1978 Legislative Session: 3rd Session, 31st Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MAY 9, 1978

Afternoon Sitting

[ Page

1201 ]

CONTENTS

Routine proceedings

Oral questions

Driediger AIR lease. Mr. Macdonald –– 1201

Personal and financial contributions towards welfare services. Mr. Gibson ––

Representation on Committee on Crown Corporations. Mr. Stephens ––

BCR strike. Mr. Lloyd –– 1204

Lending of mailing lists. Hon. Mrs. McCarthy replies –– 1204

The Raymond Lee Organization of Canada. Hon. Mr. Mair replies ––

Committee of Supply; Executive Council estimates.

On vote 5.

Mr. Macdonald –– 1205

Hon. Mr. Bennett –– 1207

Mr. Macdonald –– 1210

On the amendment.

Mr. Barber –– 1212

Mr. Davis –– 1216

Mr. Lea –– 1218

Division to rise and report progress –– 1221

Hon. Mr. McClelland –– 1223

Mr. Lea –– 1228

Mr. Mussallem –– 1230

Mr. Lauk –– 1231

Mr. Barrett –– 1236

Appendix –– 1239

The House met at 2 p.m.

Prayers.

HON. MR. MAIR : Mr. Speaker, by dint of a little good luck I noticed in the gallery on a young person a T-shirt with the word "Brocklehurst" on it, and I learned that from my great constituency of Kamloops there are a number of students from Brocklehurst Junior Secondary School along with their teacher, Mr. Love. This is the school, I might say, Mr. Speaker, that all four of my children attended, and I hope the House will join me in making the students very welcome.

MR. KING : Mr. Speaker, I notice in the House today we have the Hon. William Hamilton, the chairman of the Employers Council of British Columbia and a former Postmaster-General in the federal government. With Mr. Hamilton, I understand, is Mr. John Nixon, who will be observing proceedings in our chamber. I'd ask the House to join me in welcoming them.

HON. MR. WOLFE : Mr. Speaker, I would ask the House to join me in welcoming students here today from the Temple Academy in Vancouver.

MRS. WALLACE : Mr. Speaker, in the gallery today is a representative delegation from a rather larger delegation that had been in the precincts today from Ladysmith. They have been meeting with the Minister of the Environment (Hon. Mr. Nielsen) to discuss the problems occurring in the Ladysmith harbour and I would ask the House to join me in welcoming them.

HON. MR. VANDER ZALM : Mr. Speaker, I would ask the House to welcome a constituent of mine from Surrey, Mr. Don Gatley, who is visiting this afternoon in the House.

MR. SHELFORD : I would like to introduce eight members attending the Canadian Pharmaceutical Association convention: Ashley Proceviat from Terrace, Mrs. Violet Macdonald from Vancouver, Kathy Thomas from Kimberley, Sheila Taylor from Victoria, Helen Moran from Vancouver, Barb and Ed Stipp, formerly of Smithers, and Ruth Hoogie from North Vancouver. I'd like to welcome them here this afternoon.

HON. MR. WATERLAND : Mr. Speaker, the week of May 7 to 13 has been proclaimed

National Forest Week. I think it is a good opportunity for us in British Columbia,

especially in the Legislature, to recognize the need for good forest management.

Not only does good forest management provide an assurance of raw material supply

for our industry, but it also assures maintenance of a good water quality in

British Columbia, a good habitat for our wildlife and good forest-oriented recreation.

I think our forests affect each and every one of us much more than we realize.

In recognition of National Forest Week, I would ask the House to please recognize two gentlemen who have always spent a great deal of time in our Legislature, Mr. Clay Perry of the IWA and Mr. Fred Moonen of the Council of Forest Industries.

HON. MR. BAWLF : Seated in the gallery today is Mr. Clarence Dick, executive director of the Victoria Native Friendship Centre. This afternoon I will have the pleasure of presenting to Mr. Dick a cheque in the amount of $5,630, which represents the first instalment on a grant from the First Citizens Fund of the province to assist that outstanding centre in its work.

HON. MR. HEWITT : In the gallery I see we have a former member of the B.C. Marketing Board, Mrs. Margaret MacDonald, who has been kind enough to give the Select Standing Committee on Agriculture some of her views on the function of that board. I would ask the House to bid her welcome.

Oral questions.

DRIEDIGER AIR LEASE

MR. MACDONALD : I have a question for the Minister of Agriculture (Hon. Mr. Hewitt) about Mr. George Driediger of Driediger Brothers Farm Ltd., which leases about 243 acres in Langley. This land is under the agricultural land management branch of your department. In October of last year he moved two houses onto this land in violation of bylaws of Langley. He had no permit to move, no cash performance bond and this action was contrary to the lease, which is managed by the Ministry of Agriculture. The houses are still there.

MR. SPEAKER : Come to the question.

MR. MACDONALD : I'm coming to the question, but I have to give the minister things that he knows very well, I'm sure.

Now my question is: why are the houses still there, in violation of a directive from his ministry of last December? That's my first

[ Page 1202 ]

question to the Minister of Agriculture.

HON. MR. HEWITT : Mr. Speaker, I'll take that question as notice.

MR. MACDONALD : Mr. Speaker, I have another question. Why is the Minister of Agriculture negotiating with George Driediger at the present time for an option to purchase said lands, when George Driediger has shown contempt for directives of the ministry, and breach of the bylaws of Langley, of which he was the mayor?

Interjections.

MR. SPEAKER : Hon. members, order, please. The purpose of question period, says Mr. Beauchesne, is to seek information, and not to make statements or make speeches, however brief.

MR. MACDONALD : Well, Mr. Speaker, my question really is - to phrase it properly in accordance with the rules: are not negotiations to allow Mr. Driediger option to purchase these lands in the agricultural reserve now going on?

MR. SPEAKER : That's a proper question.

HON. MR. HEWITT : Mr. Speaker, I think that's a supplementary question to the first one. I'll take that as notice as well.

SOME HON. MEMBERS : Oh, oh!

PERSONAL AND FINANCIAL CONTRIBUTIONS

TOWARDS WELFARE SERVICES

MR. GIBSON : Mr. Speaker, I have a question for the Minister of Human Resources. I have here a draft copy of a document, dated March 29, dealing with "Personal and Financial Contributions towards Services, " which I am advised was sent out as a proposed policy to certain executives and staff in the ministry. I've sent a copy to the minister and to the deputy as well, for ease of consultation. I'd like to ask the minister if he will confirm or deny its authenticity.

HON. MR. VANDER ZALM : Well, Mr. Speaker, first I wish to thank the hon. member for giving me notice of the question, and I wish to commend him. It seems to be a course of action he takes fairly regularly and it certainly assists us in providing the information.

However, if I might answer the question fully, because I am sure that you would.... First, the document was circulated by the deputy to the various executive members within the ministry, and I would just like to give some explanation of this particular proposal -that's all it is at the moment, a proposal.

A directive was sent out by the former minister on May 8,1975, and the directive read in part: "Parents with earnings should contribute to the cost of the special services. The homemaker-housekeeper supplementation budget and income guide is to be used in determining the amount of their contribution. The district supervisor may review any case where a strict application of this guide would create undue hardship or otherwise jeopardize service goals." That particular policy was put forth by the former minister -and I commend the minister for it. Certainly I'm sure he saw the need for a programme of this nature.

However, while this policy was in existence and while it was also the means of assuring that parents contributed through the legislation, the Protection of Children Act, the policy or the legislation was not fully applied and was actually applied in a sort of hit-and-miss fashion.

We changed the income testing on January 1,1978, making it possible for particularly daycare and homemaker programmes to be available to a far greater number of people than had previously been able to benefit from these programmes. That is a very positive change which has been applauded by people in these services particularly.

However, as I said, we wanted to bring some consistency into the programme because there are still those who said they didn't wish to follow the policy. It wasn't so much, I believe - and certainly the executives would agree - a matter of reluctance to pay, but it was more of a reluctance to charge. I had social workers come to me very often on various matters, but one in particular recently in Surrey, where it was mentioned to me that the social worker made an approach to a foster parent to obtain some additional assistance for skates and hockey equipment.

The reply given to the social worker was: "I'll pay as soon as the government runs out of money." The social worker, a very dedicated person, took exception to this and brought it to my attention.

Furthermore, we have other documentation to indicate that where a policy has been applied there have been tremendous benefits from it. It has helped to reunite parents and children, children with parents, where previously it wasn't possible simply because the social

[ Page 1203 ]

worker, in keeping with policy, was able to apply a measure of parental responsibility, a partnership approach rather than parental approach.

We're hoping that the policy will not only be instituted, but applied equally to all people, but just in what areas has not been decided as yet. But I think all hon. members here would agree that it certainly is an inequity to see for example, a mill worker or a telephone worker...

MR. GIBSON : Mr. Speaker, this is a speech.

HON. MR. VANDER ZALM : ... paying through his taxes to support the child of a doctor or a lawyer or a businessman, as well as providing for his own children. So I think the policy is equitable; certainly the former minister saw the wisdom of it. I'm hoping that we'll soon be able to give full details of the policy for the House.

MR. SPEAKER : Hon. members, before we entertain the supplementary question, whenever questions are asked in question period, the answer is also sought in question period. If the question is stated in such a way as to provoke a long answer, the Chair can hardly determine this in advance. Therefore a question which requires a long answer perhaps ought better to be placed on the order paper so that we can preserve the purpose of question period.

MR. GIBSON : Just to review my question, I asked him if the document was authentic. The answer, it seems to me, should be yes or no.

On a supplementary, the policy proposals deal in part with mentally and physically handicapped children and with parents having to assume the costs for the infant development programme, which is for developmentally retarded youngsters from age one to three; for special needs and day care, age three to six; and residential programmes for the handicapped, which would see parents already heavily burdened in too many ways to count with handicapped children having to assume new costs of up to $200 a month.

Mr. Speaker, leaving aside the pros and cons of any changes for other social services, will the minister agree today, in respect to the handicapped, that at least the financial burden of doing our best for handicapped youngsters is one that should be shared by all society and not just the parents? Will he say that today?

MR. CHAIRMAN : It seems to be a question of policy. The minister may wish to answer.

HON. MR. VANDER ZALM : Well again, Mr. Speaker, though I provided possibly too lengthy an answer at first, I can't really give a yes or no to a question such as this because it requires further explanation as well. Once more we have day care for children where parents decide to both take employment. We also have day care for single parents and we have special day care for handicapped children.

Now the argument put forth in the policy paper and related documents is that where people benefit from a day-care programme, they should at least contribute that part which would normally be charged for a child, handicapped or otherwise. As it stands today, if a child goes into a regular day-care programme, they pay their share on the basis of the income charged. If, however, that child is placed in a special day-care programme, the parents, in most instances, contribute nothing at all. So once more we're attempting to bring equity.

Should the circumstances be similar, there is no attempt whatsoever to place a further hardship or burden on parents of handicapped children.

REPRESENTATION ON

COMMITTEE ON CROWN CORPORATIONS

MR. STEPHENS : Mr. Speaker, my question is for the Hon. Provincial Secretary. In view of the fact that the committee set up to inquire into Crown corporations is embarking tomorrow on a very important matter, and in view of the fact that this is an all-party committee and that the Conservative Party has made several requests to be represented on the committee, I wonder if the member can tell me when the party can expect to be appointed.

HON. MRS. McCARTHY : In response to the hon. member for Oak Bay, we tried to get our selection committee together last Friday and, unfortunately, there were not sufficient numbers. So we're trying to get that done as quickly as possible: we may even be able to meet today. It is a representation of MLAs according to the legislation, Mr. Speaker, and the numbers of representation of parties was established by the selection committee. The selection committee will meet and make that decision shortly.

