1975 Legislative Session: 5th Session, 30th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, JUNE 6, 1975

Morning Sitting

[ Page

3165 ]

CONTENTS

Coal Mines Regulations Amendment Act (Bill 94). Hon. Mr. Nimsick. Introduction

and first reading — 3165

Mines Regulations Amendment Act (Bill 125). Hon. Mr. Nimsick. Introduction

and first reading — 3165

Mining Tax Amendment Act, 1975 (Bill 122). Hon. Mr. Barrett. Introduction and

first reading — 3165

British Columbia Railway Company Construction Loan Amendment Act, 1975 (Bill

27). Second reading. Hon. Mr. Barrett — 3165

Point of order Possibility of remarks being sub judice. Mr. Gardom

— 3170

British Columbia Railway Company Construction Loan Amendment Act, 1975 (Bill

27). Second reading. Hon. Mr. Barrett — 3172

Point of order Application of subjudice rule. Mr. Speaker — 3176

Labour Education Centre of British Columbia Act (Bill 85). Third

reading — 3178

Agricultural Statutes Amendment Act, 1975 (Bill 126). Second reading. Hon.

Mr. Stupich — 3179

Liquor Distribution Act (Bill 93). Second reading. Hon. Mr. Macdonald

— 3181

Department of Lands, Forests and Water Resources Amendment Act, 1975 (Bill

127). Hon. R.A. Williams. Introduction and first reading — 3191

The House met at 10 a.m.

Prayers.

MR. D.T. KELLY (Omineca): Mr. Speaker, in the precincts

sometime, maybe now or a little later on this morning, there

are going to be 55 elementary school children from the Lejac

Indian School in Fraser Lake. These children have come 600

miles for their first visit to the Legislature and to Victoria

and I would ask all the Members of the House to welcome these

to welcome these children.

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, from

much closer at hand but nonetheless welcome are 30 students

today coming in, I believe, at 11 o'clock to view our

proceedings from Claremont Senior Secondary School in School

District 63.

Introduction of bills.

COAL MINES REGULATIONS

AMENDMENT ACT

On a motion by Hon. Mr. Nimsick, Bill 94, Coal Mines

Regulations Amendment Act, introduced, read a first time and

ordered to be placed on orders of the day for second reading at

the next sitting of the House after today.

MINES REGULATIONS AMENDMENT ACT

On a motion by Hon. Mr. Nimsick, Bill 125, Mines Regulations

Amendment Act, introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next

sitting of the House after today.

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled Mining Tax

Amendment Act, 1975.

Bill 122 introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next

sitting of the House after today.

Orders of the day.

HON. E.E. DAILLY (Minister of Education): Mr. Speaker, I ask

leave of the House to proceed with public bills and orders.

Leave granted.

HON. MRS. DAILLY: Mr. Speaker, second reading of Bill

BRITISH COLUMBIA RAILWAY COMPANY

CONSTRUCTION LOAN AMENDMENT ACT, 1975

HON. D. BARRETT (Premier): Mr. Speaker, this bill increases

the borrowing authorization of the B.C. Railway from $440

million to $650 million.

During my introductory comments on this bill I will be

dealing with material from the 1974 annual report of the B.C.

Railway. At the conclusion I will file this report...

Interjection.

HON. MR. BARRETT: ...with the House as is customary and

seek leave to adjourn the debate to allow the opposition to

study the report and other material over the weekend.

When I was in Ottawa recently I understood that some Members

of the opposition were getting very excited about the financial

situation of the B.C. Railway. With your indulgence, Mr.

Speaker, I think the House should be reminded what some of

these Members said relating to the B.C. Railway as reported in

Hansard . The statements were made during the estimates

of the Minister of Economic Development (Hon. Mr. Lauk).

The Member for Cariboo (Mr. Fraser) in Hansard April

9 and 10, 1975, stated:

It's in a complete state of turmoil. Things are serious on that

line right today. Somebody should be looking into them. We are fed up to the

teeth in the central interior with the operation of this railroad. Something

has to be smartened up and fast or there's going to be real trouble. I can assure

you all that the citizens of this province will want lots of answers about the

operation of this railroad when we are debating that bill.

I'm urging them to come forward with the scandal on the BCR. Everybody in the interior of this province knows

what happened to the BCR from 1952 till 1973. I want to repeat

that I know all about the history of the railroad and so do the

people in the interior of this province.

You know, as always, Mr. Speaker, this Member confuses me.

He tells us the railway is in chaos. He asks that I tell them

why. At the same time he finished up saying that he knows all

about what has happened to the railroad and so does everyone

else in the province.

Well, it may be quite true that he knows all about what has

happened to the railroad under the previous administration, but

there is no way that he or the

[ Page

3166 ]

former president of the railroad ever told the people of the

province which was really happening.

The Liberal Members are obviously concerned about the B.C.

Railway. Their former spokesman, the Second Member for

Vancouver–Point Grey (Mr. Gardom) as quoted in

Hansard on April 10, 1975.

There are very serious financial difficulties on the horizon. There are very serious financial difficulties that

have already been experienced, grave financial

difficulties.

Dealing with the expansion programme, how much more is this going to cost than it was estimated to

cost?

This could well involve millions and millions and millions of dollars.

There are very, very serious problems that are being presented. The general public has not been given any

specifics. They have not been given any dollar figures, but one

thing has become extremely evident. The B.C. Rail is in a

financial mess and the public wants to know to what extent it

is in a financial mess, and who caused the financial mess. I

pose those questions to the Hon. Minister.

Yes, there are serious problems. There is a financial mess,

and the Second Member for Vancouver–Point Grey is right

when he indicates that the public is entitled to know the

details of this mess and who caused this mess.

Today is another day of reckoning for the people of British

Columbia and the Members of the official opposition. The facts

I will reveal today will surely lay at rest forever the myth of

financial wizardry attributed to the former government.

In its place will be revealed the incompetence and political

chicanery which have cost and will continue to cost the people

of British Columbia hundreds of millions of dollars.

Not long after assuming office I became concerned about

areas relating to finance, administration and the construction

programme within the B.C. Railway. As a result, I have ordered

certain investigations and received several reports relating to

these investigations.

In April, 1973, I tabled in this House a report I had

received concerning the effectiveness of the B.C. Railway

financial systems which had been prepared by the

comptroller-general, Mr. M.J. Minty. Mr. Minty noted

among other things that there appeared to be little or no

internal or external audit check on millions of dollars spent

annually on construction of the B.C. Railway engineering

division.

He recommended: "...the external auditors not be unduly

restricted in setting the terms of their audit engagements, as

appeared to be the case in the past." I will have more to say

on this later.

Mr. Minty also recommended that an independent engineering consultant be hired

to review the methods of the engineering division. In a letter attached to his

report he commented as follows on the matter of awarding contracts for the rail

extension:

"With respect to the awarding of contracts for all

rail line extensions I confirm that the company's officials have seen

fit to limit spending on preliminary engineering studies, a practice

which has contributed directly to overruns in the order of $17 million

on contracts completed to date." That was in April, 1973.

Mr. Minty's words in connection with insufficiency of

preliminary engineering studies are repeated throughout the

tragic story that is now revealed in the construction of the

Fort Nelson extension and the Dease Lake extension. We will see

that this policy of the previous government led to

low-cost estimates for political consumption, for public

consumption and political gain. Indeed while we remained

shocked at the results each day, we had become more familiar

with the policy.

As with the Columbia River, the people of British Columbia

are going to learn the true facts of the costs of the recent

construction on the British Columbia railway — costs

which had to be borne for many years by the public of British

Columbia.

At the fall session of 1973 I tabled in this House two more

reports: one on financial reporting and control practices,

authored by Price Waterhouse & Co.; and one on engineering

and contract methods by Swan Wooster Engineering Co. Ltd. Step

by step every point raised by Mr. Minty, and further reports,

will be documented here by outside consultants.

Mr. Speaker, it has taken us this long to get to the very

heart of this matter by going directly to outside consultants

and their reports. The Price Waterhouse report revealed that

this great jewel in the previous administration's crown had in

fact "cumbersome," "inefficient," "inadequate"

financial accounting and control practices. In one instance

they noted that the cost of 1,000 freight cars bought in 1971

for $16.3 million was written off as a charge to equipment

rental over 15 years. They said: "In our view, this is not in

keeping with generally accepted accounting practices."

It was, of course, in keeping with the previous government's

accounting practices. As far as capital expenditures were

concerned, they found financial control and reporting

inadequate. There was no clear picture of expenditures planned

and approved by the board of directors, and the extent of

funds authorized but not spent in the previous years was not

known.

In short, the typical picture of mismanagement, inefficiency

and incompetence, which we are realizing more and more day by

day, was the trademark of the previous administration.

[ Page 3167 ]

The Leader of the Opposition (Mr. Bennett) has, on the

whole, said very little about the B.C. Railway. When he does

talk about it, he seems obsessed with three things: the alleged

$992,000 profit the railway reported in the last year of Social

Credit, 1972; the resignation of the railway's auditors, Buttar

& Chiene; and alleged political patronage in senior staff

positions.

Buttar & Chiene had been the auditors all through the

Socred years. On November 18, 1974, Hansard reports the

opposition leader stating: "...they resigned because they

weren't prepared to change the auditing procedures because of

the mounting losses that the railway wished to hide this

year."

I want to re-read the quote of the Official Leader of

the Opposition: "...they" — Buttar & Chiene,

according to him — "resigned because they weren't

prepared to change the auditing procedures because of the

mounting losses that the railway wished to hide this year."

That is a very serious charge, Mr. Speaker, not

substantiated by facts. I think that the public deserves to

know the facts. I think that the public deserves to know the

facts about these questions. I intend to give them the facts

— not gossip, the facts.

First, let's see what really happened to Buttar &

Chiene. Did they resign because they were asked by this

government to change auditing procedures, as the opposition

leader has charged? What connection, if any, was there between

the resignation and the annual report of 1972 showing the

$992,000 profit which the opposition leader kept boasting

about?

On September 11, 1974, Buttar & Chiene resigned as B.C.

Railway auditors. "For personal reasons," was their

statement.

On October 30, 1974, the professional conduct committee of

the Institute of Chartered Accountants of British Columbia laid

a complaint against Douglas McKenzie Walker, the sole principal

of Buttar & Chiene, and the complaint related to the B.C.

Railway auditing. On November 27, the institute's professional

conduct inquiry board panel held a hearing on the complaint.

After hearing the evidence, the findings were as follows:

"...and the panel having found unanimously that the

said member, Douglas McKenzie Walker, violated rule 21 of the code of

ethics and rules of professional conduct, as alleged in paragraphs 1

and 2 of the statement of complaint, by reporting on and associating

himself for and on behalf of the firm of Buttar &Chiene with the

financial statements and auditor's report thereon for the British

Columbia Railway Co. for the year ended December 31, 1972, when he had

failed to obtain sufficient information to warrant the expression of

the unqualified opinion expressed thereon and therein, and that the

said member has been incompetent in professional matters within the

meaning of bylaw 6783, in force at all material times, and also of

bylaw 6883 in force at the present time, as alleged in paragraph 3 of

the statement of complaint."

On December 20, 1974, the inquiry panel ordered, by a vote

of 4 to 1, that Mr. Walker be suspended from the accounting

institute until December 17, 1975, and recommend to Mr. Walker

that he update his auditing knowledge by undertaking a course

in advanced auditing.

I will table with this House, Mr. Speaker, a copy of the

circular from the accountants' institute, dated February 18,

1975, setting out the above.

Mr. Speaker, the facts are that under the previous

administration the B.C. Railway never ever made one cent of

profit, even if the annual report figures submitted each year

by Buttar & Chiene were to be accepted as correct.

The record also shows in

section 8 of the report of the

comptroller-general, Mr. Minty, that Einar Gunderson,

former railway director, an admitted Social Credit fund raiser,

"restricted" the auditors in their work.

