1987 Legislative Session: 1st Session, 34th 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, DECEMBER 16, 1987

Afternoon Sitting

[ Page 3037 ]

CONTENTS

Routine Proceedings

Oral Questions

Free trade agreement. Mr. Guno –– 3037

Mr. Miller

Mr. Harcourt

Mr. Williams

Mr. Rose

Presenting Petitions –– 3039

Miscellaneous Statutes Amendment Act (No. 5), 1987 (Bill 68). Third reading

–– 3039

Forest Amendment Act (No. 2), 1987 (Bill 70). Second reading

Hon. Mr. Parker –– 3039

Mr. Miller –– 3040

Mr. Kempf –– 3041

Mr. Williams –– 3041

Mr. Gabelmann –– 3043

Hon. Mr. Parker –– 3044

Legislative Assembly Allowances And Pension Amendment Act, 1987 (Bill 69).

Committee stage. (Hon. Mr. Veitch) –– 3045

Third reading

The House met at 2:11 p.m.

Prayers.

HON. MR. STRACHAN: I’d like the House to acknowledge that

visiting with us today is a Prince George resident, now a student at

the University of Victoria. Mr. Michael Podger. Would the House please

give Michael a nice warm welcome.

MS. EDWARDS: I'd like the House to join me in welcoming a

longtime friend of mine, a student at the University of British

Columbia and a former resident of Cranbrook, Margaret Williams.

MR. WEISGERBER: It's my pleasure today to introduce to the

House Mr. Perry Creighton, a former Dawson Creek resident now living in

Victoria. Perry is not only a good friend, but a good banker as well.

So please make him welcome.

HON. MRS. McCARTHY: I'm very pleased today to ask the House

to welcome two gentleman from West Germany. We have visited their plant

in West Germany. They are here to negotiate and to see about locating

in British Columbia. This organization is very well known throughout

the world, with a great history behind it and the family in

aeronautics. They are looking at British Columbia because of the

potential for a free trade agreement between the U.S, and Canada, and

that is one of the things that have brought them to British Columbia. I

would like to ask the House to welcome Mr. Camilo Dornier and Mr.

Thomas Brandt, who are with the Claudius Dornier Seastar corporation.

MR. LOVICK: I notice some friends in the gallery. Visiting

from Toronto, Ontario, is Miss Mary Sutherland; and from Nanaimo, two

friends, Diana Pullinger and her daughter Jan Pullinger. I would ask

the House to please join me in making them welcome.

Oral Questions

FREE TRADE AGREEMENT

MR. GUNO: My question is for the Premier. Atlantic Canada and

Quebec fought for and won protection for east coast fish processors in

the Mulroney trade deal. Why didn't the Premier think it was important

to do the same for B.C.?

[2:15]

HON. MR. VANDER ZALM: Mr. Speaker, the Atlantic Canada fisheries were

not subjected to a GATT ruling. The GATT ruling is being appealed, obviously,

but until it has been dealt with, I'm advised by the federal government

that it can't be dealt with in the agreement. However, if the GATT ruling

is dealt with and dealt with favourably, as we hope it will be, then obviously

it will be treated just as though it were the same as the Atlantic fisheries.

If not, we'll need to devise another approach to this. We're working

very closely with the federal government to that end, and we're sure that

we have several options available to us. I can't discuss them now because

they're still in the negotiating stages with the federal government, but

I'm very pleased with the way things are going.

MR. MILLER: A question to the Premier on the same topic. Your

Minister of Agriculture (Hon. Mr. Savage), in a letter of November 30,

1987, to the Minister of Fisheries of Canada, says that the free trade

agreement makes it impossible to put in place alternative measures such

as an export tax or a requirement for a Canadian landing. In view of

that, why would you support the free trade agreement?

HON. MR. VANDER ZALM: I'll defer to the Minister of Agriculture to provide a response to the contents of the letter.

MR. MILLER: A new question to the Premier. Your Minister of

Agriculture, in his letter, says that the best solution to the problem

is direct negotiations with the United States. Do you agree with that,

and what steps have you taken to get that process underway'

HON. MR. VANDER ZALM: I can't answer that, Mr. Speaker,

because as I mentioned a little earlier, we are in effect working with

the U.S., but as the hon. member should know, we can't work directly

with Washington. In our federal system we work with Washington through

Ottawa.

MR. MILLER: Mr. Premier, we rang the alarm bells on this back

in July. Your Minister of Agriculture is obviously very concerned,

judging by the letter he sent to Mr. Siddon. Where were you? Did you

leave it to your Minister of Agriculture to carry the ball on this

issue? Did you not write letters? Did you not go back and demand

protection for B.C. fish?

HON. MR. VANDER ZALM: As a matter of fact, it feels to me as

though it is about once a week that I'm visiting Ottawa. There are

enough meetings, and there are many discussions taking place, and I

represent the province at the table each and every time, and all of

these issues are discussed at length. However, as I mentioned

previously, these discussions going on now between us and the federal

government, involving at some point Washington.... I'll make this

information available as soon as I can, but while these discussions are

being held, I can't make that information available.

MR. MILLER: Mr. Premier, the document is clear. Five or six

provinces got protection; you didn't. Your Minister of Agriculture says

that 6,300 processing jobs are at risk. You know, there's an old

expression in the fishing industry: "It's time to fish or cut bait."

You're going back east today. Are you going to go back and sell out the

B.C. industry, or are you going to go back and take a strong stand and,

as your minister says, reassess B.C.'s position in light of the free

trade agreement?

HON. MR. VANDER ZALM: I certainly will be raising that issue

and other issues of concern, but I can again assure the hon. members

opposite that we are very much in support of free trade and what it

means to the future of our province, what it means to new industry

establishing here, and what it means to people having employment

opportunities available to them in a diversity of ways.

