1980 Legislative Session: 2nd Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, MAY 28, 1980

Afternoon Sitting

[ Page

2657 ]

CONTENTS

Routine Proceedings

Oral Questions.

Alleged polygraph testing of welfare recipients. Ms. Brown –– 2657

Indexed pensions. Mr. Lauk –– 2658

ICBC discount for old-age pensioners. Mr. Hall –– 2658

Liard and Stikine-Iskut dam projects. Mr. Passarell 2659

Moneys held by travel agents. Mr. Barber –– 2659

Election campaign practices. Mr. Macdonald –– 2659

Pollution at Alcan plant. Hon. Mr. Heinrich replies –– 2659

Committee of Supply; Ministry of Agriculture estimates.

On vote 10.

Hon. Mr. Hewitt –– 2660

Mr. Barber –– 2661

Hon. Mr. Hewitt –– 2661

Mr. Hall –– 2661

Hon. Mr. Hewitt –– 2663

Ms. Brown –– 2664

Hon. Mr. Hewitt –– 2664

Division on vote 10 –– 2664

Committee of Supply; Ministry of Forests estimates.

On vote 103,

Hon. Mr. Waterland –– 2665

Mr. King –– 2666

Hon. Mr. Waterland –– 2667

Mr. Hanson –– 2673

Mr. Lockstead –– 2674

Hon. Mr. Waterland –– 2675

Mr. Hanson –– 2676

Hon. Mr. Waterland –– 2678

Mr. Howard –– 2678

School Amendment Act, 1980 (Bill 20). Hon. Mr. Smith.

Discharged — 2680

Tabling Reports.

Agricultural aid to developing countries, annual report 1979-80.

Hon. Mr. Hewitt –– 2680

Appendix –– 2680

The House met at 2 p.m.

[Mr. Davidson in the chair.]

Prayers.

HON. MR. MAIR:

Mr. Speaker, I am very pleased to tell you and the members in the House

today that I have some very important guests. Following along the lines

of the Leader of the Opposition and my colleague the Minister of

Education (Hon. Mr. Smith), I know that these guests will ensure

unprecedented good behaviour for Mr. Speaker today. In the gallery

along with my wife Patti is a dear friend of mine, Mrs. Marion

Tepoorten; my cousin Mrs. Ann Robertson; and my mother, Mrs. Kenneth

Mair. Would the House please make them welcome.

MR. LAUK:

On behalf of all hon. members of the House and particularly the

Minister of Education, we have in the galleries today several groups of

teachers from all parts of the province, led by the president of the

British Columbia Teachers' Federation, Al Blakey, and some members of

the executive of that federation. I ask the House to welcome them.

HON. MR. FRASER:

It is not often that I have guests from the Cariboo. I am honoured

today to introduce to the House teachers from the Cariboo, Mr. Bob

Wanless, from Williams Lake School District 27, and Mr. Mike Stevens,

from my home town, Quesnel School District 28. I'd like the House to

welcome them.

MR. HANSON: It's my pleasure to have my parents here today visiting from Vancouver, and I'd ask the House to make them welcome.

HON. MR. WATERLAND:

With the teachers today are a group of teachers from the Yale-Lillooet

constituency; one is from Merritt. I'm not sure if the teachers are

still here, Mr. Speaker, but visiting with us is a good friend of mine,

Peter Malach, who has recently moved from Merritt to Victoria, and one

of his associates, one of the teachers, Heinz Lange. Would the House

please welcome them.

MR. NICOLSON: Also in the

gallery today are Mr. Cliff Faulkner, president of the Arrow Lake

teachers, from New Denver, and Loretta Young, president of the Nelson

District Teachers' Association, from South Slocan.

HON. MR. CHABOT:

Mr. Speaker, we also have, from the great riding of Columbia River, Mr.

Brian Domney, president of North Columbia Teachers' Association. I'd

like the House to welcome him.

MR. PASSARELL: Mr.

Speaker, in your gallery today is an MLA from the Yukon, Mr. Grafton

Nyootla. Grafton's riding is the most north western constituency in

Canada.

MR. LOCKSTEAD: We have in the gallery today teachers from School District

46, Doris Fuller and Fran Jovick; from School District 47, Mr. Bill Foster;

and from School District 49 in Ocean Falls, Mr. Bruce Johnson, who will not

be there much longer as the government is shutting down that community. I ask

the House to join me in welcoming them.

HON. MR. SMITH:

On behalf of the Ministry of Education. I would like to welcome all the

teachers who are here today in the gallery today and in the precinct,

and particularly Al Blakey, with his TNT button, with whom I had a good

half-hour meeting today.

HON. MR. HEWITT: In the

gallery today we have Mrs. Hawley, who is a teacher from the Olympic

Elementary School in Edmonds, Washington, accompanied by 11 of her

students and by two mothers of students, Mrs. Dick and Mrs. Garbinson,

who are visiting Victoria. Although Mrs. Hawley is a teacher in

Washington, she is a native British Columbian. Accompanying Mrs. Hawley

and the students is the wife of my deputy minister, Mrs. Elizabeth

Peterson. I'd ask the House to welcome those students.

Also

in the gallery today are five teachers from my constituency. My

constituency, being one of the larger southern constituencies of this

province, I have Mr. Nickel from the city of Penticton, Mr. Paul Wood

from Grand Forks. Mr. George Dodd from Oliver, Mr. Michael Palmer from

Summerland, and Mr. Huggard from Keremeos. I'd like the House to bid

them welcome.

MR. STRACHAN: I would like to introduce to the House a friend of mine,

a former president of the Prince George and District Teachers' Association,

and now back in the classroom. Just to show you that we're all good friends

in Prince Georee South, this gentleman is also the treasurer of the Prince George

South NDP association, Mr. Dou Smart.

HON. MR. HEINRICH:

Mr. Speaker, I did meet this morning with Mr. Smart and greeted him. I

was glad to see the opposition in my office. But with Mr. Smart from

the Prince George area and the district municipality of Mackenzie, both

within School District 57. are Mr. Don Mullis from Prince George and

Mr. Jack McDonald from Mackenzie. I would like the House to bid them

welcome too.

Oral Questions

ALLEGED POLYGRAPH TESTING

OF WELFARE RECIPIENTS

MS. BROWN: My question is to

the Minister of Human Resources. Has the minister advised the police

that polygraph tests are to be used when welfare recipients report a

loss by theft?

HON. MRS. McCARTHY: No. Mr. Speaker,

our ministry has not advised the police. I think the member's question

probably emanates from an

article in the morning paper which reports

that police are using police investigative tests on welfare recipients.

It is not a policy of the Ministry of Human Resources. I'd like the

member to know that any investigations which are under police

investigation are matters and questions to be asked of the police.

MS. BROWN: Mr. Speaker, first of all. I would like to thank the Minister of Human Resources in her continuing

[ Page 2658 ]

quest to educate me. When did the minister become aware of the existence of this policy on the part of the police?

HON. MRS. McCARTHY:

Approximately 4 o'clock yesterday afternoon, when the questioning that

had been given to my deputy minister was reported to me. My deputy

minister's report in answer to the query of the reporter of the Province

was very clear earlier than that, but was given to me about 4 o'clock.

That was the first indication and knowledge I had of this subject.

MS. BROWN:

On a supplementary, Mr. Speaker, has the minister taken very definite

steps to alert the police that welfare recipients are not to be singled

out for lie detector tests if they report a loss by theft?

HON. MRS. McCARTHY:

Mr. Speaker, it would not be within the prerogative of this ministry to

give any kind of direction to the police forces in our province. When

there are any charges of fraud or any charges involving criminal

activity, I think that it would be within the realm of the police

forces in this province and the courts. It would be untoward for me to

direct that area of responsibility.

MS. BROWN: Is the

minister aware that it is not the policy of the police to ask anyone

else who reports a loss by theft to have a lie detector test and that

this is reserved for welfare recipients? Is she aware of that?

HON. MRS. McCARTHY:

No, Mr. Speaker, I am not aware of that. Questioning of my ministry

since this subject has been raised would, as a matter of fact, lead me

to think otherwise.

MR. LAUK: I have a question of

the Attorney-General. Has the Attorney-General's ministry advised the

police at any time that polygraph tests are to be used when welfare

recipients report such losses by theft?

HON. MR. WILLIAMS:

Mr. Speaker, I have no specific knowledge of the matter which would

enable me to respond directly to the member's question. However, I wish

to thank the member for indicating his concern on the matter to me

before the House sat today. In the few moments available to me I asked

for a full report on the practices, and I'll be happy to share that

with the House as soon as it is received.

I might say that

if such instructions or practices have been given or are being carried

out, they're not in conformity with my views on the handling of

reported criminal acts.

MR. LAUK: We support that

view, but I have one follow-up question to the Attorney-General as he

looks into the matter. We are advised that the Ministry of Human

Resources officials at the local level have advised welfare recipients,

when they report such losses, that they will not be considered for a

special allowance unless they have reported the theft to the police;

and that the police, on the other hand, have indicated that so many of

these thefts have been reported that they have been using polygraph

tests and have done so in consultation with MHR officials. Is the

minister aware of that? If not, maybe that should be considered in his

investigation.

HON. MR. WILLIAMS: Yes, Mr. Speaker,

that is part of the information that I have requested to be provided to

me. If the member has any specific details of these matters, I would be

grateful if he would provide them to me.

INDEXED PENSIONS

MR. LAUK:

I have a question on a different matter to the Provincial Secretary,

Mr. Speaker. In view of the fact that the Minister of Consumer and

Corporate Affairs (Hon. Mr. Nielsen) argues that landlords need an

annual rent increase of 10 percent because of inflation, how does the

minister justify currently using the figure of 8 percent as a maximum

index increase in pensions for, let's say, retired teachers?

HON. MR. WOLFE:

This is a matter, as the member realizes, based on legislation before

the House. I don't think he'll find a reference to 8 percent in that

legislation. What is embodied here is some attempt to put some security

in our ability to pay future adjustments to pensioners. I think

everyone in this House would support that. It has no relationship, I

would say, to other percentages you may wish to throw around in terms

of consumer affairs. But perhaps it might be more appropriate to

discuss this under the legislation. I think we've had fruitful and

friendly discussions with teachers here this morning, related to this

matter, and to a large degree they have been a part of these discussion

that have worked toward the sort of package of amendments which we have

before us today.

ICBC DISCOUNT FOR

OLD-AGE PENSIONERS

MR. HALL:

Mr. Speaker, I have a question for the Minister of Agriculture, as the

minister responsible for ICBC — also dealing with people's ability to

pay. Has the minister instructed the corporation to modify the

implementation of the FAIR program by allowing seniors — old-age

pensioners, that is — who presently receive a discount on their

automobile premiums, to continue receiving it, and applying the FAIR

policy effective next year, which will see an end to that discount to,

say, new policy-holders only?

HON. MR. HEWITT: Mr.

Speaker, I'm not sure what the question was, but I gather the member is

referring to a discount to seniors under the FAIR program. At the

present time the FAIR program's rates are based on the principle that

each person who drives a car will pay a rate and all drivers will be

considered to be equal; there will be no discrimination, and that's the

FAIR program as it exists at the present time.

MR. HALL:

The minister may have some difficulty in understanding the question. I

think his difficulty is in dealing with the impact of what he's done as

a minister of ICBC. The fact of the matter is, the seniors aren't going

to get a discount any more, Mr. Minister, and seniors will not enjoy

the discount they have enjoyed in almost every other endeavour of

government activity. I'm asking the minister: has he instructed ICBC to

modify, in any way whatsoever, the implementation of that program by

scheduling it in, delaying the implementation, or at least following

the example set by the general insurance sector of ICBC in continuing

to give some sort of discount to senior citizens?

