1981 Legislative Session: 3rd Session, 32nd 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)

THURSDAY, MAY 28, 1981

Afternoon Sitting

[ Page

5845 ]

CONTENTS

Routine Proceedings

Seating of Mr. Richmond –– 5845

Oral Questions

Green Valley Estates Ltd. land. Mr. Skelly –– 5846

Mrs. Wallace

Mr. Lauk

Mr. Hanson

Removal of land from Delta land reserve. Mrs. Wallace –– 5847

Shutdown of Amax molybdenum mine. Mr. Passarell –– 5847

B.C. borrowing abroad. Mr. Howard –– 5847

Appointment of Douglas Heal. Hon. Mr. Wolfe replies –– 5848

Urea formaldehyde in B.C. schools. Hon. Mr. Smith replies –– 5848

PCBs in B.C. schools. Hon. Mr. Smith replies –– 5849

Health hazards on school grounds. Hon. Mr. Smith replies –– 5849

Committee of Supply: Ministry of Industry and Small Business Development estimates.

(Hon. Mr. Phillips)

On vote 126: minister's office –– 5849

Mr. Barrett

Mr. Kempf

Mr. Lockstead

Mr. Mussallem

Mr. Lea

Mr. Howard

Mr. Macdonald

THURSDAY, MAY 28, 1981

The House met at 2 p.m.

Prayers.

CLERK-ASSISTANT:

Province of British Columbia,

Deputy Provincial Secretary and Deputy

Minister of Government Services.

May 28, 1981

Mr. Ian Horne, QC,

Clerk of the Legislative Assembly,

Parliament Buildings

Dear Sir:

Re: By-election,

Kamloops Electoral District,

May 14, 1981

I enclose herewith certified copy of the certificate of

Mr. Harry M. Goldberg, chief electoral officer, respecting the election of Mr.

Claude Harry Richmond to represent the Kamloops electoral district in the Legislative

Assembly.

Yours very truly,

Ian L. Thomson,

Deputy Provincial Secretary

Province of British Columbia,

Ministry of Provincial Secretary and Government Services,

Chief Electoral Office,

May 28, 1981

Mr. Ian Thomson,

Deputy Provincial Secretary

Dear Mr. Thomson:

Subject:

By-election, May 14, 1981,

Kamloops Electoral District.

The February 1, 1981, resignation of Kenneth Rafe Mair,

the member for the Kamloops electoral district, created a vacancy in the membership

of the Legislative Assembly. A writ was issued on April 10, 1981, requiring

a by-election to fill the vacancy. Accordingly, May 14, 1981, was designated

as polling day. The completed writ of election has been returned to me, and

I hereby certify the election of Claude Harry Richmond as the member to represent

the Kamloops electoral district in the Legislative Assembly.

Yours very truly,

Harry M. Goldberg,

Chief Electoral Officer,

British Columbia

HON. MR. WOLFE: I move that the letter of the Deputy Provincial Secretary

and the certificate of the chief electoral officer of the result of the election

of the member be entered upon the Journals of the House.

Motion approved.

HON. MR. BENNETT: Mr. Speaker, I present to you Claude Harry Richmond,

member of the electoral district of Kamloops, who has taken his oath, signed

the parliamentary roll and now claims his right to take his seat.

Now the member will take his seat.

wish to welcome some visitors to our gallery today, who are very

interested in the seating of the new member for the electoral district

of Kamloops. Let me introduce Mrs. Pat Richmond, the member's daughter

Valerie and his son Jeff, who are sitting in your gallery. Mr. Speaker.

With them is the member's mother, Mrs. Olive Richmond, whom I ask you

to welcome also.

Mr. Speaker, I would also like to welcome

to the chamber an organization that the member for Kamloops has

belonged to and led for many years. It has brought much pleasure not

only to their own community but to every community, and it is the

Kamloops Rube Band. They have come to Victoria in concert with the

member for Kamloops.

Let me also say that visiting the

Legislature today in the gallery are a number of people from Kamloops:

the campaign manager for Mr. Richmond, Bud Smith; alderman Diane Kerr;

and a host of supporters who wish him well. I would ask this assembly

to welcome all those people I've already introduced who have come to

stand in support of Claude Richmond.

MR. BARRETT: In

witnessing the acceptance today of the new member for Kamloops. we see

renewal in a very important system of democracy, in which the people of

this province have the right to determine who shall support them in

person. Mr. Richmond joins us in this august body with the best wishes

of every member of this House. There are few moments that we can savour

together. It is a moment like this when the renewal of parliament is

confirmed, and together all members welcome the new member and his

supporters who are here today.

HON. MR. VANDER ZALM: Today we have the privilege of having a distinguished

visitor with us in the House, His Excellency Mr. Van den Block and also the consul general

for Belgium, Mr. Xavier van Migem. His Excellency and the consul-general met

yesterday with the Premier and a number of ministers, and I had the privilege

of practising a little Dutch. I ask all members to bid them welcome.

MS. SANFORD:

Seated in the gallery today are a number of representatives from the

United Injured and Disabled Workers Association of British Columbia,

who represent some 400 in their organization. I would like to introduce

some of them to the Legislature. Merril Turpin is the president, and

some of the others up there are Walter Bury and Len Reid — the original

organizers of the United Injured and Disabled Workers Association —

Cliff Bosper, Ernie Smith and George Pateman; also in the gallery is

Barrie Alden, B.C. director for the National Anti-Poverty Organization,

which is attempting to help the United Injured and Disabled Workers

Association to get satisfaction from the Workers' Compensation Board of

British Columbia. I would like everybody to make them welcome.

HON. MR. BENNETT: I also would like to join in welcoming Mr. Turpin

and Mr. Reid, who are representing the United Injured and Disabled Workers Association,

and inform the House that they have arranged a meeting with me in my office

later this afternoon, following question period. I'm looking forward to

the opportunity to hear from them.

[ Page 5846 ]

MR. RITCHIE:

I too would like to join the member for Comox and the Premier in

welcoming the members of the United Injured and Disabled Workers

Association. A number of the members here today are from my

constituency and had a meeting with me earlier. I'm very pleased to

join in welcoming the group.

MR. KING: Mr. Speaker, I

would ask the House to join me in welcoming two school groups from my

riding that are visiting the Legislature: students from Parkview

Elementary School in Sicamous, accompanied by their teacher Mr. Stewart

and a number of chaperons; and from the fair village of Falkland a

group under the stewardship of Mr. Hlady. I would ask the House to make

them all welcome.

HON. MRS. JORDAN: Mr. Speaker, it

certainly is visitors' day. I'm pleased to introduce Miss Joana Cheng

of Rediffusion Television in Hong Kong. I met Miss Cheng when I was on

my trip on behalf of the government to the Far East.

I would

also advise you, sir, that we have in the gallery Mrs. Paula Anderson,

president of the Port Alberni Chamber of Commerce.

I'd ask all members to give both Miss Cheng and Miss Anderson a very warm welcome.

MR. MITCHELL:

Mr. Speaker, I would like the House to join me in welcoming a group of

grade 11 students from Esquimalt Senior Secondary School, under the

leadership of Mr. Don Taylor. I would like the House to extend a

special welcome to two mature students who have returned to the

schoolroom to continue their studies.

HON. MR. WATERLAND:

Mr. Speaker, I have two guests in the members' gallery today: firstly,

Charlie Chilson, a constituent of mine from Hope; and secondly, a very

special lady to me, my wife Donnie. Would the House please welcome them.

MR. HOWARD:

Mr. Speaker, in the precincts today are representatives from the

Western Guides and Outfitters Association: Bob Henderson, executive

director; and three others. I'd like the House to join me in welcoming

them and wishing that when they meet the Minister of Environment (Hon.

Mr. Rogers) later this afternoon, as I understand they will, they come

away with an opinion that favourably addresses their concerns.

HON. MR. PHILLIPS:

Mr. Speaker, visiting us in the gallery today is Mrs. Marjorie Gray of

Victoria, who is the grandmother of my ministerial assistant, Michael

Donison. With Mrs. Gray is her niece, Meg Webb, who is visiting from

Bournemouth, England. I hope the House will make them welcome.

MR. MUSSALLEM: I ask the House to welcome two fine Canadian citizens who live in New Westminster, Mr. and Mrs. Schaffer.

Oral Questions

GREEN VALLEY ESTATES LTD. LAND

MR. SKELLY:

I'd like to ask a question of the Minister of Transportation and

Highways. On March 25 the cabinet's Environment and Land Use Committee

heard an appeal and overruled the Agricultural Land Commission's

decision to keep land owned by Green Valley Estates Ltd. In the Cariboo

land reserve. Did the minister, as a member of ELUC, vote to overrule

the Land Commission's decision?

HON. MR. FRASER: I was at the meeting. Under the oath I took, I don't think I should divulge how I voted.

MR. SKELLY:

We have a darned good idea how the minister voted, but that's not.... I

have a supplementary question. Did the minister receive any

representation from anyone associated with Green Valley Estates Ltd.

prior to that hearing?

HON. MR. FRASER: I talk to my constituents all the time. The people involved in that are my constituents.

MRS. WALLACE:

My question is for the Minister of Agriculture and Food. Did the

minister receive any representation from Green Valley Estates Ltd.

prior to March 25?

HON. MR. HEWITT: Not that I'm aware of.

MRS. WALLACE:

To the same minister: did that minister have discussions about the land

with the Minister of Transportation and Highways prior to the March 25

meeting?

HON. MR. HEWITT: I have conversations with my colleagues all the time.

MRS. WALLACE: Did the minister vote to overrule the Land Commission decision to remove the land from the reserve?

HON. MR. HEWITT:

The decision in ELUC is a decision of the committee. I'm not to

disclose which way I vote. However, I would say to the member that

every application that goes before ELUC is thoroughly researched and

thought out, and a judgment decision made.

MRS. WALLACE: To the same minister: does that minister know or have any personal contact with Mr. Reg Norberg or Mr. John W. Jones?

HON. MR. HEWITT: No, Mr. Speaker.

MR. LAUK:

A supplementary to the Minister of Agriculture. On what basis did the

Environment and Land Use Committee overrule the decision of the Land

Commission in that case?

HON. MR. HEWITT: Under the

terms of the legislation that is in place, the Environment and Land Use

Committee carries out its investigation and makes its decision.

Interjections.

MR. SPEAKER:

Order, please, hon. members. I don't know under which standing order

members presume to interrupt those who have the floor. May we have the

question.

MRS. WALLACE: The Premier's a little testy today, Mr. Speaker.

the Minister of Agriculture aware of any other applications from

developers in the same area as the Green Valley Estates who are

desirous of getting land out of the reserve?

HON. MR. HEWITT: Not that I'm aware of. However, the member asks a question that would be very difficult to

[ Page 5847 ]

answer on a moment's notice. I'd be quite happy to research it if she'd like me to.

MR. HANSON:

My question is to the Minister of Transportation and Highways. Would

the minister advise the House whether the Social Credit Party in the

Cariboo received any financial contributions from Norberg, Jones, Green

Valley Estates, or from any persons associated with Green Valley

Estates for the purposes of election campaigns?

MR. SPEAKER:

Order, please. Hon. members, the question seems to be beyond the scope

of the time provided for in question period. Perhaps the member has a

brief question.

MR. HANSON: Mr. Speaker, the question

is straightforward: did the Norberg and Green Valley Estates contribute

to the Social Credit Party campaign in the Cariboo district?

MR. SPEAKER: Order, please. Hon. members, I don't know on what basis I can accept that question.

MR. LEA: Justice.

MR. SPEAKER: Order! Perhaps the member has a new question.

MR. HANSON:

Mr. Speaker, to the Minister of Agriculture: what are the names of the

persons that appeared at the ELUC meeting on behalf of Green Valley

Estates?

HON. MR. HEWITT: Again, Mr. Speaker, that

type of question, I think, should be on the order paper; however, since

the member has asked it, I'd be quite happy to take it as notice.

MR. HANSON: To the same minister: what are the names of the persons or organizations who objected to the removal of this land from the ALR?

