1990 Legislative Session: 4th Session, 34th 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)

THURSDAY, JULY 12, 1990

Afternoon Sitting

[ Page

10905 ]

CONTENTS

Routine Proceedings

Tabling Documents –– 10905

Oral Questions

Awarding of forest licence. Mr. Miller –– 10905

Nurses' strike. Mr. Cashore –– 10906

Mutilation of wildlife. Mr. Davidson –– 10907

Nurses' strike. Mr. G. Janssen –– 10907

Driftnet fishing. Mr. Peterson –– 10907

Pacific National Exhibition. Ms. Pullinger –– 10908

Forest Amendment Act (No. 2), 1990 (Bill 48). Committee stage.

(Hon. Mr. Richmond) –– 10908

Mr. Miller

Mr. Serwa

Third reading

Committee of Supply: Ministry of Forests estimates. (Hon. Mr. Richmond)

On vote 30: minister's office –– 10913

Mr. G. Janssen

Mr. Kempf

Mr. Miller

Mr. Serwa

The House met at 2:04 p.m.

MR. PELTON :

Hon. members, this afternoon our Speaker has two guests in the gallery,

and I would like to introduce to you Frank Kemp and Lynne Kemp, and ask

that you welcome them to the proceedings this afternoon.

HON. MR. SAVAGE :

On behalf of the second member for Delta (Mr. Davidson) and myself, I

have the honour to introduce a gentleman who works hard in Delta on

behalf of our party and who has been a long-time supporter of this

assembly. Please welcome Mr. Vic Eaton.

MR. DAVIDSON :

If you're very lucky in life, nice things happen to you, and the nicest

thing that happened to me is in the gallery today. Would the House

please welcome my wife Debbie.

HON. MR. PARKER :

Would the House welcome today friends from Terrace: Terry Brown, Mel

Bevan and Danny Sheridan of the L'Ax Ghels Community Law Centre Society

in Terrace.

Hon. Mrs. Gran tabled the annual report of the Ministry of Government Management Services for the year ending March 31, 1989.

Oral Questions

AWARDING OF FOREST LICENCE

MR. MILLER :

To the Premier. The ombudsman has found that cabinet overruled the

Forest Act and the statutory responsibility of the chief forester in

awarding forest licence A27823 in the Takla-Sustut area of

north-western British Columbia. Can the Premier advise what statutory

authority gives cabinet the right to override legislation passed in

this House?

HON. MR. VANDER ZALM : I'll defer to the Minister of Forests.

HON. MR. RICHMOND :

In response to the member, let me say that I have just received the

report that he mentions, and I haven't had a chance to go through it

yet. When I do, I will bring back an answer to this House.

MR. MILLER :

Further to the Premier. The Ministry of Forests valuation branch,

engineering branch, industrial development and marketing branch, the

timber policy branch and the deputy chief forester concluded that other

bidders should have received the licence. What political considerations

would cause the cabinet to overrule these technical experts?

HON. MR. VANDER ZALM :

I'm very honoured to have all of these questions from the Forests

critic, Mr. Speaker. I suppose it's because the Leader of theOpposition is absent again. I'll defer to the Minister of Forests.

HON. MR. RICHMOND : I've already taken that question as notice. I will bring back a response to this House in due course.

MR. MILLER :

Further to the Premier, Mr. Speaker, the timber policy branch concluded

that the other bidders would have generated $1 million more per year in

stumpage and an additional $750,000 in bonus bids over the people who

got the licence. What political considerations could warrant the

cabinet's breaching the Forest Act and suffering the loss of $1.75

million in the first year of the operation of the licence?

HON. MR. VANDER ZALM :

Mr. Speaker, I probably shouldn't get up on these issues. I'm sorry,

perhaps I'm not thinking as clearly as I might on other days; I have

telephone-tapping on my mind. I'll defer to the Minister of Forests.

HON. MR. RICHMOND :

Since it falls under the same report in question, and since I have

already taken the question as notice twice, I will take this as notice

and get back to the House. Clearly the last question was out of order

and misdirected.

MR. MILLER : A new question to the

Premier, whom I assume has some responsibility in cabinet. In view of

the political interference outlined by the ombudsman in the awarding of

this licence, would the Premier agree to cancel...?

MR. SPEAKER : Order, please. On a point of order, the government House Leader.

HON. MR. RICHMOND :

Mr. Speaker, I respectfully submit to you that this is the same

question asked in a different fashion, and it's clearly out of order.

It has been taken as notice three times.

MR. SPEAKER :

The Chair has some difficulty, because I have to hear the question. The

questions, as I've heard them, have had a subtle difference between

them. Until I hear the question, I can't determine whether or not it is

in order. So I'd ask the member for Prince Rupert to state the question.

MR. MILLER :

The question to the Premier, who has the responsibility, is: in view of

the ombudsman's report and the political interference, would the

Premier agree to cancel the licence, to institute an independent

investigation into this whole matter and subsequently to re-tender this

supply block?

MR. SPEAKER : The matter has been taken

as notice by the Minister of Forests on two previous occasions, so I

think.... The Premier wants to answer.

[ Page

10906 ]

HON. MR. VANDER ZALM :

I could attempt to answer it, but frankly, I'm too upset about

telephone-tapping from the other side, so I will take this on notice.

MR. SPEAKER : Order, please. The opposition House Leader.

MR. ROSE :

I think it would be appropriate for the Premier to withdraw that

remark. First of all, it's untrue; secondly, it's inappropriate. I

think it's time he withdrew it. I think there has been enough news

coverage on this to indicate that he is dead wrong on this wiretap.

MR. SPEAKER :

Order, please. Could I ask the opposition House Leader if he was

standing on a point of order at that time? I need to know exactly what

the Chair is being asked.

MR. ROSE : I stood on a

point of personal privilege and asked the minister to withdraw. If you

would prefer it to be a point of order, so be it.

MR. SPEAKER :

There is no such thing in our standing orders as a matter of personal

privilege. From time to time members use "personal privilege" for some

reason, but an exhaustive search of the Journals will show that there is no such thing.

HON. MR. VANDER ZALM :

On the same point of order, I ask that I be forgiven for my concern,

but frankly, I feel awful. I feel awful for my family, for all my

constituents, for all the people who ever telephone me and for all the

people I telephone, because I don't know what's tapped. I don't know

what they're after. I don't know who in this province is safe anymore,

with the NDP tapping telephones.

MR. SPEAKER : I'd

like to deal with this point of order first. First of all, there was a

request for a withdrawal. Withdrawal requests can be made only for

unparliamentary language. There is a dispute as to fact, and the Chair

cannot ask for a withdrawal on that. But I have not heard

unparliamentary language. I've heard some things, obviously, which will

concern members, but again it's a dispute between members as to fact,

and that is something the Chair cannot adjudicate on.

I will listen to the Leader of the Opposition.

MR. HARCOURT :

An opinion was offered which I find offensive. I find it offensive as

an MLA and I find it offensive as a member of the bar that the Premier

has accused me, members of this caucus and the NDP of wiretapping. I

request that it be withdrawn.

HON. MR. VANDER ZALM : On the same point of order, I have reason to be

worried when the House Leader for the opposition and the member for North Island

(Mr. Gabelmann) put it to me that they'll give me a foot-high stack of tapes

if they can have a meeting. That was the proposal. That's what the meeting

you wanted.... Blackmail!

Interjections.

MR. SPEAKER :

Order, please. I can only listen to one point of order at a time. If we

have an interruption of one point of order in the midst of another

point of order, the Chair can't proceed.

I would ask members to restrain themselves so the Chair can maintain some kind of order.

MR. ROSE :

Again, I think there's something here for the Premier to withdraw. I

know he's upset; we're all upset about this matter. We're very

concerned about this matter.

The point is — and the Premier knows —

that on two occasions, once a written one and once a phone call, the

member for North Island and I attempted to come and make an appointment

with the Premier so we could discuss this matter with him. It was

refused both times. There was no threat attendant to any of it;

certainly not from me, and certainly not from the member for North

Island.

MR. SPEAKER : Hon. members, this is supposed to be question period. I'm going to listen to another point of order.

HON. MR. VANDER ZALM :

I think, since we heard from the House Leader, we should hear from the

member for North Island what he told to my press secretary.

MR. SPEAKER :

Hon. members, before we proceed, the Chair has only to do the duty

assigned to it by the members of the House. There is a dispute about

fact, but the Chair is restricted in how the Chair can ask for

withdrawals of matters which members find offensive. Members may find

these matters offensive, but it's not within the purview of the Chair

to deal with them at this time. Only when an unparliamentary statement

is made — and we will determine whether or not that is

unparliamentary — can we ask for withdrawal. Other statements are a

dispute as to facts among members.

I recognized the member for Maillardville-Coquitlam on a question during question period. Would the member please continue.

[2:15]

NURSES' STRIKE

MR. CASHORE :

The question is to the Premier. A constituent, a long-term patient in

Valleyview Hospital, is being moved from the ward he shares with three

people to a ward he will share with eight strangers as a result of the

ongoing nurses' dispute. The man's wife is understandably distraught

about the stress on her husband, who is severely depressed and suicidal.

In the interest of a speedy resolution and a productive bargaining process, has the Premier told

[ Page

10907 ]

his cabinet that he will tolerate no further interference in this dispute,

whether it be inflammatory statements about nurses or unauthorized statements

on the government's bargaining position?

HON. MR. VANDER ZALM : I would suggest to the member that he ask his constituent to write me. In the meantime, I'll defer to the Minister of Health.

HON. J. JANSEN :

Mr. Speaker, what's more important is that we've asked both our

arbitrator and the nurses' union to resolve this issue as soon as

possible, in the interests of patient care.

MUTILATION OF WILDLIFE

MR. DAVIDSON :

Mr. Speaker, at Boundary Bay at least six fledgling marsh hawks and a

bald eagle have been found dead with their legs chopped off. I would

like to ask the Minister of Environment what steps he has taken to try

to find the weird individual who would be responsible for such a

despicable act.

HON. MR. REYNOLDS :

I can assure the member that my staff are investigating this matter

thoroughly. I agree — and I'm sure all members of this House would

agree —

that the act is despicable. I'm sure that we will get to the bottom of

it as quickly as we can, and I would hope that members will support my

staff in that effort, because I'm sure it has very little to do with

the issue that is taking place. I'm sure it is just some person out

there with a very weird sense of what is happening who is doing this

despicable act.

NURSES' STRIKE

MR. G. JANSSEN :

A question to the Premier. Instead of receiving home-care treatment

from community nurses, many elderly and terminally ill patients are

having to check into hospital for visits that are stressful and,

incidentally, cost the health system 600 percent more than home care.

This is a matter the Finance Minister (Hon. Mr. Couvelier) might keep

in mind the next time he decides to make an unauthorized intrusion into

the collective bargaining process. Has the Premier instructed his

Finance minister to stop interfering in the collective bargaining

process, to stop making inflammatory statements and to stop posing as

an authorized government negotiator?

HON. MR. VANDER ZALM : Mr. Speaker, I guess all the questions are aimed at me because they know how upset I am about the NDP telephone-tapping.

MR. SPEAKER : Order, please. I have a point of order.

MR. ROSE :

I have got to protest. I don't like to do this during question period,

but this is a repeated attack, which we find offensive. It's also

imputing motives, and it's a criminal act to wiretap.

Interjections.

MR. ROSE : All right. So why don't you stop that nonsense and withdraw that kind of language?

Interjections.

MR. SPEAKER : Order, please, hon. members. I'm going to declare just a short recess. I want to talk to Mr. Clerk.

The House recessed at 2:19 p.m.

The House resumed at 2:20 p.m.

MR. SPEAKER : All of question period has been recorded today by Hansard ; I will take the opportunity when Hansard

is published to review all of the remarks made, and if there is a

requirement for a withdrawal, I will ask at that time for a withdrawal,

because I would like to be specific as to what matters were said.

