1977 Legislative Session: 2nd Session, 31st Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, FEBRUARY 11, 1977

Morning Sitting

[ Page

859 ]

CONTENTS

Routine proceedings

Travel Agents Registration Act (Bill 21) Hon. Mr. Mair.

Introduction and first reading — 859

Restriction of the Use of Spring Traps Act (Bill M-204) Mr. Gibson.

Introduction and first reading — 859

Committee of Supply: Ministry of Economic Development estimates.

On vote 79.

Mrs. Wallace — 859

Hon. Mr. Phillips — 861

Mr. Wallace — 862

Hon. Mr. Phillips — 866

Mrs. Dailly — 867

Hon. Mr. Phillips — 869

Mr. Macdonald — 870

Hon. Mr. Phillips — 871

Mr. Lauk — 877

Hon. Mr. Phillips — 878

Mr. Macdonald — 879

Hon. Mr. Phillips — 879

Mr. Lea — 879

Hon. Mr. Phillips — 880

Mr. Macdonald — 881

Hon. Mr. Phillips — 881

Mr.Lauk — 882

The House met at 10 a.m.

Prayers.

MR. W.S. KING (Revelstoke-Slocan) :

Mr. Speaker, in the members' gallery today we have a beautiful young

lady from Revelstoke who is Miss Revelstoke for 1977, Miss Rita

Ortwein, and her chaperone, Mrs. Barb Glover. Rita is here to attend

the young people's ball at the Lieutenant-Governor's this evening. I

certainly want the House to extend a very warm welcome to both of them.

HON. G.M. McCARTHY (Provincial Secretary) :

Mr. Speaker, it's my pleasure to welcome Mrs. Nancye Munro, who is in

the gallery today with her colleagues. She is one of our outstanding

education people in the province, and we're pleased to have her with us.

MR. E.N. VEITCH (Burnaby-Willingdon) :

Mr. Speaker, seated in the gallery this morning are representatives of

an order that has helped shape the character and destiny of thousands

of young men throughout North America and, indeed, throughout the

world: first, the public relations chairman for the Order of DeMolay

for the Dominion of Canada, Mr. Harry McWaters, and secondly, the

provincial master counsellor for the British Columbia Order of DeMolay,

Mr. David McDonald. I would like the House to bid them welcome.

MRS. B.B. WALLACE (Cowichan-Malahat) :

In the precinct today is a group of students, a second contingent

visiting from Lake Cowichan Secondary School. They will be in the

gallery later on, and I would like the House to join me in welcoming

them.

HON. W.N. VANDER ZALM (Minister of Human Resources) :

Mr. Speaker, I would like to take the opportunity of introducing to the

House all of the teachers who came from Green Timbers, Surrey today to

participate in this session and also to tour other facilities in the

legislative precinct during this, their professional day. We welcome

them.

MR. L. BAWTREE (Shuswap) : Mr. Speaker, later

on this morning there will be a group of students from the Enderby A.L.

Fortune School, who are down in this area playing basketball. They will

be accompanied by their teacher, Mr. Tom Witherly, and I would like the

House to make them welcome.

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs) : Mr. Speaker,

I ask leave to withdraw notice No. 5, standing in my name on the order paper

under Introduction of Bills.

Leave granted.

Introduction of bills.

TRAVEL AGENTS REGISTRATION ACT

Hon. Mr. Mair presents a message from His Honour the Lieutenant-Governor: a

bill intituled Travel Agents Registration Act.

Bill

21 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

RESTRICTION OF THE

USE OF SPRING TRAPS ACT

On a motion by Mr. Gibson, Bill

M-204, Restriction of the Use of Spring Traps Act, introduced, read a

first time and ordered to be placed on orders of the day for second

reading at the next sitting of the House after today.

Orders of the day.

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

ESTIMATES: MINISTRY

OF ECONOMIC DEVELOPMENT

(continued)

On vote 79: minister's office, $141,324 — continued.

MRS. B.B. WALLACE (Cowichan-Malahat) :

Last night, I asked the minister about his statements last night

regarding DREE — that is, the funding from the federal government for

regional economic expansion. First of all, he misunderstood my remarks

about our research staff. The half-day that was spent was spent by his

staff trying to decide who could tell our people what the answer was as

to how much had been expended under DREE. They finally came up with the

answer that possibly, if they had two weeks, they could advise us. But

he gave me some figures which refer to trade markets abroad. They do

not appear to relate to DREE, and I wonder whether or not he can

respond to that.

Interjection.

MRS. WALLACE :

Well, I'm wondering about that. Perhaps the problem is, Mr. Member,

through you, Mr. Chairman, that the minister doesn't realize that in

order to answer questions he has to listen to them

[ Page 860 ]

first.

The

second point that I would like to raise relates to some comments he

made yesterday about communities having to accept industrial

development. As a case in point, he used the Cowichan Bay area, where

there has been a hearing this week — I don't know if the results of

that hearing are in or not — as to whether or not an area should be

rezoned to allow a shake and shingle mill to go in on the south bank of

the Cowichan estuary.

My concern, Mr. Chairman, is that the

tone of his remarks seems to indicate that the Cowichan regional

district and the people in that area were remiss in their economic

responsibility by not granting the rezoning. I think that for the

information of that minister, and for the information of this House, I

should perhaps take a few minutes this morning to go into the history

of that particular case in point.

Some time ago, the former

government took over an operation at a time when Slegg Brothers had

been forced to close their doors during the preceding Social Credit

administration. Through the efforts of the New Democratic Party

government, a new mill was started in Cowichan Bay under the auspices

and management of Doman Industries. During the beginning of that

operation, and when Doman was preparing to take over the Slegg Brothers

property from Slegg Brothers, they found that Slegg had leased to Rooke

and Rodenbush the rights to have had a shake and shingle mill in that

area on the south bank of the estuary. In order to obtain clear title

to the property, Doman Industries signed a lease agreement with Rooke

and Rodenbush, which guaranteed them the right to operate on that piece

of property.

Later, Mr. Chairman, Doman Industries signed

an agreement with the Environment and Land Use Committee that committed

them to certain standards and certain very firm commitments as to what

would and would not be done in the course of their operation on

Cowichan Bay. One of the commitments to which Doman Industries agreed

was that there would be no development on the south bank of the

Cowichan estuary. They agreed that they would remove the bridge that

went to the south bank and that there would be no traffic on that road

on the south bank. This was part of their agreement. They signed a

lease agreement with Rooke and Rodenbush, saying that they could

operate on the south bank, and in turn signed another agreement — that

was contradictory — with ELUC, saying that there could be no

development on that side. They committed themselves to no development.

Mr.

Rooke and Mr. Rodenbush of the shake and shingle mill, incidentally,

are operating now. It's not all new jobs that would be created because

they transferred their operation to Lake Cowichan at the time when

Doman began to operate there. So it's not all new jobs that are being

created.

Mr. Rooke and Mr. Rodenbush....

Interjection.

MR. CHAIRMAN :

Hon. members, may I suggest that if there is business that requires a

conference perhaps that should be conducted outside of the chambers.

MRS. WALLACE :

As I was saying, Mr. Rooke and Mr. Rodenbush found themselves in the

position of having an agreement with Doman Industries which Doman

Industries was not able to live up to. I understand that Mr. Rooke and

Mr. Rodenbush had intended to take the matter before the court.

Instead, we find Mr. Rooke and Mr. Rodenbush appealing, with legal aid,

to the regional district for rezoning. I wonder if the minister is

aware that during those rezoning hearings, representatives from the

environmental ministry — ELUC — have been sitting in on those hearings.

They realize that if the rezoning does not go through, there could well

be an infringement on the agreement that has been signed by the Doman

Industries with ELUC.

You know, it's a strange coincidence

that that minister should happen to mention that Cowichan Bay problem

because, strangely enough, the major shareholder of Doman Industries

happens to be a director of B.C. Development Corporation, who was named

by that minister to hold that position. It's interesting, too— though certainly it has very little bearing on the case —

that Mr. Doman was one of the guests at the $100 dinner recently held

in the Empress Hotel. As I say, it has very little bearing. Mr. Doman

has every right to his own political....

HON. D.M. PHILLIPS (Minister of Economic Development) : There are a lot of Socreds creating jobs around here.

Interjections.

MR. CHAIRMAN : Order! Order, please.

MRS. WALLACE :

Mr. Chairman, I have never yet engaged in a shouting match with

juvenile delinquents. I don't intend to start now. Will you please call

the House to order?

Interjections.

MR. CHAIRMAN :

Order! Order, please. Perhaps a more moderate selection of words would

be appropriate at this time. The hon. member for Cowichan-Malahat has

the floor.

MRS. WALLACE : Thank you, Mr. Chairman.

My question to the minister is: is his department

[ Page 861 ]

prepared

to push through secondary industry, or any kind of industry, regardless

of local regional regulations and regardless of standing agreements

with the Environment and Land Use Committee? That is my second

question. My first question, just to remind the minister, relates to

DREE.

My third question, Mr. Chairman, relates to a small

operation in the Lake Cowichan area. This operation produces cedar

planters, hanging baskets, that kind of thing. They make a very

high-quality product. It's a small operation and it is operated

entirely by handicapped people. The owner-operator has about 5 per cent

vision. He operates with the help of his wife and two sons. They hire

somewhere between 6 and 12 handicapped people. They have orders

outstanding for thousands of dollars of baskets for next summer— Fairbridge Nursery, Woodward's and Eaton's, I believe, to name a few —

many thousands of dollars of confirmed orders. Yet this government, in

its wisdom, has seen fit to refuse any further funding to them. Because

of this, that operation at Lake Cowichan is going to have to close its

doors.

It's going to mean, Mr. Chairman, that those six to

a dozen handicapped people are going to be put back on welfare. It's

going to mean that that family, which is supporting itself by its

industry, is going to be faced with the problem of trying to sell that

particular industry because they cannot collect assistance as long as

they own that amount of property. It's a depressed market to sell an

industry, Mr. Chairman, and I don't know what that family is going to

do if they can't sell it. I would ask the minister to have a good long

look at that particular instance and see whether or not he can come up

with some funding.

Those are three questions, Mr. Chairman,

three very explicit questions. I would ask the minister if he would be

willing to respond.

HON. MR. PHILLIPS : Mr. Chairman,

with regard to DREE, I don't know where the member called or who she

had calling, but there was no call to my office.

MRS. WALLACE : I can tell you the names.

HON. MR. PHILLIPS :

There was no call to the deputy minister's office; there was no call to

either of the associate deputy ministers' offices; there was no call to

any of executive offices in our department.

However, with

regard to DREE, I think I've stated before that we are negotiating a

new agreement with DREE and hopefully it will be finalized in the very

near future. When it is finalized, it'll probably be one of the best

DREE agreements of any province in Canada.

With regard to

the shingle mill in the member's riding, I don't think that political

affiliation of anybody has anything to do with it when they're trying

to create jobs in British Columbia, when they're trying to provide

employment. I'll tell you, most of the people who are entrepreneurs in

trying to provide employment in this province are Social Crediters, and

I don't think we have to take any flak over that. I don't see too many

people of socialist political origin coming forward to provide too many

jobs for the people of this province. As a matter of fact, all that

group over there did when they were in power was kill initiative and

kill enterprises that would have provided employment in this prurience.

That's one of the reasons that we're faced with such a high

unemployment rate today.

MR. D. BARRETT (Leader of the Opposition) : Calm yourself! Relax!

HON. MR. PHILLIPS :

With regard to the industry, Madam Member, that you're talking about,

I'm not aware of an application, but we'd certainly be most happy to

take a look at it. I haven't discussed this with the president of the

Development Corporation, but if there is a loan application before them

I will certainly be happy to take a look at it. I'm not aware of any

application but we'll certainly give consideration to any loan

application.

MRS. WALLACE : Mr. Minister, I'm glad to

hear you will look at that Lake Cowichan situation, and I can give you

more details later on that one.

