1982 Legislative Session: 4th Session, 32nd Parliament

Hansard

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

( Hansard )

WEDNESDAY, JULY 14, 1982

Afternoon Sitting

[ Page

8761 ]

CONTENTS

Routine Proceedings

Tabling Documents

Statement of Crown proceeding payments for 1981-82.

Hon. Mr. Curtis –– 8761

Ministry of Industry and Small Business Development annual report 1981-82.

Hon. Mr. Phillips –– 8761

Oral Questions

Takeover of Inland Natural Gas. Mr. Macdonald –– 8761

Cutbacks in health care. Mr. Cocke –– 8761

Mr. Nicolson

Mrs. Wallace

Tabling Documents

Agreement between governments of Canada and British Columbia and Penticton band of Indians.

Hon. Mr. Williams –– 8763

Legislative Assembly Allowances (Limitation) Act (Bill 19). Hon. Mr. Wolfe

Discharged –– 8763

Attorney General Statutes Amendment Act, 1982 (Bill 62). Committee stage. (Hon. Mr. Williams)

section 25 –– 8764

Ms. Brown

Fire Services Amendment Act, 1982 (Bill 63). Second reading. (Hon. Mr. Williams)

Hon. Mr. Williams –– 8764

Mr. Macdonald –– 8765

Hon. Mr. Gardom –– 8766

Hon. Mr. Hewitt –– 8766

Hon. Mr. Williams –– 8766

Committee of Supply: Ministry of Industry and Small Business Development estimates.

(Hon. Mr. Phillips)

On vote 51: minister's office (continued) –– 8767

Hon. Mr. Phillips

Tabling Documents

Northeast coal development agreements and reports.

Hon. Mr. Phillips –– 8767

Committee of Supply: Ministry of Industry and Small Business Development estimates.

(Hon. Mr. Phillips)

On vote 51: minister's office (continued) –– 8767

Hon. Mr. Phillips

Mr. Leggatt

Mr. Lea

Mr. Davis

Mr. Lockstead

On the amendment to vote 51 –– 8785

Division

On the amendment to vote 52: ministry operations –– 8786

Division

Appendix –– 8787

WEDNESDAY, JULY 14, 1982

The House met at 2 p.m.

Prayers.

HON. MR. FRASER: It gives me

pleasure today to introduce to the Legislature Mr. and Mrs. Jack

Ritson, former residents of my home town who now live in Tucson,

Arizona. I'd like the House to welcome them.

MR. KING:

Mr. Speaker, I'd ask the House to join me in extending a special

welcome today to two visitors from Revelstoke, Harold and Shirlee

Ludwig, along with my wife, Audrey, in the gallery.

MR. STRACHAN:

I'd like the House to welcome Mr. Jack Hayes from the Rental Housing

Council of British Columbia, who is in the members' gallery.

MR. NICOLSON:

Mr. Speaker, in the gallery today is the chairman of our party's human

resources committee, Mr. Doug Broome. Would members please bid him

welcome.

Hon. Mr. Curtis tabled the statement of Crown

proceeding payments for 1981-82, pursuant to the provisions of the

Crown Proceeding Act.

Hon. Mr. Phillips tabled the annual report of the Ministry of Industry and Small Business Development for the year 1981-82.

Oral Questions

TAKEOVER OF INLAND NATURAL GAS

MR. MACDONALD:

I've got a question for the Premier of British Columbia. He signed

order-in-council 769 on April 15, which meant that the commission found

the case of the takeover of Inland Natural Gas could not be reversed

because the government hadn't acted soon enough. They found it wasn't

in the public interest and they found that it would be used by the

boys, who are Socred fund-raisers for real estate developers and oil....

Interjections.

MR. SPEAKER: Order, please.

MR. MACDONALD:

This is the

preamble to my question. I want to ask the Premier why that

order-in-council of April 15 was signed one day after Jim Anderson and

Ben Macdonald got de facto control of Inland Natural Gas, which the

commission says is a decision that can't be reversed but is not in the

public interest, and Inland Natural Gas is going to be used as a goblet

to be drained by those boys. Why so late?

HON. MR. BENNETT:

Orders-in-council are signed in the executive council chambers on the

days on which cabinet meetings are held and on the days on which

ministers present orders for consideration.

MR. MACDONALD: Do you not realize that the order-in-council was passed

so late that you let the horse into the apple orchard and then tried to close

the gate? Was it not a charade just to allow Inland to be picked up by Social

Credit money-bags against the public interest?

Interjections.

MR. SPEAKER: The question cannot be permitted.

CUTBACKS IN HEALTH CARE

MR. COCKE:

I'd like to direct a question to the Minister of Health. The government

has boasted about the great new Children's Hospital. Now we find that

because of restraint it has been cut back 61 beds. Has the minister

decided to give the hospital the necessary funding to open to its full

capacity of beds?

HON. MR. NIELSEN: The answer to the question is that that decision has not been made.

MR. COCKE:

I have spoken to a number of people lately, and doctors are saying such

things as: "My dreams for children are shattered." The new Children's

Hospital cannot open enough intensive-care beds to look after its

caseload. Has the minister decided to stop hiding behind his

consultants and provide adequate funding?

HON. MR. NIELSEN:

No one in the Ministry of Health or elsewhere in the government is

hiding behind the consultants in any of the hospitals where consultants

may be working.

MR. COCKE: Some of the load could be

taken off Children's Hospital if regional referral hospitals were

adequately funded. Has the minister decided to investigate regional

backup facilities and, where necessary, provide funding?

HON. MR. NIELSEN:

Not necessarily accepting the conclusion reached prior to the question,

that matter is being and has been considered by people within the

ministry.

MR. COCKE: I can say that once we had planning and now we have none.

The

special-care nursery in the Children's Hospital handles seriously ill

babies from across the province. In view of the fact that the beds in

the special-care nursery have been reduced by 41 percent, what steps

has the minister taken to protect the seriously ill infants who need

those services once the beds are filled?

HON. MR. NIELSEN:

I would take that particular question on notice and ask for details

from the ministry and the Children's Hospital as to what they

anticipate the future might hold.

MR. COCKE: The

Children's Hospital administrator, John Tegenfeldt, states that as a

result of health-care cuts, the Children's Hospital has to close beds

and cancel some elective surgery, and only urgent cases are getting

attention. Jamie Woollard, a six-year-old with Perthes' disease and in

need of rehabilitation treatment, is having his treatment postponed as

a direct result of these policies.

[ Page 8762 ]

MR. SPEAKER: Order, please. The

preamble is exceedingly long.

MR. COCKE: Answers to questions have been exceedingly short.

Has the minister decided to respond to Jamie's question: "Why can't I get my legs fixed?"

HON. MR. NIELSEN: I too have seen the story that was in the Vancouver Province

this morning, which I presume is the research the member for New

Westminster is referring to with respect to this case. I have asked one

assistant deputy minister to get the precise details of the situation

at that hospital and regarding that patient, and when that information

is available we'll have the opportunity to respond to the member's

question. The information is lacking at the moment, but we have

inquired as to precisely what the circumstances of that case are.

MR. COCKE:

Mr. Speaker, I have spoken to Jamie's mother a number of times,

including today, and in the last week she's been in touch with the

minister's office, though they didn't seem to know anything about it.

MR. SPEAKER: The question, please, hon. member.

MR. COCKE: Why hasn't the minister decided to have somebody in his office that will take care of problems such as this?

HON. MR. NIELSEN:

Mr. Speaker, as I said, I will take that specific question as notice to

get details and accurate information. I think it's dangerous to make

pronouncements and draw conclusions when the research has not been

completed. I think we've seen evidence of that recently.

MR. NICOLSON:

Mr. Speaker, I have a question to the Minister of Health. The case of

an intelligent 13-year-old girl suffering from severe learning

disabilities has come to my attention. Her doctor intended to refer her

to the investigatory unit for learning disabilities, which has been

cancelled due to health-care cutbacks at the new Children's Hospital.

As time is running out for this girl and hundreds of others like her,

has the minister decided to restore funding to the investigatory unit

for learning disabilities at the new Children's Hospital?

HON. MR. NIELSEN:

Mr. Speaker, since the question is asked today, I presume the member

has not had the opportunity of forwarding that information to my office

for consideration and specific investigation. I presume that he was

advised today of the case with respect to that 13-year-old girl, and

I'm sure the member will bring the information to my attention and I

will have it looked at immediately.

MR. COCKE: Mr.

Speaker, I think that this is well known to the minister: as a result

of budget cuts the Royal Jubilee Hospital board is forced to shut down

the family and children's unit at Eric Martin Pavilion. In view of the

fact that no alternative facility remains on the Island, has the

minister now decided to restore funding for that vital service?

HON. MR. NIELSEN:

Mr. Speaker, I would suggest that the member for New Westminster is

incorrect in saying that the Eric Martin Pavilion has shut down the

specific unit he's speaking of.

MR. COCKE: Well, Mr.

Speaker, let me familiarize the minister with the fact that they're

shutting down that facility and they have not opened the one in

Vancouver Children's Hospital.

Anyway, in view of the fact

that the juvenile justice system was one of the heaviest users of the

service, as there is no alternative facility, has the minister met with

the Attorney-General (Hon. Mr. Williams) to explore the possibility of

opening, and keeping open, this vital unit?

HON. MR. NIELSEN:

I'm sorry, Mr. Speaker, I don't know what the member referred to as

"this vital unit." Now which unit are you speaking of — the one at Eric

Martin or Children's Hospital?

MR. COCKE: The family and children's unit.

HON. MR. NIELSEN: At Eric Martin or Children's Hospital?

MR. COCKE: And the Vancouver Children's Hospital.

HON. MR. NIELSEN: I haven't spoken to the Attorney-General with respect to that, Mr. Speaker.

MR. COCKE:

Mr. Speaker, in view of the fact that the Ministry of Human Resources

also makes great use of these units — potentially Vancouver, and the

one at Eric Martin — has the minister met with the Minister of Human

Resources (Hon. Mrs. McCarthy) to find a way of reopening this vital

service?

HON. MR. NIELSEN: I presume, Mr. Speaker,

that the member again is referring to the same unit at the Children's

Hospital. I have not spoken with the Minister of Human Resources with

respect to that specific unit.

MRS. WALLACE: I have a

question for the Minister of Health. More than three months ago a

severely disturbed 11-year-old was admitted to the adult psychiatric

ward at Cowichan District Hospital because there was no other place for

her. After six weeks in that institution, she was transferred to

Vancouver General Hospital, where she remained for five weeks. Four

weeks ago she was admitted to The Maples for a trial period....

MR. SPEAKER: Order, please. We must move to the question; it is now the third sentence.

MRS. WALLACE:

Mr. Speaker, I'm just coming to the question. Four weeks ago she was

admitted to The Maples for a trial period; that institution is for

12-year-olds and over.

MR. SPEAKER: Order, please, hon. member.

MRS. WALLACE:

Will the minister tell the House what action the distraught parents can

take if on Monday next the staff of The Maples decides she cannot stay

there because she is only 11?

[ Page 8763 ]

HON. MR. NIELSEN:

I will be very pleased to contact the staff at The Maples and try to

get the information relative to this specific youngster's case. Come

Monday, I will again contact the proper officials there to determine if

they have made the decision predicted by the member for Cowichan. I

would appreciate it if the member for Cowichan would provide me with

the information, which, I'm sure, she received only today since the

matter has been brought to my attention today.

MRS. WALLACE:

I spoke to the child's father on the telephone this noon, Mr. Minister.

I would ask you, Mr. Minister, what happens to other children...?

[Mr. Speaker rose.]

MR. SPEAKER:

Order, please. Hon. members, on several occasions the Chair has tried

to assist members with questions that are acceptable to the House; it

has been suggested that

preambles be of one sentence in duration.

Debate cannot be permitted in question period.

[Mr. Speaker resumed his seat.]

