1980 Legislative Session: 2nd 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)

THURSDAY, JUNE 5, 1980

Afternoon Sitting

[ Page

2807 ]

CONTENTS

Routine Proceedings

Oral Questions.

Fire standards in rest homes. Mr. Cocke –– 2807

Alcohol and drug dependency of juveniles. Ms. Brown –– 2808

Ocean Falls Corporation contracts. Mr. Barrett –– 2808

Gambier Island mining. Mr. Lockstead –– 2809

Proposed fixed link between Vancouver Island and mainland. Mr. Lauk –– 2809

Administration of medication in schools. Mr. Lauk –– 2809

Presenting Petitions.

Elimination of telephone operators in Dawson Creek and Vernon.

Mr. Skelly –– 2810

Committee of Supply; Ministry of Forests estimates.

On vote 104.

Mr. King –– 2810

Hon. Mr. Waterland –– 2810

On vote 105.

Mr. King –– 2811

Hon. Mr. Waterland –– 2811

Mrs. Wallace –– 2812

Hon. Mr. Waterland –– 2813

Mr. Lockstead –– 2813

Hon. Mr. Waterland –– 2813

Mr. King –– 2814

Hon. Mr. Waterland –– 2814

Mr. Lauk –– 2814

Hon. Mr. Waterland –– 2814

Mr. King –– 2814

Hon. Mr. Waterland –– 2815

On vote 106.

Mr. King –– 2815

Hon. Mr. Waterland –– 2815

Mrs. Wallace –– 2816

Hon. Mr. Waterland –– 2817

Mr. Mitchell –– 2818

Hon. Mr. Waterland –– 2820

Mr. Skelly –– 2820

Hon. Mr. Waterland –– 2821

Mr. Mitchell –– 2821

On vote 108.

Mr. King –– 2821

Hon. Mr. Waterland –– 2822

Mr. Skelly –– 2823

Hon. Mr. Waterland –– 2825

On vote I 10.

Mr. Nicolson –– 2826

Hon. Mr. Waterland –– 2827

Forest Amendment Act, 1980 (Bill 17). Second reading.

Mr. Gabelmann –– 2827

Hon. Mr. Waterland –– 2827

Credit Union Amendment Act, 1980 (Bill 12). Second reading.

Hon. Mr. Nielsen –– 2827

Mr. Levi –– 2828

THURSDAY, JUNE 5, 1980

The House met at 2 p.m.

[Mr. Davidson in the chair.]

Prayers.

HON. MRS. McCARTHY:

Mr. Speaker, I would ask the House to welcome four visitors to the

gallery today. Mrs. Myrtle Russell from Vancouver, Mr. and Mrs. Frank

Alpen, and Mr. Ralph Alpen are, visiting us, and I'd ask the House to

welcome them.

MR. LEGGATT: I'd ask the House to

welcome two old friends of mine from Port Coquitlam who are visiting,

Mr. and Mrs. Reid. With them are Mr. and Mrs. Gordon Smith from Woking,

England, and Mr. and Mrs. Kennaugh from Wokingharn, England.

HON. MR. NIELSEN: I'd also ask the House to acknowledge the presence of a hard-working community worker from Ucluelet, Mr. Ted Walker.

MR. BARRETT: I'd ask the House to welcome two very old friends of mine from North Delta, Mr. and Mrs. Arne Knudsen.

MR. BRUMMET:

Visiting Victoria for most of this week, and in the galleries today,

are two very good friends of mine from Fort St. John, Roy and Dottie

Snippa. I would ask the House to give them a warm welcome.

MS. BROWN:

A group of grades 4 and 5 students from St. Thomas de Sales School are

visiting the precincts. They are not in the gallery. They are

accompanied by their teacher, Mrs. Parsons, and I wonder if the House

would bid them welcome.

MR. BARRETT: Mr. Speaker, I

rise on a point of order. I'm aware that there is a House committee on

privileges. I've attempted to define the particular problem I have, and

it appears that the best manner is to seek your advice as to procedure

in handling this particular problem.

Some days ago a member

of the staff of the Minister of Universities, Science and

Communications came to my office and asked for permission to hook up

the television set in my office to the satellite. Being aware of the

somewhat blue nature of some of those programs, my secretary wisely

gave no permission. Subsequent to that denial there was no further

contact with my office, and today, after some days, I turned on my set

and discovered that all I got was a screen shattered with electronic

signals and no picture at all. It seems that without my permission the

minister had hooked me in to the satellite, which has completely

distorted everything on my TV screen.

AN HON. MEMBER: You miss "Captain Kangaroo''!

[Laughter. ]

MR. BARRETT: I am not upset, Mr. Speaker, at the loss of my television

set; I do miss "Sesame Street," because it has a certain relationship

to cabinet activities. However. I seriously want to raise this with you in that

since the committee on privilege is meeting, I would appreciate a ruling from

yourself or some advice to this House as to the sanctity of one's office,

including electronic connections with one's office. I'd like to pick

my own programs and I just wonder if this is not bordering on an infringement

on the sanctity of members' offices.

DEPUTY SPEAKER: The Minister of Universities, Science and Communications on the same point of order.

HON. MR. McGEER:

Mr. Speaker, may I offer my humblest apologies to the Leader of the

Opposition. I concur with the Leader of the Opposition. I think the

reception has been very poor and the movies, have not been nearly as

good as many might have anticipated. Unfortunately, the equipment that

was promised was never delivered, and it had been my information that

it was the desire of the NDP caucus to be on the same feed, as the rest

of the building.

MR. BARRETT: No.

HON. MR. McGEER:

Since the NDP wishes not to be put on that feed, we have had to put the

whole building back onto the regular cablevision service, but we hope

that there will be optional satellite reception when the equipment is

delivered tomorrow. I apologize to the the Leader of the Opposition.

For those who wanted the satellite reception today, I apologize to

them, too, but we can't please everybody.

MR. BARRETT:

Mr. Speaker, on the same point of order, I enjoy the exchange of humour

on the matter. The point that must be dealt with somehow is the

sanctity of a member's office. No permission was given, and I would not

want the sanctity of a member's office dealt within a cavalier fashion.

DEPUTY SPEAKER:

Thank you, hon. member. The Chair will undertake to review the matter

and report back to the House. I thank the Leader of the Opposition for

conferring with me prior to raising the matter in the House.

Oral Questions

FIRE STANDARDS IN REST HOMES

MR. COCKE:

Mr. Speaker, I would like to direct a question to the Minister of

Health. Can the minister advise whether it is government policy that

all private extended-care and long-term care facilities should meet

national building code fire standards?

HON. MR. MAIR: I believe the answer is yes, Mr. Speaker.

MR. COCKE:

Mr. Speaker, I have another question. In view of the dilemma faced by

city councils, who must either ignore fire standards or close

substandard facilities, what steps has the minister taken to ensure

upgrading of the fire standards at private long-term care facilities?

HON. MR. MAIR: I don't have an answer to read to the question that was just read to me, Mr. Speaker. I will take the question as notice.

[ Page 2808 ]

MR. COCKE:

Mr. Speaker, as a matter of fact, I read the question because I want

him to understand that it is carefully worded. In view of the estimate

by Fire Chief Eric Simmons that 30 Victoria rest homes housing some 500

patients do not meet fire standards, what steps has the minister taken

to alleviate the fire risk to these patients?

HON. MR. MAIR:

Mr. Speaker, I believe that the Attorney-General has already given an

answer to the press with respect to this matter; but I certainly will

take the question as notice and come back with an answer for the member

from the Minister of Health.

MR. COCKE: I have

another question, Mr. Speaker. The minister is aware, of course, that

there continues to be a lengthy wait for entry into long-term care

facilities — as much as a year. We have discussed that before. Does the

minister then agree that closing these facilities is an unacceptable

solution because no real alternative exists for these patients?

HON. MR. MAIR:

Mr. Speaker, I wonder if the member, in order to assist me, would tell

me what facilities are being closed. Which ones is he referring to?

MR. COCKE:

Mr. Speaker, this is my question period. I gather you can't have it

both ways. Either we adhere to fire standards or we don't. The minister

says that we will. The private hospitals say that they can't do so and

maintain a facility. Anyway, in view of the minister's statement last

December questioning the role of private profit in the provision of

long-term care, can the minister advise whether he has decided to take

over the private long-term care facilities and run them according to

established standards?

HON. MR. MAIR: I listened very carefully to the question, Mr. Speaker, and the answer is no.

ALCOHOL AND DRUG

DEPENDENCY OF JUVENILES

MS. BROWN: I have a question

to the same minister, Mr. Speaker. I just want to preface my question

by thanking him for the showing of that film on alcoholism among young

people, though it was actually the Minister of Energy, Mines and

Petroleum Resources (Hon. Mr. McClelland) who did it.

There

is a growing need for counsellors to work with juveniles that have

alcohol and drug related problems, as demonstrated by that film. These

counsellors have always proven to be most effective when they are

working within the school system at the community level. Can the

minister tell me whether the Alcohol and Drug Commission has decided

now to rescind its instruction to remove the only family and youth

counsellor from the Burnaby area?

HON. MR. MAIR: I can't answer yes or no to that, Madam Member, but I will certainly take the question as notice and bring back an answer.

MS. BROWN:

If in taking the question as notice the minister would also, at the

same time, take a look at a report done for his ministry on the

assessment of alcohol and drug dependency of youth in the lower Fraser

Valley, which shows the incredible increase in alcoholism among teenage

children in the Burnaby area, I think that that would probably help him

to make a decision on leaving that counsellor there.

OCEAN FALLS CORPORATION CONTRACTS

MR. BARRETT:

Yesterday I asked the Minister of Industry and Small Business

Development a number of questions that he took on notice. One in

particular was when he could inform the House he first knew of the

Ocean Falls closure and its subsequent impact on the contract with the Los Angeles Times to supply newsprint. I wonder if the minister has the answer to that question today.

DEPUTY SPEAKER:

The question was taken as notice, hon. member. Technically speaking, it

is out of order to ask it again, particularly only one day thereafter.

However, the minister may wish to reply. He declines.

MR. BARRETT:

It was reported on the news yesterday that the minister had stated in

the corridor that there were other companies that have been affected by

the closure of Ocean Falls. Would the minister inform the House today

what other companies were affected by that closure in terms of

contracts?

HON. MR. PHILLIPS: In answer to the Leader of the Opposition's questions, the answer is no.

MR. BARRETT:

I would like to ask a supplementary question, Mr. Speaker. Could the

minister inform the House what the estimate is of the total provincial

liability for the breach of contract, particularly the Los Angeles Times contract?

HON. MR. PHILLIPS:

Well, I would say, Mr. Speaker, that if the Leader of the Opposition

has his way, the liability might be great. What he's trying to create

here is a problem for that Crown corporation of which his government is

the founder. The founder of the problem sits right over there, and he's

the man who's asking the questions.

MR. BARRETT: Mr. Speaker, it's impossible for me to create the problem. I had nothing to do with the creation of the minister.

Mr. Speaker, I have another supplementary for the minister.

Interjection.

MR. BARRETT: I understand the Premier's nervousness.

Can

the minister confirm that a contingency fund has been established to

protect B.C. Cellulose against such liabilities, either through

settlement or court action?

HON. MR. PHILLIPS: Mr.

Speaker, in answer to the Leader of the Opposition's question, I think

we're quite capable of handling the situation, if he'd just quit trying

to create a problem for that Crown corporation.

MR. BARRETT: Mr. Speaker, perhaps the minister would like to abolish the opposition and ignore facts.

I have another supplementary. In view of the fact that the

[ Page

2809 ]

major paper producers in B.C. have little or no

surplus production, can the minister inform the House which source of

newsprint he has contacted to assist in the supply of newsprint to the Los Angeles Times and other contracts?

