1972 Legislative Session: 3rd Session, 29th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, JANUARY 26, 1972

Afternoon Sitting

[ Page 63 ]

WEDNESDAY, JANUARY 26, 1972

The House met at 2:00 p.m.

Prayers.

MR. SPEAKER: The Honourable the Minister of Municipal Affairs.

HON. D.R.J. CAMPBELL (Minister of Municipal Affairs): Mr.

Speaker, in the gallery this afternoon there are five representatives

of our First Citizens' Advisory Committee, Mr. Bill Mussell who is

representing the B.C. Union of Chiefs, Mr. Wilbur Campbell who is

representing the B.C. North American Indian Brotherhood, Mrs. Genevieve

Mussell who is representing the B.C. Native Women's Society, Mrs. Rose

Charlie who is representing the B.C. Home-makers Association and Mrs.

Anne Hause who is representing the B.C. Association of Non-status

Indians.

MR. SPEAKER: The Hon. the Second Member for Vancouver-Centre.

MR. E. M. WOLFE (Vancouver-Centre): Mr. Speaker, in our

gallery today are some distinguished representatives from the

University of British Columbia and their alumni association. I am

referring to Mrs. Field, first vice-president of the alumni, Dean

Phillip White, Dean of Commerce and Business Administration and Dr.

Robert Cubisec, president of their faculty association. I would ask

Hon. Members to welcome them please.

Introduction of bills.

Orders of the day.

SPEECH FROM THE THRONE

MR. SPEAKER: The Honourable The Minister of Lands, Forests, and Water Resources.

HON. R.G. WILLISTON (Minister of Lands, Forest and Water Resources):

Mr. Speaker, I think of one word to describe the jist of the throne

debate which has taken place to date. Along the way we find that

practically every submission has had something to do with need, work,

welfare — things of this general relationship.

I think in the final analysis one could say that they have all had

something to do with the general field of productivity and the

productivity of the individual.

Unless this is maintained, in the Province of British Columbia, then

all of these other things we talk about must stand as mere words

because they cannot be accomplished without productivity and constant

work upon the part of all people generally.

Therefore, having specific responsibilities in this field, insofar

as the working economy of the province of British Columbia is

concerned, the main jist of my debate this afternoon is going to deal

with forest economy and the understanding of the forest economy which

is presently going through a very critical phase in this province.

However, before I deal with that topic, there are one or two things

I wish to say about the debate which has already taken place and answer

one or two policy matters which have been brought up by various

members, particularly those in the Opposition.

First of all, Mr. Speaker, just at noon today just before I went up

to lunch, Mr. Matsushida came to the office. He is the senior

representative in British Columbia for the Mitsubishi company and sits

on the board and is the senior manager for the Japanese people in the

Crestbrook Mill at Skookumchuck. He is just on his way back from his

Christmas leave in Japan.

While he was there, the board of the company determined that the

second stage of the Crestbrook Mill should go forward and they have

authorised that construction to proceed. That will amount to something.

In the light of circumstances at the moment and what I say this

afternoon, Mr. Speaker, this indicates a maximum, a real maximum of

encouragement in the industry, and an indication of the faith of some

people in the future of the pulp and paper industry upon world markets.

The addition will be in the nature of better than 400 tons to the

present capacity, and will bring into balance, all of the residual chip

supplies in the East Kootenays area. This includes wastes. It will

employ additional people both in the forest, in the mill, direct

relationship without the expanding multiplier of better than between

150 and 200 people totally and will give a real thrust to the east

Kootenay economy and certainly it was welcome news to start my address

there this afternoon.

As the Premier indicated, that is an indirect assessment. I will

deal with later today, the real multiplier in the forest industry needs

to be understood by people in the province generally because whether we

realise it or not, the total economy of this province on the multiplier

aspect depends fundamentally on the employment which takes place in the

prime industry, in the forest industry in this province. I can give you

some startling examples of that fact as the afternoon wears along.

First of all, I would like to deal with one or two matters raised by

the Leader of the Liberal group in his debate in the House the other

day. Some of them had to do with general policy of government, general

policy as it relates to the future insofar as energy supplies are

concerned.

I thought insofar as the policy statement is concerned I would

reiterate what the position of the British Columbia government happens

to be at the present time and then deal with two specific matters of

which he was speaking.

He urged this House the other day very strongly that we should stop

our dependency upon hydro-electric power in the province of British

Columbia at the present time and spend increasing time on nuclear power

and the development of nuclear power in the province.

He ridiculed the stands fundamentally taken by the Premier that we

should depend upon hydro-electric energy insofar as development was

concerned.

May I just state, fundamentally, the position at the moment and I'll allow the debate in the House to pick it up from there.

At the present time, in the province of British Columbia, without

ecological disturbance to which the member was referring, before we

consider brand new and absolute new sources of energy in the province

if we take the additional energy there is at Kemano — and we're not

talking about the Nanaca Lake diversion, we are talking about the flood

reservoir at the present elevation and level that we have there without

further disturbance to the ecology — we're somewhere in the

neighborhood of 750,000 to 800,000 kilowatts of power right there at

the present time.

In the Peace River area, without disturbance to the ecology whatsoever, we have the site one project which is

[ Page 64 ]

better than 750,000 kilowatts down river on the

Peace. We have the basic transmission lines both into the Peace River

and we have them into the Kitimat-Kemano area — or will have within the

next year.

With the Columbia River we already now are working on the Mica Creek

project without further disruption to the basic ecology at all.

We have two plants downstream from there at Downie Creek and

Revelstoke, high Revelstoke — between Mica Creek and the town of

Revelstoke — at the present time which could be brought onto line and

which use the controlled water from behind Mica Creek. We have further

plans on installation of capacity on stream at Arrow.

We've got the Canal plants to which we have made reference. We've

got the Seven Mile plant above Wanetta at the present time and the

total of these plans will approximately double the total generation

that we have in the province of British Columbia at the moment.

The Hon. Member urged it. This is the kind of economy, Mr. Speaker,

we get from the Liberal group. They urge us to go to gas or nuclear

power at the present time. The electric energy from those plants will

never be cheaper than it is at the present time, if we install the

capital structure as soon as possible. Because we do not have to depend

in future on as escalating cost of fuel or replacements. The sooner our

capital structure is in place to make use of those energy values the

better we're going to be in British Columbia and for the next decade.

For the next decade. If anybody argues that isn't the sensible plan

to be followed in the Province of British Columbia then he hasn't

considered the economic facts of life one iota. That's the programme.

Eventually we're going to have to move on. That's perfectly evident.

Whether we go to further hydro-electric plants in the north like the

Liard and the Iskit and so on will be determined at that time. But this

is the immediate future. If we come to nuclear the answer isn't there

today as he would indicate to you yesterday. I'm not taking the time,

but even as late ago as Business Week

magazine on July 8, 1972, indicated the tremendous problem they are

having in the nuclear field and even with these high-speed reactors and

the things of that nature.

AN HON. MEMBER: July 8, 1971?

HON. MR. WILLISTON: Beg your pardon, I'm sorry. It's January

8. Okay, that's better. Thank you. January 8, 1972, and this is from

the office of science and technology in the United States. You'll find

if you read it, that they have not resolved the problem. They have put

90 per cent in the nuclear field and they admit today that their

answers are going to have to be found, not only in that field but in

other fields at the moment.

We in British Columbia at the present time have the largest source

of hydro-electric energy on the North American continent ready to be

used. We know the technology now. Why anyone should urge us into the

speculative field of nuclear energy at this time until the problems are

resolved I will never know. But that is some of the precise

recommendations we get from the Liberal planning at the moment.

There are two other matters, Mr. Speaker, of which the Honourable

Member spoke. With respect, Mr. Speaker, and I give him the greatest

deference in this, I don't think he did the research on either one of

these topics that he does for his own work in the university. I say

that because he is held in respect there and the basis of his

presentation in the House here the other day would indicate he did not

follow the same fundamental research into presentation of the facts

before this House.

First of all, I wish to deal with the Canal project of which he

spoke to us the last day. First of all, I agree, Mr. Speaker, that it

is no longer going to be possible in the future to drive down that road

between Castlegar and Nelson and park beside the road and see that very

wonderful display of wasted water going down the river. That is one of

the most expensive displays that people can look at and if that's the

cost we're going to pay for wasted water tumbling down between rocks,

that kind of economics does not prevail insofar as I am concerned.

Next, he dealt with a petition of the City of Nelson, Mr. Speaker.

Let everybody in this House — this is serious — understand the

situation insofar as the City of Nelson and you as individuals, as

co-owners of public power in British Columbia are concerned, and assess

the situation.

First of all, the total river there has a capacity — and I apologise

for the statistics, you can't do it any other way — of 14,228 cubic

feet per second. That's on the flow that has existed on the Kootenay

River between Nelson and Castlegar. In the licensing the first 1,400

cubic feet has gone to the Cominco company or Consolidated Mining and

Smelting. The next 1,428 cubic feet per second went to the City of

Nelson. And the remaining 11,400 cubic feet per second went to Cominco

or the Upper Bonnington plant which is there.

You can follow this historically from the very small plant that was

started by the company and then the city, and then the larger plants by

the company that in total utilised the water that was in the river.

The plant at Nelson — and this is some of the confusion — has a

capacity of 10,000 kilowatts. The amount of 1,428 cubic feet per second

of water will generate only 6,900 kilowatts. In other words it will

generate just about seven-tenths of the capacity of the plant.

For the last few years the City of Nelson has encroached upon

Cominco's licence for the 11,400 cubic feet per second to run their

plant up to the capacity of 10,000 kilowatts, and this is an over

rating over the namesake capacity of their plant at the present time.

So obviously the city needed to purchase additional power over the

years and it has purchased it from the Cominco company on a very

attractive contract.

Cominco never exercised the total of their licence under this

arrangement until 1971 — until it became apparent that any excess water

would be taken in the canal under regulation and put through the new

canals plant.

In 1971 Cominco informed the city that they could no longer use the

714 cubic feet per second of water which they had been doing, after the

canal plant had been built at that time. The city of course needs that

1,714 cubic feet. And since the water had all been used they came to us

and asked us for a licence to take from the regulated flow behind Libby

and Duncan an additional 714 cubic feet…

Interjection by an Hon. Member.

HON. MR. WILLISTON: They've been taking the regulated flow of this that was regulated behind the Upper Bonnington works.

[ Page 65 ]

Interjection by an Hon. Member.

HON. MR. WILLISTON: Mr. Speaker, unless the Honourable Member

understands the licence capacity…he was the first person to indicate

that even at the rate he indicated the river did not have that capacity

to come. How you can licence that which you haven't got I wouldn't

know. There are certain times in the river that it hasn't got that

capacity to come.

But be that as it may Mr. Speaker, his argument that we take 714

cubic feet of your water which belongs to you as the people now, divert

it to the relatively small head in the older plant of the City of

Nelson — rather than carrying it in the canal and dropping it through

the head of 260 ft. to generate power which it would do in the public

interest — is the problem. And it's also efficiency of an old plant

versus a new plant.

Now, we've offered the city the 714 cubic feet per second until a

new plant is constructed. But this isn't the only problem. Within the

foreseeable future, which the Honourable Member didn't mention, Cominco

will not have power to sell. The Cominco Company will not have excess

power to sell, therefore Nelson will either have to build a thermal

plant, or Nelson will have to purchase power elsewhere.

The policy of B.C. Hydro is that it…

Interjection by an Hon. Member.

