Alberta Hansard — 3 November 1977, Afternoon sitting (14:30) (Legislature 18, Session 3)

19771103

Alberta — Debates (Hansard)

November 3, 1977 ALBERTA HANSARD 1865 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Thursday, November 3, 1977 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: INTRODUCTION OF BILLS Bill 96 The Trust Companies Amendment Act, 1977 MR. GHITTER: Mr. Speaker, I request leave to intro duce a bill, being Bill No. 96, The Trust Companies Amendment Act, 1977. The purpose of this bill, Mr.

Speaker, is to enable various Alberta trust companies to extend their powers of investment in order that they might com pete effectively with other trust companies carrying on business in the province of Alberta. These amendments were dealt with by the industry in co operation with the Minister of Consumer and Corpo rate Affairs and the trust companies branch of Con sumer Affairs. [Leave granted; Bill 96 read a first time] MR. HYNDMAN: Mr. Speaker, on a procedural point at this time, it's now intended to introduce a new Bill No. 76, The Provincial General Hospitals Amendment Act.

Hon. members will note there is an existing Bill No. 9 under the same name on the Order Paper, which was introduced in the spring and is now stand ing at second reading. It is not the government's intention to proceed with Bill 9. So before the subsequent bill by the same name is introduced, I would ask unanimous leave of the Assembly to withdraw Bill 9, The Provincial General Hospitals Amendment Act, at the bottom of the first page of today's Order Paper. HON. MEMBERS: Agreed. MR. SPEAKER: So ordered. Bill 76 The Provincial General Hospitals Amendment Act, 1977 MR. KROEGER: Mr.

Speaker, I beg leave to introduce a bill, being The Provincial General Hospitals Amendment Act, 1977 (No. 2). Mr. Speaker, the purpose of this bill is to allow for the establishment of a health facility, under the intent of this legislation, without the necessity of terming such facilities a hospital. It will therefore permit a facility to assume hospital stature without confining its name and/or purpose to a hospital, this in accord with develop ments in the community and in facilities designed to deliver specific physician/patient care.

This will allow for flexible and innovative approaches in facility development. MR. SPEAKER: I'm not sure I heard the hon. mem ber's opening words exactly. Is he referring to this bill with the addition of (No. 2) at the end of the name? MR. KROEGER: No, Mr. Speaker. [Leave granted; Bill 76 read a first time] MR. HYNDMAN: Mr.

Speaker, I move the following bills be placed on the Order Paper under Government Bills and Orders: Bill No. 96, The Trust Companies Amendment Act, 1977; Bill No. 76, The Provincial General Hospitals Amendment Act, 1977; and Bill No. 220, The Blind Persons' Guide Dogs Act. [Motion carried] Bill 253

An Act to Amend The Municipal Government Act DR. BUCK: Mr. Speaker, I beg leave to introduce Bill 253,

An Act to Amend The Municipal Government Act. The purpose of this bill is to repeal some sec tions of The Municipal Government Act dealing with the functions of local authorities boards, specifically to return to the board the power to make the final decision on annexation petitions. The bill would also remove the retroactivity aspects of the decision making powers. [Leave granted; Bill 253 read a first time] head: TABLING RETURNS AND REPORTS MR. MINIELY: Mr. Speaker, I've been concerned that this would come crashing down on me if we didn't get to this stage on the Order Paper.

I have rather voluminous material which, following my remarks yesterday to the Legislature, I indicated I would report whether I would like to file with the Assembly for the members of the Assembly: including the Edmonton Cardiac Institute proposal and request; a report of ministers' meetings with citizen and pro fessional groups; a review of selected North Ameri can facilities; a review of selected European facilities; Canadian Medical Association reports; a review of Seattle cardiac facilities; a report on a meeting with World Health Organization officials in Geneva; sup plementary reports on European facilities; a review of Toronto facilities and Israel facilities; a

summary out line plan for a northern Alberta cardiac rehabilitation centre; a Canadian Public Health Association

article on the subject: a conference of ministers of health, task force reports; a list of meetings held by myself, the Minister of Hospitals and Medical Care; a com bined library research and review; an Alberta Medical Association letter dated May 13, 1977; and a report by Dr. Pisa of the World Health Organization on Alberta programs.

1866 ALBERTA HANSARD November 3, 1977 head: INTRODUCTION OF SPECIAL GUESTS DR. WARRACK: Mr. Speaker, I'm very pleased today to introduce to you and to my colleagues in the Legislature the grade 9 class from Beiseker in my constituency. They are in the members gallery, 24 in number, and are accompanied by their teacher Richard Courtman and also, I'm told, a sometimes bodyguard with these students, parent Alf Hagel. I'd like to ask them to rise and receive the welcome to the Legislature of my colleagues. MR. KIDD: Mr.

Speaker, it's my pleasure to introduce to you, and through you to members of this Assembly, 31 students from the high school at Springbank. The class consists of 29 girls and two lucky boys. They're in the grade 10 social studies class and are accom panied by their teacher Mr. Tom Laubman. I would ask them to rise and receive the welcome of this House. MR. LEITCH: Mr. Speaker, I'm delighted to be able to introduce to you today and to the Members of the Legislative Assembly 17 Girl Guides from the Lake Bonavista area in the Calgary Egmont constituency.

They are accompanied by their leaders Mona Hutton and June Shackleford. They're seated in the public gallery. I'd ask them now to rise and receive the welcome of the Assembly. MR. R. SPEAKER: Mr. Speaker, I would like to take this pleasure, through you and to the members of the Legislature, to introduce another guide sitting among the lovely Girl Guides in the gallery. I would like to introduce Mr. Harry Leinweber, a former member of this Legislature who represented Medicine Hat. He is visiting us here today.

I'd like to have him stand and be welcomed. head: MINISTERIAL STATEMENTS Department of the Solicitor General MR. FARRAN: Mr. Speaker, I'm happy today to report good progress to the House on the Alberta fine-option program. This program is designed to offer an alternative to imprisonment for those who, by force of circum stance, are unable to pay fines. In effect it is a program to allow fine defaulters to satisfy their penal ty by work. Before the introduction of this new plan, up to 40 per cent of all sentenced admissions to Alberta correctional institutions were for default on a fine.

Of these, approximately 40 per cent were fined for provincial offences, 40 per cent for minor criminal offences, and 20 per cent for various driving offences. The fact that the law had considered a fine as an adequate penalty indicates that most of these offences were comparatively less serious than those of other inmates. The financial circumstances of the defaulters were generally such as to make it probable that a prison sentence would cause additional economic strain on an already weak support struc ture. And the mixing of such minor offenders with other criminals might have undesirable influences.

These facts were drawn to our attention by the Kirby Board of Review in its first report, which sug gested a work-for-fine plan. A pilot project was therefore begun in Edmonton in February 1976. Many useful lessons were learned. It was discovered that when reminded, a substantial number of late payers managed to satisfy their fines without further assistance. But some 1,421 individuals were helped by the program for fines amounting to $112,447. Through the year, the program evolved into three distinct phases.

The first phase involves an attempt to divert defaulters from prison by finding them worth-while work with voluntary agencies in the community. The other two phases deal with those who for various reasons have not been diverted from the correctional institution, but whose stay there can be considerably shortened by work. This work can be by way of employment while on a temporary day pass from the correctional institution or a halfway house, or it can be by way of work within the institution itself, such as chopping wood for government picnic grounds.

There is good discipline within the exercise, since those who renege on their work commitment can be returned to incarceration. A system has been worked out with the Attorney General and the Provincial Treasurer whereby vou chers at the minimum hourly rate are tendered as proof of satisfaction of the fine after the work is certi fied by the employers. The system was first spread from Edmonton to Calgary, Lethbridge, and Grande Prairie in July, and has since been extended to 23 locations through the province.

By June 1978 it will be available at 32 locations, and plans are also under discussion to extend it to areas where there is a court circuit, although no community corrections office. As the program continues to evolve, I expect our community corrections workers to become more and more involved in simple fine collection. This will be an important adjunct to operation Omega, the project to decriminalize traffic offences announced by my col league the Attorney General.

As amendments are made to the federal Criminal Code, I also expect that these community corrections officers will be involved more deeply in the area of restitution, a concept that was tested in a pilot project in Calgary and shown to require more legislative strength if it was to be more than 70 per cent successful. The success of the pilot fine-options project in Edmonton is being repeated in other centres, Mr. Speaker. I am proud of this progressive initiative by Alberta, and expect it will have a profound effect on incarceration rates within two years.

I would now like to table a full report on the fine-options experience so far. head: ORAL QUESTION PERIOD Environment Control Legislation DR. BUCK: Mr. Speaker, I'm sure that the hon. gov ernment members would probably want me to invite them to our convention this weekend. But that's not in my question. My question, Mr. Speaker, is to . . . DR. WARRACK: Is it in a phone booth?

November 3, 1977 ALBERTA HANSARD 1867 DR. BUCK: I've already invited the Attorney General, because he'll meet so many of his former supporters there. [interjections] Mr. Speaker, my question comes from the Commit tee for Environmental Public Participation, which says: "Join a quarter million Albertans who care about their environment and keep the Environment Conservation Authority alive." My question, Mr.

Speaker, very plainly to the Premier, is: in light of the concerns expressed by the Committee for Envi ronmental Public Participation, representing approxi mately 250,000 Albertans, will the government con sider withdrawing Bill 74? MR. LOUGHEED: Mr. Speaker, I would refer that matter to the man who very capably is assuring that there is very effective control of the environment in this province. DR. BUCK: Nobody seems to know who that is. MR. RUSSELL: No, Mr. Speaker, we're not consider ing withdrawal of the bill. DR. BUCK: Mr. Speaker, a supplementary question to the Premier. Mr.

Premier, in light of the fact that there is a large amount of concern, could the Premier indicate if the government would consider holding third reading of Bill 74 until the spring session of the Legislature? MR. LOUGHEED: Mr. Speaker, I'll make the same reference to the minister. MR. RUSSELL: Mr. Speaker, I think there's been pret ty good discussion and consideration of the principles embodied in the bill. They were announced early in June. We're going forward as we had announced. I've met with any groups who wanted to meet with me concerning this bill.

In fact I've invited some people who voiced concerns to meet with me, who have not availed themselves of that invitation. So I really think there's been pretty good opportunity to discuss the principles of the bill. DR. BUCK: Mr. Speaker, a supplementary to the hon. Minister of Government Services. In light of the fact that the government members' phone number is listed on this ad, can the minister indicate if the government members' phone will be manned this weekend to take calls relating to Bill 74? MR. SCHMID: Mr. Speaker, this matter could be taken into consideration, and I will report to the House tomorrow.

Psychiatric Patients DR. BUCK: Mr. Speaker, I have a second question to the hon. Minister of Hospitals and Medical Care. Just a short

preamble to the House, Mr. Speaker. In a recent attempted suicide case, a young man was taken to the Misericordia Hospital after setting fire to an apartment. Fortunately, the fire was limited to the apartment. The next day the man in question was released because the police didn't press charges. My question to the minister: is the minister reviewing hospital policy which makes it possible to release, just at their own request, people who have endan gered their own lives or the lives of others? MR. MINIELY: Mr. Speaker, I don't think I can answer the question the way it's framed.

But I'll certainly check the particular circumstances the hon. member refers to and report to the House the particular han dling of this matter by the Misericordia Hospital. DR. BUCK: Mr. Speaker, a supplementary question. Can the minister indicate if the department would consider referring these people for psychiatric help in circumstances such as this before they are released? MR. MINIELY: Mr. Speaker, I'll have to check with the hospitals in Alberta that handle psychiatric patients to see what the policy is in that regard, and report to the House. Stony Plain Hospital MR. PURDY: Mr.

