1977 Legislative Session: 2nd Session, 31st Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, FEBRUARY 8, 1977

Afternoon Sitting

[ Page

699 ]

CONTENTS

Routine proceedings

Tabling documents

Interim report of the advisory committee on the control of Eurasian water milfoil

on the Okanagan Lake system.

Hon. Mr. Nielsen — 699

Pacific National Exhibition financial statement.

Hon. Mrs. McCarthy —

Oral questions

BCR settlement with M.E.L. Paving.

Mr. Macdonald — 699

BCR settlement with Ragan Construction.

Mr. Wallace — 702

Committee of Supply: Ministry of Economic Development estimates

On vote 79.

Mr. Lauk — 703

Mr. Cocke — 709

Mr. Gibson — 712

Hon. Mr. Phillips — 716

Mr. Gibson — 718

Hon. Mr. Phillips — 719

Mr. Lauk — 719

Mr. Wallace — 720

Hon. Mr. Phillips — 723

Mr. Lauk — 724

Division on the motion that the committee rise and report progress —

Mr. Lauk — 724

Hon. Mr. Phillips — 725

Mr. Lauk — 726

Hon. Mr. Phillips — 726

Mr. King — 727

Hon. Mr. Phillips — 730

TUESDAY, FEBRUARY 8, 1977

The House met at 2 p.m.

Prayers.

HON. R.S. BAWLF (Minister of Recreation and Conservation):

Mr. Speaker, I have several introductions to make today. First of all,

seated on the floor of the House today is my counterpart, the Hon.

Allen Adair, Minister of Recreation, Parks and Wildlife for the

province of British Columbia.

lnterjections.

HON. MR. BAWLF: Alberta, pardon me! (Laughter.) Well, it was a short stay, Mr. Speaker.

MR. D. BARRETT (Leader of the Opposition): Goodbye, Sam.

HON. MR. BAWLF: Accompanying Mr. Adair are senior officials

of his department: his deputy minister, Mr. Tom Drinkwater, Dr. Smith,

and Mr. Fisher. I ask the House to bid them a warm welcome.

Mr. Speaker, also seated in the gallery today is a group of ladies

and gentlemen from Victoria Silver Threads. I ask the members to issue

them a very warm welcome as well. Lastly, but certainly not least, I'm

pleased to introduce a group of young ladies — 27 pupils — with their

teacher, Miss Smith, from Norfolk House School for Girls. I understand

these young ladies have made a special sacrifice today, Mr. Speaker, in

MR. G.V. LAUK (Vancouver Centre): Mr. Speaker, I would ask

the House to join me in welcoming three distinguished members of the

New Democratic Party from my riding in Vancouver Centre — Mrs. Doris

Mutch, Mary Engelman and Thelma Pankiw — and Mrs. Betty McKay from

Terrace.

MR. A.B. MACDONALD (Vancouver East): Point of order, Mr. Speaker. Mary Engelman is from Vancouver East. (Laughter.)

MR. SPEAKER: The chair accepts your point of order.

MR. E.N. VEITCH (Burnaby-Willingdon): Mr. Speaker, seated in

the members' gallery this afternoon are two distinguished residents of

that great constituency of Burnaby-Willingdon, Mrs. Florence Cooper and

Mr. Walter Cooper, and I would like this House to bid them welcome.

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing):

Mr. Speaker, with your kind permission today, seated on the floor of

the House and just arrived in the chamber is the Hon. Andre Ouellet,

Minister of State for Urban Affairs in the national government. Mr.

Ouellet and representatives of Central Mortgage and Housing Corporation

were in Vancouver for the HUDAC conference which commenced yesterday,

and I'm very pleased to be able to introduce him to you and to members

of this Legislature.

Also, Mr. Speaker, in welcoming Mr. Ouellet and others to Victoria,

I would like to express my appreciation for the very productive

discussions which we held in Ottawa just a few days ago, January 31,

and for the attitude of cooperation and willingness to work with the

British Columbia government which Mr. Ouellet emphasized at that time.

MR. G.F. GIBSON (North Vancouver–Capilano): M. Forateur, je

voudrais me joindre du gouvernement pour accueillir M. Ouellet, un ami

de beaucoup d'ans, et lui souhaiter une bonne visite à Victoria.

J'espere que cette visite va être une autre étape pour améliorer les

relations amicales centre nos gouvernements pour les gens de la

Colombie Britannique.

MR. MACDONALD: Mr. Speaker, to the minister I would like to say bienvenu et aimez-vous le juge? (Laughter.)

MR. BARRETT: Mr. Speaker, I'd like the House to welcome students from St. Patrick Secondary School.

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker,

with leave I'd like to table an interim report of the advisory

committee on the control of Eurasian water milfoil on the Okanagan Lake

system.

Leave granted.

Hon. Mrs. McCarthy tables the financial statement of the year ended November 30, 1976, of the Pacific National Exhibition.

Oral questions.

BCR SETTLEMENT WITH M.E.L. PAVING

MR. MACDONALD: Mr. Speaker, I would like to ask the

Attorney-General a question, since his House investigation is

continuing. I hope he hasn't got Mr. Vickers investigating me, but the

letter says it's continuing. In view of the fact that Mr. Broadbent

confirmed in writing that all his actions in relation to the M.E.L.

Paving contract were upon the advice and

[ Page 700 ]

consent and with the instructions of the board of

directors of B.C. Railway, and the fact that there is a statement by

Ray Williston, made on January 22 of this year, that contracts such as

M.E.L. Paving were never considered by the board of directors of B.C.

Railway, obviously one or other of the two is not telling the truth.

In connection with the continuing investigation I ask the

Attorney-General:

(1) Will you take evidence on oath from Mr. Broadbent

and Mr. Williston?

(2) Will there be cross-examination of these

gentlemen?

(3) Will it be a closed proceeding or will it be open to the

public?

HON. G.B. GARDOM (Attorney-General): I'll take it as notice.

MR. LAUK: A supplementary, Mr. Speaker, to the

Attorney-General, on the same subject. Today an order-in-council was

released, indicating that a royal commission will be held into all

aspects of the British Columbia Railway. I would ask the

Attorney-General to give this House and the people of British Columbia

the assurance that this royal commission would include within their

purview of investigation the out-of-court settlement of the M.E.L.

Paving case and all aspects having to do with contracts for the Dease

Lake extension, including the taking on oath of evidence of board of

directors as witnesses before this commission in both current boards

and past boards relating to that contract.

HON. MR. GARDOM: I think the question, Mr. Speaker, is more

appropriately addressed to the Provincial Secretary (Hon. Mrs.

McCarthy). But I would respond to this extent, hon. member: the terms

of reference as set out in the order-in-council appointing the royal

commission are very, very broad, and broad enough to include all

aspects of the railway's operation. As to what the commissioners will

look at, it is up to the commissioners.

SOME HON. MEMBERS: Oh, oh!

MR. BARRETT: Mr. Speaker, I appreciate the Attorney-General's

answer, but what is the government's desire? There are specific

statements in the order-in-council. Is it the government's desire that

the commission specifically look at the Dease Lake extension and the

M.E.L. Paving contract? Yes or no.

HON. MR. GARDOM: In response to the hon. Leader of the Opposition's question, I would like to read to him the order-in-council.

MR. BARRETT: I read that.

HON. MR. GARDOM: I'm not too sure that you have, sir.

"Whereas the Public Inquiries Act provides that

whenever the Lieutenant-Governor-in-Council deems it expedient to cause

inquiry to be made into any matter connected with the conduct of any

part of the public business of the province, the

Lieutenant-Governor-in-Council may, by commission, issued under the

Great Seal, appoint commissioners to inquire into such matters;

"And

whereas the operation of British Columbia Railway is of continuing public concern;

"And

whereas the future development of the province

and, in particular, the central interior and northern areas of the

province is in

part contingent upon the viability of transportation

facilities such as the British Columbia Railway;

"And

whereas it is desirable that the operations of

the railway be conducted in accordance with good business practices

consonant with the development of the province;

"The commissioners are hereby appointed to make

inquiry into, and concerning, all aspects of the management and

development of the British Columbia Railway, and in participation of

the Crown therein as shareholder, and in so doing to inquire

particularly into:

" (

a) the relationship of the railway to the economic

and social well-being of the province and, in particular, those parts

of the province presently served, or proposed to be served, by the

railway;

" (

b) the relationship of the railway with other transportation facilities;

" (

c) the foreseeable financial requirements of the railway for all purposes;

" (

d) the overall operation of the railway...."

MR. BARRETT: M.E.L., Garde!

HON. MR. GARDOM: Should I perhaps repeat that? That was: " (

d) The overall operation of the railway...."

MR. BARRETT: M.E.L., Garde!

MR. SPEAKER: Order, please! The hon. minister has the floor.

HON. MR. GARDOM: It continues:

" (

e) the accounting procedures utilized by the railway;

" (

f) the procedures utilized by the railway for the acquisition of materials, equipment and supplies;

[ Page 701 ]

" (

g) the procedures utilized by the railway for the

planning and construction of any part of its undertaking, and the

implementation thereof;

" (

h) the viability of the railway as it has existed and operated, and the desirability of effecting any changes;

" (

i) the legislation applicable to the railway and the desirability of revision."

Those questions, my friend, should be put to the commissioners.

MR. BARRETT: Mr. Speaker, we did not ask whether or not the Attorney-General could pass the core curriculum. We are inquiring....

MR. SPEAKER: What is your supplemental question, hon. member?

MR. BARRETT: The supplementary is — yes or no — will the

M.E.L. case be part of the public inquiry? Will the principals be

called and summonsed to speak and give testimony? Yes or no.

AN HON. MEMBER: Read it again.

MR. SPEAKER: Order, please.

HON. MR. GARDOM: I would tend to think that I have to repeat this again to the hon. member of the opposition.

MR. BARRETT: Yes or no!

MR. SPEAKER: Order, please!

HON. MR. GARDOM: Commissioners are appointed, "to make

inquiry into, and concerning, all aspects of the management and

development of the railway...and in so doing to inquire particularly

into...the overall operation of the railway."

MR. BARRETT: Yes or no on that!

MR. MACDONALD: Is it a coverup or not?

MR. BARRETT: Yes or no on M.E.L.!

[Mr. Speaker rises.]

MR. SPEAKER: Take your seat, hon. member.

Interjections.

[Mr. Speaker resumes his seat.]

MR. LAUK: Mr. Speaker, having regard for the fact that a question was asked of the

Attorney-General in the last spring session about an out-of-court

settlement to M.E.L. Paving, to which he answered that there would be a

completed trial in the matter and that was not the case, I repeat the

question to the Attorney-General: will this inquiry be allowed to

investigate the M.E.L. Paving case and the scandal surrounding it?

HON. MR. GARDOM: Once again, I'm going to have to refer the hon. member to the terms of the royal commission.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

HON. MR. GARDOM: Once again I'm going to have to inform the hon. members what the commissioners will look at. It's up to them.

MR. BARRETT: Oh, you're destroying your reputation! Shame!

MR. SPEAKER: Order!

MR. GIBSON: A supplementary on the same subject. The minister

said to this House a few moments ago that in the absence of specific

direction it's up to the commissioners whether they decide to look at

this or not. There's no specific direction in these terms of reference.

Therefore I ask him if it is the wish of the government to have some

guidance for the commissioners. Is it the wish of the government that

they look into M.E.L. Paving and the contract awards of the past?

HON. MR. GARDOM: I would like to say this to the hon. members once again. I would assume....

MR. BARRETT: Oh, oh!

HON. MR. GARDOM: What are you saying "oh!" about, my friend?

Interjections.

MR. SPEAKER: Order, please!

HON. MR. GARDOM: Just calm down and have a drink of water. You'll feel better tomorrow. (Laughter)

Once again, I will repeat to the hon. members that the commissioners

are instructed to inquire into the overall operation of the railway,

the overall operation of the railway, the o-v-e-r-a-1-l operation of

the railway — the whole bag! (Laughter.)

MR. MACDONALD: A supplementary question to

[ Page 702 ]

the Attorney-General. In view of the fact that the

Attorney-General appoints the counsel for this commission of inquiry,

will he instruct that counsel that Mr. Williston and Mr. Broadbent

attend and give evidence as to the discrepancy in their statements

relating to M.E.L. Paving?