I appreciate that all members today are very testy — I guess that's the correct word —

and perhaps with great justification. However, the Chair must maintain

the decorum and rules of the House as you have charged me to do.

would like to continue with question period and take the next question.

The next question is from the second member for Langley.

MR. PETERSON : Thank you very much, Mr. Speaker.

Interjection.

MR. SPEAKER :

Excuse me; you're quite correct. The question was asked by the member

for Alberni (Mr. G. Janssen), and if there's no answer to that, I will

take the second member for Langley.

DRIFTNET FISHING

MR. PETERSON :

Thank you again, Mr. Speaker. My question is to the Minister of

Agriculture and Fisheries. In view of the massive kill of albacore tuna

and other species by Japanese driftnets revealed this morning, will the

minister ask his federal colleagues to make urgent representations to

the government of Japan with respect to this horrible devastation of

our shared marine life?

HON. MR. SAVAGE : I share the

member's concern. I am somewhat appalled, and I have been very

suspicious of the reports we have received. As we all recognize from

news reports that have been in the paper this morning and from some of

the figures we have seen previous to that, it is appalling and

unacceptable to continue driftnet fishing as a means of targeting,

supposedly, the red squid as the target species, the bycatch being a

number of not only other marine life but, of course, mammals that are

involved as well.

British Columbia, through our Premier and through our government action, has taken the lead in

[ Page 10908 ]

trying

to have the cessation of this horrendous type of fishing in the Pacific

Ocean. It will not be allowed, I hope, past 1992. I just wish we

could end it tomorrow, hon. member, because it is despicable. I do not

accept that that is the only way to catch the targeted species.

as the government of British Columbia and I as the minister will

continue to pressure the nations — not only our own government in

Canada, but nations around the world — that are involved in this

fishery in the Pacific Rim to cease and desist as quickly as possible.

PACIFIC NATIONAL EXHIBITION

MS. PULLINGER :

My question is to the Minister of Tourism (Hon. Mr. Michael). Yesterday

the member for Esquimalt–Port Renfrew (Mr. Sihota) asked whether the

minister's assistant, Mr. Van....

Interjection.

MS. PULLINGER : Oh, sorry. I'll redirect it to the parliamentary secretary.

The

member for Esquimalt–Port Renfrew asked whether the minister's

assistant, Mr. Van, had contacted members of the PNE board concerning

the future of the general manager, Russ Smith, and the minister said he

would discuss this matter with his assistant. Given that Mr. Smith was

fired last night, will the minister tell this House whether or not that

issue has been discussed with Mr. Van?

HON. MR. RICHMOND : I would ask the second member for Nanaimo to withdraw those final comments. They are untrue.

MR. SPEAKER : Again, hon. members, we're dealing with a dispute about facts between members rather than unparliamentary language.

HON. MRS. JOHNSTON : Mr. Speaker, I would be pleased to take that question on notice and have the proper answer brought back to the House.

HON. MR. RICHMOND :

Mr. Speaker, a point of order and a request to the Chair. In response

to the concerns from many of our constituents who value their privacy

and in the interests of enabling elected members on both sides of the

House to do their jobs with some confidentiality, I have asked the

Provincial Secretary (Hon. Mr. Dirks) to have those parts of the

precincts that fall under his jurisdiction swept for electronic or

illicit bugging.

I am asking you, Mr. Speaker, to do the

same in those areas of the precincts that fall under your jurisdiction.

I respectfully request that you do so.

MR. SPEAKER : It's a point of order, but I can also hear other matters

on a point of order. It is not a ministerial statement. It's a point of

order, but the Chair will hear...

MR. ROSE :

I would just say that we on this side of the House welcome the proposal

by the minister. We think that if there is any doubt about this at all,

he should proceed forthwith.

Orders of the Day

HON. MR. RICHMOND : Mr. Speaker, I call committee on Bill 48.

FOREST AMENDMENT ACT (No. 2), 1990

The House in committee on Bill 48; Mr. Pelton in the chair.

section 1.

MR. MILLER :

Quickly to the minister, this

section allows timber within a tree-farm

licence to be allocated to a pulpwood-harvesting agreement. I'm

assuming that that's not currently the case. Is this required, in view

of the current pulpwood-harvesting agreement offerings that are being

made throughout the province?

HON. MR. RICHMOND :

This amendment makes provision for including a condition in the new

treefarm licence that will authorize the disposition of timber within

the tree-farm licence to a holder of a pulpwood agreement by adding

references to pulpwood agreements and division (6) of

part 3. The

Forest Act currently authorizes the disposition of timber within a new

tree-farm licence through the issuance of small business timber

licences and woodlot licences, providing this was a condition of the

award of the tree-farm licence.

However, tree-farm licences

issued in the future could contain pulp-quality timber of little

immediate use to the tree-farm licence-holder, small business licences

or woodlot licences. In these cases, it would be useful to be able to

make the award of a tree-farm licence subject to the reservation of

pulp-quality timber within its boundaries for sale to a pulpwood

agreement holder. This amendment achieves that purpose.

MR. MILLER :

Just for clarity, the amendment allows current tree-farm licences to be

amended to allow pulpwood-harvesting within their boundaries. Is that

subject to negotiation with the current holder of the licence? I'll

leave it at that and do one at a time.

HON. MR. RICHMOND : Yes.

MR. MILLER : In any new tree-farm licence issued, this would automatically be a condition of the licence?

HON. MR. RICHMOND : It could be, yes.

MR. MILLER : Rather than having an automatic ability, it really is a question of the ministry having to negotiate that specific provision.

[ Page

10909 ]

HON. MR. RICHMOND : It gives the ministry the ability to do it, but it's not necessary. It would be a matter for negotiation.

MR. MILLER :

Just generally, have substantial volumes of pulpwood been identified in

current tree-farm licences that currently are not being harvested, and

are people and companies desirous of obtaining that wood?

HON. MR. RICHMOND :

Mr. Chairman, I can't speak knowledgeably about every pulpwood

agreement or every TFL in the province, but in certain instances I can,

and the answer is yes.

Section 1 approved.

section 2.

MR. MILLER :

I asked a question the other day in the estimates regarding what I

called an overlapping pulpwood agreement. In other words, the agreement

that's currently being offered in the Prince George area — according to the holder of two current licences —

overlaps those two current licences. Is it the intention under this

section to be able to correct that problem by allowing the

licence-holder to consolidate those two licences I mentioned?

[2:30]

HON. MR. RICHMOND :

Yes, the amendment clearly establishes that pulpwood areas can be

designated over tree-farm licences, thereby allowing the sale of

pulp-quality timber on those licences to a pulpwood agreement holder.

The current wording in the Forest Act is not clear, and this amendment

clarifies that in the case of overlap it can be more clearly delineated

as to species, etc.

MR. MILLER : The

section reads:

"With the consent of the licensee the minister may... amend a pulpwood

agreement...." That really doesn't seem to offer any strength at all,

Mr. Minister. Why would you want to insert that?

MR. CHAIRMAN : We're dealing with

section 2.

MR. MILLER : My apologies, Mr. Chairman. I jumped.

Section 2 approved.

section 3.

MR. MILLER : I'll pose the same question I just posed.

HON. MR. RICHMOND : Mr. Chairman, we may amend a licence or a pulpwood agreement, but it has to be with the consent of the licensee.

MR. MILLER : So if the licensee refuses, I presume nothing would happen,

although certainly there are persuasive powers. The current agreements are replaceable

for 25 years. Are there opportunities to amend at the anniversary dates?

HON. MR. RICHMOND : Yes, there are. Pulpwood agreements need not necessarily be for 25 years. They could be for a shorter duration.

MR. MILLER :

I'm aware of that. I'm also aware that they need not be replaceable,

although the provisions of the act allow for that and the pulpwood

agreements currently in force, I understand — there may be one

exception — are replaceable licences. Are those in fact perpetual

licences?

HON. MR. RICHMOND :

No, they are not perpetual, and they are subject to the many conditions

prevailing at the time: performance, availability of fibre, etc.

MR. MILLER : However, providing that licensees conform to the requirements of the licence, they appear to be perpetual.

HON. MR. RICHMOND :

No, performance is only one requirement that must be met. It must be

ascertained that the desirable fibre is available. As we all know,

conditions can change, so they are not perpetual licences. In most

cases they are renewable, and as the member pointed out, in one case it

is not renewable.

MR. MILLER : Pulpwood-harvesting

agreements allow for harvesting, although the minister and others have

said that it need not necessarily involve harvesting. The primary

requirement is to purchase residuals in the area, and conditions are

laid out in terms of that purchase. Having fulfilled that requirement,

the harvesting is an option. But I would also assume that if harvesting

takes place, the requirement is also to reforest, to put in preharvest

silviculture prescriptions, and to ensure that the land is harvested on

a sustainable basis and a new crop of trees is grown. Given that, I

can't see why they would not be perpetual, providing that those

conditions were fulfilled.

HON. MR. RICHMOND : Mr.

Chairman, in many cases they may be. If the licensee has met all the

requirements in silviculture, the fibre is available and the land base

hasn't changed, it would be renewed. But I am making the point that

they are not necessarily perpetual. In practical application they may

be, but it's not written into the pulpwood agreement, and it doesn't

follow automatically that they're renewed.

Section 3 approved.

section 4.

MR. MILLER : In this

section I just want to canvass the definition of "pulpwood." It would appear to

[ Page 10910 ]

anybody

who reads the word that we're talking about wood used exclusively for

the manufacture of pulp, although that's not necessarily the case.

There are other processes that also can utilize low-grade wood. In the

last few years it has become apparent that wood designated as pulpwood

has been utilized for sawn wood in some cases. In other words, because

of pressures, demands, availability of fibre and better utilization in

mills, this wood could fall under a far broader category than the name

implies.

In inserting that clause, is it the minister's

intention that this wood would be awarded for any particular form? What

did you have in mind when you decided to bring these amendments

forward? Were you thinking of the pulp industry? Were you thinking of

opportunities that might exist in other manufacturing processes?

HON. MR. RICHMOND :

It is timber within the pulpwood agreement. It may be sawlogs or

merchantable timber that is not of interest to a small business sale.

It may not be of sufficient quantity or may not be of interest to or

needed by the tree-farm licence-holder. It provides for the sale of

timber in this pulpwood agreement.

If we have an agreement

with a company for pulpwood or wood that's going to be used in a wafer

board plant or something like that, then there may very well be wood in

there that dues not fall under the pulpwood agreement. This amendment

provides for the sale of that timber within the TFL to the holder of

the pulpwood agreement — again, with the consent of the TFL-holder.

MR. MILLER :

In the guidelines used by the ministry where offering pulpwood

agreements, is there a definition of the specific industrial plants

that would fit that licence category? A strand board plant, for

example, would obviously fit. But are there specific industrial

definitions that would qualify industrial plants producing particular

products to apply for a pulpwood agreement? Or is there a limit? For

example, if a small manufacturer proposed that they could manufacture a

solid-wood product, would they be eligible for one of these licences?

HON. MR. RICHMOND :

No. The idea of a pulpwood agreement is to make use of residual fibre

such as chips, sawdust, hog fuel and non-merchantable timber. The idea

of the whole pulpwood agreement is to deal with the category of wood

that is of pulp quality. But this amendment allows for the sale of the

small quantity of merchantable timber or pulpable product that may be

in a stand of deciduous trees to that PA-holder and, as I said, with

the consent of the licensee.

MR. MILLER : Okay. That seems fairly clear. There are additional problems

with small operators trying to acquire excess wood that's not currently

being taken out of the bush from tree-farm licences. Small operators have approached

me in various parts of the province trying to access that wood, and they're

having a great deal of difficulty doing it. I am wondering if this would give

them some relief in that endeavour.

Sections 4 and 5 approved.

section 6.

