Alberta Hansard — 3 December 1981, Afternoon sitting (14:30) (Legislature 19, Session 3)

19811203

Alberta — Debates (Hansard)

December 3, 1981 ALBERTA HANSARD 2029 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Thursday, December 3, 1981 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: NOTICES OF MOTIONS MR. CRAWFORD: Mr. Speaker, I would like to give oral notice that on Monday next I'll propose the follow ing motion:

Be it resolved that notwithstanding any provisions of the Standing Orders, the estimates of the Capital Projects Divi sion of the Alberta Heritage Savings Trust Fund and all appropriation Bills as herein defined, shall, unless earlier disposed of, be dealt with as follows:

(1) In this resolution (a) "Appropriation Bill" means (

i) Bill 69 — Alberta Heritage Savings Trust Fund Special Appropriation Act, 1982-83, and (ii) any Bill introduced in the House to appro priate the funds covered by the Estimates; (b) "Estimates" means the estimates and supple mentary estimates of the Capital Projects Divi sion of the Alberta Heritage Savings Trust Fund that have been referred to the Committee of Supply during the 1981 fall sittings, and includes the resolutions before the Committee of Supply relating to them.

(2) The Estimates shall be considered by the Committee of Supply on 5 separate sitting days after and includ ing the day upon which this resolution is adopted and if, on the 5th day, the Committee has not voted upon all of the Estimates by the following time limit: 10:00 p.m. if it be a Monday, Tuesday or Thursday, or 4:30 p.m. if it be a Wednesday, or 12:00 noon if it be a Friday, the Chairman shall immediately interrupt the proceed ings and shall forthwith put a single question propos ing the approval of every resolution then necessary to complete consideration of the Estimates, which shall be decided without debate or amendment, and the Committee shall forthwith rise and report.

(3) A motion in the House (

a) that the Speaker leave the Chair and the Committee of the Whole meet to consider an appropriation Bill, or (

b) that the House receive a report of the Commit tee of Supply on the Estimates or a report of the Committee of the Whole on an appropria tion Bill shall be decided without debate or amendment.

(4) An appropriation Bill may be introduced in the House at any time after the receipt of the report of the Committee of Supply on the Estimates covered by the Bill, when the Order of the Day is Government business.

(5) An appropriation Bill may be read a second time, considered by the Committee of the Whole, reported therefrom to the House and the report received, on one sitting day.

(6) If an appropriation Bill is moved for second reading, and if, on that day, at the time limit defined by paragraph 2, all appropriation Bills have not yet been read a second time, the Speaker shall at that time interrupt the proceedings and put the question on second reading of every appropriation Bill then await ing second reading, which shall be decided without debate or amendment.

(7) If, after all appropriation Bills have been given second reading, any appropriation Bill is before the Commit tee of the Whole for consideration, and if, on that day, half an hour after the time limit defined by paragraph 2, there remains any appropriation Bill not reported by the Committee, the Chairman shall at that time interrupt the proceedings and put . . . every question necessary to complete consideration of all appropria tion Bills still before the Committee, which shall be decided without debate or amendment, and the Com mittee shall forthwith rise and report.

(8) If an appropriation Bill is moved for third reading, and if, on that day, at the time limit defined by paragraph 2, all appropriation Bills have not yet been read a third time, the Speaker shall at that time interrupt the proceedings and put the question on third reading of every appropriation Bill then awaiting third reading, which shall be decided without debate or amendment. Mr. Speaker, that concludes the notice.

Because of the length of it, I have prepared copies that are immediately available to my friends opposite, and would indicate that the result would be 17 days of supply thus far and 6 more hereafter. AN HON. MEMBER: Closure. head: INTRODUCTION OF SPECIAL GUESTS MRS. OSTERMAN: Mr. Speaker, it's my pleasure to introduce to you and to members of the Legislative Assembly a group of 17 grade 8 students from the Trochu Valley school. They came up early this morning, and have already visited the Provincial Museum.

They are accom panied by their teacher Ed Lasiuta and their very brave, I think, bus driver Len Poffenroth. I ask them all to rise and receive the welcome of the House. MR. STEVENS: Mr. Speaker, on behalf of my colleague the Member for Edmonton Beverly, Minister of Workers' Health, Safety and Compensation, I have the privilege of introducing to you and to the members of the Assembly 59 students and three ladies from the Rundle grade 6 class in Edmonton Beverly. I understand they have met the member, who unfortunately is not able to be with the Assembly for a portion of the sitting this afternoon.

They are accompanied by Mrs. Anne Sadelain, Mrs. S. Kyseli- tzia, and Mrs. D. Golding. Would they rise and receive the welcome of the Assembly. head: MINISTERIAL STATEMENTS Department of Treasury MR. HYNDMAN: Mr. Speaker, over past weeks there

2030 ALBERTA HANSARD December 3, 1981 has been discussion and debate with regard to realized losses on investment sales in

Section 9 of the Alberta Heritage Savings Trust Fund. I have several times mentioned the fact that all managed bond portfolios have incurred such losses in what has been a volatile market over the past few years. Nevertheless, the impression may have been left that those investments of the fund could have been improperly disposed of, or unaccounted for. There has been some question that the government has not reacted satisfactori ly to the recommendations of the Auditor General regard ing those investment transactions. Mr.

Speaker, it is important that Albertans know, from a source independent of government, whether there has been any improper handling of any kind of these transac tions. Accordingly, to clear the air and establish beyond doubt the situation regarding the realized losses in Sec tion 9, the Executive Council through the hon. Premier has today requested the Auditor General to do a special report on that issue and to report as soon as he is able to do so. Following is the contents of a letter, which I will file, which has been sent by the hon. Premier to Mr.

Douglas Rogers, the Auditor General, today, December 3, 1981: Dear Mr. Rogers: Pursuant to

Section 17(2) of The Alberta Auditor General Act, as President of the Executive Council I advise that the Executive Council requests you to perform, as soon as possible, the following special duty: 1. To report, regarding that part of the audit of the Alberta Heritage Savings Trust Fund re ferred to in paragraph 1.2 entitled "Documen tation for Significant Investment Losses" of the memorandum of February 20, 1981 from your self to the Deputy Provincial Treasurer, pur portedly filed in the Legislative Assembly De cember 1, 1981: (

a) whether those assets owned by the Al berta Heritage Savings Trust fund were adequately safeguarded and accounted for; (

b) whether any evidence of malfeasance, including fraud or collusion, has been discovered relating to those assets owned by the Heritage Savings Trust Fund; (

c) whether satisfactory action has been taken by the government respecting audit observations and recommenda tions made pursuant to the The Auditor General Act. 2. To report on any matter relevant to paragraph 1 which, in your opinion, is pertinent or rele vant with regard to the safeguarding, account ing for or administration of said investments. 3. To present your report to the chairman of the Select Standing Committee on Legislative Offi cers for submission to the Speaker of the Legis lative Assembly, to furnish copies of the report to all members of the Legislative Assembly, and to make it public.

Yours sincerely, Peter Lougheed President of the Executive Council head: ORAL QUESTION PERIOD Heritage Savings Trust Fund Auditing MR. R. SPEAKER: In light of the notice of closure today and the letter of the Premier to the Auditor General, I think it's only fitting that we relate our ques tions to that subject. I'd like to direct to the Premier the question with regard to the timing of this report, in light of the events that have been announced today. Would the Auditor General's report on this matter be made available to us prior to the end of this session?

From the notice of motion with regard to closure on the topic, the end of this session would be a week from tomorrow. Is it the inten tion of the Premier to make that information available to us as members prior to the end of this session? MR. LOUGHEED: Mr. Speaker, I don't think there's any way that's possible. I'm sure the Auditor General would want to make sure he has a full and complete report. I'm sure it will be a number of weeks well beyond the end of the session before that report would be public. MR. R. SPEAKER: Mr. Speaker, a supplementary ques tion to the Premier for clarification.

In the terms of reference to the Auditor General, will the Auditor Gener al be providing information in this Assembly which documents or makes available to us the traders' notes documenting what occurred during the period of time that the $60 million was a realized loss? MR. LOUGHEED: Mr. Speaker, that would be entirely up to the judgment of the Auditor General, in terms of his awareness of the provisions of The Auditor General Act. He would respond to the request for the special report, having regard to the request I made to him today. MR. R. SPEAKER: Mr. Speaker, a supplementary ques tion to the Premier.

Could the Premier indicate whether the Auditor's report will also include a description of the management procedures that were put in place to prevent any further loss with regard to investments of bonds by the Heritage Savings Trust Fund? MR. SPEAKER: I'm somewhat puzzled by this line of questioning. I realize that possibly the hon. Leader of the Opposition hasn't had an opportunity to examine the terms of reference to the Auditor General.

But now that copies are apparently being made available to all mem bers, it seems to me that questions as to the contents might be postponed until the contents have been ex amined. Otherwise, we're going to be spending the ques tion period having question after question concerning the contents of a written document. MR. R. SPEAKER: Mr. Speaker, a supplementary to the Premier on the same.

Could the Premier give as surance that there are no restrictions in the type of material that is provided to us as members of the Legisla ture with regard to the matter at hand; that is, the realized loss of $60 million due to the investment in bonds? MR. LOUGHEED: Mr. Speaker, that will be a matter the hon. Leader of the Opposition will have to assess for himself. That would be a decision the Auditor would make, pursuant to my request to him. I realize that the matter was read by the hon. Provincial Treasurer. The

December 3, 1981 ALBERTA HANSARD 2031 Leader of the Opposition has not had an opportunity to fully read my letter, but part (

c) of paragraph 1 states: whether satisfactory action has been taken by the government respecting audit observations and rec ommendations made pursuant to The Auditor Gen eral Act.

Section 2 is a very broad section: To report on any matter relevant to paragraph 1 which, in [the Auditor General's] opinion is pertinent or relevant with regard to the safeguarding, account ing for or administration of said investments. That will be a matter of decision, because it is a special report, for the Auditor General to determine what is included in the special report. MR. SINDLINGER: A supplementary, Mr. Speaker.

When introducing the request to the Auditor General, the Provincial Treasurer indicated that it would be desirable to get this matter as independent or far removed from government as possible, in such terms. I wonder if the Provincial Treasurer or the Premier would give consider ation to allowing the opposition to provide some input to the terms of reference of the letter to the Auditor General. MR. LOUGHEED: Mr.

Speaker, I don't see any reason why any member of this Legislative Assembly can't communicate directly to the Auditor General, in writing, any observations he has with regard to these terms of reference and the request for the special report. There would seem to me no reason why that couldn't occur. MR. NOTLEY: Mr. Speaker, a supplementary question to the Premier with respect to the final paragraph: To present [the] report to the chairman of the Select Standing Committee on Legislative [Offices] for submission to the Speaker . . . .

Will it be the intention of using the chairman of the Select Standing Committee on Legislative Offices as a conduit, or will it be the intention that the committee will have an opportunity to review it in some detail, as a committee of the Legislature, before it is submitted to the Speaker. MR. LOUGHEED: Mr. Speaker, it's intended to be the former. The chairman would merely be a conduit to provide it to the Speaker to make it available to members of the Assembly and to make it public.

There's no reason, however, if that committee wished to do so, after having passed it on to the Speaker and it being made public, to consider its contents. MR. R. SPEAKER: Mr. Speaker, a supplementary ques tion to the Premier. Using the example in the case that's before us and the debate that's gone on in this Legislature over the past four or five weeks with regard to manage ment letters between the Auditor General and the Deputy Provincial Treasurer or the Provincial Treasurer — they're not made available to the select committee or to the members of this Legislature.