[ Page 3038 ]

MR. HARCOURT: I have a question for the Premier. Mr. Premier,

you're going back tomorrow to Ottawa. I'd like to ask you a very simple

question: have you read this free trade agreement yet? You hadn't on

Friday. Have you read it yet?

HON. MR. VANDER ZALM: I'm going to Ottawa this afternoon

because the meeting is being held very early tomorrow morning. So I'm

going to have to leave this afternoon. I have gone through most of the

material, and I will be finishing all of this material while flying to

Ottawa. I won't be sleeping on the plane. I'll be finishing it up; I'll

be going through it again; plus we've had our other people, our

experts, the people who worked with this on a regular basis, reviewing

it in Ottawa during the last weekend, and there will be briefing notes

available from them too. I can assure the member opposite that I'll

have no difficulty with the information, and I'm aware of the

agreement, and it has been gone over in a variety of ways. But I'll be

reviewing all of the details once again during the five-hour flight to

Ottawa.

MR. HARCOURT: The Premier has said he was too busy filming

his video yesterday at Fantasy Gardens to read it. I'm glad he is going

to read it on the plane.

Yesterday the Minister of Economic Development and trade (Hon. Mrs.

McCarthy) couldn't answer my question that future Crown corporations

under this agreement had to be approved by the Americans. She said: "I

don't know." Could the Premier answer yes or no: do we have to get

American approval to set up new Crown corporations under this agreement?

HON. MR. VANDER ZALM: For the member, yesterday I spent eight

hours minimum reviewing the material. It obviously had just been made

available. There is a lot of material there.

Incidentally, I recall when the first information about free trade

came back from Ottawa some three weeks ago. The day it arrived you were

doing your Christmas shopping in Seattle.

No, we'll not need permission from the U.S.A. in order to establish Crown corporations.

HON. MRS. McCARTHY: Mr. Speaker, I would just like to make

the point of order that the Leader of the Opposition attributes to me

that I did not know the answer to the question. I took the question as

notice, and I do have the technical answer today. The Premier has

answered it generally, and the Premier's answer is absolutely correct.

MR. WILLIAMS: Mr. Speaker,

article 1203(

c) provides

exceptions to the following provinces regarding fish-processing: New

Brunswick, Newfoundland, Nova Scotia, P.E.I, and Quebec. Did you not

notice that when you reviewed this pact initially? Did it not ring any

bells that British Columbia at the very least should have equal

protection?

HON. MR. VANDER ZALM: Mr. Speaker, I have already answered that question.

MR. WILLIAMS: On November 30, your minister responsible for

fisheries wrote the federal Minister of Fisheries indicating his

concern and that British Columbia might well have to reconsider the

whole agreement because of the disastrous impact on 6,300 workers in

B.C. Did it ever register with you, Mr. Premier, when this pact was

opened up again by the Americans when Simon Reisman was renegotiating

with the Americans regarding the maritime rules and trucking rules,

that it was the last golden opportunity to save these jobs in British

Columbia?

HON. MR. VANDER ZALM: Again, I've already answered that. I

will be discussing it again, but let me point out once more that we are

faced with a GATT ruling on the Pacific Coast, and that GATT ruling is

not applicable on the east coast for the Maritimes. So the situation is

a little different. I've spoken to the minister responsible for

international trade in Ottawa and asked to get more details with

respect to GATT and how it's proceeding following the earlier

discussions as to how we approach this particular problem, which is of

concern to us. I know I'll be getting that information later today or

early tomorrow morning as well. So there will be another opportunity to

review the material later today as well as tomorrow morning.

MR. WILLIAMS: Your Minister of Agriculture said very clearly

that the optimal solution was direct negotiations with the Americans,

which is what the bilateral agreement is. Don't give us the alphabet

soup routine about GATT. That is simply a red herring, if you'll

forgive the pun. It doesn't wash. Are you or aren't you going to say to

Ottawa: "That's it. It's on the line. We want these jobs protected in

British Columbia. We want equal treatment with the Maritimes"?

HON. MR. VANDER ZALM: Being the government — being people in

a responsible position having to make a responsible decision — we'll

not be approaching it that way, I can assure the member. We will be

approaching it, but not the way the member of the opposition is

suggesting, because I think we have to be responsible in this and

consider the tremendous impact and the tremendous benefit to our

province through the whole free trade agreement.

MR. ROSE: My question is also to the Premier. Yesterday — and

I'm sorry to say this — we were treated to an appalling display of

ignorance on the part of the government having to do with the details,

the implications and the dangers associated with our way of life and

our society in terms of jobs and all kinds of things. Even the Tory

head of the committee that studied free trade on behalf of the federal

House has said that unless we Canadians are specifically exempted from

the protectionist laws in the United States, there's no deal. Does the

minister support that same position'?

HON. MR. VANDER ZALM: Perhaps what needs to be remembered in

all of this as well is that the opposition tends to be approaching this

from the information provided them by the leader of the federal NDP in

Oshawa, Ontario. I think that all the comments I've heard from the

provincial NDP reflect an Ontario attitude, which is no doubt a part of

the information you're being fed by your federal Ontario counterparts.

Frankly, I have no difficulty with the agreement. As suggested,

there may be things that we would like to be different, and we're still

going to be talking about some of those things. On the other hand, we

are not so blind as to view this from only an Oshawa, Ontario,

perspective that has been fed to the provincial NDP.

[ Page 3039 ]

MR. ROSE: Mr. Speaker, I don't know how many Pacific salmon there are swimming around Oshawa, but I don't think there are very many.

I got my information not from Ottawa but from British Columbia's

vegetable industry, wine industry, insurance industry, fisheries

industry and printing industry. So I'd like to ask the Premier, before

he succumbs to any more Mulroney blarney: will he demand from the Prime

Minister...? Because there are going to be winners — perhaps. We

haven't heard who they are, but we know who the losers are. Will he

demand a plan from the Prime Minister — before he puts any signature to

this document — for how the losers are going to be looked after in

terms of compensation?