MRS. WALLACE:

I would ask the minister what happens to other young people who do not

have someone to bring their case to his attention. Has he decided that

providing care for emotionally disturbed children does not come under

the jurisdiction of the Minister of Health?

HON. MR. NIELSEN:

It may come as a surprise to the member for Cowichan, but many people

in the province understand procedures whereby they can bring certain

matters of importance to the attention of public officials and others.

Many

MLAs bring forth matters of concern to themselves to the appropriate

ministries in the government with frequency. Very frequently those

matters are resolved expeditiously. In other circumstances, on occasion

information is delayed somewhat inadvertently by members and others.

Specifically to the last part of the question, the answer would be no.

MR. COCKE:

While we're looking at restraint, we have a patient in this town right

now at the Royal Jubilee Hospital who was operated on three weeks ago.

Because of the fact that Gorge Road Hospital....

SOME HON. MEMBERS: Question.

MR. SPEAKER: Order, please.

MR. COCKE: Mr. Speaker, I would be embarrassed too if I were in government.

occupied a bed for three weeks when he should have been there for seven

days, but because of the Gorge Road rehabilitation beds that were

closed recently.... Has the minister decided to fund the Gorge Road

Hospital in such a way as to provide for rehabilitation care in this

region?

HON. MR. NIELSEN: I don't have the details of the Gorge Road Hospital funding here at the moment. I'll be pleased to look into that.

MR. COCKE: Headlines, for crying out loud.

HON. MR. NIELSEN: Headlines!

Mr.

Speaker, I find it very difficult to accept that member's diagnosis of

this patient's needs. I'm not quite sure of the competency associated

with it.

MR. COCKE: Would the minister accept the word of the patient's surgeon and his own doctor? Because that's their word.

HON. MR. NIELSEN: If I had a choice, yes, I would certainly prefer their opinion.

Orders of the Day

HON. MR. WILLIAMS:

Mr. Speaker, before the House Leader proceeds with orders of the day, I

ask leave to table a copy of the agreement between the governments of

Canada and British Columbia and the Penticton band of Indians, and

associated documents referred to yesterday in the debates on Bill 58.

Leave Granted.

HON. MR. WILLIAMS:

Mr. Speaker, while I'm on my feet, may I have the leave of the House to

discharge from the orders of the day the amendments standing under my

name with respect to Bill 59. That bill has already been read a third

time and passed.

Leave granted.

HON. MR. WOLFE: Mr. Speaker, I ask leave to discharge Bill 19.

Leave granted.

HON. MR. GARDOM: I ask leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Committee on Bill 62, Mr. Speaker.

ATTORNEY GENERAL STATUTES

AMENDMENT ACT, 1982

The House in committee on Bill 62; Mr. Davidson in the chair.

Sections 1 to 9 inclusive approved.

section 10.

HON. MR. WILLIAMS: Mr. Chairman, I move the amendments standing under my name on the order paper. [See appendix.]

Amendments approved.

Section 10 as amended approved.

[ Page 8764 ]

Sections 11 to 24 inclusive approved.

section 25.

MS. BROWN:

Mr. Chairman, we were told that this amendment was to correct a

typographical error. I want you to tell me whether you think this is a

typographical error. The Married Woman's Property Act as it now reads

says: "Every woman who marries or has married after April 7, 1887 is

entitled to acquire, to hold as her separate property and to dispose of

in a manner...." That word "acquire" is being taken out and instead the

word "required" is being put in its place. I want to know whether that

is a simple typographical error, because it seems to me that it is a

major change in that particular section.

HON. MR. WILLIAMS:

Mr. Chairman, it is with the greatest reluctance that I stand to

respond to the question just posed by the member for Burnaby-Edmonds.

May I read the section: "Section 7 of the Married Woman's Property Act,

R.S.B.C. 1979, c. 252, is amended by striking out 'required' and

substituting 'acquired.' You've read the

section incorrectly, hon.

member.

MS. BROWN: My most profound apologies.

Sections 25 to 30 inclusive approved.

section 31.

HON. MR. WILLIAMS:

Mr. Chairman, I have no amendment standing in my name to

section 31

which would be appropriate to be passed, but at your invitation I move

the amendments standing under my name which would add sections 31.1 and

31.2. [See appendix.]

Amendments approved.

Section 31 as amended approved.

Sections 32 to 46 inclusive approved.

section 47.

HON. MR. WILLIAMS:

Mr. Chairman, I move the amendment to

section 47 standing under my name

on the order paper. [See appendix.] By way of explanation, by reason of

the earlier amendments we have to change the proclamation section.

Amendment approved.

Section 47 as amended approved.

Title approved.

HON. MR. WILLIAMS: Mr. Chairman, I move the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill

62, Attorney General Statutes Amendment Act, 1982, reported complete

with amendments to be considered at the next sitting of the House after

today.

HON. MR. GARDOM: Mr. Speaker, second reading of Bill 63.

FIRE SERVICES AMENDMENT ACT, 1982

HON. MR. WILLIAMS:

The Fire Services Act in this province is the one which establishes the

office of the fire commissioner, and the legislation as it presently

stands provides for the imposition of a 1 percent tax on the premiums

charged by companies with respect to fire insurance coverage. By reason

of recent erroneous press statements, I wish to take this opportunity

to ensure the House that this amendment, which deals with that taxation

provision, does not impose a new tax; it deals only with the manner in

which the amounts taxable can be determined, and with the rate.

The

difficulty arises because it is rare in these days that fire insurance

in its narrower sense is written. What is written is insurance with

respect to property which covers other perils than fire alone. As a

consequence, under the existing legislation the determination of the

amount of any premium which may be related to fire coverage has been

left to the decision of individual insurers, resulting in a wide

variation in the proportion of premiums deemed to be premiums in

respect of fire coverage.

Hence, this legislation will

provide that in future the portion of the premium to which the tax will

be applied will be determined by order-in-council and will apply

equally to all property insurance — except for automobile insurance —

irrespective of which insurance company may write the coverage. This

will provide a more equitable and consistent manner for the

determination of this tax. Because this will result in changes in the

proportion of premiums which is subject to tax, and because it will

necessitate some change in the rate of tax applied, the act also

provides that the Lieutenant-Governor-in-Council may prescribe the

rate. This will be based upon experience. It is not the intention of

this legislation to impose additional tax burdens, but merely to ensure

that by the application of a fixed rate of tax set by statute, the

amount of tax recovered is inordinately high. Therefore, once the new

audit and reporting procedures under this legislation are established,

there will be an opportunity to determine what the total portion of

premiums will be, subject to the tax, and therefore to adjust the rate

of tax so as to keep the matters in balance.

The legislation

we will have following this amendment is similar to that found in other

provinces. I can only reiterate that it does not impose a new tax; it

will just provide for a fairer method of determining the basis upon

which this tax is to be paid. The tax is used to support the work done

by the fire commissioner and his staff. Their work reflects in improved

fire safety standards, and therefore in a reduction in the number of

fire losses and, hence, in the number of claims against fire insurance

companies. Therefore the use of this premium tax method which has been

in place in this province for many years is justified, and we are not

making anything more than an equitable provision for the determination,

calculation and collection of the tax.

I move second reading.

[ Page 8765 ]

MR. MACDONALD:

The Attorney-General has great faith in the government of which he's a

member — on Mondays, Wednesdays and Fridays, at any rate. You're

changing the imposition of the tax rate from being set by statute to

being set by order-in-council. It seems to me that the whole experience

of this government has been one of nickeling and diming the people of

this province by regulation, always increasing the tax imposition and

never reducing it. I suggest that this is one of those days when the

Attorney-General shouldn't trust that group that he's sitting with.

They're going to raise more money out of this bill, Mr.

Attorney-General. You know that. Who's going to pay it? The fire

insurance companies, who are mostly national or international? No, it's

going to be paid by the public of the province of British Columbia.

The Attorney-General also says that the people of British Columbia enjoy competitive fire insurance rates.

HON. MR. WILLIAMS: I didn't say that.

MR. MACDONALD: You said that the companies out there have varying rates. Didn't you say that?

suggest to you that the people of British Columbia are being soaked by

the private insurance companies. I suggest to you that ICBC has

deliberately restricted its share of the market to about 10 percent of

fire insurance sales, has met the industry rates and not given the kind

of price advantage to the people of British Columbia to which they're

entitled. Anybody who owns a house knows that with little change from

the time not too long ago when you could insure your home for three

years, now you pay that for one year only. The fire insurance companies

picked up additional revenue.

Let me quote in second

reading, to be followed by questions in committee, some of the facts of

what's happening in terms of fire insurance. If you look at the reports

of the superintendent of insurance, you find the amount that is paid

out in terms of claims, as compared to the amount received in terms of

premium income, under the heading of property insurance. By far the

largest aspect of that, of course, is fire insurance. Let me give you

those figures, bearing in mind — I'll just give you some of them at

this stage — that fire insurance is the biggest thing, and that when

the Insurance Corporation of British Columbia sells car insurance,

which is certainly a more complicated transaction than selling fire

insurance, it has an overhead administrative cost of between 8 percent

and 10 percent.

In the course of a letter to me objecting to

my comments on this subject — I do not get unanimous approval in all

sectors sometimes for what I say — the Insurance Bureau of Canada —

which did not contribute to my election expenses in Vancouver East —

said: "The average industry expense ratio in 1981 was approximately 34

percent, which included adjustment expenses." That's far too high. It's

ridiculously high compared to the way we handle auto insurance through

a public Crown corporation.

I'm saying that we have the

situation which we had in this province in relation to auto insurance

many years ago, when the private companies controlled the investment

funds and did very well out of that. They controlled the bank. Now the

fire insurance companies control the investment funds of the people of

the province of British Columbia, and the percentage we're paying in

fire insurance premiums is far too rich.

The figures reveal the percentage of the dollar you pay in fire insurance premium

that is paid out in losses year by year — and I take them at random. In 1967

it was 50 percent, in 1975 it was 71 percent and in 1979 it was 64 percent

— the latest figure from the official report. To me, 64 percent indicates 36

percent for overhead and profit, not to mention what the companies, of course,

make on the investment of the capital from the fire insurance business between

pay-in and pay-out.

HON. MR. GARDOM: That's only related to premium, eh?

MR. MACDONALD:

The exact quotations for 1979 are: direct premiums written, $304

million; direct claims incurred, $194 million — percentage paid out, 64

percent.

In the course of the letter — which was not

favourable so far as I was concerned.... I think I may have to sue on

this letter. If anybody else had seen it, some of the things they've

said here would be libelous. Since it was for my eyes only, I'd only be

able to sue myself as having seen it.

It says here that in

1981 the private companies, while making only $908 million on

investments in their underwriting portfolio.... Let me repeat that.

They're complaining in exactly the same way the international auto

insurance companies in British Columbia did prior to ICBC, which, with

all its faults, has substantially reduced the cost to motorists.

HON. MR. GARDOM: Is that $908 million for B.C. or Canada?

MR. MACDONALD:

Let me read the whole sentence, This is becoming a duet. Are you

interested in this subject? Do you pay fire insurance on your home?

It's not in Vancouver East, is it? This speech of mine is turning into

a duet with the man who took my job in 1975. Please stay out of this

for a minute: we're trying to get this session wound up.

HON. MR. GARDOM: I wish you'd left the car there.

MR. SPEAKER: Order, please, hon. members. Let's not interrupt the....

MR. MACDONALD: Do you want to be thrown out again? I'll pair with you. Who said there's no pairing in this House? Of course we have pairing.

In 1981 private insurers lost $833 million on their.... In the figure I

mentioned they were making 34 cents out of every dollar they received while

making only $908.4 million on their investments. Come on! Who are you fooling?

say that ICBC under this government is deliberately failing to compete

with private insurance companies in terms of price to the consumer.