Has the Premier recon sidered that particular aspect of the legislation, to make it possible that all management letters and all documenta tion is made available to the members of the Legislature, or specifically — and very important in light of the remarks the Premier made some time ago in the introduc tion of the Heritage Savings Trust Fund legislation — that the select committee have access to all information with regard to the Heritage Savings Trust Fund that may be involved in management letters. MR. LOUGHEED: Mr. Speaker, the answer to that is no.

If the hon. member wants to pursue the matter in terms of further possible amendments to The Auditor General Act, he's certainly at liberty to do so. Rural Property Taxation MR. NOTLEY: Mr. Speaker, I'd like to direct this ques tion to the hon. Minister of Municipal Affairs. It relates to some really unusual increases in property taxes faced by farmers, mainly retired farmers but other farmers as well in the county of Lamont, where I understand the staging in of the new assessment is taking place, as well as several others, including I might add, the municipal dis trict of Fairview.

On what basis did the government conclude that the income level to qualify for farm status, if you like, would be $4,600 a year? What criteria were used to develop that figure? MR. MOORE: Mr. Speaker, the government did not conclude that at all. The legislation is quite clear in its application to the criteria with respect to who is consid ered a farmer and who is not. It was debated at length in this Legislature two years ago. The information the hon. member has did not come from my department or from the government. MR. NOTLEY: Mr.

Speaker, I find that rather interest ing, because we contacted the minister's department this afternoon to find out this information. But I would ask the hon. minister — and this is the

interpretation by assessors of

Section L(

j) contained in The Municipal Taxation Act, which was debated in the Legislature, the

section that deals with the

interpretation of what consti tutes a farmer — on what basis assessors are using the $4,600 figure in the county of Lamont. Is the minister telling the Assembly that assessors using that as a basis are in fact not entitled to do so? MR. MOORE: Not at all, Mr. Speaker. The situation is simply this. I don't have it before me, but generally speaking the legislation defines a farmer as a person who provides a livelihood for himself from agricultural pur suits.

Municipalities throughout the province have used various criteria to determine what that level of income might be or what the test might be with respect to whether or not an individual has sufficient income from agricultural pursuits to provide for a livelihood.

When assessors at work throughout this province are in a municipality like the county of Lamont, they are working for that county, in terms of carrying out a general assessment and usually respond to whatever level of criteria that municipality may have established, proba bly in years past, in terms of their initial assessment work as to whether or not they have categorized a certain individual as a farmer. That, of course, is then subject to appeal to the Assessment Appeal Board, which in most cases is comprised of locally elected municipal officials.

It is further subject to appeal to the provincial appeal board. But the hon. member is not correct in suggesting that the criterion is developed by the Department of Municipal Affairs or by this government. It varies throughout the province and generally is established at the direction of the municipal government.

2032 ALBERTA HANSARD December 3, 1981 MR. NOTLEY: Mr. Speaker, a further supplementary question for clarification.

In dealing with the general assessment taking place now in the county of Lamont and four other municipalities in this province, is the minister saying to the House — so there's no misunderstanding — that the criterion developed for determining this $4,600 net income is exclusively decided by the municipal coun cils, or is it the criterion which has been developed on the advice of the Department of Municipal Affairs, and in fact this is the first phase of a general reassessment using the $4,600 net income figure as a base? MR.

MOORE: First of all, the hon. member is so far out of date in his information that his information could well have been dated 1980 rather than 1981. The Department of Municipal Affairs assessors are not presently carrying out assessments in the county of Lamont or the three other areas referred to. That was done several months back. In fact, assessment notices went to property owners in those areas some months ago, tax notices have gone out, and a goodly amount of the taxes has been collected.

The situation the hon. member refers to, with regard to the definition of a farmer under The Municipal Taxation Act, has been in place for many, many years. I believe it has not been altered since 1962. So the hon. member may have to search back further than my memory goes with respect to this matter, if he wants to know how that definition was established and how it became part of the legislation this Legislative Assembly must have passed at that time. MR. NOTLEY: Mr. Speaker, my supplementary ques tion to the minister.

That's correct: assessment has taken place in these three municipalities, as well as the county of Lamont, which has led to substantial increases in taxes. I don't want to be argumentative, but the question I want cleared up is the yardstick used. The minister indicated that in his opinion, at any rate, the determina tion of what constitutes a farmer is a municipal decision.

From the information I've received — and I'd like this clarified and reconciled — my understanding is that when the assessment took place in these particular municipali ties: the net income figure of $4,600 was used, and it was a figure common to all five municipalities, the county of Lamont as well as four others. Was any common policy developed by the department, in terms of the assessment, that used the $4,600 net income figure as a base? MR. MOORE: Mr.

Speaker, when this Legislature de bated amendments to The Municipal Taxation Act in the spring of 1980, I indicated to hon. members opposite and others that I would be extremely pleased if they could provide me with any assistance at all in the very difficult task of determining who was a farmer and who was not; in other words, a definition. I asked the Association of Municipal Districts and Counties if they could consider the same matter. That association, in conjunction with my office, did some considerable amount of work over the course of a year or so, looking at various

definitions. It finally con cluded that the definition which had been in existence for many years was better than any we had reviewed, and it should stay in the legislation. That in fact occurred. I don't have it before me but, generally speaking, the legis lation suggests that a farmer is an individual living on a certain amount of land who can provide a livelihood for himself from the production of agricultural products from that land.

Throughout the province in 350 municipalities — I guess there are fewer rural ones than that — for years individual municipalities have been using some criteria to determine what is a livelihood. A livelihood on a home stead north of Hines Creek may be something considera bly less than a livelihood in the MD of Rocky View, just outside the city of Calgary. It's for those reasons — and I could elaborate at some length on the problems asso ciated with trying to establish provincial criteria — that the province has not defined what a livelihood is, either in the legislation or in regulations attached to it.

Because rural municipalities in this province call upon the Department of Municipal Affairs' assessment branch to do their assessing, quite naturally those rural munici palities must say to the assessors employed by the gov ernment who are working for the municipality, here is the kind of criteria we believe should be used to determine who is a farmer and who is not. As I've explained, there is then an appeal to the Assessment Appeal Board at a local level. It's generally made up of locally elected municipal officials.

As Minister of Municipal Affairs, I don't get involved — this government does not get involved — in suggesting to those municipalities what that level should be. I expect that in almost every case they have discussions with asses sors working for the government who are employed by the municipalities, and they come to some general agree ment as to what the criteria should be. But bear in mind there are two appeals after that. MR. BATIUK: A supplementary of the minister, Mr. Speaker.

Due to the fact that the county of Lamont is so close to Edmonton — it has been proven already that many people like to reside on small tracts of land and commute to work — could the minister advise whether the change in assessment would see that people living on small tracts of land contribute their share for the costs of education and all other services they get, for which they contribute very little at present? MR. SPEAKER: With great respect to the hon. member, he is asking the minister to make some calculations which are probably well beyond the official duties of the minis ter.

Possibly the hon. member could make those calcula tions himself and also come to his own opinion about the results. MR. BATIUK: Mr. Speaker, maybe I should rephrase it. My intention was to find out whether the change in assessment was intended to provide a more balanced provision of expenses paid by all people. MR. SPEAKER: Might I respectfully ask the hon. member if he is referring to something done by the county of Lamont or by the provincial government? MR. BATIUK: I guess both, Mr. Speaker. I said I was referring to the county of Lamont, and the county of Lamont has accepted the new assessment manual.

I wonder whether the minister could advise if the change in assessment was intended to provide for the county to receive a fair income from all people who reside there, and not that only some should pay the entire cost. MR. MOORE: Mr. Speaker, maybe I could respond briefly this way. The change in levels of assessment in rural Alberta, which were discussed in this Legislature, were discussed primarily to update assessment practices

December 3, 1981 ALBERTA HANSARD 2033 to providing assessment on a basis of market value in 1980 as opposed to 1962. The exception was farmland, which was established at an economic value. In the county of Lamont and elsewhere, acreage owners who were not identified as farmers under the new assessment

schedule were relieved of a considerable amount of as sessment due to the fact that the criteria we established for acreages provided that the first three acres only were assessed at market value and the balance at farmland rates. The facts are that had we not made the changes in assessment that we made a year ago, the effect would have been much more drastic than it was on certain individuals within the county of Lamont, ID 15, and the MD of Rocky View, who lived on acreages and were not classified as farmers. DR. BUCK: To the hon. Member for Vegreville: acreage owners are paying more than their fair share. Mr.

Speaker, a supplementary question to the hon. Minister of Municipal Affairs. In the age of computers, can the minister indicate if we're going to move to a more up-to-date reassessment than we have at present, so we don't have to look at anything from a seven-year to a 12-year reassessment and we keep an ongoing reassess ment which is more current than the system we're using now? MR. MOORE: Mr. Speaker, first of all I think we have to take in the context it was given, the hon. member's remark that acreage owners are paying more than their fair share.

Perhaps the hon. member could indicate to us who is paying less than their fair share. Then we could have a debate. The facts of the matter are that, in my belief, the assessment procedures we put in place a year ago are entirely fair to everyone involved, and extremely more fair than would have been the case had we carried on with something almost 20 years old. As I indicated to the hon. member, the situation with regard to the assessment procedures that exist are con tained in the Act, a copy of which he's well aware of, and he is well aware of the debates in this Legislature a year ago.

I can't add a great deal more than that. Beef Cattle and Sheep Support Program MR. FJORDBOTTEN: Mr. Speaker, my question is to the Minister of Agriculture. Since the announcement of the beef cattle and sheep support program, the calls I've received seem to highlight some confusion regarding the overall policy and regulations which apply to the pro gram. What steps has the minister taken to communicate with producers? Has there been communication through the district agriculturist's office, or how has this been done? MR. SCHMIDT: Mr.

Speaker, the program in total has been sent to all district agriculturists throughout the prov ince, and hopefully by the end of this week should be in their hands and available to all producers throughout the province. MR. FJORDBOTTEN: A supplementary, Mr. Speaker. You say it has been sent out. Does that mean the applica tion forms will be there soon, so the producers can start filling them out and get funding before the end of 1981, or are we looking at 1982? MR. SCHMIDT: Mr. Speaker, I can't give an exact date as to the availability of the application forms.

In a very general way I would have to say that the application forms should be in the hands of the district agriculturists before the end of the year, and I can't see any disburse ment of funds until the beginning of 1982. MR. FJORDBOTTEN: A supplementary, Mr. Speaker. Since there is undoubtedly going to be some need for an arbitration process so producers can appeal a decision with regard to the number of head that will qualify for the program, has any consideration been given to setting up an appeal process? MR. SCHMIDT: Mr.

Speaker, it's our intention to make use of the local agricultural development committees that were formed in the first place as appeal bodies. Because they're made up of local producers for that particular area, we feel that if they handle the appeals, they will perhaps not only know the individuals but would know the circumstances. It's our intention to use the commit tees for any appeals. MR. FJORDBOTTEN: One final supplementary, Mr. Speaker.

Realizing that the one-time support program is just that, and we have to look over the longer term, what approaches has the minister or his office made to the cattle industry? What specific areas has the minister dis cussed with the industry, and on what particular areas is he open to discussion with the industry? MR. SCHMIDT: Mr.

Speaker, we've had a very short time since the announcement of the program, but have had the opportunity — by letter and in two instances by telephone, and direct to the Cattle Commission which is holding its annual meeting here in the city — to explain the program being a one-time program, and to suggest the responsibilities that remain ahead for both the indus try and governments to work closely together to come up with some long-term solutions, recognizing that the pro gram is an answer to a short term. DR. BUCK: Mr. Speaker, a supplementary question to the hon. minister.

