasion in the past, but it

is my right to ask for leave.

MR. CHAIRMAN: The

committee has no power to give leave or refuse leave. The committee has

been struck by the House to debate the estimates of the Ministry of

Forests, and that is the only thing that the Chair can entertain at

this time. In the report to the House, the Chair can be asked to report

that a document be tabled, and that will be a matter of the House. The

Chair cannot consider any other debate on this matter. The only debate

that the Chair and this committee can consider is the vote that is

before us now — vote 98, the estimates of the Ministry of Forests.

MR. BARRETT:

I have no desire to hold up the business of committee, nor will I

challenge the ruling. But this House has not yet been told specifically

what standing order of this House, or practice of Great Britain or

Northern Ireland, this decision is based on. I will not challenge it,

simply because I do not want a precedent established. I would request

that upon reporting to the Speaker, this committee report to the House

that such a question arose about the granting of leave in committee. I

would ask that you request the Speaker, if I may have leave to make

such a request.... I add that caveat advisedly. If I may have leave to

make such a request I would ask that the Speaker instruct the House

what standing order or rule applies that prohibits a member from asking

leave in committee for subsequent action to be taken.

MR. CHAIRMAN: That point is well taken, hon. member. That will be the report to the House when the committee rises.

HON. MR. WILLIAMS:

I'd like you to know that I certainly support the proposition just put

by the Leader of the Opposition. I think that this matter of the

conduct of the affairs of the committee should be reviewed and that all

members should be made aware of the basis upon which the committee is

able to do the limited work which the House gives it to do, and the

constraints there are upon that.

On the issue of the

document that the Minister of Forests has placed before you, Mr.

Chairman, in order that it may also be clear on the record, I would

respectfully request that when reporting to the Speaker you advise him

that such a document has been placed before you and that leave be asked

that it be tabled at that time.

MR. CHAIRMAN: A report will be made from the committee to the House.

MR. LOCKSTEAD:

I'm pleased to see that eventually we may have a look at this document

that we've been asking for for two sittings now. I don't think that the

minister need worry about revealing this information to leaseholders.

It's my view that they'll likely be pleased to see what the heck the

government is doing to them, with them, around them, about them and

over them. Furthermore, if the minister is now tabling documents,

obviously the government would not have entered into a transaction with

the CPR or Pacific Logging without some kind of an idea of the value of

the timber and property involved. Maybe the minister would be good

enough to table any preliminary appraisals of the timber and property

value of the 5,000 acres that we're literally giving away to the CPR. I

think it's important that we know that. We want to know if we made a

good deal or a bad deal.

HON. MR. WATERLAND: I

advised the member yesterday that I don't have even preliminary

appraisals in my hands at this time. When they are completed I'd be

very happy to table them with the House or to give them directly to the

member — whatever he wishes. I'll publish them in theVancouver Province .

MR. LOCKSTEAD:

It's just utterly amazing to me that the minister and the government

would enter into any kind of transaction with anybody — in this case it

happens to be the CPR — without knowing what we're trading for. We know

what they've got. We know the values CPR placed on their properties on

Vancouver Island that they received for free some time ago. The

minister is now telling this committee that he has no idea what the

timber values are on that property that they are.... I was going to say

they were proposing to give away, but they've given it away. The

minister tells us the documents are signed. He has no idea what the

property values and timber values are — no idea whatsoever. For a

government that considers itself to be sharp and shrewd — although, of

course, that's been disproved over the last few years on every occasion

that a business transaction is entered into....

Are you

telling me that this government and that minister entered into a deal

with the CPR without any idea of what they were trading for? Of course

they did it in secret; we know that. Maybe the minister can give us

just a rough appraisal. Are the timber values worth $60 million, as has

been quoted by people in the area? Are they worth $100 million or $200

million? What's the property value up there on 5,000 acres? How much?

Ten thousand dollars an acre? Who knows?

The minister must

have some idea of what he was doing before he signed the document.

Maybe the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) knows.

He's sitting just to your right. He was there a minute ago. Ask him. He

might have an idea, since it was under a

section of the Land Act that

the deal was carried on in the first place. Will the minister table any

appraisals on the timber values of that property he has?

HON. MR. WATERLAND:

I don't know if the member is losing his hearing or what. I've said a

dozen times that I don't have appraisals yet; they're being conducted

at this time. They are not in my hands, and when they are I'll be very

happy to table them or to give them to the member to do anything he

wishes with them.

The member talks about all this foreshore

land that Pacific Logging is going to receive in trade for the other

lands we have. There is very little foreshore land. When I look at the

plan I can see two small areas of waterfront, and in order to harvest

and manage a forest in that area some water access has to be provided.

The balance of the land doesn't touch the water. It's not waterfront

property. The member apparently has the same map in front of him that I

have. I think it's very clear if you look at it that there's very

little waterfront property, and that was probably included to provide

access for forest management and timber harvesting. It's difficult to

[ Page 4725 ]

harvest wood in coastal British Columbia unless you can get to the sea with it.

The

appraisals. We know the areas we are receiving. We know that they have

timber, recreational and real estate values, and there's quite a bit of

lakefront property included in the land we'll receive. I'm not about to

suggest a value for them. That's a matter for the professional

appraisers to do, and they're carrying out that work now. Perhaps they

are completed, but I have not yet got the documents. I don't have them

in my hand, and my deputy minister advises me that as far as he knows

they are not yet in the hands of the Forests ministry. When they are

the member can surely have them. Once we get through the formality of

tabling the document he can read what it says about evaluating the

lands, how this will be carried out and how differences in appraisals

will be rationalized so that a fair value can be placed on both lands

if there are differences in the appraisals done by Pacific Logging or

the government. It's very straightforward.

This land trade

provides considerable benefit to Pacific Logging in consolidating their

holdings and very considerable benefit to the government in making land

on Vancouver Island, which up until this time has been in private

ownership, available for other uses. I'm sure the people on Vancouver

Island are very pleased about having access to this land and having the

timber values there available for the small operators. Perhaps as we

learn more about the specific condition of the forest lands we can

start doing some forest management work. We could get some small

operators involved in silvicultural treatments. There are lots of

things that can happen. But I don't have the appraisal at this time.