"According to the comptroller, E.M. Gunderson" — this

is in the Minty report — "restricted the extent to which

the external auditors can go into their auditing, with a

consequent limitation of fees charged." Finally, with the

findings of the chartered accountants institute, all of the

annual financial reports which have been tabled in this House

under the previous administration, relating to the B.C.

Railway, were at least called into doubt.

Following on the resignation of Buttar & Chiene, new

auditors were appointed: Messrs. Peat, Marwick, Mitchell and

Co., chartered accountants, of Vancouver. This firm is

one of the partnerships forming the international family of

Peat, Marwick, Mitchell and Co. The Canadian partnership is

owned by the Canadian partners. They have an extensive

background involving a number of major audit clients in the

transportation and transportation-related fields,

including Canadian National Railways. They are a large,

diversified firm of chartered accountants with a total staff of

approximately 1,200, including 130 partners operating from 21

offices in Canada. The Vancouver office has been established

for over 60 years and has a staff of 155, including 19

partners. The Vancouver audit and accounting group totals 122,

including 14 partners, and of this group about 60 are chartered

accountants.

Peat, Marwick and Mitchell commenced to review the previous

annual reports, in light of the comments made by the

comptroller-general and the action taken by the chartered

accountants association in the case of Buttar & Chiene, and

to work on the present annual report which I will be tabling

today. It was because of the large amount of work involved

[ Page 3168 ]

following the resignation of the previous auditors that the

present annual report had to be delayed until now. The

certificate of the auditors which appears in the 1974 report,

which I will be tabling, related to the year 1974, and

retroactively to a restatement of previously reported amounts

in annual reports from January 1, 1957. The certificate reads

as follows:

"To the Lieutenant-Governor-in-Council of

the Province of British Columbia:

"We have examined the balance sheet of the British Columbia

Railway Co. as of December 31, 1974, and the statement of

income and deficit and changes in financial position for the

year then ended. Our examination included a general review of

the accounting procedures and such tests of accounting records

and other supporting evidence as we considered necessary in the

circumstances.

"As described in note 2 of the notes to the financial

statements, a review of the past accounting policies of the

company has been carried out. It was concluded that the

financial statements as of December 1, 1973, on an overall

basis did not present fairly the cumulative operating results

of the railway to that date, and that certain of the past

policies did not conform to the accounting regulations of the

Canadian Transport Commission.

"In our opinion, these financial statements present fairly

the financial position of the company at December 31, 1974, and

the results of its operations and the changes in its financial

position for the year then ended in accordance with generally

accepted accounting principles, including certain changes in

accounting policies which were instituted in 1974 as a result

of the conclusions, with which we agree, described in the

preceding paragraph and applied retroactively to 1973 and prior

periods, and which, after giving such retroactive effect, have

been applied on a basis consistent with that of the preceding

year."

Therefore the figures that we will be dealing with have been

certified by a firm of chartered accountants with an

international reputation as being a fair statement of the

railway's financial position in accordance with generally

accepted accounting principles, and no restrictions were placed

on the auditors, as had happened in previous years.

Because of events that I've already outlined, it was

considered necessary to review the accounting methods of the

past, and the following extract is from this year's annual

report, explaining this situation fully:

"Change in Auditing Policies.

"During the year, management undertook a comprehensive review

of accounting principles and policies being followed by the major railways in

Canada, including meetings and discussions with representatives from the Canadian

Transport Commission in Ottawa and the Department of Transport and Communications

in Victoria.

"The Canadian Transport Commission describes accounting

regulations for those railways which are subject to their

jurisdiction. The commission would usually review and approve

accounting policies and depreciation rates submitted by such

railways. Such approval is not available to the British

Columbia Railway because the company is not subject to the

jurisdiction of the federal commission.

"Management considers that the accounting regulations

prescribed by the Canadian Transport Commission are the most

appropriate basis for accounting for railroads in Canada.

"The railway has adopted new accounting policies and

appreciation rates which are summarized in note 1 to the

financial statement of this report. We believe that these

policies and rates are such that they would be approved by the

commission if submitted by a regular carrier. "

Annual reports, submitted to this House and signed, stated

that they were conforming to the Canadian Transport Commission.

That was not true, Mr. Speaker.

"Restatement of prior years: Retroactive effect was given to

the 1974 accounting policies and rates from January 1, 1957.

The date is accepted as that when the Squamish to Prince George

section of the railway became operational. The decision to

reflect these changes retroactively was considered necessary

because of:

"(1) the financial statements of December 31, 1973, were not

prepared in accordance with the generally accepted accounting

principles, and accumulating operating results of the railway

to that date were not fairly presented;

"(2) because certain past policies did not conform with the

accounting regulations.

"(3) to establish a basis for the preparation and comparison of 1974 and future statements, and because of

the significant effect of such changes on previous reported

amounts.

"The adjustments arising from such retroactive restatement give rise to an increase of $62

million in the reported deficit of the railway, as of December

31, 1973: of which $9.7 million applies to the year 1973 and

$52 million to 1972 and previous years.

"Details of these adjustments appear on note 2 in the

financial statement. The financial

[ Page 3169 ]

statements referred to are, of course, certified by the auditors."

That's how the situation sounds in the language of the

business report. Let me try to translate it into everyday

language that we all understand.

This annual report and the auditors' report is saying that

for many years now the annual financial reports of the B.C.

Railway have not been done according to the Canadian Transport

Commission regulations, although the past annual reports said

that they were. They have not been done to generally accepted

accounting principles, and they have not presented the fair and

true picture of the railway's financial position.

The end result of all of this, Mr. Speaker, was to bury in

the books a loss of $52.7 million between 1957 and 1972. And

for the benefit of the Leader of the Opposition (Mr. Bennett),

I would note that in the year 1972 there was a loss of

$8,100,000, not a profit of $993,000 which he'd like the public

to believe.

Mr. Speaker, one more sordid episode in the history of the

party that is now the official opposition. I wonder if the

opposition leader will run out to hire a hall and tell this

story to the public.

As the official opposition, how much debate were we allowed

on the $52 million deficit of the B.C. Railway between 1957 and

1972? None at all, because we were never given the true figures

to debate. All this House received at that time were

"restricted" figures determined by the former president of the

railway, and Einar Gunderson.

I have given my pledge that as long as we are the government

there will be no more "restricted" auditing. Naturally, when we

became government we accepted the 1973 annual report figures,

as presented to us by the auditor, on their face value. As a

result, the loss for that year was reported at $3,302,000.

Because of the restatement of finances from 1957 on, the true

figure for 1973, as it appears in the present annual report, is

$13 million and the figure for 1974 is $32 million.

Just to make sure everyone fully understands the former

accounting practices of the railway, Mr. Speaker, I would like

to draw your attention to one more fact. Between 1966 and 1972,

bills were passed by this Legislature subsidizing the B.C.

Railway in the total amount of $120 million from consolidated

revenue. This was called "purchasing shares." It was nothing

more than direct subsidy of a Crown corporation from general

revenue, and these bills were sponsored by the former Premier

of this province.

If it is necessary to subsidize the railway, let the people have the truth:

they are grants from general revenue, not share purchases. There is only one

shareholder: the government. And each time it puffed up the shares, it was a

device to pay money out of consolidated revenue to the railroad.

The record of the party of the Leader of the Opposition is

clear and on record: subsidies of $120 million, and a net loss

from 1957 to 1972 of $57 million — a loss that was

carefully hidden from the public by the former administration;

nor did public accounts have the opportunity to question any of

these matters. That's only part of the story; there's more to

come relating to hidden costs of construction.

I hope, but it's a forlorn hope, that the Leader of the

Opposition will stand up and apologize to this House for the

statements he made, as recorded in Hansard , relating to

the resignation of the auditors — a false charge that this

government was ordering the auditors to do something wrong.

It is obvious that if any of the instructions were issued to

the auditors to hide losses, as the opposition leader put it,

those restrictions were ordered by the former government. They

succeeded in hiding losses of $52.7 million. Today the public

has the facts certified by a firm of auditors with a

world-wide reputation.

Now the question of B.C. Rail senior staff and middle

management staff. On December 11, 1974, the opposition leader

was demanding a royal commission to investigate political

changes involving these employees, as he charged. He was

suggesting patronage. On April 12 this year, according to

The Vancouver Sun , he was still stating that we had made

significant changes in this staff since we took office.

The Leader of the Opposition, Mr. Speaker, has been shown

time after time to be wrong in his statements made emotionally

and without adequate research.

Following his speech on April 12, I asked the B.C. Railway

to prepare a list of their senior officers and administrative

personnel, including the dates of their appointments. I will

table this document in this House. The list is dated April 23,

1975, and shows that the vice-president, the general

manager of rail division and the chief engineer were all

appointed before we became government. The only senior official

appointed by this government was Mr. G. Marshall, a financial

officer, effective September 1, 1974.

The senior administration personnel on the list totals 47

persons; 39 of them were appointed prior to this government

taking office. They have had varying lengths of service, going

back in one instance to as far as 1938. Of the eight we have

appointed, four are in the new railcar manufacturing plant

division. One is the corporate solicitor whom we appointed

following recommendation No. 7 in the Minty report, and the

other three are a soil engineer, a superintendent of track

construction and the engineer of building construction.

I know it's too much to ask for an apology, but

[ Page 3170 ]

the Leader of the Opposition at least owes these people a

correction of his statement and regrets that he acted so

foolishly.

While on the subject of staff, I would like to give my

public appreciation of the work done by Mr. MacNorris, the

vice-president of the railway, and to all the staff who

have done such a fantastic job under the most difficult

circumstances. They have served the public well, and criticism

of their work by the opposition is completely unwarranted.

Now the northern extension. Having laid one myth to rest, I

would like to continue discussing the Swan Wooster report which

dealt with engineering and was tabled in this House at the fall

session, 1973. Swan Wooster, dealing with the Fort St.

James–Dease Lake extension, noted only limited records

were available. They were very critical of "very limited degree

of pre-construction engineering performed" — a

question raised in the spring of 1973 by the Member for

Vancouver–Point Grey. They found that this limited

pre-construction engineering directly contributed to

"unrealistic" estimates of quantities and costs at the time

contracts were awarded. And this, of course, again led directly

to the overruns being experienced in the Dease Lake extension.

On this extension they said there was a marked lack of

pre-engineering.

MR. SPEAKER: Point of order.

MR. G.B. GARDOM (Vancouver–Point Grey): Mr. Speaker,

I'm anxious to hear what the Hon. Premier has to say on this

point, but I think it would be advisable if you could take for

consideration the principle in which the rule of sub judice is

going to be practised in this House, as to whether or not it's

going to be consistently practised or otherwise. There is a

lawsuit at the present time, I gather, before the Supreme Court

of British Columbia concerning overruns between B.C. Rail and

M.E.L. Paving. I am informed that this lawsuit concerns itself

with estimating procedures, overruns and breach of

contract.

The rule of sub judice as stated in May — and I'm

paraphrasing — is that there should not be any debate if

it appears to the Chair that there's any real or substantial

danger of prejudice to the trial of the case. Conceivably,

there would have to be before the House, before the Chair,

information that the action was set for trial or awaiting

adjudication. But I would draw this point to Your Honour's

attention that heretofore the tests that I'm referring to have

not been placed before this House, and sub judice rulings have

been granted in this House vis-à-vis the egg board cases

and Mr. Kovachich. It was raised by the Minister of Education

(Hon. Mrs. Dailly), I quite recall, in the case of Bremer

versus the Minister of Finance which was a libel action.

I requested myself from the Minister of Education (Hon. Mrs.

Dailly) information concerning the Bremer contract and

settlement documents between himself and the government of this

province. The Minister of Education took the position that it

was sub judice because there was a libel action going on

between the Minister of Finance and Mr. Bremer so she was not

permitted to present that material. That is, of course,

fallacious reasoning, as I advocated at that point.

I think, Mr. Speaker, it would be advisable that you let the

House have the benefit of your learning and knowledge as to on

what basis this rule is now going to be interpreted and

utilized in this Legislature. We have to have some kind of

consistency.