I had to be absent the day the announcement was made, so I'd like to compliment the minister for being pushed into the program. [interjections] In light of the fact that studies are now ongoing, is the figure of $136 million being revised upward or down ward, or is that pretty close to what the minister estimates will be required for the support program? MR. SCHMIDT: Mr. Speaker, the numbers available to us on behalf of the industry, of course, base the amount of $136 million. I see no reason to change that at the present time.

There are some unknowns in the exact numbers, and I guess the largest unknown area would be the yearling feeders. But we feel the estimates we have are fairly close. Fishery Development DR. BUCK: Mr. Speaker, my question is to the hon. Associate Minister of Public Lands and Wildlife. Can the minister indicate what stage the walleye hatchery in northern Alberta is at, as recommended in the select committee on fisheries? Can the minister indicate if that program is in place?

2034 ALBERTA HANSARD December 3, 1981 MR. MILLER: Mr. Speaker, this past summer we had a consultant group making a study of the water quality and possible location of a site for a fish hatchery in northern Alberta. As yet, we have not had the report from them. DR. BUCK: Mr. Speaker, supplementary question. Can the minister indicate if any fingerlings have been raised in other hatcheries that were using natural fish? Is that program in place at this time? MR. MILLER: All fish are natural fish. [laughter] DR. BUCK: Has the minister never heard of artificial insemination? Then I'd like to ask the hon. minister: are members of the minister's department or

section of the department where they are using hatchery fish, where they are using naturally occurring fish such as the native fish — pike, perch, and pickerel . . . Has any work been done in the present hatcheries to use naturally occurring, natural ha bitat fish to restock some of our northern lakes? MR. MILLER: Mr. Speaker, we have done some work in hatching eggs and fingerlings from pickerel, as well as some arctic char from the Northwest Territories. We have done a bit of stocking of arctic char in the Eastern Slopes, but at this point in time I'm not sure how success ful it has been. DR. BUCK: Mr.

Speaker, a supplementary question. In the recommendations of the committee, we were looking at so-called rough or coarse fish. What steps have been taken to implement some of the programs for using rough fish that occur naturally in our lakes? MR. MILLER: Mr. Speaker, we have done some re search into the use of rough fish as fertilizer components at Lac La Biche. As well, we have made contacts with corporations that might be interested in establishing rough fish processing plants for human consumption and export outside Alberta, as well as for pet food manufac turing. But it's still in the talking stage. DR.

BUCK: Mr. Speaker, on that same line, can the minister indicate if there are any specific programs in place at this time to make the under-utilized or rough fish species a table product? Are those studies under way at this time? MR. MILLER: Some studies have been conducted. One rough fish we are giving special consideration is ling, which presently is not being utilized whatsoever. We have an idea there is a market for this specific type of fish in the oriental countries. Regional Planning Commissions MR. MANDEVILLE: Mr. Speaker, my question is to the hon. Minister of Municipal Affairs.

It's with regard to problems some of our small growing centres are having with subdivisions, planning, and developing in relation to the regional planning commissions. Is the minister antici pating any changes in the administration or operation of our regional planning commissions throughout the province? MR. MOORE: Mr. Speaker, the regional planning com missions throughout this province are operated by their member municipalities, with the exception of those areas of the province where the Department of Municipal Af fairs directly provides planning services.

Any changes made with respect to the day to day operations of the commission would be the responsibility of their member municipalities. If the hon. member could give me more details, or if the matter he is referring to relates to a municipality whose planning services are being provided by the Department of Municipal Affairs, I'd be pleased to respond further or look into the matter. MR. MANDEVILLE: Mr.

Speaker, the problem that comes to my attention on many occasions is that we have our small planning boards within a town — for example, the town of Brooks — but they have to get approval of the regional planning commission before they can take any steps toward subdivision. The name "stalling com mission" is becoming very prevalent throughout the prov ince. I think we should have some changes. That's what I was asking the minister: are there any anticipated changes in the regulations or in any legislation as far as the regional planning commissions in the province are concerned? MR. MOORE: Mr.

Speaker, The Planning Act, 1977, gives full authority to member municipalities; in this par ticular case, the town of Brooks, together with other municipalities in that region. It gives to those municipali ties full authority in the operation of a regional planning commission, direction to its staff within the terms of The Planning Act. If there are some problems with The Planning Act in terms of delays that might be occurring, I'd be pleased to look at them on recommendation from the hon. member.

Beyond that, I have no present plans to interfere with the autonomy of member municipalities in the operation of a regional planning commission. ORDERS OF THE DAY head: MOTIONS FOR RETURNS 149. Mr. Sindlinger moved that an order of the Assembly do issue for a return showing:

(1) What were the Alberta heritage trust fund securities that were sold over the last three years at a net loss of $60,282,000.

(2) What was the date of purchase and the date of sale of each of these securities.

(3) What was the purchase and sale price of each of these securities.

(4) What was the interest rate and maturity date of each of these securities.

(5) If other securities were acquired as a specific re placement for those sold, what were they, when were they purchased, what is their interest rate, when do they mature, and what price was paid for each. [Adjourned debate November 26: Dr. Buck] DR. BUCK: Mr. Speaker, Motion No. 149 requests that we order the Assembly to show a return showing what Alberta Heritage Trust Fund securities were sold over the last three years at a net loss of $60,282,000. In speaking very briefly to the motion, the motion is interested in the

December 3, 1981 ALBERTA HANSARD 2035 same subject matter as the request by the Auditor Gener al and the request by the Premier. As a member of this Assembly concerned with looking after the public's funds, as we all are, I find it very, very interesting and rather bewildering that the legislative committee that is struck by this Assembly to look at the investment of public expenditures of public funds does not even know the form, the amount, or the name of the brokerage firm.

If the government in its wisdom feels this would not be in the public interest, I say to the government that surely that information should be available to the legislative committee on a confidential basis. The argument by the Provincial Treasurer has always been that this would affect investments and investment procedure, and would not be in the best interest. I say in all humility that surely the committee that is struck should have this information on a confidential basis, if we're worried that it would affect the way the investments are made. Mr.

Speaker, I as a member of this Legislature do not know — the members of the committee do not know — which brokerage firm is acting for us. The Provincial Treasurer will not indicate that to us. We do not know the amounts. Are they small amounts? Are they large amounts that are invested by one firm? Is one firm doing it all or many firms? Is there a possibility that a bro kerage firm placing a large issue could inadvertently af fect the market? I think these questions are very, very important. I think the committee should be asking these questions, and that the committee should have those answers.

When we're responsible for the expenditure of large amounts of funds to be invested, surely that infor mation should be available to members of the committee if we're going to have a watchdog rather than a lapdog committee. In speaking on behalf of Motion 149, I feel that that information should be made available on a confidential basis. That would not affect the manoeuvrability of the people responsible for making the investments. I think it would be in the public interest that that information be made available: who the firm is that's investing our funds, the amounts being invested, and the transactions.

That way the public of this province, that the funds belong to, would feel much easier knowing there is a genuine watch dog committee looking after the heritage funds. At this time it leaves the question open to speculation. As we have seen in some of the information that has been provided, the provincial auditor has warned the Provin cial Treasurer at least three times that there could be room for some type of games being played. Mr. Speaker, in closing I would like to say that because they are public funds, the information could be made available to the legislative committee on a confidential basis.

I'm sure this is why the hon. member has asked that this be made a return, so the public would know what's happening with the public's money. MR. PAYNE: Mr. Speaker, I'd like to make a comment or two by way of rebuttal, I guess, to the comments by the hon. Member for Clover Bar speaking to Motion for a Return 149. Perhaps I could make two or three comments. First of all, in his remarks he made reference to the provision of this and other information on a confidential basis to the select committee on the Alberta Heritage Savings Trust Fund.

As well, he made one or two references to identification of the brokerage firm. On rereading Motion for a Return 149, I see no such re ference to the provision of confidential information to the committee, nor indeed do I see reference to the identifica tion of the brokerage firm. Perhaps I won't judge the validity or appropriateness of those comments, but they do not appear to relate to the motion for a return as it's worded in the Order Paper. Beyond that, Mr. Speaker, I feel I must take exception to the hon. member's reference to serving the public interest.

In prior debates on this and related subjects, I think other members have effectively made the point that release of a proliferation of detail on these matters would make it comparatively easy for others to determine the investment strategy associated with these matters, and would thus undermine the future management of the fund. That point has been made on numerous occasions in this House and doesn't bear elaboration. A final comment in speaking to this motion for a return relates to the hon. member's reference to public speculation. I believe he used the phrase, "the type of games being played". DR.

BUCK: That could be played. MR. PAYNE: That could be played. In our Assembly in recent weeks, there has been repeated opposition re ference to the loss of $60 million. Intentionally or other wise, this almost incessant repetition has created and fostered the impression that this loss is the result of carelessness, inadequate records, poor management, or possibly even dishonesty. Some of these opposition comments have been prompted by idealism. Regrettably, I think some have been prompted by political opportunism. At best, Mr.

Speaker, I suppose the hon. member's remarks today are a combination of both idealism and political opportunism. MR. SPEAKER: Order please. I doubt very much whether any member of this Assembly is entitled to accuse another member of political opportunism. I think we're not entitled to impute that kind of motive to a colleague in the House, and I would respectfully ask the hon. Member for Calgary Fish Creek if he would kindly deal further with that. MR. PAYNE: Mr. Speaker, given your comments, I would be happy to withdraw any imputation of political opportunism. Geez, I hate to conclude on a loser, Mr. Speaker.

DR. BUCK: Sixty million's a real loser. MR. SPEAKER: With great respect to the hon. member, I think a full and whole-hearted withdrawal of something is a winner every time. MR. PAYNE: You're too kind, Mr. Speaker. Let me establish yet another winner. Opposition members, in cluding the hon. Member for Clover Bar, know full well — and he might even discuss this with the opposition member to his right later today — what happens to the bond market during times of escalating interest rates.

Not only does it make consummately good fiscal sense in such times for portfolio managers to get out of the bond market, but one would have to question their manage ment competence if they were simply to sit tight and not move bond proceeds into higher interest securities. With those two comments, Mr. Speaker, I would like to sug gest that this motion for a return is simply not justified.

2036 ALBERTA HANSARD December 3, 1981 MR. MANDEVILLE: Mr. Speaker, I just have to make one comment on this motion for a return. The reason for not giving the information to members of the House or to the public is that they don't want us to get their strategy on how to lose $60 million. As I said, I'm a gambler myself; I invest in the markets. I wouldn't read that type of strategy if I did get it, because it's not the type of strategy I can use in my business. As the hon. member just indicated, the bond market is a tough market to play when interest rates are going up and the economy is in such a state.

I realize that, and I appreciate it. I got into the bond market, but I waited until the interest rates started going down. Then I start investing my money in the bond market, but in a very small way. The point I would like to make, which I made several evenings ago on this motion for a return, is that I don't think we should have this type of motion on the Order Paper. Because I don't think governments should be in volved in this type of participation in the bond and stock markets. There are people with Christian beliefs who don't believe in gambling. I don't think we should put their money in.

If the Member for Bow Valley or any Member of the Legislative Assembly wants to put his money in the stock market, that's his own privilege. But I don't think we should gamble public funds in the stock market. I just don't think it's the right way for us to go. When we do this gambling, I think it should be made public. As far as the strategy is concerned, who's going to have the strategy: your broker or the investor? Being in the stock market myself and understanding how it works to some degree, you can play the markets up or down, but it's dangerous.

