1976 Legislative Session: 1st Session, 31st 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)

WEDNESDAY, JUNE 23, 1976

Afternoon Sitting

[ Page

3015 ]

CONTENTS

Speaker's ruling

Legality of June 22 sittings of Legislature.

Mr. Speaker — 3015

Mr. Gibson — 3015

Mr. Macdonald — 3016

Routine proceedings

Farm and Domestic Workers Recognition Act (Bill 84) Ms. Brown.

Introduction and first reading — 3016

Oral questions

Canyon Ambulance Services dispute. Mr. Barber — 3017

Canadian Habitat delegation submission on unearned profits on land.

Mr. Gibson — 3017

Ministerial role in range war. Mr. Barrett — 3017

Adjustment of rent controls. Mr. Barnes — 3018

Premier's mode of transport. Mr. Lea — 3018

Tent Island lease withdrawal. Mrs. Wallace — 3019

Additional seating on ferries. Mr. Gibson — 3019

Closure of Port Alberni ICBC claims centre. Mr. Skelly — 3019

Comparison of ferry-use figures. Mr. Lockstead — 3019

B.C. cost in Olympic torch-carrying. Mr. Barnes — 3020

Committee of Supply: Department of Mines and Petroleum Resources estimates.

On vote 130.

Mr. Gibson — 3020

Mr. King — 3021

Hon. Mr. Waterland — 3021

Mr. Nicolson — 3023

Hon. Mr. Waterland — 3024

Ms. Sanford — 3024

Mr. Lockstead — 3027

Hon. Mr. Waterland — 3028

Mr. King — 3029

Mr. Gibson — 3032

Hon. Mr. Waterland — 3034

Mr. Barrett — 3036

Mr. King — 3051

An Act to Incorporate the Bishop of the Ukrainian Catholic Eparchy of New

Westminster and His Successors in Office a Corporation Sole (Bill 50) Second reading.

Mr. Strongman — 3052

An Act to Incorporate the British Columbia Association of Colleges (Bill 51) Second reading

Mrs. Jordan — 3052

Vancouver Stock Exchange, 1907 (Amendment) (Bill 52) Second reading.

Mr. Chabot — 3052

The House met at 2 p.m.

MR. J.J. KEMPF (Omineca): I am very happy to have in the

gallery this afternoon students from the Nechako Valley Secondary

School with their teacher, Mr. Blatner, and his good wife. They are

from the village of Vanderhoof in the great constituency of Omineca,

and I would like the House to make them welcome.

MS. K.E. SANFORD (Comox): Seated in the members' gallery

today are two people from Comox constituency, and I would like the

House to join me in welcoming Betty Hlookoff from Courtenay and my son,

Glen Sanford.

MR. L.B. KAHL (Esquimalt): From that great constituency of

Cowichan-Malahat, I would like the House to join me in welcoming the

mayor of Duncan, Mr. Ken Paskin.

MR. D.F. LOCKSTEAD (Mackenzie): I have in the gallery today

two guests from West Vancouver, Mr. and Mrs. Maurice Embury, and I ask

the House to join me in welcoming them.

HON. J. DAVIS (Minister of Transport and Communications): Mr.

Speaker, seated in the members' gallery today is Mr. Art Lipman from

North Vancouver. He's one of the most energetic campaigners I know. I

would like the House to make him welcome.

MR. G.R. LEA (Prince Rupert): Was he on your side or Trudeau's?

HON. E.M. WOLFE (Minister of Finance): I ask leave to table a document. It has to do with our anti-inflation programme.

Leave granted.

HON. MR. WOLFE: Mr. Speaker, we have now concluded our

agreement under the federal Anti-Inflation Act with the Government of

Canada, which has been signed as of yesterday, and I have pleasure in

tabling this agreement.

MR. SPEAKER: Hon. members, just prior to the adjournment for lunch the

Speaker was about to deliver a decision concerning a matter of a motion which

was put by the hon. first member for Vancouver East (Mr. Macdonald) I am now

in a position to deliver that decision. Before I do I would like to remind all

of the members of the House, and particularly the Leader of the Opposition (Mr.

Barrett), who suggested that he wanted it deferred for an hour because he may

wish to discuss it, that under the rules of the House debate or discussion on

a ruling from the Chair is not admissible, and....

AN HON. MEMBER: You're anticipating, I think.

MR. SPEAKER: I'm not anticipating anything, Hon. Member, except from the discussion that took place immediately before the adjournment.

Interjections.

MR. SPEAKER: Order, please. Even the Speaker had an opportunity to have lunch today, and I think we are all in a better mood.

Yesterday afternoon the hon. first member for Vancouver East rose on

a point of privilege and presented to the Chair for consideration a

motion reading as follows:

"Resolved: that a special committee on privileges be

named forthwith by the select committee and directed to examine and

report upon the question of the sittings of the Legislature outside of

regular hours, and the lawfulness of legislative orders passed at the

present session outside of the regular times of sitting, and with power

to summons and hear persons and testimony."

I would make the preliminary observation that the practice of this

House does not permit

preambles to motions, and accordingly the motion

as submitted was technically out of order in this regard, because it

did have and contain a

preamble.

However, as a matter of privilege alleged is one of considerable

importance, I have considered the matter further to determine whether

or not the substance of the motion constitutes a matter of privilege

which can be placed before the House for debate without notice.

Standing order 26 states as follows: "Whenever any matter of privilege

arises, it shall be taken into consideration immediately."

In deciding whether or not the matter can be raised without notice

I've examined several authorities, including Sir Erskine May's Parliamentary Practice , 16th edition, at page 392, and refer the hon. members to the following quotation therefrom:

"As a motion taken at the time for matters of

privilege is thereby given precedence over the prearranged programme of

public business, the Speaker requires to be satisfied both that there

is a prima facie case that a breach of privilege has been committed and

also that the matter is being raised at the earliest opportunity."

The earliest opportunity at which this matter could have been raised was the sitting of this House at 10 a.m., June 22...

[ Page 3016 ]

AN HON. MEMBER: Impossible.

MR. SPEAKER: ...while in fact the matter was not raised until the 2 p.m. sitting the same day.

Matters of privilege not raised at the earliest possible opportunity

must be raised by notice of motion to be placed on the order paper, and

in this regard I refer the hon. members to a decision of this House

contained in the 1968 Journals , page 140 to 141.

I would add here that the restrictions in relation to raising a

matter of privilege apply equally to a point of order, and refer hon.

members to the 16th edition of May

at page 470, which clearly states that points of order may be brought

to the Chairman's attention provided such member raises the point the

moment the alleged breach of order occurs.

There is a further ground on which the hon. member's motion appears

to be out of order. The matter raised purports to deal with sittings of

the Legislature and essentially matters of order within the House and

as such cannot be raised as matters of privilege. I refer the hon.

members to Bourinot's Parliamentary Practice ,

4th edition, at page 307. The learned author, in that authority,

dealing with questions of privilege, states as follows: "A question of

order in the House, or in a committee thereof, cannot be treated as a

matter of privilege."

It is therefore the ruling of the Chair that the matter raised by the hon. member must be raised on notice.

I wish to say further that I am indebted to several hon. members for

bringing to my attention several Speakers' decisions and quotations

from Sir Erskine May, all of which have been examined and considered.

Hon. members will undoubtedly appreciate that as the matter raised as a

matter of privilege was decided upon other grounds, detailed comments

on the authorities quoted by the hon. members become inappropriate.

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

order, Mr. Speaker, without wishing to take the time of the House, in

my remarks yesterday afternoon I noted: "Mr. Speaker, I had intended to

bring this particular question up as a point of order, but since the

hon. first member for Vancouver East (Mr. Macdonald) has raised it as a

question of privilege, perhaps I might suggest to you some of the

authorities that seem to me to bear on the case." Then I went on to

cite some authorities.

Sir, as I gave notice at that time that I did wish to raise it as a

point of order, I wonder if you might now consider it as such and take

it under advisement as such with the argumentation I gave at that time,

which I have no wish to repeat. I would suggest to you as well that it

was raised at the earliest moment, if the point of order is correct.

The point of order, you will recall, suggested that this morning

sitting was improperly constituted. Therefore raising it at the

beginning of the afternoon sitting was at the earliest possible time. I

would ask Your Honour to take that into account as a point of order.

MR. SPEAKER: The only thing that I would reply is that I

think that you should refer to the ruling of the Chair that the matter

raised by the hon. member must be raised on notice.

MR. GIBSON: Getting on with that point of order, Mr. Speaker,

I did raise it yesterday. I said I was going to raise it as a point of

order, and had that been the case at that time Your Honour surely

should have told me that I should do it in that way rather than

commenting on the question of privilege. I deferred raising it as a

point of order, though I specified that I had wished to do so, because

of the matter of privilege which Your Honour took under consideration.

That being the case, it seems to me that awaiting your decision on the

question of privilege, which surely has precedence over a point of

order, was the proper course to do, and that therefore now is the

earliest possible occasion to ask Your Honour to take it into

consideration as a point of order and to give a ruling on it. I hope

you will do that in due course.

MR. SPEAKER: Hon. Member, I appreciate your remarks. Without examining

it in more detail, I would reserve any decision and try to accommodate the hon.

member on his request.

MR. A.B. MACDONALD (Vancouver East): In view of your ruling

that the point raised should be on notice and that it's not a matter of

privilege that demands the immediate attention of the House, I would

think that I should file the motion as a notice of motion, and I would

think that the government should call that resolution forthwith,

because it's a matter of great concern. I will be filing it.

Introduction of bills.

FARM AND DOMESTIC

WORKERS RECOGNITION ACT

On a motion by Ms. Brown, Bill 84, Farm and Domestic Workers

Recognition 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.

Oral questions.

[ Page 3017 ]

CANYON AMBULANCE SERVICES DISPUTE

MR. C. BARBER (Victoria): Mr. Speaker, my question in one

part is to the Minister of Health.

In the city of Hope, Canyon Ambulance Services has been in the

dispute of many weeks with the emergency health services branch of your

department. There also appears to be a considerable conflict with the

council of the city of Hope regarding relocation and other problems

faced by Canyon Ambulance Services.

Yesterday, as the result of this continuing stress and conflict, the

manager of the Canyon Ambulance Services collapsed and is presently in

the hospital. Will the minister make a report to the House as soon as

he can and will he tell us what action he has taken to resolve this

dispute?

HON. R.H. McCLELLAND (Minister of Health): Mr. Speaker, we're

in constant discussion with the former manager of Canyon Ambulance who

is now an employee of the Provincial Government Ambulance Service, and

that will continue. I wasn't aware that Mary Angers collapsed and I am

very sorry that she did. Other than that I can't give any further

answer. It's a problem that we're hoping to resolve as quickly as

possible.

Interjection.

HON. MR. McCLELLAND: Mr. Speaker, I don't know whether I'd

report to the House. It's a problem which we're having all over the

province with reference to the takeover of some of the ambulance

services. If the member would like to come to my office I'd be happy to

talk with him about it at any time.

CANADIAN HABITAT DELEGATION STAND

ON UNEARNED PROFITS ON LAND

MR. GIBSON: Mr. Speaker, a question to the Minister of

Housing and Municipal Affairs. On June 15, over a week ago, I asked the

minister if he supported the stand taken by the Canadian delegation to

Habitat with respect to recapturing unearned increments resulting from

rises in land values. The minister replied at that time that he wished

to report to the cabinet before answering the question. Since I assume

he has now had time to do so, could he inform the House as to whether

he supported the stand of the Canadian delegation on this topic at

Habitat?

HON. H.A. CURTIS (Minister of Municipal Affairs): To the hon.

member, the assumption is incorrect. There has been just one cabinet

meeting since the question was asked last week, and I have not had an

opportunity to report to cabinet.

MR. GIBSON: On a supplementary, Mr. Speaker. Would the

minister undertake to report just briefly enough to the cabinet during

the next meeting so he can answer this question after the next meeting?