Interjection.

MR. BARRETT: "Take it as notice," Bill said.

HON. MR. PHILLIPS: Mr. Speaker, in answer to the member's question, I think the situation is well in hand.

GAMBIER ISLAND MINING

MR. LOCKSTEAD:

Mr. Speaker, I have a question for the Minister of Municipal Affairs.

Now that the Attorney-General (Hon. Mr. Williams) has declared he is

powerless on the Gambier open-pit mine proposal, has the minister

decided to use his good offices to support the Islands Trust

legislation and the Islands Trust in preventing the open-pit mine which

may be established on Gambier Island?

HON. MR. VANDER ZALM:

There's no proposal before the ministry for an open-pit mine, nor has

the ministry received any petition on that from the Islands Trust.

MR. LOCKSTEAD:

Mr. Speaker, I have just a quick supplementary. I would ask the

minister if he or his government have decided to continue their assault

against the Islands Trust legislation.

DEPUTY SPEAKER: The question is not in order, hon. member.

PROPOSED FIXED LINK BETWEEN

VANCOUVER ISLAND AND MAINLAND

MR. LAUK: I have a

question for Mister Science on the missing link — the fixed link. Can

the minister inform the House what selection criteria were used by his

ministry to select the companies now studying the fixed-link proposal?

HON. MR. McGEER:

At least one contract has been entered into. I'll endeavour to get

detailed information about whether others have yet been entered into to

provide the ministry with estimated costs of building a fixed link

across the Strait of Georgia. The criteria used were the ability and

expertise of the companies involved to provide this kind of information

within the budget available to the ministry.

MR. LAUK:

Can the minister name the three successful companies that have been

reported employed or contacted by the ministry for the purpose,

together with those that also received consideration but were not

selected?

HON. MR. McGEER: I'll endeavour to get that information for the member tomorrow. However, Willis, Cunliffe, Tate and Co. were one firm.

MR. LAUK:

Could the minister inform the House of the value of the contract to

Willis, Cunliffe, Tate and Co., and what instructions the contractors

have been given?

HON. MR. McGEER: I'll get that detailed information for the member

tomorrow, Mr. Speaker,

MR. LAUK: Finally, could the minister inform the House when the reports from these contractors will be due and available for submission?

HON. MR. McGEER: I'll have that information tomorrow too, Mr. Speaker.

MR. LAUK:

The Minister of Universities, Science and Communications doesn't know

that I'm usually not available on Fridays. I wish he'd show some more

consideration.

ADMINISTRATION OF

MEDICATION IN SCHOOLS

MR. LAUK: I have a question to

the Minister of Education. School District 36, Surrey, procedure 9181 —

I think the minister already has a copy from my office. I apologize if

it hasn't arrived yet. Re treatment of students with medical problems

at Simon Cunningham School: the procedure outlines something as

follows, that the minister should be aware of. "One's day supply of

medication with a separate container for each medication will be sent

to the school in a container or containers with a child-proof lid. Each

container will be labelled with the student's name, the name of the

medication, the dosage, the doctor's name and the method of

administration." Does the minister have any advice for teachers at that

school if the medication fails to arrive? Secondly, are they

responsible if the teacher fails to notice the non-arrival of

medication?

HON. MR. SMITH: Does the member want the

answer on Friday also? I will respond to this question and the question

that was asked of me by the member for Burnaby North (Mrs. Dailly) on

May 21 and by the first member himself on June 2, and will say this. On

May 21 the member for Burnaby North asked me a question concerning the

administration on a regular basis of medication to students by

teachers. I said at that time that I was concerned over this matter and

took the question as notice. Since that time I've directed officials in

the ministry to conduct a comprehensive review of this matter and to

recommend ways of addressing it. The problem is not a new one but it is

becoming increasingly prominent as a result of greater acceptance into

the public school system of children with varying degrees of handicaps.

Any solution to the problem has to meet a number of criteria, foremost

of which is the safety and health of the children and the protection of

teachers and staff members as well.

My ministry staff is

working with their counterparts in the Ministry of Health and the

Attorney-General and ICBC to develop an overall solution, The immediate

policy on this varies from school board to school board. Normally

speaking, routine administration of drugs is only done at the request

of a parent and also with the written authorization of a medical health

officer. I'm talking about the administration of drugs that is not done

by a public health nurse or medical practitioner in the school. There

is concern, of course, that this may violate the Medical Practitioners

Act, and we're addressing that. I am also assured that teachers who do

administer such drugs are covered under ICBC insurance provisions for

the school districts. What I am going to do is to make a full statement

as to government policy, and if it does

[ Page 2810 ]

require

some proposed amendments to existing legislation, we will make them.

I'm sure the hon. member wouldn't suggest that we have a duty to

provide a doctor and a public health nurse with every student in every

school. We're trying to be practical and to give the protection

required.

Presenting Petitions

MR. SKELLY: Mr. Speaker, I beg leave to present two petitions.

Leave granted.

MR. SKELLY:

The first petition is from Vernon and contains 2,756 names. The second

petition is from Dawson Creek and contains 2,262 names. The prayer

reads as follows:

" Briefly stated, the

petitioners pray that B.C. Telephone Co. cease and desist with their

proposal to eliminate telephone operators from the city of Vernon and

of Dawson Creek; and, secondly, that the CRTC be required to hold

public hearings in the city of Vernon and in the city of Dawson Creek

to establish what effect B.C. Tel's proposed elimination of telephone

operators from those communities would have. Specifically, they

petition that the CRTC look into the effects of B.C. Tel's proposal

with respect to quality of service, employment, community income,

emergency assistance before the commission makes a decision on whether

to allow B.C. Tel. to proceed."

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

(continued)

On vote 104: ministry administration program, $2,193,809.

MR. KING:

Mr. Chairman, I just have a brief question for the minister regarding

the overall administrative costs for his department. I note with

considerable interest that the ministry has undertaken a major program

of intensive forest management on a five-year scale. The ministry has

also undertaken a new program — a considerable expansion — which

provides for major tax write-offs by private corporations practising

intensive forest management. I note a very, very small increase in the

overall administrative allocation for the department for the current

fiscal year, and I want to ask the minister if he feels that he has

adequate staff under the existing structure to adequately monitor

expenditures for the new intensive forest management program, and

claims from the private sector for the tax write-offs incident to their

intensive forest management and silvicultural programs.

HON. MR. WATERLAND:

Mr. Chairman, there's no program in the Ministry of Forests which

provides tax write-offs. There is an offset-against-stumpage program,

and that's probably what the member is referring to. Stumpage is not a

tax; it's the value received, for the sale of Crown timber.

This

particular vote provides for the executive direction of the ministry,

and as the member knows, in the last year or so we have reorganized our

executive, along with other parts of the ministry. In this particular

vote there is an increase of one ADM for the entire year, which was

only partially funded last year because it wasn't in place for the

entire year, and we have provided some additional funds for strategic

studies.

Yes, at the present time we have a good ability to

monitor expenses. We are, as I mentioned during vote 103, doing a

complete ministry staffing review to see in what areas we could

possibly improve our administrative programs.

MR. KING:

The minister may not wish to refer to it as a tax — fair enough. It's

fealty irrelevant whether you call it stumpage or not. But it is a

benefit on a scale that was heretofore not available to private

corporations. Many people in the industry, and certainly many people in

the public of British Columbia, hold that the major forest-licence

holders in this province have an implicit obligation to do their own

intensive forest management as a return, a recognition, and a benefit

to the province for enjoying the right to harvest the timber. Now they

are going to be, in effect, subsidized through stumpage for doing that

which even the minister claims they have been inherently and

historically obliged to do — to manage the licence areas that they hold

in a wise fashion, commensurate with the sustained yield principle.

I'm

worried about the kind of provision that is made for millions of

dollars to be deducted from stumpage in recognition of intensive forest

management. When the minister responds, "Yes, I've hired another

associate deputy minister...." Mr. Chairman, I'm not so concerned at

that level of the bureaucracy; where I am concerned is in the field —

to make sure that intensive management, intensified silvicultural

procedures, regeneration, thinning, and so on, are actually carried

out. Certainly some obscure assistant deputy minister tucked away in

some corner of the parliament buildings in Victoria is hardly going to

be able to keep a handle on that kind of monitoring. So what I'm

interested in is ensuring that there is some capacity within the

ministry to actually study in the field and make some kind of appraisal

of the claims which the private companies are making as a write-off

from their stumpage costs. Does the minister have any plans in that

regard at all, or is he just going to accept at face value the

write-off claims which these private corporations make? Is it a matter

of that kind of trust, Mr. Minister, or do you not think you have an

obligation for closer monitoring in the field, to ensure that this

public subsidy to private corporations is going to be met with full

face value to the public?

HON. MR. WATERLAND: The

subject that the member is talking about has been canvassed extensively

during vote 103. I'll tell him again, though, that basic forestry

responsibilities under any forest licences in British Columbia have,

for many years, been offset as a cost in the appraisal system. The

offsets which will be increasing are only those offsets for specific

projects which will have prior approval by the ministry. Once projects

have been approved the ministry will check to make sure the work has

been done, as has been the case in the past. I would advise the member

that through our reorganization, in staff reallocation to the field

offices there will be a move of about 300 people from various regional

headquarters in Victoria to our field offices, which will help us in

our ability to monitor the increasing level of

[ Page

2811 ]

forest management work that will be done to enhance our forests for the future.

Vote 104 approved.

On vote 105: finance and administrative program, $17,236,608.

MR. KING:

I have urged the minister for some months now to try to make some

accommodation in stumpage costs to the small, indigenous British

Columbian entrepreneur who was harvesting areas of poor quality and

finding it very difficult, on a cash-flow basis, to maintain a viable

operation. The problem is, as we've discussed before, that stumpage

appraisal is conducted on the previous three-month market in large

measure, and for a small operator caught in the position of a serious

declining market, as we have now, and also saddled with a very marginal

kind of area to harvest, it was exceedingly difficult to carry on at

stumpage rates in the fashion that the major integrated companies could

absorb. Of course, usually the major integrated companies enjoy a

better quality of timber to harvest through their extensive tree-farm

licences and quotas in other areas.

The minister did respond

and bring in a variation, I think, of the appraisal on the stumpage for

these operators by an order on April 1, I believe it was. I would

appreciate it if the minister would explain for me the elements of that

change he made to the stumpage appraisal system on April 1. I

understand that rather than base it on the Vancouver log market he had

based it on the general selling price in the area. Is that correct? I

would appreciate it if the minister could clarify for me how he went

about providing some accommodation for these people in terms of the

stumpage appraisal.

HON. MR. WATERLAND: The stumpage

appraisal for market loggers as of April 1 has been based on the price

which they receive for logs rather than the general log market price.

In order to determine what this price is, we do a sampling of the

actual values received by the loggers so that their appraisal is based

upon their cost and their market prices rather than prices which are

indicated by the Vancouver log market.

MR. KING: Can

the minister tell me what particular statutory authority he utilized to

undertake that different appraisal approach to stumpage?

HON. MR. WATERLAND: The statute is the Forest Act, Mr. Chairman.

MR. KING:

The scope and the breadth of the minister's knowledge absolutely amazes

me. I'm most impressed. But perhaps the minister could be a bit more

specific and tell me what precise clause and

section of the Forest Act

he relied upon for the authority to vary the stumpage appraisal system

in this regard.

HON. MR. WATERLAND: The authority to

determine the appraisal system is

section 83. The specifics are given

in the way stumpage rates are determined in

section 84.