MR. STEPHENS : On a supplementary, I wonder if the minister is in a position now to confirm that it will, in fact, be an all-party committee and the appointment will, in fact, be made.

[ Page 1204 ]

HON. MRS. McCARTHY : Mr. Speaker, the decision as to what party opposition and government members were represented on that committee was made by the select standing committee earlier. There is a vacancy on the committee of one which is, according to the legislation, to be filled as quickly as possible. The selection committee will meet in order to do it as quickly as possible, but, unless there is an agreement with the opposition members, it will be filled by the same party as the vacancy was created by.

MR. STEPHENS : On a further supplementary, Mr. Speaker, I might say to the minister that I am certainly aware of the problems involved and I wouldn't be pushing except for the fact that this committee does sit tomorrow on a very important matter and I think it would be to the advantage to have representation from all aspects of the community.

BCR STRIKE

MR. LLOYD : Mr. Speaker, during the lunch hour I had a delegation from the northern interior lumber sector of the Council of Forest Industries who were down here on some general council business and I have a question for the Minister of Economic Development. This group has expressed concern over the BCR strike which took place yesterday - it's apparently a controversy over some hot goods. Particularly in light of the boxcar shortage we had since last spring and an accumulation of forest products, they're really concerned about how long this strike could take place. I would like to have the Minister of Economic Development indicate to the House what the present situation is.

HON. MR. PHILLIPS : Mr. Speaker, I appreciate the member's concern and I want to assure both him and the House that I have been assured that everything possible is being done to bring this dispute to a hasty conclusion. There were meetings which took place last evening until 4 o'clock this morning between the union and management, and the railway management have a meeting this afternoon with the Labour Relations Board. But again, I want to assure both the member and the House that everything possible will be done to bring this situation to a hasty conclusion because we all recognize the tremendous impact that the British Columbia Railway has on the economy of this province.

MR. LEVI : The member for Fort George (Mr. Lloyd) indicated that there

was a boxcar shortage and has been so since last year. Can the minister confirm

if that is because Railwest was closed down last year? Is that the reason for

the boxcar shortage?

HON. MR. PHILLIPS : I want to assure the member that we have had several firms from around the world looking at Railwest, looking into the economics and the feasibility of building boxcars with Railwest. All of these international firms have found that it was uneconomical to do so, Due to the bad weather in the east last year, there is a temporary shortage of boxcars in the province.

MR. BARRETT : Blame it on the east.

HON. MR. PHILLIPS : Yes, Mr. Speaker, because of the weather in the east, it has taken a longer turnaround time. I know that the members over there get pretty uptight When we start talking economics in this province but maybe someday they will understand what the situation is, although I doubt it.

HON. MRS. McCARTHY : Mr. Speaker, I wonder if I could respond to a question that was asked yesterday, rather than take up the time of the question period, if I may.

Leave granted.

LENDING OF MAILING LISTS

HON. MRS. McCARTHY : Yesterday, the question was asked from the member for Alberni (Mr. Skelly) with regard to the exchange of lists between government offices. I knew of nothing like that at the time the question was asked. I made inquiries from my ministry and this is the answer to it.

The ministry does not provide lists to the Canadian government office of tourism, nor to any other office. Our research officer states that Tourism British Columbia receives weekly sets of lists or names from the Canadian government office of tourism which are in response to people who have asked specific information on the province of British Columbia. That would be if they were in the Canadian government office of tourism, say in Minneapolis, and wanted to know about British Columbia. They would send us the information in addition to sending information about British Columbia.

Hon Mrs. McCarthy files an answer to question 23.

Leave granted.

[ Page 1205 ]

HON. MR. MAIR : I also would ask leave to answer a question asked of me -yesterday in question period.

Leave granted.

THE RAYMOND LEE

ORGANIZATION OF CANADA

HON. MR. MAIR : Mr. Speaker, yesterday the member for North Okanagan (Mrs. Jordan) asked me about a firm called The Raymond Lee Organization of Canada, with direct reference to the question of patents and copyrights. First of all, I would like to point out that the obtaining of patents for original ideas and the marketing of new inventions is, of course, a legitimate business, and it goes without saying that patent law is complicated and is not something an individual can deal with on his own.

There are indeed many scams in this particular business, and there are many ways that unscrupulous people have operated in this area and have, in fact, ripped off the public in so doing.

Having said that, Mr. Speaker, I want to assure the member that, while I cannot yet give an indication as to whether or not the firm she has mentioned has done anything illegal or improper, I have instructed my staff to look into the matter immediately and I will, with leave of the House, report back as to any findings if they happen to be appropriate.

MR. GIBSON : Mr. Speaker, I ask leave to table the document referred to in the exchange with the Minister of Human Resources (Hon. Mr. Vander Zalm) .

Leave granted.

Orders of the day.

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

ESTIMATES: EXECUTIVE COUNCIL

(continued)

On vote 5: executive council, $753,760 -continued.

MR. MACDONALD : Mr. Chairman, on the Premier's estimates last night we asked a number of questions, and I think we did not get our answers last night - although the Premier said he would send out a note to see what was going on in the energy field. I think we are now entitled to the answers, because we're dealing with major industries in British Columbia and', in the case of our coal rights, we're dealing with what is undoubtedly going to become the second most important industry in the province of B.C. And it may someday surpass timber if we don't have proper reforestation.

At this stage I'm just going to list in order some of the questions that we'd like answers to, and - if the Premier's got a pencil there, and a good memory - I'm sure he will listen to these questions and provide answers to the committee.

The first question refers to the B.C. Government News issue on the budget, which went to every home in the province of British Columbia - courtesy of the government, courtesy of the taxpayer. In it this statement is made, supposedly having been made in the budget by the Minister of Finance (Hon. Mr. Wolfe) . It said: "A coal policy has been enunciated to provide the basis for future development of our vast coal resources."

I have three questions under that heading. First, did the Minister of Finance make any such statement in the budget? I listened carefully and could not find it. It is supposed to be a reflection of what's in this great budget that came down to the people of the province. I couldn't find it, but maybe the Premier can find it.

My second question is: what is the coal policy that has been enunciated? You are telling every household in the province of B.C. that you have enunciated a coal policy. As the member for North Vancouver-Capilano (Mr. Gibson) and others have pointed out, we have a number of coal policies floating around. Heaven knows what the coal policy of this province of British Columbia is. In June of last year at Nelson we had the Premier saying that they were giving serious consideration to a bidding policy on leases. Last February we had the coal committee saying no.

And then there was the flood of applications -which is now going on, including those in the B.C. Gazette of May 4. All kinds of people are applying for licences under

section 15 of the Coal Act.

Interjection.

MR. MACDONALD : This is very important, Mr. Chairman. The Premier ought to answer, in addition to saying that there is legislation coming down - which, quite frankly, I think was an afterthought in this debate. But he has already told the people of this province that a coal policy has been enunciated. What is it? Does the Premier know what he's talking about?

[ Page 1206 ]

How lightly are we dealing with the whole question of resource rights speculation in this province?

HON. MR. CHABOT : We'll have a full debate on that one.

MR. MACDONALD : Mr. Premier, after the matter was raised by the Member for North Vancouver-Capilano, your Minister of Mines and Petroleum Resources (Hon. Mr. Chabot) told the press that these licences granted under

section 15 of the Coal Act were only for a year. I'm asking the Premier - on my third question - if he agrees with that statement. It seems to me that point has already been made clear both by that Hon. member and by the terms of the Act. If somebody gets a licence under

section 15, does the necessary work and follows production plans, they are entitled as of right to that coal licence, including production rights. Does the Premier agree with the Minister of Mines and Petroleum Resources, who supposedly is a trustee of this vital coal resource for the people of this province, when he says: "It's only for one year. What's all the excitement about?"? I think that's a dreadful statement to be made by a member of government, and to be made in the wake of the Premier's statement at Nelson. I think it shows an abysmal ignorance of how we are handling resource rights in this province.

Don't forget, Mr. Chairman - and the Premier should bear this in mind - that, while many of these applications are not by Shell Oil - some of them are by individuals - there is trading in coal licences long before there is production. If anybody doesn't believe the extent of the trading, look at what has happened in the Sukunka-Bull Moose area, where the licences were granted years ago to the Pine Pass Company. Later Teck Corporation bought them in. Then there was an option to purchase by Brascan, which they dropped for some of the licences. Then Brameda Resources came into the picture.

Then Teck and Brameda sold only part of the licences, which had been granted for nothing by a compliant government in past years. They sold part of those licences for $30 million. That is telling us two things. First, it's telling us that there is resource right speculation, which I say is at the expense of the industry. It's telling us that we are not going to have development until the start-up company, which is finally going to produce coal, can pay out something like $30 million for just a few of the licences in the Sukunka area.

Is that the way to develop our coal reserves in this province - to first hand a bill of $30 million to the companies who might be ready to do the work and give people employment, so they can buy the resource right from a speculator who has had it for a long time? Add that to the start-up costs. You say in your budget speech that you are giving $7 million this year for northeast coal development. And British Petroleum has to pay $30 million just to come on the scene. I say that you are loading down the industry.

So my three questions under coal are: Do you agree with your Minister of Mines and Petroleum Resources about the one year? What is the coal policy that you say was enunciated? I've forgotten the third question.

Interjections.

MR. MACDONALD : There are three ways you know when you are going over

the hill. The first is that you begin to lose your memory. I can't remember

what the second is.

Anyway, those are serious questions.

Now my next question relates to the report of the Energy Commission which granted, and was accepted by the cabinet, a major new price - the second round of price increases by this government in field prices and natural gas, bringing new gas up to $1.03 and old gas up to 78 cents, the second big increase under this administration which is being passed on to the consumers of the province through BCPC, amounting to, in the last six months, a 36 per cent increase in the consumer gas bill. If you look back through the record of this administration, it's more like 100 per cent since you came into office.

It's a great hidden tax imposition that's being imposed upon the users of natural gas in the province of B.C. All we have in the annual report of the Energy Commission is this last round of price increases, even though there's a surplus of natural gas and there's a cutback in the northeast fields of 50 per cent. Any new gas that we have to produce we're not going to be able to use in the province of British Columbia, and it's going to have to be exported to the Americans.

You know, that's a depleting natural resource which is going over the border and appreciating in value every year, and then you want to sell it off. That's the only thing you can do with it. It's backed up, and yet you've given the companies an additional $120 million a year in revenue. In that figure, Mr. Premier, I've made allowance for the repeal of the dominion provincial fiscal Act, under which for a period of time the government of British Columbia paid the taxes for the gas producing companies under our government. I've made allowance for that, but it still comes

[ Page 1207 ]

out to an additional $120 million a year, all of which is being passed on to the consumers and not coming into public revenue.

So I'm asking under this question - and the question of oil royalties which have been increased here is the same- question: Where are the reasons of the Energy Commission that justify this tremendous impost on the people of the province and this tremendous out flowing of money from the province of British Columbia not coming back into the public treasury? Where are those reasons?

Now in respect to the oil situation, Mr. Premier, I ask the same question, because again this is the second round of price increases that have been given to the producers of old oil which is long paid for in terms of its capital cost. They've had a $4 increase in your administration. The price of a barrel of oil now is at $11.75; there's a little differential for the Peace River country. Every time it goes up $1, and it's gone up $4, it's another $128 a year to the average family in this province.

That's a lot of money, and all we get here, without any reasons being given, is that they've recommended that oil royalties should be reduced again. Now this is the second time around. Where are the reasons that the Premier spoke about last night?

This did not promote any additional industrial exploration or drilling activity in the province of B.C. It's given to the companies; it's old oil. My next question is about something called the incentive. Everybody in the House, I suppose, knows what I mean by a portion of the price in both old oil and gas, which is the incentive which we built in under the NDP administration. Briefly speaking, in the case of oil, it was 75 cents, which could be cashed by the company which was producing the old oil provided it was reinvested in the good, green earth of the province of British Columbia in drilling and exploration.

