1989 Legislative Session: 3rd 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)

TUESDAY, JULY 18, 1989

Morning Sitting

[ Page

8639 ]

CONTENTS

Routine Proceedings

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

On vote 27: minister's office –– 8639

Ms. Edwards

Mr. Miller

Mr. Kempf

The House met at 10:04 a.m.

Prayers.

MR. LOVICK :

Mr. Speaker, in the gallery today are three very dear friends from

Nanaimo. I would like the House to join me in welcoming Ms. Pat Spring

and her two children, Kel and Nicole.

HON. MR. REID :

It's with pleasure that I introduce Gail Taylor from Bowen Island to

the House today and have the House show her our interest in her being

here.

Orders of the Day

HON. MR. RICHMOND : I call Committee of Supply.

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

ESTIMATES: MINISTRY OF FORESTS

On vote 27: minister's office, $327,244 (continued).

MS. EDWARDS : Mr. Chairman, it's my pleasure to add a bit of diversity to the Committee.

I want to question the minister on the issue of the control of pine beetle in our area and what particular....

Interjection.

MS. EDWARDS : I can't hear the minister. Mountain pine beetle. Not cats, Mr. Minister. No cougars, no house cats. Just mountain pine beetle.

There

is an amount of logging going on in the Elk Valley, as you are aware,

that is making very ugly scars on the landscape. It is being done on

very steep slopes and has therefore created sloughing and damage to the

topsoil — what there is of it, and there is very little topsoil in that

kind of terrain, as the minister knows. It has even created a situation

where there can be some sloughing into creeks and streams and

interference with the fishery.

This logging is going on

mainly on private land right now. The minister has said that he doesn't

have any control over what goes on on private land. That is an issue

itself, Mr. Chairman. There are a number of people who believe that the

minister and the government should take some control of logging as it

goes on on private land for a number of reasons; I want pursue that in

a minute. But even though the minister at present has no legislation

under which he can manage in an extensive way the logging that goes on

on private land, he can in fact do some very strong management moves

related to the control of the mountain pine beetle.

The excuse by the company that is logging — which is Crestbrook

Forest Industries — is that they are doing it extensively in order to

control the mountain pine beetle. The minister has a

part in that

function of controlling the mountain pine beetle. The citizens of the

Fernie and surrounding areas and the part of the Elk Valley that is

affected by this cut, which will be up to more than 5,000 acres in the

next two years — and I'm sorry to use acres; I haven't translated it,

Mr. Minister, but that's the measurement in acres — are upset about

this, and they have put forward their concerns. I think the most

succinct description of those concerns is in this list, which I will

put to the minister.

Their

first concern is that there are no regulations governing logging

practices on private land; their second concern is that no impact

studies have been undertaken to determine the effect of that logging on

the number of things on which they impact. That hasn't been done at

all, and they have determined that. There was no avenue for public

input on that logging whatsoever until a meeting on June 15, which the

Elk Valley Conservation Society called. They're calling it a pine

beetle infestation, but as yet there is no indication that all the

trees that they're logging have yet been infested by pine beetle. In

fact, the member of the company who is dealing with this issue with the

society was quoted in May as saying, along with the forestry

association — and that's the professional organization of foresters —

that there's no great pine beetle problem in the Elk Valley.

They

object to the fact that state-of-the-art technology has not been

utilized, and that there's been no investigation whatsoever of

alternative ways of controlling the mountain pine beetle except for

straight clear cutting. Those objections they have put to the minister

and various people. They have put the petition that I brought

yesterday, and the same petition went to the presidents of the

companies: the one who owns the land and the other who is doing the

logging.

My question to the minister is: would you respond

with how you see the ministry's job in this kind of situation, where

although the logging is on private land it has a strong impact on the

surrounding area, and it is said to be done for mountain pine beetle?

The minister has a say in that. Could the minister elaborate?

HON. MR. PARKER :

As I've reiterated a number of times in these estimates, our mandate

does not include management of private property. The only private

property we do get involved with is that in

schedule A of tree-farm

licence contracts where the licensee has dedicated it to part of the

productive base of the tree-farm licence.

The situation in

the Elk Valley, as the member for Kootenay has stated, is that the

proposed harvest is on private land. I think it's land held by the

Shell corporation. The forest management is looked after by Crestbrook

Forest Industries. The area does have substantial mountain pine beetle

infestation. In trying to curb the spread of pine beetles, one of the

approaches is to move in advance of the prevailing winds and the manner

in which the beetle would

[ Page 8640 ]

spread and remove the stands ahead of them to reduce their proliferation.

What

the exact plans are between Shell, the landowner, and Crestbrook, the

operator I don't know. As I said before, the Ministry of Forests does

not get involved in the management of private land. It is very

appropriate for the community to speak to the landowner and the

operator and try to come to some common ground, but by mandate I have

no authority to interfere. We are interested in what's taking place on

private lands when it comes to forest protection issues, and mountain

pine beetle control is a forest protection issue. If we find that

landowners aren't prepared to do what needs to be done from a forest

protection standpoint, we can take steps. It sounds to me like the

operator is trying to control the pine beetle problem, and they're

taking what appear to be appropriate steps. But it's an issue that

we'll be raising with Crestbrook in the very near future. As a matter

of fact, I have a meeting with them at noon today, right after the

morning session, Mr. Chairman. I'll be looking for further information

at that time.

From a forest protection standpoint, we want

to move in advance of the beetle; we don't want to be chasing behind it

all the time. If people are expecting that operations should only take

place in what we call grey attack or red attack areas, that is no way

to control it; that's the way you salvage. What you have to do is catch

the green attack, when the beetles are first going in — the trees are

still green — and get ahead of it, removing the material that the

beetles can flourish in.

[10:15]

MS. EDWARDS :

The minister may be aware that the Elk Valley is a very special tourist

area. In fact, it is one of three major tourist routes through the

Rockies into British Columbia, and tourists and visitors and hometown

people visiting their Aunt Sally come through there in great numbers.

They come at the rate of approximately 4,000 cars a day, we are told by

surveys. We have the kind of tourist industry that has 140,000 skiers a

year, for example, at the resort in Fernie — that's the one resort, and

that's only one that we're counting. In other words, the landscape is

important; even that has been tested. When you ask tourists what they

come for — this is very specific to the Elk Valley area — they say they

that the most preferred reasons for being there are sightseeing,

passing through, outdoor and sporting activities Those things require

that there not be great visible, ugly scars on the side of hills that

are not only uglier than what you would have if you actually did get to

a point where you were salvaging red pine, but show major damage to the

environment. The main purpose for visits is touring; after that, the

second highest percentage of people come to go to resorts and for

outdoor trips.

The minister must recognize that the

associated Kootenay and Boundary municipalities have asked on a regular

basis for government control of logging on private lands and again this

year have made a resolution to ask the government to control logging on

private lands. It's the same idea as zoning. There's no possible way

that anybody can do anything within a municipality or a region that

deals with zoning or any of the planning that's done unless it's

already agreed to for the interests of the greater good. In this case

you have a very specific example of how the greater good is not being

served. I think the minister may want to go beyond simply standing

there and saying he does not control logging practice on private lands

and look to the case that can well be made for basic controls on

private land.

