1980 Legislative Session: 2nd Session, 32nd 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)

FRIDAY, JUNE 6, 1980

Morning Sitting

[ Page

2833 ]

CONTENTS

Petition

Surfacing of Cowichan Bay Road. Mrs. Wallace –– 2833

Routine Proceedings

Credit Union Amendment Act, 1980 (Bill 12). Second reading.

Mr. Levi –– 2833

Hon. Mr. Nielsen –– 2834

Division on second reading –– 2834

Social Service Tax Amendment Act, 1980 (Bill 3). Second reading.

Hon. Mr. Curtis –– 2834

Mr. Stupich –– 2835

Mr. Skelly –– 2836

Mr. Barber –– 2837

Mr. D'Arcy –– 2839

Hon. Mr. Curtis –– 2839

Division on second reading –– 2840

Crown Corporations Borrowing Authority Increase Act (Bill 9). Second reading,

Hon. Mr. Curtis –– 2840

Mr. Stupich –– 2841

Mr. Skelly –– 2842

Mrs. Wallace –– 2847

Special Committee on Privilege report on wiretap –– 2849

The House met at 10 a.m.

[Mr. Davidson in the chair.]

Prayers.

Reading and Receiving Petitions

CLERK OF THE HOUSE: Pursuant to standing order 73(6), I have to inform

the House that the petitions presented on June 5 last, with leave of the House,

by the hon. member for Alberni (Mr. Skelly) are irregular in the following respects:

one, the petitions are not addressed to the Legislative Assembly of British

Columbia; two, the petitions are without a prayer.

All of which is respectfully submitted,

I.M. Home, Clerk of the House.

Presenting Petitions

MRS. WALLACE: I ask leave to present a petition.

Leave granted.

MRS. WALLACE: This is a petition to the Legislative Assembly signed by some 300 residents of the Cowichan area.

"We

the undersigned residents of Cowichan Bay hereby insist that the

Cowichan Bay road be resurfaced with pavement immediately. We have put

up with dust, broken windshields, broken springs and ruined tires on

our vehicles for far longer than is necessary — all due to the

conditions of this road."

Orders of the Day

HON. MR. GARDOM: I ask leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM:

I would call adjourned debate on second reading of Bill 12, the Credit

Union Amendment Act, 1980, which was adjourned by that little fellow

over there.

CREDIT UNION AMENDMENT ACT, 1980

(continued)

MR. LEVI: Mr. Speaker, I don't have very

much more to say. I can see how well the government thinks about credit

unions. They've only had the minister speak. I was hoping we might hear

from that gallant member for Boundary-Similkameen (Hon. Mr. Hewitt). He

used to work for them. Maybe he wants to give some input to the debate.

Now he's up on his feet. Now we're in trouble.

The one point that I'd like to conclude on, Mr. Speaker, is in relation

to a comment that was made by the Premier on January 8, when he issued the press

release relating to the $200 million mortgage subsidy program. He said at that

time — on page 5: "The money will be made available through credit unions,

which have wide experience and facilities throughout the province to administer

the program." As I indicated yesterday, that takes us back to the effort

that was made by the previous government in respect to starting a Crown agency

in respect to developing what would turn into a secondary mortgage market. There

is an endorsation here by the Premier that that could be in fact a function

that the credit unions play, because, as he says, they have experience and facilities

throughout the province. Later on at some time when it's available, I would

like to ask the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) — I won't

do it now, but I'll do it when his estimates are up — whether he can tell

us, because he's the minister responsible for the program, I gather, whether

he had any discussions with the banking industry about doing this particular

function, to find out whether the banking interest ever expressed any interest

in helping in the same way that the credit unions did.

The minister has now got some notice on that question and

he might want to tell us about it, because I indicated yesterday that

I've not seen any demonstrated corporate responsibility towards the

people of British Columbia in the times of a very difficult mortgage

market, where the banks were prepared to offer anything to accommodate

many of the people looking for mortgages that were reasonable, that

they could afford. We've already said to the government that the

program was a very practical and worthwhile beginning. We have argued

that there should be a broader program in terms of the money. That's

something that we have to know about. We know that the credit unions

have made their contribution, basically because they operate quite

differently from the banks. They're a grassroots movement. They are

made up of people who participate in the affairs of their organization,

which is in contradistinction to what goes on in what really can be

called the monopoly monolith of the financial world, which is the

banks. We have had no indication whatsoever from any of the banks in

British Columbia, or across Canada, that they are prepared to do

anything in respect to assisting in the mortgage markets. It is a very

crucial part.

We have not been successful in Canada in

developing that secondary mortgage market field, something that we need

to do. That was the intent of the legislation on B.C. Savings and

Trust, which that government, excluding the four Liberal members, voted

for.

The important aspect of the credit union movement is

that it needs to be encouraged both by the people — some 900,000 now

are members — and what function the government can play in using the

credit union in other ways besides just tunnelling the mortgage subsidy

program. One might well ask whether the government is disposed — and we

can ask the Minister of Finance this in his estimates — to putting some

Crown money, on a daily basis — they handle some S300 million a month,

or more.... As we understand it, there is a fairly long-standing

commitment to using the Canadian Imperial Bank of Commerce. The

minister indicates that we may be slipping away from that. Well, if

we're slipping away from it, let's see whether we can slip some money

into the credit unions.

I don't see anything in terms of

deposits being made in the credit unions by the government. There was

some $365,000 last year. That's quite a drop from what I think was in

the last year, 1975-76, some $27 million. If there's an opportunity for

us to give some direct benefit to the credit union movement in terms of

major deposits by the government, then that should be done. I would

hope at the time of the estimates of the Minister of Finance to ask him

whether the government has developed a policy about using them as a

[ Page 2834 ]

conduit

for getting their money into the community or for whatever bills they

have to pay and that kind of thing. I know some of this takes place on

a bid basis, but has the government talked to the credit unions about

that?

In closing, we will presumably have some more

discussion, perhaps not on such a broad basis because of the technical

nature of the amendments.

AN HON. MEMBER: You are supporting the bill?

MR. LEVI: Yes, obviously we are supporting it.

These

are technical amendments. I said yesterday when I started my speech

that I would have hoped that some of the members might have taken the

opportunity to get into the debate on the whole question of the capital

market system in this province and some of the shortcomings because of

the failure of the government to release well over $400,000 worth of

reports that have been done but never made available to the public. It

is a topic that is constantly on everybody's mind. Strangely enough, we

don't have anybody other than the minister from that side saying

anything at all, would be worthwhile hearing from the Minister of

Lands, Parks and Housing, who always has so much to say when he is

sitting down but so little to say when he is getting up. That's a very

difficult situation.

We intend to support the bill. We are dealing here with technical matters.

HON. MR. HEWITT: Mr. Speaker, I ask leave to make an introduction.

Leave granted.

HON. MR. HEWITT:

Mr. Speaker, in the gallery are two very old friends of mine who are

community workers in the city of Penticton. They spend a lot of their

time and effort making Penticton the great city it is. I am talking

about Norm and Kay Affleck. I would like the House to bid them welcome.

HON. MR. NIELSEN:

Mr. Speaker, I appreciate the comments made by the member for

Maillardville-Coquitlam (Mr. Levi). I appreciate, as well, that much of

the discussion from his side has been broad-ranging and does involve

many other aspects of government, many other ministries and probably

many other statutes.

I would like to emphasize, as has been

recognized, that the bill under consideration today is primarily a

technical amending bill. The primary purpose of the bill is to assist

the credit unions in functioning somewhat more efficiently and the

members of credit unions in benefiting somewhat more from their

association with credit unions.

The cooperation of the

credit union movement in British Columbia and the government of B.C. is

very, very sound. We've had a tremendous amount of cooperation and a

great deal of consultation with the credit union movement in the

province. Peter Podovinikoff has been of great assistance to us, as has

our superintendent responsible. We've had excellent rapport in drafting

this legislation over the last year and a half, and as I said

yesterday, we anticipate that there'll be further refinements offered

for consideration of this assembly in the future.

So many other questions will probably come back during consideration of estimates

and perhaps may be more appropriately responded to at that time. One particular

point the member raised yesterday was the amendments to the Bank Act. It seems

to be a long-standing program of the federal government to come through with

certain amendments, but we have no confidence as to when that ever may occur.

We recognize that there could be certain situations in conflict, but we're

prepared to move first from our point of view and give consideration to that,

should the federal government get its act together and make their long-promised

amendments to their Bank Act.

With

those comments, Mr. Speaker, and considering the degree of discussion

we will be able to involve during third reading, I would move that the

bill now be read a second time.

Motion approved unanimously on a division.

Bill

12, Credit Union Amendment Act, 1980, read a second time and referred

to a Committee of the Whole House for consideration at the next sitting

after today.

Division ordered to be recorded in the Journals of the House.

DEPUTY SPEAKER: We're back to the Minister of Finance, who adjourned debate on the Social Service Tax Amendment Act, 1980.

SOCIAL SERVICE TAX

AMENDMENT ACT, 1980

(continued)

HON. MR. CURTIS: Now, Mr. Speaker?

DEPUTY SPEAKER: Now.

HON. MR. CURTIS:

Mr. Speaker, Bill 3, introduced in this House on budget day, deals with

changes to the Social Service Tax Act. The proposed amendments to the

Social Service Tax Act serve three purposes: they contribute to

achieving greater energy security; they provide tax reductions for all

households in the province; and they provide for greater equity in the

administration of the act.

Mr. Speaker, in February of this

year my colleague, the Minister of Energy, Mines and Petroleum

Resources (Hon. Mr. McClelland), presented an energy statement that set

out a comprehensive policy framework. As the House will recall, the

major themes of that statement included conservation efforts, building

upon our energy strength and enhancing research and development

efforts. In the budget speech in March 1 proposed a number of specific

actions to give concrete effect to these broad policy directions. A

number of these are to be achieved through amendments of the Social

Service Tax Act.

That February energy statement drew

attention to the fact that although British Columbia is energy rich,

for which we are all very thankful, Mr. Speaker, we remain dependent

upon imported oil. Therefore particular attention has to be given to

encouraging oil conservation. Fifty-six percent of oil consumed in

British Columbia is for the purposes of transportation; of that total

over 50 percent is used by the private automobile. Therefore it follows

that if conservation policies are to be effective, some action must be

taken to encourage more efficient use of fuels in private transporta-

[ Page 2835 ]

tion.

The proposed amendment to the Social Service Tax Act will provide an

incentive to purchasers of new automobiles to give greater

consideration to the fuel-efficient car.

It is proposed that

new cars be categorized according to their fuel efficiency as rated by

Transport Canada. As the House will know, the rate of tax on the

purchase of new automobiles with a high fuel efficiency rating is

reduced to 2 percent. For new automobiles with poor fuel efficiency,

the rate of tax is to be increased to 6 percent. On all other new cars

the tax rate remains at the 4 percent rate which existed previously.

This incentive, we believe, will encourage the trend toward gradual

replacement of cars which achieve poor gas mileage with vehicles

designed for what is now clearly recognized as an era in which oil and

gas are scarce. The variable rates of tax will apply to new passenger

cars only. Four-wheel drive jeeps, trucks, vans, light vans and

recreation vehicles are continuing to be taxed at the standard rate of

tax.