When you play the market, you have to sign a form with your brokerage firm so they can pur chase and sell for you. We have a lot of money at stake in this province. At any time when you have a margin call on your bonds — I understand we're restricted to 5 per cent of investment in the stock market — if [there is] a scare that the president of the United States has been assassinated or had a heart attack, the bottom could drop right out of the bond market, and you can't get out. When it goes down the limit, you have to stay there. They could margin call on us as a province for a long while. Mr.

Speaker, if we're going to get involved in this type of thing, I think we should make it public to the citizens of Alberta. MR. MUSGREAVE: Mr. Speaker, speaking on Motion for a Return 149, I would like to remind the hon. Member for Bow Valley, who mentioned the Christian approach, of the parable about the people who had the talents. One of the things they strongly suggested was that the fellow who buried his talent in the ground wasn't being a very good steward. Also, I would like to point out that when you're buying bonds for a fund of this nature, I don't consider that gambling. I would hope you're investing.

DR. BUCK: Sixty million's a loss; that's gambling. MR. MUSGREAVE: Well, I'm glad the hon. Member for Clover Bar brought up the $60 million loss. I would like to point out to the members on the Legislature that the select committee of the Heritage Savings Trust Fund is not an audit committee. We don't want to sit and look at every voucher, every invoice, every single item that flows through. Any member who has served on that committee should know there are far more significant things to be concerned about.

To suggest, as the hon. members are doing, that the loss is not accounted for is, I suggest, a disservice to the people of Alberta. We all know why there's a loss. The simple reason is that there was wide fluctuation in interest rates, and those bonds were becoming worthless. DR. BUCK: Have you seen the . . . [inaudible]? MR. MUSGREAVE: Yes I have. I'm on the committee. DR. BUCK: You've seen the brokerage firms? You've seen their dealings? MR. MUSGREAVE: Mr. Speaker, I don't want to see them. I worked as an auditor for four years, and I know where you look for the significant things.

You don't go chasing the paper around in the back room when some body's stealing millions of dollars in the front. DR. BUCK: You were derelict in your responsibility. MR. SPEAKER: Order please. I'm just wondering if I should move the Chair over there between the two members so I can properly chair this side discussion. MR. MUSGREAVE: Mr. Speaker, if he would keep quiet, I would finish. Mr. Speaker, the longer we keep this issue going, the more people in Alberta are convinced that money has been stolen, that there's been fraud. [interjection] Well, that's what people say.

When you talk to people on the street, they don't think a loss is the fact that an invest ment went sour; they think somebody has stolen money. The auditor made it very clear there has been no loss; there's been no fraud; there's been no collusion. He made suggestions on how they could handle the record-keeping of their investments, and I don't quarrel with that. Mr. Speaker, I always like to take an opportunity to remind members of the opposition that they commis sioned a very expensive study by a firm from Harvard, which recommended what I thought were many valid ways of handling the fund in the future.

I notice they now ignore that report. Perhaps it's because their new leader doesn't like it. But if they would study that report, I think they could make a more substantial contribution to the select committee than they have in past months. MR. PAHL: Mr. Speaker, speaking briefly to this or phan motion — and I say that advisedly, even though I think the foster fathers in the opposition have done a noble job of trying to represent the intentions of the hon. member whose name appears on the motion for a return, although we haven't . . . DR. BUCK: The former Tory member? MR. PAHL: That's the one, Mr. Speaker.

I would like to say that I think members have ade quately discussed the reasons why this is an inappropriate direction to take. I think it boils down to the fact there's confusion between being concerned with management principles and strategy and tactics. In the public interest, it's quite appropriate to be concerned with the manage ment principles or policy direction an action takes, but when you wish to expose the strategy and tactics of the investment, as this motion does, it is clearly not in the

December 3, 1981 ALBERTA HANSARD 2037 public interest. I appreciate the very sensible comments of the hon. Member for Bow Valley in saying that at best there might be a lesson what not to do. Obviously that lesson was in some ways expensive, and that makes it worth something. His rationale also ignores the fact that there have been some considerable gains from investment. I wouldn't like to place some morality or immorality on $1.6 billion- worth of winnings, as opposed to a $60 million realized loss. So if we're looking for the bottom line in this, Mr.

Speaker, from a management point of view I guess we have to say: have the Provincial Treasurer and his people responsible for the Heritage Savings Trust Fund,

Section 9 investments, done a job that is in the public interest? I think the bottom line would have to say yes. Also, Mr. Speaker, I would say it is strange that the basis for the concern is a written report by a servant of the Legislature whose testimony before the select commit tee of the Legislature on the Heritage Savings Trust Fund satisfied in my mind the management principles we were concerned with. I have a good recollection of that, be cause I asked the questions very directly: was there any evidence of fraud, collusion, or poor management prac tices?

As many members have clearly said, in his oral testimony the Auditor General answered that there hadn't been. I also posed the question to the Auditor General that if there had been any of the concerns expressed by the members of the select committee, directly and in directly, inside and outside the committee, would we as the select committee on the Heritage Savings Trust Fund have found out about it? The Auditor General said very clearly, yes. Mr.

Speaker, in covering those brief points, I urge hon. members to be particularly cruel to this orphan motion and deny it. [Motion lost] head: MOTIONS OTHER THAN GOVERNMENT MOTIONS 210. Moved by Mr. L. Clark:

Be it resolved that the Legislative Assembly urge the government to give consideration to the funding of an experimental project to develop wind-driven turbine pumps, with a view to replacing electrically operated pumps now used in southern Alberta for the pumping of water for irrigation. [Debate adjourned October 15: Mr. Campbell speaking] MR. CAMPBELL: Mr. Speaker, it has been some time since Motion No. 210 was debated. In my previous remarks, I mentioned the advantages of the Alberta delta blade turbine.

The Alberta delta blade turbine has several technical advantages compared with the high-speed Dar- rieus or the propeller. It is self-starting, even under load. It is a slow-speed turbine with low noise levels. It avoids highly sophisticated and highly stressed blades. It's co upled with variable capacity pumping and can provide useful power throughout the full range of wind speed, rather than in a narrow band of higher wind speed required for A.C. electrical conversion by the Darrieus, and avoids a double energy loss in generation and consumption.

Coupled with variable capacity pumping, calculations indicate the average water output to be more than double that of the Darrieus or the U.S. propeller. The cost of pumping with the large Alberta delta blade turbine primarily arises from the initial cost of installa tion. Indications are that even now the wind pumping costs are competitive with electricity and as time goes on will, of course, decrease relative to increasing electric power costs and inflation.

The first stage of the project is additional design work on the Alberta turbine and the study of sizes and types of situations where it can best be applied. If that is con firmed, the construction, installation, and operation at Lost Lake would demonstrate the reliability and cost to be expected for Alberta manufacture and water pumping on a production basis. Not until the reliability and cost of wind energy pumping is clearly demonstrated is it likely that much priority can be given to working it into plan ning and design of the systems.

The first phase of the project, therefore, is to confirm the design and more reliable estimates of the economics and long-term bene fits. If the project then proceeds to successfully demon strate the turbine to be an economical, reliable tool for water supply, there is little question that the ingenuity of water resource engineers will find many more, likely thousands, of sites for its application in the years ahead. Alberta doesn't have a Boeing, a Hamilton-Standard, or M.A.N. of Germany, but the relative simplicity of the delta blade turbine doesn't require those kinds of opera tions.

Alberta does have smaller industries and brilliant, hardworking people with the initiative to develop the province. They need financial support in getting this Alberta turbine project started. Mr. Speaker, with that, and working with irrigation and water resource people, there is good reason to expect success in wind energy development. Thank you. MR. LYSONS: Mr. Speaker, I would also like to get into the debate on this very important motion. I'm not partic ularly happy with a couple of little things with the motion: the fact that it's suggesting that only southern Alberta could use the movement of water.

If we could come up with a wind system that we could use and that would be reasonably reliable, it would be of great advan tage to us in northeastern Alberta, and all over Alberta. I would have to support the motion in its entirety, with that proviso. In the early days of the settlement of the west, before electricity, windmills were all over. It was a great thing to be had in the country. It saved an awful lot of arm power. In the early days, they used pulleys and ropes, then the old wooden pump, and eventually the steel pump. Then the windmill came along and watered an awful lot of cattle and people.

I believe, though, that the turbine the hon. member referred to that should be designed is probably already designed as far as the pump is concerned. I believe it is the actual windmill or wind-driven engine he is looking at. I certainly urge the government, in particular the Minister of Agriculture, to let some of these projects go, give them some money, and perhaps utilize some of the very, very talented people we have in this great province, and support them in a meaningful way to get on with the job. We really could use it. Thank you. [Mr. Purdy in the Chair] MR. FJORDBOTTEN: Mr.

Speaker, I certainly appreci ate the opportunity to participate in Motion 210 this

2038 ALBERTA HANSARD December 3, 1981 afternoon. Being from southern Alberta, where the wind blows quite regularly of course, makes me very interested in the possibilities of using wind power as a resource. There are places around Fort Macleod and in the Crows- nest Pass where the wind speed is such that wind turbines could be very effective. With the average wind speed in southern Alberta of 13.6 miles per hour, based on a year, the effectiveness of wind turbines should certainly be looked at.

You might be interested that of a total of 8,670 hours in a year, the wind in southern Alberta averaged over 8 miles per hour for over 6,500 hours, or over three-quarters of the time. So, believe it not, when you think that the wind blows only in southern Alberta, the average wind speeds are higher only in Newfoundland and parts of Saskatchewan. One of the great things about using wind as an energy source is that it's environmentally clean. It doesn't have smoke stacks or anything like that, like a lot of other energy projects might have.

I guess the one drawback you would have to consider, though, would be the noise. There likely would be a noise problem. When you get high-speed propeller blades and with the strong winds we get in southern Alberta at times, the turbine would likely be subject to high stresses. In the research that's been done so far, the stress caused by the high wind speeds has certainly needed to be considered. If a turbine is up to 350 feet in diameter, I'm sure you can appreciate that the noise consideration could be quite significant. People are bothered when the wind blows.

There's one place in the Crowsnest Pass where the wind blows so hard and so regularly that they had to move new houses put up in one area, because the wind bothered the people, I understand. But I must make it clear that the Crowsnest Pass area — I notice the member for the Crowsnest Pass is looking at me with a jaundiced eye — is a great place to live. Just because it's true that the wind is like that in one spot in the Pass doesn't necessarily make it true all through. I bring up that one particular spot because I think that spot could be considered for a wind turbine.

When we're talking about irrigation and the use of wind for running turbine pumps, you can look either at generating electricity to run pumps or at using turbines themselves to pump water. When you're looking at it, one of the things you'd have to consider would be whether it's economically viable. I looked up and found that on the north shore of Europe, where wind speeds average 11 miles per hour, which is less than in southern Alberta, they feel a wind turbine would be economically viable.

So if wind speeds of 11 miles per hour are economically viable on the north shore of Europe, I'm sure they would be in southern Alberta, with average wind speeds of 13.6 miles per hour three-quarters of the time. It has been mentioned before that an Alberta-based wind energy development project has been proposed by a Calgary company, primarily for pumping large quantities of water, initially in southern Alberta. This would be worth while.

With the expansion of irrigation in southern Alberta, the greatly increased use of available water for electricity generated by wind turbine, whether it be on line or off-line storage pumping, could greatly enhance the existing system we have in southern Alberta at the moment. Mr. Speaker, irrigation is a large energy user. In 1977, the U.S. report said that irrigation accounted for 13 per cent of all energy used on farms. That's pretty signifi cant when you consider that that's a lot of electricity.

If we talk in southern Alberta about expanding irrigation to 1.5 million acres, and if we look in other parts of the province where we're talking about drainage — if 13 per cent is already being used in the United States, it could be very significant in southern Alberta in the future. Look ing at alternate forms of energy, it is certainly worth while. The use of sprinkler irrigation systems has made feasi ble irrigation of land that gravity wouldn't have touched. But the demand for water and the electrical power to pump that water is not presently available.