MR. MILLER :

I wonder if the minister could describe the foreseeable conditions that

gave rise to this section. It basically requires the holder of a

licence to provide a security. I might ask at the same time what kinds

of securities are optional. What kinds of securities is the ministry

seeking in respect of this part?

HON. MR. RICHMOND : We do have some licensees — some of them in the member's riding —

whose licences are running out, and there's always the possibility that

the licensee may cut and run and be gone. What we're saying is that if

you are the holder of a non-replaceable major licence, you must provide

security prior to or at the time of harvesting to cover the estimated

cost of basic silviculture, so that the taxpayers of British Columbia

aren't stuck with that bill.

MR. MILLER : Again, in what form would the Minister envisage the security being done?

HON. MR. RICHMOND :

It's a term I'm not familiar with, but I'm told it's a

receipt-and-agreement form — a safekeeping agreement, I guess it's

called —

or a form of performance bond of some sort. Whatever the licensee

chooses to use, it has to be an acceptable form to the ministry so that

we save the taxpayers harmless in the event that we have to go in and

clean up after the licensee has gone.

MR. MILLER :

We've used — for example, municipally — an irrevocable letter

of credit. I don't know it that would be the same type of thing.

Is there any provision — this may be an obvious question, and it may be an obvious answer —

in similar circumstances when a company folds and goes out of,

business? Do you take your chances that you may be stuck with the

silviculture tab?

HON. MR. RICHMOND : That's always a

risk, I guess, in any business venture. A person’s irrevocable letter

of credit or bond may be good today, and if they're out of business

tomorrow, it's not. So yes, I guess there’s always some risk that we

may be stuck with a silviculture bill.

I should just

clarify that this is on non-replaceable licence only, and there's

always the downside risk that someone will go bankrupt and out of

business and that you cannot collect.

Section 6 approved.

section 7.

[ Page

10911 ]

MR. MILLER : It's obvious that the penalties have not been the

same, and perhaps the minister would describe the difference that

exists — prior to the implementation of this section.

HON. MR. RICHMOND :

This amendment directs that when calculating the average bonus bid for

purposes of determining a trespass charge where Crown timber is cut

without authority, bonus bids tendered on the timber sale licences

issued within tree-farm licences can be included in the calculation.

[2:45]

the past, the average bonus bid has, for the most part, been calculated

using only small business forest enterprise timber sale licences

located within the timber supply areas, excluding TFLs. However, as of

1988, the small business forest enterprise program has been expanded

into tree-farm licences. It is, therefore, appropriate now to include

small business forest enterprise timber sale licences issued within

tree-farm licences in the calculation of the average bonus bid for

purposes of determining trespass charges.

MR. MILLER :

This, then, does not apply where someone from outside of or contiguous

to the tree-farm licence may trespass on the tree-farm licence, just

as — let's use a different argument — in a timber supply

area, where the holder of a small business licence goes outside the

boundaries of that licence onto Crown lands, there clearly are

penalties, trespass billings, etc. The wording of the explanatory note

could be interpreted as where a small timber sale trespasses onto a

tree-farm licence. Is that the case? I'd like to get the minister's

response to that.

HON. MR. RICHMOND : Yes, it does apply if it's a trespass on a TFL, which is Crown land.

MR. MILLER :

There's an obvious difference between what the holder of a tree-farm

licence pays for stumpage and what the holder of a small business

licence pays for stumpage and bonus bid. But you're saying that the

value of the timber on those tree-farm licences is what the current

bonus bid value is, essentially, and yet you're not charging that

holder of the tree-farm licence an equivalent level of stumpage. Does

the minister not see an anomaly in that?

HON. MR. RICHMOND :

Mr. Chairman, the district manager has the prerogative and the ability

to take an average value of small business sales adjacent to the TFL to

come up with the price that the member speaks of.

MR. MILLER : I'm not quite sure I understood the minister's response.

Just to restate my case, if you trespass onto a tree-farm licence, you will

be charged what the current small business people pay — presumably the average

for that area and species, etc. — and yet the holder of the licence itself does

not pay to the Crown anywhere near that value. I was struck by what appears

to be an anomaly, where the company trespassing onto a tree-farm licence would

be charged this higher value, and yet the holder of the tree-farm licence is

not. I asked the minister if he did not view that as an anomaly.

HON. MR. RICHMOND :

It's a very technical one, and I'm not sure I understand exactly what

the member is getting at. I'm told that the district manager will take

an average of the prices of the small business sales in the area that

are contiguous or adjacent to the TFL and come up with an average price

between what the licence-holder, the TFL, is paying and what the small

business bid was to determine the price that I think you're after. Okay?

MR. MILLER :

That's clearer. So you're taking an average between the two. Yet the

argument still holds that the higher value will be attached to the

tree-farm licence lands.

HON. MR. RICHMOND : It is

appropriate now, as I said, to include small business forest enterprise

timber sale licences issued within the tree-farm licence in the

calculation of the average bonus bid for purposes of determining

trespass charges. So to me it says that you can now include the small

business sales within the tree-farm licence in calculating an average

bonus bid. The same would apply to both: to the TFL-holder and to the

small business holder in the case of trespass. An average price would

be determined by the district manager. Is that what you're asking?

MR. MILLER :

I really don't want to belabour it. But we have an area called a

tree-farm licence, and within that the Minister can put up a small

business sale. Should the holder of that sale, either within or

contiguous to or wherever, trespass onto the tree-farm licence lands,

the penalty for so doing is an average price between what the tree-farm

licence-holder is paying and what the average small business

licence-holder is paying. There is a difference; so that would be the

penalty. So for tree-farm licence lands that are trespassed onto, the

Crown is going to charge a penalty which is greater than the revenue

they receive from the TFL-holder. That seems to me to indicate.... You

can draw many inferences from that without getting into the overall

topic; maybe we can do that a little later. The revenue derived from

TFL lands through the holder of the licence is lower than it ought to

be.

HON. MR. RICHMOND : I think now I've got what

you've been driving at. You are correct in that the amount for trespass

would be more than the value strictly in a tree-farm licence. But there

has to be some kind of deterrent, and that is a deterrent to trespass.

Likewise, if the trespass were the other way, the penalty would be the

same. An average would be taken, and the TFL-holder would pay the same

penalty if the trespass were against the small business holder. Okay?

[ Page 10912 ]

MR. MILLER :

First of all, the trespass billing isn't currently... Let's ignore this

for a moment. There are penalties for trespass, and the minister might

wish to outline exactly what they are. I've forgotten precisely what

they are, but there are penalties for trespass under the Forest Act,

and the deterrence is in the penalty.

The minister suggests

in this case that the deterrence is in the size of the penalty, and

that the penalty is greater than the value the Crown would receive from

the TFL-holder.

I see the member for Omineca (Mr. Kempf) watching me, and I don't know if he understands what I'm getting at or not.

MR. KEMPF : Very clearly.

MR. MILLER :

And he may wish to assist in this debate, but it seems pretty clear to

me that if a small business holder trespasses on a TFL, you're going to

charge him a price which is the average between the TFLs price and the

small business price. On the other hand, if a TFL-holder trespasses

into a timber sale....

I see some shaking of heads, and we

obviously have some difficulty in communicating what is really going to

happen here. The minister wants to respond.

HON. MR. RICHMOND :

No, I don't think there's any confusion. I think I know what you're

getting at, and the penalty would be the same both ways. In case of

trespass — one against the other — the penalty would be the

same. It's up to three times the stumpage plus bonus bid. So an average

would be taken between the various small business licences plus bonus

bids and the TFL stumpage, and the penalty would be the same either way.

MR. SERWA :

Mr. Chairman, it's always nice to get involved in some of the debate in

the estimates. Just some background that I've had with it. Formerly

when we did some logging, if there was trespass, there was always a

penalty — a deterrent, as the minister states — and it was

double or triple stumpage. In this situation it certainly is

appropriate that trespass charges be levied at whatever the formula

determines they should be, whether it's the small business licence

within a TFL or a TFL encroachment on that particular small business

licence.

But it seems appropriate that some sort of formula

be made so that if there was an encroachment the other way of the TFL

on the small business sale, the penalty would not simply be the

average, but it would be related to the original stumpage and vice

versa. There should be some sort of more rigid formula rather than

taking an average, but there has to be a penalty both ways.

MR. MILLER : I'll just state it one more time, Mr Chairman. It seems

to me that there still is an inequity, and maybe it's just a continuing

of the inequity in terms of what these licence-holders pay. The small business

holder — the holder of a timber sale-originally pays stumpage and a bonus bid. The

holder of a tree-farm licence pays stumpage. When it comes to fines

they are both the same, but it appears to me that you just continue the

inequity, because the TFL-holder is in a much more advantageous

position.

the first instance, all they pay is stumpage;

they don't pay the bonus bid. So you're treating these two licences

which are quite different and distinct — one is the TFL-holder,

and admittedly there are some small ones; most of them are pretty big

and able to handle the fines —

the same as you're treating the small business contractor who bids up

timber. Timber sales in this province have gone up higher than $100 a

cubic metre, and I think that continues the inequity. It's treating

people — in the sense that they're companies — who are

entirely unequal in the same manner.

HON. MR. RICHMOND : I'm finally getting to what the member was driving at — that there is an inequity because of the size of the company.

First

of all, all small business sales do not have bonus bids on them. A lot

do. But whichever way you look at it, it's a theft of Crown timber. It

may be inadvertent in some cases, but it is a theft of Crown timber,

and therefore we feel the fine should be calculated on the same basis:

an average of the stumpage in the area plus bonus bids, and either side

pays the same fine.

For a quick analogy, it's the same as

if you and I get a speeding ticket going down the highway. We've broken

the same law, and you have a lot more money than I. So should you pay a

bigger fine than I do?

MR. MILLER :

I always thought the great thing about ICBC was the points system. I

get those letters — I've only got one, I should say — from

the superintendent as I hurry around the province to conduct the

people's business. I don't know if I accept that.

HON. MR. RICHMOND : You sound like Phil Gaglardi.

MR. MILLER : God! Don't tell me I sound like Phil Gaglardi! I think I'm going to leave it at that. I think there are inequities.

have just one last question with respect to monitoring. It was pretty

clear, following reports last year about the monitoring the Forest

Service does on these timber sales, that the direction of the Forest

Service clearly has been to monitor the sales on the TSA lands and to

essentially accept the information, I would say, generally without

question from the TFL lands.

We discussed briefly yesterday

the letters of understanding and the subsidiary agreements, where the

government essentially turned over the management of Crown lands to a

private company; and I cited the statements of the former minister, who

had every confidence that people were law-abiding and that once you

have turned it over to them, you didn't really have to check anymore —

they knew they would do the right thing.

[3:00]

[ Page

10913 ]

He used the comparison of himself with a rifle in his hands — which I thought was kind of dangerous —

and he didn't want any conservation officers on his back. I don't know

why. So that raised my question. In terms of monitoring, the ministry

has added some staff. They've apparently cancelled the LOUs. Will the

monitoring on the TFL lands be up to the same standard as the

monitoring on the timber sale of Crown lands?

HON. MR. RICHMOND :

The quick answer is "yes." I will just repeat what I said yesterday.

The letters of understanding have been cancelled. It's not policy

anymore, and we've added either 45 or 46 new FTEs for monitoring on

both TFLs and TSLs.

Section 7 approved.

section 8.

MR. MILLER :

I posed a question in second reading as to what remedies can be sought

by the Forest Service. As I understood the issue.... I haven't pursued

it as an issue, because there are so many others that you tend to

prioritize them, but I had fairly extensive discussions about two years

ago with some ministry people about what happens on private land around

the issue of fire hazard. As I understood it at that time, the

legislation did not allow the ministry to enter onto private lands and

to say, for example: "We prohibit you from slash burning at this time,

because we think it represents a hazard."

This

section

provides for entry to inspect slash, but it does not delineate any

remedies that might be sought or any orders that could be made if the

Forest Service discovers conditions that represent a hazard to

adjoining or Crown lands. Could the minister advise on that?