MR. KING: I believe

section 84 refers to the regional manager rather

than the minister. I believe also that

section 84.... It's not an implicit

thing; it says "the regional manager may...." Perhaps the minister

takes the position that any authority extended to any official of his department

is an authority vested in the minister. That's an interesting point. I think

that both sections the minister quoted are connected to the condition that the

public interest be served in this fashion. If that is what the minister had

in mind and if that is why he relied on these two particular sections, I would

appreciate his cooperation in explaining to the House precisely how he defined

the public interest being at stake in this regard. I am not quarrelling with

the initiative the minister took. I am simply seeking to define the legal authority

which he felt entitled him to take this particular approach to resolving a very

problematic stumpage burden for the small loggers.

HON. MR. WATERLAND:

Mr. Chairman,

section 84 is quite clear. It spells out the procedures

that must be used and the various determinations that must be made by

the regional manager in determining the stumpage rate. As the member

knows from discussion in the last few days, any of these determinations

are subject to appeal if anyone affected considers that they haven't

been appropriately handled.

MR. KING: Mr. Chairman,

the minister is becoming rather defensive. I am not suggesting that

anyone I am aware of would want to appeal the direction the minister

took. I am simply seeking to establish what precise statutory authority

the minister had to change the stumpage appraisal system. In previous

debate the minister decried the fact that previous ministers had

appeared to act without full statutory authority in the awarding of

licences and the granting of timber supply. I agree with the minister

that any minister of the Crown acting beyond the scope of his statutory

authority is on very thin ice.

All I am seeking to determine

here is how the minister, under the sections of the Forest Act he

quoted, feels that he had the statutory authority to suddenly change

the stumpage appraisal from the Vancouver log market base — which is

the basis of stumpage calculation for all operators in the coastal area

— to accommodate what in my view was an area of legitimate concern. I

want to know how and by what precise means he felt he held that

statutory authority. I quite frankly do not recognize it in the

section

the minister quoted. It refers, as I indicated, to the regional

manager. It refers to this rather qualitative determination of the

public interest. Did the minister pass an order-in-council prior to

issuing and developing the new stumpage appraisal methodology for the

market loggers?

HON. MR. WATERLAND: Mr. Chairman,

perhaps we should address ourselves specifically to

section 84, if the

member wishes to go into that much detail.

Section 84 states:

"

(1) Where stumpage is payable to the Crown under an agreement entered into

under this or the former Act" — referring to the former Forest Act —

"the rates of stumpage shall be determined under this

section and the

regulations by the regional manager or a forest officer authorized by

him and the rates shall be varied according to the agreement.

"

(2) In determining the stumpage rates the regional manager or forest

officer shall (

a) consider an estimate of the volume, species

composition and quality of the timber; (

b) estimate the quantities and

values of the forest products specified under

section 83 that may be

produced from the timber...."

[ Page 2812 ]

the case of the Vancouver log market, the product used is logs. We can

estimate, either through the log market or any other means that we

choose, to determine the value of the product produced, which in this

case is logs. We choose, under the system for the market logger, to use

his market price rather than the market price determined by the

Vancouver log market.

MR. KING: I appreciate the

minister's reading of the

section to me. I had read the

section just

prior to coming into the Legislature, but I appreciate his refreshing

my memory. As I pointed out to the minister, the authority under the

section is directed to the regional manager, who will undertake a

variety of considerations before invoking the authority given to him. I

want to know, since the minister himself and his office were the agency

which directed the change in the stumpage appraisal system for the

market loggers: what authority does he think he has? Does he feel that

he is granted by osmosis the same statutory authority that seems to be

uniquely and singularly directed towards the regional forest manager?

Can the minister tell the House whether the regional forest manager in

this particular case compiled the studies on which this kind of

initiative must be based, as stated in

section 84? If so, would the

minister like to table that in the House? I appreciate that there is

some scope in the section, but that scope in the

section is directed

towards the regional forest manager, not the minister.

HON. MR. WATERLAND:

I can't at this time table any specific documents provided me by the

regional manager, which in this case would be really two regional

managers. It would be the Prince Rupert regional manager and the

Vancouver regional manager. We do talk to each other and we have

discussed the fact that market loggers are having problems because of

the prices established by the Vancouver log market. It was decided and

recommended by the regional managers that we change that and go to a

specific log market price.

MR. KING: The minister is

telling me then that he picked up the telephone and talked to the

regional manager at Prince Rupert and Vancouver, and they said: "Look,

we think that the market loggers are having difficulty, based on the

Vancouver log market appraisal of stumpage, so we recommend changing

the stumpage appraisal system thusly." I would assume that if that kind

of recommendation was made by a field officer the minister would have

some kind of communication from them spelling out precisely what they

were advocating. Does the minister have any correspondence with the

regional managers that he'd like to table in this regard?

HON. MR. WATERLAND: No, I don't, Mr. Chairman.

MR. KING:

Does the minister have any correspondence with these regional forest

managers relating to the decision that was made on April 1?

HON. MR. WATERLAND: Yes, Mr. Chairman.

MR. KING:

If the minister has this correspondence laying down the rationale upon

which they, under their statutory authority, have advocated a different

formula in the stumpage appraisal system, why would he not want to

table it with the House? I can see nothing that the public should not

be entitled to view in that kind of academic work and that kind of

exercise that does affect the public interest. I wonder why the

minister won't be prepared to table the documents so that I can have a

look at them and understand precisely the detailed work upon which

these recommendations were based. That seems like a reasonable

explanation. It seems like a fairly open activity that the minister

should agree to comply with in the public interest. After all, the

section refers to the public interest. If some bureaucrat — and I don't

use the word disparagingly — in any government agency is allowed to

assess and determine the public interest and then retain the

information and the data upon which he made that determination of the

public interest secret, that seems to me to fly in the face, certainly,

of open government. It seems to fly in the face of common sense, and

natural justice too, although that is just a little bit of a stretch,

perhaps.

Gee whiz, Mr. Minister, if you're going to say, "We

did this in the public interest and my regional forest manager made

this kind of determination and looked the whole situation over," that

sounds very logical and reasonable. Why not share it with us? I'd like

to learn a little more about it. I'm trying to learn as much as I can

from the minister.

HON. MR. WATERLAND: That's what

gave me trouble. The member has so much to learn that I really don't

know what to table. Any memos and correspondence and things that took

place between the regional manager, the assistant deputy minister in

charge of operations, the deputy minister and myself is available to

the member if he should wish to come and search it out and determine

what it is that he wants. I would be more than happy to table the

documents in the House, because we are running an open Forest Service

and an open government.

MR. KING: I thank the

minister for his kindness. Yes, I do indeed have a great deal to learn.

I think that anyone who holds the attitude that they know it all, be

they at this level of government or any other, is perhaps destined for

a bit of a shock some time down the road.

Be that as it may,

I think I've identified very specifically what I would like from the

minister and what I would appreciate having him table, and that is the

advice and the recommendations from the regional forest managers in

Prince Rupert and Vancouver recommending the change in the stumpage

appraisal system under sections 83 and 84, I believe it is, related to

these areas. The minister has already told me he's acting on the advice

of his regional managers, so surely there is a recommendation there,

and I wish he'd share that with the House. Does he understand that, Mr.

Chairman?

When might this be done, Mr. Minister? I would

appreciate having a look at that before we go too much further in your

estimates, because I think it's interesting information which will

certainly be helpful to me. If the minister could get it in this

afternoon, we could possibly deal very expeditiously with his estimates.

MRS. WALLACE:

Mr. Chairman, during the discussion of the minister's vote I raised a

question relative to Bradshaw Logging in the Cowichan Valley. I think

perhaps the minister didn't quite grasp what I was asking, because he

indicated in his comments that it was unusual for anybody to be

complaining about a late billing and left it at that. To just qualify

this thing very clearly I would read in part from a letter to the

[ Page

2813 ]

B.C. Forest Service, February 21 of this year, a

copy of which I and the minister received. This is from Barry Bradshaw,

the owner-operator of Bradshaw Logging. He says in part:

"I understand it is Forest Service policy for the

companies receiving the timber to pay the stumpage. It is also the

policy of most companies receiving timber to pay us, the logger, when

they receive the scale and royalty accounts. In the past this has been

a satisfactory arrangement, as the S&Rs were sent fairly soon after

the logs had been scaled."

Then he goes on to say:

worked in the forest industry for four years taking the scaling books

from the government scalers, computing footage and summarizing logs

according to grade and species for the FF-72s. The procedure is very

simple, so you can see why I'm appalled with the inefficiency in the

issuing of the S&Rs within a reasonable length of time. Aside from

excessively late SRs, we have received S&Rs cancelling four and

five previous S&Rs, and on two occasions we have sent wood to

Western Forest Industries Ltd. at Honeymoon Bay and the S&Rs have

been sent to Doman Forest Products in Duncan. This is holding up

processing of payments even further. I'm sure you can understand that a

small business cannot afford to have tens of thousands of dollars being

held up in this process."

Incidentally, he attached a copy of a letter from Doman Forest Products Ltd. supporting his arguments. He goes on to say:

"We cannot stop paying our men's wages, compensation,

taxes or accounts payable for fuel, repairs and maintenance, et cetera, because

of this unnecessary delay of issuing S&Rs."

Certainly

it's not a case of a company that is being a bit unusual in requesting

immediate billing. This is the case of a logger who supplies the logs

to mills, and because of the delay and repetition and confusion in

sending those statements to the wrong companies, they find themselves

in a position where they just have no cash flow.

That's the

point I was raising with the minister, and I would hope that he would

be able to now recognize the point and perhaps assure the House, and

Mr. Bradshaw in particular, that steps are taken that will rectify that

and that these small loggers will not find themselves in this position

in future.

HON. MR. WATERLAND: Mr. Chairman, I didn't

realize the member wished me to respond. I thought she was giving me

some advice. She's talking primarily about arrangements between someone

who harvests logs and someone who sells them, and whatever their

financial arrangements are is their business. If they base their sale

price upon our stumpage accounts and we delay that, that's unfortunate.

As I mentioned to the member, I was looking into that particular case

and we'll do everything we can to eliminate delays when they occur. I

think we've done an awful lot in the last year or so to reduce those

delays down to what we consider is a reasonable level at this time. But

if there are instances where difficulties are caused, then I'll be more

than happy to try to sort it out. I didn't realize she was talking

about a private arrangement between a seller and a buyer of logs

outside the Forest Service. If it is a problem, we're more than willing

to do everything we can to speed the process up.

MR. LOCKSTEAD:

Mr. Chairman, I just have a very short question to the minister

relating to funding for personnel within regional and local areas

throughout the province. I have over the last couple of weeks received

some complaints from local forest rangers that they have been very

short of funding and have had to cut back on what they consider to be

essential people within their local district. Also, they were unable to

hire summer students, in some cases, because of this lack of funding

from the ministry. I don't know if the problems lie within the regional

manager's office, the office of the minister, or where.

The

other rumour I've heard on a couple or three occasions is that some of

these people, who really don't want to be identified. tell me that the

reason they're given for not receiving this funding is because we

haven't passed the minister's estimates. The fact is, of course, Mr.

Chairman, as you well know, we passed interim supply in this House some

two months or so ago. But these are some of the reasons that I've been

given. I don't know if that's correct or not. I can't say. But the fact

is that this is what I'm told.

Perhaps the minister would

care to comment on the shortage of staff and the lack of funding for

these essential people out in the field.

HON. MR. WATERLAND:

Mr. Chairman, it's very difficult to comment on rumours that the member

has heard and is passing on here, but if he would like to be more

specific either here or in my office or wherever, I'd certainly be

happy to address the problems. All of our funding under interim supply

is allocated. We have no problems with getting the money. As the member

knows, our reorganization is now all but complete and our field

officers are being rearranged slightly, but as far as I know we don't

have any funding problems to carry on the programs which we have

approved. There may have been some local delays for reasons I'm not

familiar with, but the member will have to be more specific so that I

can search out the answer for him.