[ Page 2659 ]

HON. MR. HEWITT: No, I've given no instructions to ICBC.

LAIRD AND STIKINE-ISKUT

DAM PROJECTS

MR. PASSARELL: I have a question for my

friend the Minister of Energy, Mines and Petroleum Resources. Has B.C.

Hydro ordered a preliminary study of northern transmission corridors to

link the potential dam sites of the Stikine-Iskut and Liard Rivers with

the lower mainland?

HON. MR. McCLELLAND: I'll take that question as notice.

MR. PASSARELL: I have a new question to the same minister. Have any studies been deliberately designed to exclude consultation with any group?

HON. MR. McCLELLAND: That is a weird question. I don't know how to answer it.

MR. PASSARELL: Maybe I'll repeat it so he can hear it again.

HON. MR. McCLELLAND: No, I just said it was a weird question.

MR. PASSARELL:

A new question to that minister. Have any studies been done by B.C.

Hydro concerning the proposed northern dam scheme to exclude

consultation with any group in the north?

HON. MR. McCLELLAND: That is a strange question from a strange member and unfortunately I'm just not able to answer it.

AN HON. MEMBER: Do you take that as notice?

HON. MR. McCLELLAND: No!

MR. PASSARELL:

Another question to the rude minister. Can that minister assure the

House that anyone affected by the northern dam studies will be

consulted and that no one will be left off through a policy exclusion

of northern dam studies and transmission corridors?

HON. MR. McCLELLAND: At the risk of.... To my friend, who goes around calling people racist and things like that....

AN HON. MEMBER: Aw, come on! That's not true.

AN HON. MEMBER: It's true.

HON. MR. McCLELLAND:

Well, he does. It's true. I don't know how many times I have to

reiterate government policy in that regard, but there will be

legislation coming forward into this House within a matter of one or

two weeks which will ensure, for the first time in the history of this

province, that every major energy project is submitted to a full public

review. That will be enshrined in legislation and will ensure that

there will be public input from all those people who are concerned with

various major energy projects. It will be a history-making move by this

government which has always been concerned that public input and public

participation are protected.

MONEYS HELD BY TRAVEL AGENTS

MR. BARBER: I have a question for the Minister of Consumer

and Corporate Affairs.

Section 7(1) of the Travel Agents Registration

Act reads: "Money received by a travel agent or travel wholesaler

carrying on business in the province shall be deemed to be held in

trust for the person who paid it."

Section 22(

l) of the same act reads:

"The registrar" — referring to the registrar of travel agents — "may at

any reasonable time enter the business premises of a travel agent or

travel wholesaler to make an inspection to ensure that this act and the

regulations are being complied with." Has the minister received from

the registrar of travel agents any report, as provided under

section

22, indicating that a travel agent is in default of the provisions of

section 7 of the same act and is thereby liable for the payment of

certain funds owed but not deposited under the terms of the trust

requirements?

HON. MR. NIELSEN: I'm not aware of that but I'll take the question as notice and check into it.

ELECTION CAMPAIGN PRACTICES

MR. MACDONALD:

I have a question to the Attorney-General in the form of a memory test.

Does the Attorney-General have any recollection of work ordered in his

department relating to a Mr. Dan Campbell and his unrecorded

thousand-dollar bills? This is a long time ago. Has he any memory of

that?

HON. MR. WILLIAMS: No.

HON. MR. HEINRICH: I have two or three answers to questions which were asked of me. May I have leave to answer them?

Leave granted.

POLLUTION AT ALCAN PLANT

HON. MR. HEINRICH:

The member for Comox (Ms. Sanford) asked whether the WCB regulations

would be altered to ensure that former Alcan employees, who may have

suffered due to inadequate pollution standards, be allowed to claim

compensation benefits. The answer which I have obtained from the WCB is

as follows. The WCB is currently analyzing the content of the Brisebois

report and will then decide what special action, if any, is necessary

regarding former Alcan employees. The act already provides that all

workers who suffered industrial injury or disease as a result of their

employment are entitled to compensation benefits. Alcan employees and

former Alcan employees are now entitled to put in claims if they

believe they have been injured or diseased through their employment.

With

respect to the second question asked by the hon. member for Comox about

whether there is a contact with the former workers at Kitimat, the

board has a $200,000 health study underway at Alcan as reported in the

WCB's 1979 annual report. The study is being conducted by Doctors Moira

Yeung and Stefan Grzybowski, and the board will take whatever action is

appropriate on the outcome of that study.

[ Page 2660 ]

further question was asked by the second member for Victoria (Mr.

Hanson) with respect to enforcing regulations. He referred, I believe,

to regulation 36.05(l)(d), which requires employers to provide shower

facilities for workers exposed to finely divided lead or lead

compounds. The answer that I have for the member is that the board does

require such shower areas, and the company, Cominco Ltd., is supplying

those shower areas. The issue here is one which has been subject to

labour arbitration between the United Steelworkers of America and

Cominco Ltd. The question is whether the company has an obligation to

pay the workers for their shower time in addition to providing the time

and facilities.

The board is concerned with industrial

health and safety and we are satisfied that the company has provided

adequate shower facilities and adequate time. We have no position to

take in labour relations matters concerning the issue of paying or not

paying for that shower time; that's a matter of the collective

agreement.

Orders of the Day

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

ESTIMATES: MINISTRY OF AGRICULTURE

(continued)

On vote 10: minister's office, $129,448.

HON. MR. HEWITT:

Mr. Chairman, I just wanted to take the opportunity at the opening of

debate to comment on some remarks made by the first member for Victoria

(Mr. Barber) yesterday concerning ARDA assistance, or, as he put it,

welfare to the agricultural industry. It concerns the ARDA program, and

I'd like to go through some of the guidelines for ARDA assistance in

order that the member will understand that the program is there to

assist and support the agricultural industry and to make it more viable

than it is. The one individual who the member attacked yesterday was a

Mr. Fitzpatrick of the McLean and Fitzpatrick packing house in the

Okanagan Valley, and I think it's only fair that I set the record

straight.

The guidelines for the projects under

part 4 of

the ARDSA agreement.... The objective of

part 4 is to provide the

support services needed in rural areas to develop the agriculture

industry to secondary processing and valueadded stages, thereby

improving stability and rural employment opportunities. This ARDSA

agreement is a joint federal-provincial agreement, jointly funded — $30

million by the government of British Columbia and $30 million by the

federal Department of Regional Economic Expansion — and is for a

five-year term. Mr. Chairman, the program provides conditional grants

in the form of interest-free forgivable loans. To be eligible, the

project must provide a service designed to encourage primary

agricultural production, including a number of items such as livestock

treatment facilities, produce collection and sale facilities, and

community pest and disease control facilities. All sorts of projects

can be placed, encouraging primary agricultural production. Also, an

eligible project may be to establish a value-added processing operation

to enhance the value of food production, packing or grading facilities,

which would thereby give a better return to the grower and a better

product to the consumer. That is the

section under which McLean and

Fitzpatrick applied.

The project has to be financially

viable and have an adequate supply of raw material and a market for the

product, the processor must be technically sound, and the applicant

must demonstrate a need for financial assistance. Mr. Fitzpatrick

applied to the program and met those criteria. Also, criteria are in

place for equity requirements, and the equity of an applicant for a

project which is under review must be equal to or greater than 20

percent of the net book value of existing capital assets of the

facility, plus 20 percent of the capital cost of the new, expanded or

modernized structures, plus 20 percent of the working capital estimated

to be required for the purpose of producing the selected primary or

secondary products.

So the individual involved has to have

an equity position in the venture. We are not looking at welfare for

agriculture, but assistance to the agricultural community, and the

individual, co-op or company involved must have its equity up front.

The assistance ceiling for an operation such as McLean and Fitzpatrick,

for expansion or modernization of their plant, is 20 percent of the

eligible capital cost of expanding or modernizing the structure. That

is the maximum. So the other 80 percent is derived either from

financing or equity. Again, that's an indication to the House that

we're not talking about welfare to agriculture; we're talking about

assistance to agriculture to maintain a viable industry in this

province. Then we look at the administration of it. The member across

implied that because Mr. Fitzpatrick lived, first of all, in the

Premier's riding, and secondly, because he was involved with the Social

Credit Party, he got favourable consideration.

I'd like to

explain the process that any applicant has to go through in order to

get assistance under this program. First of all, there's an

investigation of the application by the farm products finance branch of

my ministry. After their investigation is completed, that branch makes

a recommendation to the subcommittee of ARDSA, which is basically the

technical committee. They review that application and the report from

my farm products finance branch, and then make a recommendation to the

management committee of ARDSA, which is a joint federal-provincial

committee. When that committee approves it, the application is placed

before the Minister of Agriculture for the province of British Columbia

for ratification, and the Minister of Regional Economic Expansion for

Canada for ratification. There's no political involvement, as the

member across would imply, but a program that is put into place, as I

mentioned before, to assist the agriculture industry in this province.

Then

the member questioned how he got paid. I advised the member that the

project was audited. Just to give him the specific guidelines, up to 85

percent of the forgivable loan was disbursed on presentation of

progress reports, which would be presented by the applicant and either

the consulting engineers or the contractor in regard to progress of the

project and the fact that payments have been made. Once we have an

indication that the job is progressing according to the application and

that payments have been made, then we, of course, disburse from the

ARDSA funds.

I mentioned 85 percent, because the balance of

15 percent is only disbursed after the completion of the project and

subsequent to on-site inspection by members of my ministry.

In regard to the program itself, which the member indicates is welfare, yes, it is a non-interest-bearing forgivable

[ Page

2661 ]

loan.

The rationale is that 10 percent of the loan is to be forgiven annually

on the anniversary date of the final payment of the forgivable loan for

the first five years. The balance is forgiven in the sixth year,

provided, first, that the applicant is still operating with the

approved structures, machinery and equipment and is in the same line of

business as was the case when the forgivable loan was granted;

granted have been met. Failing that, the loan is not forgiven.

Mr.

Chairman, I just want to take a moment to explain to the House and to

the first member for Victoria that I consider this to be an attack on

an individual, Mr. Fitzpatrick of McLean and Fitzpatrick, whose family

has been in the agricultural business in this province for

approximately 50 years and who has employees in that plant who work

hard, and who has attempted to upgrade his facility — according to the

industry report that was done and was agreed to by the entire industry

and by my ministry — only to be named in this House, or to be fair to

the member, it was implied in this House by the member that this person

got some special consideration in regard to his project. I'm sure that

not only the employees but the producers that supply product to that

plant would be somewhat concerned about the statements made by the

member for Victoria. So that should give an answer to the questions

raised regarding Mr. Fitzpatrick and the ARDSA project he has applied

for and the funding he has received through that program from my

ministry.

MR. BARBER: First of all, I'd like to thank the minister very much for such a detailed reply to my questions.

Secondly,

I should like to make certain that he doesn't misunderstand the

position of the New Democratic Party in regard to the ARDSA program. We

hold that it is a good and welcome program. It's an important

investment in the economic life of the province of British Columbia.

It's an important and a good program and it will be all the better if

it's well and impartially administered.

When I spoke

yesterday, the administration of the lotteries funds, for instance, was

the furthest thing from my mind when I thought about the possibility of

funds being spent in a peculiar way. The lotteries fund never occurred

to me. Nonetheless, I thank the minister for his detailed reply.