HON. MR. WILLISTON: That's right, it does not wholesale

power. And so B.C. Hydro has made that offer to the City of Nelson, if

they so wish, to purchase the plant upon an independent evaluation. If

as the Honourable Member argued the other day — and it's your asset

here as the people — if that 714 cubic feet per second which with that

doesn't meet the needs of Nelson were taken and placed in as a firm

licence behind the plant, the capital evaluation of that plant with

2,142 cubic feet per second as against 1,428 feet per second would

automatically mean that from a resource of the people that had been

given in the first place, to which they did not have an entitlement.

Now, Mr. Speaker that is what has been placed to us by the Liberal

group, and by the Honourable Member from Point Grey (Mr. McGeer) and if

that's his economics and his basis I think it should be exposed for

what it is in the public interest generally.

Mr. Speaker, Hon. Members are all going to need to know this.

Because the City of Nelson owns 38 acres of land, and the 38 acres of

land straddle the route of the canal and the access, they have thus far

refused to deal on any kind of a negotiated basis with Hydro, unless

they get firm rights to 714 cubic feet per second. Now, someone say,

why didn't they do this…?

Interjections by Hon. Members.

MR. SPEAKER: Order please.

HON. MR. WILLISTON: The people may say, why didn't they do

this is in the past? And the reason must be fairly obvious. They were

using the water without licence. They had the power over all those

years to complain about Cominco because in their resource policy you

either use that which you have, or you have the right to complain that

the other people did not use it.

Over the years that they have been using it they had the right at

any time to complain about Cominco not using it, and go to the

comptroller of water rights on that basis for an extraction from the

Cominco license. They never did — fairly obviously, Mr. Speaker — because of the difficulties inherent there that they were buying all of

the additional power that they needed. And the City of Nelson required

the back-up supply of power and generation that could come to them from

the Cominco system.

Mr. Speaker, this is the situation. It's your money and the people's

money in British Columbia and that's the situation at the moment. I am

willing to debate this factor as long as it happens to go.

There are one or two other matters. The Hon. Member gave us a great

diatribe on the ecological situation. For the most part, that canal has

a 100 foot bank of trees, and you'll never ever see the canal in the

first instance. In the second place even if you can see it the aesthetic

areas about it are going to be an asset rather than the debit he gave

you. Hydro has already moved the bridge up so it does not in any way

esthetically act as a detriment at the South Slocan or to those

residents. They've already moved their spoil area so it does not affect

any other aspect, at the cost of $400,000. Mr. Speaker, I contend that

when the Honourable Member waved his hands about disaster and ecology

he just didn't know what he was talking about, and he was drawing a

complete red herring towards Hon. Members of this House.

Mr. Speaker, over and above this when they talk this day on ecology

I just wish they would follow through one or two days and be

consistent. They tell us all about the consistency of the Liberal

people, they tell us of this consistency and what they're worried about

within the last few days Mr. Speaker. But if you could see upon this

map that I have in front of me — and this is a general indication — while they're talking to us about tankers, while they're talking about

going up and down the Pacific Coast and the dangers to our ecology of

what might happen, those two black spots, one on Banks Island and one

behind Queen Charlotte Islands are within the last 10 days where the

licences have been let by the federal government to Petsocar

Development Limited of Calgary, Alberta — the 1.4 million acres along

the shores of Banks Island and south of the Queen Charlotte Islands for

oil exploration in that area.

SOME HON. MEMBERS: Oh, oh.

HON. MR. WILLISTON: Now, we either talk one way, or we talk the other. And to finish this on one item.

Interjections by Hon. Members.

HON. MR. WILLISTON: Those are not licences that anybody else has had.

MR. SPEAKER: Order, please. Order.

HON. MR. WILLISTON: Mr. Speaker, they say, what are you going

to do about it? They don't even indicate to British Columbia the action

they've taken any more above it. That had to be dragged out

independently and was not made a part of ready information in the

Province of British Columbia.

Mr. Speaker, one other matter, because the afternoon is going along

and I promised the other speakers that I won't delay them. But this

also bothers me somewhat.

First of all we've dealt with the matters on the Skagit, and

[ Page 66 ]

I just want to deal with two aspects of that this afternoon.

First of all to make sure that everybody realises one factor — that

in the 1942 direction of the International Joint Commission to the

Government of British Columbia — which not only guides me but put the

whole platform under the negotiation which took place — the indication

was that British Columbia was to be indemnified for any injury that

might be sustained by reason of the City of Seattle's operation on the

Skagit River. By any direct injury that British Columbia might sustain.

I review with that in the consideration of some of the things that

have been said here. We were compensated for direct injury. As you

recall as a result of the outburst in British Columbia on the Skagit — and this was something that I never initiated and took — you'll

remember that the federal government charged the International Joint

Commission to make a report on the environmental and ecological

consequences in Canada of raising the Ross Lake, and the Skagit Valley

to the elevation of 1,725 and this report was delivered on December 17,

I have the official Press release that accompanied this report which

would indicate to people what the synopsis inside this report happened

to be.

The first paragraph had to do with where the area happened to be.

The second paragraph had to do with thanking the people that took part.

The third part was a reiteration of the statistics on the flooding, of

which we all knew. The fourth paragraph had to do with flood losses, in

the area. The fifth then had to do with the reluctance of the committee

to make unequivocally specific statements concerning mitigation

measures because of the limited time that there was to discuss it.

But they indicated that there was some basic cause for concern and

it should be given greater attention. And this was reiterated by the

Canadian government presentation and it was indicated they would give

strong consideration to this. And to make absolutely sure these

measures had been followed.

But, Mr. Speaker, really we were left, as we were given yesterday,

something like Powder Mountain where it is "an ecological disaster" to

clear a roadway up from the area of the road up to Callaghan Lake.

It was "an ecological disaster" to clear the road to the

specifications set back by the Department of Highways. That's what has

been done and in the words of the Liberal leader that's "an ecological

disaster." That's what's been cleared out, plus one subdivision in the

general area there, at the present time. And that is "an ecological

disaster" in his terminology which in some place got off the rails.

Mr. Speaker, take the Press release or anything you've seen on page

28 in that documentation that was put out by the International Joint

Commission. What did they say? They said:

The present characteristics of the

environment would be changed, but the new environment would retain many

of the former characteristics. Those who appreciate and use the valley

in its present state would inevitably suffer somewhat, although other

people would find the new environment at least as pleasant. Measured

either by the amount of use or weighed by dollar values, the overall

impact of changes in the total environment is not significantly large.

Now, Mr. Speaker when you paint this as a disaster, when you paint

the report as substantiating a disaster, all I say, is that people

quote the reports that people sign their names to and the stand that

they happen to take and that they do not have basic political

implications.

I do not stand behind the Skagit situation at the moment. There, as I say, it was brought to me.

The second thing that the Honourable Member talked about was some

kind of a financial arrangement that my predecessor had entered into

with the City of Seattle. We refused to sign actually a lump sum

payment. And that's absolutely true. We refused. It was presented by

the former government and we refused to sign it. The final agreement in

essence did exactly what the Honourable Member said. It took half the

power it translated it into dollars, but it could be taken back.

It also provided for the road costs, the timber costs, and other

things that were in the original lump sum payment. And over and above

that it gave double the return to the Province of British Columbia.

Under the circumstance, and after having twice been before the

international commission for non-compliance with the order of the

international commission, I'm not in any way proud of the arrangement

which we are assessed into. But I am not unhappy with the final

arrangement which happened to have come about. And when you get

pitchforked into something by a group which the Hon. Member represents

and then hoisted on the petard in this Legislature for being blamed of

that kind of a proposition, Mr. Speaker, it makes absolutely no common

sense.

As I promised, Mr. Speaker, the important part of my address this

afternoon has to do with the understanding of the forest industry, the

wood industry, in the Province of British Columbia. I'm staying fairly

close for the next few minutes to my notes because this is one of the

more important presentations in its implications as we're moving now,

insofar as the job picture and the rest of the purposes that are

concerned in British Columbia.

I'll debate it but I'll stay close to my notes so that other people can have them if they so desire.

For many reasons I think that it's important that I deliver a state

of the industry address relating to forestry this afternoon. It could

be termed a detailed report on the wood revolution.

It seems to me that there has been a failure to communicate

adequately both with members of this Legislature and the public in

general, and I accept the criticism.

As a consequence there has been some lack of understanding of the

problems being faced by this most important segment of our industrial

economy.

For purposes of debate — and I'm happy about this, Mr. Speaker — the

N.D.P. Opposition is now in a position to counter the presentation that

I will make this afternoon with information that should be readily

available to them through two other provincial governments in

Saskatchewan and Manitoba.

Both are faced with problems somewhat similar to our own.

The prime difference in resolution revolves about the free

enterprise approach as opposed to that advocated by those who advance

the merits of Socialism, and this is a pretty clear-cut situation. Even

so, they are finding assistance from experienced free-enterprisers in

British Columbia to get out of their difficulties.

There is merit in reviewing the position of the forest industry

which as such affects the economy of Canada in general and the Province

of British Columbia in particular.

This industry is not simply a number of large, impersonal

[ Page 67 ]

corporations, as we are sometimes lead to believe,

but rather provides an ideal economic base from which flow numerous job

opportunities, community stability and the potential for enhancing

certain intangible values as well as the obvious tangible ones of which

we all know.

In amplifying this latter statement it is a simple exercise to

identify the direct benefits of a resource-based industry whether we do

so in terms of wages, employment, exports, tax revenue or in some other

direct way. However, much of the benefit stream is indirect and

therefore hidden from the casual observer, even though it may far

outweigh any apparent direct benefit. Thus, the majority of the

economic benefits from a logging operation or of a pulp mill in the

northern interior, believe it or not, are realised as some distance

from the primary activity. This is not so true of a secondary

manufacturing plant located in an urban community.

It is this failure to appreciate the significance of indirect

benefits which has resulted in defective regional development policies

in Canada during the last 10 years. Priorities have been assigned far

too often to secondary manufacturer in the naive belief that it will

prosper independently of a strong primary base sector. Typical hothouse

economic situations result which fail through lack of continuing need

and strong support.

Before I give some specific illustrations, Mr. Speaker, may I say

that last year — as you well know — we tried to present this point of

view to leading officials in the federal government whereby money

should be expended to assist in extending the development of northern

communities to provide a basic job base that would radiate down through

the whole of the province of British Columbia.

We did not receive anything in the way of direct support, so far as

that is concerned, even though we took them, led them and so on. It's

my honest belief — and I'll say it this afternoon — that if you were

today to take a development project financed basically at the community

level, there's no area in British Columbia that would return jobs and

opportunities greater than some development at the present time at

Bella Coola. It would radiate back in wood processing, it would radiate

back in road construction, it would radiate back in forestry, in every

instance, the permutations and combinations of such a situation.

We tried to sell that basic business idea fundamentally to the

federal government and it was not accepted. Well, let's look at the

industry. Direct employment at the moment, employs 77,000 people or

only about 9.7 per cent of the labour force. I'm talking about the

basis of this industry and yet the salaries and the wages in the wood

related manufacturing industries about $438 million or 47.5 per cent of

the total of all the manufacturing in the province of British Columbia.

On the primary base, if logging wages were added, the total is $600

million or 65 per cent of the total. The values adding in manufacture

amount to $834 million or 47.8 per cent of the total value of all

manufactured goods in the province of British Columbia.

The selling value of factory shipments amounts to $1.9 billion or

48.8 per cent of the total. The wood base that British Columbia exports

amounts to $1.23 billion or 62.3 per cent of the total for the

province. Railway car loading — just as an aside — in the millions of

tons amount to 12.9 per cent or 67.5 per cent of the total recorded for

the province as a whole.