HON. MR. HEWITT:

I imagine, Mr. Speaker, in the application there is a public hearing

that is held in the local area, and it's a matter of public record as

to who objected at the public hearing.

MR. HANSON: To

the same minister: were any persons who objected to the application

present at the ELUC meeting, or was it the same as the George Spetifore

hearing that you held at an earlier date?

HON. MR. HEWITT: I'll take the question as notice, Mr. Speaker

MR. HANSON:

Mr. Speaker, one of the proponents, Reg Norberg, claims there were

documents supporting his company's application which were signed by

owners of adjacent properties. Would the minister divulge the names of

those people on the adjacent properties that submitted?

MR. SPEAKER: Is this a matter of public record?

HON. MR. HEWITT: Thank you, Mr. Speaker. It's a matter of public record.

MR. HANSON: Mr. Speaker, to the same minister again: was a transcript of the appeal hearing prepared, and is that public as well?

HON. MR. HEWITT: No, not to my knowledge. I don't recall a transcript being made.

REMOVAL OF LAND

FROM DELTA LAND RESERVE

MRS. WALLACE: Mr. Speaker, I

have a further question for the Minister of Agriculture and Food. Land

belonging to Delta Sunshine Chevrolet Oldsmobile, owned by Jim

Anderson, the new owner of the Spetifore property, was removed from the

land reserve. On what grounds was that land removed?

HON. MR. HEWITT: Mr. Speaker, I am not aware of any application brought forward to the Land Commission or to ELUC by the Sunshine Chevrolet Oldsmobile dealership.

MRS. WALLACE:

For the minister's information, that was removed by the Land Commission

in 1979. I would like to know on what grounds it was removed. The

minister does not have an answer to that question, but can he tell me

if the Land Commission received any representation from the member for

Delta (Mr. Davidson) to have that land removed?

HON. MR. HEWITT:

Mr. Speaker, the member can ask the Land Commission. I can't respond on

behalf of the Land Commission. I think her proper direction would be to

inquire of the Land Commission if they received any representation.

MRS. WALLACE:

I rather thought that the Minister of Agriculture and Food was the

minister responsible for the Agricultural Land Commission. Can the

minister indicate what other applications are before the Land

Commission or the Environment and Land Use Committee to remove land

from agricultural land reserves elsewhere in Delta?

HON. MR. HEWITT: None that I'm aware of.

SHUTDOWN OF AMAX MOLYBDENUM MINE

MR. PASSARELL:

I have a question for the Minister of Environment. Yesterday the

federal fisheries Minister asked the Amax mine at Alice Arm to shut

down because of violations of their operating permit. Has the Minister

of the Environment decided to take any action in respect of these

violations?

HON. MR. ROGERS: The company has acceded

to the request made by the federal Ministry of Fisheries and replied to

them by telegram, sending a copy to me.

MR. PASSARELL:

Mr. Speaker, has the minister decided to revoke pollution control

permit No. 4335, issued to Amax in January 1979, after three major

spills in that area in one month of operation?

HON. MR. ROGERS: No.

B.C. BORROWING ABROAD

MR. HOWARD:

Mr. Speaker, I'd like to direct a question to the Minister of Finance.

Early in February — about three and a half months ago — the minister,

as fiscal agent for B.C. Rail, took steps to attempt to borrow $100

million in U.S. funds in the Eurodollar market, for what the minister

said was not for northeast coal but for the general purposes of B.C.

Rail. I wonder if the minister could advise whether since that time he,

as fiscal agent, has taken any steps to try to borrow that $100 million.

[ Page 5848 ]

HON. MR. CURTIS:

Mr. Speaker, as I think I indicated earlier in this session when the

hon. member raised a similar question, and while I may be accused of

indulging in semantics, it is not correct to say that we attempted to

borrow, because that infers that we attempted and were not successful.

We were interested in what appeared to be a possibility to raise

capital funds for British Columbia Rail in the European Eurodollar

market. However, we did not enter that market. I think there is a very

important distinction, not only on this question but in general

discussion.

MR. HOWARD: The minister obscured by his

answer the question which I asked him. Has he taken any steps,

tentative or otherwise, since that time to try to acquire that $100

million?

HON. MR. CURTIS: Mr. Speaker, I think I

indicated in debates on legislation quite recently that we have a

Canadian management group which has been restructured during my time as

Minister of Finance for the Canadian capital market. We have a United

States group based in New York for any possible United States issue.

And we similarly....

MR. HOWARD: Answer the question.

HON. MR. CURTIS:

I'm getting to it right now, Mr. Member. We similarly have a European

management group, headed by Deutsche Bank in Frankfurt. At this

particular time we have not attempted to move into the Euromarket,

although if we hear within the next few hours, days or weeks that

market conditions are appropriate, then we would move for one of the

Crown corporations.

HON. MR. WOLFE: Mr. Speaker, I would like to respond to a question taken as notice.

MR. SPEAKER: Order, please, hon. members.

HON. MR. CURTIS:

On a point of order, I would ask the member for Skeena (Mr. Howard) to

withdraw the word "subterfuge," which he used when he took his place a

moment ago. It was directed to me and I take offence, sir.

MR. SPEAKER:

I'm sorry, I was in the process of recognizing another member. I did

not hear the word. If the word was used, would the member, in respect

of the....

MR. HOWARD: Mr. Speaker, in respect to

you.... I want to say, though, that in my opinion, that attempt in

February was subterfuge. They didn't need the money, and if they did,

they wanted it for purposes not outlined by the minister.

[Mr. Speaker rose.]

MR. SPEAKER:

Order, please. Hon. member, all that was required was simply a

withdrawal of any improper motive which may have been imputed to

another member while the Chair was engaged in recognizing another

member. Would the hon. member please withdraw. We do not need a debate.

[Mr. Speaker resumed his seat.]

MR. HOWARD: I had no intention of imputing improper motives, and if the word "subterfuge" carried that with it then I'll gladly withdraw.

APPOINTMENT OF DOUGLAS HEAL

HON. MR. WOLFE:

Last week I took a question on notice directed by the member for

Burnaby North (Mrs. Dailly). It related to information regarding a

contract between my ministry and the firm represented by Mr. Douglas

Heal earlier this year. There were two or three questions involved in

her line of questioning. The best way I can respond to that is in the

following way.

This contract involved the search for a

successor to David Brown, to manage an expanded government information

service. This activity took several months. During that period we had

input from many individuals and groups about how the government should

improve its communications with the public. It was decided that

whatever was done should include better two-way communication, so that

people would find it easier to talk to their government as well as to

get information about programs which benefit or affect them. To assist

in that task, my ministry hired the communications consulting firm of

Harris, Heal Ltd.

The firm provided Mr. Douglas Heal

virtually full-time, with necessary supplier and support services for a

concentrated period, including several weekends, from February 9 to

March 15, 1981, inclusive. During that period Mr. Heal conducted

extensive interviews and evaluations, and then prepared the

organization, structure, plans and basic information programs required

for presentation to the government. It was a management-consulting job,

requiring specialized communications experience. The firm's fee was

$600 per day. The total cost of the contract, including fees, support

services and travel expenses was $24,131.57. The fee portion of this

amount was $16,500.

UREA FORMALDEHYDE IN B.C. SCHOOLS

HON. MR. SMITH:

I would like to respond to questions I took as notice on May 12. I was

asked by the first member for Vancouver Centre (Mr. Lauk) if I could

inform the House as to the number of schools in British Columbia which

contain urea formaldehyde in their insulation. There are no schools

that contain urea formaldehyde in their insulation. There were, on the

other hand, some examples of urea formaldehyde gas attributed to the

adhesive used in the particle board, and the glue holding the boards to

the studding in certain portables. It's not in the buildings and not in

the insulation but in the glue around the studding in the particle

board.

That was identified in Richmond school district, and

I think, as the member knows, it's well known that those portables were

put out of service by the Richmond School Board. They are presently

being tested. There are no other districts which have definitely

identified urea formaldehyde. But to ensure that there is no threat to

the health of students from urea formaldehyde, the facility service

branch of my ministry has surveyed all other school districts to

determine whether there are any portables of the same make and if there

are any problems arising from them. We are providing advice and

assistance in testing, and we will continue to take steps to monitor

all portables.

[ Page 5849 ]

PCBs IN B.C. SCHOOLS

The second

question the member asked me was if I could assure the House that there

is no electrical equipment containing PCBs in schools in British

Columbia. He also wanted to know what steps had been taken to remove

them. There are some examples of transformers or capacitors which were

found to contain PCBs in four districts in this province. In Vancouver

there is a transformer bank which has already been removed, and three

other banks slated for removal in the near future. These banks and the

equipment in the other three districts in this province where they did

exist are not in a hazardous condition. They are either posted or are

sealed according to Environment Canada regulations. These districts

have been advised of the situation and encouraged to make use of

funding available for replacement. I would repeat that they are not

hazardous.

HEALTH HAZARDS ON SCHOOL GROUNDS

The

third question he asked me was if I had taken steps to prevent the use

of sprays causing deleterious effects on teachers and students in

schools, because of an incident which came to the attention of the

House. I have advised school districts through my ministry that

spraying of insecticides and herbicides in and around schools is not an

acceptable practice.

The final question the member asked was

whether I had decided to appoint a ministry committee to review all

possibilities and probabilities of health hazards in and around schools

throughout the province and, if so, if I would make the report public.

The answer to that is no, I have not decided, But all these matters are

being studied on a general basis.

Orders of the Day

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

ESTIMATES: MINISTRY OF INDUSTRY

AND SMALL BUSINESS DEVELOPMENT

(continued)

On vote 126: minister's office, $204,312.

HON. MR. PHILLIPS:

Mr. Chairman, prior to lunch break today, the leader of the socialist

opposition (Mr. Barrett) asked a number of questions. Unfortunately,

most of those questions were asked on the basis that he is trying to

put to the people of British Columbia that the taxpayers of this

province will be forking out hundreds of millions of dollars in subsidy

to northeast coal. Therefore his questions are irrelevant, because

northeast coal is not going to be subsidized by the taxpayers of

British Columbia, as the socialist hordes opposite would try and make

the people believe. There was a report recently released — not a

government report done by government economists, but one done by an

independent firm of internationally renowned accountants.

AN HON. MEMBER: For the coal companies.

HON. MR. PHILLIPS:

Internationally renowned accountants, my friend, whose reputation in

the international world is at stake, and you are doubting their word —

not on a cost-benefit analysis but on cold, hard cash flow.

MR. BARRETT: Answer the questions.

HON. MR. PHILLIPS:

You wouldn't believe the truth, because you don't want to believe the

truth. You'd rather go around trying to mislead the people of this

province. Lot me tell you, Mr. Chairman, I don't know how that man over

there had the audacity to stand in this House this morning, when in

three years while he was leader of the government and president of the

railway he blew hundreds of millions of taxpayers' dollars in this

province. Not only did he blow it, but he had absolutely nothing to

show for it.

Mr. Chairman, I take that back. He had Swan

Valley Foods to show for it. He had something else to show for it too.

He had a string of ghost towns around the province that Hollywood would

be envious of. They wouldn't have to build them. That's what he had to

show for it. After wasting hundreds of millions of taxpayers' dollars,

he had nothing to show for it.

This government has made a

decision to invest in the future. I think that the Leader of the

Opposition is hurting. He's got a lot of people after his job. His

troops are arguing among themselves. They're disunited. They're not

even good opposition. So he seized upon one very positive deal and is

trying to mislead the people of this province into thinking it's a mass

subsidy. Let me tell you, Mr. Chairman, and the members of this

Legislature that had that socialist group over there still been

governing this province, there would be no development at all, because

they would have given it all to Ottawa, the same as they wanted to give

our petroleum industry to Ottawa. They couldn't give it to Ottawa, so

they drove it out of the province.

But I'll tell you, we are

making a solid investment in the future: a good investment in

infrastructure; an investment in a railway system which will be used

not only to haul coal but indeed will be used to haul other

commodities; and a port that will not just be used to ship coal but

will be used to ship other commodities. That is a very positive

investment in the future economy of this province.

MR. BARRETT: How much?

