1973 Legislative Session: 2nd Session, 30th 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, APRIL 11, 1973

Night Sitting

CONTENTS

[ Page 2579 ]

Routine proceedings

Insurance Corporation of British Columbia Act (Bill No. 34).

amend-

ments. Hon. Mr. Strachan — 2579

Development Corporation of British Columbia Act (Bill No.

102).

Second reading.

Hon. Mr. Macdonald — 2579

Mrs. Jordan — 2581

Hon. Mr. Hall — 2586

Mrs. Jordan — 2586

Mr. Brousson — 2589

Mr. Wallace — 2591

Mr. Gardom — 2593

Mr. Williams. — 2594

Mr. McClelland — 2595

Mr. Rolston — 2597

Mr. Phillips — 2598

Ms. Brown — 2601

Mr. Phillips — 2601

Hon. Mr. Barrett — 2602

Point of order

Hour of adjournment. Mr. Chabot — 2603

Mr. Speaker — 2603

Hon. Mr. Strachan — 2603

Routine proceedings

Development Corporation of British Columbia Act (Bill No.

102).

Second reading.

Hon. Mr. Barrett — 2603

Mr. Chabot — 2604

The House met at 8:30 p.m.

Introduction of bills.

INSURANCE CORPORATION OF

BRITISH COLUMBIA ACT

HON. R.M. STRACHAN (Minister of Highways): Mr. Speaker, I

have the honour to present a message from His Honour the

Lieutenant-Governor.

MR. SPEAKER: His Honour the Lieutenant-Governor transmits

herewith amendments to Bill No. 34 intituled the Insurance

Corporation of British Columbia Act enclosed herewith and

recommends the same to the Legislative Assembly, Government

House, April 4, 1973.

Hon. Mr. Strachan begs leave to move that the said message

and the amendments accompanying the same be referred to the

committee of the House having in charge Bill No. 34.

Leave granted.

Hon. Mr. Strachan moves the said message and the amendments

accompanying the same be referred to the committee of the House

having in charge Bill No. 34.

Motion approved.

Orders of the day.

HON. D. BARRETT (Premier): Mr. Speaker, I move we proceed to

public bills and orders.

Motion approved.

HON. MR. BARRETT: Second reading of Bill No. 102, Mr.

Speaker.

DEVELOPMENT CORPORATION OF

BRITISH COLUMBIA ACT

MR. SPEAKER: The Hon. Attorney General.

HON. A.B. MACDONALD (Minister of Industrial Development, Trade and Commerce):

Mr. Speaker, the Hon. Minister of Industrial Development, Trade and Commerce,

not the Attorney General…

MR. SPEAKER: Oh, I'm sorry.

HON. MR. MACDONALD: …has the pleasure to move second

reading of Bill No. 102, a measure for the support of small and

medium industry in the Province of British Columbia which has

been borrowed from the promises of the opposition extending

over 20 years, and from the deathbed repentance promises of the

official opposition in their twentieth year and eleventh

month.

But nevertheless it is an important measure and I think

should be acceptable in principle to all sides of this House.

As I recall, the Conservative Party — which is more

numerous in Nova Scotia than it is in this House —

pioneered — and I have no hesitation in saying that

because I remember from years gone by when we were arguing for

this kind of assistance for secondary industry — the

acquisition — oh, they made mistakes, and when they made

mistakes they made dandies and when they had successes they

were modest, but nevertheless under the Hon. Robert Stanfield

(who has since gone to his reward) they pioneered these

measures in the Province of Nova Scotia and I think for the

benefit of all Canada.

I do not want to start an acrimonious debate with the

official opposition on this particular evening, but I think our

measure is more flexible than the bill they introduced as a

private Member's bill in this House, which is restricted to the

granting of interest loans on a rigid scale beginning at 1 per

cent per year and going up to 9 per cent in the ninth year.

I consider that in the arsenal of modern fiscal

experimentation and ingenuity in the governments across Canada

we should be more flexible in the kind of industrial bill that

we introduce. I think our bill does that because we incorporate

different kinds of assistance to small business in differing

situations and not merely this rigid

schedule of interest

loans.

We incorporate, of course, the idea of partnership which is

an important and emerging idea in the 1970's not only in

British Columbia but in other economies throughout the

world.

Interjection by an Hon. Member.

HON. MR. MACDONALD: Yes, we would like to think that we

could pioneer some of these concepts, Mr. Member. We're not

ashamed of that.

It incorporates the idea of equity capital so that the

public can have an interest represented by their government in

the success of the operation, and a private entrepreneur may be

to a very large extent carrying the ball.

We incorporate in this the idea of loans upon various terms

and conditions. It is very difficult to forecast ahead of time

what kind of particular assistance will be most meaningful. We

incorporate in our legislation the idea of the acquisition of

industrial sites, possibly the erection of the plant buildings,

to make an industry prosperous. We incorporate the idea of

managerial assistance when that may not be offered by the

federal Department of Trade and Commerce, which is now

beginning to embark upon

[ Page 2580 ]

the field of managerial assistance to

small business.

We are very concerned in our legislation not only to advance

and enhance the industrial prospects of medium and small

business but to protect the taxpayers' outlay. Wherever

possible that will be done by mortgage security or it will be

done by ownership of the land or the building that may be the

essential catalyst to make a prosperous and successful

industry.

We think in these endeavours that the government should be

just a little bit business-like and not too academic. I say

that after reflecting on my experiences over the last six

months and particularly the last weekend when I met with the

Hon. Minister of Trade and Commerce of the federal government,

Mr. Alastair Gillespie, a very capable Minister — a

Victoria man who went east and joined the Liberal Party —

but everybody makes mistakes throughout life. I met also with

all of the industrial ministers from all of the provinces of

Canada, including Mr. Doodie of the Province of Newfoundland,

and Prince Edward Island where they were looking for some kind

of industrial assistance for their potato crops.

It reinforced my impressions that to be successful in this

field you should not raise high expectations but your programme

should be lean and just a little hard-nosed and

sharp-pencilled. In the long run you will do best credit in

that fashion to both the taxpayer who is involved in helping

with industrial assistance and to the industry concerned

because there is no use helping a hothouse industry that is

going to fail.

So it must be based upon careful research, whether it is a

new industry that is trying to get off the ground or an

existing industry that can be expanded. Such things as market

surveys and productivity audits according to the best of the

economic abilities of our technicians in this field today

should be utilized. And, in the proper case, managerial

assistance.

Yet in the Province of British Columbia with our expanding

population and the rate of growth which has unquestionably by

any figures been put at the highest in North America — it

varies between 2.9 per cent cumulatively per year up to 3.2 per

cent or something of that sort. With this government and a new

Premier in the Province of British Columbia, I am not expecting

whatsoever that that population increase will decline; it will

increase. Because nowhere on the North American continent can

you find a better climate than you find in the Province of

British Columbia under the NDP government.

The climate is magnificent and the water warm, and our

population will increase. We will have need to create wherever

we can employment opportunities, particularly for the younger

people who are coming up through our schools.

And yet it would be only fair to say at the same time that

we have problems in British Columbia. Our market is fairly

small; we have a freight rate problem with eastern Canada which

makes it difficult for us to explode into the markets of

Ontario and Quebec and central Canada.

We have that problem, and I don't think there's any doubt

that we have a problem in the field of credit advancing, in

that in our chartered banks, even with the addition of the Bank

of British Columbia which is really just another bank, we do

not have the credit facilities that are available to business

in central Canada.

We do not intend in any way to duplicate the industrial

assistance programmes of the federal government. They are

numerous, ranging from advanced technological assistance to, as

I say, counselling services under their new programme which

they call CASE — Counselling Assistance to Small

Enterprises — and to their Industrial Development Bank

which had done a very creditable job in the Province of British

Columbia and has increased its loaning very substantially in

the last 10 or 12 years, and to the DREE programmes and the

other forms of federal assistance that may be available.

But we need an agency that will take advantage of the

federal programmes, assist our small businesses to take

advantage of them and where occasion requires, supplement those

federal programmes. So we think we do that in this little bill

where the capitalization is $25 million. But I want to assure

Hon. Members who may judge things by their size….

MR. G.B. GARDOM (Vancouver–Point Grey): Who does

that?

HON. MR. MACDONALD: Well, I don't want a competition to

arise on the floor of this House whereby we say $25 million

capitalization and then somebody else gets up and says $50

million. I don't know what the proposal of the Liberal Party

is, but it could be anything tonight.

I want to point out, that we can supplement of course, in

the British Columbia Development Corporation, the amount that

may be invested in terms of investment capital….

Interjection by an Hon. Member.

HON. MR. MACDONALD: No, under the terms of the Act. The

amount that may be advanced in terms of investment capital can

be subsidized by loans from the Treasury up to a total maximum

limit of $100 million. Yet I would say again that the British

Columbia Development Corporation can and should proceed in a

very business-like way, and its object should not be to pump

assistance into an obviously floundering industry, however

praiseworthy it may be….

[ Page 2581 ]

MR. GARDOM: Like Celgar.

HON. MR. MACDONALD: Celgar is something that you will live

to regret the opposition of. Oh yes! Celgar is a massive social

programme not only for the salvation of all of the northern

section of this province, but one which will in good time

return fat dividends for the people of British Columbia. Not

that we're discussing that tonight because I stressed that this

particular kind of industrial assistance should be for medium

and small-scale business, that we may make it successful in the

Province of British Columbia.

There is not a province of Canada that does not have such a

programme. I think it behooves us to improve upon the mistakes

that have been made and to avoid the errors that have been made

and to take advantage of their successes. Because there's no

question, whether you think of Dutronium or the Conservative

experiment at Churchill Falls and some Ontario failures, it is

essential that in a business-like way we take advantage of the

success and we avoid the errors.

A sample of success is Dosco, as the Premier points out. So

there are an infinite variety of means in which we can be of

assistance to small industry in the Province of British

Columbia. But it will be supplemental, last resort, last

financial avenue of resort assistance. On that business-like

basis, I move second reading of Bill No. 102.

MR. SPEAKER: The Hon. Member for North Okanagan.

MRS. P.J. JORDAN (North Okanagan): Thank you, Mr. Speaker.

Unaccustomed as I am to having the floor after that Hon.

Minister, I couldn't help but listen with great interest to his

comments and his sage advice to the industry of British

Columbia. He talked about the great momentum in this province

that had been build up by years of careful planning and

economic development by an industrious and independent people

in British Columbia and by very responsible government —

government that was tough, hard-nosed, as I think the Minister

said, but fair, Mr. Speaker.

It was a government that recognized that when government

expands too far into the private sector and beyond its

responsibility to the economic climate and the people of this

province, then it is in danger of stifling the very initiative

and incentive and spirit that built the justifiably buoyant

climate in British Columbia that was claimed by the

Minister.

Mr. Speaker, I would have thought when he praised the

situation in British Columbia that he would have been more

inclined to follow the well-researched and well-established

concept of the previous administration, the Social Credit

administration, in establishing an Industrial Development

Corporation in British Columbia.

It was based on a knowledge of government's responsibility

in stimulating secondary industry in a province which is faced

with many problems in this area, but an acknowledgement that

you must have the initiative and drive and incentive in that

programme to encourage people to develop on their own without

interference from government.

He said that it was a better climate in British Columbia now

that we had a new NDP government. I would suggest, Mr. Speaker,

that rather than a better climate, the business industry and

the business sector of British Columbia is finding it more like

a chilly arctic disaster as far as climate is concerned.

The Minister said that government really wanted to encourage

secondary industry. I feel he's sincere in this. But he talked

about little bits of assistance like ownership of the land and

ownership of the buildings.

Mr. Speaker, if that Minister knew anything about business

he would know essentially, when one builds a business, their

largest portion of equity is in their land and is in their

buildings, and when it comes time to retire from that business

and to sell that business, that the retirement fund is not in

the goodwill of the business, Mr. Speaker; it is in the equity

of the business.

