1985 Legislative Session: 3rd Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MARCH 19, 1985

Afternoon Sitting

[ Page

5345 ]

CONTENTS

Tabling Documents –– 5345

Oral Questions

Resignation of university dean. Mr. Nicolson –– 5345

Mr. Macdonald

Interest reimbursement program for farmers. Ms. Sanford –– 5346

ERDA subsidiary agreement. Ms. Sanford –– 5346

Mr. Stupich

Corporate tax cuts. Mr. Stupich –– 5347

Ministerial statement

B.C. participation in Expo 85. Hon. Mr. Phillips –– 5347

Mr. Williams

Budget debate

On the amendment

Hon. Mr. Heinrich –– 5348

Mr. Williams –– 5351

Mr. Mowat –– 5354

Mrs. Wallace –– 5357

Mr. R. Fraser –– 5359

Mr. Lockstead –– 5362

Mr. Michael –– 5365

TUESDAY, MARCH 19, 1985

The House met at 2:05 p.m.

HON. MRS. McCARTHY: Mr. Speaker, today in the House we have

some very distinguished visitors, representatives of the Vancouver

Chinatown Lions Club, who last Saturday evening raised $25,000 for

young people in need of extra care — crippled children — and for

services to very many people in our community. In addition to choosing

a talented and artistic young lady to represent the Chinatown Lions as

Miss Vancouver Chinatown, we were all honoured to meet and greet a

talented star of television and movies in Hong Kong who gave of her

services for that evening, to the delight of all who were present. May

I ask members to welcome, from Hong Kong, Katie Chan. Accompanying

Katie Chan are Mr. Len Lowe and Mr. Peter Tseng, representatives of the

Vancouver Chinatown Lions — probably one of the most aggressive and

active clubs in the international family of Lions.

MS. SANFORD: Mr. Speaker, today is agricultural day in the

B.C. Legislature, and visiting us are members of the executive of the

B.C. Federation of Agriculture. Many of them are in the precincts at

this time and some are in the gallery. On behalf of the official

opposition, I would like the House to welcome the representatives,

president John Savage and executive members of the B.C. Federation of

Agriculture.

HON. MR. SCHROEDER: Mr. Speaker, in the gallery today are

guests from Algonquin College in Ottawa. They are hosted by students of

the east campus of Fraser Valley College, which is in Chilliwack. I

wish you would make them welcome.

MR. REYNOLDS: Mr. Speaker, in the gallery this afternoon is a

businessman from Delta, Mr. Frank Keane, along with two associates, Mr.

Steve De Jaray and Mr. John MacPherson. I would ask the House to make

them welcome.

MR. R. FRASER: In the gallery today are two people who, I

submit, are typical of the Canadians who built this great country. They

are people who devoted years of their time to community service, and

I'll tell you some of their accomplishments. Phyllis Barbour is a

member of the first revived Winnipeg Symphony Orchestra and a long-time

community worker. Harold Barbour is a gold medal winner in economics

and law from the University of Manitoba in 1922 with an average of

about 98, I believe. He holds the Queen's Coronation and Jubilee Medals

and the Canadian Centennial Medal and the Ontario Medal for volunteer

work. He is the Canadian champion revolver shooter and a coach of one

of the Canadian Olympic teams. Would the House please welcome Mr. and

Mrs. Harold Barbour.

MR. MOWAT: Mr. Speaker, I would ask the House to join us in

bringing a happy birthday to one of our colleagues, the hon. Minister

of Environment, "the Senator," Austin Pelton.

MR. LAUK: I'm sure all members of the House will be pleased to know

that Mrs. Schroeder, wife of our esteemed minister, is out of danger and recovering

in hospital. I would ask that Mr. Speaker send the regards of both sides of

the House to Mrs. Schroeder.

MR. SPEAKER: It would be a pleasure for the Chair to undertake that charge.

HON. MR. HEWITT: Mr. Speaker, in your gallery there is a lady

from Penticton. She is a member of the Penticton School Board and a

former member of the executive of the B.C. School Trustees' Association

and was recently appointed to the board of governors of the University

of Victoria. I would ask the House to make Mrs. Sue Irvine welcome

today.

Hon. Mr. Nielsen tabled the 1984 annual report of the Insurance Corporation of B.C.

HON. MR. WATERLAND: Mr. Speaker, today is silviculture day in

British Columbia. As required by the Ministry of Forests Act, I take

pleasure in tabling the 1984 forest and range resource analysis, the

1983-84 Ministry of Forests annual report and the five-year forest and

range resource program for the years 1985 through 1990.

Oral Questions

RESIGNATION OF UNIVERSITY DEAN

MR. NICOLSON: My question is to the Minister of Universities,

Science and Communications. Today we heard of the resignation of yet

another top academic. Dean Bruton of the faculty of engineering at the

University of Victoria announced his resignation, saying that the

government is "completely mishandling its relationship with its

universities." I want to ask the minister if he has decided to stop the

hemorrhaging of our universities. This is the second topflight academic

in as many weeks.

HON. MR. McGEER: Mr. Speaker, as with President Pedersen, we

thank him for his service to British Columbia, and we wish him well in

his new post. In each case, I'm informed that the person involved went

to a better-paying job in another province. That kind of thing happens.

We can't prevent people from accepting promotions. My own deputy, who

is a very fine public servant, left a year ago to take a better-paying

job in Alberta. This is the circumstance that occasionally occurs. We

don't begrudge people promotions and an opportunity to better

themselves in life.

I disagree that university finances have been mishandled in any

fashion. I am convinced that the sky will not fall in. Tomorrow will be

a new and brighter day for our institutions and for everyone in British

Columbia.

MR. NICOLSON: The dean indicated that on February 8, 1983, a

letter to Dr. Petch from the minister approved start-up funds for the

faculty through to 1988-89, but that a later letter, on December 13,

1984, reduced the commitment to half the amount approved earlier. This

year they've had only half of the funding they were earlier promised.

I want to ask the minister: did he not have a telephone conversation

with the dean on Friday last, and did he not fail to give a commitment,

even at that late date, as to whether funding would be coming or not?

[ Page 5346 ]

HON. MR. McGEER: No, Mr. Speaker. I did give my personal

assurance to Dean Bruton that engineering was indeed a very high

priority of the provincial government. That was indicated by the

special start-up funding that we had provided through the University of

Victoria. It was evidenced by the new engineering building now under

construction, which my colleagues the Attorney-General (Hon. Mr. Smith)

and the Minister of Finance (Hon. Mr. Curtis) attended. Mr. Speaker,

all of the money that could be spent was provided to that faculty of

engineering. It is true that additional money that could be banked and

not used now was not provided to that engineering faculty, but that's

the circumstance in British Columbia where we're not funding bank

accounts at a time of billion-dollar deficits. When the University of

Victoria needs the funds for its engineering school, they will be there.

MR. NICOLSON: Did the minister not say in that conversation

that the money simply has not been available from Treasury Board, that

the dean said in his statement of resignation that the university...?

AN HON. MEMBER: It's on the next page.

[2:15]

MR. NICOLSON: Well, the minister jumps around denying various

things here, but he states very clearly that only half of the start-up

funds for this year have been allocated. The minister has just said

that all of the start-up funds have been allocated.

HON. MR. McGEER: I think the Minister of Finance could answer this question in more detail than I, and I would defer to that.

The money which had been previously allocated had not been spent

simply because the faculty is still in the start-up phase. I think it

perfectly reasonable of the ministry not to fund a kitty bank at a time

of billion-dollar deficits, but to say that the money will be there

when you need it.

MR. NICOLSON: In his letter of resignation, he said: "I hope

that my resignation will send a clear signal to the provincial

government...." Is the minister himself prepared to send a clear signal

to this provincial government about the lack of funding, the changes in

plans and the lack of keeping up commitments? Is he willing to give a

clear signal to this government by himself offering his resignation?

Interjections.

MR. SPEAKER: Order, please, hon. members. The member for

Nelson-Creston knows that while part of the question may have been in

order, certainly part of the question was not in order. The minister

may respond.

HON. MR. McGEER: I don't know how much clearer a signal could

be sent than the answers to the questions which I gave in the House

today. All I can say is that if there's any fog around, it's over there.

MR. MACDONALD: On a supplementary to the same minister, there are conflicting

reports as to whether Dr. George Pedersen, a very good man, received severance

pay or had a five-year contract and was to be paid even after he had quit. What

is the true state of affairs?

HON. MR. McGEER: Dr. Pedersen had a five-year contract. He

requested to be relieved from that contract. That request was granted

by the board of governors of UBC. There is still, according to the

latest information I have received, some discussion between Dr.

Pedersen and the board of governors as to what would be appropriate in

terms of holiday pay and other normal benefits that would accrue to him

for the time of service he gave to the University of British Columbia.

When those details become available, I will be pleased to provide them

to the House.

INTEREST REIMBURSEMENT

PROGRAM FOR FARMERS

MS. SANFORD: I have a question for the Minister of

Agriculture and Food. Interest costs are a very high component of the

operating costs of farmers in British Columbia. Nonetheless, the

government has steadily eroded that partial interest reimbursement

program, first of all by reducing the amount available from a fixed

rate of 9 percent to 2 percent below prime, and now to prime. I would

like the minister at this point to assure the House that he has decided

not to take the next step — based on the direction the government has

been going — which is to eliminate the program, and that, in fact, he

has decided to improve the partial interest reimbursement program for

the farmers of the province.

MR. SPEAKER: Hon. member, as the member is fully aware, the

question of future action cannot be raised in question period. Further

questions?

MS. SANFORD: Mr. Speaker, I asked the minister whether or not he has decided at this point. I believe that's in order.

HON. MR. SCHROEDER: If the member would turn her attention to

the budget, she will see that support for the partial interest

reimbursement program is in place for this year.

MS. SANFORD: It's unfortunate that the minister has decided not to improve the program, as is the request of the farmers who are here today.

MR. SPEAKER: Order, please, hon. member. This is question

period. While a

preamble is allowed from time to time, entering into

debate is certainly not. I would ask the member at this time to phrase

her question.

ERDA SUBSIDIARY AGREEMENT

MS. SANFORD: Next question, Mr. Speaker. Much of the

minister's hoped-for improvement in production technology and

agricultural jobs is predicated on a subsidiary agreement between the

federal and provincial governments under the ERDA program. Will the

minister advise why he has failed to date to procure this agreement on

behalf of the agricultural sector?

HON. MR. SCHROEDER: On the contrary, Mr. Speaker. This little

minister has been very successful. The fact is that the budget reflects

the attitude of the provincial government as regards the future ERDA

agreement, not only as far as agriculture is concerned, but as far as

all of the component parts under the ERDA agreement. The ERDA

[ Page

5347 ]

agreement anticipates total funding of some $650 million, and this government

is leaving no stone unturned in trying to secure agreement so that all of the

factors, including the federal government's half, can flow in its natural

form to the parts of the industrial and agricultural sector that require it.

If the member will look at the budget, she will see that

agriculture's full $30 million commitment is there, and just as soon as

we have the other signature we can begin business, which I anticipate

should be on April 1.

MS. SANFORD: Mr. Speaker, I am fully aware of what the budget

contains at this point, but my question to the minister was not

answered: that is, why has he failed to obtain the agreement of the

federal government at this point to that ERDA agreement between the

province and Ottawa as it applies to agriculture? He has not done it.

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

Finance. Would he confirm that as of this date, B.C. has still to sign

the first subsidiary agreement?

HON. MR. CURTIS: Mr. Speaker, I don't carry the

responsibility for the conclusion of ERDA agreements — the umbrella

agreement or the subsidiaries. I think that in the course of the last

couple of days questions have been answered with respect to various

components, but I don't have the duty, on behalf of the provincial

government, to see that in the course of the last couple of days

questions have been answered with respect to various components, but I

don't have the duty, on behalf of the provincial government, to see

that ERDA is concluded. I have the duty to provide the provincial

money, and it is there.