HON. MR. PHILLIPS:

I'll tell you, ten years from now the economy will be strong. There

won't be ghost towns. The mining industry won't be driven out of the

province, like you drove it out of the province when you were

government. There won't be people leaving the province in droves, like

they were doing the third year when you were leading the socialists.

They won't be leaving the province. They'll be coming to this province,

and they will be sharing with the people of this province the

opportunities created by the development of northeast coal.

Mr.

Chairman, the leader of the socialist hordes is over there talking

about the railway and how $70 million a year goes to subsidize it. The

British Columbia Railway is the best economic tool this province has

ever had, and it's an investment, my friend. I was surprised how that

member could even stand in this Legislature and talk about the British

Columbia Railway, which he practically drove into bankruptcy in the

three years he was president of the railway. The last year he was

president of the railway the loss was $22 million and getting bigger.

MR. BARRETT: Who hid the losses? Social Credit hid losses for years.

[ Page 5850 ]

HON. MR. PHILLIPS:

It wasn't only the losses on the railway. The morale on the railway was

down because of political interference. What have we done with the

railway? We've turned it around. We're making a profit and giving

better service.

MR. LEGGATT: Do you still want the $70 million for the debt?

HON. MR. PHILLIPS:

Certainly, and we're going to retire the debt. For the first time in

the history of the province we're putting money up front, and we're

going to retire the debt of that railway. It's up front; it's not

hidden. We're not like the member who was speaking before lunch. When

he gave the railway some money he didn't know whether he was giving

them a grant or a loan. He called it a groan. We're putting it up front

and saying yes, we're going to wipe out the historical debt. That

historical debt of the railway is still a good investment for the

people of British Columbia. Because of that railway the northern part

of our province is developing. Every job in the north creates a job in

Vancouver and the lower mainland; make no mistake about that.

The first phase alone of northeast coal development shows a $1.5 billion net return to the taxpayers of Canada.

AN HON. MEMBER: In the first year?

HON. MR. PHILLIPS: I didn't say the first year. [Laughter.] You laugh like a bunch of hyenas.

That's

a very positive cash return. The socialist hordes opposite don't want

to believe the facts. Not only is there a very positive tax return to

the taxpayers of Canada, but you have an upgraded railway system on the

Canadian National Railways, a new branch line, a new port, a new

townsite, new highways, a new powerline and infrastructure. You talk

about being up front. We're even putting in the cost of northeast coal

$53 million for a highway, which shouldn't be in there. The highway

would have to be built someday because of other activity in that area

and because of the tourist potential. We're putting it in as one of the

costs of northeast coal. It shouldn't be in there.

MR. LEA: Why is it?

HON. MR. PHILLIPS: Because

we're being up front, my friend. We're putting all the costs out. You

want to know the costs. We've identified the costs. In study after

study we've identified the costs. I've laid it out in this Legislature

before. You don't even want to read Hansard . You don't want to

know the facts, because you want to be able to go out and say: "Oh,

it's subsidization." You've tried to mislead the people of this

province before. You tried to mislead them in Kamloops, and it didn't

work, because they understand the benefits. There is no subsidy to

northeast coal.

MR. BARRETT: How much did the tunnels cost? Give us a figure. How much are the tunnels?

HON. MR. PHILLIPS: I'll answer your question about the tunnels in due course.

This

is an investment of the taxpayers' money with a profit, and you can't

do better than that on the first phase. The first contract, only the

first 7.7 million tonnes, which is the first phase of the development,

will pay for all the costs we're putting in and still return a profit.

You call that a subsidy? I don't understand your thinking, my friend.

You don't want to know the facts. You want to be able to distort the

facts. You couldn't put northeast coal together. You drove out the coal

buyers who came to this province when you were the leader of the

government. You couldn't put the deal together. All you could do was go

around talking about building a $2 billion railway to Alaska. To haul

what? Not a B.C. product. Did you do any studies? No. You go out and

say: "I'm going to build a $2 billion railway to Alaska with British

Columbia taxpayers' money." Did you do any studies? None whatsoever.

Yet the member for Coquitlam-Moody (Mr. Leggatt) is standing in this

House and saying: "Oh, this is premature; the minister jumped the gun."

After five years of study and negotiations we make the announcement,

and you have the audacity to stand in this Legislature and say: "Oh,

you jumped the gun." If I jumped the gun on northeast coal, what did

you do on December 4, 1975 — seven days before the election — when you

tried to hogwash the people of British Columbia into thinking that

there was going to be great economic development? You came out with

trumpets blaring and you announced: "Oh, northeast coal is going to go

ahead; we're going to build highways, townsites and railways." You talk

about jumping the gun, my friend!

I know you're a new boy

from Ottawa, but these people have to be responsible for their actions.

You know, when they were in opposition for 20 or 30 years, they could

stand in this Legislature and they could say anything. They had an

opportunity as government, and they blew it; they blew the economy of

this province right out of the water. They have to be responsible now.

But are they more responsible than they were? Not one iota.

This

is an investment with a very positive cash return on the first phase.

Not only do we get a positive cash return; we are left with a new port,

new highways, a new town and a new branch line — all paid for by the

Japanese steel industry. And you tell me that isn't a good deal, my

friends? It will be there for future generations; it will be there for

additional contracts.

Interjection.

HON. MR. PHILLIPS:

Well, I hope you keep on saying that, my friend, because the people of

this province realize what a good deal it is, and they're a little sick

and tired of the negative, harping, carping criticism of the

socialists, who have never said anything positive in their lives.

Not

only are we putting all the costs up front, having readily identified

them through cost study after cost study, and not only did we do it in

1980 dollars, but we've also added inflation and we've gone on so that

we'll have total dollars spent. Usually, when a contract is going out

and you say how much it's going to cost to build a building, you tell

it in that year's dollars. We've gone and said that with inflation and

the cost of money it will go above this. Talk about being up front,

talk about guarantees! There has never been an economic development

deal in the history of this province that has been studied as much and

had as much up-front information as there has been on this coal deal.

Not

only is there a positive cash flow, but if there is a bonanza in the

price of coal, what happens? Just so that we protect the taxpayers, to

make sure that some company isn't going to reap a bonanza like some of

the companies have done in oil, supposing that the price of coal

sky-rockets — which I anticipate it will do — we've got a built-in

[ Page 5851 ]

cost-recovery

factor for all the money we spent on infrastructure. And you say it

isn't a good deal? There are more guarantees to protect the taxpayers

of this province.

What were you going to do? You didn't even

have the deal thought out when you went out and said: "Oh, northeast

coal is going to go ahead." And how were you going to ship northeast

coal? You were going to pay an additional $4 million to $5 million a

tonne to ship it down through Squamish. And you paid no attention to

the environment — none whatsoever. I want to tell you, it's almost

incredible, some of the statements that leader made this morning.

What else did he ask?

MR. BARRETT: Just one question: how much are the tunnels?

HON. MR. PHILLIPS:

Mr. Chairman, if we had had the mentality of the socialist hordes

opposite years ago.... [Applause.] Oh, clap the desks, yes, go ahead.

You just listen to what I'm going to say. There would be no railway to

Prince George. Prince George would still be a hick town — log on log,

17,000 people. Did we do cost-benefit studies as to how much the rail

line was going to cost and how many pieces of lumber were going to be

shipped over that line? No. We said: "Build the railway north." And

build the railway north we did, and Prince George today is a thriving,

booming city. Did we do a cost-benefit analysis when we built the

branch line into Mackenzie? Did we identify how many pulp mills there

were going to be and how much lumber they were going to ship out? We

said no, the natural resource is there, build the railway, put in the

infrastructure, give it access....

AN HON. MEMBER: Vision.

HON. MR. PHILLIPS: Vision, courage and guts, yes.

just have to think back to the days of the Grizzly Valley pipeline.

That's the type of mentality the socialists opposite have. Don't build

the pipeline. Don't build the scrubbing plant. Don't invest in that

area. There's no gas there.

Interjection.

HON. MR. PHILLIPS: He fell on his sword? Well....

In spite of the negativism which is typical from that group over there.... They're

always negative. They've been against everything that ever happened in this

province. No vision. No courage. When somebody else does something, all they

do is criticize it, trying to mislead the people of this province. Yet they

come out with great big announcements, like the one that they're going to

build a $2 billion railway to Alaska.

I want to deal with the cost of the rail line. The original rail-line cost,

when we we were doing the first studies in 1969, was somewhere in the vicinity

of $150 million to $175 million. We did further engineering. We brought in tunnel

experts. Canadian National Railways took a run at it. We came up with the figure,

in 1980 dollars, of $310 million, which includes an approximately $50 million

contingency. In that $310 million, in 1980 dollars, is $150 million for the

cost of constructing the tunnels — less than 10 miles of tunnels.

I've

told all the engineers and all the specialists that I think they're

crazy; $15 million a mile to build a railway tunnel sounds terribly

high to me. Why, Alec Fraser can build a highway through solid rock,

where he has to blast out the whole top of it, for less than $15

million a mile. But that is the estimate. I personally think it's high.

It wasn't too many years ago that we built 400 miles of railway, the

Pine Point railway, for $80 million.

The whole point is that

the sooner we get on with building the infrastructure, the less it's

going to cost us. That's the benefit of having the original contract,

phase 1. There will be other coal sold out of the area, no doubt about

it. This morning the member wanted to know if I would be asking for

additional warrants. Not to my knowledge. We've got all the money we're

going to spend this year in the estimates. I told you that the money

spent by the railroad will be picked up next year. The railroad will go

out and interim-finance the construction of whatever they're building,

and we will pick that up next year in purchase of shares.

MR. BARRETT: Where will they get the money?

HON. MR. PHILLIPS: I told you this morning: the money will come out of general revenue.

MR. HANSON: Without a warrant?

HON. MR. PHILLIPS:

It will be in the estimates, my friend. Don't you try and mislead this

House into thinking here's going to be a lot of hidden....

MR. CHAIRMAN:

Order, please. Hon. member, as the member for Skeena (Mr. Howard) quite

appropriately pointed out to the Chair, the use of the word "mislead"

is both unparliamentary and unacceptable. I would ask the member to

withdraw the word "mislead" which he has used now, I believe, on three

occasions, and to refrain from further use of it.

HON. MR. PHILLIPS: I certainly withdraw any imputation of improper motive.

Now where was I? The money will be in the estimates, the same as it is this year.

MR. BARRETT: You won't spend any more than that this year.

HON. MR. PHILLIPS:

Individual departments may spend some money, but the basic costs in the

Minister of Transportation and Highways' (Hon. Mr. Fraser'

s) budget....

The $22 million in my estimates are going to be paid to Hydro to build

the hydro line. What the Minister of Transportation and Highways spends

will be in his estimates. I can't foresee any need for warrants this

year. The railway will be funding itself this year. We're building a

highway. That's in the Minister of Transportation and Highways'

estimates. The powerline is in my estimates. That's all they'll spend

this year. Moneys for the townsite will be in the Minister of Municipal

Affairs' (Hon. Mr. Vander Zalm'

s) budget. I don't know what else we're

going to do this year. That's all we're going to do.

MR. LEGGATT: What about the Anzac line?

HON. MR. PHILLIPS:

Do you want me to draw you a picture? I just explained to you that the

railway will interim-finance the cost of construction this year. Next

year we'll pick

[ Page 5852 ]

what they've spent, plus interest, and give it back to the railway. Do

you understand that now? It's in our budget forecasting.

MR. LEGGATT: They're not getting it from general revenue. They're going to interim-finance now. Just a minute ago you said....

HON. MR. PHILLIPS: I said that we're taking it out of general revenue next year. We're going to run a year behind.

MR. LEGGATT: Where are they getting it now?

HON. MR. PHILLIPS: They will interim-finance this year.

MR. LEGGATT: From where?

HON. MR. PHILLIPS: Well, I don't know. Wherever they borrow money.

MR. LEGGATT: The Minister of Finance said they weren't going to borrow any money for the railroad.

HON. MR. PHILLIPS: Not on a long term-basis.

MR. CHAIRMAN: Order, please. Hon. members, each member will have an opportunity to speak in debate. As we mentioned

earlier, it's very difficult — particularly for Hansard — when members speak without being recognized. I would ask all

members to wait until they're recognized by the Chair.