MR. LOCKSTEAD: I

can be very specific if it would be helpful to the minister, but the

fact is that in one local forest region ranger area they are short 12

people at the present time for essential duties. The reason I'm given,

once again, is lack of funding. The minister spoke about rumours and

things, but I'd like the minister to answer what the problem is in

terms of a lack of funding. Is this a situation that's going to be

rectified, or are these local areas, such as, for example, the Campbell

River, Powell River and Sechelt areas, going to continue to try to

operate with the lack of people? The problem is funding, Mr. Minister.

That

part is not rumour. The only

part I can't verify is the fact that

somebody within the ministry said that the lack of funding is because

we haven't passed the estimates in the House, which we know is

nonsense, because there has been interim supply.

Let's

forget that for the moment. The reality is right out there at the

moment. In parts of the province of British Columbia there are some

areas that are short-staffed and lack essential people. It's as simple

as that. Perhaps the minister would care to comment.

HON. MR. WATERLAND:

Mr. Chairman, all allocations to our various areas have been made. The

member is saying that somebody in the Forest Service told him we're

[ Page 2814 ]

short of funds. I can just say that funds which have been approved are available for the programs and things are moving along.

MR. KING:

I just made it to my feet with a heavy statute in hand. I'd ask the

minister if there's any possibility in a few minutes he could table the

correspondence on which he based the variation in stumpage application

for the market loggers. Surely he could send to his office and get

that. I'd be very interested in seeing it. If the minister would

undertake to provide me with a copy of the correspondence later on in

the day, that would be quite acceptable. Would the minister do that?

HON. MR. WATERLAND:

Mr. Chairman, I'm not sure that I can do it today. I will do it as

quickly as I possibly can, though. The correspondence will be in my

office and my deputy's office and in other offices. I think it would be

inappropriate to give you one set without the total package, and I'll

endeavour to do that at the earliest possible time.

MR. KING:

Can the minister tell me when he, received these appraisals from his

regional forest managers? Was it early in April, the middle of April or

when? I assume it was prior to April 1.

HON. MR. WATERLAND: , It was effective April 1.

MR. KING:

Yes, I know. The changes were effective April 1, so I should have said

the middle of March rather than the middle of April. I presume the

advice and recommendations he received from the regional forest

managers was in March sometime. Was it prior to that?

HON. MR. WATERLAND: Well, prior to April 1, for sure.

MR. LAUK:

Just one comment before the vote passes. It seems to me that the

minister should be prepared in Committee of Supply with some of these

answers. The critic has asked him several questions and he's nodding

his head and saying "prior to this date" and "prior to that date." The

responsibility of ministers is to come to Committee of Supply prepared.

HON. MR. WATERLAND:

If the member had given me advance notice of what he wished to have

tabled here, I could have brought it with me; but he didn't, and I

don't have it with me. I'll get it as soon as I possibly can.

MR. LAUK:

Vote 105 is very specific. He has advance notice. His House Leader

informs him when his estimates are going to come up. Vote 105 is in the

book. He's got advance notice.

MR. KING: Mr.

Chairman, I think the minister is a bit timid. He gets a bit panicky

when you ask him a series of questions. I'm not attempting to lay any

trap for the minister or anything. I simply wanted him to state very

clearly the statutory authority on which he changed the stumpage

appraisal system.

Interjections.

MR. CHAIRMAN: Order, please. Hon. members, the member for Shuswap-Revelstoke has the floor.

MR. KING:

The minister still hasn't explained to me satisfactorily where he gains

the authority. As I read

section 84(2), it specifically grants the

authority to the regional forest manager, not the minister. I don't

disagree with what happened; in fact, I think it's fine. I had

advocated to the minister that the market loggers get a break in their

stumpage rate, and I'm not coming back now criticizing the minister for

doing that which I advocated. Rather, I am simply questioning his legal

authority to take the route which he took, I don't quite appreciate yet

where the minister found the statutory authority to change the stumpage

appraisal system, when it appears to me from reading the statute that

that authority is vested solely in the regional forest manager rather

than the minister. You see, Mr. Chairman, there can be an important

principle here, because it's not a very healthy thing, necessarily, for

a politician to be in a position to manipulate stumpage rates in

response to lobbying. Perhaps that's why the statute appears to give it

to the regional forest manager rather than the politician. What I am

arguing and trying to explore is whether the minister exceeded his

statutory authority, for a good objective but nevertheless by serious

error.

I have seen a copy of the letter which the deputy,

Mr. Apsey, sent out explaining the change. Just let me quote from that

letter.

"Dear Sir:

"The

Hon. T. M. Waterland, Minister of Forests, has instructed the Forest

Service that effective from April 1, 1980, appraisals for the coast

market loggers will be developed from log prices that are experienced

by that segment of the industry.

"The minister

felt that these measures were necessary at this particular time because

the product, of the market logger is in a slump and this group is

currently unable to get a price for logs that would reflect the price

that is used in their appraisals. The minister's directive to the

Forest Service is made in nine points. For your information we have

summarized these points as follows."

There is the senior

administrative officer, the deputy minister, stressing in this letter

advising of the change in the stumpage appraisal system that "the

minister has instructed," "the minister felt," "the minister's

directive." I still have had no satisfactory explanation from the

minister upon what precise statutory grounds he felt he had the

authority to do this. It seems to me that the regional manager probably

did have that statutory authority. The minister said he received advice

and recommendations from the regional managers which he is not able or

prepared to table with the House yet; I accept the minister's word on

that. But I find it a bit curious that the deputy sought to stipulate

in specific terms that the minister had instructed, the minister held

this view. The deputy didn't say it was our advice from the regional

forest manager, upon the appraisal of the material being harvested, the

market conditions and public interest. The deputy didn't say that at

all. He said it was the minister's view and the minister's instructions.

just want to make sure, Mr. Chairman, that that minister, or any other

minister, does not act beyond the authority which this Legislature

gives to him, because the minister himself has decried the fact that

some ministers in the province's history have allegedly acted beyond

the scope of their

[ Page 2815 ]

statutory authority, I would never want this little minister to get into that kind of problem, Mr. Chairman.

HON. MR. WATERLAND:

Mr. Chairman, I read part of the Forest Act to the member for

Shuswap-Revelstoke a few moments ago, and he advised me that that

wasn't necessary, that he had already read it. Well, I think perhaps

it's necessary to read to him further from the Forest Act. I told the

member that the actual determination of the prices is something done by

the regional manager. He goes out and selects what prices to use once

he knows what product is going to be used for the appraisal. The

authority to say what product, in this case the product of the market

logger, lies with the minister.

AN HON. MEMBER: Where does it say that?

HON. MR. WATERLAND:

Well, if I could read for you from

section 83 of the Forest Act, it

says: "For all or part of a forest region the minister shall specify

the forest products" — in this case I specified the product of the

market logger — "the values and production costs of which shall be used

in determining stumpage rates applicable to-timber cut in the forest

region or part." It says, "the minister shall specify the forest

product," and that's what the minister did. The regional manager then

accumulates the cost of that product which has been specified by the

minister and makes a recommendation to the minister as to what the

stumpage shall be. It's very clear and straightforward. If the member

could perhaps get some legal advice from the member to his left, we

could have saved a great deal of discussion here this afternoon.

MR. KING:

Mr. Chairman, I have read

section 83, and I made reference to that when

I discussed it earlier with the minister. Certainly the minister has

some authority in terms of developing the overall standards. But, Mr.

Chairman, there already is a standard in the Vancouver forest region,

and that is the Vancouver log market. That is the standard that has

been established as the basic formula from which stumpage is calculated.

Now

the minister has intervened and set up yet another appraisal system

within the same region; and as I said at the outset, I don't argue with

the objective and the particular economic circumstances that warrant

its consideration. But the minister is a little bit on the cocky side

for a junior minister and a new person in the legislative role, in

terms of: "Oh, you don't understand the statute." Well, you know, I

like to operate with a bit of a spirit of cooperation, rather than

lectures from....

Interjection.

MR. KING:

Oh, you know, the largest noises come from empty vessels, Mr. Chairman,

and it never seems to fail that the minister there with the iron lungs

is constantly interjecting.

MR. CHAIRMAN: All hon. members, the member for Shuswap-Revelstoke has the floor on vote 105. Order, please.

MR. KING: Mr. Chairman, they're a bonny bunch, aren't they?

that's the minister's proposition, that's what I seek from him. I don't

seek sarcasm in terms of giving a lesson, and who I should get legal

advice from. I simply seek straight-forward answers. If the minister

believes that under

section 83 he is granted authority to take the

ministerial action that he seems to have taken, as far as I can

determine, without advice from the regional forest manager, so be it;

tell me. I question that, but we're entitled to a difference of

opinion. All I'm seeking from the minister are forthright answers. If

you hold that to be your statutory authority to superimpose yet another

stumpage appraisal system in the Vancouver forest area, where the

Vancouver log market is already held to be the basic system of stumpage

appraisal, fair enough. All I want from you is an answer, Mr. Minister

— an honest, forthright answer. If that is your answer, fair enough, I

accept that. But I don't appreciate being admonished by the minister or

anyone else for a question which I think is clearly in the public

interest.

MR. CHAIRMAN: Shall vote 105 pass?

MR. KING:

No, Mr. Chairman. I want a clear answer from the minister. Does he hold

that

section 83 of the Forest Act gives him the authority to amend the

stumpage appraisal system in the Vancouver forest district, as he did?

If so, I would appreciate his saying so to the House.

HON. MR. WATERLAND:

Parts of the Vancouver forest region for which this special appraisal

to help the market loggers was used were those parts upon which the

market logger is operating. I'm not a lawyer. There may be other areas

of the act which also apply, but as far as I know at this time that is

the authority.

Vote 105 approved.

On vote 106: forestry program, $60,191,667.

MR. KING:

I would like some more information from the minister. I think this is

the appropriate

section to ask questions under regarding Ocean Falls

timber supply area. If my recollection serves me correctly there were

some licences granted in the Ocean Falls timber supply area, I think,

to Crown Zellerbach — or was it Doman's? I think there was another firm

from the Charlottes too. Oh, golly, I forget. It seems to me there were

a couple, anyway; maybe the minister can recollect and refresh my

memory on it.

As I recall there were some exchanges made for

small tenures — I don't know whether they were old temporary tenures or

what form of tenure they were — on the periphery of the Ocean Falls

timber supply area, and they were traded, in effect, for a new supply

area within the Ocean Falls supply area. I think one was CZ and the

other was.... Golly, the name escapes me. I forget. Can the minister

confirm, or can he remember, the awarding of any contracts in the Ocean

Falls timber supply area between 1975, when the Social Credit Party

assumed office, and the first of this year?

HON. MR. WATERLAND:

I don't have, at this time, any recollection of trades of old temporary

tenures. That's not to say that something hasn't taken place. There

have been some mid-coast sales which took place a couple of years ago

that were advertised and competed for publicly, but I can’t recall

trades for OTTs. I would have to research it to find out for sure

whether or not that has taken place.

[ Page 2816 ]

MR. LAUK: Have you ever met Herb Doman?

HON. MR. WATERLAND: Several times, yes.

MR. KING:

Mr. Chairman, as I recall it, an inventory had been conducted, I

believe in 1975, of the Ocean Falls timber supply area to determine

whether enough fibre existed within that unit to supply the Ocean Falls

pulpmill or a modernization plant in the area. Can the minister tell me

whether any full inventory has been done subsequent to that time

regarding the fibre supply in the Ocean Falls timber supply area? Has

any detailed appraisal been done since 1975 of the timber supply in the

Ocean Falls timber supply area?

