1975 Legislative Session: 5th 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, MAY 28, 1975

Morning Sitting

[ Page

2757 ]

CONTENTS

Committee of Supply: Department of Economic Development estimates.

On vote 34.

Mr. Wallace — 2757

WEDNESDAY, MAY 28, 1075

The House met at 10 a.m.

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

ESTIMATES: MINISTER OF

ECONOMIC DEVELOPMENT

(continued)

On vote 34: Minister's office, $85,129 continued.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, one of the main

planks in the 1972 election by this government, and a great

deal of the discussion that took place when the NDP was in

opposition was on the failure of the former administration to

diversify our economic base. The then-Leader of the

Opposition and now Premier constantly talked of the tremendous

need for this province to diversify the economy and not be so

dependent on our basic raw materials. In other words, there was

a constant plea for the development of secondary industry in

this province, and a desire on the part of the NDP to process

many of our primary products and by so doing, create jobs.

I am puzzled on one or two basic aspects of this

government's economic development policy. First of all, it

seems that to achieve these goals I mentioned, this Minister

has had the budget on his department reduced. It would seem to

me that while we on this side of the House have been

talking about excessive government spending, our criticism has

been mainly directed to those areas where the spending itself

does not increase our economic wealth. I think it is all

very well, and would be part of any government's policy, to

increase social services in the fields of housing, hospital

care, schools and highways, but it is certainly a very basic

fact of economic life that if you don't have the revenue coming

in, you can't have the expenditure going out. Despite the

policies espoused by this government when they were in

opposition about how they would widen the economic base of the

province, it seems to me that there is very little evidence

that this is happening.

I understand that the statistics suggest that we need 70,000 new jobs per year

in this province. Since, constitutionally, we cannot appreciably affect the

rate at which our population increases in British Columbia.... I realize that

the federal government has presently embarked on a study of immigration, but,

basically, we know that a large number of people from other parts of Canada

choose to move to British Columbia. With an increase in population that we cannot,

by and large, control and with the certain limitation on what you can achieve

simply from your basic raw resources — and certainly we have found that at the

present time, with the slump in the lumber industry — it is very obvious that

if this province is to develop in any rational and intelligent way, then the

key has to be in diversification and the development of secondary industries.

The Minister has himself talked about the concept of adding

value to our raw resources in one way or another —

processing or manufacturing before they are exported. I

understand that Ontario, for example, has been very successful

in attracting many small industries. I wonder what mechanisms

or channels they have used to be successful in this regard,

which British Columbia doesn't seem to be achieving.

On that aspect, how much of our shortcomings relate to the

lack of budget given to the Minister in his own department?

Could he do a better job if he were given more money?

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

don't give him more money.

MR. WALLACE: The Member for West Vancouver–Howe Sound

says: "Don't give him more money." I was just making the point

that there seems to be a lack of achievement in this Minister's

department in terms of the two or three points I've raised

— attracting secondary industry and the processing of our

resources and so on. Why is this?

There are reasons, which I'm going to touch on in a minute,

and on which I expect the Minister to quote, particularly the

difficulties we have in getting fair play with eastern Canada

in a variety of areas such as freight rates, tariff barriers

and many of the other points that the Minister has outlined in

the provincial brief which was presented to the federal

government in February in preparation for the negotiations on

the General Agreement on Trade and Tariffs in Geneva.

Anyone who looks at the economic picture in British Columbia

has to wonder whether this Minister in his department is really

just taking a rather piecemeal approach in a rather

insignificant way to economic development, or is there some

overall blueprint, some general long-term plan which the

government is following to achieve some of these goals and

particularly the goals of widening our economic base.

As I mentioned a moment ago, the Minister put out a release

back in February entitled: "Western Industry Ministers Call for

Tariff Changes." The whole thrust of the Minister's press

release of that time is to ask for greater emphasis on the

manufacturing and processing capabilities of the western

provinces and particularly British Columbia. One of the points

which the Minister makes is that there's very limited

communication and information being provided by the federal

government to the

[ Page 2758 ]

western provinces to develop any kind of co-ordinated

position by which Canada nationally can negotiate at Geneva.

Since the Minister made the statement back in February, has

there been any improvement in the communication and exchange of

information between British Columbia and the federal

government?

I understand, in fact, that this Minister asked the federal

government if British Columbia could be represented at the

table in the negotiations on the General Agreement on Trade and

Tariffs — that it was his feeling that this gap in

information and communication was a very serious one and I

understand the request was made to the federal government that

we be involved directly in the negotiations. Could the Minister

tell us what response he got from the federal government on

that score?

Some of the other points which the Minister makes relate

very much to asking the federal government to look at the

difficulties we have in our economic development because of

tariff' barriers imposed to protect industries in eastern

Canada. I would be interested particularly in his comments, for

example, on the steel industry because we know that this

government is looking at the concept of building its own steel

mill — or building a steel mill somewhere in British

Columbia. The kind of statement that appears in the Minister's

brief to the federal government is asking to make the federal

government more responsive to western Canadian needs and

reducing its burden on western Canada.

I'd like to ask the Minister about one particular statement

that's made in the brief about the fact that manufacturing

activity is all encouraged in eastern Canada but all that

western Canada does is provide raw materials. One of the

statements is as follows:

"It results in prices of protected goods being substantially higher than they would otherwise be, and the

higher cost of protected goods consumed in western Canada

constitutes an unrecognized transfer payment, estimated to be

at $800 million per year, from western Canada to central

Canadian industry."

I wonder if the Minister could perhaps explain in some

detail what particular goods he's referring to — the

protected goods concerned — and the fact that the effect

of the tariffs on these protected goods constitutes an

unrecognized transfer payment of $800 million a year. That

seems to me to be a pretty substantial figure and I'd like to

know how that figure was derived. Which particular kind of

goods are we talking about? Is it tables and chairs, or shoes

or electric lamps, or what do you mean? Which are the protected

goods? How did you arrive at $800 million?

What progress are we making in British Columbia towards the potential that

we could manufacture these goods ourselves? I presume that the reason central

Canada wants to keep the tariffs high is to prevent the importing of these same

goods produced in foreign countries, and I presume that the Minister in turn

would like to be able to manufacture these goods and sell them abroad. It makes

a lot of basic common sense but I'm just puzzled to know why we're not making

more progress in this direction.

It's obvious that if we have to create more and more jobs,

they have to be created in the processing and manufacturing

business. But it's also equally axiomatic that if we produce

the goods and can't sell them abroad then we're not much

further forward. I was very puzzled by this specific figure of

$800 million a year that's quoted in the brief which this

province presented to the federal government prior to the GATT

negotiations.

All through the brief the Minister keeps coming back to the

point that western Canada has to look to the development and

diversification of manufacturing activity as a means of

promoting and influencing economic development. On that point,

too, I wonder if the Minister could give us some idea of what,

if any, progress is being made regarding transportation. We've

heard a great deal from the Western Economic Opportunities

Conference about freight rates. My information is that the

Premier didn't show a great deal of interest in that part of

the meeting. That's a minimal point compared to the fact that

no progress seems to be being made.

I understand that in the other three prairie provinces they

have finally got around to the point of really investigating

the costs of the railroad operations. I've done some reading on

this and find it very, very clear that there is a substantial

lack of basic information about railway costs. I understand

that Justice Hall has been appointed as royal commissioner for

the three prairie provinces to do a complete study of

branch-line costs in these three provinces.

Transportation, particularly by railroad, is such a vital part

not only of the history of this country but the continuing

economic prosperity of this country. Lord alone knows that we

have found out what happens when we have a rail strike or a

dock strike — the economy of the province just nosedives.

So I am simply saying that if British Columbia, along with the

other three western provinces, took

part in that Western

Economic Opportunities Conference and one of the outcomes is a

royal commission to try and straighten out the mess on the

railroad, why on earth is British Columbia not part and parcel

of that royal commission? I understand that the detailed

studies that are being done in the other three western

provinces do not include British Columbia. I notice the Deputy

Minister shaking his head. If I am wrong on my facts, I hope

the Minister will correct what I have stated but this is the

information that I have been able to uncover.

[ Page 2759 ]

Whether the facts are precise or not, I wonder if the

Minister could tell us what is being done to expedite a modern

transportation system. Surely British Columbia is the vital

fourth key to prairie economy in terms of transportation. If

you're shipping grain, minerals and other goods and there are

holdups in the Fraser Canyon for whatever reason, or labour

problems or a shortage of cars, the fact is that there is not

much good in even getting our raw materials out of the ground

if you can't ship them out of the ports.

One would hesitate to lay all the blame at the door of this

Minister because many of the problems, I realize, are federal

problems. But in the House the other day I asked the Minister

of Finance (Hon. Mr. Barrett) about the statement of Mr.

Marchand that the Clinton-Ashcroft connection

negotiations are going to take another two years or something.

To me this just seems to be the most blatant example of

doubletalk. The federal government screams and shouts about the

necessity of maintaining reliable transportation and

guaranteeing our foreign customers that if they buy X million

bushels of grain they will, in fact, be shipped out of our

ports and delivered by a certain date. I gather that Canada's

reputation as an exporter of some of these commodities is

extremely low at the present time. We needn't recount all the

reasons for that, but they are manifold.

