1989 Legislative Session: 3rd Session, 34th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JUNE 27, 1989

Afternoon Sitting

[ Page

7941 ]

CONTENTS

Routine Proceedings

Oral Questions

Water pollution by pulp mills. Mr. Cashore –– 7942

Salary levels for women in B.C. government. Ms. Smallwood –– 7942

Pay equity for women. Ms. Smallwood –– 7943

Hiring of women by B.C. Transit. Ms. Marzari –– 7943

Sale of New Westminster property. Mr. Williams –– 7943

Spetifore development and traffic congestion. Mr. Blencoe –– 7944

Committee of Supply: Ministry of State for Thompson-Okanagan and Kootenay,

Responsible for Crown Lands estimates. (Hon. Mr. Dirks)

On vote 52: minister's office –– 7944

Mr. Clark

Mr. Williams

Mr. Kempf

Mr. Rose

Mr. Miller

Committee of Supply: Ministry of State for Nechako and Northeast,

Responsible for Native Affairs estimates. (Hon. Mr. Weisgerber)

On vote 58: minister's office –– 7965

Hon. Mr. Weisgerber

Mr. Guno

Waste Management Amendment Act, 1989 (Bill 58). Second reading

Hon. Mr. Strachan –– 7969

Mr. Cashore –– 7969

Mrs. Boone –– 7972

Mr. Williams –– 7972

Mr. Rose –– 7973

Mr. Clark –– 7974

Mr. Serwa –– 7976

Mr. Miller –– 7976

Mr. Sihota –– 7979

Mr. G. Janssen –– 7981

Mr. Blencoe –– 7983

Hon. Mr. Strachan –– 7985

Litter Amendment Act, 1989 (Bill 60). Second reading

Hon. Mr. Strachan –– 7985

Mr. Cashore –– 7986

Hon. Mr. Strachan –– 7986

Farming and Fishing Industries Development Act (Bill 44). Committee stage.

(Hon. Mr. Savage) –– 7987

Mr. Rose

Third reading

Financial Institutions Act (Bill 51). Committee stage.

(Hon. Mr. Couvelier) –– 7991

Mr. Clark

The House met at 2:06 p.m.

HON. MR. REID :

Mr. Speaker, on your behalf I take pleasure in introducing to the House

today Mr. John Pozer, who now is a consultant with Intrawest. Would the

House make John Pozer welcome.

MR. ROSE :

Most of the

time we use this introduction period to say hello to people; I'm going

to use it to say goodbye to someone. One of my constituents — who, by

the way, needs his ditch filled in — from

Port Coquitlam is a CBC television photographer. He's going on to

greater things: "The National" and all the rest of it. He's leaving us

after being with us here — and we've really enjoyed him — for the last

four years. Would the House join me in saying goodbye to Doug Kerr.

HON. MR. STRACHAN :

At the outset, in making this introduction, I would like to thank the

staff in the Minister of Health's (Hon. Mr. Dueck'

s) office for

arranging for these guests to meet with Health staff today and also for

arranging for seats in the gallery for them. They are guests from

Prince George, and they are all parents who have children attending the

Child Development Centre. Would the House please welcome to Victoria

Terry Robertson and her daughter Bree-anna; Barb Warkentine and son

Brett; Connie and Dale Hunt, with son Ryan; and Carmen Coltman, with

her son Corey.

MR. D'ARCY : On behalf of the Minister

Responsible for Crown Lands (Hon. Mr. Dirks), I'd like to welcome Saul

and Vera Perks, who are visiting Victoria from Nelson.

HON. MR. SAVAGE :

It is indeed a pleasure for me to introduce to the assembly my brother

Robert and sister-in-law Daphne, who are looking after the farm very

nicely in my absence. Would this House please make them welcome.

MS. SMALLWOOD :

I'd like to introduce a group of women who have come to lobby the

government for better wages. There are many groups represented, and

I'll just introduce a few of them: Debbie Peltier, with her three

children, Maya, Mila and Mike, and Lorraine Gardner, both representing

Single Parents Organizing for Responsible Economics; Jean Swanson from

End Legislated Poverty; Pat Chauncy and her son, Brendon Hurley, from

the Child Poverty Action Committee in Vancouver; Pedro Mora and his two

children, Melanie and Justine from the Child Poverty Action Committee;

Ann Harvey, president of the Office and Technical Employees' Union,

Local 378, and her daughter, Helen Murray. Would the House make them

welcome.

MRS. McCARTHY : The Salvation Army began in British Columbia in 1887

and is very active in 43 communities throughout our province today. Their community

service, their selfless and dedicated record is well known to each member in

this House, I know, and I'd like to ask each of our members today to welcome

Lt.-Col. Bill Kerr, division commander, Major Bill Merritt, Major Sam Fame and

Major John Lake, who are with us today in the gallery.

MR. BLENCOE :

I would like to add to the list of my colleague for

Surrey-Guildford-Whalley (Ms. Smallwood) people who are visiting our

caucus today: Denise Callaghan, Cathy Senich and Marilyn Long all from

CAIMAW. I'd also like to introduce Gloria Harris and Evelyn Hammond,

representatives of Federated Anti-Poverty Groups In Victoria.

MR. PETERSON :

Mr. Speaker, sitting in the gallery are two visitors from Edmonton:

Andrew Masson and Livia Lacika. Would the House please join me in

making them very welcome.

MR. PELTON : Hon. members,

yesterday in a fit of youthful enthusiasm, I introduced to the chamber

Mrs. Cheryle Macdonald and told you all about her Stave Falls Scottish

Dancers, and how she was here because she had visitors from the

Doncaster district's Royal Scottish Dancers in the old country and was

here to visit us. Unfortunately, in my enthusiasm I neglected to note

on the notice I had received that the dear lady wasn't arriving until

today. So she's here today in the gallery, and I wonder if all members

would give her a real round of applause.

MS. PULLINGER :

Today I have a group of people who have come down from my riding to

lobby the government and the opposition for legislation to close the

wage gap and for an increased minimum wage. Those four people I will

introduce first. There is Mary Wasley, who is the coordinator of the

child poverty forum; Gail Hines and her daughter Heather, from the

Child Poverty Action Coalition; Sharon Sweder and Dorothy Meade, also

from the coalition.

As well, we have with us in the gallery

today two assistants who work for the Lovick-Pullinger community

office: Doug Creba and his young daughter Cori, and Susan Vanlerberg.

Would the House please help me make them welcome.

MS. MARZARI :

To continue the list of women and their children who have come from

Vancouver today to lobby the government, and the Minister of Social

Services and Housing (Hon. Mr. Richmond) in particular, for better

welfare rates and better wages, we have: Marian Pollack from the

Canadian Union of Postal Workers; Sue Vohanka of the Confederation of

Canadian Unions; Donna Abram from the Retail Wholesale Union; Anita

Archambault and her daughter Stephanie from Single Parents Organizing

for Responsible Economics; and from the same organization, Monica

Rosenberg and her daughters Emily and Anneka. Would the House please

welcome these women and their children.

[ Page 7942 ]

HON. MR. COUVELIER :

Saanich municipality is one of those places that seems to spawn

dedicated community-minded leaders at a great rate. I'm very pleased to

ask the House to join me in welcoming two Saanich alderman who are with

us today: Alderman Murray Coell, who happens to be chairman of the

Capital Regional District hospital board in addition to his other

duties, and Alderman Frank Leonard, who happens to be chairman of the

Capital Regional District waste management committee. Would the House

join me in welcoming them.

MR. PERRY : This week the

international scientific commission on Huntington's disease will be

meeting for its biennial meeting in Vancouver. We're very lucky to have

in the House today Dr. Henri Petit from Lille, France, who is a

distinguished member of that commission, as well as his wife

Gaudelaine, who is a municipal councillor in Lille. I'd like the House

to welcome them, please.

[2:15]

Oral Questions

WATER POLLUTION BY PULP MILLS

MR. CASHORE :

A question to the Minister Responsible for Environment. Is the minister

willing to confirm that nearly every kraft pulp mill in the province

fails to comply with existing water pollution standards, and that this

situation has existed for several years?

HON. MR. STRACHAN : No, I can't confirm that. The member's allegation is incorrect.

MR. CASHORE : We'll see about that when we get into estimates.

Can

the minister tell this House, since he says that's wrong, how many

mills have been successfully prosecuted under provincial law for

violating existing water pollution standards?

HON. MR. STRACHAN : To my knowledge, on water discharge, none. The fines we've been successful with have all been for air emission violations.

MR. CASHORE :

That confirms that this government is a toothless tiger. Howe Sound has

now been completely closed to shellfish fishing, and recent studies

show increasing contamination of Fraser River fish. How can the

minister's commitment to the new pulp mill standards and tougher

penalties be taken seriously when there has been no commitment to

enforce existing ones?

HON. MR. STRACHAN : I'm glad

you asked that question about our commitment because it allows me to

spend considerable time answering the question. In the budget released

in March of this year, we indicated that we would have an increase of

$17 million in waste management enforcement. That budget is now in

place, and the money is being spent.

Further, in December

1988 the Attorney-General (Hon. S.D. Smith) dedicated a special

prosecutor to the Ministry of Environment. His name is Peter Ewert, and

he was successful in leading the Canfor prosecution, which resulted in

fines of $65,000 in Prince George. He has now been dedicated to the

Ministry of Environment for special prosecution on environmental

matters. That's two issues.

Thirdly, on May 12 I announced

that there would be serious restrictions on dioxin production in pulp

mills. I announced that by 1991 all chlorine-process pulp mills in the

province had to discharge no more than 2.5 kilograms of AOX...

Interjection.

HON. MR. STRACHAN : I know, but there is another process, too.

...per

tonne of air-dried pulp, and by 1994 the level had to be 1.5 kilograms

of AOX per tonne of air-dried pulp. That would make them the toughest

standards in Canada. No other province has that agenda nor those levels

that must be met.

Interjections.

HON. MR. STRACHAN : Well, just a minute, let me finish.

have told you that we have spent $17 million in increasing the staff of

the Ministry of Environment for waste management enforcement, and we

have in place a special prosecutor. That is going to work very well,

and I am sure that all the province of British Columbia is going to see

those measures enforced and is going to see companies focusing their

attention on proper pollution control.

I will add in a

closing comment, in case the House or the members opposite are not

aware, that many pulp mills have now announced considerable plans in

terms of pollution control equipment that they will be installing; $150

million alone was announced in Prince George just a couple of weeks ago

by Peter Bentley of Canadian Forest Products.

If you look

at the total pollution picture from the perspective of the pulp and

paper industry in British Columbia, by the time I'm finished their bill

will be close to a billion dollars. That includes the AOX reduction and

higher air-emission standards, and on Vancouver Island it includes the

use of low-sulphur crude oil. So I think that is an enviable record,

Mr. Speaker, and indicates the toughest regulations, the toughest

enforcement, in North America.

SALARY LEVELS FOR WOMEN

IN B.C. GOVERNMENT

MS. SMALLWOOD :

I have two questions. My first question is to the Minister of

Government Management Services. During your estimates, sir, we asked

you whether you would provide comprehensive information on salary

levels for women in the B.C. government. At that time you indicated

that there was a comprehensive analysis under way, and we are

[ Page 7943 ]

wondering when that analysis will be done and if it will be made public.

HON. MR. MICHAEL :

I recollect that commitment, and I can assure the member that the

information is being compiled. We will certainly do all we can to make

that information public as soon as possible. I might add that we also

have a great deal of pride in my ministry and in the rapidly

accelerating percentage increases in the involvement of women in senior

management and other management positions, not only in the Ministry of

Government Management Services but all across government.

PAY EQUITY FOR WOMEN

MS. SMALLWOOD :

My next question is to the minister responsible for the women's

secretariat. We on this side have been very disappointed during the

estimates, what with repeated questioning, first to the previous

minister and then the Minister of Labour and Consumer Services (Hon. L.

Hanson), who again said that he was studying pay equity and didn't have

any answers for us.

I now have had brought to my attention

that your ministry has been invited to an interprovincial conference on

pay equity and has declined to attend. Can you tell us the status of

this very important issue for women with your government?

HON. S. HAGEN : I am pleased to say that the government of British Columbia supports equal-pay legislation — equal

pay for the same or substantially similar work. Equal pay is a

provision under the Human Rights Act, which prohibits discrimination in

employment on the basis of sex.