If that demand for electricity increases substantially, as it un doubtedly will, we have to look either at thermal power from coal, oil, or gas, or at electricity. I feel that electrical energy generation from wind in southern Alberta is some thing we can look at. Mr. Speaker, NASA, in the U.S., predicts that 30,000 to 50,000 wind turbines will be producing one-fifth to one-third of the U.S. electrical energy by the year 2000. In addition, the American wind energy association ex pects that 1.3 million smaller wind turbines will also be in operation.

So there is a lot being looked at in the United States as far as using wind generation is concerned. Any projects we were to do in Alberta would certainly en hance that for the future. I mentioned before that the reliability of an energy source for irrigation is important. It certainly wouldn't be successful, particularly in irrigation, if it wasn't reliable. In irrigation or intensive livestock operations, that as sured supply of energy is mandatory to being successful.

When the winds are the strongest or when you could generate the most electricity, that's when we shouldn't be irrigating, because that wind is blowing away a lot of that water. It makes it difficult. That's one thing, as we look at what the motion initially was: that we urge the govern ment to give consideration to funding an experimental project. I think that experimental project would likely show whether it was feasible or not. I remember many years ago when we used windmills for pumping water on the farm. We used wind chargers for generating our electricity. The technology at that time was certainly limited.

My dad had a wind charger, a 32-volt system, and it had storage batteries attached to it. Boy, when the wind blew we made sure we had the thing working because we needed that electricity for the times when the wind didn't blow. So, even though I certainly support research and development into harnessing wind as an energy source, how would we handle electrical need in times when the wind is nil? We have to look at the reliability of that. Mr. Speaker, I'm pleased to see that Alberta companies are active in developing and marketing wind energy tech nology.

These companies are convinced there's significant potential in the domestic market for small wind ma chines, in addition to a large potential export market. When we have had concern raised in southern Alberta about transmission lines in my constituency, the beauty of wind turbines on the domestic market in southern Alberta should be evident. It should diminish the need for additional transmission lines. The future development of research in Alberta is receiving a significant commitment, with slightly more than $1 million over the past four years.

If you add the tens of millions of dollars spent in other jurisdictions, I'm sure you'll agree that wind isn't being overlooked as an energy source. As the MLA on the Agricultural Research Council. I have concern that we approach the research and devel opment of wind energy as an energy source and that we don't duplicate a lot of the research being done in other jurisdictions. I just mentioned the significant steps that are being made in the United States. I think we should

December 3, 1981 ALBERTA HANSARD 2039 use that in any experimental project we use here so we don't make the same mistakes they made in their devel opment process. I commend the Member for Drumheller for placing this motion for debate. Too many people feel that we're really not interested in wind energy as an alternate energy source because we have so much oil, natural gas, and coal in Alberta. But there should be no mistake in anybody's mind that we are definitely interested. One way we could prove that interest is by passing this motion today.

When we talk about irrigation in southern Alberta — and I know I mentioned the wind in the Crowsnest Pass. There's wind all over. It's not any more significant there than anywhere else. When we look at what we're going to do and where experimental projects should be, I would appreciate hearing — hopefully the Member for Pincher Creek-Crowsnest will talk about one small project in that area at the moment. Every individual in agriculture should use whatever he can to farm profitably and to be a good manager of the resources around him.

To be successful a hog producer likes to use every part of the hog, up to and including even the squeal. As a southern Albertan, I see the results of wind erosion and say, why can't we use that significant energy source as a true source of energy. If we did that, we would see not only the negative effects but the positive results of what wind does. Hopefully, all members of the Assembly will support and see that we can pass this motion today. I certainly support it. Thank you. MR. BRADLEY: Mr.

Speaker, I hadn't originally in tended to participate in the debate today, but since some other hon. members have noted the velocity of the wind in the Crowsnest Pass, I think it would be important to add a few remarks to this windy debate. The Pincher-Crowsnest constituency happens to be the windiest constituency in the province of Alberta. The air flow-through per day in the Crowsnest Pass area averages 19 to 25 miles per hour.

In terms of looking at wind- driven systems, the Pass certainly qualifies with regard to what is considered to be the minimum amount of air flow-through one would require to set up a wind-driven system, which I think is somewhere in the vicinity of over 10 to 11 miles per hour per day. Just to go on on this subject of how much wind there is in the Crowsnest Pass, the hon. Member for Macleod alluded to the Sentinel area, where a housing development subsequently had to be moved because of the amount of air that blows through that area.

There is a wind recorder at the lumber mill there which on seven to 10 occasions a year, records wind at a velocity in excess of 110 miles per hour. So there's a significant amount of air in that particular area. A number of times a year, some significant damage is done to household and commercial properties by the gusts of wind which flow through the Pass area. Another very windy spot in the Crowsnest Pass is in the former village of Frank. I can recollect that a fellow was trying to construct a Quonset building in Frank.

It happened to be in the fall of the year, which happens to be a windier than normal time in the Crowsnest Pass. Unfortunately, this poor fellow almost got the building completed on three occasions and the wind came along and blew his structure, which was a fairly large Quonset, probably about 70 to 100 feet long by about 30 feet wide — it just picked that structure up and took it down the valley.

One issue I think we have to look at with regard to the electrical generation of power by wind is whether or not we can make arrangements with the utility companies to have this wind-generated electricity put into the grid sys tem in some manner. This is one of the problems which some of the very small wind generators have had. They would like to have access to the grid system, put their power into the system when the wind is blowing, and have some system where they could then draw out of the grid system to run their own systems when the wind isn't blowing.

Some consideration should certainly be given to resolving this issue. Perhaps some sort of credit system could be developed whereby those people who produce electricity by wind could have this power they generate plugged into the electrical grid system of the province. Perhaps it's one of the issues that the new electric energy marketing agency may in fact wish to address.

With regard to some research which is taking place in the province, I note that the University of Calgary Kananaskis experimental centre has requested permission to construct a wind turbine in Kananaskis Country at the site of the Kananaskis forestry experimental station. I think that should provide some interesting results on what is possible with regard to wind turbine in the province.

Another thing which we should be looking at, particu larly in terms of southern or southwestern Alberta in the constituency of Pincher Creek-Crowsnest is, because of the volume of air flow-through that is there, there are some ridges in the Eastern Slopes area, some mountain tops, et cetera, where it seems the wind blows almost all the time. I think we should identify these areas, do some studies to find out exactly where these spots are. They may be potential sites for wind-generated turbines on an ongoing basis.

The fact that the wind blows there suffi ciently on all occasions, you would never really see any down time from wind-generated turbines located on those sites. So I would like to recommend that we do a study of those sites and have them available to us. I would just like to add my support to the motion brought forward by the hon. Member for Drumheller. I think it's an excellent one. I know I've spoken on the amount of wind in my constituency, but I know less amounts flow through the rest of southern Alberta. As such, his motion is very timely, and I recommend it to members of the Assembly. MR. COOK: Mr.

Speaker, my part of the province isn't nearly as windy as the parts of the province represented by the hon. members who've spoken just before me. That's probably due to the representation in the House. I can only conclude that that's the reason. I'd like to compliment the hon. Member for Drumheller for bring ing forward a pretty imaginative motion. I've enjoyed listening to the debate that has gone on, both today and earlier in the year. Several years ago, I had a chance to go down with the water management caucus committee to look at some of the irrigation works in southern Alberta.

I got a real eye opener and learned a lot. Mr. Speaker, I view this issue as part of a larger issue, perhaps several issues. We're going to need to help Alberta Agriculture become more energy efficient in future years, and that relates to the theme I've tried to work on in this Assembly: energy efficiency. Secondly, I think we can also see that Alberta agriculture is going to be expanding in the area of irrigation in southern Alberta. So this motion is quite timely because it hits on both those items. It reflects the need to become more efficient in our use of energy in Alberta Agriculture,

2040 ALBERTA HANSARD December 3, 1981 and it also reflects on the increasing energy demands that irrigation expansion will require. As several studies have shown, wind energy is ideal for pumping in Alberta irrigation projects. I understand that pumping is one of the more significant costs in the operation of an irrigation system. Since Alberta is no doubt going to experience an increase in the amount of land irrigated, I'm sure we'll be looking at trying to make that an efficient area of enterprise. I know Alberta Agri culture is pretty active in this area of research.

I think that's a credit to the minister and to the department. As well, several Alberta engineering firms have a very impressive track record in research and development. It's interesting that they're now exporting some of that tech nology to the United States, Mr. Speaker. I think that also suggests that here's a good example of the research and development going on that could be expanded with a little more aggressive pursuit of R and D policy in the province. We can export that technology. It's a clean industry, world-wide, and Albertans are involved in imag inative and well-paid jobs.

I think that wind turbine research is just another good example of the potential we have in this province for that kind of development. Many studies have been done in the last couple of years that show wind turbines are a practical alternative to conventional pumping systems, and the costs are quite reasonable. I think it's practical to conclude that this is the area of development we should be pursuing a lot more. The hon. Member for Drumheller has done us a real service by bringing the motion forward.

I, too, like to hope that it would come to a vote this afternoon, because I think it's an area that deserves more support and Alberta Agriculture deserves the recognition. I'd also like to refer to a study done for the Energy Resources Conservation Board on the energy require ments of agriculture in Alberta. Mr. Speaker, it discusses in some detail the opportunities we have for wind pump ing and electric generation through alternative energy forms. It's interesting to note that the areas south of Lethbridge are probably the most practical for this.

I've had a few run-ins with my colleagues south of Leth bridge, in particular — probably south of Calgary — more on ideological grounds than anything else. I don't know what to conclude, Mr. Speaker. There seems to be a direct relationship between wind speed and moderation in political ideology. Perhaps it's an inverse relationship. But it's there, and it's self-evident for all who want to read the study. The further north you go, the lower the wind speeds are. I think the hon. Member for Peace River, for example, must be one of the most reasonable people in the Assembly, given that approach to politics.

Alberta is going to be facing some dramatically in creased costs in generating power. It wasn't so long ago that farmers used windmills as a way to raise water to provide electricity to the home. In the 1940s and '50s, when electricity became more generally available — and that was before my day — I gather that that source of energy was phased out. I'm not nearly as windy as my colleagues from the south have been, and I'm probably going to conclude shortly. I think that wind pumping in southern Alberta is a very practical alternative, and these kinds of options need to be explored more. Mr.

Speaker, I mentioned earlier that a Canadian- made wind turbine is under testing in the United States, and it is a good example of the export of technology. I gather that is under study in Texas and Kansas for irriga tion pumping. There is an

article in Agricultural Re search, printed last year. It's a publication of the USDA. It shows how wind turbines are proving to be very promising alternatives to conventional irrigation pumping systems. Some soil scientists, whose work I have a lot of interest in, have investigated large-scale applications. They think that up to 20 million acres of land could be irrigated with this sort of approach.

It's said that up to 60 or 70 per cent of the current demand for surface irrigation could be met with this type of technology, and 30 to 45 per cent of the energy used in sprinkler irrigation, depending on the crop and location. As the hon. Member for Pincher Creek- Crowsnest Pass pointed out, there's lots of wind in south ern Alberta. It's a technology that probably is more prac tical for the area south of Lethbridge, but it's interesting to note that that area is probably going to be developed further for irrigation.