HON. MR. GARDOM: I find, Mr. Speaker, with all deference to

my learned friend, who is also an officer of the court and,

furthermore, the former Attorney-General of this province, that if he

would suggest that the Attorney-General will be appointing the counsel

and that the Attorney-General will be instructing the counsel...

AN HON. MEMBER: Shame!

HON. MR. GARDOM: ...I would suggest very much that the Attorney-General go back to his law books.

AN HON. MEMBER: Oh, oh!

HON. MR. GARDOM: The commission counsel, my friend, as probably a first-year law student would know, would be appointed by the commissioners.

AN HON. MEMBER: Garde Bonner!

MR. W.S. KING (Revelstoke-Slocan): On a supplementary, I want

to ask the Attorney-General if, since the Dease Lake extension of the

B.C. Railway is not yet operational, we are to conclude that the terms

of reference preclude any investigation of the Dease Lake extension and

the contracts awarded subsequent thereto — because it is not

operational, and that is precisely exempt from the order-in-council.

HON. MR. GARDOM: How much time do we have left in question period? Do I have time, Mr. Speaker, to continue to read these particular sections?

The question, once again, my dear friends across the street is this:

the responses to your many queries.... I would really commend you to

read the order, and you will see the depth of it. It is an extremely

broad order.

MR. BARRETT: Yes or no.

MR. WALLACE: Mr. Speaker, yesterday the Minister of Economic Development....

AN HON. MEMBER: Aren't you up on a supplementary?

MR. SPEAKER: Order, please.

MR. WALLACE: I never said that.

MR. SPEAKER: The hon. member for Oak Bay....

Interjections.

MR. SPEAKER: Only if the hon. member defers to you. He's been waiting patiently to get into this question period.

MR. WALLACE: Mr. Speaker, I did not imply that I was on a supplementary.

MR. SPEAKER: No, I realize that.

MR. WALLACE: I have another question.

Interjections.

MR. SPEAKER: I recognize the hon. member for Oak Bay.

BCR SETTLEMENT

WITH RAGAN CONSTRUCTION

MR. WALLACE: Mr. Speaker, yesterday I questioned the Minister

of Economic Development regarding another settlement which BCR had made

with Ragan Construction Ltd. in which the BCR had bought $600,000 worth

of used equipment and had paid creditors. He assured the House that he

would immediately inquire. I wonder if he could give us the answer to

yesterday's question.

HON. D.M. PHILLIPS (Minister of Economic Development): In

answer to the member's question, I am informed by management that the

settlement was, indeed, 100 cents on the dollar to the preferred

creditors and 50 cents on the dollar to the unpreferred.

MR. WALLACE: Can the minister tell the House if he considered

that it was customary for the BCR to buy equipment owned by Ragan

Construction? What does the BCR have in mind to do with that equipment?

Is it going into the construction business on its own?

HON. MR. PHILLIPS: As I informed the House yesterday, the

settlement on the outstanding claim by Ragan Construction was settled

with counsel for the creditors and counsel for the railway, supervised

by the management. I would like to think that they made the best

settlement that they could under the circumstances.

MR. LAUK: Supplementary to the Minister of

[ Page 703 ]

Economic Development. Does the minister have any

business or political association with any principal of the company

known as Doug Ragan Construction Limited?

HON. MR. PHILLIPS: Not that I can recall immediately. I'd say the answer is no. Not that I recall, no.

MR. SPEAKER: Hon. members, before we proceed further into

today's business, I just want to make one comment concerning question

period. That is that I try to accommodate as many members as possible

during the time that we have, according to our standing orders. Now if

it's the desire of the members to take up most of that time or part of

that time with interjections, so that either members placing questions

or members answering cannot be heard in this House, that's the way the

time of the question period will be consumed. But if you have a desire

to ask questions and listen to answers, then it would be to the benefit

of all the members to allow that person who has the floor to ask the

question to state it and to allow that person who has the floor to

answer the question to give that answer without interruption.

MR. MACDONALD: Mr. Speaker, on a point of order, is it not

true that private members cannot ask questions that are already

recorded in public documents that are available to the members? If that

is true, is it proper for the Attorney-General to take up the time of

question period in reading the terms of an order-in-council which is

available to the members? You know, I think that is an abuse of the

privileges of the House and I wish you'd look at that.

MR. SPEAKER: Speaking to the hon. member's point of order,

the question was raised by members of the official opposition. The

House has no knowledge of the order-in-council until it is presented by

the hon. Attorney-General to the floor of the House; then it becomes

knowledgeable to the House because it was presented. I presume the hon.

Attorney-General will table the document.

HON. MR. GARDOM: I'd be delighted, Mr. Speaker, with leave, to table this order-in-council, No. 454.

MR. SPEAKER: The hon. Attorney-General tables a copy of an order-in-council.

Orders of the day.

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

ESTIMATES: MINISTRY

OF ECONOMIC DEVELOPMENT

(continued)

On vote 79: minister's office, $141,324 — continued.

HON. MR. PHILLIPS: Mr. Chairman, I'd just like to inform the

hon. members of the opposition that I have the president of the

Development Corporation in Victoria today, and I would appreciate some

knowledge from them if they would mind having any debate on the

Development Corporation now so that I can allow him to return to

Vancouver.

MR. CHAIRMAN: The Chair will move at the direction of the House.

MR. LAUK: From time to time there will be questions on the

British Columbia Development Corporation, and the minister has to keep

himself advised. That would be in his discretion. I thank him for his

courtesy nevertheless.

MR. CHAIRMAN: What is the wish of the House?

AN HON. MEMBER: Well, proceed to the vote.

MR. LAUK: A number of questions were asked of the minister on

the very general speech. I'll just briefly review them. The minister

has notes of these, I think, and if he'll indicate by a nod of the head

or a raise of the eyebrow whether he has had a note of the questions I

asked him last day....

I don't see any movement at all. Perhaps we should send the hon.

member for Burnaby-Edmonds (Mr. Loewen) to check him out. Oh, there he

is. Well, Mr. Chairman, perhaps the minister can deal with those

questions in due course.

A very unfortunate situation has arisen, and the minister is

required to comment on it, with respect to the British Columbia

Railway. On the one hand, some days ago the Premier, who is not in this

chamber....

Interjection.

MR. LAUK: Mr. Chairman, is it allowable for the front bench

to participate in speaking in these estimates? If so, could you

indicate to the Minister of Mines and Petroleum Resources (Hon. Mr.

Chabot) that he will have an opportunity in due course?

MR. CHAIRMAN: The first member for Vancouver Centre has the floor.

MR. LAUK: Thank you, Mr. Chairman. That's probably good enough.

[ Page 704 ]

Interjection.

MR. LAUK: Well, now we're hearing from the Minister of Labour (Hon. Mr. Williams), Mr. Chairman, in committee.

AN HON. MEMBER: You'll have lots of time.

MR. LAUK: He's anxious to hear my every word. He's hanging on

my every word and becomes terribly disappointed when there's a pause. I

understand he's installed at least three extra phones in his

ministerial office to hear the tremendous response to his advertisement

for a chairman of the WCB. That and other little problems are probably

distracting the minister, and he has nothing better to do than to come

into the House and listen to my speeches.

MR. CHAIRMAN: Hon. member, we are on vote 79. May I suggest that we curtail the debate to a point.

Interjections.

MR. CHAIRMAN: Order, please. Perhaps other hon. members might

observe the standing order that says a member making his speech ought

not to be interrupted.

The member for Vancouver Centre, please proceed.

MR. LAUK: To the Minister of Economic Development, then: the

Premier, who is not in this House, tabled in this House some time ago a

letter from the chairman of the board of the British Columbia Railway.

In that letter, the chairman — and this is the birth of another

afterthought, Mr. Chairman, this letter from Mr. Fraine — indicated

that the lawyers who were giving the board advice on the M.E.L. Paving

case said they wouldn't win, and they settled. Yesterday the

Attorney-General, after a long absence from the House — that, I am

sure, was justified under the circumstances — tabled a letter that

stated, inter alia...

Do you know what inter alia means, Mr. Attorney-General?

HON. MR. GARDOM: Pretty fancy stuff.

MR. LAUK: Well, you're doing away with all that fancy stuff now.

...that the allegations of civil fraud raised by Derril Warren were

found some time in 1974 to have no substance. After these many days —

this letter is dated February 7, 1977 — we have a very apparent

contradiction. On the one hand we have an investigation that albeit is

continuing. But on February 7, he was pretty far down the road. And if

he wasn't I'd like to find out why after that many days. He says he's

found no fraud, civil or criminal. On what basis, then, did the board

settle? The board chairman says it's because the lawyers said we should

settle because we'll lose the case. Except that they didn't, did they,

Mr. Chairman? I wonder if the minister can tell us whether it was the

lawyers who advised the board, or the minister or the Premier? That is

what I think really happened, because the counsel in charge of the

trial said he could win. That's what he said.

HON. L.A. WILLIAMS (Minister of Labour): How many times has he said that?

MR. LAUK: Is the Minister of Labour, with his cross-comment,

casting any negative reflections on the ability and competence of

counsel for the railway in this case? He says no. I'm glad he said that

because I agree with him. He's a first-class counsel.

MR. KING: He always talks when he should be listening anyway. Doesn't he, Harvey?

MR. LAUK: He said that we're going to win. In spite of the

fact, on Christmas Eve the government forked over $2.5 million and, by

that act, he admitted the guilt of the previous board of at least civil

fraud. He had no right to do it. I say it was political interference of

the worst possible order. I say that the minister has a lot to answer

for in the M.E.L. Paving case settlement.

If the letter submitted by the Deputy Attorney-General is correct —

and he does state that all the evidence wasn't before him, but he did

see all the evidence that was before the judge and the case was closed

as far as the evidence was concerned — and if on the evidence before

the judge the Deputy Attorney-General.... And I take it that by the

Attorney-General filing this letter in this House, he agrees with the

opinions expressed by the Deputy Attorney-General. That must be taken

as given. The chief law enforcement officer and lawyer of the cabinet

has said on the evidence before the judge there's no civil fraud.

On December 24, 1976, a $2.5 million settlement was announced. Why?

Look what's happened since. Everybody is lining up at the wicket from

Ben Ginter to I don't know how many others. Perhaps the minister should

tell us how many. And they want settlements. Boy, is it easy now. Easy

pickings. This minister and this government are shovelling the

taxpayers' money out of the back of a truck. They're just throwing

millions of dollars away.

MR. WALLACE: It's old Vander Zalm's line.

MR. LAUK: And the Minister of Human

[ Page 705 ]

Resources (Hon. Mr. Vander Zalm) seems to think

that's terrible when you're giving an extra $1.23 to a person in a

wheelchair. That is disgusting! But it's all right to give it away to

Ragan Construction in the minister's riding. It's all right to give it

away toM.E.L. Paving and these poor, poverty-stricken, under-privileged

British Columbians who live in Alberta. That is all right. But $1.23 to

someone in a wheelchair is a travesty. A $1.23 increase to a person on

welfare or a person on Mincome is a disgrace. But $2.5 million to

M.E.L. Paving and $1.2 million to Ragan Construction, because it's

embarrassing, is all right — that's good business.

Well, Mr. Chairman, through you to the minister, if he runs his

business in Dawson Creek that way, he should come to see me about a

bankruptcy application. That's not good business practice; that's

sheer, unadulterated irresponsibility.

These are the kinds of fuzzy decisions that that minister is going

to make because he is reeling under a scandal-ridden ministry. He

cannot make clear decisions and precise decisions. He is worried where

his next ministerial assistant is going to come from and how long that

assistant will last, and if he can trust that assistant.

In the same breath he has the unmitigated gall to come into this

chamber and say in his opening address and speech on estimates: "I'm

going to introduce a Statistics Act." And, of course, you know what

that means. He is going to require industries throughout the province

to provide confidential information about their investment and

structure to a ministry that leaks from the top, middle and bottom.

Would you, if you were running a grocery store or a hardware store or a

car dealership, Mr. Minister of Finance, tell the Minister of Economic

Development your investment plans and holdings and corporate structure

when you knew that everybody in the neighbourhood would hear about it

the next day?