Further encouragement to energy conservation and the

use of relatively more abundant fuel is the purpose of proposed

exemptions to the Social Service Tax Act. These will be introduced by

regulation. Storm windows, storm doors, multi-glazed windows and

thermal insulation material are, we believe, sensible investments for

families wishing to reduce their home heating costs. To help make these

more affordable, these items are to be completely exempt from the

social service tax. A number of other items not yet widely used but

which also offer the prospect of substantial energy conservation are to

be exempted. These include heat pumps used in heating and cooling

systems in buildings, heat recovery units or devices, time-controlled

thermostats for heating systems and automatic timer controls for

electric lighting systems.

Finally, to encourage the use of

more abundant and renewable fuels, the following items are to be exempt

from the social services tax: wood and coal-burning stoves and

furnaces, wind-powered generating equipment, propane converter kits for

motor vehicles, and specific equipment for solar heating systems.

Although

the costs imposed by higher energy prices can be reduced by more active

conservation efforts, each and every family in this province has had to

face an increased fuel bill. Therefore it is appropriate that some

action be taken through the taxation system to cushion the input of

higher energy costs. So you have before you the proposal that natural

gas and electricity purchased for home use be exempted from the social

services tax. Parallel relief has been provided to users of home

heating fuel through repeal of the Fuel-oil Tax Act. Two other proposed

exemptions will bring important relief to particular groups in our

province while providing some tax savings for all of our citizens.

First,

we have proposed the exemption, subject to the approval of this House,

of patent medicines. A full list of such medicines will be provided by

regulation, but it will include pain relievers, ointments, cough syrups

and cold remedies. The House will know that prescription medicines are

already exempt from the social services tax. Since many people rely on

patent medicines to meet their health needs, it is appropriate that the

exemption be widened to cover those non-prescription medicines.

Secondly,

it is proposed to exempt the monthly telephone rental charge from the

social services tax. Since many people are dependent on the telephone —

it was at one time considered to be a luxury or an option, but that is

no longer the case, especially for the elderly; we know of their

dependency on the telephone, and that of those living in remote areas —

it is clearly appropriate to make this exemption. I would like to point

out that British Columbia is the first province to propose such an

exemption in Canada. Moreover, long-distance calls are already exempt

in the province, although taxed in most other provinces.

addition to energy-conscious changes to the taxation of new cars and

substantial new tax exemptions, the act also proposes three changes to

bring greater equity in the administration of the social services tax.

First, all used mobile homes will be exempted from tax. Without this

change, used mobile homes would continue to be taxable if purchased

from a dealer but, strangely, exempt if purchased on a mobile-home

site. That seems silly. That inequity should be removed and it is being

done through this measure. Secondly, the Social Service Tax Amendment

Act, 1980, provides for no right of appeal against a penalty imposed

for non-collection of tax. This, I suggest, is a move which is

important and long overdue. The right of appeal to the minister, which

has been the case, is therefore going to be altered. Thirdly, an

amendment is proposed that will give unpaid wages priority over

unremitted tax collections in the case of a business going into

bankruptcy or receivership. The last two amendments — those I've just

dealt with — are retroactive to midnight, April 10, 1978. All other

proposed changes are effective midnight, March 11, 1980. The revenue

loss associated with these changes is expected to be $25.8 million in

the 1980-81 fiscal year.

Finally, I think it is important to

remind the members in this House and the people of British Columbia

that the 4 percent social services tax rate is the lowest sales tax

rate applied by any province in Canada that levies such a tax. The

sound financial management of this government and the strong economic

performance of our people and the province as a unit have combined to

produce the revenue strength required to maintain this low rate of

taxation.

These items were dealt with at length in the

presentation of the budget and in the budget debate which followed. I

welcome the comments from members today but obviously this particular

bill flows from that budget presentation. I move second reading.

MR. STUPICH:

Certainly, any relief from this particular tax — which, we have argued,

is a regressive form of taxation — is welcome, and the opposition will

support it. We would like to make a few comments, perhaps even ask a

few questions. I am sure other colleagues of mine will have something

to say on the bill as well. It would seem that every time the Minister

of Finance introduces a bill, it requires almost seriatim discussion

rather than general principles. However, I think there is not too much

problem with this particular bill before us now.

Hardly a

week goes by but I get letters asking for further exemptions from sales

tax. I'm sure the minister gets many more than I do.

So the

list is endless as to the number of items that might not be taxed under

this legislation: each year the Minister of Finance brings in new ones

to add to the list, and we welcome them. Perhaps rather than talk about

the items that might not be taxed — that would be more appropriate

under the ministers salary vote — in this legislation we might consider

whether the $25.8 million is being spent to the best effect.

With respect to the varying rates of taxation on automobiles. I seriously question whether this is going to have

[ Page 2836 ]

any

real influence on anybody going to a car dealer to buy an automobile —

to ask in what category of sales tax that particular auto falls. The

automobile dealers themselves, or at least the manufacturers, in trying

to increase their sales of particular types of automobiles, I'm sure

after a great deal of research, came to the conclusion that the best

way of influencing people to buy a certain automobile was to offer them

a cash discount rather than to say they weren't going to charge quite

as much — to drop the price. They determined that the idea of getting

some cash returned to one was the best way of influencing people in

their buying habits.

I would have thought that had the

minister, perhaps on the basis of that study that was done, offered

cash discounts to people who buy certain types of vehicles, it would

have been more effective than simply saying that there will be varying

rates of tax imposed. However, that's my opinion. The minister is not

going to change the legislation because I offer that opinion. But I

would like to have some review of this done, if it's possible to do it,

so that we might ask the minister a year from now whether there was any

evidence at all of any positive results from this particular change. It

would be interesting for everybody, I think.

[Mr. Strachan in the chair.]

The

exemptions that he mentioned from the point of view of energy

conservation.... I noticed he said they were for families. I wonder

whether he might tell us whether these exemptions for heat-saving

devices and energy-saving devices of all kinds and even the telephone

tax exemptions are limited to families or whether they will apply to

commercial and industrial use as well. I would suggest that they

should. If the objective of these exemptions is to increase the

emphasis on energy conservation, then certainly the opportunities for

energy conservation in commercial enterprises and even industrial

enterprises are much larger than in single residences. So I would think

that there'd be some advantage in having these exemptions, since they

are designed not to reduce revenue but rather to change people's

habits. I think the exemption should apply to commercial and industrial

enterprises as well.

The relief from double, triple or

quadruple taxation on used mobile homes is certainly welcome by anyone

buying these, and I compliment the minister on that step. Mr. Speaker,

the opposition will be supporting the legislation.

MR. SKELLY:

Mr. Speaker, I also rise to congratulate the minister on presenting the

bill in the direction that he's taking in using fiscal means to

encourage energy conversation in the province of British Columbia. I'm

not sure what the effect will be of the application of sales tax on

cars of varying energy efficiencies, but I guess, as the member for

Nanaimo says, we'll have to wait and see how that performs in the

coming years. Hopefully, the minister will table some kind of

performance statement as the years go on to show us what effect this

taxation measure has had on saving oil in the transportation sector.

the minister will recall, a few years ago I asked the previous Minister

of Finance to provide sales tax relief for a number of items that would

be used in homes for energy conservation, such as insulation, thermal

windows, heat pumps and that type of thing. The minister said it would

be impossible at that time, because if we provided relief for one

thing, we'd have to provide relief for everything, which sounded like a

good idea to me. So he did nothing. I'm, pleased to see that this

minister has taken a better view of the situation, but perhaps the

energy situation in British Columbia has become a little more critical

since that time.

I would appreciate it, though, in cases

like this where we're going to be providing tax relief on a series of

items that have been designed to save energy or to use alternative

forms of energy, if the minister would table a complete

schedule of

what he has plans for removing the sales tax from, rather than leave it

up to regulations. It would give usa better idea of which direction the

minister is going.

One of the problems is that although

we're dealing with sales tax here, there's no comprehensive policy with

respect to tax on energy commodities and energy-saving devices. For

example, when we look at natural gas and oil, we see that their

drilling is subsidized by some fairly generous income tax concessions.

There are also, for the producers, some fairly generous depletion

allowances and favourable income tax concessions as well as price

subsidies set up by national and provincial policy.

When we

look at Hydro, we see that it is essentially subsidized by allowing it

to become a monopoly with the right to set its own policies and to

price its energy commodity in virtually any way it chooses. Also, the

government's guarantee of B.C. Hydro's debt means that it can operate

at a lower interest rate level than a private corporation in the same

industry.

So there are these various subsidies that go to

other forms of energy — other than energy conservation. The balance is

swung unfairly in favour of the consumption of oil, hydroelectricity

and natural gas, when we should be swinging the balance a little more

competitively towards energy conservation and energy alternatives.

Nuclear power in Canada, it so happens, is one of the most subsidized

of all energy resources. The research is subsidized by the taxpayers'

money through the federal and provincial governments, the industry is

subsidized, and marketing is subsidized by a Canadian federal agency.

Almost every step of the way, fiscally and through federal government

policy, the nuclear industry is being subsidized. I think that while

it's helpful to relieve energy conservation and energy-efficient

devices from sales tax at the retail end, what we should be looking at

is a comprehensive way of making energy efficiency, energy conservation

and energy alternatives more competitive in terms of the subsidies they

receive and in terms of the subsidies that other forms of energy

receive.

I'd like to give the minister some suggestions,

which, of course, he can't bring in under a sales tax act; but there

are other statutes which come under the jurisdiction of this minister.

Some of these concessions to energy conservation and energy

alternatives should be exercised through these fiscal and regulatory

means.

For example, the building codes in the province of British Columbia have to

be changed to encourage people to build more energy-efficient housing and to

encourage industry and commercial buildings to be more energy efficient. I understand

that the Minister of Labour (Hon. Mr. Heinrich) is presently looking into that

in conjunction with a number of other ministries. If I were the Minister of

Finance I would impress on the Minister of Labour and that interministerial

committee the urgency of developing a code that would make buildings and residences

in B.C. more energy efficient and of implementing that code as soon as possible.

Also, there should be a retrofit requirement similar to the

[ Page

2837 ]

one

that they have now in Portland, Oregon. It's strange that in Portland,

Oregon, they're encouraging energy conservation because of the high

price of our gas — in part because of the high price of oil, but mainly

because of the high price of our gas. They're paying something like

$5.26 per 1,000 cubic feet for it down there, while we're really

subsidizing B.C. Hydro at about $1.17 per 1,000 cubic feet. So Portland

is requiring that within five years residences be retrofitted to a

certain energy efficiency standard or the owners will not be able to

sell them. It sounds like a pretty harsh measure; but when you consider

the harsh energy measures that people in Portland are going to have to

face in the future, having to retrofit their homes to energy efficiency

standards is not all that hard compared to what they'll be paying for

our natural gas and for oil and electricity from nuclear power plants.

would like the minister to take a look at the idea of providing

interest-free loans, especially to senior citizens or to low-income

families. It doesn't really help if you reduce the sales tax on a heat

pump....

HON. MR. GARDOM: What's your cost impact there?