When I do have it you'll be more than welcome to see it. I'll sit down

in my office. I'll give it to you. I'll table it in the Legislature —

whatever you wish.

MR. LOCKSTEAD: The point of this

questioning, of course, is that the government has entered into a deal

with a private party without knowing what they were dealing for and

with. This is the point I'm making. It's all very well to do appraisals

after the documents are signed. Who knows what happens or what kind of

a deal is struck then? It's like me going out and buying a used car

from one of your colleagues over there without looking at the car and

just taking his word for it. That would be pretty foolish. In effect

that is what this government has done. They have gone out and signed a

deal, completed their transaction — in this case with Pacific Logging

of CPR — not knowing what they were giving away, without any idea of

what they were doing. Was the property worth $20 million, $100 million,

$500 million? The minister doesn't know, and the deal has been signed,

completed. In my view, that's a shocking way to handle the people's

business in this province.

MR. HOWARD: Mr. Chairman,

I wonder if I could pose an uncomplicated question to the minister and

ask him whether he would be able to apprise the committee of his

reaction and response to the recent offer by Noranda of $56 a share for

MacMillan Bloedel shares. Does the minister have any views to express

about that proposal?

HON. MR. WATERLAND: Mr.

Chairman, I haven't studied the details of the offer yet, but the

procedure will be the same as is the normal procedure when a suggestion

of purchase of major control of a company in British Columbia takes

place. We have to assess the implications of it — what it means in

terms of corporate concentration, of regional monopoly. When that is

done we will be making public whether or not we think it's in the best

interests of the province of British Columbia. I haven't had a chance

to make that assessment yet. It will be done in due course, in the same

manner that all such assessments are made when proposals such as this

come forward.

MR. HOWARD: Mr. Chairman, the matter of

a controlled company is an easy one to understand. I assume the

minister is talking about the

interpretation

section of the Forest Act,

which identifies a controlled company as one where more than 50 percent

of the shares are held by one person or by a group of companies or

persons which are not dealing with each other at arm's length. That one

is easily identifiable. It's a mathematical thing. You just see how

many shares are out there, and if one person or group has more than 50

percent of them, that company is controlled. I understand that's why

B.C. Resources Investment Corporation only sought to acquire 49 percent

of the shares of MacBlo, so they wouldn't then run into any

difficulties with respect to whether or not licences, leases or timber

holdings could be denied transfer to them. We can understand the

controlled companies; that's fairly clear.

The minister

mentioned an examination made on the basis of regional monopolies. What

does he mean by that? Can he tell the House whether there is some

guideline as to what a regional monopoly is? Are there some geographic

figures that are available? Are there some figures about percentage

share ownership in companies and the like? Has an order- in-council or

regulation been passed to identify and spell out what a regional

monopoly is, so that the committee will have some understanding that

what the minister is saying will be examined with respect to this

attempt or offer by Noranda?

HON. MR. WATERLAND: Mr.

Chairman, spelling out in detail what is meant by.... I don't believe I

used the word monopoly. I'm thinking of regional domination or undue

regional control in the hands of one company or communities in an area.

It's a difficult thing to lay down in black and white. To a great

extent value judgments have to be considered.

The effective

control and the beneficial control of a company are two different

things. The Forest Act, in its definition of control, uses beneficial

control as being over 50 percent. Of course we know that effective

control can be acquired at a much lesser percentage of a widely held

company. These are all factors that we have to judge in deciding

whether or not it's in the best interests of the province. Of course we

have to consider the interests of the shareholders of the companies

involved as well.

People who own MacMillan Bloedel shares

now are offered, I believe, the equivalent of about $56 a share — some

in shares of Noranda and some in cash. The interests of the

shareholders also have to be considered. So there are many factors that

have to be judged, and it's very difficult to have a very hard and

fast, spelled-out policy with numbers and percentages, because it

depends on the nature of the company and how it's dispersed within the

province. The only hard and fast number we have is the control of

percentages of the allowable cut.

We have said that the present level of control that MacMillan Bloedel has is the upper limit that we would like to

[ Page 4726 ]

see,

so that's the only hard and fast number. The balance is largely in our

judgment as government and in the best interest of the province of

British Columbia and the use of the forest resource.

MR. HOWARD:

Mr. Chairman, the minister's answer, as far as the forest industry is

concerned, I think leaves them perpetually in some doubt — with the

exception of not being in doubt about what is a controlled company,

namely beneficial ownership of 50 percent or more than 50 percent of

the shares. Apart from that, the forest industry is obviously

completely in the dark as to what the intentions of government might be

with respect to undue regional control, monopoly, domination or

whatever other euphemism the minister unduly may develop to deal with

ownership control of the forest industry. It seems to me to make much

more sense for there to be some public guidelines, whether those public

guidelines relate to allowable annual cut, area, corporate ownership or

interlocking directorships or whatever. I think, Mr. Chairman, by doing

this the minister is really expressing that he, his ministry and his

government haven't got the foggiest idea what they want to do or want

to see happen in the forest industry.

We had that spectacle

a few years back where Canadian Pacific wanted to buy some shares in

MacMillan Bloedel. The Premier, seeing that there was a political ploy,

developed the phrase, "B.C. is not for sale, " on no other basis than

to take political advantage of a situation. We now have the spectacle

of the government having expressed the opinion that if Can-Cel acquired

MacMillan Bloedel, it would be undue concentration and that wouldn't be

good. But if BCRIC acquired MacMillan Bloedel to the extent of 49

percent, presumably that would be all right.

AN HON. MEMBER: What if Noranda acquires it?

MR. HOWARD:

And maybe even if Noranda acquired it nobody knows. The only clear

thing is that the CPR can't acquire it. One can't continue, I submit,

to run along on an ad hoc basis leaping from week to week trying to

assess each individual situation as it arises and say: "Well, we've got

no guidelines, no rules, no clear knowledge of what it is we want to

see happen, but we'll look at each situation and make a decision at

that time about that situation and determine whether or not that

constitutes something called undue regional control or regional

monopoly or whatever."