HON. MR. PHILLIPS: With regard to the cost of the Anzac

route, I think we've hired the best engineering brains that we can hire

to do the engineering. That's why they identified that we couldn't go

from Bullmoose across that huge ravine. It would have been one of the

highest and longest trestles anywhere in the world. We also identified

that we couldn't go through the mountain because the mountain is full

of coal. At least in the Anzac tunnels, we've got solid rock. We've

done our drilling and testing. It's far easier to build a tunnel

through solid rock than it is through a soft substance. You know that.

At least you've got a base. We've done all our work-flow studies so we

know when we have to start this or that. That's all been worked out by

groups that have put together major projects like this everywhere in

the world. We've done all that.

You talked about a penalty.

No, there's no penalty, so far as we're concerned, if we're not ready.

I have no doubt that we can be ready, barring disastrous weather and

labour strikes, over which I have no control.

What other questions did the member for Coquitlam-Moody ask this morning?

MR. LEGGATT: What big surcharge is there?

HON. MR. PHILLIPS: There is no surcharge escalation until 1989. Then the surcharge will be renegotiated.

With

regard to the escalation of the price of coal, 46 percent of it is

renegotiable on a cost analysis. But they can look at the base price at

any time if the price of coal sky-rockets.

Interjection.

HON. MR. PHILLIPS:

No, they're not whipsawing at all. If you think they're whipsawing....

Do you know what will affect the price of coking coal more than

anything else? It will be the price of thermal coal and the demand. The

two will eventually be very close.

You also talked about

markets. We've done all the analysis. I see a market for coking coal.

It's not as big as the market for thermal coal, but I predict that a

lot of the low-grade coking coal presently coming from Australia will

be followed into the thermal coal consumption in Japan. I can see

additional sales of good coking coal for us down the road with no

problem whatsoever. I guess it depends upon whose eyes you look

through, but my theory is that the more coal you sell to a company, the

more you have a say in the price. If we're selling 10 percent or 12

percent of the requirements, we don't really have much say in the

price, because we're a small player in the game. The larger player you

are and the more you supply, certainly the more you have to say with

regard to the price.

The member for Coquitlam-Moody has left

the House, so I'm going to take my seat. Maybe the Leader of the

Opposition or somebody else over there has some more questions.

MR. BARRETT:

The minister and I enjoy a few moments of amusement, and I suppose a

little political licence is allowed in debate. But for the record, the

railroad was convicted of civil fraud just this January. The taxpayers

of British Columbia had to pay something over $7 million because of a

civil fraud conviction. The civil fraud took place under the previous

Social Credit government, at which time the court stated and judged

there were deliberate underestimations of costs. The contractors

therefore recovered the costs. So it is a matter of record, if the

minister wants to exchange opinions about who ran the railroad best.

It's far better to deal with court cases rather than opinions, since

neither of us is a judge. The taxpayers have to pay anyway. The facts

are that civil fraud took place under Social Credit, and the taxpayers

of British Columbia had to pay for that civil fraud.

I'm not

saying that that minister is responsible for it. I'm saying that the

Social Credit government administration of the day was proven guilty in

court of underestimating the costs, and the consequences were huge

charges back to the taxpayers. That was just this January, and I would

commend the minister to read the transcripts of the trial to understand

why the taxpayers of this province have some deep suspicion about

Social Credit performance that would include building a spur railroad

on plywood over muskeg. These are facts proven in court. It's not a

matter of opinion for me or for that member.

I don't hold

him responsible, but I'd like to point out that the record of Social

Credit includes civil fraud, and includes building a spur line over

plywood. It builds in the responsibility, during our administration, to

spend tens of millions of dollars cleaning up the mess, and putting in

proper-grade steel and proper-grade banking on that line, on the advice

of the railroad.

It's all a matter of record. It's not going

to bring down the government, and I don't think it interests every

citizen of British Columbia this afternoon. But just between you and

me, Mr. Member, when the courts of British Columbia proved that a

Social Credit government was guilty of civil fraud, I'm a little fed up

when you say you're looking after

[ Page 5853 ]

the

people's money in the same manner. You'd be well advised not to attach

your wagon or your star in the future to the railroad and the

performance of the previous Social Credit government. That government

also deliberately hid $154 million in losses by improper accounting.

Since you wanted to bring up the record, I thought it would be best to

just gently remind you of those things, which are not your

responsibility but are the record of Social Credit in running that

railroad: civil fraud, deliberately hiding losses and building a

railroad on plywood. It's hardly the kind of record I would think the

minister would be proud of.

Having said that, it's all history. It doesn't affect the voters now, except they have to pay the bills for that mismanagement.

Interjection.

MR. BARRETT:

It was proven in court, Mr. Member, and if you don't like the way the

judges judged the facts of the performance of Social Credit, you can

mumble all you want. But it is a matter of fact that the only

conviction of civil fraud on that railroad took place under the

previous Social Credit government. The taxpayers are still paying for

it.

[Mr. Strachan in the chair.]

You go out and

tell the working people of this province that kind of big speech you

just gave. You go out and tell those people who work for so much an

hour, or run a little shop or store — the people who believe in

government, those little entrepreneurs who think that things are

wonderful. You tell them that kind of speech. Also, tell them the truth

about the fact that because of deliberate decisions by politicians the

railroad was convicted of civil fraud, and $154 million in losses was

hidden for years because of improper bookkeeping.

You stand

up in here and talk about the railroad being a nicely run railroad

under Social Credit! You didn't make feasibility studies, or

cost-benefit studies. The previous Social Credit government said, "That

way for the railroad," and they laid it down on plywood. It's

interesting in terms of who discovered it was plywood. Was it me? Was

it a Socred backbencher? No. The irony was, it was a royal commissioner

appointed by this Social Credit government, Mr. Justice Lloyd McKenzie,

who had the royal commission financed by this government; and it was

that royal commission that said that the railroad, in parts, and the

spur line, had been built on plywood. It wasn't the socialist

opposition and it wasn't the government back bench; it was the

government's own royal commission that condemned the government

previously for building a railroad on plywood. The only place in the

world — or at least in British Columbia — that railroads are built on

plywood is in the basement, for our children. But they took that whole

concept of a plywood basis for a railroad and built it on the muskeg.

Where did it come out? Not from the opposition and not from the member

for North Peace River (Mr. Brummet) — it came out of Lloyd McKenzie's

mouth.

Just to respond to those opening statements so that

we get the record straight, we don't have anything on our record saying

that our government allowed a Crown corporation to be placed in a

position of being convicted of civil fraud. That transcript would be

good reading for that member for North Peace River, to know what party

he's joined and what their legacy was in terms of heavy debt to the

people of British Columbia because of mismanagement of that railroad.

the matter at hand: since the minister wished to raise a little bit of

history, I just thought I would comment on the history of Justice Lloyd

McKenzie, the court case and the hidden losses — not that they are

going to affect people. Most British Columbians will pass this day

without knowing the heavy debt charges they have to pay because of the

mismanagement of Social Credit.

This morning I clearly asked

the minister to tell us the cost of the Anzac tunnels. You've now given

us a figure of $310 million in 1980 dollars. Is that correct? Our

inflation rate is running at about 12 percent a year. This is 1981; so

that figure is already up $24 million. I asked the minister this

morning, if there are overruns on those estimates, when will he let us

know about the projected overruns, and will he be going for warrants?

He gave me an answer today. There will be no warrants this year, to his

knowledge; that's a good cover. I appreciate the minister's answer. But

it is obvious that if the money is coming out of general revenue and if

overruns begin to show up, then there will have to be warrants. You

will have to go to Treasury Board, because you have now given the

public of British Columbia the first frank and honest statement about

financing the railroad — that is, it's coming out of increased tax

money, out of this huge increase in taxes in the budget this year.

Everybody who shops for a suit of clothes or buys a car, everybody who

pays that 50 percent increase in sales tax throughout British Columbia

will be paying part of that money directly into northeast coal, from

which he Japanese will benefit through subsidies and the low price of

coal.

The minister said: "This will all be paid for by the

Japanese." I ask the minister when the first cheque will arrive from

Tokyo. I ask the minister to tell us how much the first payment will be

by the Japanese — in yen, or does he yen for it? You're not fooling

anybody with a silly statement that the Japanese are going to pay for

this. In opening a new coal project in Australia, the Australians have

asked the Japanese to put the money up front for the infrastructure so

that they don't have to go into the international market and borrow.

Why aren't the Japanese asked to bring money over here, to ensure that

any money we borrow is available at an interest rate favourable to us,

negotiated between the government and the Japanese? The Japanese have

skinned us. They've done it by saying: "You get the money and put it up

front, and we'll buy 7.7 million tonnes of coal." The minister admits

we have to sell another 11 million tonnes before we even meet the

interest charges. "The Japanese are going to pay for all of this." You

haven't bargained with the Japanese. You haven't negotiated with the

Japanese. They've skinned you alive. You stand up and tell us the

Japanese are going to pay for all of it. Tell us when the first cheque

is going to arrive; tell us how much it's going to be. Tell us if their

sales tax went up in Japan so they can pay their share of this deal in

setting up the infrastructure.

Now you talk about hidden

reports. You were the people who hired the outside experts who said:

"Let's have a separate piece of legislation so all these costs could be

broken out." No, no, no, the taxpayers are never going to get a picture

of how much this costs. You're already admitting there are overruns in

Highways, Municipal Affairs and in other departments. They will have to

go for the warrants that the taxpayers will have to cough up the money

for. The Japanese won't have to put up one penny. In the contracts, as I

[ Page 5854 ]

understand

them, even though there's only 7.7 million tonnes of coal sold, the

contracts say up to 7.7 million tonnes. If the Japanese arrive next

month and say, "We only want a million tonnes this year," what are you

going to do about it? Is the minister aware that the Japanese are now

involved in investments in infrastructure in competing coal mines in

Alberta? Is the minister aware that the only hope of survival for the

BCRIC corporation started by this government is to get those shares the

little people of British Columbia invested in on the word of the

Premier of the province up from the $4.85 a share they're selling at

now? The only hope of getting that share up is expanding the coal

market from the southeast without subsidy. What's he saying to the

BCRIC shareholders? He's saying the government, politically, will go

out and sell as much northeast coal as it can, and for anybody who

invested in BCRIC the devil takes the hindmost, and Mr. Edgar Kaiser

cleaned out that particular deal.

The people of this province, regardless of how they vote — NDP, Liberal, Conservative

or Social Credit — are being asked today to agree with a blank cheque to give

away resources that are God-given to every citizen of this province, and you've

got the nerve to say the Japanese are going to pay for it. You may go around

this province and try to convince a lot of people that this is a wonderful deal,

but I for one want to go on record as saying very clearly that we don't

have one bit of the correct information. We don't have an admission from

the minister about how this is going to be financed, and he will not tell us

about the projected cost overruns. You're flying by the seat of your pants

purely for political purposes, Mr. Minister. I suppose that's allowed for

politicians, but when you involve literally billions of dollars in non-renewable

resource giveaways and you stand there and give the kind of answers you did

today, then God help the people of British Columbia, for this must be the worst

government they've ever had. They've had some bad ones, but this one

must be the worst ever in the history of British Columbia.

HON. MR. PHILLIPS:

The Leader of the Opposition tried to get up and again snow around and

talk about subsidies, misleading information and all of that. I'll tell

you about the railway, my friend. You drove the railway into the

ground, and you're the guy that was responsible, the last year you had

it, for a $22 million loss because of mismanagement. And I'll tell you

about the fraud. I'll tell you who changed the specs on the Dease Lake

line, and when.

MR. BARRETT: Yes, you tell us.

HON. MR. PHILLIPS: It wasn't the previous Social Credit government; it was when you were president.

MR. BARRETT: That's false.

HON. MR. PHILLIPS:

That's a fact, my friend! You changed the specs. Those are the facts.

Don't stand here in this Legislature and try and snow me, because I

know the facts. It was when you were president of the British Columbia

Railway that the specifications on the Dease Lake line were changed.