Government, as the Minister proposed in British Columbia, is

going to essentially own that equity. Equipment depreciates,

becomes outdated very quickly in today's modern technology; so

what is the Minister offering these businesses? Control.

Interjection by an Hon. Member.

MRS. JORDAN: I know. But, Mr. Minister, you should be

encouraging people to buy their own land and to develop their

own buildings. Or the Minister, through you Mr. Speaker, should

be encouraging other businesses to buy the land and to put up

the buildings.

What the Minister is doing in this statement is making it

very clear to business taxpayers in British Columbia that he is

going to use their tax dollars to compete with them. There are

industrial sites all over British Columbia, Mr. Speaker, and

our side is not opposed to some assistance in the development

of industrial sites.

But for the government to embark on — really when you

look at the various pieces of legislation before this House

— an almost massive scale of land acquisition for

industrial sites at a much debatable price — which I

can't mention at this time but is very much an issue —

and then to build buildings, he surely must recognize and the

government must recognize that this is setting up in direct

competition to initiative and risk capital that has already

been

[ Page 2582 ]

invested in British Columbia.

Those people who have taken this risk, who have invested

this risk capital, are the people that are paying the taxes

that are providing the money that this Minister is going to

take and invest in direct competition with them.

I suggest, Mr. Minister, that this is rather a distorted

point of view of how you help small industries in British

Columbia, because many of those buildings and industrial sites

are owned by small investment people, not by major

corporations.

Mr. Speaker, he suggested that the bill, No. 6, and the

proposals by the previous Social Credit administration

regarding the help to secondary industry were a deathbed

repentance. But after listening to the Minister describe what

his efforts are going to be, and the veiled threats of control

that are in this bill, I'd suggest that his statements resemble

the deathbed rattle for private enterprise and individual

enterprise in British Columbia.

He talks in terms of flexibility and I agree there should be

a degree of flexibility, but that flexibility should be

directed towards stimulating new ideas and initiative, and

stimulating the small man and woman and family in British

Columbia to invest their money in the land of British Columbia

and their money in their ideas and their money in the company;

not a flexibility that is directed in essence to cut in on the

private initiative and the private capital.

If a small business is doing well, Mr. Speaker, the Crown or

the people of British Columbia get a fair portion of that

profit through taxation. But now the government wants not only

the taxation or the cream of the profit without the risk;

they're going to go in and take part of the equity too.

What does that really leave the individual entrepreneur? Not

too much incentive, I would suggest.

Mr. Speaker, the bill on which this bill is patterned…and I recognize and appreciate the Minister's comments that

much of the bill is patterned on the Social Credit proposals.

This was done not lightly. It was done after some considerable

time of study and some considerable knowledge that before one

develops an industrial development corporation which could

truly serve the people of British Columbia and not be a drain

on general revenue or the taxpayers' dollars, that there had to

be equity capital free and ready to put into it.

We felt that $50 million was there in the Treasury and is in

the Treasury today — providing the Premier doesn't get on

too big a spending spree in the next few days — to put as

equity capital into this development corporation.

We recognize in looking at British Columbia, which has a

firm foundation built on the basis of its natural resources and

its primary industries, that this has to be done before you can

look at secondary industry. The primary needs of power, of

transportation systems, both rail and road, and in the case of

British Columbia water transportation, were recognized and were

built, Mr. Speaker, with a view to acknowledging that British

Columbia has a very small population and thus a very small

ready market.

Western Canada has a small population and thus a small ready

market. Therefore, secondary industry in British Columbia must

compete nationally and internationally. In order to do that the

province had to be sound financially; and the climate within

the province had to be such that a secondary industry could

establish with the knowledge that it could get qualified

labour, with the knowledge that it could have sufficient

transportation and sufficient power. And this was done.

The Minister mentioned, and we feel very strongly, that a

secondary industry in British Columbia faces very complex

problems in being competitive in Canada. One, of course, is the

freight rate structure which has been stacked for years by the

Liberal government against the western manufacturer.

Interjection by an Hon. Member.

MRS. JORDAN: Yes, Mr. Member, the Liberal and Conservative,

you're quite right. There hasn't been a government in Ottawa

which has been capable of looking at Canada as a whole and of

recognizing the potential of each area of Canada. They have

chosen, as the Minister said, to establish "hothouse"

programmes rather than initiative programmes. If they would

reduce the freight rates and encourage industrial development

in British Columbia, their false assumption that there isn't

enough freight going east to warrant this reduction could soon

be disproved.

There's another problem for industry in British Columbia,

Mr. Speaker, and that of course is its ability to be

competitive on the international market. This includes the

United States which, as the Minister knows, is one of our

largest markets for secondary manufacturing. In order to be

competitive there we have to be competitive in production.

British Columbia, because it has one of the highest-educated

work forces in Canada and amongst the highest wage rates in

Canada, puts itself in a position where it must have other

types of assistance or certainly some control on the economy of

British Columbia in order that it can produce and manufacture

and export at a competitive rate.

I wonder when the Minister talks about incentives and

partnership with business if he really is looking at the

overall picture of what his government has created in British

Columbia. The efforts of the former government to try and

control or set an example on the inflationary pressures in

British Columbia were done for many reasons. One reason, Mr.

Speaker, was a knowledge that if the wage rate in British

Columbia

[ Page 2583 ]

becomes too high, if the demands of the working force

become too great, and if the incentive for private industry is

too small, there is no way that we can develop secondary

industry in British Columbia and make it competitive —

not only internationally but in the United States.

Since taking office, the Minister has been part of a

programme which has released buoyant inflationary forces in

British Columbia. He has been part of a government programme

which has increased taxes on industry in British Columbia

— and that means secondary industry in British Columbia;

not as a matter of need but as a matter of principle and

philosophy.

It seems just a little ludicrous that the Minister would

stand up here and talk about what he's going to do with

taxpayers' dollars and partnerships to stimulate secondary

industry and then be party to these forces and statements from

this government which are very rapidly destroying the sound

economic climate in British Columbia; and which in fact, when

he talks in terms of partnerships, are doing much to confuse

the public and bring into their minds serious questions about

whether or not they really want to go into business with a

partner like the government — any government.

Mr. Speaker, perhaps the most serious problem facing any

industry — and certainly small industries that are in

existence in British Columbia today, or anyone who has an idea

that they want to put into production or who has a small

production force now and wants to expand that production

— is the cost of capital.

You can't go to the bank and borrow money at a reasonable

rate anywhere in Canada today. You can't go to the bank in

British Columbia, Mr. Speaker, in many instances, after the

actions of this government, and borrow money on the basis of

your land holdings. One wonders why the Minister doesn't give

this some consideration.

The Bank of Canada has just raised its basic interest rate

to 6 ½ per cent. This means that in Vancouver if one is in

business and can get a loan they are paying anywhere from 10 to

12 per cent. In the interior of the province, Mr. Speaker, a

small industry will be paying that and more. Even the

Industrial Development Bank set up by the federal government

charges a similar rate.

Mr. Speaker, if one has a small business…and I would

think in terms of one I know about where a man is working

making a special type of filter for refrigeration units in his

basement. He's built all the equipment himself. He wants to

move from a basement, part-time operation into a full-time

operation. His problem is how does he do this, raise the

capital, be competitive, bear the tax load, bear the high

interest rate that's paid and support his family at the same

time?

It amazes me that this very thoughtful Minister, this

Minister who has this new portfolio and who we know wants to do

a good job with it, can't recognize that low-interest money is

really one of the major keys to stimulating new industries in

British Columbia.

Interjection by an Hon. Member.

MRS. JORDAN: But, Mr. Minister, one of the problems within

the bill is that like so many other bills of this government it

just doesn't spell it out. I've talked to as many people as I

dare talk to without embarrassing them or the Minister before

this bill came up and nowhere have I received any assurance

that there would be what is truly low interest money on a

sliding scale or an incentive scale.

Interjection by an Hon. Member.

MRS. JORDAN: Well, I am not terribly worried about Dow

Chemicals, Mr. Speaker, but I am worried about little

industries in British Columbia that want to go into component

housing, who are in a form of that and want to expand. Mr.

Minister, the bill and our philosophy which would give these

smaller people a low interest rate of 1 per cent the first

year, 2 per cent the second year, 3 per cent the third year

— on up to 9 per cent over nine years — gives truly

a low interest rate. It gives the industry an opportunity to

take all its initiative and all its forces and its incentive to

expand and to grow. It relieves this terrible worry of how

they're going to meet this interest rate.

Mr. Minister, if you have this confidence, then why isn't it

spelled out in the bill that these would be some of the

options? We think, Mr. Minister, that there must be a programme

of an incentive type of low interest rate.

If the bill was funded with $50 million this would give the

Minister a great deal more flexibility. He says he wants

flexibility, and we agree that there should be flexibility. Mr.

Minister, through you Mr. Speaker, when you look at British

Columbia as a whole, $25 million sounds like a lot of money,

but if the company is really going to do its job, it should

have more leeway. We would suggest to you that it be funded

with $50 million to start with. The money is there; put it in

quickly before you spend it all, and be short.

Interjection by an Hon. Member.

MRS. JORDAN: No, Mr. Speaker, that's the difference, and

that is where the Minister is having his problem. I believe,

and we believe as Social Credit, in incentive — that

government has the responsibility and the right to stimulate,

but not in that stimulation to take the price of freedom the

interest rate.

Mr. Minister, I don't know how much you know

[ Page 2584 ]

about business,

and I'm no world authority on it, but I do know something about

business. A small business needs government for a partner like

it needs a hole in the head. Government traditionally, and you

have to look through the administrations of your own philosophy

in other parts of the world, cannot help but become cumbersome.

Through you Mr. Speaker, who did you have dinner with tonight,

Mr. Minister — the fellow who drafted the bill?

MR. SPEAKER: Order please.

HON. MR. MACDONALD: What about Pan-Arctic?

MRS. JORDAN: Mr. Speaker, one minute the Minister is talking

about the little businessman, and the next minute he cites

Pan-Arctic as a great example. Pan-Arctic, as I understand it,

isn't that hot because it was supposed to be for Canadian

companies, and it is largely American companies. So I wouldn't

hold that up as an example.

Mr. Minister, government tends to interfere, no matter how

well-meaning. It tends to be bureaucratic and it tends to be

sluggish. When you get a small business you have to make

instant decisions; a manager has to be free to be in California

or Chicago or Montreal or Osaka to read the climate. He has to

be able and prepared and free to make a snap decision at that

time — just as the Minister of Lands, Forests and Water

Resources (Hon. Mr. Williams) made that snap decision of the

Titanic of Ocean Falls. He was free because he is the boss of

his party to say, "That's it, boys, we're going." Now you've

given him that leeway, Mr. Minister, give the little companies

who get this type of assistance the freedom that they need to

make sound business judgment.

Interjection by an Hon. Member.

MRS. JORDAN: Well, let's face it, there are a few lifeboats

on that Titanic that are going down with it. We'll call Ocean

Falls the lifeboat.

Mr. Speaker, we feel any industry that develops in British

Columbia must have proper feasibility studies if it is to get

government assistance. It must have certainly if not a proven,

a very sound potential market; it should be non-polluting as

much as possible in nature, and able to afford the pollution

controls that will be required of it. We feel that in receiving

government assistance, there should be some explanation and

openness as far as salaries for management are concerned. We

don't feel the employees should have to be unionized.

That is one of the kickers in the Minister's bill as opposed

to our bill. Our position would be that if people want to work

with that company, it is up to the workers and the company to

decide their terms. We feel that the company should pay the going rate. If the

company wants to do it on a share basis with the employee,

that's fine. But, under the legislation that we have previously

had second reading of in this House, there is every possibility

that the Minister can also say to these small companies, "We

are going to assist you; we are going to become a partner, and

you must be unionized."

That is just another example, Mr. Minister, through you Mr.

Speaker, of where government, because of its own legislation,

cannot help but interfere. It will have a dampening effect on

the initiative and the personal feelings that those employees

and that management will have about that company, and may well

be the difference between success and failure of that

company.