That certificate could be traded to another company that was willing to do the work, and the system was working.

HON. MR. CHABOT : It became meaningless.

MR. CHAIRMAN : Order, please, hon. members. Perhaps you could relate this to vote 5.

MR. MACDONALD : I'm relating it to the now Minister of Energy, Transport and Communications, who is the Premier, Mr. Chairman. I'm directly on energy. I'm asking why the producers of old oil under this administration' which is about 40,000 barrels a day - and it's been constant like that for the last 15

years - should be given an additional revenue of $38 million a year and then, with no reasons given, we see in the annual report of the Energy Commission the statement that oil royalties should be reduced for the second time with no reasons and less being recaptured for the public treasury. So that's my next question.

Now I think, Mr. Chairman, I've asked the main questions I want to ask and given the background in terms of what is happening in energy. Let me conclude, though, because I think the Premier may be interested in this. Under the NDP government - and we should have a little history - we had a measured development of our oil reserves and a measured development of our natural gas reserves, which included a very good drilling season in 19751976, well sufficient both to answer the export demand, which is 809 million cubic feet of natural gas per day at Huntingdon, and to serve all of the homes and industries of the province of B.C.

So there's no use saying: "Oh, we put more rigs in the field." They were there anyway. There's no use turning up the tap and throwing money at the producing companies that they don't need. They are international companies; it leaves the province. When you have a measured development in a husbanded way and a conservation--minded way, and a way that's going to protect the future of this province, you don't just throw the money at them and then pass the bill on to the consumer.

So don't let me hear the Premier say -otherwise I'll have to go back and quote the figures - that we ruined the industry and gas and oil exploration and development, because it isn't true. Look at the figures for 197576: $180 million was spent by the industry in that season which was totally based upon the Thompson report and acceptable to the industry. The amount of drilling and exploration would have increased somewhat, but in a measured way.

Now we're dealing with a depleting natural resource. We're dealing with something which is now in surplus supply and we're throwing all that extra money. I think the Premier has an explanation to give to the people of this province. Why are the consumers being loaded with such additional costs? Why are the oil and gas companies being so richly rewarded in the Peace River area of the province of British Columbia with no public explanation as to the reasons?

HON. MR. BENNETT : Mr. Chairman, I was afraid the first member for Vancouver East would, on reflection overnight, try to forget some of

[ Page 1208 ]

the things he told this assembly last night. I've been in touch with the Energy Commission. Here's one of the statements I'll just read from Hansard, was said last night, page 421-1-9:17.

"MR. MACDONALD: Mr. Chairman, just a supplementary. I find it absolutely astonishing that the Premier of the province of B.C. says now he's going to find out why we gave away the store last year. It's exactly the same with those coal licences. Nobody over there knew anything about the kind of thing that was happening right under your eyes until it would have been too late. And then you flip-flop the policy and finally say you're going to bring in a new Act.... Never mind, you've passed the order-in-council (and you've) given away an additional $120 million a year to the natural gas producers of the province of B.C. when there is a surplus of gas at the present time."

He further goes on in other areas to say we changed the commission. So I made sure that I got the information today from Mr. John Ludgate, who was there under the commission when the present member for Vancouver East was Attorney-General and was on that commission. I checked the reports that he says are changing. Now today in the chamber he has quoted the annual report and he's disregarded the reports of the hearings which have been tabled in this chamber. The hearing reports very clearly state the reasons.

Another statement was made that the reporting methods had changed. I think that was one of the things last night. Who has signed the first hearing report of 1976, the one he says has changed? Andrew Thompson. Mr. Chairman, these are the hearing reports that give the reasons.

Because the member for Vancouver East wants a little history and before I get into some of the numbers he threw around so loosely, I want to go back to 1975 and the history of gas exploration, or lack of it in this province, and why there was a lack of it. I refer back to the energy report, 1975, that was commissioned by the last government from the B.C. Energy Commission. Now I can quote from the news report of the report, and I have the copy of the report here. What does it say in the news report by Alan Wilson, Sun business writer? It says:

"If the government accepts the report, it will be admitting it was wrong in its natural gas and oil pricing and royalty policies."

That's what it says; that's what that report said. It says the last government

was wrong in its gas and oil pricing and royalty policies.

It goes on on pages 10 and 11:

"Far from ripping off the people of the province, the report said oil companies have been making an inadequate return on their investment, with an average return of about 7 per cent."

MR. MACDONALD : What date is that?

HON. MR. BENNETT : It was 1975, and it's out of the legislative library. It's a report you should know about. You were there. We remember it very well. The report says:

"Oil and gas prospects available in B.C. are better than

most still available in Alberta, yet as a direct result of government policy

they are not being developed." That's what the report said.

We've heard a lot of concern over the communities of Fort Nelson and Fort St. John over there. The government has often accused the oil companies of taking profits out of the province and leaving little here, but the report lists many benefits the oil companies provide and says Fort Nelson and Fort St. John are suffering because of exploration cutbacks. That was a direct result of the government policy of that day. Their own commission, the natural gas and crude oil field-price inquiry, said their policies were wrong. It said they were not only hurting the industry, they were hurting those communities - that's what it said.

I want to give some figures here, because the member for Vancouver East threw out the figure of $120 million of revenue being lost to the people of the province in a ripoff. He said that the revenue increases proposed by the Energy Commission in its 1976 report, signed and submitted by Dr. Andrew Thompson, will take a ripoff of $120 million.

I must say that I am advised today by members of the Energy Commission that the increases there will not be $120 million but will be only $92 million. When you balance this against the increase in bids for exploration of $140 million, the revenue to the province has increased directly, forgetting what is sold through the BCPC. There is a $140 million increase in 1977 just for the right to explore.

Mr. Chairman, his figures were totally incorrect. He comes into this House with figures that are incorrect. He forgets reports that he had commissioned that castigate the last government and talk about its disasters for policies. He doesn't even deal with- the hearing reports. Then he tries to say they are written by different people. There they are,

[ Page

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signed by Dr. Andrew Thompson.

I want to go on a little further because they went on further to talk about the netback on old gas and new gas in British Columbia. Both he and the Leader of the Opposition spoke on this and they talked about Alberta, and they paid glowing tribute to Alberta.

Let me talk about this. We have an aggressive gas exploration policy here. In a moment I will tell you the results of that policy as provided by my staff. Because of the formula, you must compare companies and exactly what they're paying in netback in both B.C. and Alberta. These are the figures as of today of a major producer dealing in both Alberta and British Columbia. In B.C. for old gas, this firm is getting 32 cents. In Alberta, they're getting 39 cents. That doesn't square with the information the Leader of the Opposition and the member for Vancouver East gave last night.

For new gas, in British Columbia, they're getting 62 cents. In Alberta, they're getting more; they're getting 64 cents. They tried to leave the impression that somehow B.C. was paying more, and yet when we bring the actual figures today being paid by a major producer in British Columbia, there is the comparison.

I want to tell you that your figure of $120 million was inaccurate and incorrect and not correct information to this House. Not only were you quoting from annual reports and seemingly unaware of the hearing reports that had been tabled in this House in the fall of the year but you had changed the very nature of the report that was given to you by the commission in 1975 that talked about your disastrous policies. I remember them very well and I remember the report. This is that report. The news media then talked about your disastrous policies.

They go on to say that your policies not only hurt exploration, they were disastrous to the communities of Fort Nelson and Fort St. John. How quickly you forget.

MR. MACDONALD : Vander Zalm would do a better job.

HON. MR. BENNETT : A better job than you, yes, and that's not hard. He cleaned up the act of your colleague behind, and we're cleaning up the act that you left behind.

Mr. Chairman, I want to talk about some of the figures that were quoted and

some of the results of our policies. The policies aren't just ours; they

are recommended in the very same hearings and the very same type of reports

that have been consistent with the B.C. Energy Commission. Except rather than

being accused of hurting communities and hurting exploration, we worked to develop

a supply of new gas because we want to have that as a reserve for the basis

of B.C. energy. We want to have proven- reserves. It has been a policy of this

government that we must have those reserves identified for the benefit of the

people.

We've had some arguments earlier in this assembly last year about reserves relating to construction of the Grizzly Valley pipeline. Again, we remember that. Let me go on to say how successful this policy was. I want to talk about the drilling programme, because the wells drilled in 1975 in the Peace River area were only 82. Yet the wells drilled in 1977 were 330.That's the difference in policy. And for reserves, in 1975 you only uncovered an additional 139 billion cubic feet. Yet in 1977 the accelerated drilling programme added to the energy and gas reserves of the people of this province 643 billion cubic feet.

Not only that, the increased exploration activity generated economic activity in the Fort St. John and Fort Nelson areas.

Mr. Chairman, you don't have to think very far to know how much a future proven gas supply enhances the future of this province. Industry in communities must have that certain gas supply. To say that somewhere out there is gas means nothing. To seek it and find it and have it in reserve is good economic planning. It is also planning that has helped to stabilize and bring back the employment in those communities that were threatened, as outlined in the report to the government in 1975.

What do they say in that report? That report should be quoted; it should be printed in The Vancouver Sun on the front page. It should be printed to remind the people, along with your comments of today, some of the findings of the new reports, the results of the accelerated drilling programme, and the comparative figures between British Columbia and Alberta as compared to the statements made in this chamber last night.

Well, Mr. Chairman, these policies have been sound policies, and they've been policies that now have proven results. We've seen the policies that were apparent in 1975. We now know what can happen when policy direction is followed from the advice of the hearings, without political interference. We can see the results in increased employment, we see the results in increased drilling, and we see the results in increased gas reserves for the province. We also see the direct revenues to the province increasing.

The correct figures supplied to me by the B.C. Energy Commission today - not the figure

[ Page 1210 ]

trumped up by the member for Vancouver East (Mr. Macdonald) , which he cannot substantiate, that $120 million plucked out of thin air -was that those moves would cost $92 million, but they've been more than balanced off in the increased price of $140 million in bids for leases in 1977.

MR. MACDONALD : That's $195 million - get it right.

HON. MR. BENNETT : The province is a gainer in several ways. The province gains in direct revenue, the province gains in employment, and the province has gained in an increase in its gas reserves. Those questions brought in last night were highly detailed research questions made by members of the opposition who perhaps should have gone to the leader of the Liberal Party (Mr. Gibson) to help them, because the staff that the public of B.C. pays for, the research staff for that party, hasn't given them the correct figures. Perhaps they thought that the member for Vancouver East (Mr.

Macdonald) , as a former director of the B.C. Energy Commission, would know or perhaps could have corrected their figures.

I'd like to also talk about one of the statements of the member today when he said they had a planned policy that dealt with the provision of supply equated with employment when, in the very reports, the statements say that we were on a declining position in oil sufficiency.

We're in a declining position, and the encouragement we have given has brought us an oil find for the first time in many years in the province of British Columbia. It's just a start. We have an oil find now - not major, but an oil find. To say that they were satisfied with the oil discoveries that had been made would be foolish because we were in a declining oil position.

Who can forget the major gas failure of a well in the early 1970s that caused a cutback in the export contracts in British Columbia? Who can forget that? To say that we didn't have to prove up and bring onstream reserves to meet our obligations and to meet our concerns for the future.... Mr. Chairman, it's a little distressing that some of those things and some of those figures were said last night, because these are the figures as of today, presented to me by the B.C. Energy Commission. The member supplying that information was in the Energy Commission in 1977,1976 and 1975, and I have the highest confidence in that commission now as I did then.