I've said that in this Legislature, and I'll say it again and again,

because that's the truth, and you know it. To try and mislead or try

and say something else is not suitable. You're not even suitable to be

Leader of the Opposition.

MR. COCKE: On a point of

order, Mr. Chairman, the minister is not addressing the Chair, which is

the custom of this House and is the way everything is done in this

House.

MR. CHAIRMAN: That is a very good point of

order, and I think all members of the committee should be reminded that

debate is in fact directed towards the Chair. Perhaps at this point we

also might review some of our other rules that tell us that good temper

and moderation are the characteristics of parliamentary language.

"Parliamentary language is never more desirable than when a member is

canvassing the opinions and conduct of his opponents in debate."

Further, from Beauchesne: "It is not unparliamentary temperately to

criticize statements made by a member as being contrary to the facts,

but no imputation of intentional falsehood is permissible. On rare

occasions this may result in the House having to accept two

contradictory accounts of the same incident." I'm sure all members are

aware of that wisdom from Beauchesne. With that said, I once again

recognize the Minister of Industry and Small Business Development.

AN HON. MEMBER: Tell us about the plywood.

HON. MR. PHILLIPS:

Yes, I'll tell you about the plywood. I'll tell the members opposite

about how the management of the railway was interfered with by the

politician on the other side. That's why the railway went from a profit

position under the previous government to a $22 million loss. While the

Leader of the Opposition was president of the railway, he was going to

go back over the books and try to find that we'd been cooking the

books. With certain changes in accounting — nothing being hid, just

changes in accounting — he didn't find, as the member said, any $140

million. He came up with $52 million over a period of 20 years. That's

all you found, not $140 million. Don't try and snow me. Maybe you can

go outside the House and say that to the people. You can add $100

million here and lose $100 million there.

I'll have you know, Mr. Chairman, that we built the Fort Nelson extension. It was built as a resource line.

MR. BARRETT: On plywood.

HON. MR. PHILLIPS: And it wasn't built on plywood.

You

wonder why I lose my patience, Mr. Chairman. There was one area in the

line where, because we had moved a heavy piece of equipment into Fort

Nelson.... It was built as a resource line, no doubt about it. Under

this administration it's being upgraded. You see, Mr. Chairman, what

makes me so impatient is when a supposedly responsible member of the

House, the supposed leader of the socialist hordes opposite, gets up

and deliberately twists the facts.

Interjection.

HON. MR. PHILLIPS: Oh, you have trouble with that. Let me think of another way to put it. I'm trying to be kind, Mr. Chairman.

MR. CHAIRMAN:

So am 1, hon. member. I would advise you that the Chair has told you

that we cannot use language that would indicate that another hon.

member is intending to bring false evidence to this House or has

said....

[ Page 5855 ]

HON. MR. PHILLIPS: I'm trying to find the proper terminology to suit you, Mr. Chairman.

The

fact is the railway wasn't built on plywood. The member opposite is

trying to impugn improper motives to the railway. He's building his

facts. What other question did you ask me?

I know the story

of the railway. I know all the facts behind the railway — how you

interfered and how the railway is being run very well now. Management

morale is up. Management are allowed to run the railway. There is a new

board of directors being very well run. It's the pride and joy of all

British Columbians again. Morale on the railway is high, and that's

more than you could say when that member opposite was president of the

railway.

I think I've answered all the the questions that

they've asked. But I want to state again that northeast coal has a

positive cash flow of over $1.5 billion.

Interjection.

HON. MR. PHILLIPS: Even with that, the positive cash flow — what governments expend and what they get back is $1.5 billion.

Then

we have the branch line, the townsite and the highways all built and

paid for on the first contract. I tell you again, it's the Japanese

steel industry which is paying the bonus. The socialist hordes opposite

used to criticize the gas pipeline to the United States. The gas

pipeline that we now use to feed the lower mainland was paid for by the

export contract. That's just good, smart business. The cost of the

infrastructure for northeast coal will be paid for by the first

contract. Then, if Canadians ever need the coal, the infrastructure

will be in place. If that's not good business, then I leave the Leader

of the Opposition to go out and try to sell his theory, which is do

nothing and criticize everything that anybody else does. Leave it in

the ground, let the lights go out, don't build highways, don't build

anything. Just shovel it out the back end of the truck in social

welfare and let the people go unemployed. You go around the province

and tell the people your theory. I'll go around and talk to them about

mine.

MR. KEMPF: I'll diligently try this afternoon

to adhere to the very quiet and peaceful debate we've had so far. I

stand this afternoon to commend this minister for his initiative,

particularly in regard to northeast coal. I stand this afternoon, Mr.

Chairman, as you would as a northerner, to speak for northerners with

regard to the question of northeast coal and its development.

The

northeast coal project is seen in the north as being a very positive

vision and an investment in the future of not only northerners but all

British Columbians. It's also seen as being the vehicle by which some

of our riches will return to the north and which will provide additions

to the transportation systems which, had it not been for northeast

coal, we would probably not have seen in the north possibly for a

couple of decades. Northeast coal will mean for the people of the north

more and better highway systems and a far better overall transportation

system.

With provincial involvement in this development, we

will see in my constituency alone many millions of dollars expended and

many hundreds of jobs created just to provide the infrastructure

necessary on Highway 16. Do you think those overpasses would have been

built by the federal government or by the CNR to accommodate unit grain

trains? Not on your life, Mr. Chairman, or in your lifetime. Had it not

been for the vision of northeast coal, the citizens along the north

line could have put up with the unit grain trains or the province could

have spent the taxpayers' money from general revenue to provide that

infrastructure.

Northeast coal, as much as the socialists

would like to knock it, is a northern project, yet a project which will

capture the imagination of all British Columbians. In fact, it will

benefit all Canadians. This government's role in northeast coal

constitutes what I believe to be the true role of any government. We

will provide the seed money. Yes, money has to be provided, but it's

seed money.

MR. LAUK: One million dollars of seed money?

MR. KEMPF:

Mr. Member for Vancouver Centre, you wouldn't understand the scope of

that kind of development. You didn't when you were Minister of Economic

Development, and you still don't.

Not only will that seed

money be returned twofold and provide the foundation upon which many

crops will grow in the future, it will also provide the foundation for

many thousands of jobs for British Columbians. What of the socialists?

They oppose it, of course. They oppose northeast coal. I want that

squarely on the record of this House. Those socialists over there

oppose the northeast coal project. Two and a half years down the road

we'll tell the people of the north and the people of this province who

supported northeast coal and who didn't.

They now oppose a project which history shows they themselves were in favour of.

Interjection.

MR. KEMPF: We'll get to Kemano II — that's another subject, and we'll talk about that again in this House.

Mr.

Chairman, this is a project that they themselves five days before a

general election in this province — supported. They actually announced

the same kind of program five days before announcing a general

election, because they were broke. They announced northeast coal —

their project, a project without planning and, as you know very well,

Mr. Member for Vancouver Centre, without the socio-economic studies

that you so proudly philosophize. But we're accustomed to that from

over there by now — their socialist attitude of do as I say, not as I

do.

Mr. Chairman, history has recorded the words of their leader, the then Premier of this province — and God help us, should

he ever become one again. Those words are recorded in Hansard

in debate in this very House. Just for the record I would like to read

those words uttered here by the then Premier on February 27, 1973. You

know, they talk about public input and that the people should know

everything, and that we should have all sorts of public hearings, but

listen to what the then Premier said about Sukunka coal:

"The question of a public hearing on the economics is absurd, and the member

knows it. No government anywhere in Canada, provincial jurisdiction or any federal

jurisdiction, takes a basic matter of economic policy to public hearings."

HON. MR. PHILLIPS: Who said that?

MR. KEMPF: The then Premier of this province, the now Leader of the Opposition. I quote further:

[ Page 5856 ]

"And the member suggesting that we take specifics to a

public hearing is absurd, in my opinion. It would be a dereliction of

the responsibility that we have as a government to start throwing

around figures while we are in the midst of negotiations on a deal that

may or may not go through."

These are words of the then Premier of this province.

HON. MR. PHILLIPS: He changed his spots.

MR. KEMPF: Never. Maybe they change their suits, Mr. Member, but never their spots and never their philosophy. Mr.

Chairman, we know their attitude, we know their philosophy, and we also know their position on northeast coal, and we want that

position to be marked squarely on the record, to be read squarely into Hansard

of this House. They oppose it. They oppose northeast coal, as do others

who really don't know what they're talking about; either they don't

know what they're talking about or, heaven forbid, they do it for

purely political reasons. They want it to fail; they would like it to

fail; they would like to see a deficit from northeast coal. It's the

same old story: do anything, say anything — the socialist way to regain

power. They're opposed to northeast coal, and we know that.

MR. HOWARD: Say it again.

MR. KEMPF: I'll

say it many times, Mr. Member for Skeena. You're opposed to northeast

coal — a northern representative. Shame on you! You've never talked to

your constituents about it, I'll assure you of that.

MR. LEA: I have.

MR. KEMPF:

And you're against it, Mr. Member for Prince Rupert. When have you last

been to Ridley Island? When have you last talked to the workers in your

constituency about the jobs that will be created because of northeast

coal in your constituency? No, Mr. Member, I don't think you know. I

don't think you've talked to them. If you've talked to them, you

haven't listened.

MR. LEA: You're better as a maverick.

MR. KEMPF:

I would suggest you go there, because I've been to see Ridley Island

since you have. You better go up there, talk to your constituents, see

what they think and come down here and say it.

The critics

of northeast coal are a detriment to this province and to this country.

They should be ashamed of themselves. They don't know what they're

talking about. They oppose for the sake of opposing. They don't look at

something for the sake of this province and for the sake of the future

of this province.

I'm going to read this into the record this afternoon. I don't think anyone could have put it better than a Mr. Brian Martin,

who is editor of the Journal of Commerce , when in February 1981 he wrote the following:

"Some years ago I held a lofty office of assistant Boy

Scout troup leader. Much of my time seemed to be spent on interminable

camp-outs watching rain slowly dripping its way through the

not-so-waterproofed tent we used. A major challenge on days like that,

of course, was to think up ways to keep the kids busy and away from

each other's throats.

"On one such glorious

drippy Vancouver Island afternoon a bunch of boys were sitting around

the tent, and they got to wondering what it would be like to earn a

million dollars a year.

"'Gosh,' said one of

the little urchins, whose father was likely either an accountant or a

dentist. 'Just think, if you earned a million dollars, of the income

tax you'd have to pay.'

"'Heck, no,' shot back one of his buddies. 'Just think of all of the income.'

"That incident, I thought, rather graphically outlined the opposite directions from which people can view exact same situations.

remembered those two young kids the other morning while I was sitting

on an airplane and reading the newspapers. The press that day was full

of reaction stories to the proposed massive coal development in

northeastern British Columbia.

"A spokesman

for labour worried that there wouldn't be enough tradesmen in the

province to handle the resulting jobs. The New Democratic Party was

busily chasing its own tail around in a circle in a desperate search

for a ripoff, sellout or boondoggle. Several environmental groups were

beginning to make nervous noises, and no end of consultants, advisors

and economists on different sides of the issue were lustily shouting

conflicting advice back and forth across the columns of the business

page.

"The fact is, most of the groups doing

the talking weren't thinking about the income at all — they were

already fussing about the tax. This approach — so typically British

Columbian — completely baffles me. It's like a farmer who refuses to

plant a crop because the weeds might come up.

"What

the critics of coal development are too short-sighted to see is that

this development, like the extension of the B.C. Railway in the 1950s

and 1960s — or like the extension of the CPR to the west coast a

century earlier — is not an end unto itself. It is a catalyst of dozens

of other developments. It is meant to act as a springboard from which

will be launched new jobs, new towns and a broadened provincial

economic base. It will open up new forestry areas, other mining

developments and potential agricultural land.

"History

is littered ankle deep with examples of tiny men spreading tiny

thoughts while totally missing the bigger pictures. There were those

who thought the U.S. had gone crazy in 1867 when it bought Alaska for a

dismay as a few wayward sons set sail for a frozen wasteland known as

Canada. And 50 years after that, central Canadians did the same thing

as the next generation boarded the train for the barren wilderness of

the west.