MR. STUPICH: Mr. Speaker, the budget speech was read in this chamber

on Thursday last. On that date the Minister of Finance told us that the first

subsidiary agreement had still to be signed. I ask him whether that is still

the limit of his knowledge: does the first one still remain to be signed?

HON. MR. CURTIS: Mr. Speaker, I can't help the member with respect to

that question.

CORPORATE TAX CUTS

MR. STUPICH: Mr. Speaker, I note that he didn't say he didn't know —

just that he can't help.

I have another question for the Minister of Finance. On Friday last I referred

to a report by Canada Employment and Immigration with respect to the effectiveness

of corporate tax cuts. I wonder whether the minister has had an opportunity

to review the report, in particular with respect to the effectiveness of corporate

tax cuts, as to whether or not they are the least cost-effective method of job

creation.

HON. MR. CURTIS: No. I was in the House, indeed, when the member made

that reference, or nearby. I have not read the report.

MR. STUPICH: Mr. Speaker, I commend it to his reading.

I'd like to ask another question. Will the minister advise why no specific

employment creation targets are referred to in the budget, with respect to the

tax concessions, which are supposed to be creating employment?

HON. MR. CURTIS: Mr. Speaker, I don't know that it would be

appropriate in question period to deal with something as far-reaching

as that. I took two hours to make the presentation on the budget. I

would be happy to comment in my estimates, and I'm sure the Minister of

Labour (Hon. Mr. Segarty), would be happy to comment in his estimates

on the several — indeed the many — job-creation activities contained in

the budget. But I do say one thing, Mr. Speaker: the early word

reaching me suggests that the people of British Columbia, in particular

small business, are responding quickly to the thrust of that budget.

MR. STUPICH: Mr. Speaker, my question was with respect to the

tax concession aspects of the budget, not the total budget

presentation. The study I referred to uses the medium-term forecasting

model of the Conference Board of Canada and the focus model of the

University of Toronto when they're forecasting job creation. I assume

the minister must have had job creation in mind when he introduced

these tax concessions, and I'm asking him what studies he used in

preparing his estimates of the job-creating impact of the tax cuts in

his budget.

HON. MR. CURTIS: Mr. Speaker, we used a wide variety of

information. Again, I'm sorry that I have not read the specific report

to which the member refers, but we have reviewed a great deal of

information relative to job preservation and job creation. The budget

process, as the member probably knows, started last summer and

continued, almost without interruption, right through until its

presentation last week. It contains very significant job preservation

and job creation elements. If the member wants a number this afternoon,

I am unable to provide a specific number. But I assure the member that

the whole thrust of the construction of the budget and of spending

allocation is directed to that about which I spoke last week — that is,

job creation for British Columbians today and in the future.

B.C. PARTICIPATION IN EXPO 85

HON. MR. PHILLIPS: Mr.

Speaker, I wish to make a statement. I would like to advise the House

that Expo 85, the international exposition in Tsukuba, Japan, was

officially opened on Saturday, March 16, by the Crown Prince and

Princess of Japan. Canada was represented at the opening by our

ambassador to Japan, Barry Steers; John Powles, the

commissioner-general of the Canadian pavilion; and by my deputy

minister, Jack McKeown, who is commissioner for British Columbia

participation.

Following the official opening, Ambassador Steers, accompanied by Mr.

Powles and Mr. McKeown, welcomed a number of important visitors to the

Canadian pavilion, including the speaker of the House of

Representatives in the Japanese Parliament and the Korean Minister of

Commerce and Industry. I am advised that the Canadian pavilion — with

British Columbia as the major provincial participant — is proving to be

very popular with fairgoers during the first two days. Reaction to the

presentation in the British Columbia theatre has been very positive,

and a number of British Columbians who have already visited the

pavilion have expressed pride in our presentation.

Mr. Speaker, I am particularly proud of the presentation and the

film, because it was developed by a team from British Columbia. The

only outside influence on the film was when

[ Page 5348 ]

we had to take it to Los Angeles to dub in the numerous speakers in

the system. But the whole film was made here in British Columbia by a

B.C. team.

The uniforms which were worn by the four young actors and actresses

during the film were designed in British Columbia by British Columbia

designers and manufactured in British Columbia by British Columbia

manufacturers, and at the present time we have 16 young people from

British Columbia acting as British Columbia hosts. Twelve of the 16

speak fluent Japanese.

This province has had two principal objectives in deciding to

participate in Expo 85, These are a desire to enhance the overall

relations between British Columbia and Japan and a desire to reinforce

that this large Japanese audience sees the image of Canada and British

Columbia as a good place to do business and a beautiful, fun place to

visit — especially during Expo 86. Early indications are that we have

accomplished these goals.

[2:30]

MR. WILLIAMS: Well, we appreciate the report from the

Minister of International Trade and Investment about the great events

in Japan. The only thing we didn't hear was whether the ambassador's

wife was dressed in green or red, and whether tea or coffee was served.

If we ever had any doubts about the new portfolio of International

Trade and Investment, they were cleared up today. We now know where

that one's all at. The only problem is that the minister didn't have

his Gold Card ready to join them at the tea party.

The issue really is the problems here at home, Mr. Speaker. This

reinforces more than ever that jobs are needed here at home. They can

be created here at home. We're losing brains at UVic in engineering,

and everywhere else. The job to do is here at home, it's not at tea

parties abroad.

Mr. Stupich tabled documents.

Orders of the Day

ON THE BUDGET

(continued debate)

On the amendment.

HON. MR. HEINRICH: Mr. Speaker, my colleague the Minister of

Finance has presented a challenging budget statement. The theme is

economic renewal, partnership and the creation as well as the

preservation of jobs. It's one that we should all support.

[Mr. Strachan in the chair.]

We're emerging from a recession. Times have changed and we must be

ready to change with them. There has been a great deal of debate over

education for the last couple of years. We recognize what the

opposition and the critics have been saying. We recognize that a strong

education system is essential to economic recovery. I think the

Minister of Finance has recognized this and has provided us with

adequate funding.

The estimates show an increase in the budget for our ministry from $1.355 billion

in 1984-85 to $1.428 billion in 1985-86, which is 5.3 percent. The Education

ministry absorbs 15.7 percent of the resources provided by the provincial budget.

While it is very interesting for the critics to make reference to the actual

percentage of the provincial budget, I think what is really important is the

unit cost, whether we're looking at post-secondary or at the school system.

Once again the largest proportion of the ministry's budget is

dedicated to supporting public school education. Over $1 billion from

general revenue is provided for various grants and contributions, $565

million for operating grants, $109 for debt-servicing grants, $98

million for contribution to the teachers' pension plan, and $272

million from the homeowner grant. In addition, $576 million will be

collected by the province from non-residential taxation and distributed

to school districts. This is an interesting point: $576 million from

non-residential taxation. We should recognize the thrust of the present

budget. I'll have more to say about that in a moment.

Altogether the province's financial contribution will cover 86

percent of the cost of running our public school system. Forgetting

about the argument from consolidated revenue, and the split between

consolidated revenue and nonresidential taxation, the point is that 86

percent comes from either commercial-industrial or consolidated

revenue, and about 8.25 to 8.5 percent from the residential system.

Local residential taxpayers, I think, do very well. I've made

reference to the amount they are paying: 8.5 percent provincewide.

There is a small amount picked up under miscellaneous, and this is from

the Department of Indian Affairs, as well as the Department of National

Defence.

Even more interesting is what has happened over the past four years.

The contribution of residential property tax payers has declined from

$187 million to $159 million. That's a significant reduction.

This budget provides enough funds to pay for authorized school

district expenditures for 1985-86. What is really important, I think,

now that the funding has been finalized is that we must focus our

energies on management. We have a responsibility to our children and to

our taxpayers to use our resources wisely.

The Minister of Finance announced major reductions in school

taxation for non-residential tax payers. This is a policy change which

has been advocated by many, including the B.C. School Trustees'

Association. In 1985-86 non-residential school property tax will

decline from $663 million to $576 million, a reduction of $87 million.

Another interesting point is that we have been able, under the control

of public expenditures, to maintain the non-residential allocation for

three consecutive years at that figure of $663 million. Going into the

fourth year, we're getting a reduction.

To compensate for this $87 million, general revenue grants will be

increased. It's a modest increase in revenue from residential taxation.

It will result, I think, based on new residential properties which have

been added to the assessment roll. I welcome these measures.

Tax relief for the non-residential property tax payer is long

overdue. When the provincial government assumed the responsibility for

taxation of non-residential property in 1982, the objectives were,

firstly, to provide a more equitable distribution of tax revenue, and I

think everyone concedes that point; and, secondly, to redress the drift

— and it was a drift — towards a heavy burden on commercial and

industrial tax payers. As a result of this change in responsibility and

the control exercised over school budgets, tax relief is possible

today.

[ Page 5349 ]

Funding for post-secondary colleges and institutes remains unchanged

in 1985-86. Despite the harangue which we have picked up from the

press, as well as from the opponents and some members of the

opposition, I'm pleased that we did receive 100 percent. Frankly, I

thought the program was 95 percent of the 1984-85 budget. It turned out

to be 100 percent, and I'm delighted with that.

Over the past two years post-secondary has responded well in the

reality of public sector spending control. Through careful examination

of all programs and increases in productivity, colleges have been able

to enrol 9 percent more students, without corresponding increases in

their budgets. I applaud those efforts, I really do. Details of the

1985-86 allocations will be made in the near future, I hope reasonably

soon.

Independent schools will continue to be financed according to the

formula based on costs in the public school system. Enrolment has

increased in independent schools, and our grants are up accordingly.

The budget for independent schools has increased $2.7 million in

1985-86, because of an enrolment increase of 8 percent, and a further

$1 million following a change in accounting practice recommended by the

auditor-general, which was going from the cash system to the accrual

system.

I must remind all members of the House that the existence of

independent schools remains a cost-effective option. If those pupils

were incorporated in our public system today, there isn't any question

the taxpayers would have to come up with another $60 million.

Mr. Speaker, I believe the cause of education in our economic future

has been well served by the new budget. This viewpoint is not — and I

repeat, is not — shared by all. I would like therefore to comment on

the current debate over school funding.

We can go back a few years to 1981-82, and we can read the headlines

which were in the newspaper when trustees, administrators and officials

— it didn't make any difference — in the system were calling for some

kind of reform. Well, reform we did bring in. It is interesting to note

that even those critics I've encountered — and a lot of it, I might

say, has been constructive criticism — have all conceded one valid

point. To me, anyway, it's valid: the system is far better now than it

once was. There are some problems. We are trying to accommodate them.

We recognized early the magnitude of the economic slowdown and its

impact on workers, on businesses and on taxpayers. We placed a priority

on our own domain. By "our own domain," I mean the public sector. We

have put our own house in order, and in doing so, we've been able to

contain the deficit and avoid an unbearable tax burden. An unbearable

tax burden is the fear that I always had.

As the Minister of Education, I am the advocate of public education.

There's one thing: to be its advocate sometimes requires the necessity

of perhaps imposing a little bit of pain. But at least what we have

done has precluded the explosion of a system which was not going to

survive under the weight of the taxation which was coming to pass.

Mr. Speaker, if I am going to be responsible for executing these

duties, I think it is only fair and proper that we start with our own

ministry. We have achieved some considerable efficiencies in the

management of our own operations. Over the last three years the budget

has been reduced by almost 20 percent, with the full-time staff levels

failing by greater than 33 percent. If you will note, we started at

711, and as you'll see in the blue book today, it's 475. As all members

on both sides of the House know, these numbers vary from time to time,

and sometimes it's difficult to explain, but I am sure those members

opposite who were once on this side of the House understand FTEs and

the way they work.