HON. MR. RICHMOND :

Quite clearly this

section does allow us to enter private land to

determine if there is a hazard and to instruct the owner, operator or

agent to get rid of the hazard or we will go in and do it for him and

send him a bill. It also gives us the power to determine when slash may

be burned.

MR. MILLER : Okay. My apologies. I didn't

have the Forest Act,

section 117 with me, and I would say that it's

obviously a reasonable move in terms of the kind of damage that could

be created by people on private lands not exercising due discretion.

Sections 8 and 9 approved.

section 10.

MR. MILLER : Really, without discussing it, I am aware that the minister

had ordered or struck a committee to look at the issue of contracts and arbitration

in the interior fairly recently. This was subsequent to the Forests Committee

making its recommendations. Does this flow from that committee? I believe a

consultant was hired to look at the matter. Perhaps the minister could advise

as to why the consultant was hired. What gave rise to that, considering that

the matter had been fairly thoroughly canvassed by the committee? Are these

the recommendations of the committee, or are there requirements in here that

were not made by the committee?

HON. MR. RICHMOND :

Yes, this amendment does flow from recommendations made by the

committee. Subsequent to that, many other more complex and detailed

issues have arisen that go far beyond this. That is why I have a

consultant right now visiting with people — especially in the interior where it is a bigger problem.

This

addresses the recommendations that were brought forward by the select

standing committee. The consultant is going far beyond this, because

there have been many other smaller problems. I use the term "smaller"

in the sense that they don't deal with the overall issue of contracts

but get into more detail.

Sections 10 to 12 inclusive approved.

Title approved.

HON. MR. RICHMOND : Mr. Chairman, I move that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Pelton in the chair.

Bill 48, Forest Amendment Act (No. 2), 1990, reported complete without amendment, read a third time and passed.

HON. MR. RICHMOND : Mr. Speaker, I call Committee of Supply.

The House in Committee of Supply; Mr. De Jong in the chair.

ESTIMATES: MINISTRY OF FORESTS

On vote 30: minister's office, $336,735 (continued).

MR. G. JANSSEN :

I apologize for not being here yesterday. I was in my constituency, a

constituency that is, of course, heavily reliant on the forest

industry. A total of 85 percent of the economic activity of Alberni is

generated from the forest industry, its related products and its

workers. Although, that is probably excessive in terms of the overall

province.... I notice from the Blues yesterday that the area was

canvassed as to what percentage in economic activity is actually

generated by the forest industry. I wasn't clear when the minister

indicated that 53 percent was generated through the manufacturing

sector. He seemed unsure as to whether it was 20 percent or 30 percent

or whose figures were used and what percentage of the forest industry,

which

[ Page 10914 ]

used

to, I gather, generate 50 percent of the economic activity.... Remember

the old statement that 50 cents out of every dollar came from the

forest industry.

Does the minister have any clear indication — or could he give us some futuristic look —

as to where the forest industry is going in the next couple of years?

The concern, of course, is that in communities like my own, like Tahsis

and others in the province — where the workforce is continually declining —

the environmental concerns, both in land use and in pollution concerns,

will diminish the number of jobs, diminish the return to that economy

and diminish, in fact, the size of the community.

Could the

Forests minister tell us what percentage is actually generated by the

forestry sector today in tax revenues and economic activity? What does

he see as a role in the future? Where are we going? Will we have to

diversify even more?

In many areas, such as Alberni, we

have looked to tourism to try to generate some economic activity so

that we can move away from those forestry jobs and take some of those

vacant jobs — where people are unemployed — and move them

into other areas where they can enjoy meaningful employment, where they

can become productive workers in our society, where they can contribute

and pay taxes, so that the infrastructure of single-industry

resource-based communities can continue to thrive.

the

minister well knows, many of those communities are diminishing not only

in size and therefore in tax base, but the resource industries —

usually single industries owned by one corporation or another —

are finding that they are paying lower taxes as well, because they are

automating their industry. Their machinery tax has been virtually

eliminated.

The tax base is disappearing very rapidly, and

those communities are looking for survival. They are looking for either

another industry or some indication as to what the forest industry and

the ministry have in mind for the next number of years, so that those

communities can plan, so that they can look down the road and say:

"There is something for me in my particular job." For instance, the

forest worker may be saying: "Ten or 15 years down the road, do my

children participate in the activity that I did, and that my father

did?" Or does he move out of the community? Does the community continue

to get smaller? Does he go off and get another education and find

himself another avenue of work and move out of the area?

I know it's a broad question, but I hope the minister can answer it.

HON. MR. RICHMOND :

What an invitation to make a half-hour speech on the future of the

forest industry. I don't know if the member wants a short answer or a

long answer, because it is a tremendously wide-ranging question: "What

do you see in the future for the forest industry?"

To put it succinctly, I see a very bright future for the forest

industry, but the industry is changing. It's probably under more

pressure and going through greater change now than it ever has in its

history. The pressures being brought to bear on the forest industry are

incredible, not just from within the province — we can come back

to those in a minute — but from outside our province and outside our

country.

don’t have to tell you the effects of countervailing duties, MOUs, GATT

rulings and rulings from the European Economic Community regarding

pinewood nematodes, and various other problems that are created for us

by people who write articles about this industry when they know not of

where they speak.

Then we've got the tremendous pressures

on this industry from within our province. I think most of us know what

those are, not treating lightly the natural problems we always have,

such as insects and wildfires: pressures on the land base, probably a

shrinking sawlog supply, the pressures we always have between the big

companies and the small companies, the pressures we have from native

land claims and road blockades, etc.

Interjection.

HON. MR. RICHMOND : We'll canvass that later, I'm sure.

But

on top of that, there are pressures brought about by mechanization and

automation. Mills can now turn out twice the amount of lumber they used

to be able to turn out with half the people in the mill. The mills have

become very efficient at turning out tremendous amounts of product.

There's

tremendous pressure on the industry because of the cost of stumpage.

The cost of silviculture — taking that seedling to a free-to-grow

state, which can be anywhere from ten to 15 years —

is expensive, so getting the log to the mill is more expensive than

it's ever been, and it's not going to change. It's going to remain

high. So the industry is looking for ways to get higher value out of

that log that cost them so much to get to the mill.

The

industry is going through tremendous change. It's tough on an industry

that has been going in one direction for the last 30 years at least and

is now realizing that they have to change direction and say: "Hey,

we've either got to get higher prices for the product we're producing

or produce a different product."

Wherever

possible,

government is assisting them to get more value out of the forest. I put

out a press release just yesterday or the day before saying how

successful our small business forest enterprise program has been —

the value-added or 16.1 wood, whichever you want to call it.

It's

like any other program. It's got some teething problems. It may not be

perfect, but it's working very well. We have managed to maintain a

tremendous number of jobs in the industry with that program, and we've

been able to create over a thousand new jobs since the program was

instituted. That is a considerable achievement, Mr. Member. We always

read in the media — bless them — about a layoff of 30 or 40

people, or even 200, but we rarely read much about the creation of over

a thousand jobs because of

[ Page

10915 ]

one program which was brought in to create value-added products.

[3:15]

I've

been through some of the value-added mills and remanners in the

province, as I’m sure the member and other members have. If you

haven't, it's a real eye-opener to go into some of these places and see

some of the products now being made from material that used to go to

the burner or the chipper — incredible products made out of

material that we literally used to throw away. There's no question that

the thinking in the industry has to change.

There are also

many jobs being added on the silviculture side of the industry, Mr.

Member, that weren't there a few years ago — not just in planting,

but in stand-tending, pruning, brushing, etc. So the tree-planting side

of the industry is becoming just as important, if it hasn't

already — and I'm sure it has — as the tree-harvesting side. I guess the word "harvesting" encompasses all of that.

should also add that it isn't just the small operators that are into

value-added. I want to correct an impression a lot of the public has

that it's only the small people who are into value-added. They are, and

they're doing a good job at it. But so are many of the large companies,

and it's in many of the large companies that the research is done into

new products. I know two or three of the majors who spend between $3

million and $5 million a year each just on researching new products

that can be manufactured in British Columbia, out of wood-fibre. So I

guess we rely on the large companies and the small companies to change

the direction of the industry, and over the next few years it's going

to be going through some tremendous changes.

In your constituency alone, Mr. Member, there has been a successful 16.1 sale — a value-added sale —

to Coulson's, which will be manufacturing a product that they'll be

sending to Japan. We have many instances of people selling specialty

products in Europe, in the eastern United States, in eastern Canada and

in the Pacific Rim.

So in answer to your question, if your

constituents are asking you if there is a future in the forest

industry, I think the future never looked better. Because of the

silviculture methods we have, I think that the annual allowable cut

will one day soon be increased, not decreased, and we will be getting

more value out of all the trees we cut. We will be employing more

people than ever in the forest industry. It isn't going to happen

overnight. There are tremendous pains, I guess, to be suffered when an

industry is going through the tremendous change it's going through

right now. There's a lot of pain in the industry. There are those who

will survive and be successful, and there are those who will not, and

there are now companies that will come along to replace some of the old

ones.

To canvass the question we tried to canvass yesterday, it's easy to put

a number on the percentage of manufacturing dollars in the lumbering industry.

It is calculated that about 53 percent of manufactured goods are in the forest

industry. As to a percentage of the economy — what percentage of dollars in

the economy is generated by the forest industry — it's very difficult to put

a number on. As we canvassed yesterday, it goes all the way from a low of 25

percent, I heard in the House, to as high as 50 percent. Of course, it varies

drastically from location to location.

your community, as you say, it's in the 80 percent range. In some

communities it's higher; in some a little lower. To put an absolute

number on that.... I think the Forest Resources Commission is working

towards putting a number on the percentage of the economy that forests

generate. But suffice to say, it's still the number one industry in the

province by a wide margin, and whether it's somewhere between 35 and 50

percent of our economy is not the salient point. The point is that it

is the number one generator of the economy in our province, and I think

it will continue to be for a long time.

Whatever is in

second place.... They're all wonderful industries. Tourism is a great

business — I was minister of that for four years, and it's a good

business. It's growing rapidly.

Mining is an excellent

business. I've been very close to the mining industry all my life, and

it's very important to our province. It may be in second place; maybe

it's tourism or maybe it's agriculture. They're all very important, but

forestry is still four to five times the size of any of them and is

still far and away the most important industry in our province. I think

that's the important point.

MR. G. JANSSEN : I thank

the minister. I'm somewhat astounded that the range runs anywhere from

35 to 50 percent. The Minister of Finance must have considerable

difficulty putting together a budget every year when he doesn't know

whether we're getting 35 percent or 50 percent from forestry. The

Forests ministry has been around for a long time. They have a

considerable amount of staff, and they have excellent people working

for them. Surely they must have an idea as to what percentage of the

economy it is. If it is, in fact, four or five times the size of any

other industry in the province of British Columbia, the minister must

know exactly — or within at least 2 or 3 percent — how much revenue is being generated.

have the 15 percent difference that he’s speaking about must make it

extremely difficult for the Minister of Finance. I would have great

difficulty in running my business if I didn't know whether I was making

35 percent or 50 percent profit on one of my products.

the minister saying that we don't know, that we have all these people

working for us but we've never actually looked at it, and we've just

waited for the money to roll in the door, week after week, month after

month, year after year? Is that any way to run a business which, by his

own comments, is four to five times the size of anything else in

British Columbia? I would be very concerned if I was the Minister of

Finance if those kinds of reports were coming from

[ Page 10916 ]

the Ministry of Forests, and I couldn't depend on 15 percent.

had the recalling of the House delayed until April 5 this year because

there was some $100 million not forthcoming from the federal

government. If we're actually talking about an industry that is four or

five times the size of the next industry, surely the number must be

higher than $100 million. Can the minister tell us if that is the

fact — that he doesn't know what percentage of the economy is reliant on the forest industry or what it generates to us?