I'm just giving these, Mr. Speaker — and the information all comes

from Information Canada — to indicate that when they say that 50 cents

out of every industrial dollar in the province of British Columbia is

some way related to forestry — that is a true statement.

It is not my purpose this afternoon to bore you with statistical

material, but merely to provide evidence that it is to everyone's

advantage to keep this industry in as economically healthy and growing

a condition as is possible.

For a few minutes, Mr. Speaker, I would like to acquaint you with

the physical base of this industry in the province and to describe the

veritable revolution in wood handling and processing that is taking

place at the present time. If I'm not contradicted by somebody from

Russia, who would have to provide evidence that is not now available to

me, I can state without equivocation that British Columbia has the

largest publicly-owned sustained-yield managed forest in the whole

world today.

This simply means that the annual cut of timber being extracted from

any given area of the province can be perpetuated forever. We hear

about people talking about taking off the mountain tops when it's all

finished — it indicates a lack of even knowledge with this House. We'll

never be cut out. The land is retained for forest use, that is it will

never be cut out.

The annual sustained yield cut is measured in two ways; in the world

of yesterday our wood economy was based upon the cut of saw logs

measured and managed on an intermediate utilisation base, referred to

colloquially as an IU cut.

This meant that diameter of the usable tree was measured at breast height — it

was measured at breast height because that was the height from time immemorial

the logger cut the tree down. It was measured at breast height about 3 1/2

feet from the ground and all the sound logs had to be harvested with an inside

bark

diameter of 13 down to a top diameter of 8 in. In the interior, the specified

bottom diameter was 11 in. or 2 in. less than on the coast.

About 10 years ago your Social Credit government introduced the

policy of close utilisation and for you people on the coast and the

interior the impact is what you really should understand if you have

any interest in this aspect at all.

This means that all trees with a base diameter of 8 in., one foot

from the ground, down to a top of 4 in. must be harvested from the

land. At the same time every log must be barked and all the residuals

must be chipped.

Over and beyond this, all trees with at least 50 per cent sound wood

must be taken from the forest. This includes chunks and broken stems.

The effect on the annual cut that can be taken from the forest means

that in the five forest districts 3.4 times as much wood can be

harvested under CU provisions on an annual basis as opposed to IU cut.

I should not have to shout the economic impact of such a policy and yet

there is great difficulty, and I repeat there is great difficulty, in

having this adopted on the coast outside of the larger tree farm

licences. However, there are problems and I'll discuss them later.

It is now becoming a recognised fact that the foresters only require

the use of given acre of forest land for two or three years out of the

average 90 years in the crop rotation period. All they want is two to

three years. For the other 87 years or so the multiple use aspects come

to the fore — such as recreational needs, watershed preservation,

wildlife habitat and so forth.

Such uses can be much more beneficial in a well-managed healthy forest situation and in the future — let's face it, Mr.

[ Page 68 ]

Speaker — British Columbia will have the largest

perpetual green belt area for public administration to be found

anywhere in the world.

What are the effects of the new policies seen in action? First the

historic one, for administration and ready reference the forest

industry has always been roughly divided into two operational areas — and get this point this afternoon because it too is important — the

coast and the interior.

Up until about a decade ago when new cut policies were introduced

the coast out-produced the interior by as much 80-20 on a percentage

division. The total annual cut from the forest has been steadily

increasing and will continue to do so for many years to come.

This year the scaled volume will be just short of 2 billion cubic

feet, this year is a record year. It's up 64.5 million cubic feet more

than last year, which was also a record.

But, look at the analysis of the cut. The analysis of this cut is

one of the factors that requires understanding by all who are taking

some interest in this industry, in and out of the Legislature may I say.

The Prince Rupert district (coast) increased its cut very slightly,

it almost stayed even. It increased less that 300,000 cubic feet. The

Vancouver district, on the coast, decreased its cut last year by 15.6

million cubic feet.

The interior units increased their cut by 79.7 million cubic feet

and the greater part of this lift Mr. Speaker, came from the operators

who were serviced by the Pacific Great Eastern Railway and resulted

from the beneficial policies of that railway. The transportation and

service policies which have been instituted by this facility have paid

back tremendous dividends to the provincial economy and the people of

the province of British Columbia.

It is admitted that the service now

rendered has only served to increase demand and the railway is still in

some trouble in meeting total need. However, the comparison of recent

economic development adjacent to the P.G.E. as compared to the Canadian

National Railway across north-central British Columbia displays the

direct result of beneficial policies far more vividly than any words

that I can say here this afternoon.

The C.N.R.-served part of British Columbia cannot develop its

potential in an economic way unless the provincial railway secures

either running rights or full operation of that

section of the Canadian

National Railway from Prince George to Prince Rupert. We said that

before and Mr. Speaker, we say it again. You know, I don't have to

emphasise on the side this afternoon the three of my greater problem

areas at the present time have to do with the situation at Columbia

Cellulose in Prince Rupert, Bulkley Valley at Houston and to a lesser

degree Eurocan at Kitimat. They're all in that general area of

development on the C.N.R. And I want to tell you when things go wrong

and don't go, if you want to get any kind of a multiplier of what the

effect of the forest industry is and it goes wrong, go to those

communities. Because my colleague behind me can tell you in that area

in the central province — and the Leader of the Opposition likely can,

as well — when some things went wrong that there's actually less, far

less employment there today than there was five or six years ago. That

is factual and if you want to see when it goes and when it doesn't go,

you get the net effect.

Of even greater interest is the fact, Mr. Speaker, that 72 per cent

of the total provincial cut this last year was on close utilisation.

Outside of the larger tree farm licenses on the coast there has only

been a small implementation of such wood use there. The larger part of

all interior cut is now on C.U. — which means that nearly every log is

being barked and all residuals made into chips. I must admit that that

72 per cent figure even surprised myself. I did not realise that our

policy progress in the interior had been so dramatic.

All types of wood conversion showed increases for 1971 over 1970 and all were

relatively in the same proportion. This tends to emphasise the melding that

takes place within a completely integrated forest industry. It may not surprise

that lumber production was up by three-quarters of a billion board feet and

plywood something less on a percentage basis — about 4 1/2 per cent.

In the face of world demand and market conditions I am sure that

many would not realise that our production of both pulp and paper

increased this last year — the former by 130,000 tons and the latter by

90,000 tons.

At this point there is great need for understanding on the part of

all British Columbians and this, unless we understand it as a people,

is going to be to our detriment in the months ahead. Because the

situation in the pulp and paper field is not going to be easy for the

next two to three years at the very least.

Even though production in the province increased last year, 11 mills

carried out periodic shutdowns which removed 336,000 tons of pulp from

the market — much more than the increase in the recorded production.

This action was taken in a cooperative move throughout the western

world to curtail production. Our mills that did not shut down worked

from 80-85 per cent capacity to achieve the same result in so far as

manual-manufactured product is concerned.

The mills without tied markets found themselves in even greater

difficulty in moving their production away from the plant and some were

forced to close more frequently because of their storage problems.

The normal world inventory of chemical pulp — Hon. Members should

catch this point and it gives an indication of our problem — is about

one million tons. The present inventory totals something more than 2.3

million tons — the highest since World War II and possibly the highest

ever in our history. It is evident therefore that 1972 is not going to

be an easy year. As a matter of fact, the situation might even be a

little worse because three new mills come on line in this province

during the coming summer. Two of them will be rated in capacity among

the largest producers in the whole world. It is recognised that there

might be some difficulty in reaching designed performance for some

months and start-up might not accentuate the present problem too much.

It can be anticipated though there will still be shut-downs for varying

periods by the entire industry in the western world and the problems

with older inefficient mills will increase. Many have already closed

and others will be giving notice of their intention in the months ahead.

However, the British Columbia industry is relatively new. We have

some of the most modern, efficient plants in the whole world. The pulp

being produced meets the world's highest standards. In fact some of our

interior pulps and papers stand alone in being regarded as the highest

that's produced in the world today.

The unique character of our kraft pulps find them being used as

additive pulps to upgrade fibres made from faster growing trees and

other low-class materials. In other words, the burst, tear, and stretch

characteristics which come from our slow-growth timber makes such pulp

even more valuable than to roll into certain grades of paper. Our

papers meet the

[ Page 69 ]

highest requirements for packaging and so can often be sold even in depressed market conditions.

I have heard some of my Socialist planners say that under their

scheme of administration such a temporary situation of over-production

would not be allowed to develop.

This may be true for it is my personal belief that the deadening

hand of Socialism would not have brought the total benefits of the

production and the use of the natural resource in the first place. What

is needed right now is an understanding of the total situation so that

our reactions in resolving the problems might be positive and so

contribute to the best solutions possible.

Under the close-utilisation plan of operation all of the wood from

the forest will be processed through a sawmill. Now, Mr. Speaker,

although this doesn't sound revolutionary, what I'm saying right now

insofar as the industry is concerned in British Columbia truly is.

Under the close-utilisation plan of operation — that's what we're on

— all of the wood from the forest will be processed through a sawmill

or some other type of prime use facility like a veneer plant. Whether

you realise it or not this is a revolutionary policy. Whatever use

values there are in the log should be removed, with the residues

converted into chips and shipped to a pulp mill.

Even the logs with no other value than for conversion to chips would be handled in this manner.

In the final result there will be a balancing of the total pulp

capacity with the total residual supply available. To accommodate

market, a degree of flexibility would be built into the arrangement so

that either lumber or pulp productions could be increased with limits

according to the demand and financial return. Such an arrangement will

benefit the provincial economy to the maximum.

The only remaining material that has to be dealt with is bark,

sawdust, and shavings. The new pulp mills have been required to install

double-hog facilities to convert such material into fuel that will be

burned without smoke or particulate fall-out. The steam that is created

is used for the generation of electricity and in the pulp-making

process.

In one case this year, a surplus of electricity will be generated

that cannot be used in the plant. That's at Kamloops. Agreement has

been reached that it will be taken by B.C. Hydro and integrated into

the utility system.

Strange to say, neither the steam nor the electricity will be cheap.

But the pollution problems in the surrounding areas will have been

eased substantially and with the greatest efficiency possible. One of

the newest, remotely-located sawmills has already installed such a

system with the steam being used in the dry kiln.

So much for the general plan. And the Hon. Member said: "so much for

Social Credit." Mr. Speaker, I want to tell you I agree with him, I

agree with him. So much for the general plan. What has been happening

in practice? My immediate reference will be to the interior since that

is where the advance has been made which has resulted in the rather

dramatic statistics on production for the year that I have already

quoted.

The development of efficient, economic sawmills to process close

utilisation wood has been difficult and is only being recorded through

the process of trial and error.

As a consequence, a number of practical men, working with

locally-based equipment manufacturers, have secured results which have

been illustrated on the balance sheets of some companies in a very

positive way.

Some who have employed professional assistance that was not familiar

with the problems or the wood types or the training of the labour force

available or the economic size of such plants or the need to think in

terms of lineal flow rather than board foot capacity, have constructed

plants, that without material change, will become financial disasters.

In some cases the physical change in such plants will be most difficult and the problems created are very, very serious.

If one were to stand back now and take an over-view of the central

interior wood processing situation, he would find the largest group of

efficient, close-utilisation saw mills to be found anywhere in the

world today. True, there are examples of more efficient plants to be

found in other countries such as Sweden. However, I am talking about a

group as a whole.

This does not happen to be my analysis of the situation, but was the

view of a top American lumberman who was well-known throughout the

world timber industry.

At the same time it must be acknowledged that there are other

examples that do not fall within this generalised category. I sincerely

wish that they did. As long as the successful continue to predominate,

we will continue to make progress. That is one of the major strengths

of the free enterprise system.