The fact is that we have reduced and have reduced substantially. The

same type of careful financial stewardship is essential throughout the

education system. We knew that our actions would be unpopular in some

quarters, but we have carried through with our program and can see in

this budget the opportunities our efforts have produced.

It reminds me of something I came across. A former Minister of

Education.... Believe me, I have all the compassion and understanding

for the member for Burnaby North (Mrs. Dailly), because I remember a

statement from when she was having some difficulties — the same ones

which I am experiencing now. I always get a charge out of it: when she

sees me, there's a sort of knowing smile and a twinkle.

But there was a quote in the Vancouver Sun on December 18,

1973. After trying to resolve some of these problems, this statement

was made: "The new government, as it has loudly promised, lifted these

controls. Mrs. Dailly now says this was done on the assumption that

school trustees would exercise restraint." As the member well knows,

sometimes it's difficult to get everybody to exercise restraint. So we

knew that some of our actions in '73 were going to be unpopular, as

they are in 1983.

As have all sectors of the economy, the education system has been

asked to make some difficult adjustments over the past three years.

Both the school system and the college system have had restrictions

placed on their funding. However, their treatment has been fair, and it

has been reasonable.

[2:45]

Too often the facts are overlooked, and the tightness of funding

limits overstated. Let me give you an example. This budget includes

funding for the 1985-86 school year. In 1982 the total gross operating

expenditures per pupil were $3,500. Our funding targets will allow for

the same level of spending per pupil in 1985-86. Operating expenditures

per student will not decline. Total spending will be lower by $35

million, but the difference is all accounted for by a decline of 12,500

in enrolment.

Therein is the other point which we must not ever forget, and that

is that the decline in the student population in British Columbia has

been quite significant over the years.

Interjection.

HON. MR. HEINRICH: I'm saving a few minutes at the end to have a rap session with my critic, Mr. Speaker.

Any reduction is difficult and certainly unusual in the public

sector, but the system was put on notice three years ago that

expenditures in the public sector must be controlled. In setting

spending levels, the government has been as fair as possible. Ample

warning was given, and a system of allocating funds has been developed

and discussed with all interested parties; that discussion has

continued and innumerable changes have been made. The details of the

formula have been adjusted in response to problems identified in its

first year of application, and the original spending targets were

increased by $25.6 million.

[ Page 5350 ]

Have we been wrong to control education spending? Have we been wrong

to control property tax increases'? My answer is an unequivocal no. The

government's policies have been right for both the near term and the

future of the province. As we enter the third year of controlled

budgets, a number of school boards are having difficulty making the

final adjustment. March 15 was the deadline for districts to submit

budgets in compliance with ministry guidelines, and so far 54 budgets

have been received. I can report that of the 54, 31 boards have been

able to make the hard decisions and keep their '85-86 budgets at the

authorized level. For those who have complied, the task has been no

easier than for those who submitted budgets in excess of the

guidelines. The difference is that these districts have accepted the

need for control, have planned for it and have concentrated their

energies on the task of managing the system.

Of the districts that have not complied, some are simply making a

political statement and will comply, I am sure, when they receive the

directive that will be issued today requiring them to comply under the

act. Many school districts right now have two budgets already prepared.

As a matter of fact, they have come to my office and delivered two

budgets: one a compliance budget, the other a needs budget. Some of

them have been reasonable; others are making, in my view, staggering

statements with respect to the differential. Other districts cannot

comply because they have included in their budgets an allowance for

compensation increases. I have told the boards repeatedly that there

are no funds available in 1985 for salary awards. The Minister of

Finance's statement reinforces that point.

It is interesting how members of the opposition, and particularly

the Leader of the Opposition, is always free to quote Manitoba. Here's

a March 6 statement from the Winnipeg Free Press : "As well, the

proposed budget does not include salary increases for 1985, which are

being negotiated with staff." A further quote by a trustee in the

Winnipeg school division: "'It's the fashion to blame both the

provincial and federal governments for education underfunding,' said

trustee Esther Sims. 'But it's up to us to cut the fat."' No doubt

Manitoba can pick on some things here, but the fact is that it's not

all peaches and cream in Manitoba. We're going to have more to say

about this tremendous comparison which is always being thrown at us

from across the floor.

I repeat, the Minister of Finance's statement in the budget speech

reinforces the point that there is no further money for education. In

particular we're talking about salary increases. The funds are to be

used to maintain services to our children, not to increase the income

of teachers and administrators. Every increase in salary will result in

fewer jobs for teachers. The BCTF executive will of course say that

this is unfair; that teachers have been put in a difficult position in

having to choose between jobs and pay increases. Mr. Speaker, I can

sympathize with their position and with those members or past members

of the BCTF executive who are present in the chamber today.

AN HON. MEMBER: Where are they?

HON. MR. HEINRICH: I'm sure I saw....

May I have leave to make an introduction, Mr. Speaker?

Leave granted.

HON. MR. HEINRICH: I'd like the House to welcome Larry Kuehn, who is a past president of the B.C. Teachers' Federation.

DEPUTY SPEAKER: I should point out to the minister that leave is not really required during your own speech. You can just refer to the guest.

HON. MR. HEINRICH: It's a matter of courtesy. I'm not going to take advantage.

Mr. Speaker, I can sympathize with their position. They would like

to have both. We would all like to have both, but government does not

have that luxury. The unemployed people in this province do not have

that luxury. Small businesses who have lost their investments do not

have that luxury. We must make choices and the priority must be jobs. I

am confident that teachers will make the same choice and work with

school boards to protect jobs and maintain service levels for their

students.

MR. HANSON: Who wrote this?

HON. MR. HEINRICH: Myself and a couple of others worked for

some time — the same as the member for Victoria when we listened to his

material on Bill 3.

I cannot deny that some jobs will be lost. Enrolment in public

schools has declined. However, the number of jobs lost can be minimized

by a cooperative attitude on the part of teachers' organizations and an

understanding of the management problems faced by school boards.

Mr. Speaker, jobs are the number one priority; salary increases are not. I

repeat: jobs are the number one priority and salary increases are not. It makes

no sense for school boards to budget for increases; they do not have the ability

to pay. I expect school boards who have done so to revise their budgets. Many

districts have already complied, and others will submit revised budgets this

week.

Some, however, insist on perpetuating the myth that further cutbacks in funding

will devastate levels of service. Some have chosen to organize campaigns for

more funds rather than face the task of running their school districts. I have

listened carefully to their arguments for special treatment and to their lists

of what they call "unique problems." I am left with one question:

why is it that some boards can manage, Mr. Speaker, but others cannot? I'm

not convinced that boards such as Vancouver and Delta, who have not complied,

have valid reasons for special consideration or have unusual difficulty in meeting

budget guidelines. I can only conclude they are incapable of making the transition

from a period of ever-expanding budgets to the very different fiscal realities

of today.

I was told by some boards that government should return full local

taxing power to them so that budgets could be expanded by increasing

residential property taxation. We gave boards an opportunity to seek

additional funds from their taxpayers, but they decided to forgo the

option. Now they expect the provincial government to put additional

demands on the taxpayers of the province. We will not do what they have

refused to do. That discussion should now be put to rest; our task is

to manage — and manage well — with the funds we have.

One of the reasons given to me for why referendums were not

acceptable was that there wasn't adequate timing. All I know is this:

if we can drop a writ and conduct a provincial

[ Page

5351 ]

election for the entire province in one month,

surely there was ample time if people felt they wanted a referendum.

Everybody told me when I visited — and as you know I spent a lot of

time in three and a half months traveling — that this issue crosses

political lines and parties; there is concern. There was the

opportunity for those people to take that initiative if they so wished,

but they weren't prepared to do so.

One of things I think we're doing that I think is very important

right now is redefining the roles and responsibilities of the groups

involved. That process had begun. In January a discussion paper on

education was published, and interested parties were invited to

participate. A public debate was held on these issues. March 15 — and

that time has now expired, and no doubt there are probably some

submissions still being made.... I can advise you, Mr. Speaker, that

the response from the members of the public has been very good. The

returns received as of today represent input from more than 17,000

people. I think that's an extraordinary response — 17,000 people, who

have made one comment or several comments, or submitted briefs, or half

a dozen people who have submitted a brief together. At least 17,000

people have said there're interested in the public school system, and

they would like to advance their views.

From the public dialogue we should all gain a better perspective on

the directions for education for the next five years. From that

perspective a new School Act will be developed for this House to

consider.

MR. ROSE: When?

HON. MR. HEINRICH: All I want to advise the member, my

critic, is that I will work very hard, harder than I'm working now — as

I can; we can all work harder if we try harder — and we'll have it here

for you.

Interjections.

HON. MR. HEINRICH: I've heard about that for 25 years from

people in British Columbia — about wanting a new School Act. I give you

my unequivocal commitment that there will be a School Act in this

House, and I'll bring it in.

AN HON. MEMBER: Before the turn of the century?

HON. MR. HEINRICH: Yes.

Mr. Speaker, I've discussed the wider implications of this budget

for education and also the necessary response of the education system.

I think it's been good. The budget speech has reminded us of our

economic and social potential. Let us put the funding issues in proper

context and get on with doing the job.

Now there were some comments made yesterday by my critic which I

think have to be responded to. I enjoy the comments which he hurls

across the House from time to time, but I know that he too has his

difficulty finding solutions. I enjoyed this statement from the Alberni

Valley Times , which no doubt has come to you, Mr. Member: "Rose long on

criticism, short on solutions." It felt wonderful to see this line,

because of course I've had that unfavourable headline in a lot of the

press around British Columbia.

[3:00]

MR. ROSE: More than I have.

HON. MR. HEINRICH: I know, but I just want you to know that I'm glad you haven't got all of the solutions either.

There were a couple of comments yesterday with respect to the states

of Washington and California. Maybe, Mr. Member, you and I have the

same clippings. I just want to refer to the budget from the state of

Washington, our neighbours immediately to the south, which you referred

to yesterday. It's from the March 15, 1985 Seattle Post-Intelligencer .

"Legislative leaders responded cautiously, but leaders of teachers' and

state employees' unions reacted angrily. The governor said no decision

will be made until next year about when and whether salary hikes will

be given to teachers, state employees and faculty at community

colleges." It makes references to penny-pinching and the state's

teachers' union. We've got all of the points here, and I don't

understand where you're coming from with respect to your comments. "The

amount of money which was advanced by the budget under the current

leadership wasn't anywhere near what was expected to be brought down."

Is that correct?

In conclusion, I wish to say this: it's our job — and mine in

particular — to preserve the public education system, to be its

advocate. Our concern — and we planned this over a three-year period —

was to prevent the system from exploding and roughly doubling in seven

fiscal years from $1 billion to $2 billion. I'm rounding those figures.

Something had to be done. I think the formula we brought in is

equitable and fair. I'm not saying it is infallible or perfect, but

it's been a tremendous benefit and improvement. The counsel I received

from those responsible for administering the school districts

throughout the province — superintendents, officials,

secretary-treasurers, trustees, some chairmen — was: "Good marks on the

system. There's just a concern at times, and if we had a little more

money it would make it better. Other than that, we give you full marks

for what you've done."

[Mr. Ree in the chair.]

All I have to do is refer to the Province dated February 7, 1982,

when everyone was clamouring. No politics, no partisanship; it came

from everywhere. Members of both political parties — there are pictures

of them at the bottom of the page — were saying: "Please change the

system to try to bring in some degree of equity between districts and

some soundness in funding."

In concluding, I speak against the motion advanced by the member for North Island (Mr. Gabelmann).