HON. MR. RICHMOND :

The member is being absolutely silly, and that's the only way I can

phrase it. We're not talking about revenue estimates or income; we're

talking about people making speeches and saying what percentage of the

economy comes from the forest industry. You can talk to experts in

universities, professional economists, foresters, politicians and CEOs

of companies and get a different answer from every one of them. It was

the member for either Prince Rupert or Cariboo yesterday — I think it was the second member for Cariboo —

who said he saw an estimate that said it was 25 percent of the economy.

I've seen estimates that say it's 50 percent. The member from Prince

Rupert said 35 to 40 percent.

It depends on the multiplier

effect you use when you're trying to calculate how many jobs are

reliant on the forest industry. We're not talking about a revenue

estimate, and the member knows that. If he doesn't, he's not being

silly — he's being stupid.

MR. G. JANSSEN : I

could object to that remark, but I realize it's an opinion of a

minister who obviously can't supply me with an answer. I'm not asking

for an answer from a CEO or from a professor. I'm asking it from the

man in charge of the Ministry of Forests.

His job, I would

suspect, is to take the estimates from CEOs of companies, professors

and anybody else involved in the industry, put them together and come

up with what is a true answer — not the estimates or guesstimates

of all these other people, but for him or his staff to put together

those figures that are coming forth and come up with an answer. Then,

when we ask a question in the House, or when he's asked a question from

the Minister of Finance as to what we can expect in future planning for

the province of British Columbia, we would have an answer.

It's

very difficult for this side of the House to question. I'm sure it is

for industry to plan. We'll get to the fact that we don't have an

inventory later on. That's another factor of planning that we will be

canvassing the minister on.

In yesterday's Blues we noticed a tremendous increase in the amount of

advertising expenditures that the minister and the ministry will be making over

the next while, and he speaks about the pressures from outside the province.

There is tremendous pressure from outside the province on our natural resource

here. Some of that pressure is coming from the European Economic Community,

where people from the environmental movement are concerned about the destruction

of the rain forest on the west coast of British Columbia and are mounting a

campaign there. I'm sure the minister is aware of it.

similar campaign was put forth for the baby seal conflict in

Newfoundland. Advertisements are being taken out in European papers,

asking that people not buy products from British Columbia because of

the destruction of the rain forest. My question to the minister is:

what percentage of that advertising budget — that increase that he

has planned for his ministry this year —

is he using to counteract that campaign in the European Economic

Community, which is a major market for us? I'd hate to have to wake up

and find out that the pressure had been such that we end up with the

same situation as Newfoundland had with its seal program — that in

fact there was no market. That would be disastrous for the province.

HON. MR. RICHMOND :

The member seems to be hung up on what percentage of this and what

percentage of that. I'm not really too interested in what percentage of

our information budget we're going to spend combating the problem in

Europe, but we're going to do what's necessary to combat that problem.

I suggest the first member you should talk to is the first member for

Vancouver East (Mr. Williams), who got up in this House and agreed with

what Ms. Caufield said in her

article in the New Yorker, which was

picked up by the Vancouver Sun and the tabloids in Europe. He keeps

repeating the statements she makes about British Columbia and likening

us to the Brazilian rain forest and saying that we are treating our

forests as badly as they are in Brazil.

Your

own member

from Vancouver East got up and sang her praises, and this is part of

the problem. In Brazil they're deforesting, Mr. Member. Tell your

member from Vancouver East that. In British Columbia we're reforesting,

and there's quite a difference. Read our latest publication, "All

Things Considered," as I said yesterday. Well, the member wasn't here

yesterday, and he seems to be wanting to plough the same ground as the

member for Prince Rupert did yesterday. So I think I've answered that

question sufficiently. We're going to do whatever is necessary to

combat the problem in the British Isles that is spreading into northern

Europe. We're monitoring the situation very closely through our

agent-general in London and with the help of COFI, who have people in

the United Kingdom. There's no question, Mr. Member — and I've

said it here and in speeches elsewhere — it's causing a problem

for us.

wonder sometimes how we can bring some accountability to the Caufields

of this world and to others who make irresponsible statements that cost

workers their jobs in this province. I wonder if she knows or cares how

many jobs — potentially — she could cost in this province.

And yet there's no accountability. Who's going to make her or the New Yorker magazine or the Vancouver Sun responsible for that? They keep reprinting these things and costing

[ Page

10917 ]

jobs in your community and in mine. Where's the accountability?

yes, we are going to put a considerable sum into combating that. It's

fighting a rearguard action; we don't have any choice. It's damage

control, if you like. But I can't tell you what percentage of the

budget is going in there, Mr. Member, and I don't think it's important.

MR. G. JANSSEN :

I'm sorry to see the minister take that kind of an attitude with my

questions. I'm as concerned about the jobs and the economic activity in

the forest industry as he is, and I don't think I am canvassing the

same questions as yesterday. I read the Blues; I have them in front of

me. I'm simply trying to have an in-depth study into where the

ministry's money — and therefore the people of British Columbia's tax dollars — is going.

talks about a thousand new jobs being created in the forest industry

through the new business program. Yes, I'm aware that Coulson is

building a new mill in Alberni and that it is going to provide an

additional 156 new jobs. And people do talk about the job loss. You can

talk about the 2,100 jobs that have been lost in Alberni and are being

replaced by 156 jobs. Coulson is to be commended, as is MacMillan

Bloedel at their Somas division, which has added some 300 additional

jobs. So they're back up to about 500 jobs. That's a long cry from the

1,200 jobs that used to be there. So we still have a long way to go,

and people are going to suffer. I'll agree with the minister.

[3:30]

However,

the tree-farm licences that are handed out in British Columbia are

large; and during the debate on the bill, just before we started

estimates, there was a discussion taking place as to what tree-farm

licence holders and other people pay in the form of stumpage. So tied

to the tree-farm licence I would like to see, and perhaps the minister

can expand on this question.... It's not just a matter that the

forestry companies end up with an adequate supply of wood, but in fact

that there is some guarantee that there are jobs tied to the supply of

wood.

I don't want to get another question about how many

jobs are supplied in one country or another, because taxation

situations differ, forestry methods differ and manufacturing levels

differ. We could be here for many days if we got into that situation.

However, I think it is important for the ministry to point out that

there is a responsibility not only on behalf of the ministry but on

behalf of forestry companies who are working public lands, utilizing a

public resource — a tree-farm licence — and have created in

many cases communities in this province They have a social

responsibility that is recognized in many countries of the world;

certainly the European economy and the Japanese economy recognize far

more fully their responsibility to their workers than we do in British

Columbia, or probably in North America.

I think that

attitude will change. The big issue in Europe in 1992 is that they will

have a Eurodollar and the economy will come together, but a social

package that will be equal throughout all the European states will be

included with that package, so those people working in Spain or in

Italy or in England will enjoy much the same benefits as their other

European counterparts.

If we're going to deal with a public resource — a tree-farm licence —

I think there should be some guarantee to those communities and those

workers that there will be a benefit, other than the profit for the

company, to those communities and those workers in the form of job

security, in the form of additional revenue. When those communities

were created by those corporations that were granted those tree-farm

licences, the idea was to give — and it wasn't a bad idea in 1955 —

the corporations a tree-farm licence so that they would have continuity

of supply and there would be some security for the community and for

the workers in those communities on the investments that those

corporations made.

That issue has changed now. The

guarantee of continuity of supply is still there for the corporations.

There are some pressures there, agreed. But the guarantee for the

survival of that community and the economic activity that is generated

is no longer there on behalf of the corporation. They're paying less

taxes and they're not creating those jobs.

We would like to

see, on this side of the House, some ministerial program to encourage

those companies, if they want to continue to generate jobs and generate

income out of those tree-farm licences, to put forward to the ministry

some guarantee that they will be increasing those jobs.

know the value-added system is going on and that there is encouragement

from the ministry; however, there is no direct tie to that and the

tree-farm licence. In many cases independent loggers are bidding $32 a

cubic metre,

whereas I believe the average that I've heard is something

like $9 a cubic metre for holders of tree-farm licences. There seems to

be a great disparity there. That may be a return to the ministry and to

the Crown, but certainly I think the ministry has to take into

consideration what return there is to the community and what return

there is to the workers involved in that industry. I'd like the

minister to answer that some consideration is being given to that

security.

HON. MR RICHMOND : I have visited several

of the operations of the large companies of which he speaks, and nobody

is more concerned about getting more jobs and more value out of the

wood than they are.

I think maybe the member is talking

about times in the past, because I don't know of any of the large

companies that aren't good corporate citizens. There may be the odd

exception, but perhaps not like it used to be. In the 1990s, in the

places I've been, they have been excellent corporate citizens. They

take their personnel — even the leisure time of their personnel — very seriously and equip them with means

[ Page 10918 ]

doing fish-farming, provide them with the materials, the buildings and

in many cases dollars and the time to get involved in the wilderness

values of their area.

I'm not just making this up. I

tramped through the bush and saw it for myself. And the workers are

very proud of what they're doing in the company, assisting them, etc.

In all the communities I've been in, I have witnessed time after time

the interest that companies have in their employees, and I think it

goes both ways. I think a lot of the times that the member talks about

are times in history.

I didn't hear everything you said at

the last about the difference in silviculture costs, and I apologize

for missing some of it. I was talking on another point that you had

made. In the small business sales, of course, we do the roads and the

silviculture. And in the TFLs the licensee, of course, is responsible

for that. So there are a lot of differences in the prices paid and the

costs, etc.

Suffice it to say — to come back to what I said

a few minutes ago — that the cost of getting that log to the mill is

very high. It's very high stumpage rates, high silviculture costs, so

it's forcing the higher value-added out of the product. And we're going

to see a decrease in the so-called spaghetti factories or the dimension

lumbermills and an increase in value-added.

The members

opposite are very quick to mention countries in Europe and social

packages, and that's all well and good. I've been over there, Mr.

Member, when I was in Social Services, and I've seen what they do over

there. They do some very good things. They've had the social programs

in Europe a lot longer than we have; they’ve had them for a hundred

years. They've put them in for all the right reasons: to look after

people; a sort of cradle-to-the-grave philosophy. The one thing that

you fail to mention, and I'm going to mention it again because you

brought it up, is the cost of those programs. The costs have gotten

away on them. They can't afford them anymore.

I had dinner

the other night with a group of Swedish businessmen. Sweden is always

being quoted to us, and, yes, we can learn from the Swedes, and they

can learn from us, as they have said, and we can learn what not to do

from them. They have a value-added tax in their country of 23 percent.

Twenty-three percent — which is the same as a GST. So all I'm saying is

be cautious.

MR. MILLER : The price of beer is pretty high.

HON. MR. RICHMOND . Automobiles are pretty high too.

So be careful when you say: "Tie everything to social packages and promises

of security." You mentioned that in Europe, when they were going to amalgamate,

they had to tie social packages to it too. I'm saying that the thinking

behind it is great; it's terrific. But be careful when you start tying social

packages in, and security for life, because you may find yourselves in programs

that you cannot afford. The 23 percent sales taxes and 65 percent income taxes

are what they have in many of those countries. While some parts of their system

may be excellent, some parts are not.

MR. G. JANSSEN :

I recognize, Mr. Minister, the 23 percent value-added taxes and 65

percent income taxes, and that's why when I made those remarks I said

there are many differences. I didn't want to get hung up on those

instances. One of those differences is that mortgage rates are tax

deductible from their housing costs. There's a tremendous savings right

there.

Rather than get into that whole idea of comparing us

to them, the point I was attempting to make was that some job value be

tied to the tree-farm licence rather than that just a profit value be

tied to that. I think that's a social responsibility on behalf of the

government and it's a social responsibility on behalf of the

corporations operating those TFLs.