In the area from Terrace through to

and including Hazelton there is a regional domination in the forest

industry. One company, Can-Cel, has got everything. There wasn't any

concern expressed by the minister about undue regional monopoly,

control or domination, but it in fact exists. Maybe the region doesn't

suit the criterion of the minister; maybe his concept of region is

larger than that. But until he's come up with some idea and told the

general public and the industry what these guidelines are, everybody in

the forest industry i's going to operate on the basis of one simple

fact only: that they hope whatever they do satisfies the political

sense of the minister at any given time. That's a damned poor way to

try to run the affairs of this province, but that's what the minister

is saying. "Let's have a look at what the politics are, and we'll make

the decision on that basis" — the same way as the decision,

politically, was made on a political basis about the CPR, or Canadian

Pacific Investments, trying to buy into Mac-Blo. It was a political

decision for political purposes advanced at that time with the hope

that it would paint the Premier as a person who is the defender of

British Columbia rights. Maybe the same thing will happen with Noranda.

Maybe the Premier will decide we've got to go the same route, and we'll

tell Noranda, "No, you can't buy Mac-Blo, because B.C. is not for sale,

" or some other catchphrase. All that does is tend to destroy any sort

of clear understanding of what is expected of the forest industry in

terms of ownership.

I think those fancy phrases, whatever

they are, that the ministers talk about — regional monopoly, undue

regional control or regional domination — are just so much froth and

foam. They don't mean a damned thing, because regional control exists

in some regions, and I identify the Terrace-Hazelton area. There is

regional domination by one company — a monopoly. Is that what the

minister says is not a good thing'? If so, why didn't he stop Can-Cel

from buying out Abitibi's holdings in Terrace'? Why didn't he stop

Can-Cel from buying out Rim Forest Products in Hazelton if he was

concerned about undue regional domination or control'?

MR. BARBER:

I'd be happy to yield to the minister if he would care to reply at this

time to the questions raised by my colleague from Skeena (Mr. Howard).

not, I have a few questions about the extent to which the minister has

applied the same standards to the British Columbia Resources Investment

Corporation's proposed purchase of a 49 percent total interest in

MacMillan Bloedel as he has indicated he has intended to apply to any

other private purchaser. I wrote down and noted fairly carefully —

correct me if I'm wrong — that the minister indicated, in regard to the

proposed Noranda purchase of Mac-Blo at $56 a share, as compared with

that proposed by BCRIC at $46 a share, that "the normal procedures

would apply" and that the government would "assess the implications,"

which he then went on to identify as being issues of "corporate

concentration and regional monopoly." I wonder if the minister could

disclose to the committee what study has been made by his ministry of

the proposed BCRIC takeover of MacMillan Bloedel, were that to be

accepted by the shareholders of MacMillan Bloedel.

I am aware that this morning in the Times-Colonist and the Vancouver Province , and presumably this afternoon in the Vancouver Sun ,

a major advertisement published by the board of directors of MacMillan

Bloedel advises its shareholders to refuse the offer by BCRIC. I'm well

aware it's not a fait accompli. They may make the same advice available

in regard to Noranda's intended purchase. Nonetheless, the issue

remains, and the question is this: has the minister made any serious

study at all on the basis of the criteria, which he himself outlined,

to assess the implications in regard to corporate concentration and

regional monopoly of BCRIC's proposed takeover of MacMillan Bloedel?

The minister may reply that 49 percent ownership is not control. If so,

I would remind the minister that he himself said in reply to another

question that often in a widely held company — MacMillan Bloedel

certainly qualifies as that — you can exercise effective control with

far less than majority ownership of the equity interest and the shares.

Indeed, it's been frequently argued that Canadian Pacific Investments,

for all practical purposes, has controlled MacMillan Bloedel with less

than 20 percent interest for some six or eight years now. Nonetheless,

the concern we have is whether or not the government has applied the

same tests and standards to the British Columbia Resources Investment

Corporation, and has made the

[ Page 4727 ]

same inquiries that it would make in regard to any other corporation in the private market.

Let

me anticipate another concern that the minister may raise. I suppose he

might argue that BCRIC is a company like no other, and therefore the

rules shouldn't apply to BCRIC. He may argue that BCRIC is so widely

held by the people of British Columbia that you shouldn't consider it a

corporation like any other. Therefore the concerns raised on the issues

of corporate concentration and regional monopoly — the words used

precisely by the minister this morning — are themselves not valid.

Well,

I argue strongly that that's not so. I argue as strongly as I can that

if you're going to apply any rules at all and require of any

corporation that they meet tests of corporate concentration and

regional monopoly in the forest industry, those rules must adamantly be

made to apply to BCRIC. Because, you see, we have the word of the

Premier, for what it's worth, that BCRIC is simply now another private

corporation, owned by members of the general public, operating in the

public marketplace. If that's true, if the Premier is to be believed,

if we're to take him at his word that BCRIC is in fact a corporation

like all the others, managed by its shareholders and the board of

directors which they elect to represent them, then the minister cannot

make a competent reply that BCRIC should not be treated like any other

corporation when it makes a bid to take over, in this case, a clearly

controlling interest in MacMillan Bloedel, the largest integrated

forest company in British Columbia.

Therefore I ask the

minister if he would be prepared to disclose to the committee the

results of the inquiries that we presume he has made into BCRIC's

proposed takeover of Mac-Blo. In particular, could the minister inform

the committee whether or not he has uncovered and is prepared to reveal

any concerns within his ministry on the issues of regional monopoly and

corporate concentration? If BCRIC takes over Mac-Blo, what position

does that give BCRIC within the possible markets overseas and within

the general framework of the current forest enterprise in British

Columbia? How large a company, as a forest-operating organization, does

BCRIC become? How many licences would be affected if BCRIC won

ownership of Mac-Blo, and might be affected deleteriously in the

opinion of the minister concerned about, as he says, issues of regional

monopolization and corporate concentration?

If the minister

is unable to answer these questions, we can only presume two things:

one is neglect of duty, and the other is a double standard. Neither of

those is an acceptable reply If you have a report on the proposed

takeover of BCRIC by Mac-Blo, will you disclose that report to this

committee at the appropriate time? Will you release it to the general

public as soon as possible? Will you let us know whether or not BCRIC

has met the tests and standards which you yourself this morning have

said you will apply in the field of regional monopoly and corporate

concentration — the normal procedure that you said Noranda will now be

subject to, and that we presume BCRIC has already been subjected to

within the framework of the policy you've been outlining? If you can do

that, well and good. We'd like to see that report as soon as possible.