Interjections.

MR. SPEAKER: Order, please. That's not a question. That's a statement.

MR. GIBSON: It's a question.

MINISTERIAL ROLE IN RANGE WAR

MR. D. BARRETT (Leader of the Opposition): I would like to

address this question to the attention of the hon. Minister of Highways

and Public Works. It is concerning this news report of Saturday, June

19 wherein:

"Lloyd Bennett's cattle are in the arms of the law

again but this time there are no signs politicians are going to bail

them out. The B.C. Forest Service officials in Williams Lake confirmed

Friday that they have seized 11 head of cattle that they allege were

grazing on Crown lands without the necessary permission of government.

Bennett has been involved in a range war with the Forest Service.

Cariboo Social Credit MLA Alex Fraser, then a backbencher on the

opposition side of the House, went to bat for Bennett...."

MR. SPEAKER: Could we hear the question, Hon. Member?

MR. BARRETT: Yes, I have to read this. "...went to bat for Bennett..."

HON. MR. McCLELLAND: Why don't you read Hansard of last year?

MR. BARRETT: "...and fired off verbal shots against the government and the Forest Service." Mr. Speaker, I'm coming to the questions.

MR. SPEAKER: Hopefully, very quickly, Hon. Member.

MR. BARRETT: Then I'll defer to Old Bossie. Mr. Speaker, let

me finish my question. It is in two parts. First of all, I want to ask

the minister why, when he was a member of the opposition, he gave

service to this farmer and his cow and now he's only giving them a lot

of bull as a minister? (Laughter.) He went and bailed out the cow last

year. Why isn't he bailing out the cow this year? What is your answer?

Why was

[ Page 3018 ]

the cow bailed out last year but not bailed out this year?

HON. A.V. FRASER (Minister of Highways): Mr. Speaker, I

appreciate the Leader of the Opposition pointing these facts out. I

might say in answer to the first part of the question — or the

statement — that last year I was asked for help and this year I haven't

been asked for any help.

MR. BARRETT: A supplementary, Mr. Speaker. I am now asking the minister for help. Will you bail this cow out as you did last year?

AN HON. MEMBER: Are you the world champion bull-thrower?

MR. BARRETT: I certainly am, and now he's competing.

HON. MR. FRASER: To answer the Leader of the Opposition, the answer is no.

MR. BARRETT: Do you provide one way of service as a member of the opposition and another as a minister?

MR. SPEAKER: Order! Order, please.

Interjections.

MR. BARRETT: I am asking him a question, Mr. Speaker.

MR. SPEAKER: Would you ask the question?

MR. BARRETT: Yes, I am asking the minister if he provides one

method of service when he is in opposition but another method of

service when he is a minister.

HON. MR. FRASER: Mr. Speaker, the answer is no.

SOME HON. MEMBERS: Oh, oh!

MR. BARRETT: Okay. We know what kind of guy — playing politics, that's all.

Interjection.

MR. SPEAKER: Order, please. Allow the hon. member for Vancouver Centre to ask his question.

ADJUSTMENT OF RENT CONTROLS

MR. E.O. BARNES (Vancouver Centre): To the hon.

Attorney-General. Speaking of bailing out, what about the renters in

the province of British Columbia, Mr. Attorney-General? As you know,

they have been saddled with a 10.6 per cent maximum annual increase on

rent and we had intended to bring this down to 8 per cent after this

last election. Now you've been sitting still on this for a long time.

Would you clarify whether or not you are moving in the opposite

direction on the present rent freeze of 10.6 per cent?

Interjections.

MR. BARNES: Mr. Speaker, if this is allowed to remain for

seven years, it will be a 100 per cent increase. It is already close to

50 per cent. Now we have to have something done about that. I'm sure

that he is not going to leave it the way it is.

Interjections.

HON. G.B. GARDOM (Attorney-General): I tend to think that the

hon. member had made his speech earlier this morning, but the second

one was a good one too. I don't think I really need to reiterate to the

hon. member the policy of the government, and that is to hopefully

phase out of rent control as soon as possible, once there is suitable

accommodation. Until such time we are going to have to stick with the

controls.

Interjections.

MR. BARNES: Mr. Speaker, I didn't suggest that you phase out

rent controls. I suggested that you relieve the burden of leaving it at

10.6 per cent which, as you know, in seven years will mean a 100 per

cent increase. You should be either lowering it or setting up....

MR. SPEAKER: Order, please.

MR. BARNES: Mr. Speaker, there should be some way to justify

any rent increase, upwards or downwards, instead of leaving it at 10.6

per cent indefinitely.

Interjections.

PREMIER'S MODE OF TRANSPORT

MR. LEA: Mr. Speaker, I would like to ask the Premier a

question. On April 23 the cabinet met with the Vancouver city council.

Would the Premier confirm that on that day he travelled by limousine

from the Hotel Vancouver to city hall, had that limousine wait

approximately six hours and the cost was about $150?

[ Page 3019 ]

HON. W.R. BENNETT (Premier): No Mr. Speaker, I can't confirm

all that, but I will confirm that the member asked me this question

yesterday. He asked me the question: would the Premier tell me in what

mode of transportation he travelled from the Hotel Vancouver to the

city hall? During that day I travelled by automobile. The automobile

was a 1976 Dodge. It was leased and had been leased by the past

administration...

SOME HON. MEMBERS: Oh, oh!

HON. MR. BENNETT: ...as it was arranged for the Premier this time

to travel around on business in Vancouver under the same arrangements as were

made for the previous government.

MR. LEA: I would like to ask the Premier if he could confirm

that that price of that limousine was $150 and he had to wait

approximately six hours outside city hall in Vancouver.

HON. MR. BENNETT: Mr. Speaker, I can't confirm the price —

the going price the government had paid during the previous

administration, and the same arrangement exists now. But I'm sure that

information can be got from public accounts. I can say that the vehicle

was used for several stops on that day by the Premier.

MR. BARRETT: I never used a leased car in Vancouver.

MR. SPEAKER: Order, please. That's not a question.

MS. BROWN: One hundred and fifty dollars, shocking!

MRS. B.B. WALLACE (Cowichan-Malahat): Order, please, Mr. Speaker.

MR. SPEAKER: One moment, please. Order! I recognized the hon. member for Cowichan-Malahat.

Interjections.

MR. SPEAKER: Order! The member for Cowichan-Malahat has the floor.

TENT ISLAND LEASE WITHDRAWAL

MRS. WALLACE: My question is for the Provincial Secretary.

I'd like to ask whether or not she can confirm that the lease for Tent

Island, which has been a marine park for some time, has been withdrawn,

and if so, for what reasons.

HON. G.M. McCARTHY (Provincial Secretary): Mr. Speaker, I'll have to take that question as notice. I'll bring the information back to the member.

ADDITIONAL SEATING ON FERRIES

MR. GIBSON: Mr. Speaker, I have a question for the Minister

of Transport and Communications. On some sailings, with the increase in

the number of foot passengers on the B.C. ferries, I'm advised that

some ferries are being filled to the point where there's not adequate

room to sit on the main deck. In view of the fact that the rooms

formerly used as a restaurant are now unused and closed, and no

immediate plans for the space, will the minister see that those rooms

are reopened to provide extra seats on these sailings where required?

HON. MR. DAVIS: Mr. Speaker, plans are being made to reopen

what have been dining-room facilities on the ferries, using them for

other purposes, because we expect heavy loads in the future.

CLOSURE OF PORT ALBERNI

ICBC CLAIMS CENTRE

MR. R.E. SKELLY (Alberni): My question is directed to the

Minister of Education. Does he intend, as minister responsible for

ICBC, to close down the claims centre in Port Alberni, which services

25,000 people in that area? If so, what will happen to the staff and

supervisors, and what arrangements will be made to service claims in

the Port Alberni region?

HON. P.L. McGEER (Minister of Education): Mr. Speaker, I am

not aware of any plans to close that particular claims centre down, but

I'll be happy to take the question as notice and see if I can get

further details.

COMPARISON OF FERRY-USE FIGURES

MR. LOCKSTEAD: Mr. Speaker, last Thursday, June 16, the

Minister of Transport and Communications took as notice a question on

how many vehicles and passengers were carried on the major routes

during the first half of this month, and also the comparative figures

from June 1 to June 15 of last year. Would the minister also inform

this House of the corresponding revenues to the ferries in those two

15-day periods? Is the minister now prepared to answer that question,

Mr. Speaker?

HON. MR. DAVIS: Mr. Speaker, I can answer that question in

part. Traffic — and I'm referring substantially to vehicle traffic on

the two main routes — was down about 40 per cent in the first week of

June, and roughly 30 per cent in the second week.

[ Page 3020 ]

Last week it was down around 20 per cent.

It has been improving...the numbers of passengers travelling, as

opposed to vehicles, was not down as much. The numbers of passengers

per automobile were up from 3.1 to 3.6, so more people are travelling.

The drop in passenger travel, in other words, is not down as sharply as

it has been in respect to vehicles. Traffic, however, is improving and

lineups and overloads are now commonplace. Financially, the income is

up substantially over last year.

B.C. COST IN OLYMPIC TORCH-CARRYING

MR. BARNES: This is a question to the hon. Provincial

Secretary: as I understand, the other day she took as notice a question

addressed to the Premier asking what percentage of the $300,000 that

was being appropriated for a group of athletes to carry a torch from

Ottawa to Montreal in a programme co-sponsored with B.C. Industries.

The Premier indicated that the Provincial Secretary would give us the

percentage of the $300,000 that the province would be paying.

HON. MRS. McCARTHY: Mr. Speaker, I don't believe you did

refer it to me, but I'd be very pleased to attempt to answer. I think,

to get the exact information — I only have a generalized figure — I'll

have to bring that figure back to the House.

Presenting reports.

Hon. Mr. Davis presents a report from B.C. Hydro and Power Authority for the year ended March 31,1976.

Orders of the day.

HON. G.M. McCARTHY (Provincial Secretary): By leave, Mr. Speaker, second reading of Bill 81.

Leave not granted.

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

ESTIMATES: DEPARTMENT OF

MINES AND PETROLEUM RESOURCES

(continued)

On vote 130: minister's office, $80,964 — continued.

MR. G.F. GIBSON (North Vancouver-Capilano): Just before lunch

I had some things to say about undersea mining which I hope the

minister will respond to in due course. I'd like to ask him about a

very curious case, however, which I think could pose some potential

danger to the public, and that relates to the way in which blasting

ticket courses are administered by his department. There was a case up

in Stewart earlier this year, I believe — which was reported to the

RCMP, so I can tell him that it's no current matter of public urgency —

in which a man got a blasting ticket under somewhat curious

circumstances and then left the country in a way that I'll relate later.

The blasting ticket course, which deals with the management and

handling of all kinds of explosives, including not just the explosives

themselves but the fusing devices and the timing devices, is, according

to my understanding, administered by his department. The training is

given by the various mining companies around the province. My

understanding is that it generally requires something like eight hours

training.

In this particular case it was training given in a room off the

first-aid room on the Granduc property. The usual development is that

the company gives a provisional ticket which is good for use only on

the property itself and then the mining inspector gives the final

approval.

Interjection.

MR. GIBSON: No, this is up at Granduc, Mr. Member. It has

nothing to do with the particular location or company. It could have

happened anywhere in the province. It's the tightness of the

regulations I'm concerned about.

My understanding is that it happened earlier on this year. In this

particular case the man concerned expressed interest in making

explosives and particular interest in timing devices, went through the

course, obtained a provisional ticket and then left the country and

went back to Ireland. There are obvious grounds for concern there. It

was, I'm told, reported to the RCMP and various enquiries were made, so

I'm not reporting to the minister a matter of public urgency, but what

I'm saying is that anybody in any capacity in a mining operation who

expresses interest can get this kind of training, according to my

understanding. The minister may be able to set me right on that.