I said last night I was surprised that members would call into question that

some members had been changed on the commission, because I had confidence in

the old commissioners and I have confidence in the new ones. To even bring the

matter up creates a suggestion that I cannot accept.

Mr. Chairman, I have a number of other answers that may add some further light on this, but I wanted to clear up the policy and the figures that were presented last night and the inference that was left that Alberta had more favourable rates. We've gone to the major producers. These figures that I quoted in the Legislature are as of today. It's unfortunate that in a debate this important, in a field this important, this type of misinformation can have been dealt with and presented to the Legislature, and I present the information today as a point of clarification for the members of this assembly.

MR. MACDONALD : Mr. Chairman, it's very good of the Premier to remind me of the report of Dr. Andrew Thompson of 1975. 1 have a copy in my office. It's a very good report. It's kind of interesting that it is the only report that's been received that justified price increases in the field costs of that time.

HON. MR. BENNETT : The second report?

MR. MACDONALD : We had two public reports under our administration, and there is no use the Premier telling me that the Energy Commission this time has published a report of its hearings but not its reasons. The last reasons that have ever been given to this province were those of Dr. Andrew Thompson, who was commissioned under the NDP government and whose recommendations were accepted by the NDP government on November 1,1975. At that time, in terms of field prices, we accepted the recommendations and we increased the field prices to 35 cents for old gas and 55 cents for new gas, including the incentive allowance which I referred to earlier and which has since been eliminated.

What's the use, Mr. Chairman, of the Premier praising the report of Dr. Andrew Thompson, with which I'm perfectly familiar, and justifying an argument based upon that, when right out of that report there is a recommendation for incentive pricing to try and protect this province and see that some of the money that's given to the oil companies comes back and is invested in this? And you abandoned that. Are you going to pan that part of the report with its careful reasoning, and then praise the rest of the report? The whole report was good and it initiated in this province, as I say, balanced, measured growth in our natural gas

[ Page

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reserves and supply, and was fair to the public. That was a good report and we accepted it. But the point, Mr. Chairman, is that without any report, without the kind of reasoning that we had in the report the Premier refers to, there have been two bumps -not one, but two big bumps in the price of natural gas, the field prices for the company.

Well, I'll tell you what they are. January 1,1977, under your government, effective at that time - that's about a year after the price structure was set under the....

HON. MR. BENNETT : You'll be sorry you opened up this area.

MR. MACDONALD : Well, I have to go slowly and explain this. The Attorney-General (Hon. Mr. Gardom) doesn't think a few million dollars gone over the line out of the province.... Shovelling money out of the back of the province doesn't mean much over there, does it?

All right, let's get the sequence, and I'll justify my $120 million. Let's talk about natural gas. Let's justify the figures. The figures which are referred to in the report the Premier praised were as of November 1,1975 - the NDP was the government - and they were 35 cents and 55 cents. On January 1,1977, the Social Credit government increased those to 65 cents and 86 cents. Now as if that was not....

Somebody sent me a note telling me to resign. That makes me nervous.

HON. MR. BENNETT : It was Bob Williams. (Laughter.)

That's the play, as they say. And there's nothing wrong at all with the companies making those requests in the hearing report the Premier has :

L) his hands, but there's lots wrong with giving them two huge increases after the successful report of Dr. Andrew Thompson that the Premier talked about.

Now how did I get my $120 million? I got it in two ways, Mr. Premier. I looked at the B.C. Economic Review and I took the total number of cubic feet of gas that we produce in a year and I applied the new prices to it. Then I made allowance for the fact that the companies are now paying their tax. I think I made an allowance of 25 cents per 1,000 cubic feet, which is more than it should be, because now the government is paying that tax.

HON. MR. BENNETT : Is Alberta paying too much?

MR. MACDONALD : I'll just stick to one subject at a time; I'm justifying the $120 million.

Then I made a double check on that because you have in the public accounts of the province of B.C. the latest reports of BCPC's annual report. And if you look at that annual report, you see gas purchases going up - and I haven't got it right in front of me, but I checked this - I think, from $85 million in the first jump to $135 million, but that's only up to March 1,1977. The first price increase of the Social Credit government hadn't begun to bite in at that time and the second price increase hadn't begun to bite in.

If you look at the gas purchase amounts in the books of B.C. Petroleum Corporation, you will see that that will work out at this time, and it justifies the figure of $120 million, which is based primarily upon the total quantity produced. The two are consistent. The Premier says that these moves resulted in an extra $92 million, not $120 million, but I don't know what "these moves" are which he's referring to.

I did not take into account in the extra $120 million the price recommendations that were implemented as a result of the Thompson report. I based that figure solely upon what has happened to this province since the Social Credit coalition took office. That's an additional $120 million to the natural gas companies, which they didn't need after that successful report that the Premier quoted. That was money thrown out of the window, out of this province to the international companies with the Premier now beginning to find out something about it. He's sending out for notes and saying: "Oh, what's happening?"

[ Page 1212 ]

Do you know what that means to the average homes in the province of B.C.? Do you know what it means to public revenue? If you look at the gas purchase figures of BCPC and then you look at their gas sales, you find that they've been passing it on to consumers in a time of inflation where the AIB meant nothing to this government. They exempted BCPC from the AIB.

HON. MR. CHABOT : The royalty agency.

MR. MACDONALD : There are no royalties on gas. Don't talk about royalties. You think royalties are jacks or better. That's as far as your education has gone. And you're in charge of the resource rights in the province of B.C., Mr. Minister? The $120 million is firmly founded upon the price increases that were unnecessary and given after the Thompson recommendations had been implemented without a public report.

The $38 million extra to the producers of old oil with a reduction in the royalty on two occasions by this government are based upon the production figures which come to roughly 16 million barrels a year in this province. That was double-pricing of old stock - triple-pricing of old stock - and eliminating the incentive.

The Premier hasn't begun to answer the other questions, whether or not he agrees with that minister that these coal licences are being applied for. You'll have your chance. You have initiated in this province to the detriment of employment resource rights speculation on a scale we've never known before, with the Premier and his Minister of Energy in total ignorance, really, until he begins to get notes here and there of what's going on. Send out for a note and see whether this is really true or not. You have instituted within two years the greatest giveaway of resources that this province has ever known.

You have passed on to the consumers ridiculous price increases in defiance of AIB during a period of inflation as a result of giving excessive profits to the international companies. You have not begun to answer, Mr. Premier, the questions that I asked you. I asked you for the reasons and all you could quote was the report of Andy Thompson made in NDP days. That's all. Well, that's not good enough. It's not good enough that you say nothing about your coal policy. It's not good enough that you mail into every home in this province a free publication which is propaganda - B.C.

Government News - in which you say a coal policy has been enunciated. Here on the floor of the Legislature you cannot tell us what it is. You do not know. It's a flip-flop. You were found out selling off resource rights and seeing those traded throughout this province, and the Premier doesn't know what it's all about. He's had three policies now.

I move....

SOME HON. MEMBERS : Oh, oh!

MR. MACDONALD : It's a great joke to the millionaires, Mr. Chairman.

It's a big joke to the millionaires and the car dealers and the political

turncoats of all colours that this province is being given away under our eyes

on a scale never before seen in our history. It's a big joke. Have your

laugh. Laugh about it. Laugh about the increased gas bills. Laugh about what

the motorist is paying for his gasoline with all of the extra profit going into

the oil companies and none coining back to the public treasury. Laugh about

those who buy home heating oil for their homes and have seen their prices going

up with the Arab price and all of the money going out of the province to the

international companies. Have a good laugh about it.

I move, seconded by the member for Victoria (Mr. Barber) , that the salary of the hon. Premier as provided for in vote 5 be reduced by $27,997 to the sum of $3.

SOME HON. MEMBERS : Three-dollar Bill!

HON. MR. BAWLF : On a point of order, I would like to say that I certainly did not second such a motion and I hope the record will show that the first member for Victoria did not second any such motion.

While I'm on my feet, with leave of the House, may I take a moment to introduce in the public galleries....

Leave granted.

HON. MR. BAWLF : I apologize for the bad manners of the Leader of the Opposition. Seated in the galleries is a group of 35 grade 11 social studies students from Mount Douglas Senior Secondary school, and their teacher, Mr. Keith McColHon. On behalf of the member for Saanich and the Islands, the hon. Minister of Municipal Affairs and Housing (Hon. Mr. Curtis) , who is in Ottawa on business today, I would ask the House to make them welcome.

MR. CHAIRMAN : Hon. member, the motion does not require a seconder. I have recognized the second member for Victoria.

MR. BARBER : Thanks very much, Mr. Chairman. I am pleased to second the motion, as you see

[ Page 1213 ]

on the motion paper. It does say a seconder, but I'm now informed it doesn't require one. I'm pleased to second the motion to reduce the Premier's salary to the sum, appropriately enough, given his nickname, of $3.

We're happy to do so on a number of counts, and the one that I propose to raise now, following the remarks from the member for Vancouver East (Mr. Macdonald) , concerns the Premier's responsibility, clear as it is, for the British Columbia Resources Investment Corporation. Among the many resources of this province that this Premier has mishandled are those that have now been transferred to the resources corporation. They include assets conservatively estimated to be valued at some $151.5 million.

About a week ago I asked the Premier a detailed series of questions regarding the transfer of those assets, the valuation of them, fees and salaries paid to the principals involved, and the likelihood, if any, of a prospectus being issued this year. The Premier answered no questions of significance whatever. I continued to ask questions about the fees and salaries paid to Mr. Helliwell, and would propose for a moment, Mr. Chairman, in order to refresh the mind of the Premier and his memory, and in order to give weight to the argument that the salary of the Premier should be reduced to $3, to review the responsibility of the Premier for the resources corporation.

I mentioned before that when you think of the resources corporation, you should think of your television set. You should consider what would happen if you owned a television set and for a moment closed your eyes and discovered that someone waltzed the television set out the back door when you weren't looking. And consider further how you would feel if the same person showed up on your front doorstep with the same television set a week later and tried to sell it to you. This is the position of the British Columbia Resources Investment Corporation and the people of British Columbia.

The British Columbia Resources Investment Corporation is a political swindle from beginning to end. It serves three purposes. It serves the purpose of allowing the government, at least for a moment, to get off the hook of having to admit that the assets themselves are enormously worthwhile and that they were and are good investments for the people of British Columbia.

Secondly, they allow the province to claim, because of deliberate undervaluing of those assets, on remarkably high-priced earnings ratio.

Thirdly, they allow the Premier to attempt to sell to the people of British Columbia something they already own - a trick well known to the car dealers of that coalition.

I asked a number of questions about the corporation. I asked questions of the Minister of Finance (Hon. Mr. Wolfe) whose answers were utterly incompetent. I asked questions of the Provincial Secretary (Hon. Mrs. McCarthy) . She seemed not to know anything at all about the orders-in-council for which she's responsible. I pointed out to the Premier that when they were in opposition and it served their purposes, they asked questions about Canadian Cellulose, which the previous government owned but did not wholly own. Those questions can be found in Hansard on, among other dates, May 13,1974, page 3051.

At that time the Minister of Economic Development asked a series of questions and received a series of answers from the then Minister of Forests concerning the operations of Can-Cel. We never owned 100 per cent of Can-Cel. There were always, and there are to this day, minority shareholdings, but it was the responsible position of our government that those questions should be answered. They were. It is the irresponsible answers of this government that indicate they have no intention whatever of accounting for the corporation they themselves created.

One of the reasons why I support the motion to reduce the Premier's salary to $3 is because the Premier consistently and irresponsibly has neglected to answer questions of significance regarding the administration of the B.C. Resources Investment Corporation.