Speaker, I'd like to address a ques tion to the Minister of Hospitals and Medical Care. Can the minister inform this Assembly and the people of the Stony Plain area when the Stony Plain Hospital will receive its accreditation, which was removed approximately two years ago? MR. MINIELY: Mr. Speaker, I've asked for a report on the Stony Plain Hospital, because the hon. Member for Stony Plain had very kindly given me notice.

I can report to the House that the original recommendation of the Hill inquiry was that the hospital remain under a provincial administrator for a 24-month period, which commenced in March of 1976. Prior to the appointment of a board, some realign ment of wards will probably be necessary to ensure that representation is in accordance with current population growth in the Stony Plain area. It appears as though I would be in a position to consider, under our legislation, the reappointment of a board in Stony Plain sometime in the spring or summer of 1978.

I would point out that accreditation is applied for and granted by the Canadian Council on Hospital Accredi tation, an autonomous body not connected with any government, either provincial or federal. MR. PURDY: Mr. Speaker, a supplementary question to the minister. Regarding the reappointment of a board, will the minister be considering appointing officials from the area who are presently elected, or will elections be held for the placement of a hospital board? MR. MINIELY: Mr. Speaker, I'd have to check that procedure specifically and let the hon. member know. Water Management MR. NOTLEY: Mr.

Speaker, I'd like to direct this ques tion to the hon. Premier. It relates to a comment made by the Premier in southern Alberta on Septem ber 20 concerning opposition to the export of water and, in addition, the suggestion that the government has under open consideration interbasin transfer of water. My question to the Premier is: what studies are

1868 ALBERTA HANSARD November 3, 1977 now taking place by the government of Alberta with respect to interbasin transfer of water? MR. LOUGHEED: Mr. Speaker, unless the Minister of the Environment can correct me, I would presume that no studies are being undertaken.

What I attempted to communicate to the citizens of southern Alberta is that first of all this government policy was clear: we in no way supported or endorsed the export of water south of the border from Alberta and, secondly, we didn't accept the concept that to some extent was endorsed by the previous administration with regard to what was known as the PRIME project; but that as matters developed and as studies ensued with regard to the Oldman River basin or the other basins towards the southern part of the province, we would not have a closed mind in some years down the road to consideration of interbasin transfer.

But that would be quite a number of years down the road. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. Premier for clarification. Do I take it from the Premier's answer that there has been no formal consideration at this time? The Premier indicated there hadn't been any studies, but has there been any consideration by the government of interbasin trans fer, beyond the bounds of the PRIME project? MR. LOUGHEED: Mr. Speaker, no consideration has been given to the subject.

The question was put to me on the basis: is the government unequivocally against considering interbasin transfer within the province? So I was answering the question in the way it was put; not with a view to looking at the matter as something that would be of immediate consideration to the government, merely to make it clear that some time in the future that was a possibil ity that still would be considered by the administration. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. Minister of the Environment. The Premier had indicated that no formal studies have been un dertaken.

Could the Minister of the Environment in dicate, however, whether the Department of the Envi ronment has done any preliminary assessment of the costs of certain types of interbasin transfer of water? MR. RUSSELL: Mr. Speaker, as the hon. Premier indi cated earlier, a number of studies have been done over a great number of years by different govern ments in Alberta with respect to a variety of schemes that involve the transfer of water from one basin to another. But since the most recent study, known as PRIME, was pretty well shelved, there has been no updating of that kind of information.

Insofar as the present government's policy is concerned, our man agement of water resources is carried out on a basin- study basis. MR. NOTLEY: Mr. Speaker, a supplementary question to either the hon. Premier or the Minister of the Environment. The PRIME project, as I understand, was an interbasin project that recognized that changes of water from one basin to another would have an effect right on up north. My question to either the Premier or the minister: would the gov ernment at this stage assure the House that no modi fied PRIME project is now being considered by the government? MR. LOUGHEED: Mr.

Speaker, because of the use of the word "now" in the hon. member's question, I think it would be appropriate to answer that it's not being considered now. But what I think one should understand is that we will, over the course of years, assess and complete the review of improved water management within the various basins in the province. It's quite clear that in the southern part of the province, both in the Red Deer area and in the Oldman River basin, there is a need for improvement of water management.

When action has been taken, within the limits permitted by the resources available to see that we have fully satisfied what we can there in those basins, then at that stage, again some years down the way, it may be that the government would undertake an assessment as to the validity of some degree of interbasin transfer. Cancer Centre — Calgary MR. R. SPEAKER: Mr. Speaker, my question is to the Minister of Hospitals and Medical Care. Could the minister confirm that approval was given yesterday to the Foothills Hospital board to begin construction on the Calgary Cancer Centre? MR. MINIELY: Mr.

Speaker, I believe my officials indi cated to me, when they were just briefly in my office, the fact that some of the utilities tunnel or excavation tender had come in at a very desirable amount, and that officials had indicated to them that they could proceed because of the tender coming in at a good price.

Since this had been in process, we indicated to the Foothills Hospital board that this would be the last approval given to individual tender packages until the implementation committee is appointed, as I indicated during discussion of the Southern Alberta Cancer Centre, and from that point on, similar to the Health Sciences Centre, because they are all split up in indi vidual excavation and utility tunnels. This does not commit [us] to the actual construction. It's part of the excavation and utility tunnel that is necessary in any event for the services of the Foothills Hospital. MR. R. SPEAKER: Mr.

Speaker, I appreciate that answer from the minister; it was one of the very clear ones that we've had. MR. NOTLEY: And short too. MR. R. SPEAKER: And short, so that's a good improvement. DR. BUCK: And he knew. MR. R. SPEAKER: Mr. Speaker, my supplementary question to the minister is with regard to the end cost of the Calgary Cancer Centre. This wasn't clear in reading the minutes. Does the estimate of $75 mil lion include the interior equipment? MR. HYNDMAN: Mr. Speaker, on a point of order, it seems to me these kinds of matters relate very direct

November 3, 1977 ALBERTA HANSARD 1869 ly and would be most appropriately dealt with in the Committee of Supply study of the hospital matters referred to under the heritage savings trust fund, which will be coming up next week. MR. R. SPEAKER: Mr. Speaker, would you like to rule on that? MR. MINIELY: Mr. Speaker, I would prefer, because I have all my material and these matters are, as hon. members know — a great deal of detail to all of these individual projects.

I would prefer to answer ques tions of that magnitude and detail on each of the heritage fund projects during the course of examina tion of the estimates in this House in Committee of the Whole. MR. R. SPEAKER: I will accept that at this time, Mr. Speaker. A supplementary to the minister. The min ister mentioned that directions have been given to the implementation committee with regard to this project. Could the minister indicate at this time any types of projected reporting dates, a final date upon which the committee will make its final decision and give final approval to the project? MR. MINIELY: No, Mr.

Speaker, we're in the process now of selecting people who would serve on the implementation committee in a similar manner and with a similar mix of backgrounds to what we have on the Health Sciences Centre implementation commit tee. Of course, I'm putting priority on forming the committee to get on with it, but I'm not at all able to make any definitive statement of dates at this stage. Electroconvulsive Therapy MR. MANDEVILLE: Mr. Speaker, my question stems from the tragic occurrence last August when a 16- year-old girl died in the Lethbridge Hospital receiving electroconvulsive therapy.

My question is to the hon. Minister of Hospitals. What is the departmental poli cy with regard to electroconvulsive therapy? MR. MINIELY: Mr. Speaker, that again is a matter of substantial detail and policy that is determined internal to a hospital, along with the consultation of the College of Physicians and Surgeons and the Al berta Medical Association in the province of Alberta. Those procedures are determined in that manner. I would check that out and report to the House the specific procedures and controls on that type of thing in a hospital. MR. MANDEVILLE: A supplementary question on this, Mr. Speaker.

Has the minister's department con ducted its own inquiry into the patient's death? AN HON. MEMBER: Order. MR. SPEAKER: Apparently the minister is about to make some kind of inquiry in reply to the first ques tion of the hon. member. Perhaps if the answer then does not go as far as the hon. member wishes, he could ask a supplementary when the answer comes back. MR. FOSTER: Mr. Speaker, for information for the member, I believe that is the unfortunate occasion giving rise to an inquiry under The Fatality Inquiries Act. That will be held in due course. Disaster Services MR. YOUNG: Mr.

Speaker, my question is to the Deputy Premier, the minister in charge of disaster services. It arises out of an item in the report of the Disaster Services [Agency]. In connection with the preservation of essential records for war emergency operations, I wonder if the Deputy Premier could out line the direction given to persons who must select those records? DR. HORNER: Frankly, Mr. Speaker, I'd have to check on the detail, but I believe it's done in co-operation with the Department of Government Services, and a decision in each department as to those records that should be preserved.

They are then microfilmed and stored. MR. YOUNG: Supplementary, Mr. Speaker, could the minister advise whether this is done in conjunction with records in association with those of the federal government for this purpose? DR. HORNER: I'd have to check, Mr. Speaker, to ascertain whether any federal government records are involved. Hospital Privileges MR. KUSHNER: Mr. Speaker, I wish to direct my question to the Minister of Hospitals and Medical Care. Can the minister inform the Assembly that patients choosing their own doctors — that that same doctor would have the privilege of using hospital facilities? MR.

MINIELY: Mr. Speaker, I believe the hon. Mem ber for Calgary Mountain View is referring to a matter which receives considerable debate amongst the medical profession in Alberta, and that is whether all doctors should have privileges in hospitals. The mat ter is a complex one where there is no unanimous agreement amongst members of the medical profes sion, and also of course the interest of hospital boards as managers in the system who have a real interest in the matter.

At this stage I can only say there is no intention at this time to change our histor ical method of handling medical privileges in the hospital system in Alberta. MR. KUSHNER: A supplementary question to the min ister. What alternative is left for a patient if he has chosen a certain doctor and is quite satisfied with that doctor? MR. MINIELY: I think a patient in Alberta makes his free choice of doctors. I'm sure in making that choice they know the circumstances of the doctor.

In other words, if the doctor has hospital privileges in a major teaching hospital, a general hospital, a rural hospital, or has no privileges but practises in the community, that is something the patient would have full knowl edge of when choosing the doctor. I don't think the

1870 ALBERTA HANSARD November 3, 1977 government should interfere with that process in any way. MR. KUSHNER: A supplementary question to the min ister. Can the minister inform this Assembly if he has any rough figures on those doctors in Alberta who do not have hospital privileges but can get them? MR. MINIELY: Mr. Speaker, I wonder if the hon. member would repeat or clarify that. I'm not sure I understood the last question. MR. KUSHNER: Mr. Speaker, my question to the minister is: is the minister in a position to inform this Assembly how many doctors in Alberta do not have hospital privileges? MR. MINIELY: Mr.

Speaker, no I am not in a position to inform the Assembly of that. I'm not sure whether that is a matter I as the minister should have any responsibility to inform the House on. MR. KUSHNER: A supplementary question to the min ister. Did the minister have any inquiries proposing a change in legislation so that all doctors would have hospital privileges? MR. MINIELY: Mr. Speaker, it seems to me that's almost the same way the question came out at the beginning. I indicated the fact that these are matters between hospital boards, medical staffs, and the med ical profession in Alberta.