MR. REYNOLDS: Mr. Speaker, I ask leave to make an introduction.

Leave granted.

MR. REYNOLDS: I would like to advise the House that in the

galleries this afternoon I have 21 grade 8 students from the new co-ed

Collingwood private school in West Vancouver. I couldn't think of a

better time for them to arrive in the House, to listen to the Minister

of Education and now the eloquent second member for Vancouver East. I

would ask the House to welcome these students and their chaperone, Mr.

Gallagher.

MR. WILLIAMS: I want to talk today about two things, one

being the relative decline of the industrial structure of our forest

industry. We've had a lot of speeches in this House that

[ Page 5352 ]

have made it clear in terms of the decline of the

forest itself and the land base, but we haven't yet addressed our

failures in terms of industrial structure. I think that's a serious

matter and one worth some long discussion.

I wanted to talk about another issue as well, so I had to make a

choice. The other issue is the Shoal Island report no. 7 of the

ombudsman to the Legislative Assembly of British Columbia. That

document arrived in this House about a year ago. I would like to

reflect on some of the things the ombudsman told us in terms of the

problems of scaling at Shoal Island, on some of the information I've

since been able to obtain from various departmental memos in the

Ministry of Forests, and on the job that the ombudsman has done, which

has been of considerable benefit to the people of the province.

Why talk about Shoal Island? Because it's one of the serious cases,

maybe the most serious case, that the ombudsman has brought before the

Legislature in his nearly five-year career. Why? Because the ombudsman

was regularly stonewalled in his efforts to prepare the document;

because the Attorney-General of this province abused the power of his

office before the ombudsman submitted the report to the Legislature and

tried to prevent that report from arriving here and obfuscated

afterwards with phony criminal comments. Why? Because at the height of

the ombudsman's investigation we were at the height of restraint.

What was the ombudsman trying to tell us? The ombudsman was saying

that there were millions of dollars' worth of trees not being counted

at Shoal Island. But the government seemed unconcerned, consistently.

The deputy, the minister, the Premier, the cabinet, assistants to the

Premier and assistants to the cabinet turned a blind eye to what the

ombudsman was trying to get through to them. Restraint was beginning,

you were closing down rape-relief centres, you were cutting back on

day-care centres, and all of this at the time that the ombudsman was

trying to tell you that millions in real revenue that was legitimately

ours was not being collected. The government was unconcerned. The

government closed its eyes to as many as 4,000 truckloads of logs

coming through the gates at Shoal Island.

It's important to look at Shoal Island because there were five other

dryland sorts operating in a similar manner, the bulk of them operated

generally by the same company: British Columbia Forest Products.

HON. MR. BRUMMET: How do you relate this to the budget?

MR. WILLIAMS: This is money that we have lost in British

Columbia, that we have still not collected. It's worth reflecting on it

in terms of the continuing grinding-down of the Forest Service, and the

continuing privatization that's going on, including the privatizing of

scaling itself. It's like turning over the cash register in the

supermarket to the people taking out the groceries. That's what you

guys want to continue to do with our forest resource.

What we're talking about, Mr. Speaker, is public timber. It has an

immense value. It's important to look at Shoal Island because the

company, B.C. Forest Products, would not cooperate with the ombudsman.

They would not even cooperate with the ministry or the minister,

despite legislation that makes it clear that the ministry and the

minister have the power to obtain information from those corporations.

They would not and have not opened up their books to either the

ombudsman or the ministry.

It's important to review Shoal Island because the issue is still

unresolved, because some of the timber that went through there is still

unaccounted, and because the contractors — the people actually logging

on BCFP lands — have still not been fully paid. The whole matter,

strangely, has been referred to a medium-level civil servant: the

regional manager for the Vancouver forest region in Vancouver, Mr.

Grant.

It's important to review Shoal Island because it's important to show

the need for a truly independent ombudsman, which we have, and because

it appears that the ombudsman — and people like the member from West

Vancouver are challenging him — is in jeopardy at the hands of the

current government.

Let's summarize the basic case, Mr. Speaker. Shoal Island, owned by

BCFP, is a dryland sort. It was started in 1978. BCFP pioneered dryland

sorts, rather than water sorts. There are significant advantages in

dryland sorts in terms of retention of logs and the rest. While scaling

itself is simple enough in theory — it's just a counting and measuring

of the size of logs — BCFP set up a system at Shoal Island and the

other depots that was complex and could not be checked. While the logs

were brought in in bundles, the scaling was not done when the logs came

in by bundles but by individual sort codes of some 20 different types

of logs on different parts of the site. It was a hustle operation on

the part of BCFP. Many of the sorts got boomed away again very quickly

to other plants so that the original bundles were never properly

reviewed. There was no single checkpoint, and there was no doublecheck

either, as the act asks for.

One of the contractors that had worked for BCFP cutting timber on

the contract area packed it in in 1980. That was Kyuquot. They packed

it in because they couldn't make any money, and because they had some

doubts about whether the scaling was correct. At any rate, they

couldn't make any money. The contract was taken up in turn by a

long-time contractor, a man with long-time connections — ironically —

to the Social Credit Party, Mr. Mahood — Mahood and Traer. They

commenced feeding the Shoal Island operation in 1981. They had doubts

by April about the correctness of the tally with respect to that

operation. So they hired independent scalers to check the material for

a couple of weeks, without advising either the Crown, the Forest

Service or B.C. Forest Products, and they found an 11 percent

shortfall. It clearly was the difference for them between profit and

loss, or life and death. That check-scaling was stopped, though,

because B.C. Forest Products intervened and blocked it.

There were subsequently other checks by other consultants and the

ministry. All of those further checks indicated a shortfall. One was

the T.M. Thomson report, an estimate prepared by an outstanding forest

consultant who works internationally out of Victoria. He estimated a

shortfall of some 226,000 cubic metres. He said that was a loss to the

contractors of between $4.5 million and $6.3 million, and it was a loss

to the Crown, in terms of stumpage, of $1.3 million to $2 million. But

that was only half of the volume involved, because BCFP was logging

half of the stuff themselves from that particular show, and that was

coming into the yard as well. So if we put those numbers together, what

we're talking about at Shoal Island is a shortfall of revenue to the

contractors and revenue to the Crown of some $10 million, and the same

thing happening on five other sites — a potential loss to contractors

and the Crown, in a time of so-called restraint, totalling some $60

million.

[ Page

5353 ]

The Shadforth scale then said there was a shortfall of 11 percent.

That was stopped, as I said, by B.C. Forest Products. Why would a

company do that, Mr. Speaker? If the scale was less, then the company

would benefit; that couldn't be the reason. If the scale was the same,

the company is in the same position. But if in fact there were more

logs going through, then the company would face a loss on the improper

profit it had been receiving.

When did Shoal Island start? It started in 1978. When did this

problem finally get noticed, and when did the whistle blow? Not until

late 1981. Some four years were lost. There were subsequent scaling

checks as well: Whittaker made a check and reported to Mr. MacPherson,

who is now the Deputy Minister of Forests, and it was clear that the

problem was serious and should be dealt with. So by November the

ministry realized they had a serious problem on their hands. But a year

later the minister replied to the contractors. A year later they were

still dealing with the fact that they hadn't got their money. They

said, in a letter to Mr. Mahood, the following. That's the deputy

minister, Mr. Apsey, who has now gone back to the Council of Forest

Industries — the industry's lobby — from where he came. Apsey's letter

to Mr. Mahood, November 15, 1982, is interesting, Mr. Speaker.

[3:15]

What does the deputy minister say, after he's got all this

information, checked by several sources, all of them reliable? He says:

"Scaling is a statutory procedure to assist in the calculation of

revenue due to the Crown." "Assist," he says. I thought it was

supposed to be a precise measure of volume to determine the value of

the Crown's assets. What does Mr. Apsey carry on to say? "Scaling was

performed at the request of the licensee." But it's required by

statute, Mr. Speaker, And then he said: "Any duty the Ministry of

Forests had would be to the company" — that is, B.C. Forest Products —

"for whom the scaling was done and not to its agents or contractors

independently." But surely the ministry's duty was to the public at

large. It's interesting to see that the COFI Deputy Minister of Forests

saw his first duty as being to British Columbia Forest Products.

Then Mr. Apsey said: "It would appear that any reliance placed on

the scale returns by your company was at your choosing and based

largely on the licensee's assurances that the scaling at Shoal Island

was reliable." In effect he's saying: "If you accepted our numbers, the

more fool you." That's what Mr. Apsey said to the contractors. This

letter was written to Mahood on November 15, 1982, in reply to Mahood's

letter of an earlier date. It was written despite all of the

information the deputy minister had in his files and advice from his

staff to the contrary: in effect that there were serious problems at

Shoal Island, and that both the Crown and the contractors had lost.

Finally, the matter gets to the minister's desk, the member from

Yale. A memo from Mr. Apsey to the minister of May 19, 1983, says

that.... It deals with the 11 percent shortfall, and it goes over truck

volume details that Mr. Thomson, an outside consultant, had gone over,

and it kind of fogs them up.

A good minister can tell when he's getting fog from his staff and

when he isn't. But this minister didn't quite see it. If you put the

numbers together closely, the truck haulage weight was far less during

the Shoal Island operations period than either before Shoal Island or

after. The cubic metres from the same group of contractors increased

significantly before the dryland sort and after the dryland sort. But

the numbers are jumbled in the report, and I can see that the minister

might have got lost in that minor bit of fog that his staff left with

him. But it is abundantly clear what happened, and it was abundantly

clear to Mr. Thomson, the international consultant here in Victoria who

looked at the same numbers.

In his report to the minister Mr. Apsey says the company refused to

provide its own information. Did the minister do anything about it? Did

the minister pick up the phone and demand the information? Did he bring

in the lawyers and demand that the data be provided? The minister did

not.

What happened, though, was that when the Forest Service staff did

one small check in the September period, they found a 6 percent

difference, and that was after a considerable amount of checking — by

then much more careful work had been done. As a result, B.C. Forest

Products paid an additional 6 percent ex gratia to the contractors. But

did B.C. Forest Products pay the 6 percent to the Crown? The answer is

no, Mr. Speaker.

In his memo to Waterland, Apsey said that in their studies for

September and October of '81 they were sufficiently disturbed to.... It

was disturbing, and they said there was direct evidence that logs were

being missed at Shoal Island, and further, that recently interviewed

scalers and scaling supervisors who had worked at Shoal Island were of

the opinion that there must have been a continuing situation in which

logs were being missed. That's in the memo to the minister of that

previous date, Mr. Speaker. Mr. Apsey continues in the memo and says

the volume lost was at least 85,000 cubic metres. The contractors

argued that there were 226,000 cubic metres lost, as Mr. Thomson

argues. The truth was clearly more than what the company had paid.

Finally, in the memo to the minister, Mr. Apsey said: "If the

ministry takes no action, then the contractors may go to court, and to

the ombudsman to intercede on their behalf. In either event the

investigator would have powers to obtain evidence under oath and obtain

documents and require that they be produced" — this despite the fact

that the deputy and the minister had the right to obtain information

then and there, but did not. The minister, in face of this information

and all of the data that showed there was a significant shortfall,

simply accepted the recommendation from Mr. Apsey that the ministry

could not determine what volumes went through Shoal Island unsealed.

That's the fighter for fair play; that's the fighter for equity who is

the Minister of Forests.

After all this, the ombudsman got on their tail. What did Mr. Apsey

say in the letter of January 6, 1984, to the ombudsman, after

considering the report? He said: "By issuing a new account, the

ministry would be conceding that its scale returns are inaccurate in

the amount of the new billing. The ministry makes no such concession" —

this despite the fact that BCFP paid more to the contractors for one of

the four years in question, and despite the fact that his staff said

that it wasn't working right. His staff said the numbers were wrong,

and four groups of outside consultants said the numbers were wrong,

that there was always a shortfall. Mr. Apsey said that despite all the

background information he had.