The minister talks about

new jobs and the pressure on the forest industry. I agree; there is

tremendous pressure on the forest industry. As the minister is aware,

one of those pressures is the bill that's now before the House on the

Carmanah Valley. We've just finished second reading and are going into

third reading. It was quite remarkable that the minister found it very

easy to draw a line across a map and dedicate a large and significant

park. I'm sure it will become significant, However, there's another

area in the province that has been considered for park purposes for

many years, and that's Cathedral Grove. I'm sure the minister has heard

me talk about it in the House. For over 20 years we've been deciding

whether or not to make Cathedral Grove a park, whether or not we can

find land to trade off, whether or not we can afford to do it.

The

Carmanah Valley, apparently, is going to lose the Ministry of Forests

$750,000 a year in perpetuity. That's a lot of money. Besides that,

we're going to have to buy back TSAs of some 1,200 hectares — and

heaven knows what that is worth. I wonder if the minister could perhaps

tell us how much he thinks that is going to cost the province of

British Columbia. Are we going to reimburse, for instance, the TFL

values to MacMillan Bloedel, the holders there?

When he's

looking up those answers and when he's considering those questions, I

want him to respond in the light of Cathedral Grove. How much wood is

there? How much land is owned outright by MacMillan Bloedel? What is

the value of that in relationship to Cathedral Grove?

I'm

sure the minister is aware that city council in Alberni and the mayor

herself have written letters to both the Parks and the Forests

ministers asking what the status of Cathedral Grove is right now,

asking why it hasn't been included in a park, and asking why Carmanah

was considered before Cathedral Grove. Carmanah had some 5,000

visitors last year; Cathedral Grove had a quarter of a million. Yet we

find it more valuable and more expeditious to do a Carmanah park bill

than a Cathedral Grove bill.

Perhaps the minister could enlighten the House, and perhaps those people who visit those parks, what

[ Page

10919 ]

the hold-up is, and why one decision was made over the other.

HON. MR. RICHMOND :

I don't know why the member wants to get into the Carmanah debate

again; he clearly lost that one last week. But if he wants to lose it

again, we can have it all over again.

I'm not the Minister

of Parks, so I'm not up to speed on every piece of land in the province

that is a park, but if I recall correctly....

MR. MILLER : We thought you were when you introduced that bill.

HON. MR. RICHMOND : No, it's going to be the responsibility of the Minister of Parks very soon.

I recall correctly, Cathedral Grove was private land owned by Mr. H.R.

MacMillan and was donated to the province of British Columbia. To the

best of my knowledge, it is a park. There's a sign on it anyway, so it

is a park.

He's talking about numbers of people that see

Cathedral Grove. I don't know how you can make a comparison with the

Carmanah. It's on a paved highway that goes to a large centre. Port

Alberni, I think, is the name of the town; you should look it up

sometime. It's on a paved road, and naturally a lot of cars go right

through Cathedral Grove every day. I don't really know what that has to

do with my estimates, but there it is.

I do have a graph

here, if the Chair will permit me. It shows the answer to one of the

member's questions. The primary forest industry employs 30 percent of

the workforce in British Columbia, and a note on the bottom says it's

growing. So the number of jobs in forestry is growing. The value of

manufacturing shipments is just a touch under 50 percent. The value of

exports is 53 percent. The member seems to be hung up on percentages.

mentioned that the Carmanah decision was easy; the minister just drew a

line on a map. I don't know why he wants to canvass this argument

again, but it wasn't an easy decision to make. It had been postponed

for a long time before I got here. It was a decision that is always

difficult to make.

[3:45]

The

member got up last week and criticized us that it was going to cost

jobs in his hometown, because we took half the Carmanah Valley —

roughly 52 or 53 percent — and made it a park. I just bring him back to

the statements from his own leader that if they had had the decision to

make, it would have cost them double the number of jobs, if not more,

because they wouldn't have allowed harvesting in any part of the

Carmanah. His own leader said that himself. I think before you start

criticizing the jobs the Carmanah has cost, Mr. Member, you should

review the words of your own leader, who said: "No logging in the

Carmanah." That would have been a pity and a wrong decision. I think

we've made the right decision, but let's not get into that. We

canvassed it last week. We probably will again in committee.

When

he said that it costs $750,000 a year to create the Carmanah park

because of the loss of timber, he is absolutely correct. The people of

British Columbia have to know that. When you create a park and remove

land from the working forest, there is a cost attached. It doesn't come

for nothing. There is no free lunch. Okay?

He questions us

having to buy back some of the licences that were issued to MacMillan

Bloedel around the turn of the century. That is a fact, we do. But

we're not going to put a price on them, because that has yet to be

negotiated. If I stood here and said this was how much it is going to

cost, then that would be the starting point for the negotiations. But

suffice it to say, it's going to cost dollars, and that price will be

negotiated, Mr. Member. And we’ll get the best value we can for the

people of British Columbia.

MR. KEMPF : You know,

this place does funny things to you. I had absolutely no intention of

getting up in this debate, but I guess something that was said from

each side of the floor brought me to my feet.

Mr. Chairman,

I heard the minister paint a glossy picture with respect to the

multinational corporations being great corporate citizens. Well, Mr.

Chairman, to the minister, I've spent a great deal of my life in the

forest industry. And although there are a few good corporate citizens

among those multinationals — and they're becoming fewer and fewer, as

one gobbles up the other in the forest industry of our province — I

would say the majority are in absolutely the opposite category.

do believe as well, Mr. Chairman, that even though the situation faced

with the United States recently on tariffs that brought about higher

stumpage rates in British Columbia, those multinational corporations

are still not hurting very badly in this province. In fact, a great

deal of revenue should be coming to the coffers of the province, even

with those higher stumpage rates, than is presently happening.

listened to the debate from the Member for Alberni. I have to ask the

question there as well: where did the IWA stand with respect to the

Carmanah vis--vis jobs? Where was it that they stood with respect to

the reduction in the workforce that has taken place in the forest

industry in the last decade? Although we're cutting double what we were

a few years ago, as far as annual allowable cut is concerned, we see

only half the number of jobs that we saw then. I'm wondering if there

is such a concern for jobs. I saw the demonstration in front of the

buildings recently, where IWA members were demonstrating driving

MacMillan Bloedel vehicles, and I had become a little concerned about

that, Mr. Chairman; concerned about who is really concerned with

respect to what's happening in the Carmanah. I didn't hear one of those

people, nor have I heard anyone from the opposite side of the floor,

say: "Perhaps if we had done it a little differently, we could have cut

more in the Carmanah. Perhaps if we had done it a little differently,

we could have provided more jobs by cutting less wood." The only

concern I saw was

[ Page 10920 ]

for

the fact that we were going to clear-cut the upper half of that

drainage, which to me doesn't make any sense at all. I don't agree with

it, because it doesn't give us everything we could get from doing the

right thing in that drainage.

MR. MILLER : I've heard this one before.

MR. KEMPF :

We can have our cake and eat it too, Mr. Member for Prince Rupert (Mr.

Miller). All we have to do is cooperate. It's not just the Carmanah

Valley that I'm talking about; it's every drainage all over this

province.

MR. MILLER : Where were you hiding when the vote was called?

MR. KEMPF :

Not hiding out at all. But I didn't hear one member over there — and I'd

like to hear that now — stand up and say: "If we do things differently,

if we change our harvesting methods, if we look at things like skyline

logging, or patch logging — or whatever you want to call it — perhaps

we won't have to set aside more areas for parks in the province;

perhaps we can have our parks and have our logging on the same piece of

ground."

I think that's the problem — and I've got to say it

again here today — with this chamber. We line up on either side, no one

wanting to admit that there's something good in each debate. If we

would put it together, we could have a better situation for the people

we represent in this chamber. That has been the downfall of the forest

resource in British Columbia, and as long as we continue to do that in

this chamber, it will continue to be its downfall.

We made

a mistake on South Moresby. We set South Moresby aside as a national

park, losing that resource forever. We could have had the natural

resource and the forest resource both. In fact, because we drove

logging out of South Moresby, we're not going to have much of the

latter, because more people were able to enjoy that wonderful area

because we did have a logger down there, because there was some place

to buy gas, because there was some place to pull in if trouble was

encountered with your boat or whatever. That's gone. It's put in a

national park — gone forever — and that's wrong.

We did that

because we played politics in this chamber. We're doing it in the

Carmanah because we play politics in this chamber. Again I say it: it's

because of that situation and those kinds of decisions that we had

better take — all of us, all 69 members and soon to be 75 — another long

look at what we're doing and who we serve.

MR. CHAIRMAN : Before I recognize the next speaker, I would just like

to remind the House that we are dealing with vote 30. I know that vote 30 is

very all-encompassing. However, I should also state that the Carmanah bill as

such will be up for third reading some time later this session, and I don't

think it would be appropriate to spend an awful lot of time on the Carmanah

bill per se in these estimates.

MR. MILLER :

That was a wide-ranging speech. I thought I heard it the other day. It

was unfortunate that that member, who has recently rejoined the Social

Credit caucus, did not come in and express his opinion by way of voting

on the Carmanah bill, which he clearly indicated he was going to vote

against. But he probably had some perhaps even political reasons, I

dare say. That member who talked about politics getting in the way of

everything may indeed have had some political reasons. But I think it's

really fascinating, because we have over here the former former

Minister of Forests, we have over here the former minister and now we

have the current minister.

[Mr. Pelton in the chair.]

actually wanted to get on to some pretty dry stuff dealing with some

numbers. I don't make a lot of speeches, but I thought that given the

opportunity with this array of talent before us, there might be some

very simple questions posed about forestland and what it's capable of

producing.

For example, here is a specific question: what

would the cost be for a modest, incremental silvicultural program on

tree-farm licence 44? What additional volume could be realized from

that kind of program? How quickly could that be realized? And how many

new jobs would be created as a result of that kind of program? I await

with interest.

I wanted to go back and perhaps ask the

minister to clarify statements made with regard to the letters of

understanding. The minister said to me that the letters were

discontinued. He repeated that this morning. Yet in answer to my

colleague yesterday, he said: "If we find that they indeed don't serve

a useful purpose or are not compatible with our current standards or

practices, they will be removed, and chances are they will be." There

does seem to be some contradiction in those statements, and I would

seek clarification from the minister.

HON. MR. RICHMOND :

No, there's no intended or inadvertent contradiction. The policy has

been discontinued, but I did clarify that there are a few still in

existence. We find that they're innocuous and are not doing any harm;

they have been left there. But if we find there's no longer a need for

them, they will be cancelled. There will be no more new ones. We just

don't feel at this time that it's necessary to bother with them. I

can't even tell you where they are; I could bring back that

information, I suppose. But the policy has been ended, and they are a

thing of the past, with the exception that there are a few out there

that may still be in existence. They don't seem to be causing any

problem, so we just haven't bothered with them.

[4:00]

MR. MILLER :

By the way, I should have said that I would hope each of those

individuals I named — the two former and the current — would seek to put

[ Page

10921 ]

together an answer to my question independent of each other. I think it would be quite interesting.

the letter sent out in September 1989 about the cancellation of the

LOUs, there was reference to the requirement for major licensees to

hold an annual public meeting. The comments of the Forest Service are

that a policy is currently being developed. Is there a policy on the

licence-holder conducting annual public meetings, presumably to

disseminate information and receive input?

MR. RICHMOND : Apparently that was the policy under the letters, and the letters are cancelled.

MR. MILLER :

The letter lists 15 different responsibilities that are the obligation

of the licence-holder beside each is listed the current status. It is

clearly in reference to the LOUs. For example, the major issue, the

five-year development plan, and the fact that companies would be the

lead agency in terms of referral, has been removed. But beside the

statement, point 8, "Conduct an annual meeting, " it says: "Forest

Service policy currently being developed for all forest licences and

TFLs...." I wonder what is meant by that. It indicates to me that the

Forest Service was developing a policy. Have they developed it? Is it

in place? Could you describe it?

HON. MR. RICHMOND :

No, I can't, Mr. Chairman. I'll have to research that and bring back an

answer. I really don't know what the member is talking about. Maybe if

he wants to shoot it over to me, I'll come back with an answer.