I get correspondence by the bushel about

logging practice and how it affects people in our area. I have a letter

here that's very typical. It says: "One's observations on logging on

private land in the Elk Valley lead to only one conclusion. Member

firms" — this is the group that's putting out the "Forests Forever"

stuff — "throughout the forest industry are committed to one thing

only, profit above all else, and not to the welfare of the community."

That is being put very regularly, in many ways, to the minister and to

me.

The idea of watersheds, Mr. Minister, is something that

needs protection. The Association of Kootenay and Boundary

Municipalities has put forward resolutions asking for control of

logging within watersheds — in fact, asking very specifically that

control be taken away from the Minister of Forests and put in the hands

of the Ministry of Environment and prime water licence holders jointly.

We have situations where individual owners can log — and have logged —

on their property in such a way as to have extremely negative impacts

on the people next door. There's a case on Hosmer Creek and Thorne

Creek where we have half a dozen water licences, and these people's

water, which they take for drinking water, is being affected by the

logging that's gone on. The last time the same person did some logging

in that area they used a couple of old oil barrels with the ends cut

out as a culvert and in fact created a considerable amount of

contamination of the water around there.

I notice the

ministry tried in the West Kootenay just this spring to stop some

logging practice on private lands and was prevented from doing so. They

weren't there just because they thought they had nothing to do that

day; they were there because the logging practice needed some attention.

would like the minister to respond as to how he expects an individual

landowner to respond when logging on a private property next door is

impacting on their water supply and they hold a water licence. Is the

ministry willing to do anything about it in that kind of case?

HON. MR. PARKER :

I know socialists don't believe in private property, and I know they

believe in absolute control of everybody. We don't, and the

legislation, as I pointed out today....

MR. ROSE : That's tedious and repetitious.

HON. MR. PARKER : But it is the truth. It's important to understand that that's the way it is.

[ Page

8641 ]

As far as private property is concerned, it is not within the

purview of this ministry. Crown provincial lands that are in the

provincial forests are in the purview of this ministry.

The

matter of water quality is one with the Ministry of Environment,

regardless of whether it's private land, Crown provincial land or Crown

federal land. The maintenance of water quality rests with the water

rights branch, which at one time was part of Lands, Forests and Water

Resources. Now it's with Environment — Lands is separate and Forests is

separate. So when it comes to management on Crown provincial lands, we

work with the Ministry of Environment and protect the water quality.

First

off, everybody has to understand that every piece of land in the world

is part of a watershed. Some of these watersheds in British Columbia

have water licences on them for the supply of potable water for

domestic use.

A water licence does not give the individual

exclusive rights over the natural resource. He has the right to use a

certain quantity of water. It's government responsibility on Crown

provincial lands to ensure that the resource that is being provided

under licence to various licensees — whether it's water, lands,

grazing, hay meadows, whatever — is in a usable state. So we work with

the Ministry of Environment in the planning process, and it's a highly

involved process, wherever there's a watershed that has potable

licences on it.

For example, the Ladysmith issue. The small

business forest enterprise program in the Duncan forest district is

slated for part of that area — the Ladysmith watershed area. That

planning process has been going on for some five years now and involved

the municipal council as well as their employees, our staff, the

Ministry of Environment and other government agencies. The Ministry of

Environment includes water resources and the fish and wildlife branch.

But

the particular operations taking place in the Ladysmith watershed right

now.... It's an 18-hectare block; it's about 50 acres. It has several

watercourses in it, but they are dry at this time. They do not drain

into the Stocking Lake reservoir. They do not drain into the Ladysmith

watershed; they drain into another watershed. However, those stream

beds are dry. So the claims that operations there are causing pollution

are unfounded. The whole exercise really is a politically motivated

exercise in that particular corner, because the instigator has made

that abundantly clear to my district manager. So it's no conjecture on

our part; it's an absolute statement by an alderman of Ladysmith.

The concern about clearcuts being ugly is pretty standard fare.

There's nothing pretty about a clearcut, whether you just clearcut your

grain field, your Christmas tree farm or a natural stand; there is an

interim period. But even Roderick Haig-Brown in his books has

acknowledged that the area greens up. If you leave it to nature, it

even greens up. But in most of these instances today, it's not left to

nature. Certainly on lands that we are responsible for in theMinistry of Forests, we make sure the forest renewal is dealt with in a prompt

and efficient manner. There is a place for natural regeneration, and it probably

accounts for about one-third of the land area that's harvested. From my

travels in Scandinavia I've learned that this is basically the same ratio

they operate under: about one-third natural and two-thirds artificial. So the

approach in the northern boreal forests, regardless of which half of the globe

you're in, is very similar. About two-thirds of the area is artificially

regenerated; one-third is naturally regenerated.

All

through the process we deal with the other agencies that are concerned

with the land base. It's the fish and wildlife habitat; it's water

purity; it's land concerns, grazing concerns, recreational concerns. We

have a very involved public process at every level to make sure

everybody has an opportunity to be heard and have their input on the

management of the land base for which we are responsible.

MS. EDWARDS :

Of course, what the minister says about private lands is beside the

point. The point is: who's protecting the public interest? It's pretty

clear that the only answer I have to take back to my constituents is

that the minister is abandoning any interest at all in what happens for

the general public. This government has no problem accepting bylaws

that don't allow people to build houses a certain number of feet from

the front property line; they don't have any problem insisting that

municipalities get a permit from the Minister of Energy, Mines and

Petroleum Resources — it's written into their legislation — before they

can move a stone of gravel; but they've got some problem worrying about

saying anything to anybody who's out there strip-mining a piece of

land, because it's private land. That's simply not the answer my

constituents wanted.

I have one other question for the

minister, and it deals with range management. The proposed range

management plan was supposed to be in order by now. Could the minister

tell me whether or not he is ready to launch a new range management

plan from his ministry, and could he describe it a bit and tell us how

the public gets input into the range management process?

HON. MR. PARKER : We can expect the range review report just about anytime.

MR. MILLER :

I want to deal briefly with the question of stumpage and related

activities in terms of the price paid for residuals and the price paid

for pulp quality logs. We have seen a significant increase in the

stumpage regime. Without quoting specific industry people, this has led

generally to the situation where the integrated companies have been

able to absorb these increases and, in the face of rising commodity

prices, continue to do quite well. We see a bit of a dampening in terms

of newsprint, and possibly we'll see one in pulp, but on balance the

large integrated companies have done reasonably well even with the

increases in these costs. That has not been the case — and will not be

the case — for the

[ Page 8642 ]

unintegrated lumber manufacturers in British Columbia.

have had discussions on the system before. Statements were made

previously which were not followed through on in terms of relief for

the non-integrateds. Has the ministry done any analysis of the impact

of increased stumpage on the sectors that I outlined and their ability

to pay that stumpage and to remain profitable? Has consideration been

given to adjusting the system so that the integrateds pick up a larger

cost?

[10:30]

HON. MR. PARKER :

We've had a number of analyses done that cover all sectors, and the

determination is that some are having difficulty meeting their stumpage

obligations. For the most part, the stumpage program seems to be a

reasonable one. The comparative value pricing system is basically a

stand-as-a-whole system: the better the operating conditions, the

better the timber, the closer the timber to a conversion plant, the

higher the price; the lower the quality, the tougher the conditions,

the further away it is, the lower the price.