I am wondering: do we as opposition Members just get up at

this time every year and scream and shout, and the Minister

gets up and says: "Well, we're negotiating; we're hoping to

make progress"? It just seems to any observer that very

little, if any, progress is being made. When one reads about

the importance of overcoming the transportation problems

related to the Fraser Canyon in the winter months, I would

think this is something of tremendous urgency to the economy of

British Columbia. Yet the few years I have been in this House,

it's a perennial question that is always asked — I don't

see any answers forthcoming.

The same situation seems to relate in some degree at least

to the problem of the ports. Again, it's quite clear that

Seattle, by forging ahead and developing container facilities

and the appropriate equipment, has stolen the lead on

Vancouver.

I understand now that Vancouver certainly is developing

container facilities to a greater degree. But, again, have we

just been asleep at the switch and find now that we could be

doing much better than we are? I understand that even some of

the goods that are ultimately shipped to eastern Canada are

transferred at some point through Seattle rather than through

the west coast ports.

I would like the Minister, if possible, to tell us more about the question

of developing a steel industry and the particular point I raised as to the tariffs

which protect the steel industry in eastern Canada. I would like to know, for

example, if we transport Canadian-produced steel from Hamilton to Vancouver:

is the total cost of the steel plus the transportation less or more than the

price at which you could buy steel from Japan? This seems to be the thrust,

not specifically related to steel. In your brief to the federal government,

when you are talking about tariffs which protect eastern Canada, this seems

to be the general kind of thrust. I am just trying to find out in specifics

if steel is one of the products in particular that you were referring to.

Just the other day there was a meeting in Victoria, I

understand, of steel producers, 10 members of what is called

the Canadian Steel Service Centre Institute. One of the

comments was made that, while one day British Columbia can

economically sustain a steel mill, the population and the

demand within our own area is not yet enough to make it

economically feasible. Maybe the Minister would care to comment

on that. I think that the last time we talked on this subject

the Minister felt that eastern Canada, for its own selfish

reasons, wasn't interested in British Columbia getting a steel

mill, regardless of its economic feasibility. I am not

particularly interested in what eastern Canada thinks. I am

interested in what we can achieve economically in British

Columbia.

On the other hand, I am not interested in forging ahead with

a steel mill to try and prove our economic status, for lack of

a better word. I think we have to be sure that before we get

into this kind of development, whether it's a steel mill or an

oil refinery, that we have to have the economic feasibility to

do it and not just simply do it to show that we are one of the

big boys who is in the race with all the other manufacturers in

eastern Canada.

On the other hand, while planning is important, and I'd

never question the need to do the amount of research that is

required, again I ask the general question: what are we doing?

We seem to be planning, researching and discussing and having

meetings and submitting briefs hither and yon but, you know, I

think it's a legitimate question to ask: what actually have we

achieved in the whole field of an overall plan for economic

development since this government took over? I know we have the

development corporation, but even it just seems to be dealing

with relatively small aspects of development. I noticed the

example of a $70,000 grant to a company producing a new type of

lens for the eye, which is fine. But, again, I say it

seems to me that in these efforts and in the various press

releases we read, the help provided by the development

corporation is not very extensive in terms of the target which

I hope we have of creating 70,000 new jobs every year.

I just want to finish off, Mr. Chairman, by touching again

on the question of the railway. It

[ Page 2760 ]

seems to me that the urgency of solving the railway problems

and transportation to the coast hasn't been given the attention

it deserves. The fact that we have such difficult terrain in

British Columbia, particularly getting the railway or any

extension or connections of the railway in the region that I

have mentioned in the Fraser Canyon, means that the costs,

presumably, are extremely high.

I wonder if the Minister could tell us that in his

negotiations with the federal government regarding the

Clinton-Ashcroft connection: is the money the big

problem? Are we arguing about what the cost is going to be or

what the sharing will be? Is it to be 50-50 or whatever?

It was most depressing to hear Mr. Marchand say that these

things take a while and he thought it would be 1978 before we

could see any work beginning on it because this is the length

of time it would take for negotiation. Now that was a quote

which appeared in the newspapers the other day and, certainly,

the Premier in answering my question in question period didn't

deny that it might take that long.

He gave another pessimistic answer saying that these kinds

of negotiations are very lengthy and tortuous. This would

certainly appear to be the case.

Finally, on this question of the railways, on the Prairies I

understand that they function on the basis of allotted costs

rather than actual costs. The accusation has been made that

many of our producers of timber and minerals and fruit are, in

fact, being overcharged for transportation costs on the railway

lines in British Columbia. The reason that you can't very well

argue for or against that, apparently, is the lack of basic

information regarding true costs, both in terms of operation

and capital costs.

As I said a moment ago, if it seems important enough to have

a royal commission to look at these very important elements on

the Prairie provinces, why is British Columbia not taking part

or seeking to be actively involved with the Hall commission in

trying to get a better and more accurate determination of the

situation on the railway lines in British Columbia?

MS. K. SANFORD (Comox): I have a few brief questions that I

would like to ask the Minister of Economic Development.

In the Courtenay area there is a need for diversification in terms of secondary

industry because the Courtenay area right now depends very heavily on the payroll

which is provided by the Canadian Armed Forces Base. Parents in the area quite

often talk to me in terms of having their own children stay in the area when

they graduate from high school or university in order to work. But because there

is very little choice as far as jobs are concerned, they are required to move

out of the area. Parents feel that there should be greater opportunity for their

own children right in the Courtenay area, and I agree with them.

Now there is a possibility of three different secondary

industries locating in the area, and I would like the Minister

to comment on each one of these.

First of all, there is the Trident Aircraft Manufacturing

Co., which has been looking for a place somewhere in the

province in order to locate. One of the areas that has been

considered, as I understand it, is Comox because of the fact

that there is a large airbase there which they could use. Now I

know that they have had contact with the Department of Economic

Development in terms of getting financial assistance. I am

wondering if the Minister could inform me at this time how the

plans are proceeding. Whether or not Trident is going to locate

at Comox, and how soon Trident might be ready to go ahead.

The other question I have concerns a group of people in the

area, and known as the Gulf of Georgia Oyster

Co-operative, interested in developing a shellfish

processing plant somewhere in the Courtenay area. Now I know

that they have done considerable work on this in order to

determine the supply of oysters and clams in the area and the

kind of processing that group might undertake. I know that

they, too, have been in contact with the department in terms of

getting funding for that project, and I am wondering if he can

give me any information about the Gulf of Georgia Oyster

Co-operative.

The third question that I have relates to a study which was

done in the Comox Bay area, as far as the harvesting of seaweed

is concerned. The University of Victoria participated with the

provincial government in doing a study of the seaweed in the

area, and determined that it would probably be economically

feasible to harvest the seaweed near Denman Island. I am

wondering if there has been any approach made to the Economic

Development department, through BCDC, for assistance in the

harvesting of that seaweed. I am not aware of any approach, and

I don't know of anyone who has talked about getting involved

commercially in harvesting that seaweed. But I think this is

another opportunity for the development of some secondary

industry in the Courtenay area.

My last question relates to a study which was being conducted through the Department of Economic Development. I

think it was a north island and mid-coast study to

determine the possibility of locating secondary industry

anywhere in the mid-island to north-island area. I

understand that this study has to do with looking at

transportation problems as well as doing a complete inventory

of resources and the possibilities of developing secondary

industry. Would the Minister please comment on this as

well?

[ Page 2761 ]

HON. G.V. LAUK (Minister of Economic Development): With

respect to the questions asked by the Hon. Member for Comox

(Ms. Sanford), first, I am informed that the Trigull operation

is still having difficulty with the federal government with

respect to funding.

As you may know, Mr. Chairman, the British Columbia

Development Corp. has already advanced over $100,000 and has

committed a further $0.5 million to the project, and we

understand that there is still some difficulty in negotiating

the funding necessary to get the Trigull aircraft into

production.

With respect to its location, I understand that Comox would

be a very advantageous site for them for a number of reasons.

It's near an air base. Another reason would be that the labour

necessary, the highly skilled labour, could come from the air

force there on their retirement and so on and this would be a

natural secondary industry for the Hon. Member's area.

Certainly we have brought this to the attention of the

Trident Co. and they are, I understand, seriously considering

that location.

They have a number of alternatives, They could remain where

they are in Richmond or they could move to Comox or they could

move perhaps to near Victoria, but these are the three major

areas that are under consideration.

The Gulf of Georgia Oyster Co-operative: well, as you

may or may not know, Mr. Chairman, the development corporation

has funded that co-operative through a loan. I'm not

aware of the recent proposal, but we certainly have found them

efficient enough to support them financially in the past, and

there's no reason why they couldn't be fully considered for any

new programmes they might have in mind.

With respect to the north coast mid-island study, that

will be available soon as the final drafts are coming into my

office and we should have an idea of the base information of

that area — what kind of economic trends we can expect to

see, what changes if any can be brought about by government or

industry of encourage or increase growth, desirable growth.