If the Minister is shaking his head, then we would like a

commitment from him tonight that any company receiving

assistance under this Act would not be compelled to be

unionized. Leave it to the workers. Certainly make a

regulation, if the Minister wishes, that the wages be

comparable to other wages in that area. But don't tie this can

to their tail. Leave it to the individuals involved.

Interjections by some Hon. Members.

MRS. JORDAN: The trouble with this Minister is he gets

side-tracked. I don't really care whether the lawyers can

belong to the Bar Association or not under this bill, Mr.

Speaker. What we care about is that the taxpayer's money be

used wisely, be used in a stimulating manner, and that those

involved, as long as they are responsible in the manner that I

have suggested, not be tied with a can by this government

because of some philosophical point of view. Leave them some of

their independence and freedom.

Look at Japan, Mr. Minister, through you Mr. Speaker, where

there is a tremendous feeling of personal involvement between

the employees and many of their companies. It doesn't always

show itself in salaries; it sometimes shows itself in

recreational facilities or any other avenues. Leave the

employees and the companies free to discern this for

themselves. Don't hook them up before they get started.

We also, Mr. Speaker, would like to see this bill with more

emphasis on the stimulation of secondary manufacturing and

processing of our agricultural product in British Columbia. I

personally have a list of three companies which will have gone

through to the Minister's department who want to start up in

this business. While I would recommend them as a matter of

viewing, it is up to the department to look at the feasibility

of their projects. But if you start tying these up with too

many "ands," "ifs" and "buts," again it will

defeat the purpose of the bill, and what is really a very good

idea.

[ Page 2585 ]

The protection of the people's assets, which is their tax

dollars, Mr. Speaker, is of vital importance in this bill. We

feel that if the people's money is going to be best spent

— providing there is proper protection in the form of

mortgage holdings or collateral holdings, or whatever you want

to call it — that money will be best used if it is used

on an initiative basis rather than an almost a see-saw punitive

basis.

I would ask the Minister, in administering this bill, to

give the women of British Columbia a fair break. Now more than

ever, women are venturing into the business world, gaining

acceptance in the business world. More and more are wanting to

go into business for themselves. I am not an extreme

liberationist at all, but I do feel there is no question that

when women go to the bank to borrow money it is more difficult

for them than it is for men. They always want to know what

their husbands do.

I was a highly-paid cabinet Minister in this government, and

when I went to the bank to borrow some money they wanted to

know what my husband did. I think that this is something that

this company, this British Columbia Development Corporation,

must not exhibit. If anything, bend over backwards to help the

women. They are very, very tenacious, you know that, Mr.

Minister.

HON. MR. MACDONALD: If I can liberate any of them, I

certainly will. (Laughter).

MRS. JORDAN: How do you intend to do this, Mr. Minister?

Perhaps you'll give us an explanation. (Laughter).

Interjection by an Hon. Member

MRS. JORDAN: Take a good look at the ability of the women. The average

woman who will come to the Development Corporation to apply for a loan is not

going to have the background of the average male. She is likely not going to

have been in business for herself before, and the reasons must be looked at

— was it a lack of desire, a lack of ability, or was it a lack of an opportunity

to borrow money and establish herself? In that case, the Development Corporation

should bend over backwards. If you are going to take a risk, Mr. Minister, take

that risk there, it will be worth it. They won't fail you.

Interjection by an Hon. Member.

MRS. JORDAN: Well, no real risk. I think there is risk, Mr.

Leader of the Opposition, in any business venture anywhere. And

I happen to feel that the risk of entering business in British

Columbia while this government is in power is extremely

high.

Now, Mr. Speaker, I hope the Minister has taken my words to

heart. But, I would explain to him that that there are certain

areas of this bill that concern us greatly. Once again we

wonder who the architect of the bill is. The kicker in the bill

is again what is not said, as much as what is said. When we

look at this bill and we listen to the discussion from the

floor of this House, and the statements by the Minister, it is

almost as if this government is bent on playing a type of

British Columbia roulette with the taxpayers' own money. One

just has to look at the Manitoba manifesto and then compare its

statements with the legislation that we have on the floor of

this House to get a very deep feeling of concern as to really

where we are going in British Columbia.

Interjection by an Hon. Member.

MRS. JORDAN: Well, this is the preliminary to the printed

copy that you people have, through you Mr. Speaker. A summation

of the Manitoba manifesto is that the purpose of the plan is

spelled out. The intention is to drive private businessmen to

one side. "The government would create a series of Crown

corporations" — sounds vaguely familiar, doesn't it?

— "including a bank." Which is not likely to happen in

British Columbia in view of the fact that we have the Bank of

British Columbia, which if I recall correctly this NDP Member

opposed on the floor of this House.

HON. MR. MACDONALD: I never opposed the publicly-owned

bank.

MRS. JORDAN: The government would create a series of Crown

corporations, including a bank to elbow their way into control

of the business of the province. And Mr. Speaker, that is what

we are seeing in British Columbia right now. The government is

elbowing, to put it charitably, its way into all sectors of

business in British Columbia.

I go on quoting: "The public sector can and should be used

to change the nature and structure of production in Manitoba to

encourage a systematic redistribution of real income through

the direct production of goods and services. This is a valuable

compliment to the redistribution of money income via the tax

system." Mr. Speaker, I suggest to you that that is a manifesto

written in Manitoba which this government is following.

They have increased taxes disproportionately in British

Columbia — proportionate to need. They are elbowing their

way into the industrial sector and the small business

community, and it is clearly spelled out that the reason is not

only the redistribution of income through taxation, but the

redistribution of income through government control. Mr.

Speaker, that is something that this government did not get a

mandate for. I suggest that it is something that if the people

of British Columbia knew and recognized, it would be a

philosophy that they would not accept. It

[ Page 2586 ]

is a philosophy that

is going to stifle the initiative and stifle the future of this

Province.

It goes on to say that Manitoba has the highest rate of

income tax in Canada.

MR. SPEAKER: A point of order?

HON. E. HALL (Provincial Secretary): I want a ruling from

you, if I may so respectfully request, on the relevance of a

document, written by who knows who in Manitoba, to this debate.

On the same premise, Mr. Speaker, I could if I chose, read the

doctrines of the Edmund Burke Society — to which all the

Social Credit Party in Ontario are members — who believe

in book burning, attacking visiting politicians, and have been

subject to many police enquiries. Now, if the Member wants to

start that particular course of action, I think that it leaves

a lot to be desired. I would like you to rule on this kind of

thing.

Interjections by some Hon. Members.

MR. SPEAKER: Order. I think that the Hon, Member, in

objecting, pointed out the error of going beyond the point. I

think the Hon. Member of North Okanagan has gone far beyond the

point in regard to discussing the general principles of Bill

No. 102. What happens in another jurisdiction, unless it is

directly related to this bill, is the sort of thing one could

do around the world, but it still would not apply to the

general principles of the bill.

MRS. JORDAN: Mr. Speaker, I certainly respect your opinion,

but I suggest that this has been a practice in this House

during this session. If the Hon. Provincial Secretary feels

touchy about these matters, then that is his prerogative. If he

wants to call me a member of the Edmund Burke Society or

whatever else he wants to…. I am not. I have no part of it. I

don't even know about them. That is his prerogative.

MR. SPEAKER: Of course. Now, you see, you are quick yourself

to judge when someone else is irrelevant, but not prepared

apparently to accept the same judgment from the Chair.

MRS. JORDAN: Mr. Speaker, there is strong suspicion that the

architect of part of this manifesto is one Eric Kierans, and he

has, by the admission of this very Minister whose bill the

principle we're debating…

MR. SPEAKER: I don't think that's relevant to this at

all.

MRS. JORDAN: …has said that the government has entered into dialogue with. I would respectfully suggest, Mr.

Speaker, that Mr. Kierans' statements — whether they are

made in Manitoba or British Columbia, when it's known that this

government has been in dialogue with him — are very

pertinent not only to British Columbia, but to this bill. This

bill, Mr. Speaker….

MR. SPEAKER: There is absolutely no relevance to this bill

so far in anything that you have said. No relevance in your

remarks to this bill in regard to reading something about some

manifesto that you are talking about from Manitoba.

MRS. JORDAN: Mr. Speaker, there is indeed, because there's

provision in this bill — with all due respect — to

put taxpayer's money through the form of partnership into small

business in British Columbia…

HON. MR. BARRETT: Stick to the bill.

MRS. JORDAN: …and that is a socialist philosophy; it's

one espoused by this government. It's part of the Manitoba

manifesto which was architect, in part, as an adviser to this

government. I would respectfully suggest that it's very

relevant.

The philosophy behind this bill, Mr. Speaker, is more than

just a stimulation to industry; it is the government's stated

intention to become partners in industry. That is very much the

principle of the bill, and the principle of the bill very much

reflects the philosophy of the party and this Minister.

MR. SPEAKER: I think that what the Hon. Member should do is

try to keep with Bill 102. Would you please?

Interjections by some Hon. Members.

MRS. JORDAN: It is quite obvious that the Minister has some

embarrassment about this bill in the fact that it is more than

a stimulation to industry; it's in large part a takeover and a

control of industry. It is socialism in its wildest dreams. Mr.

Speaker, it is pertinent.

In other jurisdictions where this has been tried, it has

been highly unsuccessful. This is taxpayers' money. Mr.

Speaker, I'm a taxpayer in British Columbia and they tell me

that for the last 20 years I've been working, I've been a

shareholder in CBC. Frankly, if that's what this government is

going to do with my tax money, I don't want any part of it. The

only benefit I ever got from CBC was a headache.

I think that the taxpayers in British Columbia want to know

what sort of benefit there is going to be to them in investing

their money in this development corporation.

Interjection by an Hon. Member.

[ Page 2587 ]

MRS. JORDAN: I think CBC needs a good shake-up, Mr.

Member. It's got some good points, but it's got some very bad

points, and as a shareholder I'd like a say in what goes

on.

Mr. Speaker, I think the shareholders of British Columbia

who will find themselves shareholders through their tax dollars

in this Minister's actions, will want to know what is going

on.

That's another point in the bill, Mr. Speaker. The

corporation does not report to the Legislature, it reports to a

committee. We would suggest that this corporation should report

to this Legislature, and that all companies involved in a

partnership basis should be available for public scrutiny by

these Members.

The Minister suggests that one of the concepts will be back

the loans of small corporations at the bank. I really question

how much benefit this is going to be. I've mentioned in other

debates the danger of this government spreading the backing of

the province too thin, so that it no longer has the credibility

that it has now. It's very debatable just how much of a benefit

there will be in this backing if you come from 10 per cent to 8

per cent. This isn't a great deal of relief when you're talking

about the struggles of the small companies.

It confirms and supports the federal government's policy of

high interest rates — which this government should be

opposing, as the Social Credit opposition opposed. It doesn't

bring any return back to the citizens of British Columbia.

If the Minister uses his development corporation funds, Mr.

Speaker, on a sliding scale basis, it not only has an

incentive, but the incentive is such that the corporation will

be encouraged to go to conventional financing within a

reasonable time, and that interest rate goes to the people of

British Columbia as a benefit.

It's very questionable, Mr. Speaker, how backing of bank

loans is going to help a small company. There must be really

few marginal companies that really need the government to back

their loan.

Another point. If the government chooses, or the development

corporation chooses to back these loans, again it is a payment

that's benefiting outside British Columbia, and if the loan was

made by the development corporation, again, that interest would

benefit the corporation, and in turn, the people of British

Columbia.

Mr. Speaker, we agree with the flexibility that the Minister

wants. We are deeply concerned about how many jobs this is

really going to create in British Columbia. There is a crying

need for more secondary industry, and the Premier of this

province said quite some time ago that his government was not

interested in small companies and small jobs — 15 or 20

jobs We suggest, Mr. Speaker, that that is a prime area of

interest.