Secondly,

I invite the minister to join with us in making a representation to the

Minister of Human Resources (Hon. Mrs. McCarthy) as follows. From now

on I ask the Minister of Agriculture to do this. Would he persuade the

Minister of Human Resources to rename welfare cheques and print instead

on them: "An interest-free forgivable loan to the following citizen of

British Columbia"? On that basis, I think, the prejudicial or

euphemistic language, depending on which side of the issue you view it,

might for once be put to an end. I believe strongly that if business

deserves a break from the Crown, and the ARDSA way is a good way to

deliver it, that's just fine by me. If individual human beings deserve

a break from the Crown, that's fine too. But at the moment there's a

social prejudice. When we do something good for business we call it an

interest-free forgivable loan. When we do it for a human being we call

it welfare, and some people sneer. I wonder if the minister would agree

to join with us in persuading the Minister of Human Resources to

retitle welfare cheques as "interest-free forgivable loans."

MR. CHAIRMAN: Remembering that we do discuss the administrative actions

of the vote before us, I recognize the Minister of Agriculture.

HON. MR. HEWITT:

My comments exactly. We're discussing the Minister of Agriculture's

estimates. I think I'm standing basically to correct the member. There

are no cheques that go out that say "welfare" on them; I think he's

aware of that.

MR. BARBER: I'm sure you understand the point.

MR. HALL:

Mr. Chairman, I know that you know that I've been sitting here

patiently since Monday afternoon to talk about ICBC again, as I've only

had one go at the minister.

AN HON. MEMBER: Be brief.

MR. HALL: I don't think we'll be very long if we can keep certain members, mostly on your side, under control.

HON. MRS. JORDAN: You don't have any members present over there.

MR. HALL: When I'm up, I don't need anybody on this side.

The

first thing I'd like to do, Mr. Chairman, is to perhaps go a little

more deeply into the question at 2(15), about the implementation of the

FAIR program for senior citizens.

It seems to me that there

was a choice made at the time the directors and the government

introduced the full effects of the program of removing discrimination.

We voted to remove discrimination on the grounds of sex, age and

territorial location. I think it is of passing interest that it is

going to take the corporation a number of years to remove the

discrimination based on territory. It's going to take them a few months

to remove the discrimination based on age. And that was the point of

the question I asked regarding the old-age pensioners.

it's possible to

schedule the removal of the discrimination based on

territory and slowly to get the thing together tidily and properly

without dislocations, without affecting people, without having people

too upset over the fact that somebody in Ponce Coupe or Vanderhoof is

going to be paying a lot more over a one-year period than somebody in

the city of Victoria.... If we can get that together nicely and evenly

over a known period of time, why can't we

schedule 1n the increase of

payments — and that's what it is that old-age pensioners are going to

make?

At the same time we've done that, we've announced

boldly, and to the chagrin of the private sector — who you always claim

are your friends and who the Premier made a very, very strong

supportive speech about late on Thursday afternoon — that you're

offering large discounts to the senior citizens on their general home

insurance, discounts which the private sector say aren't justified and

represent a straightforward political interference in the private

sector.

All I'm saying is that it seems to me that you got

some bad advice. I think, Mr. Minister, if I may use some colloquial

language, you've been taken by the board. They've given you something

that's not too palatable to announce. It could have been this other way

round just as easily, and I think, perhaps, you were too busy on other

matters and weren't onto that one.

[ Page 2662 ]

Let

me go back to a couple of the questions I asked on Thursday, to which

you gave me a reply. You went over the list but the reply really wasn't

very satisfactory. I want to just reword it.

I want to

indicate to you the strangeness of the following situation. On two

occasions only in the history of the automotive business in British

Columbia in the past six years the combines investigation people have

been present in this province. On only two occasions have the federal

combines people entered people's offices, seized documents, checked on

invoices and generally caused alarm and despondency and a great deal of

expense for lawyers, consultants and everybody else — on only two

occasions in the last 10 or 15 years in the history of the automotive

industry.

Both of those arrivals of the federal combines

people followed closely upon disputes with the corporation. Once is a

coincidence, but may I suggest to the minister that twice is enemy

action. Frankly, for combines investigation people to start

investigating small businessmen in the little communities at the

northern end of Vancouver Island, central Vancouver Island, and small

operators in the city of Vancouver, is, I think, using a big stick to

cure a problem for which some honest-to-goodness negotiation might have

been the answer. Frankly, I can't accept your blanket statement

appearing in the Blues as: "At no time did the corporation call in the

combines investigation people. In regard to the second question — the

member cited the use of the federal legislation in calling in the

combines investigation people regarding supply companies and, I

believe, body shops — I would advise the member that at no time did the

Insurance Corporation call in the combines investigation people. "

Mr.

Member, who did, if it wasn't ICBC? Was it the government? Maybe I shot

the arrow the wrong way. Maybe the government called them in. Maybe the

government doesn't need the ten signatures required by law. Maybe it

just needs the one signature by the Attorney-General, or maybe the

minister himself. I don't know. For a group of MLAs banded together as

a cabinet and a government — who ran for office twice on the ticket of

free, private enterprise — to adopt that particular weaponry, having

asked for tenders, having asked for bids, having asked for supplies and

services by the automotive industry, smacks a little bit to me of....

That's certainly not the kind of election promises you were making in

1975 and 1979.

I want now to turn to the other answer you gave, which I think you glossed

over rather quickly. That is the question of the driving school rebates. It

seems to me that here you are saving $500,000 on the basis of some statistics

which have been gathered from 1974 to 1979 — statistics which, even as you corrected

them and did away with the scheme effective the end of the year.... The

figures were already being challenged in your office, already being challenged

in the corporation, and fresh figures were already available to you which indicated

your decision was based on incorrect information. Already information was being

gathered that indicated that the basic premise upon which you based your removal

of the rebate was outdated. I can only come to the conclusion that it's

some kind of economy program; the word is out in the corporation to cut down

on as many expenses as possible. Taking it by and large, that is a laudable

exercise, but not when it goes against what is sensible. When the figures are

really examined, as they have been by the association of driving instructors,

or when you look at the motor vehicle branch's own figures, you see that

there is a difference in the figures, that the figures that were used by the

minister's colleagues to remove this rebate....

They

now have to admit that the figures were wrong, that the figures indeed

show that trained drivers have fewer accidents and demerit points. The

minister has had the statistical rating of the schools. He's had

correspondence. He's had the copies of the minutes of the

driver-training liaison committee. He's got conclusive proof that

driver education support and encouragement is necessary. He's got the

figures from the various companies. Apparently the companies are

superior to both the trained groups and the untrained groups in various

of the lerge driver-training schools. He's got evidence from the

eastern seaboard states in the United States. He's got evidence that

other provinces continue this kind of support. He's got evidence that

private sector insurance corporations offer the same kind of rebate.

He's got the full commitment from the industry that they're prepared to

improve and to meet and to put forward even more classroom hours and

more work to make a better program. Yet his answer was just the bland

one that they were looking into it.

I want to get a

commitment from the minister, if I can, that they aren't going to leave

it there, that they are going to see that there is some incentive for

people to get driver training and an incentive that means something —

some certificate that is going to mean something when they go to buy

their insurance at ICBC or when they go to a driving school. That is

the kind of incentive that this government always talks about. This

government has told us that a bottom-line incentive is the best

motivator, and that is the one I am asking for today. I want a

commitment from the minister to improve that situation.

Lastly

on this review of Thursday afternoon's debate, I want to go back to the

minister's strange reluctance to meet with his colleagues and

representatives from the industry that deals with ICBC. I find it

passing strange that the minister, who is known to be a bluff, hearty,

well-meaning fellow, couldn't put an hour in with somebody and,

gritting his teeth and with a stiff upper lip, go through it. Why did

you say you were meeting under protest? Why did you have to spoil it

for them? After all, most of them voted for you. It seems to me that

that was a dumb thing to do, if I may say "dumb" in a political sense;

the minister is an educated, clever man. It isn't the smartest

political thing to suggest to people who wanted to meet with that

caucus committee....

I don't want to know what you

discussed. That's not my business, as I was told so often. Frankly, I

find that what happens in this place is usually public knowledge before

very much time goes past. As a matter of fact, here is a letter

addressed to Mr. Ritchie from the group that attended the meeting. They

were pleased to meet with Mr. Ritchie, the Hon. James Hewitt, senior

director of ICBC, Mr. Angus Ree, Mr. Bruce Strachan...

MR. CHAIRMAN: Perhaps, hon. member, you might remember that we refer to members of the House by their portfolios....

MR. HALL: Yes, I'm reading from this document dated May 20, 1980.

...

the member for Dewdney and the member for Omineca. This is what I am

curious to know about; this is what I am getting down to. I realize

that no board of directors of a corporation can commit that corporation

to action because he happens to be meeting with his colleagues in a

[ Page

2663 ]

political sense. That's why I said that the

minister could probably have stiffened up a little, and smiled, and

gone through and listened and said the appropriate things, as the

Minister of Health (Hon. Mr. Mair) does when he meets with doctors, and

perhaps as the Minister of Agriculture does when he meets with

tree-fruit growers.

The member for ICBC — if I can use that

language appeared to have some difficulty sitting down that day. I want

to know if, when he did sit down.... Now we've got the evidence of what

they wanted to do. Have you made any decisions at all, Mr. Minister,

regarding the kinds of future negotiations you are going to have with

that industry? Are there going to be regular yearly reviews of the

rates paid, or are you going to continue to be a year and a half

behind, to ignore the facts of the matter about wage rates being

settled after you give your allowances out? Are you going to meet with

the other industry sectors and have a regular date with them in which

those people supplying services to the corporation will know where they

stand on a certain date each year?

" If

our industry" — and I'm reporting here "had been able to enter into

discussions with the corporation as to an agreement on a 1980

charge-out labour rate based on actual labour costs, then yesterday's

meeting" — that's the meeting that you were at — "would not have been

required. But as we told the caucus, and as is clearly shown in the

copies of our recent correspondence with the corporation, and which

were left with you" — and I have those — "ICBC refuses to meet with the

industry to discuss any adjustment of rates. They have arbitrarily

decided the prices they impose upon the industry cannot be reviewed,

regardless of the new wage settlement recently won by the union" — by

the work-people employed by the supplying industry.

"Operators

should not be expected to provide service to the corporation at a loss,

and each day makes the situation more desperate. Would you therefore

please arrange for the corporation to meet with the industry committee

no later than May 29, 1980, so that negotiations for a proper and

realistic 1980 rate can take place."

Now what has been the

decision there, Mr. Minister? Can you tell me what the corporation is

going to do about meeting with the industry committee no later than May

29? It's the 28th today, I think. Now you may get your vote....

HON. MR. HEWITT: Don't give me any false hopes now.

MR. HALL:

I've got a sneaking suspicion you may get your vote a lot sooner than

you think. You may get your vote very soon, and you'll be out of here,

and you can go dashing down to another meeting and be a reluctant hero

and get that meeting arranged.

The other main topic discussed with the company....

This

is a new subject, Mr. Minister, that has not been mentioned before, but

is a serious one, because it goes to one of the things you had said in

one of your replies which I happened to agree with you about, and one

which I was very proud of. It's a serious one and one I happen to

disagree entirely with the Automotive Retailers Association about.

MS. BROWN: Mr. Chairman, I would just like permission from the House

to introduce a group of students who are now leaving.

Leave granted.

MS. BROWN:

Visiting with us in the gallery this afternoon, Mr. Chairman, were a

group of 36 grade 10 students from Edmonds Junior Secondary School, who

are studying government. They're accompanied by their teacher, Mr.