I know there is not unani mous agreement as to the system, but I think the system in Alberta has served the province well. Basi cally the hospitals are not built for medical doctors. They are built for the citizens of Alberta and not for the particular use of medical doctors. MR. KUSHNER: A supplementary question to the min ister — yes or no. Have you had any inquiries from doctors or citizens asking for a change in legislation to provide such service? MR. MINIELY: Oh, I've had individual doctors who have their particular view with respect to medical privileges.

Usually they are the ones who have not been granted medical privileges, for one reason or another, so obviously their view is presented with that particular bias. But I have not received many, Mr. Speaker. There have been very few. DR. BUCK: You'll love Ottawa, John. Cooking Lake Area Study MR. TAYLOR: Mr. Speaker, my question is to the hon. Minister of the Environment. Have any studies been completed on piping water from the North Saskatch ewan River into Cooking Lake? MR. RUSSELL: No, they haven't in any detailed form, Mr. Speaker.

The study that was carried out with respect to the Cooking Lake moraine of course did deal in some detail with the matter of stabilizing lake levels. The matter the hon. member referred to would have been included in such a scheme. But as hon. members are aware, any action the government might undertake in that region has been tabled until such time as the local governments, supported by their residents, agree on a land-zoning and land-use plan for the area. AHC Staff Housing Policy DR. BUCK: Mr. Speaker, my question is to the hon. Minister of Housing and Public Works.

I'd like to know if the minister has information available as to why the trailer rentals in the Wabasca area, which government employees are using, have escalated almost double or more than double. MR. YURKO: Mr. Speaker, I believe that's part of the application of the new staff housing policy. DR. BUCK: Mr. Speaker, can the minister indicate if the residents using the trailers have been notified that their rents will be increasing almost 183 per cent on January 1? MR. YURKO: Mr.

Speaker, as a result of the adoption by government of the new staff housing policy, all staff members have been advised of the new rental increases in accordance with the policy that was established. They were notified as soon as possible, and this was some weeks ago. Thorhild County Boundaries MR. NOTLEY: Mr. Speaker, I'd like to direct this ques tion to the hon. Minister of Municipal Affairs. It flows from the decision, one afternoon, to alter radically the county of Thorhild. Mr.

Speaker, to the hon. minister: have there been any discussions leading to a formal agreement to compensate the county for the substan tial loss in revenue from the recent changes in the boundaries? MR. JOHNSTON: Mr. Speaker, first of all we had a substantial number of discussions before the decision was made and subsequent to the decision, to ensure that the transitional process would go as smoothly as possible and to maintain a very viable and strong county of Thorhild. Obviously there are some transi tional questions which have to be dealt with.

Several ministers have had meetings to deal with those, both in terms of the municipal side and in terms of the school side. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. Minister of Municipal Affairs. Could the minister outline to the Assembly which ministers are involved in meeting, with whom they are meeting in the county, and whether any formal agreements have been made? MR. JOHNSTON: Mr. Speaker, the way in which cabinet meets with various delegations is a matter for cabinet to deal with. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister.

Have there been any formal agreements at this stage between the cabinet — regardless of how they handle their business, and we could comment on that — and the county of Thorhild with respect to the change in boundary and the

November 3, 1977 ALBERTA HANSARD 1871 impact that will have on both municipal and school services? MR. JOHNSTON: Mr. Speaker, I think we have stated publicly that we would continue with the level of assistance we have made to both jurisdictions: Divi sion 1, which has now been moved to the M.D. of Sturgeon and, of course, we'll continue with the same level of programs and grants to the county of Thorhild. If that is what the hon. member is referring to as formal agreements, yes we have those formal agreements. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister.

Beyond the public statements, have there been written assurances from the gov ernment of Alberta to the officials of the county of Thorhild? MR. JOHNSTON: Mr. Speaker, I can't of course account for all the written correspondence which has taken place by various ministers. But as far as I'm concerned, and as far as my department is con cerned, we have only made the assurances that the similar level of assistance will continue to the county of Thorhild. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister. Can the minister confirm in the House what the time frame is?

I understand it was three years and five years. Is that correct? MR. JOHNSTON: Mr. Speaker, I don't know what the hon. member is referring to. MR. NOTLEY: The question really relates to the time frame that these levels of services will be maintained and extra funding will be made available from the province. Perhaps I could put the question this way: will the assurances the government has given involve extra funding to take account of the change in the assessment base, so that the level of services will not be altered in any way? MR. JOHNSTON: Mr.

Speaker, I have already given the assurance that we are confident that the level of services to the residents of the county of Thorhild can be maintained at the same high level as in the past. We believe it will be a very viable county now that the deep-seated resentments have been resolved, and they will continue to carry on in a very formal and a very positive way to meet the needs of people in the county of Thorhild. As to any other agreements or special arrange ments, it's only the hon. member who is making those presentations, not anybody from this side of the House. DR. BUCK: Oh, oh. Easy, Dick. MR.

NOTLEY: Mr. Speaker, a supplementary ques tion. I'd be glad to say we should be making those submissions, no question about that. My question to the hon. minister, so there's no misunderstanding: the minister is saying, then, that despite the fact that the assessment base of the county of Thorhild has been radically altered, it is the government's position that no additional funding is required to maintain the existing level of services? Is that the position of the government? MR. JOHNSTON: Mr.

Speaker, we have maintained the position that we will ensure that the level of services to the county of Thorhild and the residents of Thorhild will be maintained. We may have to do that in several ways. We may have to review, for example, some of the transitional problems. Certain ly, one is settling out the surpluses between the two areas, between the two jurisdictions. The question of the tax collection subsequent to September 1977 is a second one. Several of these kinds of transitional questions remain to be settled.

We are in the process now, by jointly dealing with the county of Thorhild and the municipal district of Sturgeon together with departmental officials, of working these kinds of transitional problems out. We are sure in our own mind that that county can continue to be a viable and positive county, and will operate in the future much the same as it has now, without the kind of deep-seated resentment which has caused a tremendous number of problems be tween the Division 1 area and the balance of that county.

I note as well that [in] the municipal elections in the county of Thorhild, the issue was really not one which was revealed or debated. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister. Is the hon. minister taking the lead himself, as the minister, in convening the meet ings to deal with the "transitional problems", and have there been formal meetings on an ongoing basis since the decision between the Minister of Municipal Affairs, the county of Thorhild, and the municipal district of Sturgeon? MR. JOHNSTON: Mr.

Speaker, we have had several meetings, but the policy of this government is to work as a team. MR. NOTLEY: Mr. Speaker, a supplementary question. MR. SPEAKER: Might this be the last supplementary on this topic. MR. NOTLEY: Is the Minister of Municipal Affairs part of the team in this respect? MR. JOHNSTON: Yes, Mr. Speaker. Power Lines MR. R. SPEAKER: Mr. Speaker, my question is to the Minister of Energy and Natural Resources. He has been rather quiet in the Assembly, and I feel it is time for him to put forth some knowledge. This is a follow-up question relative to the cabinet tour of southern Alberta.

One of the concerns there was with regard to power lines crossing irrigated lands. I wonder if the minister could bring us up to date as to how that particular situation will be handled? MR. GETTY: Mr. Speaker, I appreciate the efforts by the hon. member to draw me into the conversations

1872 ALBERTA HANSARD November 3, 1977 with him today. However, he has misdirected his question. It's really the responsibility of the Minister of Utilities and Telephones. DR. BUCK: We didn't want a speech; we wanted an answer. DR. WARRACK: Mr. Speaker, those very important matters and the very important concerns that have been expressed to the government, to individual members, and to the agency that's involved, the Energy Resources Conservation Board, have been taken into account in a very detailed way during the course of recent months.

The Energy Resources Conservation Board handles these matters and makes final decisions under the authority of The Hydro and Electric Energy Act. MR. R. SPEAKER: Mr. Speaker, supplementary to the minister. I understand that one of the board direc tives with regard to this situation was that there must be direct consultation between the farmer and the Calgary Power representative with regard to the posi tion of the Calgary Power line. I would like to ask the minister what procedure is available if these two par ties are unable to agree. Is there a third party appeal procedure? DR. WARRACK: Mr.

Speaker, the Energy Resources Conservation Board is that third party. One party is Calgary Power; the other is the landowner. A condi tion of the final confirmation and detail of the route by the Energy Resources Conservation Board is, as the hon. member expresses, subject to consultation with the landowner. The Energy Resources Conser vation Board would in fact function as that third party to the circumstances being assessed. MR. R. SPEAKER: Mr. Speaker, a supplementary question to the Minister of Agriculture. It's with regard to future and existing power lines on irrigation lands.

The minister was reviewing this policy. Has he reviewed it at the present time, and has he anything new to announce with regard to that? MR. MOORE: No, Mr. Speaker, I haven't anything further to announce. The original negotiations which were being carried out by my department were with the local REAs, the farmers, and Calgary Power rela tive to the relocation of existing lines. I would have expected some progress in that area.

There has been some, but it has not resulted in any kind of situation where we were able to come to a conclusion and develop the program with respect to relocation as of this point in time. Fine-Option Program MR. TAYLOR: Mr. Speaker, my question is to the hon. Solicitor General regarding the excellent statement he made today in connection with work instead of prison where fines are concerned. The first question is: will this program substantially relieve the crowded situation in our correctional institutions? MR. FARRAN: I hope so, Mr.

Speaker, although the volume of people incarcerated for other reasons con tinues to climb. MR. TAYLOR: A supplementary. Has the hon. minis ter noticed any reluctance on the part of some who would prefer to go to prison over a fine rather than work? MR. FARRAN: Yes, Mr. Speaker, such cases do exist. There are also some who face other charges and can't be released for that reason. AOC Loan MR. DOWLING: Mr. Speaker, I would like to respond to questions asked by the hon. Leader of the Opposi tion yesterday regarding an Opportunity Company loan. I have those details now.

I think what confused me yesterday was an indica tion by the leader that there was a loan of some $680,000 outstanding. That is incorrect. The loan was for a total of $500,000. It was made in two amounts: one in 1973, the second in 1974, the total being $500,000. Over the course of time, accrued interest has amounted to $115,800; arrears on prop erty tax, $45,000; other secured creditors, $9,200; receiver's fee, $12,500; insurance, $18,300; making a total of $700,800. Of that, the sales proceeds for the Canyon Ski Lodge, as a result of a receiver being appointed, were $507,137.

Negotiations are presently under way, Mr. Speaker, by the Opportunity Company officials with the loan guarantors to recover that loss. From this it will be apparent that there will be no sales proceeds left to apply to moneys owed to other creditors — that was another question that was asked — or to shareholders. The receiver appointed was Thorne Riddell. They advertised in 13 newspapers and periodicals and received not one but 37 responses: 10 from the United States, three from Europe, and 24 from Cana da. None of those responding asked for additional time in which to assess the property.

In the opinions of the receiver and the solicitors for the Opportunity Company, ample time was allowed for their consider ation. It should be pointed out that the time frame for this transaction to take place was made in such a way that any purchaser could put the property in proper shape for opening up the season this fall. That is why the time frame was established. No appraisal was made on the property on such a highly specialized facility, as there is virtually no comparative base on which to establish market eval uation. The sales transaction was reviewed and approved by Mr.

Justice Cavanagh of the Supreme Court of Alberta, and all creditors and guarantors were given notice of the hearing together with details of the transaction. They all had an opportunity to appear and object if they felt the transaction was inequitable. None of them did so. Research Council Employees MR. DOWLING: One final matter, Mr. Speaker. Yes terday I referred to a code of ethics presented by the Provincial Treasurer. It is a proposed code of ethics and, as the Provincial Treasurer indicated, it applies to all members of the Alberta public service.