HON. MR. VANDER ZALM: Again, Mr. Speaker, hopefully this

agreement will see a benefit to all the people involved in it –– I

don't think we're looking — as has been suggested by many — to some

agreement which is totally of benefit to Canada and somehow counts out

the other side, because there are remedies in the case that an

agreement doesn't work. Frankly, I would hope that there's a benefit to

the United States of America and to Canada both, and that people on

both sides of the border will benefit tremendously from this agreement.

We think that to be the case, and certainly that's how we'd like to see

it work out in every respect.

That's not to say there won't be some situations on both sides of

the border that might not need to be addressed in some fashion. I can't

tell you now how it ought to be addressed. Certainly that will take a

lot of work, both from the provinces and the federal government. I'm

not out seeking some formula that somehow provides taxpayers' money to

everybody who suffers a setback of whatever dimension. I think there

needs to be reason in all of this too. We're not into some sort of new

welfare program that says,"If you can't cut the mustard" — even though

it isn't the fault of any agreement, but it may be somewhere else —

"then somehow there will be these big cash payments made." I do

believe, however, that we need to work out an equitable approach. I've

already assured the grape growers.... Incidentally, the wine industry

isn't feeling too bad about this. I think you must have meant the grape

growers.

[2:30]

MR. ROSE: Both.

HON. MR. VANDER ZALM: Well, the wine industry — I've met with

them, and certainly I think they can live without government telling

them how to make wine. They'll get by fairly well. But the grape

growers, on the other hand, do have a problem, and we want to see that

addressed fairly. We want to make sure that the grape growers in the

Okanagan continue to get the help they require and what's due them from

the banks. We're going to keep that industry in the Okanagan. As a

matter of fact, we're going to make it grow more in the Okanagan.

Presenting Petitions

MR. LOVICK: Pursuant to standing order 73, I wish to present

a petition. I'm presenting a petition on behalf of some 160 residents

in the Grassy Plains area in the central interior of the province.

These are people affected directly by the inland ferry system,

specifically the Francois Lake ferry.

These individuals are very concerned about the proposal, in the name

of privatization, to perhaps impose user fees on that ferry service for

the first time in 70 years. Their petition, therefore, does two things:

one, it registers their protest against the imposition of user fees;

and, second, it requests that the existing level of services on the

Francois Lake run should be maintained.

I might add to that, Mr. Speaker, that the individuals in that

remote community would, if nothing else, at least like to be consulted

by government. They feel they have not been given that opportunity thus

far.

My petition, Mr. Speaker.

Orders of the Day

HON. MR. STRACHAN: Mr. Speaker, I call report on Bill 68.

MISCELLANEOUS STATUTES

AMENDMENT ACT (No. 5), 1987

Bill 68 read a third time and passed.

HON. MR. STRACHAN: Mr. Speaker, I call second reading of Bill 70.

FOREST AMENDMENT ACT (No. 2), 1987

HON. MR. PARKER: I rise to speak in support of Bill 70, Forest Amendment

Act (No. 2), 1987.

The amendments introduced reflect the fundamental changes we have

made in the way we manage and renew our forests in our province. We

have undertaken these measures for three reasons. First, we have a

tremendous forest resource, which must be managed effectively and

efficiently for the long run. Second, we have a strong and innovative

forest industry that can and must take on more responsibilities. Third,

because our forest industry, in response to world market conditions,

has worked hard in the past two years to increase efficiency, we have

lost thousands of jobs, partly due to automation; therefore we must

take steps to restore employment in the forest sector.

Mr. Speaker, I would now like to talk about the initiative we have taken, which

has prompted the introduction of amendments to the Forest Act. The amendments

we have introduced to the Forest Act will make basic silviculture mandatory.

This will be accomplished by making pre-harvest silviculture planning mandatory,

and enforcing silvicultural performance and its auditing. It will achieve our

major goal of balancing harvesting and forest renewal, which we call the steady

state. Previous ministry silviculture programs had two major facets: namely,

basic and intensive silviculture. Mr. Speaker, we have also initiated a basic

shift — from the government to the companies harvesting our timber — in the

cost and responsibility for ensuring that our harvested lands are reforested.

By these amendments to the Forest Act, we are strengthening and

securing this move. Previously the costs of basic silviculture were

credited to the stumpage accounts. Now our forest industry will assume

the full costs for the basic silviculture to replace our forests after

harvesting on long-term tenures. Our industry will accomplish these

major goals.

As I said earlier, the industry is strong and innovative. In addition, they have the professional foresters and qualified

[ Page 3040 ]

technicians to get the work done. The scope of this

work is such that much of the field work will be done by our growing

silviculture contract community. This will significantly increase

employment and offset the increases in automation in the forest

industry.

Many members of this House are familiar with the work of planting

seedlings. Not only will this work be done, but also all the other

steps necessary for forest renewal. As a forester, I am proud to say

that this will include seed collection, which ensures that the right

seedlings will be grown; the preparation of sites for both natural

regeneration or planting; and the protection of these plantations by

controlling encroaching vegetation.

The great majority of seedlings required will be grown in the

private sector, and industry will thus have the option of producing its

own seedlings. Our goal is the production of healthy, free-growing

stands of trees, which will support the future industry and provide

forests for livestock, wildlife and recreation enjoyment by the public.

Where timber is harvested under short-term licences, especially

under our small business enterprise program, we've recognized that it

would be unreasonable to expect licensees to be responsible for all of

the silvicultural treatments. Our ministry will share in this

responsibility. These licensees, however, will still have to pay their

way. We will not subsidize them.

The full cost of basic silviculture will be required before the

timber is sold. We will hold funds to ensure that the full basic

silvicultural renewal process is accomplished. The work on these

short-term licences, particularly those under the small business

enterprise program, will be administered by my ministry staff.

Practically all of the field work will be contracted to the private

silviculture industry. This will further add to the creation of new

jobs.