It's a matter of public record that the Premier had hoped the valuation would have been completed, the shares transferred and the prospectus issued for the British Columbia resources corporation by December 31,1977. It's a matter of public record that the valuation itself was not complete nor the assets transferred until March of this year. Indeed, we've got it on fairly good authority, which the Premier has not contradicted, that the corporation may not go to public prospectus until December of this year, fully a year late.

I've argued that one of the reasons why that has been so substantially delayed is because of instructions, which we believe this govern-ment gave to the four underwriting houses, to deliberately choose the lowest possible valuation for the assets which were transferred to that corporation. They did so in order to attempt to reduce the real worth of those corporations as they were well managed by the New Democratic Party that purchased or established them in the first place. That serves their political purpose. It also serves the

[ Page 1214 ]

secondary economic purpose, if those assets are deliberately undervalued in the first place, of increasing the price-earnings ratio in the second. That increase, unfortunately, is entirely artificial in nature and origin. It does a disservice to the people of British Columbia and misleads them.

The questions that I wish to repeat today to the Premier, which I hope he will answer today, are these. Will the Premier, who is responsible for the corporation, inform this House of the fees and/or per diem, if any, paid to the directors appointed by him to the British Columbia Resources Investment Corporation? There are five directors who have been appointed. The Premier approved of and appointed every one of them. I want the Premier to tell this House what they are paid.

Secondly, I want the Premier to tell this House the salary and additional fees or benefits, if any paid to Mr. David Helliwell, chief executive officer of the British Columbia Resources Investment Corporation.

AN HON. MEMBER : It's amazing how many times they can recycle the same speech.

MR. BARBER : It's amazing how many times the Premier refuses to answer questions that he should have answered the first time they were asked.

Thirdly, we want to know about the peculiar relationship between Austin Taylor and the firm for which he works, McLeod, Young and Weir, and the Social Credit Party for which he is a self-admitted bagman. Mr. Taylor has been for some time the fiscal chairman for the British Columbia Social Credit Party. It is his job, politically and personally, to raise money and support for that party. Strangely enough, it is Mr. Taylor to whom the Province newspaper was referred in the fall of last year, when questions were raised about the valuation of the assets to be transferred to the B.C. Resources Corporation. Mr. Taylor has had a most unusual role.

It is the opinion of this opposition that those assets were deliberately valued at the lowest possible level in order to make the previous administration look bad, and in order to make the price-earnings ratio look good when finally the prospectus is issued, the shares are sold, and the first annual report comes down.

We want to know whether or not Mr. Taylor received any additional financial consideration for his, no doubt, most worthy services to the Social Credit Party. If so, what were they? Did he receive a special commission or a fee or a contract? If so, what was it? If he did not, let's be told that.

Fourthly, I'd like to be told by the Premier, who is responsible for the corporation, whether or not those four companies that were assigned by the government to conduct the valuation of these assets have now submitted a bill for their services. The Chairman will recall that, when that question was first asked, the Minister of Finance (Hon. Mr. Wolfe) denied that they were paid anything at all. He said they were in fact doing it as a goodwill case and treating the province itself as a charity case. Next day, as usual, he changed his story. He said: "Yes, they were paid. They were paid expenses, but we don't know what they are yet because they haven't submitted a bill."

Therefore I ask the Premier again whether he will tell us what expenses were submitted and which of those, if any, have been paid by the government for the valuation of assets, for services performed by the four investment houses who have been named.

Further, I want to know of the Premier who chose those four houses. How were they chosen? How was it determined that they be involved in the valuation of these assets? We are informed that the houses have previously done work for governments. I am informed that these are reputable and honourable houses. But, like all the others, they act under instructions. Like all the others in any instance, they acted under the instructions of this government in this instance. So I want to know how those firms were chosen and who chose them.

The Premier has yet to answer my questions about the instructions themselves given to the four houses regarding valuation. If, indeed, there is reason to believe that the houses were deliberately instructed to choose the lowest possible, plausible evaluation of the assets, then no doubt it serves the. government's purpose to refuse to answer these questions. The questions are simply these: Was there a contract between the government and the four firms? If there was not a contract, was there a letter of understanding and commitment? If there was no contract and no letter, were there verbal instructions?

If so, who issued them, and when? Most importantly, we want to know what those instructions were.

It is an important matter of public policy, and this Premier must answer. Who instructed the companies, and within what frame of reference were they so instructed to do the valuation of assets? It's been conservatively estimated by a number of persons that the replacement value alone of the assets now transferred to the B.C. Resources Investment Corporation is at least $500 million. In the list and the

[ Page 1215 ]

valuation prepared by the four companies we see Kootenay Forest Products itself valued at $1.25 - a very peculiar and, to say the least, somewhat low valuation of the assets of that particular corporation, wouldn't you say, Mr. Chairman?

These companies are honourable companies, and they act on instructions as any other investment house would in any other such setting. The government was the only party capable of instructing them. Were they instructed when assessing the value to choose the lowest possible value that might be chosen, such as, say, the worth of minority shares on the day - a kind of E-day? Were they instructed to choose the value of the majority shareholdings on those days? There is often a difference.

I want to say again that it's a matter of public record that, in September and October of last year, when these valuations were supposedly going on, shares in Can-Gel were somewhat depressed on the exchange. It's no secret to the government, or at least one hopes it wouldn't be. One presumes it was not. I want to know what instructions were given to these houses. Were they instructed to look at the replacement value, or to ignore that altogether in their considerations? Were they instructed, in looking at the value of those shares, to consider the land they also hold? If so, what instructions were given in that field as well?

We want to know who chose these firms. We want to know how they were paid. We want to know about Austin Taylor and his relationship to them. We want tabled in this House a copy of the contract or letter, if any, that was signed, mutually binding the government of British Columbia and the four investment houses. If there is no contract, this government is guilty of very poor business practices. If there is no letter of agreement, this government is guilty of even more serious neglect of business practices.

Surely they would not ask these upstanding and respected investment houses to engage in a valuation of most serious import on the basis of no contract and no letter of understanding. If there was a letter, table it.

HON. MR. BENNETT : Ask Dave for the letter on B.C. Savings and Trust.

MR. BARBER : If there was a letter, let's see it. Let's see it here in this committee as soon as we can. We have a right to know why these assets were valued so much below replacement value as to make the valuations themselves most questionable.

HON. MR. BENNETT : You're digging another hole for your leader.

MR. BARBER : We want to know what the instructions were that these houses, quite properly, acted upon. If the instructions were better, the results might have been better as well.

Finally, there is an important aspect of policy that has not previously been raised. It is that aspect which concerns itself with the question of the autonomy and the ability of this board to sell off the assets it was given. As I read the Act.... I hope the Premier listens. Well, we'll wait until he's listening.

HON. MR. BENNETT : I've heard you before.

MR. BARBER : You've not heard this argument before, much less answered any of the questions that were asked before.

The question is simply this: as I read the Act, which the Premier himself introduced and forced through this House, the board of directors has the power today to sell off the entire assets of that company. The board of directors has the power today to sell its entire holdings in Can-Cel, Kootenay Forest Products, Plateau Mills, and its rights to natural gas, oil leasings and land holdings in British Columbia. I want to understand very clearly from the Premier, if he denies it, that indeed the Act is not so written. But I took it to a legal authority who said, yes, it's very clear that the corporation now owns those assets outright.

The corporation autonomously, as the Premier would have us believe, is now in a position to sell off those assets at any price to any buyer. If that is not the case, I want to hear now in committee from the Premier that it is his government's instructions that those

[ Page

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assets will not be sold but that they will be preserved in the name of the

corporation for a long, long time to come; that they will thereby be preserved

in the name of the people who bought them, created and worked for them in the

first place. If it is in fact the case -and we have yet to hear the Premier

deny it -that his own Act permits the corporation to sell any or all of those

resources, then under the foolish guidance of this Premier we continue to see

a massive sell-out of public resources in the province of British Columbia.

It's not just natural gas; it's not just petroleum; it's not just coal. It is also the assets that have now been given willy-nilly -no pun intended - to the B.C. Resources Investment Corporation, which the Premier himself established. If, in fact, it lies within the authority of this corporation to sell any or all of those assets which have been transferred to it, then we want to hear a promise and a commitment today from the Premier that he will be bound by: that those assets will not be sold; that those assets will not be sold to anyone; that they will be retained in the name of the corporation for all of the people, public and private, who buy its shares.

There is a very particular concern we have: one of the reasons that Can-Cel was purchased by the previous government was to rescue it from falling into American hands. One of the most significant reasons for purchasing that corporation was to guarantee that those assets would be retained in the hands of Canadians and not be permitted instead to fall into the hands of aliens.

HON. MR. CHABOT : Aliens?

MR. BARBER : That's right - non-Canadians, aliens whose first loyalty is not to this country but to some other country. We want to make very sure that what foreign interests were denied in Can-Cel a few years ago, they will not be given next year courtesy of the B.C. Resources Investment Corporation. We want a guarantee that the board will not sell those assets to anyone, least of all to non-Canadians or aliens whose fundamental loyalty is not to our constitution, to our government, to our people or to our way of life. We want that guarantee.

Those, among others, are questions for which the Premier must provide answers. He is named by order-in-council as the administrator of the British Columbia Resources Investment Corporation Act. The Act itself contains three significant loopholes that exempt it from the Companies Act. This is not a company like any other governed by the Companies Act. There are most important exemptions contained within the Act. And for the Premier to pretend that somehow this company will be governed by the Companies Act and not by this House is to abandon all responsibility for the corporation which he created.

I'm happy to second the motion of the member for Vancouver East (Mr. Macdonald) to reduce the Premier's salary to $3. We'd be even happier if we got answers to the questions that we have been asking for weeks and weeks and will continue to ask for many more weeks to come. It's your corporation, Mr. Premier; you set it up. This is our Legislature; you answer to us here. We want the answers and we demand them now.

MR. DAVIS : Mr. Chairman, I want to say a few brief words about resource development and the dividends from resource development. I will have to contradict a number of the things that the hon. member for Vancouver East said in the process.

In respect to resource development and particularly in respect to oil and gas in this country, our basic problem is one of raising enough capital and accumulating enough savings to produce the additional reserves of oil and gas that we basically need for our own consumption at home - not for export but for our own use in the years to come.

There's been a major upset in the oil world in the last half-dozen years. The OPEC countries, the middle-eastern countries, with two thirds or more of the world's oil reserves, have got together and formed a monopoly. They've raised the world oil price fourfold. As a result, there's an opportunity for windfall profit advantage in the oil industry around the world. This concern manifested itself in various ways in Canada. Governments immediately, led by the federal government, moved in by increasing taxation.

The federal government increased the Export tax, reaped literally billions from it, added a 10 cent a gallon tax on gasoline from coast to coast. The provinces reacted. It was their resource. They increased their royalties, which is another means of raising moneys dramatically. As a result, today two-thirds of the income of an oil company or a gas company - and I'm generalizing - is paid out in taxes. One-third remains for reinvestment and operation. Obviously it's a unique industry in this country today.

Two-thirds of income paid in taxes, one-third paid to look for new resources and to produce resources that have already been discovered.

Our costs in this country, especially in

[ Page

1217 ]

northern development, are much higher than the costs in the middle east, higher than almost any country in the world. So we're faced with a fantastic increase, a many-fold increase in taxation and higher costs because of our climate, and our distances. So we've got a problem. We've got a problem whether government develops those northern resources or whether private enterprise in the form of multinational and Canadian companies develop those resources. But one-third only of the income of that industry is now available for exploration, development, production, transportation and refining.

It's a problem to raise capital in that environment. There was an over-reaction from 1973 to 1975 in this country. Drilling rigs left Canada, let alone British Columbia. Our exploration effort fell well behind. We were, for a brief moment in time, self-sufficient in oil. We had a surplus in gas. That's three or four years ago. Now we're importing a third of our requirements. We're paying the Arabs a far higher price than we're prepared to pay our own people. We tax our own people heavily. That's hardly a way to become self-sufficient again, so there is a problem in this country and the problem essentially is one of raising capital.