I would ask him if, in view of this particular case, he could tell

us if he has given any thought or if he will give thought to tightening

up the conditions surrounding the ways in which persons can gain the

technical skill and knowledge necessary for the making of explosive

devices, which is a skill that

[ Page 3021 ]

might conceivably be misused. I think it would be a very rare case

where it would be, but on the other hand I'm certain that we in British

Columbia don't want to, in effect, operate schools for persons who

would make loud bangs in places other than mines in various parts of

the world. I wonder if the minister would comment on that.

MR. W.S. KING (Revelstoke-Slocan): Mr. Chairman, I had

expected the minister to rise and be anxious to give information to the

House so that his estimates might speed through, but he seems to be

continually reticent in terms of explaining the administrative

functions that reside under his department. I would have thought, in

light of the last few weeks, that that minister would have been a bit

more prepared to be frank and candid with the House and to be

cooperative in terms of supplying information and answering questions.

I am concerned about the same point the Liberal leader raised, Mr.

Chairman, not only with respect to the safety of blasting permits, but

with respect to the criteria used for withdrawing those certificates. I

understand there have been occasions where persons who have been

charged with an offence and convicted under

summary convictions have

had their blasting certificates withdrawn and in essence lost their

opportunity to pursue their normal vocation and to continue to enjoy a

decent livelihood.

I wonder if the minister could give us some indication of precisely

what criteria apply in the case of criminal convictions or convictions

under the

Summary Convictions Act with respect to withdrawing or

cancelling blasting certificates. Is it necessary that the conviction

be related to a crime or an abuse of the certificate they hold, or

might this be cancelled just for some ordinary unrelated criminal

offence? I would like some information on that.

HON. T.M. WATERLAND (Minister of Mines and Petroleum Resources):

Mr. Chairman, regarding blasting certificates — questions from the

member for North Vancouver-Capilano (Mr. Gibson) and Revelstoke-Slocan

(Mr. King) — the Department of Mines does not offer training courses

for people wishing to obtain blasting certificates. Our function is to

examine people so that we can be assured that they are competent to

conduct blasting operations. There is no such thing as a formal

training programme put on by the department, although some mines do

conduct formal training programmes. The usual course, however, is that

a person becomes familiar with handling explosives through practical

experience. He must then pass examinations regarding his ability to

actually conduct blasting operations and his knowledge of blasting

regulations in the Department of Mines.

I cannot recall at this moment any instance where a person's

blasting certificate was withdrawn because of convictions for another

offence. However, I could think of circumstances where this might be

necessary. When I was an inspector of mines I did withdraw a person's

blasting certificate when evidence was produced that the person was

perhaps not emotionally stable enough to safely conduct blasting

operations. Of course, we are very concerned about the safety of people

in mines. We want to be as sure as possible that those handling

explosives are emotionally and technically capable of doing so.

As far as limiting people to whom you issue blasting certificates

because perhaps they may go to Ireland and get involved in other types

of blasting, I think this would be something that would be very, very

difficult to police. If we have any indication that a person is so

inclined, of course, we would be very reluctant to issue him a

certificate. But we have no formal programme at this time for screening

that type of motive that a person might have.

I might comment briefly on the remarks the member for North

Vancouver-Capilano made regarding undersea mining. He's quite right. I

think sometimes in the not-too-distant future underwater mining

technology will be developed to the point where it is economically

feasible. To this point I don't believe it is. I also am aware that

there are mining companies whose headquarters are in British Columbia

engaged in research by themselves and with companies from other

countries in this technology.

However, I think we must also realize that this technology is still

in its infancy and that there are going to be tremendous jurisdictional

problems as far as undersea mining is concerned. There are also going

to be tremendous environmental problems. I understand now that in the

state of Hawaii of the United States there is quite a lobby against any

possibility of any undersea mining in the vicinity of the Hawaiian

Islands.

That member also made mention of the very thin edge which we now

have as far as our costs in mining are concerned and that perhaps in

the not-too-distant future we are not going to be able to mine

economically in British Columbia. I recall a speech given by a senior

member of the Department of Mines in about 1950. At this time the

gentleman said: "There are no new mines going to be found in British

Columbia; we have found them all." He was thinking of the type of

mineral deposits that were required at that time, and of course, we

realize what tremendous advances have been made in mining technology

since that time. He couldn't have conceived of the idea that people

just a matter of 10 or 15 years later would be mining ore deposits,

copper deposits, of less than 5 per cent.

Personally, I have a great faith in man's ability to develop new

technology. Perhaps in the not-too-distant future we will be mining ore

of much

[ Page 3022 ]

less grade than that. Mining technology is developing at a rapid

pace and I am sure there are many more breakthroughs to come. I tend to

be optimistic. I know there are gloom-and-doom prophets who say that in

a few years' time we will not be able to afford to mine.

But really, I do think that our technology will advance. Also, the

steady demand of the world for metal products will have to force the

price of these products upwards. Hopefully, the price of the minerals

which we produce will go up, our mining technology will advance, and we

will be able to have a viable mining industry.

I think just as important as technology and the price of metals,

however, is the stability of the financial and political climate in the

province where we're producing minerals. The industry must have

predictability. Regardless of what type of taxation system you have, it

must be such that a return for investment will be provided. It must

also be predictable so that in the future prices and costs will be able

to be predicted and returns also predicted to justify the very large

capital expenses required to place our mines in production.

There was a question from the member for Alberni (Mr. Skelly) a few

days ago — it seems like a month ago — regarding the Mineral Processing

Act which came into effect, I believe, in the late 1960s. This Mineral

Processing Act provided that 50 per cent of the products of mines — the

concentrates — could be directed at the pleasure of the government to a

particular smelter. By order-in-council, sometime after this

legislation came into effect, that 50 per cent was reduced to 12.5 per

cent.

It was at about this time that the Lornex mine...financing was

attempted to be arranged. That company found it impossible to arrange

financing for that property, which, by the way, cost in excess of $200

million even four or five years ago. That company found it impossible

to arrange financing as long as that 50 per cent direction clause was

in the Mineral Processing Act. I don't think that is the type of

legislation which will encourage mining development, and I'm certain we

will have to have a look at it in the future.

MR. KING: Very briefly, I am intrigued by the minister's statement

that the mining industry needs a predictable climate. I want to say, Mr. Chairman,

that there could be no more predictable climate for any industry or any individual

in the province than to allow them to write their own ticket with respect to

taxation laws and so on. If that's the justification the minister is putting

forward for involving people in finding tax legislation over the mines of the

province of British Columbia who are privy to major developers, then I say it's

a sorry day for the people of British Columbia. However, that's an observation,

Mr. Chairman.

I want to elicit from the minister some more precise information in

what he gave. Perhaps I didn't frame my question well enough at the

outset. The real thing I'm looking for in terms of the Department of

Mines administration of blasting certificates is to learn the precise

criteria under which these certificates are revoked, rescinded or

suspended. I can well appreciate that there are circumstances where

this kind of action must be taken. But I am equally concerned, Mr.

Chairman, that on those occasions there be a framework for a proper

hearing to ensure that when the serious step is taken of in effect

removing one's right to a certificate to practise a vocation and earn a

livelihood, there is indeed justification for such a move, and, more

importantly, that there be a framework and a mechanism for a proper

appeal. Is the practice by the Department of Mines to arbitrarily

revoke some poor individual's licence and say: "You're banished for all

time, on the basis of my arbitrary appraisal of your conduct, of your

criminal record, of your proficiency, of your mental stability"?

I say those are rather threatening and rather dangerous prerogatives

to hold in the hands even of that innocent-looking little minister, Mr.

Chairman. I think that they are extremely dangerous powers unless there

is a mechanism for review and a mechanism for fair hearing and

representation on the part of the individual involved. That's the kind

of assurance I'm looking for from the minister.

HON. MR. WATERLAND: Mr. Chairman, in response to the question

from the member from Revelstoke-Slocan, the, procedure right now in

issuing of blasting certificates, as was outlined by the member for

North Vancouver-Capilano (Mr. Gibson), is that the person must have a

demonstrated competency to blast to receive what we call a permanent

blasting certificate; a provisional blasting certificate can be issued

by the management of a mine once they have satisfied themselves that

the person is competent to blast. That certificate is restricted to

that particular mining operation.

As I said also, there's no formal training programme, but the mines

inspectors do conduct examinations in proficiency. I have been involved

myself in suspending people's blasting certificates, and it's a thing I

never did lightly. There's one case in particular — and perhaps the

member from Revelstoke-Slocan is aware of it — and that was a situation

in the Craigmont mine in Merritt where a gentleman was involved in a

train accident. During an arbitration hearing over the action taken

against him, it was noted in the hearings that this person was of a

panicky nature and tended to get excited. In fact, this evidence came

forth from the union that was representing him. When I heard this, I

did suspend

[ Page 3023 ]

that person's blasting certificate, because I didn't want a panicky,

nervous, excitable person blasting. I said to him that his certificate

would be suspended until such time that he could bring the evidence

from a medical practitioner that he is emotionally stable enough to

conduct blasting operations.

I think I must agree with the member that although at the present

time there is not a review procedure and there has never been in the

Mines Regulation Act, perhaps a review procedure would be in order.

Anybody can be wrong. If the certificate is wrongfully suspended it

does affect that person's ability to earn an income, and I think I

would be in favour of such review procedures.

MR. KING: Mr. Chairman, I appreciate the minister's comment

and I hope he will look seriously into setting up a framework where

there is a common law requirement of redress and appeal open to the

individual. What really bothers me is the right of any government

bureaucrat to make arbitrary assessments of an individual's

psychological stability. The minister talks about a person in his

riding who was panicky. I don't know if that's a particular

characteristic of people from up in that area, but I hope that the

Premier doesn't start passing judgment on his ministers on the basis of

whether or not they're panicky, because the Minister of Mines might

find himself out of a job, too. He may lose his certificate, Mr.

Chairman.

I do want to thank the minister for indicating that he will look

into this. I'm sure he and his good friend and seatmate, the legal chap

from Kamloops (Hon. Mr. Mair), would agree that every department that

holds a regulatory authority of this nature should provide an open and

a fair mechanism for appeal on an understandable criterion of

application. Otherwise, the way is left open to abuse and to

discrimination on a variety of grounds. Justice has to be seen to be

done as well as be done.

MR. L. NICOLSON (Nelson-Creston): Mr. Chairman, the concern

that I have is one which results from an amendment, I believe, to the

Mines Regulation Act whereby reclamation permits were also required for

gravel operations. I would like to bring to the minister's attention a

loophole that is certainly causing a great deal of distress in my

riding. I have a copy of a letter to the chief inspector of mines from

a Mr. Norman Thyer re the permit authorizing surface work, sand and

gravel pit No. G-101, issued on February 19, 1974, to Mr. Henry Zukowski

of 507 First Street, Nelson, B.C. I guess that was fairly soon after

the regulation was enacted.

It was issued to him, Mr. Thyer contends, and this gravel pit, I

would imagine, would be near the Sproule Creek Road, just a little bit

out of Nelson. It appears that there was a failure to follow.... He

says:

"Dear Sir:

"It appears there was a failure to follow the correct

procedure as classified in

section 11 of the Mines Regulation Act when

the above permit was issued. In particular, regarding

section 11(4),

it appears there was no notice published in the Gazette or any local

newspaper, and I was denied my right to make representations as

provided for under

section 11(5).

"In view of this, I request that this permit be set aside

immediately and that I should be allowed adequate opportunity to present my

objections before the suspension is lifted."

The letter is dated June 18, 1976, and it is not that I am saying he hasn't

had a response yet. He's sent copies to myself and to the minister, but

it was directed to the chief inspector of mines.