HON. MR. WATERLAND:

Over the years a number of assessments of timber supply are done as our

inventory is updated. Timber supply changes constantly with various

changing conditions. I really don't know what the member wishes me to

say.

MR. LAUK: You're the worst minister we've had.

MR. CHAIRMAN: Order!

MR. KING:

Most people in the Legislature, and I think most people throughout the

length and breadth of the province, understand that the supply changes

somewhat according to growth patterns of the trees throughout the year,

according to infestation, blowdown, and a whole variety of factors. But

that's not the point, Mr. Minister. The point was that I wonder what

kind of handle.... We've had evidence that Ocean Falls closed their

pulpmill basically — cause they didn't have an adequate timber supply.

They closed their pulpmill and they breached a contract for the sale of

newsprint to the Los Angles Times .

Is the minister seriously telling me that he really doesn't know what

kind of timber supply there is in there — whether it would be enough to

supply a pulpmill located at Ocean Falls of the vintage of the old one,

or possibly a new mechanical mill? Surely that kind of work has been

done. It seems to me I recall that there was also an offer made by an

eastern forest firm to buy Ocean Falls and to acquire some kind of

timber supply in the area. Did the minister not examine that at all?

Does he have no information for the House on what kind of timber is

available there? He doesn't know whether he gave any away since 1975

and perhaps eroded some of the supply in that area. What does he know

about it?

HON. MR. WATERLAND: I told the member that

a number of ongoing studies are taking place. We had sales somewhere in

the mid-coast — I can't be specific as to what drainage — a couple of

years ago. There were bids put in by several companies, including Ocean

Falls, who I think cooperated at the time with Richmond Plywood on a

bid. They weren't successful. The Forest Service is just now completing

their finalization of the cut for the timber supply area. We have had

public hearings and meetings in Vancouver to discuss it with the

general public and the industry. I believe Sandwell did a study for the

Ocean Falls Corporation a few years ago. I know that another

consultant, E.M.O. Hood, did a study for Ocean Falls Corporation when

they were having discussions with Kruger. The Forest Service itself has

done studies. Finalization of the mid-coast timber supply area is just

now being completed after these studies and after running the

information through the, computers again. The strategic studies

division of the ministry itself did a specific Ocean Falls–oriented

study, one that I mentioned to the Leader of the Opposition a couple of

days ago. That one indicated for that specific area, economically

tributary to Ocean Falls, that there wasn't sufficient timber to

satisfy their needs or the needs of any expanded plant. That is the

state of things at the present time.

[Mr. Davidson in the chair.]

MR. KING:

The minister doesn't seem to have any precise knowledge on the

up-to-date inventory in the area. As I understand it — the minister can

correct me if I'm wrong — the minister does have the authority under

the Forest Act to direct the utilization of timber through a specific

mill or a specific fabricating plant. I just wonder why the minister

has apparently been awarding licences for the harvest of timber from

that area to be utilized in plants other than Ocean Falls. It seems to

me that that direction was calculated to ensure that there would not be

a timber supply for the Ocean Falls plant or any replacement thereof.

That is what I was trying to get at.

It seems to me, with

Kruger making an offer to purchase Ocean Falls, they must have at least

believed that the old, obsolete plant could be replaced and that there

was, in fact, a timber supply available to warrant capital investment

in a new plant of some description as a viable economic enterprise.

Kruger is a very large company, they have a lot of expertise and

experience, and I don't think they would enter into that kind of offer

without their own economic analysis and assessment indicating that

there was a viable operation there. I find it a bit peculiar that the

minister doesn't really seem to know what was available there, and that

he doesn't seem to have considered retaining all the supply in the

Ocean Falls timber supply area, to ensure that it was directed to a

fabricating plant in an existing town where there were existing jobs in

jeopardy, but rather let it be eroded away, a bit at a time, to other

companies who were directing it elsewhere, and in so doing guaranteed

the demise of Ocean Falls and the loss of jobs incident to it. That

seems a little difficult for me to understand and believe. Surely

Kruger didn't come in and make what I understand was some kind of a

firm offer to take over the enterprise out of ignorance, without some

indication that there was a fibre supply available.

There

are some strange goings-on with regard to Ocean Falls — breaching

contracts, timber being allocated to other operators when the minister

had the authority to direct that all the fibre from that area be

allocated to the Ocean Falls plant. He has that authority under the

act. It seems a highly questionable approach to the management of a

resource in the province of British Columbia.

MRS. WALLACE:

I wanted to ask the minister about the Nitinat Triangle. I discussed

this with him previously, but there have been some long-standing

negotiations going on there between the provincial and the federal

government relative to the timber supply there and the allocation of

that timber supply. I had thought the thing had been resolved, but I

had a letter from one of the companies involved just a day or two ago

which indicated that their future operations were more or less

dependent upon the decisions and suggested that it was taking a very

great deal of time to come to any decision

[ Page 2817 ]

the disposition of that timber. Naturally, I'm sure, the minister can

understand my concern, because we're talking about jobs in the Cowichan

Valley. They depend a great deal on the distribution of that timber,

because some of the areas are very short of log supply and others

perhaps have other sources of timber that they could utilize. So I

would like some comment on the status of the negotiations with the

federal government and with the logging companies there relative to the

Nitinat Triangle, if the minister is prepared to give us any

information.

The other item — and I think this is the vote —

has to do with the contracting out of tree-planting. Am I on the right

vote, Mr. Minister, for contracting of tree-planting? I'm assuming that

this is the vote it will come under anyway; I can't see any other one

where it would fit in.

I've had several people in my

constituency office who have in fact had to make some claims for

payment of wages — these are people who work for contractors who were

hired by the B.C. Forest Service to plant trees — and, of course, when

the company doesn't pay the wages and if they cannot be found or so on,

I understand there is some provision.... Certainly these people — and

the person I was dealing with — were employees of the B.C. Forest

Service, which was making some compensation to these people because

their wages had, in fact, been defaulted on by the company. The company

was not available; they'd gone bankrupt or they'd disappeared.

seems that in talking with the people who were handling this, there is

really little or no screening of the contractors who come in to plant.

In fact the advice I got was that sometimes contractors who have given

a great deal of trouble — there have been a great deal of problems

occurring after the fact — when they bid again, perhaps because they

are the low bid they will be rehired to plant again, even though their

record has been very poor on previous occasions; they haven't paid the

people they've employed to plant for them. I'm wondering whether or not

the minister has decided to take any action and to screen these people

a bit better.

Well, I see it's not just the Minister of

Universities, Science and Technology (Hon. Mr. McGeer) who has new toys

in this Legislature; the Attorney-General (Hon. Mr. Williams) has

joined the club.

Mr. Chairman, I'm wondering whether or not

the Minister of Forests has considered at all coming up with some

different method and not just simply taking the low bid, if that's what

he does, in fact, on those contracts for planting trees. If, in fact,

that's what he's doing, it encourages contractors who are not

completely responsible or reliable to put in a lower bid and then to

hire people who go out and do the job and then can't collect their

payment.

I know I had some half a dozen people who had all worked for the same contractor

coming into my office. We did eventually get payment of wages but not from the

company who had hired them; it came through a government source through the

Labour Relations Board, I believe, and certainly would eventually come out of

the taxpayers' pockets. This is certainly not in the best interests of the

tree-planting system, if we have people who are coming in on this basis to plant

trees and then not getting paid: certainly it's not going to be conducive to

the best efforts in tree-planting either. I know that we've had some previous

discussions about the regeneration rate and so on that occurs with these people

when they are planting, but if you have a company that is hiring and is not

particular about paying their employees, then they're probably not going

to be very particular about policing the kind of job that is done.

While the Forest Service, I know, is very sincere and

dedicated, it can only cover so much ground. It's been mentioned by my

colleague from Mackenzie that there certainly is a shortage of staff,

and that's something that has been raised by other members in this

Legislature as well — that the actual people out there in the field

doing the job, the skilled technicians and the trained people, just

aren't numerous enough to do an adequate job. There just aren't enough

people there. So when you're contracting out forest regeneration — the

tree planting — under this particular vote. I think if you just simply

accept the low bidder without any specifications as to their financial

stability or some means of quality control, you are not doing the best

possible job for the forests of British Columbia or for the spending of

the taxpayers' money. In addition to that, you are encouraging poor

labour practices on the part of contractors, who perhaps deliberately

underestimate their costs in order to get the bid and then opt out.

Certainly the company that we — the officials of the Labour Relations

Board, myself and the people concerned — were attempting to deal with

was a company that was just impossible to contact. I think the

representative from the board said that he had tried on 40 different

occasions and simply got an answering service. They were just

unavailable. He'd gone to the addresses of the supposed shareholders

and they weren't there. So there was no way of picking up this money

from the company. As a result, the taxpayers were being charged with

the costs that should have been borne by the company that was doing the

job; in a roundabout way the taxpayers were paying as a result of it

coming out of funds that are set aside for those kinds of things.

Mr. Chairman, I would hope that the minister can answer those two questions:

the one relative to the Nitinat Triangle timber supply and where the negotiations

are on that particular issue at this moment: also, whether or not he has any

ideas or whether he's taken any steps to prevent the kind of abuse of labour

practices that seem to be taking place with contractors.

know it's not just my own area: I had a complaint from an area around

Dawson Creek. I believe — in the northern part of the province — in

which people have been hired and in fact received no pay at all. They

worked several days and the person who had taken the subcontract — it

was a subcontract in that particular instance — from a contractor had

been paid, but the people that he brought in with him received no pay

at all. I think they just gave up on that one. I don't think they

carried it through they just decided that it wasn't worth the effort,

because they hadn't worked that long. I'm raising the point because it

is just one more example of how these things are occurring in the

reforestation program. Certainly there have to be some measures taken

to ensure that those contractors are reliable contractors and are going

to meet their payroll.

HON. MR. WATERLAND: Mr.

Chairman, the member for Cowichan-Malahat first talked about the

Nitinat Triangle. Negotiations. I believe, are now getting cranked up

again between the Ministry of Lands, Parks and Housing and the federal

government. As the member knows, the problems that we are having in the

area as far as forestry is concerned are caused by trade-offs that may

have to be made in order to establish the Pacific Rim Park. Prior to

the election before the

[ Page 2818 ]

last

one, we were getting down to the point where negotiations were,

beginning to come together as to what responsibility the federal

government would have and what the provincial government would have.

Unfortunately, these were interrupted by two different federal

elections, and in the meantime.... I read a letter from the Minister of

Lands, Parks and Housing (Hon. Mr. Chabot) just a few days ago, and I

understand that he is again in touch with the federal minister

responsible and that these negotiations should be underway again soon.

They've been going on now for some ten years and I'm not sure just when

they'll be finalized, but it is a tremendous delay.

The

member talked about the payment of wages to people who contract

planting with the Forests ministry. We do require a declaration by

contractors before we pay them that they have paid wages and other

outstanding accounts as a result of their operation. I guess from time

to time this isn't completely satisfactory and people do not pay their

employees, but we try to police it just as closely as we can. We have

literally hundreds and hundreds of planting and other silvicultural

contracts each year, and occasionally someone will, I guess, sign that

declaration falsely, and it's very difficult to catch up with him.

However, we do monitor it and we also make very close inspections of

all planting contracts prior to payment. As a matter of fact, we have a

little slide show now which is being used to advise all planting

contractors as to just what procedures we go through in examining and

assessing the quality of their planting work. Their pay is determined

on how successful their work has been. They get 100 percent payment

only if they do a very adequate job. We have deductions for those who

do not do a completely adequate job at a level of, I believe, 80

percent on the scale that we use. If it is below that 75 or 80 percent,

they don't get paid at all unless they come back and correct it. So we

monitor it very, very closely and I'm sure the government is getting

very good value for the money we spend in reforestation. These problems

with the occasional person skipping out without paying his employees

are something we try to control by requiring these statutory

declarations. Occasionally it doesn't work.