The program

brings in a targeted revenue each year. The people of British Columbia

receive a fair number — a good number — for their resource. The

dispersion around the average reflects the opportunity there from

timber quality, from operating conditions, from transportation.

far as amending the system is concerned at this point, while we work

with the federal government to get rid of this softwood lumber tax,

we're not contemplating any changes in the near future. Whether or not

there will be any changes subsequent to removal of the softwood lumber

tax remains to be seen — that's future policy and I can't comment on

that. But our immediate objective is working with the federal

government to get rid of the softwood lumber tax, and we'll go on from

there as far as forest management in the province is concerned.

MR. MILLER :

Perhaps the minister would outline. Anything that I've read on the

issue of the removal of the MOU has been negative. The most recent

statements by Carla Hills, the U.S. trade representative, have been

extremely negative. What would lead the minister to conclude that there

is a reasonable chance of getting rid of the MOU?

HON. MR. PARKER :

This province, together with other provinces, is working with the

federal government to achieve that. For example, Alberta is moving

towards a replacement arrangement that they should have in place in the

next couple of months. Ontario has been slow to move, but Ontario only

accounts for about 6 percent of the lumber sales from Canada into the

United States; Quebec, Ontario, Alberta and British Columbia that are

the key players here.

Once we have substantially replaced

the softwood lumber tax with other pricing and responsibility measures,

by the terms of the memorandum of understanding we can declare

substantial compliance and serve 30 days' notice. That doesn't stop the

trading partner from trying to establish some tariff against some of

our products, in which case we'd pursue that issue through the free

trade agreement.

MR. MILLER : I didn't hear part of the minister's response with regard to Alberta. Perhaps he could repeat that.

HON. MR. PARKER :

Alberta is working on a replacement for the softwood lumber tax

provincially. It's probably going to be a partial replacement and it

will include not only timber pricing but management responsibilities

not unlike we've demonstrated.

MR. MILLER : Within

the existing constraints, if you like, of the MOU.... For example, I

understand you had an industry committee. I talked to a few people on

that committee, representatives from COFI , looking at how the B.C.

government could get out from underneath the MOU. That's one. But

within the constraints of the MOU, I'm talking about shifting

responsibility for stumpage to those who can pay more. What have you

done in that regard?

HON. MR. PARKER : We price the

resource at its value. Some of it is higher value than others, and

those who play in the game are going to take good timber with an easy

logging chance and are going to pay a higher number. We don't tailor it

to the player; we tailor it to the resource, and that's entirely

appropriate and in my view correct.

The committee that the

member for Prince Rupert is talking about I think is the joint

committee between industry and the Forest Service on reviewing the

comparative value pricing system and looking at alternatives to that

type of system for pricing forest resource. It's not one of trying to

determine how we get out from under the MOU. It's quite clear how you

get out from under the MOU; that's stated in the terms of the

agreement. It's just a matter of those provinces that are affected

actually effecting substantial compliance under the terms of that

agreement, and then 30 days' notice can be served by Canada.

MR. MILLER :

It was described to me by a member of that committee as trying to find

out ways to get out from under the MOU, and maybe they're labouring

under a misapprehension. It could be. But are you saying that there's

no opportunity within the constraints — this tailoring to resource, not

the players? What about Quebec? Do they not have a slightly different

arrangement? I know they've got some legislation in terms of pulp

versus lumber; lumber gets first call. Does their system allow for more

of the cost to be borne by the sector that's more able to pay?

don't think you can simply dismiss it in terms of tailoring it to the

resource, not the player. Here we have an extremely profitable industry

in British Columbia, the pulp industry, which has seen dramatic

increases in the price of the commodity that

[ Page 8643 ]

they

produce, from a low of below $400 a tonne in the early eighties. They

certainly had a rough period, but it's gone to a dramatic high. The

price of that commodity in the market has more than doubled. Yet we see

this extremely profitable, integrated industry — there are other

avenues here; I'll try to categorize them and keep them separate — that

is in many ways effectively controlling the industry in this province.

It's not really bearing the cost or the price, if you like, for the raw

material that I would think would be preferable. I don't think it's

preferable to have the weak sector pay the lion's share of the

stumpage, while the integrated, profitable sector — and many of these

integrated companies are controlled from outside of Canada — is in fact

paying a pretty low value for their raw materials. In any kind of

economic world, that's not a realistic situation. Surely it would be

one that the minister would want to address.

The costs of

raw materials for our pulp sector are really low compared with our

competitors. This opens up a whole field in terms of our taking

advantage of our natural advantage, the timber that was there that

really no expenditures were put into. But that's going to change. We

see the minister's bias in terms of paper — paper, paper, paper,

reconstituted wood products. Look just comparatively at some of our

competitors in terms of the cost of their raw material. We operate

generally in Canada, and I think the same figures are true for British

Columbia.... In terms of the cost of the final product, if we take a

low cost we are talking about $120 a metre and a high to $180. That's

the Canadian average. B.C. is actually lower than that with around $115

in the interior and $135 on the coast. Yet if we look at Finland, for

example, we see that their costs range almost up to $300. Sweden ranges

up to about $280.

We do have this imbalance in terms of the

two sectors. To compound that we have the immense control exercised by

very few corporations who seem to me, in terms of this issue, to be

getting a relatively free ride. As I said, surely the minister would

want to address that imbalance.

HON. MR. PARKER : The

round wood — logs, standing timber — is priced according to the

comparative value pricing system. Whether you take that log and put it

through a pulp mill or whether you take it and put it through any other

conversion plant, you pay the same price for it. When it comes to

pricing residuals such as wood chips and hog fuel, it's the marketplace

that's going to set the price. We set the price for the round wood.

When the end users take the round wood, they know what the price is and

what their logging costs are. They'll have to determine the most

effective use of that timber to sustain their business.

Just to drop back to a comment the member for Kootenay (Ms. Edwards) made earlier

about how operators like Crestbrook are just interested in profit and not interested

in land and forest management, it might interest the House to know that Crestbrook

first started operating right after the turn of the century and has a long,

established record of responsible forest management and forest protection in

the Kootenays. Some 80 years later, the reason they're still going is stewardship:

stewardship of the land and stewardship of their business. They have provided

careers for several generations in the southeast Kootenay country. I think you'll

find that they've moved with the times from a small box mill to today where

they're producing a pulp product and looking at expansion and getting to

paper, so it would be the whole gamut of forest products offered.

When

they get their round wood, they pay the same price whether it's for

pulp furnish or for plywood furnish or lumber furnish. We don't get

involved, as I've said time and time again, in the business aspect of

the forest industries. People who are involved in that, corporately and

individually, are better suited. It's no place for government.

hear talk about Finland having to pay so much more for their fibre than

our operators here in British Columbia. When you stand in Helsinki and

look across the gulf, you can see the smog rising from their

marketplace, a very short barge-ride away. We're halfway around the

world from that same market, we compete in that same market, and we

sell in that same market. They may have higher operating and higher

raw-material costs in Finland, but they have very low transportation

costs to market. We have a fair price for timber, we have an efficient

industry, and we have a very substantial transportation bill to get to

market. So we seem to be pretty significant players in the world pulp

and paper markets and lumber markets. I believe that's because

there's a reasonable balance between government charges and industry

efficiencies that make it possible to be that substantive a player in

the world economy.