What's been said, I think, is clear. It was available at a very

early stage, and the minister tended to ignore it. There was a memo

that went out to all the scalers and supervisors in the Duncan forest

district way back after those initial studies. It said: "By now I am

sure that you have heard any number of stories about the errors in

scaling at Shoal Island, Crofton. I am taking this opportunity to set

the record straight." This

[ Page 5354 ]

was a memo from Mr. Holloway, the operations superintendent for the Duncan forest district. He said:

"Our scalers have been missing pieces, a significant failing.

The error.... . does not reflect on any scaler's technical ability to scale.

The fault lies in the system under which the scalers are required to work at

Shoal Island."

"If you have personal knowledge of the system at Shoal Island,

I probably need say no more. If you are not familiar with Shoal Island, I think

it suffice to say Shoal Island employs probably the most complex system of record-keeping

— not to be confused with scaling — of any dryland sort in the province, with

virtually no built-in checkability."

That was a memo made available to all scalers in the fall of 1981.

Since then the minister has finally referred the whole matter to the

regional forest manager, Mr. Grant, in Vancouver, to determine the

amount of unscaled wood at Shoal Island. Since then there was a hearing

in September, a hearing that was supposed to take five weeks and

instead received only written briefs and lasted no more than two days.

Still we have no report to the public, no statements from the minister,

no redress for the contractors, no additional stumpage for the Crown.

Where are we now? We still don't know. There has still been no report

from the minister. There's been no report to the public.

I am aware, though, of an additional memo, Mr. Speaker, dated

September 20, 1984, from Mr. H.J. Whittaker, who was then the regional

scaling coordinator — that is, in charge of this whole area — for the

provincial government and a long-time Forest Service employee, to Mr.

D.L. Clancy of the legal services branch. He says — and he's pretty

clear about what his duties are, unlike Mr. Apsey, who clearly saw his

duties related to British Columbia Forest Products and the major

corporations: "My primary duty is to ensure that a true and accurate

scale is done by all scalers, and that no parties that have an interest

in the scale suffer because the scale was inaccurate for whatever

reason. In this case there are at least four parties involved: (1) the

logging contractors who were under contract to BCFP to log certain

timber;

(2) BCFP, who would consume a portion of the timber...;

(3) other lumbering companies who purchased timber that had been scaled and

processed at Shoal Island; and (4) the citizens of British Columbia,

who own the timber." Later in the memo he's clearly responding to the

kind of push he's getting from the lawyers in the Attorney-General's

office, because he says: "Is it not reasonable to assume the Thomson

report has some merit?" He underlines "reasonable" and "some." Then he

asks if it isn't reasonable to assume that check scales conducted at

Shoal Island by his staff in September and October have some merit.

Then he says: "Is it not reasonable to assume the Burdge-Whittaker

report (on truck load sizes) has some merit, and is it not reasonable

to assume that the check scales from two of BCFP's converting plants

have some merit?" That's what Mr. Whittaker said to Mr. Clancy of the

legal services division.

What that tells me, Mr. Speaker, is that there's continuing pressure

from the Attorney-General's office on this issue, just as there was

from the Attorney-General before, in terms of blocking process and

procedure. Mr. Whittaker has since taken retirement, like other senior

people in the Forest Service, and we've lost him. He had a different

point of view. He said it wasn't just one big company's interest that

he was concerned about, as Mr. Apsey did.

Despite that pressure, Mr. Whittaker responded, and his concluding

paragraph in that memo reads as follows: "I accept that the premise" —

and clearly he has been challenged by the A-Gs office again — "that the

reasons why I think a shortfall in volume occurred is narrow in scope.

Nevertheless, it's my opinion that a shortfall in volume took place at

Shoal Island during the entire period in question" — that is,

throughout the four years. The chief scaling person for British

Columbia concluded that there was a shortfall, and that BCFP got an

improper benefit for four long years. Their hustle-hustle operation at

Shoal was to serve their interests. It served not the contractors, the

hard workers, the loggers in the bush. It served not the Crown, the

owners of the timber. It served British Columbia Forest Products.

What's the member for Yale, the Minister of Forests, doing about it?

We don't know. It has been stonewalled by various sections of

government. And we're all the losers. All of this in a time of

restraint, when that money could be used to pay for the schools that

this minister a few minutes ago said you didn't have. It was there but

you were turning a blind eye to it, because it was public timber and

the public be damned.

When this man became Minister of Forests a decade ago, Mr. Speaker,

for some reason he found it necessary to give a speech. It was his

first speech, and he said: "I want everybody to know that I'm no

patsy." I wonder why he felt it necessary to give the speech, Mr.

Speaker? One thing Shoal Island tells us is that the minister is indeed

a patsy.

[3:30]

DEPUTY SPEAKER: Mr. Second Member for Vancouver East, I

presume you were not implying anything untoward toward the minister on

the statements....

MR. WILLIAMS: A patsy is a patsy, Mr. Speaker.

MR. MOWAT: Before I start my speech in support of the budget,

I'd also like to welcome, as the member for West Vancouver-Howe Sound

did, the students from Collingwood School. It's a pleasure to see them

in the gallery this afternoon.

It is with pleasure that I rise and speak in support of the budget

brought down by this government. I would like to thank all the

hard-working individuals who have aided the Minister of Finance in his

preparation and analysis: the economists, the accountants, the

managers, the secretaries and all the staff who worked on the

publishing at the Queen's Printer. It represents a great team effort.

The publication "The Economy in a Changing World" is must reading for

everyone in British Columbia.

I congratulate the Minister of Finance for preparing a budget of

economic recovery and partnership in progress. This budget provides

B.C. with a tremendous opportunity to get its economy working in high

gear as it pulls out of a global recession. Incentives are there for

business to invest, to expand and to hire more people. The potential

for even greater growth is out there in our people, in our resources

and in the spirit of B.C.

Mr. Speaker, the budget provides very well for those social services

that make life more livable for all of us, especially for the less

fortunate in our province. This budget will help our citizens to

continue to achieve the greatest possible degree of independence.

[ Page 5355 ]

In health, education and social assistance it will sustain the

generous levels of support which British Columbians have come to

expect. In health, education and social assistance the expenditures

will be $6.3 billion, up 6.9 percent over last year. Another way of

putting it is that 70 percent of our budget for this year will be spent

on health, education and social assistance. For example, in health

alone, it is up 5 percent over last year, to a total of $2.677 billion.

Just one small example is the fact that we will be purchasing over 50

new ambulances this year to provide a very needed, vital and essential

service to our citizens. This alone, for providing just 50 ambulances,

will be $1.8 million.

The government in this budget is able to provide incentives and

maintain services because it has, in the past years, acted responsibly

in the face of rising government costs. We have not allowed British

Columbians and their children to be buried under an excessive public

debt, which would not only cloud the future of economic growth now but

also that economic growth which our children will create and enjoy.

As the Premier said in his television address of February 16, we now

have room to move, to take positive action and to mobilize our

resources within government and the public sector to get our people

back to work. Some would tell us not to worry about deficits; just to

accept them as a way of life, and to get more money into people's

pockets. Well, Mr. Speaker, I too want people to have more money in

their pockets, but I want it to be their money. I repeat: I want it to

be their money, not our children's money. That's what would happen if

the government of this province forgot its responsibility to the future.

The interest on the provincial debt this year — just the interest

alone — is $384 million; or another way of putting it is that over $1

million per day every day of this year will be spent to pay the

interest on our debt. Our children will have no future if we continue

to add to the provincial debt in this manner. I repeat for the students

who are here: we're going to be paying a million dollars per day

interest on the debt. If we continue to add to our provincial debt,

that interest is going to increase, and there will be no future for our

children. They'll go to work to pay the debts that we've incurred.

Responsibility to the future demands that we refrain from spending,

even when we might otherwise want to, and that we invest in our future

growth. We must be at once bold, measured, original and timely, within

the confines of the information and money available. This government

has taken what I believe to be firm and positive steps toward providing

all British Columbians with a future they will benefit from and look

forward to.

Part of the future will be the result of the upcoming Expo 86 in the

city of Vancouver, in which I take deep pride. Already 35 countries

have committed themselves to a pavilion at Expo 86. Most recently Japan

and Switzerland have joined these ranks. Each of these countries,

innovators in transportation and communications, one in Europe and one

in Asia, see the value of Expo, and the value of British Columbia not

just as a market for their own products but also as a secure and

important place to invest.

Fifteen companies have signed with Expo, the most recent being General Motors,

which will be building a $7.2 million pavilion complete with a theatre and a

display area. Pacific Western Brewing of Prince George have just come on and

signed an agreement to be the official suppliers of beer to Expo. It is very

interesting that a provincial company out of Prince George is taking on that.

They will be spending $1 million to do this. We welcome the international and

corporate guests, as do the 72 community committees which have been formed throughout

the province and are planning special events and visits in conjunction with

Expo. They demonstrate better than anything that the spirit of Expo is the spirit

of British Columbia.

Mr. Speaker, to give some of our less informed members an idea of

the scope and worth of Expo, I would just like to review a few numbers.

The provincial government, through the lottery program and other

sources, will make $800 million available to Expo during the economic

life of the project. That sum will nearly be matched by $700 million

from the private sector, for a total investment of approximately $1.5

billion. The return through the economy will far exceed the investment.

Approximately $3.7 billion will be generated in the Canadian economy in

the form of wages and purchases of goods and services. Of that, $1.34

billion will be in British Columbia. It is well to remember that these

figures do not include the benefits in investments, in new jobs created

by Expo and in having stimulated a global interest in British Columbia.

The jobs generated just by Expo are impressive. I take particular

interest in these figures, not just because of their size but because

any number could represent some man or woman in my riding of

Vancouver–Little Mountain working and supporting themselves and their

family. Over all, 63,000 person-years of employment will be created.

During its operation, in terms of both direct and spinoff jobs, 13,800

people will be working on the Expo site and 21,000 people will be

working off the Expo site.

I would like to mention that Expo has proven conclusively that all

British Columbian workers can work side by side in harmony and

productivity. There are very few projects of this size in the world

that have enjoyed the solid and stable working relationship that Expo

has. Expo exemplifies a spirit of cooperative labour relations which

will guide our province in years ahead.

[Mr. Strachan in the chair.]

Mr. Speaker, I could go on about the benefits of Expo, but I want to

stress one thing. It's going to be a heck of a lot of a good

old-fashioned fun. It will be exciting to see; it will be even more

exciting to participate in. We will all learn from the exhibits. We

will all enjoy meeting people from around the world and, I must

confess, sampling many of their cuisines. Even in something as basic as

food, we British Columbians have a great deal to learn if we are going

to remain competitive in developing our agriculture industry. I am

reminded of a story that the Minister of Agriculture (Hon. Mr.

Schroeder) recently told, that our sales of apples to the Chinese

market picked up considerably once it was realized that to them the

perfect apple is striped and long, rather than our own British Columbia

idea of a perfect apple being red, round and large. The Pacific Rim

agricultural show at Expo 86 will be a perfect opportunity to learn

such similar ideas important bits of information.

The experience of new people, new ideas and new advances in

communication and transportation will teach us something about the

world and about ourselves. I hope particularly that the people of

British Columbia and Canada will learn more from the example of one

young man, Rick Hansen, who will be coming to Expo when he returns to

Canada as part of his journey around the world. Mr. Hansen, a

paraplegic, has a dream. His dream is to wheel around the

[ Page 5356 ]

world, 27,000 miles, and with it he will leave a

legacy. The legacy will be left twofold: firstly, in the awareness of

the needs of the disabled throughout the world; and, secondly, he will

exemplify the programs that are available in British Columbia for a

seriously disabled person to achieve what he will be doing on behalf of

British Columbians and on behalf of Canadians.