In regard to the DREE

thing, there was a call to the deputy minister's office, and I could

give you the name of the person who finally told us there was no way

they could get the information. But I don't think I should finger a

civil servant.

You didn't answer my question regarding the

Cowichan Bay shingle mill. You talk about creation of jobs and try to

say that only members of your political affiliation are interested in

creating jobs. But, really, that mill is already operating. When Slegg

went out of business they moved to Lake Cowichan. They are operating at

Lake Cowichan now; they're going to transfer their operation back to

Cowichan Bay. It's not a creation of jobs. There may be a few more, but

it certainly isn't a creation of jobs, as the minister would have us

believe.

The question I asked the minister was: does he

believe, and is it the policy of his department, to insist upon

establishing secondary or tertiary industry— or any kind of industry —

in a specific area contrary to local regulations and contrary to

agreements duly signed by the ELUC branch of the Department of

Environment? That's my question that the minister did not answer.

HON. MR. PHILLIPS : As I stated last night, communities in the province will have to make up their own minds as to whether they want industry or

[ Page 862 ]

not,

and that's certainly up to the community. I think environmental

standards must be met and I think you have to adhere to rules and

regulations. But don't forget that people make the rules and

regulations, and there are always two sides to every story. My

statement still stands: communities are going to have to make up their

minds whether they want industrial development or not.

MR. G.S. WALLACE (Oak Bay) :

Mr. Chairman, earlier this week I made some comments about the

philosophy of policy of the British Columbia Railway in regard to its

public relations. I criticized it as being a very poor symbol of the

espoused open government which we are reputed to have in B.C. now.

just want to further confirm the fact that although the British

Columbia Railway is a Crown corporation and that we are frequently,

perpetually, being told that all citizens of British Columbia are

shareholders, in fact the British Columbia Railway arrogantly espouses

the idea that it need not communicate any information about the railway

to the public and certainly not to the elected MLAs.

I just

want to quote a conversation which my assistant had with one Mr.

Armstrong, executive assistant to Mr. Norris, vice-president of the

railway. Mr. Armstrong, who, as I mentioned earlier on, we had

attempted to contact to gain information for this debate, finally did

phone back my office. I think this House should know the content of the

conversation. Mr. Armstrong notified my assistant that any questions

that my office wished to ask about the B. C. Railway should be raised

on the floor of the House.

I might just interject at this

point that sometimes it's difficult to ask intelligent questions unless

you have some basic information on which to base the question in the

first place.

MR. BARRETT : Political interference — all questions on the floor of the House. I thought they were independent of politics.

MR. WALLACE : Mr. Armstrong's statement was to the effect that, after all, he wouldn't get any work done if he had to respond to 55 MLAs.

MR. BARRETT : Under whose instructions did he give that reply? He couldn't have done it himself.

MR. WALLACE :

My assistant then inquired as to whether he was suggesting that MLAs'

offices should never contact BCR. Mr. Armstrong replied to the effect

that that was certainly not the case. But that would be no indication

that we would get any answers.

MR. BARRETT : It wasn't that way under our government.

MR. WALLACE :

We can phone BCR and we can ask for information, but really their

policy is to raise questions on the floor of the House, which is fair

enough. But very often the MLA requires some basic amount of background

information before he can really ask questions in an intelligent and

economic way. We're not here to waste time, but we waste a lot of time

having to go in a very roundabout way to try and get the answer to a

certain question. After my comments in the House the other day I had

the opportunity for the first time to speak personally with Mr. Norris,

who is the vice-president. He confirmed to me in discussion that

generally speaking it was the policy of the railway, as directed by the

board.... It is certainly the right of any board of directors to set

their own policy, and I wouldn't question that; I would just say that

it's the wrong policy.

One of the reasons that this debate

is going on so long and one of the reasons that we've had to go through

all the turmoil and tribulation of a royal commission is related in

large measure to attempts by this government and by the B.C. Railway

Crown corporation to hide information which is embarrassing to them. By

hiding the information, the hope is that the problems will be hidden

long enough that this session will end and the railway can go back to

its own inadequate and inefficient administration.

MR. BARRETT : Don't blame it on the staff.

MR. WALLACE :

I'm not blaming it on the staff; I'm blaming it on the policy of the

minister and the board of directors. who have given instructions to

their administrators, such as Mr. Norris and his executive assistant,

not to tell MLAs anything when they phone.

MR. G.V. LAUK (Vancouver Centre) : Backroom government!

MR. WALLACE :

Mr. Chairman, you can't have it both ways. If this government claims to

be open and if it claims that each of us is a shareholder in the B.C.

Railway— and I don't know how often I've heard that said in this House —

you can't have it both ways. If I'm a shareholder, I think I should

have access to all the information that is important in the running of

the railroad. There's nothing more important at the moment than trying

to find out how all these different disputes regarding overruns are

being settled. Some are being settled and some are not being settled.

Some are going to court; some involve meetings with creditors; some are

hanging in limbo. When you add them all up— $2.5 million for MEL, $1.2 million for Ragan Construction, and Keen Industries still waiting for settlement — we're talking about several millions of dollars. I think it is an

[ Page 863 ]

arrogant attitude by the B.C. Railway board of directors to suggest that I can't find out that kind of information.

Related

to this same subject, of course, Mr. Chairman, is the whole question of

political interference in Crown corporations. Back in a report in the

Vancouver Province of January 28, 1976, when the provincial government named six new directors to the B.C. Development Corporation, it said:

"Minister

Don Phillips said in a news announcement in Victoria that it was his

department's policy to phase out appointment of cabinet ministers to

boards of Crown corporations. 'I will remain on the board of BCDC only

for an interim period of 6 to 12 months on a transitional basis. I

believe that the affairs of the corporation should be managed by the

board of directors without interference.'"

MR. BARRETT : Ha! What a joke! What a mockery! Well, that's the end of that.

MR. WALLACE :

"Phillips said the directors will set the policy and direction of BCDC,

and he said: 'I am sure the corporation will play a greater role in

assisting developing business enterprise in B.C.'" A clearer commitment

to the policy of getting ministers off Crown corporation boards of

directors you could not find.

Here we are, more than 12

months later, and I repeat the question I asked the minister the other

day: is he about to step down as a director of the BCR and as chairman

of the B.C. Development Corporation? It would seem to be very much

something we could anticipate in the light of his statement of January,

1976. We have certainly demonstrated in this debate, Mr. Chairman, on

various occasions, that regardless of his well-founded motives— for example, trying to help creditors in Dawson Creek —

he has nevertheless shown the very problems which arise when we have a

minister on a Crown corporation board becoming involved in various

conflicts of interest.

MR. G.R. LEA (Prince Rupert) : The Premier didn't want to be in town for this, did he?

MR. BARRETT : The Premier's not on thin ice on the Rideau canal.

MR. WALLACE :

I would like to ask just one or two specific questions about BCDC. I'm

particularly interested in the statement that appeared on June 30 last

year when the president of the B.C. Development Corporation, Mr.

Duguid, made the statement that it would become the sole agency for the

sale of all provincially owned industrial land. The idea apparently was

to sell the land and provide some cash which could be used to provide

loans to small business, or any size of business, where this was

merited. Apparently the previous policy was that land would usually

only be sold if the land buyer generated some benefits— for example, for B.C. Hydro or for B.C. Railway —

but the idea was that a cash flow might be obtained to stimulate

secondary industry. Now I just wonder if the minister could give us

some general information. Is that, in fact, the policy— that the B.C. Development Corporation should be the sole agency for the sale of provincially owned industrial land?

I'd

also like to know this: in the last year, how many acres of land have

been sold under that policy and what was the total sum of money that

the Development Corporation has acquired? What, has it subsequently

done with that revenue to provide loans or other forms of financial

assistance? Particularly, can we demonstrate a secondary industry that

has been created or expanded in British Columbia as a result of that

policy of selling land and using the cash for loans?

One of

the other statements which I would just like to clarify was attributed

to Mr. Duguid. It relates to a report which appeared in the newspaper B.C. Today

on May 27 last year. He said that the B.C. Petroleum Corporation

revenues will start declining shortly and that the amount of gas which

is available for export at high prices will decline to zero within five

to seven years. Now recently the minister has stated that, particularly

in the north country, the amount of exploration and development which

has been going on and the search for oil and gas have shown an increase

which he attributes to the change of government. I'm not prepared to

argue that one way or another, but this is quite a pessimistic

prediction by Mr. Duguid to the effect that within five to seven years

the revenues will start declining and there will probably be no natural

gas for export at that time.

Now first of all, does that

prediction still stand in February, 1977, or is there evidence to show

that new sources have been found or can be anticipated within that

five- to seven-year period? One of the areas in which, during the NDP

government, we were able to boost our revenue was by trying to adjust

the price of our exported natural gas up to a level which the United

States was paying for its home-produced gas. It seemed to me to be a

very fair and reasonable policy that they should not be acquiring our

gas at any less a price than they were paying for their own.

Another

point that was raised at the same time was the role of coal deposits at

Cumberland. According to estimates there are between 40 million and 50

million tons which could be marketed easily. The minister has made a

great deal of mention about coal and how, basically, it presents us

with a real

[ Page 864 ]

potential

source of large amounts of revenue by selling to Japan and other

countries. What is the present status of plans for the development of

the coal deposit at Cumberland?

There was a controversial

question regarding the boxcar plant in Squamish when the NDP government

moved into this field to try and provide B.C.-produced boxcars when

there was apparently a continental shortage. The concept was that not

only would we overcome that shortage but we would create new jobs in

British Columbia.

I wonder if the minister would care to

bring us up to date with the situation at that plant in terms of how

many cars are being produced. What was the profit or loss in the last

fiscal year? I hope the minister or someone is taking note of these

questions because I think they are very important in helping us, first

of all, to determine whether that project was well planned in the first

place and whether, in the course of time, it has proved successful or

can be changed so that it can become successful.

I'd like

to know how many employees are employed at the Squamish plant and

whether it's operating at a profit or loss. Are there any plans for

expansion at the Squamish plant? What is its present manufacturing

capacity? Is it delivering at the rate that was projected? How many

bids has the plant put out in the last 12 months for contracts and how

many orders has the plant received in the last 12 months? I would like

to know to what degree the plant actively pursues possible orders, or

does it sit and wait to be approached? Does the government plan any

basic changes? Is the plant to continue in Squamish?

In a

more particular situation, the minister in Ottawa recently provided

information at very short notice for a contract. The federal government

was calling tenders for the manufacture of boxcars, and my information

is that the Squamish plant was given an extremely short time in which

to prepare its bid— two weeks, I think, or something of that order.

would like to know the circumstances of that unusual situation. Did

they only find out about the bids being available two weeks ahead of

time or was there any evidence that the federal government purposely

was trying to prevent the British Columbia plant from bidding on this

federal contract? What is the situation regarding that particular

contract? Did the British Columbia plant get its bid to Ottawa on time

and, if so, when are the tenders to be opened, or have they been

opened? What is the outcome?

We have a plant there but we

haven't heard much about it in recent months. But on the one occasion

when I did read about it, it seemed as though British Columbia wasn't

exactly getting fair treatment from Ottawa. Now those might not be the

facts of the matter; maybe the fault lies elsewhere. But I think that

when we've used a great deal of capital to create that plant and to

provide jobs, obviously we have to be very much on the ball to know

where contracts exist that we might be bidding on from the Squamish car

plant.

There is another interesting piece of information

that I had sent to me by a newspaper in the interior regarding a letter

from marketing consultants in Vancouver, stating that they represent

several clients in the province of Quebec who are giving serious

consideration to moving their business to other parts of Canada. The

letter went on to say that the clients range from small private

companies to multi-million dollar corporations which are presently

engaged in light manufacturing, marketing, retailing and distribution.

I don't want to read the whole letter, but basically these marketing

consultants were making it plain that they had been contacted by

variety of commercial industrial concerns in the province of Quebec,

outlining the kinds of enterprises which these people wanted to move

from Quebec to other provinces, depending, naturally, on the

circumstances of the enterprise.