[10:45]

MR. MILLER :

Once again we hear the statement from the minister about business

decisions: if a company wants to put a high-value log to a low-value

end use, that's a business decision. That's a simplistic notion in

itself and begs the question about value. Business decisions are made,

I presume, on the basis of economic considerations. If an integrated

company can afford to put a saw log into a pulp mill, then there's

something wrong. There's something terribly wrong if that is the case,

and that appears to be the case.

The minister washes his

hands of it. He says: "I don't care what they do." He said again, "What

business decides is their business; it has nothing to do with us, "

ignoring the fact that we are major players because it's our timber.

But the minister confirms that he could care less if pulp mills chip up

sawlogs — he has said that on previous occasions; he's repeating it

today — and refuses to deal with the question of pricing, which, it

would seem to me, would tend to deal with the situation.

talks about markets. I don't know how you can have a market in terms of

that. We have regional markets. They are controlled; there is no open

market in that sense. They're regional, and they are dictated

[ Page 8644 ]

those regional considerations — transportation, etc. In addition to

that, the pulp mills, the integrateds, have independent sources of raw

material, and they're prepared to pay handsomely for it to maintain

that raw material base. So the non-integrateds are constantly going to

be in a position of being captive to the integrateds.

cite one example: Canfor buying out Balfour. There's a good example of

where Canfor, with considerable holdings in this province and with

quotas of about three million cubic metres a year, paid in excess of

$95 million to buy out Balfour Forest Products, with quotas of just

under two million cubic metres a year, to secure a chip supply. One of

the articles that I read on that issue had an economic analyst suggest

that Canfor did that in anticipation that there might be some movement

on residual pricing.

So the minister's answers do not

satisfy the independents, the non-integrated companies. It's surprising

that the minister would wash his hands of the whole affair, given the

fact that sawlogs, or logs from which solid wood could be extracted,

are being put into pulp mills. That can only come about for one reason.

If that's a business decision, then it means a company can afford to do

it. It means integrated resource companies are making so much money and

they're getting their fibre so cheap that they can afford to chip logs

from which solid-wood products could be made.

As far as

delivery costs are concerned, from the table that I have from Widman's

latest forecast, the delivery costs on softwood bleached kraft pulp

are: for the B.C. coast, $47; B.C. interior, $60; eastern Canada, $50;

U.S. west $51; U.S. south, $44; Sweden, $44; Finland, $39. There is not

a great discrepancy. There is not a wide difference between those

delivery costs. I think it's a weak argument, that they can pay more

for their fibre because they have cheaper delivery costs. At least it's

not borne out by Widman's analysis. So the minister really should offer

some better explanation for his refusal to deal with the situation.

HON. MR. PARKER :

It's easy to kick out a bunch of statistics without justifying

precisely what we are talking about. When we are talking delivery

costs, are they out of the interior of British Columbia into the

midwest, or into Asian markets or European markets? Are we comparing

apples with apples?

However, the House should remember that

in international trade we not only deal with all the rigours of the

business place, but also with international monetary matters and

exchange rates. The member for Prince Rupert complains in one breath

that stumpages are too high and we should offer relief, and in the next

breath says that stumpages are too low because these people can afford

to run them through a pulp mill.

We price the resource on

the basis of a comparative value pricing system, and the end user can

determine whether he can afford to put it through a solid-wood plant or

reconstituted-wood plant, whether that's a pulp mill, oriented strand

board mill, particle board mill or whatever it may be.

The

number of people employed per cubic metre in a pulp and paper mill,

where paper is the end product, is equivalent to the number of people

employed in a sawmill per cubic metre of throughput. If the lumber

prices are at a point where an integrated operator can take certain

grades of what have been used for sawmill furnish and put them into

pulp and paper production, it will be the marketplace that determines

that.

It works back to equivalency. If it's so much a tonne

in the marketplace for lumber and so much more a tonne for paper, the

attraction is to go with paper. When the markets swing the other way,

you have the ability to swing the other way. It's one of the advantages

of being integrated, and that's why things have evolved as they have

since the Industrial Revolution. They will continue to evolve.

The

member has concern for multinational ownership, and we've heard from

the member for Omineca (Mr. Kempf) time and time again about the big

bad multinationals. Then when a British Columbia firm consolidates in

the Prince George area, such as took place with Canfor and Balfour....

repatriated, so to speak, by the employees at Balfour who lived in

British Columbia. Now the Balfour operation has been acquired by

Canfor, a British Columbia operation. I guess that's bad now in

everybody's eyes.

Canfor has done an admirable job in

forest management, business development and support of a number of

amenities in British Columbia such as symphonies, art galleries,

universities, colleges and even right down to local schools. Why the

member for Prince Rupert sees fit to beat on the private sector, I

think, is because, as I've said time and again, it comes back to

strictly political philosophy where the state should reign supreme and

there is no place for private enterprise.

MR. KEMPF :

It's really interesting to listen to this debate. You know, that is

exactly the philosophy of that minister. He really doesn't care what

goes through a pulp mill in British Columbia. He really has no concern

in a province where the resource is dwindling. We no longer have a

resource that's overabundant in the province, and he stated here again

this morning that he couldn't care less what grade of log goes through

the wood room of a pulp mill.

That's absolutely and totally

unacceptable on behalf of the people of British Columbia who really own

that resource out there — not the multinational integrated companies as

the minister would like, but the people of British Columbia. The

minister has no concern about sawlogs and veneer logs, because those

who have power over government set the price and can put what they like

through their chippers.

The minister talked earlier about

arriving at a value. In the system in British Columbia which we operate

under, how can you arrive at a true value for a log? That too is an

absolute impossibility. Unless

[ Page 8645 ]

you

put that commodity on the auction block, you have no idea what it's

worth. In a free enterprise system — and the government opposite likes

to talk a great deal about free enterprise — the value of a commodity

is what the user will pay for it. That's what's wrong with the system

in British Columbia. That's why it has cost the taxpayers of this

province $30 billion in the last five decades.

That $30

billion should have gone into the coffers of the province but did not,

because those who can afford to pay and have the ability to pay....

That has nothing to do with the buying of wood in British Columbia. The

minister says it doesn't matter that they have the ability to pay, and

it doesn't matter that they're paying the people of British Columbia

$21 for the raw material to make $900 worth of pulp. He calls that a

fair return and a business decision. I'd love to be in the position of

making some of those business decisions, and I'm sure many small

business people in British Columbia would love to be in that position

as well. The ability to pay!

The minister has a lot of

concern about the industry meeting their stumpage obligations. What

about the small business enterprise program? Why hasn't he as much

concern about the small business person meeting their stumpage

obligations, rather than going broke and down the tube?

Then

the minister talked about people employed in the pulp industry in

British Columbia, and that's a reason that the multinational integrated

companies should get their material for nothing. What about Quebec,

that employs at least three times — it's more than three; it's about

three and a half — the number of people per cubic metre than does

British Columbia?