MS. SMALLWOOD : A

supplementary to the minister. That legislation has been law for a long

time. To hear that this government supports laws that are on the books

is not comforting. What the women who are in the gallery are interested

in is closing the gap between men's and women's wages. We want movement

from this government.

HIRING OF WOMEN BY B.C. TRANSIT

MS. MARZARI :

I have a question for the Minister of Municipal Affairs regarding B.C.

Transit and its training practices. Madam Minister, is it not true that

B.C. Transit has an affirmative action program for the hiring of women?

HON. MRS. JOHNSTON :

I guess I rather take that type of situation for granted. Whether or

not B.C. Transit has it actually spelled out I can't say, but I'll get

that information for you.

MS. MARZARI :

The reason I ask, Madam Minister, is that I recently received

information that during the trainability tests for bus drivers — the

screening process for who is going to drive buses — there

is a particular procedure in which, before training even starts, men

are asked simply to drive diesel buses; women, on the other hand, just

fresh into the situation, have been asked on a consistent basis over

the last number of months to manoeuvre the heavy electric trolley

wires. Some of them have been given no gloves and no towels to protect

their hands from these very dangerous trolley wires. Women are being

treated in a discriminatory fashion during the very early stages of

training. Is the minister prepared to conduct an inquiry into the

training procedures that disqualify women before they start?

HON. MRS, JOHNSTON :

I'm not familiar with any of the situations that you have described,

but I'll certainly be in touch with B.C. Transit and attempt to receive

some clarification for you.

SALE OF NEW WESTMINSTER PROPERTY

MR. WILLIAMS :

To the Minister of Government Services. I'd like to revisit the New

Westminster waterfront. A site remains which the Enterprise Corporation

holds, immediately upstream from the public market. We were advised by

the Minister of Crown Lands (Hon. Mr. Dirks) In estimates that it is

still in the hands of BCEC. Could the minister advise whether there is

a tentative deal on that?

HON. MR. MICHAEL : I have

not had the privilege of listening to all of the estimates from my

colleague the Minister of Crown Lands, who is indeed responsible for

the disposition of all properties belonging to BCEC.

As the

member knows, the vast majority of the property held by BCEC has been

sold through the public process of tendering. Many parcels have been

disposed of; the most recent one, as the member is familiar, is the

Westwood property. I'm sure the member is also aware that Songhees has

been tendered, and decisions are about to be made on that very shortly.

The only significant piece of property left with BCEC is the property

still held in the Whistler area. There are four parcels, and I can

assure the member and other members of this House that decisions will

be made very shortly on the balance of the properties at Whistler. The

process will be in place within the next two weeks.

Regarding

the Westminster Quay properties, of which the member speaks, we've been

through that quite a bit in my estimates. I'm sure the vast majority of

the supposed facts put forth by the member opposite have proven to be

completely false. He made references to flipping. Of course, being the

grand master of flipping, dating back to the year 1971 The first time I

ever heard the word "flipping" was from that particular member on the

famous Hemlock Street property.

Regarding what's going on

in Westminster Quay right now, if there are any properties left over

that are not disposed of in line with property held in Whistler, the

balance of the lands held by BCEC will be transferred in their entirety

to the lands branch.

[ Page 7944 ]

MR. WILLIAMS : We certainly know who is flippant — the Minister of Government Management Services.

Fine, Mr. Minister. We'll pursue that subsequently with the Minister of Crown Lands.

Will

you provide the House with all of the information regarding the sale of

the Westminster Quay Public Market at the foot of Westminster Quay — an

activity of the ministry when the member for Vancouver-Little Mountain

was the minister responsible?

[2:30]

HON. MR. MICHAEL :

We spent several days discussing details during my estimates. Reams of

questions were asked; a lot of material was searched and delivered to

this House at that time, Mr. Speaker. When the member rises and makes a

statement about whether the minister will provide all of the

information relating to a particular sale, perhaps he would be kind

enough to put his specific request in writing, so that we know exactly

what he's looking for, and deliver it to me. If it falls within my

jurisdiction, we will indeed attempt to gather all of the information

and deliver that data to him post-haste. However, if the question

relates more to the responsibilities of the Minister of Crown Lands, I

would then refer that to his ministry to search and provide the

response.

SPETIFORE DEVELOPMENT

AND TRAFFIC CONGESTION

MR. BLENCOE :

I have a question for the Minister of Transportation and Highways.

Delta council appears to be intent on pushing through the Spetifore

lands, despite the intense opposition of the public Because this

government removed planning powers from regional districts, this

development will have a serious impact on the transportation corridor

through the George Massey Tunnel, which is already seriously congested.

What steps has the minister taken to ensure that an adequate

transportation plan is in place before the Spetifore development plan

is approved and goes ahead?

HON. MR. VANT : Given

that there's a hearing process going on in regard to those particular

lands.... Nevertheless, no matter where there happen to be proposed

developments, we have our transportation planning committees. Also,

many urgent priorities have been identified, such as easing the

congestion in the George Massey Tunnel. Of course, I've already

announced a counter flow measure there to ease that congestion and

possibly signage on Highway 10 indicating the alternative route when we

get the east-west freeway and the full six lanes open on the Alex

Fraser Bridge. So all these various components will ease the traffic

congestion in that part of the province.

Orders of the Day

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

ESTIMATES: MINISTER OF STATE

FOR THOMPSON-OKANAGAN AND KOOTENAY,

RESPONSIBLE FOR CROWN LANDS

On vote 52: minister's office, $298,377 (continued).

MR. CLARK : I'll kick off this discussion; I know the first member for Vancouver East (Mr. Williams) will be back shortly to follow up.

would like to discuss some developments along the New Westminster

waterfront, and I might say I was heartened to hear the answers from

the Minister of Government Management Services (Hon. Mr. Michael), who

said that all land being sold by BCEC is now the responsibility of

Crown Lands. Therefore I would like to back up a bit and discuss the

history behind some of the transactions, and then bring it up to the

current date and talk about the Minister of Crown Lands.

What

I'd like to talk a bit about is a project called the Westwater hotel,

which is right next to the market in New Westminster. The minister may

not know this, but the Westwater hotel is predominantly owned by an

individual named Dan Fritz. Some members on the other side of the House

may know Dan Fritz. I see the members for Surrey know Dan Fritz — and I think it's his father — Herb Fritz.

The

Fritzes have a long history of association with the Social Credit

administration and with the current Premier of British Columbia. In

fact, I saw one newspaper document that showed that Dan Fritz was "a

bagman for Bill Vander Zalm when he was mayor," but I won't dwell on

that, because I have no information except for what I read in all those

land dealings and land public hearings with respect to Surrey in the

early seventies. I'm not familiar with it, but I notice that there were

hearings on the Cryer turkey farm that they were associated with.

Suffice

it to say that Dan Fritz is associated. Herb Fritz, by the way, was

appointed to the Labour Relations Board by the previous

administration — the Bill Bennett administration.

I thought, well, this is a clear Social Credit friend of the

government. Let's take a look and see how he managed to get this

property and what he paid for it, and that comes to the kind of

information we've been pursuing. I know that there are many developers

who are friends of the Social Credit administration, so it may be

difficult sometimes to find ones who aren't. I might say that Dan Fritz

is closer than some others I could mention.

Here's the interesting thing. The person in charge of land sales for the government was a gentleman named Tom Douglas — a

great irony for us on this side of the House. Tom Douglas worked for

First Capital City Development Co., he reported to B.C. Development

Corporation and to BCEC, and he was in charge of the land sales. So

what happened? The land was not put up for public tender; it was

negotiated between Tom Douglas and Dan Fritz. The price was negotiated.

I'll let the first member for Vancouver East (Mr. Williams) canvass

what value

[ Page 7945 ]

was received for the Crown for that land. Suffice it to say that it was not market value.

But

here's another interesting thing I've found out. Mr. Douglas left

working for the government through First Capital City Development Co.,

and within a matter of weeks went to work for Mr. Fritz at the hotel,

putting together the package. So Tom Douglas negotiated with Mr. Fritz

the sale of Crown land, and then he followed the purchaser. In some

jurisdictions there are conflict-of-interest rules around that, but

there don't appear to be any in British Columbia.

HON. MR. BRUMMET : When was that?

MR. CLARK : That was around '85-86-87.

This

is the thing I think members might be interested in. I found out that

Mr. Douglas, in 1974, had a company called Realescope Realty Ltd. Dan

Fritz and Tom Douglas were partners in a real estate development

company. Here's the fact pattern. They were partners in a real estate

development company in Surrey and were closely associated with the

Surrey Voters' Association — there is a lot of documentation on that.

Mr. Douglas then went to work for the government, and he negotiated a

sale to his former partner — no public bidding, no tendering process — a

sweetheart deal for the hotel site, and then he left government service

to work for that private company. That's the fact pattern.

What

we have to ask is: "What kind of deal did he get? What kind of deal did

this friend of the government get?" I know that the first member for

Vancouver East will canvass this in some detail, but I can assure you

that he not only got a good deal on the property, but he got a good

deal on other things — like the waterfront lease. I might say,

incidentally, that it was granted, and the minister confirmed a 99-year

waterfront lease on that property.

So he negotiated a deal with his former partner — though he was supposed to be managing on the interests of the Crown — a

less-than-market deal to his former partner who has close contacts with

this Social Credit administration, particularly with the Premier, and

he also negotiated special deals with Crown Lands, presumably, and

others for waterfront access for waterfront lots. In any other

jurisdiction, this wouldn't be allowed, because all Crown land would be

up for public tender, just as every municipality has to go through a

tendering process. Yet almost all of the lands sold by BCEC, and

presumably now under the auspices of Crown Lands, were negotiated sales

and not public tendering. There was no bidding and no wide advertising

for bidding on this hotel site; there was simply a negotiated deal with

an individual who worked for the Crown, who used to be a partner of Mr.

Fritz in the seventies and who subsequently went to work for Mr. Fritz

in the eighties after unloading this Crown property to this individual.

Mr.

Chairman, I can go through the details, and I will, but I'm waiting for

the first member for Vancouver East, who has the actual documentation,

because I wouldn't want to be wrong with the facts. The fact pattern

that I've outlined is clear for everybody to see. But the questions now

arise. Given that we know the contacts, given that we know the

connections between the person in charge of Crown land sales and the

person who negotiated that sale, given that we know the very close

connections to the provincial government, the question then is: what

kind of deal did this former partner drive on behalf of the Crown? I

suspect that in any kind of analysis it will show that we didn't get

adequate value for that Crown land. It was another case of friends or

insiders getting special treatment — no public tendering, special

negotiations with a friend of the government, and given at less than

market value.

HON. MRS. JOHNSTON : Will you make that statement outside the House?

MR. CLARK : Yes, I will say that outside the House, Madam Minister.

But

beyond that, those negotiations are still ongoing with Mr. Fritz and

with other properties on the site and adjacent to the site. The

minister said there is some interim agreement, and we're interested in

that. The Minister of Government Management Services tells us: "Ask the

Minister for Crown Lands; don't ask me." So it's his responsibility now

to deal with those interim agreements and to deal with the sweetheart

deals that Mr. Fritz has driven with his former partner. So with that,

Mr. Chairman, I will ask the first member for Vancouver East to fill in

the financial details with respect to this sweetheart arrangement which

we've seen all too often by members on that side of the House.

MR. CHAIRMAN : Just before we move along, the member for Maillardville-Coquitlam asks leave to make an introduction.

Leave granted.

MR. CASHORE :

Mr. Chairman, I would like to introduce some friends from Coquitlam who

are seated in the gallery. There are 28 grade 7 elementary students

from Vanier Elementary School, along with their teacher Mr. T. Sitter

and three other adults. They're here to learn about our special brand

of democracy in British Columbia, and I would like to ask the House to

join me in making them welcome.

MR. WILLIAMS : I

think the other member for Vancouver East has given some interesting

background to some of the people involved in some of this exercise. You

know we're all familiar with the $10 flip upriver in the New

Westminster waterside development, but we've never looked at the range

of other sales. Some of them were pioneering sales, as they were with

the cooperatives in the background and with Bosa. They are more

understandable in terms of pioneering people developing a previously

undeveloped area such as the New Westminster waterfront.