The requirements range

from small retail stores of 2,500 square feet to office space of

various sizes, manufacturing sites zoned for building, or completed

buildings up to 5,000 square feet with potential for expansion to

30,000 square feet, within five years. The letter went on to point out

the importance of proximity to road transportation and all the other

basic factors that anybody would consider when relocating. All I would

like to know from the minister is: first of all, had his ministry or

BCDC had a similar kind of approach, directly or indirectly, from

businesses in Quebec? The last thing I am suggesting is that we should

in any way go to Quebec and start trying to persuade any businesses to

leave.

But what I am saying is that there is this.... I am quoting from the Merrittonian

newspaper of December 14, 1976. I am just wondering whether the

Ministry of Economic Development, directly or indirectly, has been

provided with the same information. If so, what has been the response

by the minister's administration? What is the present likelihood that

if industry in Quebec wants to move, then once again it's a little bit

like the Squamish car plant? Let us be sure that we are first in line

to try and acquire some of the new industries and businesses in British

Columbia.

The particular letter from the marketing

consultants is a little indefinite as to the particular types of,

business to which the letter refers, but there is no doubt that the

commitment to move from Quebec has apparently been made by a variety of

industrial and business concerns.

Earlier on this morning

somebody asked about DREE. I know the minister has already answered the

question. But he did make a statement back in September, 1976. He said

in the Vancouver Province :

[ Page 865 ]

"Mr. Phillips declined to give specifics of British Columbia's

proposal, but said his basis is for the whole province to be designated an economic

development area eligible for federal assistance." Since I found that a rather unusual approach, I just wondered if, in fact,

that is the policy that British Columbia has presented to the federal government.

I just ask: is it realistic to suggest to Ottawa that the whole of the province

be designated an economic development area?

Driving

down to the buildings this morning, I just heard on the radio an

interview with one of the MPs from Prince Edward Island. I understand

that on Prince Edward Island unemployment is 30 per cent. This is just

nothing short of tragedy and disaster for the people of Prince Edward

Island. I just think to myself that we talk about our problems in

British Columbia— and we certainly have them, with an average unemployment rate of 10 per cent —

but is it realistic for a province like British Columbia, with the

assets that we do have, to ask the federal government to designate the

whole province an economic development area? If we do believe in

Confederation, surely a province that should be designated a disaster

area right now would be Prince Edward Island.

I think we in

this House often lose sight of the fact that, while indeed we have our

economic problems in British Columbia, we are a part of a confederated

nation where there are other parts in a far worse plight than we are.

It does seem to me somewhat selfish— in fact, in seems to me very selfish —

if we are attempting to get a bigger bite of economic help from Ottawa

than would be justified for provinces on our eastern coast which are

obviously in a much worse economic plight than we are.

Now that's not to suggest that we shouldn't be a fair participant in all negotiations regarding DREE — again,

I don't want my remarks to be considered entirely negative. I am simply

saying that this remark of the minister's that the whole of British

Columbia should be designated under DREE seemed to me to be

unrealistic. In the light of the economic plight of our maritime

provinces, it seems to me downright selfish.

The minister

didn't say when the negotiations would be terminated, or when we could

anticipate the final decision on DREE, or when it could be made public.

Perhaps the minister would care to comment on that. In other words, to

just quickly rephrase it: are we still asking for the whole province to

be designated? When can we anticipate knowing what the agreement will

finally be?

I don't want to belabour unemployment unduly,

but I think one of the facts that should be set straight is the myth

that a lot of our unemployment problems are related to people still

flowing into British Columbia. That's a myth that I think was recently

exploded by an excellent detailed

article by Alan Merridew, who wrote

an

article pointing out that while British Columbia is still growing,

it's growing more slowly. One of the interesting statistics which he

was able to pin down, based on the receipt of family allowance cheques,

was the fact that in 1975, for the first year, there was a net outflow

of families from British Columbia. This increased in 1976, and the

figure that he was able to pin down was a net outflow of 641 families

from British Columbia.

Now families are only one element in

the whole flow of individuals in and out of the province, and these

figures that I've quoted certainly cannot be absolutely indicative of a

net outflow of the total population. Indeed, there's still evidence

that other persons are coming to British Columbia in greater numbers

than those that are leaving. But as far as families are concerned, Mr.

Chairman, I think the people with young families who have to have

employment and who want employment and want to have a future are the

ones who would leave because of lack of opportunity and a high level of

unemployment. I think that should be a sobering statistic in our debate

on economic development— that in '75 and '76, for the first time in many years, there was a net outflow of families from British Columbia.

This

points up the serious need for development of other types of industry

which don't rely entirely on the problems we have in the forest

industry and the mining industry. I feel that this is one area where

the present government has not realized its commitment when it sought

election that it would, in fact, get the economy rolling and that one

of the main reasons it would succeed in doing so would be to restore

investor confidence and create new jobs.

I wouldn't just

blame the British Columbia government either. One of the headlines I

read with great anguish the other night in one of our newspapers says:

"Dole to Remain First Line of Jobless Defence." What a pathetic

admission at the national level of the complete failure of the federal

government to provide jobs in a productive and positive way!

I say this with no disrespect to our Liberal leader (Mr. Gibson) , who wanted an economic council of British Columbia — I respect his point of view —

but as a person who is not an economist but a layman and a taxpayer, I

look around and look at all the various research bodies and the

Economic Council of Canada and all the sophisticated, highly academic

people who carry out prolonged studies and are coming up with all kinds

of 100-page reports, and then you look at the newspaper and it says

that the dole is to be the first line of defence against unemployment.

MR. CHAIRMAN : Hon. member, your time has expired.

[ Page 866 ]

MR. WALLACE : I'd like the minister to consider some of these questions.

HON. MR. PHILLIPS : I'll endeavour to answer some of the member's questions and I'll go backwards — last questions first.

With regard to the report — and I'm not sure just what report you were referring to — that shows an outgo of population, indeed that was a fact in 1975. I'm not sure of the date on your report.

MR. WALLACE : January, 1977, in the Vancouver Province .

HON. MR. PHILLIPS :

January, 1977? Well, the stats used in that must be outdated, because

the latest population and labour force statistics show that in the year

1976, the labour force grew by 32,000 people. I should say 29,000 of

those were absorbed into the labour force and, of course, the balance

of 3,000 would go on the unemployment rolls. So last year we did have

an increase in population. This is just actual labour.

So I

realize that in 1975 there was an outflow of families, but I think if

you check your latest statistics you'll find that that flow has now

been reversed.

With regard to DREE, when I say it can cover

the whole province I'm talking about a flexible policy whereby you're

not just designating a particular area because the old incentive

programme whereby there are grants made to a particular industry for

locating has been cancelled. That policy has been cancelled by

Industry, Trade and Commerce in Ottawa. They'll run out the ones they

presently have, but it has been cancelled. As I said before, we're

working on a policy. I can't tell you exactly when it will be finalized

but hopefully in the very near future.

I might give you

some figures for the years 1974 and 1975 that compare British Columbia

receipts from the DREE programme and the other four regions in Canada.

British Columbia received a total of $6 per person; the prairies

received $22; the Atlantic regions received $85; Quebec received $19.

So we're moving, of course, to rectify that.

Our agreement

that we're working on, as I say, will be flexible. It can be moved into

any area of the province where industry is going to go to assist in

land. It's not a case of designating it; you're thinking under the old

incentives agreement where you designate the whole province and

industry in the whole province is going to receive grants. That's no

longer the case. If the member looks at it in that light, he'll

understand what we're trying to do.

With regard to

businesses from Quebec, yes, we've received some inquiries. I'm glad

the member stated that he didn't want to see us down in Quebec directly

soliciting business. Those inquiries have been treated in the normal

manner. Some of them come into the department and they're referred to

the Development Corporation, if it's a case of needing land or

assistance.

Interjection.

HON. MR. PHILLIPS :

Not to my knowledge. We're presently negotiating with five Quebec

firms. Three of them elected to move to the United States of America.

Since the Quebec election we haven't really seen any noticeable

increase in inquiries from Quebec. As I say, we will treat inquiries

from Quebec the same as we'd treat them from any other area.

With

regard to Railwest, you've asked some detailed questions. I've noticed

that a lot of the questions you've asked are on the order paper. They

will be answered just as soon as I can get all of the answers together.

But I can share the member's concern with regard to that Railwest

plant. There again, one of the reasons for the royal commission is to

check into all aspects, including the Railwest plant, to determine its

future and where it's going so that this government can have some

guidance and future governments will also have some guidance.

MR. WALLACE : What about that federal government bid?

HON. MR. PHILLIPS :,

We put a bid in to the federal government. I think it eventually ended

up that we were going to be given some consideration about 100 cars.

But we moved, and we tried to put our bid in. One of the unfortunate

things about it is that our price is going to be a little higher

because labour costs in British Columbia are higher and the cost of

getting steel out here from eastern Canada is higher. Of course, we

have a new plant, we have interest, we have everything.

One

of the problems, as I see it, with that rail plant is that it should

have had federal government money in it to start with. Here you have

your rail plants in eastern Canada. The capital costs are basically

written off, and they don't have the amount of interest burden to

carry. With regard to grain cars, of course, they've got all the

tooling done. It costs tens of thousands of dollars to get the jigs

ready to do the tooling, and they have it all.

However,

with regard to tenders we have received, we've received the opportunity

to tender on many railcars, but unfortunately we have not got any of

those outside bids. We've been building railcars for the British

Columbia Railway. We've had the opportunity to put out about 12 bids to

outside firms, and I'd have to get you all the details. We have been

fairly aggressive in seeking orders in other countries but we haven't

been successful.

With regard to the coal at Cumberland and statements made by the president of the

[ Page 867 ]

corporation....

When he made those statements on gas and coal he wasn't really talking

for the corporation. Those statements were made as a citizen. You must

realize that the coal at Cumberland is mainly thermal coal; it's not

coking coal. We're developing policies on that.

With regard

to the number of acres of land, Mr. Member, and the sums of money

involved, that's a detailed question and I'll have to get it worked out

for you. The policy on having one co-ordinator sell industrial land is

so that you don't have B.C. Hydro, B.C. Rail, the Lands department and

everybody running off in different directions. We want to co-ordinate

the efforts. Instead of the Development Corporation just going out and

buying land and assembling industrial parks and so forth, they are

co-ordinating all of the industrial land in the province. That's the

purpose.

Naturally there has been some discussion as to

whether, for instance, an industrial park on a rail site should be

there for somebody who is just going to generate rail traffic or if

it's an overall....

MR. WALLACE : Isn't there a danger in a monopoly like that?

HON. MR. PHILLIPS :

No, you still have individual people out there and developers who are

developing the land. We're not taking it over. It's strictly land

that's owned by the Crown, unless there's an area where a developer

doesn't want to go into a community. The Development Corporation will

go in and help that community. If a private developer wants to go in,

that's fine— we're not running in competition with him. All we want to

do is create industrial land so that it will be here at a reasonable

price when industry wants to come.

We've identified in this

House that this is one of the main problems in getting industry. We've

got that problem right here on the Island. If you want to put an

industry in the Victoria area, could you name me a place where a guy

could move in and get an acre, or even a good lot, and put up an

industry without waiting and going through all of the rigmarole? That's

one of the problems, and that's why I say communities have got to get

together and realize that we've put up just a few too many barriers.

didn't know this information, but I'd like to find out why these

industries from Quebec didn't come to British Columbia. Why did they go

to the United States of America? Now I know the state of Washington is

very aggressive in bringing in industry, and they've made it easy for

industry to come in. Land is available. They have one meeting and clear

out all of the environment and all of the planning and the whole deal.

They have one meeting and they get it all done! I'm telling you, that's

what we have to do in this province.