ICBC is a pussycat with respect to fire insurance. ICBC deliberately

refuses to move into the market except to the extent of about 10

percent, I think. It's leaving the people of the province of British

Columbia to the tender mercies of the international fire insurance

companies — and I include Toronto when I say international fire

insurance companies.

In a period of inflation we're dealing

with something that affects the living costs of practically every

family in the province of British Columbia. It's time to call a halt to

this soaking of the public by the private companies in the fire

insurance field.

[ Page 8766 ]

The

tax is a minimal thing. We know it's going up. The important thing is

that some action be taken about overcharging the people of this

province on fire insurance. The investment pool into which they pay

should be used for the benefit of British Columbians; the income from

that investment pool should go to reduce their fire insurance premiums.

HON. MR. GARDOM:

Apropos the remarks of the last hon. member, it's very true that ICBC

does provide excellent service, and I believe it enjoys the lowest

administrative costs of any insurer on the continent. I think they are

to be greatly congratulated for that and for the type of operation that

they carry on. Also, a few years back when I was on the board of that

corporation, it was able to provide fire coverage when it was not

obtainable from private insurers carrying on business in B.C. The

Insurance Corporation, which my colleague the Minister of Agriculture

(Hon. Mr. Hewitt) may well wish to speak on, does indeed provide fire

coverage today at, I gather, pretty well the same rate. One reason, of

course, why the rate has increased right across the board is that homes

have become more expensive; also, the cost of repairing or rebuilding

after a fire has increased dramatically.

The member made the

point, which is very valid, that the private insurers — who are

entitled to do this if they so choose — do not plough back the amount

of their interest income into reducing the cost of premiums. Insurance

is a prepaid trust. In tough times, the prepayments don't come in quite

as quickly; very often people pay their premiums on a monthly or annual

basis. So there are other sides to the coin. But I think he made some

valid points.

HON. MR. HEWITT: I'd like to make a few

comments, since the issue of ICBC, a state-owned insurance company, has

been raised. I have sent for the ICBC annual report. When you look at

the low administration costs of ICBC, you must recognize that it is a

melded figure of automobile and general insurance. I believe the member

will find that his 8 percent figure is somewhat inaccurate. But I will

be prepared to stand corrected after I review the report and advise the

member.

My concern, Mr. Speaker, is that the member opposite

would lead you to believe that the marketplace in which competition is

available does not work. He would prefer to see 100 percent fire

insurance coverage provided by a state-owned insurance company — the

same way he and his party would prefer to see a state-owned automobile

industry in this province, and everything that the socialists could get

their hands on. We have a presence in the general insurance field, and

I am proud of the fact that it is just a presence and not a total

impact on those private insurance companies which compete in the fire

insurance or general insurance field.

When we talk about the

private insurance companies' profits, we can show the member opposite —

and I'm sure he's already aware of it — that there are substantial

underwriting losses incurred by general insurance companies in the

field. So when he makes an all-encompassing statement about this

tremendous profit made by insurance companies, I think he must also

recognize that there are substantial losses from time to time for those

same insurance companies. The resolution he would like to see, which is

a 100 percent involvement by ICBC in the whole insurance field — kick

out all the private insurers — I don't support at all. I can support

the concept of ensuring that people in British Columbia can get fire

insurance, I can support the concept to the point that we should have a

presence, but I would not support a concept that the private insurers

are "dishonest" in making a profit, and therefore should not be in the

position of selling insurance in this province.

MR. MACDONALD: On a point of order, I ask the minister: was he quoting me when he used the word "dishonest"?

MR. SPEAKER: Order, please. That's not a point of order.

MR. MACDONALD: Well, it's a point of correction, Mr. Speaker — that's what I rose on.

MR. SPEAKER: I can't find one of those in my little red book.

HON. MR. HEWITT:

Mr. Speaker, I just wanted to make that comment to the member opposite,

because he leaves the impression that there are massive profits made by

the private insurance companies on the backs of property owners. He is

fully aware that the value of the homes that are insured is up; the

cost of repairs or replacements for those homes, should there be a

fire, is up; and therefore the value of claims, should they be

incurred, would be up.

The one final point I would make, Mr.

Speaker, is that on those private insurance company profits that he is

so concerned about there are corporate taxes which have to be paid,

which contribute to provincial revenues which provide the people's

services we're so proud of.

HON. MR. WILLIAMS: Mr.

Speaker, my admiration for you, sir, grows day by day for the qualities

of forbearance that you show. This debate we have had from the second

member for Vancouver East (Mr. Macdonald), the hon. House Leader (Hon.

Mr. Gardom) and the Minister of Agriculture (Hon. Mr. Hewitt) has been

an interesting one. The only difficulty is that it has nothing at all

to do with the bill which is before the House for consideration. We're

not talking about insurance rates, ICBC or replacement costs for

destroyed houses. But I know that some offence to the rules of this

House is acceptable, and I do congratulate you on your forbearance.

MR. SPEAKER: Order, please, hon. member. This line of debate is out of order under this bill. [Laughter.]

HON. MR. WILLIAMS:

Well, Mr. Speaker, I certainly do accept your ruling. I didn't know who

was speaking on the other side of my congratulatory remarks, but if you

wouldn't like me to invite such a statement, I'm sure.... However,

we'll continue.

In closing, may I simply correct a

misimpression that the hon. second member for Vancouver East had as a

result of my opening remarks. What I said was that under the present

practice different companies have different approaches in calculating

the portion of the property premium which they attribute to fire

insurance. This legislation will correct that practice and will ensure

that there is consistency in the practice by which such determination

is made. That will ensure that maybe those companies which haven't been

making their proper contribution to this tax will do so, and it may

[ Page 8767 ]

also

ensure that those companies which have been over-contributing do not

continue to do so. I think that's the appropriate way in which taxes

should be viewed.

Mr. Speaker, I move second reading.

Motion approved.

Bill

62, Fire Services Amendment Act, 1982, read a second time and referred

to a Committee of the Whole House for consideration at the next sitting

of the House after today.

The House in Committee of Supply: Mr. Davidson in the chair.

ESTIMATES: MINISTRY OF INDUSTRY

AND SMALL BUSINESS DEVELOPMENT

(continued)

On vote 51: ministers office, $249,538.

HON. MR. PHILLIPS:

To continue on from when the House adjourned last evening, I will

depart from that line of debate. I don't want to talk about the

socialist lilies of the valley that might be growing up there and were

involved in some of the analysis that we did with regard to the

environment.

I do once again want to point out to the House

the numerous studies that were done on this development during the

period 1976 to 1980. To reiterate for the benefit of the House, this is

probably the most studied project that has ever taken place not only in

North America but indeed anywhere in the world. To add to that, I want

to say that we have studied practically everything possible prior to

making a decision. In this regard, I want to say that the cost-benefit

analysis, which I will table very shortly, was developed starting back

in 1976. Although it was not finite in its delivery, it certainly was a

guide to cabinet in making decisions as we progressed on this project.

I want the House to understand that.

I will now table the

results of studies and reports completed this past year. I know that

members of the opposition will realize what a fantastic job we have

done in putting this project together. The first document that I would

like to table is the comprehensive agreement between the province of

British Columbia and Quintette coal. The director of northeast coal

development, Mr. Basford, the Attorney-General (Hon. Mr. Williams) and

a battery of lawyers worked on this for some time. It is probably the

most comprehensive agreement that has ever been developed in putting a

project like this together, and I would like to....

MR. LEGGATT: Did they do the debenture for you too?

HON. MR. PHILLIPS:

Yes, Mr. Member, the lawyers were certainly involved in protecting the

people of British Columbia in developing that bond for $700 million,

which the companies.... Was it $700 million or $600 million? It was a

tremendous amount of money anyway.

MR. CHAIRMAN: Order, please. Possibly the member would prefer to wait until we are in the House for any tabling.

HON. MR. PHILLIPS: No, I'd like to table these now, Mr. Chairman, because I know that....

MR. CHAIRMAN: I realize that you would like to, but....

HON. MR. PHILLIPS: You mean I can't do it now?

MR. CHAIRMAN: Unfortunately, hon. member, the tabling of documents must be done in the House, not in committee.

HON. MR. PHILLIPS:

Are you sure we can't suspend the rules and ask leave of the House, Mr.

Chairman. There must be some way we can do this, because you know the

minister desires to get these documents on the table.

MR. CHAIRMAN:

No, hon. member, we cannot ask leave. The documents must be tabled in

the House proper and not in committee. It can be done forthwith when

the committee rises.

Interjection.

HON. MR. PHILLIPS . Well, do you want to look at it?

MR. LEGGATT: Yes.

HON. MR. PHILLIPS: I don't know whether I can legally do that. I'm sort of caught in a little quandary here.

MR. LEGGATT: Yes, you can do it. Trust me.

HON. MR. PHILLIPS: Yes, I move the committee rise.

Motion approved.

The House resumed: Mr. Davidson in the chair.

The committee, having reported progress, was granted leave to sit again.

HON. MR. PHILLIPS: Mr. Speaker, I ask leave to table documents. I'll tell you what they are as soon as we get back into committee.

Leave granted.

Hon. Mr. Phillips tabled agreements and reports related to northeast coal development.

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

ESTIMATES: MINISTRY OF INDUSTRY

AND SMALL BUSINESS DEVELOPMENT

(continued)

On vote 51: minister's office, $249,538.

HON. MR. PHILLIPS: Now it's perfectly all right for me to refer to tabled documents.

have just tabled the comprehensive agreement between the province of

British Columbia and Quintette Coal Ltd. I have tabled as well a

comprehensive agreement between the province of British Columbia and

Teck Corporation. As these are large legal documents. I have also

tabled the northeast

[ Page 8768 ]

coal

development notes to the legal framework; in other words, I've had the

comprehensive agreement put down so that an ordinary layperson like

myself, not a lawyer, can understand it. I have also tabled the

northeast coal development planning and implementation document, and a

cost-benefit analysis of northeast coal development.

I would

like to say a few words about that cost-benefit analysis if I may. This

analysis, which the opposition has been waiting for, is certainly a

very positive report, showing a positive return to the taxpayers of

British Columbia for the money they are investing in the infrastructure

for northeast coal. This report was prepared not only by provincial

government economists, but private-sector consultants hired by the

for all, irresponsible charges that the taxpayers of this province

would be subsidizing northeast coal by....

The figures range

from hundreds of millions of dollars to a billion or a billion and a

half. They are irresponsible statements, because the Price Waterhouse

report previous to this....

MR. HOWARD: They're accurate.

HON. MR. PHILLIPS: No, they're not accurate, my friend. They're not accurate at all and you know it.

MR. HOWARD: I know they are accurate.

HON. MR. PHILLIPS: They're not accurate.

don't want to get into an argument with the member for Skeena. As I was

saying, it puts to rest once and for all.... Maybe the member for

Skeena would rather that we not put our money in. Maybe we should

subsidize the construction of a coal mine in Peru or something that

will eventually take jobs away from British Columbians.

MR. LEGGATT: I thought you didn't like cost-benefit analyses. You told us you didn't think they're worth anything.

HON. MR. PHILLIPS:

I don't like cost-benefit analyses. I said it in the House last year.

But it's a good report, and now that we've got it we're going to live

with it. However, there are variances, and it's a very conservative

report.

The economists in my department who worked long and

hard on this report certainly deserve a great deal of credit, and I

want to give them that credit right now.

The work on this

report started in 1976. It was rough to start with and we kept

developing; but the scene changed, as you know. We had different mines,

we changed the railroad, and they were all benefits from the analysis

that we did as we went along. It's been an ongoing tool and guide for

cabinet in making their decisions.

As I've said before, I

don't think there's ever been a project put together in the history of

this province or any other province, or any state in the union or place

in North America, or probably in the world, that has been studied as

much as this project. It just shows that we have done our homework. The

project definitely is a great economic development project, not only

for British Columbia, but indeed for the whole of Canada. Because we

did our homework and moved slowly — naturally, we had to wait to get a

sales contract — this is the only project of any size happening

anywhere in Canada today. Unlike some of the other projects that were

talked about and held out as carrots — that western Canada was going

have great economic development — this little government, because we

did our homework and we did our planning, was able to put this project

together.