It's interesting to look at those particular sites with respect to the hotel and the office building. The

[ Page 7946 ]

hotel traded at the site, which was 0.9 hectares — a couple of acres or so in size — on

the waterfront in New Westminster, for $920,088 in May 1987. The

adjacent site traded for $779,338 in June 1987, and it was 0.44

hectares; and it was Westwater Industries. Westwater Industries is the

firm that my colleague was referring to. Westwater didn't in fact

register it in their name; they registered it in a numbered company

name, interestingly, 149925 Canada Ltd. There were subsequently other

arrangements, and it's a very complex arrangement in terms of leasing,

option-back and that sort of thing, which is common among these kinds

of players.

But if you look at those numbers on a price per

acre and then compare it with something across Columbia Street in a

site that I would argue is less valuable, in a fairly comparable

time-frame, then you get $2.2 million per acre across Columbia Street

and you get $0.5 million per acre on the waterfront. So that gives you

an idea of the kind of relative market differences there were there.

There was a market test across Columbia Street at the $2

million-an-acre level; on the waterfront it was more like $0.5 million

an acre, and yet it was on the waterfront.

We've become

accustomed to this, Mr. Chairman: the Crown or the government or its

government agencies, in the hands of a minister, selling at fire sale

prices or prices that are clearly below the real value of the site. I

think that applies to much of the New Westminster waterfront. This

particular area — not a dramatic flip like some of the others

we've seen or noted but still an indication of the kind of mindset or

the willingness of government to sell far, far below what real value is.

[2:45]

The other interesting thing here is that there's a marina in front

of the hotel. I asked the minister last night what the rules were with

respect to selling off marine water lots. He indicated that the rules

were 30 years maximum, and there are probably escalation clauses in

those lease arrangements, aren't there, Mr. Minister? Over the 30 years

there would be escalating periods, and wouldn't they normally be on a

five-year term basis, or at most a ten-year term basis, when you're

handling water-lot leases on the coast of British Columbia? Wouldn't

that be the normal pattern?

Could the minister advise the

House what the normal pattern is with respect to water-lot leases,

because the hotel owner is one of the owners of the marina here.

HON. MR. DIRKS :

I'm having problems with this whole thing, because what we're talking

about is past history. The member is talking about 1987, a date before

I assumed the office completely. I'm sure he had an opportunity last

year to canvass it in the House. I don't know why he didn't canvass it

at that time. I was under the impression we were talking about the

estimates of the Minister of State for Thompson-Okanagan and Kootenay

and Responsible for Crown Lands for fiscal '89-90.

MR. WILLIAMS :

Let's talk about '88-90 in terms of this particular lease. Can you tell

us how much rent they're paying this year for this lease?

HON. MR. DIRKS : Could he specify which "this lease" he refers to?

MR. WILLIAMS : The waterfront in front of the hotel in New Westminster — the

inn on the waterfront at Westminster Quay. There's a lease for a marina

in front of the hotel and the office building that we've been talking

about. Your department is responsible for that lease with respect to

the Crown, and it has been granted by the Crown.

HON. MR. DIRKS :

Really, the only thing I can tell you.... Again we're going back prior

to my time, but I can tell you that the lease was transferred together

with lot 1. BCEC only owned a one-third interest in that lease, and it

sold that one-third interest for $140,000. But again, that was prior to

my time, Mr. Member.

MR. WILLIAMS :

But the lease is in fact registered at $1 a year. Is that not the case?

There is a 99-year lease from the Crown at $1 a year — that's $99. One

dollar a year for 99 years in downtown New Westminster. That document

is registered.

MR. CHAIRMAN : On vote 52.

MR. WILLIAMS : I had understood, Mr. Chairman, that the minister was checking with his staff in this regard.

HON. MR. DIRKS :

As I said earlier, the transfer of that lease occurred in 1987, prior

to my time, and it was transferred with lot 1. So it was a private

deal. BCEC owned one-third interest and sold that one third interest

for $140,000.

MR. CLARK : Is the minister saying the $140,000 was part of that purchase price of some $900,000 that the first member talked about?

HON. MR. DIRKS : I would hate to confirm any of the figures that the member opposite is using, so I would have no comment on that.

MR. CLARK :

Well, will you find out for us? You're the Minister of Crown Lands.

This is a sale of Crown land that appears to be substantially below

market. If our information from the land title office is incorrect,

then I would appreciate it if you would clarify the question for us.

There is a document registered with land titles which shows a 99-year

lease of the waterfront, which to my knowledge has never been done

before in history They have always been 30-year leases by the Crown.

It's a 99-year lease registered at $1 a year. Perhaps the minister can

explain why that is.

[ Page 7947 ]

HON. MR. DIRKS :

I have to remind the member that this was prior to my assuming office.

I wish we could become relevant and to the point in the estimates for

this fiscal year.

MR. WILLIAMS : Deposited in the

land registry office, Mr. Minister, is a document that is a lease with

respect to the waterfront in front of the hotel and office tower. That

lease indicates it is for 99 years at $1 a year, payable in advance — very

smart businessmen. You demanded the money up front. You wanted it all

up front so that you could put it in the bank and get some interest — $99.

Ninety-nine dollars is what is in the document. There is no waterfront

lease that I am aware of anywhere in British Columbia that lasts for 90

years. Is that the case, Mr. Minister?

HON. MR. DIRKS :

I hope that this time the member opposite is raising rumours that are

more accurate than the last time he did that, because the last time he

raised expectations of what was going on in New Westminster, it cost

the taxpayers $20,000 simply to rectify that. I hope he is a little

more accurate in what he is doing right now.

As I said before, the lease was transferred together with lot 1, and BCEC only owned one-third interest in that.

HON. S.D. SMITH : That was two years ago.

HON. MR. DIRKS : That was two years ago, Mr. Member, and it was for $140,000.

MR. WILLIAMS :

For clarification then, Mr. Chairman, I think the minister is saying

that it was part of the package, and internally, within the package,

there was a $1 arrangement. So this was an envelope that included the

$1 long-term arrangement. Is that the case?

HON. MR. DIRKS : All I can do is repeat that they got $140,000 for their one-third interest in the lease.

MR. WILLIAMS :

We might also just carry on. This is a registered lease, and it is $1 a

year, and it's 99 years, which is unprecedented. You didn't answer the

question about other leases. Last night you indicated — I believe —

that policy was a maximum of 30 years for a lease in terms of a water

lot. Is that the case?

HON. MR. DIRKS :

There is a distinction. I did indicate that it was 30 years, and that

is 30 years for Crown lands. What we are dealing with here is not Crown

lands — or was not Crown lands, I should say, in 1987.

MR. WILLIAMS : You're saying this was fee-simple land? Is that what you are saying?

HON. MR. DIRKS :

I have problems going back to 1987, which is prior to my assuming that

role. If we could be more current, it would certainly help speed up

this whole debate.

MR. WILLIAMS : No, no. We're current. The minister is saying that the Fraser River is not Crown land?

HON. MR. DIRKS : I would clarify that. The Fraser is Crown land, but it is administered by the harbour commission.

MR. WILLIAMS :

So you are not clarifying; you are correcting. Right? You are

correcting what you said a couple of minutes ago. The Fraser is indeed

Crown land, and this lease is indeed on the Fraser River, because it's

a marina on the Fraser River, so it too is Crown land. So do you want

to correct everything you've been saying for the last five minutes?

Okay.

So it is Crown land. Why would a lease be registered at $1 a year? Do

you have any idea, Mr. Minister, if that wasn't indeed the arrangement — 99

years for a dollar? Do you not think it is worth investigating the fact

that for some reason and for somebody, they've granted a 99-year water

lease in New Westminster in the case of this hotel site, and they've

done it nowhere else in British Columbia? Can you confirm that this has

been done nowhere else in British Columbia?

HON. MR. DIRKS : To my knowledge, I am not aware of any other 99-year lease. No.

MR. WILLIAMS :

Thank you. Now that's established. It's 30 years everywhere else,

probably with escalating clauses throughout the 30 years of the lease.

In this case, it's a 99-year lease paid In advance at $1 a year — $99.

It's clearly another sweet arrangement with respect to Crown property.

It is par for the course in everything that is touched, and especially

under the hands of that former Minister of Economic Development who was

responsible for this at the time, the senior member from Little

Mountain. Once again, this is a land scam where she was the minister

responsible; I'm not saying this minister is responsible. I'm saying

that she's got a lot of answering to do around here. Time after time

after time, whether it's Transit, whether it's the Enterprise

Corporation, whether it's First Capital City, you check behind it and

you'll find that the power behind it was the first member for

Vancouver-Little Mountain (Mrs. McCarthy), every time. And never any

answers.

I can understand the Premier's frustration when he

was dealing with the Expo lands and he had that minister to deal with.

I can understand his frustration. He had some doubts about her

abilities. He had some doubts about what she was up to. And he muffed

it all by dealing with his own friend Mr. Toigo. But he had every

legitimate reason in the world to finally think: "Ding, ding, ding,

something's wrong in Little Mountain; it ain't working out right; I

don't think we're getting a good deal here." He had every reason in the

world to think he wasn't getting a good deal on the Expo land site, and

he was right. He was absolutely right. But we had a press gallery up

here that was on the run, determined that they were going to run after

the Premier and not the member from Little Mountain.

[ Page 7948 ]

Well,

it was a clever ruse on her part, I'll tell you, because every time I

look at the land dealings around this province and the ones that smell

the most, the member from Little Mountain is the one who was the boss

at the time. That applies with respect to New Westminster and the $10

million flip; that applies when I look at Transit; that applies when I

look at the marina; that applies when I look at the hotel. That's the

picture. It has been a clever piece of work. The real kind of work

should be around what happened through those years when that other

member from Little Mountain was the minister responsible.

[3:00]

I asked yesterday about another site on the waterfront in New

Westminster. It's a significant site; it's at the foot of 6th. I was

told by the Minister of Lands that it was in the hands of the Minister

of Government Management Services (Hon. Mr. Michael). In question

period today I asked the Minister of Government Management Services,

and he told me it was in the hands of the Minister of Lands. Well, now

I'm talking to the Minister of Lands.

Mr. Minister of Lands, regarding the remaining site — that hopefully we could have got market value for — on

the waterfront in downtown New Westminster, your staff advised you and

you advised the House last night that there already was an interim deal

of some kind on that land. I had hoped that there might be a market

tendering process on the last remaining public waterfront land in New

Westminster, but it appears that there's some deal in the background.

Can we be advised of how you have flogged the last piece of waterfront

land in downtown New Westminster?

HON. MR. DIRKS : I

believe the member is referring to lot 3, which is a 1.9 acre property,

and lots B and C, 3.2 acres, 40 percent of which is under water. Both

of these deals, I would tell the member, were done in the first one.

The purchase and sale agreement for lots 1, 2 and 3 was made in 1987,

prior to my assuming office. Lots 1 and 2 have already been drawn down.

Lot 3 is a fully serviced lot. The purchase agreement will close on

June 29, 1989, to 149925 Canada Ltd.

MR. WILLIAMS : What's the number again?

HON. MR. DIRKS : It's 149925 Canada Ltd. I'm sure that's no surprise to you, Mr. Member.

It also includes a six-year lease for 80 parking stalls to the public market, protected by covenant to the title.

Lot

B and C is 3.24 acres, which, as I said before, is 40 percent under

water. It's unserviced. On No. 138, Sailview Ventures Ltd. is the

company, and that was an option that they received in 1986. They have

been leasing it with an option to purchase the lease of the land for

the public market parking, and they have until the option closes on

August 30, 1989; but this was granted to them in 1986.

MR. WILLIAMS : The price?

HON. MR. DIRKS : The price that was established was $2 million for lots B and C, and $2,652,460 on lot 3.

MR. CLARK :

Mr. Chairman, this raises a whole series of interesting questions. I

just want to recap briefly. When the public market was being

started — it's quite apparent that it was a pioneering venture — we

know that the Crown led that pioneering venture, through lots of

government investment, lots and lots and lots of government investment.

We know that Bosa Bros. anchored the project at one end through

government money, through a co-op housing project, and the government

anchored it through a market.

So one can understand that

initially there's some higher risk which might drive the price down.

But surely the minister would agree that it's not only a tremendous

success, but that waterfront land in New Westminster is now worth a lot

of money. I wonder if the minister has any comments with regard to the

fact that land that is not on the waterfront but on Columbia Street is

trading at the same time for four times the value of the land

negotiated by his predecessor and people in his ministry. They

negotiated a sale for what appears to be 25 percent of market value, if

you use land on Columbia Street as a market test. This is waterfront

land, which should be worth a lot more.