That's why I say again

that if communities want economic development they've got to get

together and invite it and make it easy for those industries to come in

here. We can talk about one-shot policies and quick-bubblegum deals and

spend millions and millions of dollars to create some employment on a

temporary basis, but it's time we in Ottawa, in Canada and in the

province of British Columbia got together and started doing some

long-range planning— no more of this bubble gum patching we've had in

the last 20 years. Let's plan. Let's get back to some basics and make

it easy for industry and economy to come into the province.

Now

do you think I'm talking pie in the sky? It's all very well, but if we

don't do this we'll be putting bubblegum patches on the economy from

now until doomsday. We may suffer a little in the meantime, but we're

going to have to suffer until we get these long-term policies worked

out. We can have a great outdoors, we can have environmental standards,

and we can have everything, but the two of them have got to go

hand-in-hand. As I said during the election campaign, it's pretty tough

for a guy to go out there and enjoy the environment if he's got an

empty stomach and there's no job. So the two have to go hand-in-hand.

I'll

get the detailed answers on the number of acres and the amounts of

dollars involved for you as soon as we get time to work them out.

MRS. E.E. DAILLY (Burnaby North) :

Well, the remarks and questions I have to give to the minister today

fit in rather nicely with his last remarks. He said that it is

long-range planning that is important for this province. The area I

want to deal with is an area of long-range planning which the minister

has talked about but has given very little detail to the House on.

know the minister is busy talking just now but I would like to assure

him that I intend to make my questions as constructive as possible.

That is not because of the lecture which was delivered to us last night

by the second member for Vancouver South (Mr. Strongman), who I don't

think is aware that if I deliver my questions in a constructive manner

today I will not be emulating the minister when he was in opposition.

was rather ironic that the member for Vancouver South should select the

Minister of Economic Development to lecture us on being constructive.

I'm afraid our memories are not so short that we recall that the

minister who is now being questioned in his estimates was one of the

most destructive debaters in this whole House.

AN HON. MEMBER : And still is!

MRS. DAILLY : And still is. Therefore, it takes a

[ Page 868 ]

considerable

amount of self-control by most members over here to try and be

constructive, Mr. Member, when we realize what we were subjected to by

that minister throughout our three years of government. I just wanted

to make the point to the member for Vancouver South, that if you're

going to deliver such a lecture perhaps you might pick one of the other

ministers who, when he was in opposition, was perhaps not quite so

destructive as the minister we are now dealing with.

As I

started off by saying, I do wish to be constructive. We have a

responsibility to be so. I was glad that the minister talked today

about long-range planning. So the area I wish to deal with is the plans

in the whole area of the northeast coal development. I think that the

public has a right to know more details about this plan. The minister

said a few moments ago that we can't spend millions and millions of

dollars without knowing that it is going to benefit the people of this

province.

We have listened throughout the last few days to

the minister evading a number of specific questions that are going to

create an aura around his department and himself that what the public

doesn't know about his department will not hurt the minister. So I

certainly hope that when we get into the specific questions I have here

the minister will show us that the aura being created around his

department is not so.

The questions I want to deal with,

Mr. Minister, are that we understand that you have been involved in

this project since you came into your position as minister. This means

that for more than 14 months your department has been working on the

plans for the northeast coal development. Yet there's been very little

information given out to the public or to the members of the

Legislature.

First of all, I think what we would like to

know is just how many technical studies are being carried out. Our

understanding is that there is a tremendous amount of committees in the

department and outside involved in this northeastern coal development

project. We understand that your department is working with

Environment. They're working with Highways, Mines, B.C. Rail, Canadian

National and also Hydro. What we'd really like to know, first of all,

is what kind of a co-ordinating process is taking place in his

department. Maybe you could share that process with the House. We know

there is, may I say, almost a proliferation, perhaps, of technical

committees. We're concerned— and I'm sure the minister can allay that concern — that there be purpose to all these committees and subcommittees. What is the goal?

Then I would like to ask the minister: could he indicate — and this is so important to all of us —

the kind of general costs that are being considered with respect to the

northeast coal development? I realize that some of these questions may

be somewhat detailed, but perhaps you could at least give us an

estimation, after 14 months of study by your department, on what the

general costs are that are being considered for this big development.

I'll

pose some smaller questions, and if they're too detailed, I can put

them on the order paper. But I would hope the minister would at least

answer us as to what the general costs that are being considered for

this development are. Can he give us some idea of the cost for the

development of the proposed townsite that, of course, is going to

involve the utilities, the streets and community facilities? What are

the costs, or estimates, at least, of access, of highways and of

railways? What are the estimated costs of bringing power into the

townsite and into the mining area? What sort of cost-sharing with the

companies is being contemplated with respect to the townsite costs? I'm

sure that after 14 months of constant study and all these committees

there must be some answers for the public on these questions.

question which really concerns the opposition is this one: in all your

discussions, are you providing, Mr. Minister, guarantees to the

companies that there will be no increases in coal royalties? Is this

part of your overall plan— to guarantee that there will be no increase in coal royalties to the companies?

view of the fact that we are facing one of the most serious

unemployment problems this province has ever seen, I think a question

that should and must be answered by the minister is: when we are going

to be spending millions, apparently, of the public's money on this

project, what is the projected number of jobs prior to 1985 which has

been estimated by his department? After all, if the public is going to

pay, we certainly....

As the minister says, he's concerned

about employment. If he's concerned about employment, we hope that this

project which he seems to be endorsing is going to produce employment,

and we're not talking about 200 or 300 jobs for a multi-million dollar

project. I would certainly hope not.

I have another

question, Mr. Minister, regarding the coal development: what kind of

assurances have you got from the Japanese that the minimum necessary

volume of coal will be purchased by them? Really, what I'm asking is:

is a basic amount necessary to be purchased by the Japanese to make

this whole project viable? Then, Mr. Minister, when you were in Japan,

at the time you failed to obtain a steel mill — which we are aware of —

did you get formal assurance on the selling of the coal? Do you have

any assurances of aid from the CNR, either capital or construction

financing aid?

We know you've been working with the

Ministry of Environment, and I see the Minister of Environment (Hon.

Mr. Nielsen) here. Will the environmental impact studies that have been

[ Page 869 ]

undertaken

regarding this development be made public? Will you make public all the

basic economic studies that have been undertaken? Will the basic

transportation studies that have been undertaken be made public?

Most

importantly, the big question in all our minds is: have cost-benefit

studies been undertaken by your department? There's no question that

the cost of this development will be enormous— roads, railways, power

extension, the new town, the mines themselves. What we really want to

know, Mr. Minister is: with the massive development being projected

from your department on this scale, how does it all balance out against

the benefits? Mr. Minister, we do feel that you owe it to the members

of the Legislature, and to the public, to give us a basic picture of

the status of this development. I'll sit down and wait for some answers.

[Mr. Veitch in the chair.]

HON. MR. PHILLIPS :

I'm so glad to see the opposition interested in the northeast coal

project. It's just too bad, Mr. Chairman, that for the three and a half

years they were in government they weren't very interested at all. None

of the studies were done that should have been done or they would have

had these figures and facts themselves. We had to start almost from

scratch to do the studies on all of the items that that member just

spoke about.

MR. LAUK : Nonsense!

HON. MR. PHILIPS :

You know that we spent well over $3 million on those studies last year

just to determine the very questions you asked in this House.

But

as I say, Mr. Chairman, it's sort of amazing to me that, all of a

sudden, when they sat on those projects for three years and talked in

this House about welfare to the coal companies, and the member for

Vancouver Centre (Mr. Lauk) has said, "Oh, the infrastructure's going

to cost $700 million"— I think he had it up to $1 billion once — I

thought he had all the answers. When the member for Vancouver Centre

starts talking in this House he's got all the answers. You knew it all

then. You did nothing while you were in office, and now you start

standing up wanting detailed studies all of a sudden.

Well,

I can appreciate your concern. We will advise the public in due course,

when all of the studies are completed and when we finish our

negotiations with Ottawa. We'll advise the public of all of the

benefits and so forth.

But as I say, if you're so

interested in all these figures, why didn't you have your Minister of

Economic Development do something about it when he was in office? You

just sat there like a hen trying to hatch an egg, and nothing happened.

You didn't do any studies. The minister ran around the province making

great statements about a great development, but no studies were done.

You didn't do any transportation studies. You didn't do any studies of

the cost benefits. You didn't identify where a town site should be. You

didn't say where the roads would be. Rail studies that we've had to do

this year, and that we have to continue to do this year, may even set

that project back a year. Those rail studies should have been done two

and three years ago.

SOME HON. MEMBERS : Oh, oh!

MR. LAUK : Now the retreat.

HON. MR. PHILLIPS : Oh, retreat nothing! I'll tell you, you sit there and you can talk about the retreat.

MR. LAUK : You're nothing but a puff of wind.

HON. MR. PHILLIPS :

You can talk about the retreat. All your Premier could do was stand up

and make statements in this House, which couldn't have been further

from the truth, about having an agreement with the coal companies to

get an additional dollar per ton. Nothing could be further from the

truth!

You know, it's all very well to stand up and ask for

all of these detailed studies. You want all the plans. We'll get them.

We're working on the deal; we're getting very close.

MR. LAUK : You're not working on any deal. You don't even know your own phone number.

HON. MR. PHILLIPS :

You know, it's also amazing to note that in the southeast several of

those projects which almost ground to a halt during that three and a

half years are now showing great aspirations and are coming on.

We'll

make sure that the markets are identified. There will be massive

investments by the private sector, and there will be some money put in

by the federal and provincial governments on infrastructure. The one

thing you have to remember is that all we're doing is creating

infrastructure which would be necessary whether you put a new pulp mill

in Smithers or whether you put a new mine in Terrace. A basic function

of government in communities is to provide that infrastructure.

you're to have an increase in population, if you're going to have

people gainfully employed, you're going to provide that infrastructure

no matter where they go, but you want to identify this as something

extra. If there was some pulp mill going outside the community of

Chetwynd, for instance, the government would have to build new

hospitals, they'd have to build new schools, they'd have to help

[ Page 870 ]

the town of Chetwynd provide that infrastructure — water

systems, sewer systems, and so on. You try and build this up as though

this is something different. No matter where people go in this

province, the government is going to have to provide infrastructure and

those basic services. It doesn't matter whether it's in the northeast,

the southeast, or the top of the Island— no matter where you go.

When we built that great railroad into the Peace River country years ago — you remember, in 1958-59 — did we have any identifiable tonnages that were going to come out of that area?

AN HON. MEMBER : No.

HON. MR. PHILLIPS : No, but there was a potential there. Look what great economic development has taken place in that area since that time —

six new pulp mills, all kinds of sawmills and great development. The

city of Prince George grew from 17,000 to 70,000, with a trading area

now with something like a quarter of a million people all gainfully

employed. That's the type of long-range planning this government is

doing.

MRS. DAILLY : Is the minister telling us then

that after 14 months of a study on the northeastern coal development,

with I don't know how many subcommittees and committees and technical

advice, he cannot give the answer to this House to one question which I

posed to him?

I recall once the minister referring to

another minister in the House as "a little toy train moving all over

the place backwards and forwards." I think the minister recalls that

debate. Well, the minister reminds me of a little toy train that is

just wound up and is going nowhere. It's broken down completely. He

came in with a great lot of noise and he has flim-flammed this last

answer again. I've sat in the House long enough to know that the

minister can get up and talk and talk and talk and talk and say

absolutely nothing.

Mr. Minister, I can assure you that the

public of B.C. is going to be very nervous with that explanation you

gave, because for all we know you could be committing this province to

millions and millions of dollars for a project which you don't seem to

know anything about but which your department has worked on for 14

months. I had given you some very specific questions. If you cannot

answer them after 14 months, Mr. Minister, you are incompetent and you

should leave your position.

HON. MR. PHILLIPS :Well,

the member already knows the answer to the question, because we've

stated publicly the need for investment of approximately $500 million

by the governments. That includes railways, all the infrastructure, and

so forth. That 'could be high. It depends on where the actual roads go,

which has not been determined; it depends on where the actual railway

will go. There are still ongoing negotiations; we haven't finalized it.