Mr. Speaker, a week Tuesday, I went north of Kamloops to a new mill

at Davendy, which is likely one of the most modern mills to be found

anywhere at the present time.

I just wish to say it was designed under a technician from Salmon

Arm. It was built in half the time allowed them; it was built under the

budget that was set forth for them. Every single piece of equipment,

machinery in the plant, was made in the province of British Columbia.

Every single piece that you will find that British Columbia

manufactures today, are more efficient than can be found anywhere. Some

people do not realise this fact.

When you talk about secondary industry the point I am trying to make

this afternoon is the help the forest industry on an escalating basis

provides the secondary industry. Those machinery people now, some of

them, are exporting all over the North American continent.

Within the last decade, the pulp mill capacity has been designed to

process chips as they become available. The planning appeared sound in

spite of the F.A.O. projections. To those unfamiliar with the initials,

I might add that they refer to the Food and Agricultural Organisation,

a branch of the United Nations headquartered in Rome. This body has

projected the world needs for fibre products in a fairly accurate, if

somewhat conservative, manner.

Much of the planned production in the western world has been geared

to the projections prepared by this organisation and I happen to have a

copy of their statistical information right here.

Much of the planned production in the western world, as I said, has

been based upon these reports. It is agreed that a quality fibre

shortage will develop, although the timing has been set back due to

unstable world conditions. This organisation could not foresee the

present world monetary problems — the impact it has had on the world's

trading nations — particularly those with whom we do business, in large

measure — the United States, Japan and Great Britain.

Nor could the internal turmoil in the United States be predicted as

such relates to the war in Vietnam with a negative reaction of the

American people. The net effect on the economy has been depressing.

The move to chip production by the interior saw mills was as slow as the start up of the first pulp, as arrangements

[ Page 70 ]

had to be made for some round log chipping.

The initial installations, both for the manufacturer and for the

handling of the chips, cost many millions of dollars and it is now

doubtful if such a cost can ever be properly amortised through use.

The new pulp mills have no facilities installed for the handling of

round wood whatsoever. This may surprise many members in this House.

They have no facilities installed for handling round wood at all. All

their raw material supply must come in the form of chips and for this

reason it is imperative that there be a close co-ordination in the

operation of the pulp and sawmill economies. On a large-scale basis,

this is another revolutionary move.

The development of residual chip production by the sawmills has now

reached the stage where there is a substantial surplus. This will be

brought into balance this summer when the new pulp mills at Kamloops,

Quesnel and Mackenzie come into operation.

The rapid build-up in the quantity of chips created a transportation

problem for the P.G.E. which has still not been fully resolved. The

direct losses to sawmills that have been forced to burn their chips

have been substantial. I have the records of one Quesnel firm that

burned $134,000 worth of chips from July to December, 1971.

It is anticipated that the loss will be substantially more than this

again before the Quesnel pulp mill starts to stockpile in advance of

production.

Pulp mills have already learned of the serious deterioration in chip

quality which results from prolonged storage in large piles. This is

something else that was learned on a trial-and-error basis as the

interior pulp industry became established on the residual chip base.

Not only has there been a loss from the burning of chips but the

problem of the actual burning has created complaints because of the

smoke pollution and particulate fall-out that resulted.

I may say that I even had an irate Minister of Municipal Affairs

phone me all the way from Quesnel, this summer, on a particularly bad

day when they were burning their chips.

The period of wood use revolution has had a financial side which has

not created too favourable an impression on some people in the

investment world. Last May the Paper Trade Journal

published an interview with some Wall Street investment dealers

concerning prospects for loaning money in the pulp and paper field.

Someone from Vancouver sent me a copy anonymously and you will see why in

a moment. First, I present an opinion of Mr. Lawrence Ross of Mitchell, Hutchins

and Company:

I think that British Columbia is an

investor's nightmare. You are caught between an aggressive union and an

aggressive government which is constantly trying to get more money for

its trees. Most of the trees up there are owned by the government.

Further, a presentation, by a Mr. Bruce Kirk from W.E. Hutton and

Company states: "British Columbia is a cemetery of company earnings. I

don't know how else to describe it."

I point this out, Mr. Speaker, because people sometimes — particularly the Opposition members — because of the advance it's been

making at the present time, indicate that this is a very easy procedure

and one from which tremendous sums of money happen to be made.

The points that are made are recognised and can be validated. The

aspect missing, and this is the important one for all Hon. Members of

the House, is that the investments that are now being made on policies,

are to coincide with the necessary tie-in with a long-range economic

raw material base and it must be rated on a long-term chance. That's

what's going on at the moment.

Everyone must recognise this same fact, not only the people

investing money — those that work in the industry and everything else.

It has been stated some of the many high-priced jobs that have been

created may call for some time loss in the immediate future. The

alternative however is no jobs, a greater waste of chips, a poorer use

of the basic natural resource and a more uneconomic situation in the

associated sawmills.

On balance — and, Mr. Speaker, I am proud of it — on balance, the

net gain far out-weights the limited negative aspects that will prevail

for a relatively short time into the future.

In the last six years, and I wish the members of the Opposition

would get this sometimes when they are speaking about interest, in the

last six years, eight new pulp mills have been operational in British

Columbia.

All are now largely supplied with waste residuals in the form of

chips. Not one of these plants has paid a single dollar in profit on

the investment that has been made. These installations give a clear

indication of the faith of their owners that, in the future — and we

hope in the fairly near future — demand for product will return and the

price will be such as to return a profit on that investment.

The three new mills that will come into production this year will

add a further $250 million to the capital investment in this segment of

our economy, and will provide the jobs as well.

One sometimes hears criticism, that industry does not carry a fair

share of the social costs in communities directly related to the

plant's activity. A check on only 11 representative forest companies

between 1966 and 1970, showed that property, land and business taxes

had increased an average of 51% to $29,243,000. That's into the social

structure.

During this same period the return on capital investment for these

firms varied from a high of 4.2 per cent in 1966 to a low of 1.1 per

cent in our down year of 1970. I am well aware that in accounting one

must understand the implication of the term, "return on capital

investment." However, it is at this point that the investor and the

government share in the return that have been termed as profit and

unless the capital can be generated internally in the corporation,

these figures do inhibit investment as indicated in the

article which I

quote. In which gives some indication of the faith in the future which

I demonstrated in my announcements earlier this afternoon.

I present further evidence that wood-use revolutions can prove to be

expensive unless the planning, the construction and the operation of

the plants is efficient and specifically adapted to the complex pattern

now being developed.

In 1971, six wood producing plants of which I am aware had a

combined loss in operation in this province, of more than $50 million.

Yet this was a year in which the market and the demand for lumber

improved materially over 1970.

In almost every case the firms concerned are not pessimistic

concerning the long term and are making changes in the operating plants

involving further substantial capital expenditures. Now that timber

production is based on an annual harvest, Mr. Speaker, similar to that

found in agriculture, operators have adopted the attitude like the

farmer that next year just has to be better.

I can say with some confidence that the revolution of

[ Page 71 ]

which I have been speaking in the interior is just

about over. For the most part problems have been resolved or the

methods of procedure have been devised.

Markets will still fluctuate from the standpoint of demand and

price. Flexibility has been developed in wood handling which will allow

these problems to be faced in a manner which will bring greater

stability to the economy. I am sorry that I cannot say the same about

the coast. We still face the most difficult problems in adapting the

industry on the coast for the world of tomorrow.

Historically on the coast the economic returns from the pulp

industry have been such that round logs could be processed for chips as

a basic source of the raw furnish.

The sawmills and the veneer plants tended to high grade from the

total supply of logs available since those that were left could always

be used directly for pulp. Both sawmills and veneer plants were

designed on the basis of lumber returned rather than volume of material

processed.

Over the years this has worked well but the stands of

readily-accessible, high-grade timber are gradually declining and as we

move northward and higher up the slopes of the mountains new types of

timber stands have to be cut. Such require a new type of plant for

processing and new ways of handling and sorting the logs.

With the advent of close-utilisation in the interior, some firms on

the coast decided to follow the lead that had been established up

country by building mills to handle small logs.

Most of the additional wood under C.U. cut in the interior comes in

the form of small logs, particularly those found in thick lodgepole

pine stands.

Encouragement was given to the coastal action before it was

realised, even by ourselves, that much of the additional wood available

on the coast under C.U. management was not to be found in the form of

small logs. Pockets of defect or partial decadence along with the small

logs demanded a new type of mill to extract the firm wood values that

were present in the logs together with more adequate means of chipping

the residues which had increased in volume.

It is only now that the lineal footage mills are being developed to

handle the C.U. material in volume here on the coast. Four known to me

are presently in the advanced design or construction stage and a fifth

firm indicated last week that such a mill would be built on the coast,

this year.

The more chips that are developed, the less will be the market for

logs which were formerly designated as pulp and so these, too, will

have to be processed through a mill facility to take out all possible

values. Unless this is done there is not sufficient value generated

from the log to pay for taking the trees from the forest in the first

place.

Up until the present time the introduction of the C.U. programme on

the coast has suffered from the "chicken and the egg" problem. No one

was willing to harvest the wood unless it could be sold to cover costs

plus a fair profit. On the other hand no mills had been developed which

could successfully handle this material in a profitable manner and so

it could only be used for pulp. The revolution is now under way and

many facets of the industry will be affected before one could say that

these problems have been resolved.

There is going to have to be more dry-land sorting in the forest

with the segregated wood shipped by barge to specific plants which can

process the material in a profitable manner. The nature of some of this

small, decadent wood means that it is not possible to boom and to sort

in the water. The buoyancy of much of this wood is such that it would

not support a man. Bundling will become far more common.

The traditional market for coast lumber has been has been rough-cut,

green dimension and timbers. To a degree this will remain for this

province has been one of the world's chief sources of this material.

However, there will be a gradual change in part to the production of

kiln-dried, precision-cut, planed and packaged material for specific

use without further processing.

This is the form in which the bulk of the interior production is now

sold on the United States market. However, much of the coast production

is sold offshore and different requirements will have to be met.

It is of interest to observe that certain firms have already been

established on the coast which reprocess green, roughcut lumber from

the mills for specific use and for export. It may also be of interest

to know that a surprising percentage of the structural lumber used in

construction on the coast comes from the interior sawmills.

There is one serious competitive factor in the coast-interior

relationship, and I would like also, Mr. Speaker — if some of the

members have been a little dozy with this — to pay attention to this

factor.

There is one serious competitive factor in the coast-interior

relationship which has only recently come to the attention of

management. It has been estimated that the production-employee ratio on

the coast required to manufacture rough green lumber, varies from 1,000

to 1,400 board feet per man per day. In the interior the comparable

volume is from 2,500 to 3,500 board feet of dried-planed lumber, per

man per day. If the comparison were on a direct rough-green basis the

difference would be appreciably more. This is one of the factors which

has allowed interior operators to absorb their higher freight costs in

business at the present time.

As I said at the beginning of my remarks on this topic, things are

happening of great importance in this No. 1 industry and I doubt if the

total impact is yet apparent even to those who are directly engaged in

the day-to-day activities associated with the production from our

forests.

Nearly all revolutions have a direct impact on the people at the

site of the turmoil. In this case it is even more significant since the

people are the owners of the basic resource and of the land on which

this resource happens to grow. Within the last decade there has been a

strong move towards the multiple use of our natural resources and in

this case it has been reflected in new concerns for recreation, the

preservation of wildlife, protection of watershed areas, new care taken

to see that stream flows are not impeded.