I alluded to its applying to senior members of the public serv ice; that was incorrect. They should also know, Mr. Speaker, that in the

November 3, 1977 ALBERTA HANSARD 1873 Alberta Research Council we have by-laws which in dicate that wages, hours of work, holidays, and gen eral things that apply to the public service of Alberta would normally apply to people involved in employ ment with the Alberta Research Council. However, to clarify that particular point, it is our intention to make this a matter of substantial discussion at one of our future Research Council meetings. ORDERS OF THE DAY head: MOTIONS FOR RETURNS MR. FOSTER: Mr. Speaker, I move that Motion for a Return 163 stand and retain its place on the Order Paper. [Motion carried] head: MOTIONS OTHER THAN GOVERNMENT MOTIONS 1. Moved by Mr. Notley:

Be it resolved that an all party select committee of members of this Assembly be struck to examine the deteriorating relationship between farm incomes and farm input costs in the province of Alberta with a view of making recommendations aimed at establishing bet ter markets, more secure prices, and controlling neces sary input costs, with specific attention to be paid to the feasibility, with reference to other Canadian provinces, of provincial income assurance programs, systems of orderly marketing, and land-use and tenure policies. MR. NOTLEY: Mr. Speaker, I think the motion is fairly self-evident.

In speaking to the motion, I'd like to say at the outset that perhaps the point of departure in assessing this motion is the speech the Premier gave to the chamber of commerce yesterday, where he underlined the importance of agriculture and urged the chamber to become more interested in and knowledgeable about not only the problems of agri culture, but the potential for agricultural development in this province.

While I don't agree with everything the Premier says, and while I don't agree with many of the programs of this government, I do support that sort of sentiment, at least, and hope urban Alberta recognizes that our primary and most important in dustry — notwithstanding the fact that at this tem porary juncture in our history the proceeds from the petroleum industry are great — I think there's no question that the long-term future of this province is going to be more clearly bound up in what we do in strengthening our agricultural base than in our non renewable resource industry. So, Mr.

Speaker, in leading off debate on the sub ject today, there are a couple of points I would like to make. There's no doubt in my mind that while agri- power is going to be the wave of the future, the long-term prospects for agriculture are exciting but the immediate future is uncertain. So we have a situation where in 10 or 15 years' time — perhaps less than that, who's to say — there's no question that the value of farmland, the value of agricultural production, the value to a province like Alberta of a strong and vibrant agriculture is just incalculable.

On the other hand, for the next few years there are some warning signs that concern people in organized agriculture. Mr. Speaker, despite many of the programs that have been advanced by this government, the fact of the matter is that there has been a decline in the number of farmers in the province of Alberta. In 1971 there were 62,702. In 1976 that had dropped to 57,310, a drop of 5,400 or approximately 90 farm ers a month or 3 a day during the course of that five-year period. I would underline the importance of those statistics, Mr.

Speaker, because those included the good years for agriculture, the years when prices were very high, the years when there was a marked increase in the net income of Alberta farm families. As we look at the most recent statistics, we find that situation has changed rather dramatically. Mr. Speaker, before going into a review of the cost/price squeeze in general in the province of Al berta, I want to make a few comments about the situation in the northern part of the province.

The most recent crop report I have, November 1, 1977, is really a confirmation of what rural members of this Legislature have been able to gain from talking to people in their respective constituencies. No ques tion that in large parts of northern Alberta this spring, we didn't have anything like full-scale seeding. In one small homesteading area in my constituency, only about 30 per cent of the acreage that was intended was seeded. Of course at today's price level you just can't make any money if you're putting in 30 per cent of your projected acreage.

In addition, we've had the problem, as we all know, of very inclement weather in the fall. That has necessitated rather substantial grain drying activities throughout northern Alberta. While the cost of drying grain is really a function of what it tests, the fact of the matter is that whether it's 10 cents, 15 cents, or 20 cents a bushel — in some cases it's even higher than 20 cents a bushel — at today's price of barley you can't make any money if you have to spend that much to dry grain. I raise this, Mr.

Speaker, because throughout the northern region of the province there is a feeling that some kind of assistance program is necessary. As I mentioned during the Speech from the Throne de bate, over the long haul everybody recognizes that a workable crop insurance scheme is the most prefera ble course to follow. But we have to recognize that crop insurance has not been that successful.

When I look at the statistics for the province as a whole and I see that only about 30 per cent of the farmers take out crop insurance — and I know in my own constitu ency some of the best managers have simply looked at the pluses and minuses, weighed the balance sheet, and concluded that they're not going to go into crop insurance — that leads me to the conclusion, Mr. Speaker, that notwithstanding the very heavy public commitment to crop insurance, the present arrangement is just not as workable as it should be, and some major modifications should be considered.

I also recall that in the 1960s there was a program for assistance in grain drying costs during several years when we had very wet falls. I've had represen tation made to me by a number of my constituents requesting cash assistance for unseeded acreage. Some have advanced one figure, some another. A

1874 ALBERTA HANSARD November 3, 1977 group of people in the Savanna area have suggested $30 an acre. The Unifarm people in northwestern Alberta have also advanced a cash assistance figure, not in substitution for crop insurance because that would in fact act as a disincentive, but recognizing that there is a problem.

And with only 30 per cent of the people having crop insurance, in this proposal — whether it's advanced by Unifarm, the NFU, or those who are concerned about it — the feeling [is] that because crop insurance is not adequate, because it doesn't pay on stubble but only pays on summer fallow, the cash assistance program should be on top of crop insurance. In other words, those who had crop insurance would in fact have the bonus of crop insurance. But the concern I've had expressed to me pretty clearly, Mr.

Speaker, from farmers not just through out the Peace River block but from other areas of northern Alberta — particularly where we have had trouble this spring getting crops seeded — is that some kind of program is necessary, and that kind of program is not more loans. All one has to do is look at the statistics compiled by the statistics branch of the Department of Agriculture, and it's rather amaz ing. Interest payments make up almost 25 per cent of the net income of farmers in this province today. So more loan programs are not the answer.

At least that's certainly the message I'm getting from farm people of this province. Mr. Speaker, let me move on to the body of the resolution itself. In reviewing the price structure — and I'm not saying anything new as far as rural members are concerned, but it's important to under score what has happened for urban members — there has been a rather serious decline in the price of most commodities. Red spring wheat, for example. In the 1975-76 crop year the average was $5.18; as of today that is $3.49 a bushel, or a 33 per cent drop.

For No.1 feed oats the 1975-76 average was $1.74; as of now that's $1.08, or a 37 per cent drop. Barley a year ago was $2.66; now that's $1.68, or a 37 per cent drop. We all know what has happened to cattle prices. We've had debates in this Legislature on the cattle market and the whole question of whether assistance should be provided to the cow/calf opera tors. Recently we've seen the situation as far as the pork industry is considered. And while I notice that the Edmonton Journal has a little indication that prices are slightly higher, very few pork producers would be overly enthused with today's pork price.

That's one side of the ledger. We see a picture that is very clear, Mr. Speaker: that over the whole the price of agricultural commodities — there are excep tions here and there — is in some cases lower and, in most of the remaining cases, at best equal or just slightly better than it was in the last several years. On the other side of the ledger we look at cost.

Taking the statistics compiled by the statistics branch of the Department of Agriculture we find, for example, that in 1976 the price of fuel was up 23 per cent over 1975; the cost of power up 22 per cent; interest charges up 27.1 per cent; taxes up 13.3 per cent — or even the cost of farm buildings. We like to brag about the buoyant economy we have in this province. That's true.

But one of the arguments brought out — and I recall this from the Management of Growth document I released on behalf of the government of Alberta during the 1975 election cam paign — was that the cost of major projects like Syncrude could very well be an inflation for the small business sector or the farm sector. And we see in the figures prepared by the statistics branch that that is indeed true; that the cost of building has gone up substantially. We then look at the overall picture: operating ex penses, $1,211 million in 1975, up to $1,350 million in 1976 or an increase of $139 million.

On the other hand the receipts have dropped between those two years, and there's every evidence on the basis of the fall this year, the difficult problems during the spring, and the falling prices that the total for the year will be lower in 1977 than it was last year. Mr. Speaker, the shape of things to come — that is, for the next several years — doesn't look a great deal more encouraging. We all know there are going to be these higher costs I mentioned — the cost of grain drying, for example, in much of northern Alberta.

We know as well that as a consequence of the fuel increases on January 1 and again the increase in the price of oil on July 1, with the increases projected for January 1 and the following July 1, that the price of energy for farmers is going to continue to rise very substantially. On the basis of this year's increase we can expect something in the neighborhood of $30 million added to the farm fuel bill for agricultural producers in this province.

Of course members from the rural areas will note, as I have noted, that many customers of the power companies have looked at their recent bills and found it hard to believe that they're paying as much for the three-month period in the summer as they did several years back in the winter. The cost of electric power has increased that much, and the fact of the matter is that that cost seems to be showing every sign of going up, up, and up almost without limit as to the size of the increase. So what I'm saying, Mr.

Speaker, is that while in the long term there's no doubt in my mind that agriculture is the basis of our province's ultimate prosperity, for the next several years we're going to face a very difficult situation. The evidence that that is a difficult situation is just to look at the raw statis tics. In the last five years there has been a very sharp reduction in the number of Alberta farmers. As I say, from 62,000 down to 57,000, or about 90 farmers a month are folding up the tent and moving on to some other type of occupation. Mr.

Speaker, I want to say just a few words about what I would outline as the double standard this government employs vis-a-vis the two largest indus tries in the province: the petroleum industry on one hand, and the agricultural industry on the other. The reason I raise this specifically, if hon. members would be interested, is that the state of Venezuela in South America is in many ways somewhat similar to Alber ta. Venezuela has very large oil reserves. On the other hand, it has substantial acres of land that can be used for agricultural purposes.

As a result of the oil windfall the Venezuelan government has embarked on a massive program of modernizing, im proving, and upgrading their agriculture — not just a few million here or there, not just the $200 million over 10 years that we're talking about for irrigation in southern Alberta, but a massive program involving billions of dollars. They've done another thing as a result of changes made by the government of Vene

November 3, 1977 ALBERTA HANSARD 1875 zuela: 30 per cent of all bank loans have to be directly channeled into agriculturally related projects. So, Mr. Speaker, the government of Venezuela is recognizing that they are moving from an economy based on non-renewable resources to one that has to be based on renewable resources. They are under taking not token measures, but a massive shift; the windfall, if you like, from the oil price increase is being deliberately shifted into agriculture. I look at the performance in Alberta, Mr. Speaker.

Yesterday we voted $10 million for additional agricul tural research over the next five years. I support that move, Mr. Speaker, but I would say to the members of the House that before we pat ourselves on the back too much for making $10 million available to agricul tural research over five years, we should look at what we've done for the petroleum industry in the area of research in the last three years: $100 million to AOSTRA when the thing was set up, an additional $40 million to AOSTRA last year, $40 million this year, and $100 million for conventional energy research. In other words, Mr.

Speaker, by contrast we've funneled $280 million over three years into energy research. We have, for example, the cow/calf program, and that took a long time in coming; finally a program at around $41 or $42 million. But by con trast, when one looks at the various incentives under ALPEP this year, those will be in the neighborhood of $500 million. I notice that the Legislature, with only me voting against it, has extended the same sort of incentives to the coal industry. So, Mr. Speaker, what I'm saying is that many people in rural Alberta feel there is a rather amazing set of double standards.