It also depends on what mines come in, when and so forth. In that

you're looking at rail access, road access, port development,

navigation, airport communications, community development, townsites,

regional impact on existing communities, human resources, manpower

supply and manpower training.

Yes, we've had a committee,

and the committees are all being co-ordinated by the coal committee of

cabinet. They include Environment, Labour, Energy, Transport and

Communications, and all of the departments of government that would be

involved in that.

As I say, during the past year we've been

doing these studies, so we know where we're going. We're getting down

to the wire where some hard decisions are shortly going to be made. As

I say, we're negotiating with Ottawa. All of the moneys won't be spent

until they're accounted for, and those decisions will all have to be

made.

MR. A.B. MACDONALD (Vancouver East) : I'm not

going to be angry with this minister. I admire him above all in this

House for the straightforward way in which he dodges the questions.

(Laughter.) I'm tempted to get angry, but I can't do that.

Sukunka, you say we did no studies, Mr. Minister. Did you know that we

sent a shipment of coal to the British Isles for testing a long time

ago? I don't want to make a political speech about that minister, but

he lost the steel mill. Now you've said that you've got more rail

studies and Sukunka might be another year down the track. I think

you're backing down from that project and I think it's a shame because

we should expect more.

Anyway, I want to ask you, through

the Chairman, about the $2 million advanced to Quasar, because I asked

on Wednesday and I haven't had any answer. You announced on August 11— $2 million to Quasar for testing and recompletion of wells. I want to ask you now some specific questions about it.

First,

who made the decision to give Quasar Petroleum $2 million of public

money? Was it the cabinet? Was it the Minister of Economic Development?

Was it a resolution of the directors of BCPC? Or was it an

administrative-managerial decision? That's question one.

The

second question is, was there an agreement made with Quasar covering

that advance? Was it in the form of a signed agreement, a letter, or

what? Will the minister table that agreement?

The third thing I want to ask.... Well, I'd like to stop there and let the minister answer those

[ Page 871 ]

questions, and then I've got some more on the same subject.

HON. MR. PHILLIPS :

Well, Mr. Chairman, the member who just spoke, and who was in charge of

the Petroleum Corporation, seems to have a very short memory, because

he knows full well that the British Columbia Petroleum Corporation

would make that decision. They made the agreement with Quasar. They've

handled all the documentation....

MR. MACDONALD : The board of directors?

HON. MR. PHILLIPS :

The British Columbia Petroleum Corporation. If you're trying to say

that I was involved in this, you're absolutely, positively wrong. I

have told you of my involvement in this. I had the Department of Mines

and Petroleum Resources and the British Columbia Petroleum Corporation

before the economic planning committee of cabinet. I said: "If there

are not reserves enough in there to warrant a pipeline at the present

time, tell me how much reserve you have to have because there is a

field of gas in there...." The figures have changed a lot, you know,

and there will be a report published with regard to reserves very

shortly by another company in there.

I said: "Look, it's plain and simple: if there isn't enough gas

there now to warrant a pipeline, tell me how much more gas you've got

to have. But if it's possible to build a pipeline, let's get on with

the job.If it's not, say how much more, because it's going to be very difficult

to get any more exploration or any more money spent in that area until somebody

can see something at the end of the tube." All the negotiations on this

whole deal were made by the Petroleum Corporation. They advised me what they

were doing, and I made the announcement. It's as simple as that.

MR. MACDONALD :

The minister made the announcement, and you had the advice at that

time. Was there a contract with Quasar? Can you not answer my

questions? They were specific.

HON. MR. PHILLIPS :

Mr. Chairman, I would suggest if that member has specific questions

about the Petroleum Corporation he should ask the Minister of Mines and

Petroleum Resources when his estimates....

MR. MACDONALD : But you made the announcement.

MR. LEA : Why did you make the announcement? Why?

HON. MR. PHILLIPS : I told you I made the announcement. Certainly I made the announcement. It's in my constituency.

MR. MACDONALD : Oh, oh!

MR. CHAIRMAN : Order, please.

HON. MR. PHILLIPS :

Oh! Did the member not make an announcement when it was in his

constituency? I was the person who had the Department of Mines and

Petroleum Resources move before the committee.

MR. MACDONALD :

Well, Mr. Chairman, this press release didn't recite that it was made

by the member for South Peace River; it said "the Minister of Economic

Development." It is very interesting that the minister should now say

that it was in his constituency, and that when $2 million of public

money was given to Quasar Petroleum, he was really acting on a

constituency matter as the MLA for the area in making this big

announcement. Because, you know, up to now we thought you were acting

as Minister of Economic Development. That's what your press release

said. That makes it very interesting, Mr. Minister, as to why a

minister of the Crown should be taking up, in a constituency way, the

advance of $2 million to Quasar Petroleum. He now apparently knows

nothing about it except that he's been advised things that he won't

tell the House.

The Quasar connection goes back a long

time. I mentioned the road and how you had met with the Quasar people

in Calgary and then came flying back into the Minister of Highways'

office— "Please help these people out!" — and how you appealed to the

Premier. Here, in November, 1973, in question period, to invest money

in the Quasar Petroleum Company. Do you know what the Premier replied?

He said: "Are you touting?" He asked you a question: "Are you touting

for that company?" Now you say you made this announcement because it

was a constituency matter, not as Minister of Economic Development.

want to know how many meetings you had prior to that announcement with

J. Kenneth Groves, to give him his proper name, who is vice-president

in charge of operations of Quasar Petroleum for western Canada, and

what meetings you had. I want to know whether you've had any business

dealings.... You know this is a constituency company, eh? Have you, in

your own business dealings, had dealings with Quasar Petroleum— sales of cars, anything of that kind? I'm asking these questions very specifically because, Mr. Chairman — and I want to make this very plain....

AN HON. MEMBER : A little lower.

[ Page 872 ]

MR. MACDONALD :

No, no, we're not going away here unsatisfied. When $2 million of

public money is spent, and the minister who makes the announcement

comes into the House and says he doesn't know anything about it— he doesn't know whether it was a decision by cabinet or by the directors of BCPC.... Let's eliminate them, eh?

Was

there a directors' resolution to BCPC? Was there any contract? The

figure itself is ridiculous. To give $2 million of public money— through BCPC, it's true —

that otherwise would have gone into the public treasury of the

province, and to give that money out to a private company.... For what?

It was for testing wells, which the minister says he asked the Ministry

of Mines and Petroleum Resources to do, not the Quasar company.

And how do you test the well? You put a gauge and a valve on it and flare some gas off and take the pressure. What was the cost — $2 million? Boy, that's an expensive testing job, Mr. Minister! I want to be sure that what we're hearing is correct —

that the minister who grandly made this big announcement last August is

coming in and saying, in effect, that he knows nothing about it and

that he was doing it as a constituency favour for a company in his

riding. That's what we're hearing, and the answers are simply not good

enough. I want specifically to ask the minister about his meetings with

the people from Quasar Petroleum prior to that announcement on August

HON. MR. PHILLIPS : It's amazing how that lawyer

from Vancouver East tries to weave so much intrigue around this deal.

It really is disappointing to him and, I am sure, to that group over

there that we have a judicial inquiry into this affair. I am sure they

are very disappointed because they wanted to bring in a lot of smear

and smut, and they have tried to do during this session. I can

understand their disappointment, because it might come out at this

inquiry how they killed that project. That member gave instructions to

the British Columbia Petroleum Corporation to kill that pipeline. He's

afraid that's going to come out. They wanted that pipeline killed at

any cost, and that member wrote to the people in the British Columbia

Petroleum Corporation and said: "Don't you make any deals. We don't

want that pipeline to go ahead. We don't want the employment created.

We don't want the results of the natural resources of this province to

go to the people. We want them left in the ground forever." And this

member stands up and tries to weave some.... I'll tell you, I hope it

all comes out at the inquiry. All the questions that this Vancouver

East lawyer is trying to bring out here— how many meetings I had — will all come out in the inquiry.

Interjections.

MR. CHAIRMAN : Order, please. The hon. minister has the floor.

HON. MR. PHILLIPS :

Your questions will be answered. I hope they go back into it and find

out how you interfered. You and your Premier and your Minister of

Economic Development interfered with the construction of that pipeline.

What is the difference of me announcing a pipeline and announcing a

pulp mill or a coal deal? I suppose that you're going to try and

involve me somehow and say: "Oh gosh, that member announced a coal

deal! Did he have a meeting with Denison Mines? How many meetings did

he have? Do you do any business with Denison Mines?" How low do you

want to go?

Interjection.

HON. MR. PHILLIPS : Well, you go ahead.

The

thing you're so disappointed about, Mr. City Lawyer, is that we have

moved, and moved surely. The whole deal will come out and you'll be

very disappointed. I know all your involvement in the whole deal, so

you go ahead and you try and make your headlines in the paper. The

people in the province will know and the people in my constituency will

know what's going on. The people also know.

MR. BARRETT : Would you answer the questions?

HON. MR. PHILLIPS :

I had not intended to get involved with the British Columbia

Development Corporation and the past history of that Development

Corporation, but when certain statements are made on the floor of this

House by the member who was in charge of the Development Corporation I

just have to bring out a few facts so that the public of British

Columbia will know the sad and gory history of that corporation until

we had a board of directors of independent businessmen in there who ran

it like a company.

Now first of all, Mr. Chairman, the

first financial statement issued by the Development Corporation for the

year ending March 31, 1975, showed a provision for losses on loans in

the amount of $75,715. That was their first report. That provision for

bad loans was approximately one-half of the actual bad loans that

existed at that time. The member stood in this House and said that they

were trying to mislead the public of British Columbia by saying that

they were processing and had processed approximately 20 loans a month—

as much as to say that we hadn't processed any. There were 25 loans

processed in the first year and, to my arithmetic, that's approximately

two a month. They had loans outstanding and put out $3,724,300.

Now the other thing, Mr. Chairman, that the

[ Page 873 ]

people

of this province should be advised of is that in their first two years

of operation, there were no outside auditing firms. They did their own

auditing. Not until we went outside and got Campbell Sharp in to do an

independent audit were we really sure exactly what was going on.

In the second year of operation...

MR. LAUK : Do you withdraw it now?

HON. MR. PHILLIPS : ...in the second year of operation...

MR. LAUK : Do you withdraw that now or later?

HON. MR. PHILLIPS :

...in the second year of operation.... I'm saying there was no outside

auditing firm. We went outside and got an outside auditing firm.

MR. CHAIRMAN : Order, please. The hon. minister has the floor.

HON. MR. PHILLIPS : Now in the second year of operation to March 31, 1976, when we had it just for the last third....

MR. LAUK : You're irresponsible.

HON. MR. PHILLIPS : Would you please tell that member to be quiet?

MR. CHAIRMAN : Order, please. The hon. minister has the floor.

HON. MR. PHILLIPS :

You know, it's all right for him to get up and yack in the House and

spread smear and smut and innuendo. I'm talking facts here in the House.

MR. LAUK : You're not telling the truth.

HON. MR. PHILLIPS : Well, you'll have the opportunity to say so. Just be quiet, will you?

MR. CHAIRMAN : Order, please. The hon. minister has the floor.

Interjections.

HON. MR. PHILLIPS : Will you please be quiet? We got an outside auditing firm to do the audit of the company and to carry on. In the second year —

and recall that in the first year there was only $75,715 set aside for

bad debts, which I said was approximately one-half of the existing bad

debts at that time— that figure had increased to $374,285. The total

for the first two years of operation, during which they were in control

of that corporation, was approximately $450,000. At the end of the

second year, there were 72 loans out in the amount of $7,588,500.

Mr.

Chairman, the member talks about letting out loans and so forth. Do you

know that seven of the first 25 loans that were put out by that

corporation went sour and could cost the taxpayers of this province

$1.4 million?

Interjections.

HON. MR. PHILLIPS :

We definitely will lose over $700,000. We got an auditing firm, Mr.

Chairman, that has experience in land deals so they would know what

they were doing.