The minister must relieve himself of his duties and allow the

Premier to appoint another minister. There's no question about that.

And what about what happens when a minister is concentrating 90 per

cent of his time worrying about scandals when he should be looking at

the administration of the railway, looking at the administration of his

department and of the Development Corporation, and he's ignoring those

heavy duties and he's busy putting out fires for his Premier. He's

putting out the fires of M.E.L. Paving and Doug Ragan Construction and

maybe Ben Ginter Enterprises or whatever.

I saw Ben Ginter waiting outside the minister's office the other day

carrying a big box of Kleenex. He knows a good thing when he sees it.

He had an empty bag in his hand — one that usually carries money — a

satchel.

MR. GIBSON: Was he going in or out?

MR. LAUK: He was going in for his welfare payment. Everybody's lining up at the wicket, Mr. Chairman.

Now it's all right for the minister to feel wounded and sit back and

say, "oh, you can pick on me; I'm the martyr of the week, " and not

answer any questions. After all of the questions that have been raised

in the throne speech debate and in the budget debate in this House, the

minister hasn't said two words about it — nothing. He won't answer any

questions. He refers to the judicial inquiry, which doesn't even have a

review of it, or he takes it as notice, or he doesn't show up. Most of

the time he doesn't say anything. He's a wounded stag. But, that's not

good enough. A Crown minister has to answer questions. He can't avoid

them. He has to give the detailed answers. If he doesn't, we assume two

things: he's afraid of the answer or he doesn't know the answer. In

either case, that's grounds for dismissal.

The minister has the opportunity now, being on the board of

directors of the BCR, that he will not, in any way, prevent the

judicial inquiry into the BCR from inquiring into M.E.L. Paving and

into the Doug Ragan Construction Ltd. settlements. He must assure the

people of British Columbia that he will not politically interfere with

this judicial inquiry. Oh, it's fine for the Attorney-General (Hon. Mr.

Gardom) to stand up in question period and read out the

order-in-council and really look quite surprised at why the opposition

presses the question.

Well, you know, in June, 1976, Mr. Chairman, you were sitting in

your seat at the time and I'm sure you were as shocked as I was when

the settlement took place. We were in this House in June, when the

Attorney-General stood up and said: "We will not settle the M.E.L.

Paving case out of court." The minister stood up and said the same

thing: "We will not settle the M.E.L. Paving case out of court." So is

there an objection now when we press the Attorney-General and the

minister to assure this House that they will not interfere with this

inquiry and prevent it from naturally inquiring into the M.E.L. Paving

settlement and the Doug Ragan Construction settlement?

HON. R.H. McCLELLAND (Minister of Health): The member for Vancouver East asked us to interfere. He asked us to interfere.

MR. MACDONALD: I asked to present evidence.

MR. LAUK: You can present evidence. Of course you can! The

British Columbia Railway's officers will be called before this

commission, or should be.

Interjections.

MR. LAUK: That's correct, and I'd be glad to give

[ Page 706 ]

evidence, and I can give a whole pile. I'd be

delighted. I'm checking the supreme court rules now, Mr. Chairman, to

see how much witness fees are.

HON. W.N. VANDER ZALM (Minister of Human Resources): You might even pick up the files out of your basement.

MR. LAUK: Oh, here we hear from the Minister of Human

Resources, the man from Surrey. You know, poor little Surrey... I

really feel sorry for Surrey, Mr. Chairman. This is very apropos

economic development. First of all, they had a reeve — I forget his

name now — and he was turfed out of office under a cloud of suspicion.

Then they had the Minister of Human Resources there — a most

unsatisfactory mayor, everybody will agree...

HON. MR. VANDER ZALM: But he defeated the former Provincial Secretary (Mr. Hall).

MR. LAUK: ...and now they've got Ed McKitka.

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

MR. LAUK: Is Surrey to be spared nothing? (Laughter.)

HON. MR. VANDER ZALM: They were spared the NDP!

MR. LAUK: Are they to be spared nothing? Surrey's loss is our gain.

MR. CHAIRMAN: Hon. member, would you please restrict your debate to vote 79? That's the matter presently under consideration.

MR. LAUK: But that's the minister, Mr. Chairman, who I

related to earlier who was complaining about $1.23 to somebody who was

blind, while his colleague is running around shovelling money out of

the back of a truck not $1.23, but bundles of millions of dollars.

HON. MR. VANDER ZALM: Give names.

MR. LAUK: The $1.23? When are your estimates coming up?

HON. MR. VANDER ZALM: Name names! I want names. I don't want to wait until estimates. I want them now.

MR. LAUK: I will give you names. Will you give me $1.23 for every name?

MR. G.R. LEA (Prince Rupert): You've got a whole battery of investigators and you want us to give you names!

MR. LAUK: I seem to have hit a sore spot with the Minister of Human Resources.

MR. CHAIRMAN: Hon. members, may I just interrupt the

proceedings long enough to remind every member of the House that we

will not be able to proceed with orderly business unless we observe the

standing orders of this House? Therefore I will ask all members not to

interrupt the member who presently has the floor and who was doing

quite well until he was interrupted.

May I also take the opportunity at this present moment while I have

interrupted the proceedings to remind all hon. members that matters to

be discussed in committee need to adhere to certain general practices

of the House? Although matters before a commission are not necessarily

out of order to be discussing, nonetheless I would draw all members'

attention to the fact that we need not, or should not, address

ourselves to evidence or proceedings that are presently before a

commission, because in so doing we are really detracting and rendering

impotent the very commission that we wish to do the job for us. I would

just give this as a general reminder and a short-term warning that this

is something that we ought not to be involved in in this House. I know

the hon. member will take this into consideration. Please proceed.

MR. LAUK: Mr. Chairman, I appreciate your caution in this

respect. I just refer this to Mr. Chairman: I am being guided in my

remarks by, and am very cognizant of, the many judicial inquiries and

in-house inquiries that this government has knee-jerked itself into.

This very question, Mr. Chairman, was discussed in the House of

Commons in Ottawa at some length on May 2, 1976, when Speaker Lamoureux

gave what should probably be regarded, it states in The Parliamentarian , as the definitive ruling on the matter. He said:

"The creation of a royal commission is purely an

administrative matter. The commissioners are not called upon to render

decisions on what has been submitted to them, but are only asked to

make recommendations which the government is free to act upon or not,

as it wills.

"In other words, parliament is still the highest court

in the land. One of its traditional rights is to express its power by

the enactment of legislation, and this right cannot be set aside by a

mere reference of certain matters to a royal commission for a study

thereof, and recommendations thereon. They are, it is true,

[ Page 707 ]

given such powers as are vested in any court of record, but the

wording of the Act does not constitute them as a court of record."

Speaker Lamoureux went on to confirm that in discussing the matter

before a royal commission members should not delve into the evidence

itself, as "we would not want to have a parallel inquiry going in the

House at the same time as that now being carried out in another forum,"

with which I thoroughly agree. I wasn't discussing the evidence at all.

I was being critical of recent settlements which may or may not be the

subject matter of the inquiry, but certainly do not delve into the

evidence.

If the minister says that he will refer the matter and give evidence

before an inquiry, I will take my examination into a different area.

However, he drew a distinction between the essence of the evidence and

knowledge acquired from evidence, which is to be considered in the

House as a collateral issue.

I refer Mr. Chairman and the Chairman's staff to The Parliamentarian of July, 1976. There is a very, very excellent

article on the sub judice convention in the Canadian House of Commons.

MR. CHAIRMAN: Hon. member, your point is well taken. It is

not to debate the issue at all at the moment, but just to give the

House a caution on the proceedings, because Speaker Michener, in May,

1968, also handed down a ruling which would read as follows:

"I would accordingly rule that it is not out of o rd

er to discuss, in this instance, transportation problems generally when

such matters have been — referred to a royal commission. On the other

hand, I would also rule that reference should not be made to the

proceedings, or evidence, or findings of a royal commission before it

has made its report."

I think that this is the area in which the caution is made.

MR. GIBSON: Mr. Chairman, on that same point of order, I have

been studying the same ruling to which you have made reference. I would

suggest to you, sir, that since the commission has just been

constituted, there currently is no evidence or any proceedings.

Therefore it seems to me that debate is wide open.

MR. CHAIRMAN: To the point, I think that I must say that

there is no way that debate in this area could be called out of order.

It is only a caution to members to not make the commission's work more

difficult than it may already be.

MR. LAUK: Mr. Chairman, the letter that was tabled in this House, as

I stated earlier, by the Deputy Attorney-General.... "It is the opinion

of the Attorney-General that no Attorney-General tables a letter of his second-in-command

unless he adopts it as his own."

Interjection.

MR. LAUK: No. As a matter of fact, I think most of the

letters under the Attorney-General's signature are written by the

deputy. I think it is more the other way around, because I don't see

any of the Attorney-General's colourful language in the letters I see

coming out of his office these days, the colourful language that we

were all so used to in the old days, when he sat on this side of the

House.

In any event, Mr. Chairman, getting backAp the Minister of Economic Development,

if the minister is not prepared, or cannot respond, or feels incapable of responding

to the critique that has been well established and set up by the opposition

parties of this House, he should step down.

The letter from Mr. Fraine, who is chairman of the British Columbia

Railway, indicated that they settled the M.E.L. Paving case because

there was every indication that they would lose the case before the

judge. The Deputy Attorney-General has investigated. He has tabled the

letter, and he says: "There is no evidence of civil fraud." Well, why

on earth did they settle the case? Is the Fraine letter a fraud in

itself? Is the Fraine letter a self-serving letter that was drafted by

the chairman of the board at the direction and the insistence, or at

least, encouragement, of his political masters?

Those charges must be answered. They cannot go unanswered, because

if it is left the way it is, you have two contradictory bodies of

evidence. On the one hand, you have Williston denying that the BCR

board ever dealt with contracts with M.E.L. Paving. On the other hand,

you have Joe Broadbent, the former vice-president of the railway,

saying: "Yes, we did. I received all my instructions from the board."

Who is telling the truth? On one hand you have a letter from the

chairman of the board of directors saying: "We would have lost the

case." On the other hand you have the Deputy Attorney-General saying

"no." Who is telling the truth? Can the minister provide clarification?

The minister has also stated in an opening address.... By the way, I

checked my opening address for 1975, and it's almost word-for-word the

same address I gave! Then it was new.

AN HON. MEMBER: Were you both living in the same place?

MR. LAUK: He's had 14 months and he comes up.... I'm

complimented. I really am complimented. Or should I be? Should I be

complimented that the minister would adopt my material, after what's

[ Page 708 ]

happened?

MR. GIBSON: Yes, you should be!

MR. LAUK: Maybe I should. Maybe I should be embarrassed.

Maybe I should reconsider those press releases and retract them. I

won't say the minister is lazy. He's distracted, and who wouldn't be?

He doesn't know whether he can talk to his wife. He's worried about

whether he talks in his sleep. Where's the leak? The ship of state

leaks from the top, Mr. Chairman.

I think that the minister should carefully consider his position as

minister. Last day, he was about to rise in his place — or was that

just a way of getting me to be seated so you could bring on the bill? I

wasn't quite sure. Was the minister up to his old tricks, Mr. Chairman?

Does he have any life left? Gee, I hope so.

I asked him about these coal commitments that he got in Japan. He

took a trip to Japan, you see. He said he had new coal commitments for

purchases of B.C. coal to Japan. Well, my instructions are, from

information I have, that he almost lost the ones we had. I ask the

minister to be specific. I certainly hope that he's right, and I

certainly would be delighted if he has new coal contracts. Can he give

us some of the details in the estimates before the committee now?

There are 112,000 people unemployed in British Columbia today. It's

the highest actual number of unemployed in the history of this

province. It's worse than it ever was in the 1930s. Of course, there

was a smaller population then. But it's worse today, nevertheless, than

it was in the 1930s. There are 112,000 able-bodied British Columbian

men and women who are unemployed. People who are looking for work —

112,000. I am told there is something like 30 per cent unemployment in

the hon. member's constituency of Skeena. The percentages are

unbelievable, Mr. Chairman.

I heard that the minister went to Ottawa. He's starting to take care

of his own constituency, which is his perfect right to do, but he's the

minister for the whole province. Let me just canvass for you what I

heard his success was in trying to get jobs for his own constituency.