While a good deal of lip service is paid to agriculture by the Premier, the Minister of Agriculture, and many other people, when it comes to money and funding, it appears the bulk of the funding is directed toward the non-renewable resource sector of the economy. Mr. Speaker, let's look at the three specific propos als contained in the resolution. First of all, the ques tion of examining income assurance programs. I know the minister is not in favor of provincial income assurance programs. But I had to be rather amused about two weeks ago.

I ran into a good old-fashioned, free enterprise cattleman in the Peace River country. I asked him how things were going, and he said, "It's a great year. Sold all my cattle; good price." "Oh, where'd you sell them?" "Well, I sold them to B.C." "Oh, you sold them to B.C., did you?" "Yes. They've got that income assurance program in B.C., and there's a good market there." So he was a very happy rancher. Mr.

Speaker, when the NDP government was replaced in the province of British Columbia in the fall of 1975, I know that one of the programs the new Bennett administration made very clear was going to be continued was the income assurance program. I'm not suggesting, Mr. Speaker, that these are the kinds of programs most of us would want to see on a provincial level. Obviously we should be striving for federal programs. That was the whole thrust behind the Agricultural Stabilization Act in 1957, when Mr. Diefenbaker first became Prime Minister.

But the fact of the matter is that in my view we have not gone beyond the perimeters of that legislation, now 20 years ago. In the absence of reasonable initiatives from Ottawa in this field, I think the provinces at least have to look at it. The second area I point out in my resolution is to examine orderly marketing. I raise this deliberately because of the present hassle between the packing companies on one hand and the Hog Producers' Marketing Board on the other. Mr.

Speaker, after talking to members of the board and people in the industry, I find it impossible to understand how it is that when we have a 38 per cent deficit in produc tion, there can be this problem with the price. The old law of supply and demand is supposed to operate this way: if you have more demand than supply, the price should be up. That's what we were told in high school and university, and that's what we hear from people who are continually defending the so-called free enterprise system.

But in the Alberta and B.C. markets we have this very strange situation where, despite a deficit in supply, prices are lower than the Toronto market. We have prices that are lower than other markets where they have a surplus. I find that rather hard to understand. It really raises the question: is there manipulation in the market place or not? I know the minister will say, well look, we've got the Harries report. I gather it should be in his hands today, and he's going to be tabling it in the Legislature Monday. Personally I think the government made a good choice in the selection of Dr.

Harries to undertake the report. But I would just say to the minister and members of the government: if we're dealing with something as big and interlocking as the hog market in North America, with the ins and outs and moves that can be made by companies that operate here and around the world, I really question whether, in a period of two months, Dr. Harries is going to be able to assess and amass sufficient information to really give us a report that will tell us what we can do and what steps to take.

The people in the Hog Marketing Board I've talked to have indicated, in their judgment at least, that's going to be a rather bigger job than can be handled in two months. Mr. Speaker, I think what we should be doing in terms of the hog marketing approach is that the three prairie provinces should be working on a common policy.

It's my view that if we're going to get any where with the packing companies, we're going to have to have some flexibility in two ways: either a form of supply management — and I know the minis ter doesn't like supply management — or some kind of program similar to that of B.C., so we can subsidize our product into other markets if we find the packers are playing games with the market place. Mr.

Speaker, I know that a number of people in agriculture reject any form of supply management, although I would say that as I talked to people in certain industries where we have supply manage ment, whether it be the Egg and Fowl Marketing Board or some of the other boards, they would not want to go to the open-ended system. Nor, Mr. Speaker, I suspect would some of the more powerful interests in our society either. I recall the late 1950s and early '60s when we had a glut of oil in Alberta. There was really no doubt about it.

We had far more oil that was discovered as a result of Redwater and Leduc than we had markets. So the oil companies came to the government at the time and requested prorationing. The government moved on that basis and set up a system of proration

1876 ALBERTA HANSARD November 3, 1977 ing. So did the government of Saskatchewan. When you come right down to it, Mr. Speaker, prorationing is a form of legislated supply management. As members will know, the same thing is now being challenged in the courts in our neighboring province of Saskatchewan, over legislation Mr. Thatcher brought in when he was Premier. The potash companies suddenly found they had more supply than markets. So they came to the govern ment of Saskatchewan and said, we want legislated prorationing; we don't even want to have a voluntary agreement, we want it in black and white.

We want the Legislature to pass a system of supply management. Mr. Speaker, while some people can argue against supply management, the fact of the matter is, when I see how effectively it works in other areas of the economy, I can't help but think it may be one of the methods that would help farmers. When farmers have to buy in a market where supply management is the order of the day, it's a little difficult to live as the last vestige of a free market in an economy that is more and more clearly controlled one way or another. Mr.

Speaker, the final point I raise in the resolution today is to ask the members of the Assembly to take a very careful and serious look at the whole question of land policy in Alberta. I know I'm not going to con vince this government to endorse the principle of a land bank, even though I think it should be made very clear that a land bank is a voluntary option program. At the end of five years if people wish to purchase they can. Of course this is happening in many cases in Saskatchewan.

But the objective of a land bank is to make it possible to transfer land from an older generation of farmers who want to retire and, quite rightly, want the equity they have out of their farm to a younger generation of people, without getting them into capital buying. Mr. Speaker, I say to the mem bers of the House it is rather interesting — I've said this before, but I think it's worth underlining again — that the largest land bank in Canada is not in the province of Saskatchewan where there's been one on the books since 1972, or in the province of Manitoba. The largest land bank in this country is in Alberta.

The special areas are a form of massive, public land operation not unlike at least the principle of a land bank. Mr. Speaker, I raise this because it seems to me that just making more loans available to younger people so they can go out and pay absolutely ridicu lous prices for land is not going to solve the problem of land transfer. I wish it would.

But I don't know how in heaven's name people can pay some of the prices land is fetching today, prices that to a large extent are altered not by what you can produce on that parcel of land, but if it's near Red Deer or a centre, you're paying speculative prices that have absolutely no relationship to the productive value of the land. So it is important, Mr. Speaker, that we pull our views together on this question and come up with some kind of meaningful land policy.

I note, for example, on page 26 of the paper pre pared by the resource economics branch of the De partment of Agriculture, April 1977, that: The net result of [the] tremendous . . . pressure on urban periphery farmers [is to encourage] them to sell out and cash in on the inflated land value in alternative uses. And it goes on to say: Clearly outlined policies in this area may be needed to assist the transformation of this land to the best alternative use, for instance to aid the agricultural industry in the retention of land for productive purposes. Mr.

Speaker, the resource economics branch of the department is recommending that the government simply make more money available to buy land when we already see in the annual statistics report that almost 25 per cent of the net income of farm produc ers in 1976 went to debt payments, and that there was a 27 per cent increase between 1976 and 1975. In my view, just loaning more money is not the way to accommodate land transfer unless, Mr. Speaker, we find it's a form of backdoor socialism because when people can't pay their loans, at some point the gov ernment forecloses. I hope that doesn't occur.

But I am saying, Mr. Speaker, that the need for a land-use policy and the need at least for the alternative, the option of a land bank, is one that in my judgment anyway should be considered. I raise this knowing full well that I'm not going to convince a Conservative government that a land-bank program should be developed in the existing part of the province. Might I say though — and I see the hon. Associate Minister of Energy and Natural Resources is in his seat — that one of the things we should consider in the new areas of the province would be a land bank. I see my time is almost finished.

In the one remain ing minute I have I'd just say to the Associate Minis ter of Energy and Natural Resources that where we might consider a land bank would be in these areas where we're talking about opening up new homes tead land, so that we go in with a package proposal so we have roads and some of the facilities people need if the 4 to 5 million acres of arable land that still exist, that still could be opened in this province, are to be made available to young Albertans.

I think that sort of proposal on an option basis, a lease-back or an option to buy basis, would be a tremendous incentive to get young people into farming in the northern regions of the province. Mr. Speaker, in

summary I say to the members of the House that the resolution is an effort to under score some of the problems and, at the same time, recognize the opportunities. I urge members to con sider it carefully. MR. BUTLER: Mr. Speaker, I'd like to pass a few remarks on this resolution. I find my seat gets pretty hot, and I have a hard time maintaining it when I hear a socialist getting into the agricultural field. It's been socialist ideas that have caused most of our problems. We all know that agriculture is the number one priority of this province.

It's our number one industry and will probably remain so for some time. There's no doubt that our best heritage is our first six inches of soil. We've lived off that up to now, and we'll be living off it for a long time after the oil and gas are gone. So I think that has to be looked after, and the farmer is doing a good job of it. It's common knowledge that there are fewer farm ers today than there were a few years ago. They're declining continually, and probably will continue to do so as long as it continually becomes more economical

November 3, 1977 ALBERTA HANSARD 1877 to farm with bigger machinery and more output per man. We know there are fewer people operating actually on the farm. It's the biggest contributor to occupation and to make-work projects in all its relat ed industries. But fewer people are actually operat ing on the farm, because bigger and better machinery is operating and they're doing it cheaper. I see no end to that. I'm not sure I hope there is, because today you can get into a tractor with a cab and cover a quarter section.

Not too many years ago we had smaller tractors, no cabs, and you'd be out there for several days covering that same quarter. Even in spite of our expense, I think this is definitely a step forward. Some of the things this government has done for farming — I think we're very fortunate in this prov ince. We have the tax reduction plan, the transporta tion grant for farm fuel, and good market information. If you're a cattleman, there's really no problem find ing out where your markets are and the best way to market your cattle. The markets are a worldwide proposition.

We can do very little about them on a provincial level. When you speak about production management or supply management on a provincial level, you're only hiding your head in the sand. Because it is a worldwide proposition, and particularly a North American propo sition. We're just wasting our time talking about supply management on a provincial scale. Because if we as a province don't fill these world orders, some body else will. In the cattle industry, it's a 10 to 1 proposition. There's only one cow in Canada to 10 in the United States.

That means that if every man in the United States running 100 head of cows ran 110, we'd have just as many cattle as we now have, without any from Canada. So run off and hide and talk about supply management, and you won't have any markets. There are several things this provincial government has tried to do, and I think is doing very well. One of them is our Premier's holding out on this gas swap for better tariff arrangements. This is something that has been needed for some time, particularly in the red meat industry. We talked about double standards.

I completely disregard the statements on double standards, because I don't think they exist. I think that's a [figment] of your imagination. I've made a statement on orderly marketing, but I'm sure that if you tried to sell that to the cattlemen of Alberta, it wouldn't be accepted. Reference was made to the assured income plan in British Columbia. In speaking to cattlemen and ran chers in British Columbia, the legitimate ranchers are not very happy with it. There are people buying and selling, and using the plan to their advantage. The plan is being badly abused.

Someday they probably will wake up to the fact that it's not getting the job done and has wasted a lot of the taxpayers' money. If I understood the hon. Leader of the Opposition correctly, Mr. Speaker, he said that we were in a deficit position for cattle in British Columbia and Alberta. MR. NOTLEY: And hogs. MR. BUTLER: And hogs. Well, perhaps hogs. Not cattle. MR. NOTLEY: Not for cattle. MR. BUTLER: Because we're in an export position, and it's quite easy to understand why there should be a different price in the east than there is in the west. I think one red meat helps to control the price of the other.

Reference was made to our special areas. I am relatively well-versed in what is going on in the special areas and how it came about. I'm not sure it can be considered a land bank. It's a part of our province that was not handled correctly in the first place. It was settled when it should never have been settled. They tried to farm it when it was land not fit to be farmed. It's sub-marginal land that, through the administration of the special areas, has been put back to where it's paying its way. It's a part of the province that should be left the way it is.