With regard to the land policies of that

corporation, they really didn't have any. There were no accurate

estimates of cost when they went in to do a land development and there

were no proper accounting procedures. There were no detailed and

comprehensive budgets, no detailed engineering work and no construction

planning. Sales of land were just projected. They went in and they just

moved around and did a development— no estimates, no bids, no nothing.

There

has been a lot of talk about the Dawson Creek land. I want to tell the

House, and I want to tell the public of British Columbia, that the city

of Dawson Creek has submitted approximately five proposals for the

Development Corporation to assist them in assembling industrial land in

that city. None of them were accepted by the Development Corporation.

All of them were submitted by the city of Dawson Creek and not by the

member. The fifth one, which the member is trying to smear with

innuendo and smut and false accusations, was decided by the board at a

meeting in Prince Rupert. I was not even at that board meeting because

I could not attend that board meeting in Prince Rupert that day. So he

smears me with innuendo and smut that I did something. That was an

independent decision made at a board meeting when I was not even there.

I hope the member will stand up and apologize.

MR. G.H. KERSTER (Coquitlam) : He's got to crawl out of the gutter first.

HON. MR. PHILLIPS : All of the proposals have been made by the mayor and city council. The purchase was authorized by the board in my absence.

just want to say one thing, Mr. Chairman: the British Columbia

Development Corporation board now doesn't just sit in a cushy office in

Vancouver. They move out in the province and they hold meetings

elsewhere in the province so they will know what is going on in our

great province. As I said before, we will look at proposals from any

municipality.

With regard to Aspen Lok-tite, with which the

[ Page 874 ]

member

has tried to involve me in some conflict of interest, the loan was

authorized by the executive committee up to $200,000 and was ratified

by the full board, providing that Aspen Lok-tite would meet certain

criteria.

MR. LAUK : Why didn't you say that yesterday?

HON. MR. PHILLIPS :

Well, you had all the minutes. You knew all the facts. You were so

smart. You stood up in the House and did all the innuendo. You've got

the minutes of all the meetings. You're so smart. Why did you not tell

the truth in this House? You wanted to wallow in the gutter. You wanted

to wallow in the mire of your own bureaucracy. Wallow in the gutter— that's what you wanted to do!

MR. BARRETT : Goodness gracious!

MR. CHAIRMAN : Hon. minister, would you kindly address the Chair, please?

HON. MR. PHILLIPS : Yes, Mr. Chairman. The loan was left in the hands....

MR. LAUK :

On a point of order, Mr. Chairman, on several occasions this individual

has stated that I made false accusations, that I'm wallowing in the

gutter, and so on and so forth. That's unparliamentary and the minister

should withdraw those remarks. He still hasn't answered the legitimate

charge that he's in a conflict of interest. Now answer it! All he's

doing is proving what I said.

MR. CHAIRMAN : Hon. member, when unparliamentary words are used and they escape the Chairman's notice they must be complained of immediately.

MR. LAUK : That's what I just did!

MR. BARRETT :

On a point of order, Mr. Chairman, the member for Vancouver Centre is

complying with the rules of the House by bringing to your attention

words just uttered by that minister. The member has asked for

withdrawal and, by the rules of this House, the minister should be

asked to withdraw.

MR. CHAIRMAN : Will the hon. member repeat the words, please, that are offensive to him?

Interjection.

HON. MR. PHILLIPS : Mr. Chairman, if I've said something unparliamentary, I certainly apologize for it and withdraw it immediately.

MR. CHAIRMAN : The hon. minister withdraws.

HON. MR. PHILLIPS : I certainly don't want to bring myself down to that member's level.

MR. LEA : For you it would be a step up.

HON. MR. PHILLIPS :

Mr. Chairman, the loan was authorized. After being ratified by the full

board the loan was left to the discretion of the president, if the

company could meet certain criteria. The loan was not cancelled by the

board and by the NDP members on the board. That is completely and

utterly not true.

MR. LAUK : Will you resign if it is?

HON. MR. PHILLIPS : But that's all right, Mr. Chairman. It's all right for him to make these statements.

[Mr. Schroeder in the chair.]

HON. MR. PHILLIPS :

Now, Mr. Chairman, we have directors on the board from the interior; we

have directors from the Island. The entire province of British Columbia

is represented on that board.

Interjections.

HON. MR. PHILLIPS : I'd just like to say, Mr. Chairman, if you would keep order in the House, that here is a case....

MR. CHAIRMAN :

Hon. members, the minister has asked for a little more order. If we

could just have an observance of that on both sides of the House, I'd

appreciate it.

HON. MR. PHILLIPS : Here is a case,

Mr. Chairman, of another instance where a wasting natural resource

could possibly be used. We certainly want to do everything we can to

see that if there's any way possible we can use Aspen, we certainly

want to. There are some technical difficulties at the present time with

that particular loan application, but hopefully someday they can be

ironed out and we can start to use....

Now, Mr. Chairman, I

want to say just a couple of more words about the accounting procedures

of the British Columbia Development Corporation. A decision was made— I guess it was a political decision, because we have to recall that the board was run by politicians at that time —

to develop some land in Prince Rupert. Before they went in there to

develop that land, Mr. Chairman, there was no budget for the

development of the land; there were no realistic figures whatsoever.

There was no subdivision approval even applied for in the city of

Prince Rupert

[ Page 875 ]

not even a subdivision. In other words, they just went in with a

bulldozer, there was no tender let, and they started moving land.

Now

we have set up proper accounting procedures where the cost of loans and

industrial projects are separated from the costs of developing lands.

Now we have rigid accounting. Before we move in to do anything, we're

going to know what the costs are going to be at the other end. They had

no idea what the costs were going to be. I don't know where they got

them, but in some cases the costs were double. They had no control on

the costs of developing their land. We're still receiving back bills on

that development up in Prince Rupert.

Now in order for that

corporation to find out where they were going, evidently four of the

directors and some of the people on the Development Corporation went

over to Europe. I understand that they toured Sweden to find out what

Sweden was doing in ways of developing industrial land. I just have to

ask the House why they spent $16,000 going to Sweden when they could

have gone south of the border to a successful country, a country that

has been successful in developing land, successful in bringing in

industry, successful in many other things. Why couldn't they have gone

south of the border and got some experience from somebody who knows

something? But no, they had to travel to socialist Sweden.

One

member of the staff went all the way to Hawaii to find out how dredges

work, with the thought of buying a dredge. Now there's lots of dredging

done in the United States. I don't know why he had to go to Hawaii, but

that was all done while that member over there from Vancouver Centre

was in charge of that corporation.

Now, Mr. Chairman, we

have adequate accounting procedures. We budget, we do proper

engineering and we know what the costs will be. Unfortunately, that

development at Prince Rupert is going to cost in the end about $70,000

an acre, and I doubt if we'll be able to sell it for any more than

$50,000 an acre. So that's the type of thing that was going on under

that member for Vancouver Centre.

The other point about

that Prince Rupert property is the area that was highlighted by

engineering as the most difficult to develop was the area they went in

and developed first. Instead of going in to the easy area so that they

could get some cash flow going, developing it and putting it in the

hands of industry so that they could use it, they went into the most

difficult area first.

Now, Mr. Chairman I didn't want to

bring all of this out, and I certainly won't go any further. But I do

want the public to know that we have taken hold of the Development

Corporation. We've instituted new procedures, engineering, accounting

and the whole deal, so that the taxpayers of British Columbia will have

their money protected.

MR. LAUK:

The minister made an inaccurate statement in this House, and I asked

him if he would resign if that statement was not true. He didn't answer

me because he knew the statement, when he was making it, was untrue.

quote to the Chairman of this committee; minute 23176: "It was resolved

and unanimously carried by the board of directors of the Development

Corporation on October 29, 1976: the authorization of the loan to Aspen

Lok-tite Components Ltd. and the same is hereby rescinded."

MR. BARRETT : You're not telling the truth.

MR. CHAIRMAN : The member makes a correction.

MR. BARRETT : A correction! He should resign! He's deliberately misleading the House!

MR. LAUK :

Make a correction! These are absolutely irresponsible statements made

by that member in this House. Talk about wallowing in the gutter!

MR. CHAIRMAN : Order, please.

MR. LAUK : This minister consistently, while he was a member of the opposition, said anything that came to his mind.

MR. CHAIRMAN :

Order, please, hon. member. Would you just give me a moment? I must ask

you to retract the statement "deliberately misleading."

MR. BARRETT :

How can I? I was here and I heard him deliberately mislead this House.

The member has now proven the fact that the member did not tell the

truth to this House.

MR. CHAIRMAN : Order, please.

The hon second. member for Vancouver East (Mr. Barrett) has been a

member of the House for far longer than the Chairman has...

MR. BARRETT : Yes, and I've never heard such distortions in my life.

MR. CHAIRMAN : Order, please...and knows full well that such remarks must be withdrawn. I ask you to do so.

MR. BARRETT :

Mr. Chairman, if you wish to put this matter to a substantive motion

and a committee of this House to find out whether or not he's telling

the truth, certainly! But under the circumstances,

[ Page 876 ]

you're

asking me to withdraw an accusation that has every foundation in truth.

The member did mislead this House this morning. Mr. Chairman, I am

prepared to withdraw the word "deliberate," but that is all.

MR. CHAIRMAN : Thank you for coming halfway. Now I ask you to withdraw "deliberately misleading the House."

MR. BARRETT : No. He misled the House.

MR. CHAIRMAN : Hon. member, I have to refer you to May's....

MR. BARRETT : "Misleading" is not out of order.

MR. CHAIRMAN : Excuse me, please, I am on a point of order.

lnterjections.

MR. CHAIRMAN : I'm just in the middle of a point of order.

MR. LAUK :

I was just going to point out that I don't think it's unparliamentary

or offensive to say that the member "misled" the House. The offensive

part is "deliberate," and the hon. Leader of the Opposition did

withdraw the word "deliberate."

MR. CHAIRMAN : It is

the practice of the House not to allow the use of the words

"deliberately misleading" or "misleading," as there are many other

phrases which are unparliamentary by practice. I think that the Chair

has been fair in all instances in bygone days to just request the

withdrawal. It's not a major issue; it's just a matter of withdrawing

these. Therefore I have asked the hon. member for Vancouver East to

withdraw. Up until now he has refused but he has had time. Perhaps he

has reconsidered.

MR. BARRETT : I withdraw the word

"deliberate." I stand by the remark that the minister has misled the

House. That may be deliberate or accidental. I withdraw the word

"deliberate."

MR. CHAIRMAN : Thank you very much for a partial compliance...

MR. BARRETT : No, you're not going to rule me out of order.

MR. CHAIRMAN : ...but in order for this House to continue we must have an unqualified withdrawal.

HON. MR. PHILLIPS : Mr. Chairman, I certainly in no way intended to mislead the House. If the loan was withdrawn — I'm just getting a copy of the minutes — it was withdrawn because it wasn't used at that particular time.

MR. LAUK : That's right; I said that.

HON. MR. PHILLIPS : Yes, but that member was insinuating — and he stated that it was in the paper this morning —

that it had been withdrawn by NDP appointees to the board because it

was a bad loan. The loan was withdrawn because it was not used at that

time. We can't have outstanding loans on the books, because we have to

have a cash flow. If you approve a loan, it either has to be taken out

or used. We're taking another look at the situation so let's get the

whole thing out in the open.

MR. BARRETT : That's right!

HON. MR. PHILLIPS :

We don't want anybody misleading anybody, and I hope that member will

apologize for trying to mislead yesterday when he said that the NDP

appointees on the board had cancelled the loan because it was a bad

loan. The loan application was halted and ceased because it wasn't

taken out that time. Now let's get the whole thing and be clear and

honest with everybody.

MR. CHAIRMAN : Hon. minister, just a moment. We have not completed the point of order.

MR. BARRETT :

Mr. Chairman, on the minister's explanation that he's clearing up.... I

accept his explanation of his misleading statements and I withdraw my

remarks.