[11:00]

The minister talks this morning as if nobody else in this chamber knows anything

about the forest industry of British Columbia and Canada, and he's the only

one in this chamber who knows anything about the forest industry. If what he

said this morning in reply to the member for Prince Rupert is true, he's

got a lot to learn about the forest industry of British Columbia. What he doesn't

realize is that the people of British Columbia are learning very quickly. It's

almost too late, but the people of British Columbia are beginning to understand

what has gone on in their primary resource industry for five decades. They've

been taken to the cleaners, and they're still being taken to the cleaners.

That's why we have a deficit in this province — a deficit in the country's

richest province, in a province that clearly has at least 35 percent of the

forest resource in Canada.

The

minister gets up and says he doesn't care what quality of log goes

through the wood room of our pulp mills in this province. Absolutely

and totally unacceptable! A minister who would tell that to this House

should resign as minister responsible for this province's primary

resource. There should be no other avenue. Whose resource is it? Does

it belong to a multinational integrated company from New Zealand? Does

it belong to a multinational integrated company from Ontario or the

United States? Who does the resource belong to, Mr. Chairman?

The

minister says that the marketplace dictates the price. What marketplace

is dictating the price paid for our resource in British Columbia?

Clearly the pulp companies are getting their material for nothing,

compared with the selling price in that marketplace that the minister

likes to talk about. So how, I ask the minister, does the marketplace

dictate the price, when $21 is being paid the Crown for two bone-dry

units of chips, which is what it takes to make one metric tonne of

pulp, which sells for $900 in that marketplace?

Mr.

Chairman, it has gone on for five decades. It has gone on for five

decades too long. Whether or not that minister has guts enough to stop

it, and it would appear that he does not.... His strings are pulled by

the multinational corporations, the same as those of the person sitting

in the corner office, so it's not going to happen under this

administration. Perhaps it's not going to happen under the next, but it

has got to happen. Perhaps it will happen when it's too late, when

there is no longer the fibre in this province to support the industry

as we have grown to know it. But it has got to stop, if it means

driving these large corporations from this province. They've filled

their pockets enough with the profit that should have gone into the

coffers of the province. It's time the people of British Columbia saw a

return for their resource. It's time the people got a bit of that

profit from a resource that they own, rather than those integrated

companies taking it from our boundaries.

With that

attitude, we go into the next decade. I read from the very latest

MacMillan Bloedel journal, June '89, which makes it quite clear in a

report done by Woodbridge Reed and Associates that in the next decade

there will be a much greater need for printing and writing papers in

the world. In fact, the need could, it says, leap by 150 percent. We

have the attitude in this province that the status quo can continue,

that we can continue as the people of British Columbia to give to those

multinational, integrated companies that resource for nothing, which is

going to do nothing but rise from an already high price in that

marketplace that the minister talks about. We're going to continue the

philosophy of giving that product to those companies for nothing. It's

sad. I say to any Forests minister that has that attitude, that

philosophy, in the province of British Columbia: resign.

HON. MR. PARKER :

I'm afraid the member for Omineca is allowing the frustration of his

own shortcomings to overrun into this House — his hatred for the corner

office and for this office.

He mentioned something about

the level of employment per cubic metre in Quebec being three times

what it is in British Columbia. The information we have from the

Canadian Forestry Service's economic report E-X-39 indicates 4.8 per

thousand cubic metres in Quebec and 2.6 per thousand cubic metres in

British Columbia. If the member for Omineca is so knowledgeable, he

then would understand that Quebec

[ Page 8646 ]

a long way down the road out of the solid wood industry and into the

pulp and paper industry. It's a reflection of the fact that Quebec is

very much a pulp and paper industry and not a solid wood industry.

British

Columbia is a commodity manufacturer in solid-wood products, to mention

lumber and studs primarily, and has been trending in the last couple of

years away from commodities and more into value-added products, looking

to serve the Asia-Pacific markets and specialty markets in the Middle

East as well as Europe. We see a growing industry in the value-added

sector as a result of policies of this government, including the

timber-pricing policies.

It certainly is the marketplace

that will determine how well your business goes. The member for Omineca

has been actively involved in the log export business, and may still be

for all I know. He knows that to be able to have the business,

including a log export business, at least to break even you have to be,

preferably, in a profitable position — if you're going to have a going

concern and if you're going to offer employment. The marketplace very

much dictates any sort of business, whether it's commodity lumber or

whether it's pulp or fine papers, whether it's printing papers or

whether it's logs. The marketplace determines what you are going to get

for those logs. You have to work back from there to whether or not

you've got a going concern to provide the employment and returns to the

people.

The member for Omineca likes to harp about

stumpage. He tells us that he knows all about the industry. What about

all of the other taxes that the business pays as it pumps out a tonne

of pulp. It's not just the stumpage price of timber, but they have to

pay water licences; they have to pay taxes on their real property and

on their physical plant and on all the components they buy. They pay

taxes on automotive supplies, they pay corporation taxes and they pay

logging taxes over and above stumpage. Then, of course, there's payroll

which is a big item in any undertaking, whether it's government or

private enterprise. Out of payroll arises income tax.

MR. KEMPF : Take the taxes off the backs of the people. That's all you people know over there.

HON. MR. PARKER :

Listen to the babble from the member on taking taxes off the backs of

the people. The only way they pay tax is if they're receiving gainful

employment and their income is in excess of base limits so that they

have a taxable income. You only pay taxes if you have sufficient income

to support taxation, and you only get the income if there is an ongoing

enterprise. Everybody plays a part, all right? But the only place the

payroll comes from is the marketplace, and it's too bad the member for

Omineca never got that sorted out or he'd probably still be in business.

MR. MILLER : I'll try to get back to the discussion. It is extremely

difficult to get some kind of discussion here, because the minister either doesn't

recognize what I'm trying to say or deliberately chooses to go off on some

spurious tangent.

just listened to the last part of the debate in terms of value-added,

and it's clear that Quebec provides more jobs per cubic metre of fibre

or timber than we do. It is clear, whatever the difference is, that

there is more, and the minister previously cited the fact that the same

levels of employment could be obtained. He used the example of

newsprint and then went on to say that we're more into value-added. If

you follow that conclusion, we should have more than Quebec. Using the

minister's own logic we should have more employment per cubic metre

than we do.

[11:15]

To get back to it, I don't recall at any time when I was discussing

the Canfor-Balfour buyout that I attacked Canfor or Balfour or any

other company. For the minister to stand up and say they support the

arts.... Don't bring their name up: is that what you're suggesting? I'm

trying to get at a point here. Certainly the market plays a role, but

you play a role in the market.

Look what's happening in

terms of the independents. I didn't argue for lower stumpage overall; I

talked about trying to shift to those high profit areas that were

paying extremely low prices for their raw material. Everybody that I

have read in industry agrees with what I'm saying. If you look at

Crestbrook themselves, Jack Croll, Crestbrook's vice-president of

finance and chief financial officer, in a Sun

article on April 13, says the lumber sector and the sawmills are being

hammered, "The sawmills are being hammered," but Crestbrook can weather

the storm because "it is an integrated company." If you look at

Canfor's bio in terms of the argument I was trying to make that really

we're setting the stage for major integrated companies to buy out the

sawmills.... Canfor bought out Balfour, according to Canfor's own words

in a Province

article on

April 25, "to secure the chip supply, to become more self-sufficient in

chips." They don't pay a lot for chips. They don't want to buy them on

an open marketplace, on a real marketplace; they want to control and

sew up.