MR. MILLER :

Certainly, Mr. Chairman. I have no hesitation at all in passing along

the letter. Perhaps if the assistant deputy who signed it had a look at

it, it might allow him to provide an answer.

The

pulpwood-harvesting agreement — we just started into that yesterday. I

expressed some concern about the silviculture requirements or what I

described as a liquidation policy with respect to the non-replaceable

licences in the Cariboo. We talked about what is growing there and what

the environment would allow to be re-grown. The minister talked about

fertilization and incremental silviculture, intensive silviculture.

Could the minister advise what the cost is in that particular region of

the silviculture program, which is required to ensure a second crop and

subsequent crops of trees? Could he perhaps describe what type or

quality of trees is the objective of the silviculture plan?

HON. MR. RICHMOND : I don't think — and neither do the staff — that

you can put an exact amount on that. I don't have a figure for the member,

but it would depend on the site: the geographic location, the type of soil,

the species being planted. I'm sure the professional foresters would have

to take into account all of those factors. Of course, you would expect whatever

was planted there to be the very highest quality of growth that you could achieve,

whatever the species was. You would use genetically superior stock and expect

the highest quality possible.

for putting a price per hectare on it, I suppose we could give an

estimation, but it's going to vary widely depending on the location and

the species planted.

MR. MILLER : You're offering a

licence that requires the licence-holder to submit a silviculture

prescription before harvesting. Surely the ministry had some idea in

mind about their objectives before offering this. Are you saying that

you had absolutely none?

HON. MR. RICHMOND : Sure, we

have an idea of what it will cost. You tell us the area, and we can

tell you what it is going to cost. I am told that it can range anywhere

from $200 to $1,000 a hectare to take a seedling to a free-to-grow

state. So depending on the location, the answer is somewhere between

$200 and $1,000 a hectare.

MR. MILLER : That's for basic silviculture?

HON. MR. RICHMOND :

That's correct. It's not including any incremental silviculture; it's

to take it to a free-to-grow state. It would include some brushing,

obviously, if you call that incremental, but it doesn't include

juvenile spacing, commercial thinning, pruning or fertilization.

MR. MILLER : How does that cost relate to the value of the stands?

HON. MR. RICHMOND :

Again, I guess that can range all over the map, depending on the

species and what the selling price was, whether it was sawlogs or

pulpwood or exactly what it was. The price could range all over the map.

MR. MILLER :

There must be some economic analysis of that. You're clearly going in.

I'd raise the concern about harvesting in an area that obviously has

some environmental constraints. The ministry documents say, and this is

a quote from page 12-1 of the submission of the Ministry of Forests to

the Forest Resources Commission: "Such stands include decadent timber,

part of age classes 8 and 9, very dense small-diameter lodgepole pine

stands on poor soil, low-site...." Surely there must be some body of

work within the ministry that relates the value of the stand to the

cost of reforestation. I assume that in terms of the basic economics,

one would, hopefully, if the cost of silviculture is the cost of

harvesting.... If the cost of silviculture is so great, in fact greater

than the value that can be realized from the timber itself, it is

uneconomic. That relates to my original question about what is intended

for these sites.

HON. MR. RICHMOND : I have

difficulty sometimes following the line of thought or reason here. I'm

trying to follow what you're getting at. I don't understand how you

make a connection between the

[ Page 10922 ]

value

of the timber to be harvested, when it might be decadent and age

classes 8 and 9, as you say, and very small-diameter, and the cost of

silviculture. I don't think that the value in that stand is related. We

may be harvesting that stand to get it out of there so we can get a

valuable crop planted. We may also be planting trees that we may not

intend to harvest. We may be harvesting the majority of them and

planting some for a wilderness area or other integrated uses. Unless

I'm missing something.... I'm trying to follow the gist of your

question and your reasoning and be as helpful as I can. You've lost me

somewhere there in relating the value of some old timber that's there

to the cost of planting a new crop.

MR. MILLER : I

assume that because the cost of silviculture presumably comes from the

value received for the timber.... There are many costs associated with

harvesting: the planting, the engineering, the road building, the

harvesting itself, yarding, etc. and silviculture. All of those costs,

as far as I know, are covered by the actual value received for the

timber. If they are not, somebody is paying a subsidy that appears to

be evident. Have you related the value of the timber to the cost of the

silviculture requirements, and is it economic? Or does it have to be

subsidized?

HON. MR. RICHMOND : The member has got me confused as to what he's trying to get at.

Let's

say a stand is bad wood; it's just junk and should be gotten out of

there. I suppose there might be cases in a sale where we would have to

allow for that. Maybe the cost of silviculture would be more than it's

worth. We even do silviculture in parks. We plant trees in parks, which

will never be harvested, so, yes we are bearing the cost of that as

taxpayers of the province.

I don't know how else I can

answer the member's question. I'm not trying to be difficult or evade

anything. I'm trying to get at what he is getting at and answer his

question.

While I'm on my feet, I might as well answer to

the best of my ability a question that he asked yesterday about how

much we were spending on incremental silviculture. I don't have a

dollar amount, but I do have an area in hectares. Since '80-'81 to the

present we have done incremental silviculture on 442,918 hectares.

This includes site rehabilitation of backlog, NSR areas, pruning,

mistletoe control, falling snags and residual trees.

The

benefits we receive from incremental silviculture increase the health,

vigour and value of our younger stands. Of significant importance is

the shortening of the time required for a stand to become merchantable.

Of course, this helps alleviate timber supply shortages predicted in

some areas. So we have done a considerable amount of incremental

silviculture. I just wanted to put that figure on the record.

MR. SERWA : I was going to pose that question, because it's an interesting

question. It's one that I have always been concerned about — the cost of

intensive forest management and silviculture.

we utilize the figure of $1,000 per acre as a silviculture cost, if

we're looking at interest costs of, say, 10 percent — and money then

would double every seven years — and we're looking at a relatively

short coastal rotation period of, say, 80 years, it would seem to me

that you would have to recover about $1 million per acre in forest

values to justify that original $1,000 expenditure.

The

minister has a very able deputy minister with him. I was just wondering

if there is something wrong with my calculations. I'm trying to find

out what amount of silviculture would be justified in return for the

investment on an 80-year rotation, let alone in the Interior on perhaps

a 100- or 120-year rotation.

HON. MR. RICHMOND : That's a pretty difficult one to answer.

First of all, it's per hectare, not per acre, and the costs range up to $1,000 per hectare.

don't know if I can answer that question for you, except to say that

the companies are very interested in it. They see an investment there

that will pay dividends in the long run, and I am sure they wouldn't be

doing it and hiring helicopters to fertilize, etc., if there wasn't a

payback.

I guess what they're looking for is that 80 years

from now those trees are going to be very valuable. Nobody on this

earth can put a price on what they'll be worth, but the big companies

who have these costs calculated right down to the last cent are very

pro-incremental silviculture.

I guess that's the best

answer I can give you: there must be a payback at the end of 80 years

or they wouldn't be so interested in doing it.

MR. SERWA :

Just further to that.... I worked in New Zealand in 1958, and we were

looking at a rotational period there of about 25 years, when a

substantial amount of those costs could be justified. I would really

like a response at some time in the future on the economics of it.

We're placing a lot of faith in it, and yet, to me, the economics seem

to be in question.

It has been my experience in the

interior that a lot of the spacing and thinning in silviculture-type

work has been done with federally acquired moneys rather than corporate

funds that have gone into it.

HON. MR. RICHMOND : I

will endeavour to get as good an answer as I can for you. I am sure I

won't get it today or tomorrow, but we'll have an answer as close as we

can get for you.

[4:15]

The other

thing is that in New Zealand there's quite a different situation. They

have gone literally to one species for their growing — radiata pine —

which has a term of about 25 or 27 years. So it's quite a different set

of circumstances than here. But we will do our best to get you an

answer. The answer will be in the mail.

[ Page

10923 ]

MR. MILLER : After the election.

On the question

of reforestation, again, I pointed out that it's a requirement, and

presumably it's covered, and I'll use the small business forest

enterprise count as an example. The cost of reforestation is covered.

The revenues derived from the sale of the timber cover the costs

associated with removal and replacement of the timber. If that is not

the case, then it has to be subsidized.

The Crown clearly

indicates, in their timber sales, that they don't subsidize. Presumably

operators would not want to bid on timber should they be required to

subsidize it. It kind of begs the question then: how can you make the

capital investment in silviculture if what you realize off of the land

is less than what it costs to do that? Where does the subsidy come in?

Mr.

Chairman, the minister just talked about some of the big companies

being quite interested in incremental silviculture. You said they must

be interested. There must be a payback or they wouldn't be interested.

In other words, is there recovery on your investment? If there's no

recovery on your investment, how can you afford to do something, and

does that apply in the kind of conditions that I outlined earlier,

where you have extremely poor growing sites? Do the costs of

silviculture essentially outweigh any value you derive from harvesting

the stands?

The minister is probably familiar with the

Jeanes report on Tackama Forest Products up in north-eastern British

Columbia. A great deal of difficulty was experienced — and may still be

being experienced, for all I know — where a company was not paying its

stumpage, where in fact the ministry wound up in a very embarrassing

position of having to trash 800,000 seedlings because of a dispute

that could not be resolved between your ministry and a private forest

company. But the Jeanes report essentially outlined that the cost of

silviculture in that region — I believe I'm quoting it correctly; I

don't have it in front of me — was greater than the value received from

the stands. So where does the money come from to do the silviculture?

Nobody's going to make investments when they don't have a recovery on

them, and certainly silviculture investments take many, many years to

get that kind of recovery.

Additionally,

I would cite the

fact that we have extensive areas of land in British Columbia that are

not stocked to our standards, so they are categorized as NSR, and a

decision has been made not to deal with all of those sites. The wording

in some document I read recently was: "The ministry has made a decision

not to deal with those sites." You're only going to deal with some

500,000 hectares of presumably reasonably good growing potential, so I

think the question is quite legitimate. It is not a trick question; I

think it's very straightforward, and I think I'm expressing it in a

fairly straightforward fashion So maybe the minister might want to take

another run at it.

HON. MR. RICHMOND : I think, Mr.

Chairman, that I've got a better idea of what the member is getting at.

I wasn't accusing you of a trick question, and I'm not trying to evade

answering. Today I've had a little difficulty getting at what you're

asking.

We are doing studies at the moment in some of the

northern parts of the province on silviculture — the cost of it and

whether it is economical to do it. I don't have a specific answer. The

situation you mention of the seedlings being trashed was before my

time, and I'm not familiar with all the details, so I won't try to get

into that argument. I'm aware of it, but I'm not familiar with all the

details.

You speak of NSR land. Yes, we are replanting NSR

land. There are some areas that we have left to natural regeneration

because of the expense of doing it. Some areas, because of the

remoteness of an area and the cost of getting timber out, are marginal

at best, and in some poor growing sites there's no question that

incremental silviculture would probably be out of the question, because

it's just too expensive for the growing conditions. So I guess that's

the best I can answer your questions.

To come back to the

nub of your question, yes, there probably are some sites where the

value of the timber is not sufficient to replant. There probably are

some areas where the value just isn't there, and those are areas that

we have to take a real serious look at as to whether it's worthwhile in

the overall economics of the province to go in and replant it, and put

it up for sale and then subsidize the replanting. It might be the thing

to do. Maybe, if it's bad wood in there, we can get it off and put in a

good crop into the land. But those are decisions that the foresters will have to make specific to each location.

MR. MILLER :

I'm glad the minister understood my question — and he clearly did, by

his answer that studies are being conducted. You referred to northern

British Columbia regarding the cost of silviculture and whether it's

economic. I'll go back to the question I asked earlier, specifically

with respect to those areas in the Cariboo that are subject to PA

agreements, those areas that are described as having very dense

small-diameter trees with poor soil. Can the ministry offer the kind of

study or analysis or documentation that you think is required? At least

you're studying it in other areas. Can you offer that in this

particular instance as a means of assuaging any concerns people have in

that region that the land is not capable of being regenerated because

of all the environmental restraints I talked about earlier? Can you

offer that? Is there a document that you can offer on that?