Dahlo. I wonder if the House would join me in welcoming these students

before they leave the gallery.

MR. HALL: Going back to this last question for the minister, the other

main topic discussed with the government caucus — I inject the word "government":

"We

hope that all our elected officials will support our contention that

there is absolutely no justification for the heavy expenditure of our

dollars in keeping open the very large corporation- owned, retail body

shop in Surrey, known as Autoplan Autobody, which operates in direct

competition with shops operated by the private sector.

"Our letter, which accompanies our submission, documents

the case for closing down this totally unnecessary facility."

My last question, therefore, in reviewing all the others with you and going

into some new material, is: may I get the minister's assurance that that will

continue to be a living laboratory and a check on body shops and, indeed, a

measurement of the efficiency and cost control in the industry for a long time

to come?

HON. MR. HEWITT:

Mr. Chairman, if I can go back to the beginning, regarding the increase

to senior citizens and the phase-in of that increase under the FAIR

program — I think that's how the member phrased the question — at the

present time the FAIR program, of course, treats all drivers equally as

it comes into being, and the rate of insurance, the premium, will be

the same for all drivers. I can understand the member's concern, and

it's an approach we can give some consideration to. I haven't got an

answer for you, but I have advised this House that we're going to have

a planning session of the board of directors of ICBC, and maybe this is

one of the issues that we can explore at that time.

With

regard to general home insurance, the 20 percent discount given to

seniors and the objection — as the member put it — from private

companies, a number of other private companies have been giving senior

citizens discounts on general insurance well before ICBC. So it's not

new or specifically related to ICBC.

In regard to the

combines investigation branch, I advised you the other day that ICBC

did not call in the combines investigation branch, the government did

not call in the combines investigation branch, and the minister did not

call in the combines investigation branch. All this of course relates

to, I believe, Campbell River; I think you were raising the issue in

regard to body shops in the Campbell River area.

As to the

driving school rebates, and the $500,000 saving effective next year,

when the program of $50 to drivers taking the driving school course

will be discontinued, as I advised the member the other day, management

is working on a new concept which will make more effective use of the

drivers' premium dollars. As the member recognizes, the funds used for

any of these programs are not government

[ Page 2664 ]

funds,

but funds supplied or provided by the corporation out of insurance

premiums paid by the motorists of British Columbia. If the statistics

that are gathered indicate that we haven't received the best use of

those dollars, then it's only the responsibility of management and the

board of directors of ICBC to ensure that the dollars are well

administered and well spent, and that we get a fair return on whatever

investment is made.

In regard to proper administration, I

can't recall just what that one was about, but I only point out to the

member that, as in any insurance corporation, the premiums are pooled

to cover claims against that corporation; rates are set that properly

reflect the amount of dollars required through premiums to cover the

potential claims of the corporation. I much prefer that approach, Mr.

Chairman, as opposed to the previous administration's approach, where

ICBC suffered substantial losses because it wasn't actuarially sound. I

think of the recent experience in Saskatchewan. I believe that

Saskatchewan government insurance reported a $29 million loss in 1979.

I am sure that in the reports that I've seen they are now going to have

to address themselves to recognizing the insurance concept, which is

really that the premium should pay for claims rather than setting rates

on an actuarially unsound basis.

In regard to meeting with

the ARA, I have met with the ARA, Mr. Member, shortly after I became

minister responsible. I have met with the independent insurance agents,

and I've met with the towing company association, the taxi cab

association and independent insurance adjusters. As minister

responsible I have met with them on numerous occasions to attempt to

hear their thoughts, and then, of course, be more knowledgeable when I

sit down with the board of directors of ICBC and attempt to determine

policies of that corporation.

In regard to the body shop, no

decision has been made with regard to the body shop operation. The shop

operates. It does have some merit, Mr. Member, as you say, in

determining rates for body-shop work, in determining or establishing

the latest techniques, providing apprenticeship jobs for young people

looking at that for a career. It also has a program where it brings in

independent body-shop owner operators and holds courses for them in how

they can better manage their own independent operation. So it does have

some merit, although it does impact to a certain extent on the

body-shop industry in this province. I understand the concern of the

Automotive Retailers Association.

MS. BROWN: I'm going to be very brief, Mr. Chairman, because there are a group of students waiting to meet with me.

Earlier

in the estimates I mentioned to the minister about the farmers in the

Big Bend of the Burnaby area down on the flats. I just want to bring to

his attention that on Thursday last they suffered a lot of damage from

a hail storm, and a number of those farms — ten of them in particular —

were very seriously damaged. As he knows, most of the crops grown on

those farms are vegetable crops. Some of them are so seriously damaged

that they've had to be ploughed under, and now there has to be some

replanting because the damage is so severe. The farmers are talking

about damage in the order of about $100,000 and about 100 acres. I'm

wondering whether the minister would declare this a disaster area and

make these farmers eligible for the Distress Area Assistance Fund, that

joint federal-provincial fund that would help them in terms of the

replanting and getting back on track on this particular area. This is

on the flats.

HON. MR. HEWITT: My deputy minister advises that my staff are assessing the damage down in that area at the present time.

Vote 10 approved on the following division:

YEAS — 28

Waterland

Nielsen

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Brummet

Ree

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Mair

Kempf

Davis

Strachan

Segarty

Mussallem

Hyndman

NAYS — 22

Macdonald

Barrett

Howard

King

Lea

Lauk

Stupich

Dailly

Cocke

Nicolson

Hall

Lorimer

Levi

Sanford

Gabelmann

Skelly

Lockstead

Brown

Barber

Wallace

Hanson

Passarell

Mrs. Wallace requested that leave be asked to record the division in the Journals of the House.

Vote 11: deputy minister's office, $1,155,166 — approved.

Vote 12: finance and administration, $1,137,221 — approved.

Vote 13: field operations, $9,863,929 — approved.

Vote 14: economics and marketing services, $1,200,310 — approved.

Vote 15: Financial Assistance Program, $52,793,224 — approved.

Vote 16: information services, $233,196 — approved.

Vote 17: Milk Board, $239,987 — approved.

Vote 18: Provincial Agricultural Land Commission, $1,170,317 — approved.

Vote 19: building occupancy charges, $3,078,000 — approved.

Vote 20: computer and consulting charges, $408,400 — approved.

ESTIMATES: MINISTRY OF FORESTS

On vote 103: minister's office program, $123,272.

[ Page 2665 ]

HON. MR. WATERLAND:

I have a few brief comments to make before we get into the very

interesting discussion on our forest management work in British

Columbia. I think we're all aware of the fact that during this year the

Forests ministry has done a rather complete analysis of the state of

the forest and range resource in British Columbia. This report was

presented to the Legislature on March 14, I believe, and I'm sure the

members have had a chance to review it. It's the first time in the

history of forest management in British Columbia that this complete an

analysis of the state of the forest and range resource has been carried

out and presented to the Legislature, as is now required by legislation

passed by this Legislature in 1978.

[Mr. Hyndman in the chair.]

have a few comments on the procedure used to develop this information.

First of all, each region of the Forests ministry's organization, of

which there are six, did their analyses within their regions by further

breaking down their regions into districts. Many factors in addition to

those factors directly relating to the forest and range resource, of

course, had to be considered: what effect our analyses and our

perceptions within our ministry of the forest resource that exists and

what effect it would have on other resource uses, on the population, on

communities.... We had to study the climate of the areas; we had to

break the areas down into biogeoclimatic zones, land areas by elevation

and, as I mentioned, by soil type, do a complete physiography of the

areas; we had to assess the timber land base in terms of forest cover,

description of the growing stock which we had in the form of timber,

and our ranges, as far as forage for livestock is concerned; we had to

assess the level of denuded areas, the regeneration and the areas not

satisfactorily restocked; we also, of course, had to consider the

industrial requirements of areas — the wood-use projections for the

areas.

All these area analyses were then worked into area

programs, as was presented in our five-year program, and again each

area developed what they thought was a most realistic and manageable

program for five years for their particular region for protection for

silviculture, range and recreation and how other uses such as

agriculture, mining, hydroelectric development, parks, fish and

wildlife, land and housing, highway construction, and so on, would

affect the use of the forest and range resource. And then we had to

develop options for the management and use of this timber.

All

this information from the regions was then taken to Victoria for a

summary and an overall analysis on a provincial basis. Now this

summary, which is the large volume you received, is but a

summary of

this type of work done in each region, and even it is condensed

somewhat. Information by region is available in our ministry offices

for anyone who cares to go into more detail than is presented in this

report. The same was done for three resource management areas. They

are: range, recreation and forests. As a result of this tremendously

large job, we have come up with the first ever analysis of the forest

and range resource. The next one is due in five years' time. The act

presently requires that this be done every ten years thereafter.

Judging from the information which we received from this report, I would perhaps

at some later time suggest that we do it at more than ten-year intervals. I

think five-year intervals would be more appropriate and keep us much more on

top of the changing forest scene as the years go by.

But

in any event, each year we must present a five-year management program,

a

summary of which was presented to the Legislature at the same time

the analysis was presented. We have indicated in the analysis that

through the various programs, through the special fund passed by the

Legislature, through my budget and through offsets to stumpage, we'll

be spending in the order of $1.5 billion in the next five-year period.

These dollars that we estimate, I would emphasize again because I think

this point was missed by many, are 1980 dollars. In other words, the

program is based on constant dollars. If inflation has an effect, and

I'm sure it will for the next year or two at least, our program will be

adjusted yearly to account for the inflationary changes.

There

are those who say that it's not enough money. Perhaps it isn't, but in

the judgement of the professional staff within the Ministry of Forests.

and after consultation with other ministries, and in the judgment of

the government, this is the optimum level of spending that can be

effectively managed. As I mentioned on debate of the fund bill, yes, we

could spend perhaps $100 million more this year, but it would not be

wisely spent and we would perhaps waste a great deal of it. In fact,

trying to push expenditures at that level could have the effect of

degrading the forest stands.

We have a lot to learn about

the various forest areas of British Columbia and how they react to the

various silvicultural treatments we will be using. Until we learn more

about them, we cannot proceed at a faster rate. Also, of course. It

takes time and training to make sure that people in this type of work

can work effectively and, in fact, will upgrade the stands rather than

degrading them.

This was the major thrust of the work by the

ministry this year. I would like at this time to pay a personal tribute

to all those in the Forests ministry who devoted many, many hours,

above and beyond the normal calls of their jobs, in a work of love,

really, because they do respect and appreciate the resource they have

to work with. They did an excellent job and as a staff should be

congratulate for that.

At the same time as this work was

going on, the ministry was implementing many other aspects of the

legislation passed two years ago. One of these was developing and

implementing the regulations to put into operation the resource

legislation we passed.

A very time-consuming and at times

disrupting thing that we have done, which nevertheless was quite

necessary, has been in the reorganization of the ministry. Our

objective, which now has the organizational structure pretty well in

place, is to have the decision-making at the closest possible level of

management to the field operations. A great deal more responsibility is

being placed upon our district managers, of which there will be some 46

in the province. A great deal more authority to commensurate that

responsibility is being extended to them as well. And as this type of

authority and responsibility is extended further and further to the

field, we, of course, have in place a formal appeal procedure for

looking after people who perhaps feel aggrieved by local decisions.

have had some uncertainty in people in the ministry, because as we

developed the final organizational structure and people were waiting to

find out where they fitted in to the structure, rumours began to run

throughout the ministry. We have done as good a job, I believe, as was

possible in keeping in touch with people in the ministry to make sure

that they

[ Page 2666 ]

know

where we're going. Towards the end, as the final crunch came, some

short-term disruptions for staff did take place. That has now been

resolved. Practically everyone in the ministry knows where they'll be

working and what their job will be. Now they are very anxious to get on

with the job because I think they respect the fact that now, for the

first time, they have a good comprehensive program in front of them.