He went to Ottawa and he said to the ministers there: "You have 30 days

to come up with the money I need for infrastructure in the coal

development in the northeast." Then he left, and everybody in Ottawa

looked at each other and said: "Who was that guy?"

MR. LEA: That was about 60 days ago.

MR. LAUK: "Who was that masked man?" Well, 60 days have gone

by and he's been waiting by the phone and he says: "When will they

call? When are they going to call?"

He didn't check, of course. You see, they didn't have a half-billion

dollars. Oh, they could have written one of those $181 million cheques,

I suppose — the ones that bounce from here and there. Get Evan the

paperhanger to write you a $500 million cheque for the northeast coal

development. Or rubber-cheque Bill. It's just not going to happen.

Pipe dreams, Mr. Chairman, are not going to happen. Ministers who do

will make things happen in this province — not ministers who dream, who

are totally out of their depth, who have revealed no judgment in hiring

of personal staff and who have not come up with one new idea in 14

months. Here were the financial wizards who got swept into office and

who were going to turn this economy around. Today, at 3:05 p.m., 1977,

there are 112,000 British Columbians out of work.

The minister promised during the campaign in 1975 that he would turn the economy around.

MR. LEA: He did!

MR. LAUK: He fulfilled that promise. He turned it around and

down. It's now going down the tube. He promised to get B.C. moving

again. He fulfilled that promise. They're moving — to Alberta,

Saskatchewan, Manitoba, Ontario, California, Washington, Oregon, Hawaii

— if they get a flight. He fulfils his promises.

Mr. Chairman, I want you to know, I want the minister to know and I

want everybody to know that I do not hold anything personal against

this minister. People who sacrifice time and their family life for

public service must be complimented, and I do so. Each and every person

who enters public life comes under a great deal of pressure, and I

don't wish to be a part of the pressure on that minister. But the

responsibility of each and every member of this House, including those

strangely silent backbenchers in some of whose ridings there's over 30

per cent unemployment — they're very silent — is to represent those

people. We haven't got too much time to feel sorry for one another in

the stresses and pains of public life. There are people that are lining

up for the dole for the first time in the history of this province.

There are 112,000 people unemployed. And this minister is sitting back

very smugly and saying, "All right, martyr me."

I say, get off your haunches, Mr. Minister, and fight back. Fight

back. You've got the intestinal fortitude. You go back into those files

and dig up some more of my press releases. Some of them are good. You

fight back.

MR. W.G. STRONGMAN (Vancouver-South): Who's got the files?

MR. LAUK: And remember one thing: if you provide positive new programmes for employment in

[ Page 709 ]

this province, you will have the wholesale support

of the New Democratic Party. Not only the parliamentary side but all of

the membership and supporters in this province will get behind you and

push — not over the cliff; they'll get behind you and push if you've

got some good ideas.

But that weak, year-and-a-half-year-old speech is admitting defeat.

You've hoisted the white flag. We haven't got time for people who sit

around feeling sorry for themselves because we represent 112,000 people who

today are unemployed and looking for work. It's no longer a joke where we

used to call across to each other: "Get off your fat stats." It's

no joke for those people, Mr. Chairman. The minister should know that, and I

would hope knows that.

These pipe dreams of economic development, this phony pipeline in

the northeast and a coal development that he hasn't got any money for —

even if they were feasible, would they come onstream in time to help

112,000 families that are not receiving income today?

A word about the Development Corporation. In the first year of

operation, in 1975, the Development Corporation averaged under the NDP

administration 20 small-business loans a month. In one year, to

December 31, 1976, under the present administration, their total number

of loans to small businesses was 20. And here is the government that

represents small business in this province? This is the government that

represents the community businessman?

Another form of treachery — they've turned their backs on the

municipalities. They promised revenue sharing; homeowners' taxes go up.

They said they'd get the economy moving again; there's 112,000 people

unemployed. They said they'd help the community businessman; 20

small-business loans in one year. And in the first year of operation,

it was 20 a month. Too small potatoes for the minister? Too busy with

Cheyenne Pete? No feeling or concentration on the little businessman in

Dawson Creek or Pouce Coupe? And the minister has one of those nervous

laughs.

Interjection.

MR. LAUK: Yes, he's sympathetic all right. I don't want him

to be sympathetic to me, Mr. Chairman, through you to the Minister of

Finance (Hon. Mr. Wolfe). I want him to be sympathetic to the people in

his riding. I want him to be sympathetic to the people unemployed in

this province. I don't need his sympathy; I can take care of myself.

I'm talking about people in this province who relied on his promises

for jobs. And all he's worried about is where his next executive

assistant is going to come from.

MR. LEA: The same place as the last two — the Premier's office.

MR. LAUK: Well, hire someone quick and we'll hand you over a

piece of tape to tape up his mouth and you'll be well away. Have

someone who can type with one finger so you can catch him in time.

Mr. Chairman, this side of the House deeply regrets that the

Minister of Economic Development has been such a hopeless and dismal

failure in his portfolio in one year. I had not thought for a moment

that it was possible....

Three minutes, Mr. Chairman. Thank you, Mr. Chairman. The Minister

of Health (Hon. Mr. McClelland) is just delighted. I can't wait for the

Minister of Health's estimates. I can't wait for his estimates.

Interjection.

MR. LAUK: What a beautiful guy. Do you remember the old Hansard

quotations from that member over there? Totally one of the most

completely irresponsible opposition members in the history of British

Columbia parliaments, and now he's over there so responsible.

"Your three minutes are up."

AN HON. MEMBER: Are you sure of that? Put another dime in.

MR. CHAIRMAN: Hon. member, your three-minute warning was a very short three-minute warning, and the red light is on now.

AN HON. MEMBER: You have so much to say when you're in opposition.

MR. D.G. COCKE (New Westminster): Mr. Chairman, there are a

number of disasters in the new government. It's bad, however, to have a

combination of disasters at this time in our history that really affect

the lives of the people in the province. On one hand, we have the

Minister of Human Resources (Hon. Mr. Vander Zalm) who indicates that

unemployed employables can go looking, and we have the Minister of

Economic Development, who really isn't very much interested in economic

development. In his own First Minister's riding — his own Premier's

riding — we have an unemployment rate of 20 per cent.

Last year I brought to the attention of the Minister of Economic

Development a situation where a carpet company up there decided to move

on to Calgary. This was a carpet company owned by the Capozzi brothers

and family and all. They were moving to Calgary because they were told

they musn't pollute

[ Page 710 ]

the Okanagan area. That minister ignored that kind

of thing. He was going to attract business, but he can't even attract

his own friends, Mr. Chairman. That's why we have situations, which I

am sure the minister is aware of, such as were cited by the member for

Skeena (Mr. Shelford) who admitted it in the House. He said: "There are

30 per cent unemployed in my riding." The member for Omineca (Mr.

Kempf) denied there was unemployment in his riding. But I suggest,

having done a little bit of listening up there, that I have heard there

is a good deal of unemployment in that member's riding, so he had

better go home and check. Meanwhile, we have 112,000 people in this

province unemployed.

AN HON. MEMBER: Shame!

MR. COCKE: Mr. Chairman, it's a lot more than 112,000 people

because many of the people who are unemployed in our province and have

been on unemployment insurance are now off unemployment insurance, have

given up, and are no longer registered as unemployed, so the numbers

are considerably more than 112,000. But I think it's significant that

in the Premier's own riding his paper, Kelowna Today, on February 2,

1977, just last week, indicates that there is 20 per cent jobless in

that riding. If I were the Premier and I were here, I'd fire the

Minister of Economic Development for his total inadequacy. We asked him

some time ago to look at that minister's record, such as it is — a

record that I am sure is deemed by some to be unfortunate and by others

to be a disaster.

[Mr. Veitch in the chair.]

Mr. Chairman, who are we talking about? Let's look at that minister

for a moment or two in opposition. Let me quote one or two of that

minister's — at that time, member's — discussions in this House.

Remember, Mr. Chairman, his comments on Gottesman and company?

Incidentally, I wonder if any of you read Beale's last newsletter. You

would, Mr. Member from Harvard andNorth Vancouver–Capilano (Mr. Gibson). You would have read it.

AN HON. MEMBER: Vicious attack.

MR. COCKE: It's no attack at all. I'm just acknowledging the

fact that you would be reading something like that. In the last

paragraph of Beale's letter they are talking about this prestigious

firm, how they'd endowed a chair at Columbia University in perpetuity,

and talking in terms of the chairman of the board, Mr. Wallach. This is

what that member said about Ira Wallach in 1974: "Gottesman and company

and Ira D. Wallach probably ripped off last year about $8 million."

That's what he said, that very responsible Minister of Economic

Development. In opposition that's what he said about Ira Wallach.

MR. BARRETT: Say anything! Do anything!

MR. COCKE: Say anything, do anything in order to try and win the next election.

MR. BARRETT: Smear!

MR. COCKE: Smear. He even attracted, with his smear, a

Conservative or two and a number of Liberals. I was surprised at that,

because if anything would have repelled a person who was really

interested in decency in politics, this is the kind of thing that would

repel them.

He went on to say, Mr. Chairman: "This is the very thing this

opposition pointed out would happen when the ministers of the Crown —

indeed, the cabinet — get into business such as they are in taking over

the private sector." Do you remember what was happening to Ocean Falls

at the time? And he accused us of taking over the private sector. They

were down the tube. They were dumped by Crown Zellerbach.

That minister is showing the kind of sensitivity today that he

showed then when he was over here. Obviously, that minister must

reflect some of the government's own feeling with respect to this whole

question. He should hang his head in shame.

There are 20 per cent unemployed in Kelowna and 30 per cent

unemployed in Skeena. The member for Skeena (Mr. Shelford) said, and I

think he said it very aptly and very well: "They have absolutely no

direction." I can see why they have no direction. Every three days we

have a royal commission investigating another arm of government, or a

Crown corporation, or government wheelings and dealings. I suggest, Mr.

Chairman that not only can that minister not run a popcorn stand, but

the whole government together can't run a popcorn stand.

MR. BARRETT: It would be cheaper if we gave them a popcorn stand.

MR. COCKE: It really would. And you know, possibly a place to

put it would be right outside where they're ploughing for...whatever.

Does anybody know what they're ploughing for out there?

HON. MR. McCLELLAND: They're looking for Gary's files.

MR. COCKE: Mr. Chairman, those are interesting remarks from across the floor — interesting indeed!

I just want to go on and quote a few more bits and pieces from that minister when he was a member of

[ Page

711 ]

the opposition. He links the government to Gross,

the director of Can-Cel, to a web of international corporations

attempting to take over the B.C. forest industry, to possibilities of

receiving kickbacks and favours under the table through international

trade and black-market trade with the Third World. These are the kinds

of accusations he made then when he was an opposition member,

accusations that were so irresponsible, had they been reported widely

they would have shocked the world. They certainly shocked any of us who

had the patience to listen to his diatribe.

Mr. Chairman, many of us wondered where the whole question of a state police force originated. All you have to do is go back in Hansard and you'll find where that original suggestion came from. I'm surprised at the Liberals...

MR. GIBSON: Former!

MR. COCKE: ...excepting former Liberals — that's right, I'm insulting you — accepting partnership with this kind of people.

Let me just go back to where the member, on February 4, 1974, I believe it was, said:

The intent of the Attorney-General, even though he couches it in

general terms with establishing a police commission, is to establish a

police force in the province of B.C. That's step No. 1. The

Attorney-General says we can't give all this socialism at once because

it will alarm the people. We must couch it in broad, general terms. We

must tell them that we're going to establish a police commission.

Mr. Chairman, he was totally irresponsible with respect to the Land

Commission. He spoke for hours and hours upon hours on Bill 42 at the

time, showing his total lack of respect for farmland. This side was

particularly happy when he was divested of that responsibility.

Hopefully, the now minister is going to have a little more concern than

that minister showed while he was Minister of Agriculture.

Interjection.

MR. COCKE: We wonder whether he was part of that dinner meeting — or was it a luncheon — with Harry Terry. Or was it a kaffeeklatsch?

MR. CHAIRMAN: We are on vote 79.

MR. COCKE: You're on vote 70, Mr. Chairman; I'm on vote 79.