MR. SKELLY:

Well, this is something I'm asking him to look into. He has the staff

and the capability of working out the cost impact of that. I would

suggest to you, Mr. Minister of Intergovernmental Relations, that the

cost impact would be nowhere near the cost of the Cheekye-Dunsmuir

power line, which will probably overrun its budget by the time it's

completed by an amount greater than the Columbia River Treaty program

overran its budget.

HON. MR. GARDOM: Do you want to abandon that?

MR. SKELLY: The Cheekye-Dunsmuir project? Yes.

MR. KEMPF: Let there be darkness on the Island.

MR. SKELLY: As there is darkness from Omineca.

DEPUTY SPEAKER: Order! This is no time for levity.

MR. SKELLY:

I am asking the minister — because this is, in part, within his

jurisdiction — to examine interest-free loans to senior citizens and

low-income families, because even though we've reduced the sales tax on

some of these energy-efficiency commodities and alternate energy

equipment, it's pretty difficult for somebody on a fairly low income or

a pension to buy a heat pump at the cost of $1,000 to $2,000.

The

fact that you have taken off the 4 percent sales tax is not going to be

all that helpful to those people. I would like you to look into the

possibility of making interest-free loans available to them. Even

though you are losing money on interest, you are gaining money because

you are saving energy, which is spiralling in cost; you are gaining

money over the long term.

I would also encourage the

government to embark on a program of free energy audits. They are doing

this now in the city of Seattle. Seattle City Light, the utility down

there, is doing audits free or at a nominal price for homes in the

Seattle area. The same thing is taking place in Portland, Oregon.

I would also like the minister to look at an abatement of assessment on homes

that install solar equipment, which represents a fair capital investment that

is assessed and taxed by the government. In some states of the United States

anyone who installs solar panels and solar equipment on his home receives a

five-year tax abatement on the increased assessment that results.

would like the minister to look at all those other fiscal measures

which could be used to assist people who wish to save energy and to

make energy conservation competitive with using the existing resources

such as hydroelectricity, oil and natural gas. In closing, I'd like to

congratulate the minister for this first step towards using fiscal

means to encourage energy conservation. I would hope to see more of

this in the future.

MR. BARBER: Mr. Speaker, I will

be supporting the bill, and I am pleased to. I do so chiefly because it

introduces an important new principle, which, as my colleague from

Alberni just stated, is some means whereby the government of British

Columbia encourages, in an active, forthright and perfectly direct way,

people to use some common sense about energy conservation. One of the

ways in which people are rewarded for using common sense, of course, is

in the pocketbook. That's a good thing. In our system and our society,

and given the values by which we live, apparently that is often one of

the only ways that you can encourage common sense. But whatever the

motivation may be on the part of the individuals who apply such

intelligence, I nonetheless congratulate the government for recognizing

a very practical way to get the ball rolling. I am pleased to support

the bill and to credit the minister who has introduced it this morning

for its authorship.

I would like as well, if I may, to

congratulate the first member of this Legislature to ever propose such

a technique and such a strategy. That is of course the member for

Alberni, who just spoke. The member for Alberni, as every member of

this Legislature knows, is continually presenting innovative and

imaginative ideas...

HON. MR. GARDOM: Division.

MR. BARBER: You know it's true.

...to

this Legislature in order to recognize the individual and the corporate

responsibility we have as persons and as citizens to conserve energy

and to use that energy we do have in a very wise and prudent way. So I

would also like to congratulate the member for Alberni, who was the

first member of this Legislature to propose this particular strategy of

encouraging the use of energy-saving and energy-conserving devices by

reducing the sales tax and other measures. The member for Alberni, I

think, is developing a well-earned reputation in the province of

British Columbia for being consistently one of the first elected

persons at the provincial level to put forward such proposals in a

tough-minded and highly articulate way. So both the member for Saanich

and the Islands and the member for Alberni deserve credit for this

legislation this morning. That is among the reasons why we will support

it.

I want to add as well, though, if I may, one caveat to

section 1. It is, I think, a good principle that persons who continue

to purchase private automobiles are encouraged to purchase automobiles

that are energy-efficient. It is a good idea it is a necessary idea; it

is something we welcome. But there is a fundamental flaw in the

argument that any of us would put forward, that the way to reduce

energy consumption uniquely and solely lies in the field of encouraging

more

[ Page 2838 ]

energy-efficient

automobiles. Another way, of course, is to encourage alternatives to

the automobiles altogether. One way is to recognize that the automobile

is inherently wasteful.

Although this is a good principle

within the framework of the use of the modern automobile and the

internal combustion engine, nonetheless there is a broader framework

that I would ask the minister to consider. That framework, of course,

is to encourage, again through the device of the sales tax — an

admirable principle enunciated here — much, much more popular use of

alternatives to the private automobile. The minister knows exactly what

I am going to say.

HON. MR. CURTIS: Hot-air balloons.

MR. BARBER:

Balloons, dirigibles of any order — no. Of course I am referring to

bicycles, one of the principal modes of transportation in Europe. In

the highly urban centres of the western world the bicycle is treated in

a perfectly respectful and serious way as one of the fundamental....

HON. MR. CURTIS: Would Barbara come over the Malahat on a bicycle?

MR. BARBER: If we could convert the CN to a bicycle trail, she just might. It would be a marvellous thing.

HON. MR. CURTIS: Barbara shakes her head.

MRS. WALLACE: I think I'll sail in my sailboat..

MR. BARBER:

The Minister of Finance knows that I am talking about urban

communities. I am not talking about interurban transportation. I am

talking, though, about one means. Drawing from the European experience,

where in the great urban centres bicycles are encouraged in every

possible way, including, I expect — although I don't know for a fact —

by the national authorities, who reduced or eliminated the sales tax as

one of the principal alternatives to the automobile.... So I want the

House to understand, Mr. Speaker, that I support this new principle in

section 1; it's a good thing. But I wonder if it's possible that we

might think just a bit more originally about not simply encouraging the

use of more energy-efficient internal combustion engines, but also

encouraging in a dramatic and bold way alternatives to the private

automobile where they are appropriate. Of course I'm speaking of

cities; of course I'm speaking of the bicycle.

Let me

illustrate in a very practical way. In Victoria, according to the city

police, there are far more bicycles than automobiles. Typically,

bicycles exist at the rate of about 1.7 per household, apparently, in

the greater Victoria area. The Minister of Finance will know that I was

once active as the finance chairman for the Greater Victoria Regional

Bikeway Committee. We discovered that about 100,000 bicycles exist in

greater Victoria, and if bikeways were built and bicycles themselves

were given preferential tax status, it might be possible to encourage

the greater use of them. Now again, I'm not talking about interurban

use or commuting from Omineca or Atlin to the capital. It's not very

practical. But it certainly is practical and inevitable....

Interjection.

MR. BARBER: We'll be in your riding in a week, as, a matter of fact.

I'll bring you a bicycle to ride on.

What

we have is an opportunity, through this and other legislation which I

hope the minister will consider introducing or amending, to recognize

that within the urban communities, it's not simply good enough to

encourage the use of less wasteful internal combustion engines. The

point is that they are inherently wasteful. The internal combustion-

engine is one of the most inherently inefficient engine systems that

the western world ordinarily uses. It's tremendously inefficient no

matter what you do. I wonder if the minister might consider extending

this principle. I call on him specifically to consider, if not at this

session then at one in the near future, an amendment to the sales tax

which would eliminate altogether the sales tax on bicycles, mopeds and

motorbikes.

These three are inherently efficient. They are

inherently appropriate in the urban communities of British Columbia.

They are safe and, indeed, the bicycle itself is a tremendous

encouragement to good public health. It is a tremendous encouragement

to people to get out of the automobile and away from arteriosclerosis,

early heart attacks and all the other fads of North American living

when we rely on the private automobile, and instead get out pumping the

heart and pumping the legs and doing something safe, efficient and

healthy.

Of course, we need bikeways to physically separate

bicycle and automobile traffic. That's necessary. A recent University

of Calgary study demonstrates just that in a very direct and practical

way.

Nonetheless, in the great urban communities of North

America the bicycle increasingly will be seen as a safe, healthful and

tremendously energy-efficient means of transporting great numbers of

people. Now this is important. It's important to recognize that

principle, and I'm sure the minister does, at least philosophically. I

expect most people do, at least philosophically. But there is a

practical enunciation of it that could be found in this legislation

and, regrettably, is not. Maybe next year it will be.

would urge the minister to consider altogether the abandonment of

social services tax on bicycles, mopeds and motorbikes. If, however,

the minister is not prepared to go quite that far, I wonder if he might

consider a fourth proposal. It is a very simple realignment of that

suggestion which would have the abandonment altogether of the sales tax

on Canadian-manufactured bicycles.

The minister may well

have an argument saying that because of the tremendous influx of

Japanese, Korean and Taiwanese bicycles and because of the fact that

the Canadian bicycle manufacturing industry, especially in the hands of

CCM, which, unfortunately is not a terribly well-managed company — or

so it appears by their sales figures.... It might, therefore, be

appropriate to give a special dispensation to the Canadian bicycle

manufacturing industry which every year turns out, I understand,

something like a quarter of a million bicycles. Now that's a good

thing, and that should be encouraged.

If the minister isn't

prepared to go all the way with a sales tax removal for bicycles, at

least go sufficiently far that we simultaneously encourage the bicycle

and Canadian industry by abandoning the sales tax entirely on bicycles

which are manufactured in Canada. At the very least that serves two

important purposes. It substantiates and reinforces Canadian industry —

and that's always a good thing — and it substantiates and reinforces

the current public attitude, especially

[ Page

2839 ]

among young people, which increasingly is turning

to the bicycle as a serious, necessary, and indeed inevitable

broadbased means of popular transport of many people in the urban

communities of Canada.

I think these are important

principles. Because of the comparative reduced cost of the bicycle as

opposed to a modern Ford or Chevrolet product, they would, in fact, be

far less of a drain on the public purse than the current tax before us.

AN HON. MEMBER: There are too many car dealers over there.

MR. BARBER: Conflict of interest, yes.

think the cost of such a fiscal measure would be tremendously less than

the cost of this fiscal measure today. But the social benefit would, I

think, be at least as great, and perhaps in the long run greater, when

you realize the inevitable obsolescence of the private automobile in

the great urban communities of North America.

I support the

bill. I congratulate its authors, the member for Saanich and the

Islands and the member for Alberni (Mr. Skelly). I congratulate the

government for putting it forward in this form, and I ask the

government to consider, just for a moment, reducing altogether the

sales tax on bicycles — with, perhaps, a preferential tax reduction for

Canadian bicycles only — on mopeds and on motorbikes. This would, I

think, be welcomed by many people in British Columbia. It would cost

the taxpayer relatively little, and it could lead to social benefits in

the energy field and in the health field as well.

For all those reasons I commend these ideas to the government.

MR. SKELLY: With leave of the House I would like to make an introduction.

Leave granted.

MR. SKELLY:

We have in the gallery today, wondering what is going on, His Worship

Mayor Jim Robertson, Alderman George McKnight of the city of Port

Alberni, city manager Mr. Jim Sawyer and the planner, Mr. W.J. Blaikie

of W.J. Blaikie and Associates. I ask the House to make them welcome.