Although revolutionary when viewed against pioneer activities, both

industry and the public are in general accord concerning this approach

to the future management of timber stands.

In fact the new breed of foresters can be termed the real new

leaders in conservation in the Province of British Columbia. The

additional costs imposed are still the subject of argument since they

do affect the public's other interest and that relates to the sharing

of revenue.

Within the last decade the approach to the sharing of revenues from

the forest has also undergone a revolutionary change. With a guidance

and direction from the forestry committee of this Legislature, it was

decided to opt for stability and a higher level of wood use rather than

uncontrolled bidding for timber cutting rights without concern for

established communities and manufacturing arrangements.

Stability of operation could not be assured unless there was to be some continuity in the supply of logs to a

[ Page 72 ]

converging plant so that lumber and other products could be made.

The emphasis on stability was to mean that as many people as

possible — and this is the policy base upon which you have been

working, Mr. Speaker — should be employed and economic conditions

should be controlled to ensure that the industry could remain

competitive under varying market conditions.

This is accomplished in two ways. The public share of revenue return

is based upon a system of sliding scale stumpages which increases with

good markets and decreases when the selling price falls.

To ensure continued activity with employment as long as possible,

the province takes a maximum drop with poor markets. This move is much

more popular than is the opposite condition when the province takes the

larger share of the increase when the market goes up.

With the imposition of the logging tax, which can be charged back in

part against the income taxes paid by industry to the federal

government, the people of the province have a direct interest in the

profitability of operations. This factor and this is another part of

the revolution, Mr. Speaker, has now been incorporated into the timber

allocations of all who wish to increase their cutting rights through

the use of close-utilisation wood.

The argument now is that if the wood cannot be handled in a

profitable manner it should be directed to those operations that can do

so and thus share with the people who own the resource a greater return

of the revenue.

It is for this reason that an interest has been taken in this matter

of profit for the first time at the administrative level and why I was

able to speak earlier of some of the cost experiences of this last year.

It is also the reason that I am speaking on the subject today

because such a policy concerns the productivity of the men employed.

They have a stake in the whole operation which goes far beyond the

collection of the paycheck.

Few people seem to be aware of this fundamental change in management

policy. As time progresses a successful wood-based operation will have

to reflect the maximum in contribution of both management and labour to

ensure that the continued and expanded timber allocations are made.

This factor is likely the most revolutionary change that has taken

place in this period of change and is only now being given direct

attention by the forest service.

To this end we have recently obtained the assistance of a forest

economist so that decisions made will be soundly based. It is obvious

that a continuous loss position without adequate indication of actions

taken towards change will not be allowed to continue. Even if a

position is being held for the future there is an obligation to perform

to the maximum of efficiency today.

Let me flesh out the policy as I close, Mr. Speaker, with some

financial statistics. As I have stated, the stumpage or fee paid for

the right to cut standing timber owned by the Crown is on a sliding

scale and relates directly to the selling price of the product and the

cost of production.

It can be expected that provincial revenues will fluctuate

accordingly. This gives one reason why funds can be and are established

from time to time by government from the surplus account to meet some

particular people's need in perpetuity and don't come from the source

as mentioned by the Hon. Member from Kootenay (Mr. Nimsick) the other

day.

1970 was a poor year for the forest industry. Despite this fact the

province posted a new record cut as I have said. People worked but

returns suffered. A combination of negative circumstances prevailed.

There was a relatively weak demand from a poor market paying a low

price. Over and above this, the Canadian dollar was allowed to float

and in so doing lowered the relative value of the American dollar which

automatically decreased our returns, since from 80 to 85 per cent of

our business is done in terms of United States currency whether or not

the material is sold in the United States.

My comparisons are on the basis of the calendar year and not the

fiscal year which does not end until March 31. The 1970 revenue from

stumpage was about $65 million. This compared with a record 1969 return

when from less timber volume the returns were about $89.5 million or

about $25 million higher than they were in the lower year.

It may come as somewhat of a surprise to Hon. Members that 1971

revenues on a still higher volume of cut and on an improving market

totalled $60.9 million down about $4.1 million even from last year.

There are two reasons for this fact. First, collections trail

billing up to 60 days. Second, adjustments reflecting improved price

are taken from actual audited returns and this tends to delay the

change in charges by a further two to three months.

The beginning of 1971 reflected the low markets of 1970 and the real

impact of change was not felt until this fall. Of interest is the fact

that 20,775 stumpage upward adjustments have taken place within recent

months. This figure was only exceeded once in our history and that was

during the runaway market situation of 1969.

Officials now predict that by the end of this fiscal year our

revenues will exceed those collected last year by about 15 per cent.

When the market drops the same lag factor continues and industry

complains about the high charges as against returns. An effort is being

made to close the gap — both going up and coming down.

The upward return on revenue has been maintained through the decade.

The 1968 calendar year recorded $53.8 million and 1967 — $41.9 million

so Hon. Members can readily see the impact even of forest policies as

we've been moving despite the general market situation which has taken

place.

When taken with the payment of the logging tax it can be said that

the people are securing a fair return and increasing return from the

natural resource which they themselves own.

The receipts from the logging tax reflect economic conditions in the

industry even more dramatically. It is still too early to get

information for 1971 but the figures for the fiscal year 1970 are $23.9

million and for the fiscal year 1970-71 about half or $13.4 million

which indicates the profitability of the year through which we happen

to have gone.

Remember that despite this, Mr. Speaker, the be-all and end-all of

policy is that people work throughout the whole entire period and

produced a record cut even though the direct revenue position went down.

I apologise, Mr. Speaker, for the length of this presentation but I

think it essential that legislators realise the impact of the policy

changes which have taken place in our prime natural resource industry.

Problems have been compounded because the wood use changes have come

at the same time as the requirement for operational modifications due

to environmental concerns. Industry has reacted in a responsible manner

but that which

[ Page 73 ]

can be done immediately will be tied in with the

need to maintain employment, which is number one, while making

essential changes in plant as well as in operating procedures.

Operators know and accept what they have to do. However they cannot

respond without giving consideration to their competitive position on

world markets which involves the ability to sell at a profit that which

is produced. There is no "-ism" on earth yet devised that will allow a

non-profitable enterprise to continue in production on a long-term

basis and meet its obligations and they are the only kind of

enterprises we want in the province of British Columbia. Thank you, Mr.

Speaker.

MR. SPEAKER: The Honourable Member for New Westminster.

MR. D.G. COCKE (New Westminster): Mr. Speaker, I'm delighted

to be back in this chamber, particularly representing New Westminster,

wishing I was there to enjoy the good weather as opposed to the rather

blizzardy, wintery conditions that you have in Victoria.

Mr. Speaker, it was interesting yesterday to listen to the Hon.

Attorney General (Hon. Mr. Peterson) discussing our trip to Washington.

As he got on with the trip, he began to realise the significance of it.

He began to realise just how much of vacuum this government has created

in leaving something like that wide open. He also began to realise that

the man that sits across from him in this House made a very valuable

contribution to B.C. and showed real leadership, Mr. Speaker.

I couldn't blame him for getting more and more upset as he went

along with his speech and our condolences in that regard. But we're

going to continue going around this province, with or without standing

committees that should be activated at all times. We're going to be

listening to what the people have to say. We'll try to communicate some

of those thoughts to this government whenever we get an opportunity.

We noticed those lines that the Premier was feeding the Attorney

General yesterday — the "pinkos" stuff. I don't even think that colours

are of very much significance in this case. I think we could throw a

few at the party across the way. Let's not.

Mr. Speaker, the Hon. Minister of Lands, Forests and Water Resources

just finished a fine speech about our forest industry. Prior to that he

made some observations about the question of the leader of the Liberal

party and what he said with respect to oil exploratory leases, federal

exploratory leases that have been granted.

Oh, great was his criticism of those terrible Liberals. I ask the

government, Mr. Speaker, are they against those leases? Are they

against those leases?

MR. R. A. WILLIAMS (Vancouver East): Hansard , Hansard !

MR. COCKE: Have they informed the federal government if they

are, that they are against those leases? A letter of protest should be

sent, Mr. Speaker, right from this House. Right now. Last year on the

order paper, may I refresh your memory? "Mr. Hall moves, seconded by

Mr. Dowding that this House expresses to the federal government their

deep misgivings over the ecological disaster which will engulf the

coast of British Columbia following drilling or exploratory drilling

for oil in our coastal waters and urge the prohibition of any such

drilling by the appropriate authority."

Mr. Speaker, this

government stood behind the constitution's skirts, if you will, on that

resolution. Now is an opportunity for this government to really make

their feelings clear — if they have any feelings on the matter at all.

We certainly do. Put up or shut up!

AN HON. MEMBER: Hansard , Hansard — put it in the script.

MR. COCKE: No, that motion wasn't debated because it…

AN HON. MEMBER: It died a normal death.

MR. COCKE: That's right. It died a normal death.

AN HON. MEMBER: In this House it's normal.

AN HON. MEMBER: Normal Social Credit.

HON. J. R. CHABOT (Minister of Labour): Pinko, pinko!

AN HON. MEMBER: His colour bias is showing.

MR. COCKE: Mr. Speaker, I'll ask the question: Does this government really care about the unemployed?

Interjection by an Hon. Member.

MR. COCKE: I ask the Hon. Minister of Labour, does the

government really care about unemployed? You might feel that they do

listening to the throne speech.

AN HON. MEMBER: No, no!

MR. COCKE: Yes, you might feel that they do. We find words

that are not borne out in action. That's the problem. Words like

"fostering expansion of our industrial and commercial base." We find an

increase in capital investment of 22 per cent but no commensurate

increase in jobs, Mr. Speaker. No commensurate increase in jobs.

Where is the secondary industry of this province? What's been done

about it? The growth of investment is highly significant if it doesn't

produce a healthy economy. We have an economy that serves other

masters, other than us. Those Hon. Members know them, Mr. Speaker, do

they?

AN HON. MEMBER: General Food…

MR. COCKE: Very interesting. Mr. Speaker, our capital growth is a result of home-grown money.

Interjections by Hon. Members.

MR. SPEAKER: Order, please.

MR. COCKE: Home-grown money, that's why we have our capital

growth. There is an increase in the value of these foreign-owned

investments, and that shows up. The profits left in the country, that's

where you get the increase in that capital growth. Last year the

outflow — and that real estate man probably knows — last year the

outflow of capital was greater than the inflow. Yes. So where is your

capital growth?

[ Page 74 ]

Just plain good planning would require that some of our visiting

capital be put to work for our benefit. A top American State Senator

recently told us we are not tough enough in this province. Right to our

faces he said: "You're not tough enough up there." Yes, he as much as

said that we have more resources that others want and we could make

much better deals but we continually come off second best. We

continually come off second best.

Yes, this was a representative of the Senate in the United States

and he said it to our face. Of course, there are many people that would

verify that even enough to satisfy that Hon. Member, Mr. Speaker. We

on this side of the House have maintained that requirements or

conditions should be set in dealing with foreign capital. The price of

our wood should be jobs. The price of our minerals should be jobs, Mr.

Speaker. The price of our power should be jobs. That magic word that we

heard last session — jobs.

We haven't seen too much indication of any great plenty of jobs.

Instead the Social Credit government is delighted in making a sale even

though it does not serve the people's best interest. That's our

problem. Mr. Speaker. This government goes on to talk about the

creations of jobs that they've planned. At about this point, we find it

hard to believe, Mr. Speaker.

Where have they been during the past two years I want to know? Where

have they been? Government agencies all over the province are

understaffed. The Land Registry Office is a good example. What does Mr.