About the seaweed, I'm not informed that the seaweed study

is being monitored by our people doing a marine study for the

government. I'm not sure what the results of this study are at

the moment. I'll certainly keep the Hon. Member informed.

Interjection.

HON. MR. LAUK: Not that I'm aware of, no.

A number of questions were asked by the Hon. Member for Oak Bay (Mr. Wallace).

I'll be as brief and as precise and as speedy as I can. They were broad questions

involving a number of areas. It would take me an hour and a half or two hours

to describe to you all of the different programmes and activities that this

little department and this little staff have undertaken in an efficient manner.

I'd like to say that there's been a lot of criticism about the small number

of people involved in my department, and people have called for expanded civil

service. In my area they have called for a retraction of the civil service,

and in other areas. They have called for more budget and more money and so on.

The question of efficiency and good advice and economic

planning and assistance to the business community, and to the

people of this province does not necessarily depend on the

number of people you have or the amount of money you have to

spend. You can do so very efficiently with a small group of

people, task force oriented, very highly professional and

efficient individuals indeed. I'd like to compliment my

department. With the staff they have had they've done a

first-class job in responding to industry and government

needs in the economy.

Now the question of diversification. It's been argued that

there are two things that need to be diversified in order to

take this province away from the boom-and-bust

syndrome of a primary — extract ion, resource — based

industry. Diversify your markets to protect and keep healthy

the economy you already have and diversify your economic

activity.

The steps that must b e taken in a

primary-resource-based economy with a population

2.5 million people are not the kind of steps...you don't move

from a mine to an electronics industry. There are intermediate

steps that must be taken, and they are frighteningly slow and

are hard to encourage if your domestic market is small. These

are problems that we've all been aware of over many years, but

they are problems that don't go away. They remain with us. How

do we cope with them? Let me just briefly run down the kinds of

programmes we've undertaken.

We have actively participated in the Canadian overseas

marketing programme with the federal government and the Council

of Forest Industries. Through the efforts of that programme we

have succeeded in bringing about a change in building standards

in the Japanese housing and construction industry. They have

gone from what is called 4 x 4 construction to 2 x 4

construction, making the sizes of lumber products produced in

this Province of British Columbia more attractive to the

Japanese market.

Now that takes time. They have to train carpenters in a new

way of construction. The market avenues have to be opened and

crystallized. But this is proceeding, and the Japanese market,

increasing as it will and as it is doing now, will stabilize to

some extent our tremendous dependency on the United States

market for our sawn timber.

[ Page 2762 ]

The British Columbia Development Corp. You noticed a press

release on some optical equipment. Another Member may notice a

couple of things in his area or something may catch his

interest. But if you take the whole programme of the

corporation together, there are loans being made daily all over

the province. They are not dramatic; they are not $2 million or

$3 million a crack, or $10 million or $20 million.

We believe that secondary industry starts with the small

business. This government believes in supporting the small

businessman. We have a tremendous opportunity in this province

to see that the small businessman is really the pioneer and

forerunner of a secondary-manufacturing-based

economy because we are a primary-resource-based

economy. So we are emphasizing that.

The department and the development corporation have a

management support-service programme where we go

throughout the entire province, in the smallest of communities,

and offer courses to individuals on the simplest and most basic

small business management skills. We find that most often it is

not the finances or market, but it all has to do with

management practices, and these skills are being provided.

The loan programme is, as I said, supportive of small

businesses, and the small loans to the business of 20 employees

or less, or to the medium-size corporation of up to 100

employees, are being supported.

From these you will eventually see a base of secondary

industry in all communities in the province.

Our land programme in the development corporation is along

the same lines. It is not only to decentralize industry from

the lower mainland, but also to attract various

labour-intensive industries that could locate on

reasonably priced leased land in the province.

It takes time to deal with municipalities to get these

things rolling, to develop an industrial site that is exemplary

and in keeping with environment standards, yet trying to

achieve that goal of attracting labour-intensive industry

to the province.

In the field of research, through this government and this

department, we fund and support the activities of the British

Columbia Research Council which has developed many unique

products and carried through on several of them to see if they

could be manufactured and marketed from a British Columbia

base. In addition to that this department has had consultant

and in-house studies of every description, on every

aspect, to thoroughly canvass every idea to make sure that if

there is any technological advancement or product that could

result from any technological advancement, we take advantage of

it here in British Columbia.

Our trade mission programme has been very successful and is

going to quadruple or at least triple this year — not

taking the politicians on boondoggles and junkets, but taking

businessmen from this jurisdiction to foreign jurisdictions so

that they can diversify their markets and find new customers.

This has been very successful and it is highly supported by the

small businessmen who have participated.

That we are emphasizing the small businessman is evident.

Since 1972 we have had the greatest increase in incorporations

of small businesses in the history of the province. In the

history of this province there has never been a greater

percentage of small businesses start, survive and grow into

medium-sized businesses. That is the surest sign that we

are moving into a secondary industry phase. This

government is doing everything it can to support that.

We are also taking a look at the larger-scale projects

— copper, steel and coal. It is our opinion that looking

for added value to the resources that we have — the

better use of coal, the refining of copper, gasification of

coals, blending, marketing, transportation, economics and so on

— are the kinds of things that this department can do to

accelerate the move toward a secondary industrial base.

The Member mentioned federal harbours, tariffs, departments

and so on. I will try to cover them as quickly as I can. I'll

take these things out of order because I didn't take them down

in order.

The federal harbour board is the one that has a stranglehold

on British Columbia ports. I use the word "stranglehold"

advisedly, I do not believe that the administration, planning

and efficiency of the ports properly reflects the federal

interest, let alone the British Columbia interest. I do not

believe that it will ever be able to do so unless the maritime

province of British Columbia has an equal voice on the federal

boards that administer and plan for those ports. That will

never be the case. We have asked it. We have demanded it. We

have threatened. We have cajoled. We have been polite. We have

been impolite. We have gone every possible route.

We are presently negotiating with respect to both major

ports, as we see them, in Vancouver and Prince Rupert. But we

constantly come up against a great monolithic federal

bureaucracy. It seems to us that the bureaucracy, especially in

the Ministry of Transport, is in control of the political arm

rather than the other way around. In any event, we are

proceeding in the best way we can.

We are negotiating a voice and some strength for the

provincial government to plan and administer its own ports.

It's only until that day when it's at least equal

administration in governing of these ports that we will see an

efficient use — a visionary use — of our ports and

transportation system for the entire western Canadian region.

This has been argued for.

As far as containerization, by the way, I think that

[ Page 2763 ]

that's a glamorous issue. I don't think that as far as the

economy is concerned it is necessarily important that we have

massive containerization in Vancouver. As a matter of fact,

Vancouver's an excellent bulk-loading port and a general

cargo port. I don't think we should get too uptight if some

containerization is going to Seattle, which is a

containerization port. Some containerization is taking place. I

think that to this point, although a little below a goal that

we would set for it, it's not that unsatisfactory.

The Ashcroft-Clinton line. The British Columbia

government is ready to negotiate and sign an agreement in the

shortest possible time. As far as the federal government is

concerned, in my opinion the present Minister is suffering from

information overload, administrative overextension and a number

of other diseases that I don't know whether the good doctor for

Point Grey (Mr. McGeer) could cure. But as a result of this

kind of thing, negotiations seem to bog down. But we're ready

— we're ready. We think the Ashcroft-Clinton cutoff

is an important aspect of the railway agreements that have been

discussed in principle — some will be signed soon.

Interjection.

HON. MR. LAUK: Construction? We've got to sign an agreement

first. We're ready to negotiate and sign an agreement

immediately.

MR. WALLACE: He said 1978.

HON. MR. LAUK: Well, I don't agree with him. If he wants to

come out and see us, we can get down to it in a matter of

weeks.

As far as the tariff situation is concerned, there has been

a substantial improvement. It's by no means satisfactory; I

don't believe that I have a mandate to be the Minister in this

portfolio to be satisfied.

The federal government has agreed that we have the Geneva

negotiators constantly brief the provincial representatives

during the negotiations. That is a breakthrough from the time

when Mr. Gillespie and Mr. Turner indicated to us that there

would just be a one-shot consultation — that has

improved. We've asked to be at least observers at Geneva. We

don't ask because of federal sovereignty, we don't ask that we

participate directly in negotiations. But we want to

participate in Ottawa, first of all, where the decisions and

the policy are formulated and, secondly, to monitor that

position as it's being negotiated in Geneva. We've got the

first half but not the second half — we're working on the

second half. So things have improved.

As far as the tariff and the freight rates affecting the secondary manufacturing

industry in this province, it has been said time and time again that we are

working very hard. We have a good business community, we have an imaginative

one, but when you are working against odds like the tariff protective structure

and some of the inequitable use of freight rates in the country, it becomes

a little discouraging. The $800 million transfer payment was described as a

transfer payment by Premier Schreyer and the Premier of this province during

the WEOC conference. Those figures are not disputed by the federal government.