In this province, if we're to maintain our self-sufficiency, have a secure supply of natural gas, stay anywhere near our minimal production of oil, we're going to need something like $500 million a year of new capital for exploration and development in the Peace River area of this province - $500 million a year. That has to be raised, at least the way things are going now, by the private sector, and there has to be some incentive, some profitability there to attract that money.

If the government were to take over the operations as the hon. member for Vancouver East (Mr. Macdonald) might be implying, if the government was to do the job through, say, the B.C. Petroleum Corporation, it would have to raise $500 million a year. If it were to do it, say, through the sales tax, it would mean 5 per cent more on the sales tax, doubling it from 5 per cent to 10 per cent. The money has to come from somewhere. Government would have to raise it through taxes. It would invest and hopefully it would be successful in its search for new oil and gas reserves. But governments typically have been wary of getting into risky enterprises where they may or may not succeed.

I suggest that very few countries have had the courage to go ahead and try

through their own socialistic enterprises to find oil and gas in their own territories.

This is basically why we still have private enterprise providing the bulk of

the initiative with respect to oil and gas development in this country.

The Energy Commission, with two different chairmen and very capable commissioners over the last few years, has produced a series of good and, I think, valuable reports. I think one of the statements in the latest report -1977 - was interesting. Up to 1973, the oil and gas industry had invested $1.2 billion dollars more in British Columbia than it had taken out. Obviously, up until 1973, there wasn't a ripoff in British Columbia. Since then, they've roughly broken even through to 1977, and if one is taking the balance sheet back 25 years, the oil and gas industry, you might loosely say, has lost $1.2 billion in British Columbia.

But the prospects have to be better and the prospects have improved. One of the reasons the prospects have improved is that the wellhead price has risen and it has to rise to a point where it will continue to attract the amount of capital necessary to keep drilling and exploration at a level that will maintain our self-sufficiency in natural gas. I'm not suggesting we drill up more for export, merely for B.C. consumption and hopefully to keep up our production of oil, which has tended to slip, as several members have indicated.

So there has to be an incentive; there has to be an attractive rate of return. The Energy Commission has recommended and the National Energy Board has approved increases of the price at the border. Within the last 12 months the price at the border went up 34 cents per thousand cubic feet. The Energy Commission in its wisdom has recommended that the increase at the wellhead - that is, at the producer end - be 20 cents, not 34 cents. In other words, the increase now in place in the field is less than two-thirds of the increase at the border.

So not all of the increase of income at the border has been passed back to the producer. Far from it; it has flowed into the treasury of this province. That's one of the reasons why the B.C. Petroleum Corporation has been turning over additional funds now running in the hundreds of millions of dollars to the provincial treasury.

But the essential criteria in the field, in the Peace River area, is a price that not only will yield a fair or reasonable return to those who invest in exploration and development there, but also that the price be competitive - if I can put it that way - with the price or return which the same operators could obtain in neighbouring Alberta. And so fundamentally, the recommendation of the Energy Commission has been a price comparable with,

[ Page 1218 ]

competitive with, in the same order with the price - certainly the net return - obtainable in Alberta. Otherwise the drilling rigs would operate in Alberta. They wouldn't be in British Columbia. They wouldn't be in British Columbia in increasing numbers. And so the field price - and this is a fact of life - is dictated more by the price in Alberta by far than any political theory. And I'm sure, regardless of the chairmanship or the membership of the B.C. Energy Commission, they would have to recommend, if they were to maintain exploration and development in this province, the level of fuel prices that presently exists in British Columbia.

There was some question about reducing the royalty on oil. As it happens, the recommendation was for a reduction in the provincial royalty on old oil; not new oil, not oil in the process of being discovered now but oil that had been discovered in the past. It's really old oil pools, the pools that were discovered in the past.

The Energy Commission's reason for reducing the royalty or the tax on old oil was to encourage the operators to use new and improved techniques to get more of that oil out of the ground. In many parts of the world only a third of the oil that's down there is raised to the surface. With improved methods of recovery, such as putting water down under pressure, they can get it up to 40 or 50 per cent. And there are other methods involving steam and so on.

In order to encourage our producers to lift not 30 per cent but 40, 50 or, hopefully, even 60 per cent of that oil out of those old reservoirs, the royalty has been reduced as an incentive for greater recovery of proven reserves. But without new techniques or new investment, a low yield would be the result. We want a higher yield.

British Columbia only produces a small fraction of the oil it uses. We don't want to have to rely on tankers; we don't want to have to rely unduly on the rest of Canada if we do not have to; hence I think a reduction in royalty in that case was well advised indeed.

I've mentioned an increase in the border price, a lesser increase in the field price, a lesser increase in the price to consumers in this province. As a result of the recommendations of the Energy Commission over the last three or four years, we have the lowest natural gas prices in Canada, save Alberta. Our natural gas prices at the burner tip at the consumer level are 60 per cent of oil prices. If one is referring, say, to space heating, it's half the cost of electricity for space heating.

Gas is relatively cheap; its price has been rising to the consumer; it's been rising everywhere in this country. But British Columbia consumers, compared to users of natural gas in, say, Manitoba, Ontario and Quebec, have been sheltered from a large part of the oil price rise and certainly from the natural gas price increase. So consumers in this province have had an edge and an advantage. We now, as users of gas in this province, have something we can boast about and use to attract industry here.

But I want to get back, in closing, to the main point I want to make. The real problem in energy is capital; the real problem of new energy supplies, additional energy supplies -be it solar energy, be it coal-based power -is capital. It's people's savings, and people have to be persuaded to accumulate money and lend it to energy corporations and energy commissions in order to build these facilities.

And we've got a heavy tax structure in this country. Typically, the oil and gas companies are very heavily taxed. The hon. members opposite are trying to persuade me or trying to persuade other members of this Legislature that there is a gigantic ripoff going on. They've got a lot of proving to do if they're prepared to also refer to the facts. I challenge them certainly to come up with a method whereby government would raise all of this kind of capital, all of these funds necessary to make us anywhere near self-sufficient in this country in oil and to keep us self-sufficient at least in this province in respect to natural gas.

In other words, Mr. Chairman, it isn't an easy problem. It's being resolved in part by governments backing off a bit in respect to taxation. But don't let anyone tell you, Mr. Chairman, that the resource industries in this country are being milked totally by multinational corporations, because government is taking a very large slice of the pie. I think it must take a reasonable slice. Private enterprise, the private sector, however, needs a sufficient return to carry on a massive exploration and development programme in this country or we're going to be in trouble.

MR. LEA : Mr. Chairman, in this amendment we are discussing whether the official opposition has confidence in the Premier to lead the government and the province. I think all we've had to do is understand that in reality this non-confidence motion should be voted on by everyone saying that yes, there is no confidence in this Premier to lead. Even in his own estimates, if you were observant, Mr. Chairman, you watched the Premier sit there and not

[ Page

1219 ]

answer questions. In little fits of nervousness he would start to talk to ministers whom he hasn't talked to on the floor of the House for quite some time, beckoning them over with his finger, asking them to sit beside him, to be his friends, saying that they're all buddies in the same boat traveling down the same river. Up until now we haven't seen that.

Then what did we see? Not one minister stood in his place to defend the Premier from the start until now in his estimates. Then we saw the Premier walk down and make one of his infrequent visits to the back bench and speak quietly to the ex-minister, the member for North Vancouver-Seymour (Mr. Davis) , and ask, I have no doubt, that ex-minister to stand in his place and defend him in this Legislature. Do we need any more proof than that, Mr. Chairman? I'd say not.

I recall, oh, about two and a half years ago, right after the government formed, after 1975 when we lost the election. The Hon. Liberal leader and the member for Oak Bay, Scott Wallace, at that time, and I had to pay a visit to the Premier's office to ask whether or not it would be possible for us to have some staff in order to do our job as opposition.

MR. CHAIRMAN : Order, please, hon. member. That's hardly relevant to the motion we're on right now.

MR. LEA : We have a motion of non-confidence and I'm talking about the reasons I feel that that member for South Okanagan is not capable to lead his party, not capable to lead the government and not capable to lead the province, and it's perfectly in order.

When we went down to his office that day, I saw the most nervous man I've ever seen in my life. I saw a man with a piece of Kleenex in his hand talking to three people, and he actually ground that piece of Kleenex up in his hand and it was coming out in little pieces of yellow confetti onto the floor. Is that the man we want to lead this province?

MR. CHAIRMAN : Order, please, hon. member. Insulting language is not....

MR. LEA : I haven't yet.

MR. CHAIRMAN : Order, please. It's not in order in this House. Secondly, I must remind you that we're on a motion to reduce the salary as provided for in vote 5, so reflecting on something that happened some time ago or something that's alleged to have happened some time ago is out of order.

MR. LEA : Well, I'd like to make a speech too.

HON. MR. BAWLF : Yes, but you don't have to be sleazy.

MR. LEA : Calamity Sam! What about unfreezing that property along the whole waterfront, Sam? Who is going to do okay on that?

[Mr. Chairman rises.]

MR. CHAIRMAN : I would ask that when you continue the debate you're relevant to vote 5, and I'll supply you with a copy of the motion. Please continue.

[Mr. Chairman resumes his seat.]

MR. LEA : Mr. Chairman, whether the Premier has the ability as a personality to be the Premier is very much in question in this motion. We have seen a Premier whose cabinet will not back him. I mentioned earlier, Mr. Chairman, that when someone in that group gets on fire, you can liken it to a wagon train with one , wagon on fire. As it goes over the cliff, the rest circle on the other side of the pasture. That's what we're seeing here, a Premier not defended by his cabinet, but a cabinet cowering away because they're afraid they're going to get burned by the fire of the Premier going down the tube. That's what they're afraid of.

We're talking about a giveaway in this province that has heretofore never been seen of this magnitude. I have a little release here about coal energy put out by the mining companies.

"The British Columbia mining industry is more interested, of course, in the debate of the future development of coal lands in the province. Industry observers are also a little surprised that MLAs would consider a policy of granting coal lands on the basis of first application, which is a giveaway of the resource.

"The industry was pleased when the moratorium on coal licences

imposed by the NDP was lifted. The moratorium simply delayed development of

coal lands because applications for licences were not acted upon. The industry

also approved the manner in which the moratorium was lifted, because it gives

the same opportunity to small companies and to individuals as it does to the

big companies. Many individuals and smaller companies along with major oil companies

had applied for licences during the moratorium, and without some consider-

[ Page 1220 ]

ation on a priority basis, only the highest bidders would succeed."

I'd like to read you the names of some of those small companies that have applied for coal licences out of the British Columbia Gazette, May 4: Canadian Superior Exploration, McIntyre Mines, Shell Canada, Shell Canada, Shell Canada, Shell Canada, Quintette Coal, Shell Canada, William E. Clinehout - a little one, I guess - J.W. McCloud, a little one. Then we go back to Denison, we go on to Shell, we go on to Shell again. What do they have to do? The Minister of Mines says: "It's only for a year." tie's only out by 20 years; it's 21 years under the Act.

And what do they have to do? First of all, let's examine under the Minister of Energy, Transport and Communications whether or not we could hold those coal lands in abeyance for energy needs in this province in the future. Let's start to examine that. We have approximately 600,000 acres under licence now capable at the present time of between 12 million to 15 million tons a year. The potential from those lands under licence is approximately 35 million tons. Let the Premier or the minister show us where in the next 20 years there is going to be a marketplace for 35 million tons of coal out of British Columbia under lands that are already licensed.