There are many thousands of acres there that are good for nothing else but growing grass. In summing up, the criticism by the hon. Leader of the Opposition — when our Premier made his trip to Europe this summer, he was on a business trip seeking markets. That's what we need. We don't need supply management. We need markets. If there are plenty of hungry people, we can find mar kets and get food to them. He attended the negotia tions on the GATT agreements, and I think that is good. Agriculture has taken a second seat in the GATT agreements for a number of years.

The hon. leader of the NDP criticized our Premier. This little

article I have here says: Premier Lougheed had been home only three days when New Democratic Party leader Grant Notley blasted him for "flitting hither and thither around the world" ignoring the less interesting [parts of the province]. Well he wasn't flitting around the world; he was out there looking for markets. And I think he was doing a darn good job. I hope he keeps it up. If we can find markets, we can produce the goods, as long as we don't have someone telling us through supply man agement: you can only grow so much. MR. MANDEVILLE: Mr. Speaker, I'm going to have to get my little pitch in on agriculture.

I guess I'm going to have to go down the middle of the road. We've had the left and right; that only leaves the middle for me. DR. BUCK: No. You've got two lefts. MR. MANDEVILLE: I have to say, Mr. Speaker, that I certainly appreciate the concern the Premier and members of this Legislature have with our agricultur al industry. We all appreciate and realize agriculture is becoming one of our major industries. Somewhere down the line it's going to be our major industry. At the present time we do have a lot of emphasis on oil and gas development.

But somewhere down the line we're going to have to take a real good look at our number one industry, agriculture, and put oil to the side. Mr. Speaker, being in the industry myself, I have never seen a time when red meats and cereal grains are buoyant at the same time. We're facing a de pressed market in either red meats or cereal grains. An agricultural economy just can't be buoyant in all areas. That's absolutely impossible. It always seems

1878 ALBERTA HANSARD November 3, 1977 that we're caught up in a cost/price squeeze as far as agriculture is concerned. At the present time my assessment has got to be that it's bleak in the area of our cereal grains, for our produce markets are getting lower and our inputs are getting higher all the time. The net agricultural income in Canada is going to drop 21 per cent for 1977. This is pretty hard to tolerate, especially with the high inputs we have in growing cereal grains. Mr. Speaker, I am not in favor of subsidies as far as agriculture is concerned. I certainly lean to the right in this area.

It is hard to come up with solutions to the problems we face in agriculture. If we do get involved in subsidies, we're overproducing or we're getting the farmers leaning on governments for help. This is certainly not where we've got to be going as far as our agricultural industry is concerned. Where we have to do some work, and where work is being done, is in marketing our products, especially manufactured products. We certainly haven't had a very good experience manufacturing products in this province, and I think one of our big problems is freight rates.

We have got to get freight rates for manufac tured products in line with the statutory rates for raw products. This is one of the big problems we're facing as far as manufacturing agricultural produce in the province of Alberta is concerned. Our lamb plant at Innisfail certainly wasn't suc cessful, but I do think we can get someone involved in there, or diversify the plant and start boxing beef or even slaughtering hogs. We don't have enough lambs in Canada to supply the plant at Innisfail, so we have to get someone.

Before anyone's going to get involved, I'm sure they're going to see that they're able to diversify the operations to make it economical. It certainly won't be economical if they're going to stick strictly to the slaughter of lamb and mutton without importing from New Zealand, Australia, and the United States. As far as the experience with our 'dehy' plants is concerned, they certainly haven't been that success ful. However, if they are able to continue to operate and establish markets, they are possibly going to come out on top. There are several having problems at the present time, and several went under.

Howev er, some that have established markets and got assis tance through ADC are, I am sure, going to be successful. Mr. Speaker, as I indicated, our cereal grain pro ducers have had a depression in the market for the last two years. If it hadn't been for the situation in Russia this year, it could have been much more serious. The crops in Russia this year weren't that good, and as a result they are going to be importing some of our cereal grains. The Wheat Board has guaranteed $3 a bushel for wheat, but of course they've got to sell this wheat before the farmer can take advantage of the $3 a bushel.

I can recall in 1975, when our input costs weren't so high, we were getting $5 a bushel for wheat. One thing I'm going to have to say: the farmers were fortunate in getting their crops off this year. If they hadn't been able to get their crops off, it would have been very serious, because the amount of money they have spent growing a bushel of grain the last year or two is certainly large, and they certainly can't lose their crops. With the price of machinery going up every year — this last year the price of machinery increased 17 per cent.

For one combine you now pay from $55,000 to $60,000; for a tractor, $45,000 to $50,000. The price of our land is skyrocketing. It's getting up where it's almost impossible to produce cereal grains or any agricultural produce. Our fuels are increasing. They went up $18 million since 1974. Our farm labor is going up. But what concerns me more than anything, Mr. Speaker, is the debt load our farmers are taking on. Interest charges alone, as the hon. member men tioned, are as high as 21 per cent. That's more or less in the operating side. Then if you include the capital, the debt load is higher than 21 per cent.

Our interest rates are so high that it's going to be really hard, especially for some of our young farmers, to be able to service the debt load, let alone pay for their land. As the hon. mover of the motion mentioned, we don't value land today at productive value; it's market value. In some places you can get close to a town or village, and they'll pay up to $1,000 an acre for farmland. Well, Mr. Speaker, it's absolutely impossi ble for our young farmers to service the debt load when they get involved in this type of operation.

Some of the areas I think we should be able to help in: as far as crop insurance is concerned, I think we've got to take another look. I was on the commit tee the hon. Member for Camrose chaired. We looked at crop insurance for our cereal grain produc ers. I think we've got to take another look at that, especially in the northern part of the province where some farmers weren't able to get their crops in last spring. They could get crop insurance where they didn't seed summer fallow. However, the practice in the northern part of the province is that they stubble their crops in.

They couldn't take advantage of the all-crop insurance in those particular areas. I know the minister has been working with the federal gov ernment to try to straighten this situation out. Another area: I hope our farmers don't completely move out of the cattle industry. I think we're just now moving into a cycle where the cereal grain farmers are going to be in the depression and the cattle producers are probably going to be making a few dollars. So I certainly hope there are no programs in the provincial government to promote our farmers' getting out of the cattle business.

However, many farmers and ranchers I've talked to are going to sell all their cows. They're going completely out of the cattle business. I certainly think this is the wrong time to be doing this. Also many of our ranchers are going out of the cow/calf situation. I can't say I blame them. They are going into yearlings, because they've lost so much money over the last few years. One of the cheapest proteins you can eat now is beef. It's almost cheaper than tomatoes. As I say, Mr. Speaker, what's going to happen is that we're going to see this situation reversed and we're not going to have red meats.

If one takes a look at the statistics on the slaughter on the North Ameri can continent, our cow slaughter is up dramatically over this last year, our heifer slaughter has been very high, and our ranchers and farmers haven't been keeping heifers for replacements. They've been mar keting their heifers, putting them through the feedlots. Another area is the tonnage of our beef — as a result in Canada, a shortage of meat to kill right now.

November 3, 1977 ALBERTA HANSARD 1879 The packers are slaughtering low-yielding beef. This is also happening in the States with the new grading system. So our tonnage is down. Along with all this, Mr. Speaker, the consumption of beef is up. This indicates something to me. As the hon. Member for Hanna-Oyen indicated, we have 10 per cent of the cattle in Canada. So I think we'd better take a real good look at that Senate report, that recommendation that came out of the Senate as far as tariffs on beef are concerned, espe cially between the United States and Canada.

I wouldn't be that concerned if the concern was with our oceanic beef. However, we've got to have free trade between Canada and the United States. At the present time we're locked in as far as beef is concerned. We've got 51 -cent beef in Toronto; we've got 47-, 48-, and 49-cent beef in Calgary; we've got 41- and 42-cent beef in the United States. We're locked into the beef markets in Canada, because we've got no place to go with that beef. With our devalued dollar, there's no way we can go across to the United States or any place with our beef. Even in western Canada we have an inflated market.

In western Canada when our kill gets up to where it supplies the demand in the west, our beef prices are going to slip off, because we can't even go to eastern Canada with our beef then. So the only thing that might happen at the present time that gives me some concern: we do have a lot of manufactured beef in store in Canada. I've got to say, Mr. Speaker, that as much as we sometimes com plain about the packers, I've seen some of their losses the last three or four weeks in western Canada. They've been terrific. They've lost a tremendous amount of money. Mr.

Speaker, meat is Canada's fourth largest food industry. We had annual sales of nearly $4 billion. As far as livestock last year, we spent $6 million every day on livestock. The livestock industry em ploys 33,000 people. So our livestock industry is certainly a large industry. The hog situation: I think last spring we faced a situation that we certainly shouldn't have faced. We had the lowest prices to the producer in Canada and one of the highest prices to the consumer, when they were buying the pork back.

I certainly hope we don't have to contend with this type of situation as far as our hog producers are concerned. I really can't say why this happened. I'm interested to see the report Hu Harries is bringing in as far as the hog producers in Alberta are concerned. Our hog prices are going down. However, our cattle prices are going up just a bit. In conclusion, Mr. Speaker, I appreciate the action the minister took, as far as the resolution I had on the Order Paper last spring is concerned. I realize that a lot of these situations were going to be taken care of anyway.

However, I appreciate that they were taken care of. One of the programs was a water well program. The $1.2 million was used to the advantage of many ranchers. Also, I know the pumps that were sent throughout the province were used very extensively down in southern Alberta. They had the six pumps and they used them all summer in southern Alberta, pumping water to livestock. It was certainly an assis tance as far as livestock was concerned. The one portion of my resolution that I think the minister still should take a look at is distributing fodder throughout the province.

I know they are short of fodder in the southwest part of the province. Pos sibly we should be moving forage from some of the areas where we have too much into dried out areas, so we can retain the cattle population in the province. Thank you, Mr. Speaker. MR. STEWART: Mr. Speaker, I'd like to take this opportunity to discuss something pretty close to my heart; agriculture is the one industry I've spent a life time in.

At this point I think we've got to recognize that the evolution that has taken place in agriculture in the last 10 years has created some problems that may not have surfaced at the moment, but down the road they're certainly going to be a big factor in the way our agricultural economy operates. In the last 10 years our gross farm income has increased two and a half times, but our net farm income has only increased twice. We've done that with 8,000 less farmers than we had 10 years ago.

I'm not quite sure how many people were employed as farm labor 10 years ago, or how many less there are today, but I'm convinced there are a great many fewer today than there were 10 years ago. Conse quently I think we've got to agree that in the last 10 years agriculture has improved its productivity proba bly better than any other industry.

I'm convinced that while these figures do not look too out of line, we have a lot of young farmers in this province today who started farming since 1970, bought land at highly escalated prices, and are carry ing probably the biggest debt load we've ever seen in agriculture in western Canada.

While we have our price peaks and lows in both grain and livestock, I think the problem is going to arise over the years that the older established farmers can survive some of the pits and hollows, but if we have a severe climatic condition at the same time we have a depressed market, I'm afraid a lot of these young people are not going to be able to survive long enough to weather the storm until the market conditions correct them selves.

There's no doubt about it: if you're carrying a debt load of several hundred thousand dollars and your income is drastically reduced, you're not going to be able to survive very long. I think I've expressed my concern for the problem. Now I would like to express what I feel the hon. Member for Spirit River-Fairview has expressed in his way — the solution. It seems to be . . . MR. SPEAKER: I regret interrupting the hon. member, but the preferred time for this resolution has now elapsed. MR. STEWART: Mr. Speaker, I'll adjourn debate. HON. MEMBERS: Agreed.