We will encourage industry to invest additional money to carry out

more incremental silviculture on long-term tenures. We will guarantee

that any increase in allowable annual cut from industry investments in

incremental silviculture will be retained with the long-term tenures.

On the other hand, where government invests additional money, British

Columbians will share in any increased forest yield.

With the amendments to the Forest Act, we are confident we are on

the right track and that our actions will ensure that our forest

resources will continue to meet the needs of future generations of

British Columbians.

MR. MILLER: I'll be relatively brief in my remarks today on

second reading. We intend to support the bill. We think the moves by

the government are overdue, and I'll actually congratulate the

minister: I think they make a lot of sense.

We do have some specific concerns, and we will be discussing some of

these in committee, in clause-by-clause debate. Certainly, as I

mentioned yesterday, the changes that are coming about in British

Columbia are overdue. It's unfortunate that they have come about

primarily, I think, because of the push by the U. S. producers, who

reacted to the increasing share of the market that was being taken by

British Columbia producers.

It's a bit hard to swallow on this side of the House — and I'm sure

it is for members over there as well — that we now are really in the untenable

position where policy is really made in the U.S.A. They might make some things

well down there, but I'm not sure that they're all that good at making

our forest policy.

The major thrust of the bill, as the minister said, is to put the

responsibility for basic silviculture to major licence holders and to

offer an incentive in terms of the company being able to recapture the

value of incremental silviculture. It's not a bad approach in that term.

We do have a concern in terms of the ministry. Obviously, with a

change of this magnitude we're going to see a requirement for fairly

extensive and accurate monitoring. We wonder if the ministry staff is

up to the appropriate level to make sure that that kind of function can

be carried out, because as much as the bill is a good move on paper,

it's really in practice where we discover whether or not we're making

the right moves. Will the bill work in practice? Are we up to speed in

terms of the staff to monitor and do the audits required so that the

silviculture work done is not the kind that will fail? If fundamental

mistakes are made in the first instance in terms of silviculture, as

the minister knows, mistakes which may not be discovered for some

years, all that work really is a loss. That's a very important feature

of the bill, and I would be interested in the minister's comments with

regard to the ability of current staff of the ministry to do the

monitoring and auditing that is required in order to make sure that the

bill works.

The impact of the changes.... Of course, there will be more changes

coming. There's been a substantial change in terms of the revenue, and

I would just touch on that in this debate, because I think that they do

all tie together ultimately. The change there from a market-driven

system to a revenue target system, I suppose, is obviously causing some

discomfort in some areas of the province. Some of the producers are

saying that it's going to be hard to live with, if not impossible.

Perhaps the minister could comment, either now or in committee, about

how the ministry has dealt with that problem.

We've had a forest industry that for a good number of years has

really not had the responsibility and the obligation in terms of

management or supplying revenue to the province, and now all of a

sudden, very quickly, we're saying: "It's now yours." We're throwing

the ball to them and giving them what should properly be their

responsibility, but I'm wondering about the ability of some sectors of

the industry to assume that responsibility, and whether there's been

any kind of analysis on the minister's part of the impact particularly

on the small producers. Obviously with the revenue figures that are

coming in for the integrated companies with pulp mills, one would

assume that it would not be a major problem for that sector of the

industry, but some of the smaller sectors could experience a fair

amount of difficulty. We have seen threats from some that they intend

to close down.

I raise as an aside an interesting question in terms of a revenue

target. If the target is in place and operators stop working, is the

target still there? Will the target be adjusted, or will the rest of

the producers still operating have to pick up the whole of the target

that's been set for the region?

[2:45]

One of the problems that the small producers have — the

non-integrated companies — and clearly the reason we changed from a

market system in calculation of stumpage, was that there was pretty

overwhelming evidence that the market was a false one. It was

controlled. It was unrealistic to derive our revenue figures from a

market that was controlled by the major players. I suppose over the

years alternatives

[ Page 3041 ]

have been offered. One, of course, is the concept

of a government agency that becomes the marketing agency for logs.

Obviously the government is not accepting that and has decided to go

with a strictly revenue-target system. But it still leaves the small

producers somewhat at the mercy of the big companies in terms of price

for the material that they produce. I'm thinking particularly of chips.

Nilsson, in his report of a few years ago, indicated that he thought

chips were about 50 percent undervalued. Of course, without having done

a great deal of work on it, it occurs to me that there may be an

opportunity for the small lumber producers to recapture a bit more

value in sales to the pulp industry, and that is in some regulation of

the price of chips.

Just recently we've seen Fibreco complain publicly that although

they welcomed the recent announcement of Japanese investment in the

Howe Sound pulp mill and the diversion of chips that previously were

going on the export market, their real complaint was that the pulp

mills set the price for chips, and they were getting a heck of a lot

better price on the export market, and they were really going to lose a

lot by that kind of change. I'll throw that into the discussion because

it's something I want to pursue.

Next, the question of the rollovers comes in. I think in

section 5

of the bill there is a clause that allows discussion on the concept of

rolling over.

MR. ROSE: Logrolling?

MR. MILLER: No, it's not logrolling, as my colleague from the

lower mainland or the Fraser Valley has suggested. It's rolling over a

forest licence to a tree-farm licence, and it's an integral part of the

new forest policy. We will resist that because we think there's a

significant value in the Crowns, and we're not satisfied that it would

be a good move to transfer that value to private companies,

particularly given the level of corporate concentration that exists in

the forest industry in British Columbia and which appears to be

growing. Two recent moves back up that contention, I believe. That will

be a

section that we will be discussing in committee.

There's the question of the backlog. If the bill works — again in

theory — from October forward the industry will assume their proper

responsibility and obligation for silviculture, and we will presumably

not develop any further NSR lands in British Columbia. But we still

have the problem of NSR lands that were created previous to October,

and I believe they're still significant. We've seen a little more than

two and a half years of the federal-provincial program called FRDA;

$300 million over five years to try to deal with the NSR problem. Not

completely NSR; I note that a lot of money from that program has gone

into some research and development areas, and I think that's good; but

we still have, in my opinion, further problems to deal with in terms of

the NSR question. Of course, the minister will have to detail how he

intends to handle that problem so that those lands are put back into

production and will be of value in the future in B.C.