HON. MR. BARRETT: Mr. Speaker, I am quoting from a Swan

Wooster report that was tabled in this House. I have discussed

the exact wording and material of this with the

Attorney-General's department in concern over the sub

judice rule. We are not reflecting other than on public

knowledge that exists. I have to state facts in the statements

in this House but I will not comment on the case, Mr.

Member.

MR. GARDOM: If I might speak again on the point of order, I

agree with the sentiments expressed by the Premier and I agree

with the approach that he is taking, but I would also

demonstrate very, very clearly that we are having a double

standard in this House. When the egg board cases were up and

when the Bremer case was up, the government took an entirely

different position. Their position then was completely wrong.

Make no mistake of that.

MR. SPEAKER: Order, please. I think that one must tread

carefully on the whole question so as not to infringe on the

sub judice rule. I point out that we are here discussing the

general principles of the financial condition of the railway.

That requires a rather large canvass for discussing if this

House is to be informed on the question of what moneys are

necessary to run a railway.

If you look at page 400 of the 16th edition of May , which I

happen to have here at the moment, it states: "A matter, whilst

under adjudication by a court of law, should not be brought

before the House by a motion or otherwise. This rule does not

apply to bills." On page 457 it says: "Matters awaiting the

adjudication of a court of law should not be brought forward in

debate (except by means of a bill)." It then refers back to the

quotation that I have already cited. This rule was observed by

Sir Robert Peel and Lord John Russell both by the wording of

the Speech from the Throne and by their procedure in the House

regarding Mr. O'Connell's case and has been

[ Page 3171 ]

maintained by rulings from the Chair.

Regardless of the fact that this is a bill, I do urge that

only those matters that are already public knowledge, without

comment on the merits of any cases before the court or without

indulging in any canvassing of the evidence that may be brought

forward by any pleadings in that proceeding, would be the limit

at the most, in my view.

MR. GARDOM: I would also mention to you, Mr. Speaker, that

at page 328 of May it states that by a resolution of the

House matters awaiting or under adjudication in a criminal

court or a court martial and matters set down for trial or

otherwise brought before a civil court may not be referred to

in any debate or question period.

I'm not quarrelling with the

interpretation that has been

placed today. But I'll tell you one thing that I'm quarrelling

with and that is that this is the first time the government has

seen fit to permit something to go ahead. They refused it in

Dunhill, they refused it in the egg marketing board and

Kovachich, and they refused it with Mr. Bremer.

HON. MR. BARRETT: Mr. Speaker, Swan Wooster, dealing with

the Fort St. James–Dease Lake extension....

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Speaker,

point of order.

HON. MR. BARRETT: Don't you want the facts?

MR. McGEER: Yes, we do.

MR. GARDOM: But we want a consistent rule, too.

MR. McGEER: Mr. Speaker, I'm very keen to learn the facts

about B.C. Railway, and was at the time the Minister of

Transport (Hon. Mr. Strachan) originally ran interference

against questions that I tried to raise in the public accounts

committee. I recall attempting to raise points with regard to

the egg marketing board when the Natural Products....

SOME HON. MEMBERS: Order!

MR. SPEAKER: Order, please. Debate during the estimates is a

quite different matter.

MR. McGEER: Mr. Speaker, excuse me. This was in regard to a

bill — the Natural Products Marketing Act — that

was brought before the House on second reading. When I quoted

the exact same rules from May that you are quoting to me

now, a completely opposite

interpretation was placed on them by

the Chair.

MR. SPEAKER: It's very nice for you to say that but I think

the Hon. Member is making a distinction that is not fair to the

Chair in this question, in that in the case before the House at

that time there was not any mention or relationship between a

court case specifically and the bill that was before the House.

It would only be if the bill in any way affected the court case

that it would be proper to debate the court case at all. Here

we are discussing the financial state of a railway where there

is a requirement for more moneys. The House must know whether

these moneys are necessary, what the financial state of the

railway is and what the causes of any losses or problems that

the railway has are.

I tried to suggest to the Member that since that deals with

the financial state of the railway, the financial state of the

railway must be paid before this House. That is the one

exception that is found in May .

The Hon. Member, in effect, is not really looking at the

ruling fairly if he suggests that because he was stopped by a

collateral matter that was not part of the bill from debating a

court case in that bill, then here, where the very heart of the

issue is the financial state of the railway, if the Member who

is speaking should be stopped, then he is really mistaking the

interpretation of both those situations.

MR. McGEER: Mr. Speaker, am I to understand, then, from your

ruling today, that when the time comes for debate on second

reading of this particular bill, matters such as the pleadings

in the court case, which obviously affect the financial

condition of the railway and which are matters of public

knowledge, will also be quotable in this House?

MR. SPEAKER: No, no they will not. So far as I am concerned,

they will not. If the House disagrees with me, they can; but I

don't believe you should canvass a court case, the issues in

the court case or the evidence in the court case. But you are

entitled to discuss the financial state of the railway so far

as the public facts are ascertained and not the subject of

court determination.

MR. McGEER: Mr. Speaker, the court case itself will affect

the financial condition of the railway very considerably.

MR. SPEAKER: I would have to look more closely at the

pleadings to determine that. The Hon. Second Member for

Vancouver–Point Grey (Mr. Gardom) did not indicate that.

Now he seems more aware of the court case than I am.

AN HON. MEMBER: No, you're missing the point. Mr. Speaker...

[ Page 3172 ]

HON. MR. BARRETT: Not at all.

MR. McGEER: Now don't you start on that.

HON. MR. BARRETT: Well, don't you start it either. Are you

going to counterthreat and threat? Let's get on with the

business.

MR. GARDOM: Now look, Mr. Premier, let's have this

thoroughly understood. The position that I have made today,

which is a correct one...

HON. MR. BARRETT: Yes.

MR. GARDOM: ...is that this does not violate the rule, and

it didn't violate the rule in those other three situations

either.

HON. MR. BARRETT: You are incorrect. Mr. Speaker, Swan

Wooster dealing with the Fort St. James–Dease Lake

extension, noted only limited records were available. They were

critical of the "limited degree of pre-construction

engineering performed." They found that this limited

pre-construction engineering directly contributed to

"unrealistic estimates" — estimates of quantities and

costs at the time contracts were awarded. This, of course, led

directly to overruns being experienced in the Dease Lake

extension. On this extension, they said there was, "a marked

lack of pre-engineering." Public information, Mr.

Speaker.

The time has come to burst another bubble, time for the

people of British Columbia to be made aware of the results of

this incompetence in the previous administration as it relates

to the B.C. Railway Dease Lake extension. Because of my

concerns over this particular project, I ordered a study to be

made, an assessment of the Dease Lake extension, and to

recommend the course of action to the railroad. This study was

prepared by Touche, Ross & Co. I will be tabling the report

in the House today.

Touche, Ross found that the capital cost estimate of this

project used by the previous administration was $69 million.

They estimated it needed to be increased up to $102 million as

of December, 1972. That's from June to December. They found

that the two major traffic generators used to justify the

original projections, the Stikine-Dease pulp mill and the

Groundhog coal fields, were not likely to be developed. They

concluded that the wood supply at either Dease Lake or Stikine

Crossing would provide, one-quarter to one-third

of the production required for an economically efficient and

viable pulp mill." I repeat, Mr. Speaker: "one-quarter to

one-third of the production required for an economically

efficient and viable pulp mill."

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources):

Toothpicks.

The conclusions are obvious. Either the previous

administration was so incompetent that they did not ascertain

the simplest of facts from the forestry department...

HON. R.A. WILLIAMS: Didn't even ask them.

HON. MR. BARRETT: ...or, alternatively, they chose to

deliberately ignore or accept such facts. It is a

multiple-choice question with both answers leading to

incompetence.

Notwithstanding their reservations, Touche, Ross concluded

that the Dease Lake extension still appeared to be financially

feasible after taking into account a federal capital cost

grant, which this government negotiated, and other assumptions.

I want to publicly thank the federal government for assuming

shared responsibility in this project with their eyes wide

open. Had it not been for the federal government's commitment,

this would have been even more of a major disaster.

Touche, Ross recommended that the construction continue, "at

least as far as the vicinity of the junction of the Skeena and

Sustat Rivers, to negotiate a firm commitment from the federal

government for a grant, and, if it was received, to continue to

Dease Lake." If an unsatisfactory result was obtained in

negotiations for a grant with the federal government, the

recommendation was to reassess the completion of the extension.

This report was considered by the board of directors and it was

decided to continue with the construction.

We have also obtained a report from P.S. Ross & Partners

as to an alternative route to the west of the Dease Lake

extension; but in their opinion, the Dease Lake extension was

superior.

Following the Touche, Ross report, capital costs, with their

resulting overruns, continued to mount. Because of this, I

again ordered further evaluation by Swan Wooster Engineering

Co. Swan Wooster was asked to advise whether a decision by the

railway to proceed with the winter works programme on two

particular contracts on the Dease Lake extension between miles

222 and 216 would produce certain savings in costs.

On January 21 this year, Swan Wooster reported as

follows:

"Our analysis indicates that it will be feasible and

preferable to carry out this operation in winter, that possible

completion dates for the extension would be in the latter part of 1976

with winter grading, and mid 1978

[ Page 3173 ]

without, and that the present value of the winter work alternative

is some $5 million to $20 million less than the summer work alternative."

It was therefore decided to proceed with the winter

work.

Because this matter is so important, I am going to table two

reports which were prepared by the B.C. Railway staff and

delivered to me earlier this year.

The first report is dated February 27, 1975, and is a

factual history of the Fort Nelson and Dease Lake extensions

prepared by George T. Hanrahan, general counsel of the British

Columbia Railway. I will take some time to highlight particular

parts of Mr. Hanrahan's report.

He begins by saying that prior to the decision in August,

1968, to extend the railway from Fort St. John to Fort Nelson,

three reports were prepared, but nowhere in these reports was

there any reference to capital cost projection. Nowhere. Mr.

Hanrahan carefully outlines the history of the contracts that

were let for clearing and grading, and the overrun on each

contract. He reports that the total amount of these contracts

was $16,400,000. The total cost of the extension to date is

approximately $72 million, and it is expected that the capital

expenditure during 1975 will be approximately $15 million. To

this must be added an interest cost on capital employed.

As construction to Fort Nelson was supposedly completed by

1971, one obvious question arises. What are the expenditures in

1975; Let me quote Mr. Hanrahan's report as follows:

"Although construction was complete in 1971, numerous

revisions since then were required to improve the rail grade.

Furthermore, stabilization and reconstruction of the Fort

Nelson extension will take approximately four more years before

the rail grade is of acceptable standard.

"At the date of this report, the Fort Nelson extension is

still operating under the construction department and has not

been turned over to the operating department. Since the

extension has been in operation there have been 270 derailments

of various magnitudes, declining from 143 in the year 1972 to

57 in the year ending 1974 because we went on with the job of

reconstructing that whole extension."

Mr. Hanrahan continues his report by stating:

"The decision taken on December 11, 1969, to extend the

line from Takla Lake to Dease Lake was preceded by a report prepared by the

research and development department of the railway. The report assumed massive

and rapid economic development in the region, but again, as with the Fort Nelson

extension, nowhere was there to be found any reference to capital cost projections."

Again Mr. Hanrahan carefully outlines the various contracts

that were awarded, the amounts of money involved and the

enormous overruns experienced. It is a matter of public record

that the railway is presently involved in litigation with one

of the contractors, M.E.L. Paving Ltd. There are two suits in

the Supreme Court of British Columbia, one by the railway

claiming, among other things, damages for breach of contract,

and the second by M.E.L. Paving Ltd. claiming against the

railway for:

"rescission of an alleged contract for clearing, grading and

installing culverts on the defendant company's railway from

mile 296 to mile 335 in the Province of British Columbia; for

damages for fraud, conspiracy with the defendant Broadbent,

misrepresentation and negligent miss-statement, inducing the

plaintiff to enter into an alleged contract; for return of

holdback security deposit and other moneys paid to the court;

compensation on a quantum merit for work performed at the

request of the defendant company; interest on said holdback

security deposit moneys to court; a mandatory order requiring

the defendant company to forthwith remeasure quantities; an

inquiry into the amount owing upon such remeasurement; and

judgment for the amount found owing thereunder."