They know where they're going. They have been provided with the

budgeting and funding for that program, and acceptance of a five-year

funding program by the government. Also, the ministry reorganization is

in place to help them better fulfill the obligations under the Forest

Act.

Of other programs we have underway this year, one is a

small business program. I remember a discussion last year when the

member for Shuswap-Revelstoke (Mr. King) was asking how quickly we

could get it going. I told him then as quickly as we possibly could,

and we did. We started on a smaller scale. It has developed rather

quickly. As a result of the rather fast implementation we have had some

problems with the program, some abuses that we are trying to iron out.

I guess whenever you have a new program there are people who try to

take advantage of it. It is beginning to work a little better. It is

very well received by the vast majority of people for whom it is

designed — that is, the small business sector. So far we have actually

issued a total of 152 sales under the program and as of the end of

March we had another 720-some still pending. The program does require

more work to make it work smoothly. I think we're well on the way.

After we work out some of the anomalies that exist I'm sure that it

will be a well-received program.

This has been the main

thrust of our work this year. As we are quite aware now, the forest

lumber manufacturing sector is in a rather serious downturn, only a

slump, I hope. Recent indications are that it has bottomed. We have

indications of a bit of a recovery. We're not yet certain whether this

is a trend or just an anomaly because it's been quite recent. This has

caused the layoff of quite a number of people in the industry. But I

think the industry, by and large, has managed these layoffs in quite a

sensitive manner. They've spread layoffs, when they're necessary, over

as broad a number of personnel as possible, with staggered layoffs so

that plant closures don't occur. They've worked their normal

maintenance shutdowns in. More have recently been announced and perhaps

more will be announced, but as more people are being laid off, others

are going back to work. I really think that we've seen the worst and

recovery is in sight, especially with the recent reductions in interest

rates in both the United States and Canada, which I think is a good

indicator. A number of futures are showing some life. As I mentioned,

current prices have shown this little blip in the immediate term. We

hope it's the beginning of a trend.

During the debate

on Bill 6, the Forest and Range Resource Fund Act, the members asked:

"Where are you going to spend this money? Specifically, what programs

and projects is it going into?" Just as the analysis was developed from

the field levels, condensed and finalized in Victoria, so the actual

management projects are being managed in that way. I have an outline

here which I think would be a little too detailed and complex to

discuss in the Legislature. If members have specific questions I could

perhaps help them. But this is available, through my office, to anybody

who wants to get into detail. But perhaps the best way, if you're

interested in your specific areas, is to deal with your regional

manager, who will know what specific projects in the way of

stand-tending work, planting, and so on are being undertaken. I don't

know, myself, as the minister, about each and every project which will

be undertaken this year. I know that we are spreading the money among

the regions. The decision as to where it is spent has to be a

combination of where the forest needs the work, where the return from

the forest response will be the greatest and also those areas in which

we have the most serious timber supply problem. That information is

available, either through my office, through our headquarters office in

Victoria, or through the regions.

I have just one other

comment, and that is on reforestation. I wish that members on both

sides of the House and the general public would stop equating

reforestation with forest management. Reforestation is a very important

part of forest management, but it's just a part, something which has

been progressing since the 1960s when the government of the day had an

objective of being able to produce 75 million seedlings per year by

1975. Work was begun at that time in establishing the Forest Service

nurseries with that objective in mind. It carried on through the New

Democratic Party term of office and again when I became the minister.

The objective was, by and large, reached. Our nursery capacity, right

now, is 100 million seedlings, although that is pushing the capacity.

It's not a comfortable 100 million seedling capacity, although that's

the number of seedlings we have. In order to maintain that capacity,

with over-capacity needed to account for losses which are inevitable

due to weather conditions and other factors beyond our control, we must

have a larger capacity.

As you know by the program, our

objective is, by the end of this first five-year program period, to

have a nursery capacity of 135 million seedlings in the province, with

a production of at least 117 million, to give us a seedling excess

capacity of some 18 million. In good years we could produce 135

million. In order to ensure 117 million we have to have that

overcapacity. The Forest Service capacity will be levelled off at about

100 million seedlings as we expand our nurseries to be able to have a

comfortable 100 million seedlings, and the balance, we hope, will be

done in the private sector. Already we have commitments by several

operators in the private sector, both industrial and commercial

nurseries, to enter into seedling production. It's been received very

enthusiastically, and a great deal of planning has been done. I

understand that, even now, that physical work on nursery site

preparation has been carried out.

That is the general thrust

of what the ministry has been doing this year. I hope that we can have

some rational discussion on the program, on the analysis. There are

many questions that I know the members opposite would like to ask. If I

don't have the answers myself, I have two of my staff here who could

perhaps help us if we want to go into a great deal of technical detail.

We are managing and running the Forest Service in as open a manner as

we possibly can. Our staff are always available, ready and willing to

provide any information of a public nature that any members wish to

have.

So with that, Mr. Chairman, I would welcome discussion from the members opposite.

MR. KING:

I want to thank the minister for his remarks and thank him for his

offer of cooperation in making more information available to the

Legislature, with respect to the very detailed five-year inventory that

is being provided by the ministry this year. Yes, there are a lot of

questions that I

[ Page

2667 ]

and presumably other members will have. It's good

to know that the minister will approach the dialogue with a spirit of

cooperation in making as much information as possible available to the

public through the Legislature.

I wish I could share the

minister's optimism about the fine shape of the morale in the forest

industry, and the fact that everybody's all happy and gung ho about the

new direction in the ministry, the reorganization and so on. I would

suggest that the reality of events in the last couple of days would

seem to refute that proposition by the minister.

We had the

unprecedented events of the forest staff in the various regions of the

province walking off the job and staging what I think was a two-day

protest strike against the alleged unfairness of the ministry's

reorganization plan. I know that's not the most burning issue in terms

of forest policy in the province of British Columbia at the moment, but

it's pretty fundamental to the success of the initiatives which the

minister has outlined. Obviously, unless we have a ministry composed of

staff who feel that there is fair play and who feel that their roles

and their capabilities are appreciated, that will indeed detract from

the ability of the ministry and its human resources to adequately

administer the policies which the minister hopes to embark on.

Perhaps,

first of all, since the minister raised that, we could spend just a

little time talking about it, and my perceptions of it as I understand

it from the outside, admittedly, but nevertheless with some opportunity

to discuss the ministry reorganization with the people involved in the

various field offices of the ministry, with the ministry staff and, to

some extent, with the minister from time to time, as well as with the

regional municipalities affected by the reorganization.

First

of all, I want to say that I rather regret the fact that the minister

failed to live up to a commitment he gave to this Legislature two years

ago when I questioned him at that time regarding the proposed

phasing-out of various field offices of the ministry. I asked him for

an assurance that when he was contemplating this cutting down or the

phasing-out of field offices from the Ministry of Forests, he would

provide lead time to the municipality in which the office was located,

so that regional councils and representatives of the municipality, as

well as the ministry staff, would have an opportunity to discuss the

wisdom of the move and to discuss its economic impact on that

particular area of the province.

The minister gave that commitment, and it's recorded appropriately in Hansard .

He said: "Yes, and I will consult with the local MLA for the area. "

That commitment has not been followed through. There has been a phasing

out of various field offices and the minister has not consulted with

the MLA before the fact. The minister, in my view, has not provided

lead-time consultation to the municipalities involved either. They have

been notified after the decision was made. I don't want to recite once

again the importance of some of the field staff offices with their

eight or ten personnel as a factor in supporting the narrow balance of

local economies for small villages and towns. I think we've gone over

that in the past. Nevertheless, it was a commitment the minister made

and I regret that he has neglected to follow through on that

commitment. I choose to think it was by neglect rather than design. I

think the minister must have forgotten. Nevertheless, in my view it's

not the kind of performance one should be able to expect from a

minister of the Crown.

I think the more important thing is that the new reorganization, as I understand

it, has deprived certain ministry staff in the field offices of an opportunity

to compete for the new positions designated under the new scheme of things in

the Ministry. In other words, unless you are a registered professional forester

you do not have the opportunity for the upward mobility within the ranks of

the ministry that used to be available. People serving in the ministry who may

have 10, 15 or even 20 years' practical experience in terms of appraisals,

cruising and the stumpage area are now out in the wilderness in terms of any

opportunity for upward mobility within those specific components of the ministry,

because under the new scheme of things one has to be a registered professional

with those letters behind his name before he can compete for the position. That

is what I am advised. Indeed, Mr. Chairman, I am advised that in at least one

regional district of the ministry advertisements have been placed in newspapers

outside of the province of British Columbia and university graduates from other

provinces have been invited to compete for positions in the ministry which have

not been available for competition to existing employees of the ministry. The

regional manager has been able to accomplish this under his own resources without

a proper competition for the position.

These

are the main complaints I have received regarding the reorganization of

the ministry. I trust that there must be a problem there somewhere. I

trust that there must be a feeling of inequity. Otherwise ministry

staff and employees would not at this point in time take the very

unusual and drastic action of conducting a two-day strike in protest

against the ministry's policies on reorganization.

I hope

that the minister will try to shed some light on this particular

problem. I don't think it's good enough to get up and say that the

employees are all wrong, that they misunderstand the intention and the

policy of the department. Some of those people have been in the

ministry for many years, and I don't think you could provoke them to

the point where they conduct a two-day strike unless they have some

real grounds for concern and objection. I would appreciate it very much

if the minister would shed some light on this particular subject before

we go on to other areas that are perhaps more important to the people

of British Columbia in terms of the broad issue of forestry.

Nevertheless, unless we have a competent ministry with high morale and

dedicated to the principles that the minister has outlined, then I

question the strength of that ministry in adequately monitoring,

regulating and enforcing the very principles that the minister has

tried to articulate here this afternoon.

HON. MR. WATERLAND:

With regard to ministry morale and the recent two-day work stoppage, we

as a ministry have been dealing on a continuing basis with people

within the ministry. As a matter of fact, when reorganization planning

began, we received recommendations from our field professional staff

and non-professional staff, and as the member probably remembers we had

outside management consultants assist us, and then of course our own

executive in Victoria. All of this form of input was used to develop

the organizational structure, and as the actual final structure was

being developed, there was constant dialogue back and forth. If we have

a failing it is because that type of dialogue back and forth quite

often starts rumours, and rumours have to be doused and corrected. So

that caused some concern among our staff.

This work stoppage that took place.... Those things which we have the authority to negotiate, to make final

[ Page 2668 ]

decisions

on, were resolved with some very serious discussion and negotiation

between our personnel people and our personnel — resolved, by and

large, to the general satisfaction of both sides.

There are

a few issues which are not specifically related to my ministry and

which are government-wide — such as early retirement — that some people

may feel desirable in reorganization; severance pay if they decide to

leave, moving expenses or relocation expenses, a few things like this

which had to be negotiated on a government-wide basis. As a result,

they had to negotiate on these matters with the Government Employee

Relations Bureau, and it was during these negotiations that we got hung

up, because we were the ministry trying to resolve them; the job action

was taken against us.