He will be leaving on March 21 at 9 o'clock from Oakridge Shopping

Centre. He will be traveling through 11 states of the United States —

Washington, Oregon, down the coast and over to Florida, touching 11

states. He will then go to Ireland, Scotland, England, France, Belgium,

Netherlands, West Germany, Denmark, Sweden, Norway, Finland, the

U.S.S.R., Poland, East Germany, Czechoslovakia, Austria, Switzerland,

France, Spain, Portugal, Gibraltar, Morocco, Algeria, France, Monaco,

Italy, Yugoslavia, Greece, Jordan, Israel, Kuwait, Singapore, New

Zealand, Australia, Hong Kong, Japan, Korea, China and Taiwan,

returning to the United States, where he will go through 17 more states

starting with Hawaii, back to Florida and up the eastern coast, leaving

Maine and entering British Columbia. He'll have gone through 34

countries and over 100 major cities.

He will come back to Expo 86 in September after traveling across

Canada through our ten provinces. He will bring, again, a ray of hope

to all the disabled in the world, and leave a legacy in dollars for

spinal-cord research and also bring a legacy of rehabilitation.

Our permanent benefit to Expo will be to provide for making

Vancouver a permanent city for conventions not only in North America

but throughout the world. Already conventions have a strong impact on

the Vancouver economy. The president of the Greater Vancouver

Convention and Visitors Bureau, Mr. Art Jones, estimates that in 1984,

conventions contributed approximately $100 million to the Vancouver

economy.

[3:45]

Canada Place will be instrumental in Vancouver emerging into the big

leagues of convention cities. At present, our largest facility in

Vancouver can accommodate 1,200 participants. With Canada Place that

number will climb to 6,000 persons. It will provide Vancouver with a

range and flexibility met by only a handful of North American cities.

The Trade and Convention Centre at Canada Place holds particular

promise. The investment of $144 million by the federal government and

$50 million by Tokyu Canada in their hotel is a clear demonstration of

the faith in the future not only in Vancouver but in the whole province.

The federal government contribution to the total project at Canada

Place will be over $250 million. This is indicative of the growth links

between British Columbia's economy and that of the Pacific Rim trading

partners. When we look at what the provincial government has done for

Expo, we look at the moneys they've invested in the city of Vancouver

and the lower mainland. The B.C. Place Stadium, $200 million; the ALRT

will represent an investment of $1 billion by the time it reaches

Surrey; Expo will be $800 million in provincial government dollars. The

Annacis bridge will be another $150 million towards bringing people to

Expo. The city of Vancouver has contributed $5 million to the Trade and

Convention Centre in the form of road access, and it is to be commended

for its efforts. But it is to be hoped that the city of Vancouver will

continue its interest and efforts to ensure that the centre is run and

maintained to its maximum potential.

The benefits to Vancouver as a city will be great. The city of

Vancouver will be receiving this fantastic structure free. There will

be no capital expenditures for the city of Vancouver, and therefore it

must be the responsibility of the city of Vancouver to show aggressive

leadership, particularly from our mayor Michael Harcourt, to bring

forward a task force of the hotel industry, the restaurant industry,

the trade and convention centre business and the chambers of commerce.

The first ministers should be available. The mayors and councils of the

lower mainland should be on the task force. I only wish that the first

and second members for Vancouver Centre were here to listen to the

problems that we're having in the city of Vancouver. No one wants to

take over the leadership of the convention centre; no one has come

forward to run the convention centre. We are already losing many of the

conventions that this centre can hold. Last week we lost a large one

from Texas. Unless the city of Vancouver comes forward and shows some

leadership in running and maintaining this potentially great investment

for the citizens in terms of jobs and money, and the many industries I

mentioned — the restaurant industry, the hospitality industry, the taxi

industry — we are going to have a very difficult time with a convention

centre that will not be used.

B.C. Place Stadium is already attracting events which otherwise

would not have taken place in Vancouver, and has proven the market.

Last year there were 12 trade and convention shows held in B.C. Place

Stadium, four of which were brand new to the province. Special events,

such as the Michael Jackson concerts and the papal visit have shown the

capacity of the stadium. The potential for job creation in the

convention and tourist industry is even stronger now that B.C. is

regaining its full confidence and asserting its full appeal. Certainly

this budget recognizes its potential, as it contains measures dealing

with hotel room tax relief, it also provides a stimulus to the fishing

industry and to the recreational boating industry through a tax

reduction on marine fuels, aviation fuels and bunker fuels — used by

our larger vessels — from 20 percent to 7 percent.

We should nonetheless remember that B.C. continues to create jobs.

From December 1983 to December 1984, 20,000 new jobs were created in

British Columbia. No other western province created more. From February

1984 to February 1985, 29,000 new jobs were created in British

Columbia. Manitoba, for instance, in that period of time created only

5,000. Indeed, in the last three months British Columbia has led all

other Canadian provinces in its job creation rate. It is on a rise. We

heard this morning from two agencies that they are getting continual

requests for job placements.

This is not to deny that too much unemployment still exists in our

province. As long as there is one person who wants work but can't find

it, there is too much unemployment. However, we must remember that

B.C.'s population continues to grow, not only through our own birth

rate but also through migration into the province from other provinces.

Mr. Speaker, I beg your indulgence to present some more statistics

which our colleagues may be unfamiliar with. From 1980 to 1984

approximately 77,000 people immigrated to British Columbia. In

comparison, 16,000 left Manitoba. Many of those former Manitobans have

ended up in British Columbia. I can't say that I blame them. We have

the climate, we have the greatest potential to create jobs and we have

a strong belief in our future. Yet there is no doubt that when people

move to B.C. they look for work, and in many cases

[ Page 5357 ]

enrol in our exemplary social programs. After a

little figuring, I'm willing to suggest that had B.C. not experienced

the immigration that it has had in the last five years, our employment

rate would be a full two points lower.

But that aside, Canada is a free country, and B. C. is a free

province. We welcome people to B.C., because we believe in the power of

the individual, no matter what their origin. B.C. cannot be great if it

does not grow. That is the message I hope our colleagues here will

appreciate. Growth requires strong commitment, both to be responsible

to the future and to invest in the future, whether it be in tourism,

the convention industry, northeast coal or aquaculture. This government

has shown its commitment in this budget. That is why I do not hesitate

to join with my colleagues in supporting this budget. I call upon the

people of British Columbia to do the same.

MRS. WALLACE: I was going to remind the House that we were

discussing an amendment, because that didn't seem to be very noticeable

in some of the speeches that I've been listening to lately.

I couldn't help but think, as the last member was speaking and as he

was talking about the $800 million that they were going to get in from

the lotteries, that perhaps this government might be termed the

"lottery and liquor" government, because they are certainly getting a

major portion of their income from lotteries and liquor sales. It's

interesting to note that liquor sales are forecast to be some $390

million, which is well over twice the amount that they expect to get

from our forest and resource industry. That's a shocking figure, when

we have historically been a resource-based province and forestry has

certainly been our number one resource, to find that while we get $154

million in estimated return from forestry, we are proposing to take in

$390 million from liquor sales and $800 million from lotteries. It

indicates to me there's something radically wrong with what's been

going on in our forest industry.

When the Minister of Forests introduced his five-year forest program

— a milestone in the history of forest management in B.C., as he

indicated — back in 1980, he said the objectives of the province were

"to realize the maximum contribution of available forest and range

resources, now and in the future, towards the social and economic

well-being of British Columbia." Certainly the Forest Act indicates

that when the minister grants a tree-farm licence and holds a public

hearing, the first thing he has to look at is the

"... potential for (

a) creating and maintaining employment

opportunities and other social benefits in the province, (

b) providing for the

management and utilization of Crown timber, (

c) furthering the development objectives

of the Crown, (

d) meeting the objectives of the Crown in respect of environmental

quality and the management of water fisheries and wildlife resources, and (

e) contributing to Crown revenues."

Well, it hasn't been happening. Certainly the employment figures

indicate that — or the unemployment figures. Nearly half a million

people are out of work in British Columbia, out of a 2.7 million

population. If you add all the UIC recipients and the social assistance

recipients together, those are the kinds of figures that you come up

with.

There was recently undertaken in my own constituency an economic review, with

the aid of a federal grant, of the situation in Cowichan-Malahat. They came

up with some startling figures. What appears to be the case in Cowichan-Malahat,

which is a forest-based community, is that we have a population of approximately

45,000. In their study, they found something like 7,000 people out of work

— employable people either in receipt of UIC or social assistance, or in receipt

of nothing if they've fallen through the cracks. The average family size

in Cowichan is three people, so if you multiply that 7,000 by three, you have

21,000 people out of 45,000 people dependent on either UIC or social assistance.

That's close to 50 percent.

I was in Lake Cowichan last weekend. You will recall that Lake

Cowichan has had one mill closed. There's been a great curtailment in

the logging industry as a result of one of the companies moving out of

the area. Now the last existing mill, B.C. Forest Products, which has

already put in an automatic greenchain which put some 50 or 60 people

out of work.... I'm not knocking that, because nobody wants to work on

the greenchain, but those are the kinds of things that happen when you

get those improvements. They also took out their veneer and moved it to

Victoria.

Now 47 more employees have received their notice and will be through

there, finished work, on March 22 — over, out. Another 11 will be going

June 15. It's expected that a further 19 will be getting a further

notice. And B.C. Forest Products is saying: "No, we don't really intend

to close down. We're going to do everything we can to prevent that."

[4:00]

If ever there was need for a government-sponsored silviculture

program in the Cowichan Valley, it is now. What we've been doing in the

way of reforestation.... The government will tell you that they've

improved; they're now planting one hectare for every two that are

logged, instead of one for every three. But that's disgraceful. We're

not even keeping up and we're doing nothing to catch up on the 1.2

million hectares that are insufficiently restocked; yet this government

sits on its hands. While every other province has been successful in

negotiating agreements with the federal government under ERDA, this

province has not. Today in question period the Minister of Finance gave

a very evasive answer as to what was going on there, but he admitted in

his budget that that was the case.

If we are to realize the maximum contribution from our forest

industry, then certainly we must move to ensure that we do just that.

Ninety-five percent of the timber resources in this province are owned

by the Crown, and they're made available for use by the private

sector. The quantity of land that is let out under tree-farm licences

is startling. I know we cannot use charts or demonstrations, but I have

in my hand a map that the minister put out which indicates the number

of tree-farm licences issued in this province in 1981-82. It is

amazing, the amount of our forest land that has been turned over,

almost in its entirety, to the private sector, because once you issue a

tree-farm licence, you as the owner of that property, lose control. The

control goes to the private operator.

There are many other forms of acquiring timber — the timber licence,

forest licence, woodlot; lots of other ways of doing it. But this

government, in its wisdom, has seen fit to expand the tree-farm

licence. We inherited some of those. Back in 1906 it was the only

method that the government of the day found available to get any kind

of control over the lands that had previously just been tossed away.

Through the years we have gone on issuing those long-term tenures,

which are either in perpetuity or else almost automatically renewable,

and we have begun to turn over more and more of

[ Page 5358 ]

that Crown land to the private sector under that very firm and secure type of tenure.

At the present time about 28 percent of our annual allowable cut is

controlled by the holders of tree-farm licences. But this minister is

presently looking at 45 applications from holders of forest licences or

timber licences to extend the amount of timber — the number of hectares

— in their treefarm licences. If all of those applications are accepted

— and there's no reason to think they won't be — it will mean that 56

percent of our annual allowable cut is in the hands of the private

sector. That means we are losing control.