There has to be an opportunity for the development of small

companies in British Columbia. Every single job, Mr. Speaker,

that we can produce and develop in British Columbia is of vital

importance.

Interjection by an Hon. Member.

MRS. JORDAN: Well, that's very true, Mr. Member. Big

businesses are the outgrowth of successful small

businesses.

You can go through British Columbia, you can walk down the

streets of Victoria and see business after business after

business that is employing 200, 300, 400 people. But they

started out, Mr. Speaker, employing one, two, three, and four

people. That Minister has a responsibility to know the need for

the creation of jobs, even if they are only two or three or 15

or 20 in a successful small business.

The other point, Mr. Speaker, is that this Minister doesn't

seem to understand that if you're going to have a growing and

healthy province or jurisdiction, you've got to have a balance

between the so-called corporate structure — the

large corporate structure — the government and its

bureaucracy and the… I wish the Minister would listen. He

might learn something.

Interjection by an Hon. Member.

MRS. JORDAN: Well, he won't learn any law from me, Mr.

Member, but he may learn a little bit about life, which is

probably more than you know. Come out of your musty, dusty law

books and get down to where the living goes on. The living

doesn't go on there and in here, Mr. Member; it goes on out

there, where there are little people trying to start little

businesses. They don't want government as a partner. They just

want an opportunity.

If we're going to keep British Columbia for British

Columbians, then those little people have to have the

opportunity to own the land, not the government. That's how you

keep it a free country. They have to have the opportunity to

develop their small businesses, so that you get a balance, Mr.

Speaker, in the middle with these individual initiative

enterprises. That keeps government from getting too strong and

it keeps the large corporate structure from getting too strong

and it creates a real enterprise society and a real enterprise

climate.

In speaking to the principle of this bill, Mr. Speaker, and

when we hear the Minister talk about partnerships and the type

of industry, we're concerned about what has been stated by his

party as being their objectives. One of their objectives was

that the provincial government make nationalization of British

Columbia Telephone a major priority. Is that where some of this

money is going to go, Mr. Speaker? That isn't going to create

any more jobs in

[ Page 2588 ]

British Columbia and it certainly isn't going

to increase the efficiency of the service. If some of this

money goes there, then it's straight philosophical

nonsense.

One of the other sound suggestions from the NDP in British

Columbia is that the provincial government investigate the

feasibility of establishing a Crown corporation to produce a

pollution-free Canadian car. Mr. Speaker, in theory this may be

a very worthy objective. But I would suggest that if the

Minister has any idea of this type of development, he'd better

go down and find out just how much it costs to even develop the

prototype of a car that could be marketed.

AN HON. MEMBER: Like the Edsel.

MRS. JORDAN: The Edsel will be nothing compared to what this

government is going to produce.

Mr. Speaker, we are very concerned about the type of

partnership company that this corporation is going to develop.

To talk about developing a car in British Columbia, with the

millions and millions of dollars that it would cost, is

extremely far-fetched and, I would suggest, irresponsible. In

50 years it might produce revenue to the province. But, Mr.

Speaker, that attitude is saddling the taxpayers of today with

the burden of tomorrow. This Minister has a responsibility to

see that that isn't done.

There's talk of a publicly-owned British Columbia airline,

Mr. Speaker, and that this should be a top priority of the

British Columbia Development Corporation under the NDP

government. Mr. Speaker, the third largest airline in Canada is

Pacific Western Airlines. It's a British Columbia company. It's

a growing company and it's a good company and it has good

management. Mr. Speaker, part of its life's blood are what they

call the truck routes or the turtle runs within British

Columbia. For the government to take taxpayers' money —

and some of it will be Pacific Western Airlines' money —

and establish a competing airline which would do all the

government's business and likely be in a monopoly position, is

something that we just cannot accept.

Interjection by an Hon. Member.

MRS. JORDAN: Yes, all these companies that are successful

companies were started in British Columbia in a free enterprise

climate, Mr. Speaker; not a partnership of government but a

free enterprise climate, where they were willing to take the

risks and put their homes and their health and their life and

their ingenuity on the line.

The Minister says, "Whoever said we're going to start a

British Columbia airline?" I don't know where he's been during

this session, but on numerous occasions references have been

made from the cabinet benches about an airline, about emergency

ambulance service. We know that the Minister of Highways (Hon.

Mr. Strachan) is viewing airplanes at this time. There's no way….

AN HON. MEMBER: Red Air.

MRS. JORDAN: It would be a disaster whichever way the air

goes — red, left, right — Mr. Speaker. There is no

way that the taxpayers' money of British Columbia should be

funnelled into a government airline which is really just to

serve cabinet Ministers and disabled corporations.

HON. MR. BARRETT: Don't think everybody acts like you.

MRS. JORDAN: The previous cabinet Ministers weren't highly

overpaid cabinet Ministers. They were just overworked cabinet

Ministers.

Mr. Speaker, the Premier says, "Don't think everybody acts

like you do." Well, he'd be a far better Premier if he acted

the way I do.

Interjections by some Hon. Members.

MRS. JORDAN: Mr. Premier, you're the man who won't give the

old age pensioners a $50 a year increase but you take a 20 per

cent salary increase for yourself. I wouldn't hold your action

up for any examination, Mr. Premier. As I said, the only

welfare programmes we've got that are operating in British

Columbia are the overpaid cabinet Ministers and the disabled

companies. We don't want a disabled airline in British Columbia

with taxpayers' money.

The next business suggested by the NDP is a government-owned and operated auto body repair shop — direct

competition to individual enterprisers in this province with

their own money. You talk about Russian roulette. It's British

Columbia roulette.

The government should build salvage departments and depots

and establish these throughout the province. The government has

legislation to do this right now, Mr. Speaker. Now this bill,

the principle of which we're addressing ourselves to at the

moment, is putting up the funds — taxpayers' dollars

— for this government to establish businesses which are

in direct competition to the small enterprisers in this

province. We don't approve of that, Mr. Speaker.

We believe that the Minister should follow along with

providing low-cost capital money, certainly research assistance

to small companies or large companies, for that matter. There

should be a much stronger relationship and contact — and

I know there will be — between the department personnel

and various areas of the province. There is room for some

industrial park development in British Columbia by the

government, particularly through the British

[ Page 2589 ]

Columbia Railway

and Hydro. But not, Mr. Speaker, in direct competition to other

little parks throughout this province with their own money; and

not for the purpose of controlling business.

Mr. Speaker, we suggest that this government should embark

in South America particularly, where Canada is missing the

boat, and in the Pacific Rim markets; and certainly examine

closely the Common Market and what potential there may be there

for Canadian and British Columbian investment. They should

assist with these trade missions, not fully paying the shot,

Mr. Minister, through you Mr. Speaker. The individual companies

should put up some of their own money in order to assure their

interest. It's tax deductible for them. But they certainly….

Interjection by an Hon. Member.

MRS. JORDAN: Well, Mr. Speaker, we're back again.

(Laughter).

MRS. JORDAN: And that poor, overworked, bored Press gallery

is saying to you, Mr. Minister…

AN HON. MEMBER: That enough is enough.

MRS. JORDAN: …that enough is enough. Enough government intervention

is enough government intervention, Mr. Speaker.

Here's the bill, Mr. Speaker. Use it wisely, but use it on

the basis of incentive and don't play British Columbia roulette

with the poor, overworked Press gallery and the initiative and

industrious attitude of the people in British Columbia.

We will support the bill, Mr. Speaker.

Interjections by some Hon. Members.

MR. SPEAKER: Order, please. The Hon. Member for North

Vancouver – Capilano.

MR. D.M. BROUSSON (North Vancouver – Capilano): Mr. Speaker, I

almost hesitate to speak at all after….

HON. MR. BARRETT: Go ahead. Somebody has to.

MR. BROUSSON: Mr. Speaker, it really is a privilege perhaps

to be the first speaker in the House this evening to speak to

the principles of this bill.

One can't help noticing, Mr. Speaker, that this bill, as the

last speaker did comment, has great flexibility like a lot of

other bills this government's brought in so far this year. And

also like a lot of other bills brought in so far by this

government it provides great and sweeping powers.

However, Mr. Speaker, having said that I do want to say it

is very pleasant also to be able to say that I am going to

support this bill.

Before speaking very briefly to that, I want to make one

comment on something the Minister said with reference to the

Bank of British Columbia. He did say that the Bank of B.C. is

"just another bank" and I want to make one comment about that.

The Bank of B.C. in the British Columbia financial community is

more than just another bank. It is a bank that is based in

British Columbia, in Vancouver. In its very short history it

has done a great deal to improve financial conditions of this

province because it is the first time we've had a financial

base that was in British Columbia, and not controlled from

eastern Canada. And this is, I think, a very important thing to

be noted.

Now, Mr. Speaker, this bill obviously provides for items

that many of us have advocated for many years, and we advocated

those items when we were criticizing the estimates of the

former Minister of Industrial Development (Mr. Skillings). I

think perhaps the first thing that must be referred to there is

its provision of a bank of last resort.

British Columbia is, and has been for many years, the only

province without such a bank, and in industrial development we

do need to be competitive. I would urge the Minister to

consider, in acting as a bank of last resort, that we do

consider special rates for special cases.

I want to emphasize also the importance in that regard that

we do not provide a hothouse atmosphere for industries that

will quickly wither later on.

Many provinces have had those problems, Mr. Speaker, and the

Minister did refer to some of them. I want to mention only two

as examples whose lead I hope we won't follow. They are very

recent examples in the history of western Canada. One would be

the Province of Manitoba, where there's an airplane

manufacturing company that's very heavily provincially financed

and I think, without question, is never going to return any of

its finances at all to the Government of Manitoba. The Province

of Saskatchewan, for some strange reason, has just in the last

few weeks purchased a meat packing company at what appears to

be double its market value. I think this is consideration that

this government should look at very closely as it begins the

operation of the Development Corporation of British

Columbia.

There are some things which the development corporation

could do and which, from my personal experience, are very much

needed in British Columbia.

First, I think, is the need of serviced industrial land.

Looking, for instance, at the Greater Vancouver area, there is

a great deal of land which is zoned for industry but there is a

tremendous scarcity of land that is serviced for industry

— that means roads,

[ Page 2590 ]

sewers, power and water and this sort

of thing. Now the difficulty is that, because of the scarcity

of this serviced industrial land, what is available has an

artificially high price. As a matter of fact, it is very clear

since Bill 42 and the land freeze that some of those prices

have risen again in the last few months — anybody with

industrial real estate in Vancouver will tell you this.

The problem is that so many of the municipalities in the

Vancouver area do not have the finances or the expertise to

develop first-class serviced industrial parks. This is

something to which I addressed myself in the estimates of the

Minister of Industrial Development a year ago. I suggested that

the government should be providing this kind of assistance to

municipalities — advice and financing to provide serviced

industrial land. I hope that this is something this bill will

enable the government to do.

I want to mention particularly consulting services. The

Minister referred to this and he has implied by his remarks

that he wanted to leave this, I think, to the federal

government. But I want to expand on this just a little, Mr.

Speaker, because of the problems that B.C. industry has. I

won't dwell on them at great length, but they include the

problem of freight rates, the problem of high wages, the

problem of the low population in our area.

The secondary industry — the small company in British

Columbia — has got to be extra good. If it is just as

efficient as, say, a firm in Ontario it won't survive in

national markets. It's got to be a little more efficient. It's

got to find a better way of doing something. Therefore I would

like to think that this bill would enable the government either

directly through the corporation, or through the Department of

Industrial Development, to provide some special consulting

services either itself, or by bringing in the experts that it

required, to try to provide some of this extra efficiency.

B.C. is blessed with many small firms that are trying to

become medium-sized firms, and medium sized that are trying to

become larger. Today we have new requirements of financing

techniques, new requirements of using computers — all

kinds of advanced technology of this kind. The firm that has

grown from two or three employees to a dozen or 20 employees in

many cases knows it needs some of these techniques but doesn't

know where to get the advice as to how to use them to get this

extra efficiency in economies of scale.