Yesterday or the day before yesterday

these outstanding matters were resolved, as GERB continued discussions

with the employees. So I don't believe there is dissatisfaction,

although in any reorganization there are going to be certain

individuals who don't agree and who perhaps think they're not well

treated. But by and large — and we keep in pretty close touch with our

field people — there is general acceptance and a great deal of

enthusiasm, Mr. Member, for the types of things they see here.

consultation with local governments, with members of the Legislature, I

believe about a year ago I sent a letter to all MLAs inviting them, if

they felt any concerns, to meet with our field people, our regional

managers who make a recommendation as to where various people should be

located. I don't know if any members opposite took advantage of this;

I'm sure they did. I know members on our side have. I have had some

problems within my constituency, so I am sure the member will read me

some headlines about where local government didn't agree with the

decision that I finally had to make on the location of the district

office. When it deals with my constituency it's an even more difficult

problem, because I am the MLA and I'm also the minister making the

decision, but in a case like that I have to make the decisions in the

best interest of the ministry, of personnel, the effect on the ministry

and the efficiency with which we can function, and that's what's

happened throughout the province.

We have met with local

governments. We have not closed any locations yet. We are still

discussing with governments which object, and if there is going to be a

reduction in the staffing level — especially in small towns — local

governments will object. But I think our responsibility is primarily

toward the effective and efficient operation of the ministry. No forest

centre in British Columbia, I think, will forever be in one place,

because the forest scene changes, the things we're involved in change,

and our people will always have to be mobile to a certain extent.

The

problem the member brings up between registered professionals and

non-professionals — there are perhaps within the ministry about 300

positions which require professional registration. These are by and

large specialized areas such as research officers, and they require not

only professional registration but very specialized professional

expertise. These are primarily staff people. Most of the field jobs

where career development takes place are open to both. There were two

that until a few weeks ago did have some restrictions, and these were

the silviculture resource officers and the timber resource officers. On

further discussion with my staff we've decided that really these jobs

require as much in the form of operational ability as in technical

expertise, because we do have these other backup professionals in the

ministry. So these two critical areas were opened up to open

competition. The objective is to get the best possible person in these

jobs, whether he's professionally registered or not. I think that's the

way it should be. So that's one area of discontent.

Quite

frankly, Mr. Member, I feel we're in the right area, because I'm

getting just as many complaints from the professionals as I am from the

non-professionals, so it seems to be fairly well balanced. The

professionals, of course, think many more jobs should be closed to

other than themselves; the technicians feel there should be no

restrictions. But I think we've struck a pretty good balance and it

will be to the benefit of the ministry.

As far as

competition, any job in the Forests ministry is open competition. Our

first priority and preference is given to people within the Forests

ministry, The next level is from the province of British Columbia, and

then from Canada or abroad.

There are some jobs which are

highly specialized, where we may actually seek, either on a consulting

basis or an individual perhaps even from a foreign country, because he

has some special research or technical expertise which we need very

badly.... We may even write to people and say, "We would like you to

work for us, " either on a consulting basis, or on a term basis, or in

some cases permanently when there is a specialized job which somebody

has very special expertise for, but very, very seldom. By and large our

competitions are open and, as I say, our order of preference is

in-service, provincial, and out of province. I think that covers the

areas outlined by the member.

MR. KING: Mr. Chairman,

I appreciate the minister's response. I would just point out to him

employees of the ministry adversely affected by the ministry

reorganization are a proper matter of control and concern to the

ministry. It's not good enough to divest yourself of that

responsibility by saying that it resides with GERB or the agency

responsible for dealing in total and in general with the public

service. There are ample examples, Mr. Minister, where other agencies

of the government have negotiated special terms with respect to those

adversely affected by reorganization; BCBC is one. I think the Minister

of Transportation and Highways (Hon. Mr. Fraser) could fill you in on

whether his ministry held the responsibility for negotiating special

provisions for those adversely affected and whether he recommended it

to GERB and had them accept it or not. But he accepted the basic

responsibility for those special conditions. There's no reason on earth

why your ministry could not have done the same thing, rather than

stickhandling it aside to GERB. They're your employees, Mr. Minister.

You're the person who instituted the reorganization. So I don't think

it's good enough to sidestep responsibility in that regard.

However, be that as it may, I'm sure that the staff all around the province will be receiving copies of Hansard and

having a close look at this exchange and monitoring it for exactitude

in terms of the responses you give. So we'll see what happens.

want to congratulate the ministry on the preparation of the five-year

range resource analysis. It's a very complex but very competent

document. I've had the opportunity to make some remarks about it

previously. It's a very good piece of work in terms of pulling together

technical data. That was

[ Page

2669 ]

overdue in the province. I think there are many

things omitted from the report, though, that provoke a great number of

questions. Perhaps it produced more questions than it answered. What it

did do, of course, was for the first time acknowledge that in certain

specific regions of the province particularly we are facing a very

serious shortage of timber. In this respect it's very useful. In

respect of the allocation of funds for intensive forest management,

it's a very, very vague document. In terms of how and where the money

is going to be spent, in terms of what kind of auditing procedures

might be available to monitor the expenditure of these public funds to

determine whether reasonable value is being returned to the public for

the investment of these funds — it is in those areas that I have quite

a variety of questions.

[Mr. Strachan in the chair.]

For

instance, "in those areas where future timber supply assessments

indicate appropriate conditions, additional commitments can be made."

Well, I'd like clarification of that point. How is this going to be

done? Is it going to be done strictly at the regional level? If so, how

is the ministry going to monitor the program? How are you going to

determine whether value for this money is being realized, whether the

cost-benefit, if you will, justifies that kind of investment in

site-specific areas? There's nothing of that nature in the report, It

simply says that we're way behind, we need a much larger investment. Of

course, that's kind of motherhood, because everyone associated with the

forest industry — indeed, most of the public — is aware that we are in

fact way behind and there has to be a much greater investment if we are

to preserve anything of a vestige of sustained yield in the province

that will support our current level of economic activity. But it's not

good enough to throw money at it. I think the public — and, I believe,

this Legislature — has the right to understand precisely what the

initiatives are that the ministry wishes to take. Where are the areas

you are going to apply this intensive forest management? What are the

steps that are going to be taken to monitor the administration of these

site-specific areas?

The five-year plan indicates that

within the next five years $448.1 million will be expended in stumpage

offsets. Little, if any, information is given as to how these funds are

to be used and specifically by whom, other than the forest industry as

a whole. What kind of mechanism does the ministry have to monitor these

offset claims by the private sector, to ensure that the public is

receiving fair value for the offset claims which those private

industries are making?

I'm probably more concerned in this area, in light of a variety of recent

things.... Basically, the ministry has been telling us, up until the release

of this report, that there's really no problem. We have lots of timber and

the sustained yield concept is firmly in place. Everything's hunky-dory.

The professionals in the industry and the ministry know what they're doing.

All of a sudden, boom, out comes this report and we see we have major problems.

Perhaps those professionals, over the years, haven't really been levelling

with the public, or at least they've been misreading the state and the health

of the industry. If that's the case, I have some reason to be concerned

that we're now going to embark on a program to recapture our viability as

a forest industry and to bring up the intensive forest management approach to

the extent that we can rely on having enough fibre in the future. I think we

have a right to believe that we have a ministry that is competent to monitor

the expenditure and application of all these public funds that are going to

be thrown at the problem.

Recently

there have been all kinds of reports of the increasing concentration of

control in the forest industry by, basically, the major companies. Is

there a ratio of any kind, as between the large integrated firms and

the small operators, the small quarter-holders and so on, as to what

will be accepted in offset costs?

I have a great many

questions in this area, and perhaps, before I get too deeply into it

and list a whole variety of questions, I should give the minister a

chance to respond to my initial concern, which is basically: how are

you going to control all this expenditure" The public is being asked to

allocate this money for intensive forest management. Do you not think,

Mr. Minister, that they have a right to know, in some precise terms,

how it's going to be spent, and what areas it's going to be spent on.

and how it's going to be monitored to ensure that there's some kind of

cost-benefit analysis applied along with the expenditure of that money?

That is the basic question.

HON. MR. WATERLAND: The

member went over quite a few areas — first of all, basically, I guess,

control of expenditures — and he was referring to the offsets, I guess,

under

section 88, which provide large expenditures over the next

five-year period.

Let me advise the member that companies

cannot go out, do work, sell and then come and collect funds for it.

Any silvicultural project to be carried out by a company from which it

expects to get credit under

section 88 must first be thoroughly

assessed by our staff to make sure that the project is worthwhile and

will provide a benefit. It requires prior approval of the ministry. As

the work is carried out, it is assessed and checked by our staff. When

it's completed there is an assessment of it. Before payment is made, we

do have our very strict government-wide financial control — and our

ministry's comptroller. We have a comptroller-general, who, I am sure,

is just as interested in expenditures provided under

section 88 offset

as she is on expenditures voted in individual budgets.

it's not as if we had a free hand to run around and sprinkle this money

all over the province; it's very strictly controlled. We provide not

only for financial audits, but there are technical audits and checks of

what's going in the field as well, to make sure that the work is

happening. And before it can happen it must be approved, in any event,

by us, because we have to budget those expenditures. I believe in this

current fiscal year we have budgeted $84 million for offsets under

section 88. So the same type of financial control is exercised there as

in other areas of government expenditure. In fact, I think with the

zeal of our field staff, we're going to probably have even tighter

financial control and be surer of a return for our investment than,

perhaps, any other area of government.

The member said, I

believe, something to the effect that things seemed to be going along

well, and then all of a sudden up jumped this report, and we perceived

problems. What this report has done is focus upon problems and

opportunities that we have, as a government and a ministry, in our

forests. It's given us very valuable lead time. By assessing it, we're

planning and projecting our timber flows ahead, deciding what must be

down now in order to assure that we don't have this large falldown in

timber supply in the future. And we won’t.

[ Page 2670 ]

There

are many people who, I'm sure, consider sustained yield as something

that says we shall have a uniform, even flow of timber for ever and

ever. That's not what sustained yield means at all, and it never has.

Anyone who understands forestry at all knows that sustained yield does

not mean even flow. Many factors are constantly changing in the forest

land base in British Columbia. The yield of timber per acre from a

new-growth stand at a rotation of anywhere from 40 to perhaps 120 years

will be much, much less than the yield per acre from the old-growth

forest, which took perhaps 500 years to accumulate. Every forester and

every person in the industry knows that this natural falldown effect

will take place when we start making the transition from old-growth

liquidation to second-growth management.

We have a constant

erosion of the forest land base in British Columbia, which is of

concern to me and, I'm sure, other members here. We must protect our

forest land base, especially the better sites, because it's on the

better growing sites that we grow a very large portion of our timber

supply.

These things, the loss of the land base and the

natural falldown effect, can be largely.... More optimistic foresters

say that it can be more than offset by more intensive management. Some

of the others say that perhaps you will have a falldown effect. We

don't know who is absolutely right at this point. We can say that any

future reduction in cut will be minimal. If we combine the increased

growth possible through more intensive management with increased

standards of utilization and increased species utilization, I'm sure

that all of the future natural falldowns can be offset by these means.

nothing has suddenly jumped up. I think it's a tremendous opportunity

to be able to focus on the overall provincial problem and focus on it

within specific areas. We have the lead time needed to offset future

supply problems. There are areas in the province where we still have

uncommitted timber. There are areas in the province where, by utilizing

species that we're not now using, we can increase our cut. I'm sure

that as our industry continues to mature and as we, as a government,

continue to encourage the utilization of all species and get better

utilization within the mills as well, our forest industry and our

forest resource will continue to play at least as important a

part in

our economy as it does now. I'm sure there are many areas for growth

opportunity in the future.