I want to point out to the members of the House

that this cost-benefit analysis that we have here — the one that I just

tabled — differs from the Price Waterhouse cost-benefit analysis in

that the Price Waterhouse report included government revenues from

personal income tax from the workers on the project. The cost-benefit

analysis done by our economist does not include that benefit, because

they took the attitude at that time that if the workers weren't

involved in the northeast coal project they would be involved in one of

the other megaprojects; therefore there would be no benefit because all

of the people would be employed. As you can see in the climate that

we're in now, with the economy the way it is, those people would not be

employed, because there are no other projects. Therefore the timing of

the projects could not be better in our economic history, and certainly

the member for Prince Rupert (Mr. Lea) well realizes the tremendous

impact that it is having on the largest city in his riding.

I said last night, it has been the dream of the city of Prince Rupert

since 1910 to become a major port. Well, this government recognized

that dream and did something about it, and now because of our strategy

and work, that dream for the great city of Prince Rupert has come true;

it's happening. I know there are still people around today.... They

even phone me or contact me once in a while, and they say: "Is it going

ahead? Is it happening?" Of course, I'm always pleased to say:

"Certainly it is."

There is another difference between the

Price Waterhouse report and the study done by our economists; that is,

that our economists put the report together based on 1980 dollars. The

Price Waterhouse report is in 1981 dollars, plus they have a column of

benefits in escalated dollars, which certainly shows more benefits

accruing to the taxpayers of the province. The other difference, of

course, is that both reports are based, I guess, on 7.7 million tonnes

of coal, and already we have exceeded the 7.7 million tonnes that the

study was done on. At present we have firm sales contracts for 8

million tonnes.

As you know, Mr. Chairman, I'm an eternal

optimist, and I am certainly looking forward, of course, to adding

sales contracts in the not-too-distant future, and that's where the

real benefits start.

The other point that I must make is

that the cost-benefit analysis really shows that when you write off all

of your capital, what do we have? We have that infrastructure in place

owned by the taxpayers of British Columbia for future economic

development. I'll tell you, if that isn't a good deal for the taxpayers

and for the province, I don't know what is. It is probably one of the

best deals that has ever been put together.

Again, Mr.

Chairman, for the benefit of those within hearing distance, I will not

only table these reports in the Clerk's office, but there will be

copies in the ministry library, there will be copies in the office of

the director of the regional resource analysis branch in Victoria, in

the office of the, Assistant Deputy Minister of Industry and Small

Business in Vancouver, in the office of the British Columbia coal

coordinator, in the office of the director of northeast coal in

Vancouver, in the development offices in Chetwynd and Dawson Creek, and

in the public libraries in Vancouver, Prince George, and Prince Rupert;

and there will also be internal

[ Page 8769 ]

distribution.

So we're making the reports available, as we did with the hundreds of

reports that I tabled last year, giving them as wide a distribution as

possible, because we want everyone to have access....

MR. RITCHIE: To the facts.

HON. MR. PHILLIPS:

That's right — access to the facts. I know that this minister has been

accused of hiding the facts, but it wasn't right, and the accusations,

of course, were unfounded.

There is a lot that I would like

to say about other things in northeast coal and my ministry, but I will

now take my place and allow the official opposition to compliment me on

the tremendous job that I have done. I know that my official critic is

just waiting over there to jump to his feet and tell me what a

tremendous job this ministry and the devoted and loyal staff have done

over the past year.

Certainly, if you pay attention to the

annual report that we just tabled, you will find that last year this

ministry did more work for less money. In other words, we have cut the

fat out of this ministry. There wasn't any there to start with, but

we've cut a little more of it. We run a lean ministry. Our main

objective in this ministry is performance for the taxpayers of British

Columbia. We have, with less money, produced greater results. I know

that the official critic from Her Majesty's Loyal Opposition will

recognize that when he reads the report.

Thank you for paying such detailed attention, Mr. Chairman. I look forward to saying a few words later.

MR. LEGGATT:

First of all, I want to congratulate the minister for an incredible

performance yesterday. I thought that his description of the Rocky

Mountain miniature rose and the creeping blue violets which had been

protected by the sensitivity that only this minister shows to things

like the Rocky Mountain rose was really something we hadn't seen in the

Legislature. It was a very enjoyable performance. I think the minister

is to be congratulated in deflecting hostility before he gets underway

with his estimates.

Last year we had a look at the estimates

and had a debate in the House. I thought the minister came on a bit

like Jekyll and Hyde. He seemed to change personalities depending on

the issue that he was directing his attention to. This year it hasn't

happened. This year, in fact, he has come on a little bit like Peter

Pan dancing among those Rocky Mountain roses, telling us about the

great sensitivity he has to the environment. I'm glad the minister is

now showing sensitivity, because there are a few people who have

visited Williston Lake and looked at those trees growing out of the

middle of the lake. There are some lessons to be learned in the way we

go about doing things in the province of British Columbia. The minister

is on the right track. There's some improvement in terms of the

environment.

I want to quote something the minister said

last year when he commenced his estimates. In his initial remarks last

year he said this about his performance and his government:

Those

in the workforce, those union members, are not worried about losing

their jobs; they're not worried about the economy going backward, as

they are in other provinces and jurisdictions in Canada. That is

because we have done a good job of managing the economy of the province

of British Columbia.

This year the minister was very silent about the economy of British Columbia, and he's got good reason.

We'll

leave northeast coal for a little bit. Let's talk about the economy

generally. We are now facing more bankruptcies and foreclosures than

we've ever seen in this province since the Depression. We have seen UIC

claimants in this province rise to 180,000. Over last year alone,

there's a 128 percent increase in UIC claimants. We have the worst

unemployment record west of Quebec. In other words, Ontario, with its

car industry completely under and almost totally shut down, has still

got a better employment record than the province of British Columbia.

We have a worse unemployment record than Manitoba. Saskatchewan or

Alberta. There's not much to be proud of in trying to defend this

government in what is an economic mess. As I said, it's the worst

economic record outside of Ontario.

Perhaps more

importantly, the thing that the minister has always prided himself and

his government on has been the question of job creation. In spite of

the numbers, whenever we've raised the problem of unemployment in this

province, he always says: "Oh, but we're creating more jobs than anyone

else. Well, that is no longer true. The figures from the Ministry of

Labour confirm that we created 50,000 fewer jobs this year than last

year. In spite of northeast coal, we created 50,000 fewer jobs.

What

does the Employers Council of British Columbia have to say about

investor confidence in British Columbia? They should be confident with

this free-enterprise group here running the province, but the Employers

Council says that it's the worst since the Depression. Very rarely do

we consider them close friends.

MR. RICHMOND: It's because of your Liberal friends in Ottawa.

MR. LEGGATT:

Oh, you have to blame Ottawa. Who are you going to blame next? It's

either Ottawa or the United States or "those socialists." Sometime the

buck has to stop with the government, and they have to take

responsibility for managing the economy of the province. You can't keep

hiding, behind these excuses, like "it's Trudeau's fault" or "it's

Reagan's fault."

Interjection.

MR. LEGGATT:

No, my friend. When you are government, stand up and be counted and

say: "It's our government, and we'll take responsibility, and we'll try

to do something about the economy."

Mr. Speaker, this is a

one-project government and a one-project minister. This minister has

done an aggressive job around the northeast coal question. I give him

full marks for his try in that area, but I'm afraid that it's a try

that will not bear serious analysis in terms of the viability of the

project.

Sometimes it's important to examine statistics, you

know. You want to take the areas closest to the northeast coal project.

Let's have a look at Dawson Creek. Over this year Dawson Creek has gone

from 932 people to 1,851 people drawing unemployment insurance; that's

an increase of 98.6 percent in Dawson Creek. Fort St. John has gone

from 852 to 1,785; that is up 109.5 percent. Prince George has gone

from 3,216 a year ago to the latest figure of 7,482; that's an increase

of 132.6 percent. Prince Rupert has gone from 1,302 on the dole to

2,491; that's an increase of 91 percent.

Those are the communities that are most affected by the northeast coal project. If you want to look around the

[ Page 8770 ]

province

to see what's happening elsewhere, those figures are modest. In other

areas in this province we are facing an economic crisis, an economic

disaster and, yes, a depression of the worst order. The problem with

this minister's approach is that his entire attention has been

hypnotized on one project. This is a one-project minister.

a result of concentrating on one project, we have seen the small

business sector decline to the worst condition it has been in since the

Depression. We are facing bankruptcy and ruin in the small business

sector because of the direction of public funds. The direction of this

government and this cabinet has been that the one thing that is going

to go is northeast coal. Everything else has to take second place.

congratulate the minister for the clout that he obviously has in

cabinet and on Treasury Board, and I congratulate him on doing a good

deal for his own constituency in the province. The rest of the province

is going to hell in a handbasket, my friend. The rest of the province

is in trouble.

Interjection.

MR. LEGGATT: The member for Omineca (Mr. Kempf) can groan all he likes, but he knows in his heart of hearts that that statement is true.

MR. KEMPF: You've never been to the north. Come on up to my constituency.

MR. LEGGATT:

Go outside and talk to the people in the lineups outside the Salvation

Army; go around the lower mainland and talk to people about this

economy. I'm not preaching doom and gloom; I'm preaching the reality

that's out there. You do not solve that problem by putting all your

eggs in the northeast coal basket.

If, by not being

one-project ministry or a one-project government, you had decided to

take the massive amounts of public money that are going to be spent on

building that railroad, and to use that money in alternative ways, then

you would be starting to come to grips with some of the economic

realities of this province. But instead we have allowed everything else

to go, to be sacrificed, because of the minister's dream. The minister

dreams well, but he reasons little, Mr. Chairman. The reasoning inside

this project will not stand careful analysis. The risk analysis is what

the minister should be looking at, not just the cost-benefit analysis.

He is risking public funds on that project, drying up public funds for

other purposes, because we know this business of taxing people is not a

bottomless pit. The result is that because of that concentration on one

project, a project that has internal flaws which we'll deal with.... We

can no longer be swayed by the minister's charm, because the minister's

charm won't overcome the reality of the depression in the province of

British Columbia, a depression that he is contributing to because of

the emphasis on a single project and his sacrifice of the rest of the

things that must be done.

I've had only a very brief chance

to look at the cost-benefit analysis, and if my figures are in error,

I'm sure the minister will correct me. First of all I want to quote to

the minister what he thinks about the cost-benefit analysis. This is

what the minister said on March 26, 1981, in answer to a question of

mine in the House. I asked him, in respect of the northeast coal deal,

as to whether a cost-benefit analysis has been undertaken and what

stage that analysis is in. The minister's reply was this: "In answer to

the member's question, yes, there is a cost-benefit analysis going on.

But I think the member knows as well as I do that that is not really an

exact science. It depends on who is doing the study. Cost-benefit

studies at the best of times depend on what one wishes the outcome to

be."

AN HON. MEMBER: Who said that?

MR. LEGGATT:

Who said that? "Let's face it," said the minister, "that's the reality.

That seems to amaze the socialists across the way, but that is a fact."

Well, Mr. Minister, it is a fact. Cost-benefit analysis is only a

prediction about the future — just the same as Jeane Dixon predicts the

stars — and the minister's assistants, those star-gazers in the

ministry, have tried to gloss over this project using Pollyanna

rose-coloured glasses about northeast coal. And I congratulate the

minister for putting the best light he possibly could on a project

which will still squander millions and millions of tax dollars.