As a matter of fact, even from industry itself the indicators show us that it's exactly the opposite - that in the next 20 years British Columbia will be fortunate indeed to get a marketplace for 35 million tons a year. But the government arid the Minister of Energy, Transport and Communications, the Premier, tell us that we have to start letting other licences out. All it is is another speculative game with the resources owned by the people of this province. How much do they have to pay for a licence? Six hundred and forty acres, at $1 an acre rental, and in the first year $3 worth of work....

So for the first year, for one licence for 640 acres, they have to pay $2,560 to hold that licence, and they can sell it. That is like free, Mr. Chairman. Is there any member in this House that could say that's for the good of British Columbia, that you give someone like Shell oil, for $2,560 a year in the first year, $3,200 in the second year and $3,840 in the third year, the right to hold those licences and to sell them to the first-come highest bidder? That is good for British Columbia? And what will be the revenue to the province if we were to alienate a further 400,000 acres of land to coal leases?

It would be $400,000. That's what we would get a year as rental money to the people in this province. Is that a great deal of money to sell out our heritage? Is there enough money to sell out our heritage? I suggest to you there is not.

The minister will come back and say: "Well, mines need lead time - maybe 10 years." But we know that it's going to be at least 20 before we need further lands under licence than the ones already under licence. We can support 35 million tons out of our own licensing that we have now in the province. So even given a 10-year lead time, we still have another 10 years before we have to even examine whether we have the need for further coal licences. To give those coal licences out today for $2,560 for the first year, $3,200 for the second year and $3,840 for the third for speculative purposes is absolutely absurd.

What will those licences be worth in the marketplace 10 years from now, 20 years from now, 21 years from now? What will they end up making in speculative profit? The first member for Vancouver East pointed out that it's already happened. British Petroleum paid $30 million for licences that were already alienated from the public to the private.

What is a licence that's alienated now for $2,560 a year going to be worth 20 years from now? We have no need for those licences to be given away.

We have 10 years in which to sit down and to strike up an autonomous body with great, strong ties to the province to take a look - maybe a coal board, a coal authority, to take a look at the kind of needs we're going to have in the future in British Columbia and in Canada; to take a look at what we have and to assess what we have in coal; to take a look at all the needs we may have in the by-products from coal and there are over 300 known by-products now to take a look at that on behalf of British Columbia and on behalf of Canadians everywhere, and not to hand out these licences for pure speculation on the world market.

It's absurd.

One licence here, Mr. Chairman, from Quintette Coal says: "Map sheet 39-1-14, Block J, units 85 and 86 - 367 acres; Block K, unit 91 - 184 acres, totalling 551 acres. Just in this one little square, totalling it all up we have 7,152 acres we're going to give away for speculative purposes. There isn't anybody that I know of in the industry that will stand up and tell you that we're going to need to develop those new coal bodies in this province for at least another 15 to 20 years, and no more than 10 years lead time is needed. So what are we doing? We are obviously selling out under pressure from international, multinational corporations for political favours. That's all we're doing.

Mr. Chairman, I move that the committee

[ Page 1221 ]

rise, report progress and ask leave to sit again.

Motion negatived on the following division:

YEAS - 18

Macdonald

Barrett

King

Stupich

Dailly

Lea

Nicolson

Lauk

Gibson

Stephens

Wallace

Barber

Brown

Barnes

Lockstead

D'Arcy

Sanford

Levi

NAYS - 30

Waterland

Hewitt

McClelland

Mair

Bawlf

Nielsen

Vander Zalm

Davidson

Davis

Haddad

Kahl

Kempf

Lloyd

McCarthy

Phillips

Gardom

Bennett

Wolfe

McGeer

Chabot

Fraser

Calder

Shelford

Jordan

Smith

Bawtree

Mussallem

Loewen

Veitch

Strongman

MR. LAUK : Well, Mr. Chairman, I think that the...

HON. MR. GARDOM : Are you not rising to record?

MR. LAUK : I don't think we should.

AN HON. MEMBER : Are you ashamed of it?

MR. LAUK : No. But on a dilatory motion, why do you want them to go to all that trouble?

HON. MR. GARDOM : We would like to have it recorded, hon. member.

MR. LAUK : If you would, then you apply.

Hon. Mr. Gardom requests that leave be asked to record the division in the Journals of the House.

[Mr. Davidson in the Chair.]

MR. CHAIRMAN : The Minister of Health - on a point of order?

HON. MR. McCLELLAND : No, I want to speak to the motion, Mr. Chairman.

MR. CHAIRMAN : I've already recognized the first member for Vancouver Centre.

HON. MR. McCLELLAND : Oh, well, he was not on his feet. I didn't see him. I thought you recognized me, Mr. Chairman.

MR. LAUK : I should say that I've never seen such presumption on the part of that little minister in all of the history of this parliament. He's wearing his yellow orchid today.

HON. MR. McCLELLAND : It's a rose.

MR. LAUK : It's a rose. I see.

HON. MR. McCLELLAND : It's the yellow rose of Langley.

MR. LAUK : It looks like it's spreading out to grab you by the neck. I wonder if the Minister of Health, Mr. Chairman, knows that he's got competition over in the far corner here. The crocodile is being outdone. The Premier has a Dutch treat in store for him.

HON. MR. McCLELLAND : Mr. Chairman, I want to take this opportunity....

MR. LEA : On a point of order, Mr. Chairman, I believe it is obvious I was on my feet first, and ministers have no more right in this House than any other member.

HON. MR. McCLELLAND : I was recognized.

MR. LEA : I ask you to reconsider.

MR. CHAIRMAN : It has been the practice of the Chair in the past in this House to recognize alternating members.

MR. LEA : No, Mr. Chairman, the rules say the first on his feet, and we had eye contact and I was on my feet before you ever saw the minister.

MR. CHAIRMAN : The Chairman has discretion, and it is customary to go from one side to the other.

MR. LEA : Mr. Chairman, you have the discretion to go by the rules of this House, and the rules of this House are that you recognize the first person on his feet. You have not the authority to recognize the other side when I have stood in my place and was the first on my feet.

HON. MR. BENNETT : What are you afraid of?

HON. MR. McCLELLAND : How many times do you think you can speak on a motion?

[ Page 1222 ]

MR. CHAIRMAN : Mr. Member, it is traditional to go from one side of the House to the other. A member from this side has already spoken, and I have recognized the government member, the Minister of Health.

MR. LEA : Mr. Chairman, then I ask you: is there a rule that we go by in this House which says that the first member standing will be recognized by the Chair?

MR. CHAIRMAN : The discretion is at the Chair, and I have recognized the Minister of Health.

MR. LEA : No it is not. Under rule 30, 1 think you will find, Mr. Chairman, you do not have that option.

AN HON. MEMBER : Which rule?

MR. LAUK : Standing order 37.

MR. LEA : Standing order 37, I'm sorry.

MR. NICOLSON : Maybe I could help, Mr. Chairman. Rule 37....

MR. CHAIRMAN : Mr. Member, I recall the rule because I read it some short time ago.

Interjection.

HON. MR. BENNETT : Don't throw your books. Be calm.

MR. NICOLSON : On a point of order, I would ask you to consider, Mr. Chairman, first of all standing order 37: "When two or more members rise to speak, Mr. Speaker calls upon the member who rose first in his place." This obviously is, in my opinion, the member for Prince Rupert.

And in the second case, as I see you looking to perhaps Beauchesne or Sir Erskine May, I refer to you standing order 1, which says: "In all cases not provided for hereafter or by sessional or other orders, the usages and customs of the House of Commons of the United Kingdom, Great Britain and Northern Ireland as enforced at the time should be followed as far as they may be applicable to the House." In matters upon which standing orders are silent, we do look to other authorities, but where standing orders are very clear, we follow standing orders and we do not follow practices of other Houses.

So we have no recourse but to follow standing order 37, with respect, Mr. Chairman.

MR. CHAIRMAN : Thank you, Mr. Member. The minister was on his feet prior.... I recognized the minister before I recognized the member for Prince Rupert. The Chair rules that the....

MR. LEA : On a point of order, Mr. Chairman, you and I were looking directly at one another and you were looking out of the corner of your eye later and caught that minister's figure standing. Now I challenge your ruling, if you rule that. I challenge it.

MR. CHAIRMAN : The ruling of the Chair has been challenged.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN : Mr. Speaker, during committee the ruling of the Chairman was challenged when the Chairman recognized the Minister of Health over the member for Prince Rupert.

MR. SPEAKER : Thank you, Mr. Chairman. We have to place the question.

MR. LEA : On a point of order, I would like to explain to you what happened in committee.

MR. SPEAKER : Order, please. The instruction has already been given by Mr. Chairman.

MR. LEA : Well, Mr. Speaker, I would like to have your opinion.

MR. SPEAKER : Order, please. Hon. members, in a procedure of this nature the report is made by the Chairman to the Speaker and the Speaker puts the question to the House, because after all it is the House who will decide whether or not the Chairman's ruling will be sustained.

MR. LEA : Well, Mr. Speaker, don't you already have some knowledge of this?

MR. SPEAKER : Hon. member, the report has already been made to the Chair.

MR. LEA : But I would like to explain to you so that you can make a ruling, Mr. Speaker.

MR. SPEAKER : I'm sorry, I cannot accept that. It's part of the procedures of the House, hon. member.

MR. LEA : But you have no knowledge of %hat happened in committee.

MR. SPEAKER : I have the report in hand and it is for the House to decide, hon. member.

[ Page 1223 ]

MR. LEA : But you have no knowledge of what happened in committee.

MR. SPEAKER : Shall the Chairman's ruling be sustained?

Interjections.

MR. SPEAKER : I say the ayes have it. The Chairman's ruling is sustained.

MR. LEA : On a point of order, it's my understanding when these sorts of matters are brought to Mr. Speaker's attention - a matter of the Chair being challenged during committee - that the Speaker has no knowledge of what happens in committee. But in this case I assume that while we were in committee Mr. Speaker was in here, I would think, offering advice to the Chair. I think that makes an awful lot of difference in this case.

AN HON. MEMBER : You're now attacking the Speaker.

MR. LEA : I'm not attacking. The Speaker was in here; you were here, Mr. Speaker.

MR. SPEAKER : I think the hon. member is aware that the procedure in matters such as we have just experienced is that if the Chairman I s ruling is challenged in committee, the report is made to Mr. Speaker. Mr. Speaker simply puts the matter before the House and the House, after all, is in the best position to absolve itself. Therefore the ruling is posed before the House.

MR. LEA : In most cases, Mr. Speaker, you're absolutely correct.

MR. SPEAKER : In every case in this House, Hon. member.

MR. LEA : No, not in every case.

MR. SPEAKER : The Chairman's ruling is sustained.

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

HON. MR. McCLELLAND : Mr. Chairman, you would think that after proposing a motion as frivolous as the one which has been proposed by the members opposite, the members would at least have the fortitude to sit in this House and debate that motion after proposing it. However, it seems quite clear now that they are extremely sorry that that motion was put because as soon as it was put, they made a move to end the debate in the House, which was defeated. Following that, they're desperately anxious that no one else speaks in support of the Premier of British Columbia in this motion. Mr.

Chairman, I have no hesitation whatsoever in saying that every member on this side of the House absolutely denounces the frivolity of that kind of a motion against the best Premier this province has ever had.

We've spent a week and more in this House listening to the most innocuous, unintelligible, stupid debate that has ever come from any opposition that I can remember reading about as long as I've been interested in politics. There has been nothing constructive, there has been nothing of any positive nature. It's down, down, down with the wrecking crew gang that's at it again, following the lead of their Premier who went to Halifax, Nova Scotia and told the people of Canada that British Columbia was in economic trouble and he was loving every minute of it. What nonsense! What hypocrisy! What a shameful attitude from the official opposition of the province of British Columbia.