So the member can rest assured

that there will be very strict financial control and very strict

technical auditing of what happens in the forest, and as we learn more

about the forest we'll be in a better position to refine and make

better decisions on exactly where the money should be spent. That is

why I don't think we can rush into it any more quickly than we are.

believe the member also understands that

section 10 of the Ministry of

Forests Act requires that a program of evaluation of the effects of

these programs must be done by the ministry and reported to the

Legislature, which will be a part of next year's program presentation.

Our strategic studies branch is already involved in that.

MR. KING:

I thank the minister for his response. I wonder what the criteria will

be in terms of a situation where a private firm undertakes to reclaim a

site that perhaps has been taken over to some extent by weeds and so

on, and they propose to reclaim that site for forest production like

the site preparation program of replanting. How would you apply their

claim for an offset in the first year for the expenditure of a million

dollars on a site of that nature? Would your assessment include any

appraisal of the success ratio of the seedling planting? Or would you

not wait a couple of years to see whether the project was successful?

Would you allow that million-dollar write-off in the first year?

The

minister says everything is going to be nice. We're going to watch it

very closely. He really doesn't tell me very much about specifically

how they are going to monitor it. I thought it was just slightly

ironic, Mr. Chairman, that the minister based some assurances on the

auditor-general's appraisal. I just happen to have with me the

auditor-general's report for the years 1978 and 1979. The only

reference I find to the Ministry of Forests is not particularly

flattering, Mr. Minister. I'll read it for you just to refresh your

memory. In the 1978 report, at page 30,

section 8(c)(ix):

"Timber

royalties and stumpage grazing fees. These accounts receivable

represent unpaid billings as of March 31, 1978. My staff has estimated

that an amount of $43 million could reasonably have been added to this

receivable representing timber scalings made in March 1978 and prior

months which had not been billed as of March 31, 1978. Had billings

been made on a current basis, it is estimated that $26 million of the

above amount would probably have been collected and included as revenue

for the 1978 fiscal year. Further details in this regard appear in

section 10 of this report."

section 10 it simply says:

"My

examination included a review of the systems of internal control over

the collection and recording of major provincial revenues. In the

course of this review, it came to my attention that abnormal delays had

occurred in the billing of timber royalties and stumpage fees. These

delays were attributed to problems encountered with a new computerized

billing system of the Ministry of Forests. As a result, an estimated

$26 million of revenue which otherwise would have been collected in the

1978 fiscal year was collected and recorded as revenue in the following

fiscal year."

Well, maybe we could expect the ministry to do

a better job in the subsequent year, after that fairly serious

indictment by the auditor-general of the province. What do we find in

1979?

HON. MR. PHILLIPS: Why don't you sit in on Public Accounts? That's all been rehashed there.

MR. KING:

Mr. Chairman, if the minister of small things wishes to get involved in

the Forests debate, he's quite welcome to get up and talk about it when

I'm finished my remarks.

Interjection.

MR. CHAIRMAN: Hon. minister, the member for Shuswap-Revelstoke does have the floor.

MR. KING:

We have reference to the Forests ministry on page 15 of the current

report of the auditor-general. It comments on the Ministry of Industry

and Small Business Development too; it points out the incompetent

financial controls in that ministry as well, but I won't comment on

those at

[ Page

2671 ]

the moment. We'll deal with forestry. Taxes and other accounts receivable,

section 5.10:

"Timber

royalty and stumpage and grazing fees. The account balance of

$88,288,320... represents unpaid billings as at 31 March, 1979. We

estimate that an additional $118 million, representing timber scalings

made prior to 31 March, 1979, had not been billed as at that date. We

also estimate that, had billings been kept current, $45 million of the

unbilled amount could have been collected and included in 1979 revenue.

The matter is reported on further in paragraphs 7.26 and 7.27 of this

report."

At that point in the auditor-general's report —

I'll just read it briefly — it says: "Unbilled fees as at 31 March,

1979, were estimated at $118 million." I trust the ministry will

recover that revenue eventually. But what it points out is that the

ministry is not in a very strong position in terms of current cost

controls. If they cannot protect the public interest by current

billings for stumpage due, and cannot ensure that that is in the

current fiscal year as revenue to the Crown to be utilized for other

programs as well as forestry, then I have to worry a little bit about

the minister's assurance: "Oh, we're going to monitor these large tax

write-offs in any current way and ensure that the public is receiving

value for these write-off claims." Are they going to be a year at a

time or on a five-year basis? How are you going to monitor it? I'd

appreciate some more details.

HON. MR. WATERLAND: The

member identified a problem and presented, perhaps, a partial reason

for it. He mentioned the fact that we were getting into a new

computerized billing system, which is not an excuse but is a partial

reason for some of these unbilled accounts.

MR. KING: That was 1978.

HON. MR. WATERLAND:

In 1978, yes. We didn't resolve those problems throughout that year and

it went up from 1978 to some $88 million, I believe, by March 1979. I

think we have most of our computer problems sorted out and we've made

some changes in operation methods within our ministry to help eliminate

these unbilled accounts. As of February of this year they've been

brought down to a total of $13 million. When you consider the number of

billings carried out by the ministry last year — I believe our revenue

was $550 million — then $13 million is getting to a more acceptable

level. I don't know if we can ever completely eliminate the unbilled

accounts. I guess we could if we wanted to be completely ruthless. But

many times problems developed in an area where we have approved the

cutting permit and for some reason it becomes necessary to move the

cutting permit. It may be a fire, problems with other ministries or

public concerns. It may be necessary to move a permit, and rather than

force an operator to shut down and to lay off his employees, we'll say:

"All right, you can start cutting now. As you're cutting, we'll try to

determine what your proper stumpage charge should be." That's when we

get into unbilled accounts.

However, I think that's in

relatively good shape now. It came down from $88 million in 1979 and by

February of this year it was $13 million. We can perhaps get it down

lower than that. I don't think, in realistic terms, that amount will

ever be zero. But I think we've done a good job in responding to the

auditor-general, and I think the auditor-general perhaps, after

discussion with our comptroller and our financial control people, now

better understands some of the complexities of dealing in a province of

this size with a resource as varied as forestry is and with conditions

as varied as they are. So, that, I think, covers those comments by the

member.

MR. KING: The only thing the minister never

commented on was the proposition of what criteria he is going to apply

to the write-offs claimed by the private sector for intensive forest

management. What criteria are there for that?

HON. MR. WATERLAND:

The member, I think, probably received a copy of our incentives White

Paper. We're still trying to finalize our policy in that regard.

Whether or not incentives in the way of additional cuts, should

silvicultural work lead to a faster-growing forest and a larger

allowable cut.... But on the basis of approving expenditures, we have

to approve an expenditure for the treatment of an area before it

happens. Money is expended which has been approved in advance by us and

will be paid upon completion of the work. If that leads to increased

cut as long as.... At the present time if the Forest Service does it

directly or if the licensee claims a refund for it. that increased cut

is in the hands of the ministry to dispose of it. We're trying to

develop in this White Paper approach a combination of incentives,

perhaps a partial offset of the cost and a partial increase in cut if

it develops from that silvicultural work.

But we haven't yet

resolved that problem. We've had a large number of reports back to us.

There's no real consensus coming. nothing about which we can say: "It's

all black; it's all white: we can do this. I think we have to come up

with a bit of a compromise. I believe that paper or those final

recommendations will be forthcoming within a month or two. But I can't

advise the member yet because we haven't made a final decision as to

what part of that cut will be used as an incentive. If the incentive

will lead to better, and more, silvicultural work, I think it's in our

best interest to have an incentive. I'm not sure that's the case yet.

Our

forests, as I've mentioned many times, are terribly complex. The

response is different in different areas. The member asked the

hypothetical question: what about the reclamation of a brushed-in site?

At the present time — if it were to be done in the private sector as an

offset — what we would do is assess the area with the licensee. We

would have to assure ourselves that there is a benefit in doing that.

It may be not be strictly an economist's cost-benefit ratio type of a

study because there are other things that have to be considered, but we

would assure ourselves in the overall benefit received, in terms of

commercial timber, habitat enhancement, stream protection and whatever

these factors are, that there's a benefit to us. We would settle on a

price with them. They would do the work, and once the work is done to

acceptable standards the cost of doing it would be offset against their

stumpage.

MR. KING: Mr. Chairman, I do have some

philosophical problems with this tax write-off system. Nevertheless, I

appreciate the minister's answer. To the question of whether it's a

reasonable proposal from a cost-benefit point of view, I didn't intend

to imply that you measure this on the normal economic guideline. I can

appreciate that in that kind of equation the long-term public interest

and the long-term potential is at work. Nevertheless, I do feel that

there has to

[ Page 2672 ]

some kind of cost accounting system, some kind of audit control over

the expenditures of these public moneys to make sure that it is a

reasonable value in return to the province.

I have some

notes here, and perhaps I'll just read from them for a moment to try to

make the point a little more cogently than I have thus far. In the

report, the goals are set out on page 4 of the five-year program. The

only one requiring comment, really, is the stated goal: "to produce

timber in a cost-effective manner in order to encourage a vigorous,

efficient and world-competitive forest industry." The goals as stated

are acceptable. The basic issue is whether the program proposed will,

in fact, produce timber in a costeffective manner. To resolve this

question, there is a real need for considerably more information than

is presently available in the report. One needs to know the survival

rates per plantation by forest types and sites for each region in

timber supply region, the cost per surviving seedling and the projected

growth rates. All of those things, if they were available to the public

— these kinds of projections on what kind of return the ministry

expects — I think, would go a long way to assuring the public that this

is a valid investment in the future. None of those specifics are

available in the report. It simply identifies the deficiencies and then

says we're going to spend a lot of money to correct them. We want some

assurance that, indeed, the expenditure of this money is going to

produce reasonably the desired results. There seems to be a vagueness.

There seems to be an absence of those kinds of specifics around the

report, even though the details of the general report are very good.

The

submission dealing with the five-year program really is less

satisfactory than the technical report. We're asked to accept on trust

the development of a multimillion dollar program without being given

access to the reasons for the choices and priorities. This is the

problem we have with it. The dollar figures proposed do not represent a

substantial increase in the funds available to the ministry, but with

the problems presently being experienced as a result of their recent

reorganization, it is doubtful if the ministry has the capacity to

handle a larger program. Indeed, the one presented will strain the

resources of the ministry to the very utmost.

The technical

report is, for the most part, a factual account of the ministry's

program. It does, however, contain some interesting contradictions,

too. For instance, on page 65 it states: "The Forest Act allows the

authority of the chief forester to designate, develop and maintain

recreational sites and trails." However, the new organization, depicted

on pages 120 and 121, clearly indicate that the chief forester has no

responsibility for recreation. Perhaps the minister would like to

clarify that apparent ambiguity — that apparent contradiction.

This

is reinforced in the program description under "recreation" as set

forth on pages 150 and 151. However, Mr. Chairman, the real issues are

to be found on page 174, contained in the following sentence — and I

hope the minister is listening: "The research program is directed

towards obtaining information required by intensive forestry

operations. Without this data base there is little assurance that

moneys spent on various forestry practices will yield benefits in

excess of costs." In the report no hard evidence is presented that

this, in fact, will not be the case.