In Quebec the pulp companies control 75 percent of

the wood chip supply. Where is the market when 75 percent of supply is

controlled by integrated companies? Mr. Minister, tell me where the

marketplace is. Tell me where that great marketplace is that you talk

about. How can the marketplace work when the major integrated companies

control 75 percent of the supply?

Another

article suggests

that the only reason Canfor bought Balfour was to secure the chip

supply. They paid a premium price; they paid in excess of what the

company was worth, by their own admission and by independent sources

stating that, in order to secure the chip supply. An

article from the Financial Post

on April 12, 1989, said: "Canfor has made the deal to nail down the

supply of chips...." They want to avoid the market, Mr. Minister. Don't

you understand that these major companies like to avoid the market?

They like to have everything neat

[ Page 8647 ]

and tidy and sewn up so they control costs, so they're not subject to the vagaries of the marketplace.

From the Prince George region independent sawmill owners.... I don't have a date on this story for Hansard , but I'll get it later. An

article by Malcolm Curtis in the Prince George Citizen

said: "Meanwhile, independent lumbermen in Prince George warn that

their companies will be targets for more takeovers unless the lumber

market improves dramatically" — or there's a shift in stumpage.

seems to me that it's a simple, fundamental point. You have some impact

on that marketplace. You determine who pays what, and you're setting

the stage where the integrated companies with their enormous financial

resources will do in British Columbia what they have done in Quebec and

are probably doing elsewhere: that is, to buy up, to lock up, the

independents. That has, I think, some negative ramifications.

It's

important that we have an independent, healthy operating forest sector

in this province. I don't think it's a good thing that the game is

controlled by too few players. It seems to me, if you subscribe to the

principles of the marketplace, that you would agree with that. The

United States of America, which in many respects must be held up as a

bastion of free enterprise, has far more rigorous standards in terms of

concentration and control. They don't blink; they don't think it's doom

and gloom or some socialist plot to say to major corporations: "Break

up; you're too big. " It has been a fundamental tenet of the

marketplace, at least in terms of regulation in the United States, that

they have done those kinds of things. You only have a marketplace if

you have competing players in the marketplace.

The

independent operators in British Columbia, because of the system that

this government has put in place, are now in the position where they

will be takeover targets. The major companies will buy them up. If we

follow your logic, if we follow the statements you have made in terms

of the marketplace and what that dictates in terms of the commodities

we produce, why would a major keep a sawmill running which doesn't make

any money? If we have to look anywhere for proof, we look at your

refusal, your inability, to deal with Fletcher Challenge. Although the

minister has the power and the authority and, I would hope — as many

British Columbians would hope — the responsibility to deal with this,

you won't deal with it.

Where you had an opportunity to

deal with this in terms of a major player moving into British Columbia,

you didn't. You made a secret deal to allow that company to shut mills

down. You tell me what the difference is, when and if the lumber market

hits the skids and the trend seems to be that it's declining.... What

on earth would possess a major company, whether it's Fletcher Challenge

or any one of the major companies in this province, to maintain an

operation that is not profitable? By the laws of the marketplace that

you subscribe to, they should shut it down.

HON. MR. PARKER : That's right.

MR. MILLER :

"That's right," he says. Let the record show that the minister says:

"That's right." I suppose that's cold comfort to any of those people

who are now working in the solid-wood sector — in the sawmilling sector

— that the Minister of Forests would say: "That's the natural evolution

of things. That's been going on since the Industrial Revolution. Sorry,

fellows, don't look to me for any kind of assistance." Yet he's in a

critical position to determine what happens in terms of that

marketplace, because he decides how the pricing system is set.

amazes me: this blind adherence to the principles of the marketplace

which the minister stands up and espouses every time he manages to put

his shoes on the floor, and yet he doesn't follow it. There's been no

indication from this minister that he either understands the

marketplace or understands his role in the marketplace or understands

his responsibility to the people who live and work in this province.

Are you content to allow this situation to exist?

I presume

you're going to rubber-stamp every buy-out that comes across your desk

regardless of the future consequences, and regardless of the fact that

those major integrated companies will presumably say in the future when

the sawmill sector becomes unprofitable: "Well, we'll shut it down." I

don't want to hear about Canfor's contribution to the arts, Mr.

Minister. I'm sure they do wonderful things with the arts. I want to

hear about your responsibility in terms of this marketplace and these

jobs and industries In this province.

HON. MR. PARKER :

I can't help but be amazed, but then I really shouldn't be, because the

socialist philosophy is so different from the private enterprise

philosophy. Certainly the industry doesn't control the marketplace.

What they can control are their own costs. It's entirely appropriate

for them to control their own costs.

We've heard several

references this morning about levels of employment per thousand cubic

metres of wood converted in Quebec versus British Columbia. Quebec has

a long history of pulp production and a shorter history of paper

production, but it has been in pulp and paper production a lot longer

than British Columbia. British Columbia, because of the size of wood,

has long been a producer of solid-wood products. As we all know, the

eastern Canadian forests have much smaller trees that are more readily

handled mechanically. The predominant species, black spruce, has a very

high yield in fibre and is a very desirable furnish for the pulp and

paper industry. For example, the banknote paper that we are all

familiar with has been produced in Quebec for years, pretty well since

it's been produced in Canada. That's the extent to which their industry

has evolved. Our population has moved westward; everybody understands

Canadian history. The industry has evolved a little further in eastern

Canada than it has in western Canada. We see a mature forest industry

in eastern

[ Page 8648 ]

Canada that's reflected very much in reconstituted wood products.

Industries

in eastern Canada as well as western Canada are always concerned about

adequate wood supplies and about the cost of their wood supplies. The

best way they can deal with those is to acquire cutting rights. When

they acquire cutting rights in British Columbia, whether they're going

into reconstituted wood or solid wood, they have to pay our stumpage

rates, which reflect fair value for the timber resource, and whether or

not that wood is best utilized in producing paper — and we use lots of

it — pencils, furniture or dimension commodity items like dimension

lumber and construction lumber, that's very much a function of the

marketplace. What the producer deals with are the things that he can

control: that is, wood supply and cost of production. The marketplace

is a worldwide market — an international market. Even a large

corporation in British Columbia doesn't control the world market.

We've

heard some comments about dealing with corporate concentration. The

federal government deals quite adequately with corporate

concentrations. One of the examples is the Esso Canada-Texaco

acquisition, where a number of the assets have to be disposed of to

avoid the concentration in that particular industry. Where it is

perceived by both provincial and federal governments to be a problem,

it is addressed.

In the meantime, in British Columbia we

have a forest industry that we as a government are developing, which

reflects not only the small operators but the major operators. We have

no less than 15 percent of the provincial annual allowable cut

dedicated to small business. It's a percentage; it's not a number fixed

at 10 million or 12 million cubic metres. As our management of the

forest resource increases the provincial annual allowable cut, that

means there is a greater volume available for the small business

operator, because no less than 15 percent is committed to the small

business operator. So we have a diversity in our industry as a result

of government policies, and the opportunities are many, particularly in

the value-added end of the industry.