If this does come to a vote this afternoon, I hope the hon. member, in his concluding remarks, could just high light points on the costs, practicality, opportunity for expansion of irrigation, and need the to investigate alter native energy sources, among others. I hope the Assembly would ultimately support this and give recognition to both the member and the Department of Agriculture, which has done a lot of work in this area, and to the Alberta engineers who have shown a lot of initiative and imagination and whose work is being recognized outside this country.

I think a positive vote this afternoon would serve well in all those areas, and I'm looking forward to having a positive conclusion to this debate. With that, Mr. Speaker, I'd like to conclude. MR. STROM BERG: Mr. Speaker, in the past I haven't been too interested in alternate energy sources. But after going home the other night and being presented with my latest power bill and my wife's demand for my autograph on a cheque so she could pay it, I've even given consider ation to going around my farmyard with shotgun, shoot ing out some lights. Mr.

Speaker, the debate has [centred] considerably around research done in Alberta and throughout the world. I think we're sadly lacking in Alberta and Canada compared to what other countries have accomplished. I think of the wind banks in California, where they set up windmills on a quarter

section of land for the production of a fair amount of power. Of course, the Japanese have now built some experimental ships in their merchant marine — and apparently it has worked — using sails as standby and, I believe, a cut in fuel of 25 per cent. The sails they're using are not of cloth but are aluminum and can be turned at any angle. It's very exciting. In Alberta, at its micro tower on Highway 14 east of Edmonton, AGT has a wind charger they call the egg- beater. It's purely experimental. It would be interesting to hear from the minister responsible for that how successful it has been.

Apparently they also have a smaller wind charger located there to charge the standby batteries. Mr. Speaker, one of the more exciting programs you might be aware of is TransAlta's experiment in co operation with one farmer in southern Alberta. They have adopted a wind charger using helicopter blades, with the idea that surplus electricity would flow back through the meter and, of course, when the wind was not blowing, the power was coming directly off the line. Your com pany, Mr.

Speaker, felt it has not been too successful because when TransAlta needs power in the peak period, the wind isn't blowing, and vice versa. Here is an area that if it were equipped and the work done to bring these down to a reasonable cost, the feedback into the line, as

December 3, 1981 ALBERTA HANSARD 2041 mentioned by the Member for Pincher Creek-Crowsnest — the power that could be produced into the system could be quite exciting. Also, Mr. Speaker, I think we need some legislation to encourage wind chargers in our cities and towns in the province. As it is now, cities and towns have discouraged through by-law — you cannot put up a wind charger in that village. There are people — and I think of the former mayor of Ponoka, who requested permission to put up a wind charger in his backyard. Town council said, abso lutely no way.

I don't see anything wrong with a wind charger in a man's backyard. It's no worse than TV aerials. Mr. Speaker, it was also interesting when the Member for Pincher Creek-Crowsnest described the wind through that pass, and I can certainly vouch for it. I went through there last winter, and fair size boulders roll down and across the highway. I've seen snow and soil drift, but I've never seen boulders drift. When he describes the wind velocity in the pass, I can certainly vouch for that. It seems to go along with the members who have been elected to this Legislature from the Pass.

Some of them have been the most windy this Assembly has ever seen. Thank you, Mr. Speaker. MR. ACTING DEPUTY SPEAKER: May the hon. member conclude debate? HON. MEMBERS: Agreed. MR. L. CLARK: Mr. Speaker, I would like to thank all members who spoke on this motion. It's been a kind of fun motion and, at the same time, I think it's been an important one. I got interested in some of the members who spoke today. The Member for Rocky Mountain House brought out some advantages of this type of tur bine which moves very slowly. He answered the question of the Member for Macleod. He said they'd get very noisy.

That's the one great advantage of this turbine invented in Alberta over the eggbeater type they're re searching. It travels at a terrific rate of speed, needs special steel, and has to be engineered perfectly, while this one goes only 60 revolutions a minute at its fastest speed and under full load. That way, it doesn't have nearly the noise some of the others have. As far as storage capacity is concerned, in my closing remarks I'm going to speak on that a little and on a new way of producing power. I would like to bring that out in my closing remarks.

As far as producing power now is concerned, with this new electric energy agency we have put into effect, it is my understanding that if there were a grid system, wind power could be funnelled right into the lines as another power source, if it could be proven that it was reliable. This is one thing I was so enthusiastic about when it came to the energy agency Bill we passed a few days ago. I think it's going to give more competition to the energy field than we have at the present time. The Member for Edmonton Glengarry said he would like to see some of the costs.

For his benefit, I guess the study is to find the cost of producing it. Before I go into my final remarks, I'd like to say what has been done in energy in Alberta since this motion came on the floor in early spring. Since early spring, the government has funded the wind turbine being developed in Calgary that's been mentioned in the debate. They have already funded the first of three stages of the program. Since last spring, a complete engineering study has been done and the design and engineering of a 75-foot wind turbine and all its component parts is now on the drawing board.

By the first of the year it will be ready for the second stage, which I'm surely hopeful they will also fund after this motion is passed. The second stage will be the actual construction of the 75-foot windmill, wind turbine, and its component parts. The third stage will be the installation of this wind turbine into Lost Lake in southern Alberta to pump waste water back into the irrigation system. They already have an electrical pumping system there that is in operation at a cost of $20,000 a year to the irrigation district. They picked this spot for several rea sons.

They could compare the costs with electrical energy. They have a 75-foot windmill which they feel will pump a tremendous amount of water, just as much as they are pumping now. I think they're working on something like a 16-foot diameter piston. It will pump a tremendous amount of water, even a 75-foot one. Their object is to make a 150-foot blade, which with an average wind of about 13.9 miles per hour will pump 48,000 acre feet of water a year. That's a tremendous amount of water. Ask anybody in irrigation. Mr.

Speaker, I think it's very important that we men tion a bit about where we're going in Alberta and in Canada as a whole when it comes to our technical people. Over the years, we've had a lot of people developing farm machinery and all sorts of new methods for doing this and that, but it seems a lot of this expertise is lost to us due to a lack of funding. Before they can really have it developed and get it on the market, they've found them selves in a financial bind due to lack of funds.

They don't seem to be able to talk people in Canada into having any faith in our own technology and some inventions our people have brought out. I have found over the years, at least what I've seen of it, U.S. industry will sit back and watch Canada develop a good product. When it dies down and comes to a disastrous end for lack of funds, they'll pick up the people and the technology, and we'll be buying that back again across the border. A perfect example of this happened in the farm machinery business not too long ago where . . . I'm getting notes from everybody here.

One of the examples I was going to cite is a rotary type of combine which started by a farmer in Saskatchewan, developed with the help of the government, but they never had the funds to complete it. Now when you buy a rotary type of combine, you buy it from the United States market. I'm getting people here who want me to be quiet, but I don't get the floor very often, Mr. Speaker. I'll wind up with just a couple of short remarks. One member mentioned we had to have some way of storing electricity. There is a way of storing electricity.

A novel way could be if these pumps work and pump the tremen dous amount of water they say — and this is what this experimental program is for — we could build small three- or four-week storage dams on the edge of our rivers, pump water up 300 feet, drop it back in the river, and produce the energy by hydro as it's coming down. With that, Mr. Speaker, I urge everybody to support this motion. I would like to thank everybody who spoke. [Motion carried] MR. KING: Mr. Speaker, notwithstanding the fact this is [private] members' day, I ask unanimous consent of the House to call Committee of Supply.

2042 ALBERTA HANSARD December 3, 1981 MR. ACTING DEPUTY SPEAKER: Is there unani mous consent of the Assembly to revert to Committee of Supply? HON. MEMBERS: Agreed. MR. KING: Mr. Chairman, I move that the House re solve itself into Committee of Supply for consideration of estimates. head: COMMITTEE OF SUPPLY [Mr. Purdy in the Chair] MR. DEPUTY CHAIRMAN: The Committee of Supply will please come to order.

ALBERTA HERITAGE SAVINGS TRUST FUND CAPITAL PROJECTS DIVISION 1982-83 ESTIMATES OF PROPOSED INVESTMENTS Department of Hospitals and Medical Care Agreed to: 1 — Alberta Children's Provincial General Hospital [$2,970,000] MR. KING: We'd like to have a motion that the vote be reported, Mr. Chairman. MR. DEPUTY CHAIRMAN: Not until the complete vote is Finished. That's all that's necessary. MR. KING: We'd like to do only one vote from Hospi tals and Medical Care at this time, Mr. Chairman. MR. DEPUTY CHAIRMAN: I'm sorry. Would the min ister then report the vote? MR. RUSSELL: Mr.

Chairman, I move that the vote be reported. [Motion carried] Transportation Agreed to: 1 — Airport Terminal Buildings $3,150,000 MR. KROEGER: I move that the vote be reported. [Motion carried] MR. KING: Mr. Chairman, I move that the committee rise, report progress, and beg leave to sit again. [Motion carried] [Mr. Purdy in the Chair] DR. CARTER: Mr. Speaker, the Committee of Supply has had under consideration the following resolutions and reports as follows.

Resolved that from the Heritage Savings Trust Fund, sums not exceeding the following be granted to Her Majesty for the fiscal year ending March 31, 1983, for the purpose of making investments in the following project to be administered by the Minister of Hospitals and Medical Care: $2,970,000, the Alberta Children's Provincial Gen eral hospital; and by the Minister of Transportation: $3,150,000, airport terminal buildings project. The Committee of Supply has had under consideration certain resolutions and reports progress thereon.

CLERK ASSISTANT: Mr. [Acting] Government House Leader, request leave to sit again, if you please. MR. KING: I request leave to sit again. MR. ACTING DEPUTY SPEAKER: Having heard the motion and the request for leave to sit again, do you agree? HON. MEMBERS: Agreed. MR. KING: In view of the hour, Mr. Chairman, I move we call it 4:30 and move to private Bills other than government Bills. [Motion carried] head: PUBLIC BILLS AND ORDERS OTHER THAN GOVERNMENT BILLS AND ORDERS (Second Reading) Bill 208

An Act to Amend The Ombudsman Act (No. 2) MR. NOTLEY: Mr. Speaker, I ask the matter be held over. I notified the Government House Leader that I'm not going to be able to be here for the balance of the period. Under those circumstances, I request that we hold Bill 208 until next week. MR. ACTING DEPUTY SPEAKER: Is it agreed that Bill 208 stand and retain its place on the Order Paper? HON. MEMBERS: Agreed. MR. KING: Mr. Speaker, in the absence of its sponsor. Bill 225 will drop to the bottom of the Order Paper. Bill 202 The Consumer Purchasing Power Index Act [Adjourned debate April 16: Mr. Kowalski] MR.

KOWALSKI: Mr. Speaker, the last opportunity the Assembly had to look at Bill 202, The Consumer Pur chasing Power Index Act, introduced by my colleague from Drayton Valley, was just prior to the Easter week end. I have placed a 26-ounce bottle of Glenlivet Scotch whiskey in front of me, and it's full. I have it placed in front of me because I think all members of the House should focus their attention on this imaginary bottle. I would like to underline "imaginary bottle", because this bottle of high-priced Scotch might in fact be something a rich man is accustomed to.

However, for a poor man, it might be a luxury he's never had an opportunity to obtain. Be that as it may, for the poor man, it might very well be the only indulgence that individual would ever have or consider as a personal necessity.

December 3, 1981 ALBERTA HANSARD 2043 I table this imaginary bottle of Glenlivet Scotch whis key today because it could very well be one of the 450 items Statistics Canada uses on a monthly survey to determine the changes in the cost of living for the citizens of Canada. We all know that that monthly index is referred to as the consumer price index. The point I'm trying to make with my imaginary bottle of Scotch whiskey is that one person's necessity may very well be another person's luxury.