I'm

going to tell the minister in some detail how I come to this conclusion

and give him an opportunity to tell me where I'm wrong. If we had

decided to sell coal or get rid of coal.... After all, we weren't using

it. No doubt the minister and I agree that we've got enough coal, and

let's sell it and make a profit. There is no dispute about that; we'll

sell coal out of the northeast, and so will the minister, and we'll

work just as hard as the minister trying to market that coal. But if

we'd said to the Japanese, "We've got coal, and you need it for your

steel mills; come on over and take it," and the Japanese said, "Well,

we will if you buy us a railroad...." That's the bottom line in the

project. We have provided the Japanese, not the province of British

Columbia, with a railroad. That railroad that the minister is so proud

of, which, by the way B.C. Rail wouldn't touch with a ten-foot pole,

knowing that it couldn't possible make a profit on the railroad....

They had to have a government handout to build the railroad.

The

key problem in the project is the subsidy on the railroad. The federal

government's negotiating stance wasn't a bad one. Even on the basis of

the minister's own cost-benefit analysis, you will see that the federal

government looks pretty good. The provincial government doesn't look

very good if you compare those numbers. When you start crunching

numbers and making a prediction for 15 or 20 years, if you make just a

tiny mistake, it becomes a foot long by the end of that 15-year period.

So we're all star-gazing, you know. We're all looking at down-side and

bottom-side. It's like trying to predict when the depression is going

to end; nobody really knows.

The cost-benefit analysis

itself comes to certain strange conclusions, and makes, I submit,

inaccurate and false assumptions. Let's look at some of them. First of

all, the ministry's officials and their consultants have used a 20-year

period, not a 15-year period, to try to determine the viability of the

project. The minister knows that he hasn't got any contracts for 20

years. He's got a 15-year contract for 7.7 million tonnes a year. Now

he's announced that he's got another 300,000. That will probably bring

it up to about 8 million tonnes a year. That's not significant. They

lose more coal off the top of the cars going into Roberts Bank than

300,000 tonnes. The minister knows that 300,000 tonnes is not

significant. The minister knows it's not, and I'm glad he's shaking his

head in agreement.

[ Page 8771 ]

HON. MR. PHILLIPS: Be responsible. You know that's not true.

MR. LEGGATT: Yes, I know it's true. I know that 300,000 tonnes will not make this project in any way viable. The minister knows it's true.

HON. MR. PHILLIPS: You know they don't lose 300,000 tonnes going into Roberts Bank.

MR. LEGGATT: I know the minister can agree with me.

MR. CHAIRMAN: Order, please. The minister will have an opportunity to respond when the member takes his seat.

MR. LEGGATT:

The minister is going to agree with me that at least 11 million tonnes

more — and probably closer to 15 million tonnes more — a year are going

to have to be carried over that railroad before the public receives any

protection with regard to its investment.

The first thing

about this cost-benefit analysis that I see is that they've used 20

years. That's the colour they put on their glasses. It makes it look a

lot better when you use 20 years. But then when I see the cost-benefit

comparison — what they call the central case — I looked to see what

they've done with the Tumbler Ridge branch line. They're using a cost

figure for the Tumbler Ridge branch line of $267.1 million. If its been

raised....

HON. MR. PHILLIPS: Look down below. Add it

up and you'll find that it's $467 million. My gosh, I'll have to come

over and help you oppose this project.

MR. LEGGATT:

All right, $467 million. It's not on the list, but I'm very happy to

accept the minister's correction. He says that they're using $467

million as the final public cost investment to build the Anzac line. Am

I correct?

HON. MR. PHILLIPS: I said that this was all in 1980 dollars, and so are the benefits.

MR. CHAIRMAN:

Order, please. Hon. members, we are in committee. A member can stand at

any time to reply, but before that happens one member must take his

seat before another member is recognized. The member for

Coquitlam-Moody continues. He is free to yield at any time to the

minister.

MR. LEGGATT: Remember that where that

figure is used — whether it be $267 million, $450 million or $460

million — if they are only $10 million out in estimating the cost of

the tunnelling and the branch line, this cost-benefit analysis goes

down the tube. What is a $10 million or $100 million error at the time

the cost-benefit prediction is made, by the end of the road becomes a

massive error.

I'm going to quote from page 4, I think, of

it. It says: "BCR revenues of $216 million are expected to exceed their

costs, excluding the branch line, by $16 million." The branch line is

the whole key to the cost-benefit analysis project. The key to the

analysis of northeast coal is that you've given a railroad away. You

have built that railroad with tax money, money that you have no hope of

recovering unless the tonnage over that line is increased to a

fantastic degree.

AN HON. MEMBER: What would you do?

MR. LEGGATT: I'm going to tell you what I'd do.

I want to note that the report says something else. One thing about those

wonderful economic star-gazers in the minister's department is that they

hedge their bets — the Jeane Dixons of the civil service. There they are predicting

that everything's coming up roses. "Only time and the efforts to implement

the project by the various participants will determine whether these projected

net benefits will actually materialize." There's nothing, definite

about that.

HON. MR. PHILLIPS: Would you stop the project?

MR. LEGGATT: No.

HON. MR. PHILLIPS: Oh, you wouldn't?

MR. LEGGATT: No, I wouldn't stop the project. But we'll tell you

what we're going to do with the project. Before we do, we want to tell you

how bad the deal is. You have a cost-benefit study that took six years. You

went into a project without a cost-benefit study, which is not a good way to

do business. You take six years to produce a report, and the minister says the

report's not worth anything anyway, because cost-benefit analysis really

doesn't count. I haven't heard him saying that today, but I hope he'll

get up and hold to the position he took in the House a year ago, that cost-benefit

analyses weren't worth the paper they were written on. You said you could

make them look like anything you wanted to, and you have. You've turned

a sow's car into a silk purse overnight with those wonderful star-gazers

of your department.

The

facts are these. First of all, round out the cost of the Anzac line at

$500 million and add the interest cost of $75 million — that's just to

get it underway. An operating subsidy will be about $7.7 million in the

first year — we're estimating that to be 1984 — and that'll give you

$582.7 million. You're going to get something back. Your surcharges on

the basis of your present tonnages are going to give you $22.25

million, so that's got to come off. That gives you a debt at the end of

the first year of $560.45 million. Without additional tonnages.... If

the minister can say he's got another 15 million tonnes, I'll be the

first one to apologize. I'll be the first one up to say

congratulations. It's a viable project. But on the basis of 7.7 million

tonnes, the minister knows — and he knew when he made that Freudian

slip in front of the press that he needed another 11 million — that the

thing won't wash. The minister is a good businessman. He has a

background in business, and I respect that. He knew this project was

dicey all the way through. He knew it in his heart of hearts. He knows

he's got to sell a pile of coal before this breaks even.

Let's go to 1985. That debt goes up to $629.96

million. In '86 it goes to $709 million. In '87 it'll be $801 million.

If you take the life of the contract.... Instead of looking through

rose-coloured glasses, I'm going to look through dark glasses. I'll

admit this is a pessimistic look — to be fair. Let's assume the

minister doesn't sell any more coal than he's contracted for. That's a

fair assumption it could happen. By 1993 we're in the glue

$1,629,000,000; by '96 we're in the value $2,329,000,000; and by 1998

we're in the glue $2,963,000,000. I know the minister can argue that

I'm not taking into account inflated dollars. Fair enough. I'll listen

[ Page 8772 ]

that

argument. But we're still looking at a project — a massive tax subsidy

— based upon the minister's hunch about world coal markets. I say to

the minister that that hunch should have been backed up with evidence

and facts.

You should have reviewed the Massachusetts

Institute of Technology's world coal study, which predicts real coal

demand for the next 20 years — and it isn't there. There is a surplus

of coal, and it's a buyer's market, and it's going to be a buyer's

market for a long time yet. Japan has shrewdly — and I give them full

credit — out-negotiated the minister to the point that we have built

them a railroad, subsidized the deal and got rid of a non-renewable

resource.

HON. MR. PHILLIPS: If it's such a bad deal, why wouldn't you guys close it down if you were in government?

MR. LEGGATT:

I'll be happy to tell you why I won't close it down. We will

renegotiate that deal and obtain, first of all, Canadian shipping to

carry that coal to Japan and get the shipping industry underway in

British Columbia, as the minister should have done. We will begin a

steel industry for British Columbia, using Japanese technology and

using the leverage of those raw resources, which the minister didn't

do. Yes, and we will produce a manufacturing assembly plant for a major

Japanese automobile firm right here in British Columbia.

Those

are minimums that the minister should have obtained before he gave away

the precious resources of British Columbia. But he didn't get it; he

didn't get it because he was desperate for a deal. The deal was built

on political emergency. The government was in trouble, and he had to

make an announcement. If the minister had kept his cool, the deal would

have been very different. He didn't protect B.C. suppliers and Canadian

suppliers. A procurement policy should have been built in, guaranteeing

that British Columbia workers and suppliers come first. Right now we're

building two ships in Korea, two in Belgium — at least the Japanese

are. We are one of the greatest ship-building provinces in the world,

but nobody gives our people a chance to build ships.

A stage

two report on procurement policy shows that a substantial amount of the

contracts don't go to British Columbia at all; they go to foreign

suppliers. Yes, I know; the conveyor belt, as the minister tells me, is

practically all being built right here in Canada, in British Columbia.

The fact is that the sophisticated technology and the engineering are

going abroad, not to British Columbia. That should have been built into

the contract and it wasn't. And we should be been producing the

railcars for that project right out of Squamish. They should never have

shut down that railcar industry.

I'm being waved at by the Chairman, so I'll be very happy to sit and listen to the minister's response.

[Mr. Strachan in the chair.]

HON. MR. PHILLIPS:

I thought the official critic for the opposition would have come down

out of the clouds, but he's still up in the clouds. He talks about

giving away those precious resources. He also says we should sell more

coal.We're not giving away any precious resources; we are providing

jobs and economic development for British Columbians. If he and his

leader continue to chastise our number one customer in public, we may

not get those additional sales.

He'd

build a steel industry in British Columbia. That's a typical socialist,

political dream that you hang out there. The government would probably

build the steel industry, just like they built the railcar plant, the

most efficient railcar plant in North America. He wanted us to keep

that open and produce cars at a cost 25 percent higher than they can be

produced anywhere else in Canada. We wouldn't have had room on the

British Columbia Railway to run the trains, to haul the merchandise in

British Columbia; it would have been filled up with railcars had we

kept that plant open for the last five or six years. That's good

political fodder, but I would have expected better from the official

opposition.

He talks about giving away those natural

resources. I wish the opposition would be realistic. Coking coal is an

international commodity, and the Japanese don't have to buy it in

British Columbia. They can buy it in Australia; in the United States;

they can buy it from China and other countries. It's an international

commodity, and it's a very competitive world out there. As I have said

before, I give a lot of praise to the British Columbia and Canadian

coal mining companies that can produce that coal and ship it four times

farther than the Australians have to ship it, and yet be competitive on

the world market. I give them credit, and I give our transportation

system credit, in spite of the fact that we're subsidizing the movement

of grain out of western Canada on the backs of merchandise moving in

British Columbia. Our lumber industry, our mining industry, our

coal-mining industry, all are subsidizing the movement of grain out of

western Canada, and have been for years. Although our railway system is

hampered by having the Crow rate on its back like a saddle, our

transportation system and our railways can still be competitive in the

world.

I'm not going to go into all of the statements that

the official opposition have made about this project, because they've

got their tongues in their cheeks when they start talking about

renegotiating it. It's good political fodder to talk about Canadian

ships. The member was in Ottawa, and he knows the decision was made in

Ottawa not to have a Canadian merchant marine. He knows that federal

laws have to be changed in Ottawa to make British Columbia companies

competitive on the high seas. I ask that member, who comes out here and

floats around that great big political promise of a Canadian merchant

marine: what did he do when he was in Ottawa to have the laws changed?

What did you do when you were in Ottawa? All you did was get in bed

with the Liberals and support some of the policies that are hampering

the economy of British Columbia and Canada today, and you know it.

Mr.