"The northeast coal development in

B.C. Is sane, sensible and necessary. It is not a one-shot go. It may

well require heavy taxpayer support for transportation systems and

other facilities. But so what? Every major step forward in this country

has required incentives and support. If Sir John A. Macdonald hadn't

given bundles of incentives to the CPR, we might still be lining up for

the noon stage to Kamloops.

[ Page 5857 ]

for one can't think of a better way for government to spend tax

dollars. And, unlike my labour friend, I can't think of a better

problem to have in these slow-growth, recession-ridden days than more

work for our labour force than our labour force can comfortably handle.

We should always have such problems."

Mr. Chairman, again I say that I couldn't say it

better than Mr. Martin. They are wise, logical words from someone who

is fortunately not politically motivated.

Let's look at the facts of northeast coal. The Teck and Denison

sales agreements with the Japanese steel mills for 7.7 million tonnes

per year for 15 years, extendible to 20 years, represent just a little

over 1 percent of the known coal reserves in that area of the province.

Four additional new mines in that district are already in serious

development planning and sales negotiations. By 1990, it is realistic

to expect production to rise to 23 million tonnes annually, using

essentially — and get this, Mr. Chairman — the same new transportation

network in northern British Columbia that will be put in place and paid

for as a result of proceeding with the first stage. The initial phase

involves, in addition to the building of two new mines: a new rail line

from Anzac to the coalfields; major upgrading of the present BCR line

from Anzac to Prince George and of the northern CN line from Prince

George to Prince Rupert; ten or eleven new unit coal trains of 100 cars

each, plus locomotives and spares; a new coal port at Ridley Island,

Mr. Member from Prince Rupert, to be owned by the National Harbours

Board, but with loading facilities to be built and operated by the

private sector companies; a new townsite at Tumbler Ridge, new roads

and a new powerline from the Shrum generating station at the dam site

to Tumbler Ridge — all on a construction-completed

schedule that will

permit commencement of shipments in October, 1983, and deliver full

production by 1985.

The capital investment in all this will

reach $2.9 billion in these first two contracts by 1984 — $1.6 billion

from the private sector in the two mines, townsite and port loading

facilities, and $1.3 billion from the public sector in transportation

and other infrastructure — for a total of 7.7 million tonnes annually.

The prices negotiated include rail rates, surcharges, port charges and

royalties, which, combined with the new taxes generated from the mines

and related operations, will fully recover the forecast public sector

investment and operating cost, plus a substantial overall positive cash

flow or surplus or profit — I know you think that's a dirty word,

members opposite — to the federal and provincial governments over the

life of these contracts.

Further, these first contracts will

provide over 10,000 permanent jobs and over 51,000 construction

man-years. It will contribute in escalated dollars over the next 20

years about $37 billion to Canada's balance of payments. It's a project

for all Canadians, not just northerners and British Columbians. The

socialists oppose that. There will be criticism, for whatever devious

reasons, but not by northerners. You won't see criticism from the

people that live in the area concerned, who can see their future, who

can see a future for this province a little beyond their noses, who

think positively, looking beyond just today — looking, in fact, to

tomorrow and the day after, to the future for their children and their

children's children. We have, as northerners, supported and will

continue to support northeast coal or any other such visionary project

which will benefit not only us but all of the citizens of this province.

Interjection.

MR. KEMPF:

You oppose it, Mr. Member for Vancouver Centre. Yes, we know. Let's get

it firmly on the record, because we're going to tell it all over this

province about two and a half years from now.

There is another item....

Interjections.

MR. KEMPF: Mr. Chairman, would you please keep those members in line, so they can listen to logical debate.

There

is another item on which I would like to speak in this minister's

estimates. I guess I could wait for vote 166 in which to do so, but

while I'm on my feet I might as well say it now.

SOME HON. MEMBERS: Say it now!

MR. KEMPF:

In fact, Mr. Chairman, the members opposite seem to think that's a good

idea. Maybe I'll repeat it when vote 166 comes on the floor.

The

subject I wish to speak about is the British Columbia Railway — in

particular, the freight and, more importantly, the passenger service on

that railway north of Prince George, particularly between Fort St.

James and Driftwood. I've said it in this House before and I'll

probably say it again. I will continue to say it until something is

done about the service — if that's what you can call it — that the

citizens of the area north of Fort St. James on the British Columbia

Railway have to put up with. To say the very least, that service is

totally unacceptable. In fact, Mr. Chairman, in this day and age it's

really difficult for me to comprehend what those people in that area

are expected to put up with. They're treated worse than cattle. I've

said that before in this House, and I'll repeat it. They're treated

worse than cattle. You have to understand....

Interjection.

MR. KEMPF:

The members opposite make fun of this particular item. I think that's a

shame. I'm going to make sure that the people along the BCR line

between Fort St. James and Driftwood know exactly what the members

opposite in this House think about the subject of their transportation

system and how they're being mistreated by the system that's now in

effect.

MR. HOWARD: You'd tell them anything.

MR. KEMPF:

How would you know? When was the last time you were in the north, Mr.

Member for Skeena? When was the last time you were in Smithers? I have

to handle all your problems there. When are you going to represent

those people?

MR. CHAIRMAN: Perhaps we could get back to the vote, hon. member.

MR. KEMPF:

Yes. Mr. Chairman, we can. As I was saying, the people taking

part in

the transportation system provided by the British Columbia Railway

north of Fort St. James are treated worse than cattle. It's their only

mode of transportation. There is no other way, except by air, and that's

[ Page 5858 ]

not

only expensive but also, because of weather, very unpredictable. These

citizens are expected to put up with two ancient cars which are tagged

behind a train hauling logs and lumber. Sometimes it takes 12 hours to

travel from Fort St. James to Tatla Landing, a distance of 60 miles on

a train which is anywhere from three to seven hours late pulling out of

Fort St. James in the first place. That's the rule and not the

exception. The cars are dirty, most often cold, and more often than not

they aren't even lighted. You know perfectly well, Mr. Chairman, the

length of the nights in the north for eight months a year. It's a

horror story. It's totally unacceptable, and I'm virtually embarrassed

to be any part of that kind of situation in regard to those citizens

whom I represent. It must be rectified. That railway, by whatever means

necessary, must provide those citizens with a proper, modern Budd car

service. It's a service they deserve and are entitled to.

this House, we speak about the hundreds of millions of dollars of

taxpayers' money which is spent on light rapid transit in the lower

mainland. Then we see that kind of transportation system provided for

those citizens in the north. We also see millions of dollars going to

provide the transportation for northeast coal. I have nothing against

that, but I have to relate that to the type of service that's provided

for my constituents along that line, from Fort St. James to Driftwood.

The

people along the BCR north of Fort St. James are citizens of this

province. They, too, deserve a transportation system, and one which is

better than those used by cattle in other jurisdictions. I want to say

to the minister responsible for the BCR that I cannot accept the type

of service that's now being given. I'll sum up in just a few seconds. I

can't accept the fact that just because they're northerners they should

be expected to put up with that kind of transportation system.

I see my time is up. As I said before, I will probably raise this particular subject again under vote 166.

MR. CHAIRMAN:

I should point out to the committee that in times past, the committee

has established that if a vote is well canvassed during the minister's

vote, it is considered canvassed when the appropriate vote comes along.

Of course some latitude is allowed when the appropriate vote does come.

HON. MR. PHILLIPS:

The last speaker has raised a very legitimate problem in his

constituency. I was aware that we didn't have first-class service on

that particular end of the line, but he's made me aware of a very

severe problem. I would like to go with you to your riding and have a

first-hand look at the situation. I'd like to discuss with you and the

residents of the area what we can do to improve it. So I will tell you

now that shortly after the House rises I will arrange with you to go to

your riding with you and take a look at the situation.

MR. LOCKSTEAD:

Just to comment on the remarks of the member for Omineca (Mr. Kempf),

before I change the topic, I think the problems of that member's

constituents would be much better served if that member would convene

the Crown corporations reporting committee, as he has been charged to

do by this Legislature, for which he receives the sum of $4,000 a year,

and which he has ample time to do.

Before that member got

up, the Minister of Industry and Small Business Development said that

we are opposed to northeast coal in this province. As far as I am

aware, this caucus has never been opposed to rational economic

development of any kind. But I will tell you what we are opposed to, in

terms of northeast coal.

AN HON. MEMBER: Incompetence.

MR. LOCKSTEAD: That as well. We are certainly opposed to massive giveaways, which have been the record of the Social Credit Party since 1952.

The

minister has not seen fit to table the figures and cost justification

studies. He tabled massive amounts of material, but he has not tabled

the documents relating to northeast coal that are relevant to the

debate taking place here today. It's been my experience — certainly in

my own riding — that people are aware of the northeast coal

development, and are aware that we are once again on the brink of what

appears to be a massive giveaway of British Columbia's natural

resources without adequate compensation. That's the expense of the

southeast coal sector as well, and the expense of BCRIC.

The

reason I'm on my feet now, Mr. Chairman, is to discuss with the

minister an item that I've discussed with him many times. I thought

this would be the appropriate place to discuss once again the problems

relating to Ocean Falls. To give a bit of background, the minister is

well aware that that community was about to close down in 1972. The New

Democratic Party came to power and we purchased that community, saving

the jobs of approximately 500 people who were directly employed in that

community; and the operation showed a profit during the years that the

New Democratic Party was the government in this province. In the

six-year period the Ocean Falls Corporation achieved export sales in

excess of $150 million — part of that was under Social Credit, which

became the government in 1975. During the same period more than $55

million was paid in wages, which in turn generated more than $13

million in income tax revenues; another $55 million was added to the

economy through purchases of logs, pulp and fuel; interest paid on a

loan from the provincial government totalled $2.7 million; capital

taxes, stumpage and water rentals returned approximately $1 million to

the coffers of this province; an estimated $2.6 million was paid in

provincial sales tax; also, the corporation spent approximately $15

million on equipment upgrading and improvement.

Furthermore,

the community is equipped with a relatively new high school, a new

hospital — the residents of that community contributed generously to

its construction — a hotel, bank, post office, elementary school,

stores, laundry, liquor store and police facilities — all those things

that any modern community has. At the present time approximately 90

percent of the homes and apartment blocks in that community are

abandoned. If these homes were in Victoria or on the lower mainland

they would be worth from $100,000 to $200,000 apiece. They are boarded

up and abandoned at the present time. So that brings you up to date.

of June last year, the government arbitrarily and quite suddenly

decided to shut down that community, as we all know. During the

announcement of the closure, they promised that another industry would

be moving into that community and that something would happen. At the

present time there are approximately 140 residents in Ocean Falls. I

think there are nine maintenance people employed by the corporation;

they are the only employees in town at the present time. Those people

who decided to stay in this

[ Page 5859 ]

community

are faced with nothing, because the government has not in effect kept

its promise to these people and to the people of this province. I think

that's quite deplorable.

I've been in touch with the

minister, by correspondence and in official conversation, and with the

chairman of the board of directors of the B.C. Cellulose Company. I

must say that Mr. Williston is always very optimistic that something is

going to happen here or there, but nothing has happened. People up

there are unemployed; those who are eligible are living on UIC; some

are living on severance pay. How much longer can they hold out? They

want an answer from this government.

My purpose in getting

up here this afternoon on the floor of this Legislature is to attempt

to get a reasonable, sane answer from the Minister of Industry and

Small Business Development. I don't want to hear the same old speech

that we heard last year — "we're looking at this and we're looking at

that." We don't want to hear that stuff any more. I have files and

files of your answers out there in my office which are totally

meaningless and can't even be taken at their face value.

What

I want to hear from that minister this afternoon is a positive....

That's your key word, isn't it — "positive?" Be positive for a change.

You're talking about jobs. You say you've created jobs here, there and

everywhere. You don't talk about the jobs you've done away with. You

don't talk about those jobs, do you? Well, I'm talking about them now.

I want that minister to get up in this House calmly....

Interjection.

MR. LOCKSTEAD:

We'll get to the Minister of Lands Parks and Housing (Hon. Mr. Chabot)

sooner or later, Mr. Chairman. I've got some good stuff for him.