This is where this kind of approach can come in —

these kinds of consulting services can help the small company

get into these new and more sophisticated, efficient management

techniques.

Another area that the Minister has referred to very quickly

has been the matter of research. Now this department that is

responsible for this bill, Mr Speaker, has in the past done

some research and has produced publications — surveys of

particular markets in different parts of the province, and

that sort of thing. But I want to suggest, Mr. Speaker, that

they have been neither really useful nor really practical.

If a department of this kind prepares a study that says

there ought to be a factory to produce some particular kind of

widget in British Columbia, and distributes it to everybody in

Canada, probably nobody has very much interest in coming in to

make that kind of widget, because it's a matter of common

knowledge.

I think what is needed is for the government or this

corporation to say to free enterprise, "We are prepared to help

you. If you have an idea for a product or market, come and talk

to us. We'll discuss it with you. If it has merit perhaps we'll

give you some assistance in researching it and studying the

market, and we'll do it with you and for you on a confidential

basis." But not this great broadcast of surveys saying that

widgets would go great in Abbotsford, or whatever it is.

HON. D.G. COCKE (Minister of Health Services and Hospital Insurance):

We've already made that decision.

MR. BROUSSON: Widgets are no good? O.K.

HON. MR. BARRETT: We need things we can sell in the North

Okanagan. (Laughter).

MR. BROUSSON: Another very important point, Mr. Speaker, is

the matter of marketing. I've spoken year after year on this

subject. I think that in comparison to every other part of

Canada B.C. has looked particularly bad in its assistance to

the marketing of its own products.

There's just a wealth of things that could be done around

the Pacific, across North America, in Europe and around the

world in providing marketing assistance to the manufacturers

both small and large, but especially the small ones. The large

manufacturer has the facilities, has the financial backing and

has the network of people to do it. But the small manufacturer

so badly needs the marketing assistance to get him across the

continent, across the oceans.

Mr. Speaker, if the Minister, as he has previously

suggested, leaves this to the federal Department of Trade and

Commerce, B.C. is going to get very short shrift and be treated

very badly. That federal department is based 3,000 miles away,

and its facilities are not going to help the small firms of

British Columbia.

It's a British Columbia Development Corporation, a British

Columbia Department of Industrial Development that has got to

get going and provide a first-class world-wide marketing

programme for the firms of British Columbia, be they large or

small.

[ Page 2591 ]

I want to make one point clear, Mr. Speaker, that I am glad

to see some limits and controls placed on this corporation. At

the same time, by requiring approval directly by the cabinet of

many of the actions of this corporation, it's going to mean

that the management of the corporation is going to be very

close to the government and to the politics of the government

and the politics of British Columbia. I think the people of

British Columbia have to realize that this is one of the

dangers in this corporation. It could become a very political

organization. I think we should be clear on that at the very

beginning. That is the fact. I hope that doesn't develop.

[Ms. Young in the chair.]

I want to make a suggestion to the Minister, Madam Speaker,

not for the short term, not for this year, on this corporation.

I think it's possible that this might turn into a very

profitable and successful operation. I wonder if the government

would consider the possibility of making it possible in the

future for the private citizens of British Columbia, for

individuals to purchase shares in the Development Corporation

of B.C., so that the shares aren't all owned by the Crown. Why

should not the people of the province have the opportunity, if

they wish, to buy shares from the province?

I think that this corporation has first got to prove itself

— to prove that it can be successful, which I believe it

can. If it is showing signs of being successful, I think the

government should make its shares available for sale and make

it a true public, British Columbia company.

Mr. Speaker, we welcome the establishment of the Development

Corporation of British Columbia. It's been a long time coming

to this province. I hope it will function well. It's going to

need a good deal of imagination. It's going to need a good deal

of financial wisdom. It's going to need a good deal of luck.

But it can be a very potent force for good in the financial

future of this province.

Finally, Madam Speaker, considering the importance of this

department and the importance of this bill that I tried to

emphasize, I do hope that the Premier will soon appoint a

full-time Minister of Industrial Development so that the

Attorney General can get on with the needed law reforms in

British Columbia, the reform of the Fire Marshal's department

for instance, and the protection of the consumers of British

Columbia.

DEPUTY SPEAKER: The Hon. Member for Oak Bay.

MR. G.S. WALLACE (Oak Bay): Thank you, Madam Speaker. I

didn't quite know if the Member for Vancouver–Howe Sound

was going to make it for a minute there.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): West

Van. (Laughter).

MR. WALLACE: Thank you, Madam Speaker. We're very happy, as

the Conservative Party, to support this bill which is very

similar in many ways to part of our election programme.

Interjection by an Hon. Member.

MR. WALLACE: No, I didn't write it. We're pleased to see,

for whatever reason, that we were on the right track and that

the socialist government sees the wisdom of this kind of

bill.

Actually, Madam Speaker, in introducing the bill the

Attorney General used such phrases as "being hard-nosed" and

"using sharp pencils" and….

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Real

Conservative.

MR. WALLACE: Well, Mr. Minister of Mines, the statement of

the Premier came back to me very clearly the other day when he

said that this government is really a bunch of free

enterprisers masquerading as socialists. The fact that they see

eye to eye with the Conservative Party on this kind of bill is

very gratifying.

One of the reasons is that it sees the real need to support

small business. As one other Member has pointed out,

enterprises which start off in a small way, if given a real

chance to get going in the first two or three years, can go on

to be a very useful economic factor in the economy of British

Columbia.

In introducing the bill, the Minister also talked about the

emphasis on managerial skills. This kind of very solid and

earthy approach to the problem is exactly the kind of

philosophy which we in this party appreciate. We'd also like to

say, incidentally, that we're amazed that the Social Credit

Party could put up a speaker like the one tonight who tore the

bill apart and then said she would support it. It must be the

peak of inconsistency of all the 12 weeks we've been in this

House.

HON. MR. BARRETT: That, my good doctor, is known as

schizophrenia.

MR. WALLACE: Well, she's always using the word

"schizophrenia." I'm beginning to wonder if she really knows

what it means.

DEPUTY SPEAKER: Order, please.

MR. WALLACE: Yes, Madam Speaker. One of the other aspects of

this bill which we appreciate and

[ Page 2592 ]

support is that in defining

industrial enterprise, the government has made the very clear

intent of describing it as "any form of agriculture and the

processing of agricultural products."

We've been critical of this government in the early weeks of

this session that they're doing very little for the farmer. It

really pleases me because of the particular efforts that were

made by a former Member in this House to get government help in

the financing for the processing of alfalfa. At that time the

request to the then government, of course, was turned down.

The examples of the kind of business which I'm sure this

bill will help greatly are some of the ones that have already

been mentioned in this House. I won't repeat all of them.

Particularly in the area of medical technology, I'm sure

there's tremendous scope for an enterprising businessman to

develop equipment which almost from month to month or year to

year comes into world-wide demand. I'm thinking particularly

— and the Minister of Health (Hon. Mr. Cocke), I'm sure,

would be very interested in this simple example:

There's one little drainage unit which is used after

surgical operations which is the simplest technique you could

ever imagine. It really consists of two circular flat plates

separated by springs attached to a tube. One end of the tube is

in the patient. The two sides are pushed together on the

springs to promote a form of gradual suction on the tube for 24

or 48 hours after surgery.

I was interested enough to ask the administrator of the

hospital what we are paying for this very simple little device,

which is a suction apparatus. It's something in the nature of

$14 or $15. It's manufactured in the States. It's like any

invention, I suppose. Once you see it, you wonder why we didn't

think about it. But it's a simple example of the kind of

product which is being sold all over Canada and throughout the

States.

As I say, the cost in relation to the inherent value of the

product and even the complexity — because it is not the

least bit complex — anyway, we're buying at great cost

this kind of simple equipment.

Interjection by an Hon. Member.

MR. WALLACE: Yes, the other one. I wasn't going to repeat

that because I've flogged it to death in this House in the last

week or two.

But there is this artificial kidney. The scope and potential

for this kind of business, Mr. Minister, through you Madam

Speaker, really is tremendous. At the present time the

artificial kidney, as we all know, involves a very large

cumbersome piece of apparatus. The patient has to stay in

hospital overnight and so on. This doctor in Vancouver says

that the potential is really there to develop a portable unit

which the patient can wear, if we can achieve miniaturization

of the equipment.

I could talk about this at great length; but the principle

is that many of these industries and businesses need help to

get started. Once they prove the need and once they corner the

market, the employment factor and the dollar value of the goods

sold — and of course the tax revenues that come from

employing more people — the whole thing is a cumulative

matter which is to the tremendous advantage to the

province.

We are very much in favour of the principle behind the bill.

We feel that there's tremendous potential in the medical and

surgical fields of technology. If you think of the tremendous

advances that have been made in the treatment of heart disease

with electronic pacemakers and a host of other associated,

relatively simple pieces of equipment — these are then

used all over the world but, they tend to emanate from one or

two sources in the United States.

I feel very strongly, even with a limited knowledge of the

technology, that some of the equipment is really relatively

simple. Whoever got into the market first cornered the market.

I feel that this bill should enable the potential that we have

in British Columbia to be developed in some of these

directions.

I don't know if $25 million is enough or whether it should

be $50 million or $100 million. But as far as we're concerned,

as a party in this House, we like the bill. We would certainly

feel that if $25 million proves to be inadequate, we would not

stand in opposition to expanding the amount of capital based on

the early success of the corporation.

It has been stated that it is flexible. I didn't quite

follow the Minister in introducing the bill when he talked

about rates from 1 to 9 per cent. But there is no clear

definition of interest rates in the bill.

Interjection by an Hon. Member.

MR. WALLACE: Oh, I see. Oh, I beg your pardon. I just

noticed that there's no specific rates quoted in the bill. I

presume that it's graded according to the need of the

enterprise.

Certainly, the bill seems to us to have both the

flexibility, which makes good sense, and the safeguards.

Interjection by an Hon. Member.

MR. WALLACE: Well, I'd certainly want to apologize for

confusing your bill with the Social Credit bill.

An interesting point that the Minister mentioned, on which

we would urge caution, is the question of the capacity to

borrow up to $100 million. We would wonder, if at times the

corporation made some bad calculations and put money into

companies which

[ Page 2593 ]

went broke, whether or not the government is

prepared to go on borrowing more money to put, as it were, good

money after bad.

There's one

section of the bill that puzzles me a little

bit. We won't go into sections at this stage, but it's

section

25. You state that where there's reason to believe that the

enterprise is not flourishing, you can refuse to advance any

more money, and in fact you can demand that they pay the amount

outstanding there and then. I just wonder how you do that when

an enterprise is going broke. How do you tell them to pay up

their outstanding debt? It would seem to me that you'd be in no

different position than I would be if I lend you money

personally, and after you've spent the money you borrowed, you

can't pay me back. I don't really know how I can demand

payment. This puzzles me in that particular section.

Interjection by an Hon. Member.

MR. WALLACE: Well, presumably if there are buildings or

machinery or equipment….

Anyway, Madam Speaker, I feel that's a rather picayune

criticism because a bill of this nature involves risks.

Whenever a government corporation or an individual lends money,

he takes a risk by lending that money. Although the bill spells

out that it will attempt to apply good business policy and have

securities in various forms against a loan, I think we have to

accept that there are certain risks and that the government

might lose money.

But, if the kind of principles which the Minister outlined

— he talks about having managerial skills and an

objective analysis of the potential for the business to survive

and grow and the value of the enterprise to the economy —

if these very basic, common sense attitudes, which are typical

of Conservatives and which I'm pleased to see in the socialist

rank; if these basic business attitudes of sound common sense

and evaluation of the people borrowing the money are followed,

I foresee that this bill will be a big step forward in creating

jobs and in diversifying the economy of British Columbia.

We're always hearing about the forest industry and the

mining industry being the pillars of our economy. Certainly in

this highly technical era in which we're living, it would seem

to me only to make sense that we should diversify the sources

of our tax revenue and provide jobs in areas other than

forestry and mining and construction.