I imagine that the shareholders of MacMillan Bloedel would also like to

see it as soon as possible. We certainly would. I call upon you to

disclose that this morning, to table at the appropriate moment the

report that we presume you've already conducted, or if it's still being

conducted, to tell us what stage it has reached, what progress has been

achieved thus far.

But if the minister says that that's not

available because it hasn't been done, then we have to point out that

two things have occurred. First, there is a transparent neglect of duty

on the part of a minister who should be willing to examine the

implications of any takeover of MacMillan Bloedel by any corporation,

including BCRIC. Secondly. there is the possibility that this

government applies a double standard, that BCRIC is not be be treated

like all the other corporations, and that just because BCRIC proposes

to take a monopoly interest in MacMillan Bloedel — and thereby, it

would seem, in the whole of the forest industry in this province — it

is nothing we should worry our little legislative heads over.

We think these are legitimate questions. I hope the minister is prepared to answer them at this time.

MR. CHAIRMAN:

For the benefit of the record, in deference to standing order 36, I

might point out that because of a technical difficulty the Chair

allowed the member to stand in another member's place. I just wanted to

have that on the record, hon. member.

HON. MR. WATERLAND:

Mr. Chairman. the ministry has the statistics available. They're

available to anyone who wishes to seek thenm — as to the levels of cut

that are held by various companies and the levels of cut they hold in

various forest regions. There is an unlimited number of combinations of

possibilities of company acquisitions. dispositions and so on that

could take place. I don't have a report as such at this time about the

possibility of BCRIC acquiring 49 percent, or whatever it is, of

M&B. These numbers can be put together. If the member so wishes, I

can have the specific combination as to what that would mean put

together for him and I can give it to him.

The same thing

can be done for Noranda's recent offer — the other holdings of Noranda

through Northwood Properties Ltd. and their interest in B.C. Forest

Products. What percentage interest do they have? What does that

interest mean in terms of control? We can give you the numbers. They're

very easily developed. You can interpret them as you wish. Those

numbers can be made available. I don't have them at this time; I don't

even have them in the form of a single report. But the strategic

studies branch of the ministry is assembling this information, and it's

public information.

MR. BARBER: I thank the minister

for his willingness to disclose the numbers. I appreciate that and will

in due course call upon him to do so. What I was wondering is whether

or not you're prepared to disclose your conclusions. You correctly

observe that anyone can interpret numbers his way. What we're asking

for is your

interpretation. Is BCRIC's proposed takeover of Mac-Blo

acceptable to you within the framework of the policy you yourself have

enunciated concerning corporate concentration and regional monopoly? We

appreciate the offer of the numbers. We'll take you up on it in due

time. What we'd like now is your policy, your version, your

interpretation, your notion of whether or not it is an appropriate

thing for BCRIC to control Mac-Blo.

HON. MR. WATERLAND:

Mr. Chairman, I pointed out the other day that the general policy is

that we don't wish to see companies acquire more control over timber

rights than MacMillan Bloedel has now. That's in the order of 11 or 12

percent of Crown timber plus tree-farm licence lands. In addition. they

have private timber rights, which brings them

[ Page 4728 ]

to about 14 percent of the total provincial allowable cut, including

private lands. We've also said — and I said in the House the other day

— that we would allow BCRIC to grow larger than that if BCRIC were to

acquire control of MacMillan Bloedel. That is, if you took not just the

beneficial interest, but the total cut that MacMillan Bloedel has plus

the total cut that BCRIC has through Can-Cel, Kootenay Forest Products

Ltd. and others, that would amount to something in the order of 18 to

20 percent. I believe that I have said — if not, I'll say it now — that

that would be acceptable.

However, there is also an upper

limit to which BCRIC should go. That is not a clearly defined line yet,

but I would think that it should not grow much beyond that, if at all

beyond that, because you're getting quite a bit of total provincial

concentration in one company. You then have to look at the regional

problems, because BCRIC does operate in several regions in which they

are quite large — the northwest, the Kootenays. Then if you combine

MacMillan Bloedel with that the regional concentration doesn't change,

because the two companies aren't really operating in the same areas.

The total provincial picture is what we look at in that respect.

MR. BARBER:

If I understand the minister correctly, he's indicated that were BCRIC

to take over MacMillan Bloedel, with MacMillan Bloedel currently

occupying roughly 14 or 15 percent of the market — putting it crudely

and using figures which I realize are approximate — and given that

BCRIC currently has control of Can-Cel, Kootenay Forest Products,

Plateau Mills and a couple of other minor holdings, that would take

that new enterprise, if it were accepted by the MacMillan Bloedel

shareholders, to roughly a 20 percent position in the forest industry

in B.C. Do I understand the minister correctly? Yes, he agrees. That's

a fifth of the whole market. That's a fifth of the future. It strikes

me, for what it's worth, that that is itself too much.

I for

one hold that the stronger the forests industry will become depends

largely on the extent to which it can be diversified into smaller and

more efficient holdings. I've seen in studies, I've met with foresters

and I've been told in private meetings — and I have no reason to doubt

the veracity of it — that, man per man, Sooke Forest Products from

Victoria is more efficient than is MacMillan Bloedel. There may be

particular conditions of work and there may be particular historical

circumstances that justify that, but I think it can also be argued —

and not just by Hershell Smith at Sooke, but by lots of other people in

the industry too — that in a certain way, for clear and arguably sound

reasons, smaller enterprises are often more cost-conscious, more

concerned generally about problems of delivery and service, and more

urgently required to maintain a good reputation with suppliers and to

maintain as well a good relationship with their employees. I think it

can be fairly argued that there is much data across the province to

suggest that smaller, well disciplined, well-run logging companies are

simply more efficient, more effective and more prudent in their use of

the forest resources of this province.

I'm not persuaded

that by allowing BCRIC to take over one-fifth of the whole show, we're

going to be guaranteed any such efficiency, prudence or caution in

regard to the best and the highest possible use of the forest resource

in B.C. I'm concerned about that. The minister says that at the moment

20 percent is the limit. Well, it may be that with a new minister, if

BCRIC's proposal to take over Mac-Blo were accepted, it would become 25

or 30 percent.