I would like to add to this, though, Mr. Chairman, that this very

same individual, Mr. Zukowski, appears to be exploiting a loophole —

and I've discussed this with the local mines inspector — in the Act,

and that is that he is transporting prodigious amounts of gravel from a

piece of land which he's not legally operating as a gravel pit. First

of all he started to remove some of the overburden, and it was used as

land fill which he, I believe, gave to the city of Nelson as part of

their waterfront land reclamation project. He might or might not have

been reimbursed for the truck traffic and for the transportation. I

don't know about that.

What I do know is that he is now using the material as part of

operations of another housing development which he is building within

the city limits. Now this second site is on Johnston Road, directly

across from the city of Nelson, and it's fairly densely populated urban

residential area, or a developing urban area, if you would. It's in the

unorganized area, of course, of the regional district of Central

Kootenay, but it appears that since money is not being paid and the

gravel is not actually being sold, it doesn't fall into the regulations.

To point out the seriousness of this, I've looked at the site — I

regret I didn't have my Polaroid camera with me the day I was up there

— but I would estimate that excavations have taken place nearly to the

border of a very nice home, right up to the property boundary, and

there must be a good 30-foot drop-off created. The landscape...while

I'm not an engineer, I could say that future use of the land is almost

prohibited.

[Mr. Rogers in the chair.]

So on the one side it has encroached upon a person's property, their

home, and I'm sure they moved there feeling that they had some sort of

[ Page 3024 ]

security. In fact, they feel: "Well, can't government protect us? There must be something we can do."

I started trying to find something to do. I first became aware of

this problem actually during the last provincial election. We tried,

and the local inspector of mines attempted, but the legislation falls

short. It is something that either the minister, who I think is the

most directly charged at present, or the Minister of Environment (Hon.

Mr. Nielsen) have got to address themselves to, because once a loophole

like this is discovered, it gets bantered about and there could be a

terrific proliferation of it throughout the province, much to the

dismay of people who will one day find next to them a gravel pit

through lack of action, perhaps, towards proper zoning and protection

of property rights through regional districts.

I think that the provincial government level has some responsibility

in this area. I certainly would have sought to have some input into

some legislation, and that's what I'm attempting to do here today

during the minister's estimates.

I would go further and point out that on the back boundary of this

property — I don't know if it's the boundary of the property — there is

an easement for West Kootenay Power and Light, and it's also up very

close to the power line. If it were extended, I would say that a slump

could actually cause that power line to come down, but because there's

no way of controlling this type of excavation, it's rather difficult.

I might bring up another point, too, in passing, and a concern in

the area of the Reeves Macdonald mine which was recently closed down. I

would like to know if the reclamation work is taking place. I would be

particularly concerned about a vent hole which exists, I am told. A

hunter or someone might wander on to that property, children or others,

and could actually fall into it if it's not properly sealed off. The

last time I checked, certainly nothing had been done in that area. I

would like to be assured that the Act is being carried out.

I don't think it preclude the opening of that mine if they should

find that the Red Bird ore property is worth exploring, or something at

some future date. I understand they've sealed things off internally so

pumping operations would be facilitated to get into some of the

prospective ore properties adjacent to the Reeves Macdonald property.

Is reclamation taking place, and particularly what I understand to be a

large open vent hole?

HON. MR. WATERLAND: Yes, the letter you referred to, to the

chief inspector...I forget the name of the person who wrote it, but I

did receive a copy of that, and I immediately contacted the chief

inspector asking him to be sure that the matter was looked into. There

are, of course, ways of getting around most laws, and as time goes on

we gradually get the loopholes filled in.

A circumstance where somebody is taking gravel from one place to

another, and calling it a residential housing development, or where the

fill is going into the development — it's one of these borderline

things which I think is quite difficult to enforce. However, we are

looking into it and when I get an answer I'll be very happy to report

back to that member.

So far as the Remac or the Reeves Macdonald mine is concerned, there

is a possibility this mine may reopen. In the meantime the company does

have a watchman at the site all the time, and I understand that the

areas which provide access to the various openings through the surface

are barricaded up. Whether they're adequately done I don't know; I

haven't seen the property. The mine is permanently closed, and of

course, all the reclamation work must take place.

That member is familiar with the Salmo operations of Canex Placer

which shut down a year or so ago. I personally at that time was doing

some work in the area and all the mine openings were safely closed off

and reclamation work started at that time before I left — I haven't

been back since. But this type of thing is done and you can be assured

that that mine will not be reopened and all the openings will be

permanently closed off so as not to create a hazard to the public.

MS. K.E. SANFORD (Comox): Last time we were discussing this

minister's estimates, there was a good deal of reference made to the

people who were involved in drawing up the legislation for this

minister, and, as you recall, the sittings at that time became quite

heated.

But I would like to make the comment, Mr. Chairman, that it's quite

obvious that those who were drawing up the mining legislation — and I

would assume that this is under the direction and the guidance of the

minister himself — were going to have that legislation for the benefit

of the mining industry, largely foreign-owned and certainly not for the

benefit of the people of this province. I think it's shameful that our

ore, which belongs to everybody, is again going to be given away free

of charge — "Help yourselves, mining companies."

I think it's unfortunate that a tradition which has been established

for a long time, a principle that has applied for a long time in the

forest industry — that is, stumpage rates, paying something for the

resource you're getting — is being eliminated under the direction and

guidance of that minister. I think my point with respect to this

giveaway is that made by a couple of headlines in a local paper, the

Campbell River paper, very recently — one on top of the other, and

which illustrates very well the point I'm trying to make here this

afternoon.

[ Page 3025 ]

The first headline says: "Mining Firms Very Happy With Socreds." The

second headline, right underneath it, Mr. Chairman, says: "Ferry Fares

Up, Traffic Down." The

article underneath the second headline starts

out by saying:

"The Shoreline Motel on the Island Highway South of

Campbell River has been flying its flag at half mast during the past

week to mourn the drop in tourist traffic since the ferry fare increase

went into effect at the first of this month."

So there you have the two headlines. Both of these are directly

related to the attitude and the approach that this government takes.

Let's give it away again to the mining companies and let's sock it to

the people.

Mr. Chairman, time and time again in this House after the government

has brought in measures such as doubling, tripling ICBC rates, 40 per

cent increase in sales tax.... You know the list. We've heard it many

times in here. When they have done all those things and then doubled

the ferry rates...

MR. D.F. LOCKSTEAD (Mackenzie): Tripled in some cases.

MS.SANFORD: ...tripled in some cases, as my colleague from Mackenzie states....

MR. CHAIRMAN: Hon. Member, we are on the Minister of Mines.

MS. SANFORD: Yes, and this is directly related, Mr. Chairman. You don't recognize that this is directly related.

When we have gone through all those changes and then have a doubling

and a tripling of the ferry rates, and the government over there is

busy giving away the ore under the direction of that minister — when

that happens, those of us on this side say: now that you have made all

of these changes, the least you can do is to conduct an impact study on

what is happening to the people that are affected in these areas.

I've asked at least twice in this House if the government will

conduct some kind of impact studies to see what is happening as the

result of their policies. Every time the answer has been a flat "no."

"No", says the Premier, "we won't look in to find out why this

businessman is flying his flag at half mast. We're not going to worry

about what effect an $80 return trip for a car and driver to Vancouver

is from places like Alert Bay and Sointula. We're not going to worry

about that. We're not going to study that." When it comes to the mining

industry and the approach that that minister takes to the ore in this

province, that is a different matter. We certainly will treat them

quite differently than we treat the people of the province.

This industry is largely foreign-owned, and this is the industry

that campaigned vigorously against the previous government and is now

getting its rewards. "Mining Firms Very Happy With Socreds" — Sure they

are.

Why doesn't that minister, Mr. Chairman, ask the motel operator in

Campbell River who is flying his flag at half mast these days what he

thinks about giving the ore away in the province? Why doesn't he ask

that person who is now forced to pay $80 for his car and the driver to

get to Vancouver from northern Vancouver Island? Why doesn't he find

out from them what they think about giving the ore away? Why doesn't he

ask the teacher and her students in the Courtenay area who had worked

for an entire year to raise enough money to take a ferry trip to

Vancouver during June, and then they find at the last minute that the

rates have been doubled and they have only half enough money to pay for

their fare across there? Why doesn't he ask them what they think about

giving the ore away?

We brought that to the attention of the Minister of Transport and

Communications (Hon. Mr. Davis) and said, "Look, these kids have worked

all year to raise enough money to give them this trip to Vancouver.

Will you give them special consideration just once?" "No," said the

Minister of Transport. But the mining industry gets special

consideration. They get a fine deal in this province.

Mr. Chairman, the mining industry last year in this province was in

trouble, as was the forest industry, as were a lot of other businesses,

because last year was not a good year economically anywhere in B.C., in

Alberta, in the rest of Canada, or in North America, or in many other

parts of the world. No one denies that.

When the price of copper plummets down, because copper is one of the

major ores that is produced in this province, the mining industry is

going to be in trouble. There's no doubt that they had difficulties

last year. But at the same time, it was rather convenient for the

mining industry to have the prices drop last year, because it gave '

them an ideal opportunity to yell about having to pay a mineral

royalty. They yelled lots. They yelled during the campaign. They yelled

before the campaign. They cried the blues everywhere.

Mr. Chairman, I do support the mining industry in this. They contend

that it is unfair for the federal government not to allow them to count

the payment of mineral royalties as an expense. The federal government,

as you know, made changes on this and requires them to pay tax on their

mineral royalties. I agree with them on that, but a royalty in this

province is a legitimate business expense.

They are paying for something they are receiving from the people of

the province, and it should be there; it should remain. But it was

convenient for them last year because they were able to get the

[ Page 3026 ]

sympathy of a lot of people because they were in trouble financially, all over.

Mr. Chairman, when that mineral royalty legislation was initially

introduced by the previous government, there were some very interesting

comments that came out from the mining companies. I think the Minister

of Mines should be informed about these comments, or at least should be

reminded of them if he already knows about them.

The mining companies sent out a handbill asking for a meeting — the

British Columbia and Yukon Chamber of Mines. They talked about the

mineral royalties bill, and these are some of the comments they made

about the bill after it was introduced by the previous government. You

know what they called the government? A bunch of crooks. Not very

parliamentary, Mr. Chairman — a bunch of crooks. One of the things they

said at that time I would like to quote and read into the record:

"These people — referring to the government — "want to destroy us,

destroy our way of life. They want to install an eastern European type

of Socialism." Then they said: "Let's counter-attack so they will know

who runs this province." Now I ask you — "the government will know who

runs this province"! Now that this bunch is back in, we know who's

running the province again. We know.

MR. KING: Dan Campbell.

MS. SANFORD: Right, Dan Campbell. I don't disagree with you.

MR. G.S. WALLACE (Oak Bay): Do you know Dan?

MS. SANFORD: I've heard of him. Yes, I've heard of him, Mr. Member for Oak Bay.

But, you know, the attitude of this government and this minister is

really very similar to that held by the previous government and, I

think, one P.A. Gaglardi, a cabinet minister in the former government

and, yes, an MLA for Kamloops. I'm sure that scares you, Mr. Minister

of Consumer Services (Hon. Mr. Mair) to realize that he was once

representative for your area.

Mr. Gaglardi expressed the philosophy of the former government, this government

and this minister by the comments he made some years ago. This is what Gaglardi

said: "God put the coal there for our use, so let's dig it up. Never

mind the pollution that will come from Kaiser coal mine." Then he later

said: "Greed was given to us by God, and without that greed, there is no

progress, no incentive to build a better Canada." Without that greed! We

are encouraging that greed by the approach taken by the minister to his department,

Mr. Chairman.

So what is he suggesting instead? "Oh, we're going to tax their

profits," he says. "We're going to tax their profits." But the federal

tax policies, as most people recognize in this country, are generally

designed to provide welfare for the undeserving. And if you look at the

various tax concessions, loopholes, escape routes and depletion

allowances that the companies have had over the years under the federal

tax structure, then you begin to question what kind of money the

companies are going to pay under the policies of this particular

minister.