This bill, in our view, is a very sound, good, sensible bill

brought in by the Minister with the kind of reassurances which

the Conservative Party would always itself bring to bear on

legislation.

DEPUTY SPEAKER: The Hon. Second Member for

Vancouver–Point Grey.

MR. GARDOM: Madam Speaker, I would draw to your attention,

since the House is within your custody and control, that one of

the lights in the ladies' gallery went out. I don't know if

this is the responsibility of the long speech that we had from

the lady Member or the bill. But I would draw to your attention

that the power did fail up there. Make sure there's daylight

between all couples.

Madam Speaker, I intend very much to support this bill, but

I would say not with the degree of complete enthusiasm that's

been expressed by a number of earlier speakers. I'd like to say

this. The bill itself has exceptionally wide powers of

participation in a business endeavour. I note that it's within

the provisions of the Act that the development corporation can

purchase any shares in an industrial enterprise or, in fact,

any shares in any company. I suppose it's not even restricted

to British Columbia companies. I also note that it does not

have elected directors, but it has appointed directors.

Mechanisms such as these are ones which could make it capable

of becoming a patronage vehicle. I indeed hope that it would

never be that.

The thing that troubles me most, Madam Speaker, is the power

to participate in equity. Personally, I do not like governments

being in the business. I look upon the duty and responsibility

of government to be a carrot in front and a cattle prod to the

rear, but keep out of the facility. In my view, Madam Speaker,

a government is never able to do as good a job or as

inexpensive a job as the private sector, nor indeed can it be

as facile…. I'm delighted to see I'm getting some new support

from the New Democratic ranks down there. For the very first

time, they're slowly seeing the light, Madam Chairman.

Nor indeed can government be as facile in correcting a bad

job. If you do find a bad job in the private sector, then that

can be corrected by the law of the marketplace — by

replacing a shopworn or poorly-functioning vehicle. That

happens whenever the demand is there.

But, I would say that any government, whoever they may be,

are never wont to abandon an uneconomic or poorly-functioning

or a publicly unacceptable ship. They're just prepared to stay

in there far, far too long. In the private sector, by virtue of

the natural law of the marketplace, you can go ahead and have

that unfortunate situation which proves to be a drain upon

management, those who hold equity, those who loan money and

indeed upon those who work for it — in the private sector

you'll find that they're able to create and effect cures.

So I would very much urge that the government tread very

easily with this bill and exercise the very broad powers that

they're granted under the bill very, very carefully, and only

after extremely thorough research and investigation. That

certainly includes cost projections.

[ Page 2594 ]

Cost projections are one thing that we've heard precious

little of from the New Democratic Party and its new government

in any of the proposals that they've advanced this year.

They've advanced, in the bulk of the cases, open-end proposals.

We've not had any information given to this House of what the

cost projections are for the general public.

DEPUTY SPEAKER: The Hon. Member for West

Vancouver–Howe Sound.

MR. WILLIAMS: Thank you, Madam Speaker. Just briefly, as the

Hon. Minister of Industrial Development, Trade and Commerce

(Hon. Mr. Macdonald) introduced the bill tonight, I was certain

that I saw shining through that hard exterior the heart and

soul of a true free enterpriser, and I welcomed what he had to

say.

As I listened to him talking about the manner in which this

corporation would be managed, I recognized that it was on its

way to sure success. Then I thought, well, succeed or fail, the

government will take it over anyway, so we're safe. (Laughter).

I draw your attention to the right of the Province of British

Columbia to take it over if it succeeds or fails. Based upon

your performance to date, if it fails, it's got a better

chance.

However, Madam Speaker, this is not a new venture, as the

Minister has said. And not being a new venture for governments

at the provincial level, the Members will also be aware that

there have been many spectacular failures in the use of

development corporations by several of the provincial

governments. That alone is not enough to deter us from making

this move. I think that the government, in its approach to this

bill, with the amounts of money that are being made available

at this particular time — the limits on individual

investment and the limits on the totality of investment by way

of loan guarantee or otherwise — this would indicate that

the government is at least taking a cautious approach in the

first instance.

I don't think that the people of British Columbia should

look at this particular time for any great achievements from

this corporation because the amounts of money that are to be

made available are not themselves such as would assure any

large, spectacular industrial development in the Province of

British Columbia.

Certainly, if the limitation in the investment in any one

enterprise is to be $1 million, then we would not go very far.

Even for such a laudable purpose as the development of the

renal dialysis mechanism that the Member for Oak Bay referred

to, $1 million would not go very far towards the establishment

of the necessary production and marketing facilities for that

kind of a device.

Anyone with any experience recognizes that venturing into a

new field can consume a great number of dollars before any

return can even be anticipated, let alone realized.

However, it is wise I think for the government to be

approaching this matter with caution.

I notice that the corporation is to make its decisions as to

participation by way of investment or loan on merit. Yes, on

merit. And that's wise; I'm not criticizing that. I just hope

that in reaching judgment as what is meritorious or not, the

Minister may indicate when closing the debate what the

guidelines will be for making that kind of a decision. The

Attorney General seems to be having difficulty in finding the

section, and if I might refer him to

section 24(2), Mr.

Minister.

There is a merit provision and it provides there's to be no

discrimination of any kind.

Interjection by an Hon. Member,

MR. WILLIAMS: Oh, yes. But you are still to be guided by merit. Merit

a loan, it says — without discrimination. Yet, of course, when I turn over to

section 31 I find that you can't lend money to a corporation in which an MLA

is involved and obviously that's discrimination right off the bat. You've created

a new class of 55 people who are not to have the opportunity to participate

in the opportunities. I was thinking of Century Sales and all those exciting

corporate developments that the government is missing an opportunity to latch

on to.

But when I think about merit and the guidelines that may be

established, I want to offer one suggestion in all seriousness

to the Minister. Since it is likely that we will have some

failures in these ventures, may I enquire from the Attorney

General whether or not the government would give consideration

to participation with companies who might be prepared to

involve their employees at the directorship level. We have

often heard this spoken of in this province and elsewhere.

We know that this technique functions in some of our highly

industrialized European countries. Indeed some of the countries

in the European Economic Community which have displayed the

greatest industrial success are those where the employees have

played a significant role on the board of directors of their

companies.

Interjection by an Hon. Member.

MR. WILLIAMS: That's right. West Germany is a particular

example. West Germany is a country which has had an astounding

industrial success. Yet it is found in that country that many

companies, where the employees are sitting on the board of

directors have, on occasion, been able to have the top

management of the company changed to the great

[ Page 2595 ]

advantage of the

company.

I would think that when we are embarking even hesitatingly

upon this new industrial step in British Columbia — where

the government is going to participate either by equity or loan

— that in determining what might be meritorious,

consideration could be given to companies which say "in our

operation, our employees are going to have some say; not

necessarily a majority say, but some role to play in some of

the management decisions that may be taken."

I would think that, certainly with fledgling operations,

there is a possibility that that very factor may itself do as

much to ensure the success of that operation as would the

financial loan or investment from this corporation.

If it doesn't work, then it's a failure for which the

corporation will be blamed and for which government will be

blamed. But that's the risk you run. It's a risk enterprise

when you go into equities in this field.

But if it happens to succeed — particularly in

corporations of the size of which we are speaking in this bill

— it may indeed do much to encourage secondary industrial

growth of businesses of this size; and it may itself do much to

quieten down some of the concern that has been expressed about

the development of secondary industrial operations in the

Province of British Columbia because of the alleged

labour-management uncertainty.

If this were to happen I think that this venture would repay

many, many times to British Columbia more than the return that

this industrial development corporation might enjoy from either

its loans or its equity investments.

DEPUTY SPEAKER: The Hon. Member for Langley.

MR. R.H. McCLELLAND (Langley): Madam Speaker, I can't share

nearly the confidence of the previous speakers with regard to

this industrial development corporation. I don't understand,

Madam Speaker, how this government can take such a good idea,

an idea for a development corporation, and completely

emasculate it because of their insistence on intruding into the

private sector every move they make.

Madam Speaker, the previous speaker who just took his

place, said that the Minister of Industrial Development, Trade

and Commerce sounded almost like a free enterpriser when he was

speaking. But he was much too proud of the government's

intention to get into equity positions when he was introducing

this bill to sound anything like a private enterpriser.

[Mr. Speaker in the chair]

Interjection by an Hon. Member.

MR. McCLELLAND: You bet I noticed that, Mr. Minister. Mr.

Speaker, I'd suggest that that's the only way that this

government is going to participate in most of the areas in

which they say they are going to help out with this development

corporation. They are going to participate providing they can

get the kind of equity position they want.

Earlier, Mr. Speaker, the Minister talked about protecting

the taxpayers' outlay. Well, Mr. Speaker, I would say that

neither the Minister nor the government care very much about

the taxpayers' outlay because they haven't given one whit for

the taxpayer in this bill.

Where's the promise that we've heard so many times before

that this government will work side by side with private

enterprise? If you intend, Mr. Speaker, or if this government

intends to work side by side with private enterprise, then why

do they need all of the sections in all of the bills that

they've put forward in this session which insist that they must

have equity positions in private business? They must hold a

clubhead over private enterprise before they'll even get

involved.

They are rushing headlong, Mr. Speaker, into public

ownership and this is another example of that headlong rush to

do away with private ownership.

Mr. Speaker, the Minister of Industrial Development, Trade

and Commerce and the Premier insisted over and over again that

they don't want to get into any failures. But that's all, Mr.

Speaker, that's been offered to the taxpayers of British

Columbia so far. Failures. The only evidence that we have so far

of any government participation in private enterprise has been

with failing companies — failures, Mr. Speaker. And

that's what we are going to see in this bill as well.

The Minister also said earlier that this is a "last resort"

and we've heard other speakers in this debate refer to the

"bank of last resort." It's some kind of a magic formula.

But I wonder if that means, Mr. Speaker, that the government

is going to jump in just before bankruptcy. Is that what it

means in every instance, that the government comes in and jumps

in to bail out a bankrupt corporation? It's the only kind of

indication that we've had up to this point.

I think, Mr. Speaker, that it's the major thrust of this

government. It's nothing to do with the kinds of things that

have been quoted for this industrial development corporation,

but rather it is that this government wants to establish an

equity position in as many British Columbia companies as

possible; and they'll do anything they possibly can to maintain

that kind of a position.

I say, Mr. Speaker, that that position is folly. It doesn't

make any sense. All you have to do, Mr. Speaker, is look at the

examples that we've had offered before us over and over and

over again in

[ Page 2596 ]

other jurisdictions, and we can say that it is

folly, folly, folly. We have a trail of bankruptcies dotting

Manitoba and Saskatchewan. Is that what you want? It's what we

have. Of course it is. Mr. Speaker, the entry of government

into private enterprise is noted only for its failure.

Interjection by an Hon. Member.

MR. McCLELLAND: Mr. Speaker, I don't believe in the

government entering into private business of any kind. They

should play a support role and a support role only.

For some reason, Mr. Speaker, the socialists will not give

up despite the evidence of failure after failure wherever it

gets its sticky fingers into private enterprise. You talk about

"last resort," Mr. Speaker. The Premier says he isn't

interested in supporting losers. Those two statements, Mr.

Speaker, are not compatible at all. You'll be the last resort.

The winners don't want you and they don't need you and they

won't accept you. So all that's left for you is losers. That's

all you're going to get into.

Ocean Falls — a loser. Colcel — a loser. Every

other entry that you make into the private enterprise sector is

going to be a loser because the winners don't need your help

and won't accept your help unless you force your way into their

position.

Failure after failure after failure, Mr. Speaker, and the

socialist still thinks that if he gives the lever one more

pull, he'll finally hit the jackpot. But the odds are stacked

against you. You don't know what private enterprise is

about.

AN HON. MEMBER: Did you say "crackpot?"