You know, there are people in the forest

industry of British Columbia, Mr. Chairman, who are desperately

concerned that BCRIC might try to take over all of it. One of the

reasons why BCRIC has, to say the least, a not entirely good reputation

with industrialists in this province is that those industrialists are

terrified that, by virtue of BCRIC's considerable holdings and assets,

it is in a position to take over virtually any private enterprise it

wishes to in this province. The minister well knows, I'm sure — he no

doubt has met with the very same industrialists that the official

opposition has met with — that that's one of the gravest concerns faced

by business in this province. As Mr. Knudsen put it at a press

conference last week, it's like being embraced by a large bear when you

talk about being embraced by the loving charms of the British Columbia

Resources Investment Corporation. I'm not sure it's in the best

interests of a healthy forest industry. I'm not sure that it guarantees

efficiency, the best and the highest use of the forest and fibre

resource, to allow BCRIC to become even that large.

It could

be observed that as far as the stock-market is concerned BCRIC is a

flop. BCRIC shares were valued at $11.75 when it started. The Premier

artificially lowered them to $6. They hit $5.25 a few days ago. They

were at 51/8 yesterday. I don't know what they are trading at today. At

the moment, as far as the stock-market tests these things, BCRIC is a

bit of a flop. One of the reasons it is a bit of a flop is the reason I

am concerned about its proposed takeover of MacBlo. BCRIC has not been

perceived to be well run or well managed. The deal with Kaiser

Resources was presumed to have been a very foolish deal, and is widely

perceived by people within the stock-market industry and within trading

industries generally across this province to have been an ill-advised,

ill-conceived and most certainly ill-managed proposal.

BCRIC is able to see its own shares start at $11.75, reduced to $6 and

tumble to $5.25 — have all of that happen in a political atmosphere

which saw BCRIC off to a splendid start and saw BCRIC make the largest

single share sale in the history of Canadian enterprise — if BCRIC has

been able to mismanage all of that, how much better can we expect BCRIC

to do with Mac-Blo? If BCRIC was able to botch the deal to take over

Kaiser Resources and create a great deal of public concern; if BCRIC's

relationship with the industrial community of British Columbia is as

I've portrayed it — and I think it is one of fear on the part of that

industrial community that they might be taken over by this monolith;

and if BCRIC shares continue to trade far below the paper value stated

when the four commercial houses said two and a half years ago that the

paper value should be minimally $11.75, based on the assets that were

conveyed to it — having been established and added to by the New

Democrat administration; if BCRIC has been able to achieve all of those

poor things, what kind of performance might we expect from BCRIC if

they were allowed to take over Mac-Blo?

The policy argument

that I want to leave with the minister is this. Small can be very

successful, very efficient, have good labour management relations and

can often use the forest resource in a more prudent and conservative

way than any large company can ever do. If all of those figures and

cases favouring small enterprise are legitimate and valid — and I think

they just might be — then it seems to me BCRIC has got to be able to

make a far stronger case than it has so far that it is entitled to a

one-fifth control of the forest industry of this province. I'm not

persuaded that a company as big as

[ Page 4729 ]

BCRIC

is competent to manage as precisely and ably as the forest resource has

to be managed. We don't have any evidence of it so far. Look at the

Kaiser deal — the problems with its shareholding, what happened to poor

Mr. Helliwell and all the rest of it. I don't think that big

necessarily means better in this case, and we'd like to hear a far

stronger argument from BCRIC management, and thereby from this

government, as to why BCRIC should be allowed to assume a 20 percent

interest in the forest industry of this province if its Mac-Blo

proposal goes ahead.

There's a lot to be said for the Sooke

Forest Products companies of this world; they're small, efficient,

tough, and have good labour relations. They fight like hell in the

marketplace, and they succeed. I think one of the reasons they succeed

is because they're small. They're small, they're accountable and you

can see what they're up to. The shareholders are absolutely satisfied,

and the workers like it too. By the way, Sooke Forest Products has also

experimented with a number of forms of worker participation and

industrial democracy within the plant itself. Apparently that's another

reason for the greater efficiency per man-hour of Sooke Forest Products

employees as compared with some of the larger companies. But that's a

separate issue for another time.

The policy I would argue to

the minister is this: if you think BCRIC is entitled to manage and

control one-fifth of the forest industry of this province, we'd like to

hear a darned strong argument as to how able BCRIC is in fact to meet

that promise and those obligations. On the basis of the poor track

record of BCRIC so far, we're not persuaded that it is so entitled, and

it might be better to leave well enough alone as it is today.

MR. HOWARD:

I wanted to follow along on what the first member for Victoria and the

minister had to say about control of timber-cutting rights and the 20

percent figure, which seems to be acceptable as a figure. Could the

minister advise us — because I understand Noranda officials spoke

either with him or departmental officials, although that understanding

may have been improperly given to me — whether they discussed this

matter earlier with the department? Therefore the department and

certainly the minister would have known that Noranda was interested,

especially since Calvert Knudsen of MacMillan Bloedel and the board of

directors kept telling the investment community that $46 was not

enough, that it didn't truly reflect the value of MacMillan Bloedel,

that they were in fact asking for other offers and they were bound to

get them on that basis.

If the minister had this prior

knowledge that Noranda was interested in acquiring MacMillan Bloedel,

can he tell us, using the same references and percentage figures of

cut, what it would mean if, for argument's sake, Noranda acquired the

49 percent of MacMillan Bloedel? Add that on top of what Noranda now

controls or participates in in timber cutting rights in B.C. through

B.C. Forest Products, which is one of Canada's largest integrated

forest products companies, as well as through Northwood Pulp and Paper,

which have cutting rights and a mill in the Prince George area.

Northwood has a pulp harvesting licence covering something in the

neighbourhood of 2.5 million acres. I wonder if the minister could give

us what knowledge he has about the percentage ownership of those

companies and so on, so at this point we'll be able to assess,

superficially in any event, whether Noranda would fit within that 20

percent limit that the minister seems to think is okay. Could the

minister provide the committee with that information now?

HON. MR. WATERLAND:

I've already answered that question. I don't know what the specifics

are, because I've only now received the proposal. Noranda, in making

their offer, have indicated that they would dispose of certain other

assets — various things that they would do. Those numbers are being

researched in an attempt to draw them together. They're not available

at this time. Noranda have discussed with me their intent to do this,

and in order to get the numbers regarding other companies' positions,

they have discussed this with my staff. They did that prior to making

their offer. I don't have the answers yet. They're being developed now.