Let's look at some examples of the kind of payments made by

companies under the federal tax policies. In 1969 — and this goes back

a few years, I recognize — 87 per cent of the 268 metal mining

companies paid no income tax. None. Eighty-seven per cent of the 268

that were operating in this country. Now I ask you, Mr. Chairman: what

kind of a tax policy is that? These companies are doing fine. Western

Mines in my own constituency — and this is in 1973 — earned a profit of

over $5 million. Do you know how much they paid in taxes, Mr. Chairman?

I think this will surprise you — not one cent.

Interjection.

MS. SANFORD: Not one cent to the people of the province who own that ore, and not one cent to the federal government in tax, Mr. Member.

MR. CHAIRMAN: Order, please! The hon. member for Comox has the floor.

MS. SANFORD: Mr. Chairman, I tried to find out what the other

mine in my constituency makes, what kind of profits are made there. At

least Western Mines publishes quarterly reports and gives you some

inkling of what's going on. So I wrote to the other mine within my

riding, and I think, Mr. Minister, this is something that should

concern you.

I wrote to Utah Mines, the Island copper mine up in Port Hardy, and

asked them for a copy of their annual report, because for some reason

or another they had not put me on their mailing list. I received the

following letter which, Mr. Minister, I think should really concern you.

"Utah Mines Ltd. is a wholly-owned subsidiary of Utah

International Corp. and as such does not publish quarterly or year-end

reports. The parent company reports are not relevant and will only

contain comments on the Island copper mines, as the data is commingled

with other Utah ventures." Well now, isn't that interesting? So we

don't even know what kind of profits they're making or what kind of

taxes they're not paying, Mr. Chairman.

The philosophy of the federal government, as far as this tax policy

is concerned for mining companies and for most industries, is that you

sweeten the pot

[ Page 3027 ]

at the top a bit and then maybe there'll be some money that trickles

down somehow to those people who are in the low-income brackets or

living below the poverty line. David Lewis, at the federal level, has

time and time again referred to this particular philosophy which has

been promoted by right-wing groups, whether they be Liberal,

Conservative, Social Credit or coalition, as this is.

The issue of taxing and tax loopholes, as expressed by David Lewis

in a book that he wrote called Louder Voices, is: "By what means do

before-tax profits of $1.13 billion in the mining and petroleum

industries" — which he was referring to at that time, and I am talking

about before-tax profits of $1.13 billion — "shrink to a taxable income

of $136 million?" Mr. Lewis aptly notes that the touch of metamorphosis

is well beyond the ordinary taxpayer. There is no way that he can

suddenly shrink his taxable income in the same way that mining and

petroleum and other industries can. Just try it if you are an ordinary

taxpayer. You can't do it.

So this business of taxing profits is something that I am very

sceptical about, and I am certain that the return to the people of the

province for their ore will be less than it was under the previous

government — the previous Social Credit government.

Interjection.

MS. SANFORD: It is unfortunate when people are forced to pay

the kind of increases that this government is making them pay. Western

Mines, within my own riding, prepared brochures for the tourists who

they took through their mines, conducted tours, and those brochures

cried the blues and indicated to tourists who are coming through that

"Oh, the B.C. mineral royalties were doing us in." They didn't mention

anything about copper prices or anything of that nature.

But do you know what was happening at the same time that these

brochures were being handed out to tourists coming through the mine,

crying the blues about their profitability, that they might even lose

money, that they had to lay off 75 guys up there because things were so

tough?

Do you know what was happening at the same time, Mr. Chairman?

Brascan was wanting to buy the mine. Brascan! They were negotiating.

They were fighting for the controlling interest of Western Mines while

all this crying was going on about mineral royalties introduced by the

previous government. What a laugh! Mr. Chairman, Brascan does not buy

into a mine unless it thinks it can make a profit. Based on the stories

that Western Mines was telling our constituency and telling the

province, that they were in deep trouble financially, certainly no one

would want to buy that mine. Brascan is not operating in Brazil out of

a love for the peasants there.

AN HON. MEMBER: How do you know?

MS. SANFORD: They're operating for the profits, and all you

have to do, Mr. Member for Omineca (Mr. Kempf), is read something about

that company and you'll recognize that they are not operating there

because they're concerned about the residents or the peasants of....

MR. F.A. CALDER (Atlin): What's wrong with profits?

MS. SANFORD: Mr. Chairman, I'm not going to respond to that particular comment.

Interjection.

MR. CHAIRMAN: Order, please. The hon. member for Comox has the floor.

MS. SANFORD: You know, now that we have this coalition and

that particular Minister of Mines (Hon. Mr Waterland), I expect that

the mining companies are happy, but I know that the people are very

unhappy. I know that the people within my constituency do not like to

see the ore given away again by that Minister of Mines while they're

facing the kind of increases that they've had to face within the last

six months.

But there's no doubt that this headline, Mr. Minister of Mines, is

accurate: "Mining Firms Very Happy With Socreds." Thank you, Mr.

Chairman.

MR. LOCKSTEAD: Mr. Chairman, I have a few questions for the

minister. Perhaps when he rises in his place to reply to the hon.

member for Comox he will reply to some of these questions as well. I am

particularly concerned about a mine in my riding known as Texada Mines,

an iron-ore property located on Texada Island. This mine is a

wholly-owned operation — wholly owned by the Kaiser people in the

United States, based in San Francisco.

Interjection.

MR. LOCKSTEAD: Yes, I'm not sure, but this is certainly a wholly-owned Kaiser property, Mr. Minister.

Anyway, it is well known. I think your deputy is reasonably familiar

with this case, and I hope you will be as well. This mine will be

shutting down in the near future. I would like to know, Mr. Minister,

if you are aware of exactly when this mine may be shutting down.

Now there is no question that if and when this mine does shut down — it is my understanding that it

[ Page 3028 ]

will be this year — first of all, it will have a tremendous impact

on the community which it serves and in which it is located. There are

people working in that operation; we don't know what is going to happen

to many of those people. How are they going to be relocated if the mine

does shut down?

But I would like to know if that mine has been worked in the best

possible way. I haven't been down into that mine for some time and, of

course, there is no way for me to know, but I understand, according to

some employees, that a certain amount of high-grading has taken place —

so-called high-grading. That is, mineable ore was left in the ground

because of declining world markets and prices.

I know that your department would likely have some information on

this. I would be very interested in hearing from you, Mr. Minister, if

that mine was mined in the best possible way. I would like to know as

well if on that particular property there are still copper bodies that

perhaps should be mined, or could be mined, prior to the mine shutting

down. Does that company have any intentions of working the copper

values on that property?

Interjection.

MR. LOCKSTEAD: An interjection from the member for Columbia River.

I wonder if the minister could as well tell this House how much

profit the Kaiser people have taken out of this country. How much money

have they actually taken out of this country that should have perhaps

stayed here for redevelopment? How much? What was the profit that was

taken out of this province and out of this country, Mr. Minister?

MR. CHAIRMAN: Would the hon. member kindly address the Chair?

MR. LOCKSTEAD: Yes, Mr. Chairman.

Finally, Mr. Minister, I would be very interested in knowing from

you if any impact studies are being contemplated for Texada Island and

that regional area, because there will be a huge impact on that area

when that mine does finally shut down.

HON. MR. WATERLAND: Mr. Chairman, I was going to reply to

some of the questions asked by the member for Comox (Ms. Sanford) but

she doesn't seem to be here any longer. I guess she wasn't interested.

However, I will make a few remarks about her remarks.

Foreign ownership: she referred several times to this large foreign-owned mining

industry in British Columbia. Members opposite, I know, have the Price Waterhouse

report because they have referred to it on many occasions. The 1974 report,

which was the last one issued, indicates that in British Columbia in 1974 the

mining industry shares were 56 per cent owned by Canadians, which was down 2

per cent from what it was in 1973.

As far as the value of shares owned in the mining industry in

British Columbia, in 1973 it was 64 per cent — that's the value of the

shares owned. So the mining industry in British Columbia is not owned —

not even majority-owned — by foreign investment. However, we do need

foreign investment to help develop the mines because it is a

tremendously expensive undertaking. I would like to see more Canadian

participation, and I believe that through federal government incentives

perhaps some day British Columbians and Canadians will have more

incentive to actually get involved in their own industry. I don't think

we can encourage Canadians to invest in this industry by discouraging

foreigners. I think we should have a little bit of a tax advantage as

individuals if we invest in a high-risk industry such as mining.

The member also referred to the ripoff and the tremendous profits

made by mining companies. She said that the reason that mining

companies didn't come out in British Columbia in the last few years and

develop more mines is because we had low metal prices. But in the last

few years, Mr. Chairman, we have had the highest copper prices in

history — still no mines were developed in British Columbia.

I am not saying this because it is a politically motivated thing,

but I feel very strongly that an off-the-top royalty will discourage

mining, and I think this has been demonstrated.

For example, I have some figures here which I copied down several

months ago. They're for the first six months of last year. Gibraltar

Mines, for example, had a gross operating profit in the first six

months last year of $584,000, and they paid taxes of $980,000. That's a

pretty high tax rate.

Noranda Mines, for the first six months last year, had an operating

profit of $686,000 and they paid taxes of $775,000. Bethlehem Copper:

their mining income for the first six months of last year was $560,000

— which is very, very low considering the cashflow at that property —

$560,000 mining profit, B.C. royalties and taxes $639,000 and federal

income tax $121,000. Even though they had an operating profit, they

wound up losing over $200,000 after taxes. These are figures from their

annual reports and audited statements.

Granduc, in that same period of time, had taxes and royalties of

$451,000 in spite of a total loss, including those taxes, of $850,000.

We really do need investment in British Columbia mining if we are

going to develop the people's resource. I don't think you can properly

compare mining royalties to stumpage on timber. The, royalty that is

paid by mining companies is the tremendous cost of exploring for and

finding the mineral deposits

[ Page

3029 ]

and the much higher risk nature of that industry. In the forestry

industry it is to a certain extent high risk, but at least you can go

out and feel a tree and touch it and say: "This is a tree and that's

why I'm buying from the government." In mining, a great deal of money

is spent before that resource is ever found and developed, and I think

we must recognize that.

As far as Texada Mines is concerned, the member for Mackenzie (Mr.

Lockstead), I realize the ore deposit there is being depleted. Our

department has been talking with Texada about just what ore reserves

they have left, and this change in mining taxation which is coming up

now will favourably affect the life of that mine. As you know, ore is

defined as that mineral commodity which can be economically extracted,

and if you have a royalty on top of the cost of extracting that ore, it

adds to the cost and makes material that was ore into waste. By

removing the royalty and going to a profit-based tax, the mine will

last longer — how long, I don't know.

The Department of Mines is not involved in plans for what happens

for the future of the community there. I hope there will be other mines

coming on stream which will at least replace the jobs which will be

lost when that mine shuts down, and, believe me, every mine operating

in this province will someday shut down. I have personally lived in

five different communities which were dependent upon a mine, and these

five communities all were abandoned when the mine closed down, because

it was the only reason for them being there. In all cases there are

other mines to go to for the people employed there.

I don't think we can say that when an ore deposit is depleted the

mining company must continue mining a waste rock. That is complete

unrealistic and would require a subsidy from the government. I think it

is much better that they are involved in economically viable ventures,

because so long as we have the proper climate, new mines will come to

replace those that close down.

We are continuing to study the Texada situation, as far as I know.

As a matter of fact, I have a report in my office regarding the mining

method used and the recovery of the ore that has been carried out. I

haven't had a chance to study it in detail, but the opinion of the

engineers who did was that the mine is doing a reasonably good job

under the conditions which they have to mine all possible ore.

That member for Mackenzie mentioned also that some high-grading went on.

Interjection.