Bellwood, who was the registrar who resigned, what did he say? Mr.

Bellwood said that the registry office is chronically understaffed and

overcrowded. Chronically understaffed and overcrowded. He said he

resigns because repeated requests for more staff went unheeded by the

Attorney General's department. This government that's so worried about

jobs. Just worried about jobs.

Mr. Speaker, that was only one example of many offices in this

province that are understaffed. Virtually all of them. They are running

much behind in their work, in the Land Registry. People waiting for

service are being unnecessarily inconvenienced. Those working are

putting up with intolerable working conditions. The fact that senior

officials have quit over the chaos speaks for itself, Mr. Speaker. It

speaks for itself. This is the depth of concern our government has over

employment.

This group of "truly concerned" or whatever, individuals has made it

necessary to cut staff in hospitals, by their edicts, and in the

schools, Mr. Speaker, staff in schools. Interesting. I was in Riverview

the other day. After 2 1/2 years I've been watching Riverside, the

maximum security part of Riverview. In this last 2 1/2 years, in the

depth of unemployment, what has been done? What progress has been made

in renovating that area?

Not one particle. They still live in those intolerable conditions

that I described in this house some two years ago. Identically the

same. Absolute bedlam and no excuse for it in a time of unemployment,

Mr. Speaker.

A government agency right now when we're in the depths of this unemployment.

"Union Fears Hydro To Cut Staffs." Well, why do they fear that? They

brought in a firm of California efficiency experts, that's why.

California efficiency experts. Knock'em-down, and carry-'em-out

government.

MR. BARRETT: Ronnie Reagan's friends.

MR. COCKE: Ronnie Reagan's pals, from California, are up here to see to it that…

Interjections by Hon. Members.

MR. COCKE: That's what concern this government shows over employment.

Interjections by Hon. Members.

MR. BARRETT: Stop being objectionable, you're waking up your Members.

MR. COCKE: So, Mr. Speaker I say this: having cut staffs and

having had a policy that was for unemployment as far as the government

staffs are concerned, and their influence areas, they've aided and

abetted Prime Minister Trudeau's stupid policy. That's what they've

done. Throwing people out of work to cure inflation.

MR. G.H. DOWDING (Burnaby-Edmonds): Trudeaucats.

MR. COCKE: The Trudeau copycats, right there.

The Hon. Minister of Rehabilitation (Hon. Mr. Gaglardi) has been

talking for two years, and we're still waiting for results about that.

It would appear that the government is following the lead of the

Alliance for Businessmen which is "talk is easier than action."

Mr. Speaker, I would like to hear an explanation from this

government on their handling of situations where people were caught up

in the red tape of the U.I.C. — that would be something to hear — when

the federal government found that they couldn't handle a claim properly

they asked for the provincial welfare help, and ours turned them down.

What the Unemployment Insurance Commission wanted was a loan made to

the claimant — we found out about it at Christmas time — A loan made to

the claimants. Those loans, and those claimants that had made claims,

were just lost in the shuffle. B.C. said no.

MR. DOWDING: Shame, shame.

MR. COCKE: If this government were truly concerned about the unemployed surely they could have honoured this request.

There is a credibility gap, Mr. Speaker. There's a credibility gap

growing, and growing. The "take-home pay" slogan has to go down as the

biggest joke played on the people of B.C. for some time. That was a

joke. "Take-home pay" would have looked good to thousands out of work

last Christmas, Mr. Speaker. Even a little help would have been better

than nothing to those who couldn't even get their unemployment

insurance last Christmas. "Take-home pay" — an empty promise from a

hollow government Mr. Speaker.

AN HON. MEMBER: A hollow man, a hollow man.

MR. COCKE: Mr. Speaker, for many years the McGavin

Toastmaster Company put bread in our mouths in this province. We paid

well for their product. And in return they took bread out of the mouths

of their own employees.

Here, I am not discussing the merits of them closing down their big

operation in Vancouver last March, nor of their using a phony issue to

bring about this end, nor of their tossing a large number of people

into the unemployed role.

[ Page 75 ]

While this is hard to take from the business community it certainly has become regular practice in this province.

We are dealing with a situation where this employer used a badly

set-up pension plan to his advantage and literally stole from his

employees.

The pension plan was a non contributory-negotiated plan. A

negotiated plan — get that, that's right. The employees accepted it as

being a portion of their earnings. And that was the way it was

understood. It was certainly charged out as a labour expense. We paid

for it along with all the other expenses when we bought a loaf of bread.

The fact that an employer can see to it plans are designed in his

favour is widely accepted. I know Mr. Speaker, I was there. To be so

artful in so doing is a dubious honour, in my mind. The consultants and

trustees prepared a plan that provided no vesting or paid-up benefits

for people terminated under the age of 55. Nothing. Nothing for them

under the age of 55.

AN HON. MEMBER: What happened to the money?

MR. COCKE: When the plant closed down — and I'll explain to

the Hon. Member in a moment — when the plant closed down only those

over 55 could look forward to any recompense. Any other employee

regardless of years of service or dedication walked away with a missed

potential retirement income. Nothing.

A good example is a man aged 53 who worked 33 years for that firm and gets not one cent of pension credit. Not a nickel.

AN HON. MEMBER: That's free enterprise.

MR. COCKE: Needless to say that this man and dozens of others

are incensed. They're mad. They feel robbed of a benefit they've been

counting on. Their chance of building a pension elsewhere is either

reduced or wiped out on account of their age, because they're too old

to really build up a fund, I want to tell the Hon. Minister of Labour,

through you, Mr. Speaker.

AN HON. MEMBER: What's the Minister of Labour doing about it?

MR. COCKE: There's no way for these people to redeem their loss, no way.

Mr. Speaker, I have this many letters on the subject. One of the

employees got in touch with the Honourable the Leader of the

Opposition and he put them in touch with me. I've discussed this matter

on the telephone with some of these people, and they've written me

letters.

The fact of the matter is they're very anxious. There should be

rules in this province and I'll go on with that in a minute. But let me

just give you an idea of what they're saying.

"In reference to the McGavin plan, I am 52 years old

and have worked for McGavin's Bakery for 20 years. And on termination

of the company, received no credits in any way from the pension fund.

We took this pension plan in lieu of wages and I feel we should have

received some benefit from it. If there is any help you can give us in

this matter we would greatly appreciate it." Letter after letter, and

every one of these letters, Mr. Speaker, has the same kind of story:

"We expected a pension as a result of taking a little lower wages when

the negotiations went on."

The Minister of Labour asked: "What union?" Teamster 189 I understand, according to this letter.

Interjection by an Hon. Member.

MR. COCKE: Mr. Speaker I am bringing this to the highest chamber in this province. What's going on?

AN HON. MEMBER: Let them eat bread — is that it?

MR. SPEAKER: Order, please. Order.

MR. COCKE: Mr. Speaker, I'm not going to go through all

these. Here's another one: "I am 53, being penalised for starting

young, because now I haven't another chance."

Here's another one: "I am now a former McGavin employee. I started

to work for this company in 1948 in Prince Albert, Saskatchewan. I got

a transfer to Vancouver in 1953. I was with them until March of 1971. I

never looked for another job because I had good wages and a pension

plan, things were rosey. Then boom, the bottom fell out. I am 47 years

old, too young for McGavin's pension but too old to take up another

trade so I must work for small wages. I would appreciate whatever you

can do."

Mr. Speaker, this is bad news for this province. It's bad news for

people. There are some 50 people — 48 I believe — with 810 years of

service with this company.

Mr. Speaker, there is a way out. There are employees in this company

in other provinces not faced with this kind of devastation. Now in

answer to the Hon. Member, he's gone now so he won't mind if I tell the

rest of you.

He wanted to know what happened to the money. The employees' loss is

someone else's gain. The plan goes on. That plan was comprehensive. It

covers some of the other McGavin subsidiaries. It pays for the

liabilities for the few who qualify — members of Mother Hubbard and

other areas in the company, bakeries which are, incidentally, part of

the same McGavin empire. Ask anyone in the pension business…

AN HON. MEMBER: Who underwrote the plan?

MR. COCKE: I beg your pardon? It wasn't underwritten, it's a

trusteed plan, Mr. Speaker. It is a trusteed plan set up by William

Mercer and Associates.

The bakeries which are part of that empire are still involved in the

plan. Ask anyone in the pension business. The employer is going to get

off cheap for a long time to come. That's how it works. The employer

only has to pay the amount required to provide for future benefits of

those left. That's the way it works. The fund got rid of a large

liability and that liability in this case was people, now the employer

has a nice rest. He just sits back.

The money which normally belongs to those terminated employees is

being used to pay the employer's present bill, and Mr. Speaker, that's

not good enough.

AN HON. MEMBER: He might even go into the gas pipeline business.

MR. COCKE: It could be, it could be.

The same plan covers employees in Alberta and Saskatchewan but there

at least the employees have the protection within the law. There, any

employee with 10 years in the plan or who is age 45 gets full

proportionate credit for his service.

[ Page 76 ]

Obviously, we can't leave it to business to act in a responsible way

Mr. Speaker. We must have legislation here to provide protection for

the worker. Since this is only an isolated situation duplicated over

and over it's obvious we can no longer leave protection of employees'

rights to chance.

Now there are federal vesting rules with respect to

employer-employee plans, but non-contributory plans are left out. It's

up to the province to fill in that crack. Other provinces have. Let's

us do it. Let no one else be bilked out of their pension Mr. Speaker.

Let no one else arrive at retirement broke because of a misplaced trust

held by an employee of his employer.

In the McGavin fiasco there are at least 48 men, as I said, holding

the bag. These men represent over 800 years of service to this and

that firm.

Mr. Speaker, I do ask that question: what's going to happen about pension

plans in this province?

The Premier of the Province and the chairman of the B.C. Hydro have

been carrying on a battle of the headlines. Whether this is a sham

battle or an actual dispute is anyone's guess. Chairman Shrum seems to

be in favour of atomic power — at least for some areas. The Premier has

other ideas. One thing that worries me is that neither the Premier or

Dr. Shrum seem indisposed to the Moran dam at Lillooet.

If we are prepared to increase our already astronomical debt, power

could certainly be produced and the neon tubes could shine brighter and

brighter. The case against the dam has been well documented. The

increased power potential would be achieved by sacrificing a great

proportion of the fishing industry, impairing the navigable portion of

the Fraser and stopping the flow of silt to Delta.

The proponents of hydro power feel that economically it is worth a

great sacrifice. They fail to realise that a rich food resource has

more than an economic value. Food production is becoming more and more

a vital necessity. No longer can concerned people sit on their hands

while others go about deliberately destroying our food-producing

potential.

We have capitulated to developers in the loss of much of our rich

agricultural land and we must stop forthwith. We have capitulated to

the power producers on the loss of valley-bottom land and fisheries and

we must stop that forthwith. The Fraser must not be dammed at Moran or

any other site, Mr. Speaker.

Those who try to comfort fishermen by saying that the Adams River

run would not be impaired cannot substantiate that statement. There are

at least two reasons to believe that the Adams River run would be

devastated.

Despite the fact that the fish in the run divert and go up the Thompson they could be in water highly charged with nitrogen.

Fish kills below dams are well documented. The State of Washington

lost 80 per cent of what was left of their Columbia River run because

of the concentration of nitrogen in the water below the dams. Governor

Evans says they are working hard on research to remedy the disasters.

How much better it would have been if it had not been permitted to

happen in the first place.

For those fish fortunate enough to survive the bends — which is what

happens to fish under those circumstances, the same as what happens to

a human being diving too far and coming up too quickly — there will be

little natural protection afforded them in the then silt-free Fraser.