I'm discussing the Minister of Economic Development and the fact that

he's led us down the garden path in the past 14 months in this

province. He should be ashamed of himself. He should resign. I hope

that he'll stand up in the House today and say he is resigning.

Never in the history of this province has there been such utter disaster; never

in the history of this province has there been such total chaos. Where did it

originate? It originated from a group of people over here who felt that they

knew more about economics than economists. They thought that they could squeeze

this province dry, Mr. Chairman. They thought that they. could squeeze $500 million

out of he economy. Incidentally, when you have the ripple effect of that, it's

something in the order of $2.5 billion that they have squeezed out of the economy.

Then they thought that they could run a productive province. You can't do

it. That Minister of Economic Development has done nothing about it.

Now either he is out there taking the flak, which is not his

responsibility, or else he is specifically responsible because this is

his area of concern. He said nothing. He gets up once in a while in

this House and gives bombastic statements, such as: "Tomorrow

everything will be okay. Everything will be fine. We're on the right

course." Once, in a Freudian slip, he said: "We'll put this province on

the rocks." It's the only thing that that minister has said that has

really come true. Last year in some of his press releases he was

telling us how "we're getting it together, friends" — I'm paraphrasing

— "and we're heading right out there and we're going to do a real good

job." Well, how long must we wait must we wait?

We recognize that the western world has problems with respect to the

economies of the different countries. But we recognize that B.C. has a

special problem, one that, by comparison, has taken us farther down

than virtually any other economy. So, Mr. Chairman, will the minister

stand up in this House and tell us something definitive about where

we're going? Will he tell us something definitive about what he's going

to do about unemployment? Will he tell us something definitive about

what he's going to do about the exodus of business from this province —

and it's occurring. I don't know. There is either an exodus of people

and businesses, or somebody was lying a couple of years ago. You could

go for miles in the city of Vancouver, and in New Westminster, and

never see a "For Rent" sign and never see an empty business block. Now,

I suggest to you, you go all over Vancouver, New Westminster, Victoria,

or wherever you like, and you'll find empty apartments, empty houses,

empty business blocks....

MR. GIBSON: Those are old Social Credit headquarters.

MR. COCKE: Well, that partially solves the problem, but I don't think even they, with all their money, have that many.

MR. WALLACE: Well, there's one on Oak Bay Avenue. It's empty.

[ Page 712 ]

MR. COCKE: Oh, it's empty? Well, Mr. Chairman, that minister

has a lot to answer for, particularly in view of the viciousness of his

past. We expect that he could stand up and repent, and as part of his

repentance, he might be forgiven if he had resigned. He should resign

and he should do it now.

He sits there and smiles and he thinks: "What can I say? What can I

do? I'll just sit here and smile and maybe it'll all go away." But I'll

tell you — between you and the Minister of Human Resources, you're not

a very humorous act. You're not a very good act.and I suggest that what

we need in this province is some very serious attention paid to the

economy. That minister has an obligation to do so, and we need some

very serious consideration paid to the people that are affected by the

economy of this province. Mr. Chairman, hopefully he's going to get up

and respond to some of the questions asked by the member for Vancouver

Centre and to some of the questions that were asked by the member for

Vancouver-Burrard. I suggest that he stands up and indicates whether

he'll resign.

MR. GIBSON: Mr. Chairman, if the minister wants to answer any of the questions, I'll be glad to defer to him.

Interjections.

MR. GIBSON: Well, Mr. Chairman, apparently not right now.

The minister indicated earlier on today that the British Columbia

Development Corporation is represented here, and that's very nice. I

wonder if we could get some information out of the BCDC representative,

via the minister, because the facts we have from the annual report are

all too sketchy.

I was puzzled, I might say in passing, by the figures from the hon.

member for Vancouver Centre, but the annual report doesn't do much to

clear it up.

This report was received in my office — the date stamp says January

26, 1977. It's the second annual report, up to March 31, 1976. It's

almost a year old. I don't know what anybody who can't keep books

faster than that is doing running the Development Corporation of the

province of British Columbia.

AN HON. MEMBER: They needed time because they've got two sets.

MR. GIBSON: Now I don't want to be unfair to the BCDC people.

It could be that they keep their books a lot quicker, and it's just

that the minister doesn't pass the figures on to us in time.

AN HON. MEMBER: Right on.

MR. GIBSON: But I want to know why that corporation, that

should be some kind of an inspiration to all of the businesses of this

province, isn't able to get its books out within a month or so, the

same as any other corporation is expected to do — preferably even

faster, if they're the kind who keep on their toes and make a bit of

money. So it's entirely unsatisfactory to me, Mr. Chairman, that we're

working on data that's about a year old. But even that data that's a

year old is pretty incomplete.

The main job of the BCDC and the reason it was established by this

House was to assist and invest in small business around this province.

Now, Mr. Chairman, we're given some figures here for the year ended

June 31, 1976. It indicates the corporation participated as to loans or

to guarantees in the amount of $7,588,000. It doesn't give us any

breakdown as to how much is loan and how much is guarantee. It seems a

pretty elementary initial question to ask, so I would ask that.

Then I would go on to say: how's it looking for this year? We're 10

months into the fiscal year. How do the first nine months look? The

minister has got to have those figures. Of course he has. He's a

director of a company that keeps its books properly. What are those

numbers so we can judge the progress of this year?

Now the next fact that we're given in this out-of-date report is the

fact that there were 72 loans or guarantees approved. Mr. Chairman,

what I would like to know, in order to better assess the job that the

BCDC is doing, is: what is the name of each company that got each loan

and what was the amount of each loan or guarantee? It seems to me that

that's an obvious and elementary question to ask. It should be made

public.

I notice the minister shaking his head. If he's worried about

commercial confidentiality, he can even call a private committee

session, perhaps. I can't buy the fact that they shouldn't be made

public. I'd like to go one step further. If you're really going to

assess the job that this corporation is doing, you not only need a list

of who got the loans; you need a list of who didn't get the loans. That

is where the real assessment of the judgment of the BCDC comes in. Are

they doing their job?

The minister is shaking his head. I want him to stand up and

articulate his philosophy as to why that couldn't be. I don't know how

else, Mr. Chairman, this House can control that corporation without

having information of that kind. An ordinary company has a

shareholders' meeting every year where we can go and ask questions. If

I had a share in MacMillan Bloedel or something, I could go ask a

question. They might not give me the answer but at least I could ask

the question; I could raise a little hell.

MR. WALLACE: Just like the House — you can

[ Page

713 ]

ask a question but you don't get an answer.

MR. GIBSON: But there's no meeting of the BCDC I can go to.

Maybe we can get at them in public accounts. I can tell you, I'm going

to ask for this information in public accounts. But I'd rather have the

minister give it to this House now for the purposes of these estimates.

Otherwise, we can't judge what kind of a job they're doing. I hope

they're doing a good job, but I have no evidence to indicate that.

The next question I have about BCDC — and I'm very concerned about

this — is the news that we have received that this corporation is to be

in charge of all of the province's industrial land. Mr. Chairman, this

might be a good thing on an organization chart. But what protections

does this House have and do the people of this province have for the

integrity of that stewardship? I want to make it very clear that I'm

not making any kind of a charge whatsoever. I'm just saying that as

long as those kinds of transactions are within the public service, you

have some kind of protection in that there is an oath of office and

you're not to profit from insider knowledge and all this kind of thing.

What kind of protection do we have in terms of the integrity of that

stewardship in the B.C. Development Corporation? I simply can't

overemphasize the importance of this, not just to this House but to the

minister's own skin in years to come. He has got to be sure that that

operation is 100 per cent clean. I want to know what checks and

balances there are there. What about the procedures for negotiations

when you're dealing with private companies? How do you arrive at the

price? We have to have some guarantees on that, Mr. Chairman.

That's what I have to say on BCDC and that will give the gentleman

here from that corporation a few minutes to chew away at that.

Now I'd like to go on to the British Columbia Railway, We have been

told, Mr. Chairman, that the BCR people were going to be here today,

and I'm sorry they're not. Perhaps the minister thought that the

Premier's press conference this morning would effectively cool that

subject out, but I'm telling you it hasn't. I'm delighted there is an

inquiry.

I want to suggest to the minister that there has to be two aspects

to that inquiry and that he has to make it abundantly clear to the

government, and through the government to the commissioners in his

capacity as a director of B.C. Rail, that there must be these two

aspects. One aspect is the past and one aspect is now and henceforward.

They are both important. The segment of the inquiry which looks into

the past will identify some good things and some mistakes. And there is

a purpose for that.

The first purpose is so we can learn by them. Who was it who said

that if you don't study history you're doomed to repeat it? I wouldn't

want to be doomed to repeat the BCR history of the last few years, I'll

tell you that. But we can learn from it.

The second thing, Mr. Chairman, is that an inquiry into the past

will tell us who is still around who was involved in those good things

or those mistakes of the past who today deserves promotion or deserves

to be fired out of the back of the caboose. That's the second reason.

The third reason, Mr. Chairman, is very simple: to fix political

responsibility for the things that have been going on in that railway.

Where does it lie? What years? What administration? Who made the

decisions that have led to some of the most incredible overexpenditure

ever seen in any government contract in this country?

It is of utmost consequence, Mr. Chairman, that the wish of the

government be made known, that this inquiry be retrospective as well as

prospective. I was, very disturbed today when the hon. Attorney-General

(Hon. Mr. Gardom) refused to give that assurance to this House. He read

out terms of reference which might well allow that kind of

retrospective inquiry, but then he said that it's up to the

commissioners whether they did it or not.

Mr. Chairman, I say that as a director of that railroad, the

minister can't settle for that. He has to see that the wish of the

government is amply and adequately made known to the commissioners and

to the public.

AN HON. MEMBER: Hear, hear!

MR. GIBSON: Retrospective investigation should be made. For

greater certainty, it should be affixed and described in an amending

order-in-council of those terms of reference, so that it is not

discretionary but obligatory on the commissioners to look at that

aspect. Alternately, if the minister should say we want this commission

to be concerned with the future, then I want another commission to be

concerned about the past, because somehow or other that has to be

looked at.

Now the second

section of that royal commission — and in fairness I

think it has to be said, the most important, Mr. Chairman — is the time

they will spend looking at the future. As they look at the future of

the BCR, without question the most important immediate question is the

future of the Dease Lake extension. I am rather inclined to call it the

Dease Lake rat hole, because the money has been going down it at an

appalling rate.

Would the minister, as a director who will have this information

when he stands up in this debate, let us know just a few basic figures?

We know what the basic estimate was to start with. That was $68

million, so we don't need that figure. But we do need to know what has

been spent so far on that extension. We need to know what the current

[ Page 714 ]

estimate is to finish it. Those figures together

are going to total something well in excess of $250 million. Then we

need to know what the current revenue forecasts are along that line.

Mr. Chairman, I am very concerned about possible future revenue for the

Dease Lake line. There are mineral deposits up there. That is correct,

but the line is not as well sited as it might be to pick up some of

those mineral deposits. I believe that some of the potential producers

up there have been doing a few studies that indicate to them that

they'd be better to take their ore to tidewater by trucks, for

goodness' sake, rather than use this new line. If that happens, what's

going to happen to even the very superficial feasibility studies that

were done for this railroad some years ago? What's the update on that?

Surely this great new power-charged board of directors has a forecast

as to what the revenue's going to be off the Dease Lake line.

Mr. Chairman, this is all critical now. We can't afford to wait

another year for that information. Do you know how much we're pouring

into British Columbia Railway? According to the Minister of Finance, in

his budget statement, so far in this fiscal year it's $140 million

borrowed for the BCR. In the coming fiscal year, he forecasts $203

million. You put that together and in two years you've got $150 for

every man, woman and child in British Columbia that's gone into the

British Columbia Railway, and what have we got back for it? I'll tell

you what we've got back for it. We're got some miles of the Dease Lake

extension built — miles on which we have no revenue forecast at the

moment — and we've got some losses.

That leads me to my next question to the minister, a very simple

question. What's the loss going to be for this year? What's the loss

for the first 10 months? I'll settle for that because that's something

the minister knows now.

MR. MACDONALD: Make a note of these questions.