We have determined those figures as meaning that we must import from central

Canada goods — consumer durables — and pay high prices for them because of tariff

protection. If there were an open and fairly free market here in British Columbia,

we could purchase those goods. Because of a small domestic market here, we could

manufacture goods and export them without tariff retaliation. In whatever way

we look at it, a free — trade situation in most areas would benefit the Province

of British Columbia; the opposite — the tariff protection situation — benefits

central Canada.

Interjection.

HON. MR. LAUK: Yes, in-House studies go back a long

way.

Interjection.

HON. MR. LAUK: On steel I think it's fairly clear. It's

interesting that central Canada, just last year and the year

before when steel was in short supply on the continent, made

the western markets secondary markets. In other words, the

steel producers of central Canada supplied their customers in

the eastern areas of the continent before they would supply us.

It was not a question of what was the cheapest steel; it was a

question of steel or no steel. We either got it from the

Japanese or we didn't get it at all. They didn't protect their

customers in the west; that was the issue. It can still be the

issue. Although the market for steel has softened and we have a

supply of steel, I would say that the price could be equal or

more for Japanese steel than it is for central Canadian

steel.

AN HON. MEMBER: Not better.

HON. MR. LAUK: No, not better at this stage.

With respect to steel production in this province, there are

all kinds of people who have economic objections to it because

of the domestic market situation. I never suggested from the

beginning to this day that there is enough of a market in

British Columbia or even in western Canada for a major,

global-sized steel plant. But that's not the point. The

point is that if one can be produced with a foreign steel

producer, we can not only capture the greater part of the

domestic market but we would also have

[ Page 2764 ]

access to their market penetration on a global scale so that

we would be exporting a great portion of the steel that is

produced. This, on a global scale of steel production, is

economically desirable and feasible.

If you think of only the domestic market, of course there is

no requirement, there is no economic feasibility or viability

for such a plant. Globally there is. In our view, if it

proceeds eventually, we will see that it will be that second

step towards a secondary industrial base. We will have a

reasonably priced supply of steel. We do not have to depend on

the global market or central Canada and we will be able to use

that steel which is the base material for a lot of secondary

manufacturing operations.

Interjections.

HON. MR. LAUK: How many jobs do we think we have created?

Well, this goes on back and forth for years and years about who

is responsible for creating jobs within the province.

AN HON. MEMBER: You're not.

HON. MR. LAUK: The previous administration claimed that it

created so many jobs in so many years because that's how many

more new jobs there were. Well, I am not going to get into that

kind of a debate. As far as specific jobs are concerned, there

are thousands of jobs that have been created by this government

by its support of secondary industry and, small businesses

throughout the province. How many jobs that in turn creates in

a spin-off way we don't know. But it's rather simplistic to

come and say how many jobs you have created. The fact is that

the economy is sound, it's moving ahead, small businesses are

opening up throughout the province and people are being

employed. The unemployment rate for the last two months in this

province has dropped,

whereas everywhere else in Canada it is

on the increase.

Generally in this province the economy, the government and

everyone working together, has created about 100,000 jobs in a

year and a half. More jobs than any other jurisdiction in

Canada have been created here in the last year and a half. We

have an increasing population for the reasons that you outlined

in your remarks earlier, and the responsibility for creating

those jobs is a joint one. It's the economic community and the

government, and I think it has worked very well. It certainly

has worked better than anywhere else in the country.

MR. WALLACE: Comment on the railway commission....

HON. MR. LAUK: Oh, yes, we are thoroughly involved in that from the

beginning. I think you are mistaken to say that we are not involved. We have

been involved since WEOC. We are part of the federal — provincial committee.

We meet from time to time on that committee and we are part of the policy that

is going on. There is a new transport policy review under way in Ottawa and

we are also contributing to that.

MR. D.M. PHILLIPS (South Peace River): I certainly won't

make any lengthy speeches, as we have witnessed in this chamber

this morning. I will be brief and to the point. I think the

Minister likes the sound of his own voice. The Minister likes

the sound of his own voice. You know, if talk were music, the

Minister would be Philip Sousa.

But I was very interested, Mr. Chairman, in the Minister

saying that he's created thousands of jobs.

MR. J.R. CHABOT (Columbia River): Diatribe!

MR. PHILLIPS: Well, there's another name for it but I won't

use it in this chamber. While he has maybe created a few jobs,

he's lost millions of jobs in this province. And the policies

of his government have lost millions of jobs. The policies of

the socialist government, of which that Minister is a Member,

have cost this province tens of thousands of jobs. I don't know

how he stays in the cabinet. Well, I know how he stays in the

cabinet. I know he doesn't agree with the policies of the other

Ministers, but I know how he stays in the cabinet, Mr.

Chairman. He is a do-nothing Minister.

AN HON. MEMBER: An apple polisher.

MR. PHILLIPS: Well, apple polisher — that's a good

word for it, but he doesn't even work too hard at that. He's a

do-nothing Minister. Of all the departments in that

government, this Minister does the least. A do-nothing

Minister! I don't know how he is able to sit in cabinet,

because this is the department that was renamed the Department

of Economic Development and that department is a disaster in

this province. There is no economic development.

They talk about creating a few little jobs here and there,

while they are driving out jobs with their policies on mining

and the petroleum industry, the lumber industry. They are

driving out of this province millions and billions of dollars

of investment capital that would provide the jobs. Now we may

have a short-term period where the Minister tries to

delude the people of British Columbia into thinking that he's

doing something. But his long-term policy is going to be

complete economic chaos.

There is one point I want to bring out, and that is this

Minister's complete and total failure in dealing with Ottawa.

Oh, we've heard fancy speeches. Every

[ Page 2765 ]

time you talk to the Minister — oh, it's just around

the corner, just a few days, just another week. And the signing

of the DREE programmes.

This Minister has been a complete failure in dealing with

Ottawa, and he has left millions and millions of dollars on the

table in Ottawa that could have been available to help our

sagging economy in British Columbia, and to assist the industry

that he's been talking about — free money from Ottawa.

But this Minister's obstinance or his inability to deal with

Ottawa has left these millions and millions of dollars in

Ottawa.

I don't know, Mr. Chairman, whether the Minister is even

still dealing with Ottawa. I don't know. We hear very little

about it these days. But there were certainly lots of promises

— oh, just around the corner, going to help industry in

British Columbia to pick up free money from Ottawa, from the

Department of Regional Economic Expansion. Not one red cent is

coming to the Province of British Columbia from that

department.

I would like the Minister this morning to tell us why he

hasn't signed these agreements with Ottawa.

Interjection.

MR. PHILLIPS: Oh, we've talked about development. I remember

all the big, grandiose plans he had for the northeast part of

the province, the northwest part of the province. He was going

to help everybody. They were going to sign with Ottawa, they

were going to negotiate with the federal government, They were

going to negotiate with the senior railroad.

But what's happened, Mr. Chairman? What's happened in your

area? Nothing! Now the Minister Without Portfolio (Hon. Mr.

Nunweiler) is going to call another conference. You know, when

things go badly, call another conference. When something in

your department doesn't work, hire another head, hire some more

staff.

Mr. Chairman, I am very disappointed in this Minister, very

disappointed, because I did look with some anticipation when he

was appointed. But now he is right down with the weakest of the

Ministers, down there sitting in the corner with the Minister

Without Portfolio, right in bed with the Minister of Mines and

Petroleum Resources (Hon. Mr. Nimsick), one of the weakest

Ministers in the cabinet, and in bed with the Minister of

Transport and Communications (Hon. Mr. Strachan), the losing

Minister.

MR. CHAIRMAN: Order, please. I think the Hon. Member should

confine his remarks strictly to this Minister.

MR. PHILLIPS: I'm just using that for some comparison. I'm just using

that as a means of comparison, Mr. Chairman.

AN HON. MEMBER: Don't say the Minister of Education (Hon.

Mrs. Dailly). (Laughter.)

MR. PHILLIPS: No, I didn't say the Minister of Education. I

said the Minister of Transport and Communications — the

Minister that was born to lose. Everything he touches he

loses.

I'm going to ask the Minister to tell us in this Legislature

what he is doing in his talks with Ottawa. Where are we at? We

don't want promises. If you've broken down, if you've been a

complete and utter failure, if you're leaving all those

millions on the table, tell this House so, so that we know the

facts. But don't go on dangling that carrot in front of

industry, saying that it is coming. There are millions of

dollars waiting to be spent in industries in British Columbia

that are waiting for some of that free money that the eastern

firms get in Ontario and Quebec. British Columbia is the only

province in Canada that hasn't completed and signed subsidiary

DREE agreements, Mr. Chairman.

Why? Does the Minister have some hang-up? Why haven't we got

this programme underway? Why are we allowing those millions of

dollars to go into the eastern provinces, Quebec, Ontario, and

indeed into the Prairie provinces? Why is British Columbia the

only province in Canada that hasn't signed those

agreements?

I think the Minister should tell the House. Never mind

making great speeches about what he hasn't done, but tell us

why those agreements are not signed. We want to know. Nothing,

nothing!

MR. D.E. SMITH (North Peace River): I would yield the floor

to the Hon. Minister if he wishes to reply to the Member for

South Peace River.

MR. PHILLIPS: Oh, he lost his tongue.