MR. D'ARCY: It seems to be my draw to enter into the debate as soon

as the minister has left the chamber. However, I have a couple of points to

make. I don't want to again cover the ground covered so capably by my friend

from Victoria. However, I wish to emphasize the point that while Victoria is

an admirable place to commute and do other business on a bicycle — as the member

knows, that is how I get around in Victoria — the fact is in most areas of the

province....

Interjection.

MR. D'ARCY: Right. You can do very well going downhill in Trail

on some of our 10 percent grades, but it's somewhat difficult getting uphill.

The

point I want to emphasize is that it is inconsistent to reduce or

eliminate the tax on four-wheeled rubber-tired power vehicles and not

do it for motorcycles and motorbikes. These are a far more practical

way of getting around in my riding than a bicycle is.

I want

to particularly point it out for the industrial worker, whom we perhaps

forget about in these kinds of discussions. In my area industrial land

is at a premium. Both of the two major industrial plants, Cominco Ltd.

in Trail and CanCel Castlegar have parking lot problems, not because

the companies are too cheap to provide for adequate parking, but there

just isn't the space. You run into a mountain, into a river. or into a

deep gorge. Both companies have been encouraging those employees who

choose to to commute to work either by bus or, perhaps more importantly

nowadays, on motorcycles. Many employees are doing just that. They may

use the motorcycles in certain weather and certain conditions and

bicycles at other times. It has resolved the parking problem to some

degree for employees and resolved the parking problem in terms of the

use of land and the constraints it puts on expansion and development of

those companies. Clearly it is a very poor use of land, as the member

for Victoria has stated on many occasions, to have vast acreages

devoted to parking lots when there are other ways of transportation.

The car just sits there for eight hours.

I want to make

another point. Perhaps, Mr. Speaker, you may call me to order and ask

that this be brought up under

section 2. I am going be very quick,

though. Subsection (z) — perhaps the minister will read the Blues and

pick this up — deals with telephone services qualifying for a

residential rate. A factor that was overlooked — quite honestly so — in

drawing this up was the taxation on the service which the resident of

an apartment building has when his door is buzzed. The fact is that

apartment residences are continuing to be taxed because it is the

interpretation of the senior administrators in the Ministry of Finance

that the subsection (

z) only applies to the monthly rental and not on

the telephone itself to the fee charged by the telephone company in the

door opening devices. It is a small amount of money and tax, but it is

that kind of annoying thing which is totally inconsistent with what I

believe to be the meaning of the act, which is

an act that we all

support. I hope that the minister will take it into consideration that

either by an amendment or by regulation that minor inconsistency could

be taken out. It is clear that apartment owners should not have to pay

a fee which homeowners and other individuals do not have to pay.

DEPUTY SPEAKER: The minister closes the debate.

HON. MR. CURTIS:

I was called out on a matter which required immediate attention and I

apologize. I was able to keep one ear tuned to the closing remarks — my

right ear.

I think a Minister of Finance finds it difficult

to respond to suggestions which are made regarding future tax changes,

for reasons which are historic in the British parliamentary system.

have, and I hope all members will take advantage of this opportunity,

established a "tax suggestion file,'' for lack of a better term.

Suggestions which came in immediately after the presentation of the

budget and other suggestions which have come in since, and which I know

will continue to come in, will all be given very careful consideration

prior to the preparation of the next budget for the 1981-82 fiscal year.

Some

of the suggestions are clearly not practical, and as an example I would

respond to one which was made in this brief debate today, with respect

to the removal of sales tax on Canadian-made bicycles only. Well,

nothing is impossible, but the members will know that that would be

considered

[ Page 2840 ]

discretionary

and would contravene the GATT international agreements which are in

place. So that's the kind of problem which we face when reviewing these

suggestions.

MR. LEA: Did you sign GATT?

HON. MR. CURTIS: I did not sign GATT. Did you sign the Waffle?

MR. LEA: Yes, I did — the Waffle Manifesto.

HON. MR. CURTIS: I see. Okay. In any event, Mr. Speaker, seriously....

Interjections.

HON. MR. CURTIS:

Mr. Speaker, a number of people seem to be closing this debate. The

suggestions which have come in and which will come in through the

balance of this fiscal year will be pulled together in, I would think,

the last part of the calendar year, in late October or November, and

will be given very serious consideration by members of this ministry,

senior staff and by myself. Some of them, I would hope, will be brought

in as part of the budget and accompanying legislation in 1981. I thank

the members for their suggestions and I invite all members of the

House, as new thoughts occur to them, to please provide me with their

suggestions and recommendations. They will be given serious and very

careful consideration at the appropriate time.

I thank the

members for their support of the measures which have been introduced in

the budget and in this particular bill, and I now move second reading.

Motion approved unanimously on a division.

Division ordered to be recorded in the Journals of the House.

[Mr. Davidson in the chair.]

HON. MR. CURTIS: Mr. Speaker, I move Bill 3 be referred to a Committee of the Whole House for consideration at the next sitting after today.

Motion approved unanimously on a division.

Division ordered to be recorded in the Journals of the House.

HON. MR. GARDOM: I call second reading of Bill 9, Mr. Speaker.

CROWN CORPORATIONS BORROWING

AUTHORITY INCREASE ACT

HON. MR. CURTIS: As the Legislature is aware, the Minister of Finance

is the fiscal agent for a number of Crown corporations in British Columbia.

At this time three of those corporations, namely the British Columbia Buildings

Corporation, the British Columbia Railway and the British Columbia Hydro, and

Power Authority, have requested increases in the amount of their borrowing authority.

This act proposes increases of $100 million each in the limits of the amount

of the borrowing authorities for BCBC and B.C. Railway and $750 million for

the B.C. Hydro and Power Authority. The increases are proposed to allow these

corporations to proceed with their projects and leave a reasonable amount of

borrowing power available for any unforeseen events.

The

British Columbia Buildings Corporation is projected to have had a

balance of $5 million of their $200 million borrowing authority

remaining at March 31, 1980. The major projects now underway or planned

requiring funds in the next five years include the New Westminster

courthouse, Vancouver pre-trial services, Oakalla women's unit,

Victoria office buildings, the Kamloops courthouse, Kamloops remand

centre, Port Kells highways establishment, Kamloops highways

establishment, Prince George courthouse, the Vancouver Island

correction centre, Prince Rupert highways establishment and Oakalla

men's unit. The borrowing requirements for 1980-81 construction are

estimated to total $58 million. This bill therefore proposes to

increase the borrowing limit for the British Columbia Buildings

Corporation by $100 million, from $200 million to $300 million.

The

British Columbia Railway's projected balance of its present borrowing

authority is seen to be $39 million as of March 31, 1980. The

corporation requires $30 million for acquisition of rolling stock in

the present fiscal year. This would therefore leave only $9 million

borrowing authority, and, clearly $9 million is not considered

sufficient to allow for the possibility of additional capital

expenditures.

Mr. Speaker, members will also be aware that

an increase in the amount of the borrowing authority does not

automatically mean that the corporation can borrow to that limit.

Borrowing by the corporation is subject to approval of the

Lieutenant-Governor-in-Council, so that the amount of borrowing is

controlled by the government initially and in the final analysis by the

Legislature through the total amount of borrowing authorization which

is given at any particular time.

At this time, in view of

the possibility of additional funds being required, it is prudent to

increase that borrowing authority limit. Therefore the bill proposes to

increase the British Columbia Railway borrowing limit by $100 million,

from $900 million to $1 billion.

British Columbia Hydro and

Power Authority now has a borrowing authority limit of $5.65 billion.

However, again at March 31, the projected balance of that limit is $290

million, and with an estimated $709 million requirement for borrowing

in this fiscal year, there is the projected shortfall of $419 million,

Major projects, plant and equipment expenditures will approximate that

amount. Indeed, in committee stage perhaps I could speak of those. They

involve construction of transmission lines, Revelstoke and a number of

sites, buildings and a variety of projects, including substations,

switching, termination and protection and control of electrical energy

during the transformation to distribution voltage process, other

electric, including service buildings, control centers, research

laboratories, vehicles, tools and equipment, the gas service

distribution system, underground storage exploration, rail freight

service — that's trackage improvement, diesel and other additions —

and, generally speaking, the kind of thing for which similar borrowing

authorization has been given in this House over a number of years.

Mr.

Speaker, the expenditure for capital projects for B.C. Hydro in this

fiscal year would total approximately $858 million. Therefore there is

a projected shortfall of $419 million between the present borrowing

limit and the amount required. This would therefore increase the

borrowing au-

[ Page 2841 ]

thority for British Columbia Hydro and Power by $750 million, from $5.65 billion to $6.4 billion..

One

of the points which I think should be referred to in connection with

this increased borrowing authority for three Crown corporations is the

fact that if it is necessary to go to the markets once again, all

British Columbians and all members in this House, I am sure, will be

pleased that very significant sums of money will be saved as a result

of British Columbia securing through its Hydro bonds at this particular

point in time, a AAA rating from Moody's Investors in New York.

That

is the general observation with respect to second reading of this bill.

Perhaps in committee we can have more discussion, if that is the wish

of the members of the House. I move second reading of Bill 9.

MR. STUPICH:

Twice this morning the government has challenged us to vote against

their legislation. They've called divisions when there was absolutely

no opposition in the House to the legislation before us. There were

questions and constructive suggestions, but absolutely no opposition.

In this instance there will be opposition from the opposition side of

the House. We do intend to oppose this legislation.

It's not

so much that we are opposed to any of the specific suggestions for

spending the money, as detailed by the Minister of Finance; but for a

government that professes to not believe in government debt — although

on occasion it has embarked on some pretty questionable policies, such

as selling three new ferries rather than borrow the $85 million that it

desperately needed to balance its budget in the year ended March 31,

1977, and setting up a debt of some $271 million as of March 31, 1976,

for purely partisan political purposes.... This legislation before us

is actually reaching a new level of hypocrisy for a government that, as

I say, doesn't believe in going into debt.

With respect to

government borrowing and contingent liabilities, there has long been a

debate as to what exactly is the true level of debt in the province of

British Columbia. I can recall a previous Minister of Finance, the Hon.

W.A.C. Bennett, explaining the difference and saying that in the case

of debts that were owed by B.C. Hydro, the money was not coming from

the government. Payment of the debts was guaranteed, so these were

contingent liabilities rather than real liabilities. His arguments got

a bit more shaky when he started dealing with school district capital

borrowing, because each year money was paid directly out of

consolidated revenue to the various school districts and was allocated

specifically to the purpose of paying debt charges. Roughly 50 percent

of the total amount required for debt charges in the province for that

purpose were a direct impost on the Crown and should have been

recognized in Public Accounts as a direct liability — a real debt of

the government rather than as contingent liability.