I'm sorry I wasn't in the House last night, Mr. Chairman, because I really would have liked to have been here to listen to the member for Vancouver-Burrard deliver the most scatter-brained collection of baloney and pure ham that I've ever heard. In reading Hansard today, I can't believe it. I can't believe that any member of this House would fill this chamber with such misinformation and distortion of facts as that member did last night. I won't deal with all of the things that she talked about but I sure want, the opportunity, Mr. Chairman, to talk about what she called a list of cutbacks, cutoffs and wipeouts.

I was alarmed when I read that because I thought: What are we cutting back? What are we cutting off? What are we wiping out? I thought maybe she had something that I should know about, as Minister of Health, until I read Hansard and saw what she was talking about. I'd like to tell the people of B.C., Mr. Chairman, what she was talking about.

I'll go through her list one by one. She numbered them for convenience so I'll use her numbers. No. 17 is the cutback in funds for the development of the Prince George regional hospital, thereby delaying the expansion of that hospital for three to five years. Well, Mr. Chairman, has that hospital been delayed?

MR. LAUK : Yes!

HON. MR. McCLELLAND : Well, that little member has never been to Prince George. He's

[ Page 1224 ]

never been north of Hope and there is no hope for that member.

MR. LAUK : You're beyond hope.

HON. MR. McCLELLAND : Mr. Chairman, I would like to tell you that there is a major hospital construction programme underway in Prince George right now. The expansion is progressing in an orderly manner under the arrangements which were agreed to by the hospital, the Fraser-Fort George regional hospital district and the ministry. They include a 75-bed extended care unit which is under construction now for $2.5 million, which will be completed in March, 1979.

A centralization of a number of other programmes within the hospital will be completed in August of this year, for a total cost of $2.5 million, and we're now into final sketch drawings of a major proposal that will bring the expenditures for that hospital up to $11 million before 1981.

No. 32 on the member's list of so-called cutbacks was the cutback in physiotherapy and speech therapy for Royal Columbian Hospital. Well, I just went and had a quick look at the operating budget for the hospitals that member has mentioned and they reflect no reduction whatsoever.

Mr. Speaker, we next go to No. 33. "The Vancouver School Board's health budget for 197811 - I'm quoting the member for Burrard now - "has been cut by $60,000." She went on to say: "This means that 200 fewer children in this province will receive dental services in the hospital." Mr. Speaker, there was no budget cut. There was no $60,000 cut. As a matter of fact, those programmes are continuing and improving and expanding and are paid for by the province of British Columbia.

MR. LAUK : Paid for by the city of Vancouver.

HON. MR. McCLELLAND : You don't know what you're talking about. There was a cutback of $60,000 proposed by the city but it never happened. There has been no cut in provincial support towards Vancouver city's dental health programmes - no cut.

No. 33 in the litany of cutbacks that the member for Vancouver-Burrard talked about in the Premier's estimates was the inadequate payment by government for private hospitals. "Again, " she said, "we find that a number of these hospitals are being forced to close down." How many? Do you know how many? None. None of these hospitals are being forced to close down or are being closed down. There has been only one closure of a private hospital in this province in recent years, . and that was as a result of a labour board decision taken in 1975 - the Grandview Private Hospital that the member mentioned last night.

It was closed because of decisions taken in 1975. Mr. chairman, who was government in 1975?

MR. LEA : On a point of order, is the minister inferring or implying that the labour board took political direction from this government, our government or any other government? Is that what he's implying?

MR. CHAIRMAN : That's not a point of order.

MR. LEA : It is a point of order. He is inferring that it happened while we were in government. Therefore there was a political decision made by the Labour Relations Board. That's what he's inferring.

MR. CHAIRMAN : That was not a point of order.

MR. LEA : It was a point of order.

MR. LAUK : He's improperly impugning, that's what he's doing. He's a no-good impugner.

MR. CHAIRMAN : The Minister of Health has the floor.

HON. MR. McCLELLAND : You wouldn't know an impugn if you had one in your corral.

MR. LEA : But you put a saddle on it and tried to ride it. You were riding it for four days.

HON. MR. McCLELLAND : No. 36: the planned $40 million expansion programme for St. Paul's Hospital was rejected by the government. Well, there was a reduction in funds which had been approved before this government took office and was finalized by the Greater Vancouver Regional Hospital District, and Hospital Programs of my ministry. However, there is a redevelopment of St. Paul's Hospital underway now - not plans on some architect's table, but underway now - for a total of $22 million plus, which will see that hospital brought up to date and be brought into the kind of condition in which it can serve the people of the city of Vancouver.

MR. LAUK : You're not even the real Minister of Health. Pat McGeer is.

HON. MR. McCLELLAND : Oh, I didn't know that. No. 37 was the health centre for children. We are being told, according to the member's quotes in Hansard last night, about a beauti

[ Page 1225 ]

ul, new children's hospital being built. "Yet the space put aside for research in the hospital is woefully inadequate." The member quotes some person from out of town who came in here and had one look at a hole in the ground where the construction is underway for a new children's hospital, and a new maternal hospital, thanks to the leadership of this Premier. And I'd like to tell you that I had an office full of plans and pie-in-the-sky drawings and ideas and discussions, and more ideas and more discussions that had gone on for three years under the former government.

But when we took office, thanks to this Premier's leadership, we threw out that whole roomful of junk and we started to build a childrens hospital for the people of this province. I'm going to tell you, Mr. Chairman, that's going to be the best children's hospital in Canada, and perhaps in North America.

MR. LAUK : You're spending money like water, I'm telling you. You're spilling more than we spent.

HON. MR. McCLELLAND : Are you against the building of the childrens hospital?

MR. LAUK : If you went on the original plans, you would have saved money. It's your inefficiency.

HON. MR. McCLELLAND : Do you know how much the original plans were? They were $150 million. That hospital is being built today for $40 million and it's going to be 10 times as good. What's the matter with you, you silly little man?

No. 38, listed by the member for Vancouver-Burrard, is a $5 million cut from the operating costs of Riverview Hospital. I couldn't believe that one because I had to go and get my own estimate book and look in there for that $5 million, and I couldn't find it.

AN HON. MEMBER : That's what she said; it was cut.

HON. MR. McCLELLAND : Yes, she said it was cut from the operating costs of Riverview Hospital. Well, according to figures in those estimates which each of you have for your own perusal, last year the budget was $33.6 million. This year the budget - which hasn't been approved yet by this House, but I'm sure you will - is $37.5 million. That's an increase of $4 million; that's not a cut of $5 million.

HON. MR. McCLELLAND : Oh, there's some more here. Just hang on for a moment.

"No. 41. If you just took one area, the Cowichan, and separated it out from the rest of the province, you'd find that this government has cut back in the number of public health nurses available to that area. There is no child psychologist. They've cut that back. They've cut back on their speech therapist, and their hospital staffing is down to a skeleton state."

Holy smoke! What a bunch of rats we are!

Mr. Chairman, what are the facts? First of all, there has been no cutback on any speech therapists. If you ever get through this budget and approve it, and stop the nonsense on the other side of the House, we have a proposal in the budget for an expansion of those services in that area.

Since October 1,1977 - which shows how far out of date that member's research is - the position for the children's psychologist has been filled by a full-time psychologist.

Then she said:"The hospital staffing is down to a skeleton state." it's very interesting to note that for the period from 1973 to 1977, this hospital has had an extremely good record of operating costs. Staffing figures report that the hospital has maintained its staffing at a consistent level, which would indicate that the hospital is reasonably satisfied. The staff was 296 in 1973 and 341 in 1974; it's now 349. The hospital is a very good hospital and it operates in a very effective and cost efficient way.

Where did she go next?

"No. 29. The alcohol recovery centre in Courtenay has had its application for funding rejected. It's another indication of the policy of this government which, despite the fact that alcohol is the fastest growing drug in this province which is being abused, it is taking money out and putting it somewhere else. And the Courtenay alcohol recovery centre has had its application for funding rejected."

I would like to tell you that we have had an increase of about 25 per cent in the funds available for alcohol recovery services in this province in the past year. Over 30 per cent of the total funding agencies budget of $1,300, 000 has been allocated to the Vancouver Island region, which compares extremely favourably with that allocated to the other three regions of the province. As a matter of fact, we have talked over and over by letter and telephone to the Comox society people and we've suggested that until we can firmly commit funding, please don't get yourself involved with something you can't back off from. We know that they need some interim

[ Page 1226 ]

support, and we have arranged for the society in Campbell River to place an Outreach worker in Courtenay to cover the Courtenay-Comox area. Office accommodation has been arranged in Courtenay for this counsellor, who is familiar with the total.... That service starts on June 1,1978.

I want to tell you, Mr. Chairman, that because of the leadership of the Premier of this province, we have embarked and have developed probably the most rapid escalation of services ever seen for alcoholism in British Columbia. It's thanks to that man's leadership.

I want to tell you a little bit about it because we are so proud of it. I'll save some of it for my estimates because that's probably where it should have been brought up in the first place. I'd like to tell you that for the past two years the Ministry of Health, through its Alcohol and Drug Commission, has steadily increased its services to the community in the development of its total system of care, residential treatment centres, residential supportive homes, detox centres and outpatient clinics.

Today the commission provides four residential treatment centres, four residential supportive homes, four special residential treatment centres, six detoxification centres and 28 out-patient counselling clinics. They include four out-patient and one residential agency specifically serving native people in this province, and there are also nine native community counsellors located throughout British Columbia.

In

summary, I just want to go on a little further in this. Early in 1976, shortly after the Ministry of Health was given responsibility for the Alcohol and Drug Commission, the whole system was reviewed. We found that there was a lack of proper accountability and differing standards of care. It was decided that there was a need for an overall strategy for this province. And that strategy has now been formulated. Four provincial regions have been organized and basic service is available in all four regions in terms of detoxification, out-patient counselling, residential treatment and supportive homes.

Since February, 1976, Mr. Chairman, 14 new services have been brought into operation: out-patient counselling units in Terrace, Chilliwack, Richmond and Nelson; detox centres in Merritt, New Westminster and Vancouver; Outreach workers in Courtenay, Duncan, Trail and Kitimat; residential treatment centres in Kelowna, Prince George and New Westminster. These openings have increased the detoxification beds from 58 to 108; intensive treatment beds from 26 to 93; and out-patient counselling from 17 to 29.

Planned for our next fiscal year, Mr. Chairman, is a 48-bed compulsory detoxification centre in Vancouver to replace the drunk tank, a promise made for three years by the former government and kept by this one, thanks to the leadership.

MR. LAUK : We were about to do that. Don't give us that nonsense!

HON. MR. McCLELLAND : I know, Mr. Chairman, we'll change their name from the wrecking gang to the "just about" gang. "We were just about to do that." That's like the money that you were just about to put into that fund that you just about started for the Vietnam people, only you never had it and you never put it there and you never spent it and you never did it.

At the risk of repeating myself, Mr. Chairman, not only have we kept all our promises, but we had to keep all their promises too.

MR. LEA : Like don't raise taxes?

HON. MR. McCLELLAND : What was the next number? Let's see, No. 8 and No. 9. They're really good ones, where she says "...which reflects the policy of this minister, whom we are discussing under vote 5." That's the Premier, Mr. Chairman, I hope you're listening. She said we "eliminated the ambulance services that were introduced by the New Democratic Party when we were government not just of the Vancouver area but of the province, " and we cut back in the training of crew for the ambulance services and cancelled the training programme for paramedical personnel throughout this province.

Well, I was really astonished at that one, Mr. Chairman. I could hardly believe it because it's not what I 'said in my estimates last year and I knew I wouldn't lie to the House, so I had to go back and have another look at the estimates for this year and find out when we eliminated