HON. MR. WATERLAND: He said it was reported that some high-grading was

going on. Well, high-grading is a hard thing to define. As metal prices go down,

in order to profitably extract ore you must go to higher grade material, and

this is done....

Interjection.

HON. MR. WATERLAND: Well, it did to a certain extent. In

fact, royalties, especially with our large core-free deposits which

generally consist of the higher-grade core and the marginal material on

the edge of it...adding the cost of the royalty to the cost of

extracting that low-grade ore in many cases made it unprofitable.

However, mining companies who have surface mined generally stockpile

this material in hopes that at a time when metal prices are high they

will then be able to run that material through the mill, because at

that time the only cost is really picking it up again and putting it

through the mill. They do their best to extract all possible value from

the rock.

High-grading is a term that, well, comes down through history. I was

thinking of the fellow in the high-grade gold mine taking a chunk and

putting it in his lunch bucket and taking it home. That type of

high-grading is really not done in the large, sophisticated mining

industry of today. When prices are low, higher-grade materials have to

be mined, and when prices are higher, then the lower-grade material can

be mined. Mining companies want to extract every possible bit of value

from their ore bodies, and I am sure this is the plan of Texada Mines.

MR. LOCKSTEAD: Just a very brief remark. In regard to the

study that the minister has on his desk, I wonder if it would be

possible to look at that, through his office, because the impact of

this mine shutting down in that area, Mr. Minister, is going to be very

severe. I appreciate some of your answers, a large part of which were

quite political and made no reference to my questions whatsoever. But

just the same, I would be very interested in having a look at that

study.

HON. MR. WATERLAND: Yes, to the member for Mackenzie, by all

means, if you would like to come to my office some time, my executive

assistant, Bill Fothergill, the son of the advertising fellow, is a

mining engineer and he can get that report for you and explain it to

you in detail, if you wish.

MR. KING: Mr. Chairman, I appreciate the minister's

cooperation. I'm very familiar with his executive assistant — he's

another Revelstoke boy who made good. I just trust that when the member

for Mackenzie shows up at the minister's office he's not confronted

with some new mining slogans. In any event, I think the information

would be welcome.

Mr. Chairman, I just wanted to make a few remarks — I'm certainly no

expert in mining, though I have worked in a mine on one occasion. I

have in my riding quite a number of mining properties and there is a

lot of prospecting that goes on in the south part

[ Page 3030 ]

of the riding. There's also the imminent operating and coming into

production of a mine at 54 Mile, north of Revelstoke — the Goldstream

area. We had King Resources operating in close proximity to Revelstoke

for the last few years — it's now shut down and the company has moved

out.

AN HON. MEMBER: Are you the president?

MR. KING: No, it was a Texas firm — no relation.

So we've had quite a number of mines over the years. I'm interested

in the minister's appraisal, his rationale, for the administration of

the Mine department in the province. I think we on this side of the

House understand and agree that there has to be a reasonable margin of

profitability in mining endeavours. We understand that it is a

high-risk industry in many ways — not to the extent that it used to be

by any means because of the new technology that the minister himself

talks about. So the risk is certainly not like it used to be in the

days of the old prospector going out, being grubstaked and searching

for years to find a property that was worth something, then all of the

expensive testing to determine whether a sufficient-sized ore body

resided under the surface to warrant development. They have more

sophisticated ways of finding adequate ore bodies to bring into

production.

If we accept the minister's approach, which is basically that there

should be a minimum of, or very little, government intervention in the

mining industry as far as taxes and royalties are concerned, one of the

things that interests me is: what profit do we as a people, what profit

should the public of the province of British Columbia expect from a

resource which is a one-shot resource, which is irreplaceable? I

believe the minister did make the statement, up in his own riding at

one point, that copper ore was replaceable. I wasn't aware that we had

that new kind of technology yet, and perhaps the minister could expand

on that statement at some point of time. But I was never aware that ore

was replaceable.

It seems to me that the public has a right to expect not only a fair

return to the public treasury, but they should have a right to expect

some social benefit as well — such as employment and such as some kind

of protection for the investment the community places in mining

development. The minister has admitted being involved in a variety of

mining endeavours which eventually were abandoned and the community

closed so the people had to scatter and find new employment. Now there

is a social cost involved in that kind of exercise, and that's gone on

since time immemorial. That has gone on through history and is still

going on.

You know, it doesn't happen in a vacuum where only the mining

company is affected; there's a cost investment by the public, and a

loss to the public when that mining operation finds it is no longer

profitable to operate and moves on. There's the cost of providing

school facilities in many cases — health and hospital care, recreation,

housing — a whole variety of things which have a public investment in

them.

I think what we're concerned with, and what the public is concerned

with, is some reasonable balance of the responsibility. Certainly it's

my view that when the company has profited from our resource for many

years, when there has been an infusion of public funds to support their

operation, as there inevitably is — both with respect to the facilities

I've talked about and of roads and so on — then surely that mining

company has some obligation to offset the economic and social impact

that accrues when they fold their tent and steal away. I think that's a

reasonable proposition and one that should be looked at seriously in

terms of the balance of social responsibility between the community and

the private company.

The other question that the minister has not talked about is one

that I think must be viewed intelligently, regardless of political

philosophy, if we are to find a happy balance between the exploitation

of any resource and the benefit to the public. Because there are those

people in society today and in politics — many of them — who take the

position that perhaps at a given point in our history, due perhaps to

world markets and world supply, it would be more intelligent to let the

resource lie undeveloped for the future than to exploit it now simply

because we know it's there. And in terms of making that kind of

decision, surely we have to know what the social advantage of

development would be.

I think it's essential, Mr. Chairman, that the overall employment

opportunity accruing from mining development be reappraised, because

I'm familiar with a survey that was done in the mining industry in 1969

which covered the preceding 10-year period and analysed what had

happened to the jobs related to the mining industry in this province. I

want to tell you that it wasn't the government that did that survey. It

should have been but it was not. It was not the industry; rather it was

the trade union involved in the mining industry. They could see the

shrinkage of their membership and they realized that, although

production and mining activity was rising, employment opportunity and

consequently the membership in the trade union was shrinking.

That's understandable quite easily because technology is changing

rapidly. We have new methods of mining today — huge machines that strip

mountains, machines that can accomplish the work that used to require

the strong backs and muscles of thousands of workers. I think we have a

right to know in terms of framing policy, and I think the minister

should demand to know what is happening

[ Page

3031 ]

to employment. What is the real balance of social benefit derived

from mining? That's the kind of information we must have before an

intelligent policy direction can be undertaken and certainly any

intelligent debate on the subject.

Now the minister gets up and says: "I have great sympathy for the

mines and I think they have to be relieved of off-the-top royalties."

That's fine. I don't know what he supports that upon, simply because he

was associated and worked for the mining industry, whether it's an

euphemistic kinship he has or whether it's an intelligently based

appraisal of what's going on in that industry. Conversely the critics

on this side of the House see that that's a pretty ineffective way of

sound policy appraisal in mining.

We argue on this side of the House that it's unrealistic and

ineffective to impose a net profit tax in the mining industry. We

believe that in a corporation as complex as mining corporations usually

are, with a variety of interrelated corporations provided with

depletion allowances, provided with vast capital investment which can

be written off in terms of depreciation to an extent, that is usually

not available in any other kind of industry, we see devices, at least

on the surface, for the write-off of virtually all profits, which means

that the tax is applicable to an unrealistic profit at the end of their

accounting year. So we feel that's an unrealistic way of assessing the

tax in the mining industry.

Conversely, the minister argues that a royalty payment off the top is

unrealistically prohibitive and curtails mining incentive. Now I'm

suggesting, Mr. Chairman, that we have to have more information. I

regret that the Department of Mines has not kept a more up-to-date

record. In fact, as far as I can determine, it has not even showed any

particular interest in measuring the employment opportunity that is

available in the mining industry today.

What has happened to it in terms of growth or the fall in employment

opportunity? What is the social cost of mining towns that operate for

10 or 20 years and then close down? What is the social cost imposed

upon the people of British Columbia by losing expensive facilities that

we have brought in to support their operation? What is the social cost

in terms of the transfer, relocation, mobility costs to workers which

the federal and provincial government provide? What is the retraining

cost if there is no other alternative than employment available in the

mining industry? What are the retraining costs?

Before we can have an intelligent mining policy in this province and

before we can really monitor what is fair in terms of a royalty upon

the mining industry, it seems to me these are the things we should know

and these are the things that the Department of Mines should be

presenting to this House so we have some data base upon which to

determine what is fair, what is equitable. Without getting into a

highly partisan political debate as to whether or not we want to kill

the mining industry, we could debate intelligently what a fair and

equitable taxation policy or royalty policy is. I think the minister

would be well advised to try to go down this road in terms of future

discussions in this House.

The minister talks about royalties being unrealistic. I don't know —

if we looked at a particular operation and concluded that there's no

employment benefit there, and if his new taxation policy is so low as

to virtually contribute nothing to the public treasury, what is the

point of having the operation come into production at all? Why not

leave it until economic circumstances on world markets, new technology,

and new and more intelligent generations find a more profitable and

equitable exploitation from a social viewpoint and from a profitability

viewpoint? That is what we are talking about and I think that is the

intelligent approach.

Rather than having any of the statistics upon which to formulate

this kind of policy, we have rhetorical arguments regarding the

political posture of the different parties. It's really meaningless. I

would hope that the minister would try to present something more

tangible to support his approach to mining: the elimination of

royalties. I would hope that next year when his estimates are before

this House for consideration he will be prepared to come in and say:

"Now look, the taxation level which I and the mining industry

formulated last year is reasonable because here is what it contributed

to the province." I don't mean only taxes. What did it contribute to

employment? What did it require in terms of public funds as support for

that industry? That is an equation that must be looked at. It must be

balanced, and we must have an accounting of whether or not, from a

social viewpoint, it is prudent for us to go ahead now. These are the

kinds of things we have to look at.

Finally, I want to say, in terms of the debate regarding royalties

as opposed to taxation, that I think I have given an indication that it

is very difficult for the public or the politicians to make that kind

of appraisal without these facts, but I do want to point out in

conclusion, Mr. Chairman, that we are dealing with a resource in terms

of minerals which does indeed fluctuate wildly on world markets as

demand rises and falls, usually related to conflicts around the world

rather than some productive purpose, unfortunately. We must remember

that in this particular area we are dealing with a one-shot resource

that, once exploited, is in no way available for recapture. Not only

that, but digging out that resource and exploiting it is a high-risk

industry, not only in terms of financial input but in terms of damage

to the environment.

We have a whole variety of considerations that should go into the formulation of an intelligent

[ Page 3032 ]

mining policy. We should be thinking, when we discuss royalties as

opposed to taxation, whether or not there is a great degree of

pollution of the air involved, and whether or not clear streams might

be destroyed. I want to say, Mr. Chairman, that one of the most

important resources in this nation and in the world today — and one that

is also virtually irreplaceable — is fresh water. I do not think we can

any longer tolerate the kind of industrial development, be it in the

mining industry or elsewhere, that runs rampant over and destroys

freshwater streams and lakes.

We must weigh all of these things and we must always be conscious of

the fact that many of the ingredients that go into mining can, if not

wisely pursued and initiated, be a one-shot kind of situation which

destroys that resource and mars the landscape and the quality of life

and the environment for all time. Before we are going to become wildly

enthusiastic about the minister's approach, regardless of how sincere

it may be — and I think it is perhaps sincere, but somewhat naive,

because sometimes you have to stand back and take a look — I think that

we will want to have a whole lot more information. We will want to have

assurance that not only the interests of profitability for the

corporation are being protected and looked at, but the whole quality of

life and the whole protection of the public are going to be a factor

and a basic ingredient in terms of setting our policy and charting our

course for mining in British Columbia for the future.

MR. GIBSON: Mr. Chairman, this debate has been flowing back

and forth over a great many subjects. I hope you won't mind if I go

back to some of the earlier topics.