[11:30]

Since I've been minister, we've been pushing for a value-added

industry in the small business sector as well as in the integrated

sector. We see the majors — like MacMillan Bloedel and Canadian Forest

Products — getting more and more into the value-added products. We also

see them getting more and more into applied research and technology

transfer.

We see a growth in our industry that's going to

carry us through all the funny little cycles that happen in a natural

resource industry. Sure, lumber markets are softening. Pulp markets now

appear to be static; they may soften in a year's time or so, the

forecasters say. That's the nature of the business. It has always been

cyclical. Anybody who's had anything to do with the industry realizes

that. What we have to do, as government, is help to provide the

opportunities for diversity in the forest industry so that we dampen

those cycles as best we can within our own economy. That

diversification is being achieved, and it's being achieved because of

the policies of this government.

MR. MILLER : There

wasn't one answer there to any of the issues I raised. I guess the

minister fails to grasp, to understand, what I tried to outline in

terms of effective control and the role the government should play in

the marketplace.

This government has allowed industry to

concentrate to an enormous degree. Limited research shows that just

nine corporations or corporate groups in British Columbia control 48

percent of the annual allowable cut. Six corporations or groups out of

that nine are foreign-owned and controlled, and they control 30 percent

of our annual allowable cut. I'm sure intensive research on the issue

would show that the degree of control is even higher.

It's

a fact that this government does absolutely no analysis of that issue —

absolutely none. They put out a chart. I don't know how often they do

it. When I asked the minister at a public information session in

Smithers, in front of a bunch of people.... First of all, he tried to

tell someone who was up at the mike that you have to go somewhere else

to get that information. I finally went up and said: "Well, look, you

put out the chart. Would you make that available?" And he sent me a

copy. But absolutely none.... They don't have the staffing, and most of

all they don't have the inclination. I don't know if the minister

really understands the links in terms of corporate power and how that

distorts the marketplace. I don't know if he really understands that,

but it's a dangerous situation.

British Columbia has a

natural advantage right now, because we have these incredibly valuable,

enormous forest lands. We have been reaping or taking advantage of that

since we first started to develop our forest industry. But it does

evolve. It does change. Our policy of converting our old growth in a

fairly rapid way without really looking at that pool of fibre that we

can convert into a value, if you like, that we as citizens of this

province own.... We really haven't looked in any fundamental way at how

that pool of wealth will be used on into the future.

As we

go through the conversion process and we reduce the amount of old

growth — for lack of a better term — that's available, that tight-grain

good wood that can be used to make solid wood products, and as that is

diminished, and it's diminishing quite rapidly in various parts of this

province, we move into the paper production that the minister so

glowingly talked about. Paper, paper, paper. Or reconstituted wood. But

when we get to that position and then assess our relative position in

the world markets and our ability to compete, we find that we start to

lose our natural advantage. We find that the southern climates can

produce fibre for the pulp industry much faster. There's one instance I

read about. I think it was eucalyptus; it can be grown in 12 years.

exhaust our natural advantage. We do nothing of any substance in the

current time in terms of looking at getting solid wood products,

value-added

[ Page 8649 ]

products

— relatively nothing out of that resource. We allow it to be exhausted.

We allow the major companies to dominate the market. I would think that

if we forecast down the road, when our fibre supplies become so high,

when the cost of silviculture and reforestation.... And it is higher in

Canada. In fact, there are academic arguments which suggest that we

should not really invest in intensive silviculture, because the return

on the investment, using those marketplace dictates, is not as great as

it is in other countries.

I suppose that we could foresee a

time when even the pulp industry might look to different areas of the

world to produce their product. Certainly it's not a major problem for

a corporation to simply shut down a pulp mill. It's been done before.

It's not a major problem to shut it down and rebuild somewhere else. We

see the forays that MacMillan Bloedel, for example, has made. They

recently made the decision to invest $79 million in a plant in

Minnesota.

Interjection.

MR. MILLER : To make oriented strand board. They decided to go to Minnesota to do that.

MacMillan

Bloedel actually has one of the more enviable records in research and

development, and my own view is that it's because it was a British

Columbia-based company. It had roots, and a feeling for British

Columbia. Even the former Premier recognized that when he said, "B.C.

is not for sale," and refused to allow Canadian Pacific to take over

MacMillan Bloedel. He rode down from the hills in Kamloops, or wherever

he's from, and intervened in the marketplace, something that this

minister would never do.

If we look at the other forest

companies in British Columbia, we see that the record is not that good.

Just briefly going through some of the research and development

efforts.... These are all tied together — the fact that you have this

concentration, the fact that there are branch-plant economies. The

"Adjusting to Win" report and all kinds of other reports have pointed

out that corporations controlled from outside our borders are less

likely to invest in research and development. Statistically that's

true. If we look at the kind of research efforts being undertaken by

various forest companies in British Columbia, we find them, with the

exception of MacMillan Bloedel's, woefully inadequate. Fletcher

Challenge Canada's was started under Crown Zellerbach — 17 staff

members, and the research is extremely limited, focusing on technical

and environmental services. Look at Canadian Forest Products, with a

staff of 17 researchers conducting studies on forestry tissue culture,

fibre for hardboards and adding value to solid-wood products.

Balfour-Canfor: it doesn't state the number of employees, but it's

basically research on trees and seedlings. Western Forest Products: ten

researchers; Canadian Pacific Forest Products: 20.

That's the kind of research effort being supported by those companies in

this province. I recited a lot more facts and figures in terms of that during

the Ministry of Advanced Education estimates. It's woefully inadequate.

The government is doing something in terms of Forintek, in terms of the new

UVic facility; there is government investment in research and development. But

there is not a commitment that I can see from most of the major forestry firms

in British Columbia to undertake any substantive efforts in research and development.

I would think that that is a prerequisite to our advancing the state of the

forest industry and allowing us to be healthy and competitive long into the

future.

The

links are there between the position of the small non-integrated

companies.... The scenario is developing that they are attractive

opportunities for major companies. It was pointed out to me during the

tree-farm licence public information sessions that even that policy

would have induced further concentration in fewer hands. One forest

licence owner said to me that although he was opposed to the policy of

converting his forest licence to a tree-farm licence — he was opposed

in principle because he didn't like the concept — he said, "I would be

a fool not to apply." And he would have been a fool not to have sold

once he received the licence. It simply would not have been worth his

while as an independent. It would have been far more attractive, having

gained that TFL status, to then sell. That would have, as I said,

induced an even greater degree of concentration.

I wonder

if the minister could advise the House why there is such a low level of

research and development among these major companies. Apart from

government investment, what are you doing to get them to do more?

HON. MR. PARKER :

The member for Prince Rupert suggests that we should preserve our old

growth and that we should get value-added from our old growth. I don't

know how you do both. You can't preserve it. You can conserve it; you

can use it wisely.

I submit that the industry is doing

precisely that: it's using it wisely. The information I have is that

our old-growth resources are some 70 years ahead of us throughout the

province.

[11:45]

What we really have to bear in

mind when we talk about the fact that other parts of the world are

going to replace our fibre supply in the years to come.... They have to

realize, particularly if we're going to talk about eucalyptus resources

and a 12-year rotation in some parts of the world — certainly that's

true — that eucalyptus is grown for pulp furnish. When it comes to

creating products out of pulp, such as paper, there are over 600

recipes for paper. There are different types of paper for different

applications. Those papers require different types of fibre. Eucalyptus

provides a certain type of fibre; it has certain characteristics. Our

northern species provide other characteristics which are vital to paper

manufacture.