B.C. Buildings Corporation is a case in point where we've go ne

to the absolute extreme. Every cent of revenue that B.C. Buildings

Corporation gets, it gets from the various ministry budgets, where they

are recorded as rent expenses. There isn't any other source of revenue

for B.C. Buildings Corporation of which I am aware. B.C. Buildings

Corporation is an organization that does have some real debt. I don't

know what the current figure is. We have public accounts for the year

ended March 31, 1979. That is the latest we have available. At that

date the long-term debt of B.C. Buildings Corporation exceeded $68

million. In addition to that, there were notes payable to the province

of British Columbia in excess of $143 million. Total debt of that

corporation, debt that it incurred purely for the purpose of providing

buildings for the use of various provincial government ministries,

expenditures that were previously recorded fully in Public Accounts,

that were not recorded as debts under any previous

administration.... But this administration, in order to be able to

say that it is not putting the public directly in debt, set up a

corporation that by March 31, 1979, had borrowed in excess of $211

million and is now proposing to have legislative authority to borrow a

further $100 million.

[Mr. Strachan in the chair.]

Looking

at the nature of some of those debts is rather interesting too. Again

quoting Public Accounts , the notes payable to the province of British

Columbia — as I pointed out — total over $143 million. Over $123

million of those notes bear absolutely no interest at all. One wonders

about a source of funds that is actually bearing no interest. The

province of British Columbia invests money in a Crown corporation that

it chooses to treat as a separate entity, and says that that Crown

corporation's debts are its own debts which it will finance out of its

own revenue, forgetting that all the revenue is coming from the

province of British Columbia, and having loaned that corporation all

that money in addition to other money that was granted. Buildings were

granted at least, and the figure is shown on the balance sheet.

addition to that, they have loaned them $123,571,000 to this day that

bears absolutely no interest at all. In addition to that, they have a

very attractive rate on the balance of $20 million, at least attractive

today at 10.5 percent. B.C. Buildings Corporation's debt, at this

date, is in excess of $143 million and should be honestly recognized as

a direct debt of the province of British Columbia.

The

second

section of the legislation deals with B.C. Rail. B.C. Rail is

getting money from the private sector. It's obvious that B.C. Rail is

never going to be in any position to meet its debt payments. The

government recognized that this year. Legislation provided for money to

be given to B.C. Rail to actually meet its debt payments. The

Auditor-General, in examining this particular Crown corporation, argued

that since the moneys were totally guaranteed by the province and since

it was patently obvious that B.C. Rail itself would never be able to

meet these debt obligations, those debt obligations should be

recognized in public accounts as a direct debt of the province of

British Columbia. This legislation before us does not. It chooses to

continue the fiction that this is a separate Crown corporation which is

raising money other than through government consolidated revenue funds.

It is now going to go out and borrow a further $100 million which will

not be government debt — it'll be somebody else's debt — recognizing at

the time that the only source of money to meet the servicing charges on

that additional debt will be consolidated revenue of the province of

British Columbia. It is a long-term debt for B.C. Rail. Again, I have

to refer to the latest figures available from public accounts. They're

quite old now — December 29, 1978. But the long-term debt at that time

exceeded $627 million.

It's interesting to read some of the

notes in the financial statements in telling us some of the details of

that debt. Note No. 4 says: "Long-term debt is not secured by the

assets of the railway." Nobody would take the assets as security for

this kind of debt. There's no point in pledging those assets as

[ Page 2842 ]

security

for this debt. In that note it is recognized that the only security for

that debt is the security offered by the government of British

Columbia. It is, in fact, a real debt of the people of the province and

should be recognized as such.

Further, note No. 4 says:

''Bonds totalling $143,951,000, which are held by the Minister of

Finance for Canada, contain a provision whereby under certain

circumstances they may be presented for redemption upon six months'

notice given to the railway." Mr. Speaker, that truly is a real debt —

a current debt. A debt that can be called anytime within 12 months is

considered in accounting fields as a current debt. So that total amount

is a current liability. There's no point in saying that it's B.C.

Railway's current liability. If B.C. Rail were called upon tomorrow to

produce that money within six months, and the agreement is that they

would have to meet it, there is no other source for that almost $144

million than the people of British Columbia through consolidated

revenue. The government might have to go out and borrow. Nevertheless,

it's the government that would have to come up with that. It is a true

and a real debt and not a contingent liability. This legislation before

us prefers to continue the fiction that this is somebody else's debt

and is not really a debt of the province of British Columbia.

further $48,387,000 of the bonds are subject to redemption after 1979

at option of the holder or the railway. Well, I can't imagine the

railway redeeming them. But the holder may redeem a further $48

million. So we now come up with a total of in excess of $192 million.

Quite apart from the total debt, some of which is long-term, $192

million might very well be called at any time. The government would

have to come up with the money. It is a true debt and not a contingent

liability as far as the people of British Columbia are concerned.

The

government should recognize that. The Auditor-General gave that advice

and it's advice that we can support. The legislation before us chooses

to ignore that kind of advice, chooses to pretend that this is not a

real debt of the people of the province and chooses to continue in the

fiction that it's only a contingent liability and might have to be

covered by the people only in the event that the particular Crown

corporation isn't able to do so. In fact, we know that those two Crown

corporations will never have any ability to pay any of these debts,

other than the ability guaranteed and provided for by the people of the

province.

We can't support this legislation, because it just

isn't dealing with the truth with respect to those two particular Crown

corporations.

MR. SKELLY: Just following along with

what the member for Nanaimo (Mr. Stupich) said, the opposition intends

to vote against the bill for a number of reasons, among which were the

reasons given by that member.

I'm particularly concerned about the fact that the bill now combines what

the government considers to be the debt requirements of three separate Crown

corporations, rather than dealing with the Crown corporations on a bill-by-bill

basis. While I don't have much experience with B.C. Rail and B.C. Buildings

Corporation, I am concerned about the operations of B.C. Hydro and their plans

for the province of British Columbia over the near-term and long-term future.

One of the problems I see with B.C. Hydro is a total lack of accountability

to the people of this province and to the Legislature. And one of the things

I see wrong with the ministers who are placed on the board of directors of B.C.

Hydro by this Legislature — or I should say, by this government — is that they

fail to account adequately to the Legislature for what is happening within B.C.

Hydro and for Hydro's plans for the future.

Occasionally,

in spite of the veil of corporate secrecy that's thrown around B.C.

Hydro, we do get a little information out of the corporation, but not

really enough to give members of the Legislature an accurate idea of

what the corporation is doing and whether or not we should be voting

money or debt to Hydro to support some of the projects that they are

planning over the long-term future. We know what Hydro's anticipated

expenses are for the coming year because it appears in their press

releases and in their corporate newsletters, but it's been extremely

difficult to find out what methods Hydro uses to develop its

load-growth projections. It's only been recently that Hydro....

Well, they didn't release this one but they have released forecasts of

gross load requirements. It's only been recently that they've made

these documents public and made the public aware of some of the

methodology that goes into their load-growth projections.

For

this reason many of the people of the province do not trust B.C. Hydro

and they do not trust the figures given to them by B.C. Hydro. When,

and only occasionally when, the Hydro directors who are also cabinet

ministers report to the Legislature — and I see none of them are here

today to assist the Minister of Finance with this bill — only

occasionally can we really trust what they say is happening in B.C.

Hydro, because often they don't know.

DEPUTY SPEAKER:

Hon. member, I would have to draw your attention to that last remark.

If you have impugned any dishonourable motive against a member I would

have to ask you to withdraw that.

MR. SKELLY: No, it

was a mistake on my part, I think, more than anything else, Mr.

Speaker. I do withdraw the statement if it reflected on a member of

this House. No, I don't think that they're really capable of knowing

what is happening in B.C. Hydro, so that some of the statements they do

make to the House don't really reflect what's going on in B.C. Hydro,

but it's not intentional that those ministers are so confused.

MR. BRUMMET: But you're an expert. You know you can trust everything you say.

MR. SKELLY:

I'm perfectly willing to let the member for North Peace River take his

place in the debate and tell me in what way he is an expert on B.C.

Hydro, because he's suddenly developed that expertise, Mr. Speaker.

During the last election he went around North Peace constituency and

people were confused. They didn't know whether he was in favour of the

Site C dam or against the Site C dam. But once the votes were

counted....

MR. BRUMMET: Point of order, Mr.

Speaker. That is incorrect. I made myself clear. That member has just

said that during the last election campaign the people did not know

where I stood. I made my position clear, so I think I'd ask that member

to withdraw that statement.

AN HON. MEMBER: That's not a point of order.

MR. BRUMMET: It's a valid question of privilege.

[ Page 2843 ]

DEPUTY SPEAKER: Hon. member, you have made your point, and the Chair will ask the member for Alberni to speak to Bill 9.

MR. COCKE:

On a point of order, Mr. Speaker, the member has, at the end of the

speaker's speech — that is, the end of the present speaker's speech —

the right to get up and correct what he thinks to be an error. He did

not bring up a point of order. He should pay more attention to the

rules of the House.

MR. SKELLY: It might be drawn to

the attention of the member for North Peace River that it's against the

rules of the House to make interjections across the floor, but I

wouldn't suggest that to the Speaker.

MR. BRUMMET: It's also wrong to make false accusations.

DEPUTY SPEAKER: Order, please. All members will come to order. The member for Alberni has the floor on Bill 9, second reading.

MR. SKELLY:

In any case, during the last election the people in the North Peace

River area were confused as to that member's position on the Site C

dam. They are no longer confused, because there was a two-page

article

in the Alaska Highway News recently, sent to me by one of his

constituents, which shows that he is solidly in favour of the Site C

dam. That

article has all the earmarks of being written by B.C. Hydro

rather than by that member.

MR. BRUMMET: Of all the dirty allegations!

DEPUTY SPEAKER:

Hon. member, the Chair heard that remark and I'm afraid I'll have to

ask you to withdraw it. Will the member withdraw, and will the member

for Alberni remember that we are on Bill 9.

MR. BRUMMET:

Mr. Speaker, I am not that knowledgeable about the rules of the House.

I am just familiar with the rules of justice. I will withdraw.

DEPUTY SPEAKER: The member will continue on Bill 9, addressing the Chair.

MR. BRUMMET: I wrote that myself and you know it.

MR. SKELLY:

Mr. Speaker, what I was talking about was the kind of lack of trust

that people in the province and in the Legislative Assembly have for

B.C. Hydro, because of the veil of secrecy that surrounds the

corporation and because the plans and projections of the corporation

are not adequately communicated to this Legislature on a year-by-year

basis. When B.C. Hydro comes to the Legislature to ask us for an

increase in their borrowing authority, we really don't have in detailed

and concrete terms precisely what it is that B.C. Hydro is planning to

do in the future. Also, we don't know upon what basis they are making

their plans. People are very suspicious of the data that is presented

to them by B.C. Hydro, that data being the data which Hydro says

requires long-term planning.

They make some interesting statements in their forecasts of gross load requirements.

Here is one statement from page 1 of the most recent — 1979-80 to 1989-90 for

all services: "System planning will be developed on the probability forecast,

with appropriate testing and contingency planning to ensure that the high projection

can be met." In other words, Hydro is really planning to meet the highest

projections that they pull out of the figures. They are not working on the probability

projections of load growth at all. They are working on the highest projections

that they have developed. So the idea within the Hydro organization is to

overbuild in order to meet the high projection of load growth demand.