HON. MR. LAUK: Largely, the timing of DREE agreements in

this province was left to the provinces. I make no apologies

about that. We were approached from the federal government to

provide a new system of DREE assistance in this province. The

money that was left on the table is not very great. I've stated

that to the Hon. Member privately; I've stated it to him

publicly; I've stated it to the people of his constituency on

several occasions.

I don't believe that running around the country raising

expectations of your constituents about DREE that is relatively

negligible is serving your community whatsoever.

MR. PHILLIPS: You're the one who made the promises.

[ Page 2766 ]

HON. MR. LAUK: Absolutely not, Sir. That is a lie. I said

that DREE would be involved.

Interjections.

HON. MR. LAUK: I said that DREE would be involved, but I

said from the beginning that the amounts would be small, and

you check that out too. Don't start raising expectations

falsely with your own constituents for cheap political

reasons.

MR. PHILLIPS: You're the one that....

HON. MR. LAUK: Ward healer. You get in there and you tell

the truth to your constituents and be responsible to them

instead of playing cheap politics in this House.

Now we had to get planning going, Mr. Chairman, and we did.

We provided the base information to the federal government and

the first of several agreements currently are in Ottawa for

approval.

I must correct something that I've said earlier, not in

these estimates, but I indicated in question period some time

ago that the first railcar at the Squamish plant would not roll

off the production line until the middle of June. I must

correct that because I have a report today that the first car

to roll out of the B.C. Railway's new $8 million railcar plant

at Squamish gets the once-over from production manager

Jim Lyon. No. 1 for the B.C. Railway is off the production

line.

AN HON. MEMBER: You just read it in the newspaper.

Interjections.

HON. MR. LAUK: You know, Mr. Chairman, these people are

amazing.

Yesterday the sky was falling. The $8 million plant had a

three-inch coat of dust on it. There was gross negligence

and so on.

The cars are being produced. This is the first car.

Interjection.

HON. MR. LAUK: I ask the Hon. Members to have some vision.

What's going to happen this fall when we start producing four

and five and more cars a day? What's going to happen when we

sign contracts with national railways to supply them with

railcars and we're providing jobs in Squamish?

Interjections.

HON. MR. LAUK ; They're upset, Mr. Chairman, when we do anything good

on this side of the House. They're a negative, carping critic of this government.

[ Page 2767 ]

There isn't one positive thing that they've said about this

government in the last three years since we've been elected,

not one positive thing. And the people of this province know

that that kind of destructive negativism is not only

unproductive in this province but it's disloyal to the people

of this province.

MR. PHILLIPS: I just want to, Mr. Chairman, set the record

straight in this Legislature. It was that Minister who went up

north and who said that he was on the verge of signing a DREE

agreement. I never brought it up until he did. He's the one

that has dangled the constituents, not only in the northeastern

section, but in the northwestern part of the province. He is

the one who said: "We are on the verge of signing the DREE

agreement."

AN HON. MEMBER: How long ago?

MR. PHILLIPS: Two years ago, and every time that Minister's

been approached — "Oh, it's just around the corner." But

I want to tell you, Mr. Chairman, he can talk and he can be

negative now about the DREE money, but he knows that millions

and millions of dollars are flowing out of Ottawa into the

Province of Ontario, into the Province of Quebec and into all

of the other provinces, and British Columbia is the only

province that hasn't signed a subsidiary DREE agreement. I

don't care in what kind of glowing terms the Minister says: "It

isn't very much now." But the Minister knows that it involves

millions and millions of dollars and it would provide tens of

thousands of jobs, and the Minister can backtrack and try and

soft-pedal, because that's all he does. He's a do-nothing

Minister. He hasn't done one thing with his department.

Mr. Chairman, I thank you for the opportunity to set the

record straight.

MR. SMITH: Mr. Chairman, I'd like to speak for a few minutes

in this debate.

We listened to the Minister a short time ago talk about the

boom-and-bust syndrome of the old government who

based all of their policies on primary resource-oriented

industry that was cyclical in its manner of employing people,

and for that reason the economy went up and it went down

according to the world markers, and he was not going to be one

of these politicians who went on boondoggles and junkets

and trips here and there. Of course, we've not seen anything as

a result of his trip to Japan. We'd really like to know, if he

knows, what the Premier's going to do when he takes this junket

to England to discuss supposedly an oil refinery with a country

that has no oil and has no means of financing a refinery in the

Province of British Columbia, let alone helping their own

economy out. So let's dispel that for a moment.

He also talks about the "negative, carping critics" of the

government and said that the official opposition had nothing

good to say about the....

HON. MR. LAUK: Never been truer.

MR. SMITH: And now he says "Never been truer."

Mr. Chairman, I'd like to speak for a few minutes this

morning, about another person who I suppose the Minister now

calls the negative, carping critic of the policies of the

NDP.

HON. MR. LAUK: That's right.

MR. SMITH: His name is Peter Pearse. Have you heard of him,

Mr. Minister? I think he has. Just to refresh your memory, Mr.

Pearse did quite an exhaustive study of the forest industry in

the Province of British Columbia. On his recommendations a

number of the policies brought forward by the now Minister of

Lands, Forests and Water Resources (Hon. R.A. Williams) came

into fruition. These were the result of the recommendations of

Peter Pearse.

It so happens that the same Peter Pearse addressed a

conference very recently — a conference of the Canadian

Association of Geographers. He. had a number of comments about

the advisability of secondary industry in the Province of

British Columbia — some very interesting comments

concerning this matter. I would like to quote from this

morning's edition of the Province , Wednesday, May

28:

"B.C.'s policy makers were advised Tuesday to be less

uncritical of the supposed blessings which the creation of new

secondary industry will bestow on the province.

"Economist Peter Pearse, of the University of B.C., told the

Canadian Association of Geographers, which is meeting here this

week, that the desirability of expanding secondary

manufacturing activity is so well accepted within and outside

government that it is seldom questioned. He counselled rigorous

examination of the belief."

Pearse apparently made no direct reference to the Government

of British Columbia. How could he after preparing a report?

"But he warned that the creation of industry not tied to

provincial resource extraction activity may well depend for

success on direct subsidies out of the public purse, protective

trade restriction, fiscal concessions, or other forms of help

to compensate for relative production inefficiency."

I think that it would be interesting to read a few other

things out of this.

"Pearse said that support for more secondary manufacturing in

B.C. appears to rest on three claims: it will increase income

levels and improve general economic well-being; it will

create more jobs, and it will tend to curb wild swings in the

province's economic fortunes.

"He said the argument that more secondary industry will

raise incomes is easily dismissed. 'Labour and capital in a

competitive market seek their highest returns, and the present

dominance of primary industries in B.C. undoubtedly reflects

the fact that returns are more often higher in primary than in

secondary activities here.'

"Pearse said that any induced shift of capital and labor

into secondary industry cannot cause wages to go up. And while

it will create new jobs, it offers no guarantee of reducing

unemployment."

That is very interesting, Mr. Minister. It offers no

guarantee of reducing unemployment. When I take my seat again I

would like the Minister to tell me if Peter Pearse is one of

these negative, carping critics that he talks about, seeing as

he seems to feel that there is good reason to question the

advisability of secondary industry just for the sake of

secondary industry in the Province of British Columbia.

"He observed that B.C. is the only province in Canada

consistently to derive half its growth from an influx of

newcomers."

That is interesting. An influx of newcomers provides half

our growth.

"He suggested that new economic opportunities will simply

draw in more labour and capital from outside the province,

rather than redirecting money and men already committed to

primary activity within B.C."

HON. MR. LAUK: Why don't you just table the whole

article?

MR. SMITH: It goes on:

"Thus secondary industry might give no relief to cyclical

unemployment in primary industries tied to fluctuating world

markets, by weaning away workers from them."

HON. MR. LAUK: Why don't you just table the whole thing?

MR. SMITH: No, it's a very interesting article.

MR. CHAIRMAN: Order, please. I would point to the Hon.

Member that it is not considered proper in Committee of Supply

to read lengthy extracts. Short extracts are usually permitted

but lengthy extracts tend to become a written speech.

[ Page 2768 ]

HON. MR. LAUK: It's better than his own speech. You better

let him go.

MR. SMITH: It goes on:

"Pearse said some may consider it desirable to expand

population growth through the creation of new secondary

industry, though he doubted whether the advocates of such a

policy are as vocal or as numerous as they used to be."

I could

go on, Mr. Chairman, because I do believe that it's interesting

to note that a man who was responsible for providing

substantial advice to this government has looked at the whole

problem of creating jobs through secondary industry. He

certainly indicates now that perhaps we should go easy on this

matter of development of secondary industry.

It's easy for this Minister to stand in his place and talk

about steel mills and the development of new petrochemical

industries and great expectations for secondary industry. But

really what we would like him to do is tell us just what he has

created in the way of new employment and jobs in the Province

of British Columbia. If you want to build a steel mill in the

Province of British Columbia, I think that one of the first

things you should tell us is where the studies are that

indicate the sources of ore. Where will it come from? Certainly

it's not going to come from known sources in the Province of

British Columbia. So it would seem that we have to bring that

ore in from offshore, transport it to Prince George and then

redirect the finished product back out to the coast. Is that

where you'll get it?