HON. MR. CHABOT: Good, I'm waiting for it.

MR. LOCKSTEAD: I'm ready for you.

In any event the Minister of Industry and Small Business Development said in one of his constituency articles in

the Peace River Block News:

"There is presently a three-year experimental logging and

timber-use project centred on Ocean Falls. This three-year program will involve

the renovation of the wood-preparation mill, and it is anticipated that it will

be in operation in the late spring of 1981 and employ 100 people."

Well,

Mr. Chairman, it's the late spring of 1981. Where is the mill, where is

that experimental project, and where are those 100 employees? I know

that the minister has had some opportunity to think about these things,

and I would appreciate it if the minister would get up in his place now

and answer this one question. Tell us what is happening in Ocean Falls.

Are you going to abandon it? Are you going to sell it? Are you going to

let it decay? What's going to happen to the people remaining there?

Those are simple questions and you should be able to answer without a

lot of arm-waving and screaming and carrying on. For once in your life,

get up in this House and give us a single answer to a very

straightforward question. Get those people up in Ocean Falls off the

hook. That's easy to do.

While I'm on my feet, perhaps the minister would be good enough to tell us the status of the lawsuit that is underway

between the Los Angeles Times

and the Ocean Falls Corporation and the government of this province.

Has the government decided to settle out of court? Is that particular

item going to court? I don't want to go into a lot of details if the

case is before the court. Perhaps the minister could tell us what is

happening in that particular instance.

HON. MR. PHILLIPS:

I can appreciate the member's concern about Ocean Falls in his riding.

But I can't give him a definite date for startup. We're still analyzing

the wood supply. It wasn’t as favourable as we first thought it would

be. A lot of the timber in the area, when we got in and started looking

at it, was more decadent than we had anticipated. We're still doing our

studies, and we're still hopeful that we can indeed come up with a

viable economic project in the area. I can’t give you a definite date.

I'm not going to comment on the lawsuit between the Los Angeles Times and Ocean Falls at this time.

MR. MUSSALLEM:

I'd like to say that we are not debating the issue we should be

debating — the job that this ministry has done in all British Columbia,

how the whole province is bursting at its seams industrially, and how

everywhere there are jobs and employment. Only yesterday I received a

letter from the president of the University of British Columbia. Every

member of this House received the same letter, I believe. It said that

almost every single graduate from the University of British Columbia

had found employment within the year. Furthermore, the concern was not

enough enrolment at the university. Some concern! Young people today

are finding too many jobs, and they don't want a university education.

I don't exactly welcome that trend. However, that is the situation. The

province is expanding so rapidly, it's bursting at the seams.

The

hon. member for Mackenzie was just crying tears over Ocean Falls. The

trouble with that member and that party is they have no vision. As a

prophet of old said, without vision the people perish. For example, our

government, during the W.A.C. Bennett days, found that Ocean Falls was

impractical and impossible to operate. In 1972 they were defeated, and

in 1973 they resurrected Ocean Falls. But Ocean Falls was not to be

resurrected; it was positively not functional. We tried manfully. Mr.

Williston, a former member of the executive benches of this government,

tried hard to develop Ocean Falls, but it wouldn't work. Instead of

trying to resurrect the dead — and Ocean Falls had died; people there

recognized that.... This is spoken with respect. They did that, but

what did they do with the gas pipeline to Vancouver Island that could

have been built for $60 million. They killed that at the same time.

That is not said in criticism, but there's a lack of understanding and

knowledge — a lack of looking into the future and a lack of vision.

This

minister and this ministry have vision. These are the things that count

in this day. I never thought I would live to see the day when British

Columbia was so prosperous that pages upon pages of jobs go begging for

a placement. That is the issue. That is what we should be talking about

— not these little nattering, nittering things.

You talk

about northeast coal. I don't intend to debate that now. but there'll

be plenty of time to debate northeast coal, Mr. Member. That is the

mark of the grandeur and imagination of that ministry. This opposition,

dealing in nickels and dimes, cannot see the great picture for trying

to consider how much per tonne we're receiving from the Japanese. That

is not the issue. The issue is whether it will operate, make

[ Page 5860 ]

money

for British Columbia, create jobs, a new town, schools, employment and

new homes. These are the social problems. These are the important

things we must consider. This opposition doesn't see that. I'm not here

to teach them.

It leaves that ministry and this government

with the responsibility of carrying the full load without the

assistance of the opposition. It is their duty not to criticize and

knock down, but to build up. The idea of an opposition is not to

destroy but to give creative suggestions and encouragement, not to

knock down everything in sight. Only a few years ago they said the

two-river policy, the Peace River and the Columbia River, was

unthinkable. We weren't ready for Columbia River until 1984. The first

thing this government did was to connect the PGE to North Vancouver and

Prince George. What did they say? "Don't do it. There's no need for a

railway there." It was empty, there were no cars, no towns, nothing up

there. But the vision of this government said yes, there are mines and

forests. There are places where people live. It took vision — vision

that was over the heads of the opposition. By the strength of their

sinew and their determination, in spite of all the fighting and

criticism, the PGE went through, and the two-river policy went through.

I ask you, Mr. Chairman, where would British Columbia be today....

MR. KEMPF: In the dark.

MR. MUSSALLEM:

No, we wouldn't be in the dark. But still the lower mainland would be

everything. We'd still have the B.C. Electric down there with Stave

Falls, Buntzen Lake and a few other small power plants creating power

for the lower mainland. Victoria would have no pulp mills, no power,

nothing. When the first direct-current powerline left the....

Interjection.

MR. MUSSALLEM: You're right, Mr. Member. I'm glad you give me these ideas. I continue on.

it wasn't for the encouragement and foresight of that government there

wouldn't be the direct-current powerline to the Island that went

through ten years ago. There'd be no power on the Island, no Victoria,

no Duncan, no Nanaimo, no Duke Point, nothing. We could not have had it.

But

we could have had an expanding Island today with a gas pipeline which

could have been built for $60 million. Instead of that they tried to

resurrect Ocean Falls. We could have had a pipeline for $60 million,

and now it's going to cost almost triple that amount to put it in. Are

they going to stand up and say the people of Vancouver Island are not

entitled to this pipeline? They've said it already, but they don't dare

say it openly. They say it underhandedly. They say: "You can't afford

to spend that money." The only argument is how the pipeline comes down.

They don't tell you that they killed that pipeline ten years ago —

killed it.

But I want to say that this ministry and that

minister represent the future of British Columbia. The people recognize

it, and we recognize it. We know that we'll go on and succeed, because

our policies are right and our purpose is clear. There never was a

minister in this House who's had the foresight of that Minister of

Industry and Small Business Development. I knew him well. In the

previous government he and I sat back there. Now he's in the

stratosphere, and I'm still here. We didn't know the potential then,

but it has been developed by knowledge and ability and by building on

the foundation that was created. He didn't do it alone, but through

power, railways, gas, mines, resources — all developing and creating

more things for the people of British Columbia. Then you get a

president of a university who writes every member a letter and says:

"We've got trouble here. All graduates are finding jobs right away, but

we haven't got enough people signing in." What a problem!

That's

the way British Columbia has expanded. And that's the minister. This is

the government. Let us have your support, not your kicks. Don't tell us

about why northeast coal won't work. I'm going to tell you: don't waste

your time; it's going to go anyway, like the two-river policy. Five

years from now, when there's ten times the demand for our coal, they'll

be saying how they helped it. Five years from now with five times the

demand, we'll still be using less than 2 percent of our reserves.

Interjection.

MR. MUSSALLEM: Keep it in the ground.

MR. RITCHIE: They want to give it all to Ottawa.

MR. MUSSALLEM:

I don't want to open up that subject, Mr. Member. The resources of

British Columbia belong to the people of British Columbia. I rue the

day when Ottawa gets its fingers on our resources. I hope it never

happens.

Mr. Chairman, before you pick up that gavel.... I

wish you'd use the other side of the gavel, because I like it when you

hit the hammer harder. I want to congratulate the minister on his

efforts and what he's done in the ministry, and to say to him that the

policies of the past extend to the future. Go on and create a greater

British Columbia. Don't listen to these guys.

MR. LEA:

First, I'd like to congratulate the hon. member for Kamloops (Mr.

Richmond) for joining us here. I knew when I first saw that picture and

that beard that he was going to be a winner. People love virility.

think some of the charges that have been made by the member for Omineca

(Mr. Kempf) and the member for Dewdney (Mr. Mussallem) should be

answered by our side, because they are indeed serious charges. They

charge that we on this side of the House do not want to have any sort

of development in this province. These charges, I believe, have some

sort of a political basis. I'd like to think of that positively —

according to Goldfarb, that's the big word. We have to be positive

about everything. What you're supposed to do to win politically these

days is call your opposition negative and say that you're positive. It

appears that's your big plan for elections these days.

Interjections.

MR. CHAIRMAN: Order, please. I'll ask all members of the committee not to interrupt the member who is speaking.

MR. LEA:

I would like to briefly review the historic manner in which we have

developed the resources of this province, because with hindsight you

would think that we could took back on that history and say: "There are

some of the good moves we made" — just looking at it from an historical

point of view — "and there are some of the moves

[ Page 5861 ]

made that aren't quite the kind of moves that we should make today,

because, indeed, we have learned from history." We can look at other

jurisdictions and also learn from their history in the management of

our resources. Basically, the story of resource management in this

province has been knee-jerk and non-planned, and then at the moment

usually for political purposes. I don't lay the blame on any political

party, because it isn't that kind of issue, It's the kind of pressure

we as politicians find ourselves under, regardless of the political

stripe that we are. What happens, Mr. Chairman, is that in order for us

as politicians to appear like we are pushing the economy ahead, we have

traditionally underestimated the value of the resources that we're

dealing with, in order to get the economic deals of the day that we

hoped to make us look good as politicians. That's been the history of

this province.

[Mr. Davidson in the chair.]

It's

amazing when you start comparing the different kinds of industry. For

instance, let's compare manufacturing with resource extraction. One of

the things that the resource companies tell us is that it is bad

economics if we charge them for the product they're going to deal with.

They say: "That just can't be. If you start charging us for the coal,

the trees and those resources in this province, then it just doesn't

become economical to take them out." The manufacturing business should

have it so nice, or the retail business should have it so nice. The

member for South Peace River (Hon. Mr. Phillips) should have had it so

nice when he was in the car business. It would have been nice if the

car manufacturer hadn't charged you for the cars you were going to

sell, but it just doesn't work that way — not in the retail business

and not in the manufacturing business. But according to Social Credit

it only works that way in the resource business. If you start actually

charging the resource companies for the resource they are going to

exploit and sell, then it's bad economics. In fact they say that it's

impossible economics.

What we've done in this province every

time — and our government when looking at projects was guilty of the

same thing as is Social Credit, in my opinion, although not to the same

degree — is that when we start looking at further economic activity in

this province we don't add wealth to the resources, but we start

looking for investment to further widen and exploit the extraction

process. We go in and take more of our resources and ship them out of

this country without any secondary application or any tertiary

application to speak of. Every time we go for new investment in this

province, that's the route we take: further widening the extraction

process, adding no or very little wealth, and then shipping them out.

The

minister and other members have asked for some positive suggestions in

regard to northeast coal. They've mentioned the amount of money — $1.6

billion — that the private sector is going to spend in putting this

deal together. I think that's a good deal. When we can get the private

sector to invest $1.6 billion in this province, that's nothing to be

sneezed at; it's something we should take a look at very seriously. We

also note that the private sector is going to take a very serious look

at a return on their investment. I suggest to the government that we,

the taxpayers, who are going to invest over $1 billion in this project,

should also look at a return on their investment, which the government,

in my opinion, is not doing.

This is what the minister likes

to call profit. He talked about $1.5 billion in profit in the first 15

years of this coal project. I suspect — and the minister can correct me

if I'm wrong — that when he's talking about the profit he's hoping to

realize, he's talking about the jobs that are going to be created — the

money that those workers are going to make and what they purchase; he's

looking at the income tax that the federal and the provincial

governments are going to make; he's looking at the sales tax revenue

that will come in out of this economic activity. Those are the kinds of

dollars that he's looking at and calling profit of $1.5 billion over

the next 15 years. They are dollars that would accrue to the economy

even if we asked for a fair return on our investment in northeast coal.