The

first member for Victoria (Mr. Barber) doesn't agree that BCRIC can

effectively manage its assets. He says that it's too big and that it

shouldn't get any larger. He says that the Kaiser purchase was a bad

deal. He says that the value of the shares, when originally stated,

were at around $11 and subsequently went down to about $6. I think the

member knows what transpired when BCRIC shares were issued. If an

unlimited number of shares had been sold, the value would have been at

$6, because that was the purchase price of them. The book value of the

company was diluted by the increasing number of shares that were

issued. The member understands that. The value of trading on the market

does not reflect the worth of the company, especially when members such

as the first member for Victoria continue to try to do their level best

to state to the public that it's a bad investment, The public begin to

believe that, and he depreciates the value to shareholders. I don't

think that's a wise thing for him or any other member to do.

That

member talks about the concentration of the forest sector into one

company. Strange that he should speak that way, because the Minister of

Lands, Forests and Water Resources under the previous government had as

his objective, which was very apparent to everyone, the eventual

takeover of the entire industry into a government operation, and he was

working in that direction. The member knows that. He becomes somewhat

embarrassed when I say that and begins to wail his head around and make

noises as do these members.

MR. KING: That's completely false.

HON. MR. WATERLAND:

See how nervous they get when I begin to talk about their socialistic

aspirations when they were in government? Is it any wonder that

investment in the industry stopped and that the plants and machinery of

the forest industry began to run down. No one knew when they were going

to be the next to be taken over by the socialists.

The

purchase of Kaiser Resources by BCRIC has put that company in the

position of having control of the largest coal-producing company in

this country, or North America for that matter. They have tremendous

assets in energy resources. They're currently planning and working

toward the construction of another mine. That company is a tremendous

asset for BCRIC. Kaiser has been a well-run company, and I can only

conclude it will continue to be, because the same managers are involved

with the company now as before. BCRIC is a widely held company with a

tremendous resource base in the province. It's a great asset for the

shareholders of BCRIC to have, and I feel very confident that the real

value of those shares will be demonstrated in the marketplace in the

not too distant future, in spite of the efforts of the members opposite

to depreciate it in the eyes of the investing public.

[ Page 4730 ]

MR. BARBER:

The minister misrepresents the case on two counts. He would have us

believe that the reason BCRIC shares have tumbled to less than half

their book value is that the market decreed it. That's complete

nonsense: the Premier decreed it. The book value of BCRIC shares was

set at $11.75 by four different investment houses, who examined the

worth of the assets that were transferred to BCRIC, having been taken

over and enhanced by the New Democrat administration. For political

purposes the Premier artificially lowered the value of the shares to

$6, and then the shares were sold. For the minister to try to misstate

and misrepresent the case in that way is unconscionable. The market did

not lower the value of the shares; the Premier did. The book value was

$11.75, and the Premier said he would sell them at $6. Well, fair

enough: he did that for political purposes, and he got re-elected —

that's how it works sometimes in this province. But the minister has no

right at all to misrepresent the facts of the case in regard to the

value of BCRIC shares and why they went from $11.75 to $6. To say that

it was because the shares were so widely sold and therefore diluted in

individual value is completely wrong. The minister should know better,

or at the very least he should know enough to keep his mouth shut, if

he doesn't know what he's talking about in the first place.

But

the second issue misrepresented by the minister is the false claim that

it was the policy of our administration and of its Forests minister to

nationalize the whole of the forest industry in B.C. That is false. It

is, however, on the same level of the equally false claim of the now

Deputy Premier (Hon. Mrs. McCarthy) that we had established a secret

police force in B.C. It has at least as much going for it as that

preposterous piece of fiction did, but it has no more going for it than

that.

The minister has no right to misrepresent what

actually happened when the BCRIC shares went from $11.75 to $6. It is

certainly a matter of

interpretation as to why they've fallen from $6

to $5.25. That's fair enough: there may or may not be good reasons for

that. I would argue that one of the most important reasons for that is

the clear, definable, provable public perception that the Kaiser deal

was mishandled, that far too much was paid for those shares and that

certain individuals profited in a wrongful way. That's one of the

reasons. It's got nothing to do with the value of the coal in the

ground or the company itself. It's got a great deal to do with the way

in which BCRIC has been managed. The competence and the quality of

management of any corporation will inevitably be reflected in the

trading value of its shares on the VSE or the TSE or NYSE or anywhere

else you care to look. The perception is that BCRIC is not well managed.

know that the assets that were obtained or created by the New

Democratic Party and transferred to BCRIC — CanCel, Kootenay Forest

Products, Plateau Mills, the holdings in B.C. Tel — were worth a lot of

money. We know it because we created it that way and we managed it

well, and we're proud of that achievement. We're well aware that those

things are worth a lot of money, and they stand as blue-chip assets in

BCRIC's own portfolio.

We're also well aware that the value

of coal in the ground at Elkford and Sparwood — the coal in the

southeast developments of this province — is significant, but that's

not the case we're putting, and for the minister to claim otherwise is

to claim a false thing.

We say the reason BCRIC shares are

trading so poorly is not because the opposition has the nerve to point

out the obvious. We say they're trading poorly because the financial

industry in this province has lost confidence in your government and is

advising people not to buy the shares because of the debt equity

relationships that BCRIC currently suffers under.

Interjection.

MR. BARBER:

Then stand up and speak for the stockbroking companies if you will and

tell us how they are touting BCRIC shares currently. You'll be lucky to

find one stockbroker that's doing that.

MR. CHAIRMAN:

Order, please, hon. member. If we continue to address the Chair and

side comments are kept to a minimum, we'll accomplish our goals.

MR. BARBER:

I accept your advice, Mr. Chairman, and I conclude with this advice to

the minister. If you expect us to endorse BCRIC's takeover of Mac-Blo

you'd better be able to demonstrate to us that BCRIC is well managed,

that its decisions are well taken and that the worth of those decisions

and that management is reflected by the stock-market itself in this

province. It's a bit much, even for that paranoid minister, to claim

that the stock-market is a commie front doing the bidding of the NDP

and therefore bad-mouthing the value of BCRIC shares for political

purposes.