MR. McCLELLAND: I said "jackpot" but this is crackpot

legislation, I'll buy that. (Laughter). Slot machine government

— pull the lever one more time and you'll hit the

jackpot. Slot machine government, Mr. Speaker.

Mr. Speaker, if this development corporation is kept as a

support programme, as the Social Credit Party suggested and

proposed in an excellent piece of legislation, it can work and

it can stimulate both employment and a healthy economy. That's

what this is all about.

But this government, Mr. Speaker, isn't content with

offering a support role. This government needs to keep on

getting its sticky fingers into the jam. They want to take

part. I suggest, Mr. Speaker, that you stay out. You won't only

drag the company down but you'll drag the taxpayers of British

Columbia down with it.

Speaking of jam, Mr. Speaker, I was reminded a moment ago by

one of our Liberal colleagues on this side about some jam. This

government is so anxious to stumble into private enterprise

that it even forces a small doughnut manufacturer up against

the wall because the B.C. Federation of Labour snaps its

fingers.

How about a company like this small doughnut manufacturer

that we've been talking about earlier today? Will this

manufacturer be allowed to get a loan or support from this

development corporation?

Not on your life because his employees belong to the wrong

union.

SOME HON. MEMBERS: Oh!

MR. McCLELLAND: You put him out of business now. You mean

you're going to put him out of business and then help him,

providing he gets his employees to join a Federation-supported

union? Mr. Speaker, there's no way that this kind of

once thriving enterprise can ever get a part of the Industrial

Development Corporation.

HON. MR. COCKE: Go back and write another editorial in your

newspaper.

MR. McCLELLAND: Mr. Speaker, I do that every weekend. Sure

that's fine. I have the right to do that.

Interjection by an Hon. Member.

MR. McCLELLAND: And subscriptions are open to all of the

Members on that side of the House if they want to learn

something. Just take out a subscription.

Mr. Speaker, what we're getting here is just a foretaste of

what's to come. This government seems bent on finding any kind

of excuse that it possibly can to cut out private enterprise

and then move in and pick up the pieces. Once the government

gets around to moving in, Mr. Speaker, that's all that's left

— pieces.

This bill, Mr. Speaker, is exactly the opposite of the kind

of development corporation that British Columbia needs and

deserves: the kind of corporation which will help out those

people in the private enterprise sector. Instead, Mr. Speaker,

this government is offering only a fantastic opportunity to

blow the savings of the taxpayers of the province, one more

opportunity to pour money after money after money down the

drain.

Mr. Speaker, we spoke earlier about examples. What kind of

examples do we have of government intrusion into the private

sector? The only examples we have, Mr. Speaker, are bungle

after bungle in every instance. Just look at your sister

socialist province of Manitoba. Consider the Lake Winnipeg

cruise ship, which lost a bundle. Our friend Mr. Schreyer put

$200,000 into a chop suey factory. The honourable

[ Page 2597 ]

owner

disappeared in a maze of noodles. They're still looking for

him. (Laughter).

AN HON. MEMBER: He drowned in his own soup.

MR. McCLELLAND: They had to sell that one at auction. The

Development Corporation of Manitoba is still sifting through

the noodles looking for their money.

AN HON. MEMBER: Sweet and sour Schreyer. (Laughter).

MR. McCLELLAND: Mr. Speaker, there was also something in

Manitoba called Omnitheatre, which also went down the drain. I

suppose we shouldn't dare mention Flyer Industries — half

a million bucks down the drain.

HON. MR. COCKE: Oh, come on.

MR. McCLELLAND: Half a million dollars down the drain.

British Columbia's trying to shore them up, I must admit, with

a nice little donation. But that won't help. That's another

winner. The Premier says we'll invest only in winners. Flyer

Industries, I suppose, is the kind of winner we're going to

invest in.

The Manitoba taxpayers, Mr. Speaker, are now spending $1

million a month to bail out the Manitoba Development

Corporation and to support that government's folly — $1

million a month and no evidence that the taxpayers have any

hope of ever getting that money back.

Mr. Speaker, the aim of a bill setting up a development

corporation is excellent: to develop and expand the economy by

the encouragement of industry. Nobody in British Columbia could

fault that aim. It's marvellous. But, Mr. Speaker, this

government is heading down the wrong road and will not achieve

that aim by the methods it has chosen.

Mr. Speaker, the government has already created an economic

climate in this province that may ensure that we have nothing

left but losers, so that you'll be able to invest to your

heart's content in losing corporations. Mr. Speaker, I suggest

that the taxpayer of British Columbia will be the biggest loser

of all.

MR. SPEAKER: The Hon. Member for Dewdney.

MR. P.C. ROLSTON (Dewdney): Mr. Speaker, I want to rise in

support of this bill. One of the things I first got involved in

in being an MLA was to hear from the various councils,

especially in Maple Ridge and Mission, and hear some of the

concerns they have about industrial development.

I think that many parts of the province feel that many of

the Crown corporations and many of the heavy government

expenditures are really not shared throughout the province, and

there is a real need to see more provincial and public input

into some of the depressed areas. I'm not saying that my riding

is all that depressed, but it should be pointed out that as far

as the tax base and industry, we in Maple Ridge and Mission

only receive 13 per cent of our total taxation from industry. I

think we would prefer to see more like 40 per cent; certainly

30 to 40 per cent of the tax base should be from industry.

So there is certainly a hope on my part and on the part of

industrial development committees in my riding to see that

there can be a much greater input and that we can use

provincial money in the form of loans. I would emphasize here

that we're talking about loans, not subsidies or grants, which

I think the Social Credit tended to emphasize in the dying days

of their regime.

We're asking for loans. We have $25 million here. I believe

we're talking about $1 million maximum loans per project as a

partnership. I think a lot of work has been done in Mission and

in Maple Ridge anticipating some kind of a partnership with a

Crown corporation such as the Development Corporation of

British Columbia. In fact, six months they were anticipating

this kind of legislation.

I would just like to share some of the things that they

would really like to see. Before I go on, Mr. Speaker, it

should be pointed out to the House that 33.2 per cent of the

B.C. labour force in 1968 was involved in the producing

industries, contracted to 44.6 per cent in 1951.

In the service industries and especially the high

labour-intensive industries — I'm thinking of

transportation and communication, trade, finance, insurance, et

cetera — this is increasing all the time. In 1968 it was

66.8 per cent. In 1980 it could be nearly 71 per cent. It's

these high labour-intensive industries that I am especially

hoping can be attracted to parts of my riding.

We've sent several letters to the Minister of Municipal

Affairs (Hon. Mr. Lorimer) hoping that we could get options on

land; that we could assemble this land; that we could

service it; that in some kind of a partnership — again

borrowing from the Development Corporation of British Columbia

— we could establish and service an industrial park in

various parts of Dewdney. It's my hope that this can really be

done very quickly; that we can put this money to the land,

possibly to buildings — let the manufacturer put up risk

capital. Usually, Mr. Speaker, the manufacturer has spent most

of his capital on land, services and building, then has nothing

for operating. So it is our hope that we would have this

available for him. He would lease it and use his capital in the

operating of his facility.

It's very important that there be low-interest

[ Page 2598 ]

loans. I

appreciate the flexibility that these bills give to the various

people, or municipalities or private corporations that are

hoping to work with the corporation. I think flexibility is

very necessary.

It is certainly my hope that we can encourage this

corporation as soon as possible. It should be impressed upon

the Members that when you set up such an industrial park,

usually you're not imposing heavy personal costs such as

schools, health, police and other personal services. You're not

actually adding to the population; you're simply adding to the

industrial capability of an area.

I simply want to encourage this legislation. I think it's

long overdue. I don't think there's anything safer than just

starting with land and servicing land, and seeing that this is

in really appropriate parts of the province. I really can't see

how we can lose with this initial phase. Maybe next year, with

a new capital outlay and a budget, we can go from there.

I have documents here that really have suggested and, I

think, anticipated this kind of legislation. I would certainly

encourage the Members to give second reading to this bill this

evening. Thank you.

MR. SPEAKER: The Hon. Member for South Peace River.

MR. D.M. PHILLIPS (South Peace River): Thank you, Mr.

Speaker. I want to say first of all that I would certainly be

very remiss in my duties if I did not enter into this debate to

establish a Crown corporation in British Columbia after I

tabled a bill of my own, which was a good bill, Mr. Speaker. It

was an excellent bill.

AN HON. MEMBER: You're biased.

MR. PHILLIPS: Well, maybe I am biased. The bill that we

introduced on this side, versus the one the Minister of

Industrial Development introduced, represents two distinct and

entirely opposite philosophies.

I certainly want to agree with the Minister of Industrial

Development, Trade and Commerce (Hon. Mr. Macdonald) when he

says that there is a need in British Columbia for a corporation

to assist small industries to develop. I think, Mr. Speaker,

that when the Minister of Industrial Development, Trade and

Commerce said that this was a very flexible bill, I have to

agree with him. The bill he introduced is very flexible. As a

matter of fact, Mr. Speaker, it's so flexible that it reminds

me of an elastic band. I'm afraid that once it's stretched by

this government as far as it can be stretched, it's going to be

bent and twisted. They might even twist it up and put a

propeller on the front of it.

HON. MR. BARRETT: Is that how you make alfalfa?

(Laughter).

MR. PHILLIPS: After it's stretched to its limit, I'm afraid

that it's going to snap back. The Minister of Industrial

Development, Trade and Commerce is going to feel the sting.

Unfortunately, when he feels the sting, so does everybody else

in British Columbia, so do all the taxpayers in British

Columbia. Of course, it's the taxpayers that I'm really

interested in.

I have to agree also with the Minister of Industrial Development when he says that we need additional credit

facilities and that western Canada suffers by not having a

financial institute in western Canada that is aware of what is

happening in western Canada so far as business is

concerned.

But what I have to wonder, Mr. Speaker, is why in a nation

like Canada do we have to continually stuff feathers into the

pillow of small business? We have a nation which is rich in

natural resources. It's all over Canada, but particularly in

western Canada. Why do we have to prop up; why do we have to

entice people to go into business?

Mr. Speaker, that is something that I want the Minister of

Industrial Development, Trade and Commerce to search thoroughly

in his mind. I think Ottawa should take a look at this. Why?

You have to realize, Mr. Speaker, that the philosophy in Canada

has always been that Ontario has all the industry and we in

western Canada subsidize it by freight rates.

I want to speak for just a moment about freight rates. The

reason I want to speak about freight rates — and this is

very appropriate and also very, very, very interesting. I want

the Premier to listen. I've got a good suggestion….

Interjection by an Hon. Member.

MR. PHILLIPS: Yes, it has, Mr. Speaker. It has a lot to do

with this bill.

Here's an

article that's dated March 12, 1973: "How B.C. Lost

a Business." The reason that B.C. lost the business, Mr.

Speaker, is not because there wasn't money to pump into the

business, not because of interest rates, not because there

wasn't a development corporation in British Columbia, not

because the gentleman who started the business didn't have any

business experience. No, the reason, Mr. Speaker, is because of

freight rates, number one. Number two, because of labour

costs.

If we're going to have a successful development corporation

in the Province of British Columbia, it's not good enough to

just do what has been done in other provinces. It's not good

enough at all. Because, Mr. Speaker, it hasn't worked in other

provinces. It didn't work in Saskatchewan. It didn't work in

Manitoba. Every time that the government joins hands with small

businesses…. It's all very well and good to talk about

Northern Slope Oil — that's a major project. And we're

not talking about B.C. Hydro.

[ Page 2599 ]

What we're talking about here, Mr. Speaker, is small

businesses that are going to employ anywhere from five to 100

persons. We're talking about the type of management in these

small businesses. Maybe he doesn't have a college degree; he

doesn't have a C.A. We're talking about small businesses….

Would you like me to adjourn the debate, Mr. Premier?