In addition to that, there were leases that appear to be at variance with accepted government practices — 99

years instead of 30 years. And we now have confirmed in the House for

the first time that the same company has the remainder of what appears

to be three acres, again at significantly less than market value. That

does not close until the end of this month, which I believe brings us

up to this minister's responsibility at least to deal with it or pass

comment on it, or to have his staff look at transactions which are yet

to take place, even though the arrangements took place previously.

There

are lots of questions. I wonder whether the minister has any concern

about the fact that the person who negotiated the sale used to be a

partner of the individual he sold to on behalf of the Crown, and then

subsequently worked for that individual. I wonder if he has any concern

about that apparent conflict of interest. Does he have any concern

about the fact that the land appears to be far below value? Does he

have any concern about the fact that this is a 99-year lease instead of

30 years?

Interjection.

MR. CLARK : The

minister said that Crown land is, and always has been, 30 years. He

knows of no other water lease that goes beyond 30 years. This one is 99

years. Does he have any concern about that, given that he's now

responsible for administering these deals, which admittedly may have

been negotiated by other members of the government?

HON. MR. DIRKS : To quote a famous man: "Don't put words in my mouth. It tastes awful." Really, you

[ Page 7949 ]

are

mixing it all up. You are making mistakes that are very visible and

evident. Just one little one, which might seem small but really isn't:

the closing option is on August 30. Read my lips: August 30.

Remember,

this 3.24 acres is 40 percent under water. I don't know what kind of

market study you've done as to values and so on. I think that If you

looked at that particular lot, you might come up with a market value

much less than that $2 million, if you take into consideration what

might be required to get that site ready for development.

MR. WILLIAMS :

I'd really just like to clarify the situation, because the numbers were

given to us fairly quickly. Mr. Minister, you are saying that lots 1, 2

and 3 were sold for $2.06 million. Lots B and C, Sailview Ventures, was

3.24 acres, and that was for $2 million. The previous one was the

numbered company.

On the Sailview Ventures one, then, would

we have the information on the amount of water frontage involved? I

have a map here that shows lot B, I think, but I don't have lot C. I'm

interested in the length of water frontage for lots B and C — the

3.24-acre site. Those of us who are schooled in the old days have

trouble looking at metric numbers, but the metric number will do; the

the frontage numbers?

HON. MR. DIRKS : Mr. Member, I suffer the same malady as you. Although I do have a drawing here of the site, I don't have the scale.

MR. WILLIAMS :

I think we're talking about the equivalent of a couple of blocks of

water frontage. Is that right? If you relate it to 6th Street, Begbie

Street or McKenzie Street, for example, in downtown New Westminster....

It's that chunk of property between the Westminster pier acquisition

and the market and related acquisitions downriver.

HON. MR. DIRKS : I guess it's all relative. There are short blocks and long blocks.

MR. WILLIAMS : So it's a short block and a long block put together, I guess. All right. That really tickled the minister's fancy, anyway.

MR. CLARK : He's short a few blocks.

MR. WILLIAMS :

We're all short a few blocks when it comes to the land dealings of this

government. But what we have, though, is an option that was arranged

some years ago then, and what was the amount that they would have paid

in terms of upfront option money for the deal?

HON. MR. DIRKS : Mr. Member, that was certainly before my time, and I really don't have the details here.

MR. WILLIAMS :

I guess we might look at it another way. How much is going to be owed

when the deal is consummated in August? Will they be paying the full $2

million or will it be $2 million minus something else?

HON. MR. DIRKS : It will be the $2,652,460.

MR. WILLIAMS :

So it might appear that they got the option for a nominal amount in

those circumstances if that is the number on the paper and the deal,

and it would appear that the option then was for a nominal amount,

because the normal pattern would be that the option money would be

applied against the purchase price.

HON. MR. DIRKS :

What I gave you there was an error; I was talking about lot 3. You

obviously are talking about lots B and C. You are quite correct: it is

the $2 million.

MR. WILLIAMS : I appreciate the

clarification. So they're paying the full $2 million in August and

that's that. But maybe somebody could help me, because my mind isn't

clicking too well in terms of numbers. The current market value in New

Westminster for condominium sites.... This would be more than a

condominium site; it would be towers. The city of New Westminster has

approved 25-storey towers on the adjacent site, and they've approved

800 units plus on the adjacent site. The adjacent site is nine acres.

This is three acres, so we can assume then that one-third....

Interjection.

MR. WILLIAMS :

Oh, yes, 3.24 acres you said, right? You're arguing that because

there's water you can't count it. That ain't the way it works. They

count the full acreage in terms.... The other site had the same sort of

situation with respect to water. For clarification for the minister,

the Westminster pier site of about nine acres had a similar chunk of

water that was within the site, so I would argue they're very clearly

comparable properties.

Westminster has approved 800

condominiums on the adjacent site. This one is about a third, so that

would mean that we'd probably get about 250 to 300 condominiums on the

site. Let's be conservative: let's say it's 250 condominiums. The

current land value in the New Westminster waterfront for land value per

condo is $25,000; so $25,000 times 250.

HON. MR. BRUMMET : In water or on land?

MR. WILLIAMS :

That doesn't matter because if you go to New Westminster, Mr. Minister

of Education, you'll find that the hotel indeed is catapulted on stilts

over the water. That's not a difficult thing to do; surprisingly, the

foundation problems are not difficult in that chunk of waterfront in

New Westminster. There have been soil studies, and if your people had

wanted to find them, they would have found that out.

[ Page 7950 ]

you multiply those together, you get $6 million current market value

for that site. To that you would have to add the commercial potential

as well, and on that site I'm sure the municipality or the city would

approve commercial development as well.

Mr. Minister, are

you not at all curious as to why your predecessor would have given an

option to purchase down the road on this site, with no option money

apparently upfront, and at a third of the market value when it's

consummated? Do you have no curiosity whatsoever?

[3:15]

HON. MR. DIRKS :

I get a great kick out of the member opposite. He starts extrapolating

and he starts multiplying this by that, and certainly when you start

out with a base that isn't sure and then you add some more uncertainty

and you go off onto cloud nine, you can end up with whatever kind of a

picture you would like to have.

I would remind the member that this land that is so valuable — as you say it is — is

presently being used for parking. Now if it was truly as valuable as

you say, if you could really build all these condominiums after your

extrapolation and all your speculation, why, Mr. Member, are you the

only one that intelligent to see that tremendous opportunity? Indeed

why hasn't it happened? Perhaps your figures aren't quite correct;

perhaps your extrapolation isn't correct; perhaps you couldn't get all

those condominiums on that site; perhaps the cost of developing it

today is not feasible for that development.

MR. WILLIAMS :

We're talking about your predecessor making a deal, with no apparent

option money up front, to buy downtown New Westminster waterfront land

at a fixed price a few years later. Nice deal! Who wouldn't want that,

knowing that SkyTrain was under construction and being extended and

knowing that there were condominiums being built everywhere around the

waterfront in New Westminster? All you do is get your friends to give

you an option, and you get them to give you an option at a third of

what it's going to be worth when you buy it. Nice arrangement! That's

the deal. They don't have to build anything. They've got an option.

They can sit and watch the land grow in value before they exercise

their option at yesterday's price. No, not yesterday's price; God knows

when it was worth only what they're going to pay for it — some years ago.

How

many of these sweet deals do we have to parade before this Legislature

before somebody starts an investigation around this place?

Interjection.

MR. WILLIAMS : Yes, you hired a dentist to look at a boil on a foot, and then claimed you had a fancy high-priced study. Smart stuff, folks.

Every time you lift a rock, whenever you smell something that's probably

wrong, you can count on it, under the previous minister in terms of the way

she operated that ministry. They crashed down these Crown corporations and just

said: "Sell, and sell at any damn price you like." That is pretty

well what happened.

The

Minister of Government Management Services (Hon. Mr. Michael) gave us a

list of some 80 properties that were her responsibility. You check most

of those properties and you start shuddering at the lack of return to

the Crown, the lack of thoughtful work, the lack of process — the lack

of the kind of process your own ministry at least currently does. They

picked up the remnants of BCEC's mess and started doing a proper job.

They started getting independent appraisals and full analysis and so

on. But the history of these previously is extremely questionable.

can't understand for the life of me why one would make a deal to sell a

chunk of the New Westminster waterfront with no option money up front

and they can buy it a few years later at a price a third the value. Why

would anybody make those kinds of deals? Why?

MR. KEMPF :

It's been very interesting to.... [Applause.] I hope when I'm through

in about two or three hours from now I get the same applause as I'm

getting now.

It's very interesting to sit and listen, as

I've done this afternoon and yesterday, to the sweetheart deals that

are made with respect to Crown land in the lower mainland of this

province.

HON. MRS. JOHNSTON : You're not going to start that too!

MR. KEMPF :

No, Madam Member, I'm here to look after the best interests of my

constituents, and that's what this part of the debate is going to be

all about. But it's interesting to listen to the sweetheart deals that

take place on the lower mainland and then to stand as I am standing to

speak on behalf of ordinary British Columbians who are being squeezed

to death with respect to the price of waterfront land in my

constituency.

Before I get into that again — and I'm certainly going to revisit it — I

read the Blues of yesterday's debate very closely with respect to the

probe that the minister has initiated into the agricultural use of

Crown lands, and I have several questions that emanate from that probe.

It would appear that we need probes into a number of other areas,

particularly the prices at which Crown land is sold in the lower

mainland. But I have serious doubt about the need for a probe into the

use of agricultural land, so a number of questions arise in my mind

when I read of the probe initiated last week.

I want to

know the terms of reference for the inquiry that's to be done by Mr.

David Gillespie. I want to know as well.... Maybe the minister should

write these questions down, because I asked him several questions this

morning, and by the time I sat down and he got around to answering,

he'd forgotten about them. Perhaps he could write them down, and then

he wouldn't forget. Then he could give me the answers, and we wouldn't

have to go all through it

[ Page 7951 ]

again. We'd only have to do it three or four times to get the proper answers, rather than half a dozen.

want to know what problems were identified that prompted the minister

to ask that this probe be done by Mr. Gillespie. I want to know how the

public hearings for this inquiry will be advertised. I want to know

where they will be advertised. I want to know where the hearings will

be held, because that's very important.

AN HON. MEMBER : Socred ridings.

MR. KEMPF :

I hear from across the floor that they will be held in Socred ridings.

I don't doubt that for one moment. We have citizens in ridings of

politicians of other political stripes as well. I would hope, and I am

sure the Minister of Education (Hon. Mr. Brummet) would as well, that

this government would serve all of the citizens of British Columbia,

not only those represented by Social Credit members.

HON. MR. BRUMMET : They thought you were a Socred when they elected you, didn't they?

MR. KEMPF :

Mr. Member, I'm more of a Socred than you'll ever be. That's the

problem with that administration over there; it's not Social Credit

anymore.

Interjection.

MR. KEMPF : I don't pound my desk for either side of this House.

MR. CHAIRMAN : Order, please. Back to vote 52.

MR. KEMPF : If the member for North Peace River wants to talk about ideologies, I'll talk about ideologies. I'd be happy to.

want to know if the minister thinks that the four short months this

inquiry is going to take place over is enough time for those people

concerned, particularly the agriculturalists who have more to do than

spend their time sitting in inquiries. Is four months adequate for them

to prepare to voice their concerns? Can you ensure that such an

inquiry, carried out, it would seem, not on behalf of Lands but also on

behalf of the Ministry of Forests, would not adversely affect the

agriculturalists in my area? You know, it's very important to the

agricultural industry in north central British Columbia that we don't

upset the applecart.

We've heard a lot of talk over the

last couple of years from this administration about raising grazing

fees. I know that isn't in this minister's jurisdiction, but it

certainly involves the use of Crown land by agriculturalists. If you

want to kill the ranching industry in the northern two-thirds of

British Columbia, just fool with the grazing fees. Just fool with the

right they have now to utilize Crown land for grazing, and you'll do

just that.

I have a great deal of concern about this

inquiry. I want to know who initiated it, whose idea it was and why it

was initiated. Perhaps — I see the minister has been writing furiously — he can answer some of those questions.