Many critics and opponents who look at the consumer price index basically argue that many of the bureaucrats who include this bottle of whis key in calculating the cost of living cannot often distin guish between luxury and necessity. The interesting thing about the consumer price index in the country of Canada is that it's based on some 450 items. Each of these 450 items is given a weight based on an expenditure chart, but all of them are geared on the dollars necessary to purchase them, based on 1974 spend ing habits. Of course, today we're in the year 1981, and some seven years have gone by.

Those in favor of the consumer price index argue that it arrives at a composite figure that takes in the life styles of the rich, poor, young, old, single, married, couples, single-parent families, and everything between. In actual fact, the only thing the consumer price index in Canada has in common is that the figures and statistics used in compiling it are based and obtained from cities with a population of at least 30,000. Most of us in the province of Alberta would not even be consulted in trying to determine what this consumer price index is all about.

The seven major spending categories looked at on a monthly basis to determine the consumer price index are weighted in some rather interesting ways. In order of declining percentage, the weightings are the following: 34.1 per cent for housing, 21.5 per cent for food; 15.8 per cent for transportation; 10.1 per cent for clothing; 8.3 per cent for recreation, reading, and education; 6.2 per cent for tobacco and alcohol; and 4 per cent for health and personal care. Taking all the statistics together, you get this composite of 100.

Talking about the consumer price index, it's of interest to me that you have to ask yourself what it really means. I'd like to read into the record of the Legislature a press release put out for September 1981: According to Statistics Canada, the Consumer Price Index [CPI] rose by 0.7% in September, reach ing 242.4 in a base of 1971 = 100. The increase in September, 1980 was 12.5%. I really don't know what that statement means to many members in this Assembly.

I have a very difficult time understanding what it means to me as an individual Canadian, when I have been told that all of sudden the base is 242.4 of what it was supposed to cost in the year 1974, which was based on 100. Then I look at the various composites in determining the consumer price index. The release goes on further to say: The food index declined by 0.2%, primarily due to lower prices for fresh vegetables, beef, poultry and sugar. Higher prices were noted for selected pork cuts, fresh fruits, selected cereal and bakery prod ucts.

Milk prices rose in Nova Scotia and British Columbia, while prices for other dairy products in creased across the country. I live in Alberta. If the price of milk actually rose in Nova Scotia or British Columbia, I really have a difficult time understanding what the consumer price index in crease has been for me as a citizen of the province of Alberta from those two months of September 1980 and 1981.

I raise that because the motion put forward by the Member for Drayton Valley with respect to a consumer purchasing power index is an extremely innovative con cept that I think has considerable merit, one that all Members of the Legislative Assembly should give very careful thought to and should support. I think it has merit in determining what it costs an average individual in the province of Alberta. In Canada, we measure inflation by the consumer price index. In many ways, it's a very blunt tool.

It's calculated by tracking the price of these 450 consumer products, ranging from housing to wine or the imaginary bottle of Glenlivet. To many citizens of this country, that bottle is only an imaginary thing. In my view, the CPI, consumer price index, has two major significant flaws. The first is that it's very much out of date. The consumer price index basket of 450 goods and services was last defined in 1974, nearly eight years ago. Needless to say, many Canadians have changed their pattern of expenditures greatly since then.

Consumers today may spend more for housing and less for clothes than they did in 1974, or it may be vice versa. They may buy lean pork rather than fat beef. They may buy leafy- green house plants rather than powder-blue leisure suits. When you look at the consumer price index, that change in consumer patterns is not looked at to the degree it should be. As well, the consumer price index takes no account of substitution, the replacement of one commodity by an other because of changes in tastes or prices.

Since one of the major effects of inflation is substitution, the Canadian consumer price index in reality becomes less relevant the more inflation there is in existence at any time in our country. Mr. Speaker, the consumer price index probably overstates the real inflation rate by ignoring how con sumers actually respond to higher prices. Certainly, when you look at Canada since 1974 it's a reality. When you look at the surpluses of commodities at one time or the shortages of commodities at another time, consumers do react to price increases. They react in a very realistic way.

The higher the price, the more costly the product is in terms of the total budget the family has, the less likely it is that that family is going to continue to buy in that particular direction. That family may, in fact, look else where and try to find substitutes or readjust their con sumer purchasing patterns because of increased costs. A second problem with the consumer price index is its inability to distinguish among social groups. When you look at one national consumer price index for the whole country of Canada, you have to look at the type of groups of people we have in our country.

We look at the young, the old, the poor, the rich, the single-parent fami lies, and the large families. That consumer price index does not distinguish between individuals or even individ ual types within that basic group.

A study that took place in the United States nearly a decade ago clearly showed that the consumer price index of the poor was actually lower than that of the wealthy, because the price of the basket — the global figure of things that a family was most likely to get — in fact rose more slowly for the poor because they were less able to buy some of these items, including the imaginary bottle of Glenlivet, than perhaps the family of the rich.

Bill 202, The Consumer Purchasing Power Index Act, put forward by the Member for Drayton Valley, is imagi native, innovative, and basically takes off where the Sta tistics Canada consumer price index remains. It proposes to measure the movement of earnings as well as prices.

2044 ALBERTA HANSARD December 3, 1981 One of the essential weaknesses of the consumer price index, in addition to the two I've already talked about, is that it only reports price changes. Earnings as well have changed in recent years. When you look at the years from 1974 through 1981, you can very easily say that today the consumer price index is 242 points above the 100 base in 1974, but it does not recognize the fact that earnings have changed and gives no real indication exactly where con sumers stand at any given time.

As it has been presented to the House, Bill 202 would see the Provincial Treasurer of this province present an annual report to the Legislature. That annual report would summarize index indicators and reports of a number of things, including the hours of work necessary to pay for such items as housing, food, consumer goods, and income taxes. Consumers would thus be informed whether it is taking more and more hours to pay for items they need or if it is taking fewer hours.

Another feature of this Bill is that the proposed pur chasing power index would report on urban and rural bases, and would actually reflect differing earnings and input costs. Not to be too repetitious but to point out one negative, the information attached to and brought into the consumer price index is geared only to and found only from those living in urban communities with a population of 30,000 or larger throughout Canada. It ignores all of us who live in rural areas. Mr.

Speaker, the bureau that would be created as a result of Bill 202 would basically say that we need to have an annual index, and it would include such things as income tax. Income tax and indirect taxes are not in cluded in the determination of the consumer price index. We all know that income tax is one of the highest percentage factors in everyone's family income through out this country. Secondly, the Bill is saying that the overall index should consider the cost of shelter, includ ing expenses in respect of rent, property taxes, main tenance, utilities, and interest on home financing.

One of the real disadvantages of the present consumer price index is that it does not recognize to the degree that it should such innovative projects or programs as the $500 per capita property reduction program this govern ment brought forward several years ago. If you look at a consumer price index of 12 or 13 per cent across Canada, a property reduction program brought in by a progressive province like Alberta that would allow an individual's or family's disposable income to be increased, would not be recognized. We now need to have that included.

A third item that would be included in the overall index proposed by the Member for Drayton Valley would, of course, be the cost of food. And that's a really fascinating item. I'm not sure what basic food commodi ties are used on a month to month basis, but surely beef would be a prime commodity used in Alberta,

whereas if you lived in the maritimes, particularly Newfoundland, you might be looking at seafood. Of course the dollar figures are very different. When we go to a food market in the province of Alberta and wish to purchase such things as crab, we're looking at $11, $12, $13 a pound today. If that item is included in the consumer price index, it inflates the total global figure considerably, because king crab certainly is not what you would con sider a necessity of life. At the very best, it could be considered a luxury item for those who are fortunate enough to purchase it on a regular basis.

A fourth item that has to be included in the new consumer purchasing power index is clothing. It's re markable to me that we live in Canada where statistics indicate that each and every family has to pay between $400 and $600 more on their annual clothing bill because of hidden tariffs, excise taxes, and indirect taxes, really to subsidize and beef-up a deteriorating clothing industry in two central provinces of this country. Remarkable, to say the very least.

A fifth item to be considered in terms of the consumer purchasing power index is service and financing charges an individual will have to pay for the purchase of certain goods. Some goods are necessities, and service and financing charges are attached to them. The cost of transportation has to become a base, but it has to become a base for the minimal required transportation that each and every one of us would have to endure to get from residence to work place.

I certainly hope the Member for Drayton Valley is not going to throw in as part of the Bill such luxurious items associated with transportation as holidays and the like, which are certainly not considered a necessity of life. Another item is the cost of education. We live in a society that encourages people to expand upon their educational base and to take advantage of such outstand ing institutions in the province as our universities and technical schools.

The cost of tuition, books, tutor fees, and the like should certainly become part of the base for the individual who works on a full-time basis, who wishes to upgrade his educational standards, or who wishes to take advantage of such institutions as Athabasca Univer sity or the Alberta correspondence school. Recreation, too, has to be included in the base figure in terms of the index. It's not clear to me, at this point, if the hon.

Member for Drayton Valley would include the cost of tickets to see NHL games in Edmon ton or Calgary, or would it be just a minimum kind of recreation to allow mom and dad to take their children to the swimming pool or to the occasional movie, or things of that type. I certainly hope she would clarify that for me. The costs for health and personal care must also be included.

Again, I have no information at this point exactly how far the Member for Drayton Valley proposes to go in that regard, but I would certainly hope that the basic costs of the Alberta Health Care Insurance Com mission fees would be part of it. In terms of personal care, I wouldn't suggest it would necessitate a $12 haircut every week or the like. It would be basic requirements for a basic family so they might be able to compare them selves on a one to one basis per year. Finally, the Member for Drayton Valley proposes that The Consumer Purchasing Power Index Act also have an index for vacations.

I think that cost might be recognized. Alberta being the very wonderful province it is, with its tremendous opportunity for family vacations. My only reservation would be that perhaps the Member for Dray ton Valley might suggest a two-week holiday in Hawaii might be included as a basic index, and of course that is not a necessity or requirement of life. At the very least that would be considered a luxury, aside from a very small number of people in our province.

I think the index would provide an extremely impor tant mechanism whereby individuals might find out how their earnings are being affected on a year to year basis. For the consumer price index just to come out and say, well, it costs 12.5 per cent more this year to live than it cost a year ago, does not tell the whole story. Undoubted ly, one of the primary things that has to be included in this Act is a recognition of the fact that the consumer purchasing power index would in essence indicate to all

December 3, 1981 ALBERTA HANSARD 2045 citizens of Alberta the number of hours they have to put in to obtain a certain product. People can relate to that. If people know that it takes 100 hours of work to buy a snowmobile, they have an objective they can work towards. It's amazing to me, when we take a look at the cost of food, that people today say it is rather expensive. The consumer price index might come down and say, well, the cost of food has risen from 12.5 per cent last year to this year. What does that really tell you?

What you don't know is how much more money you're making this year compared to last year. If your disposable income has gone up 17 per cent over the past 12 months, then in reality the cost of food has reduced itself rather than increased as a percentage of the whole. When you take a look at the amount of money Canadians — and by the very nature of it, Albertans — are spending on food, one has to be concerned. All too often the consumer goes down to the local supermarket and comes out horrified saying, look, it cost me $125 to buy this food.

But when you take a look at the food included in the four, five, or six packages, you really wonder how much of it should be defined as food. When you take a look at such products as underarm deodorant, toothpaste, shoelaces, and grass seed all included in the food basket, you quickly realize that a generalized statement is being made, and it is not in fact food that is being purchased for the total. In reality, Canadians are spending smaller and smaller shares of their income on food.