The minister in responding to the remarks I made about the

desirability of direct provincial incentive for getting into undersea

mining, one way or another, stood up and gave an appreciation of some

of the difficulties of undersea mining. I was glad to see that he

thought it was going to be the coming thing. He thought the technology

wasn't there right now.

Mr. Chairman, I appreciate those difficulties. The only point I want

to make is that it's essential that British Columbia get in on the

ground floor, and that may require some direct government

encouragement, whether simply moral encouragement or perhaps actual

financial encouragement as well.

Now the minister, in commenting on some of the rate-of-return

difficulties that I saw in the mining industry, mentioned a speech that

had been made in the early '50s about the imminent demise of the mining

industry in British Columbia. At that time they thought that the known

relatively high-grade reserves of those days were going to be depleted.

We're in a different situation now, I think, when we express concern

about the mining industry. It's not a concern about reserves; it's a

concern about our capital cost and our competitive edge in the world. I

know the minister knows that, and I don't think there's any difference

between them. I think what needs to be done is to carry the message to

the people of British Columbia that the mining industry is in a little

bit of a dicey situation and it needs careful attention. It certainly

doesn't need uninformed taxation — that's for sure.

Then the discussion moved on to blasting tickets. There were a

couple of issues there. One of them was raised by the hon. member for

Revelstoke-Slocan (Mr. King), who expressed concern about the possibly

arbitrary lifting of blasting tickets when a person has such. The

minister, I think very thoughtfully, agreed that a review procedure

would be useful.

I hope that he would also go around the other route, though. What

we're talking about when we're talking about lifting tickets is

something that's after the fact. The concern I was expressing was for

some kind of a control before the fact of the acquisition of this

potentially dangerous knowledge on the handling of explosives that's

necessary for industrial purposes, particularly in the mining industry,

but knowledge that can also be turned to socially destructive purposes

as well.

In the particular case I cited which had been reported to me, the

implication was very definitely that the person concerned did express

unusual interest in such things as timing devices and made a very quick

departure, indeed, to northern Ireland. It was considered sufficiently

important to get in touch with the police. That particular case is

past, but the concern I have is: will the government not consider

instituting some pre-certification before people go into blasting

training programmes, because if by any rare chance the knowledge is

acquired by someone who would put it to violently anti-social use, you

can lift his ticket but you can't do anything about lifting the

knowledge. It does seem to me that there's some need to consider a

programme of pre-screening.

There were a couple of other items in the debate. Someone, and I

didn't mark down who, made a comparison between royalties and stumpage.

If I understand correctly, Mr. Minister, they were attempting to

justify the royalty concept by reference to the stumpage concept.

Well., the stumpage concept is a very different thing. The stumpage

payments, of course, come out of profit as royalties do not necessarily

do. Royalties are flat off the top. I would say if you want to relate

stumpage to the mining industry I think you probably have to go to the

Manitoba approach, where you say there'll be some kind of a rate of

return which we say is reasonable profit, and beyond that reasonable

profit the state is going to pre-empt a certain — probably rather large

— fraction of what's left.

That's a possibility for taxing the mining industry,

[ Page 3033 ]

but it's very, very different than a royalty.

Royalty is the one

that has been so long in British Columbia. Speaking of which, Mr.

Chairman, I would like the minister to tell us what is going to be done

about the regulations under the Mineral Land Tax Act that have the

effect of providing on Crown-granted land the same kind of royalty

structure that we had with Bill 31. It's important, I think, that a

statement of policy be made by the minister that the regulations under

the Mineral Land Tax Act will be changed so as to remove the Bill

31-type, royalty-type provisions and make it quite clear that those

sorts

of royalties are being taken off all lands, whether Crown-owned or

Crown-granted.

Next I would ask the minister if he would give some of his thoughts

to the House about the desirability or otherwise of British Columbia,

through the national government, encouraging the national government to

participate in some way in the embryonic attempts to form an effective

world copper cartel. I know there's a lot of arguments pro and con. I'd

be glad if the minister would tell us the state of his thinking on that

subject.

Next I would ask the minister if he could tell us what studies he

now has available and what studies he feels he might make public on the

whole subject of the economics of the development of northeastern coal

in this province. I know that the minister is studying this in

conjunction with his colleague, the Minister of Economic Development

(Hon. Mr. Phillips), and probably other cabinet ministers, and I have

reason to believe that there have been some task forces doing work on

the underlying economics of these northeastern coal properties.

[Mr. Schroeder in the chair.]

I'll tell you my concern, Mr. Chairman, through you, to the

minister. Very frankly, my concern is that we might be rushed, by

misguided enthusiasm, into putting an overabundance of public money

into projects to finance infrastructure which, if looked at in terms of

overall rate of return, might really not be a good investment for the

province of British Columbia. Some of these properties will be, some

may not. All I am saying at this time is: what will the minister make

available in terms of information? What kinds of studies does he have

about the costs and benefits of the development of this great potential

resource — but still only potential?

Next I would ask him a question on that part of his mineral

portfolio which has to do with oil and natural gas. Our current oil

price structure, looked at on the basis of an average company, gives

quite an incentive in terms of netback to producers to do their work in

Alberta as distinct from British Columbia. The figures I have obtained,

and I've obtained them from industry sources — the minister may

indicate whether or not they're correct — refer to an average company

working in both Alberta and British Columbia. The figures I'll give

here now are the adjusted netbacks after effecting the total change in

oil prices and in natural gas prices as contemplated by the federal

government in their recent announcement.

At that point, my information is that on the $9-a-barrel price, the

producer netback in British Columbia will be $1.67, and on the $9.75

Alberta price, which is conditioned by oil quality and transportation

factors — the 75-cent difference from British Columbia on the gross —

the netback will be $2.37, which gives Alberta an advantage of about 70

cents. That was old oil — so-called "old" oil. In terms of so-called

"old" gas, Alberta of course has a far more consequential advantage

because the British Columbia Petroleum Corp., or I suppose more

precisely, the cabinet, has not yet seen fit to pass along any of the

increased prices to the producer to encourage increased field netbacks.

At the moment, again the comparative figures I have between Alberta

and British Columbia, in British Columbia there is a netback of around

16.3 cents on an average price of $1.13 a thousand, or on a million

BTUs; and in Alberta there is a price of around 30.3 cents — this is

after giving effect to the new prices — which gives Alberta an

advantage of 14 cents, or almost double the British Columbia situation,

which makes it pretty clear to me that something has to be done on the

natural gas side through the B.C. Petroleum Corp., and on the oil side

as well. The comparisons on new oil and new gas are different as to

numbers but, in terms of the general thrust, it's the same kind of

thing. If the minister would give us the direction of his thinking in

this regard, I would be very grateful.

I'd also be grateful to have him talk to us a bit about exploration

expenditures in British Columbia as compared to Alberta. In Alberta, my

understanding is that the incentive on the drilling of certain

exploratory wells which meet certain conditions — I think, for example,

they have to be three miles away from a producing well — can achieve a

return from the government in terms of capital cost of between 30 and

40 per cent. In British Columbia we have a somewhat different kind of

incentive, if I understand it correctly. For every dollar spent you can

claim 75 cents off your royalties for certain approved exploration

expenditures, and I believe you can also sell your credits to someone

with production royalty payments if you're an outside producer with no

royalties to otherwise net that against.

Now being far from anything like an expert in this field, I want to

ask the minister about an

article I read in the newspaper the other day

which suggested that under the terms of these incentives it would be

possible, in certain cases, to drill a sideways hole through the B.C.

Legislature and make a profit on

[ Page 3034 ]

that, because you'd get back more dollars for having drilled that

hole than your cost of actually drilling it. Now I'm not suggesting

that, Mr. Chairman — at least not until we recess for the summer, and

even then I think it would be imprudent — but if the fact of the matter

is that there is more than 100 per cent interest to drill what might

conceivably be completely useless holes, it seems to me that would

be wrong. There has to be some incentive left to the industry to say:

"We've got some money in here too."

As I say, I was puzzled by that newspaper story and I'd be glad if

he could shed any light as to how the existing tax structure makes that

possible and, if so, what he thinks of it.

HON. MR. WATERLAND: I believe if a person were to drill a

hole sideways through this building, he'd strike quite a lot of hot

air, if not gas. Right now, Mr. Chairman, in answer to some of the

remarks of the member for North Vancouver-Capilano, the B.C. Energy

Commission hearings are currently underway and one of the things being

discussed there is the netbacks to producers. This government realizes

that there must be sufficient return to justify continued exploration

and the cost of production in the fields which have been discovered.

We haven't, as a government, to this time had a chance to address

ourselves to the whole problem of the petroleum and natural gas return

and the return of the government. However, it will be one of our

upcoming projects. At the present time the credit system seems to be

having the desired effect. We have had a very active year this year in

oil and gas exploration drilling and we expect to have an even busier

year next year. Now as long as the effect is there and exploration is

taking place, perhaps we don't have to mess around with it, other than

making sure that there is a sufficient netback because of the coming

increases in export prices. We are aware of the necessity of a return

to producers to encourage further development, because if we don't have

further development, then we will run short much sooner of this

valuable energy source.

Interjection.

HON. MR. WATERLAND: This didn't happen in British Columbia, I

don't believe. I recall hearing reference to this type of thing in

Alberta, too, where if you spend $1 you can get $1.05 back. You know,

that's not a very good return — 5 per cent. But it does seem ridiculous.

MR. GIBSON: If it's guaranteed, I'll sure go for it.

HON. MR. WATERLAND: If it's guaranteed, perhaps. No, that is not right and I would never suggest anything like that should be done.

You were speaking again of problems with blasting certificates and

policing it. Perhaps there is a case for having some organization clear

a person who is requesting a blasting certificate. The Department of

Mines doesn't have the machinery to do this. But perhaps consideration

could be given to getting a clearance from the RCMP much as a taxi

driver has to have. It couldn't be an intensive investigation. The RCMP

would be filled full time investigating blasting certificate

applications. But I think you are quite right. They shouldn't be handed

out like hotcakes just because a person has the technical ability. It's

something that hasn't been done, but I think, perhaps, it's something

that could be looked at in the future, and I would be more than willing

to do so.

You were talking about the northeast coal sector. At the present

time there is a cabinet committee on coal. One of the major functions

this year is the study of the whole economic aspects of the northeast

coal development. This involves the Department of Highways, Department

of Environment, Department of Mines and all of the government

operational departments, including the Departments of Housing and

Labour and so on. Yes, there is a tremendous undertaking, capitalwise,

on the part of the government to develop that resource.

This is a rather unique situation where a resource hasn't really

been tapped. Yet we have a tremendously large proven reserve, and when

it is developed it will be developed almost at the same time. It is

going to require railway connections, highway connections, the

community infrastructure, to use the word which is quite common with

the secretariat. But the whole government has to put in a tremendous

investment here, and, of course, we want to be sure that the coal

resource is, in fact, going to be developed. The timing right now is

that we will have the answers regarding the government cost and

government participation as far as providing these services at about

the same time that Denison Mines and others in the area will be making

fairly firm commitments to develop their resource.

MR. GIBSON: Roughly when is that now?

HON. MR. WATERLAND: It will be late this year. It will be

early fall when the bare-bones reports are out, either late this year

or early next year before firm decisions are made. At that time we all

have to go together, because when the mine is developed the railway has

to be in place and there has to be a place for people to live. There

have to be roads and electrical power. So the government is really

going into this thing in a partnership with industry, and very serious

consideration is being given to....

I think it will happen that there will be a user charge placed on

that coal to help the government defray the front-end costs of what we

have to invest

[ Page 3035 ]

in the area. The companies involved are aware of this and they are

all for it, saying: "We know it has to be developed, and if you don't

help put the community in and the railway system and so on, we will

have to." There will be a tremendous investment by industry and by

government, and the ultimate result will be the development of this

very important resource.