There

are also some interesting ways in which Hydro develops the figures for

the increase in their bulk loads, their heavy industrial loads. When

the regions produce a projection of increase in bulk load requirements,

that figure goes down to head office, according to this little booklet.

At head office a factor is added to the aggregate figure. Nobody knows

what that factor is, how accurate it is or how probable it is that that

figure will be met over the term of the load growth projections. So

some figure is added at head office to inflate the bulk load

requirements of B.C. Hydro over the next ten years.

I would

like to give an example from the Vancouver Island figures for

residential load growth. Hydro, in its load growth projections, breaks

these down into residential homes that don't use electricity for

heating, residential customers that do use it for heating, and a total.

They show in the historic figures that there has been a decline in the

average kilowatt hours used in homes that have electricity as their

heating. In 1976-77 the average kilowatt hours for home heating dropped

off by 928 kilowatt hours. In 1977-78 it dropped off by 492 kilowatt

hours. In 1978-79 it dropped off by 457 kilowatt hours. So over the

last three years the historic figures show a substantial decline in the

use of electricity in those homes that have electricity for their home

heating requirements.

Hydro does something very unusual.

They project that decline for another three years in a decreasing way.

In 1979-80 they drop 158 kilowatt hours. Then they turn around and

increase it by 150 kilowatt hours a year, out to the end of their

projection. So in spite of a downturn in electrical energy use in those

homes on Vancouver Island that use electricity for home heating, Hydro

turns that around and projects that those homes are going to use more

electricity in the future.

Those figures simply cannot be

trusted, Mr. Speaker, and nobody in the province really trusts Hydro in

their forecasts of load-growth requirements. One of the problems with

B.C. Hydro is that it lacks the trust of the people of British

Columbia. There are no mechanisms by which B.C. Hydro is directly

accountable to the people of British Columbia, and the people of

British Columbia resent the fact that Hydro comes every year to borrow

another three quarters of a billion dollars from the Legislative

Assembly without being accountable to the people and without providing

accurate information to the people.

HON. MR. FRASER: We'd burn candles in British Columbia if we'd listened to the socialist policies 20 years ago.

MR. SKELLY: That's the kind of inane comment we expect from the Cariboo, Mr. Speaker.

The

crown corporations committee, on which some of those people were

represented, questioned B.C. Hydro, questioned its accountability,

questioned the methods by

[ Page 2844 ]

which

it develops projects and issues tenders and awards contracts,

questioned B.C. Hydro on the way they account for the projects that

they have under construction, and recommended some fairly fundamental

changes in the organization of B.C. Hydro, recommendations which seem

to have been ignored.

One of the recommendations was that

Hydro be broken up into separate operating authorities — a gas

authority and an electrical sales authority — and that the planning and

the holding company aspects of B.C. Hydro should be separated from the

operating aspects so that there would be an improvement in Hydro's

performance. In spite of that recommendation, nothing has been done to

change the structure of B.C. Hydro.

This is such an

important Crown corporation in the province; its work is so expensive

to the people of the province; it spends so much money in the province

of British Columbia. We're spending more in this bill on energy than

the whole Ministry of Energy, Mines and Petroleum Resources, including

special appropriation, is going to be spending. Yet there is less

accountability in this bill and there are fewer explanatory notes in

this bill than we get from the minister during his estimates — I'm just

making a prediction; possibly there are more.

Look at the

things that happen at B.C. Hydro. The top two floors of B.C. Hydro, 20

and 21, are the executive floors, and we've just done a refit of those

floors, because we've hired a lot more executives at B.C. Hydro since

the Socred government came into office. Now there is talk about having

the elevator stop at the twentieth floor, and you have to have a

special executive key to get onto that floor. There has been a big

spiral staircase built between the twentieth and the twenty-first floor

so that the executives won't have to lower themselves to mix with the

working people down at Hydro in the course of their daily work. The

total estimated cost of that is $150,000 to $200,000 in the last year.

Is that what we're borrowing this money for, Mr. Speaker — to make the

accommodation of the executives at B.C. Hydro all that more luxurious?

Where does B.C. Hydro account for that kind of expenditure to the

people of this province? What would happen if the Minister of Human

Resources (Hon. Mrs. McCarthy), for example, spent $150,000 to $250,000

on her office installing spiral staircases and the like? You would be

outraged.

HON. MR. FRASER: Tell us about Cass-Beggs.

MR. SKELLY:

I'm pleased to hear, Mr. Speaker, that the minister from the Cariboo is

outraged. They spent more money on the top two floors of B.C. Hydro

than they've spent on road development in my riding in the last two

years, and I'm angry. The people of that riding are angry. And you guys

allow this to go on.

Interjection.

MR. SKELLY:

We're on the fact that Hydro has spent something like $150,000 to

$200,000 just redecorating its executive offices to insulate them from

the working groups within B.C. Hydro. That's what I'm concerned about.

This money is being wasted in B.C. Hydro and there is no accountability

to this Legislature.

While I was talking recently to an

executive member from the corporation who explained some of these

figures to me, he said: "If you think that's bad, and you think that

parliamentary restaurant is good" — that everybody complains about down

here — "you should come up to our restaurant. Our waitresses don't

dress up in uniforms; they dress up in livery. It's like a private

downtown Vancouver club."

I see the member for Cariboo

(Hon. Mr. Fraser) is laughing because he has obviously been up there.

He's not going to the White Lunch in Vancouver; he's not going to the

race track; he's going up for lunch at the B.C. Hydro executive

restaurant, where you can get anything you want on the menu — not like

the White Lunch. You can get anything you want in the restaurant and

you can get anybody to serve you. The silverware and the ambience are

luxurious.

HON. MR. FRASER: Get out the candles.

MR. SKELLY:

They have candles on the tables, while everyone else has fluorescent

lights down here in the cafeteria. What I am trying to say is that the

executive of Hydro lives totally isolated from the problems

and energy needs of British Columbia — totally isolated from

accountability to this Legislature and to the people, and we treat them

as luxuriously as lords. They are spending money upon money that is

raised by the taxpayers, the utility bill payers and the transit bill

payers of this province. They are living in luxury, and they have no

right to be. They should be accountable to the people of this

province, and they're not. We are spending a tremendous amount redoing

the offices of B.C. Hydro's executives in order to treat

those members as though they were the exclusive members of a downtown

private club in Vancouver.

One of the things we are

concerned about is the way Hydro develops policies like pricing of

energy commodities. It has been discussed in the Legislature and in

public meetings on a number of occasions. I wrote to the people in

Hydro who are responsible for developing energy pricing, and I got a

reply from Robert Bonner. I asked Mr. Bonner: "How do you develop

pricing, and what is the policy behind it? Do you develop pricing in

order to meet your revenue requirements, to encourage energy

conservation or to encourage the use of electricity throughout the

province?" The fact is that Mr. Bonner wrote back to me that they have

no pricing policy and they haven't done a study on pricing in Hydro for

years, even though one of the main criticisms of Hydro is that they

discourage other probably more economical energy forms by not

developing a pricing strategy that would encourage, for example,

co-generation of electricity by some of the industrial concerns in our

province. They develop a pricing policy that encourages waste of

electricity in the residential sector, because they charge a great deal

for the first block of kilowatt-hours used and very little for the

rest. If you get over the limit, then you get the rest of the

kilowatt-hours virtually free of charge. Hydro's pricing policy

encourages the use of electricity and encourages waste of electricity.

That is something we are concerned about, because it has an effect on

the projected demands and the project requirements of B.C. Hydro. Yet

Hydro does very little in the way of studies to find out how they can

change their pricing policies in order to encourage energy conservation.

The

member for Omineca (Mr. Kempf), writing in the Lakes District News a

few months ago, said he was outraged by the fact that Hydro was allowed

to increase its price by, I believe, 4.7 percent prior to the

implementation of the British

[ Page 2845 ]

Columbia

utilities legislation. He said he was going to come down to Victoria

and fight for changes to have that price increase rolled back until the

utilities legislation had been brought in. I guess he knew at that time

that Bert Price's daughter was being appointed to the utilities

commission and that it would be a shoo-in for Robert Bonner to get that

price or even more, because a political back had been appointed to the

commission. No, I don't think he realized that at the time. I think he

was attempting to get across....

HON. MR. FRASER:

On a point of order, I would like that member to withdraw the remark

that a political hack had been appointed to the commission. That's not

so.

DEPUTY SPEAKER: Hon. member, all members are

responsible for their own statements, and it is against the rules of

this House to offend another member. Another member has not been

offended.

MR. SKELLY: I will withdraw that statement in any case. A person with political connections was appointed to that commission.

The

member for Omineca said he was going to come down here and fight

against those price increases because the government had allowed Hydro

to slip one by us before the B.C. Utilities Commission had been

established, which was going to have the right to rule on those price

increases and was going to give the public an opportunity to discuss

whether those price increases were justified or whether some

alternative form of pricing would have given Hydro its revenue

requirements and would have given some incentive to the people of the

province to save energy and diminish the need to build some of these

huge generating and transmission projects.

So it appears to

me, Mr. Speaker, that Hydro has greater control over this government

than the government has over Hydro. It's reflected in the changing of

the Premier's statements over the last little while. At one time he got

up a few years ago and he said: "Well, gee, I'm really worried about

Hydro. I'm really worried about that corporation. It seems to be going

everywhere on its own, and it's out of control." Just last Friday, or

the Friday before, be opened up Hydro's new research facilities and now

he says we should all love Hydro. So there's been a change in the first

minister's attitude toward B.C. Hydro — I don't think there has been a

change, but there's been a change in what he's saying about Hydro. Now

he says we should all love Hydro.

Mr. Speaker, they now say

it looks like Hydro wrote a part of the throne speech. They said

there's all these rivers in British Columbia flowing towards the sea,

and they're nothing but a tremendous waste of energy, dumping into the

ocean, with a loss of electrical or mechanical energy. It's a shame to

consider our rivers from that kind of Hydro tunnel vision point of

view. It looks like Hydro has slowly gained control over this

government. It's something that we're very concerned about on this side.

Mr.

Speaker, I don't think that the minister has adequately explained to

the Legislature, at least enough for us to justify voting for this

bill, the expenditure requirements for B.C. Hydro and Power Authority,

requiring that we vote them an additional $750 million in borrowing

authority.

I'm wondering how much of this money is going into the Cheekye-Dunsmuir

project. It says in Hydro's material that this year they require $57 million

for the new Vancouver Island-mainland link. But last August they awarded to

Pirelli Industrie of Italy and to Standard Telephone and Cable Fabric of Norway

a $279 million contract to build the submarine cables for the Cheekye-Dunsmuir

project. You probably remember yourself, Mr. Speaker, when Hydro said that the

total cost of the project was going to be $312 million. I expect that this project

alone — one single transmission project that doesn't create a single new

kilowatt hour of electricity in the province of British Columbia — will overrun

the initial estimates of its cost by the amount of the total overrun on all

of the Columbia River Treaty dams. It'll overrun by at least $1 billion.