If you take a look at the statistics of how much money Canadians spent on food over the last 10 years, you find that that percentage has decreased and in essence an individual's disposable in come has increased. Today Canadians spend some 13 per cent of their income on food in the home. That figure has reduced itself from nearly 14 per cent in 1971. What is also true is that the percentage figure expended for food eaten away from the home, in restaurants and the like, has also decreased marginally from 1971 to 1979. In fact, Mr. Speaker, consumers spend less of their income on food only in the United States.

They spend approximately 12.25 per cent of their income on food compared to the rest of the world, which spends consid erably higher than that. A survey was put out in April 1980 by the United States Department of Agriculture. It basically looked at a cost of an 18-item food basket in a number of capitals throughout the world. It determined that the medium cost for these 18 items in a food basket, consistent items throughout, in 17 world capital cities was just a few pennies above $66. In Ottawa, that figure was $50.85; in London, it was $66.89; and in Paris, it was $82.17.

Another survey was done by the Union Bank of Swit zerland in 1979, and it went beyond the 18 items included in the American survey. It looked at a cost of a uniform basket of 39 food and beverages: about a two-week supply for the normal family. Again, it looked at a number of world cities. Of the 45 cities surveyed, it found that the average cost was $158 for this uniform basket of 39 food and beverage items. When you look at the cost of that same basket in Canada compared to cities in other countries, you find some remarkable discrepancies.

In Montreal, that basket of 39 food and beverages would have cost $134; in Toronto, $149; in New York, $172; in Brussels, Belgium, it was $191; Stockholm, $207; and Geneva, a whopping $223, a significant cost factor above what Canadians are asked to pay for food. Our consumers in this country are getting an incredibly good deal when it comes to quality food available to them in all parts of this country. In fact, it's remarkable to me how the average citizen complains about the cost of food.

It's high time that all of us spent a little more time pointing out to the consumers that when they go down to the local supermarket on a given day of the week, take a look at all the items in their basket, and use the term food for them, they are misleading themselves. A lot of the articles and particles in those bags are not food items. They are related household items, but they are not food. That has to be very, very clear. The Consumer Purchasing Power Index Act would allow us as Albertans to understand exactly how much it costs us to live in this province at any given time.

Albertans have many advantages that other Canadians do not have. But when the consumer price index is issued, and it says that it costs 12.5 or 13 per cent more to live in this country, it ignores some realities that are not in cluded, and should and could be, in The Consumer Purchasing Power Index Act. There is no recognition in the consumer price index of a sales tax.

Alberta, of course, is the only province in the country that doesn't have a sales tax, which would suggest to me that if the consumer price index for the country of Canada is 12.5 per cent, surely in the province of Alberta it is reduced, because we do not have a provincial sales tax. Property taxes in this province are significantly lower than proper ty taxes in other provinces in the country, but those taxes are not included in the consumer price index. In essence, because Albertans have a higher percentage of disposable income than other Canadians, the average Albertan is substantially better off.

It's remarkable to me that if you look at the average property tax, perhaps in the city of Edmonton or Calgary, it is in the neighborhood of $700 or $800 for the average-sized home. If you move to Winnipeg, Manitoba, you'd almost go bankrupt, because that average property tax would be in the neighborhood of $2,300 to $2,500. Another item that's not included in recognition of the consumer price index is the fact that we have a large number of indirect taxes removed. We have no tax on gasoline in this province; other provinces do have a direct tax slapped on.

In fact, we've even gone the other way in the province of Alberta: for a number of our consumers, particularly our agricultural consumers, we have a farm fuel rebate of 12 cents a gallon. Of course, that is not included in the consumer price index, but certainly could become part of the index that would be looked at in determining a consumer purchasing power mechanism. Mr. Speaker, the Bill that the Member for Drayton Valley introduced deserves the attention of the Legislative Assembly. It would be based on the realities of life in the province of Alberta, not in the country of Canada.

When the consumer price index looks at 450 articles across the country, one has to be concerned how many of those articles emanate from or are based on the quality or standard of life in the province of Alberta. The second concern I have about the consumer price index is that it's based on consumer patterns of 1974. We now live in 1981. The mechanism proposed by the Member for Drayton Valley would have an annual re newal look at what the composite figures would be in terms of determining this index. In conclusion, I think the member has a very good idea. I congratulate her for introducing it.

I certainly look forward to other members participating and indicating their support for the Bill put forward.

2046 ALBERTA HANSARD December 3, 1981 [Mr. Speaker in the Chair] MRS. EMBURY: Mr. Speaker, I am very pleased to participate today on Bill 202. I also would like to commend the Member for Drayton Valley for bringing this very innovative Bill before the Assembly. It has brought to the attention of all of us an issue that many of us are probably not too well versed on, although the implications of what is happening today is a concern to all of us. One interesting aspect of this Bill is that it goes a long way towards pointing out the danger of the use of the wrong index.

It also points out the problem with the present index. Although many members of the Assembly, particularly the member for Barrwood . . . [interjections] MRS. OSTERMAN: A new constituency. MRS. EMBURY: I thought the member might like to expand the borders of his constituency, so I thought I would help him with a new name. I do apologize humbly because certainly on one or two occasions in this Assem bly, I've taken exception when members have used the wrong name for my constituency. I do apologize to my colleague. I was going to say that the Member for Barrhead was extremely knowledgeable on this topic.

This is certainly more than I can say I am. So if the members of the Assembly can bear with me, I would like to repeat a few of the facts and figures the Member for Drayton Valley brought out so well in her initial speech on this subject. There's that old saying that after the Lord Mayor's chariot comes a mud cart, and that's about the way I feel on this topic. It's not one I've been very knowledgeable on in all the details. However, I would like to say that the consumer price index is a comparison between the cost of goods in 1971 and the cost of goods today.

It is based on a market basket of goods and services which is intended to repre sent the purchases of an average Canadian family of four. The Canadian price index, as it is known today, reflects the seventh revision of item weights and content since it was introduced early in the century. I felt that the Member for Drayton Valley, in her opening comments, reiterated some very interesting rea sons she brought forth this Bill and the implications she feels it has.

I found it very interesting that she stated that one of the basic concerns arose over a long period of time of looking at the cost of living and a true measurement of a family's purchasing power. As she stated, unbeknownst to many Albertans, Canadians are certainly better off today than they were a generation before. In fact I believe she gave many examples of some of the things average Canadians can do today that they certainly couldn't do in previous years. I think this principle certainly exemplifies that Canada is indeed a land of opportunity, and even more so in Alberta.

Through hard work rewards, not only material rewards, are produced for everybody. It certainly is an indication that upward mobility on a social stratum is readily available for everyone in Canada. So many factors enter into how a family today can assess purchasing power. As has been stated, the CPI has been viewed as an inadequate tool. Secondly, it is being used in a manner that it was not intended to measure. It is viewed to be out of date because Canadians have changed their patterns of expenditures. The Canadian price index does not take substitution into account.

By that, I mean the replacement of one commodity by another due to changes in taste or price. The CPI possi bly overstates the real inflation rate by ignoring how consumers respond to higher prices. This is important because social security payments, income tax exemptions, and some union wage contracts are actually tied to the Canadian price index. This index only measures prices, but it omits many non-price factors such as additions to family size and changes in the income tax structure. A true cost-of-living index would attempt to measure the impact of all these non-price factors.

In simple terms, the CPI is a statistical measure only. While the CPI is the best indicator of average retail price movements across the country, it doesn't measure the cost of living for Canadians. Howev er, despite its weaknesses, it is the best measure of infla tion in Canada. It's considered one of the best price indexes in the world. The Canadian price index was never intended to be used for such an enormous variety of purposes.

The problem with trying to reach a criterion for any type of index is that people at the low income levels have to purchase exactly the same consumer items as the ones at higher income levels do. There is absolutely no rationale for relating the consumer price index to the 1971 dollar, nor is it reasonable to ignore interest and taxation. It should be a consumer purchasing power index, based on how many hours of labor are required to purchase a commodity, or the wages per hour divided by the cost of the item. The purchasing power index certainly won't improve the position of the consumer.

It would only give a realistic basis on which to compare the consumer's position today. I understand the purchasing power index would not replace the CPI but would be used in conjunc tion with it, to give consumers a better indication of their relative financial strength today. The problem actually is not with the CPI per se but with the many uses it has been put to. It was not designed to be anything more than a single statistical measure of the change in price of a basket of goods.

Since it is being used for other purposes, such as measuring inflation, there is obviously a public need for other types of indices. The purchasing power index would fulfil some of these needs, would keep consumers better informed, and even aid in keeping down the inflationary spiral which the CPI tends to generate when it is misused. For example, the purchasing power index would reflect the cost of income taxes, the biggest single expense for Canadian families. Used in conjunction with a tax index, a much clearer picture would be established.

When the CPI indicates that the cost of living has increased again, many consumers blame it on the rising price of food. This is a very natural reaction, given that consumers make regular trips to supermarkets

whereas such items as taxes and insurance are paid only once a year. Food prices are often considered to be high, but high compared to what? As is obvious to many of us, Canadians actually are better off than most consumers in other countries. Canadians enjoy the lowest prices for food of consumers almost anywhere in the industrial world. Even though Canada has had a higher rate of food price inflation than some other countries, Canadians in 1979 worked fewer hours to buy their groceries than did people in other countries. MR. SPEAKER: Order please. I realize the hon. member is dealing with a fairly complex topic, but I seem to have

December 3, 1981 ALBERTA HANSARD 2047 a growing conviction that the hon. member is reading her speech. MRS. EMBURY: Mr. Speaker, thank you very much for bringing this to my attention. [laughter] I thought my eye contact was sufficient to indicate that the information I'm referring to had passed through not only my eyes but also my brain. The other points I'd like to make are merely issues looking at what this Bill would do or some of the aspects we should consider in relation to this Bill.

As I mentioned before, the purchasing power would allow Albertans to have a better picture in regard to their relative financial strength, but it really doesn't solve the problem of the low income bracket. Also, as I stated, there is no single index that could be used to really simplify the overall picture of the consumers' relative financial picture. The interesting thing about Bill 202 is the fact that it would rely basically on some set of figures very similar to what is used for the CPI. Again, this would lead to debate as to how relative it would be.

One of the questions that also arises is that this Bill, the purchasing power index, could not be used without reference to some of the consumer price index. Therefore it would be difficult, if not impossible, to measure the quality of work in order to make effective use of this purchasing power index. As I said, I am very pleased to have the opportunity this afternoon to study this very complex issue and to ask the Assembly to consider supporting this Bill. I again would like to commend the Member for Drayton Valley, because I suspect she's been very interested in this subject for quite some time.

I'm sure she has brought it before the Assembly for our consideration on behalf of many of her constituents. In closing, once again I would like to urge all members of the Assembly to please consider supporting this Bill. I beg leave to adjourn the debate. MR. SPEAKER: Is the hon. member adjourning the debate or closing the speech? I wasn't quite sure. I thought the hon. member was concluding. Is there a motion to adjourn the debate? MRS. EMBURY: Yes. MR. SPEAKER: Does the Assembly agree? HON. MEMBERS: Agreed. MR. KING: The hon. member Mr.

Notley has asked that Bill No. 216 stand and retain its place on the Order Paper in his absence. I believe there will be unanimous consent to that, in which case we would move to consideration of Bill No. 203. MR. SPEAKER: Is there unanimous consent for passing over Bill No. 216 for the time being and having it retain its place on the Order Paper? HON. MEMBERS: Agreed. Bill 203

An Act to Amend The

Document details

Collection	Alberta — Debates (Hansard)
Citation	19811203
Type	hansard
Volume / chapter	L19 S3 19811203 1430 01 han.pdf
Language	en
Format	json
Source	PROVINCIAL
Identifier	3950be6a508dc527427cce92b28d529c404b24ac

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