MRS. WALLACE:

Just a couple of questions as a result of the minister's answers. Do

you in fact go to the lowest bidder? Is that part of the requisite? Is

it always the lowest bidder who gets the contract, or do you look at

other requisites? What you are telling me is fine; you are checking up

after the fact. But are there any prerequisites? Do you look at all at

these companies' past records? For example, the company I was talking

about had planted trees previously with the same kind of history and

then they were right back in there doing it all over again, repeating

the same kind of bad history of not paying employees.

You

talked about the inspections, and that the company is only paid 100

percent if they have done a good job, Perhaps it is not your

responsibility, but if in fact the company is paid 80 percent because

they've done such a terrible job, what happens to the employee then?

Does he get paid at only eight-tenths of the number of trees he has

planted, or does he get paid for all the trees he's planted?

HON . MR. WATERLAND:

How the contractor pays his employees is between them. Some of them go

on a piece basis, some go on an hourly basis and there are various

arrangements made. We discussed that to some extent the other day, I

believe, when the member for Shuswap-Revelstoke (Mr. King) was talking

about going to the lowest bidder. We usually do. If the bid is

extremely low we discuss it with them and try to find out why it is so

low and if they can actually carry on at that low a level. At times we

have refused to award a contract on a bid that is so ridiculous that we

know the person can't possibly complete the contract satisfactorily

without losing money. We do follow the history of planting contractors

and if the history is of abuse or poor work then we have at times

refused a contract to people on that basis as well. So it is not just a

matter of getting the contract if you are lowest. We do try to assess

the ability of a person to perform as well.

MR. MITCHELL:

I would like to switch a little from the large multinational

corporations and the large timber resources that my fellow members have

been discussing. I would like to bring the House back to a question I

raised in the minister's estimates earlier on — that is, the

development of the salvage of forest waste. I feel that the ministry,

under the leadership of our minister, should develop a policy such that

we can have an effective labour-intensive industry that is going to

create jobs. I've travelled throughout areas in my riding and I have

spoken to a lot of men and women who have attempted to earn a living

from the forest industry about the waste today that is going up in

smoke, the waste today that is being allowed to lie on the ground and

rot. I know the minister stated in his offhand way that it doesn't just

rot, that it gives nutrients back to the ground. I agree with that. He

may be interested in producing nutrients for the ground, but I am more

interested in producing food for the tables of people who are not

working. There is a vast group out in the community who don't have a

trade or a college education, but they are prepared to go into the

forest and do an effective job of salvaging wood that otherwise has

been allowed to rot and be burned each year when they burn the slash.

have toured some of the areas and though I have talked to different

groups of people and different salvagers, I am going to confine my

remarks this afternoon to one part of my riding, the area covered by

tree farm licence no. 25 in the Jordan River area, the area that is

controlled by Rayonier Canada Ltd. This goes back over a period of five

or six years of one particular enterpriser making a living and hiring

anywhere from five to ten employees who, instead of being on welfare or

instead of claiming unemployment insurance, were going to work every

day, earning a living. But because of the petty little bureaucracy, or

the regulations that were developed by the ministry, this particular

industry ground to a halt and was shut down. At present at least two of

the workers who were earning a living are back on welfare. I won't

mention any names, but I am more than happy to give to the minister the

name of the particular company, the dates, times, and the copies of all

letters.

I would like to have a review of what happens when

a group of individuals are prepared to go into forestry, to go into the

slash that is left by the companies who go in and cream it, taking the

best of the timber out, who can have the multinational organization

behind them so that they can process it. But when you have a group of

people who are basically working with their hands — working with the

minimum amount of machines and equipment — what they are doing is

taking the waste. As they say, the large companies have creamed the

forest, and they are trying to make an existence on the skimmed milk

that is left.

[ Page 2819 ]

They

can make a living on some of the products and can bring them back into

the local economy. Some of the products are needed by our society today

— products that are and can be utilized, but regulations that have

developed have shut it out. I'll just read a few of the products: there

is sawn lumber — fir, cedar and hemlock; shake blocks; shingle blocks;

fence posts from the debris on the active logging site and also from

the commercial thinnings; fence rails; sticks and stakes for gardens;

and cordwood. Each one of these products is being produced from waste.

They are products that are used. They are products that create

employment. They create the pride that a person can develop by getting

out into the forest and working. As I stated before, Mr. Minister, the

procedure that has developed has shut this one particular operation

down.

I'll go back to the letter that actually was the straw

that broke the camel's back. It is a letter from Rayonier Canada, dated

February 28, 1979. It says:

"Please be advised

that due to the request of the B.C. Forest Service, effective on this

date all special forest products removed from company lands are to be

scaled at the forestry office in Jordan River. As such, you should make

the necessary changes in your hauling

schedule to have your products

scaled during the working hours of 8:00 a. m. to 4:30 p. m., Monday

through Friday.

"Also, please be advised that

the rates of payment have been increased by approximately 2 percent as

a result of the increased work for our staff due to the new metric

scaling arrangements instituted by the B.C. Forest Service."

For

someone who is working in an office — someone who goes to work every

day, has his regular coffee breaks, has an hour for lunch, and goes

home with the local car pool — these regulations may fit into your

bureaucratic mind. But for people who are out 20 miles from the main

road, hustling a living by developing and salvaging waste, when you've

left home at 6:30 in the morning and drive two hours, you're 20 miles

back in the bush, you start an operation going, and then you realize

that to have it scaled, you have to leave at 2 o'clock to get back. The

department can issue a scaling licence to individuals. They can issue a

testing requirement, and the department can make effective spot-checks

to bring in a regulation that actually cuts a third of the day out of

the operation. Once you get back 20 miles into the bush, once you have

pulled out a few sawlogs that are broken anywhere from seven to ten

feet for the slabs that you're running through a small portable mill

that you've invested $18,000 in, that you've moved into the bush,

you're not running an operation like a major mill; it's an operation of

individuals trying to make a living. When they get into the woods, when

they get their operation set up, when they have to do their work, and

conform to the regulations of the Workers' Compensation Board and all

the other regulations that come into employment, they are running an

operation.... They are salvaging wood that would normally be burned,

salvaging shake blocks, salvaging, out of the debris that has been left

out on the piles, to make fence posts, to cut — as a lot of the women

are doing now — simple little things like flower stakes for gardens,

for Beacon Hill Park. Many of the local nurseries are buying them;

they're creating that job. They're getting that person out, and he has

to pack all these bundles of sticks out so some person can be there and

can get off at 4:30 p.m.

There must be a method of

authorizing and training a person — someone in a crew — who can do

scaling on the amount of wood that is salvaged. This is salvage that is

normally going to be burned; it's going to be allowed to rot. It's not

any great amount of forest products that is being ripped off by

individuals. It is material that is creating employment, and in this

time of economic slump.... In the rural areas there are a lot of people

who want to work; they're not happy collecting your welfare, they're

not happy collecting unemployment insurance. They are prepared to get

out there and do a hard day's work and earn a good living. A lot of new

youth without any training can get out and get into the woods, get

their training, and then they can move back into the major industries

that are in my particular area — and in the rest of B.C.

feel, Mr. Minister, if, through your department, you could develop some

type of ombudsman who could work in conjunction with the Forest Service

and the multinational corporations that control the vast areas that

make up our tree-farm licences...that there can be a type of regulation

that they can work with, that they can work under, and that you can

develop an industry. I feel that maybe in the past we could keep the

economy of British Columbia going by just having everyone as fallers

and buckers and that they could work in the mines and the mills and we

could cream the resources. But I think we're coming to a time in our

own economic development that we have to develop a secondary type of

industry. We must develop utilization of our resources.

feel that the leadership must come from people within the department.

It must come from people with a little bit of compassion, with a little

bit of business sense, with a little bit of understanding of working

with their hands, not from those who've got the degrees in forestry and

those who can create a million dollars with a million acres of timber.

These people will survive because they have the ability and the

knowhow, and they have the cream that they're taking off our resources.

But there are a lot of people that are not even asking for the cream.

They're only asking for a simple opportunity to have a share. I say

that, Mr. Minister, very humbly. They want a share of the resources

that are being allowed to go to waste. Instead of worrying about the

nutrients for feeding trees, let's worry about putting food on the

tables of people who want to work.

[Mr. Strachan in the chair.]

I've

heard all kinds of stories that if you allow people into the woods,

they destroy and steal the company's equipment and that they don't do a

good job. I think it's only fair — as I'm using one particular company

that I'm prepared to submit to you — to read a letter that came from

the forester to the particular company that he was working with. He

says: "I am pleased with the job you did in salvaging material on our

Juan de Fuca operation. I have set up the new agreement for your

signature, and if you wish to continue salvaging at the Juan de Fuca

River, the new agreement is the same as the old one. Again, if you will

sign both copies, return one and keep one yourself." It's continued.

Now this operation would have been working today. This operation would

have been working and they would be creating employment, but because of

the little regulations, the bureaucrats, the frustration, it has been

shut down. I ask on behalf of a lot of people out there what the policy

of the ministry is on salvaging. What kind of

[ Page 2820 ]

rules

and regulations can be brought in to help the little guy who is trying

to make a living out of something that right now is being wasted, right

now is left to be burned, and right now is left to rot on the ground?

HON. MR. WATERLAND:

Well, Mr. Chairman, the member is once again using the old tactic of

saying that the big companies are creaming the forests and the little

companies and the individuals are getting nothing. All licensees in

specific areas in the province must harvest to the same utilization

standards; nobody gets any different rates than others.

far as the ability to salvage after harvesting to utilization standards

is concerned, in the past this has been by arrangements made between

licensees, because they have had the responsibility for post-harvesting

cleanup, etc., on the landsite. So the agreement has been between the

licensee and the salver. Now at times salvers have not done their work

properly and have actually created problems for both the licensee and

the Forest Service — admittedly it's not very many; most of them do a

good job. But when this happens, it makes the licensee somewhat

reluctant to enter into agreement.

In order to overcome this

problem I have an amendment to the Forest Act before the House now

which will make it possible to have a licence issued for salvage

without placing the responsibility for the salver on the original

licensee. He can have a salvage or a special products licence issued

either before, after or during the normal harvesting licence's period

of validity. So in that particular area of concern one of the reasons

it was difficult to do has been overcome. By and large the relationship

between salvers and licensees is good, and there is nothing in the

regulations or the forest legislation that causes people not to be able

to do this; it's a matter of agreements between the two of them. Now we

are taking that one step further, whereby we can relieve the licensee

of that type of responsibility.

MR. MITCHELL: Maybe the minister, Mr. Chairman, missed what I read from the letter — and I'm prepared to supply him with it. It says:

"Please

be advised that due to the request of the B.C. Forest Service,

effective on this date" — which is February 28, 1979 — "all special

forest products removed from company lands are to be scaled in the

forestry office in Jordan River. You should make the necessary changes

in your hauling

schedule to have your products scaled during the

working hours between 8 and 4:30 p.m."

Now up until that

time there was a very efficient arrangement between the owner of the

tree-farm licence and those who were doing salvage work. To understand,

when you are talking about those who are doing the salvage work, they

are a small group of people who are going out to log dumps, to where

the spar tree had been removed, to where all the slab, the debris and

the junk is. They go out and they salvage that on-site and then they

bring it out — and in many cases they're 20 miles away from the main

road. By the time they get in there.... Many of them want to work

throughout the day while there is daylight, because there are a lot of

winter nights, a lot of snow, and they can't work. The type of people

that go into salvage are people who are prepared to work and to work

hard, and they can't be tied down to this simple little regulation of

from 8 to 4:30. Once they've got into the woods, once they have got

onto the site, they want to work, they want to salvage as much as they

can and then they want to bring it out.