HON. MR. DIRKS :

The member asked some questions this morning. It wasn't a matter of my

having forgotten those questions. He wanted to know the contracts and

the cost of those contracts under the Kootenay region. If you've got a

pencil, Mr. Member, you can write this down, if you like.

Production

of camera-ready newspaper advertisements, $10,000; snow-based

recreational opportunities study with BioQuest International Consulting

Ltd., $43,380; regional study on employment trends, skill requirements

and training needs based on questionnaire — this was a personal

contract — $7,000; study of the East Kootenay ranching and wildlife

conflict under

Dan Closkey, $10,000; and a regional health care program study, B.C.

Health Services Ltd., $14,000.

[3:30]

You asked also about the salary levels of RDOs and RDLOs, expense

accounts and so on, and whether we provide cars. As I said this

morning, they are in the civil service, management level 5, and they

would have the same expense privileges as any other civil servant.

far as cars are concerned, they cover a large area. That's certainly

one of the things that the member for Vancouver East, who is now out of

the chamber, alluded to: the tremendous number of municipalities and

what not that they have to cover. We don't supply them with

recreational vehicles, but we do supply then with automobiles at the

taxpayers' expense. We do provide them with expense accounts, but we

ensure that they are accurate and up to date.

As to the

announced inquiry into agricultural development on Crown land, it was

initiated by Crown Lands. You want me to ensure that such an inquiry

will not adversely affect agriculturalists in Omineca. You say that you

are not part of that side, but when you start looking for words and

using words like "ensure" and "guarantee" and so on, you are perhaps,

Mr. Member, starting to lose some of your free-entrepreneurial spirit.

Let

me tell you that this is to look at the agricultural situation and how

we can determine to what extent Crown land should be available for

agricultural purposes, and then to identify the most effective policy

and procedure for making this land available. I am sure that true

agricultural pursuits will be enhanced by this, not deterred in any way.

for adequate time, I believe it is adequate time. We certainly don't

want this thing to drag on. But if the hon. member has some concerns

about it and would like to put those in writing, as to why this

time-frame is not sufficient, and can justify an extension, we are

always open to suggestions, Mr. Chairman. We want to make it the best

procedure that we can have.

Where

and how the public hearings will be advertised and where the public

hearings will be held — at this point I don't have an itinerary, but I

will ensure

[ Page 7952 ]

that the member opposite gets the details of those public hearings and where they are advertised when that is available.

The problems identified — basically

the Ministry of Crown Lands has been administering this program to

encourage regional agricultural development through the provision of

Crown land for agricultural purposes. I am sure that's nothing new to

the member opposite. A lot of the land that has been made available is

indeed in his riding and in that whole region. I am sure that when he

was the Minister of Forests and Lands it was a concern that he had — whether it was being effectively used and so on.

The

program involves a lease-develop-purchase option and currently includes

1,300 such leases covering nearly 140,000 hectares. Obviously it is a

very important component, and that's basically why we are carrying out

the inquiry. We realize that there is a growing scarcity of Crown land

suitable and available for agriculture and increasing competition for

such lands for non-agricultural use. The agricultural program has

evolved over the last 20 years, and I think it is time, and that is why

the initiative was made by Crown Lands.

MR. KEMPF : I

appreciate those answers from the minister. I am really concerned. I

hear the minister speaking very highly of Crown land for agriculture,

and never once in his answering my questions did he talk about the

possibilities of some of that land going into forest inventory. I

really wonder about his remark to the press when announcing this

inquiry: he said the review will examine whether Crown land should be

used for agricultural purposes or included in the province's forest

inventory. That led me to wonder about an ulterior motive for such an

inquiry.

I know of no problems, and I asked what problems

were identified that brought about this hurried inquiry. I didn't hear

the minister suggest any problems that existed. I know that for a

number of years there has been a problem with the B.C. Ministry of

Forests with respect to wanting more land in their inventory — more

Crown land added to the provincial forest inventory. That's why I am

concerned when I see this quote by the Minister of Crown Lands. Who is

he serving by this inquiry? Are the bureaucrats in the Ministry of

Forests finally going to get their wish and see additional land taken

out of agricultural use or out of other uses? You shake your head, Mr.

Minister. Then why did you make the remark? What prompted it? There

must have been some reason that you were thinking about the

possibilities of this land going into forest inventory. What prompted

you to make that remark to the media when announcing the inquiry?

You

know, this wish list by the B.C. Forest Service goes back a long way. I

have some real concerns, some of which I enunciated here yesterday. The

Minister of Agriculture (Hon. Mr. Savage) is in the House, and I'm

happy to see him here, because this should concern him as well. It

should deeply concern him on behalf of those he represents in this

province, those in the agricultural industry who are having a tough

enough time already out there without more problems, problems which

might emanate from this inquiry.

[Mr. Clark in the chair.]

That's why I asked the

question: can you assure...? That may be a socialist word. Everything

seems socialist now. I'm glad the minister is concerned for my

philosophical well-being, but I'm here to speak for the people whom I

represent, and I have to tell you that not only is my philosophy

changing, so is theirs. You're going to find that out soon enough, Mr.

Minister. The way you're....

Oh, the member for Prince

George South (Hon. Mr. Strachan) is here as well, and he's one of those

slow learners as well. But It's going to be a big shock when you find

out.

HON. MR. STRACHAN : Have you seen the Fisher report?

MR. KEMPF :

Sure, I've seen the Fisher report. Do I like the Fisher report? Yes, I

like the Fisher report; I'm probably the only one in this House who

does.

HON. S.D. SMITH : On a point of order, Mr. Chairman, perhaps we could deal with vote 52.

MR. CHAIRMAN : The point is well taken. I'd ask the member to address vote 52.

MR. KEMPF :

It is very well taken, thank you, Mr. Chairman. While we're at it,

would the Chairman please keep those people on the benches opposite in

order, in order that we might simply discuss this minister's estimates

and not the Fisher report and other such things.

AN HON. MEMBER : That's for another day.

MR. KEMPF : For another day.

But the Minister of Agriculture should be very concerned about this announcement.

Interjections.

MR. KEMPF : Mr. Chairman, now it's the government Whip who is chattering away. Would you bring him to order?

MR. CHAIRMAN :

Order, please. I must say that there is a lot of chattering going on.

Only those who have the floor can speak. The member for Omineca,

continue, please.

MR. KEMPF : So I want to know from

the minister whose estimates are up at this particular time why he

alluded to the fact that one of the reasons for this inquiry was to see

whether Crown lands now outside the provincial forest might be included

in the forest Inventory. That's the question; that's the key to this

whole thing. The concern I had — I voiced it yesterday, and I'll put It on the record again — is for

[ Page 7953 ]

the

annual allowable cut in this province and for the possibility of the

annual allowable cut being increased, should it be decided by this

commissioner.

Interjection.

MR. KEMPF :

No, it's not forestry at all. Wise up, Mr. Member. If you'll stick

around here for a while, you might learn something. Well, I doubt

whether they're going to stay around long enough to learn anything, but

perhaps one or two might.

It is certainly an issue with

respect to this inquiry. If land presently allocated and outside the

provincial forest is included in the provincial forest, it will, in

effect, increase the lands available for forest and therefore perhaps

increase the annual allowable cut of this province. It's germane to

this subject, whether you think so or not. Why, Mr. Minister, were you

talking of putting Crown lands that are not presently in the provincial

forest in the forest inventory?

HON. MR. DIRKS : I'm

very pleased.... I'm not as pleased to hear the member for Omineca

thunder forth as he is to hear his own voice. Perhaps if he wasn't

quite so pleased, we'd be able to get on with answering some questions.

We do try and please and answer questions whenever possible, when we're

given the opportunity.

As the member was asking about the meeting dates and the inquiry dates — where they were going to be and when — I

would like to inform the member right now that on August 8 it will be

In Prince George; August 9, Vanderhoof; August 10, Hixon; August 15,

Fort Nelson...

Interjection.

HON. MR. DIRKS : Oh, I'm sure the member can get a little leave from his caucus to go and attend something like that.

...August 16, Fort St. John; August 17, Dawson Creek; August 22, Williams

Lake; August 23, Quesnel; August 24, McBride; August 29, Smithers;

August 30, Hazelton; August 31, Burns Lake. Those dates have just been

established, but they haven't been advertised yet. You are the first

one to know, Mr. Member. The terms and where they will be located — again,

I will try and let you know the precise locations and times of those.

Certainly, you will be able to put those on your calendar now and make

sure you've got leave from the Whip to attend some of these very

important meetings.

[Mr. Rabbitt in the chair.]

I'm

not exactly sure of some of the things that the member is talking about

and some of the concerns. I hope he does attend those meetings because

with the loud booming voice he's got, he'll be able to make his

presence felt and raise these issues with Commissioner Gillespie in the

inquiry process. Virtually, what we are looking at is agricultural

policy to determine how Crown land should be made available for

agricultural purposes, to identify the most effective way — effective policy and procedure — for making this land available.

[3:45]

This is quite contrary to what you are thinking about, Mr. Member.

The good member for Vancouver East likes to extrapolate on buildings

and condominiums and what not. You like to extrapolate on trees and

turn things upside down. I think, Mr. Member, if you attend some of

those inquiries, you will find it is a very complex issue and will be

dealt with very fairly and openly by Commissioner Gillespie.

MR. KEMPF :

I'm sure that my constituents in the agricultural industry will be

happy to hear once again that the government is going to fix something

that isn't broken, because they are very happy with the present policy

for the use and lease and sale of agricultural Crown land. I know there

were some bureaucrats in the ministry that didn't like the policy when

I brought it in, but I'm sure that I can assure you the

agriculturalists do. That was the ulterior motive that I talked about

being in the drawer yesterday.

One thing they do with a new

minister is haul out an old program that they couldn't put across to

somebody else. They've got a perfectly good, perfectly logical, well

accepted agricultural lease policy in place. They'll be happy to hear

they are going to fix it again.

I'd like to go back to

something the minister said. He was telling me about his staff, and

we're now going back to his responsibility as the Minister of State for

Thompson-Okanagan and Kootenay. I just wanted to pursue that a bit,

because I know that very soon the estimates of the minister for state

for the area that I represent will be before this House, and I just

want to make a few comparisons. The Minister of State for

Thompson-Okanagan and Kootenay said something that was very

interesting, and I would hope that the Minister of Education (Hon. Mr.

Brummet) isn't educating him too much, so that he won't hear my

question.

The minister was talking about his employees, the

people working in and out of the offices of the Ministry of State for

Thompson-Okanagan and Kootenay, and he suggested to this House that

they're civil servants. I just want to pursue the question of whether

in fact his economic development liaison officer is or was a civil

servant, and if so, how....

Interjections.

MR. CHAIRMAN : Order, hon. members. Would the member for Omineca please proceed.

MR. KEMPF : Thank you, Mr. Chairman. Would you please control the Minister of Education.

HON. MR. BRUMMET : You want some education? Sit down and I'll give you some.

MR. KEMPF : I could say something....

[ Page 7954 ]

Mr.

Chairman, I want to know where and on what credentials the economic

development liaison officer for Thompson-Okanagan and Kootenay was

hired.

HON. MR. DIRKS : First of all, I'm not exactly

sure which one he wants to talk about. Do you want to talk about the

one in Thompson-Okanagan or do you want to talk about the one in

Kootenay? There are two, and they are regional development liaison

officers.

AN HON. MEMBER : Both.

HON. MR. DIRKS :

We advertised in the Kootenays and got a response. They were short

listed, interviewed and looked at very carefully. Then we decided who

was going to take the position. I know that very well, because I was a

parliamentary secretary to the then minister of state for the Kootenay

region, the Hon. Rita Johnston, Minister of Municipal Affairs. I was

involved in that process. Yes, he was a civil servant before; he worked

with the Forests ministry.

As for Thompson-Okanagan, that gentleman was in place before I assumed the role of Minister of State for Thompson-Okanagan.

MR. KEMPF : We're getting someplace.

Could

the minister tell me what salaries are paid to each of the two economic

development liaison officers and what they have for an expense account?

Do they have a vehicle, and are the expenses on that vehicle paid? How

much of that comes out of the $1.47 million budget for that minister's

two political offices?

HON. MR. DIRKS : Well, I think

I've answered that question before, basically. I thought I told you

very clearly that they were entitled to the same level of expenses as

any other public servant at management level 5. I said before that they

were given automobiles; they weren't given recreational vehicles. I

thought I made that very clear to the member, so I really don't know

what his problem is. Their salaries and their expenses for their

automobiles, and their expenses for travelling throughout the region,

are part and parcel of the $1.47 million budget.