HON. MR. LAUK: Look at the answer I gave to Anderson last

year.

MR. SMITH: Well, certainly...

HON. MR. LAUK: That was yesterday's news.

MR. SMITH: ...last year and this would seem to be one and

the same in respect to anything that has been accomplished by

your department, Mr. Minister.

HON. MR. LAUK: Yesterday's news, Ed.

MR. SMITH: Yesterday's news?

HON. MR. LAUK: That's right.

MR. SMITH: Unfortunately, with your department there is no new news

— nothing that's new. No, Mr. Minister, I think that you should take a look

at the direction your department is going — be a self-analyst of what has

happened and the direction you're taking. If you're satisfied with what has

happened, fine. But I suggest that you won't be, because there's nothing really

tangible for the people of the Province of British Columbia to grab on to or

look at of a positive nature. You haven't done it yet. You've talked a lot about

it but nothing has been accomplished.

But to return to the basis of my remarks when I first took

my place in this debate, what do you...?

HON. MR. LAUK: What do the people of your constituency

want?

MR. SMITH: What do they say about you? They write you

off.

HON. MR. LAUK: No, no, no. What do they want in your

constituency?

MR. SMITH: What does the Minister say about the...?

HON. MR. LAUK: Answer that question.

MR. SMITH: I'll answer your questions when you start

answering some of ours, Mr. Minister. What does the Minister

say about the comments of Mr. Peter Pearse? Do you agree with

what he has said?

HON. MR. LAUK: Yes. Do you understand what he said?

MR. SMITH: Well, if that's true, what were you doing

filibustering for 30 minutes on the floor, talking in glowing

terms about what you were going to do in the

boom-and-bust syndrome of the previous

administration? You can't have it both ways, Mr. Minister. If

you look seriously at what he's saying, secondary industry may

not be the answer to all of the economic ills of this province

by any stretch of the imagination and the capital employed in

primary industry is better off employed there than in secondary

industry.

HON. MR. LAUK: Do you know what the people of your

constituency want?

MR. SMITH: Yes, I know what the people of my constituency

want. They want the right to enjoy a fair standard of living, a

climate created by the government that allows them to operate

effectively in a business or in business endeavours that they

have developed over the last 20 years. That's what they want

and they're not getting it from the present administration,

believe me. Some day you should go up and talk to some of them

and find out.

Mr. Minister, if you are so much enamored with secondary

industry, you can't agree with what is being said by Peter

Pearse. On the other hand, if what he has said is correct, you

must re-examine your

[ Page 2769 ]

whole policies in light of a person who has been regarded by

your party as a very good economist and one who has given

advice to more departments than just your own. I'd like the

Minister to tell me where he stands on the position taken by

Peter Pearse.

HON. MR. LAUK: I'd like to answer some of the points raised

by the Hon. Member. I think his name is Mr. Pearse.

We believe in the rigorous examination of the belief in

secondary industry. That's the process that we have been going

through. We agree with Pearse that we are not looking for

hothouse industries, artificial-type industries; that's

been the approach. Your previous administration was asked for

years for a development corporation and never did it. We

brought it in. We make loans; we don't make grants. We make

loans to economically viable enterprises. We agree with Mr.

Pearse. We're looking for more value added to our primary

resources. The Member for Oak Bay (Mr. Wallace) mentioned my

speeches; the best parts of the remarks of the Member for Oak

Bay were my speeches.

MR. SMITH: How many grants approved? How many loans approved

in your new economic development corporation?

HON. MR. LAUK: We're looking for industries that have a

natural advantage in this province using the natural labour

skills that we have and so on. I've said this for months; you

haven't been listening. I asked you what the people of your

constituency want. I read in one of your local newspapers that

what they want is your silence, Mr. Member.

Interjections.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr.

Chairman, the Minister whose vote we are assessing now has a

very heavy responsibility in this cabinet. He has my sympathy,

because he somehow has to try to make some slight moves towards

economic development in this province in a cabinet dominated by

wild spenders, economic illiterates, people who don't know that

you can't take out of the barrel more than you put in. That's

his challenge.

I don't know that he's really been rising to it, but let's

ask a few questions and see what his answers indicate. I

understand that the Minister now has on his desk the report of

the copper task force. Just let me clarity that before anything

else. Maybe the Minister could nod his head if he does, indeed,

have the report of the copper task force on his desk now.

HON. MR. LAUK: It will be released soon.

MR. GIBSON: Maybe he could give us a little preview today because this

is so critical to this province. Copper is around $500 million worth of our

export and we could upgrade more of it here. Does it recommend a smelter, Mr.

Minister? What process — the old fashioned process or the new hydro-metallurgical

kind.

HON. MR. LAUK: There is nothing old-fashioned about

this government, my friend.

MR. GIBSON: That's encouraging.

HON. MR. LAUK: Except the good things.

MR. GIBSON: Are various locations canvassed in this report?

Are there environmental studies? You can tell us these things

just to foreshadow a little bit of this report. Were companies

involved and consulted in this process? Will the government own

the smelter?

HON. MR. LAUK: Everyone was involved.

MR. GIBSON: Will the government own the smelter when it

finally comes down the pike, if there's still any copper being

mined in British Columbia at that time?

HON. MR. LAUK: We are not against private enterprise.

MR. GIBSON: There are some questions on that one.

The Minister has had some comments to make, both in recent

months and in his speech today. I want to examine him a little

bit on them. The first is a clipping of January 16, 1975, which

is headed up: "Lauk Sees Growth For 1975." There is a big

smiling picture of the Minister in this clipping.

HON. MR. LAUK: The year isn't over yet, my friend.

MR. GIBSON: I want to know if the Minister still sees things

quite so rosily. I want to know if it was his advice in this

regard that led the Minister of Finance to project such

inflated revenues. 1975 doesn't look quite so good now because

of the policies of this government.

HON. MR. LAUK: Read the article.

MR. GIBSON: "Read the article," says the Minister.

I'll read a little bit out of the article. I don't want to tax

your patience, Mr. Chairman, but he is talking here about

labour relations. He said that a more realistic approach to

labour negotiations must be attained. He said that he did not

believe, however,

[ Page 2770 ]

that these negotiations would have a significant impact on

the provincial economy this year.

I want to ask him if he still believes that in the light of

the provincial government's settlements. I want to ask him if

he still believes that in the light of the negotiations we have

coming up this summer in the forest industry. I can hardly

believe that a Minister of Economic Development would pay so

little attention to one of the basic determinants of the

economic future of this province.

A few months ago the western Premiers met. I won't ask the

Premier for an elaboration of this quote; I will ask the

Minister of Economic Development as I think he was at this

conference with the Premier. The Premier was commenting on an

agreement by the four western Premiers to have a common

industrial development strategy. He said that he hoped it would

end what he called "mindless competition for the same

investment dollar." The Minister nods his head in approval.

I want the Minister to make a note of this so that in his

reply he will tell me what investment dollar he has stopped

competing for. I think the people of British Columbia should

know that, Mr. Chairman. It's the duty of this Minister to do

what he can to get the investment dollar in British Columbia.

What ones has he stopped competing for? Don't you think that's

why the people in this province employ him? Don't you think

that's why the people in this province employ him?

HON. MR. LAUK: I'll tell you what the others have stopped

competing for.

MR. GIBSON: Maybe he has stopped competing for investment

dollars in the potash industry. If that's it, I don't mind. We

don't have any potash.

HON. MR. LAUK: I agree to that.

MR. GIBSON: But he better not have stopped competing for any

investment dollars we can use in this province.

HON. MR. LAUK: That's exactly the point.

MR. GIBSON: I want to get that clarified.

HON. MR. LAUK: You don't want to miss the point.

MR. GIBSON: In his speech today, when he was talking about the development

of secondary, tertiary and higher-function industry in this province, the

Minister said that you don't move from a mine direct to an electronic industry.

I hope the Minister is not going to take that as the policy of his department

because that's exactly the kind of thing we should be doing in British Columbia.

And we can do it in British Columbia.

Fortune magazine of June, 1974, the first

paragraph:

"A few decades ago Santa Clara County, California, was a

tranquil expanse of apricot, prune and cherry orchards." That's

even more primitive than a mine, I think you will admit, Mr.

Minister. "Now it's the place where American industry is

thrusting out its newest branches and roots. Some 800

pioneering technology companies, along with numerous service

and supplier firms, are clustered in the area, forming the

densest concentration of innovative industry that exists

anywhere in the world."

That's the kind of thing you can do, Mr. Minister.

HON. MR. LAUK: What's that again?

MR. GIBSON: You can develop an innovative,

knowledge-oriented industry complex in British

Columbia.

Interjections.

MR. GIBSON: Innovative.

HON. MR. LAUK: A research industrial park.

MR. GIBSON: You take your dictionary, and I'll take mine. I

say it's "innovative." That's what is needed.

Interjection.

MR. GIBSON: No, but you do have a dictionary.

Interjection.