Chairman, I'm glad that that member stood in this Legislature and said

that I was a one-project minister, because nothing could be further

from the truth. With all of the negotiations that have been carried on

with regard to northeast coal, we have moved on more fronts than any

other government in Canada. You can talk about the unemployed; I'm not

happy with it. There's nothing I can do about the world market for

lumber, although this ministry, working with the lumber industry, is

indeed trying to do something to diversify our markets, and we have

been successful.

There's nothing I can do about the world

situation in the mining industry, although I am working — and our

ministry is working — to have British Columbia minerals further

processed here. That is something real; it is alive, and it will happen

within this decade or the early part of the next. It won't be an

airy-fairy steel mill that can't compete when steel

[ Page 8773 ]

mills

all over the world are having difficulty. I want to remind that member

that indeed Canada has a very efficient steel industry — one of the

most efficient in the world. I want also to remind that member that

that very efficient steel industry in eastern Canada buys its coking

coal in the United States of America. So I guess you would have to say

that the United States of America are giving away their precious

natural resources. I just wish the member would come back to earth.

want to give the member a few statistics. As the member knows, it was

this government that brought in the assistance to small enterprise

program to assist the small businessman. Since its inception we have

created approximately 1,894 jobs, and every member in this Legislature

was given a list last night, or early today, of the projects that have

taken place in his or her constituency. Mr. Member for Coquitlam-Moody,

a number of those ASEP loans have gone into your riding.

There

are approximately 3,200 jobs in our industrial park program. Our

economic development commissions have helped industry and those

interested in establishing in British Columbia. That has been one of

the best programs brought in anywhere in Canada. I didn't go out and

spend millions and millions of taxpayers' dollars establishing offices

of the Ministry of Industry and Small Business Development everywhere

in the province, but I did bring in this industrial commissioners

program so that the communities could help themselves, with our

assistance. We are working with each individual community. They hire

the commissioner; we assist in the funding. It's been a fantastically

successful program.

Our small manufacturers assistance

program, which this government brought in, has created approximately

605 jobs. Our low-interest loans assistance program, LILA, and the LISA

program have created approximately 2,325 jobs; the tourist industry

development subsidiary agreement has created approximately 2,798 jobs.

hope you are listening, Mr. Member; all in all, those programs have

created approximately 10,912 jobs. They are spread throughout the

province; it's happening out there in the community. Loan after loan

has helped the small business community off the ground to create new

products and employment. It's happening. It's been a good program.

You

talk about my being a one-project minister. All you have to do is go

out there in the real world in British Columbia and take one aspect

alone: the tourist industry development subsidiary agreement. You don't

even have to take the whole agreement; just take the ski industry

anywhere in this province. Through that agreement we are helping to

make British Columbia a 12-month-a-year recreation area. I don't care

whether you go to Mount Washington on Vancouver Island, the first

destination ski area established through that program. It has done a

great deal to help the Comox-Courtenay area. It has created hundreds of

jobs in that particular area. It helps the economy of Vancouver Island.

MR. KEMPF: Hudson Bay Mountain.

HON. MR. PHILLIPS:

Yes, I was just going to mention Hudson Bay Mountain in Smithers, which

brings in hundreds of skiers in the wintertime from the neighbouring

province of Alberta.

You can talk about Whistler. You can go to Hemlock Valley. You can go into

the Kootenays. You can go into Kimberley. Unfortunately, I couldn't be in

Kimberley last Saturday when we opened up that fantastic development, which

was a result of positive programs brought in by this ministry.

You

can go to Panorama, Penticton, Kelowna, Kamloops or Vernon. You can go

anywhere in this province. I'll tell you that my dream of making

British Columbia the Austria of North America will eventually come true

because of the initiative....

You say I'm a one-project

minister. Just go up the Island to Duke Point. When that socialist

opposition was government there was no development at Duke Point; you

held it up because you couldn't negotiate with the federal government.

What was one of the first initiatives of this ministry? To get that

fantastic development going at Duke Point. Now we have an industrial

park which will be home to flourishing industries before the end of

this decade.

Go to Roberts Bank. What's happening at Roberts

Bank? Hundreds of people are being employed today. It will be another

major development here in British Columbia to carry resources in the

future. I'm looking to the future. This ministry could never be accused

of just living from election to election. Our plan has been from decade

to decade — long-term planning. The results are happening right here

today.

I want to tell you, Mr. Chairman, that if it hadn't

been for the forward planning and the projects that this ministry has

brought in.... You think British Columbia has unemployment today, my

friend; I hate to think what it would have been if you, with your

socialist policies, had been government during the last few years.

Northeast coal wouldn't be going ahead. You'd still be arguing about

Duke Point. There be no agreement with the federal government. There'd

be no LILA, ASEP or TIDSA; none of those programs would have been

signed. But you would have had a post office on every corner, and

make-work programs.

I want to tell you something, Mr.

Chairman. That member over there talks about subsidizing northeast

coal. It has been proven, not only by an in-house study but also by an

external study, that the Japanese steel industry is paying for a new

port at Prince Rupert; they're paying for the upgrading of the Canadian

National Railway from Prince George to Prince Rupert, which will serve

the farmers and other producers in western Canada who will ship their

goods through the port of Prince Rupert; they're paying for the Anzac

line; they're paying for the new town of Tumbler Ridge; they're paying

for that new power line from Peace River to Tumbler Ridge; and they're

paying for highways in my constituency. As I said, never before in

history have highways been included in the cost-benefit analysis study

or charged to a project. The government should have provided those

roads without putting them in, but we have put everything into the cost

of that project.

I want to talk about a few other projects,

not necessarily relevant to my ministry. Originally the socialists

opposite who talk about unemployment today were against northeast coal.

They didn't want the project to go ahead. This summer it will be

providing 5,700 jobs in the construction industry. The other

announcements that I made in this House recently.... The grain and bulk

liquids terminal going ahead in Prince Rupert will be providing

thousands of jobs.

The Minister of Energy (Hon. Mr.

McClelland) is holding a press conference in the morning, and I presume

he's going to make another announcement about economic development in

the province of British Columbia; something

[ Page 8774 ]

that has had forward planning. And you say that I'm a one-project minister.

MR. LEGGATT: I think you're feeling guilty.

HON. MR. PHILLIPS:

It's not so. As I said before, I could be out there practically every

day, opening up some new job-creating project in this province, because

people are coming to British Columbia. In a time when the economy is

low, who's making announcements about projects going ahead? What other

province in Canada is making announcements about projects going ahead?

Name them. There is none. But because of the forward planning of this

ministry, looking ahead in a time of economic recession, projects are

going ahead.

There are projects on the planning board now,

and they will be announced in due course. The economy of the province

of British Columbia is not dead. People are still looking to the

province of British Columbia because of the policies of this

government. You won't find anywhere else in North America the projects

on the planning board and being announced that you will find right here

in the province of British Columbia. Those are facts that the

opposition have to live with. We have done our homework. People are

being employed. Money is coming in. Investment is still going on in

this province. You name me another province in Canada that has as

bright a future.

I realize that our major industry, the

lumber industry, is having some difficult times in the international

marketplace. But we are working to correct that so that our markets

will be diversified. It disappointed me when the official opposition

critic took the side of the automobile manufacturing industry in

eastern Canada and said that what the federal government was doing in

slowing up the movement of Japanese cars through our province.... He,

at that time, was working and talking against employment in the

province of British Columbia. What they are doing over there, in the

first place, is totally illegal. It doesn't fit in with the general

agreement on tariffs and trade. He doesn't seem to realize that 50

percent of the goods and services that are sold to Japan come out of

British Columbia. He was taking a very parochial view, supporting jobs

in eastern Canada and Ontario against the interests of the province and

the people that he is supposed to represent.

Nobody in

British Columbia supports that view. There are many statistics that I

could get into. There are many other projects that I could talk about,

but I don't think that I would convince the member opposite, because I

think he's being political in this Legislature.

I can

remember — it wasn't too long ago — when the official opposition were

saying that when northeast coal went ahead, it would kill the

southeast. Nothing could be further from the facts, because in the

southeast today we have three, and maybe four, mines that are going

ahead. Three are definitely going ahead, and there is going to be one

opened in August. Additional millions of tonnes of coal have been sold

out of the southeast since the northeast project was announced. We're

not only diversifying our markets into Japan. Every time I go on an

overseas trip, the opposition stands up and criticizes the amount of

money I spend. They say that I'm taking junkets and that I don't

produce anything. Nothing could be further from....

MR. LEGGATT: I've never said that.

HON. MR. PHILLIPS: Well, maybe you haven't, Mr. Member, but some of your colleagues have said that.

want to tell you, Mr. Chairman, and I want to tell all the members of

the House, that in British Columbia we have to be more aggressive than

we have been in the past in merchandising our goods and products. A

time of economic downturn is the time we should be putting more

emphasis on it. That is why we cooperated with the lumber industry.

They said: "We can't afford the money this year for our travel budget

to promote our sales in overseas nations." I went to them and I said:

"I can deal with you. We'll fund it entirely if we have to, but now is

the time you've got to go out."

We have had missions here. I

invited a mission from Korea when I was there and had the opportunity

to break into that market. We're making great inroads into the Japanese

market, Holland, Italy and the United Kingdom. We're working in the

North African market, and we're doing a good job in Australia. We will

be tapping new markets and putting in new initiatives, because that is

the type of operation that at this time in history we should be putting

more effort into and, indeed, we are.

I want to tell you

that there are jobs being created here in this province. Although the

economy is depressed at this time and a lot of people are laid off in

our two major industries, there are things happening, Mr. Chairman, in

this province.

So I hope I've answered all of the members questions, and I'll listen for more.

MR. LEGGATT:

Mr. Chairman, I want to deal with a couple of areas the minister has

raised and a new one that hasn't been raised. Perhaps I can deal with

that one while I think of it. It is the question of the employment of

native people, women and local people in the project itself. Reading

the stage two proposals, there is no affirmative action program, but

there is a best-efforts clause in the document in which the companies

say they'll use their best efforts. It seems to me, Mr. Chairman, that

that's not good enough. The minister should guarantee that local

people, natives and women will be trained for that particular project.

The reason I'm making this point, Mr. Chairman, is that in the northern

boom-town psychology, using local people is by far the best social atmosphere.

Too often in northern communities people from the south, where I live, come

to the north with a view to making a stake and getting out. And I think northern

people would like to have permanent residents — people who wish to make their

lives in that community.

The

idea, for example, of a husband and wife both working in the coal

industry is very desirable, both of them trained and bringing home

incomes. It seems to me that the minister is probably in agreement on

this subject. He wants to see this happen in Tumbler Ridge and so do we.

Interjection.

MR. LEGGATT:

We'll deal with the question with the unions. The fact is that the

unions have not been approached prior to the commencement of the

project. It seems to me that the minister should move now. I realize

that the construction phase is probably a time when it would be very

difficult to change the hiring-hall procedure for the construction

work, but I think it's worthwhile.

For example, I

congratulated the Premier the other day. I thought it was a good idea

that we got the three elements in the economy together and sat down and

talked. I think we

[ Page 8775 ]

could

do that on the northeast coal project, and I think you'd get some

cooperation from the union movement, Mr. Chairman. I think they just

have to be approached to make some changes in the hiring-hall practice

to provide room within their unions for training of local people and

natives so that they're guaranteed that they get a piece of this action

in the north.

I'm making a constructive suggestion, not a

negative suggestion. My only criticism really is that this should have

been confirmed and done before the project was along as far as it is

now. If that's going to be a viable community, it'll be a viable

community because people are there to make their permanent home in that

community. If this is where they want to live and this is the

life-style they enjoy, they don't want to go up and make a quick buck

and fly back to the comfort of Vancouver or one of the lower mainland

cities, which is a different atmosphere. All of us have different

lifestyles; there are people who enjoy the north and there are people

who don't. I feel emphasis should be put on making sure that the jobs

the minister is creating go to those people in the north.

want to deal with another question the minister raised, which is the

question of Japanese car imports. It's a little off the point, but in a

way is connected with the whole style of negotiations with the

Japanese. I was in Japan about three years ago, and in those days they

had grading requirements on B.C. lumber where Canadian lumber suppliers

were being beaten out every day because non-tariff barriers at the

docks were preventing our manufacturers from getting into the Japanese

market. Today we still have a 10 percent tariff in Japan on B.C. lumber

products. Try to enter the Japanese market with any manufactured

product from North America, Mr. Chairman — just try it.