If you have occasion to check into those tree-farm licences, they're

very interesting documents. I had occasion some months ago when another

of our mills was closing — that was the Chemainus Mac and Blo mill — to

check into the tree-farm licences, and it's very interesting. The

original document is still the licence, and all the changes are just

little notes and appendages attached to those licences. They seem to go

on and on forever, with a million little changes here and there.

Basically the principle is still the same as when that licence was

first issued. The case in point was the Chemainus mill and the Mac-Blo

tree-farm licence there. The old original licence had indicated....

There is a provision in those tree-farm licences to ensure that what

they cut out of those tree-farm licences must be processed. When that

licence was drafted way back when, it referred to the fact that they

must maintain a processing plant at Powell River. You will recall, Mr.

Speaker, that it used to be MacMillan Bloedel in Powell River. Of

course that has changed completely. There are many other processing

plants. All that was done when the licence was renewed was that they

dropped the words "Powell River." It simply read that they would

maintain processing plants — completely open-ended. That's just one

example of the kinds of things that happen.

Another example occurred with Crown Forest Industries. They used to

have tree-farm licence No. 47 up on the north coast, which had some

provisions that the government could sell the mature timber in that

site to other holders if Crown didn't take it out. This minister, in

his wisdom, saw fit to roll that over and issue No. 47 — a combination

of old No. 2 and old No. 12 under that provision — and simply left that

out, because it had supposedly expired.

Again it seems to me that the Ministry of Forests is still involved

and is moving in the direction of trying to privatize our forest land

almost completely. If we can move from 26 percent to 56 percent in a

matter of a few months, we can certainly assume that that is the

direction he's proposing to go.

The recently completed operation with Canfor Corp. or Westcan; it

has a different name now — is an example of how wrong that is. When you

create a tree farm, you create a single use, a single purpose: it

becomes forestry. The licence that has just been completed with

Canfor.... I'm not sure if it's Westcan. I'll call it Canfor, because

that's what they were calling it at the time it was completed.

Thirty-two percent of that area covered by the application was

productive forest land; the remaining 68 percent is high-site land for

wildlife and agriculture. You will not have the concept of multiple

land-use working if you are going to alienate that land to a single use

under a tree-farm licence. That is exactly what is happening.

My colleague for Vancouver East pointed out some of the problems

that have occurred in the past relative to accurate scaling and getting

an accurate return for our forest resource. I think that is just one

example.

The Minister of Forests was quoted in the House the other day in a

report of an interview that he had held in your town, Mr. Speaker,

saying that there was no competition, so we might as well just turn it

over to the private sector. The reason there's no competition is the

fact that that minister is not prepared to use the powers he has under

the Forest Act. He is not prepared to move in the direction of

protecting the interests of the Crown in this resource. That move, of

course, means that the small enterprise in the forest industry, the

small operators who want their opportunity to make a living and employ

people and operate in this province, are being denied that opportunity.

Any productive forest land is being alienated into the single-use

purpose under the tree-farm licence and under the control of the major

operators. Certainly I'm concerned about that, as are all our caucus,

because this is not the route to go. The small regional operations are

the best users of the resource. We don't have the loss of return from

the small operator that we do with the big operator, and I think that

has been proven over and over. For that reason, if no other, we should

not be continuing to expand those tree-farm licences.

Certainly we have seen a move to privatize not just the land but the

whole operation of the forest industry. We have seen this government

move in the direction of not only giving that land, the operation of

that land and the control of that land to the forest company, but then

saying to them: "You can police what you do." Rather than sending

people — Crown employees — whose interest and purpose for being there

is to represent us as the owners of that resource, what we have said to

those companies is: "You go ahead. You hire somebody to do that, and

we'll take their word for it." That is certainly one of the reasons why

we're in the situation that we're in today, with such a low return from

our forest resource.

We're now looking at proposals where we're going to go even further.

We're going to say to those companies: "Look, not only can you decide

how you're going to manage this and police the management, but we're

also going to let you tell us how much timber you're taking out. We're

not going to bother to come in, review and check this out. We're going

to let you tell us what you take out."

If ever there was an example of sending the fox to watch the

chickens, this is it. And this is it in our one basic resource — our

most valuable asset — in this province. Here where we have some 50

percent of the total forest industry in Canada, we're saying to ten

major operations: "You take it. You manage it. You tell us how much

you've cut. You tell us what your expenses are, and if there's anything

left over you could send us a cheque." In some instances, they say:

"Sorry, there's none left over. You owe us something." That has

happened.

[4:15]

That's what we are doing with our resource, and I think it is

shameful that this government has taken such an attitude toward the

forest industry. It has been one of the major employers of people, and

it will continue to be our most valuable asset. It's not a dying

industry; it is going to continue. If the government managed it

properly, and if the government was committed to getting a fair return

from the resource for the taxpayers of this province, instead of being

committed to doing all they can to line the pockets of the corporations

managing that resource, we would see a far better return and a far

better managed forest. We would see a

[ Page 5359 ]

commitment to ensure that the people of British

Columbia continued to enjoy jobs in the forest industry, and to ensure

that we continued to process our product, rather than shipping out raw

logs.

We've seen the export of raw logs doubled and trebled from other

years, with the blessing of this minister. We've seen him back off....

You know, when there's an election on, it makes a difference, Mr.

Speaker. When there's an election on, he has a big stick and he tells

MacMillan Bloedel, in the Chemainus situation: "Use it or lose it. If

you don't build a mill here I'm going to take away some of your timber

cutting rights." But that all faded out once the election was over. Of

course, eventually MacMillan Bloedel did build a small mill in there,

which is operating with about 150 people, compared to the 600 before.

What is happening to those 600? They are some of the people who are

sitting on the welfare and UIC rolls in Cowichan, making up that 50

percent of our total population, that are.... Two terrible things have

happened as a result of this. One is the social cost to those families

— the discouragement and the lack of opportunity for the young people.

It's a very sad thing to have a man who has worked all his life and

supported his family come into my constituency office and say: "You

know, I'm out of UIC. What am I going to do?" I say: "Look, you're

going to have to go down and apply for social assistance." He doesn't

want to do that. He wants to work. He feels unwanted, unneeded, and

that rubs off on the family, on the wife, on the children. It works

both ways; we have women in the same situation.

It becomes debilitating, and the social costs are high, but also the

loss of productivity. For every person on unemployment, we're losing

something like $4,000 a year in productivity returned to the gross

provincial product. It's not necessary. If this government had a

different set of priorities we would see that there were jobs for those

people in the forest industry. You have to take a long view, because if

we now undertake the silviculture programs that the professional

foresters have been telling us for many years are needed, we will have

trees for the future, we will have jobs for the future, and we will

have income to the Crown in the future, if there's any way we can stop

this minister and this government from giving away in perpetuity that

forest resource.

We must try and turn that around. We must try to ensure that we, the

owners of that resource, keep control of it. At the very worst, if we

alienate land into a tree-farm licence, then at least we live by the

terms of the Forest Act and ensure that the corporations who have those

tree-farm licences carry out the principles under which they have been

granted, including creating and maintaining employment opportunities

and social benefits in the province, providing for the management and

utilization of Crown timber, furthering the development objectives of

the Crown, meeting the objectives of the Crown in respect of

environmental quality and the management of water, fisheries and

wildlife resources, and contributing to Crown revenues.

Those things are not happening. They are simply being ignored. The

companies are being given carte blanche to mine our timber, not to

forest it. Those programs, Mr. Speaker, should be in place. They have

been ignored in the past. The minister has run and hidden and let the

companies do as they please. He's not only privatized the land; he's

privatized the foresters, he's planning to privatize the scalers, and

he's planning to write collusion into law. If there is bidding involved

on a piece of timber, the act says very specifically that there should

be no prearrangements, that there shall be no agreements that one

company will fail to bid on this one and the other one will bid on that

one. Now the minister is saying — and he's doing this because he's been

letting it happen and it's become a precedent — that it's okay to do

that as long as the regional forester knows about it. That's collusion,

and that's being sponsored and pushed and advocated by the minister

responsible for our forests in this province. It's a disgrace.

[Mr. Ree in the chair. ]

MR. R. FRASER: I rise to speak against the amendment and

therefore for the budget. I can tell you there's nothing that makes

people go in this province better than listening to those who cry that

the world is coming to an end. This is not the way this province was

built. These are not the kind of people who are going to get us out of

the difficulties that we're facing because of our special circumstances

here.

I want to thank the Minister of Finance for coming down with this

great budget that's going to give businesses a chance to hire people.

It is not a business budget, Mr. Speaker, it's a people budget. They

are not megaprojects we're talking about, they are people projects.

People work on them; people make money on them. That's how they pay

their rent. And the interesting thing about the people who built this

great country, Mr. Speaker, is that they were self-reliant. They didn't

rely on governments in the old days in the beginning of the country,

because there wasn't one, really. So they learned to rely on themselves

and on their neighbours, and they could count on them for help if it

was needed. If it wasn't needed, they didn't ask. We really have to

come to the point pretty soon where everybody stops looking to the

government for money, for a handout or for an idea, and starts to solve

some of their own problems.

We heard yesterday the suggestion that the moly battery was an

accident. It was no accident. It was designed on purpose, on the theory

that it could be done, and it was done. But the most significant thing,

I suspect, with that battery is not that the university physics

professor found out how to make such a battery work, but that he found

out how difficult it is to get research off the shelf and into the

marketplace. It wasn't until he hooked up with an expert in that field

that, in fact, the battery came to life in the real sense of the word.

It's the people who can make things happen that we need; we don't

need the tears of the crocodiles coming down upon us, Mr. Speaker. We

need people to dig in and get going, and all I hear from the other side

is cry, cry, cry that it's over; and it's not over. Every opportunity

is there, you just have to find it. You can't just wait for it to fall

on your lap. You've got to look, and that's what we're talking about.

I was so delighted when the Minister of Municipal Affairs (Hon. Mr.

Ritchie) came out with a partnership deal for the municipalities. I'll

tell you why I was delighted about that. Because a man that I happened

to know on a casual basis told me he was building two plants. One he

was building in a lower mainland municipality, and one he was building

in the United States. And guess where he got the best reception. Not

here, not in the past; for sure not here. Good heavens, all the hurdles

the poor man had to go through finally to build the plant were

unbelievable. The frustration level was incredible, and he got so

frustrated trying to create a job opportunity for the people in the

lower mainland, and he damn well couldn't do it. He finally did it

because he's got drive and incentive.

[ Page 5360 ]

He's the kind of person that makes the country grow, and we need more of those people.

On the other hand, when he went down to the States, he found that he

was received enthusiastically by the community he went to down there.

They said: "Welcome to our town. Do you need any financing? The local

merchants and farmers here will each put up a certain amount of cash,

and we'll help you. Can we help you with the road? By the way, we have

a stable labour force here. We have a bunch of people who want to work

here, really want to work, and we're going to help you." And he built

the plant down there. As a matter of fact, it wouldn't surprise me if

he had moved, because I haven't seen him for quite a while.

We really want to get the message through to the municipal

governments that in fact it is an advantage to have job creation

opportunities in the community, Mr. Speaker. It is so important to make

them think that if they don't get the plant in their neighbourhood,

somebody else will get it in theirs, and away goes their tax base. What

a wonderful opportunity to have extra taxes to provide the extra

services that people really want. I think it's terrific.

You know, in the city of Vancouver we have a planning department

that is so difficult to deal with that you can't even talk about it.

They're afraid to talk about the planners in the city of Vancouver.

I've tried to arrange meetings with reputable people in the city to

talk about that department with the elected people there and, by God,

they won't meet with them. They just won't, because they're afraid of

retribution. I don't think that's healthy.