MR. GIBSON: Oh, I'll ask him again, Mr. Member, if he doesn't answer.

MR. MACDONALD: He's not making a note of them.

MR. GIBSON: It's all right. I have a note of them and I'll ask them again if they somehow escape his attention.

What's the loss going to be? I suggest it's going to be well in

excess of $50 million. I suggest the operating ratio of that railway is

something worse than 140 per cent. Let me have the figures from the

minister who knows them rather than causing members on this side of the

House to guess about a line that is a tremendous financial burden on

the taxpayers of British Columbia. We don't mind burdens if it's for

some worthwhile purpose. But I want to know what the minister's plans

are for this railway.

I want to raise another specific question on the railway. If he

decides to continue the Dease Lake extension, I want to ask to what

extent has he examined, and does he support, the Bear River Pass route.

This is an excellent submission that was made to the cabinet when they

were meeting — I think you were meeting in Terrace, was it, Mr.

Minister? — by the mayor of Stewart. Now I haven't inquired for a

couple of weeks, but the last time I asked they'd had no reply as to

what the government thought of this submission. This is a submission

that the town of Stewart paid for out of their meager resources and

that are a little more meagre than usual because of the difficulties

Granduc Mines Ltd., has been having and the tremendous reduction in the

work force there. So this submission meant something to them, and I

think they deserved the courtesy of a reply.

But quite beyond courtesy, Mr. Chairman, what are the merits of the

submission? What it is, in essence, is a scheme to have an all–British

Columbia Railway line from Prince George to the sea. By building

through the Bear River Pass, you save the construction I think, of some

86 miles of line that would otherwise be built between the Nass River

crossing and Terrace. I think you save that on a net basis — yes,

because it's 124 miles in total — and you build an additional 44 miles

on the Bear River Pass route. What you have in the end is a complete

British Columbia Railway link from Prince George to the sea, Stewart

being a very promising seaport. I just want to put into the record some

of the conclusions of the consultant that was paid for by the hard-won

resources of the town of Stewart.

First of all, he talks about the cost of that link. Going now from

Stewart to the Nass River junction, he says: "There would be a net 44

miles for a total of $48 million. In addition, there would be the cost

of approximately $2 million for the crossing of the Nass River, for a

total of $50 million." Then he goes on to talk about the cost from the

Nass River junction to Suskeena, which is on the Dease Lake line. He

says: "The distance there is 100 miles, for which the cost would be

approximately $110 million. The total cost then from Suskeena to

Stewart would be $160 million at today's cost." This is a recent report.

Then he makes this comparison:

"For comparison, the cost of construction of the railroad

connection from Suskeena to Terrace, for a total of 224 miles" — instead

of 144 — "would be $246 million. This means an additional $86 million to

connect the Dease Lake branch of the BCR through Terrace to Prince Rupert as

compared to connecting it

[ Page

715 ]

with the viable deep-sea port of Stewart. The probably cost for

connection of the BCR from Suskeena to Stewart would appear to be in the order

of $86 million less than the cost of construction from Suskeena to Terrace.

This is a major saving in construction costs that requires serious consideration."

Well, I would say that's putting it mildly, Mr. Chairman. I would

like to know what consideration the BCR and the government has given

that suggestion.

Then the consultant gets into the value of an additional port for

northern development in our province. He says a little about the value

of alternate routes because, I repeat again, this would be an alternate

route from Prince George to the sea, and it would give the BCR some

negotiating advantages with the CN and it would give shippers a little

bit of competition along the route. Here is what the consultant says:

"The alternative of an all-BCR route to a viable

deep-sea shipping terminal versus an all CNR route would provide a

competitive situation which would certainly result in sharpening of

pencils, and would be more likely to ensure that the coal development

projects would proceed at an early date."

These are projects dear to the heart of the minister, I would remind you, Mr. Chairman.

"In this respect, it is only necessary to recall the

difficult freight-rate negotiations experienced by Kaiser Resources

Ltd. with the CPR and the beneficial effect on establishing conditions

under which the project could go ahead resulting from the provincial

government plans for a railroad connection south into the United States

and then up to Roberts Bank."

You remember that, Mr. Chairman — a sad thing that that ever had to

be considered in this province at all. The very thought of shipping

southeastern British Columbia coal to market through a United States

line is abhorrent to me, but you had that competitive situation there

with the CPR monopoly. You've got the same thing in northern British

Columbia. But you could have a different situation with the Bear River

Pass line and a port at Stewart.

I'll just read this penultimate excerpt:

"An all-BCR route from both the northwestern region of B.C.,

and Prince George to the port of Stewart, would provide an effective tool for

the provincial government to use in establishing policies and programmes for

the development of these areas, and for the benefit of the people in these regions.

Such policy potential would not be within control of the provincial government

if the alternate through Terrace on the CNR to Prince Rupert were to be used."

It gives us better bargaining power, Mr. Chairman.

Finally, in terms of the costs to the port of Stewart, the consultant states:

"In terms of the port of Stewart's competitive

position relative to the proposed coal terminal at Ridley Island near

Prince Rupert, the development cost for handling 5 million to 10

million tons annually at Stewart would only be a fraction of the cost

of the initial development at Ridley Island." I repeat: "a fraction of

the cost," Mr. Chairman. So you would save money there, according to

this report. You would save $86 million on your rail lines. Even this

government has to be a little interested in $86 million. You might be

in a better bargaining position, or you might not. I don't know. I'm

not a railroad consultant. But this report was given to the minister

back in September, and I want to know what study has been made of it

and I want to know what conclusions he and his board and the officials

of the railroad have arrived at.

Once again I want to get back to this question of current results

because, you know, the minister was quoted last summer in the BCR

magazine, which is called The Coupler ,

as saying: "The prospects for financial recovery are very bright." Are

they really, Mr. Minister? What do you mean by "very bright"? Do you

mean we are maybe going to lose only $40 million this year instead of

$50 million or $60 million? I think we in this House deserve to know

that.

I would like to know if there are any negotiations going on, or if

any have been going on, with Ottawa or with the CNR in respect to the

possible sale of the British Columbia Railway to the CNR.

Have there been any negotiations, formal or informal, on or off the

record, with Ottawa or with CN headquarters in Montreal, or with local

CN headquarters here, or with anybody on that general topic? Because

we've heard rumours about this, Mr. Chairman. It's terribly important

to British Columbia. We'd like to know whether there have been

they are talking. We just have to have this information, and this

minister is extraordinarily reticent. Last year I called it the most

important department of government.

AN HON. MEMBER: The nerve centre.

MR. GIBSON: They've got a lot of nerve. That's right — the

nerve centre. Yet we can't get this information out of them. I'll be

back at him asking where the coal report is when I talk later on that

subject.

But in the meantime, Mr. Chairman, it seems to me that the BCR is

not well. I am riot talking about the crew; I am not talking about that

marvellous

[ Page 716 ]

communications system. But that railroad is not

well, and that Dease Lake extension is not well. I am glad we have an

inquiry but what took you so long to realize we need it? In the

meantime, what are you going to do right now about those incredible

amounts of money that the public of this province is being asked to

pour into that Dease Lake extension? I'd like to hear some of the

answers on those.

HON. MR. PHILLIPS: I'll endeavour to answer some of the.very positive questions asked by the member for North Vancouver–Capilano.

With regard to the lateness of the filing of the report, you do

realize that we were in the throes of changing our president at that

time. The report was evidently finalized about May, and I guess that I

am probably responsible for not getting it into this House prior to the

close of the session. I can't remember the exact circumstances

surrounding it, but the report was prepared just prior to the close of

the session last year.

MR. GIBSON: Will it be better this year?

HON. MR. PHILLIPS: Well, I would certainly hope so. As a matter of fact, we are making great progress on the Development Corporation.

With regard to loans and guarantees on the corporation, of course,

it's very difficult to put much credibility into some statements made

by the member for Vancouver Centre (Mr. Lauk), because the actual facts

are that in 1974 there were 25 loans processed, in 1975 there were 85

loans processed and in the first nine months of 1976 there were 47

loans processed. That's a far cry from what I believe the member for

Vancouver stated.

AN HON. MEMBER: Twenty a month!

HON. MR. PHILLIPS: Twenty a month. It's very difficult to put any credibility in anything that member says.

Now loans approved in 1974 were 12; loans approved in 1975 were 47; loans approved in the first nine months of 1976 are 33.

MR. GIBSON: Are these calendar years?

HON. MR. PHILLIPS: No, that's the fiscal year I am talking about. I am talking about the first nine months of the 1976-77 fiscal year.

The amount authorized in 1974 was $802,000; in 1975 it was $12,984,000; and in 1976-77 to date it is $5.5 million.

Present authorized loans distributed, and I presume that's for the

first nine months of this year.... No, I had better check on that

particular figure.

The current production of loans being processed is an average of 10

a month. The total guarantees: for 1975, one; for 1976, seven. The

amount of the total guarantees in 1975 was $900,000; and in 1976 the

total is $9,773,000.

The number of jobs created or projected in 1975 was approximately 300; in 1976, there have been 1,240.

With regard to the actual names of the persons or companies to whom

the loans were made, Mr. Member, I questioned that same thing when I

was in opposition. You have the right to question that in public

accounts, and I suggest that that's where you do it. We have not listed

in the past, nor do we intend to in the future, those applying for

loans. It's private knowledge.

MR. GIBSON: Why not?

HON. MR. PHILLIPS: Well, I don't see the federal government making lists available.

Interjection.

HON. MR. PHILLIPS: It's a very sensitive matter. You asked me, and I have made a statement.

MS. R. BROWN (Vancouver-Burrard): We don't like your statement.

AN HON. MEMBER: Public accounts is a public meeting.

MR. LAUK: You're saying that this Legislature can't ask questions at the public accounts committee on this.

MR. CHAIRMAN: Order, please. The hon. minister has the floor.

HON. MR. PHILLIPS: Now with regard to the Development

Corporation handling industrial land, I want to point out to the member

that that is mainly Crown corporation land. The purpose of it — and

it's working very well — is to have one agency in government handle

industrial land, the same as we now have the Department of Housing

handling all the land available for housing so that you don't have a

multiplicity of corporations and government bureaucracies involved in

the same purpose.

One of the reasons that this decision was made is because one of the

difficulties of establishing a business in this province is finding

serviced industrial land. So we're moving forward to have the

Development Corporation bring on stream land which is serviced and

available so that industry can locate. I don't have to draw you a

picture of the problems that industry is having to obtain land, in some

instances,

[ Page

717 ]

in the province of British Columbia. What we're

trying to do is streamline the process and make it easy for industry to

locate here. In the analysis that we did of the economy and how we

could attract manufacturers here, and how we could attract industry to

the province, this was one of the areas of concern we found that stood

out like a sore thumb.

You don't have to go too far, Mr. Chairman, to find instances where

an industry wants to locate in a particular area and it takes them

sometimes a year, sometimes two years, with a battery of accountants

and a battery of lawyers to wade through all the red tape and

government bureaucracy, part of it the responsibility of the provincial

government, part of it the responsibility of the municipal government.

You know exactly what I'm talking about. So what we're trying to do is

streamline and make it easy for those wishing to locate here. That is

one of the areas of concern.

As you may or may not be aware, through our planning committee of

cabinet we've come to grips with the problem of planning bypasses and

access to highways. We identified that and we identified many instances

where commercial enterprises, manufacturing firms, were driven out of

this province because of the bureaucracy that was created within out

own civil service by the rules and regulations we had laid down.

I want to tell you, Mr. Chairman, that we have come to grips with

that problem and we have made changes. We have published a book whereby

a person wishing to have highway access now can have some guidelines

instead of working for sometimes eight, nine months or a year repairing

a subdivision plan and spending, in some cases, up to $100,000 in

preparing a plan only to be turned down by the provincial government —

which is fine — but with no reason. We've come to grips with that

problem. It wasn't easy because we had to seek the cooperation of the

Department of Highways, we had to seek the cooperation of the

Department of Municipal Affairs....

MR. KING: Phil Gaglardi.