How

has it gone up? In 1978 they said it would cost $312 million. In July

1979 they said it would cost about $640 million — this is without a sod

being turned. In January 1980 they said it Would cost $779 million —

again without a sod being turned. By the time we get anything on site,

Mr. Speaker, it will cost over $l billion, with just a few land lines

and some substation preparation. By the time it's complete it will cost

well over $1.3 billion.

But how many jobs is it going to

create in British Columbia? What is the total job creation of this

expenditure, by the government, through debt raised on the backs of the

people of this province? What is going to be the total number of jobs

created in British Columbia? Well, let me read some sections from a

report which Hydro has yet to release. Or maybe they've released it

now, I don't know. This is in Phase I, Appendices 1 through 3,

"Cheekye-Dunsmuir 500 Kilovolt Transmission Line Route Selection Study.

" It talks about employment and income. It says: ''Post-construction

employment supplementary to the normal B.C. Hydro crews based in the

region is expected to be minimal. With the regular crews responsible

for normal maintenance activities, additional work will be generated

only through periodic maintenance of the right-of-way.'' In other

words: herbicide spraying. No additional permanent employment in the

regional offices related directly to the proposed facilities is

foreseen by B.C. Hydro. In other words, there is an expenditure of $1.3

billion by Hydro and no additional work within the corporation.

Then

they talk about direct employment. Estimates of manpower requirements

provided by B.C. Hydro are given in table 3.1. A total of over 400

man-years is indicated for project construction. That's 400 man-years

of labour out of an expenditure of $1.3 billion. So, by simple

division, you can work out what the cost of each job is, and it's

horrendous. But where is this labour going to come from? Until the

successful bidders are named, it will not be known how much of the

manpower will be drawn from local sources. However, it can be assumed

that part of the project labour force would be permanent residents of

the geographical areas crossed by the project, particularly those

employed as labourers. So in the most unskilled categories, the local

areas will provide some of the project people.

But on the

same page it says: "Note that the estimates do not include any manpower

requirements for underwater cable installation, as this will be handled

totally by the supplier" — foreign — "on a single contract. Some

unskilled labour may be hired locally by the supplier, but the skilled

labour for this aspect of construction is expected to be imported." So

in the main, B.C. Hydro, borrowing money from public pension funds in

the province of B.C., or perhaps offshore, at the rate of 14.5 percent

in some cases, is creating jobs for labourers who will be imported to

the

[ Page 2846 ]

province of British Columbia. No labour will be created here on the submarine

section of that cable.

checked with my brother, who's the Member of Parliament for

Comox–Powell River, and he has checked through the embassies in Norway

and Italy and found out that in the construction of the cable in Italy

— the cable is being built in Naples — in addition to plant expansion,

they have created over 100 jobs in Naples as a result of the

Cheekye-Dunsmuir project. So 25 percent of the total jobs created will

be created in Italy. We don't know how many jobs are going to be

created in Norway yet, but I will report that to you, Mr. Speaker, as

soon as we have the information.

I tried to get the

information about the job creation overseas from Charlie Nash of B.C.

Hydro. I asked him for a copy of the contract between B.C. Hydro and

Pirelli Industrie for the Cheekye-Dunsmuir project and he said: "You

can't have it. " I said: "Why not?" He said: "Well, I have to get

permission from the suppliers, from Pirelli Industrie in Naples or

Standard Kabel in Norway." I said, "Well, I'm sure you'd be willing to

do that for me, " and he said: "No, I wouldn't." In other words, I, as

a member of the Legislature, and you, as a legislator, and the

Legislature in general, were told by B.C. Hydro and Power Authority's

chief executive officer, or one of their chief executives, that they

had no right to find out what was in the contract between Standard

Telefon and Pirelli Industrie with B.C. Hydro to build that submarine

section of the cable. This is a Crown corporation that's supposed to be

responsible to the people of this Legislature and indirectly

responsible to all the people of the province who pay the bills for

that corporation, and we were told we couldn't even have access to the

contract for building of the Cheekye-Dunsmuir power line.

All

of the labour on the submarine

section was foreign labour. Only 400

jobs were created in Canada. What about the labour rates that are going

to be paid in Canada? Again, this is from Hydro's own figures. Out of a

$1.3 billion project — and that's my estimate — the amount of wages

paid directly to Canadians would be $10.5 million. That is as much

money as Cranbrook, Dawson Creek and Vernon are losing from the loss of

operator services through B.C. Tel's elimination of the operator

services in that area — $10 million is all of the local labour wages to

be created on Vancouver Island and the mainland by the Cheekye-Dunsmuir

project. Mr. Speaker, this project is a tremendous loss in terms of

wages paid to British Columbians, jobs created in British Columbia,

materials purchased in British Columbia and in terms of any economic

benefit to British Columbians at all. This job is a tremendous loss.

More jobs are being created in Italy and Norway by the Cheekye-Dunsmuir

project than are being created in British Columbia by far. It's a dead

loss; it's a bad decision by B.C. Hydro.

There were numerous

energy alternatives available on Vancouver Island that Hydro chose to

ignore. Economic studies of the cost-benefit of this project indicated

that Hydro purposely ignored the alternatives available on Vancouver

Island — alternatives to that Cheekye-Dunsmuir project, projects that

would have been more job-intensive, less capital-intensive, and would

have required less borrowing overseas or less borrowing from our

provincially trusteed pension plans. Hydro selected the most expensive

alternative and the least job- intensive alternative, and we're all

going to lose — not simply on Vancouver Island, but also on the

mainland of British Columbia. All British Columbians are going to lose

as a result of Hydro's decision and the government's decision to

proceed with this project.

On that basis, why should we as

legislators take B.C. Hydro's word for anything, including their

borrowing authority requirements, unless Hydro is called before this

House and called upon to explain why they went into the

Cheekye-Dunsmuir project without adequately examining the other

alternatives available to them? I'm certainly not prepared, as a

responsible member in this Legislature, to approve an increase in

Hydro's borrowing authority until that has been explained to me.

The

other example, of course, is the Site C dam. Again, the question of the

Site C dam is: are we to build an 880 megawatt electrical project in an

area where we have prime agricultural land and threaten the loss of

something like 6,500 acres of prime agricultural land as a direct

result of the construction of that dam? Max Saltsman, I believe, made a

speech in the House of Commons once in which he said there are two

things that contribute to inflation.

AN HON. MEMBER: Who's he?

MR. SKELLY: Read Hansard for a change, Mr. Member, and you'll find out who he is.

Max

Saltsman said that there were two things that contributed to inflation.

One was the high cost of food and one was the high cost of energy. When

you analyze it a little more deeply food and energy are precisely the

same thing.

AN HON. MEMBER: There's a message for you. They want you to sit down. Your own members are deserting the ship.

DEPUTY SPEAKER: Hon. member, I've just been informed that the green light is not working; however, you have three minutes left.

MR. SKELLY: I was advised that I was designated speaker, Mr. Speaker.

DEPUTY SPEAKER: Oh, well, in that case, hon. member, carry on.

MR. SKELLY:

I think we were back on the Site C dam and Max Saltsman. Max Saltsman

said that food and energy were the major contributors to inflation. As

the price of energy goes up — energy is an input to everything we do —

then the price of everything we do goes up. Every commodity we produce,

every service we provide, every time we move ourselves from one place

to another on any transpiration facility, energy contributes to the

cost of that service, the cost of that commodity, and as energy goes up

the price goes up. Food is nothing more than human energy, and you can

convert food to human energy. Even the Minister of Agriculture (Hon.

Mr. Hewitt) is aware of that. Energy also contributes to the price of

food because of all those inputs into the agricultural industry, the

agribusiness industry: the gas you put in the tractors, the natural

gas-derivative fertilizers and petrochemicals that you use to kill the

bugs — and the people who eat the food — all of those things.

Every

aspect of inflation is affected by the price of food and energy. Here

we are in a classic confrontation with the Site C dam over whether we

should produce energy on that valuable agricultural land or whether we

should produce food, because there are other alternatives. We can

produce

[ Page 2847 ]

energy through wood waste; we can produce 200 megawatts on Vancouver Island according to....

HON. MR. FRASER: And candles too.

MR. SKELLY: Oh, you guys are crazy.

can produce energy through wood waste on Vancouver Island. The Paul

Jones and Associates study shows that there are 200 megawatts of energy

available from wood waste and forest residues on Vancouver Island that

are economically feasible now — not sometime in the future but right

now — if we had the policy direction coming from this government. I

suspect that if you took every other region of the province.... The

region of the Minister of Transportation and Highways (Hon. Mr. Fraser)

is one where there is some possibility of Hydro combining with the

industry to produce energy from wood waste. There are a number of

alternatives, including area heating, use of industrial waste and

burning solid waste which we now dump in landfill sites.

Every

possible alternative exists and is available to us now. Every possible

alternative exists now as an alternative to that Site C dam. The one

thing that there is no alternative for is good, high-quality,

food-producing agricultural land. This was one of the things that

defeated the McGregor diversion project, Mr. Speaker. The fact that

that project would take out of production — and that is in your area —

millions of acres of prime forest land was one of the reasons why the

McGregor diversion was shot down. Those trees were probably far more

valuable to the economy of B.C. than any energy which may have resulted

from running the McGregor diversion waters through the Peace River

system.

MR. KEMPF: How many acres in Site C? He doesn't know how many acres. He's never even been there,

MR. SKELLY: Yes, I have been there. There are five million acres.

MR. KEMPF: How many acres?

DEPUTY SPEAKER: Order, please. The member for Alberni has the floor. Please continue, hon. member.

MR. SKELLY: I once took a trip on a riverboat just to........

DEPUTY SPEAKER: Speak to the bill, hon. member.

MR. SKELLY:

This has something to do with the bill. I am being questioned on it by

the member for Omineca (Mr. Kempf), who should know some answers.

MR. KEMPF: How many hectares...?

DEPUTY SPEAKER: All members will come to order.

MR. SKELLY: For the benefit of Hansard ,

it should be shown that his question was answered. I took a boat trip

up the McGregor River right up to James Creek where they were going to

divert the water over into the Parsnip River system.

MR. KEMPF: I'm talking about Site C. How many acres?

MR. SKELLY:

I'm talking about the 6,500 acres of prime farmland that was mentioned

in Mr. Brummet's

article in the Alaska Highway News , so argue with him

about it.

Mr. Speaker. It is prime agricultural land that

would be lost forever, and they are not making it anymore. According to

the consultants you hired, changes in the micro-climate would

inevitably take place in the area that might have affected agricultural

production and the range of crops that could be grown over the

agricultural land remaining, and that could have dramatically affected

the economy of that North Peace River area. Those are some of the

things we are concerned about with the Site C dam, and whether Hydro is

the proper authority to make a judgment on whether that land should be

used for food energy or agricultural energy. As far as I am concerned,

Hydro is not the agency that should be doing that.

Earlier

this year in February, the Minister of Energy, Mines and Petroleum

Resources (Hon. Mr. McClelland) promised that we would have an

independent, two-stage, streamlined project review procedure to look at

some of these energy projects. He keeps saying that this legislation is

going to come down in the House in three or four weeks, or 30 or 45

days, and it never comes down. It will probably come down within the

last few days of the session and we'll all be in a rush to get out of

here.

MR. BRUMMET: When's that?