MR. CHAIRMAN : Thank you so much.

MR. LAUK :

Well, I don't accept his explanation. I must disagree with the hon.

Leader of the Opposition, but I will say this: he's becoming a little

more candid....

MR. CHAIRMAN : Hon. members, lest

there be some misunderstanding.... Hon. member, would you please take

your seat until I just cite this? Lest there be some misunderstanding

as to what the practice of the House has been and should be, let me

just cite from May, 18th edition. It talks about the use of disorderly

or unparliamentary words.

"Where any

disorderly or unparliamentary words are used, whether by a member who

is addressing the House or by a member who is present during a debate,

the Speaker intervenes and calls upon the offending member to withdraw

the words. If the member does not

[ Page 877 ]

explain

the sense in which he used the words so as to remove the objection of

their being disorderly or retract the offensive expression and make a

sufficient apology for using them, the Speaker repeats the call for the

explanation, informs the member that if he does not immediately respond

to it will become the duty"— and this is the

part I don't like, but it's here —

"of the Chair to take one or other of the steps which are about to be

described: one of them is to ask the member to withdraw from the

chamber, and the other is to name him."

I think that either of those things should be avoided, and I thank the member.

MR. BARRETT : I withdrew, after the explanation.

Interjections.

MR. LAUK :

Well, let's not get into hair-splitting. The minister stood up this

morning and gave the impression to this committee that the loan had not

been rescinded. We've cleared that up. He said he was referring to NDP

members of the board. Because the vote was obviously unanimous it

wasn't only NDP appointees on that board who voted. So that's fine.

However, it was moved and questioned by an NDP appointee to the board— you wouldn't disagree with that? — who, I understand, won't be reappointed. I'll take that up with you maybe next week during the latter part of your estimates.

also said that it was an outside auditor to the BCDC. That is not true,

just simply not true. It was an inside auditor during 1975. The same

auditor for Hydro and many other Crown corporations did the audit for

BCDC. His name is J.W. Minty, C.A.— standing for chartered accountant —

comptroller-general for the province of British Columbia, who has

served this province for many years. If you call his reputation into

question, you are not worthy of any public office, sir! He gives the

BCDC a clean bill of health.

Then he brags about an outside

firm of chartered accountants. There's no magic to an outside firm of

chartered accountants. Do all the hon. members of this committee recall

the Clarkson Gordon report, where the ministers involved manipulated

the figures and presented the kind of report to the public that they

wanted? Well, Campbell, Sharp, Nash and Field said this of the 1975 NDP

operation of the BCDC:

"We have examined the

balance sheet of British Columbia Development Corporation and the

statements of earnings and retained earnings and changes in industrial

development programmes for the year then ended. Our examination

included a general review of the accounting procedures and such tests

of accounting records and other supporting evidence as we considered

necessary in the circumstances.

"In our

opinion, these financial statements present fairly the financial

position of the corporation as at March 31, 1976, and the results of

its operations and the changes in its industrial development programmes

for the year then ended, in accordance with generally accepted

accounting principles applied on a basis consistent with that of the

preceding year."

That's the outside accountants giving a clean bill of health to the NDP administration.

Interjections.

MR. LAUK : May I point out to the committee — although these are not my estimates —

that the Development Corporation, in its first year of operation, made

a handsome, retained-earnings profit for that year and paid a $200,000

dividend to the province's consolidated revenue? All right?

Interjections.

MR. LAUK :

What have you made this year? You've made a drop in the bucket this

year. Do you call that good business? I call that bungling! And these

snide, back-of-the-hand remarks are designed to insult me, but really

attack the staff of the British Columbia Development Corporation.

You're trying to say we bought land without planning and

pre-engineering? False! Not true! The plans and reports and designs by

the volume are on the table of the board of directors of BCDC going

back to 1975 for each and every land acquisition.

Let me

point out to you that acquiring land at a certain cost for the purposes

of industrial development, and then finding in the downturn of the

economy that you can't develop that industrial land.... That land was

acquired and designed to be acquired so that it could be sold off if

necessary, not only at cost, but at a profit to the Development

Corporation, even if it wasn't developed. You know that, Mr. Minister,

and for you to stand up and try to make your Good Friday into a Palm

Sunday is a little bit unfortunate.

Interjections.

MR. LAUK :

Well, I just get a little bit mad when you try and twist like that.

That's not fair. That's just not fair, and it's not being honest with

this chamber. This is the only place that we have a chance to get at

the Crown corporations under your control. You haven't been candid.

I've had to pin you down like a butterfly before you even give the

least bit of

[ Page 878 ]

information.

You look back at the debates when I was Minister of Economic

Development. Every question was answered, in detail and in spades. Let

me tell you my estimates lasted for four or five hours and no longer

because I satisfied the people of British Columbia that everything was

done proper and above board.

MR. BARRETT : Floating like a butterfly and flop like a fish! (Laughter.)

MR. LAUK : You haven't answered any questions.

MR. MACDONALD : Mr. Chairman, I'm changing the subject that the minister changed, back to that advance of $2 million. I want to read — and I read this the other night, Mr. Minister — from Hansard , November 1, 1973. But I want to read what follows, just a few lines from Hansard :

"MR. PHILLIPS :

I would like to direct a question to the Minister of Finance. In view

of the energy crisis in British Columbia, does the Minister of Finance

plan to invest in the Quasar Corporation, which has the hottest gas

field in British Columbia in the Monkman Pass area?

HON. MR. BARRETT : Mr. Speaker, I can't accept touting in the House. Nor can I answer that, as it is speculative.

AN HON. MEMBER : Insider.

HON. MR. BARRETT : That's right. That's touting in the House."

And now the minister doesn't answer questions about $2 million advanced six months after he came into office.

MR. BARRETT : There's the record. Shame on you!

MR. MACDONALD :

He hasn't answered the other questions, but I'm asking him this

question now. You described this as an advance in your press release.

Was it a loan? Was it a grant or gift? If it was a loan, what was the

interest, the term and the security?

HON. MR. PHILLIPS :

Mr. Chairman, I advised that former minister who was once in charge of

energy in the province that the details were worked out by the

Petroleum Corporation, most of the staff of which was appointed by that

member. The details of that advance, which I understand was to be paid

back by future sales of gasoline, are that it was to test that field to

find out whether the pipeline should be built or not, because, as I've

stated in this House before, there was an argument as to the reserves.

There were four different estimates of reserves, as the member well

knows. I said: "If there aren't sufficient reserves, how many reserves

do you have to have?" But this is the type of economic development that

this province needs so the people can have the return on their natural

resources and so that there will be employment in the province. The

decision was made, as the member full well knows, by the British

Columbia Petroleum Corporation. As I say, I think they're very

disappointed that we are having a full inquiry into all the aspects of

this, because Lord knows what might come out.

MR. MACDONALD :

Mr. Chairman, is the minister saying this question is going to come up

before Mr. Justice Kirke Smith? I understand that the question of the

events leading up will probably not be considered by the judge. I don't

want him to send us down that trail and then find we're not going to

get answers there.

Interjection.

MR. MACDONALD :

Present a brief to the judge? My brief would be very simple on this

question. I think it's a good idea. The brief would be very simple. It

would say that in the matter of the $2 million advance, after a long

association of that minister with the Quasar Petroleum Corporation, a

$2 million advance was given and the minister doesn't know whether it

bore interest or how long it was for, or really whether it was a grant.

He didn't know anything about it. Was it approved in cabinet or not? It

was $2 million? Did it come before cabinet?

HON. MR. PHILLIPS :

The member knows that the Petroleum Corporation puts in a budget to run

their affairs and it doesn't come before cabinet every time they turn

around. The decision was made by the Petroleum Corporation.

MR. MACDONALD : Did the minister have any meetings with the Quasar people prior to this advance — particularly Mr. Groves?

HON. MR. PHILLIPS :

Certainly I had a meeting with the people from Quasar early in the

year, but with regard to this advance and negotiations, the member

knows that I had absolutely nothing to do with it. That decision was

made by the Petroleum Corporation. I'm not sure what you're trying to

prove, but if you have any charges or anything to make, let's out with

them.

I don't know what you're trying to say, but you know

how the Petroleum Corporation works. What I've said about having the

Petroleum Corporation before the economic planning committee and the

whole deal will stand up. I don't back down from it at all.

[ Page 879 ]

So I would suggest that I do not know how the Petroleum Corporation functions — what the basis for their decision was —

but legitimate advances were made many times in developing fields

against future sales of gas. It's not new. For the member to stand up

and say all you've got to do is take a cap and burn off some gas to

test it is completely wrong. You should go up into a gas field some day

and find out what's going op.

AN HON. MEMBER : We found one right here today.

HON. MR. PHILLIPS :

Well, there's been one over on that side of the House for a long time,

but I'm not going to enter into passing insults back across the floor,

Mr. Chairman.

MR. LAUK : Answer the questions and we guarantee your estimates will be over.

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

MR. MACDONALD :

Did the minister, in meeting with the Quasar people, discuss the

question of proving their reserves, and a possible advance from the

corporation?

HON. MR. PHILLIPS : No, I said.

MR. MACDONALD : What did you discuss?

HON. MR. PHILLIPS :

I guess we might have talked about the reserves down there. Maybe they

talked about some of the problems that they'd had with the previous

administration in trying to get any action to build a pipeline. Maybe

they told me that there would be no more money spent in that area until

such time as they could see some light at the end of the tube. How

could they go back to their board of directors after spending $35

million or $40 million in that area and get more money to drill more

wells when there was no light at the end of the tube?

MR. LEA :

Mr. Chairman, now it appears pretty obvious what has been going on. We

have a minister who says he made an announcement in regard to $2

million of the public money being passed on to a private firm because

it was in his riding. Now it's not unusual, as the minister pointed

out, Mr. Chairman, for an MLA to make an announcement in his riding

pertaining to a different department. We've all done it. It's

recognized and practised— everyone knows that — but you make the

announcement as the MLA and you make it in your riding. That's where

you make it. We all know that that is recognized practice.

It would seem awfully funny, I think, if the Minister of Mines and Petroleum

Resources (Hon. Mr. Chabot) were to announce, as the Minister of Mines and Petroleum

Resources, that there was going to be in his riding the same kind of project.

But if he did, it would seem rather natural, Mr. Chairman, that we may ask the

Minister of Mines and Petroleum Resources something about it because he is the

Minister of Petroleum Resources.

the other hand we have the Minister of Economic Development admitting

to a number of things. He admits that when he was in opposition he flew

to Calgary specifically to meet with Quasar Petroleum and when he

returned he not only touted in this Legislature but privately lobbied

ministers to help Quasar.

We also have information that

probably the minister received campaign funds in 1975 from Quasar. That

could be cleared up very easily by the minister filing in this House

all campaign contributions that he received in 1975. It could be

cleared up very easily. If the minister didn't receive campaign funds

from Quasar, the House and the public of British Columbia will be very

pleased to know that and probably relieved to know that. But I don't

think that that minister dares to table in this House his campaign

contributions for 1975. I don't think he dares, Mr. Chairman.

Now $2 million was given to Quasar —

for what reason? As the hon. first member for Vancouver East has said,

we know that Quasar received a great deal of money from Alberta and

Southern to do exploration, and we know that Alberta and Southern

received that money from Pacific Gas and Electric in California. We

know that there is a clause in a contract between Alberta and Southern

and Quasar that they're going to get the gas, and it's going to be

shipped east. As far as we know, that clause is still in the contract

and still binding.

HON. J.R. CHABOT (Minister of Mines and Petroleum Resources) : Nonsense!

MR. LEA :

"Nonsense," the Minister of Mines and Petroleum says. If the clause is

not in the contract, when was it taken out? It was there. Is the

Minister of Mines telling us it isn't there any longer? I say it is

there.

What were the $2 million given to Quasar for? It was

obviously not to test the deliverability of 14 wells. There wouldn't be

one gas field ever come in in the whole if it cost that kind of money.