I don't own any shares in anything except one

share in Westcoast Savings. I'm in no position to influence the

stockmarket. I don't know what the minister's personal holdings are —

they're probably greater than mine — but I do know the stock-market

itself has its own expectations, its own standards and its own point of

view. The current point of view, expectations and standards of the

Vancouver Stock Exchange hold that it is worth about $5.50 a share,

period. Not the $11.75 it started at, not the $6 the Premier

artificially devalued it to, but $5.50, and it's been trading there for

weeks and weeks. It'll likely stay there for some time as well. It may

briefly go up to $6.50, $6.65 — no more than that — if it manages to

take over Mac-Blo, but it will go back down again. To say that the NDP

somehow controls....

Interjection.

MR. BARBER: I know how the stock-market works, and I know how you worked when you falsified the record regarding the Princess Marguerite .

MR. CHAIRMAN:

Order, please, hon. member. Again, to impute any improper motive to a

minister of the Crown is most unparliamentary. I would ask the member

to withdraw the word "falsify." Would the member withdraw the remark'?

MR. BARBER: I always withdraw any remark the Chair asks me to withdraw.

The

minister's motives were no doubt not impugnable at all. They were

typical Socred motives to try to discredit — in this case wrongly — the

vessel Princess Marguerite , but that's another issue for another time.

MR. CHAIRMAN:

I would ask the Minister of Industry and Small Business Development

(Hon. Mr. Phillips) to come to order and, secondly, I would ask the

first member for Victoria to return to vote 98.

[ Page 4731 ]

MR. BARBER:

The concern we're raising is whether or not BCRIC is entitled to take a

20 percent stake in the forest industry in this province. We hold that

unless the government can demonstrate that BCRIC is better run by its

management and better respected by the stock-market than it is today,

it has no right to obtain such an enormous position in the forest

industry of British Columbia.

Interjections.

MR. CHAIRMAN:

Order, please. I will again ask the members to come to order. The

member for Shuswap-Revelstoke is the only member who has the floor.

MR. KING: Thank You, Mr. Chairman. I'm the only member in order. That's a customary position for me, Mr. Chairman.

I'm

rather intrigued by some of the answers the minister gave to my

colleagues. He talked about the undesirability of corporate

concentration, either on a regional basis or presumably a provincial

basis.

Interjections.

MR. KING: Mr.

Chairman, the minister of clearcut is interrupting me again. I don't

think there's been an adequate program of regeneration there. Perhaps

he wants to get involved in the forest estimates here, and I can't seem

to subdue the gentleman.

I was intrigued by the minister

indicating that there is a double standard in terms of his government's

policy of preventing what he refers to as undue corporate

concentration. He indicated previously that BCRIC is exempt from this

program. He further clarified that a bit this morning by pointing out

that BCRIC will be subject to some limitations also.

Whereas the

limitation for other companies is about 14 percent, by using MacMillan

Bloedel as the model, BCRIC would be entitled to acquire a higher

degree of concentration, presumably through acquisition of other

companies — private purchases — of up to 20 percent. I'd like to hear

something from the minister about precisely what his reasoning is. What

is it about BCRIC that allows it this special status? Has the minister

done my analysis of the share control and ownership within the British

Columbia Resources Investment Corporation? What degree of BCRIC's share

ownership and control resides outside the province of British Columbia?

Why is BCRIC so special that it should be treated differently than

Noranda, for instance?

I'm not going to give dignity to the

minister's statement that the previous NDP Minister of Forests sought

to take over and nationalize the total forest industry in the province

of British Columbia. That's patently false. In fact, there was no

nationalization whatsoever but the purchase on the open market of the

very companies that this government has placed under the control of

BCRIC. That's a matter of record, and the minister should know that.

One of the things that intrigues me is that this minister and his

colleagues have criticized the NDP over the years and suggested that we

might in some way manipulate the private corporations so that their

shares would go down and that we would then be in a position to capture

them. What is the effect of this government's policy with respect to

MacMillan Bloedel? There was an offer made by BCRIC — S46 a share.

MacMillan Bloedel's chief executive officer, Mr. Knudsen, indicated

that in his view that was too low. I think that when he did so he

indicated that other offers would be looked at — he at least implied

that, I should say. That has now occurred, apparently. Noranda has made

an offer, but because of this government's policy MacMillan Bloedel is

apparently not going to be allowed to consider the higher offer from

Noranda because Noranda does not fit the optimum size role which this

government has set out with respect to concentration of ownership in

the forest resource. Now I want the minister to explain to the

committee what effect he thinks that will have on the value of

MacMillan Bloedel shares. Does this government believe in free

enterprise at all anymore? They call themselves free enterprisers and

say they are adhering to the market, Mr. Chairman, but here they arc

intervening between competitive bidding for the shares of a private

company in the province of British Columbia. They're saying: "According

to some secret formula or to some hidden criteria we are going to give

preference to BCRIC. We are going to ensure through this vehicle that

there is no competition." As a consequence, the value of MacMillan

Bloedel shares is going to be depressed. Isn't that the natural

consequence of the policy that the minister has enunciated here? I

think it is. If I'm wrong, I'd be very happy to hear from the minister.

I haven't taken my seat yet, Mr. Minister,

but since the minister is anxious to respond fully and frankly, I would

be most interested in hearing his response.

HON. MR. WATERLAND:

Mr. Chairman. the member has said that I said Noranda would not be

allowed to succeed in their offer for a purchase of a major interest in

MacMillan Bloedel. I have not said that. and I think it's unwise of you

to let that impression be created in any way to be felt throughout this

province or throughout Canada. I have not said that. What I said — and

the member may or may not have been listening — is that we would have

to assess what effect the Noranda offer would have on corporate size

and regional domination in the province. We have not said that they

will not be allowed to do it. A judgment has not yet been made.

The

industry and the investing public understand well that each time a

major takeover is considered in British Columbia, the government does

judge that. This is common knowledge throughout the investing world and

the forest sector. I think it's very unwise of that member to try to

leave the type of impression that he just did. I have not said that

Noranda will not be allowed. I said that we're assessing the

implications of it and we'll make that judgment with the facts at hand,

which is probably an unusual way of operating, according to the way

that member operates and the way the Minister of Forests under his

government operated.