We will always have a place in that category.

We will also always have a place in solid-wood manufacture. That is a

fact of life, because we are farming the forests of British Columbia —

the productive forest

[ Page 8650 ]

land

base — to make sure that we have a sustainable yield furnished for a

number of manufacturing opportunities. As the future comes upon us,

we'll find a growth in technology and in markets that is going to

dictate basically what's done with that fibre. But we must always renew

the fibre supply, and we're doing precisely that.

The

member for Prince Rupert touches on research and cites some statistics

about the number of people involved directly in research in certain

corporations. If anybody understands research, they understand that

what you're after is not numbers of bodies, but quality of research,

quality of the product.

He doesn't realize that in Canada

the approach in the forest industry has been to work on a lot of

projects jointly. We have the Pulp and Paper Research Institute of

Canada, which has labs here on the University of British Columbia

campus as well as labs in eastern Canada. We have Forintek, which works

on solid-wood opportunities — and that's jointly; it has an eastern lab

and a western lab. The western lab is right on the University of

British Columbia campus, just a stone's throw from PAPRICAN, the Pulp

and Paper Research Institute.

From the woods operations

standpoint, we have FERIC, the Forest Engineering Research Institute of

Canada. That too has an eastern entity and a western entity, and it is

jointly funded by the forest industry and the players in the forest

industry. Of course, there are the various research contracts to the

universities, which are vital for their graduate schools, and those

with good solid graduate schools get those contracts. Then of course,

there's our own commitment here with our research division in the

Forest Service and our facility at the University of Victoria.

There's

substantial meaningful research taking place in British Columbia, and

what's more significant is the significant amount of technology

transfer, because you can have all kinds of research, but if you can't

put it into practical use, it is of very little use to you. We have

accomplished that, and we continue to accomplish that. Probably one of

the best examples is the Parallam product that MacMillan Bloedel

brought over with their own research section. It's the type of product

they'll be manufacturing in their new plant in the United States —

which they located, by the way, in the heart of a

furniture-manufacturing area. It will draw its wood supply from that

area; a lot of it is wood that's not used today, and it will supply

those manufacturers in that area. That was a good market opportunity,

and once again British Columbia firms have shown leadership.

far as tree-farm licence rollovers and replacements are concerned, as

was explained at numerous meetings — not just the public information

sessions but numerous sessions with members of the British Columbia

public and the industrial sector — the whole process is long and

involved and uses a substantial amount of public input. For example,

when a forest licensee states his interest in replacing his forest

licence with a tree-farm licence, that's a letter of intent. That

indicates he's interested in replacing his forest licence with a

tree-farm licence.

The next step is one where the licensee

asks for the public hearing process, at which time the public has an

opportunity to comment on whether or not there should be a replacement.

Out of that hearing, if everything's in favour, you move on to the

process of replacement; but you don't do it without a great deal of

public input. It's not done behind closed doors, as the member for

Omineca suggests; it is done in a public process. It's in the Forest

Act. So for the member for Omineca or the member for Prince Rupert to

say otherwise is not factual, because the procedure you have to follow

is right in the Forest Act, and it's a very public procedure. Nobody

was doing anything behind closed doors.

I am the first

Minister of Forests in this province to take the whole issue out to the

public and around the province and listen to the concerns of the

people. Lots of them didn't want to talk about tree-farm licences; they

wanted to talk about other things. We took that information and we've

got it all booked. We have a full transcript, because we took the

trouble to pay for a recording secretary so that we had every comment

and every submission so that we could take that information back to

government and act. We continue to listen to the people of British

Columbia. It's a democracy, and public opinion or public concern

eventually becomes public policy. That's done in democracy. This

government has demonstrated it time and again and will continue to do

so.

MR. KEMPF : I've sat here for three days and

listened to the rhetoric of that minister rather than answers to

questions asked from this side of the floor.

Interjection.

MR. KEMPF : No, I don't think the estimate can pass as yet.

I've

heard some very interesting things in the last few moments. The member

from Prince Rupert suggested that the minister doesn't know, that he

doesn't understand. You bet the minister understands. We can fault him

for a lot of things, but we can't fault him for not understanding the

system in British Columbia. What is more important in B.C. than the

corporate concentration with respect to the annual allowable cut or the

percentage thereof is the control that the industry, the big boys, the

integrated companies, have over the minister. Mr. Member from Prince

Rupert, that's 100 percent control. That's where the problem lies.

Rather than the government controlling the industry, the industry

controls government, and it has been doing it for a number of decades.

That's what is really dangerous in British Columbia.

They

like to throw the comment across the floor from the other side — I

heard the minister do it just a few moments ago — that it's socialist

philosophy. I say again, as I've said before in these estimates, I

don't think anyone in British Columbia would accuse me of having a

socialist philosophy. No one, not even the members on the opposite

benches, would accuse me of having a socialist philosophy. It's not a

socialist philosophy at all, and that phrase is not going to fly

[ Page 8651 ]

the next general election in British Columbia, as it has in previous

elections. And it's not going to fly in the by-election in Cariboo.

Perhaps the minister can accuse people of being socialists, but I just

want to read into the record some words of a person who I believe not

even the minister would accuse of being a socialist. His name is

William Kordyban Sr., and he operates one of those home-grown B.C.

operations that the minister was talking about earlier. He wrote a

series of articles very recently. I'd like to quote from one of them.

Again I say, this is a man that even the minister can't accuse of being

a socialist or having any kind of socialist philosophy whatsoever.

"The

public has been suspicious for years that our forests are not properly

managed nor properly sold. For years we kept electing a political party

to power that preached free enterprise, but behind closed doors" —

those closed doors you talked about earlier, Mr. Minister — "did the

opposite. Instead of challenging the protectionist system, they allowed

it to grow to a point where practically all of the timber is disposed

of by quota. This makes many people of B.C. angry, and for a justified

reason — people expect a government to practise what it preaches and

not create a system where the people are denied equal opportunity to

buy the timber."

Are those the socialist philosophies that

the minister was talking about? It's easy to throw that connotation

from that side of the floor to this, but it's very nice to be able to

sit in the middle and see both sides of the issue. Is that the kind of

socialism that that party over there is going to try and win the next

election with? Well, Mr. Chairman, it's not going to work. The people

of British Columbia have learned there's something rotten in the forest

industry of this province and it's got to be cleaned up; and they're

going to change governments until they find one that has guts enough to

do it.

Vote 27 approved.

Vote 28: ministry operations, $368,123,785 — approved.

Vote 29: fire suppression program, $50,000,000 — approved.

Vote 30: forest resource development subsidiary agreement (ERDA), $73,143,941 — approved.

HON. MR. RICHMOND : Mr. Chairman, I move the committee rise, report resolutions and ask leave to sit again.

The House resumed; Mr. Speaker in the chair.

The committee, having reported resolutions, was granted leave to sit again.

Hon. Mr. Richmond moved adjournment of the House.

Motion approved.

The House adjourned at 11:59 a.m.

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