MR. GIBSON: Again on this subject of "you can't leapfrog

from one phase of industrial development to another", Here's a

recent speech by an official of the Japan-Canada Trade

Council saying that that country, which has been very heavily

into secondary industry, is moving out of the

labour-intensive, heavy-polluting, material-

and energy-demanding industries into the cleaner, what

I call knowledge-intensive industries,

high-technology and high-value-added

undertakings.

This means a shift away — I am paraphrasing

that official — from steel and petrochemicals and

ship-building and manufacture of heavy machinery into

areas like undersea and engineering information processing and

dissemination, medical technology — that kind of

thing.

In British Columbia we can do that kind of thing. We have

that great essential, a climate, to attract that kind of

knowledge-oriented person from all across

[ Page 2771 ]

this country and this continent here. I would suggest to the

Minister that in particular we should be working on the

development of undersea mining technology. Considering what

this government has done to land-based mining technology,

the least they can do is to encourage our mining people to get

into the future world of mining, which is under the oceans.

Interjection.

MR. GIBSON: Mr. Minister, you stand up and tell us what this

government has done to mining all around this province. It's

one of the saddest stories of this generation. But I will be

back to that later.

So would the Minister address that point a little bit,

please?

Now this government has been systematically evading its

responsibility....

HON. MR. LAUK: Oh, a carping critic.

MR. GIBSON: A carping critic. How do you carp, Mr.

Minister?

HON. MR. LAUK: You ought to know.

MR. GIBSON: You stand up and carp a bit; then I will know

what you are talking about. I try to be a constructive critic,

try to give you a little good advice.

Interjections.

MR. GIBSON: I want to ask you what you are doing to help the

Greater Vancouver Regional District implement that aspect of

its livable region project that has to do with the distribution

of jobs around that area.

HON. MR. LAUK: That's what we are doing. Tilbury is one of

them.

MR, GIBSON: That's what I want to hear. Now the GVRD has

basically asked that there be a better job distribution around

the metropolitan area in order that there will be less travel

required to and from work and a less expensive transportation

infrastructure. They want to see the ratio in jobs on the North

Shore, for example.... The ratio of jobs to job holders is now 1 to 1.7 and they want it brought down to 1 to 1.4. The same

thing in other parts of the GVRD.

Now he's an executive vice-president of the BCR. Will

he move the BCR head office to North Vancouver? It's a simple

question. That would aid that target. It is something very

tangible that the government could do.

HON. MR. LAUK: Why not outside of the lower mainland

entirely?

MR. GIBSON: We'll listen to your explanation on that, Mr.

Minister. I would like to hear broadly what you are doing on

this all over the lower mainland, not just the North Shore. But

I am particularly interested in that question on the North

Shore.

I'll carry on with the BCR just for a moment, and this is

just a short question. I'm glad you are talking for a moment

with the Minister of northern affairs (Hon. Mr. Nunweiler). Oh,

he's not the Minister of northern affairs; he's the Minister

Without Portfolio. He didn't have the answer to this

question.

What tonnage is that Dease Lake extension going to carry,

now that your policies have shut down any chance of developing

the mines along the line that were supposed to provide a

million tons of freight?

MR. CHABOT: They're carrying doughnut holes.

MR. GIBSON: They're carrying doughnut holes, says the Hon.

Member for Columbia River. They're carrying the doughnut

hole-making machinery up there, made in the new

high-technology plants that are being developed by the

Minister of Economic Development in the lower mainland.

MR. CHABOT: Tilbury Island!

MR. GIBSON: It's a simple question, Mr. Minister. What

tonnage is that line going to carry? You're executive

vice-president of the BCR; you're an expert on these

things. What's going on there?

What about BCR taxes? It doesn't pay a cent to the district

and city of North Vancouver, and that's the southern terminus

of that railway. This government agency is evading the proper

responsibility of paying over $125,000 worth of taxes a

year.

HON. MR. LAUK: Are you against the railroad?

MR. GIBSON: I'm for equity.

HON. MR. LAUK: Come now!

MR. GIBSON: I'm for Crown corporations paying the taxes they

should. I want that executive vice-president, Mr.

Chairman, to stand up and defend the rotten policy of that

railroad in not paying their local taxes in any way whatsoever.

He can't defend it.

Interjections.

MR. GIBSON: Mr. Chairman, this is just a brief question. I

certainly hope the Minister is noting all these things down, or

I will have to ask them again. I

[ Page 2772 ]

just want to ask him briefly what he has done to keep up his

statistics department over the last year.

HON. MR. LAUK: Keep moving back and you'll fall off the edge

there.

MR. GIBSON: The Deputy Minister is writing that down. The

Minister is too busy, engaged in frivolous interchange. Maybe

the Deputy will remind him.

Next I want to ask the Minister to make a statement on the

current fundamental economic problem in British Columbia. He

owes the people this statement because some guidance, Mr.

Chairman, has to be given in the way that our economy is

unfolding.

In the short range we're in real trouble for markets because

of market conditions. The price of some of our minerals is

down.

The housing market in the United States is the one that's

sadly down. I have an economic commentary here dated April 7

from one of the brokerage houses which makes this statement.

They say there's a whole year's supply — 400,000 units

— of unsold single family homes in the United States. The

economist that's reported in this newsletter says this: "For

1975, Mrs. Mackey expects housing starts will be 1.1 million

and that starts will not get back to an annual rate of 1.8

million until the summer of '76 when the average for that year

is expected to be 1.8 million." That's even in 1976, Mr.

Chairman. That's real bad trouble for British Columbia —

real bad trouble.

Now that's the short-range, and the Minister should

not make rosy forecasts that aren't a part of the facts.

HON. MR. LAUK: You didn't read the

article then.

MR. GIBSON: The labour and management and government and

academic inputs in this province have to have an atmosphere of

reality in which to work. They can't have a rosy, arm waving

Minister who says everything's fine. They have to have some

reality. So I ask the Minister to give them reality on the

short-range picture, but on the longer-range

picture I ask him to give his colleagues the reality because

they don't know what's going on, Mr. Chairman. They don't

understand how this province works. They think that there's a

bottomless pit there of goodies that you can pull out and

spread around in any way you like without even keeping a

careful accounting of them, and that the money machine just

goes on and on and on. And it doesn't, Mr. Chairman, because

they have to understand that we are a market-export

economy, and that's how we make our living in this world.

I just want the Minister to get across to his colleagues that the maximum we

can pay in this province has to be conditioned not by what we would like to

pay — whether we pay it to people who are working, whether we are paying it

to owners of capital, whether we are paying it to people for social purposes,

any of these payments — but the maximum has to be conditioned by what we can

earn from the rest of the world. It can't come from anywhere else.

Now what we can earn from the rest of the world depends on

our costs. If we can keep our costs reasonable in British

Columbia on a net basis, taking into account the upward or

downward valuation of the Canadian dollar, we'll be all right.

If our costs start getting seriously out of line and our

investments start declining we will not be all right. The

long-term future of British Columbia in that case will

not be rosy; it will be mediocre.

There's a lot of people in the government who believe that

we are sitting, Mr. Chairman, on top of the highest-grade

resources in the world. They think that in terms of minerals

and lumber we're like the Arabs in terms of oil, that all we

have to do is name our price and the world will beat a path to

our doorstep and will pay that price.

I ask the Minister to convince his colleagues — I pray

that he will convince his colleagues — that this is not

true. That the only way that we're going to be able to make our

way in this world is not by holding people up like the Arabs,

but by holding up our end and putting out a good product at a

reasonable price that we can sell on world markets. It's only

these basic industries that pay for all of the other nice

things we want from the rest of the world, be it entertainment,

or automobiles, or appliances, or technology, or whatever it is

we want to import into British Columbia. We've got to sell some

wood or some copper or some coal to be able to pay for

that.

So the Minister has to admit a couple of propositions. He

has to admit that you can't take more out of the economy than

you can put in. He knows that. He's got to convince his

colleagues.

The Minister has to admit and has to convince his colleagues

that the export situation has to govern and that we can't allow

costs in other parts of the economy, particularly the

government part of the economy which has the power to tax and

tax and tax some more, so that it never feels losses. We can't

allow costs in the government part of the economy to start

dictating costs in other sections of the economy which make

them uncompetitive and in the end make us all poorer in this province. The government has

to show that kind of restraint in leadership. And the Minister

finally has to convince his colleagues that after all the other

costs are looked after and brought into line we have to have

investment in this province and that in our two basic

industries investment has dropped right off.

I had occasion to ask the Minister of Mines (Hon. MT.

Nimsick) if he realized that exploration drilling in

[ Page 2773 ]

this province had gone down in the first quarter of 1975

compared to the first quarter of 1974 by 99 per cent — 2,400

feet of exploration drilling reported in three months. In the

meantime Quebec has going along at 100,000 feet a month —

300,000 feet in that period, Quebec hasn't the kind of a

mineral prospect we have in British Columbia. It's good but

it's not as good as here.

Expenditures in the Yukon and the North West Territories are

up higher than they ever were before.

HON. MR. LAUK: Get back to my estimates. I'm getting

jealous.