That's the basic

concern that I've been trying to outline to the minister. He's

indicated that, yes, the staff will be monitoring the proposals that

the private sector bring forward in terms of their plans for intensive

forest management. He has indicated that prior approval will be

necessary by the ministry. But the case I'm trying to make, and shed

some concern on, is that the ministry is having a tough time keeping

current with their stumpage revenue, as outlined by the reports of the

auditor-general. The ministry has reorganization problems; witness the

two-day work stoppage by ministry staff who felt they were

unjustifiably treated in the reorganization. Now you're going to

superimpose on your ministry a large new responsibility that really

wasn't there before — the responsibility to monitor and control the

claim for millions of dollars of tax write-offs by the private sector

based on their involvement in- intensive forest management.

can't help wondering, Mr. Minister, despite your assurances, that I am

asked to accept on trust also.... In the absence of any proof, you

know, I doubt the adequacy of the ministry to do an effective job of

this kind of tight control of audit over these tax write-off claims

that you're going to be getting in spades from the private sector as

soon as the door is open. Pale assurances don't really satisfy me. I

can understand why the constituents up in Yale-Lillooet are looking at

the minister with a jaundiced eye these days. I am wondering who he is

representing. Maybe they trust him. I hope they do. I trust his good

intentions but I'm not sure I trust his competence, in light of the

record, to do an adequate job in cost control on these write-off claims.

There

are a couple of other areas. I mentioned some of the other conflicts in

passing, like the approach to recreation. Maybe the minister would like

to comment on that. There are a couple of other things I'd like to

mention. I think the ministry should produce their detailed plans by

regions, not rely on just MLAs to go to the various regions and say,

"Look, I want to see your regional plans, your forest types and so on,

your cost-benefit analysis for the various programs in this area." I

think that should be a matter of public record. I think the ministry

should be laying those before the Legislature. I think they should be

available to the public. After all, the public is paying the shot, in

large measure, for this investment in the forest industry. Be open

about it and lay that material before the public so everyone can see.

think I'll just let it go at that stage. There's not much point in my

standing up here and saying, "I have concern about your ability to keep

a tight handle on this whole new program, " and the minister standing

up and assuring me that he has. That's a rhetorical exchange which

accomplishes little. I've expressed the concern, and I want to say it's

not just my concern. Naturally I have consulted with a great many

people in this regard, some from the industry. That concern is a fairly

broad one, so the minister shouldn't take it just as a political handle

proffered by the opposition. That is a genuine concern that people in

the industry, people of the public and certainly that we, politically,

have too. But I guess that if he's satisfied that his ministry can do

the job, that he's got a real handle on what's going on, in the final

analysis we have nothing more to do than to accept that and hope that

the record proves the minister correct rather than us in terms of the

concerns we have.

I would hope that the minister would respond a bit further to some of the questions I raised.

HON. MR. WATERLAND:

Very briefly, first of all, the member mentioned tax write-offs.

Stumpage is not a tax. Stumpage is the price received by government for

the sale of a Crown asset, i.e., timber. The member again mentioned a

[ Page 2673 ]

historical

document, the auditor-general's report, which indicated a couple of

years ago, and as recently as a year ago, that we had some problems

with unbilled accounts. I will say again and emphasize that this is now

within reasonably good levels, down to $13 million by February.

to public involvement and disclosure of what we're doing to the public,

I don't know how many MLAs have gone into our regional offices and our

district offices since this information was produced, but I can tell

them that a large number of the general public have, especially those

involved directly in the forest industry or in areas affected by the

industry and our management of forests. The public is taking advantage

of our openness and willingness to discuss the plans. For example, in

the development of our timber supply area analyses, one of the steps in

it, before it's approved, once we have gathered all the technical data

together and the ministry technical staff have developed what they

think is a reasonable cut level for a timber supply area, considering

all the other factors such as esthetics, water quality, fish and

wildlife habitat, alienations expected for other uses, and agricultural

impact.... Once all of these things are put together and we have

decided, in the best judgment of the ministry, the level of cut that

should be recommended, our next step is to go to the public — and we're

doing this now. In Vancouver we had meetings on the coastal timber

supply area; at the current time we're having meetings in the Okanagan,

because our analysis is completed — and this input we get does effect

what happens. So our objective is actually to make any and all

information available to anyone who wishes it, and I think we're doing

a relatively good job in that area.

MR. HANSON: Mr.

Chairman, the rules of the House call for an intervening speaker after

a certain period of time, and I'd like the Chair to recognize me as an

intervening speaker. Later on in the debate I would like to ask the

Minister of Forests how the series of Forests ministers from 1952

through to 1972 could not anticipate the fact that the overcutting was

taking place. Anticipation should have been made that the cutting was

in excess of the ability of the land to produce the wood. I'd like to

talk to him about that at a later time.

I'd also like to

talk about the proposed project to have scaling done by the private

sector, which I think is something that is coming in the works. It is

of great concern to me that the scaling for revenue would probably be

done by the private sector, and then a cheque would just be sent to the

government. I think scaling done internally by the provincial

government is an important function of government as a check and a

monitor of the industry. I'd like the minister to respond again on that

matter at a later date.

I see that our debate leader is out

of the House for a moment, so I'd just like to continue. In 1952, when

Social Credit assumed power in British Columbia and the forest industry

was the major industry in the province — as it is now — how was it that

the cutting was projected into the future to exceed the ability of the

land to produce the wood? Since becoming an MLA only a year ago, on two

occasions I have taken tours — one by Crown Zellerbach and one by

MacMillan Bloedel. The industry is very interested in seeing that we as

opposition MLAs see exactly what the present situation is and the

so-called falldown effect or shortfall or whatever the term is. On each

occasion we went for three days to see the full operations of the pulp,

of the wood supply and so on.

It is clear that you don't

have to be a sort of geographical wizard to know that wood grows more

slowly at higher elevations, that cutting wood at high elevations

becomes more costly with road construction and so on, and that wood

grows more slowly on slopes that aren't afforded the same exposure to

light, the same kind of bioclimatic conditions that the minister

referred to in his introductory remarks. At the same time we asked, as

opposition MLAs concerned about our number one industry, how quickly

reforestation was done in the past. We were given very candid answers,

and the candid answers were that much land was left for years before it

was actually cleared properly. I know burning was a major practice at

the time: it's not so much of a practice now. Many, many acres —

hundreds of thousands of acres — were not quickly planted. So the

recovery time has been delayed by the inability of people to get

quickly onto that landscape and to replant.

I raised a

number of questions with the industry that I still would like answers

for, and I'd be very pleased to have the minister attempt to answer

them for me. We have, as I understand it, a plant succession whereby

when forests are cut, various species come back — so-called weed

species, alder and so on — on the lowlands or wetlands. What we have in

a sense is so-called weed species that replenish the soil in nitrogen

and other kinds of nutriments as they fall. Other more dominant species

come in at a later date. Our forest industry is primarily based on

harvesting of climax vegetation — hemlock and fir and spruce and so on.

I'd

be very interested if the minister — or his deputy could advise the

minister — could answer my question: what is the long-term implication

of harvesting only a climax vegetation and supplementing nitrogen and

nutriments by aerial spraying. I know it's very costly to deposit

nitrogen by planes onto the surface of the landscape. My question is:

what happens to the land in the long run when you deposit nitrogen by

air, but you don't allow the alder and other weed species to fall down,

deteriorate and supplement the soil? That is something I would like to

know, because our industry is based on harvesting a climax forest. That

means that we have in a sense a monoculture that is vulnerable in the

sense that we may deplete the soil in the long run. I'm not an

agrologist. I'm not a soil scientist. but I think it's something people

should know.

I'm very interested in the carrying capacity of

the land. I'm interested in how the Premier's party from 1952 to 1972

allowed our forests to deteriorate to the condition they presently are

in.

Interjection.

MR. HANSON: The Premier says that he would prefer to go on to a different estimate, rather than listen to basic concerns.

Interjections.

MR. CHAIRMAN: Order, please. The second member for Victoria has the floor.

MR. HANSON:

The member for Omineca (Mr. Kempf) feels that he is an expert in

succession of plant communities and different bio-geoclimatic zones.

MR. KEMPF: How long did you work in the woods?

[ Page 2674 ]

MR. HANSON: I worked in a pulpmill. I know something.

MR. CHAIRMAN: Order, please. No personal comments in debate, hon. member. You still have the floor on vote 103.

Interjection.

MR. LOCKSTEAD: The member for Omineca should address the Chair.

MR. CHAIRMAN:

Perhaps the member for Omineca and the member for Mackenzie would be

reminded that when a member has the floor no one shall impede that

member. The second member for Victoria does have the floor.

MR. HANSON:

I am going to sit down in a moment, but I would just like to serve

notice to the minister that I am very interested in the proposal. I

don't know whether it is a formal proposal by the ministry to actually

have scaling done where the calculation of revenue for the public

treasury is presently done internally by people in the government — to

have that done by the private sector so that the public will not have

its own internal watchdog to safeguard the interests of the public. I

would like to hear the minister's answers on that in due course.

MR. LOCKSTEAD:

Mr. Chairman, I thought perhaps the minister would want to get up and

answer those questions posed by the previous member; but I know that

the minister is keeping track of all these questions. Before I start

asking questions of the minister under this particular vote.... I will

have a great number of questions over the next several weeks under the

debate of these particular estimates relating to tenures, reforestation

and a whole number of issues — the list will go on.

At this

time I think I will confine myself to one topic. It is a topic that is

very current in the industry. That is the matter of the plight of the

small, independent loggers on the coast and in the interior of this

province, but particularly on the coast. As the minister is aware,

there are a large number of layoffs taking place in the independent

sector of the logging industry. One of the factors these independent

loggers blame for not being economically able to produce and harvest

logs is the high stumpage rates which have remained unadjusted for some

time.

I have had personal conversations with the minister

and people within his ministry. I might take this opportunity to put on

record that, personally, I have had a great deal of cooperation from

people within the Ministry of Forests in my own riding and here in

Victoria. Be that as it may, it really does not solve the problem of

the people that we are talking about at the present time. As a matter

of fact, as recently as this morning I had a phone call from an

independent operator in Sechelt who employs some 90 people. He has

already laid off some of those people, and there will be further

layoffs in his particular operation unless a readjustment in stumpage

rates is forthcoming.

As I mentioned earlier, the minister

put out a press release dated around April 1 this year, I believe — I

don't have it in front of me at the moment. There was an announcement

about a readjustment of stumpage rates based on some kind of market

value at the coast — current selling price. The fact is that those

decreases in stumpage rates at all times are some three months behind

the actual current selling price of logs. I would like to know from the

minister if he certainly intends to re-evaluate that system of

re-evaluating stumpage rates so that it's more modern and efficient and

so the independents, particularly, get a reasonable break in stumpage

rates. Because the net effect of all of this is layoffs in the

independent sector on the coast of British Columbia.

[Mr. Hyndman in the chair.]

has been brought to my attention that several of the large integrated

companies as well have asked that the stumpage rates on their forest

tenures be reduced. I don't know if that is correct or not. They have,

I'm told, asked for the minimum stumpage rates to be paid to the

Ministry of Forests and the government of British Columbia. I have no

idea whether that allegation is correct or not, so if the minister

could clarify that particular matter for me it would be much

appreciated.

Tomorrow I have a delegation of independent

loggers coming in from.... As a matter of fact, they were supposed to

be in today, but their aircraft was cancelled. So they will be in,

hopefully, tomorrow morning to meet with me over this very issue. I

hope that the minister or someone within the ministry will take the

time to meet with these people. Once again, these are a group of

independents working in a PSYU in the lower central coast area — an

area which I happen to represent — and they have this very same

problem. Their stumpage rates have not been re-evaluated, so as a

consequence a number of people on that part of the coast have been laid

off.

I don't blame it all on stumpage rates. We know that

the lumber market is down the tube because of housing starts in the

United States. It's hoped that President Carter will initiate some