The young fingerlings will be clearly visible to predators. The

predators will multiply and could very well wipe out the salmon run.

Now, this government should go on record in opposition to damning

the Fraser right now. They should go on record. Here is a resolution by

the corporation of the City of New Westminster. They're on record, Mr.

Speaker. They're on record and I'm sure that this province has a copy

of it. If they haven't I'm certainly going to file this particular

resolution with the clerk.

And the resolution says:

Be it further resolved that the New Westminster

Council immediately notify the Provincial Government of our concern and

state that we stand unalterably opposed to policies that lead to the

conclusion that any responsible governmental body is in favour of the

hydro-electric tampering with the ecology of the Fraser River and its

fish carrying tributaries.

May it be further resolved that this council seek the support of the

is the

conclusion of this resolution.

They should promise the people of this province that power

production will be more carefully thought of in the future. This

government should give an undertaking to the fishermen that their

important industry will not be impaired by a thoughtless plan. The

government should immediately instruct Hydro to study alternative

methods of power production.

Research and study are imperative at this time. Surely the people

are getting impatient with a tired old government who moves from

mistake to mistake.

Mr. Speaker, since there is a need for electrical power and it won't

likely reverse, we should provide some leadership in providing

alternative sources.

We have given United States access to a major portion of our present

hydro power. We have also as Canadians seen to it that natural gas is

piped into the U.S. in quantities that could produce a fantastic amount

of electric power.

I believe we think of ourselves as dependent on these markets. But

the truth of the matter is they are entirely dependent on us. It's

interesting in this context that the State of Washington see their

cheap power — which they produce as largely as a result of our exports

— as a good chance to encourage industry. Well, industry that they have

developed so far has not been job intensive according to the Governor.

AN HON. MEMBER: What's their unemployment rate?

MR. COCKE: About 16, 18, 20 per cent, maybe 50 per cent. But

the fact of the matter is, they're suffering and have been suffering

under the same illusion as this government, Mr. Speaker.

Interjections by Hon. Members.

DEPUTY SPEAKER: Order, order.

MR. COCKE: Mr. Speaker, the un-American across the way speaks again.

The industry that they've developed has not been job-intensive — that's what they indicated. We had better therefore take our second

look at this situation if our government is truly interested in real

progress.

Since hydro power is damaging and atom power is possibly dangerous,

it's a good time to look further ahead. Now, Mr. Speaker I'm not

suggesting that we shouldn't be

[ Page 77 ]

looking at all types of power development, but there is another

source that we should be looking at very carefully and that's

geothermal power. It's receiving more and more attention around the

world. Even B.C. has token representation at conferences on the

subject. We had to go out of the province to find that out, mind you.

We found that out in Washington when we were there.

Geothermal power is non-polluting heat energy produced by the

world's biggest nuclear plant, the earth itself. It is so great that if

it were cooled 1°F at the centre of the earth, it would release enough

energy to run all the power plants in existence in the world for 20

million years.

It is interesting to note just who are most determined to develop

earth heat power. It's mostly private companies in the oil industry.

They include such names as Union Oil, Sun Oil, Signal Oil, and they're

not doing a great deal of advertising about this matter either, Mr.

Speaker.

These companies look at it as a potential dollar producer. There are

other names like Magma Thermal Earth Energy Inc. and Union Magma but

where are the governments? Where are the governments on this question?

As is often the case, governments leave research and innovation to

the private sector. They don't leave defense research to chance

however. Our government in B.C. should show some leadership right now.

Get people working on the whole idea of power production from

geothermal sources.

We are on a geothermal belt that extends from Alaska through B.C.,

western U.S. and all the way down into central and south America. To

follow the belt around the Pacific is to follow the so-called fiery rim

of the Pacific. On this geothermal belt we have a real opportunity to

use a resource to save a resource. I suggest that the government of

B.C. invite Dr. Robert Rex to the province in order to secure his

advice. He is a geologist from the University of…

AN HON. MEMBER: Where's he from?

MR. COCKE: Can I finish? He is a geologist from the University

of California at Riverside. I'm sure he is one of the best-informed

authorities on geothermal power in North America.

AN HON. MEMBER: Did you find that out when you went down to the states?

MR. COCKE: Dr. Robert Rex has been consulting with Mexico, as

a matter of fact, in recent months. I'm sure therefore he would be

willing to give us the benefit of his knowledge…

Interjections by Hon. Members.

DEPUTY SPEAKER: Order, will Hon. Members please address the Chair?

MR. COCKE: Right now with our obvious power shortage from past

mistakes we could use a great deal of help, Mr. Speaker. Not the kind

of help we're getting across there.

If the cost of geothermal power is as low as many claim we cannot afford to overlook this very important source, that's all.

In southern California Dr. Rex claims that the cost of geothermal heat for

both electricity and desalinisation of water would only be about 1-2 cents

per million British Thermal Units,

whereas heat from nuclear sources would

be 22 cents and coal and gas about 30 cents per million B.T.U. So, if you can

get at it and if you can develop it, it's certainly worth researching for something

that cheap and non-polluting as well.

In the throne speech the impression is left that hydro power is

non-polluting — page 4, paragraph 8 and I won't quote it here. But

that's what was implied, that hydro power is non-polluting.

In one sense it may be non-polluting Mr. Speaker, but it is

certainly damaging and the loss of land and fishing is intolerable at

this time.

Before more area is lost let's go on with some hard research into

alternatives. The alternatives may not be geothermal for a while but

there is too much evidence that there is too great a potential to

ignore it.

Mr. Speaker, we're not indicating here either that you shouldn't

machine what dams are already there, not at all. Those dams are there

and so nothing is going to reverse that situation. We're suggesting

research done for future needs.

At a United Nations conference in Pisa, Italy, on geothermal power

there was presented 200 scientific reports. After the conference one of

the officials said: "We used to think geothermal energy would only last

for 40 years." He went on to say: "Now we think geothermal fields

properly managed could go on forever."

The Russian report at that same conference said that the geothermal

energy potential of the Soviet Union is greater than all sources put

together. Considering Russia's huge reserves of coal, oil, gas and

hydro, this report has staggering implications, to even the most

dull-witted.

Despite the throne speech, production of power is the main source of

environmental blight in this province — on this earth for that matter — if B.C. follows the United States' lead in using science to produce but

not to conserve, Mr. Speaker.

We would think first in terms of preservation of the environment. If

we did, science would be put to work in that way. We are the backwards

child of this planet, Mr. Speaker, in our handling of our resources.

We don't wait with baited breath in B.C. In B.C. we have become

accustomed to the Simon Legree attitude to ordinary people — but each

year we hope to have some repentance and atonement for past sins, Mr.

Speaker.

What a delightful surprise for the people of our province it would

have been if the throne speech promised some real humanitarian changes

in government agencies in this province.

AN HON. MEMBER: I wonder which one, eh?

MR. COCKE: In regards to workmen's compensation we are told

"new regulations will reflect the cooperative effort of labour,

management and government officials who have drafted 255 new

regulations and 520 revisions."

I suggest, Mr. Speaker, that another 255 new regulations and 520

revisions could just about make the Workmen's Compensation Board the

most over-regulated and under-productive government bureaucracy in our

province. The fine concept of compensating people for injuries

sustained on the job has deteriorated into a game of poker with the

board holding all the cards, Mr. Speaker. And I'll bring some

documented evidence of cases to the attention of the Hon. Minister and

House later in the session.

Meanwhile, despite rumors to the contrary workmen's compensation has deteriorated in its claims handling again.

[ Page 78 ]

Remember they improved for a while. For a time it seemed to improve

under new leadership, but now claimants who have a claim that doesn't

fit into the preconceived ideas of the board may as well go whistle in

the dark.

Getting back to the throne speech and its relevancy, it surely loses

touch with reality respecting municipalities. There is no trouble in

the cities, towns and villages according to this hollow document. To

quote: "The financial position of British Columbia's municipalities is

unexcelled elsewhere anywhere in Canada." Loose talk like that, Mr.

Speaker, just doesn't wash. That's what it says.

The municipalities are carrying the load in services to people far

beyond their ability to tax in this province, Mr. Speaker. I have yet

to talk to a civic official anywhere in this province that shares the

government's sentiments.

Last year the Union of B.C. Municipalities indicated the books were

cooked by the government. That's right. Their report showed that rather

than being well treated by the senior government they were being

shabbily treated.

To quote from their report presented May 15, 1971:

It can be concluded that as a result of provincial

fiscal policies, increases in municipal revenues from the two primary

sources — property taxation and grants — have been diverted to the

support of services over which municipal governments have no control — education and social welfare. When measured in terms of the revenue

allocation which prevailed in 1957, this diversion in revenue increases

by 1968 amounted to $46,497,432. Even if the home-owners' grant could

be considered as an offsetting revenue fact — which it cannot — the

increase in this grant does not equal the extent of the diversion.

In terms of their capacity to support expanding

municipal needs municipal governments in British Columbia in 1968 were

in much worse position than they were in 1957.

When B.C. is supposed to be in such great shape what's their excuse? What's

the government's excuse for putting the municipalities into this kind of position

where they're worse off now than they were in 1957? Where is this progressive

government?

Because of the brevity of the comment in the Speech from the Throne

it was probably thought it would be discounted. We cannot discount it.

This is government policy which is taxing our senior citizens out of

their homes. That's what happening as a result of their policy — taxing

our senior citizens out of their homes. It's a policy which sets one

group in an intolerable position in that they are carrying more than

their fair share of the load.

By placing the load on the little people, the Social Credit

government helps its corporate friends in that as a result the

corporations carry less than their fair share of the responsibility,

Mr. Speaker.

I've spoken on another subject once or twice before in this House.

I'd like to say a few words about it again. For months and months B.C.

Hydro has played cat and mouse with New Westminster. Since December 29,

1969, until the present, Mr. Speaker, Hydro has been trying to

confiscate a distribution system already owned by the people.

Hydro should welcome local involvement, Mr. Speaker, especially when

it's traditional. New Westminster owns the facility and its people

don't want it to be pilfered by almighty Hydro.

In a letter dated September 21, 1970, Chairman of Hydro Gordon Shrum

wrote: "It is the firm policy of B.C. Hydro and Power Authority that it

not supply electricity for resale by municipalities."

Shocking words from a government agency in my view, shocking words.

All I have asked for the past two years is a reason for this policy,

Mr. Speaker. No reason has been given New Westminster by Hydro, and no

reason has been given New Westminster by this government. Obviously it's

part of the big-handed authoritarian methods so often used by Hydro and

the Social Credit government.

In 1904 B.C. Electric signed an agreement with New Westminster. The

agreement was for 10 years certain and further 10 year periods at the

option of the city. There was no limit on the duration of obligation of

the company. Implicit in the agreement was power at reasonable rates

compared to the rest of the lower mainland.

B.C. Electric, according to the agreement, would sell power to

industrial users and New Westminster would sell power to the community.

Hydro inherited the package but somehow unjustly feel privileged to

deny the obligation. Both industrial and other consumers have been well

served and there is no reason to change this system, Mr. Speaker, no

reason whatsoever.

In forcing a change, Hydro has blackmailed the city. They refused to

even discuss the extension of the contract. Every form of pressure has

been used, including raising rates. The latest increase demanded a

raise of 90 per cent which is sledge-hammer tactics to say the least.

Now, the Hon. Minister of Lands, Forest and Water Resources (Hon.

Mr. Williston) informed me that while Hydro would not supply power for

re-sale, they would welcome New Westminster generating her own power.