Basically what

they're asking, Mr. Minister, is that this type of regulation at least

be discussed with those who are working there, so they have some input.

When they have a regulation like that, you should listen to the

explanation that they give that it's not workable, and come up with

some other regulation, come up with something where you can issue a

person with a scaling licence. They are people who are working in the

woods, who understand scaling. No one is complaining about the stumpage

rates; no one is complaining about the regulations of producing it;

they're more than happy to show their books. There must be another way.

When you collect the sales tax, you don't have someone there every time

you collect the sales tax so that you have to file a form. You develop

a trust with the store owners and those who collect the sales tax, and

you develop in that particular branch a method of spot checks. You

develop a method; they have to follow within a certain average. If a

person with three or four men working in the woods — I say three or

four men; some of them are single parents; some are men and some are

women. If they are going to fit in that particular schedule, they are

going to come up with an average very much like the collecting of the

sales tax.

In these sorts of laws, rules and regulations I

know that with a little thought, with a little input from those who are

involved in it, you can come up with something workable. You can come

up with something that is going to produce employment, and it's going

to help an awful lot of people who, as I said before, don't have a

trade, do not have any degrees, but are more prepared to work than they

are to sit back and collect either welfare or unemployment insurance.

They want to get out and make a better living. They want the training.

As this industry develops, they will be making lots of money.

There

is an abundance of resources there. I've been quietly estimating that

you could put a six-rail fence all around Victoria with just the

thinnings that are lying in the woods and rotting. I can show you on

farms all kinds of rail fences that have been salvaged, that have been

built, that have been sold. I can show you buildings that have been

built with salvaged material — shakes of cedar bark on the side of

buildings as a decorative industry. This was something that was

normally burned. But this is something that is there to salvage, and it

is a product that is sold.

You say it was the simple final

straw that broke one particular company's back. I think that the

minister, with a little thought, with a little input from those who are

involved, can come up and get this operation back onto the rails.

MR. SKELLY: Mr. Chairman, I thought the minister was going to answer the questions of the member for Esquimalt–Port Renfrew.

have just one question under this vote for the minister, and it relates

to the Pacific Reforestation Workers Association and the concern that

they have about pesticides. Apparently during the growth of seedlings

in provincial government nurseries, a number of pesticides are used to

prevent the new stock from being attacked by various bugs, organisms

and that kind of thing, and some of these pesticides leave residues on

the seedling stock that could have some health impact on the

reforestation workers. They are concerned that they've never had any

agreement between the

[ Page 2821 ]

Forest

Service silvicultural branch and their association to notify the

reforestation workers as to what pesticide residues they can expect on

the seedling stock, and what possible health impacts these materials

will have on those doing the actual work of reforestation in the

province of British Columbia.

They did some testing on their

own, I understand, of seedling stock, and found out through the

environmental laboratories in Vancouver that there were residues of the

fungicides Captan and Benalate on the seedling stock. Both of these, I

think, are based on mercury compounds, and mercury is an extremely

dangerous chemical, as we all know from the minamata experience in

Japan. The reforestation workers would like to have some assurance from

the Ministry of Forests and from the silvicultural branch that where

these chemicals are used in the nurseries, and when residues are

evident on the seedling stock, they will be notified and will also be

notified of the potential health impacts of these chemicals. I wonder

if the Minister of Forests has come to some kind of agreement with the

Provincial Reforestation Workers Association that the silvicultural

branch will notify those workers when there are pesticide residues on

the seedling stock that could have some impact on the health of those

workers.

HON. MR. WATERLAND: We have met quite

frequently with the western reforestation — I forget the name of the

group — regarding the use of these pesticides on seedlings. They have

been made fully aware of what we're using. As a matter of fact, when

seedlings which have been treated with herbicides of any kind are

shipped out to our regional areas, our regional manager is aware of it,

and they advise any reforestation workers just what has been used and

make sure that they are aware of the fact. We are continuing to discuss

these problems with them. We are always using ways of seeking other

systems which will not require the use of chemicals. However, at this

time it does require that use.

All of our nursery personnel

and nurseries are licensed and all pesticide applicators hold

certificates of qualification under the various pesticide control

regulations that exist. We are in touch with them at all times. As far

as I know right now, we have never received seedlings that have been

treated with chemicals without being advised of that fact before the

planting contract begins. There is a good communication with them. It

is a matter we are continuing to discuss and trying to find ways of

avoiding that but at the present time the use of chemicals is still

necessary. As I said, they are always notified.

The member

for Esquimalt–Port Renfrew was talking about salvage. There is no way I

can see that any material within the utilization standards should not

be charged for. I will not subscribe to the idea that under an

agreement with the licensee they should be able to scale their own

product. We went through that discussion with the member for

Burnaby-Willingdon — whether it is a large or small volume. If it has

stumpage accruing as a result of it, I think the scaling should be done

by Forest Service people, so I will not subscribe to them scaling their

own. However, I believe that material below the utilization standard

that is taken out should perhaps be taken out stumpage free, because if

you apply stumpage to it, what you are doing is discouraging the use of

it. It is a disincentive and I think we can move in that direction.

However, as long as it is at or above the utilization standard it will

have to have stumpage paid. If they take out that kind of material

under agreement with the licensee, it should be scaled by the Forest

Service scalers. If the demand were to justify it, I don't think it

would be impossible for us to provide for some extra-hour scaling for

these people if they have to come out after hours. Whether the cost

which we'd be required to pay as a result of that would be justified in

benefits which would accrue to the salvager is something we'd have to

assess. We are concerned about those problems. We are working with the

salvagers and trying to encourage the salvage of a lot of this unusable

material.

MR. MITCHELL: There is one other thing you

brought up. No one is really complaining about paying a certain amount

of salvage. There has been a change in regulations in spite of my

colleague who asked why you had different rates. I believe the

department rightfully came up with a different rate of salvage.

Originally in this particular area they were charging $34 a metre or

whatever it is, but they did drop it down because they did recognize

that the cream was taken off in the large bulk trees. They came up with

a different rate for the salvage material, which I agree with. On

behalf of the many people who were salvaging, they appreciated that

bending, changing, altering or whatever they did in the rules and

regulations of the department.

This other

section of getting

out in an area.... It is easy to say we can't do it. It's not that we

can't do it; it is that there are certain regulations we have to

develop to fit a particular problem. As the old saying in police is: if

it can't be done, we just work a little harder. I'm sure that the

minister with his deputies and with some consultation.... The sales tax

people who have developed rules and regulations and the policy of

averages can assume — they put in so many types of scale reports and do

spot checks — when somebody is ripping off the system. It is quite

obvious. It is not for me to come up with the ideas, but it has been

tried. The income tax people do it; many groups do it now. This is all

I'm asking. I'm asking you to realize there is a problem and come up

with a solution.

Vote 106 approved.

Vote 107: fire suppression program, $7,717,500 approved.

On vote 108: timber, range and recreation program, $36,221,670.

MR. KING:

I have a brief issue to raise under this vote. I am advised that a firm

by the name of Little, Haugland and Kerr at Terrace, which was, I

believe, a wholly owned subsidiary of Joslyn Manufacturing and Supply

Company, a U.S. firm, sold their plant, and the timber supply was

awarded along with the sale to another American buyer, namely Bell

Pole. I think the minister is familiar with this transaction. The

problem that has been raised with me by a Kamloops firm named Rogers,

Hunter and Co. — which represented British Columbia firms interested in

purchasing this mill at Terrace — was the fact that they had no

notification whatsoever that Little, Haugland and Kerr were interested

in selling out their plant. They had no way of knowing that they had

gone ahead and made a private arrangement for sale to another American

firm in British Columbia. Consequently they lacked any opportunity to

bid or make an offer to acquire — and hence repatriate to the

[ Page 2822 ]

province

of British Columbia — an interest in our forest industry. The proposed

sale was referred to FIRA — the Foreign Investment Review Agency — and

it was approved.

It was only after the approval by FIRA that

the British Columbia firm became aware that a sale of this plant was

pending. At that point, I am instructed, they approached the British

Columbia Minister of Forests and asked him to delay any transfer of the

timber rights until such time as a public hearing was held and the

records of both the American seller and the American purchaser were

reviewed. I am advised by Rogers, Hunter and Co. that the corporate

record of both the seller and the purchaser leave something to be

desired. I am advised that they have evidence that Little, Haugland and

Kerr, a subsidiary of Joslyn Manufacturing and Supply Company of the

U.S.A., sold some of their products directly to their parent company in

the U.S.A. at a far lower value than was available on the open market.

This inside selling was resulting, in effect, in the transfer of

profits from British Columbia to their parent in the U.S.A.

Additionally, that would erode the proper return to the Crown which

should have been forthcoming from the harvesting and marketing of a

British Columbia resource.

At this point it is not my

purpose to say whether or not these allegations are valid; but

certainly when allegations such as that have been raised with the

minister, there should be a full opportunity for a hearing. I am

advised that there was evidence of other practices by both these

American firms which certainly were not in the best public interest of

the province of British Columbia — poor utilization and other things. I

am advised that the Forests minister in the province of British

Columbia refused to intervene and delay the transfer of timber rights.

I am advised that the cabinet eventually held a hearing at which time

Rogers, Hunter and Co. of Kamloops, and their client who was interested

in the purchase of the Terrace plant, had an opportunity to make their

presentation to cabinet. I am advised further that that opportunity was

totally inadequate; they were cut short and not afforded the

opportunity to present the evidence they had of poor performance by the

two American companies involved in the transaction.

Be that

as it may, the real, central question here is: is there not a right for

a British Columbia business enterprise to be notified of the pending

sale of an American firm in this province, so that they might bid for

repatriation of timber rights and control in our own house? The Foreign

Investment Review Agency in Ottawa certainly doesn't notify them.

The

Minister of Forests here has refused in this case. What is the

minister's policy? Is it not to encourage British Columbia firms to

take the initiative and develop manufacturing plants, to acquire them

by purchase, and to create industrial activity and job creation in the

province? Or does he not care whether it goes to foreign corporations?

I would be very interested in hearing the minister's response to the

story as it's been told to me, and an outline of precisely what the

government's policy is when it comes to ensuring that an opportunity

exists for British Columbia entrepreneurs to at least be apprised of a

pending sale, and have the opportunity to put forward a bid.

HON. MR. WATERLAND:

The sale of LH&K's operation to Bell Pole.... The member's right —

I believe it was Mr. Ralph Yeo who was represented by the Kamloops law

firm. This sale had been approved by the Foreign Investment Review

Agency and a request had been made to me for approval of the transfer

of the cutting rights when Mr. Yeo requested by letter or telegram — I

forget which — that we hold up the approval until such time as he had

had an opportunity to present us with certain facts and apprise us of

the fact that he was interested in purchasing the plant which was done.

I believe that the sale was delayed for a couple of months for that

reason. Mr. Yeo sent in an extensive brief, outlining the reasons why

he felt that Bell Pole should not buy it, why they should not be

allowed to buy it, and why he should be. He was given an extended

period of time to present any and all information he wished. His report

— I don't know if the member has it or not — which I received and went

through in detail, was what the member said: primarily allegations of

mismanagement, selling at below cost in other jurisdictions, not

complying with the Canadian Income Tax Act, and not paying holiday pay

for Mr. Yeo's father, who previously had managed the LH&K plant.

This was gone through in great detail and painstakingly by myself and

my staff. We afforded an opportunity to Mr. Yeo and his legal counsel

to appear before the cabinet committee, at which time Bell Pole also

appeared. He was given every opportunity to present any and all

information he may have wished at that time, which he did.