I had a pamphlet here which I can't locate, but as I recall, one of the

studies done under the FRDA program was an analysis or study of the possibilities

of increasing value through incremental silviculture. I would like the minister

to give some kind of outline of what they foresee. Clearly, I would think the

incremental silviculture angle in the bill would direct investment to the best

sites in British Columbia. Do we know what is possible? Are we going to increase

production by 5, 10, 15, 50 percent? What kind of increased production could

we see as a result of that move?

I think I've pretty well canvassed most of my areas of concern with

regard to the bill and its intent, so I will leave it at that for now.

Some of my colleagues may also wish to make comments under second

reading.

MR. KEMPF: I too am going to be very brief in speaking in

favour of this particular bill. It's a bill that's long, long overdue

in British Columbia, and I commend the minister for seeing a policy

through which was spawned some months ago. I thank him for that.

The multinationals have been ripping off this province for decades,

and this is just one way. I speak in favour of Bill 70 in hopes that

there will be another Forest Amendment Act, a No. 3, a 4, 5, 6, 7,

however many we need to assure the people of British Columbia of their

fair share from the forest resource, which has not been the case for

many decades. It's one of the reasons that this province finds itself

in a deficit position today. We need far more changes than we see in

Bill 70, but it's a start — and it's a good start.

We talk about rolling over. The previous speaker joked about rolling

over. We've rolled over to the multinationals in the forest industry

for 40 or 50 years, and this is a bit of light at the end of the tunnel

that possibly it might change. I think some of us in this Legislature

are going to stay around here for a long time to make sure that it is

changed.

I have one not so small concern. The member before me talked about

NSR lands. Are we going to let the people who created those NSR lands

off the hook? On behalf of the taxpayers of this province, we had

better not. You have literally thousands of hectares of NSR lands in

this province created by that giant industry out there, and it's their

responsibility, Mr. Minister, to make that good to the people of

British Columbia; to ensure not only that they assume from this day on

their rightful responsibility of reforestation and silviculture in this

province, but also to assure the taxpayer of this province that he or

she is not going to pick up the bill for what they have done wrong in

the past. We will be watching that very closely in this Legislature as

well. Because a wrong has been done to the people of this province, and

it has to be righted.

The other concern I have is for close scrutiny of what's going to go

on as far as those multinational companies out there doing a good job,

a perfect job, of replenishing our forests. That has to be very closely

scrutinized. It cannot be left to the registered foresters on the

payrolls of those corporations. You can't leave it to them, because

although they are professional people — and in many cases very good

ones — they are on payroll. Mr. Minister, I just want to remind you of

that. It can't be left just to the registered foresters on the payroll

of the multinational monopoly in this province to ensure that the job's

going to be done right. That's a concern of mine.

Other than those two concerns, I'll leave further debate for the

Forest Amendment Act No. 3 and 4 and 5, which surely must come to this

Legislature.

MR. WILLIAMS: I'd like to endorse what the member for Prince

Rupert has said. It has been my personal feeling for some time that the

silviculture obligation should be the primary obligation right from the

beginning, in terms of any harvesting activity.

[ Page 3042 ]

The Scandinavians, I think, have set the right tone in the modern

era in that regard. The first call for any funds out of logging or

cutting is that moral obligation to replant and to treat the land

properly. We on this side of the House are encouraged to see that this

administration is beginning to take the tack that the Scandinavians

have set for generations. It's long overdue, but it's good news.

There's a whole range of questions that I suspect will be brought

forward in terms of additional legislation once the ministry has done

some additional work. I would expect additional legislation in the next

sitting. Maybe the minister could comment on that. The whole 5-percent

question, in terms of the AAC, where there are transfers, is important

and is a beginning in terms of starting to rejuvenate the industry and

properly beginning a reallocation process so that newcomers in the —

industry will have some opportunity and so that we get more of the

competitive enterprise in this industry, which has desperately lacked

it in the modem era. It is maybe in some ways our greatest weakness as

an economy in this province: the inadequate entrepreneurship in this

sector at some levels. And the reversion of some of the AAC can be the

beginnings of refuelling the entrepreneurship desperately needed in

this industry.

So it begs the question about Canfor, Mr. Minister, and the proposal

with respect to Port Mellon. I guess we might get some assurance that

there will be reductions and reallocations there, since indeed it will

be a new corporation. I would hope we would get the same assurance with

respect to B.C. Forest Products, which is indeed a new corporation,

with the further acquisition by Crown Forest Industries of that entity.

And that will begin this renewal process.

So we're not only looking for renewal in the forests in terms of

basic silviculture, but for renewal of entrepreneurship among small —

or smaller — people within the industry and newcomers who want to begin

in this part of the economy. In a sense, however, basic silviculture is

just a beginning, as the minister knows.

Again, the Scandinavians have shown us that something significantly

more than basic silviculture should be the goal. Thirty-five percent of

the cut in Sweden comes from commercial thinnings — obviously a much

more intensive practice in terms of real forest farming in that part of

the world. We get virtually nothing out of thinnings in British

Columbia. So clearly there is tremendous wealth to be tapped for the

people of the province by moving beyond basic silvicultural practice.

It's clear in the legislation that a basic silvicultural plan is not

necessary before a TFL is granted — as we read the document. If there

is this kind of commitment to silviculture and reforestation, then we

think that should be there right from the beginning, before these

tremendous alienations are entertained. That's not to say that we

favour those alienations, however.

Incremental silviculture. As we see it, new targets are needed. It's

not clear in the legislation where the old NSR stuff stands in terms of

existing licence-holders. Surely that should be their obligation, in

terms of cleaning up the mess they're responsible for. Especially in

the northwest one would anticipate that that would indeed be the case

for companies such as Westar, who have sold off some of their

industrial assets and yet still have TFLs — which I think is

extraordinary.