That's what he said. And every action since then by Hydro has been to

place stumbling blocks in the way of any alternative except take over

by Hydro. Now that's the inconsistency of the whole thing, Mr. Speaker.

Where are they? Where is Dr. Shrum? Where is Hydro on this question of

the difference between him and the Minister?

I call for the government to get back to square one on this issue and sign

a reasonable contract at reasonable rates. Let New Westminster carry on with

distributing power. Hydro is best equipped to provide power; we agree. New

Westminster is equipped to distribute it and if other communities wish to do

the same, let them do the same — including Nelson or anywhere else in

the province.

Mr. Speaker, I have one other delightful little goodie here, I

think. We could go down the line and I'd like to just enlarge just a

little bit on what the Honourable First Member for Vancouver East (Mr.

Macdonald) was talking about last year.

I'd like to do a little history on B.C. and what happened to them

subsequently. They're going into Northwest Life. I think, Mr. Speaker,

that the report in the throne debate that we have a committee reviewing

companies in the security law, and that new legislation is under

consideration, is very much welcome. And I'll tell you why I think it's

welcome — because of some of the things that have happened in this

province. We would hope that there will be committee hearings on the

whole question. This province has been from a corporate standpoint a

happy hunting ground for wheeler-dealers — a happy hunting ground.

Here's a short history of an infamous deal. Back in 1960 two men met

and became interested in one another's objectives. The men were W. H.

Walters of Seattle and M. Donald Easton, barrister of Vancouver. Now,

I'm going to read you three letters that went between these two people.

This is a letter from Mr. Easton of Suite 204, 525 Seymour Street,

Vancouver, B.C. It's to Mr. W. H. Walters, 714 North 74th Street,

Seattle 3, Washington.

[ Page 79 ]

Dear Wally:

Nice to hear that you arrived safe and sound back

in Seattle after our foray in Bellingham. Colin and I are slowly

recovering from the ordeal. The property we were discussing very

briefly when we were in Bellingham consists of 5,800 acres of Crown

granted timberland.

Remember this, this is Crown granted land to begin

with, that they're talking about. They talk about all sorts of things.

The property is situated in the interior of British Columbia and is

accessible by both water and rail. It's fully developed as regards

roads and was last cruised in 1945. At the date of the cruise in 1945

there was something in excess of 32 million consisting of 52.4 per cent

hemlock, 12.4 per cent cedar, 14.2 per cent fir, 19.3 per cent white

pine, 1 per cent spruce and 0.7 per cent white birch. This property

would make a nice tree farm area to be logged on a sustained yield

basis as the rate of growth in the area is very good. One of the

interesting aspects of Crown granted land is that the stumpage royalty

payable is 50 cents for timber and a quarter of a cent per lineal foot

per pole.

We're presently in the process of negotiating

with the forest engineer toward having a recruise made of this area, as

since the date of the last cruise, there has been timber removed.

However, we hope that the rate of growth in the past 15 years has been

sufficient to compensate for the timber removed. If you know of anyone

that may be interested in acquiring such a block of Crown granted land,

we would be interested in providing you with any necessary further

information.

Your best regards,

Don Easton.

That's letter number one. Letter number two, from the same person to the same person.

Dear Wally:

Re: Oil leasehold properties

I have now obtained a reasonable amount of

information regarding availability of oil properties in northern

British Columbia and I am wondering if you are still interested.

One rather interesting bit of information is that

50 per cent of all wells so far drilled in the particular area, have

turned out to be producers of either oil or gas. There are many ways of

approaching the classification of properties for drilling and if you

are interested, it might be as well if you telephone me and we will

arrange a suitable date to give you all the necessary information.

Letter number two. Letter number three — same person, same recipient.

Dear Wally:

Re: North West Life Assurance Co.

September 29, 1970

As a result of our telephone conversation on

Monday last, I have now obtained information regarding availability of

the above company. The company was incorporated by a private Act of the

Legislative Assembly in the Province of British Columbia, March 2,

1956, and is presently actively engaged in the insurance business.

The company is capitalized at $1 million, divided into 40 thousand shares

of $25 each. The objects for which the company is incorporated are for the

sale of the following classes of insurance; accident insurance, life insurance

and sickness insurance. The company is presently licensed to sell in the three

classes of insurance and has a deposit with the superintendent of insurance

of $56,000 in stocks and bonds. Out of the 40,000 share capital, 9,558 shares

are issued which shares are only partly paid up and the amount paid on the

issued shares is $86,936.30 and the remainder is subject to call.

The present directors of the company are not

experienced insurance people and we understand would be very likely to

sell their interest in their shares for the amount actually paid up.

Although this company is limited in its objectives it has been carrying

on business in the past few years and we would think it possible for a

federal company to take over its assets and to obtain a federal life

insurance licence and also broaden its objects.

I enclose for your information the report of the

superintendent of insurance for 1958 pertaining to the company. If you

are interested in proceeding further, kindly advise as soon as possible.

There is another company that may become

available, but at the present time some interests in the east have an

option until the end of October. This company is Canadian Western

Insurance that is presently in voluntary liquidation but could be

stopped at any time.

I am also enclosing the report of the

superintendent of insurance for 1958. I might add that the acquisition

of this company could involve less money. The superintendent of

insurance would be quite anxious for this company to again be active in

the insurance field.

Kind regards…

The same recipient — that was September 29, the other two were June

7 and 17, 1960. I might as well tell you where I get all this

information. Mr. Walters is a very unhappy man and the Hon. Attorney

General knows that and I just want to indicate where I get the

information that I have.

This is a document that was given under seal, October 13, 1960.

"Know all ye men by these presents that…" and then it names Mr. T.A.

O'Connell, Mr. W. H. Walters…

Subject to that certain joint venture agreement

entered into by and between T. A. O'Connell, C.C. Coon and W. H.

Walters, dated October 1, 1960, that certain British Columbia Life and

Casualty Company of Vancouver, B.C., organised after March 20, 1958,

Percy Winterborn, President.

Said assignee is hereby authorised and empowered to

institute any action which a signor might otherwise bring for the

enforcement of the conclusion of the purchase of the above-mentioned

company.

October, 1960. On December 3, 1960, "To whom it may concern," a

little agreement. It showed the address and this is the only important

thing here. First and foremost it shows that O'Connell, Walters and the

bearer of this is Walters, who got these first letters from Mr. Easton.

It shows the address as B.C. Life and Casualty, Suite 204, 525 Seymour

Street, Vancouver, B.C. The same address that he had been having his

correspondence on oil leases, Crown granted timber leases and whatever.

You name it, B.C. has it for sale.

So, Mr. Speaker, this is the kind of climate that we live in. So far

in 1960, I've named the people that were involved. Then in March, 1961,

an H. S. Reed appears. There were others involved, mind you but these

are the major figures in those early days of B.C. Life and Casualty.

September, 1961, Columbia Pacific Holdings set up with 5 million

shares. Now that was set up as a vehicle to activate B.C. Life and

Casualty, to put them to work. Mr. Coon, on behalf of the other

shareholders, transferred all his shares in B.C. Life and Casualty to

Columbia Pacific, and in return all shareholders were to get 1,250,000

shares.

[ Page 80 ]

But the transfer was never quite completed. Never quite. Charles F.

Jensen was brought in, on the sales and development side. He was the

promoter from down south. He was brought in for a short period in that

same year. Later in '61, Mr. Walters and Mr. Easton travelled around

the U.S., promoting the company and in this junket they picked up a

David Anderson of San Francisco, an insurance man who became executive

vice-president of B.C. Life and Casualty.

Now all I'm indicating here is that this kind of crazy proposition

made itself into an octopus that had 37,000 people of British Columbia

investing in it — 37,000 people really made into suckers because the

history of this company and its future has always been blacker than the

ace of spades.

AN HON. MEMBER: A provincial company!

MR. COCKE: Now, Anderson got a voting trust, mind you, of

that 1,250,000 shares. He was the only individual that was given a

specific allocation as far as we can find out from the files. How the

rest of the 1,250,000 shares were allocated wasn't firmly settled at

all.

Now, many administrative problems followed. Reed, in his promotion

activity, promised many appointments to people in the United States and

there is record of this. You know, they would appear as directors in

this company. It was sort of an enticement to invest. This raised funds

and it also raised a great many hackles down in the United States.

Some major investors at this time were Henry Mode of Los Angeles and

Inch Brothers Construction and many, many small investors — from Idaho,

North Dakota, South Dakota, Washington and California.

In all this promotion of stock in this company, the American federal

securities regulations were being broken, because the regulations are

explicit in that they say you cannot raise money inter-state for a

company whose principal business is out of the country. So they're

breaking their own law.

They had a head office in B.C., but in this adventure, the only

Canadian so far that I can see in the whole thing is Don Easton. Mind

you Reed became a landed immigrant later in 1961.

Time went on and new names appeared, like Rodney Stookey, in 1963 — the first president of B.C. Life and Casualty — then in 1964 Columbia

Beneficial Holding was formed by Reed and Stookey to whom Columbia

Pacific stock had been transferred by Coon and others.

Goodbye past friends. This is the time that there were a lot of

shaken-off people, who had been early investors. I am not suggesting I

have any truck with any of these investors. I am just indicating the

kind of company that attracted 37,000 people from B.C. to invest their

money later on.

During late 1964 and in early '65 offerings were made to our public.

Thousands and thousands of $5 shares to B.C. investors, that's what

happened then, and then later life insurance was sold to the same group.

With a law suit impending later in 1969 things became a little bit

difficult, and Mr. Reed quit at that time. Then finally came the N.W.L.

take-over which was a memorable affair in Vancouver — most of us

remember the headlines that occurred around that and Hon. Members on

this side and the other side of the House, I am sure, have spoken on it

from time to time.

Who profits? Who profits from this kind of activity, Mr. Speaker? A long line of leeches and bloodsuckers.

Who pays? It's our own unprotected people, Mr. Speaker. That's who pays for this sort of work. Poor old W. H. Walters is

still sitting in the wings, Mr. Speaker, with a large file and a letter

from a Mr. Scott. Mr. Scott tells him what he has to tell him. This is

the Securities Commission, written May, 1971, to Mr. Walters:

Dear Sir:

Re: Columbia Pacific Holdings

We have completed our investigation of this

matter and have checked all the various documents in the hands of your

solicitor as well as certain documents in the hands of the Columbia

Beneficial Holdings Ltd.

A careful review of the evidence does not

disclose anything which would establish a prima facie case of breach,

either of the Criminal Code or the Securities Act. It would appear that

the shareholders of Columbia Pacific Holdings Limited have been treated

shabbily by some of the directors, who, when Columbia Pacific Holdings

Limited could not raise the necessary financing to develop British

Columbia Life Insurance Company, obtained financing through other

sources and it would appear decided to keep the benefits of that

financing for themselves.

There are a number of similar cases based on

somewhat similar situation and in them it has never been suggested that

any criminal act has been committed. In fact in some of the instances

the courts have ruled that even no civil wrong was done.

You must realise that there is a substantial

distinction between a breach of duty and a criminal offence, and as

stated we see no evidence that any criminal offence has been committed

here. Accordingly we are closing our files.

O.K., and that's the way it is. I suggest, Mr. Speaker, that there

were 37,000 shareholders in this country left out in the cold because

of those kind of directors that were always attached to that company

all the way through the years.

Where is the law to protect that little guy? Not only a weak law,

but there's an understaffed commission in this province, Mr. Speaker — one lawyer and four investigators.

What happened when the Medicorps issue hit the pages? Nine days that

whole commission met on that plan. Nine days with nothing else in front

of them because they had no time and not enough staff.

It's common knowl