The

allegations which he made were unfounded. There was no documentation or

substantiation of them. In our analysis of the benefits to British

Columbia of allowing this to be sold to Bell Pole, we considered their

record. Bell Pole has been operating in British Columbia about 50

years, I believe — since around 1930. They have been good operators and

good corporate citizens. They've employed a large number of British

Columbians for many years and treated their employees very well. As

there was no documentation or hard evidence to support the allegations,

and as the combination of the LH&K and Bell Pole plants made a lot

of economic sense in the Terrace area, a combination of the cuts of the

two and the commitment to upgrade the plant will give economic benefit

to the area and will secure employment and continuation of employment.

Mr.

Yeo had apparently made an offer to purchase to LH&K, and his offer

was subject to his being able to raise the funds. It was subject to his

being awarded or allocated an additional timber supply. He was advised

that if when the TSA analysis was finished there was additional timber,

it could only be acquired through the competitive route, and that we

would like to reserve some of that timber for a small business program

which will keep it in circulation in the area. But his offer to

purchase was very conditional, and conditional upon things that I don't

think were going to happen — that is, a direct allocation to him of

additional wood. So we investigated it very thoroughly. We, as a

government, would prefer to see Canadian owners and operators, and if

we can encourage that, we will. This case, as is the case with all of

these requests for transfers, was looked into in great detail, and the

bottom line has to be: "Is there substantial benefit to British

Columbia by allowing this to happen?" When the answer is yes, we

generally approve it. We don't have objections to Americans or Japanese

or any others taking

part in our economy, as long as they are good

corporate citizens, and as long as they abide by the rules and

regulations of the particular areas they happen to be working in.

Mr. Yeo had ample opportunity to present his case. He did come before

the economic development committee of cabinet; even though he may say

he was cut short, he had every opportunity to explain his case

completely. We did

[ Page 2823 ]

consider

it very seriously and carefully, and in our judgment it is in the best

interest of British Columbia to have allowed this transfer to go ahead

and, therefore, approval has been given to transfer the cutting

authority.

MR. KING: Mr. Chairman, I want to advise

that I don't know Mr. Yeo from Adam. I haven't talked to the gentleman.

Rather, I talked to one Brian Ross, from the legal firm of Rogers and

Hunter, who authorized me to use his name in terms of putting forward

the whole transaction which had taken place and objecting to it. Fair

enough. If the minister feels that a cabinet appeal committee was

struck and there was ample opportunity afforded to hear the evidence

and that evidence was presided over and considered in a fair and

impartial manner, then so be it.

I think the point that

concerns me a little more deeply, though, is this. Since I wasn't

involved in that hearing, I can make no judgment in that regard. I

guess that's between the minister, Mr. Ross and his client. What does

concern me a bit, and what the minister never responded to, is the

proposition that this kind of sale between one foreign corporation

involved in the forest industry in British Columbia and another can

take place without any option, public notice or any opportunity for a

B.C. firm in the industry to compete for the purchase. I would think

that before the minister gave approval for transfer of cutting rights

it would be very difficult for the minister to properly analyze whether

or not this proposed transaction made economic sense if he had no

alternative bid from anyone else.

You know, Mr. Minister,

you may say this made great sense for Bell Pole to buy out LH&K in

Terrace, but had you not received an urgent eleventh-hour request from

a British Columbia entrepreneur who heard by the grape-vine that this

sale was going through, what would you have had to compare the economic

benefits to British Columbia of the purchase by the American company or

the British Columbia firm that was interested? You'd have had no basis

for comparison to decide which offer provided the greatest economic

advantage to British Columbia. So I would think that before the

minister, in his wisdom, decided, "Okay, we'll accept this sale and

transfer cutting rights," as a matter of public policy, particularly

when it involves foreign companies, which are very, very dominant in

the British Columbia forest industry....

It would be

different if they only had 15 or 20 percent, but we're looking at

around 80 percent dominance by American corporations in the forest

industry in British Columbia.

It seemed to me, under those

circumstances, that the minister, as a matter of public policy, would

say: "Okay, before I'm going to transfer any cutting rights I'm going

to ensure that British Columbians are aware of this pending sale and

have an opportunity to get into the game." Who knows? Maybe an

interested person within the province will come along with the ready

cash and a plan of development and investment that would provide a

better option for the economic interests of our province. But if the

minister is prepared to let the sale transaction slide through with

only one proposed purchaser, to run it by the Foreign Investment Review

Agency and give his approval for the transfer of cutting rights with no

guarantee that anyone else in British Columbia even knows about the

sale, it seems to me that's not in the best public interest. That's the

point I'd appreciate the minister stating his position on.

HON. MR. WATERLAND:

Mr. Chairman, it may not have been advertised as such, but it was

common knowledge for the last couple of years that the LH&K plant

was for sale. In fact, other companies had made offers which were

rejected, for what reason I don't know. It's not a matter of it sliding

through; it was common knowledge. I understand that the federal

government, under their Foreign Investment Review Agency, are

considering a requirement that the sales of companies to foreign

companies be advertised to seek possible Canadian participation. We

don't have at this time any such requirement in British Columbia. There

is no legislative authority to require that. If the federal government

does it, it would accomplish the same end result, but these sales

usually don't develop without it becoming pretty well known. There's a

tremendous grape-vine within that industry, as well as in other

industries. I know for a fact that the pending sale and the fact that

LH&K was for sale was quite commonly known in the province for at

least a year — probably more like two years.

MR. KING:

Mr. Chairman, the minister does have the right to transfer cutting

rights or to refuse to transfer cutting rights. Armed with that

authority, which is virtual life-or-death approval over the sale —

certainly as a matter of policy — he could take the initiative and say,

when it comes to the exchange of British Columbia timber rights between

foreign corporations in this province: "As a matter of public policy I

demand that it be advertised so that other interested people have an

opportunity to at least make an offer." Why wait for the Foreign

Investment Review Agency to set that policy which protects the best

interests of British Columbians? I suggest to the minister that that's

the very least he can do. Certainly, in assessing the highest public

interest and the best economic potential for this province, it's

advantageous to have more than one offer — perhaps a whole variety of

them. To rely on the grape-vine or hearsay....

Interjection.

MR. KING:

Oh. It was common knowledge. Well, these people tell me that they had

no knowledge of it until it had in fact been approved by the Foreign

Investment Review Agency. That seems like pretty sloppy administration

to me.

I see no reason why, as a matter of public policy,

the minister would not stand up and forthrightly say: "When it comes to

dealing with British Columbia resources, and where the owner is a

foreign corporation and proposes to sell to yet another foreign

corporation, at least the business community and the public of British

Columbia will be notified so that they have an opportunity to compete

for the purchase of that right to British Columbia's resources.''

There's nothing so difficult about that, and I commend that policy to

the minister.

MR. SKELLY: I think this is the

appropriate vote to deal with this — under timber management — and I

don't think it's been mentioned during the forests minister's estimates

before. I'd like to talk about energy forests under the question of

timber management. I'm wondering if this is an issue that the minister

has dealt with in his department. I'd like to put forward a few ideas

that have come to my attention over the last couple of years from

various articles and from discussions with various people it! the

industry and connected with energy.

The first is that, as probably the richest province in Canada in forestry terms, we've probably done less than

[ Page 2824 ]

most

others in looking at the value of our forests as a renewable energy

resource. Most people in Canada don't really understand the

relationship between wood energy and other forms of energy, because

it's not a big issue — when you hear people talking about nuclear power

and people who are opposed to nuclear power. The simple fact is that

wood produces about as much energy in Canada as nuclear power, if not

more, and it's a fairly high-quality energy source. I'm just wondering

what research has been done by the minister in regard to the production

of energy from the forests of British Columbia.

I recently

visited the province of Alberta — what they call an energy-rich

province — at the invitation of the Premier of Alberta, and at that

time I met with the director of the Alberta environmental council. They

were in the process of doing an environmental assessment of forest

management in the province of Alberta. One of the things they looked

into — being a province that's concerned about energy — is the energy

value of that renewable resource that they have growing over most of

northern Alberta, in the poplar belt of northern Alberta. What the

director told me was that it was probably one of the most significant

energy resources that was available to the province of Alberta,

considering the fact that oil and petroleum products would probably not

last in Alberta for another 20 years. That wood was the renewable

future in energy terms for Alberta.

He talked to me about

some of the research they had done with poplar, cottonwoods and alder —

species that are related to species that we grow here in British

Columbia — in areas that aren't suitable for agriculture at all, but do

grow tremendous amounts of cottonwood and related species. He said that

cottonwood is the kind of tree that picks up nutrients from the soils

and stores a great deal of the nutrients in the leaves. During the

winter the leaves fall and restore the nutrients to the soil through

the natural process, and what remains within the trunk and the branches

of the tree is virtually carbohydrate. It can be burned, it can be

turned into methanol. It's a very efficient fuel source, according to

the director of the Alberta Environmental Council, and they have a

tremendous amount of that renewable energy resource available. We have

the same energy resource growing in the area that you live in, Mr.

Chairman, and north of Prince George — tremendous amounts of

cottonwood, poplar and species related to those growing in Alberta.

Because of the till-now easy availability of petroleum products and

hydroelectric power in British Columbia, we haven't really examined

wood power as a possible alternative, albeit sometime in the future, to

the energy resources we now use.

There have been some

studies done in Ontario by research organizations and by Ontario Hydro,

although they're not too happy about that research being done. Let me

discuss just briefly some of the figures coming out of the research in

Ontario. They estimate that it is possible to produce 14 to 20 tons per

acre per year of fuel wood in the eastern counties of Ontario. They can

maintain the fertility of that area by putting wood ash back onto the

land or, in the interim, by planting leguminous plants such as alder,

which is also itself a valuable fuel. The researchers in Ontario

estimate that by taking an area of land 28 miles by 28 miles — that is,

28 miles square of land — and using it for wood fuel, growing poplars,

hybrid poplars and that type of thing, they can provide the wood fuel

necessary for something like a 500-megawatt electric generator. The

capital cost, installed, of the 500 megawatt thermal — generator would

be about $245 million,

Just to give you the comparisons that

have been found out through research, for the Atikokan coal thermal

plant the comparative cost would be $845 million for a 500-megawatt

plant. For James Bay hydroelectric — we usually consider hydroelectric

power as the cheapest form of power — the installed cost per 500

megawatts of power capacity is $733 million or almost three times what

it would cost for a wood thermal plant. The nuclear industry tells us

nuclear is the cheapest power in the world. According to Ontario Hydro,

the Darlington nuclear plant will cost us $850 million per installed

500 megawatts, something like four times the cost of a wood thermal

plant. In addition, the cost of the fuel is relatively cheap. I can

just give you the figures for wood and coal. Water is pretty cheap, but

some people don't have it, so I can give you the figures for wood and

coal. Wood is available to the plant at $17 per dried ton, and that

represents something like 15 million btus per ton. Coal is $40 per

dried ton, and that represents something like 25 million btus per ton.

With

the obvious advantages of wood as a renewable energy resource, I am

wondering what kind of research the minister is doing into the use of

the forest lands of British Columbia. I am not talking about all the

forest lands; I am talking about some of the marginal lands now, lands

in the lower Canada Land Inventory categories for forest use. What is

the minister doing to analyze those lands and possibly direct the

timber growing on those lands to fuel timber for electric generation,

or possibly for the production of methanol?

Recently a study

was done by Paul Jones and Associates on the availability of wood fuel

from logging residues on Vancouver Island. The study, I gather, was

made available to the public in late 1978 or early 1979. I don't have

that study in front of me now, but I could just paraphrase what was in

the study. According to Jones, the 45 percent of the forest residues

that were economically accessible could be used — he took the cost of

hauling into account — to generate