HON. MR. PHILLIPS: I want to tell you, one thing this

government is doing that was not done by that socialist regime is that

we have all departments of government working together in a united

front. I know there are those on the opposite side who want us to wave

the wand and automatically solve some of the problems they created, and

create hundreds of thousands of jobs. They want us to put bubble gum on

the problem. We're moving, Mr. Chairman. Maybe we're not moving swiftly

as I would like to see us move, but I want to assure this House that we

are moving steadily and solidly forward.

It will be interesting, Mr. Chairman, to read in some future year —

and in the not too-distant future — about those over there who have no

faith in the private enterprise system, who are not really recognizing

the solid planning that is going on by this great government.

MR. KING: Government by inquisition.

HON. MR. PHILLIPS: Now with regard to the British Columbia

Railway — there are some questions I will answer and there are some

questions that will be answered by the judicial inquiry.

MR. MACDONALD: You voted against the BCDC. What's the matter with you?

HON. MR. PHILLIPS: With regard to questions that have to do

with the current operation, yes, I'll be most happy to answer, because

it will be in the annual report when it comes out very suddenly. But

I'm not going to get into the area where we have a judicial inquiry,

Mr. Chairman.

One of the great disappointments I know that the opposition must be

having today is the fact that we have appointed a judicial inquiry into

the entire operation of the British Columbia Railway. Prior to this

appointment, being made the member for Vancouver Centre and the Leader

of the Opposition were crying for a judicial inquiry. We've complied,

because I want to tell you that we're also concerned about the

operation of the British Columbia Railway. We're concerned where it's

going, and this judicial inquiry, Mr. Chairman, will complement some of

the work that is presently being done by that great new board of

directors, and I want to pay a great deal of tribute to that board of

directors today.

Since their appointment some few months ago, they have worked

diligently, conscientiously and long hours on the British Columbia

Railway. I want to say, as I've said in this House before, that the

railway today is probably running as efficiently as it has ever run.

It's serving the great industry of this province and allowing the

workers of this province to work at their jobs, because the products,

the creation of their labour, are being moved regularly every day by

the British Columbia Railway. I have faith that that will continue

through the years 1977 and 1978 and well into the future.

Now, Mr. Chairman, as to the member's request for actual operating

loss to date, I'm trying to obtain that figure for you. I have the

projected loss that I will give you at the same time. Here we are here,

thank you very much. As of December 31, 1976, the net loss was

$53,245,000 and that is an unaudited statement. And, Mr. Chairman, the

projected loss for the year is in the vicinity of $69 million.

MR. KING: Way to fire! What a little

[ Page 718 ]

businessmen's government!

HON. MR. PHILLIPS: Mr. Chairman, as I say, I'm not going to be taunted into getting into a full debate on the railway's past, future and so forth.

MR. KING: I guess not.

HON. MR. PHILLIPS: But I want to say that there have been

some areas identified by the new board of directors that have given us

some concern. I hope that this royal commission on the operation of

this railway, when it comes down, will serve as a guide, not only for

this government, but for future governments, whoever they may be and

whenever they may come in to serve the people of this province. I hope

it will serve as a guide for them to see that that railway does serve

its original intention — that is, to serve the province of British

Columbia in the best manner possible.

[Mr. Schroeder in the chair.]

Mr. Chairman, the member was talking about the submission from

Stewart. That submission only becomes functional if a line north of

Terrace or Hazelton is built, and that line is not contemplated at the

present time. The way I understand it, unless major new lines are

built, it would not serve to move coal from Prince George to Prince

Rupert because, as you know, that line is already built. It's probably

one of the best grades in North America. It's part of the old Grand

Trunk Pacific that was originally built to run silk from Prince Rupert

through to Chicago. From railway people who have told me about it, I

understand it is one of the best grades in North America. Now it has to

be upgraded, but so far as the grade and the curvature are concerned, I

understand it's one of the best. It's presently being upgraded —

heavier steel bed — that portion has been going on for a couple of

years.

With regard to negotiations on the coal deal, yes, we're doing cost

studies and the CNR is doing cost studies. The BCR is doing cost

studies. The Ministry of Transport is doing cost studies. We hope to

have some definitive answers to some of our questions, hopefully, in a

month or a month and a half.

MR. GIBSON: Concerning the sale of the CNR?

HON. MR. PHILLIPS: Concerning what?

MR. GIBSON: Concerning the sale of the BCR?

HON. MR. PHILLIPS: No, I didn't mention any sale to the CNR.

MR. GIBSON: Yes, but that was my question.

HON. MR. PHILLIPS: Oh. To my knowledge there's no negotiation

going on about selling the BCR to the CNR. I thought you were asking

questions with regard to rail rates for movement of coal.

Now, as you know, there was a study released in Alaska on Friday

afternoon. I would suspect that in the very near future there will be a

top-level meeting of probably Alaska, Canada and officials in the

United States to study further where we should go from here with regard

to that proposal. I think that when you're criticizing the extension of

the British Columbia Railway north to Dease Lake and the proposal to go

on up to Watson Lake, you must bear in mind the purpose of some of

those decisions when they were made at that time.

Now I think I've answered most of the members' questions, and if

I've left out any, I apologize and I'd be quite happy to answer them.

MR. GIBSON: I'll just be quite brief on a supplementary, Mr.

Chairman. I think we should allow a little follow-up and certainly I'll

be glad to allow you that when the time comes.

I thank the minister for the response that he gave to certain of my

questions. I have to say on the question of the publication of the

companies that get loans from the BCDC, I have to disagree with him. We

can't properly judge the operation of that company without that

information.

Why should they not be published, Mr. Chairman? It's not a crime to

get a loan. It's not an indication of weakness to get a loan. It's an

indication of strength to get a loan. It means you've got more money

and it means you've got good credit. I can't see how, in any sense, any

company would say: "Well, we'd better not approach BCDC because they're

going to publish our name that they gave us a loan." That's information

that this Legislature should have.

And, Mr. Chairman, other information this Legislature should have,

though I still agree that perhaps this should come in camera, is a list

of those who did not get loans. That could properly be in camera

because if you don't get a loan then that is an indication of weakness;

that is something that could be used against you in a commercial sense.

So I would see every reason why that might be kept in camera. But the

list of people who did make loans should be made public because it is

public money — and we have to keep returning to this principle.

On the BCR, there were certain specific questions that the minister

did ask and I'm saddened to hear those loss projections. There are

other questions he didn't ask which I fear even more, and I hope he

will answer them to clarify that. What has been spent on the Dease Lake

extension to date? was one I asked. What is the projected total

expenditure on the Dease Lake as of this time here? — because there is

a lot yet to be spent, when we see the Minister of Finance

[ Page

719 ]

saying we have to borrow another $200 million over

this coming year. And what is the current revenue forecast on that

line? That's the one that bothers me. We've got to have that.

With respect to the Bear River Pass line I think there must be some

misunderstanding of the minister. He probably doesn't have the map in

front of him. But he mentions that you don't need that line from

Suskeena down to Terrace. You don't need that line unless you're

proposing to haul those materials to the sea, which would be the normal

thing, unless you have that line you have to go an extra 300 miles back

to Terrace. So that line, in effect, cuts off 600 miles.

But there's an alternative to that line which in total is 224 miles.

And that alternative is by building from Suskeena to the Nass River

junction, which is 100 miles and which is common to either route, and

then building an additional 44 miles down to Stewart through the Bear

River Pass rather than going the extra 124 miles down to Terrace. The

advantage that is advanced for this is threefold. First of all, it

would be cheaper by $86 million, according to the consultant. Secondly,

it would be much cheaper as to a port facility. Thirdly, it would give

the British Columbia Railway a wholly BCR-controlled outlet to the sea

and would thereby both improve the negotiation position of the BCR with

CN and, at the same time, give some competitive rates to shippers in

northern and northeastern British Columbia. It is for those reasons

that I think that this proposal must at least be studied carefully.

I would appreciate an assurance from the minister that his

department or the railway or both are indeed studying it carefully and

that within some reasonable time they will deliver themselves of an

opinion on this, which is so tremendously important to the people of

Stewart and to the people of British Columbia because it's their money.

I would ask those follow-up questions of the minister.

HON. MR. PHILLIPS: I think when we get into the area of the

Dease Lake extension and the extension you're talking about, that's

going to be very well covered by the royal commission, because it

states very specifically "the relationship of the railway to the

economic and social well-being of the province and, in particular,

those parts of the province presently served or proposed to be served

by the railway." We would like to know the answers to some of those

questions as well. So I think they'll best be served, Mr. Member, by

the royal commission.

MR. GIBSON: But in the meantime, aren't we putting in $10 million a month or so?

MR. LAUK: The hon. minister neatly sidestepped a number of questions

and I'll ask them again.

One, he stated he had commitments for new coal sales to Japan. Could he state what they are?

Two, will he state why the board of directors settled the M.E.L.

Paving case — which is not the subject of a judicial inquiry — against

the advice of counsel, particularly after the filing of the letter of

the Deputy Attorney-General?

Three, which stems from the question period: can he indicate to this

committee whether or not he had any association, business or political,

with any of the principals of Regan Construction Ltd. which is

situated, as I am instructed, in his riding?

Perhaps he'll need some time; he can check that out. But I'd

appreciate that he would answer during estimates or in question period.

The minister replied to my question about the number of loans. Well,

his figures are quite wrong. I was talking about small loans out of the

small-loans division of the British Columbia Development Corporation.

Those are loans to the little businessman whom he said he wanted to

protect. Those are the figures that he should have. If your chief

executive officer doesn't have those figures, well, send him out to get

them. The small-business division has fallen flat on its aplomb, Mr.

Chairman. That's the point that has to be made. Those are questions

that must be answered in this chamber. They certainly must be answered

before we can possibly consider whatever amount the minister should get

by way of salary.

While he is on his feet, the minister should answer these questions:

having regard to his answer to the number-of-loans question, will the

minister table the financial statements of the British Columbia

Development Corporation for the six months ending September 30, 1977,

which already have been presented to the board, together with a revised

summary of loans presented to the board up to December 31, 1976?

Another question: is the minister making a note of these questions?

Interjection.

MR. LAUK: Well, we've got lots of time, Mr. Chairman. I'll just carry on.

The minister failed to answer questions with respect to the — number

of coal sales that he made in Japan. He stated that he brought back

commitments for the purchase of coal in Japan. My instructions are that

he — almost lost what we had. Perhaps he could tell the committee what

those new commitments are.

Can he tell the committee why the board of directors of the British

Columbia Railways settled the M.E.L. Paving case against the advice of

counsel, particularly having regard to the recent letter tabled in this

House by the Deputy Attorney-General?

Will the minister re-check his facts with the small-loans division?

[ Page 720 ]

Will the minister table the financial statements of the British

Columbia Development Corporation for the six months ending September

30, 1977, which have already been presented to the board? Will the

minister table the revised

summary of loans to December 31, 1976, which

has been presented to the board?

Has the BCDC purchased the Canadian National Telecommunications

installation and site in Dawson Creek, consisting of 9.8 acres plus

eight buildings? Was this bought on behalf of the city of Dawson Creek?

Is it not true that it was against the recommendation of his land

branch in the British Columbia Development Corporation and other

officials?

Is there a deal between the minister and the city of Dawson Creek?

What was the deal? Who makes the profit on the resale of this land? Who

makes. the profit? Does the BCDC sell the land at appreciated value '

to the city of Dawson Creek, or, as I'm instructed, does it sell to

Dawson Creek at cost so that Dawson Creek can make a profit? How does

that fulfil the goals under the statute of the British Columbia

Development Corporation? Why is it in the minister's constituency that

this unusual deal takes place? Did the British Columbia Development

Corporation's staff recommend against it? Was it a private deal made

between the minister and the civic government- that he took to the

board and forced it upon them?

Has the British Columbia Development Corporation authorized a loan

to Stothert Management Ltd. so that Stothert can build a pulp mill in

Nigeria? If so, for how much? What is the total cost of the pulp mill

in Nigeria? How many jobs does that get us here in British Columbia?

The minister isn't making notes, so I'll go back to the beginning.

Could the minister indicate to this committee what specific coal

commitments he has that he indicated to this House he achieved when he

travelled to Japan? I'm instructed that he almost lost what we had. He

says we have some. Maybe he can tell us what those commitments are.

Why did the board of directors of the British Columbia Railway

settle the M.E.L. Paving case out of court against the advise of

counsel, particularly in the light of the tabling of a letter of the

Deputy Attorney-General stating that there was no civil fraud?