[3:00]

The whole justification for these TFLs in the first place was, in

effect, the asset behind the pulp mill or the new plant. Just think of

Celgar at Castlegar in the southeastern interior. By and large they

maintain their TFL, and the pulp mill is not owned by them. It is owned

half by Consolidated-Bathurst and half by the People's Republic of

China, and I think it's being managed far better than it was under

Westar. In fact, they're operating fine as an independent pulp mill,

buying freely in the open market. It blows to the wind all of the

arguments about needing these tenures to have the industrial plant.

I talked to the operating people last spring at Celgar and said:

"Well, how are you doing for wood supply there now that you no longer

have the TFL? They said: "We've never been better off." "Where do you

get your raw material?" They said: "We're getting 80 percent of it in

the form of residuals and chips from small enterprises and mills in the

region, 10 percent in roundwood we're buying on the open market, and

only 10 percent from the old TFL in the form of roundwood. It blows to

the wind all of the arguments about needing these tenures in order to

have an industrial plant. So are the old NSR obligations going to

remain with those licence-holders?

Regarding

section 88, I am sure the member for Omineca (Mr. Kempf)

and others here are pleased that to a great extent it is eliminated. It

is not clear in terms of the road question, and maybe the minister

could clarify that. Are there still opportunities in terms of tapping

Crown funds, in terms of system roads and that kind of thing? It would

appear that there may be that kind of opportunity there. It's not clear.

We are concerned in a fundamental way about the idea of expanding

the tree-farm licence system. We are not convinced by the industry's

propaganda that this is the ultimate tenure form and the best managed.

I urge the minister and his staff to look at studies carried out over

the last summer by people at UBC under Professor Haley. They looked at

the TFL tenure question to determine whether TFLs were better managed.

It's my understanding that they don't think the propaganda really

stands up to scrutiny. I think they found as a result of their analysis

that the private lands within the TFL were intensely managed very well,

but that the Crown lands within the TFL were, by and large, not managed

as well. So I think you should look twice at this TFL question.

You should think about what's happened on the coast and in the

interior, and the recent modem history, I think, is clear. The more

successful industrial plant in British Columbia is in the interior. Our

sawmills in the north central interior are setting lumber price for

North America because of the levels of efficiency achieved. If there is

any linkage to the tenure system — and I think there is — and the

historic modem tenure system, where third band wood was reallocated on

the basis of efficiency in the interior, then there are some real

lessons there: that is, they responded to the carrot and the

opportunities that were provided under the legislation of the day and

became more efficient. They did not have the full security tenure that

the TFL represented. The people on the coast have those tenures, and

they let their plants decline.

Some of the big companies were involved in adventures in the Far

East, South America and France that were quite unproductive and

unfortunate for those corporations. In the interior, they stuck to

their homework in terms of the stuff they knew best. They had that

challenge and nagging problem of not really being fully sure about

their cut and the cutting rights that were based on performance. If you

look at

[ Page 3043 ]

it closely and think about it, that has clearly

been beneficial for the industry in the interior. What you're proposing

in your new policies is to move this blanket system, which has failed

in several measurable ways in terms of the evolution of the industrial

structure, from the coast into the interior so that they would be able

to play the same game. We don't see that as beneficial. We think you

should look seriously at it and review the history of expenditure and

efficiency of plant. Compare the coast with the interior and look at

the tenure behind those things. We think there are some very good

lessons that should not be ignored.

We also think there's some evidence there out of South Moresby: that

when you want those tenures back — part of them at least — for other

purposes or other public needs, you run into the compensation problem.

We pay dearly then for what is ours, and that doesn't make sound policy

sense to us on this side of the House. We see it as the wrong direction

in terms of protecting the public interest. If you want a more

efficient industrial structure, you should look at the history of the

tenure system in the interior and stick to it more closely. Think twice

about giving them the excessive privilege that the industry has had on

the coast, which has not been beneficial for them, the economy or the

workers.

In terms of the primary focus of the legislation in the

silvicultural area, we're encouraged. We think it's a decent beginning

in terms of beginning to recognize the kind of direction that the

Scandinavians have set for some time, and for that we're encouraged.

MR. GABELMANN: If it takes having a professional forester as

the Minister of Forests to bring in legislation like this, I suppose

the next minister should be an economist so that we can get on with the

rest of the very serious issues out there in forestry. I'm delighted

that this minister, this professional forester, has put the priority on

silviculture in the way that he has in this legislation, even if it was

spawned by the countervail and the needs of the Americans.

I want to raise a couple of concerns. Most of the issues that I had

noted to raise are either best raised in committee stage or have

already been raised. I just want to touch on a couple of others that

I'm not clear enough about in my own mind, although other members of

the House may be. The announcement in September about the 5 percent

scoop effective January 1, 1988, seems to me to require a legislative

initiative. If I'm correct about that, then does that take place on

January 1? If it doesn't, how are the effects of this legislation

measured in those TFLs, which may well be reduced by at least 5

percent, or maybe more in some cases if other proposals are presented?

Maybe other members do understand how that will work, but I don't see

how the transition is going to occur in respect of that scoop.

[Mr. Pelton in the chair.]

It's my understanding that in the period from fall of '82 to fall of

'87, there's about $400 million worth of undone silviculture. When

members talk about the NSR and the continuing slippage in terms of

keeping up with silviculture, a lot of us think about the bad old days

and forget that those bad old days have continued right through until

this legislation. In fact, they continue today; we constantly appear to

be slipping back. I wonder if the suggestion that I'm making — that

there is some $400 million worth of backlog in that five year period —

is accurate. If it is, how will that money be recouped? That point has

been made in a different way by other members preceding me.