Mr. Joseph S. Broadbent, former vice-president of the

railway, is also sued in the same action by M.E.L. Paving, and

the alleged claim against him is for "damages for conspiracy

with the defendant company to induce the plaintiff to enter

into a form of contract...."

MR. McGEER: Point of order. Just for clarification, since we

were ruled out once before....

HON. MR. BARRETT: Not on the name of the suit.

MR. McGEER: Oh, yes, we were, Mr. Speaker.

HON. MR. BARRETT: Oh, no, you weren't.

MR. McGEER: I wonder if we're open to discuss this sort of

thing since we were ruled out of order before. I'd like to

discuss it, but I'm merely pointing out that the ruling of the

Chair in an identical case was exactly the opposite....

HON. MR. BARRETT: I'm not discussing it; I'm reading the

case.

MR. McGEER: We were prevented from reading documents that

were before the court by the

[ Page 3174 ]

Chairman of the committee.

HON. MR. BARRETT: Nonsense!

MR. McGEER: During a bill. The Premier should have been

here. If he wasn't he could have had the loudspeaker on. I'm

just pointing out that it's hypocritical, Mr. Speaker.

MR. SPEAKER: Order. I think the Hon. Member realizes that to

canvass the pleadings and to comment on the pleadings of a

court case that is before the court, a statement of claim or

the plaintiff's claim, which are outlined ... to canvass those

matters and debate them would be improper.

MR. McGEER: No, no, Mr. Speaker, we were prevented from

stating them.

Interjections.

HON. MR. BARRETT: Okay. "...for damages for conspiracy with the

defendant company to induce the plaintiff to enter into a form

of contract for the said work by deliberately and falsely

reducing the defendant's company

schedule on...."

It would not be proper for me to discuss in any way matters

sub judice. I have a right and responsibility to read the

charges.

I have a duty, however, to report that the allegations

raised in the preceding statement of claim were not news to me

when they were filed in court. As a meeting proceeded on the

litigation, attended by the solicitor for M.E.L. Paving, the

Attorney-General (Hon. Mr. Macdonald) and myself, similar

allegations were made. The Attorney-General, as a result

of that meeting, retained and received the report from Mr.

Robert Plummer, Q.C., a distinguished Vancouver lawyer.

I am advised that it would be improper for me to table that

report which discusses and reaches conclusions relating to the

matters involved in the litigation. I have reported that Mr.

Broadbent is a party to the litigation, and he is separately

represented by counsel.

On December 11, 1974, I met with Mr. Broadbent in the

presence of the Deputy Attorney-General to discuss the

payment of his legal fees in that action. There was no

discussion of the matters at issue in the lawsuit. None. When

the meeting was concluded, I sent a letter to Mr. Broadbent, as

follows:

"I am writing to confirm my conversation with you this afternoon in connection with these proceedings.

"You have advised me that all of your actions and decisions

taken in connection with M.E.L. Paving Ltd. were made upon the advice, consent

and with the instructions of the board of directors of the British Columbia

Railway Company. I have said to you that the government would not be in a position

to indemnify you if that were not so. Upon your reaffirmation of the above facts,

I have undertaken on behalf of the government to indemnify you for all loss,

costs and reasonable expenses incurred by you as a result of these proceedings.

"Would you kindly acknowledge receipt of this letter and

confirm our understanding at that time?"

Mr. Broadbent has subsequently acknowledged receipt and

confirmed our arrangement through his lawyer: "We refer to your

letter of December 11, 1974, directed to the attention of Mr.

J.S. Broadbent" — the date is December 20, 1974.

"Mr. Broadbent has asked us to reply to his letter, and we

wish to acknowledge receipt of your letter and confirm Mr.

Broadbent's and your understanding at that time as set forth in

your letter dated December 11, 1974.

"We assume that as solicitors for Mr. Broadbent, we will be

given complete access to the documents of the British Columbia

Railway Company relating to the above-captioned matter.

We will co-ordinate this with the solicitors for the

British Columbia Railway."

I will file both letters, with leave of the House.

Mr. Hanrahan's report discusses the litigation and other

actions of the Supreme Court of the Yukon Territory, commenced

by the railroad against M.E.L. Paving Ltd.

He also reports on arrangements made with Keane Industries

and K.R.M. Construction to continue the construction undertaken

by those companies, notwithstanding the claim to recover

compensation for damages suffered as a consequence of alleged

incompetent design and miscalculation by the railway in

defining the scope of the project which the companies

tendered.

Mr. Hanrahan's report concludes by recording that the total

cost of the extension is approximately $157 million and that it

will be expected that capital expenditures during 1975 will be

$50 million and, during 1976, $25 million. Again, to these

figures, interest on capital must be added. This totals $232

million.

The annual report of 1974 carries updated figures on the

Dease Lake extension, and indicates that the cost of the

extension will amount to $227 million.

In the case of the Fort Nelson extension, updated figures in

the annual report show the cost between $80 and $90

million.

In

summary, Mr. Speaker, the shocking facts are that the

Dease Lake extension will cost $227 million instead of the $69

million figure given by the former

[ Page

3175 ]

administration. The Fort Nelson extension will cost $80 to

$90 million instead of $42 million, the original estimate. In

the case of Dease Lake, the figure is subject to possible

increase, depending on the results of litigation.

From all of this, we have a railway to Fort Nelson that is

so badly constructed as to have experienced 270 derailments

from the time it commenced operation.

The second report I will table is by B.C. Railway former

engineer, Mr. M.S. Wakeley, and is a history of the northern

extensions insofar as the various construction contracts are

concerned.

Without going into detail on the constant recording of

overruns due to under-estimated quantities, the following

paragraph from Mr. Wakeley's report puts the situation in a

nutshell.

Mr. Wakeley's report was received on January 30, 1975. I'll

file all of these documents with the House so every Member can

have these.

"Throughout the entire route only centre line and the limits of right-of-way were

surveyed. Centre-line profile only was recorded throughout the

route. This meagre information was used to estimate quantities

for all contracts let. Since this information was insufficient

to obtain reasonable estimates of quantities of earth to be

moved in the construction of railway grade, there resulted

excessive overrun of work actually performed over the quantity

specified in the contract."

Interjection.

HON. MR. BARRETT: Yes, it is. And what a way to run a

railway! What a way to run a railway! Today the project looks

like it's becoming another monument to the fiscal incompetence

of the previous administration. The facts speak for

themselves.

However, I want to stress what is evident from all the

reports: namely, that it is essential to upgrade the railway

built by the previous administration. The decision could be

justified by the number of derailments alone: namely, 1972 — 142; 1973 — 69; 1974 — 54. This is a

scandalous report of derailment resulting directly from a

railway constructed on political ambition and without regard

for sound construction practices and safe engineering

principles. Incompetence and political chicanery results in

another day of reckoning for the people of British

Columbia.

In a short period of time we've learned the lessons of the Columbia River and

the B.C. Railway — political ambitions ignoring the very people who will be

called upon to pay for generations to come. The gross underestimation of costs

was used with great effect in the Columbia fiasco. It was then: "It won't cost

the taxpayers a nickel." "Nothing is freer than free, my friend." In the case

of the B.C. Railway: "The greatest jewel in our crown."

The original estimates are recorded as $69 million.

According to the Vancouver Province , November, 1969, the

former Premier refused to make public any estimates. But they

quote a PGE spokesman, quoting him saying it was likely to be

around $50 million.

Now we know the truth. The day of reckoning has come. To

complete this project it will cost approximately $227 million,

not $50 million or $69 million — an overrun of $158

million, Mr. Speaker, on this one project alone.

If you read through Hansard , it is interesting to

note that since he's been a Member of this House, the present

Leader of the Opposition has had very little to say about the

Columbia River treaty or the B.C. Railway in this House. He may

well have a good reason for his silence. But it surprises me,

in view of his recent statements that he made outside the House

and reported in The Victorian on March 19 of this year.

The Victorian was discussing what made various people

really mad or angry. The opposition leader expressed fears of

admitting that he was mad, but he went on to say that what

really made him angry was "incompetence, distortion and

cover-up." We can only hope, Mr. Speaker, that the clear

evidence of these elements that I've outlined today will make

him angry or mad, and let the public know just how he feels

about the fiscal chaos caused by the actions of the former

Social Credit administration. Because of their incompetence,

distortion and cover-up policies, the taxpayers of this

province have no option but to pay for these tragic

blunders.

We have always, from the days of the CCF, supported and

voted for the extension of the B.C. Railway to open up the

north. Our votes are recorded in the Journals of this

House. We have always voted on the assumption that the

development of this railway was being carried out in an

efficient manner, based on sound and complete engineering

principles, and that this House and the public were being told

the true cost of the various projects and the true financial

position of the railway. We know now that we were not told the

financial truth, and that the inefficiency and incompetence

were orders of the day.

We have constantly followed the advice we have sought from

experts in various fields. That is why I have taken this much

time over the time we've been in office, step by step by step,

to document what has gone on in that railroad. To rectify the

errors caused by the previous administration, since we became

the government the railway's research and development

department and our own Department of Economic Development have

continuously studied the feasibility of the Dease Lake

extension, taking into account not only the costs but the

economic benefits to the north and the province as a whole.

The

[ Page 3176 ]

previous administration committed us to this extension, as

they did the Columbia River.

Millions of dollars have already been expended to carry out

this commitment. We're satisfied that given all these facts

plus the fact that we're very near to signing a

federal-provincial agreement which this government

negotiated, which will mean a contribution of approximately $100 million from the federal government toward the northern

extensions, there is no course but to go forward and complete

the Dease Lake extension as efficiently as possible. I welcome

the federal government's co-operation in this matter.

With a target date of early 1977, the people of the north and

the people of British Columbia as a whole have a right to

expect no less from us.

When I opened my speech, I quoted three questions that had

been posed by the Second Member for Vancouver–Point Grey

(Mr. Gardom): (1) is the BCR in a financial mess, (2) what has

to be done to bail it out, (3) who caused the financial mess?

I have done my best to answer the questions that were posed. I

think that the Member and his two independent colleagues would

do well to ponder the answers.

Mr. Speaker, this bill increases the borrowing authorization

of the B.C. Railway from $440 million to $640 million. This

increase is required in order that the company may continue its

extension programme, its improvements to the present line and

its acquisition of the additional equipment needed to handle

the extra traffic. Although not all of the amount of increased

borrowing authorization is to be used in the coming year, it is

needed now so that the company can plan its development

programme and arrange the necessary borrowing at the best times

and terms without restrictions of insufficient borrowing

authority.

Hon. Mr. Barrett moves adjournment of the debate.

Motion approved.

MR. SPEAKER: May I point out to the Hon. Members, before we

proceed on this question, that it is one thing to read an

endorsement on the writ to identify the writ, but I will not

condone the practice of reading the pleadings — that is,

the statement of claim with all the allegations which may or

may not be true.

Interjection.

MR. SPEAKER: I understood this was the endorsement on the

writ. Is that not correct?

HON. MR. BARRETT: Mr. Speaker, I ask leave of the House to file certain

documents — namely: the B.C. Railway 1974 Annual Report; the Assessment of the

Dease Lake Extension, by Touche Ross & Co., January 15, 1973; the History

of the Fort Nelson and Dease Lake Extensions, by George C. Hanrahan, general

counsel of the B.C. Railway, dated February 27, 1975; the History of the Railway

Line, commencing at O'Dell through Dease Lake, as of January, 1975, by M.S.