MR. KING: Mr. Chairman, I don't

know what school of logic the minister went to or came from, but he has

indicated clearly on numerous occasions during consideration of his

estimates that MacMillan Bloedel is the optimum size for any firm

operating in the forest sector of British Columbia today, and that no

other firm is going to be allowed to grow beyond the size of MacMillan

Bloedel — except BCRIC. Under that criterion, which he has so clearly

laid out, there is no question that if Noranda acquired MacMillan

Bloedel's shares, then their cutting rights, in conjunction with the

current MacMillan Bloedel holdings, Northwood holdings and some B.C.

Forest Products holdings, I believe, would far exceed the model which

he has articulated. It would far exceed the

[ Page 4732 ]

size

of MacMillan Bloedel. He said: "No one's going to get any bigger than

MacMillan Bloedel, except BCRIC." But now he says: "I didn't say

Noranda couldn't come in and bid on it."

Well, of course you

said it in a backhanded, foolish way, and you're playing with

semantics. Do you think these people are stupid? They may have been

stupid enough to deal with your government in the past, but not much

longer, my friend. He has outlined a criterion for limiting the size of

corporations in the forest industry in the province of British

Columbia, and now he says: "Well, sure Noranda can bid." But he's

already predetermined that they do not fit the restrictions that he has

articulated here. What nonsense, then, to get up and say: "Well, I

didn't say they couldn't bid." They've got a message — the same kind of

message the Premier gave to CP Rail: stay out of British Columbia. It's

the same kind of thing. And when a minister of the Crown gives that

kind of indication to the industry, you better think that it's taken

seriously.

I've never heard such nonsense in all my life as

saying: "Well, I didn't say they couldn't bid." By his own policy,

which he has clearly outlined here, British Columbia Resources

Investment Corporation is being treated preferentially. He still hasn't

answered my question with respect to why there's this differentiation

between BCRIC and any other private company. What is it about BCRIC?

The Premier said it was not influenced by politics, that it was simply

a public company operating in the private sector. He has nothing to do

with it any more. What is it about BCRIC, if you really don't have that

political umbilical cord still attached, that allows for this

discrimination against private companies and this preferential

treatment for BCRIC? I ask again: has the minister done any analysis of

the shareholdings of BCRIC? There has been a great deal of dealing on

the stock-market, both in Vancouver and Toronto, since this government

created BCRIC. Who knows what affiliations there may be between blocks

of shareholders in BCRIC and other corporations? What criteria is he

setting out for extending this preferential treatment to BCRIC?

All

we've got so far is a minister who's being stubborn and saying: "Look,

I'm going to sit in my office and by my discretion I'm going to wheel

and deal, dispense favours and dispense different standards of

treatment to different corporations in the province of British

Columbia. But trust me. My motives are good and therefore I deserve

that kind of broad discretionary power." I say that's not good enough.

We've found the minister less than forthcoming when asked to table the

deals that he has made on behalf of the people of the province. Only

after extreme pressure has he been prepared to table documents with

this committee. I see no reason why we should trust him to set policy

by whim, by ad hockery, when it comes to dealing with the province's

forest resource. The government has a mandate to govern and they

certainly have a mandate to set policy, but with that they have a

concomitant obligation to set it clearly and equally without fear or

favour for all people in the province so it's open and clear and

readily understood by the public as well as the private corporations in

this province. That's where the minister is remiss, and that's where

he's culpable. I'm certainly not satisfied with his performance.

I move that the committee rise and report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN:

The committee reports progress and asks leave to sit again, and further

that a document was presented during the debating committee and the

committee requests leave that the document be tabled in the House.

MR. SPEAKER: Regarding a document to which the committee referred, shall leave be granted for the tabling of the document?

Leave granted.

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

MR. KING:

On a point of order, I just wanted to apprise the Speaker of the fact

that discussion arose during committee regarding whether or not

documents could be tabled during committee. I believe there was

agreement between the House Leaders on both sides that the Speaker

might make a ruling or at least consider the rules that are applicable

when documents are requested by leave to be tabled in committee.

MR. SPEAKER:

A ruling is not required in that the procedures of the House are very

clear on this matter. Documents referred to in committee cannot be

tabled in committee but can only be tabled when the House is

reassembled. Those practices are well established in this House, and I

don't think a ruling is required.

MR. KING: A further

point of order. It's my understanding that with leave virtually any

procedure could be varied either in committee or the House. The point

is whether with leave it is not possible to table documents during

committee.

MR. SPEAKER: The House, of course, can

instruct the committee and can empower the committee in any way it

wishes. However, the committee can only carry out those instructions

given to it by the House. As I understand the rules which you have

placed in my hands, the committee does not have the authority to either

grant leave or deny leave. That can be done only in the House itself.

Perhaps we could sit down over a cup of tea in my office this afternoon

and discuss it.

MR. KING: Is that an invitation?

MR. SPEAKER: That's an invitation.

HON. MR. WILLIAMS:

Continuing the matter which has been raised by the member for

Shuswap-Revelstoke, the discussion actually went beyond the question of

simply whether we were entitled to table documents in the House. The

hon. Leader of the Opposition, in attempting to seek leave for the

House to suspend the rules for certain purposes at that time, provoked

some discussion, and what he sought was some clear enunciation of the

rule or precedent which governs the manner in which the committee must

conduct its business under the order of the House. It would be

appreciated if you, sir, and the Clerks could address yourselves

perhaps to a brief memorandum.

[ Page 4733 ]

MR. SPEAKER:

It would perhaps be advisable to review again the fact that the

committee is constituted and given its instruction by the House. It

acts independently and accepts the responsibility to resolve any

matters of order while they are in committee. They can, of course,

report these matters to the House through the Chairman. The Speaker

himself does not involve himself in questions of order in the committee

itself. The rules speak very clearly, and I would hope that this would

not be seeking to establish some precedent to bring up matters which

truly belong in committee to the House itself, except by formal report.

HON. MR. WILLIAMS:

Without attempting to continue this discussion too long, what the

members really sought during the course of the discussion was some

clear exposition of those rules which govern the committee and its

conduct.

Hon. Mr. Williams moved adjournment of the House.

Motion approved.

The House adjourned at 12:32 p.m.

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