Japan

has got to learn that trade is a two-way street. I know that the

minister is going to say that I'm kicking the Japanese around. Well,

sometimes you've got to get hard-nosed with the Japanese, because

they're the most effective traders and negotiators in the world, as

they demonstrated in their negotiations over northeast coal. A

temporary attempt to influence the Japanese in the way we have opened

our car market to them is not such a bad thing. I agree with the

minister that it shouldn't be permanent. I think there is a point where

the lesson has sunk home and now we get serious about the way we have

our trading relationship with the Japanese. If we continue to simply be

suppliers of raw products, hewers of wood and drawers of water, and do

nothing to make our high-technology industry sophisticated enough to

compete in the Japanese market — and it's a great market in Japan....

should be into that market in a very large way. We're not going to do

it if every negotiation just means that they get our raw products, but

they don't have to take anything that's manufactured, sophisticated and

highly job-creating

That is why, on a temporary basis, I

support efforts of the Canadian government to say that we can't lie

down and play dead with the Japanese. We have got to deal on equal

terms with that incredible market, with that incredibly sophisticated

economy, which is much more planned, I might say, than the one that we

labour under here. I make no apologies for the position that I took

with regard to the imposition of a non-tariff barrier — a barrier and a

name that was invented by the Japanese. They've been imposing

non-tariff barriers on products from around the world as long as

they've been trading. There's nothing the matter with showing them that

two people can play the same game. But I would agree that there's no

point in cutting off our nose to spite our face forever, and we can

withdraw that, having shown that we can be just as tough as they are in

dealing with international trade.

You can't trade

internationally on the basis that our markets are completely open and

you can take anything you want, except that you'll refuse all our

manufactured products. That's the situation we now have in Japan, and

it's got to change and the minister has got to help. Instead of just

fighting the federal government it's time the minister helped in

international negotiations so the Japanese understand they must take

Canadian manufactured products — particularly British Columbia's. Yes,

it's time we had a look at that tariff barrier on lumber in Japan. Let

us show the Japanese we're dealing with them on an equal basis, because

at the moment I don't think they get that impression from dealing with

the Canadians.

You have a northeast coal transaction in

which 38 percent of the Quintette mine is now owned by the Japanese

steel industry. That project would not have been financed without

Japanese interest rates becoming involved. It's interesting that

Japanese interest rates are now among the lowest in the world. Maybe we

should study their economy as to how they were able to keep their

interest rates down.

There would not have been financing

available without Japanese money which could reduce the onerous rates

we have now. This project could not have flown at all, on the private

side, without what is in effect a Japanese subsidized rate in terms of

the loan position. I don't know what the percentages are — those have

never been released — as to which bank holds which percentage of the

very large loans that Quintette has taken. We'll wait and see with

that. But there's no doubt that Japanese interest rates have persuaded

the private sector that the thing was viable. It was not viable on

Canadian rates at the present time, which perhaps is a lesson to the

Canadian government that we've got to have a made-in-Canada interest

policy, because we can't even make our own projects fly with Canadian

money. We've got to go abroad for an economy that's sensible enough to

keep its interest rates at a reasonable level.

That's all I have at the moment.

HON. MR. PHILLIPS:

I appreciate what the member has said with regard to jobs for

northerners. But as you know, during construction it's under the

construction union. It's the construction union that has the closed

shop — the worst in hiring-hall practices. Lord knows, I'd like to be

able to do something, not only for the native people up there but also

for my own constituents. You know that if there's an electrician out of

a job in Calgary, Winnipeg or no matter where, and there's a job, the

union boy gets it first. They won't allow members to join. That's the

way it is in the construction industry. It's a closed-shop union deal.

I've

argued with the union leaders. I could talk to you and have quite a

discussion on that, because it gets into apprenticeship, training

technicians and the whole deal. I think the union leaders would sooner

see people unemployed with no trade than they would unemployed

electricians, carpenters or tradesmen. They don't want any surplus of

technicians on the market. That's their attitude. It's a fact of life.

I certainly don't agree with it.

With regard to permanent

jobs in there, I think it would certainly be for the benefit of the

coal companies to have northern people employed in the mine. I think

that will happen. As a matter of fact, I know it will happen. We're

already having negotiations with the federal government on

[ Page 8776 ]

that

particular aspect of it. I think a lot of those jobs should be trained

for. I've met with the native people there. I said: "Look, you should

get in there now and start talking to the companies about providing

them with people for the jobs that are available, because it's going to

be an excellent opportunity." They're good workers. There will be lots

of opportunity, because there will be a turnover. A lot of people who

go up there from the lower mainland to work and who are not

acclimatized will not stay. There's going to be opportunity for the

local people.

I don't want to spend a great deal of time on

this Japanese car deal, other than to say that the grading requirements

on Canadian lumber, because of the negotiations that I've had with the

Japanese, are now removed. I still cannot justify and support — and

really don't think you can support — the actions of the Canadian

government in bringing in an illegal, non-tariff barrier on Japanese

cars. My position has been — and Lord knows, I've had enough talks with

Mr. Lumley and Mr. Gray in Ottawa: "If you can't negotiate with the

Japanese, stand back and I'll do it for you." They showed their

weakness in not being able to sit down and negotiate with the Japanese,

so they took another tactic that is illegal. That's hampering our

reputation not only in the Japanese market but also in the

international world, because it's an illegal act. I told them when I

was in Ottawa three weeks ago Monday that if the produce were going to

Japan from the province of Ontario, this wouldn't have happened. If

this was going to save the North American car industry, then I would

even say there might be justification. But the ironic part of it is

that that it is not going to save the North American car industry.

They

want them reduced by some 30,000 cars a year. What it is going to do —

and is doing right now — is create unemployment in the province of

British Columbia. Don't forget that the importation of Japanese cars

has been built up over a period of time, and a lot of foreign car

dealerships have money invested in plant, stocks, real estate, tools

and employment. If they can't get the cars, there is going to be more

unemployment. I just have to tell you this is strictly another case of

the Ottawa government and the eastern interests looking after the

eastern interests and not working for the good of the province of

British Columbia. I cannot condone that and I will not condone it.

You

say that if you are government, you're going to get a Japanese

car-manufacturing plant here. Well, you trot that out in pretty nearly

every election campaign. I am negotiating with the Toyota company, and

do you know why the negotiations are tied up? Again, they're tied up in

Ottawa; we're waiting for a decision from Ottawa. As I've told them,

Mr. Chairman, a "no" decision would be better than no decision at all,

because I don't know how to handle it. There's another case of Ottawa

not being too interested in British Columbia's problems, even though

the leadership of the government of this province is assisting the

economy of Canada probably more than any other province. We will

continue to do so because we're good Canadians, as witness the results

of benefits that flow to the rest of Canada from the great northeast

coal project.

We're good Canadians, but we like to be

listened to and we like to have a fair shake, and sometimes it gets not

just a little frustrating to deal with Ottawa, but very frustrating.

Don't forget that when my estimates were up last year, we had sold the

coal, we were going ahead and everything was in place, moving ahead.

But could I get a decision out of Ottawa on the port? No, I couldn't

get a decision out of Ottawa on the port. It went through the spring,

it went through the summer, it went through the fall, and all the time

there was no deal. This province had the courage to carry on, hoping

that we'd get a deal. No wonder I'm grey. Finally, even after I held up

letting the contracts on the tunnels for two weeks.... It was the only

way I had of forcing Ottawa's hand to come to grips with reality.

want to go through it again. It went through the spring, it went

through the summer, it went through the fall, and it went right into

December. I was nearly a nervous wreck, but I still didn't have a deal,

because Ottawa wouldn't come to grips with it. That's why this province

is espousing the policy that the ports of western Canada should be

managed by people in western Canada, not by some bureaucratic insular

group of people 3,000 miles away. Did that member fight for that when

he was in Ottawa?

I took a trip to look at some world-class

ports. I visited a couple in Europe. The one in Rotterdam — I think

it's probably the largest port in the world — is run by the city of

Rotterdam. But it doesn't only serve the Netherlands; it serves all of

the countries in Europe and a lot of countries behind the Iron Curtain.

When I say that the port authority in western Canada should be run by

western Canadians, Ottawa tells me: "You guys out there.... That

wouldn't be in the national interest, because you might hold up the

movement of goods and services through that port to the detriment of

one of the other provinces."

AN HON. MEMBER: Who's holding it up now?

HON. MR. PHILLIPS: Who's been holding it up, my friend?

negotiate, and I want to tell you in front of everybody that I've had

some good negotiations with the Hon. Mr. Pépin, the Minister of

Transport. We've had good negotiations. We sat down, and it didn't take

us too long to solve the Duke Point deal. It took us about ten minutes

sitting out on the front steps of the Legislature to come to an

agreement on the Roberts Bank for that project to go ahead. We've had

numerous negotiations on Ridley Island, and I have to say that I think

that Jean-LucPépin is a very fine Minister of Transport. If he solves

this Crow rate, he will go down in history as probably one of the

greatest Ministers of Transport in Canadian history.

I just

have to say that I have a lot of time for him. I can pick up the phone

and talk to him. He's a reasonable man, but he's hampered in what he

wants to do by his other colleagues, and by the interests of the

National Harbours Board, which wants to run everything....

MR. LEA: It's the same as you. You're hampered by your colleagues.

HON. MR. PHILLIPS: No, we work together as a unit. Our cabinet works together. We set a common policy, don't we, Mr. Chairman? We work together.

Interjections.

MR. CHAIRMAN: Order! One at a time, please.

HON. MR. PHILLIPS:

I don't think there's ever been a government in the history of British

Columbia that has worked together as well as this present cabinet. The

whole

[ Page 8777 ]

government

works together, and we set policies by utilizing the brains of everyone

in the government. That's why we're able to come up with these

fantastic economic development policies. These policies are indeed

helping to employ thousands and thousands of British Columbians today.

still forecast a positive growth in British Columbia in 1982, and we're

one of only two provinces in Canada that can say we're forecasting

growth. I want to tell you that when I go over to Vancouver and look

around, it reminds me of Hawaii five years ago. Their national emblem

was the one-armed crane. You see people pouring money into Vancouver.

Why? Because they have faith in this province, and they have faith in

this government. That's why they're pouring hundreds of millions of

dollars into British Columbia.

You tell me that there's no

employment; I want to tell you that our workforce has grown every year

that we've been government. There are more people working in British

Columbia every year, even with the layoffs in the lumber industry.

Let's put that where it is — in the lumber industry. Look at what is

happening in the construction industry, and we're not building post

offices on every corner.

[Mr. Ritchie in the chair.]

remember making a little speech in this Legislature last year about

monuments. Someone accused this government of building monuments. I

said, "Yes we're building monuments, but they're monuments to the

people of British Columbia." You talk about employment. We have

hundreds of people employed on the B.C. Stadium, a project that you

were against, which I think you will regret. We have hundreds employed

and to be employed in the ALRT system. We will be employing hundreds in

the trade and convention centre. We are employing hundreds at that

great development at Lonsdale Quay. We are employing hundreds of people

in the redevelopment of downtown New Westminster. This is just in the

lower mainland. These are projects that are the result of the planning

of this government.

I'll take my seat again, Mr. Chairman, and wait for further piercing questions from the opposition.