I wonder what the impact of this legislation will be on the FRDA and

the subsequent FRDA II, as the jargon has it. Is there an impact for

silviculture in terms of negotiations about that particular revenue

source? In short, how do we recoup the shortfall of the last five

years? Because this legislation doesn't do that.

In addition to that, there is a more narrow point. In this

transition period, seedlings — and I know seedlings are only one part

of silviculture — are clearly in place. The number that can be

planted.... You can't add to that now; you've got your number and that

can't change. It can be reduced with calamities, but it can't be added

to in dramatic terms. What happens if the requirements under this

program for next year are such that insufficient seedlings are

available? It seems to me that there are a lot of other transitional

questions if this legislation is made into law in the next weeks, in

terms of getting the silvicultural program into full effect, certainly

in the first year.

The other and final point relates to management of the silvicultural

activity — maybe "scrutiny" of that activity is a better word. Under

the legislation, we are now going to have a series of so-called major

licences, which I find a bit of a curious term, because some of these

major licences may be a few dozen hectares in a woodlot. Quite a minor

licence, actually; nevertheless. It will be called a major licence. All

of these "major licence-holders" will be responsible for filing their

silviculture plan in advance of harvesting. Who will be scrutinizing

this?

The policy of the previous two ministers was that in the TFLs the

scrutiny would no longer be in the hands of the Forest Service, but

that there would be an audit approach. I wonder if that audit approach

is still envisioned by the government. If so, I just want to say that,

like the member for Omineca (Mr. Kempf), I don't have a lot of

confidence in that particular approach. I think, as he said, that we

have some excellent professional foresters working for private

companies. But no matter how committed they are to their professional

association and their professional ethics and their own commitment to

silviculture and forestry, in the final analysis they get a pay cheque,

they don't have union protection, and they can lose their job if they

are too zealous. An audit isn't going to catch the day-to-day things

that these foresters are going to catch.

Outside of the TFLs, in the other "major licences" there is no

ability for internal management. Your typical woodlot licence-holder or

forest licence-holder is not going to have professional foresters

on-site. Who does that? Will ministry staff be augmented in order to

provide solid public protection for the implementation of this

legislation, not just in the filing of the silvicultural plan prior to

harvesting but in the actual implementation of that plan?

Who is going to deal with the detailed work of measuring the

incremental forestry or the incremental silviculture? I guess that word

replaces the old intensive forestry, and that's fine; I think there's

some logic to the different terminology. Who's going to measure that?

It seems to me that it becomes a fairly technical question, a very

detailed question that requires intensive on-site scrutiny. There is

now going to be a whole series — at least six, if I read this correctly

— of categories of licence that will have scrutiny applied to them. I

wonder if the current Forests ministry staff is sufficient to do

[ Page 3044 ]

the kind of scrutiny of these provisions that would be necessary.

The minister's comments on those questions would be appropriate.

[3:15]

HON. MR. PARKER: I'll run through the points raised by the

members opposite. I'd like to speak to the matter of whether or not the

Ministry of Forests and Lands is capable of auditing the performance of

licensees on Crown land. It's my opinion that it most certainly is. We

operate with six regions, and we have 46 districts well staffed by

competent personnel. It's about three dozen per district, some more and

a few less. These people are quite capable of monitoring contractual

obligations.

Touching on the stumpage question, the member for Prince Rupert (Mr.

Miller).... It's not part of this bill, and I'm not sure.... I need

your guidance, Mr. Speaker. Do we discuss it now or do we save it

for.... ?

DEPUTY SPEAKER: This is second reading, Mr. Minister. We're talking about the general principles of the bill.

HON. MR. PARKER: The concern that the member for Prince

Rupert had on stumpages.... I think his comment was that there was

discomfort in some areas of the province. It's an empirical application

of a new program that needs to be localized. We work with our regional

and district staff and our licensees in these areas and address each of

their concerns. There are some matters that need refinement, and we

will be improving our field information on such things as

merchantability factors and decay factors in standing timber and some

of the things that go along with that, and the lumber recovery factors

when it comes to manufacture. So, we'll continue to work with licensees

and our staff to make sure that the stumpage program is effective,

returns a fair revenue to the province and still keeps our industry

healthy.

The silvicultural concerns that the member raised. He said that the

sudden responsibility of having to look after basic silviculture came

as a surprise and may be a little too onerous for some operators. The

policy evolved from discussion papers put forth by the member for

Omineca (Mr. Kempf) just a year ago, to which we received several

hundred replies. This silvicultural policy was a result of the majority

of the replies that we received. So it wasn't really a surprise to

industry. In fact, a number of major multinational ripoff artists —

apparently, as some people call them — were eager to take on the

silvicultural responsibility, because they had been very thorough and

effective in their silvicultural operations and wanted the opportunity

to take it over in its entirety because they felt that they could

better manage it.

The question of whether or not targets for stumpages would be

adjusted when mills shut down.... The stumpage program is such that

it's under constant review. Everything we do in the industry is under

constant review. It doesn't matter whether you're the licensee or the

licenser. It's a dynamic situation. Nothing stands still for very long.

The stumpage program is constantly being reviewed, and no mills should

ever have to shut down because of it.

Regulation of the price of chips may be a means to an end in some

jurisdictions, but this government believes it should stay out of the

marketplace and out of the industry.

FRDA is a forest resource development program that is set up between Ottawa

and the provinces, and we have a very good share of it. We have $150 million

from Ottawa, which we match with $150 million provincially over a five-year

period, and we're halfway through the first stage of FRDA, which is addressing

NSR areas prior to 1982. Many of those areas were found to be in the northeastern

section of the province, largely due to substantial wildfires, but also due

to substantial stands of aspen which were considered until lately to be non-commercial

stands and looked upon by the Forest Service as opportunities for rehabilitation

of white spruce and lodgepole pine stands. With the establishment of the Louisiana-Pacific

oriented strand board plant in Dawson Creek, there is now a substantial market

for aspen in the South Peace, and we have just held the hearings for PA 13 with

interest in similar plants nearby. So now the aspen is an asset rather than

a liability, and we'll have to be recalculating the NSR areas, so it looks

like we won't have quite the backlog we all were led to believe.