MR. KEMPF : I'm not very familiar with the civil service pay scale, Mr. Minister. Can you tell me what management level 5 is paid?

HON. MR. DIRKS :

I'm not sure offhand what they are paid, but I can tell you that if you

really want to find out, you can do a little research, or have your

caucus do a little research, and find it in Public Accounts for last

year.

MR. KEMPF : If the minister doesn't know, I'm

positive I can find time to research that and find out. Ah, staff has

it. Perhaps he could tell this House, then.

HON. MR. DIRKS : No.

MR. KEMPF : Oh, they don't have it. All right. We'll perhaps find out at a later date, Mr. Minister.

want to get back to the sale and price of Crown land. It was

interesting to listen to the debate earlier and to find that there are

people in this province who get a fair deal with respect to Crown land

and the purchase of same.

I read the Blues of yesterday

very carefully, and I didn't see any logical, sincere responses from

the minister which I can take back to the people of Topley Landing with

respect to the sale and purchase price of those waterfront lots that

the minister is now asking $10,000 apiece for; no acceptable responses

at all, no logical reasons why the government through this ministry is

asking the people at Topley Landing to pay more than three times what

that lakefront property is worth.

The minister will talk

again about independent appraisers, and we heard debate around

price-negotiating for Crown land in British Columbia. I think we should

scrap the whole idea of selling these lakefront lots to British

Columbians and go back to the same kind of deal that exists at New

Westminster. I'm sure my constituents would be very happy to be leased

lakefront lots for 99 years for $99. They're being asked $10,000 for a

lot which in the private sector in the same area would sell for $3,000

or less.

I'm prepared to keep the minister here quite a

while until ' hopefully, he comes to his senses with respect to a fair

price for those lakeshore lots at Topley Landing. These people have

nowhere else to go. They're being held to ransom: pay or move off, or

lease it for the rest of your life. You're going to lease it to them

for a dollar a year, Mr. Minister? If I can tell them that, they'd be

very happy; or forget about the purchase and all will be well. One

dollar a year for 99 years — then perhaps they could buy it for a third of its worth.

Interjection.

MR. KEMPF : No, that would give them the fair price.

The

minister says: "Let's be fair." That's all I'm asking: let's be fair.

The government is asking $10,000 a lot for lots worth $3,000 or less.

You're going to reduce the price? just nod your head yes or no.

HON. MR. DIRKS : Have I got a deal for you.

MR. KEMPF :

Such a deal you got for me. You really bought one in initiating this

probe — you were had. I don't want to be had by the same kind of deal,

Mr. Minister.

[4:00]

It's going to be different from your letter of June 20, where you're

saying: "Let the independent appraisal system be the judge." I'm not

willing to do that. As I asked you yesterday, Mr. Minister, if you're

willing to take the name of an appraiser, who belongs to the institute,

whom I name to do a fair appraisal —

[ Page 7955 ]

not

an appraiser looking for more government business or one that the

government has on a list; one who will come forward with a fair

appraisal of those lots....

AN HON. MEMBER : Time.

MR. KEMPF : Not time yet, Mr. Minister.

Ten thousand dollars for a lot worth $3,000.... Well, the minister wants to answer; I'll let him answer.

MR. CHAIRMAN :

Mr. Minister, just before we proceed, this item before the committee

was extensively canvassed yesterday, and I would like to ask both the

member and the minister to consider that and also keep in mind our

standing orders.

HON. MR. DIRKS :

Obviously the

member is very concerned about this whole issue, and he has come to us

before and said the assessment should be used. He has put forward the

argument that the assessment should be fair market value. Now he is

telling us that — if I heard the member correctly; he can nod his head

— those lots are worth only $3,000. Is that what you said, Mr. Member?

He nods in the affirmative.

Well,

Mr. Member, I find it extremely strange that while we are asking prices

on those lots at Topley Landing from $9,500 to $10,500.... You agree

that this is what we are asking? He nods in the affirmative again. We

have also checked with the B.C. Assessment Authority, and we find that

the B.C. Assessment Authority has those prices pegged — are you ready for this, Mr. Member? — at

about $1,500 to $2,000 lower than our prices. So that, in my

calculation, would mean that somewhere the B.C. Assessment Authority is

saying that those lots are worth $8,000 to $8,500 or $9,000.

Mr.

Member, if that's the real case, and you say that's what the B.C.

Assessment Authority has them shown at, and that the real market value

which you have been hammering about and ranting and raving about is

$3,000, then in trying to represent and help those people, why in God's

name didn't you tell them that they should take these assessments to

the court of revision and get their taxes lowered, if that is really

the market value?

Somehow,

Mr. Member, your addition

doesn't work out. The facts that you are trying to lay out are not true

facts. I believe you need to reassess that whole picture and certainly

look again at those lots that you say are worth $3,000, because that

is lower than the assessed value of those lots. I don't know — I'm still

waiting for an answer from you — if you would sell your property for

the assessed value. Forget about something in excess of the assessed

value.

MR. KEMPF :

Well, the minister goes on and on about what he thinks the government

should get for these lakeshore lots that we are speaking of, and he

pays no attention whatsoever to the price of like property in the

private sector that has recently sold in that very area, which is

significantly less than the $3,000 figure I gave the minister.

The minister talked a lot about fairness. That's all we are asking for these people — fairness — in

a very depressed area. I don't know when those assessments were done.

I'd like to see the same assessments for the same period at Granisle,

not five kilometres away, in which I told you this morning that three-

and four-bedroom homes with the lots were selling for as little as $15,000.

When were these assessments done, and by whom, Mr.

Chairman? You can't deny the facts. Lakeshore land of any sort in the

private sector in that area is not worth $9,000 by any stretch of the

imagination. We are not talking about downtown Vancouver, or even

downtown Nelson, Mr. Minister. We are talking about Babine Lake, a lake

that is 100 miles long and probably has a shoreline of 300 miles. We're

asking these people who live in that area, most of them working at the

local mine — which may or may not be in operation two years from now — to

pay those kinds of inflated prices for a piece of Crown land on the

lakeshore, which they carved out in the first place. When they first

took them up, there weren't even any roads there. They put in their own

water system. They weren't serviced by taxpayers' money; they did it

themselves.

Now, when the government brings forward a

policy.... I agree with the policy. I think the people of British

Columbia should own their own land. But when they come forward with

that policy after so many years of having those people lease, they put

the price of the land out of their reach. Visit that area and see for

yourself what's happening. You talked this morning about visiting

firemen. Asking $10,000 for a lot that's worth less than $3,000 is

hardly a fire sale, Mr. Minister.

You people over there

really don't care at all, do you? That's the problem. These people have

nowhere else to go. They've built their homes. They've improved their

properties. In many cases they've built their own road into them and

put in their own water systems. Now they're being asked inflated prices

by an uncaring government. It's wrong. You can talk as you like about

your assessment. Go to that area and see for yourself. With 300 miles

of lakeshore, surely this government, given the prices they've sold

land for in Whistler and New Westminster, can come up with a fair price

for these ordinary working British Columbians. They're being held to

ransom because they have no choice.

All

we ask is for a little bit of fairness in a very depressed area, which

may be even further depressed should that mine close — and it could,

very logically, in a couple of years.

MR. ROSE :

I was very interested in the minister's response to the previous

question. Maybe he feels he has responded in the past and doesn't want

to do it, but I'm glad to yield the floor for that purpose. I was going

on to another subject, so if the minister intended....

[ Page 7956 ]

MR. CHAIRMAN : Please proceed, hon. member.

MR. ROSE :

In 1984 there were only ten fish-farms in all of British Columbia. By

1988 we had 173. With government support and fire-sale prices on the

spawn and the eggs, there has been a vast proliferation of these

fish-farms along the B.C. coast. They have been embraced by the

government, I think, because they genuinely felt that here was an

operation that might be suitable to the best interests of British

Columbia in terms of development of a brand-new industry. It didn't go

uncriticized, of course, because a lot of people expressed concern over

the dilution of the wild stocks and the fact that there could be

pollution.

In terms of my own property on the ocean up in

Powell River, I was forced to put in $8,000 or $9,000 worth of

equipment to make sure my sewage didn't go into the pristine bay upon

which my lot is situated, but not more than a mile and a half or two

down the coast from me are several fish-farms, with houses out on the

floats and thousands of tons of feed thrown into these pens on a yearly

basis. In terms of the pollution of that environment it's certainly

intense. States such as Alaska are all set to pass laws banning this

industry entirely. I'm not suggesting we go that far, but it's not

without problems. Washington State has passed a moratorium on the

development of all further fish-farms.

I'm making this a

long introduction so that the minister can receive all of the pertinent

advice he has to offer. I would like to know if the minister can tell

us a little bit about the nature of these leases, their terms, their

costs, their value and whether or not they are fluid in the sense of

being able to be traded.

HON. MR. DIRKS : I would say

that the lease is a 30-year maximum with a replacement option after

midterm. It's valuation is its own land value. The pricing is 8 percent

of zoned land valued annually The method of disposition is application

or public auction. As far as the licence of occupation is concerned,

it's a ten-year standard with replacement option after midterm. Again

it is zoned land value, but instead of being 8 percent of the zoned

land value, as a lease is, this is 7.5 percent of zoned land value

annually. Again, the method of disposition is application or public

auction.

[4:15]

MR. ROSE :

That's a bit of jargon that I don't quite understand. This 8 percent of

zoned land value; I'd like a little bit more information on what that

really means. What is the value and what is the zone, and how do we

come by that? What restrictions and regulations in terms of proximity,

one to another? All this kind of information is quite important. What

kind of pollution standards are required of them? Their 30-year lease:

a ten-year standard was mentioned later on, and I didn't understand,

with a 30-year lease maximum and a 10-year standard lease, whether or

not....

I will restrict my questions. The thing just

bristles with questions about how these are renewed, how they can be

bought and sold, what tenure exists. All this stuff is pertinent,

because, as I said earlier, in some areas they are becoming highly

controversial.

HON. MR. DIRKS : What I would say to

the hon. member opposite is that Crown Lands does have a policy

summary

that was put out in the winter of 1988 that he could refer to. It

explains all about finfish, aquaculture, the pricing zones and so on.

It is a bit of a technical document, but certainly it would give him a

lot of the information that he is looking for, that he'd be able to

peruse at his leisure sometime. Then we could sit down and have a good

discussion about it.

MR. ROSE : I seldom peruse this

kind of material at my leisure. I was kind of hoping, since I am a

rather dyslexic reader, that the minister might just peruse it himself,

if this isn't the first time he has seen it, and sort of pass it on to

some of the rest of us with learning disabilities. Okay? Why doesn't

the minister tell us about...? Oh, I'm sorry. I really shouldn't sneak

up on him like this. I should give him a chance to read it. If you'd

like to read it and peruse it at your leisure, that would be fine for

me.

How much does it cost to lease the land, or the

water-lot lease? That's the first thing. Now you're going to say 8

percent of the zoned value.

HON. MR. DIRKS : Again it

would be very helpful, really, if the member did look at this book,

because it's full of very useful information. If you look at the

finfish aquaculture pricing zones, you will find that there are four of

them. Zone A has a zoned value of $7, 031 per hectare; zone B has a

value of $6,375 per hectare; zone C is $5,156 per hectare; and D,

which is located up around Prince Rupert, is $4,875 per hectare.

a point of information, I would say that zone A is the area covering

the west side of the mainland from about halfway up between — if you

were putting the points on; I know they are not on the same part of

that side of the passage — Allison

Harbour and Campbell River, if you drew a line across there and you

took in the eastern shore of Vancouver Island and the west coast of the

mainland about halfway up. Zone B is the area on the western side of

Vancouver Island, about halfway up the Island; C is that area that is

covered by the north part of the Island, both sides, the east and west,

and basically north up to Allison Harbour. D is a small area that

surrounds the Prince Rupert area.

MR. ROSE : Very

interesting. I congratulate the minister on his reading ability. I find

this whole subject fascinating, if not alluring — no pun intended.