Wakeley, dated January 30, 1975; B.C. Railway Senior staff list, April 23, 1975;

Institute of Chartered Accountants of B.C. circular, February 18, 1975, concerning

the suspension of Douglas McKenzie Walker; and letters dated December 11 and

20, 1974 — correspondence between myself, Mr. J.S. Broadbent, and Worral, Page

& Co.

Leave granted.

MR. GARDOM: Mr. Speaker, on a point of order. In response to

your remark of just a few seconds ago, which not too many

Members heard — that you would be permitting Members to

read endorsements on writs, and that's all — you fully

appreciate, Mr. Speaker, that you are only permitting one side

to have its case in this court. That is grossly unfair.

MR. SPEAKER: I will certainly give it my consideration, but

I think the important point is that when you are discussing an

action, and you are asking the Speaker who knows nothing of it

— as I know nothing of this particular action — I

must have something to identify it, and I suppose other people

do, too. A mere saying that A is suing B is not sufficient

information. We must know the subject matter to the extent only

that there is a claim. If the Hon. Member wishes to take it up

further with me, I am very open to any argument on the

subject.

I must know what the claim, is about. But that does not

include allegations contained in paragraph after paragraph of a

statement of claim, or a statement of defence.

MR. GARDOM: Mr. Speaker, as statement of claim, I assume the

Hon. Premier is reading from an endorsement of writ.

MR. SPEAKER: I don't even know that at the moment, because I

have no knowledge of the action.

MR. GARDOM: Perhaps you should have found out before it was

read, then, Mr. Speaker. I think the procedure that was

followed today was the correct procedure. I emphasize that

again. But, Mr. Speaker, with every respect, I do think it is

rather unfair for you to suggest that the only document that

can be read is a statement of claim, which is the position

[ Page 3177 ]

the plaintiff, without giving the defendant an opportunity

to have his pleadings before the House.

MR. SPEAKER: Order. I think the Hon. Member is beclouding

the issue by referring to a statement of claim.

MR. GARDOM: May I finish, Mr. Speaker?

MR. SPEAKER: I did not state that.

MR. GARDOM: May I finish my point?

MR. SPEAKER: I think I am entitled to correct a Member if he

says that I made a statement that I did not make.

MR. GARDOM: Mr. Speaker, I gathered that your statement was

to the effect that you may have an endorsement on a writ read,

and that is all. I don't think that is correct.

MR. SPEAKER: No, you said statement of claim.

MR. GARDOM: I'm sorry — an endorsement on a writ which

is, in essence, a statement of the position of the plaintiff.

It is not as expanded as a statement of claim, as you well

know.

Mr. Speaker, I would suggest this to you: instead of taking the position you

have taken this morning, give yourself an opportunity to consider it. And instead

of saying that it is fine and dandy to have an endorsement on the writ read

into the record, I would say the endorsement on the writ, the statement of claim,

the statement of the defence. They are pleadings; they are public documents.

Any Member in this House can go to any court registry and obtain one of them.

Let's be practical about the thing.

MR. D.A. ANDERSON (Victoria): On the general points of order

that we have been discussing today, Mr. Speaker, in your

earlier judgments on the propriety or otherwise of the Premier

referring to the general background of what might be a case in

court, you distinguished this from previous decisions of the

Chair, including: the decisions in the case of the Egg

Marketing Board versus Kovachich; in the case of the marketing

board legislation which we had as a bill on the floor of this

House; in the case of Bremer where there was a potential law

suit; and in the case of Knight where there was once more a

grievance procedure. You distinguished all those previous cases

from the present case.

I agree with the Second Member for Vancouver–Point Grey (Mr. Gardom) that

your decisions today were perfectly correct in this area. However, we have the

unfortunate and unhappy problem of precedents that fly counter to the decisions

today.

MR. SPEAKER: I think the Hon. Member should note that the

distinction between this case and the others that were referred

to is that the legislation concerned with in those cases had

nothing to do with the events that were being described by you

or the canvassing of the evidence that you attempted to do.

My point was, very simply, that no canvassing of the

evidence, no canvassing of the statement of claim shall be made

in that case nor should be made in this case. Now how can that

be distinguished?

MR. D.A. ANDERSON: If I may finish my point, Mr. Speaker, I

would suggest that you once more examine the Hansard

when the discussion was taking place on the marketing board

legislation, which of course grew out of the Kovachich problem.

You will note that decisions then were much more restrictive,

obviously, than decisions today. I think today's decision was

the correct one, but I would ask whether you would consider the

precedent suggested today and warmly recommended today by the

Premier. That is that perhaps independent legal counsel should

examine possible discrepancies between judgments and come out

with some sort of independent report whereby we could either

have this problem of potential discrepancies dealt with one way

or another. There is an unhappy precedent here that there does

appear to be a double standard being practised with respect to

decisions and cases before the courts.

MR. SPEAKER: I fail to see how you can make such a

distinction when I have indicated today, as I did on the

previous time when I discussed this with you, that you cannot

canvass a court case or the evidence in a court case unless the

bill before the House actually would have an adverse or some

effect on the outcome or determination of that court case. I

pointed that out to you then, and I refuse to permit you to

debate the evidence, to debate a court case that was only

collaterally and only incidentally concerned with a bill before

the House.

Now I have warned the Premier and I have warned all of you

that the matter should not be canvassed in terms of the

evidence that may be educed before a court or the pleadings

— that is, the statement of claim or the statement of

defence that might be educed before a court. How can you make

any distinction without really trying to rake over some rather

old arguments that took place a long time ago here?

MR. D.A. ANDERSON: They may be old arguments, as you say,

and I think this is probably why your memory of them needs

refreshing by

[ Page 3178 ]

examination of Hansard . There are questions of

principle which are identical. I do feel it is important for

these conflicting precedents to be reconciled. I would urge

you, Sir, to examine them once more and perhaps, after so

doing, come down with a final and declaratory judgment as to

how we can deal with all these previous conflicting decisions

on the whole question of sub judice.

Sub judice has been used as a blanket to cover and wrap

around every Minister with the slightest bit of trouble, going

right down to the Knight case.

MR. GARDOM: It's used to stifle debate in this House.

MR. D.A. ANDERSON: As the Member for Vancouver–Point Grey says, it has been used to stifle debate.

I feel it is time for some sort of declaration, some sort of

statement, indicating what rules of sub judice will be followed

in this House. The rule has been, we believe, up to now widely

abused. We feel that your judgments today, Mr. Speaker, have

restored the better and truer meaning of sub judice. We

appreciate your decisions today, but we would only point out

that previous decisions need to be dealt with. They may be old,

but precedents, as we know, are a dead hand upon the operation

of any Legislature. It may be that at some future date these

precedents will be revived. It may be that the less — how

could we put it — acceptable decisions of....

MR. SPEAKER: I really don't appreciate your rather

patronizing attitude on this subject. I would like to quote

just for a second the decision in the House of Commons on this

very point, where it states....

MR. D.A. ANDERSON: May is our authority.

MR. SPEAKER: This is the Canadian House of Commons.

MR. D.A. ANDERSON: Well, is not the British House of Commons

our authority in this area?

MR. SPEAKER: May I finish what I was saying?

The sub judice rule, as outlined in Beauchesne ,

should be interpreted narrowly. May 's citation, which

states that the rule does not apply to bills, should be

applied. Otherwise, the initiation of legal proceedings in a

court of law might stop the whole legislative process.

MR. D.A. ANDERSON: Right on.

MR. SPEAKER: That is why, in the case of bills, the Chair must always

consider whether the complete stifling of debate on the issue in the bill would

prevent the legislative process. That is the distinction I made the last time.

This time, on the question, I think that any canvassing of the court case and

the pleadings and the statement of claim would be distinctly out of order. It

does not necessarily assist us one way or the other. In the other case, the

same applied.

MR. D.A. ANDERSON: Mr. Speaker, I completely agree with your

decision this time, as I mentioned. The quotation from May

is from page 362 of the latest edition, where it says that

the sub judice rule does not apply to other proceedings on

bills. This was interpreted during the decision on the Natural

Products Marketing (British Columbia) Act. I believe it was

interpreted in a totally different manner than the

interpretation just given.

Therefore, Mr. Speaker, I would urge that these precedents

be re-examined with the object in mind of giving Members

of the House who are not lawyers, such as myself, the

opportunity of having some clear guidance. At the present time,

I must admit the....

MR. SPEAKER: I will look at the problem further to see if I

can outline a way that you will perceive the distinction that

exists. The distinction is very important. The matter that is

in the bill must be of such a nature that it must be debated,

regardless of a law suit that may be in the courts.

MR. D.A. ANDERSON: Mr. Speaker, I thank you very much for

your acceptance of the suggestion that it would be looked at.

Many of us in this particular part of the chamber are very

concerned about possible conflicts.

MR. SPEAKER: May we get on now with the other business of

the House?

HON. MRS. DAILLY: Mr. Speaker, report on Bill 85. Bill 8 is

not printed yet, so we will go to Bill 85.

LABOUR EDUCATION CENTRE

OF BRITISH COLUMBIA ACT

Bill 85, Labour Education Centre of British Columbia Act,

reported complete without amendment, read a third time and

passed.

MR. G.F. GIBSON (North Vancouver–Capilano): On a point

of order, I'd like to ask the House Leader the general sort of

order of business we'll be following.

HON. MRS. DAILLY: Certainly. We're going to second readings

now: 126, 93, 99, 96, 100 and then committee on 77 and 87.

[ Page 3179 ]

So, Mr. Speaker, I'd like to call second reading of Bill

126, Agricultural Statutes Amendment Act.

AGRICULTURAL STATUTES

AMENDMENT ACT, 1975

HON. D.D. STUPICH (Minister of Agriculture): Mr. Speaker, at

the advice of the Attorney-General's department several

government departments that have a number of relatively minor

amendments to a number of Acts are bringing in a statute law

amendment Act with respect to legislation in their departments

in the belief that this would be more fair to the Members in

the House. They would perhaps be better able to look at these

various statute law amendment Acts as opposed to having one

rather large statute law amendment Act dealing with a host of

departments and a host of Acts.

With respect to discussion of it I think there's little that

can be said in second reading. If the Members have any

questions about anything in the bill that they think should be

dealt with in second reading as opposed to committee stage, I'd

be quite prepared to deal with them, but I do believe that a

more worthwhile discussion of this bill could be proceeded with

in committee stage.

I move second reading.

MRS. P.J. JORDAN (North Okanagan): Mr. Speaker, I appreciate

the Minister's comments, but in light of the fact that the bill

just came in yesterday, and the House was sitting till nearly

midnight last night, I would move adjournment of this debate

until the next sitting of the House.

Motion negatived.

HON. MR. STUPICH: I wonder, Mr. Speaker, if I could just

explain. I was hoping that we could proceed with second reading

today and committee stage on Monday, as I'm going to be absent

for a few days from Tuesday on. I don't feel that there's

anything in the legislation. If something arises during the

course of debate that would indicate that more time should be

taken, that's another matter but, unless there's some reason in

what would seem to be fairly reasonable changes, we're not

prepared to accept the adjournment.

MR. SPEAKER: Does the Hon. Member for North Okanagan wish to

speak on the debate then?

MRS. JORDAN: I wish to speak on the Minister's comments.

MR. SPEAKER: Well, it's all out of order unless you have

leave of the House.

MRS. JORDAN: The Minister has denied us the right to have

adjournment of debate and made a comment, and I would only ask

the same privilege on behalf of the opposition.

MR. SPEAKER: Well, we're now in debate on second reading.

The Minister's made an explanation that most of this can be

taken up in committee on Monday.

I'm wondering if the Hon. Member wishes to debate second

reading. If she does, I would have to ask leave of the House;

otherwise she forfeits her right to speak. You moved the motion

of adjournment and....

MRS. JORDAN: If I understand you correctly, Mr. Speaker, you

advised the House — and I'm speaking on a point of order

— that the Minister now just spoke on second reading and

closed the debate.