1880 ALBERTA HANSARD November 3, 1977 head: PUBLIC BILLS AND ORDERS OTHER THAN GOVERNMENT BILLS AND ORDERS (Second Reading) Bill 229

An Act to Amend The Securities Act MR. PLANCHE: I appreciate the opportunity to give second reading to Bill 229,

An Act to Amend the Securities Act. Mr. Speaker, this is actually a fairly simple bill, and I'd like to give a graphic example of the concerns that caused me to bring this bill to the floor of the House. If there was a company made up of shareholders, such as the group assembled in this body, and they all owned stock which was selling, for example, at $1.50 a share, an offer could be made to take over that company by either a company or some individu als. That offer could be made to a few selected shareholders without the knowledge of the balance.

The transaction could then be made at a price prefer ential to $1.50, and the remaining shareholders could unknowingly find themselves in a position where they no longer had a buyer for their stock. The result could be that the stock could go down from $1.50 to whatever a stock without a buyer prices itself at on the market. In my view this inequity could be corrected by simply removing two parts of

Part 9 of The Securities Act. The Securities Act as it presently exists provides a set of rules and regulations on takeover bids that allow full understanding and time for both parties to consider. In a formal way it lays out the rules for things like takeover circulars, changes in value of the company to be taken over during the time of consid eration and, in general, all things fair to all share holders so a rational decision can be made as to whether or not to sell. DR.

BUCK: Hon. member, may I ask a question in all sincerity: did the hon. member say that when the takeover took place, someone could buy a controlling interest without the other people knowing? MR. PLANCHE: That's right. I think the way The Securities Act is presently set out, the protection afforded shareholders so they have full knowledge of what kind of decision they're going to make is valu able, because in Alberta we're going to have a grow ing need for equity participation. Mr.

Speaker, I'm sure there are a lot of people who don't have daily contact with the sophisticated bro kerage houses, financial newspapers, or whatever, who are putting a lot of money into things like bonds and blue chip stocks that are not in fact of any assistance to people who need some equity invest ment in the province of Alberta. It may be true that a great deal of money from the outlying area is going into debt equity when the people of Alberta are really in bad need of equity financing.

I'm sure the protec tion afforded in the amendment I'm proposing to The Securities Act might very well go a long way to giving these people the confidence to invest. Clear evidence of that fact is that the $75 million in Alberta Energy Company shares were oversubscribed by people in Alberta in fairly short order.

I suspect the stock was sold on its own merit, but the good auspices of the government also tended to give an aura of solidarity that I think investors in this province should perhaps be entitled to for stocks not necessari ly sponsored by the government but simply put out in the market place by people who need equity capital. The rules as they are spelled out in The Securities Act to allow full disclosure to people in terms of a takeover bid are fairly comprehensive, but four classes of transactions are exempted.

The first is an offer to purchase shares by way of private agreement with individual shareholders and not made to share holders generally. My amendment would withdraw that exemption. The second is an offer to purchase shares through the facilities of a stock exchange or in the over-the- counter market. In my view that is the market place and is totally acceptable, because when the offer is made it will be possible to recognize activity in a stock simply by reading the stock market page or getting advice from a broker.

The third exemption is an offer to purchase shares in a private company, or in a public company that has fewer than 15 shareholders, whose last address as shown on the books of the offeree company is in Alberta. Two or more persons who are joint regis tered owners of one or more shares would be coun ted as one shareholder. Now in my view the exemp tion to a private company or a public company with less than 15 shareholders should only apply if all the shareholders are getting an equal offer. That way, if 50 per cent, for instance, was required by a buyer, then all shareholders would be notified.

It could be prorated among them all at 50 per cent each of their holdings, depending on how much of a percentage over the buyer was prepared to share. That could be prorated also, so the people who went into the enter prise in a risk way would also be entitled to the fruits of the enterprise as it was sold. Item four is an offer exempted by order of a judge of the Supreme Court made pursuant to

Section 89. I have no objection to that particular exemption because of all the ramifications I'm not able to see, but which surely come up from time to time. People who begin companies, Mr. Speaker, and subsequently sell stock to others, and those who invest early in a company's history are likely to be the ones most affected by the withdrawal of these exemptions, and that concerns me. I don't think it's fair to be unduly hard on the people who were first in, Mr. Speaker, but let's not forget that offsetting this they have the advantages of treasury stock.

They may also have the advantage of directors' fees and expenses, and are often entitled to salaries as officers of that company. Mr. Speaker, these changes will not of course guarantee that an investment can be made without risk. It does, however, close the door on what I consider to be an inequity; an inequity that has been recognized in legislation and proposed legislation in several other jurisdictions. Hopefully all members who recognize this deficiency in our present Securi ties Act will support this bill or changes in a future securities act, as the opportunity presents itself. Thank you, Mr. Speaker. MR.

PEACOCK: Mr. Speaker, in rising to speak on Bill 229, I would like first to congratulate the Member for

November 3, 1977 ALBERTA HANSARD 1881 Calgary Glenmore for bringing forth this bill. I believe it is very progressive. I think in the western world there is a tendency toward this kind of legislation as far as the securities acts are concerned, although it has not been enacted at this time. I think the public aspects have been considered in Ontario at this time. For simplification, I'd like to talk for just a few moments as I see this bill relating to a public company — a public company is one that offers its shares to the public — then to a private company, and the advantages I see in such a bill.

In relation to a public company, people generally invest in a public company and in most cases those shares are offered because there is a necessity to defer debt into equity. In other words, the cash flow of that company is such that they have to get a broader base and therefore reduce the debt, so the cash flow and the company will afford it to grow and prosper. That trust is therefore identified with the principals of the company.

As a result, when any transaction takes place for a takeover of that com pany, the minority shareholder who has got involved in consideration of the skills and abilities of the then management of that public company, should receive the same offer for the share on any takeover consideration. Mr. Speaker, I'd like to give an example of a case that happened in our own province in relation to the situation I'm talking about.

If I may read: some years back a new industrial plant was started up in Alberta, and its initial financing was provided by a large number of small investors, in addition to the original promoters. After a few years getting the plant into production, an offer was made to all the shareholders for the issue and outstanding shares of the company at a price of $4 each. The management of the company and the controlling shareholders fought strongly against the acceptance of the offer by the majority of the shareholders, on the basis that the offering price was too low.

Shares of the company which had been listed on the Toronto Exchange by that time were trading only at $3.25. However, the campaign against the offer was successful and it was not accepted by a sufficient number of the sharehold ers for the offer to effect a takeover of the company.

Very shortly afterwards the management and control ling shareholders sold out to a large national indus trial company for approximately $7 per share, com pletely ignoring the minority — that is, the small shareholder — and subsequently the market price of those shares took a drastic drop, for reasons I don't think we have to discuss here. I cite that, Mr. Speaker, as an example of why it seems to me that in any takeover bid within a public company, it should be fair and equitable to all share holders, and at the same price, and full disclosure should be made. Mr.

Speaker, I'd just like to touch for a moment on a private company. The reason I believe this bill should be extended to private companies is that a private company brings in minority shareholders for very different reasons. A private company brings in shareholders possibly to attract or hold the particular expertise they are in danger of losing maybe to a higher or more competitive company, and in most cases the shareholdings in that private company are not for reasons of equity/debt transfer.

But the same factor exists in relation to trust and confidence in the principals that extend those shares to the minorities. For that reason, along with the fact that in the private company there is no market for their shares and therefore the minority shareholder is certainly vuln erable, I believe there should be consideration for full disclosure and the same offer made to all shareholders. In conclusion, Mr. Speaker, it seems to me that this bill should be part of a very comprehensive basis for The Securities Act of Alberta to be rewritten and decided upon. MR. YOUNG: Mr.

Speaker, in rising to support the hon. member on his bill before us this afternoon, I'd like to preface my comments on the amendments by saying that I think the hon. Member for Calgary Currie has made an observation in his concluding comment that should be considered very thoroughly; that is, the level of activity in this province has changed, and is changing very dramatically, therefore we ought to have special regard to legislation of the type we are looking at today.

I was just examining the annual report of the Securities Commission, which has been tabled for all of us to read, and noting that the commission expects national interest in Alberta and its securities products to continue to increase, resulting in an attendant jump in the volume of trading on the Alberta stock exchange and in over-the-counter markets in the province. The report indicates that there was a very substantial increase in the activity of the commission, a tightening up in many respects of the controls they apply to securities trading in the province.

I guess the legislation before us this afternoon does not extend to takeover bids as reported in the annual report of the commission. In fact, an increase of seven takeover bid circulars in 1976-77 from the previous year was reported in the annual report. That doesn't sound like very many, Mr. Speaker, but when you're looking at only 24 takeover bid circulars in the previous year that's an increase of about 30 per cent. So it does suggest that it's a timely topic and a subject which ought to have continuing concern. Mr.

Speaker, I'm not, and don't pretend to be, learned in the law with respect to takeover bids, transfer of shares, and offers to take over majority interests in companies. I'm not sure whether the bill before us goes quite as far as may be necessary if we're looking at a complete consideration of the rele vant legislation. We may also have to have regard to The Companies Act. But in any event, Mr. Speaker, I do support the proposition before us.

As I understand it, and as applies in most situa tions, full and fair disclosure must be provided to all shareholders who can be identified when a takeover of a public company is in process. As the hon. member outlined, the purpose is to give every share holder the same opportunity to make a decision to accept or not to accept.

I presume the rationale is that all shareholders accepted the same risk in pur chasing the shares originally; they ought therefore to have the same opportunity to divest themselves of those shares at profit, if that be the case, or at a reduction of their loss if that be the other side of the coin. Mr. Speaker, as has been outlined, what we have under consideration is four exemptions to the general rule. The proposal is to eliminate two of those

1882 ALBERTA HANSARD November 3, 1977 exemptions. I for one think the elimination of those exemptions is most timely.

I think that when we have a situation where there are fewer than 15 sharehold ers, and it's possible to be one of those 15 sharehold ers, any hon. member here would be quite put out, to use a mild expression, if he owned shares, took a grave risk during the initial founding stages of the company and had lived with the suspense which is normal in owning a piece of equity in a struggling company, and then awoke one morning to find the management of the company and the major share holders had totally changed, and they had changed at a substantial profit.

The majority shares had been purchased by a company or another group of share holders with whom he could not relate in any way, whose planning horizon for that particular investment might be quite different from his, who possibly were in a position to cease all dividend payments, all payouts from the company, because they're interested in building the company up, or whatever goal they might have which might be inconsistent with that of the individual shareholder.

I think any hon. member here would be quite disillusioned to find that his opportunity to sell out, that he had looked forward to, had gone by the board. For that reason, Mr. Speaker, I would have to support the first amendment proposed. The hon. Member for Calgary Currie, in concluding his remarks which I referred to earlier, suggested that a fairly comprehensive review of this legislation and our controls in this whole area should be undertaken. I agree with that.

And while saying I agree we need to do this, in recognition of the rapid development of the province and the increasing importance of our security markets, I also must recognize what I regard as a tremendous beefing up in the securities controls in the province at this time. Mr. Speaker, I do want to emphasize that while the hon. member, in introducing the bill, made the sug gestion that it would encourage the public at large to feel confident and willing to undertake a greater risk, I think that would be achieved.

But regardless of whether that goal could be effected by this particular provision, I do think it is important that our laws should be such that all are treated fairly and equally, and there's no better way to do that than to provide information to all who are directly concerned, which I think these amendments would do in these two instances. MR. JOHNSTON: Mr. Speaker, I always enjoy an opportunity to speak on a bill which is founded on wisdom and sagacity, as I think this bill is in part. I want first of all to commend the hon. member Mr.