Things are dynamic. That's what I was pointing out earlier: nothing

stands still. I guess that's progress. It's good now, especially for

the farmers in the northeast, because what they had was a substantial

liability in trying to prepare land for grain crops. Now they have an

asset, and they're not sure whether they should be raising grain crops

or tree crops. So we'll be happy to help them raise tree crops.

Just to touch on the matter raised by the member for Omineca on NSR

lands: prior to October 1, 1987, it was the licenser's responsibility

to see that the timber crop was replaced. That was the policy in the

legislation in place, and we intend to live up to our obligations and

restock any such NSR lands, either under FRDA or, if they were

subsequent to January 1, 1982, through provincial funds. Those who have

contractual obligations of any sort will be expected to meet those

obligations.

Again, the member for Omineca raised the point on whether effective

scrutiny of the licensee's operations can be done. It's our intention

to ensure that audit is done by the Forest Service, but for tree-farm

licences they will also be audited by internal and external means —

external from the licensee and the licenser. Every five years they have

to go to public hearings and report progress. They have to report what

they've accomplished in the past five years and what they intend to

accomplish in the next five years. I would say that scrutiny is pretty

thorough. It's an internal audit, a Forest Service audit and a public

audit.

The first member for Vancouver East (Mr. Williams) likes to wave the

Scandinavian flag in here, yet he finds that he's not in favour of

TFLs. The success story in Sweden and other Scandinavian countries is

the very high percentage of private land. So if the member is in favour

of alienating Crown lands to fee simple, that might be one big option.

He may achieve what he's seen in the Scandinavian countries. What we

try to achieve is the same sort of commitment, but without alienation

of the land, by going with the tree-farm licence tenure, which we are

convinced is a well-performing tenure run by capable licensees with

professional, well qualified staff.

Interjection.

HON. MR. PARKER: He says: "Check out Haley's work." I presume

the member is referring to Dr. Haley of the University of British

Columbia, who in one summer is in a position to pass judgment on years

of very capable management by a number of professional people. I would

say that

[ Page 3045 ]

after we've scrutinized the report and criticized it, we might be prepared to discuss it further.

To talk about the reductions in allowable annual cut due to Port

Mellon and the announcements made by Canadian Forest Products Ltd., no,

there won't be any reduction in AACs, because there are no licences

involved in this announcement. All it is is hardware, and the

commitment of substantial sums of money to improve the plant, its

environmental impact and its productivity and product options.

The Port Mellon transaction is no change of ownership as far as

licences are concerned. All Port Mellon is is a production plant. On

the question on B.C. Forest Products, where there's a change of

ownership in that Fletcher Challenge, through Crown Forest, has

acquired more than 50 percent, yes, there is a recovery of 5 percent of

the allowable cut and the licences involved there.

Again talking about the great crops of commercial thinnings that

Sweden picks up.... As I mentioned earlier, Sweden is primarily private

land, especially in the higher productive sites. In many cases that has

been going on for 300 years — for 15, 16, 17 generations. We'll be able

to report the same sort of progress.

Interjection.

HON. MR. PARKER: Well, you see, this country wasn't settled

until a hundred years ago, my son. It takes a little while for a few

people to figure that one out, but then, I understand the source of the

comment.

Just to answer the question of the concern about the

section 88 road

matter, systems roads are not eligible for

section 88, but if the road

is to serve some other public purpose, incremental costs may be

considered for

section 88.

Just to touch on some of the items raised by the member for North

Island (Mr. Gabelmann), the 5 percent scoop, I think he called it — the

5 percent recovery from all renewable tenures — will be implemented to

be effective January 1, but will require legislation that we expect to

deal with in the House early this spring.

[3:30]

A question from the member for North Island on what happens if there are insufficient

seedlings a year down the road for the program that's envisaged. It's

unlikely that that would happen. Our planning process is quite effective, but

should it happen, there are several alternatives. One is to sow more for the

following planting season, and all you lose is one year in an 80- to 120-year

rotation — a very small impact. Another alternative is to look at more naturals

and to look at what you can do to encourage natural restocking. You're asking

what happens on those contingencies. That's the sort of thing that you can

consider. Also consider broadcast seeding. That's not an effective use,

though, of Crown assets. Seed is very difficult to accumulate. Frequently crops

are seven or 12 years apart. So we are very careful with our seed. If we broadcast

seed, we lose a lot to rodents and birds; it's very expensive critter feed.

We propose not to broadcast seed in any situation.

Again, this member shared his concern with the House about whether

adequate scrutiny will take place, and we've dealt with that issue.

As for incremental silvicultural activity and who will determine

what the difference is between status quo and what incremental

silviculture produces, the incremental silvicultural programs will have

to be outlined in the preharvest prescriptions and in the management

and working plans for the licences. It will be scrutinized by competent

individuals and considered, once approved. Then it will be monitored

both by licensee and licenser representatives, and it will be

physically measured for any incremental values.

I believe, Mr. Speaker, I've covered the issues raised by the members opposite, so I now move second reading of the bill.

Motion approved.

Bill 70, Forest Amendment Act (No. 2), 1987, read a second time and

referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

HON. MR. VEITCH: Committee on Bill 69.

LEGISLATIVE ASSEMBLY ALLOWANCES

AND PENSION AMENDMENT ACT, 1987

The House in committee on Bill 69; Mrs. Gran in the chair.

Sections 1 to 3 inclusive approved.

Section 4 approved on division.

Sections 5 and 6 approved.

Title approved.

HON. MR. VEITCH: I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 69, Legislative Assembly Allowances and Pension Amendment Act.

1987, reported complete without amendment, read a third time and passed.

Hon. Mr. Veitch moved adjournment of the House.

Motion approved.

The House adjourned at 3:35 p.m.

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