MR. SPEAKER: No, he spoke and other Members are entitled to

debate second reading, but your motion to adjourn, which was

not accepted by the House, would preclude your speaking again

unless you had leave of the House. I'd ask that leave of the

House if the Hon. Member wishes to debate second reading.

MRS. JORDAN: Mr. Speaker, on a point of order, am I correct

in assuming that Members are only allowed to speak once on

second reading?

MR. SPEAKER; Yes, except the mover.

MRS. JORDAN: The mover introduces the bill and moves second

reading and closes debate.

MR. SPEAKER: That's right.

MRS. JORDAN: And the Minister has closed the debate.

MR. SPEAKER: No, he hasn't. He moved second reading when he

stood up.

MRS. JORDAN: I certainly stand to be corrected, but after

the Minister denied the right of the opposition to move

adjournment of this bill, in light of the fact that it just

came in yesterday, he then proceeded to get on his feet, not on

a point of order, as I understand it, but to speak, as you

said, on second reading. I would assume from that that he has

now had his position in closing debate.

MR. SPEAKER: He asked permission to explain to you why he

wanted the bill forwarded on Monday. He was not speaking in

debate at all.

[ Page 3180 ]

MRS. JORDAN: Then I understand that.

MR. SPEAKER: It's open to anyone to speak on second reading

except yourself, but you can speak if you have the leave of the

House to do so.

Leave granted.

MRS. JORDAN: Thank you, Mr. Speaker. I might as well carry

this on and I appreciate the opportunity, because quite

obviously the Chair was once again not going to give the

Members of the opposition the same privilege in the House as

they were giving the Minister.

MR. SPEAKER: Wait a minute. Are you suggesting that I'm not

giving you the same privilege...?

MRS. JORDAN: I suggest, Mr. Speaker, Hansard will

reveal that the Minister got up to make a comment, not on a

point of order, but just to, as you just said yourself, explain

the situation. You goofed it, Mr. Speaker, because, quite

frankly, I was going to accept his comments. I think this is

just another example of where the Chair is really in a very....

[Mr. Speaker rises.]

MR. SPEAKER: Order, please! The Hon. Member is attacking the Chair for

using every courtesy possible to the Hon. Member. May I explain to the Hon.

Member what's going on?

Interjections.

MR. SPEAKER: Order, please! I'll be glad to explain.

The Hon. Member is complaining about the Chair's conduct

in this matter, and I think it's only incumbent on the Chair to

explain.

The Minister stood up and made a speech on second reading,

and moved second reading and sat down. The Hon. Member for

North Okanagan (Mrs. Jordan) then asked for an adjournment of

the debate on second reading and moved that motion. The motion

was defeated by the House, which means the House goes back

again to second reading. The Minister asked leave to explain to

the Hon. Member. He said, "May I speak on this matter of why

I'm putting it over?" — and I permitted that. It was not

a debate by the Member; it was not closing off or precluding

the right of this House to debate the matter in second reading.

He explained why he wanted this put over until Monday, and why

he felt that it would be satisfactory, and he was going away

after that date. I accepted that explanation as not being in

any way a debate in second reading.

Now if that's understood, the next point is: the Hon. Member

then stood. I took it that she wished to speak on second

reading, but to do that she would have to have leave of the

House since she had moved a motion that had failed. She could

not get back on her feet again to debate this bill without the

unanimous leave of the House, which I immediately asked the

House to give, and which the House gave. Then she turns on the

Speaker and starts attacking me for what I've done. I don't see

how I could be more courteous to the Hon. Member than to try to

preserve her right to speak in second reading after she had

lost that right to speak by her own actions.

[Mr. Speaker resumes his seat.]

MRS. JORDAN: I accept your ruling, as is the order of the

House, but I suggest that from your own words once again in

this explanation you leave considerable doubt in the minds of

the Members of the House as to exactly what privileges are

extended to what Members.

HON. MRS. DAILLY: Nonsense!

MR. SPEAKER: I didn't make the rule, Madam. I didn't make

the rule to cut your right to speak off. I didn't make that

rule. That's the rule of the House.

MRS. JORDAN: The Minister of Education (Hon. Mrs. Dailly)

keeps saying "nonsense." The Speaker, with all due respect,

said just now that the Minister, in saying "I'd like to explain

my reasons," was asking leave. All the Member for North

Okanagan requested was the same privilege. As I explained to

the Speaker later, the Member for North Okanagan was going to

accept his explanation, and I suggest Hansard will

reveal this. Once again, with all due respect, the Chair has

created an embarrassing situation.

MR. SPEAKER: Well, if the Hon. Member misunderstood what I

was doing, I would humbly apologize to her.

MRS. JORDAN: Mr. Speaker, we accept the Minister's

explanation. In so doing, I would make to make very clear, on the

part of the opposition, that this House has been in session,

according to the Attorney-General (Hon. Mr. Macdonald) on

Jack Webster's programme two weeks ago, for over four months.

According to the record it is for under four months, but

certainly for a period of well over three months. There have

been times when this House has been adjourned for lack of

business to undertake because of the rulings introduced by this

government. Yet we find ourselves in a position at this time of

introducing bills one day and being expected or asked to debate

them the next day with the degree of

[ Page 3181 ]

knowledge which we should express in concerning ourselves

with the legislation of this province.

This particular bill may very well be innocuous, Mr.

Speaker, in terms of anything that the opposition would object

to. I have examined the bill. I have it under study at this

time, but I still feel that when it is my responsibility to

debate a bill in this House it is then my responsibility to be

sure of my knowledge and my facts. I also believe it is the

right of the public, who are affected by the legislation

introduced by this government, to have the opportunity when a

bill is introduced to at least examine it for a period of one

or two days so that they may put forth their ideas at the time

of second reading.

The Hon. Speaker is well aware, as is every Member of this

chamber, as are much of the public, that second reading is the

time when, presumably, reasonable latitude is given to the

subject. The Members are addressing themselves to the

principles of the bill, and it is at that time that they can

question the Minister and, hopefully, have some degree of

answer from him before they must go into the detailed analysis

of the bill in third reading. Mr. Speaker, we feel that this is

something that has not been done in this instance....

MR. SPEAKER: Order, please. The Hon. Member has not been

speaking on the principle of the bill at all, but discussing

the time limits, the time of the House, the rush in this bill,

and so on, which has nothing to do with the principle of this

bill. Will the Hon. Member please deal with the principle of

the bill?

MRS. JORDAN: It's very difficult to discuss the principle of

the bill in that it has very little principle, which is

probably one of the complaints. It does in its broad overview

discuss a number of Acts. One is the Bee Act which was

introduced into this House and passed at this session, and is

now, once again, having an amendment after I think a week's or

two weeks' time. It touches on income assurance, which is a

programme in this province involving millions and millions of

dollars of the public's money.

It involves itself in several detailed bills — the

Stock Brands Act is a bill that most likely should have been

rewritten in the first place and could be discussed at this

time under the principle.

Mr. Speaker, I want to make it very clear that we feel that

this Minister and this government should be efficient and

capable enough to bring in their legislation well thought out

and in time to give the public an opportunity to understand it

and have their opportunity to speak to all Members of the

Legislature before the bill is discussed in principle.

MR, SPEAKER: The Hon. Minister of Agriculture closes the

debate.

HON. MR. STUPICH: I just hope that we are talking about the

same bill. It's Bill 126, Agriculture Statutes Amendment Act,

1975. My copy of this shows nothing to do at all with the

beekeeper's Act.

In any case, if there are no questions or nothing to comment

on with respect to the legislation, and since the Member agrees

that these are fairly innocuous amendments to existing

legislation, I move second reading now.

Motion approved.

Bill 126, Agriculture Statutes Amendment Act, 1975, read a

second time and referred to Committee of the Whole House for

consideration at the next sitting after today.

HON. MRS. DAILLY: Mr. Speaker, second reading of Bill 93,

Liquor Distribution Act.

LIQUOR DISTRIBUTION ACT

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

we intend to proceed with second reading of Bills 93 and 99. I

think that much of the legislation can be discussed under the

sections, and questions answered might relate to both, unless

there is an objection heard, because the two bills are

complementary.

The first bill establishes the liquor distribution branch. I

want to pay tribute to the very hard work of Mr. Keith Warnes

who has become the general manager of the distribution branch.

He has tied into his work with dedication and understanding in

a matter of weeks. And also I would like to pay tribute to Vic

Woodland who will be the licensing and control area manager and

who has been a long-time public servant. In sort of a new

day for liquor distribution in the Province of British

Columbia, I think that both of these men are owed a great deal

of thanks. Also, Tony McCrossan has helped us not only with the

drafting of legislation but is now helping us with the drafting

of regulations to complete the implementation.

In dividing the old liquor board into the two branches, may

I just give the principal features? As I say, distribution is

one branch. Under that, we are establishing a listing committee

which, while it is advisory only, will for the first time make

the products listed and stocked on the liquor shelves of

British Columbia responsive to greater public demand. We will

have expert advice, but it is, nevertheless, basically a lay

listing committee.

Again for the first time, because we have purchased so much

from Europe, we have in the person of Mr. Peter Adams a

part-time member of our listing committee and someone to

advise us on our purchases from the point of view of getting

the best

[ Page 3182 ]

bargains for the public system and also getting the best

products that may be available. Peter Adams will sit on the

listing committee.

Under the distribution Act we have the ability to create

agency stores in remote areas of the province. It might be a

grocery store or it might be some other existing establishment

where liquor products can be sold under licence other than

directly through a liquor vending store in places where it is

not economical to set up a store but where the public should

not have to drive 200 or 300 miles in some cases to the nearest

store for the products that are available to people who live

closer to what might at times be called civilization. We also have the ability to distribute liquor products such

as beer in other outlets such as small stores. This Act is

permissive.

We have the ability to allow the wineries of the province to

have sampling rooms and possibly wine stores and to be able to

conduct tours of visitors through their wineries.

We are introducing sunshine because, in addition to the

liquor board which is our appellate body which we established

at least a year ago under the chairmanship of Mr. Neil

Davidson, we are now under this new Act requiring that when the

general manager of licensing gives a decision to accept or

reject an application, reasons for that decision should be

given to the applicant as well as to those who might have

objected to the application. Again, there is the appeal that I

mentioned. The appeal procedures are somewhat widened under

this Act.

Apart from such obvious things as mobile homes being homes

just like any other home, we have poolside patios and things of

that kind which are defined as public places. We also have the

ability, under the Municipal Act, to allow the municipality to

designate picnic areas where such liquor products as they may

decide may be consumed. But that's up to the

municipalities.

We have one general licence because we think there should be

flexibility in this, and, subject to the regulations, that

licence will specify on the back what conditions apply to that

particular outlet, including such things as hours of opening.

We have increased the penalties on minors who frequent drinking

establishments. We have provided that the bartenders, subject

to the Human Rights Act, may call in aid a police officer to

have somebody who is engaging in disorderly conduct removed

from the drinking establishment. We have a

section dealing with

the breathalyser machines which can be installed in the various

outlets.

We have put our licensing fees for breweries, wineries and distilleries on

a gallonage basis. We have provided for the recognition of agents who heretofore

have been rather shadowy creatures employed in the liquor industry but now legitimized,

licensed and able to conduct their business in an ethical way, subject to cancellation

of their licence.

Mr. Speaker, there are other sections in the bill, in the

two bills, some of them really of minor interest, and I think

they can best be discussed under the various sections. So at

the moment what I am doing is moving second reading of Bill

MR. R.H. McCLELLAND (Langley): Mr. Speaker, I don't quite

know how we can discuss at the second readings both bills at

the same time. But if we could start with Bill 93, first of all

just a brief comment. I think it makes a good deal of good

sense to split the responsibilities for the liquor

administration, and I'm sure that it will work to everyone's

advantage in British Columbia in the future.

I'd like to speak to each bill separately, if I may, because

Bill 93 doesn't concern me.

Interjection.

MR. McCLELLAND: Oh, thank you, Mr.

Attorney-General.