We are also right now in the formulation stage of a general coal

policy for British Columbia. We would very much like to see much more

utilization of our coal made right here in B.C. as feedstock for the

petrochemical industry, gasification, liquefaction of coal. We are

planning to.... How we are going to do this we haven't yet decided. But

we certainly want to get the government involved in looking at the

maximum utilization of this resource here, because it is a technology

that is fast developing in the world. We can develop along with the

rest of the world so we can take

part in it here. It's something that

we in British Columbia can and should be able to do as well as anyone

in the world, considering the tremendous resource that we have in coal.

You mention the mineral land tax and how it relates to the current

legislation on the table regarding taxation. What our intention is, and

it has been stated in our press releases on this taxation bill, that

once the new Bill 57 becomes

an Act and law, then at the end of the

year, the time at which the royalties will have expired, we will be

passing orders-in-council redesignating lands which have been

designated as production areas for the purpose of collecting this

mineral land tax as it was based on production. So in effect it will be

exactly the same under the mineral land tax and the mineral royalties

tax.

MR. GIBSON: How about the super-royalty portion of it?

HON. MR. WATERLAND: The super-royalty portion, as it states in the bill, will end as of the first of the fiscal year this year.

MR. GIBSON: And the same under the Mineral Land Tax Act — will that

order-in-council be passed?

HON. MR. WATERLAND: The mineral land tax actually is

collected in arrears. What we are collecting now are those amounts

which were actually accrued last year. The effect will be the same.

The member for Revelstoke-Slocan (Mr. King) had some very

interesting remarks he made about the dropping employment in the mining

industry, even though our actual production is going up. It may appear

as if employment is dropping, but in effect what is happening is

that.... I will refer back to the type of mines that were in existence

a number of years ago. I mentioned the fact there were five mining

communities in which I had lived that closed down; the towns ceased to

exist. Today a one-industry company mining town is becoming a rather

rare item; there still are some around. But when a company operated a

mine, a community and all the service facilities that went with it, the

direct employment by the mine was considerably higher. Now we have

mines being developed and they don't have cookhouses and communities to

look after. The machineshop facilities are much less than they had to

be in the past because much of this work is contracted out. So the

direct employment may appear to have gone down, but all of these other

services are still required, and they are generally acquired through

dealing with other people who specialize in this kind of work.

The member for Revelstoke-Slocan asked me what I meant when I said

that ore is renewable. I didn't say that we can renew our ore; what I

said was that we are not depleting our ore reserves. We are not,

because ever since we have been mining in British Columbians have been

adding to the ore reserves by discovery and increases in our

technology. So we are not depleting the reserves; we are using the

resource as we find it, but we have been, in the past, constantly

adding to it.

I have already mentioned northeastern development as far as

involvement of the government. The member for Revelstoke-Slocan talked

about the responsibility towards communities. As long as we are not

directly involved in one-industry towns, I think towns will continue to

exist, particularly after mines are no longer workable. A good example

right now is the Highland Valley where we have Logan Lake, which was

established as a townsite to service the Lornex mine.

We will have other mines in that area, and we will have other

industries around that area related to mining and to the forestry and

ranching community. So it is not a one-industry town, although it is

very heavily dependent upon one industry. There is a tremendous

resource in the Highland Valley and it will be many, many, many years

before that resource could possibly be exhausted. I am sure that by

that time the community of Logan Lake, or similar communities, will

have developed other bases to justify their continued existence.

I believe that covers most of the points that have been raised. Oh,

the Department of Mines inspection branch — I guess they were talking

about its involvement in the industry and the function of the

department. The Department of Mines inspection branch has to become

more heavily involved in the reclamation aspect of the mining industry.

We have over the last half-dozen years developed some good expertise in

that department. However, with the rates that especially coal mine

developments are taking place now, we are understaffed. We must have

more

[ Page 3036 ]

people to carry out this very important aspect of that department's work.

We must also have more staff and expertise insofar as the

environmental aspects of the actual mining operations — noise control,

dust control and working conditions for the men. We are right now — I,

my deputy minister and others in the department — looking at a fairly

major restructuring of the actual organization of the department to

make better use of the people we have and to just have a good look at

where we need more expertise and more people to do the work we know

must be done.

MR. GIBSON: Mr. Chairman, I would just remind the minister

that I asked him if he could comment on the prospect of British

Columbia and Canada participating in the organization which is trying

to put together a world copper cartel — as was at least mentioned by

the copper task force. They weren't too strong in their recommendation,

but it was a possibility that was raised.

Also, in response to his forthcoming remarks on the development of

policy on coal, I wonder if he could give us some undertakings about

the availability to the public of documentation on this subject, as and

when it becomes available. I believe there has been a task force

working for the past year which will have produced a great deal of

material. Much of the documentation, I would think, produced for the

cabinet committee on coal would be of the kind which could be released

and would provide the background for an enormously helpful public

dialogue.

I would ask the minister if he would be good enough to assure the

House to the very maximum extent possible that this documentation will

be released. Because to the extent it is undertaken, this northeast

coal development will be one of the most consequential public and

private investments ever made in the province of British Columbia. I

think it is terribly important that the average citizen, if he or she

wants to look at it, has the underlying factual information to decide

on it.

HON. MR. WATERLAND: Mr. Chairman, the copper cartel

situation.... Canada and British Columbia produce a very small

percentage of the world's copper. I don't believe that with the amount

we produce we could have any effect, really, on people who might tend

to want to set or control the price of copper. This government is not

now actively seeking any involvement in that way. Perhaps it is

something that could be discussed with the federal government, but it

has not yet been done.

The coal task force report is at the present time at the printer. I

believe it is almost ready for printing, and as soon as it is

available, it will be made available to the public. I have read the

draft of it; it contains a lot of very valuable, factual technical data

and should be of interest. A lot of it is written in laymen's terms so

it is quite understandable. Yes, the public should be aware of the

nature of our coal resource. I think this is a good way of doing it. We

will also be coming up, as I said, with a general government policy

regarding development of our coal resources — sometime within the next

few months, I would think.

MR. D. BARRETT (Leader of the Opposition): Mr. Minister,

could you explain to me why it is that the coal royalty has stayed

where it's at when the price of every other commodity has gone up in

this province? As a matter of fact, your government has made a point of

telling the people of British Columbia that the rationale for huge

increases in goods and services provided by the government is to

reflect the inflationary drive of prices throughout the world. Coal is

now selling at over $50 a ton. Not to belabour the former

administration before the former administration — i.e. a real Social

Credit group rather than a conglomeration of what some people describe

as politicians of the last resort for power....

MR. A.B. MACDONALD (Vancouver East): A rag-out.

MR. BARRETT: A rag-out — is that what it is, a ragout?

Interjection.

MR. BARRETT: My friend, no wonder there is cause for the

air-traffic controller situation. If that's your French, we're all in

trouble. A rag-out!

AN HON. MEMBER: A ragout is a stew!

MR. BARRETT: A ragout — that's right.

Interjection.

MR. BARRETT: Why in that ragout the member for Columbia River

(Mr. Chabot) is not a member, I don't understand — except that he

forgot to join the Liberal Party. If he'd joined the Liberal party he

would have made it. I won't put any more of that in, because it's out

of order.

Mr. Chairman, it seems to me that the rationale is: if you use the ferry you

have to pay more; if you have to drive your car, and not have to sell it, you

have to pay more; if you're going to go to a doctor, whether you go or not,

you have to pay more; if you're sick you have to pay more on extended-care

homes — so why doesn't Kaiser pay more for coal that belongs to us?

Formerly Kaiser was paying a royalty around 25 cents a ton for coal. Some sensible businessmen got

[ Page 3037 ]

elected and bumped it up to $1 — then to $1.50 and this April it

was to go up to $2.50 a ton. A modest, cautious, small-c conservation

increase in light of what Alberta has just done to the mining industry.

I've told people to beware of Peter the Red; there's nothing like a

socialist masquerading in Tory clothing. Imagine what he is doing to

the mining industry in the province of Alberta!

Can we not now see huge ads in the Calgary papers? What was the

one... The Albertan that was run by that old wreck — what's his name? Is

that one still being printed in Alberta?

AN HON. MEMBER: Yes, but nothing in it, really.

MR. BARRETT: Well, I want to tell you.... Will the mining

industry be posing big ads in British Columbia saying: "All those

leaving Alberta now come to B.C." because something more dangerous than

socialism has arrived in Alberta — i.e. a reasonable mining royalty on

coal? Will the mining industry be asking the minister to approach the

government of Alberta to say ease off?

Why do the people of this province have to subsidize all these other

services when in actual fact coal should be paying its own way? The

old-age pensioners have been told that they've got to pay their own

unless they carry the bus onto the ferry. If the bus carries them, they

got to pay; but if they carry the bus, they don't got to pay. That is

Social Credit. That is what the minister told us — the man who spends

his extra hours writing out chits for his second cup of coffee. I'm

going to send him one of those chits because he too may want to beat

the system.

Nonetheless, what are you giving the coal away for? What kind of

businessmen are you? You tell everybody in the province that they have

to pay more for everything, but Kaiser and Fording only pay $1.50 a

ton, when in April it was supposed to go to $2.50 a ton. Are you afraid

of Edgar Kaiser, Jr.? Are you afraid of him? Will he write a letter

complaining that he won't support you any more? He can't even vote for

you — he's American.

What are you afraid of the CPR for, through Fording? Why is it that

every citizen in this province has to pay more money, but the CPR

doesn't and Kaiser doesn't? You're the Minister of Mines; you're the

guy that ran around saying: "Vote for me and I'll help the mining

companies." And darn it all, that's what people did; they voted for you

and you're helping the mining companies. You kept that promise. You

were very clear about that; there was absolutely no confusion. I want

the editorials that have been criticizing you lately to leave you alone

on that point. Don't you ever criticize this Minister of Mines. He made

it very clear what he wanted to get elected for; he wanted to get

elected to help the mining companies. And he's certainly kept that

promise.

But, Mr. Minister, if Alberta is raising the royalty of coal up to

$9 a ton, do you think that the mining companies are going to pack up,

leave Alberta and come to B.C.?

HON. MR. WATERLAND: I hope so.

MR. BARRETT: You hope so. Mr. Chairman, that has got to be

one of the least intelligent statements made by a minister responsible

for resources. If the coal is worth nine bucks a ton to the people of

Alberta by royalty, why isn't it worth nine bucks a ton to the people

of British Columbia by royalty? And you sitting there with your arms

folded, flying with no help except on occasion when you turn back and

ask for some help, telling us that you hope those mining companies that

leave Alberta will come here and get the coal at a royalty of a buck

and a half....

MR. MACDONALD: They are going to leave Alberta and take their coal with them.

MR. BARRETT: No, Mr. Attorney-General, do not fall for that mining company propaganda.

MR. MACDONALD: It is a very ticklish situation.

MR. BARRETT: I know it is. You read those ads when they used

to attack the NDP. They used to say: "We're leaving British Columbia

and we're going to take the minerals with us." The CPR at one point

threatened to roll up the railroad tracks all the way to the Alberta

border. You remember that? You were at that meeting with me.

MR. MACDONALD: Was that what it was about?

MR. BARRETT: That is what it was about. That is right — when

we met with the Hon. Mr. Sinclair. Wasn't that his name — the fellow

who picked up your cigar butt because the company was losing so much

money? I remember that.

MR. CHAIRMAN: Please address the Chair, Hon. Member.

MR. BARRETT: Mr. Chairman, $9 a ton for coal in Alberta on

royalty — everything else has gone up. Royalty was to go to $2.50 in

British Columbia in April. It is May, now June, and Kaiser is not

paying its fair share, Fording is not paying its fair share, but the

old-age pensioners are told if they carry the bus on the ferry they can

have a free ride. What kind of business is that? You are the giveaway

gang, sir, through yo