Almost

every economy in the world today, Mr. Chairman, when dealing with the

private sector and resource extraction, is going into what is called

co-adventuring, where the public sector and the private sector put up

some money and share in the profits of that project. It's called

co-adventuring. It makes sense. Why should the taxpayers of British

Columbia put up almost an equal amount of money but not take a share of

the profits of the project itself? Does it not make sense that if we're

going to put up half the money as taxpayers, we should realize half the

profit? Not just the profit we get from the other areas or the other

returns we get in income tax from the workers, but also from the money

that the workers pay; and we get sales tax from cigarettes, liquor and

gasoline. The minister is using all those revenues from the economic

activity of the proposed development and he's calling it profit.

I'm mistaken, I'd like the minister to stand up and correct me. I don't

think I am. Those are the kind of revenues the minister is looking at

when he talks about the $1.5 billion profit to the country. Those are

moneys that would accrue to the country regardless of whether we, as

taxpayers, got a fair return on our investment in the initial money

investment going into the project.

The minister wants a

positive suggestion. Mine is that if we’re putting up over a billion

dollars, and the private sector is putting up over a billion dollars,

let's co-adventure. Let's go into business with the private sector.

Let's share in the real profits. Then it might be worthwhile for the

taxpayers to invest in northeast coal. Otherwise we're getting the

short end of the stick. We're investing almost as much as the private

sector, and we're not getting anything back except the revenues that

would naturally accrue to Canada and British Columbia through taxation

and economic activity spinning out of northeast coal.

The

member for Dewdney suggests that it is negative for the opposition to

look at these kinds of economic factors in the northeast coal deal. I

think it's our job. I think it's our job as the opposition to take any

proposition that the government puts forward and to go through it with

a fine-tooth comb to ensure ourselves, and therefore the people of this

province, that the deal is a good one for British Columbians. When we

do that, they say it’s negative, and what we should do is positively

support the government regardless of what they're going to do, and

never mind the details. To do that is negative and unfair, according to

them. To do that means you're part of the socialist hordes. I suggest

that to do otherwise means you're part of the fascist gang.

Surely

to God, if the people of this province are going to be equally sharing

in the investment of northeast coal we deserve an equal share of the

profit coming out of that

[ Page 5862 ]

investment

and economic activity. Surely we deserve that. What does the government

say? The government says that's an incentive for the private sector to

invest their money; otherwise they wouldn't do it. Surely we can view

our investment as taxpayers as more than an incentive for the private

sector to put their money in.

MR. KING: It's welfare for people, but incentive for the corporations.

MR. LEA: True, that's what it is.

Surely

we deserve the same return on our tax dollars that we're going to

invest in northeast coal as the private sector deserves. I'm sure that

B.C. Rail would like to get the same return as the CNR or the private

sector. Surely we need that kind of return for future capital expansion

and for operating costs; surely we need it.

Interjection.

MR. LEA:

As my friend to the right points out, the report of the royal

commission on the B.C. Railway, page 79,

part 2,

section 5, says

exactly that on northeast coal, and that the BCR feels exactly that way.

It's

not a case of the opposition being opposed to the concept of the

exploitation and the selling of northeast coal. We are in favour of

northeast coal. What we are talking about are the details around

northeast coal.

AN HON. MEMBER: That's a flip-flop.

MR. LEA: It is not a flip-flop. We are talking about whether

the investment is a good or bad deal for the taxpayers of British

Columbia. It is becoming clear and definitive what both sides of the

House mean when we talk about that. The government talks about the

investment of taxpayers' money as being an incentive. We talk about the

investment of the taxpayers of British Columbia being exactly that — an

investment. Therefore we should get a direct return into the coffers of

British Columbia on behalf of the taxpayers of this province, and not

just the spin-off economy that the minister's talking about. That's

what we should be getting.

I think it's a positive suggestion. The suggestion is that

dollar for dollar that we put up with the private sector, we get

exactly the same kind of return as the private sector gets on their

investment dollar. Is there anyone in this chamber who can say that

that's asking too much? The answer is yes, there is. There's the

minister, the hon. member for Omineca (Mr. Kempf) and the hon. member

for Dewdney (Mr. Mussallem). Those are the people who I can remember

having spoken on this subject who said that the tax dollars we put in,

forget it. Use it as an incentive so that private industry can make

money and profit. They say: "Oh, you over there think profit is a dirty

word." No, we don't. What we think is that if you're going to invest

your money as taxpayers, you have the same right to profit. We are not

here as taxpayers in this province to subsidize the profit of private

enterprise. We are here as people representing the taxpayers of this

province, asking that we get a return on the public dollar investment

in northeast coal. That's what we're asking.

MR. KEMPF: Is 25 cents on the dollar the return that you're talking about? You think government can do it better than the private sector.

MR. LEA:

No. You can co-adventure with the private sector. One of the beautiful

things about co-adventuring with the private sector is that the

government does not have to get involved in the everyday management of

that corporation that is going to be making you money.

MR. KEMPF: Is that what you did with Plateau Mills?

MR. LEA: Oh, shut up, Mr. Half-Maverick Half-wit. Just shut up.

MR. CHAIRMAN:

Order, please. Hon. members, firstly, I would ask the member for

Omenica (Mr. Kempf) to come to order. Secondly, I would ask the member

who is currently recognized by the Chair to....

MR. LEA: I apologize, Mr. Chairman.

MR. KEMPF: I won't accept.

MR. LEA: I didn't think you would.

Let me deal with Mr. Maverick for a while.

MR. CHAIRMAN: Hon. member, we were doing so nicely on vote 126.

MR. LEA: I was doing very nicely until that big mouth went into gear without even looking at the gearshift.

What

we are talking about here is a return on the investment dollar. I was

saying that the most beautiful thing about co-adventuring with the

private sector is that you can draw upon the expertise and experience

of the private sector to manage the project, and the public sector can

get a return on its invested dollar. I, for one, think that if the

government gets into managing everything, it becomes so large that the

bureaucracy is inevitable and you can't manage properly. I believe that.

Interjection.

MR. LEA:

The minister says that what he's suggesting is that we take our tax

dollars, invest them with the private sector, let the private sector

manage it and we get a return. That's what I'm suggesting. What the

minister is suggesting is that we give the money to the private sector,

ask for no return and let them manage it. That's what the minister's

suggesting.

HON. MR. PHILLIPS: What did you do with Swan Valley?

MR. LEA:

Mr. Chairman, I'm not talking about Swan Valley. I'm not talking about

Plateau Mills. If you want to talk about that, I'd be willing to talk

with you any time, any place.

MR. CHAIRMAN: Order,

please. Hon. members, the member currently recognized is on vote 126. I

would ask other members to keep their interjections until they are

recognized and can take their place in debate.

MR. LEA:

Mr. Chairman, it's all right, because I suggest that what I am putting

forward as a positive suggestion to the government is a hard one to

rationally not accept. Because I'm putting forward an argument that is

rationally hard for

[ Page 5863 ]

them

to not accept, they have to resort to going back into their little bag

of tricks and try to bring out red herrings to take me off the subject

and to stop the flow. That's what they're trying to do. Because the

minister is embarrassed in his haste to try to get a deal off the

ground for political reasons, it's all stops out: subsidize, ask for no

return, and everything's fine.

It's amazing. The government

stands up and asks for some positive suggestions: "We may not agree

with them, but would you give us some positive suggestions? But when

they start getting them, they don't want to hear them, because they

can't deal with them. When the minister takes his place again, I would

like him to explain to me and the taxpayers of this province why, when

we're investing tax dollars in northeast coal, it shouldn't be an

investment, but is rather, from his point of view, an incentive to get

the project off the ground — a gift.

It's rather interesting

that three years ago, when visiting the major financial institutions in

England and asking them about investment in this province, one of the

organizations that we visited was Rio Tinto-Zinc Corp. I asked one of

the vice-presidents whether it made any difference to them if they

invested in British Columbia with the NDP in power or Social Credit in

power. The answer over and over again in Rio Tinto-Zinc and in every

one of those financial institutions was: "Not a bit. We see British

Columbia as a good place to invest, whether the New Democratic Party is

in power or the Social Credit Party is in power." If the minister

doubts my word, I'll give him a list of the people we talked to in

those financial institutions, and he can phone them, write them or any

darn thing he wants, because it's true.

[Mr. Strachan in the chair.]

The

vice-president of Rio Tinto-Zinc also said that more and more

throughout the world mining companies are starting to have to

understand that when they're going into jurisdictions that have

commodities and resources that they want, they have to co-adventure.

It's better for them, and it's better for the people who live in that

jurisdiction. It's not only better for the people of this province, but

also for the firms in the private sector that are going to be doing it.

They also like co-adventuring because it brings together two groups who

have a vested interest in making sure that that project is a success

from every angle that you look at it.

I would like to hear

why the minister thinks that it would be a bad idea to treat the

taxpayers' investment in northeast coal as an investment rather than an

incentive.

MR. MACDONALD: Why not give them some equity?

MR. LEA:

That's right. Let's get some equity in northeast coal. That's what I've

been saying. We should have a return on our tax dollar. We should take

an equity position in northeast coal in conjunction with the private

sector, so that we can get a return as taxpayers. Why should we

continue to be the historical boobs that we've been and use incentive

dollars, which are a gift, as opposed to investment dollars, for a

piece of equity that is an investment, especially when the private

sector has shown more than willingness — a desire — to be

co-adventurers with the government of British Columbia? They have shown

it, they will say it, and they will do it.

One of the things

that Social Credit accuses us of all the time is being blinded to

common sense by our ideology. You know, I think that does happen to us

once in a while. But it's amazing to watch the group over there,

because, as I see it, nothing points it out better than an ideology

blinding a group to common sense. You don't have to agree with them,

but you have to respect their belief. Why don't they come right out and

say they believe in subsidies to the private sector, as opposed to

co-adventuring and investing and getting a return back for your dollar?

Why don't they say it? Because they know that the taxpayers of this

province don't like it. That's why.

That's why they're busy

trying to cover up the taxpayers' investment in northeast coal in all

sorts of deals. That's why they won't put it on the table. They don't

believe that the taxpayers of this province will put up with an

incentive subsidy, but the taxpayers of this province will put up with

an investment in northeast coal, to take an equity in northeast coal,

and to get a return on those taxpayers' dollars in terms of dividends,

the same as the private sector.

It's what every modern,

clear-thinking resource economy is doing these days. One of the last

holdouts to a group who are blinded to any movement forward, to any

progressive thought, to any new thought by their ideology, is the

Social Credit government. They cannot see that it isn't necessary. It

isn't something you should be proud of, to say: "I'll never change my

mind." They think it's a sign of weakness to change your mind, maybe

ten years after you've thought of something. They yell at us all the

time. Every time we say, "Lookit, we've thought it over and...." they

point at us and laugh and scream. They think it's a great joke, because

to them it's a sign of weakness to change your mind.

I think

it is imperative that the Minister of Industry and Small Business

Development in this province take his place in this House and explain

to us why Social Credit will not invest money in northeast coal and why

they insist on subsidized incentives. Is it because they are blinded by

their ideology? Does that ideology circumvent common sense? What is it

that makes this government the same as they were in the fifties?

there's one feeling I get looking at the government benches, it's déjà

vu. The attitudes, the words, the programs and the incentives are all

reminiscent of the 1950s. I suggest to you that there are many

conservatives in this province who have gone far beyond the 1950s

mentality that we see opposite. I suggest that's true. I suggest that

there are conservatives today who see co-adventuring with the private

sector as one of the means of developing a province where everybody

benefits and nobody get stung. Everybody benefits.

MR. KEMPF: You'll never win an election in this province.

MR. LEA:

No, we may not, but I'll tell you one thing: we will have served the

people of this province in trying to get them a fair shake on resource

management. If we were only interested in winning elections, then we

could hire a Go