HON. MR. RICHMOND :

No, we don't have a document that we can hold up and say that we've

studied it and that this is the case. But I remind the member that it

is the law that before a licence-holder can harvest, he or she must

have a preharvesting silviculture prescription and must replant. So in

a case like that, where it's marginal, it would be up to the licensee

to make that determination: if the wood just isn't worth it and I've

got to replant it, then I'd

[ Page 10924 ]

better

be very sure of what I'm doing before I go in there and harvest,

because I've got to replant it to the specifications outlined by the

ministry. So then the onus would be on the licence-holder to determine:

is this going to be economical or should I just leave it alone, because

I have to replant before I can go in and harvest.

MR. MILLER : I would assume the ministry would have a fair idea of what

the economics are and would not over-rely on licence-holders. I wonder, just

generally in relation to that whole question of silvicultural investments....

Clearly there's a cost benefit to certain investments. The minister talked

about that. But whether to allow harvesting on very poor sites with high silvicultural

costs, whether on those sites, if you do allow it — and this I think is an important

question — you would as a policy allow harvesting where you would not require

silviculture; whether you are in a position to make those kinds of decisions

that I talked about in terms of alternatives like a more intensive regime on

better growing sites.... In other words, I'm talking about the kind of cost

benefit that I would think would be important in terms of managing the forest

lands.

Despite

the numbers you've read out — let's not kid ourselves — incremental

silviculture is not practised to any great degree in this province,

neither by licence-holders nor by the Crown. We subsidize through

section 88 the major licensees to do their basic silviculture; and

that's why they did it, although we even offered relief there. The

Crown, simply because of other priorities, did not in many instances

live up to their requirements. That's why we're doing this backlog

stuff, and that's why the taxpayers are paying for it. But we really

don't do any appreciable amount of incremental silviculture, at least

in terms of what we are capable of and in terms of what could result

with a higher level of investment in intensive.... I hope that wasn't

too broad a question, but you might want to respond to that.

HON. MR. RICHMOND :

I don't know whether I can capture everything. But just to repeat, I

think the first question again was on harvesting and whether it should

be harvested. In the case of a licence-holder, whether it would be a

TFL or a pulpwood agreement, that determination would have to be made

by the licensee as to whether his PHSP was going to cost more than the

value he could get out of the wood.

The second part of the

question was whether we would replant. We don't have any choice; the

law says we will. And we cannot step outside the law — neither can a

licensee — nor would we want to. So yes, the answer is that we would

replant.

The member is correct when he says we don't do enough incremental silviculture.

Nobody can argue with that. But again, times are changing very rapidly We did

a lot of things ten years ago that we don't do now, and we didn't do

a lot of things ten years ago that we do now. I just submit that as the supply

of wood fibre that's specifically sawlogs becomes scarcer, there will be

more incremental silviculture done in this province, not just by the government

but by licensees.

MR. MILLER :

Clearly the minister is saying that on Crown land timber sales that you

offer directly you would not offer a sale that in the opinion of the

ministry could not be satisfactorily reforested.

I wanted to talk about pulp and harvesting agreements a little more, but I'll get to it, hopefully.

The

constraints on incremental silviculture are surely not constraints of

capital. It seems to me the investment can be realized. Does the

minister agree with that? What are the real constraints?

HON. MR. RICHMOND :

Well, again, Mr. Chairman, the member is correct — provided the growing

site is good enough and desirable enough. I would think there would be

some sites, though, where incremental silviculture would just not

provide a payback. But on many other growing sites, I agree with him. I

think there is a payoff there. We should do more of it; the Crown

should do more, and so should the licensees.

MR. MILLER : Is it a constraint of available capital on the part of the Crown?

HON. MR. RICHMOND :

Yes, it is. There isn't a limitless supply of funds, as we recognize by

the difficulty we're having signing the second FRDA with the federal

government, and other constraints on the government treasury. I guess

every minister in this House would like to see a bigger budget and more

money spent on his or her ministry, but there's only so much of it to

go around.

However, in the future we will be able to expend more money on incremental silviculture. I have no doubt about that.

[4:30]

MR. MILLER :

The minister said that there's a return on capital for incremental.

Let's stick to good growing sites. There is a return. Given that

there's a return, why would capital be a constraint?

HON. MR. RICHMOND :

I guess the simple answer would be that there's a return on many things

that the government spends money on — universities, hospitals,

highways, ferries and the like; and yes, on incremental silviculture.

But we just don't have a limitless pot of money. Incremental

silviculture is relatively new. I think that when we can demonstrate

that there is a good return on it, we will be able to free up more

funds in the years coming to do just that. But we can't do all things

all at once for everybody. We just don't have that kind of budget. I

wish we did, but we don't.

MR. MILLER : Mr. Chairman,

I think it's a pretty feeble excuse: we can't do everything for

everybody all at once. You said there's a payback. You now seem to be

saying that you're not sure there's a payback. I

[ Page

10925 ]

don't think you compare investments in universities with investments in silviculture. I'm talking about tangible benefits.

Interjection.

MR. MILLER :

I just heard the foolish minister. You used to be the Minister of

Advanced Education, didn't you? Now he's travelling the world. He

should listen for a while; he might learn something. He can consider

this an advanced educational institute.

You said that there

is a payback and that capital was the problem. Now you seem to be

saying that you are not sure there's a payback.

You are

shaking your head. That's fine. You can get up and answer then. Have

you done that kind of modelling? Is the information available that

would demonstrate that a certain level of investment in incremental

silviculture produces a very tangible payback in terms of additional

volume, additional jobs, etc. ? Have you done that kind of work?

HON. MR. RICHMOND :

Yes, Mr. Chairman. Just to clarify the record, I didn't say that I

wasn't sure there was a payback. I'm sure there is. There is a payback

to incremental silviculture, and there are numbers to back it up. I

don't know if the numbers are absolutely right up to 1990 and 1990

prices. Fertilization, for example, per application may also increase

merchantable yields at rotation by up to 30 cubic metres per hectare on

the coast and 20 cubic metres per hectare in the interior. So there are

numbers that we can attach to incremental silviculture. It goes on to

say: "These potential gains may also permit an increase in the annual

allowable cut." I have said many times that in the future we will be

able to increase the annual allowable cut because of better

silviculture and incremental silviculture.

"Significant volume gains are realized through regenerating backlog NSR

areas but may take 60 years or more to realize." There is a payback to

incremental silviculture. There's no doubt about that. It's just a case

of not being able to do everything you want to do right exactly at this moment.

I'm sure the member understands that in each budget year there are only

so many dollars to go around. I'm sure that as the years go by and we get

more and more into this, we will be able to free up more money from one source

or another and probably in some cost-sharing scheme with the federal government — hopefully, anyway — do more incremental silviculture.

MR. MILLER :

Going back to the question I put earlier is there not a tangible return

you could identify — an immediate or a short-term return? What's the

return on the capital that is...?

The minister is perhaps familiar with the TFL 35 pilot project. There are some

hard numbers in there. Are they accurate? They indicate to me an immediate return

in terms of an increase in available volumes and an immediate increase in employment.

Because of the method we use to calculate the annual allowable cut, when you

factor in the incremental, there is an immediate return. Have you done that

kind of work?

asked earlier about the modelling required to make investment

decisions. In other words, you invest a certain amount of capital and

you see a return. If that's the case, it would seem that there is no

fundamental reason why we shouldn't be embarking on this at a much more

rapid pace than currently.

HON. MR. RICHMOND : Mr.

Chairman, I think the member is referring to the project being proposed

north of Kamloops. Yes, I'm familiar with it. We are taking a very

close look at that, because what the licensee wants there — if I'm not

mistaken; I haven't looked at it in the immediate past — is an

immediate payback for something in the future. They want to do some

incremental, very intensive silviculture in the area but are saying:

"We can increase the annual allowable cut X years out, therefore we

want to be able to harvest more now." That is a good rationale, but we

just want to make absolutely sure that the calculations are correct. We

are going to take a very close look at that, and we may monitor it over

a two-year period. We've told the licensee: "Give us two years to

monitor this project so that we can make sure your calculations are

correct." The last thing we want to do is assume they are correct,

allow some overcutting now, and then have the payback not be there in

the future.

In theory it's good. I like the sound of it,

the idea of it. The ministry agrees that on paper it looks good, but we

want to make sure it actually works before we do it. So we're on the

same wavelength; I don't disagree with you. There is a payback. A lot

of it has to do with tenure too. If a company is uncertain of its

tenure for any reason at all, they're going to say: "Why should we wait

X years out to get our payback? We'll do this work, but we want the

payback now. We want the benefits now." So we're saying: "Okay, we can

go along with that, provided we're sure that the payback X years down

the road is there." I follow you on that, and I'm familiar with the

project you're speaking of. I have no doubt that in future years, if

this is sound and factual, we'll see a lot more of it.

MR. MILLER :

Your use of the comment, "in theory it's good, " seems to suggest that

there is a lack of hard information available upon which you can make

informed decisions about investments in incremental silviculture.

You've pretty well hedged on it.

I was going to ask you

about licensees. They always use the term "uncertainty." I'll tell you,

the forest licensees of this province are a really uncertain lot. As I

understand it, they want to make sure that if they make an investment,

they reap the return on that investment.

Are you familiar

with recent proposals by Haley at UBC to enter into specific contracts?

In my view, this has been an outstanding issue since the introduction

of new forest policy and legislation which, for the first time, defined

silviculture on two bases: the basic level and the incremental level.

Also it dealt

[ Page

10926 ]

legislatively with the issue of incremental silviculture, clearly

with the intent of trying to encourage it. Yet really, since the

introduction of that legislation, nothing has happened. I'm aware that

there have been various attempts to come to grips with the issue, but

in three years really nothing has happened. I think that's too bad,

because I don't think there is any question about the current state of

forestry in British Columbia that sees manufacturing companies relying

heavily on timber from a variety of sources, which in the very near

future is not going to be available to varying degrees in varying

regions. One of the ways we can start to deal with that problem is

through these kinds of programs.

So what is being done to

resolve the impasse in terms of the application of that

section — I can't

quote you which

section of the Forest Act — which really was intended to

encourage incremental silviculture?

HON. MR. RICHMOND :

Mr. Chairman, I forget what

section of the act it is — 58 or 52 — but I

am advised that it just hasn't worked. That being the case, I suppose

we're going to have to go back to the drawing-board. We do have a

number of stand models, both managed and unmanaged, which we can now

use to predict returns depending on the sites, prescriptions,

predictions and the rest of it. It's probably the most accurate way of

determining what the member was talking about, the return on the

dollar. But I am told that the incentive section,

section 52, of the

bill just has not worked the way it was intended to.

MR. MILLER :

I thought that's what I said. I asked you what's being done to resolve

the impasse. Is any work going on? Are you just now realizing it hasn't

worked, after three years? Has there been some attempt to come up with

a solution to the impasse? Where do we sit? Do you expect that within a

reasonable amount of time you will see that resolution?

HON. MR. RICHMOND :

Yes, I think so. We're working with the industry all the time trying to

resolve this problem. I think we're making some strides. We're also

asking the Forest Resources Commission for their views on it, and we

work with the industry. We're not just ignoring it, because we feel, as

you do, that incremental silviculture is the way to go, and it's the

way we have to go in the future if we're going to replace some of the

timber that's being lost to us.

MR. MILLER : Has any consideration been given to encouraging, perhaps

on a pilot basis, the development in each forest district of incremental silviculture

projects that could be funded out of the small business forest enterprise account?

The account did return a fair investment to the Crown last year, and it's

projected that in this fiscal year there will be an a