Will the minister check his facts on the small-loans division?

Will the minister table the financial statements of the British

Columbia Development Corporation for the six months ending Septejnber

30, 1977, and a revised

summary of loans made up to and including

December 31, 1976, all of which has been presented to the board?

Has the BCDC purchased the Canadian National Telecommunications installation

and site in Dawson Creek consisting of 9.8 acres plus eight buildings? Was this

bought on behalf of the city of Dawson Creek? What was the deal? Was this not

made in contravention of the advice and recommendation of adequate and competent

staff of the BCDC? Is it not true that that land will be sold at cost to the

city of Dawson Creek so that the city of Dawson Creek can speculate in land?

How does that fulfil the goals of the Development Corporation, all of which

takes place within the constituency of the minister?

The minister still isn't taking notes? Well, perhaps we'll give him

an opportunity to reflect on some of those questions and still listen

to the speech of my friend from Oak Bay (Mr. Wallace). I have other

questions. You might as well answer those now.

MR. CHAIRMAN: Order, please.

MR. WALLACE: My first question is: why does the minister

happen to be the first of many ministers to be dealing with his

estimates in the House? It seems that there's some unreasonable haste

to get the minister through his estimates, probably because of all the

day-by-day unfolding of information which is most detrimental to the

minister and his department. In all the years I've been in this House,

and that's now eight, we have had estimates handled very much on an

alphabetical basis starting with Agriculture.... Well, actually we used

to start with the Premier, but I realize he's out of town. But beyond

the Premier we always went through the estimates alphabetically, and it

certainly went through my mind that this is a very unusual change of

procedure for the government to put the Minister of Economic

Development up first on the whole, series of estimates that we'll be

debating.

I find a second puzzle. I understand the Premier is in Ottawa

dealing on extremely vital matters with the federal government —

exactly these vital matters for which this minister is responsible. Why

is he not in Ottawa with the Premier? Very puzzling; maybe it isn't

puzzling, Mr. Chairman, because now we find that more and more evidence

is unfolding of the incredible mess and smell that surrounds some of

the dealings of the British Columbia Railway, and this minister is on

the board of that Crown corporation.

I find very puzzling the sequence of two other events: yesterday the

Attorney-General (Hon. Mr. Gardom) tabled a letter affirming that, in

his opinion, there was no evidence to indicate civil or criminal fraud

regarding the M.E.L. Paving case and the day after we have the public

inquiry announced. While I certainly wholeheartedly support the concept

of a royal commission, I can't but help leave this question with the

House: do we really think that we would have had a royal commission had

in fact there been a different decision by the Attorney-General?

[ Page

721 ]

I am very grateful to the Chair for the very clear way in which, Mr.

Chairman, you have pointed out that the announcement today of a royal

commission need not in any way stifle some of the matters which this

House should most correctly discuss during the estimates of this

minister. The overall image of the B.C. Railway must surely be at its

lowest ebb right here and now in the light of all the evidence that's

been brought forth in public in the last few weeks and months. I think

many people are asking themselves whether or not it is just the

incredible bungling and mismanagement of BCR, in which this minister

participates, or whether in fact it's just one great big con game with

the contractors of British Columbia.

I won't go into detail, Mr. Chairman, on the documentation, which no

doubt will go before the royal commission, but there is certainly the

most complete kind of evidence which was tabled in the House by the

former NDP government. It could only lead one to one of two

conclusions: either the BCR was so incredibly incompetent and inept in

reaching contracts with contractors it either, through sheer,

incredible bungling, provided figures that bore no relationship to the

facts, or worse, the railway knew very well that these figures bore no

relationship to the truth and they nailed down contractors into

contracts which they knew they could not possibly meet but which, at

the same time, they could not get out of and where they would lose

their performance bond and probably their shirt as well.

So the business practices of the B.C. Railway and the performance of

the board of directors, of which this minister is a member, leave a

great deal of suspicion in the mind of any individual who tries to view

the evidence and take

part in this debate on the responsibility or

irresponsibility shown by this minister.

I want to talk for a moment about one of the specific areas in which

this minister's credibility, if not his integrity, has to come under

question. I am dealing specifically, Mr. Chairman, with the matter of

Doug Regan Construction Ltd., which is one of the contractors who

became embroiled in the ongoing construction of extensions of the B.C.

Railway and who finished up with creditors asking for something on the

order of $1.4 million.

I would like to quote from the Dawson Creek newspaper of August 18, 1976, where

a meeting of the creditors was summoned by Larry Lewin, who is a lawyer in Dawson

Creek and is the city solicitor representing many of the creditors. "Lewin,

who stated that nearly every contractor who has worked for the BCR in the north

has experienced financial difficulties...." He asked that Phillips intervene

to get the BCR to put Regan back to work again, so that he could pay off his

creditors. "Phillips stated he felt Lewin was an able salesman and could

convince BCR officials, while maintaining that he had to hold his position of

no political interference with Crown corporations."

Mr. Chairman, I happen to be one of the members of the House who is

frequently accused of being naive. But in this particular involvement

of this minister in this particular situation, one would have to be the

most naive individual that God ever created not to see the enormous

conflict of interest which is involved in this particular aspect of

B.C. Railway affairs.

I just want to continue with the quote:

"Lewin pointed out the urgency of the situation since

assured creditors were prepared to move in and force the sale of

financed equipment which could force Regan Construction of Dawson Creek

completely out of business."

This next phrase is very important, Mr. Chairman:

"Due to the depressed price of heavy equipment at the

present time, returns could be expected to barely cover the amount

owing to the finance company.

"Lewin went on: 'We have to have action within a week

to forestall this. If the usual bureaucratic procedures are followed,

the remedy will just be too late.'

"Lewin stated that he had asked the corporation to

guarantee a bank loan" — this is the B.C. Railway corporation — "with

money currently owing Regan by the railway, and this would enable Regan

to pay off his creditors at 70 cents on the dollar, with the balance to

be paid over an extended period. This would entail the railway backing

a loan for over half a million dollars to Regan.

"Phillips stated that the matter had been discussed at

a meeting of the board of directors of the railway, and the other two

directors on the board had been of the opinion that there was no

obligation to do anything on the matter.

"Pressing for action, Lewin contended. that other

firms like Keen Construction had run into considerable difficulties

because of the policies of the BCR. Mr. Lewin stated: 'The small

businessman of the north should not be taxed by the failure of prime

contractors of BCR.' He asked that Phillips and the board of directors

study the policies of the BCR capital expansion department and see that

these policies did not further harm the northern areas."

Mr. Chairman, I think out of that background one or two or three or

four very reasonable and valid questions arise. I would hope the

minister would answer them. Does he consider it quite correct and

customary for a minister of the Crown to meet creditors who are seeking

redress from a Crown corporation, where he is on the board of directors

[ Page 722 ]

that Crown corporation and where, in this case, the

creditors live in his own riding which he represents as an MLA? Is this

the kind of avoidance of political interference that the minister is

always talking about?

Later on in this debate I'll quote from a clipping where he said he

was only going to be on the board of one of these other Crown

corporations for 6 to 12 months — and I'm talking about the BCDC. The

12 months have long expired, and he's still on the board. So we have

the minister frequently espousing the principle that there must not be

political interference in Crown corporations. Yet in this case, the

political interference appears to have been of the most blatant kind.

I would like to know if at any time in the discussions Regan

Construction threatened legal action in the same manner that M.E.L.

Paving not only threatened but took legal action and finally won their

day out of court.

After the August meeting, I would like to know, or have the Minister

tell the House, with what parties he discussed the creditors' request,

particularly since the two other members of the board of directors felt

that there was no obligation whatever for BCR to do anything in regard

to Regan.

We now find from the minister's confirmation in question period

today that the BCR has coughed up something in excess of $1 million.

One has to ask the question: did the minister, the other member of the

board of directors, feel differently from the two members who are

quoted in the Peace River News?, Did he, in fact, persuade the other

two directors that their opinion that they didn't have to take any

action was wrong, and that, in fact, there should be a settlement?

What percentage of the outstanding total debt does the settlement

that he confirmed in question period today represent? The minister

confirmed that preferred creditors got 100 cents on their dollar and

the unpreferred creditors received 50 cents. But what did it all add up

to? What was the total sum of money that Regan Construction was due,

and what percentage of that total sum was paid?

Another question that arises out of this Regan Construction

situation is the purchase by the B.C. Railway of heavy equipment which

is stated to have been worth $600,000. Can the minister tell the House

if, in the course of discussion with the other members of the board,

the purchase of this heavy equipment was part of the deal? Who

suggested it? Was this another initiative by the minister to try and

settle?

I would like to know the market value of the heavy equipment. Did,

in fact, BCR seek some outside appraisal to determine what, in fact,

they should pay for the heavy equipment and whether or not it was right

to buy it in the first place?

I would like the minister to confirm whether or not the $600,000

figure placed on the heavy equipment is correct. Secondly, were there

appraisals sought from objective, sources as to what that equipment was

then worth on the market? If that wasn't the value, what was the

appraised value?

I would also like to know what parties were involved in reaching the

final settlement with Regan Construction. I would like to know, and I

think this House should be told, if the minister, as a member of the

board of directors, was consulted prior to the final settlement being

offered the creditors. In case I don't make myself plain, I'd like to

know if the minister was a party to the final discussion prior to

making the offer to the creditors.

The final question, which surely has to be the obvious one: does the

minister not consider that in the face of all these aspects of this

Regan Construction issue...? Is it not surely clear to the minister

that there is an incredible conflict of responsibility and interest

involved in the minister being some kind of intermediary pleading the

cause of creditors in his own riding? However the creditors came to

find themselves in this position is beside the point. The Minister of

Economic Development is frequently pleading for and espousing the idea

that there must not be political interference in Crown corporations.

Yet here we have the most blatant example of him trying to function an

both sides of the fence at the same time by sitting down with creditors

who were trying to make a deal with the very Crown corporation of which

he is a director.

Now, Mr. Chairman, I just can't see how anyone could not come to the

conclusion that the minister has compromised himself to an incredible

degree by taking

part in these discussions. Unless he can produce

evidence to the contrary, on the face of it, at least two directors

said there was no BCR obligation to settle with Regan Construction. We

find that nevertheless, the final decision made was, indeed, to settle

for the very substantial sum of around $1.2 million to $1.4 million.

Now there may be specific figures and facts that the minister can

now give the House to put the whole matter out on the table. If I have

misquoted, or if the minister can show that some of the information

I've collected is inaccurate, then I'll be very ready to withdraw these

statements that are shown to be inaccurate. But on the face of it,

there is so much evidence to suggest that the minister was drawn into a

situation where he — unavoidably, once he was drawn into it —

compromised his position and his responsibility. Because his wider

responsibility as a minister of the Crown is to British Columbia, not

to specific creditors in his own riding. I can sympathize with how he

must have felt, or how I would feel if I were in the same position and

I were holding ministerial office when creditors in my riding came and

asked for help. I would certainly be concerned and try to help. But I

think the manner in which the

[ Page

723 ]

minister went about the proposition that was put to him has just incredibly demolished any credibility that he now has.

When, in conjunction with that situation, we have the pre-existing

problem resulting from members of his very office — one of his closest

assistants — creating the problem for him by making unwise investments

in companies about which he had confidential information, one really

has to, perhaps regrettably, suggest that this minister no longer

retains enough credibility to remain in the very important post of

Minister of Economic Development. I don't know. He's probably even

created a first in the history of British Columbia politics. He's

probably the first minister to have two judicial inquiries going on at

the same time pertaining to matters that are very vital to the safe and

responsible conduct of his ministry.

There are many other matters that I would like to raise later on,

Mr. Chairman, but I think these questions deserve an answer. I still

think that with the Premier in Ottawa, dealing with the federal

government on such matters as coal development and the pros and cons of

the Kitimat pipeline and a wide variety of other vital economic issues,

it is most surprising that the Premier would not have the minister

responsible for these important issues with him in Ottawa to take

part

in these discussions.

So just before I sit down, I wonder if I could repeat the key

questions. First of all, does the minister have any information that

would correct the picture that I've drawn of a minister who became

involved in a conflict-of-interest situation