When we're talking about small businesses, as soon as the

government becomes a partner in a small business, then that

small business operator — who as I say hasn't got the

experience of a law degree or a certified accountant — is

going to say, "Well, this business isn't going to fail because

I've got jolly Big Brother," who is the Minister of

Industrial Development, Trade and Commerce — whoever he

maybe at that time — "as my partner."

This is exactly what happens. This is the reason, Mr.

Speaker, that I'm trying to point out the pitfalls.

Whereas if

you loan that small enterprise the money, then that small

enterprise is responsible for running the business, for making

its own decisions and for paying that money back. Mr. Speaker,

this is the fallacy. Sure, it didn't really work that well in

Nova Scotia either — and there you had a Premier at that

time who had a wide and varied business experience.

HON. MR. COCKE: In underwear.

MR. PHILLIPS: Well all right, in underwear. What's the

matter with underwear? You against underwear? Up where I come

from we have to wear it in the wintertime — we can't live

down here in this wonderful climate of Victoria. We have to

wear underwear.

HON. MR. BARRETT: Are you against the trap door when you get

down here?

MR. PHILLIPS: No I'm not against them at all. All I'm saying

is, and as the Attorney General said — and I feel that

Ottawa was as much responsible for that blunder on that heavy

water plant in Cape Breton Island as was the Nova Scotia

Development Corporation. But when they blundered, they cost the

taxpayers of that province millions of dollars — not only

in Nova Scotia, but the taxpayers in British Columbia are

paying for that today — that blunder. This is the type of

thing, Mr. Speaker, that we have to be very wary of. Very wary

indeed.

Mr. Speaker, before we get involved in being a partner in a

lot of small businesses, I would suggest this idea of a British

Columbia airline is not that far off. Pacific Western Airlines

is doing it now. If we can afford to fly cattle all around the

world, why doesn't the Minister of Industrial Development,

Trade and Commerce think of buying, or in cooperation with

Pacific Western Airlines, getting some flying boxcars and

seeing if we can't compete with the railways directly'?

Instead of before you lose all this money in this Industrial

Development Corporation, what would be the matter with

starting, or cooperating with, an airline and flying

manufactured merchandise back to Ontario? I'd like to ask the

Minister of of Industrial Development, Mr. Speaker, if this has

ever entered his mind.

In world of commerce today, and in the very near future, air

transportation is going to be the transportation regardless,

Mr. Speaker, of what the Premier may think about running a rail

line up to Alaska to get the oil out.

I want to say, Mr. Speaker, that the oil companies, who have

access to research, and the United States government are

thinking about a railway line to get the oil out at the same

time as we're talking about shipping it out through the

northern passage. There are studies going underway, Mr.

Speaker, to fly that oil out of the northern slope. It's not

that far removed. As a matter of fact, the studies are very,

very close to being completed.

All I'm saying is — the Members can pooh-pooh the idea

all they want to — all I'm saying is that we in western

Canada have suffered since the beginning of Confederation

because we have had to subsidize Ontario industry. Mr. Speaker,

if the Premier is sincere about studying freight rates, I don't

think you're going to be able to break that camel's back

because it's a lot bigger than British Columbia — you're

bucking the whole economic climate of Canada.

Would you like me to adjourn the debate? I've got a few

things that I want to say now. Will I carry on or will I

adjourn the debate?

SOME HON. MEMBERS: Carry on.

MR. PHILLIPS: Carry on. All right, and I'll try and be

brief. There again, Mr. Speaker, I really haven't got much

sympathy for this government, in trying to ask me to be brief,

when they cram — as I said this afternoon — as much

legislation at us as they have and then sort of urge us to be

brief. It just doesn't add up. As I told you before, Mr.

Speaker, if I have to stay here till next September….

Somebody's tripping me here. That's all right, it's all right.

I've got my feet on the floor.

MR. SPEAKER: Order. Don't trip the Member.

MR. PHILLIPS: No.

Now, the second thing, Mr. Speaker, that enters into small

industry being successful in British Columbia happens to be

succession duties, and I know that the government will

pooh-pooh this idea as soon as I say it. Anybody who wants to

argue that — and you

[ Page 2600 ]

can use all the philosophy you want

to, Mr. Speaker — but this is one of the main reasons….

MR. SPEAKER: Order, please. I don't see how succession

duties has anything to do with the development corporation.

It's going to take great ingenuity to link them, maybe you

can.

Interjection by an Hon. Member.

AN HON. MEMBER: Order.

MR. PHILLIPS: Oh order nothing! Mr. Speaker, if anyone

doubts that succession duties in British Columbia doesn't have

a bearing on people starting enterprises and not selling them

out and having them moved out — well I'd like to prove

they do, and I'll tell you why, Mr. Speaker.

Alberta does not have an industrial development corporation

at the present time. Yet industry in that province —

small industry — is thriving.

Interjection by an Hon. Member.

MR. PHILLIPS: Doubt it? You can look it up — they

don't have it. They do have their Treasury branches, but they

do not have, as such, what we're setting up — an

industrial development corporation. Yet, you go to Alberta

today, Mr. Speaker, and you will find hundreds and hundreds and

hundreds of thriving small enterprises. Manufacturing is

starting. Doubt it? Go there and find out. Why? And maybe

you'll see where the link is, Mr. Speaker — they have no

succession duties in the province of Alberta.

Interjection by an Hon. Member.

MR. PHILLIPS: Oh, well listen. I realize that the hour is late, but

I'm sure that the Members have enough intelligence to understand what I'm talking

about, Mr. Speaker.

Neither does Manitoba — I mean Manitoba has succession

duties. Here, Mr. Speaker, is an

article in the Toronto

Globe and Mail , dated October 20, 1972: "Succession tax

claimed driving firms out of Saskatchewan." And yet here, we're

probably going to invest in this at the very minimum, $50

million. And we're not getting at the root of the problem. If

we want this industrial development corporation to function and

to do the things that it is set out to do, you've got to get at

two of the basic problems.

I'll warn you right now, Mr. Speaker, your industrial

development corporation, as you've got it set out, will not

work for the reasons I have outlined. I'll repeat them again.

One is that as soon as the government becomes a partner in a

small business corporation, the private individual partners

feel that the government is going to be responsible, they're

going to help make the decisions and they're going to be a

success.

Number two is your freight rates. I've offered you a good

constructive idea as to what we can do to buck the freight rate

problem we've had since Confederation.

Number three, Mr. Speaker, is the succession duty on

entrepreneurs who want to build up something. As soon as they

die, it can't stay in the family, so they say, "Why bother?" So

as soon as it gets to be worth a certain value, they sell out

to some American firm.

The fourth one, Mr. Speaker, of course as the Attorney

General himself mentioned, is interest rates. I don't know how

his industrial development corporation is going to help. This

development corporation, Mr. Speaker, is not going to help the

interest rates at all.

I have to warn the government, Mr. Speaker, that the boss of

this corporation has got to have certain qualifications. As a

matter of fact, he's got to have so many qualifications that I

doubt if we will ever find such a man. The boss of this

corporation, Mr. Speaker, has got to have had a successful

business career in his own right; he's got to have been a

successful businessman because if he hasn't been, he's not

going to be able to make the decisions that are necessary to

make this corporation a success. He's got to know and have a

good knowledge of the business atmosphere in this province, not

only in his own phase of business, but in all the industries

with which he is going to be dealing because we're not going to

just be setting up small corporations in manufacturing. There

will be food processing, and I hope that if the bill passes,

there will be agricultural processing plants. This man must

have knowledge, and if he doesn't have knowledge he must know

where to get it.

All this, Mr. Speaker, is very necessary but, the most

important quality this man has to have, and this has been the

downfall of corporations elsewhere, particularly in Manitoba

— he's got to have the strength to oppose politically

attractive, but uneconomical proposals. This is an absolute

must. He's got to have the diplomatic skill to steer the

enterprise along the path dictated by his own business

instincts.

Mr. Speaker, in British Columbia this is going to be very

difficult, and I'll tell you why. I'll tell you why. Already in

this province, pressure from the cabinet — which would be

on this general manager — to buy out two businesses that

were on the skids. Already, before we even get this development

corporation started, Mr. Speaker, we are heading down the wrong

path.

MR. SPEAKER: Order, please. I think the Hon. Member is

predicting rather than discussing the principle of the bill. We

are here dealing with the general area of legislation, and not

making predictions

[ Page

2601 ]

about what will be done with the legislation. Surely the

principle of the bill is the subject matter….

MR. PHILLIPS: The principle of this bill is to start a

development corporation that will not lose money so that it

will, as the Attorney General says, return…so that any

money he puts out he'll get back.

Now what I'm saying and as I just pointed out, is that the

essential skill of the man who's going to run this organization

is diplomatic skill — I'll read it again — "to

steer the enterprise along the path dictated by his own

business instinct and not to be pushed and shoved by decisions

of the cabinet who maybe have their own particular portfolio

that they want to see go ahead." This certainly has a lot to do

with the principle of the bill.

MR. SPEAKER: The point of order that I was raising is simply

this: If you're talking about the appointment of management,

there is a

section in the bill in committee that deals with

that. Surely that's the time to bring up the point.

MR. PHILLIPS: I don't know, Mr. Speaker, how much business

experience you've had, but let me tell you something. The

success or failure of any corporation is the man who runs the

corporation.

MR. SPEAKER: Well, then, talk about it in committee.

MR. PHILLIPS: Oh, Mr. Speaker. We are talking about the

principle of setting up a development corporation and

certainly, as I say, the most important part of it is going to

be the man who is going to run it.

Maybe if the Minister of Industrial Development, Trade and

Commerce (Hon. Mr. Macdonald) would answer some of my questions

in closing the debate, I'll be able to make up my mind. But,

before the Minister will give all these answers, we have to

raise all these points.

The other thing that I want to caution the man who's going

to run this organization is that we mustn't allow him to be

pushed around by the Premier who may want to make a coup-de-grâce here on some organization in the province which

maybe has a monopoly.

HON. MR. BARRETT: Are you against your research staff?

MR. PHILLIPS: No, I'm not attacking my research staff at

all. And the reason that this is very appropriate is…. You

know the frivolity with which this very important matter seems

to be handled really concerns me, Mr. Speaker. It really

concerns me.

Here we're talking about a $100 million investment in the

Province of British Columbia, and everybody takes it with a

grain of salt, and they laugh at it. I'll tell you, Mr.

Speaker, this is no laughing matter.

Here is a development corporation which was just recently set

up in Canada. It's called the Canadian Development Corporation.

And what was the first investment they made? It was an

investment made because of certain relatives who were in

certain other ventures. It only involved…. Let me see, it

didn't involve very much, just let me see. Well, it says: "The

Canadian Development Corporation bought 35 per cent interest in

Venture International Limited for $4.5 million." However, the

private owners of this particular corporation for $3.5 million

— in other words a million dollars less — has 65

per cent. Now this is the type of thing, Mr. Speaker, that we

must guard against. This is why I point out to the Minister of

Industrial Development, Trade and Commerce that he's going to

have to have a pretty sharp man operating this company and one

who can't be pushed around.

MR. SPEAKER: A point of order.

MS. R. BROWN (Vancouver-Burrard): The Member seems to be

really concerned about the man who is going to head-up this

corporation. I share his concern, and I wonder whether he would

lay the matter aside if I assured him that if we can't find a

man, we certainly can find a woman with all of these qualities

to do this job.

Interjections by some Hon. Members.

MR. PHILLIPS: The other thing — and I'm just about

finished Mr. Speaker, which will relax your mind.

MR. SPEAKER: Thank you.

MR. PHILLIPS: Yes, just relax.

This same thing, unfortunately — the thing that I'm

warning you about here — has happened in Saskatchewan.

Right now, Mr. Speaker, they're on their fourth manager of the

Manitoba Development Corporation. Their fourth manager. Mr.

Schreyer and his cabinet have invested in something similar to

what he did — they put $92 million into Churchill Forest

Industries, and they're still trying to pump money into it to

make it a viable enterprise. And the previous manager of the

Manitoba Development Corporation was against it. He was against

it. But why did