Anyway, why should the people of British Columbia pay the money to

Quasar to test their own wells? Are they broke? They shouldn't be

broke; they've made a lot of money on the stock market lately,

especially since the minister and the Premier started making their

announcements. So he has some questions to answer there. Campaign funds

could be cleared up very easily.

[ Page 880 ]

AN HON. MEMBER : You're being repetitious.

MR. LEA :

Yes, it may be repetitious. The questions may be repetitious but the

answers sure are not, because we are not getting any, Mr. Chairman. Let

him table his campaign fund contribution and the record of those in

this House. Did he get money from Quasar.

AN HON. MEMBER : You're covering old ground.

MR. LEA :

Covering old ground? I'm covering old ground; you've yet to break

ground. Table your campaign contributions in the House, Mr. Minister.

I'll make you a side bet of five bucks that I'd win— that you did receive money from Quasar.

MR. CHAIRMAN :

May I please remind the member for Prince Rupert that under vote 79 we

discuss the administrative responsibilities of the minister?

MR. LEA : That's what we're talking about.

MR. CHAIRMAN :

Some of the material that is presently being covered is clearly beyond

his administrative ability. Perhaps the member would like to move to

another question.

MR. LEA : In his ability, Mr.

Chairman, as the Minister of Economic Development, he has been touting

within his own government for Quasar. He admits it; he says he's proud

of it. So be it. But why? Did he get campaign contributions? That's

within his responsibility.

Let's go back a little bit more

to the minister's responsibility as a Crown minister and the kind of

people he hires to work for him. That reflects on his ministry and his

jurisdiction and his responsibility, Mr. Chairman. I believe that maybe

the minister is taking a bit of the heat for the Premier. That's what I

believe. It's understandable that when the Premier tells him "take on

this staff member," he would try to please his boss and not fight it. I

would like to ask the minister whether Arthur Weeks approached him for

a job or whether he approached Arthur Weeks to come and work for him.

That's a simple question.

HON. MR. PHILLIPS : Mr.

Chairman, you know, it really is amazing, ever since this House opened,

to listen to the opposition talk about the number of unemployed in the

province. They say: "There are 112,000 unemployed! What are you doing

about it?"

MR. LEA : We're doing all we can.

HON. MR. PHILLIPS :

Here we move to develop a natural resource in the Grizzly Valley, to

build a pipeline, to build a new scrubbing plant, to create money for

the people of British Columbia by the utilization of one of their

natural resources, to create employment in building the pipeline, to

create employment in building the scrubbing plant and to create

permanent employment in the scrubbing plant after it's built, and what

have they done? They've harped and bellyached— I was just about to say something else, which I won't say — about the fact that we're moving ahead with the economy of British Columbia and getting things underway.

We've

had no positive suggestions from that side of the House, and I just

want to say, Mr. Chairman, that the people of the province of British

Columbia, when some of these projects that have taken some time to

bring on stream, some time to get people working, come on and create

employment, the people of the province will realize that our policies

have been the right ones. I had to start my office from scratch because

the previous Minister of Economic Development chose to clean out his

office. He took all his files with him. He got his secretary to hire a

moving van and move them over to Vancouver. Now I wonder why he removed

those files, Mr. Chairman?

Those files would have been of a

great deal of assistance to me in some of the background research I

have had to do. But what did I find? Empty drawers, the files gone. I

just have to ask again, Mr. Chairman: why were those files removed?

What was the past minister, the member for Vancouver Centre, trying to

hide?

MR. LEA : Did you get campaign contributions from Quasar?

HON. MR. PHILLIPS : What was in those files? Would you please ask that member for Prince Rupert to maintain his calm?

MR. CHAIRMAN : Order, please.

HON. MR. PHILLIPS : I know he's a very excitable lad and I know he's wallowing in his own mire down there in the gutter...

MR. CHAIRMAN : Hon. minister, may I...

HON. MR. PHILLIPS : ...and the more he wiggles the deeper in he gets.

MR. CHAIRMAN : ...encourage you not to inflame the matter?

HON. MR. PHILLIPS : I'm not inflaming the man at all.

MR. JJ. KEMPF (Omineca) : He's naturally red. He's not inflamed at all!

[ Page 881 ]

HON. MR. PHILLIPS :

I'm just asking that he please keep his cool. I have to ask the House,

Mr. Chairman: just why were those files removed? I don't know whether

it would be....

MR. LEA : Did you get campaign contributions from Quasar?

AN HON. MEMBER : Be quiet over there!

MR. CHAIRMAN : Order, please.

HON. MR. PHILLIPS :

Would you please tell that man who is kicking in his own quicksand that

he's just getting in a little deeper and would he please be quiet?

MR. LEA : Did you get it?

HON. MR. PHILLIPS :

The files were removed nonetheless. I just have to think the reason the

files were removed is that there was nothing in them, because when that

member was Minister of Economic Development he was out to lunch most of

the time.

MR. KEMPF : He's still out to lunch.

HON. MR. PHILLIPS :

As a matter of fact, there was a vacant office up there. Nobody could

find him. Nobody could talk to him, He might as well have been out to

lunch.

MR. L.B. KAHL (Esquimalt) : What was he hiding?

HON. MR. PHILLIPS :

I really have to question why, when we're trying to provide employment

for the people of this province, they are being so negative about it.

We try and develop natural resources for the good of the province. Of

course, I know what their attitude was. The Minister of Economic

Development said: "What's the hurry? Why do we need economic

development now?"

But that's the type of backward thinking

that was prevalent in that ministry when he was in charge of that

department, because in those good years the momentum of the province

was high. Jobs were coming on which had been planned for and couldn't

be stopped, decisions had been made, so he said: "What's the hurry?" Do

you know what the Premier said? He said it in this House many times,

Mr. Chairman: "Leave them in the ground." In other words, let the

unemployed in this province eat cake. There's no hurry. Now when we try

to get the province going and do some long-term planning and get

projects going that should have been brought in two and three years ago

so that now the people of this province would be gainfully employed,

all they can do is wallow around and condemn every positive thing that

we've done.

MR. MACDONALD : Mr. Chairman, the

minister hasn't answered questions about campaign funds or even whether

he's had business dealings with the Quasar people. You know, they're

simple questions, simple answers.

But I want to point out,

Mr. Minister, that the minister is saying that the B.C. Petroleum

Corporation was fully independent and made this decision. Obviously

from the press release there were talks going on between the provincial

government and the Petroleum Corporation. "They expect to reach an

agreement,"— so there have been talks and the minister was part of those talks — "within 90 days about a $ 100 million pipeline."

You fired Jack Caplette, a director of the Petroleum Corporation, and put two cabinet ministers in —

a board of three. You politicized the thing completely. Now you're a

part of it. So let's be clear about that, Mr. Chairman. The minister

hasn't answered questions frankly about this. To make that kind of

announcement with those kinds of answers is not good enough.

HON. MR. PHILLIPS :

Well, Mr. Chairman, I suppose that if I, as Minister of Economic

Development, made an announcement about a mine coming on, I would have

to go in and check the Ministry of Mines and see that the ore was there

and that all of the leases had been let. If I were to make an

announcement about a pulp mill, I should go to the Ministry of Forests

and see that the trees are there and look at the financial statement of

the company. Now the member for Vancouver East knows better than that.

With

regard to business dealings with Quasar, maybe I should just tell the

House a little bit about my business dealings, and then everybody will

know. I think I went above and beyond the call of duty to ensure that

there would be no conflicts of interest with me when I went into this

portfolio, so much so that I sold my operating automobile dealership in

my home riding. I knew that if that company, while I was a shareholder,

sold one car or one truck to anybody who was involved in the natural

resources of that great riding, it would be termed a conflict of

interest whether I was managing the operation or whether the shares

were in trust— no matter what. I sold out my interest so that there would be no conflict of interest.

want to tell you that I was appointed to the cabinet on December 22; I

got home to my riding on December 24; Christmas the 25th; the 26th was

Boxing Day. At 10 o'clock on December 27 I was in my office in my

dealership and signed a deal with my partner so that I no longer had an

interest in that dealership. Now that was not necessary. I could have

kept my interest; I could have put them in. But I

[ Page 882 ]

knew,

as I said, that if there was one ton of coal hauled in a Ford truck

that was bought from my dealership, there would be a conflict of

interest.

AN HON. MEMBER : Right.

HON. MR. PHILLIPS :

So how could I possibly have done any business with Quasar Petroleum?

My other interests are all listed, and everything I have is tied up

with National Trust. I just ask the member: what more do they want me

to do? They can try and bring in all the innuendoes, smear and smut

that they want to, but I am suggesting to them, Mr. Chairman, that if

they have any charges to make they stand up and make the charges.

One

thing that bothers the members opposite, Mr. Chairman, is the fact that

we did move and we did move swiftly. We moved swiftly with Weeks, I

moved swiftly with Mr. Cameron, and we move very swiftly to have a

judicial inquiry into the whole affair. That bothers then, because they

would have loved to have seen the thing erupt. It we hadn't appointed

the judicial inquiry, well then, they could do the same type of thing

they're doing now— innuendo and smear and smut. But I just thought that I would outline my actions as an individual...

MR. LEA : Let's get it straight; did you...?

HON. MR. PHILLIPS : ...so far as conflict of interest....

Now,

Mr. Chairman, there goes that member for Prince Rupert (Mr. Lea) , and

he's really losing his cool this morning. I explained campaign

contributions the other day. I explained to him, but he doesn't seem to

campaign were made through my fiscal agent. I don't know who they were

or the amounts or anything else. He knows the procedure there.

want to tell you, Mr. Chairman, that this great government will be

moving to bring in new legislation with regard to elections. I guess

that must bother them because they know that we'll move and that it

will be in before the next election. That bothers them. As a matter of

fact, all the positive moves that this government is making in every

direction bothers them over there because they really can't find

anything to criticize.

MR. LAUK : Again, I must

repeat the hon. member for Vancouver East's statement that this man has

skilfully and straightforwardly dodged every question asked of him all

week. I repeat it because it doesn't seem to be understood.

argued in the spring of last year when that government brought in two

very important bills. We had to plead with the press gallery to give

any coverage to the debate on the Government Reorganization Act. And I

confess that the way the Government Reorganization Act was drafted, I

don't blame the press gallery for being somewhat unimpressed with the

opposition attack. It was a very cleverly drafted Act, but it was

deceptive.

The power in that Act to the cabinet is

unprecedented, in my submission, anywhere in the Commonwealth. They can

shift funds around. They can change government structures. They can do

practically anything behind closed doors in the secrecy of the cabinet

room. The only opportunity that the people of British Columbia— the public —

have to let the sun shine in on what they've been doing is in

estimates, before this committee. This is the only opportunity that we

have to get the truth and all of it.

AN HON. MEMBER : It's only an opportunity, not a guarantee.

MR. LAUK :

But as is clearly demonstrated, if this minister is going to be the

standard for the performance of other ministers of the Crown, this

Committee of Supply will be sitting through the summer and all year and

all next year, until the truth is out.

Interjections.

MR. LAUK :

How do you impress upon this cabinet the importance of telling the

truth and letting all the facts out so that the public can make their

own judgment? How do you do that? Let's deal with the corporate

structure. I know that some of the members opposite on the treasury

benches are familiar with corporate structure.

There isn't a company in Canada that is not required to hold an annual general meeting —

not one. In this province, if they delay that annual general meeting,

they have to get the permission of the registrar of companies, which is

not granted without condition. Reporting companies— that is, companies the size of Crown corporations —

must have a full and complete shareholders' meeting every year at

least, so that they can decide on the board of directors, review the

financial policies and question the last year's board of directors.

Where is the opportunity here?

It's a requirement of the

Companies Act that full financial disclosure be made to the

shareholders and that a full directors' report in detail be submitted

to the shareholders prior to the actual meeting itself. There's no such

requirement here. Oh, I suppose one of them can stand up and say: "Oh,

well, the province has a review every four or five years at general

election time." But the shareholders, the public of British C