How

big are these fish-farms? I've never seen one that looked to me as if

it were a hectare. So if you have a hectare in a D zone worth $4,000 a

year, and 8 percent of $4,000 is $320.... I haven't seen one that I

[ Page 7957 ]

would

say would be more than, say, a quarter of a hectare. And a quarter of

$320 is $80 a year. Was that a good lease figure? Is that the kind of

return we're getting?

Interjection.

MR. ROSE : A lot of water has to flow under the bridge before he could rent one for $80 a hectare.

HON. MR. DIRKS :

Those leases are approximately ten hectares in size. That would be an

average type of situation. But they are spaced widely, so that you do

have a large distance in between the leases.

MR. ROSE :

As I understand it, then, it's not the pen area. You must lease the

whole area, in excess of that which is covered by the pen. And

therefore, if it's ten hectares at $4,000 in Prince Rupert, that's

$40,000, and 8 percent of $40,000 is $3,200 a year to lease that. If

HON. MR. DIRKS : Like all leases, I would say yes, there is provision in there for assignment.

MR. ROSE : I wonder if the minister could tell us if any of these leases have lapsed in the last year.

HON. MR. DIRKS : I don't have any information about that handily available, Mr. Member.

MR. ROSE :

Perhaps that can be researched and I could get a letter on that, along

with another question, which is a collateral question. How many of

these have lapsed because they've gone out of business? How many have

been bought and sold — traded, in other words? And how many have just

simply gone out of business? I understand that there have been some

really difficult times in that industry, especially this last year, for

a number of causes. I won't go into the causes at this time, because I

want the minister to respond to that.

HON. MR. DIRKS :

I would be very pleased to supply that to the member, but I would ask

that he be a little specific as to time-lines that he would like it on,

if possible.

MR. ROSE : Two years back from the latest information would be fine.

had another question which sort of slips my mind now. Oh, yes. Under

cause an operator to forfeit a lease? And have there been any examples

of bad actors in this business?

HON. MR. DIRKS : When

they obtain these leases, they have to file a development plan for the

use of that lease. If they don't comply with that development plan,

then they forfeit the lease.

MR. WILLIAMS : What we

have here, then, is a pattern that ranges from about $390 a hectare to

$580 a hectare, and they are generally about 10 hectares in size. So

we're talking about $3,900 to $5,600 per annum. in terms of rental.

always intrigues me.... We have something like 125 of them that are

operating. We have 200 leases in total here. I suspect that there would

be a pattern of trading in the leases prior to actual development. That

would be a natural pattern, it would seem to me, in an under priced

resource, if my economic training is of any use.

The

interesting thing would be whether there is a pattern of training prior

to development to some extent. Further, if there is a pattern of

trading, have you attempted to find out what the trading values are at

that time and how that relates to what the Crown itself is charging?

The tendency throughout the piece is to capitalize the difference

between what the Crown charges and what the market value really is.

That would tend to get capitalized and traded and sold. That's what

happens in the forests of British Columbia. One would think that the

same economic principles would apply to these leases. So I just wonder

if there has been any investigation by the ministry to see if there has

been a trading pattern, whether it's fairly significant and whether the

numbers are very different than the Crown's numbers and are reflected

in those capitalized value differences.

HON. MR- DIRKS :

I guess the member is trying to give me a lesson in economics. I would

say that this certainly is not an under priced resource. There Is no

developed pattern in trading. We are aware of assignments, but I would

say again that that is not significant.

MR. WILLIAMS : So there have been assignments prior to development. Is that the case?

HON. MR. DIRKS : Yes, there are a few, Mr. Member — changes in corporate structure and so on.

MR. WILLIAMS : Then the ministry staff does try to obtain the trading information at the time of the transfer. Is that the case?

HON. MR. DIRKS : Yes.

MR. WILLIAMS :

It would seem, then, that if that is done, it would provide an

Indication of adjustments in the market as far as the Crown is

concerned. Would it be the pattern that the staff will keep vigilant in

this regard and see to it that there are indeed adjustments, so that

the people of British Columbia get the income due them for their own

resources?

HON. MR. DIRKS : Well, the zone values

that I talked about earlier.... Basically, any trading that is going

on.... That information is used in establishing new zone values. So it

is being utilized.

[ Page 7958 ]

MR. WILLIAMS :

I appreciate that. I think it's a worthwhile exercise for the ministry

staff, and it will result in some differences, I'm sure, over time.

Just

to wind it up, are there escalation clauses? If they are 30-year

leases, are they reviewed every ten years or something like that?

HON. MR. DIRKS : Every lease has a rental review clause in it for every five years.

MR. WILLIAMS :

I appreciate that. I wish the member for Vancouver-Little Mountain had

been aware of that sort of thing when she was handling the stuff in New

Westminster. The sort of traditional policy that's built up over the

years gradually does get refined in the civil service. Step by step by

step — drip, drip, drip — or whatever, things are gradually improved,

and there are procedures established. It's when we've had these new

Crown corporations playing in the land game that we've had some

disastrous results.

[4:30]

I'd like to revisit the lease thing. I mislaid the New Westminster

lease that I had mentioned earlier; I have it before me now. It was

registered in the land title office in New Westminster on May 29, 1987.

It's a lease between First Capital City Development Co., which was a

subsidiary of BCDC-BCEC, and Quayside Marina Inc. Quayside Marina Inc.

included Mr. Fritz, who is Westwater Industries, which had the hotel

and the office development; Mr. Setton, who is United Properties, which

did some of the condominium development; and Mr. Bosa, who did some of

the condominium properties as well. It's between those two parties, and

it reads as follows: "The tenant shall have and hold the lands for a

term of 99 years, commencing on October 17, 1986, and ending on October

16, 2085. The premises means the marina facility, which includes some

54 individual berths" — which were to be constructed by those parties,

and they have now been constructed.

When it comes to the

question of rent,

article 3 of the lease reads as follows in

section

3.01: "Rent. The tenant will pay, upon the execution of this lease, to

the landlord the sum of $99 as prepaid rent...." Ninety-nine dollars

for 99 years, to the year 2085.

MR. CLARK : But they made them prepay it.

MR. WILLIAMS : They did make them prepay it,

Attached

is, I guess, a 30-year lease. The

schedule at the back shows the lease

area, and it straddles the area that includes both the hotel and the

office tower. Attached to

schedule B is the plan of this area:

"Explanatory plan of lease-over, parts of lots 1 and 2, district lots

3980 and 3981, group 1, and the bed of the Fraser River. New

Westminster district, plan 74261." So there it is.

Really,

for my own interest at least, I want to clarify it, because the

document is clearly an executed document between the Crown corporation

and Quayside Marina. It's at a dollar a year for 99 years. It's another

one of those deals of the member from Little Mountain, and

I find it intriguing. I'd be happy to provide a copy to the minister

and his staff, because it does run counter to what we heard today. It

may have been involved in the total transaction in some other way, but

this document itself seems fairly clear.

HON. MR. DIRKS :

Again, I think we're getting some of the information. We're not getting

all of it, and you're certainly not coming forth with the total picture.

You've

done a lot of research, Mr. Member, and I appreciate that. You

certainly do research. I think it's quite a compliment that you are the

critic for Lands rather than.... In private industry and private

business I've always appreciated my competition, because that's what

kept me sharp, and I appreciate you as the critic, because you do some

research.

One thing that has failed to come out is the fact

that lots 1 and 2 were privately owned. Both lots included a portion of

the riverbed where the marina is now located. So what you had there

virtually was not a Crown lease, not the same as what would be issued

under Crown Lands, but rather privately owned land that was leased.

Again, FCC sold our interest in that lease two years ago for $140,000.

MR. WILLIAMS :

I'm intrigued. So the Crown sold its interest in the lease for $140,

000, and that was sold to the numbered company. Is that the case?

HON. MR. DIRKS : I would say FCC sold their portion of that.

MR. WILLIAMS :

I'm having trouble, because the lease indicates it was for a dollar.

You're saying there is some subsidiary agreement or other arrangements

of around $140,000 as well? I understand that the lease is within lots

1 and 2, but nevertheless it is a lease, and it is the price that was

paid for the lease, but it is within those parcels. You see, there was

the $700,000-plus figure, the $900,000-plus figure for the two

parcels, the office building and the hotel. You're saying that the

lease was simply part of that package. Is that the situation?

HON. MR. DIRKS :

Basically the submerged lands on lots 1 and 2 were jointly held

one-third by Bosa, one-third by United and one-third by FCC. It was the

one-third FCC share in those submerged lots where the lease is

pertaining that was sold for $140,000.

MR. WILLIAMS : Okay. I appreciate that. So $140,000 for one-third of the water area. Is that the situation?

HON. MR. DIRKS :

What FCC sold for $140,000 was one-third of the lease on the submerged

portion of lots 1 and 2. Lots 1 and 2 were sold at the same time to the

numbered company for $1.7 million.

MR. WILLIAMS : I

simply ask for clarification. Thank you, I appreciate that. What we're

saying, though, is that one-third of the water was worth

[ Page 7959 ]

$140,000. We have to triple that, so we get to $360,000 in terms of the

water value; and that, presumably, is then deducted from the $1.7

million as part of the package, Is that the case? No?

HON. MR. DIRKS :

The $140,000 was our share of that one-third, but the $1.7 million is

in addition to that. I think the member is extrapolating again.

MR. WILLIAMS :

So an additional amount was paid on top of the $920,000 and the

$779,000, and another $140,000 was paid for one-third of the underwater

area. Is that the case?

HON. MR. DIRKS : It was $1.7 million plus $140, 000 for our share of the submerged land.

MR. WILLIAMS : When the minister says "our share," he means FCC. Then how do we understand the lease at $1 a year?

would ask the minister if his staff ever reviewed the lease that is

registered. It clearly states $1 a year for 99 years; that's the

trouble I have. I don't know where the $140,000 comes in and where the

transaction is registered; that's what I have trouble with. If the

underwater land was worth $360,000, where was the transfer? Where does

it show up? It doesn't show up anywhere.

HON. MR. DIRKS : I think the member is failing to remember that basically that's a lease of private property.

MR. WILLIAMS :

Yes, but it's a lease from FCC, and you're saying that's private

property. No? If it's a lease of private property, what kind of private

property? You're saying that the water is defined as a legal entity. Is

that it? And the lease is within that legal entity?

HON. MR. DIRKS :

I'm not exactly sure where the member wants to go with this. Lots 1 and

2 were privately owned, and part of lots 1 and 2 included a portion of

the riverbed. That's where the marina is located now, and that was the

area subject to this lease. But again, it was private land; it was

privately owned.

MR. WILLIAMS : It was privately owned by a public corporation, a Crown corporation.

Lots

1 and 2 were sold by First Capital City to 149925 Canada Ltd.; they

were sold for $900,000-plus and $779,000. 1 have a copy of the lease

with First Capital City that says it was $1 a year for 99 years for the

marina land — the underwater land. But you're saying that one-third of

the underwater land was really worth $140,000, and what I'm trying to

track is that transaction. I don't know where it is. Where would the

transaction for $140,000 be registered or take place?

HON. MR. DIRKS :

Again I fail to see where we're going with this, because basically

we're talking about what was privately owned land. FCC did have a

one-third interest in the submerged lands, but it was privately owned

land, and it remained private land; it was not turned into what you

would normally classify as Crown land.

MR. WILLIAMS :

So two-thirds of it was owned by somebody else. Is that the situation?

If one-third of the underwater land was owned by the Crown or its

representative, two-thirds was owned by somebody else. Who was the

somebody else?

HON. MR. DIRKS : I said that a little earlier: one-third was owned by Bosa and the other one-third was owned by United.

MR. WILLIAMS :

I'm intrigued, Mr. Chairman. How would they have ended up owning

two-thirds of the underwater land in this site off the hotel and office

tower when they had condominium projects further downriver in another

location?

How would that occur?

[4:45]

HON. MR. DIRKS :

Again, I really believe I have to go back to what I said very early in

this whole debate. I would certainly supply information wherever

possible, but this really does precede me by a long shot. Consequently,

I think this should have been canvassed in the minister's estimates

last year rather than this year. It really doesn't pertain to what

we're discussing today, Mr. Member.

MR. WILLIAMS : I

appreciate the point the minister is making, and I couldn't agree more.

I do wish the member from Little Mountain was here to answer hundreds

and hundreds of questions on her term when she was Minister of Economic

Development and was handling these public lands in the manner she did.

Getting to the bottom of it all is extremely difficult. The more you

review it, the more you are satisfied that they were improperly

managed, that the sales were extraordinary and improperly handled.