MR. GIBSON: These are your estimates, Mr. Minister, because

you have to be the custodian of this kind of basic

understanding in that know-nothing, wild-spending

cabinet. Somehow you have got to convince these people that the

fact that there are about four drilling rigs operating now for

mineral exploration, when there were about 50 or 60 in normal

times, is not due to the state of the world copper market. This

is due to the state of the government we have in British

Columbia.

HON. W.L. HARTLEY (Minister of Public Works): Rubbish!

MR. GIBSON: "Rubbish," says the Minister of Public

Works. He's the Minister of empty offices and that's all he

knows about. He sure doesn't know about the economy, Mr.

Chairman.

HON. MR. HARTLEY: Tell us why the Gibson family shut down

Giant Mascot.

MR. GIBSON: You don't know what you are talking about, my

friend.

Interjections.

MR. GIBSON: So there are a few questions for the Minister.

With all of his problems, I would like him to come back,

finally, to the question of an economic council for B.C.

because that can help him. They can help him in his own

thinking and they can help him convince his cabinet

colleagues.

The Minister was talking earlier about internal studies that

he has on free trade. I would like him to table those studies

in this House. I take it that there is nothing confidential

about them. They would be of great assistance in the public

dialogue in this case.

AN HON. MEMBER: Didn't you get a copy?

MR. GIBSON: I don't think so, no.

AN HON. MEMBER: Well, we will send you a copy.

MR. GIBSON: Thank you.

This is the kind of basic thing that an economic council of

B.C. could do for him. It could do studies for him on resource

processing, competition in various industries, specific and

vexing economic problems like rent control that afflict our

province, questions of the maximum sustainable wage increases

in B.C., the economic impact of growth on our province and of

different kinds of people coming from other parts of Canada and

the world, the adequacy of the statistical base that his

department and Statistics Canada puts together for assessing

the state of our economy, the impact of Confederation and the

costs and benefits of it on our province — we have

discussed this many times before — and finally, Mr.

Chairman, an annual and independent report on the state of the

economy of British Columbia.

The people of B.C. are interested in the comments of the

Minister on the state of the B.C. economy. They are also

interested in the comments of the opposition. But they would

like an independent report of a body set up for this purpose,

known to be neutral and impartial and with a necessary staff to

say: "Here is where the B.C. economy has been, here is where it

is now and here is where it is going unless we change things;

and here is where it should be going." Those are the four basic

questions, in addition to specific references, that the

Minister could expect a council like that, if he had the wisdom

to set it up, to offer him and the people of British Columbia

advice on every year. I commend it again to his attention.

MR. L.A. WILLIAMS: Filibustering his vote.

HON. MR. LAUK: The Hon. Member for West Vancouver–Howe

Sound (Mr. L.A. Williams) likes his questions answered in

estimates. Because he has deserted the Liberal ranks and feels

no loyalty toward them, he figures that I should sit down here

and ignore the well-considered questions of the Member

for North Vancouver–Capilano (Mr. Gibson). Boy, how

things have changed! You so easily change, Mr. Member.

I will be as brief as possible, Mr. Chairman. The common

western development strategy is proceeding along nicely.

Saskatchewan has agreed not to get involved in

ship-building. But seriously....

Fruitful discussions were held last year between the

Ministers and officials about the kind of duplication that

could occur. We agreed to pursue areas of best advantage for

each province. That is generally an accepted practice. I think

that it is unrealistic for some provinces to pursue things that

it can be demonstrated would be so much better suited,

economically and otherwise, to another jurisdiction.

[ Page 2774 ]

We have agreements there. We have given up nothing, Mr.

Chairman, in terms of what is best for this province. We don't

need money to invest in potash or uranium. We are not seeking

out investments in those areas.

In the statistics department we created a new branch under a

director. There are six professional people. We brought in a

senior Statistics Canada man. He has been seconded to us for a

year. We wish to provide B.C. with B.C. statistics, and that is

the approach we are taking. All this from a statistics division

with one clerk in it. It is not the quantity of people but the

quality of people.

The copper task force report is in the hands of the Minister

of Mines and Petroleum Resources (Hon. Mr. Nimsick) and myself.

We are presently reviewing it and we should soon be making

comments on it.

B.C. strongly supports high technology. We gave a grant of

$0.5 million to the ocean engineering centre at the B.C.

Research Council. It is proceeding along nicely. We toured it

the other day and had a board meeting of the B.C. Research

Council, It is a good facility and will be one of the most

advanced in the world. It will be providing B.C. with

technology in some of its strongest areas of ocean engineering.

I think that you argue along with many of us, for an

industrial research park. This has been examined thoroughly by

the B.C. Research Council on our behalf. That material is being

reviewed. We saw that MacMillan Bloedel have developed their

own complex and we are looking at that and seeing if that

should affect the timing of trying to bring a research park on

stream.

MR. GIBSON: Will the study be made public?

HON. MR. LAUK: On the research park? I'll take that into

consideration; I don't see any reason why it shouldn't be, at

this date.

Yes, I know the bathtub theory of economics, Mr. Member:

you've got to put in what you take out and so on; all of us do

realize that. I think that when I make statements on the

economy it must be realized.... At the time in January.... By

the way, that

article is a good

article — it still

stands. I said that if pulp and paper holds and if there is an

upturn in the market in the United States, and a number of

these things happen, as I expect them to still do, there will

be an upturn in the second half of 1975. I haven't changed

that.

If the newspapers say: "Lauk Thinks Things Are Rosy".... I said that

there may be a growth factor of 3 per cent — I don't call that rosy.

MR. GIBSON: That's less than our population growth.

HON. MR. LAUK: That's not rosy, and I said so at the time. But certainly

I don't think we should be the doom-and-gloom boys like the Member for West

Vancouver–Howe Sound (Mr. L.A. Williams) and his comrades over there on the

Social Credit benches. Doom and gloom, that's all they talk about.

MR. L.A. WILLIAMS: Take it back. Untrue.

HON. MR. LAUK: No, no. I think, Mr. Chairman, that there's

still a great deal of indication that the economy will begin to

turn upward — in British Columbia there is already. Our

unemployment rates have dropped. In Canada they remain the same

or have increased. Surely, that should indicate something. No

one is happy with the number of people unemployed. It's silly

to suggest that we are. But at least we see some hope in the

downturn in the unemployment rate. We can see that we are

creating more jobs than in any other jurisdiction of the

province — 100,000 jobs in 18 months, Mr. Member. That's

more than in any other jurisdiction.

MR. L.A. WILLIAMS: You created them?

HON. MR. LAUK: I'm saying that this province created them

— that's the people and the government that have created

a climate where these jobs can be created.

MR. PHILLIPS: There's a big increase in social welfare.

HON. MR. LAUK: So, Mr. Chairman, the economy should turn

upwards soon. I can see that I've got a few more minutes left

to speak on some other matters. The economy should be turning

up favourably. I can see that President Ford has an election

year in 1976. We know that President Ford wants to be

re-elected. We know that efforts that should be made to

improve the American economy will have a direct reflection on

the economy in British Columbia.

MR. CHABOT: Mr. Chairman, I have a few questions to ask the

Minister, but I'm sure that time won't permit me to ask all the

questions I'd like to ask the Minister.

I do want to say that the Minister flabbergasted me this

morning. Needless to say I was immensely shocked with the

complete ignorance of that Minister, complete ignorance of

what's taking place regarding the railcar manufacturing plant

at Squamish.

The Minister told us in this House, in answer to a question

during the question period, that the railcars would start

rolling off the assembly line on June 15. Now the Minister

tells us, after having read an

article in the Vancouver

Province, that the first car has

[ Page 2775 ]

rolled off. If that isn't ignorance, I don't know what

ignorance is, Mr. Minister. It points out very clearly to me

that you are not aware of what is going on on the B.C. Railway.

You are a director of the railroad, and it appears to me that

you are not fulfilling your responsibility. No wonder there is

economic chaos, no wonder the morale is low on that railroad

when directors such as yourself are in such complete ignorance

of what's taking place on that railroad.

Mr. Minister, I never thought I would see the day when a,

Minister of the Crown would be so completely ignorant of what's

taking place relative to his responsibilities. Mr. Minister,

you are completely uninformed; you are derelict in your duties

as far as a director of the BCR. You have shocked me with your

ignorance this morning. I have been here for 12 years, Mr.

Minister, and never have I asked for the resignation of anyone

in 12 years. But I ask for your resignation as director of the

BCR because of your complete ignorance of what's taking place

on that railroad.

MR. D.A. ANDERSON (Victoria): Mr. Chairman, in view of the time, I move

the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee reports progress

and asks leave to sit again.

MR. SPEAKER: I don't think the committee has to ask leave to

sit again. By this sessional order adopted you will meet again

tomorrow morning at 10 o'clock. You have made the motion to

rise, and I don't have to deal with that either. All I have to

do is try to get ready for lunch. Well, I think we can adjourn.

It would be very useful if we adjourned the House.

Hon. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 11:57 p.m.

[ Return to Legislative Assembly Home Page ]

Copyright © 1975, 2001, 2013: Queen's Printer, Victoria, B.C., Canada