I would certainly like the mayor of our great city — it is great —

to come down with some decisions with respect to where he wants the

city to go. He hasn't done anything yet.

AN HON. MEMBER: He likes our programs.

MR. R. FRASER: Oh, he likes our programs. Gee, I'm not

surprised; he couldn't think of one for himself. Good heavens, you

know, he won't do anything in the city, but he wants to take a

delegation to the Orient. Well, maybe we should get him a one-way

ticket or something. Good gracious, it would be cheaper in the long run

probably.

There are things in the city that are so important. We're so lucky

to live there. The long history of good councils and parks boards that

we had in the city of Vancouver that kept the open space, which some

councils in the recent days have given away, which is goofy.... We have

to have a place for the kids to play. We have to have a little better

effort, a little more thought; we have to have municipal districts and

city councils that will actually work and stay working and get

something done. It's so easy to be popular, to go to all the meetings

and have all the fun, but for heaven's sake, make a tough decision and

what happens to you? Oh, the world is coming to an end, Mr. Speaker.

Good God!

[4:30]

Interjection.

MR. R. FRASER: The member over there is complaining that we

haven't signed the ERDA agreement. Well, we hear it's going to be

signed. Is it a problem whether it's today or yesterday? It's coming,

it's coming, and you'll be delighted. The Premier asked you over there

to get your federal members to help, and I haven't heard anything over

there except the cries: "It can't be done, it can't be done."

Mr. Speaker, it can be done. I speak against the amendment on

exactly this basis. Then somebody else says we shouldn't export logs.

Well, I can tell you, the people in my riding who have mills want some

of those logs to get exported, because that provides the cash flow that

keeps the company alive that keeps the existing employees on the

payroll. That's why those things are done. Sure we'd like to mill them

all here — and we will. But in the meantime don't drive every business

in the lower mainland, the interior and the up-coast area out of

business.

MR. LOCKSTEAD: You're driving them out of business.

MR. R. FRASER: If you'll come to your senses, Mr. Member over

there — which will be a big job, I know — you can help. I don't want to

hear any more about problems. Good gosh, we need solutions, and you

actually could help, you know. You're that kind of a member.

We hear about education. Gosh, I'm in a city that has a very big and

powerful school board, and a much bigger head office for the B.C.

Teachers' Federation — an enormous lobby group. I know a fair bit about

education, because it happens to be a subject close to my heart. I

spend time in those schools in the riding, and I spend time in schools

outside the riding. I can tell you that the difference between schools

is related directly to the attitude of the principal in charge of the

school. If he feels positive, his mood goes to the teachers, that mood

goes to the children and the children go home. We've got a great school

system in Vancouver, for sure. That I know. It wouldn't surprise me

that we have it all over the rest of the province. On the other hand,

I'm getting complaints from parents whose children go to schools

outside my riding, and they're saying: "My children are coming home

saying, 'I can't have this because the government won't let me have

it."' So I talk to that principal, and I say to him: "Has there ever

been a time when the school board has had all the money it would like

to have?" And he said: "No, there never has been and there never will

be." "In that case, " I said, "why is it then that the children from

this school are complaining to their parents that it's the government?

It's you. It's your attitude. It's you that's not helping."

You know, the kids are ingenious. They like to use their

imaginations. Anybody in the room who has ever had children will tell

you that five minutes after the toy is out of the box on Christmas Day

the children are playing with the box, because they can use their

imaginations. There are lots of things to do in the schools besides

complain that the government is not giving you the money. The

government is providing the money. There's lots of money out there for

the schools.

It's just incredible. The city of Vancouver.... We heard from over

there a suggestion that the ESL budget was racist. Well, I was in a

school in my riding one day. I wrote a number on the board and....

Interjection.

MR. R. FRASER: Yes, they have blackboards, and you could learn something, Mr. Member.

I wrote a number — 30,000,000 — on the board. I asked the children

to describe that number. One of them said: "It's a big number." Another

said: "It's a small number." They weren't quite sure what I was trying

to get at. I said: "Is it a

[ Page 5361 ]

female or a male number?" No, a number does not have gender. "Well,

is it a Chinese number, a Greek number, an Anglo-Saxon number?" They said:

"No, no. A number does not have race." I said: "That's the

point I'm trying to make." I hear people in our district saying it's

a racist budget for ESL. Mr. Speaker, I would doubt there is any other jurisdiction

in the world that commits a bigger percentage of a school board budget to immigrants

coming from another country than here: $30 million annually — or very close

— in the city of Vancouver alone. That's for 9,000 students who want to

become Canadians and who have communication problems, and for 1,100 students

who have difficulty communicating at all, out of a population of some 46,000

to 47,000 students — out of a budget of about $150 million. That's 20 percent

of the budget to new Canadians. I suggest to you that that's a commitment

of faith in people who come here. Come here and feel welcome, Come here and

become Canadians. Come here and retain some of your ethnic history and your

ethnic culture. But you are Canadians first, and always first. That's the

way it has to be.

We've all read, I guess, the book In Search of Excellence . We find

that in times of difficulty there are businesses out there who

innovate. Because they innovate, and because they think about what the

customer wants, they succeed. That doesn't sound too amazing, does it?

They think about what's out there. They address the problem at hand,

and then they solve it. That's what I call the Canadian spirit. Those

two fine people that I introduced today, 85 years of age, who never

stopped working, never stopped giving to the community, they were never

wealthy. They never stopped being part of society. Never a tear. All

through the Depression, all through the hard times, it was work, work,

work. Get at it. Get your shoulder to the wheel, for crying out loud!

That's what we have to do now.

AN HON. MEMBER: You have to have a wheel.

MR. R. FRASER: You have to supply me with a wheel. You have

to figure out an answer for me. Help me! What is my problem? You've got

a brain. We want the kids to go to school to learn how to think, not to

give them everything. Turn the brains on. How do you think?

I was at a meeting in my city, outside my riding, and the then

chairman of the Vancouver School Board said: "I've been on the school

board for almost ten years. All we ever did was add programs and costs.

I said to my fellow board members, 'If we don't address the problem of

re-evaluating some of our old-fashioned programs, someday Victoria will

have to do it for us.' Look what happened."

All we're asking the boards to do, anywhere in the province, is to

make it work, to think about being positive. We don't have to supply

everything to the kids. We can supply lots and lots of good basic

education. In the schools I go to where the principal is positive, the

attitude is wonderful. The kids are having a great time. They put on

great concerts, they work hard in school. The kids have never worked

harder. I've got a lot of faith in those kids. They can make it. A lot

of people here had a tough time for one reason or another at a given

time in their lives. Do you cry to the government? No. You try to solve

your problem. If you need a hand and you're in big trouble, I'll help

you. But if you can solve your own problem, go to it. Gosh, there's no

other way.

I could go through, page by page, document by document, about people

who are getting old-fashioned — some who are winning and some who are

losing. I happen to have a company that has a collective agreement with

a trade union, and guess what? It works very well. It works well

because that union knows it has to survive, and it's not surviving by

being pig-headed. That very union has gone in to companies in the

Vancouver area and told every man and woman working there to take a

salary reduction to save the business and save their jobs. That seems

to me to make a lot of sense. The unions that survive are going to be

just like the businesses that survive, not the dinosaurs of the world.

It's going to be the unions that can think and can help their members,

who can think about what it is we're trying to do. My union people tell

me that they don't want my company to go bankrupt. Gee, I share that

feeling. I don't want to go bankrupt either. But they understand that

the business has to make some money. That's why I speak against the

amendment.

We've organized tours in Vancouver South into the plywood mills and

the sawmills, and where we have union and management representatives

we've found that sometime during the course of the tour the management

side and the union side will both come up to you and say: "Yes, it's

true. At the bargaining session we'll beat our brains out, but once the

deal is made we're working together because we know that this company

has to make a profit." Profit — it's a lovely word. You have to have

it. Everybody who knows anything knows it has to be there. Those people

working in the businesses I spoke of a minute ago know that. They're

not doing all kinds of silly things, like trying to wreck the business

or the gear. They're trying to make that business profitable. After

all, Mr. Speaker, a business is only the people there.

As recently as the late seventies a couple of people here started

Thrifty's food store. We're in tough times, right? Nothing can be done,

right? No solutions, right? That's wrong. Two people started a little

store and now they have four stores employing 200 people, with a

payroll of $3 million and sales of $30 million in 1984. They had an

idea and they made it work. There are people who have had far more

difficult problems to solve than we do, and they didn't stand up and

cry about yesterday. They looked at tomorrow, There is no other way.

I've been in business long enough to know that if I'd known what I

know now I wouldn't have done it. But it's been fun, I'll tell you —

the great response you get from people when you're fair and straight.

Sure, I like to pay our people as much as I can. I'd like to pay them

more. But if it isn't there and they know it, they're not going to ask;

they're not dumb. I'm here to tell you that there are thousands and

thousands of people in the workforce who aren't dumb — they're smart.

They understand the reality of the company making a profit on every

single sale.

Now I get back to that wonderful organization, the BCTF, which was

once the proud professional group of the teachers and is now the proud

union of the teachers. I must say I regret it. I can hardly believe the

things that that organization does in the name of the teachers they

represent, who are obliged by law to be members — which makes me

wonder, Mr. Speaker: obliged by law to do things that can't be in their

conscience. I know too many teachers. I understand them better than the

BCTF, in my view. There can't be 27,000 teachers in the province who

want to boycott Eaton's. There can't be whatever number of teachers at

UVic who want to make a contribution so that CUPE can boycott Eaton's.

I remember going years ago to the B.C. Ferries. If there hadn't been a secondary picket line there I would have

[ Page 5362 ]

wondered what the crowd was all about, but there

was. I can recall being infuriated. This was the same union that had

organized my own business, and I wrote to the head of the union and

said: "Look, you and the company you're fighting are bigger than me.

You're big enough to fight in your own yard; go and fight there." Guess

what? I haven't seen them do it since, and I hope I had something to do

with that.

Solve your problems on your own time and in your own space. People

can do that. Here is the BCGEU: "' Our union feels the LRB should

assist workers to join unions, not hinder them from doing so,'

Richards says." The Labour Relations Board is not here to help people

join the union or to get out of the union. The Labour Relations Board

is here to make sure the wishes of the workers — not the leaders, not

the management, the workers — are understood and adhered to. That's

what it's all about. We're not setting up these organizations to help

people get into a union. We're here to help them do what they wish to

do. Gosh, it can't be any simpler than that, Mr. Speaker.

In search of excellence, making people think positively and

productively and hopefully and wishfully. As my friend from Dewdney

will tell you and maybe has already, the song "Look For the Silver

Lining" was written in the bottom of the Depression when there wasn't

any hope, I guess; there couldn't have been much. But somebody thought

there was hope. Somebody thought there had to be a way, and there was.

Everybody just worked a little harder and tried a little harder and

created a little more, took a little less like we're all doing.

[4:45]

MRS. WALLACE: And a war.

MR. R. FRASER: There was a war, sure, but I'm certain it

wasn't invented to get over the Depression. What a stupid remark. I'm

disappointed in that speaker. Of course there was a war. It wasn't

invented to solve the Depression. The Depression would have been solved

anyway by the will of the people, Mr. Speaker, and that's really it.

We know, Mr. Speaker, that this province is dependent on exports;

everybody knows that. The world is much smaller today. There are more

people supplying products today. We don't have an exclusive any more.

It was nice when we had it; it was terrific when we had it; but we

don't have it any more. We have to think in a slightly bigger picture.

There's no doubt about that. We have to get a world perspective.

I said a minute ago that I have a lot of faith in the seniors of

this country. I've met a lot of them. I like them. They've got a great

attitude. They've made it by working and by thinking and by planning,

and even the students — who surprise me sometimes by suggesting that

they should have a stockp