Planche for taking the time to bring such a major concern to this Assembly. MR. GHITTER: What is sagacity? MR. JOHNSTON: It's a small town outside Clover Bar. MR. GHITTER: I thought it was something you ate. MR. JOHNSTON: Mr. Speaker, the bill suggests two possible amendments which I think have been out lined by the hon. members who spoke on the bill.

One is that in the case of a takeover those offers which intend to purchase a minority portion of a public company would be exempted from The Securi ties Act; and in the case of a private or public company with less than 15 shareholders those com panies could be exempt as well. I am in general agreement with the first part of the amendment, which deals with publicly traded corpo rations, but I do have some difficulty with the second part, which goes after those closely owned or closely controlled private or public corporations. On the latt er point, I'm sure you can imagine the hon.

Member for Clover Bar having to reveal to the Securities Commission a takeover to buy his private and his professional corporation. So on the whole I think the private corporation will be divorced from my com ments, but I would like to direct some views with respect to the public corporation side. In the province of Alberta we have not yet really seen the real kinds of manipulation and exploitation that are possible in securities and exchange.

We find that when you deal with some of the smaller stocks in terms of price in this province, fortunately we've been able to maintain a very tight control through the laws, the officials, and the regulations. However, some of the exchanges — for example, those to the west and east of us — have suffered a severe reputation set back because of stock manipulations and unfair prac tices with respect to takeovers of corporation shares. I think we're all aware, Mr. Speaker, of opportuni ties wherein such things as running a box is a common practice whereby speculators can move the stock up and down.

We have common practices whereby legal and illegal short positions can be de veloped on stock exchange, therefore exploiting the rights of an individual shareholder in a corporation whereby the unassuming private investor is taken to task and suffers substantial losses.

Various kinds of stock manipulations are possible in this province, and to this end I think we all have to be aware of the growing possibility that as this province continues to prosper and to be the heart of real economic growth, some of those people with less than scrupulous principles can be moving into our stock exchange and our Alberta territory with the same kinds of attitudes, with the quick buck trick. I'm sure that our existing legislation will prevent some of those possible abuses.

But I think we have to give very serious consideration to dealing with the oppor tunity, as described in this bill, whereby a very smooth operator could take control of a large public company by dealing almost surreptitiously and quietly with the very few shareholders who perhaps would allow that individual to take control of the company. Mr. Speaker, we have other provisions in the legis lation which provide protection for minority share holders and others who own shares in public corpora tions.

I think I have to concur that some of our disclosure requirements are substantial in this prov ince, requiring first of all that public corporations adhere to insider trading accounts, that the exchange of shares in this province among insiders is carefully recorded and available for all the public to view, understand, and have full information on. I think further that the powers our stock exchanges have with respect to seize orders, delisting of certain corporations which have not practised scrupulous principles and have not adhered to the

section or regulations as set down by the exchange commis sions — I think these are real, effective ways we can

November 3, 1977 ALBERTA HANSARD 1883 control perhaps some of the blatant abuses of our stock exchange system. As the hon. Mr. Peacock pointed out, the stock exchange system is one of the real, dynamic ways in which those companies per haps oriented to a higher speculative risk, such as resource businesses and others, have an opportunity of putting together risk capital for the real purpose of developing and perhaps eventually producing a resource which is important to this province wherein other forms of financing are not readily available.

I have some difficulty — I would just like to add the caveat with respect to the private corporation. There are opportunities of course, Mr. Speaker, whereby public companies could be controlled by a private corporation. While I've indicated I have a caveat with respect to disclosure or the requirement to indicate takeover of a private corporation or a public company with less than 15 shareholders, I would add the caveat that if that private corporation is one that controls a publicly traded corporation, then indeed we would have to have the same kind of criteria, the same kind of restriction.

Because of course there are several public corporations in this province controlled by private companies, and we should have to have that flowthrough. Obviously the insider disclosure would provide that information, so it shouldn't be that difficult to come up with a list of those companies that do control public corporations. With respect to the exploitation of minority share holders, I think I have to concur that this amendment is certainly necessary for our legislation.

The hon. members have indicated there are ample opportuni ties for quiet deals to be made on the side whereby control of a corporation can pass to some other indi vidual without, first of all, full opportunity of informa tion and price to be given to the minority sharehold ers. Of course once those minority shareholders are disadvantaged, that disadvantaged status can con tinue for some time. When you have control, of course, you can continue to manipulate and perhaps generate some disadvantages to the minority shareholders. So I have to agree, Mr. Speaker, that I support the first part of the amendment to

Section 80(b)(i). I have some reservations with respect to the second part of the amendment. However, I would add I do commend the legislation we have in this province for establish ing a very official way in which takeover bids, as established in The Securities Act, are provided for; secondly, the way in which the Alberta Stock Exchange is operating almost without challenge and with a very careful record of the kinds of abuses which are available in stock manipulations. So, Mr. Speaker, I would only add my support to the hon. member, Mr. Planche. I hope the Assembly can consider his amendment. MR. GHITTER: Mr.

Speaker, as I listened to the de bate, particularly the previous speaker, I had the feel ing we were dealing with a different bill. I pulled out my Planning Act for a moment to see if that's what we were dealing with. But then I noticed that the previous speaker came back to the topic. I'm happy to see we came to a conclusion, and there were no amendments. As a result I can certainly deal with the bill. Mr. Speaker, I think I agree with the previous speaker, firstly, that there's a great distinction to be made between the private company and the public company.

But I also think what we're trying to do here is come in the back door to meet problems that minority shareholders face that really don't evolve around the difficulties you experience with takeover bids. After all, I would imagine anyone who invests in a company in the province of Alberta is over 18. If they've got a few dollars in their pocket, and if they wish to invest their moneys, firstly, in a public company tightly controlled by very few shareholders, they do so at their own risk. Dealing with public companies for a moment, they have every opportunity to scrutinize that company.

They have a prospectus in front of them that requires full disclosure of all information relating to that company. If, taking all those factors into considera tion, they wish to risk their hard-earned dollar to buy some shares on a public exchange, knowing control of that company is so tightly held that a private deal can be made, then that's the name of the game. It's not a matter of unscrupulous activity. It's not a matter of manipulation. It's just the fact that there are some tightly held public companies. If they wish to invest their money there, fine.

But why should we as a Legislature come in and say, well if you're going to make that deal then you have to offer it to every body else and come up with some worry that there's going to be great manipulation carrying on. Mr. Speaker, I'm not really that concerned about takeover bids. I only know really of one abuse that some would suggest was an abuse in the province of Alberta. It can be argued whether that was in fact an abuse or whether those who held those shares in such a tightly controlled way did so and got the best price they could and that the management of the company changed.

Those are the risks you take in the private sector. If you're going to buy shares — I suppose those who are playing around in the stock market today looking for big profits and speculation on an oil market are probably enjoying the profits. But they will also have to suffer the losses if they're there. That's what the stock market is all about.

In Alberta we have a growing, viable, important market industry that should be encouraged, should be controlled where controls are necessary, but probably shouldn't be overly controlled where really the type of impediments we're dealing with here might just end up having more negative than positive effects for those kinds of companies that are of a growth nature. Mr. Speaker, last spring in this Legislature we came in with a very important bill, I thought, with the amendments to The Companies Act which allowed a company to buy the shares of its shareholders.

Now we put into that legislation, you may recall, certain protections for the other shareholders in the event the company was going to buy shares — that they would have to make the same offer to the other shareholders. I think that was very wise. I think that was a protection that had to be dealt with, because the company was using its surplus funds to buy the shares of the shareholders. As a result, minority shareholders should have that same opportunity if they want to sell, because it could be they are diminishing their position within the company. I think that was an important amendment.

I don't have the same feeling with respect to this amendment, because I think it doesn't really cover the area of my greatest concern — embarking now for

1884 ALBERTA HANSARD November 3, 1977 a moment on dealing with private companies — and that is the position of minority shareholders in private companies. I know there is an extensive study of our present Companies Act that has been undertaken through Consumer and Corporate Affairs.

I do think there are many areas there, not involving really takeover bids but more just involving the position of minority shareholders, where minority shareholders in private companies can be easily manipulated out of their position and are really in a position where their rights can be seriously affected and their assets depleted without any ability whatsoever to get out of the deal. At least in a public company, Mr. Speaker, you can try to sell your shares, assuming there is a purchaser around, and you can get your money out.

If you're a minority shareholder in a private company, you don't have that same benefit and you can sit back and watch the majority slowly deteriorate your posi tion by bad management, manipulation, or whatever. Then you have very few rights which come to you. I think that is really the area of my concern in terms of the difficulties in company law practice in the province right now; that is, the position of minority shareholders in private companies. I know that has been seriously looked at. So it should. I think that's an area we certainly must be dealing with.

I would suggest, however, that what this proposed amendment does — and I certainly credit the hon. Member for Calgary Glenmore for bringing it forward — is to highlight an area of great difficulty in the province with respect to people who are in minority positions in companies, be they public or private. I think this is a novel approach. I can see areas where it could work a hardship within the normal practice of company law.

But I also think it should open up all our minds to areas where we should be seriously considering protecting the rights of minority share holders who find their assets being deteriorated and diminished by improper actions of others. I certainly commend the member for bringing this to our attention and the debate that moved from it. I know there will be further consideration of this mat ter. In the interval, while we're considering it further, Mr. Speaker, I would like to beg leave to adjourn debate. MR. SPEAKER: May the hon. member adjourn the debate? HON. MEMBERS: Agreed. Bill 228

An Act to Regulate Holiday Closings for Retail Businesses MR. PURDY: Mr. Speaker, I rise on second reading of this bill with some feelings of trepidation, but I bring this forward on a request from the Alberta branch of the Retail Merchants' Association of Canada. Some people have written to me saying I am infringing on local autonomy rights, and so on. But the Retail Merchants' Association of Alberta passed a resolu tion at an annual meeting in July 1976, and then forwarded the following questionnaire to the various merchants in the province of Alberta. I would like to read this into the record, Mr.

Speaker: Our sole purpose in sending you this Resolution is to find out whether or not the majority of Retailers feel there is a need to have Provincial Legislation to Regulate the Closing of Retail Businesses on Public Holidays. Therefore, we respectfully request you to READ THE RESOLUTION — then — COMPLETE THE . . . PORTION at the bottom . . . — and — RETURN IT If the majority of the replies received are in support of the Resolution, we will then draft up a Public Holiday Closing Act, and send you a copy of same to obtain your comments and suggestion on the proposed Legislation.

The resolution forwarded read as follows:

Whereas, Public Holidays, such as: New Year's Day; Good Friday; Victoria Day; Dominion Day; Labour Day; Thanksgiving Day; Remembrance Day and Christmas Day, were established as Holidays, for all people in Canada, as a remem brance, or in observance of some "Special Hap pening", and

Whereas, Public Holidays have normally always been . . . "Observed" by Business & Industry over the years that such Holidays have been in Exist ence, but

Whereas, an increasing number of Retail Busi nesses, particularly the large Department Stores, Variety Stores and Discount type Stores, . . . have, during the past few years, not been observ ing most of the Public Holidays by remaining open for business and having some of their Employees work on such Holidays, and

Whereas, this is "forcing" other com

Document details

Collection	Alberta — Debates (Hansard)
Citation	19771103
Type	hansard
Volume / chapter	L18 S3 19771103 1430 01 han.pdf
Language	en
Format	json
Source	PROVINCIAL
Identifier	3eab953560e785a39acecd8ddacc895f1333cbb1

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