MR. SPEAKER: For clarification, I think that each Member

should deal with the bill before us. Then when it comes to the

other one, and any other remarks, do it again.

MR. McCLELLAND: I agree that probably the best way to handle

this bill is in the sections when we get to committee stage.

But I'm a little confused about the method by which the

Attorney-General says we can establish outlets for beer

and wine, or whatever we decide, in other areas such as small

grocery stores. I can see the

section where the Minister may

establish agents, and I understand, too, that he'll use that

section to provide for outlets in those kinds of remote areas

where perhaps the people don't have the opportunity of a liquor

store in their area. But if he's also considering that that's

the

section under which we'll establish agents, which may be

small grocery stores, I see this open to some horrendous

abuses.

In other jurisdictions where that kind of leeway was allowed

either to the cabinet, to a governmental body or to some

servant of the government, we've seen in the United States and

in areas of Quebec where political patronage and other abuses

become very prevalent. In the decision of which small grocery

store gets the licence, what is a small grocery store, why did

that grocery store on that corner get a licence and not the one

over there...? I just think it's far too loose, if that's the

section under which we're dealing, to allow even the

possibility of those kinds of abuses. I'm certainly not

suggesting that there will be political abuses, but there could

be all kinds of other abuses as well.

[ Page 3183 ]

HON. MR. MACDONALD: Are you opposed to the whole thing?

MR. McCLELLAND: No, I didn't say that. I'm opposed to that

method of establishing licences in what are small grocery

stores. We don't know what small grocery stores are. Maybe that

shouldn't be where they should go; maybe they should go in

large grocery stores as well. I'm just saying that the whole

system, if that's the way the Attorney-General plans to

make those licences available, is open to these kinds of

abuses.

You know, the Attorney-General isn't going to be

Attorney-General for ever, even though he might wish to

be. We might not have such a fair and non-discriminatory

Attorney-General next time around. The Hon. Economic

Development Minister (Hon. Mr. Lauk) may be....

AN HON. MEMBER: You're attacking the Minister of industry

now.

MR. McCLELLAND: No, the Economic Development Minister isn't

in the House at the moment.

Anyway, that concerns the opposition, Mr. Speaker. I know

that the Attorney-General has said that they plan to go

slow on the establishment of these kinds of agencies. But if

this

section means that we establish outlets for people who

live in areas that don't have outlets at the moment, that's

fine. I think that's an admirable approach to take. But if it

also means that we're going to use this kind of

section to also

establish where these outlets will be in corner grocery stores,

then I say that's not good enough and that it must be much

tighter than that. Some kind of formula has to be developed so

that there is no discrimination at any time.

Mr. Speaker, I would ask if the Minister could explain where

duty-free liquor stores are planned to be established or

if that has been decided yet, whether they will be established

as agencies or whether the government will run them as a normal

part of the liquor administration branch. The same goes with

the possibility of establishing liquor stores at distilleries,

which is quite a departure from the method which is now used.

Will those be contracted out to the distillery, Mr. Speaker, or

will the government again, as a normal extension of the liquor

administration branch, operate those stores in the distilleries

as well? Will they sell only that distiller's product, or will

they carry a full range of products? Will they sell beer as

well as liquor, or wine as well as liquor, or will the

distillery itself actually operate under contract to the

government that liquor outlet and sell only that distiller's

product?

I don't think I have any other comments on this bill. I would like to speak

to Bill 99 when it comes up, Mr. Speaker, but that one particular

section about

the establishment of those other agency outlets I think needs some clarification

and some assurances from the Minister that there will be a formula established

that won't allow any discrimination or any possibility of any kind of abuses,

either political or otherwise.

MR. McGEER: Mr. Speaker, I want to indicate that I will

certainly support this bill. I want to compliment the

Attorney-General on doing such a thorough job of drafting

the bill. I know the care and attention that he gave to the

details of the drafting. (Laughter.)

I would like to ask him about the meaning of one or two

sections. I would gather that one of the principles we could be

supporting, but not necessarily supporting, by voting for this

legislation would be the establishment of wine merchants.

If I interpret

section 8 correctly, the

Attorney-General could designate a government wine store

and under

section 15 the store manager could bring in liquors

for sale that are not part of the normal listing. But the

question is: will that take place? In other words, can we

anticipate now or at some future time as a result of this

legislation that we might have wine merchants in British

Columbia who would be allowed to bring in the best wines in the

world in case lots and then sell them to people who would like

to enjoy something with a little better international

reputation than our local product?

Mr. Speaker, I am not going to elaborate on the opinions

that I hold with regard to some of the 345 different products

from some of the local wineries that are on our liquor store

shelves — I won't say "grace the shelves" — but I

think that with the many thousands of wines around the world,

there is a place for a little more variety. That of course is

traditionally done by wine merchants with a sensitive palate

and discriminating taste.

Mind you, the Attorney-General is given awesome powers

under this bill. I say awesome because the decisions that are

within his power under the regulations of this Act are similar

in scope to powers given by former Attorney-Generals of

this province and their counterparts in other jurisdictions in

Canada and the United States. The history of

Attorney-Generals getting into difficulty has very

frequently surrounded their administration of liquor

regulations. It is just an unfortunate curse which in many

places has gone with this particular office because it has been

given arbitrary powers over the handling of liquor.

I would certainly hope that there never would be any cause

for criticism of our Attorney-General with regard to the

way wines in British Columbia are handled. Certainly, given

broad powers to wine merchants, then nobody would be able to

complain.

[ Page 3184 ]

Certainly the big five vintners of British Columbia who have

claimed that their product without difficulty can stand up to

anything else in the world would not object to a little bit of

competition coming in.

I would just like to ask a little aside, Mr. Speaker, if I

may. That is: is there some kind of directive that has gone out

from your department with regard to imported wines being served

at official functions of the government where government funds

have been involved directly or indirectly?

I've been to some of these where execrably bad wines have

been placed on the table, and as a proud British Columbian I've

been embarrassed at the faces that have been made. I just

wondered if this kind of thing is emanating from some official

source.

I would sooner apologize for British Columbia's weather, Mr.

Speaker, in the wintertime when guests come here, than to have

to deal with people who slip a glass under the table during the

middle of an otherwise very fine meal. I discovered, to my

embarrassment, at a dinner I was hosting just a day or two ago,

as a result of a brief interlude I had away from the House, the

consequences of this regulation.

Anyway, perhaps the Attorney-General could clarify

that, but I'd certainly welcome....

Interjections.

MR. McGEER: Yes, I could name one or two that are

reasonable, but I could name 355 that are execrably bad. I

don't want to go through the list now, but I just think that

there's a very simple cure to all of this. It's within the

powers, as I understand it, of the Attorney-General to

deal with that under this legislation and I'm really asking

whether he's going to be prepared to do that.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Mr.

Speaker, I would like to say a few words in this debate about

the powers that are given to the Attorney-General to act

by regulation and to carry out the rather broad brushstrokes

that are comprised within this particular bill. I'm not going

to deal with it in the same manner as the First Member for Vancouver–Point Grey, who suggests that the

Attorney-General is going to be faced with serious,

difficult decisions regarding licensing. That's true enough,

but there's another awesome power which is contained in this

legislation and I think that we all should recognize it.

The Attorney-General is being given the authority through this branch to

extend the outlets for beer, wine and liquor on an arbitrary basis throughout

this province. I just hope that the Attorney-General in exercising this power

will recognize the devastation that can follow if we continue the present mystery

which is allowed to surround alcohol in whatever form it may be for human consumption.

I will recall in the northern part of my constituency when,

as a result of pressures brought by the merchants and citizens

in the area, the government was encouraged to open a liquor

store. I can demonstrate, and that community can demonstrate,

the devastation that followed that event. There happens to be a

large Indian reserve in this part of my constituency, and

subsequent to the opening of the liquor store it was possible

to tell the time of the month in relation to the time when the

Indians received funds by the increase in drunkenness and the

conduct which follows upon those events.

Now the Attorney-General is going to have the power,

if it isn't appropriate to open a store, at least to establish

an agency through some other commercial outlet. This is another

way in which this kind of devastation can be spread to the

outlying areas of the province.

Now I'm not a prohibitionist in any way....

HON. MR. MACDONALD: The licensing manager does that, subject

to appeal — I don't do it.

MR. L.A. WILLIAMS: Well, I'm saying that you're taking the

authority under this legislation to give somebody the right to

expand this.

HON. MR. MACDONALD: It's subject to appeal.

MR. L.A. WILLIAMS: Of course it's subject to appeal, but,

Mr. Speaker, the fact of the matter is that we have to

recognize what we're doing by this legislation.

As I was about to say, I'm not a prohibitionist at all. I

enjoy a glass of wine or a glass of beer or a drink as well as

anybody else — sometimes even two.

AN HON. MEMBER: Two?

MR. L.A. WILLIAMS: On rare occasions three. But I tell you,

Mr. Speaker, that one of the difficulties we face is that with

the control of licensing outlets which have been exercised by

the government, and will under this legislation continue to be

exercised by the government, we still have a mystique which

surrounds this matter of alcoholic beverages which I think

encourages people in their use.

The Attorney-General has taken a major step forward

and I commend him for it, but I don't know why we don't start

to treat alcoholic beverages as a normal commodity available

for sale in any of our stores without restriction, but subject

to licensing and subject to control. I'm not suggesting that

you shouldn't make certain that there aren't any improper

activities carried on, but because you choose between one place

and another you give to this particular

[ Page 3185 ]

product a mystique it really doesn't deserve.

I think that if beer is to be sold in government stores or

elsewhere, then it should be sold in exactly the same way as

soda pop which, I suggest to you, Mr. Speaker, is every bit as

dangerous as beer, and sometimes more dangerous. It rots your

teeth. At least beer doesn't do that.

HON. MR. MACDONALD: What about the sale to minors?

MR. L.A. WILLIAMS: You have restrictions on sale to minors,

of course.

Some people are concerned about the possibility of robbery

and burglaries of liquor stores. It costs about as much to buy

a half-dozen bottles of Coke today as it costs to buy a

half-dozen bottles of beer. Money is no problem. I just

think that the merchants, under proper regulations and

inspection, should have the opportunity of selling this

commodity the same as any other. Then we downgrade the

importance that is given to this commodity by the techniques of

the past. Only in moving that way are we going to bring true

opportunity for moderation to all of our citizens. That is what

you are aiming at, yet we seem to be so hesitant to take the

step forward.

If it is the case, I would rather have a young person go to

a grocery store and buy a half-dozen bottles of beer than

I would have that same young person pay some older person to go

to a liquor store and get it for him. That is what is

happening.

I suppose we will deal with this in the next bill, but

insofar as the control that is exercised on other licensing

outlets is concerned, a very senior member of the

Attorney-General's staff, even last evening, must have

recognized how ineffective some of these controls might be in

some of our establishments. Therefore I think that we should

make the move to placing this commodity on the shelf the same

as any other, and treat it as a normal

article of commerce and

get rid of the mystique. Then if there are dangers, attack

those in the same way we do with other dangerous commodities.

There are many of them sold in the grocery stores today that

are far more dangerous to humans that is beer or wine, but we

don't have any restrictions on those. We have commodities that

people can buy which, carelessly used, can result in death,

blindness....

HON. MR. MACDONALD: Vanilla extract and things like

that.

MR. L.A. WILLIAMS: That's right. I was going to come to that

under the other bill, but perhaps this is the appropriate time

to discuss this. Is the Attorney-General going to stop

the terrible practice of bay rum and vanilla extract sales? Are

we finally going to come to the situation where those stores

in Vancouver which prey upon unfortunate people in that city by

the sale of beverages which have a most devastating effect upon

the human system...? Is the Attorney-General finally

going to bring an end to that practice by the liberalization of

these regulations? I think that we are entitled to have some

assurances from the Attorney-General as to the extent to

which he sees us going under this legislation, and the way in

which he is prepared to terminate some of the unacceptable

practices of the past.