MR. LEA:

One of the things about politics that never ceases to amaze me — and

we're all guilty of it as political parties — is that when times are

economically good, politicians stand up and say: "Look at that. The

economy is great and it's because of us." When the economy is bad,

governments say: "It must be somebody or something else that's causing

it." In B.C. the truth of the matter is that the B.C. government

doesn't have much influence over the economy. When it's good, it's not

particularly to the credit of the government or politicians; when it's

bad, it's not particularly because of a bad government or bad political

decisions. We have gotten ourselves into a position where our control

over our own economy is fairly limited.

There are certain

things we can do that can either help or hinder the economy, but even

those are somewhat limited. I suppose we could bring in taxation that

could kill the economy if we were completely stupid or nuts. We could

give it all away and not charge anybody a dime for our resources, if we

were just as conversely stupid or nuts in that area. But no government

or politician is that completely stupid or nuts.

I think the

problems that we have in our economy are more deep-rooted than the

day-to-day economic policies or the day-to-day fiscal policies of any

government. The reason that we are in the trouble we're in now is

obviously because of a downturn in the world economy. There's no doubt

about that. As the minister says, this is especially true in our lumber

and forest industry, which relies so heavily on housebuilding and the

economy of the United States. We're in a lot of trouble.

I'm

the critic for small business, which is part of the minister's

portfolio. There's very little you can do for the small business

community when the entire economy is sour. If the cash flow isn't

there, and if the workers in the primary industries aren't working and

aren't spending they money in the small business community, there's

very little you can do.

All of the programs outlined in the

government's booklet "Our Business is Helping Your Business," which is

basically aimed at the small business community, aren't bad programs —

the LILA, the FREDs, the FLIPs, the grants. But they really don't want

no-interest loans; they really don't want grants. What they would like

to have is a vibrant economy, where they don't have to come to the

government for grants or loans; where from their savings they could

invest in expansion and new business, and preferably go to private

lending agencies as opposed to government. There are usually so many

restrictions that it's hard to make a buck anyway, after you're

finished with government.

Regarding our economy, I think we

have to take a much deeper and more intensive look at what has happened

historically in British Columbia, North America and, I guess, the world

— because we're only one small cog in the wheel. A while ago the

minister and the member for Coquitlam-Moody (Mr. Leggatt) were talking

about the problem of Japanese cars coming here — one seeing it as a

problem and the other not seeing it as a problem. The fact is that if

the North American car industry were turning out quality automobiles at

the same price as the Japanese, we wouldn't have a problem. We'd be

buying North American automobiles; we wouldn't be importing Japanese

automobiles in the first place. That's the real problem: we are not

putting products onto the world market that we can do well, that we can

sell competitively. That's what we're not doing, but we're subsidizing

obsolescence. All we have to do is take a look at Massey-Ferguson and

Chrysler to see that we're not doing anything but subsidizing

obsolescence.

The iron foundries were really quite disturbed

when the steel industry came along; they tried to stop it. The harness

makers and the carriage-makers were really quite disturbed when the

automobile came along and tried to stop it. The horses were even more

disturbed, because we made them into dogfood. That is what's wrong with

the North American economy generally, particularly in British Columbia.

After the Second World War, through the World Bank, the International Monetary

Fund and particularly the Marshall Plan, we went into West Germany....

We like to point to West Germany and Japan today and say: "Look how wonderfully

they are doing; why can't we copy them?" You have to go quite

a way back to find out exactly why we haven't copied them. Through the Marshall

Plan, with moneys from North America, we financed and retooled new industry

in West Germany and Japan. We put provisions in there. We said: "You

can't spend this money on national defence; you can't put it into war;

you've got to put it into something else."

Partly

through natural inclination, being fairly bright, and partly because of

the Marshall Plan financing, the Japanese put a lot of money into

research and into the development of

[ Page 8778 ]

the

research that looked good. There was a slack time between receiving the

Marshall Plan money and the money that had been put into research and

development coming back a thousand-fold. We in Canada have not done

that; we in British Columbia particularly have not done that — not

through this government or any previous government.

We have

been satisfied to be hewers of wood and drawers of water over the

years, and it has served us fairly well. But the crunch always comes,

and the crunch is with us now. We don't have enough markets for the

traditional products that we produce. The traditional products of the

forest industry and mining industry have very little secondary

application and almost negligible tertiary application when going into

the marketplace. All of the investment that we have historically looked

for in British Columbia has been new money — not to put new products

into the marketplace but to develop more of the same old products,

which have no secondary or tertiary application, and which are mostly

raw — and to ship them out for somebody else to manufacture into the

consumable products that the world needs. That's been our role. We have

probably run one of the most stupid resource economies anywhere.

Forward linkages and backward linkages in our economy have been almost

negligible. By that I mean that we have not produced, for the forest

industry or for the mining industry, the kind of materials that they

need to be the extractors. We've left that to someone else, usually a

subsidiary of the parent company that owns the extraction company in

British Columbia. At the other end, we haven't been manufacturing or

applying any secondary application to the goods before we ship them out.

This

government is still doing it today. Last year we put $8.1 million into

research — direct government money. Without having access to more

government figures than I have, I find it impossible to know what we

contributed in tax breaks to the private sector for research.

seems to me that if we're going to pull ourselves out of this present

economic slump, we can't just sit back and hope that the world economy

picks up, that housing starts pick up in the United States and we can

go back to the same old game that we've always played. Because it won't

work. If by magic tomorrow the interest rates dropped in the United

States, housing starts were up and our full forestry industry was going

flat out, if all of a sudden the prices went up on the London metal

exchange and our mining industry was going flat out, we would have

unemployed people in this province and could not supply them with jobs.

That would be our situation because of new people coming in and our own

sons and daughters coming into the workforce every day. What we have to

do is find a way to add wealth to those rich resources, and we have to

apply something to those resources before we get wealth. One of the

wealth-producing things we are doing is the kind of thing we're doing

with northeast coal — rail lines, port facilities. That is wealth. The

rich resources that we possess can't really do anything until we apply

something to them — ideas and capital — and make some wealth for

ourselves and for the future. But we aren't doing that in any

organized, planned way.

If I have one criticism of this

government, it's that sort of a knee-jerk application to projects. You

sense it; I think the people sense that there's a lack of vision from

the government and that there's a knee-jerk application to the projects

that are underway and the ones that the minister mentioned that are on

the books. Those are projects that will only get us by.

The

minister talked a few moments ago about members of the opposition,

regretting that we're against the stadium. We're not really against the

stadium. I think it would be beneficial not only for Vancouver but for

British Columbia and all of Canada to have a stadium such as the one

being built. The point is, when do you build it? The Premier's fond of

using the family as a means of explaining higher forms of economics. He

says you don't borrow to put groceries on the table, although it's okay

to borrow to buy a house. I'll put the stadium in those terms too. It

might be desirable to build a swimming-pool for your family. It might

be something you want and need for your own recreational purposes; in

other words, it might be a worthwhile project. But when do you build

the swimming-pool? Do you build it when you don't have enough money to

put a nutritional diet on the table? Do you build the swimming-pool

when you can't afford to make your medicare payments? Do you build the

stadium when you can't afford to keep a good health-care system in

place? It's not that the stadium isn't something that we don't all

desire or agree is needed or would be good for British Columbia; it's

when do you build the swimming-pool in your back yard, and when do you

build the stadium?

Really all you've done is transfer jobs.

You've said to places like Dawson Creek, Kamloops and Prince Rupert:

"We're going to take away some of your jobs in health care. We're not

going to put money into the health-care system as we have in the past."

Because of that there are going to be fewer jobs in Prince Rupert. I'm

not even talking about the services we're lacking out of those fewer

jobs. We said to the educational system all over this province: "We're

going to cut back; we're going to call it restraint; and there are

going to be fewer jobs in the educational system. And we're going to

take that money into downtown Vancouver and build a stadium."

The

government has only got so much money to spend. Where they spend it is

a government priority. They've decided to build their swimming pool in

downtown Vancouver, at the expense of health care in my community and

in many of yours. It's a matter of priority. When do you build the

swimming pool? When do you build this recreational facility called a

stadium that we all want, and that I think we all need? It's a matter

of timing. You've really borrowed jobs and services from throughout

this province for a project that you think is highly visible — the

majority of the people in this province live in the lower mainland. I'm

sorry to say that I think you've done it for votes. I'm glad to say

that I think it's backfiring, because I don't think people are going to

put up with a health-care system that isn't adequate in order to build

a recreational project in downtown Vancouver where all the votes are.

What

you're doing is really a make-work program. The stadium is a make-work

program, along the lines of the new deal that Mr. Roosevelt brought in

years ago in the United States. You're not giving this economy a shot

in the arm generally. You're not looking at the future. You're not

putting money into research and development so that down the road we

can reap tenfold, a thousand times, benefits, with new jobs, new

products and markets. I'm afraid this government is short term. If you

look at each one of their projects on its own, you can't condemn it.

You can't condemn northeast coal. I believe the infrastructure for

northeast coal should go in, and there's no better time than now. You

may as well take advantage of what looks to be an inflationary world

for some

[ Page 8779 ]

time to come. That doesn't mean you have to get skinned in the process.

You're

very fond of saying that the only dollars the government has are

taxpayers' dollars; the money that the government is putting into

northeast coal is taxpayers' dollars. It is only fair that if the

government is going to invest our tax dollars in northeast coal, then

we taxpayers should expect the same kind of return on our investment as

the coal companies get.

We have said repeatedly that we're

not against northeast coal, but in return for the investment that the

taxpayers are making, we should have an equity position in the coal

mines themselves. That doesn't mean run them, in my opinion. I think

the private sector is more capable of running coal mines than is the

bureaucracy of this or any other government, but that does not mean we

shouldn't assume an equity position in northeast coal because of the

taxpayers' investment in the project.

Northeast coal is not

something you can condemn out of hand, although you may have slight or

not so slight differences with the government on the method by which

it's being done. Our party's position is that the taxpayers should have

an equity, not the government. The taxpayers who are putting up the

money should have an equity position in something they're investing in

almost equally with the private sector. We can't be against the

stadium, although we can suggest that maybe government shouldn't be

spending money on a stadium now when health care in this province is

suffering. A stadium, yes; maybe not today.

Look at light

rapid transit and the transit system. I'm not that familiar with the

system that's going in, but people who are — and there are many — for

the most part say we've made a mistake in choosing the system. You

can't argue with a transportation system that will move the public

around in a more energy-conserving and sensible way and get us out of

our automobiles, but you can argue about the details of whether it's

the correct system.

B.C. Place is an interesting one. The

government is bragging about the new commercial space that's going to

be created by B.C. Place. What's going to happen to the merchants who

are in the old commercial space, or is the economy of Vancouver going

to pick up to such an extent that all of that commercial space can be

utilized, that we won't have a surplus of space? Because all you have

to do is take a look at Nanaimo, Cranbrook and other cities in this

province which have built gigantic shopping centres, and see what's

happened to the downtown core of these communities and the family

businesses.

I think most people in most jurisdictions are

starting to take a new look at shopping centres and what they can do to

a community — and it's not all good. We have created slums of many

downtown sectors of many communities by allowing gigantic shopping

centres to draw away from the downtown sector. We see in many

communities the strip of porno houses, rows and rows of those video

machines, dirt on the street and the dregs of society down there, as we

see business move out of the downtown core to the outskirts.

don't know whether that's going to happen with B.C. Place and all of

that commercial space coming on, but I have the feeling that this

government hasn't really looked at it in that way; it just seemed like

a good thing to announce at breakfast one morning, because there are a

lot of votes in the lower mainland and Vancouver. It's going to have

effects, and I'm fairly satisfied that the government isn't fully

cognizant of or hasn't looked at the effects it may cause. They're just

moving ahead, knee-jerk, project to project, without any rhyme or

reason or any proper planning. I'm very afraid of that kind of

government.

You can look at all of the projects one at a

time and you can say there is some good about them, but I just feel

that this government has no vision as to where it's going. It's a

knee-jerk, economic government that really hasn't put it all together,

either for the short term to get us through a bad economic time