Clearly, neither of us, neither the minister nor I, are going to

finally resolve this one.

I suspect there's another story,

another chapter, and it was indeed another player to a very great

extent, a player who just a couple of weeks ago, as part of her

leadership campaign, released polls indicating she was the most trusted

politician in British Columbia. I'll tell you, it's nothing if not a

bag of ironies — one of the biggest bags of ironies, if you'll pardon the pun, I've ever come across.

any rate, we've seen that there's a transaction here that leaves a lot

to be desired in terms of public information. There's an option that's

going to be exercised in August by a Canadian numbered company — not a

British Columbia numbered company — and we can be sure that, yes, your

time is up, folks. It's down the road before very long.

Numbered

companies prevail. They pervade the activities that took place under

that BCEC umbrella, the cleanup job you guys are stuck with over there.

[ Page 7960 ]

It's

just extraordinary. These convoluted options, mortgages and so on, tied

to numbered companies in eastern Canada, with options to buy back again

in the future by people that have been close to the Premier in the

past. It's abundantly clear that these kinds of machinations are

pervasive in what has happened over the last few years in property

dealings.

I said a while back that having this government

handle Crown lands is like having Dracula manage the blood bank. That's

exactly what it is.

HON. MR. RICHMOND : A point of

order. We were doing quite well until the member at the very end of his

monologue couldn't resist taking some personal shots, then hoping to

sit down and leave that on the record unchallenged. I feel that the

innuendos surrounding the Premier and the comments he made were most

unparliamentary. I would ask the member to reconsider them and perhaps

withdraw the allegations that land was being sold and resold in

connection with the Premier's name. And the reference he's made several

times in this House to Dracula in the blood bank I find not only

offensive but unparliamentary. I would ask the member to withdraw those

remarks.

MR. WILLIAMS :

I am prepared to withdraw the comment about Dracula and the blood bank,

Mr. Chairman, if that disturbs the minister — appropriate as it is.

MR. CHAIRMAN : Thank you. Shall we proceed?

HON. MR. RICHMOND :

It's hardly a withdrawal, Mr. Chairman, but it's about what I expected.

How about the comments about flipping land and the Premier's friends,

and reselling lands and buying them back? Does he wish to leave that on

the record? If so, that's fine. I didn't expect an unequivocal

withdrawal from that member.

MR. CLARK : On the same

point of order, Mr. Chairman, I think the facts are very clear: Mr.

Fritz is an associate of the Premier and has been a friend and

supporter of the Premier. That's on the record. Mr. Fritz got a

negotiated land sale with the government that appears to be below

market value. I think those are factual statements that make no

innuendo whatsoever, Mr. Chairman.

MR. CHAIRMAN :

Hon. member, we're not here to debate that particular subject. I would

presume that the hon. member is not attributing an improper motive to

another hon. member of the House. That is the point of order.

MR. MILLER : I wanted to canvass with the minister the review that was

done on the Charlottes on the issue of sports fishing lodges. The issue tends

to be divided among more than one ministry. If I could briefly outline the particular

problem, there is a growing — if I can use the term — commercial sports fishery

in British Columbia, which is causing considerable difficulty for the existing

commercial fishermen. There has been a great deal of pressure on the lower coast,

in the gulf, on this issue, with quotas which are allocated by the federal Minister

of Fisheries changing over the years. But the situation we have on the Charlottes

has become quite critical. Last year there were essentially two of these commercial

operations on Langara Island, on the northern tip of the Charlottes. As a result

of the pressure, the then Minister of Lands announced a moratorium on additional

Crown land leases in the area while a joint review study was conducted, not

only by your ministry but in concert with other provincial and federal agencies.

That review concluded with a recommendation that no new leases be granted on

Langara, but it also formalized a third lease there. So where there were two,

there are now three. In addition, there are other applications on the Queen

Charlotte Islands to establish commercial sport fishing operations.

These

operations, which are growing as people from outside British Columbia

come to experience the wilderness values and to take advantage of our

excellent fishing opportunities, don't really do much for the area. If

I could illustrate, the people who go to these lodges — and I think they pay rather handsomely to do it — fly

to the airport in Prince Rupert or Sandspit, where they're picked up by

a small plane and flown directly to Langara. There are essentially no

local purchases that benefit the community. These people generally

never see the rest of the community. So one would question the value to

British Columbians, apart from the lodge-owners and the airlines. I'm

not trying to attack the people in the business, but it seems to me

that the benefits are very restricted, in that they don't flow very

much to others in the community.

[Mr. Rogers in the chair.]

the same time, there is a real problem with the pressure on the fish

stocks. The traditional users have seen what has happened in the gulf.

There are, I think, some problems that have to be ironed out with the

federal Minister of Fisheries in regard to that allocation.

Essentially, the existing commercial operators are given a certain

allocation. It's fairly easily measured by federal Fisheries. Once

they've reached their quota, then they're out of business for the year.

We've seen increasingly in various sectors of the industry that those

quotas are filled rather quickly. I think of halibut, where it's not

uncommon to have very brief openings of two or three days. Over the

long term, along with the other pressures on our fisheries, such as the

driftnet, it has led to fairly serious reductions in stocks.

MR. CHAIRMAN : Could the member please relate this, for the Chair, to vote 52.

MR. MILLER :

Mr. Chairman, I did say at the outset that it was an issue that. really

overlapped more than one ministry. In fact, the Ministry of

[ Page 7961 ]

Tourism

and the Ministry of Fisheries are involved. The Ministry of Lands is

involved to this extent: they were the ones that initiated a moratorium

on leases in the area that I'm talking about. They did it partly for

the reasons that I cited just now. For that reason, Mr. Chairman, I'm

on target In terms of asking questions. I have a couple of letters from

the minister on the subject.

In any event, Mr. Minister,

I'd like you to elaborate somewhat. The review

summary is all I

received from you, although I did request the full report. I'd like to

know why you allowed the additional operation to become permanent;

where there were two, there are now three. I'd also like to know what

position you're taking with regard to other applications in the area,

because I don't think you can simply isolate one particular island and

say we'll deal with the issue on this one island, when the issue is

much larger than that. Just to get into it, I would like the minister

to respond to the questions I have raised so far.

HON. MR. DIRKS :

I would say that, first of all, we are limiting the tenure; we do

realize the pressure on fish stocks and so on and what can occur in an

area, and we are limiting the tenure. We have limited it to three. We

did increase it from two to three, as the member said, but that was

after a trial basis for two months and a determination that that area,

in effect, could handle the third tenure. We are not giving tenure in

that area to any further...

MR. MILLER : When you say "in that area," Mr. Minister, are you referring strictly to Langara Island?

HON. MR. DIRKS : I was under the impression that that was what the question was all about, Mr. Member.

MR. MILLER :

I did try to elaborate and explain that the issue is really one of this

pressure on the fish stocks. The provincial government is a player in

the game by allowing these operators to locate. There are many areas

where they can locate — they needn't be on Langara Island — which

doesn't reduce the problem; it only increases it. I believe there is an

application now — and I am not exactly certain where the area is,

because I haven't checked it out on a map — for

an area called Seal Inlet for a similar type of operation. Obviously

your ministry felt it was of sufficient importance to initiate a

moratorium.

Perhaps the minister could expand somewhat on

the findings of the review committee. What aspects did they look at in

arriving at their conclusions? It is a fairly large area, Mr. Minister.

[5:00]

HON. MR. DIRKS :

As the member says, it is a fairly large area. It is a very difficult

area to police effectively. But I think the basic root that the member

is alluding to and the basic issue in the whole matter is certainly an

issue of allocation of catch. In that case, really, it is a federal

Ministry of Fisheries concern. It is our concern, but it is certainly

an issue that should be taken up with the federal Ministry of Fisheries.

MR. MILLER :

I disagree, Mr. Minister. If it is the position of the provincial

government to promote this type of operation in British Columbia....

And I assume that is the case. The Ministry of Tourism advertises and

promotes this kind of activity. The Ministry of Fisheries is concerned

about the issue In terms of the fishery, and your ministry is in a

position to play a role in terms of allowing these lodges to be

established.

Is the minister not prepared to elaborate on

the findings of the commission? Is it simply a matter on which the

minister is going to say: "We decided to increase it from two to

three"? Are you prepared to discuss the findings of the commission? It

was your industry that put the moratorium in place, Mr. Minister. You

must have done it for a particular reason.

What about the

issue of licensing further lodges, or allowing leases in adjacent

areas? What about the issue in terms of the entire coast of British

Columbia, for that matter? You do play a role; your ministry plays a

role. What is that role? What kind of referral process do you have in

place for these lease applications? Are they referred to federal

Fisheries, for example? Is there an overall comprehensive look at this

issue being taken, or is the ministry simply dealing in isolation with

one very small area in British Columbia?

HON. MR. DIRKS :

We do have a referral process in place and we are constantly reviewing.

Any new applications that we would receive would be referred to people

like Fisheries and Oceans, Environment Canada, the provincial

Environment ministry, the Ministry of Forests and the Coast Guard. But

we do have a referral process in place for any new applications.

MR. MILLER : Is that referral process coast wide? Is your ministry involved in any kind of interministry planning in terms of this issue?

HON. MR. DIRKS : Yes.

MR. MILLER : Could the minister describe what that process is in terms of those other ministries?

Well,

perhaps the minister needs more time to read what has been handed to

him. I've asked what the process is, in terms of these other

ministries: the Ministry of Tourism, the Ministry of Agriculture and

Fisheries and his own ministry. What kind of interministerial process

is in place to deal with this fundamental issue on the coast of British

Columbia? I'm talking about a particular area in my constituency where

it has become a very difficult problem. So can the minister elaborate

on my question?

HON. MR. DIRKS : I was baffled a little bit, because when I said we did have a referral process in

[ Page 7962 ]

place,

I meant precisely that. We refer the applications to the various

agencies that are involved in this referring process and ask for their

comments and input. I didn't know that it required referral as referral.

MR. MILLER : Is there any particular planning group that has been set up interministerially in British Columbia to look at this issue?

HON. MR. DIRKS :

We have a planning exercise to identify suitable locations for

commercial recreational sport fishing and so on to reduce the conflicts

that exist there, and that is headed up by Crown Lands.

MR. MILLER :

Perhaps the minister would elaborate: just describe to me or the House

how that planning process works. Is it deputy minister level? Surely

the minister could be a little more forthcoming about the issue.

HON. MR. DIRKS : It's an operations level headed up by the regional director and his staff.

MR. MILLER :

It's headed up by the regional director in each region? The regional

director in my region, I believe, is in Smithers. I don't know if a

regional director from Smithers would necessarily be all that

conversant with issues on the coast of British Columbia. What's the

form of this planning operation? I don't seem to get the sense that

there is much, or at least you're not able to explain it that well.

This is a serious issue, Mr. Minister. Have you discussed the issue

jointly with the Minister of Tourism (Hon Mr. Reid) and the Minister of

Agriculture (Hon. Mr. Savage) in terms of what should be put in place?

HON. MR. DIRKS :

Although the regional director is located in Smithers, let me assure

the member opposite that he is very conversant in the matter. Actually

he might find it very advantageous to take the regional manager out

fishing some day — he's a great sports fisherman — and have a good

discussion with him about what is going on, and what is really

happening in that area.

MR. MILLER : Mr. Minister, I somehow feel that's what I'm doing with you: fishing and not catching very much.

HON. MR. DIRKS : It's the bait you're using.

MR. MILLER : It's the bait I'm using. Perhaps the minister is trying to be wily. Is he? He feels a bit like a fish perhaps.

Could

you inform the House what the separate initiative is and what's

happening in terms of the other recommendations that came out of your

moratorium, particularly with regard to the commercial operations on

transient vessels?

HON. MR. DIRKS : Again when you

get to something like that, it really is a federal issue, and we're

working with the Coast Guard. But it is a federal issue, and I would

suggest that that would be better taken up with them when you're

talking about a floating vessel.

MR. MILLER : I

received a letter from the minister on March 31, and he enclosed a copy

of a

summary of the Langara Island review study conducted by his

ministry. It's a very simple document. It wasn't all that I wanted; I

wanted more. Under recommendations and

summary it says: "The

recommendations of the review report will have a positive impact in

dealing with the issues and concerns in this area. It will help to

create an environment of stability. However, there are