HON. G.R. LEA (Minister of Highways): Mr. Speaker, there is

one aspect that I would like to touch on, dealing with some of

the comments that have been made by the Hon. Member for West

Vancouver–Howe Sound. I don't feel it would be proper if

I didn't take part after hearing what he had to say, and I hope

I misunderstood. That was when he suggested to the Attorney-General that you shouldn't put a liquor store

where there are impoverished groups or people on the lower end

of socio-economic scale because of the way if affects

them.

MR. L.A. WILLIAMS: No, I didn't say that.

HON. MR. LEA: He related it to when they put a liquor store

in the northern end of his riding, and the devastation that

followed, the drunkenness.

MR. L.A. WILLIAMS: Yes, that's right.

HON. MR. LEA: He tied that in with the Indian people who

live there and the way they acted after that liquor store made

available to them alcoholic beverages.

MR. L.A. WILLIAMS: That's right.

HON. MR. LEA: I just can't follow that kind of reasoning. I

am not saying that what he said happened didn't happen. I am

sure it did. But I don't think the solution is not to put the

liquor store there or make available to those people the same

kind of services that we make available to the rest of the

people in society. I think it is a complete misunderstanding of

what happens at that lower end of the socio-economic

group.

MR. L.A. WILLIAMS: You're missing my point.

HON. MR. LEA: Maybe I did miss your point. You can clarify

it for me later. But the way I read it was that people at the

lower end of the socio-economic scale can't handle

alcoholic beverages the way people in the middle and

upper-middle classes can.

[ Page 3186 ]

MR. L.A. WILLIAMS: That is not what I meant.

HON. MR. LEA: That may be true because of the kind of

poverty quagmire they find themselves in — the treadmill

effect they get into, and the low level of expectation people

have in that area. But it would seem to me that to make that

kind of plea to the Attorney-General, not to make

services available to that end of the socio-economic

scale that are going to be available to the top end, is

horrible.

If we are going to start dealing with those kinds of

problems in society, it is to make sure that those kinds of

people have the opportunity to be educated in the same way that

everyone else is in our society. It is like saying that at the

lower end of the socio-economic scale you find that they

have larger families which they can't often care for. Then

instead of dealing with that problem by trying to teach those

people something about birth control and get them out of that

poverty where they find themselves, we pass legislation in this

House to deny them sex. It's the same thing.

I think if we are going to start dealing with those kinds of

problems, we have to start by getting those people out of that

poverty level, off that treadmill they are on and into the

general stream of society. Sometimes I wonder why they would

want to be here, in the areas that we are in. But I think that

we have to handle the problem that way and try to bring these

people along through social programmes and education, and

through giving them some economic base. To deny them services

because they find themselves in poverty and at the lower end of

that socio-economic scale is something that I just can't

go along with.

MRS. JORDAN: I must say that I fail to see the rationale of

the Minister of Highway's comments.

HON. MR. LEA: I'm sure you do.

MRS. JORDAN: I don't always agree with his approach, and not

in this instance, but I think the Minister has taken a very

reasonable argument from the Member for West

Vancouver–Howe Sound (Mr. L.A. Williams) about a very

serious public concern and tried to twist it around and

masquerade it into class warfare. This is absolutely wrong and

that Minister should hang his head in shame. He is consistently

doing it.

This is a very serious problem. Alcohol is a very serious problem. There are

two factors in our society: one feels that if you completely liberalize the

attitude to alcohol, the problem will go away because common sense will prevail;

the other feels that the liberalization of alcoholic beverages in the province

is not going to answer the problem at all. I hope to have here, under the next

bill, some research that I have done in relation to this.

I believe the Attorney-General is as contained as the

rest of us. I don't think there is anyone who is temperate in

this House, but I do think that a lot of us have a serious

concern about the medical statistics and figures that are

emerging in the countries where so-called liberalization

and civilized drinking takes place. They are alarming.

When the Member for West Vancouver–Howe Sound said

that pop rots your teeth, he is right. And it appears that

booze rots your liver. If it is a matter of which of the

druthers you'd have, I would suggest that we have to take other

steps beyond just updating liquor laws. I would hope that the Attorney-General, in closing debate on second reading of

this bill, will outline very clearly some of the educational

programmes he intends to introduce in British Columbia to make

young people and adults aware of the serious social and

economic problems and the very serious health problems that

evolve from civilized drinking.

I don't want to convey the impression that I am opposed to

drinking, because I am certainly not. But I think that this is

far too serious an issue to just shrug our shoulders and jump

on the bandwagon of "Let's open it up and see what happens." I

think that we have to listen to those who are authorities in

the fields of health and social education.

[Mr. Dent in the chair.]

On that point, the Minister of Highways suggested that those

people who have less material assets, or, as he puts them, the

lower socio-economic scale, couldn't handle their liquor

as well as those in the so-called upper socio-economic scale. I would suggest to him that he has

his economic scales mixed up. I know many people who he would

class the lower socio-economic scale — the

Pemberton area for example — who derive a very good

income. They work in the bush or in construction. It isn't a

matter of money income; it's a matter of one's ability to

handle money, and one's priorities in their personal life. I

would suggest to him that they probably handle a tankard of

beer or a bottle of whisky better than the people he referred

to as being in the upper socio-economic scale. I think

that overindulgence in liquor is evident in most people in the

same way; it doesn't matter from what interest they come or

where they come from.

Also, I would like to suggest on that point that the people

in the so-called upper socio-economic scale, as he

calls it, have just as many problems. They may take a different

form, but I suggest there are people who work, who sit in the

press gallery, which might be considered the upper socio-economic scale, who own a grocery store that we are

talking about, who are lawyers, who are doctors, or who are

maybe Members

[ Page 3187 ]

of the Legislature, but feel at times in life that they are

on a treadmill of frustration — maybe a quagmire of

mediocrity tied in to insurance, mortgages and income tax

— maybe they suffer frustrations in their jobs.

I just find that the Minister of Highways' (Hon. Mr. Lea'

s) statements are very shallow and tend to continually harp on the

emphasis of trying to stimulate class warfare, which we

shouldn't have in British Columbia. We have been very

fortunate. We have really evolved to an almost classless

society in British Columbia. Certainly we have our problems in

terms of some people who definitely need more income, but as a

whole you just have to get on the B.C. Ferries, which has got

to be one of the greatest examples. It is not who you are that

counts — everybody is there in bright sport shirts and

jeans or whatever they want to wear. People mix as people, and

they enjoy each other as people. That is generally a concept

around British Columbia and I don't think we should be doing

anything to try and foster anything else. I think we should be

speaking in positive terms and developing more and more that

type of an attitude in British Columbia.

There are two or three points I would like to bring to the Attorney-General's attention, because I don't think he is

going to solve all the socio-economic problems in British

Columbia. But in relation to this bill, I would like to go back

to the comments by my colleague for Langley (Mr. McClelland) as

to the regulations for offering licences to outlets. I want to

refer specifically to places like grocery stores.

I think the definition is extremely important. There are

many areas, not so much in the metropolitan areas, as the

Minister knows, but certainly in the non-metropolitan

areas where you might have three little grocery stores. I'll

cite one actually right here in James Bay, on the corner of

Simcoe and Menzies Street, I believe it is. There is the little

Simcoe Foodliner, there is a Safeway and there is another

little grocery outlet. All are within no more than 200 or 300

feet of each other. Who is going to get the licence?

This is predominant if you go into Vancouver, North

Vancouver, the Langley area, and then you start moving around

areas like the Okanagan. You'll find that there tend to be

multiple little grocery stores.

HON. MR. MACDONALD: It might be all three if they fit in the

definition.

MRS. JORDAN: Yes, this is the point. If this is the case,

then they are all operating on the same basis and each has the

same opportunity to compete openly with each other.

There is one point that concerns me very much. That is a statement made by

the Attorney-General. I wouldn't want to misquote him. I know he realizes

that.

HON. MR. MACDONALD: I don't mind.

MRS. JORDAN: There was an inference made by the Attorney-General in the introduction of the bill....

HON. MR. MACDONALD: I've objected to being quoted sometimes,

but I've never objected to being misquoted.

MRS. JORDAN: If I am quoting you accurately I'm very

disturbed. I object to you being quoted accurately. The

inference was that somewhere along the line in the last few

months unless beer sales were introduced in some of these

little grocery stores they would go under. This is true, Mr. Attorney-General. I know that you've got letters because

I have encouraged people to write to you. I know where they are

from. One is from within the precincts of the buildings.

The disgrace here is: what kind of society are we that a

small business operation is going to go under unless it has a

licence to sell liquor? It's sort of a booze-cruise

socialism. Those letters that you have, Mr. Attorney-General, have indicated that the increase in

taxes, the increase in their costs of overhead, the increase in

their powers, and the increase in their licensing since this

government took over has cut into their meagre profit margin to

the point where they simply cannot make a go of it. I refer you

to one just down the street. These stores felt that operating

as an outlet for liquor was one of the very few ways they had

to make their businesses pay. I think that this is a very sad

state of affairs.

If it is the desire of the Attorney-General to allow

or encourage grocery stores and small outlets to serve and sell

beer that's fine. But let it not be on the basis that this is

one of the ways that we are going to save business. That's just

sick, sick, sick. Surely the climate in British Columbia should

be such that a small family operation or a small grocery store

can provide a service to the public without being absolutely

beaten to death by their overhead.

These are some of the points that we were trying to explain

to the Attorney-General and to his government in previous

debate when they glibly increased the cost of doing business in

this province under the guise of attacking the big corporate

structure when in fact it has so drastically hurt the small

operator.

There is the problem of age and who is going to sell the

liquor, I don't want to refer to the other bill — 99

— except I think that in

section 39 of Bill 99 the

Minister clearly outlines that to sell liquor to a minor is a

punishable offence. What is going to be the

[ Page 3188 ]

situation in small grocery stores when people under the age

of 19 will be selling liquor and selling beer? I have a letter

of this matter right now, and it has been referred to the Attorney-General's department.

There are grocery operators in the province who are very

concerned for right now. Should they hire students for the

summer? I assume the Attorney-General is not going to

have this in effect, so that isn't a problem. But would he

please, in closing the debate, make very clear what is going to

be the situation when you have minors working alone, as often

is the case in small grocery stores? Will they be able to sell

the liquor that is sold in the store or not?

The last point that I'd like to bring up is the matter of

the personnel policy of the Liquor Control Board. Those who

work for the Liquor Control Board fully concur with the posting

of positions as vendor or the chief clerk. They don't have any

objection to this at all, but what appears to be happening, and

what they object to, is that other clerks or other employees in

the liquor stores do not come from the local area. If I may, I

would cite the example of the new liquor store which is going

to be opening in Vernon. We have a liquor store operating

currently. The positions of vendor and chief clerk have been

posted and advertised, and they appreciate this. But they have

been advised that local people will not have priority in

applying for permanent jobs with the service. There are over 70

applicants in the Vernon liquor store at this time from people

within the North Okanagan region, who live there, who've made

their homes there, who have their families there, who would

like to have a job in the new liquor store, but they've been

told that the only jobs that really will be open to them are

those part-time jobs. I recognize that they can bid on

the permanent jobs, but the option is now open so that anyone

in the province with seniority will have priority.

HON. MR. MACDONALD: That's the union agreement.

MRS. JORDAN: But as Minister, don't you feel that it's your

responsibility to see that local people are not denied the

right to jobs in their own area, where they may be very

competent, where they've made their life, where they have their

families, because of a negotiation between the government and

any organization?

What I'm asking the Attorney-General to do is have a

policy where the chief positions are posted, but have an open

policy of employing....

DEPUTY SPEAKER . Order, please. I just would ask the Hon. Member if she

wouldn't mind saving the more specific points for committee stage. However,

if it's germane to the principle of the bill then it's relevant.

MRS. JORDAN: Mr. Speaker, I appreciate your comment and I

will, but if I just finish this last little bit then I'm

hopeful that we will be able to discuss it in more detail in

committee stage, and the Attorney-General will have a

positive answer. I'm asking today for