MR. SKELLY:

That's up to you. It could be December. He wants the procedure to be

operating in July. If there is an opportunity to delay the Site C dam

by delaying the adjournment of this Legislature until 1985, I am

willing to stand up here until 1985 to do that. because I think it is a

bad decision. Furthermore. I don't think there has been sufficient

public input nor will there be under the minister's proposed two-stage

streamlined project review procedure. Until I see that procedure, maybe

we should adjourn debate on this bill and then we'll have more

information with which to consider this bill.

In any case,

Hydro has embarked on a number of projects which have very serious

environmental and social implications, serious implications with

respect to agriculture. In closing. Mr. Speaker, I would urge all

members of the House not to vote an increase in Hydro's borrowing

authority until such time as that corporation has become more

accountable to this Legislative Assembly and to the province and the

people of British Columbia who are so concerned about projects such as

Site C and the Cheekye-Dunsmuir transmission line. Again. I would urge

members to vote against this bill.

MRS. WALLACE: I am

pleased to take my place in opposition to this bill, as I have done on

previous occasions in relation to similar bills in this Legislature,

because I am concerned that what we are doing here is throwing good

money after bad, particularly in relation to B.C. Hydro. I'm not

surprised but I am a bit shocked by the comments coming from that side

of the House whenever conservation of energy or alternate energy are

spoken of.

All we get from that side of the House are

comments like "light a match" or "light a candle" or "freezing in the

dark." Certainly anyone who has viewed with any degree of depth or

seriousness the energy problems facing not only British Columbia and

Canada but the world as a whole

[ Page 2848 ]

recognizes

that we have to look at alternative forms of energy. This government

and B.C. Hydro are not prepared to make any commitment to those kinds

of directions.

I'm convinced, Mr. Speaker, that the time is

fast approaching when the attitudes are going to change. The attitudes

are not going to change specifically because of environmental concerns

— though certainly those are concerns. They're going to change because

of sheer economics. It has been indicated by many of the people that

have reviewed the whole energy picture that large concentrations of

generation far removed from the market are not economic. Quebec is in

this situation, Mr. Minister of Finance — and I note you're listening

with great interest to my remarks — where projections towards future

costs of those projects have been so revealing that, though the

projections have been made, they have not been released, because it

would be a disaster if they were released.

We're in a

position where transmission costs represent about 90 cents or more of

every consumer dollar in the total delivery of electricity to the

consumer, the customer. Those costs are increasing. We're going to have

to, for economic reasons, change our perspective in energy production.

We're going to have to, for economic reasons, move into more localized

types of power supply, and we're going to have to look at alternatives

in the very doing of that.

I'm always concerned whenever I

hear of a project such as an incinerator going in or any other kind of

operation that has waste-heat energy, because we should be utilizing

that. It takes a little planning, Mr. Speaker, and that seems to be

something that governments in the past, and Hydro in particular, have

been very short of. They don't do all-inclusive planning. The don't

look at overall needs and possibilities.

We must start

utilizing the energy that we are now wasting. Certainly heat energy

from industrial sites, incinerators and from those kinds of projects is

something that we could be utilizing. The technology is there. It's

being done in areas right in this province, as the minister is well

aware. It is being done in other jurisdictions around the world. All it

takes is a little initiative on the part of this government to move

into that direction and use some of that waste energy to provide the

kind of local plant that provides energy close to the consumer.

Those

are the directions in which we're going to have to move, Mr. Speaker.

Unfortunately, there is no provision for those kinds of directions in

any of the legislation that we see coming before us. We have instead a

continuation of the large centralized power projects, far removed from

the consumer. It means that we're going to have very expensive

transmission lines, and the previous speaker has outlined in very great

detail the costs involved in bringing power to Vancouver Island through

the Cheekye-Dunsmuir line — not an extra kilowatt of generation, but

millions and millions of dollars to bring that power to Vancouver

Island.

We can talk about use of waste energy. We can talk

about conservation. We can talk about those things in a concept that

maintains our present lifestyle. The minister himself, in a previous

bill — and I know I can't refer to it — introduced a measure to try to

consume less fuel oil by giving a tax break to cars that have a better

rating for mileage. That's one of the steps in conservation. It's not

going to change our lifestyle — we're still going to use our

automobiles — but we're going to use less energy. The same thing can

apply to our homes. It's estimated that individual residences in Canada

waste more energy than they use. More energy going into that home is

wasted through poor insulation and through poor equipment than could be

used if the proper insulation and the proper methods were applied.

We're wasting energy constantly and we can move to conserve it. The

technology is there.

When I think of solar energy, and I

recognize the small amounts of moneys that are being put forth by B.C.

Hydro or any other jurisdiction in the experimentation.... We don't

really need to experiment; we can be doing. I drive by a place every

day that is doing just that. I think his installation cost him

something like $7,000, and he's heating his home with that installation.

HON. MR. CURTIS: You're supposed to bicycle by.

MRS. WALLACE: As I said, I'm going to use my sailboat, Mr. Minister.

Certainly

it can be done. It is being done. It needs a little push from

government and from Crown corporations such as Hydro to take those

steps. Unfortunately, we seem to be in a rut. We seem to think that

conservation means, as those members have said today, lighting a match,

burning a candle and freezing in the dark, and it's just not true. We

can live in exactly the same degree of comfort and convenience and

still, through conservation and alternate sources of energy, meet those

requirements.

As the agriculture critic, I'm faced

constantly with problems that occur because of excess farm waste. Those

products are high in energy, Mr. Speaker. I believe I've spoken in this

House before about an experiment that has been carried on at the

University of Illinois, just outside of Chicago, where the manure from

the university dairy herd has been put into a pit and heated to the

point where it produces gas, which is energy, Mr. Speaker. There is

enough energy produced just from the waste from that herd of 100 dairy

cows to provide 90 percent of the energy requirements of that

operation, plus enough energy to reheat the waste from that herd.

Those

are the kinds of technologies that are now available. We can utilize

those. Again, it takes a little planning. You know, if you can do that

with cow manure, think how much better and more effectively and more

efficiently you can do it with hog manure, which is high in methane.

Yet

we have over in the Fraser Valley a hog farm there that is continuously

increasing its permits to pollute the Fraser River with its effluent.

Those permits are being granted and the increases are being allowed.

Yet with simple technology that effluent could be used as an energy

source. Those are the kinds of projects we're talking about here when

we talk about alternate energy. I have no qualms about failing to

support a bill that simply adds more money, more borrowing power, to a

Crown corporation that has continuously neglected those kind of

approaches, and instead of that has continued to proceed on the damming

of rivers and the large centralized projects with the long transmission

lines that are simply economically unfeasible.

I would

think, Mr. Speaker, that that is quite evident when you look at the

increase of the borrowing in their own report over the last ten years.

They have increased their bonds and debentures outstanding by more than

four times over the last ten years. Yet you find that their fixed

assets have increased by less than three times. I suggest, Mr. Speaker,

that we're not getting a picture of an organization that is able to

build up its productive capacity in line with its expenditures, because

we're finding that instead of that we're borrowing far more than we're

actually capitalizing as

[ Page 2849 ]

result of those borrowings. We're falling far behind, and that's going

to continue. The more we centralize our power generation and the more

we continue to build long lines for transmission purposes, then we're

going to be faced with these ever-increasing borrowings with less and

less value for our money.

Mr. Speaker, with your permission

I would like to yield to the member for Vancouver South (Mr. Hyndman),

without jeopardizing my position. Now do I have your assurance that I

will not lose my place in debate if I do that?

MR. HYNDMAN: Thank you. I would like the leave of the House to make a brief introduction.

Leave granted.

MR. HYNDMAN: May I say I appreciate greatly the courtesy of the member for Cowichan-Malahat in so yielding.

Mr.

Speaker, in the members' gallery we have with us some students from

grade 6 in the Sir Wilfrid Laurier School in Vancouver South. I wonder

if members would join me in welcoming them warmly to the precincts.

MRS. WALLACE:

I would like to refer to the report filed by the Committee on Crown

Corporations in April 1979 on the construction management practices in

the Columbia River Treaty project. But as this is going to take me some

time, Mr. Speaker, I suggest that I would prefer to carry on when next

this House meets, which may be some little time, I understand.

Mrs. Wallace moved adjournment of the debate.

Motion approved.

MS. BROWN: Mr. Speaker, I wonder if I could have leave of the House to make an introduction.

Leave granted.

MS. BROWN:

Mr. Speaker, 35 grade 10 students from Edmonds Junior Secondary School

had a tour of the Legislature and were in the gallery earlier with

their teachers, Mr. Elwood and Mr. Hiller. I wonder if the House would

recognize their presence.

Introduction of Bills

HOME OWNER GRANT ACT

Hon. Mr. Vander Zalm presented a message from His Honour the Lieutenant-Governor:

a bill intituled Home Owner Grant Act.

Bill

31 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

HON. MR. SMITH:

Mr. Speaker, I have the honour to present a report of the Special

Committee on Privileges appointed pursuant to the order of this House

on March 18, 1980.

This is indeed an honour, Mr. Speaker,

because of the unanimity of the report and the positive work of every

member of this committee regardless of which side of the House he sat

on. I move that the report be read and received.

Motion approved.

CLERK OF THE HOUSE: Report, Legislative Committee Room, June 6, 1980.

"Mr.

Speaker, your Special Committee on Privileges appointed Tuesday, March

18, 1980, pursuant to a resolution of the House of March 6, 1980, begs

leave to report as follows:

"The term of

reference of the committee was to consider the matter of the

interception of a member's communications, brought to the attention of

the House on March 3, 1980. The committee held seven meetings and heard

evidence from Mr. Ian Horne, Q.C., Clerk of the Legislative Assembly of

British Columbia and Mr. Joseph Maingot, Q. C., Law Clerk and

Parliamentary Counsel to the House of Commons, Ottawa. In addition to

the evidence of the two witnesses aforesaid, your committee considered

the Legislative Assembly Privileges Act, the invasion-of-privacy

provisions of the Criminal Code, general procedures followed for

obtaining intercepts and details of the intercepts complained of,

including location and scope of intercepts. The committee also

considered and examined the range and scope of matters which were

discussed by the member in question during the relevant time period.

"It is accepted by the committee that the authorizations

and renewals to intercept communications were obtained in accordance with the

provisions of the Criminal Code. The intercepts in question were sought, obtained

and implemented by the Royal Canadian Mounted Police. The RCMP and the Department

of Justice gave full cooperation to the committee by supplying committee counsel

with all information requested by the Chairman and members of the committee.

The listening devices monitored telephone calls from the member's office

in the legislative precincts, his constituency office and home for a period

of approximately one year, and the Legislative Assembly was sitting for approximately

nine months of the year in question,

"The

committee finds that intercepts were placed on the member's phones in

his legislative office without a physical entry to the member's office

by the RCMP. The committee finds that matters intimately involved with

the member's function in the Legislature were discussed on the phone

during the period the intercepts were in place. On approximately 1,700

of the intercepted calls, the member's voice was identified by the RCMP.

"Findings and formal recommendations:

"After

considering all the evidence, and in particular the extensive evidence

provided to this committee on the law of privilege and contempt by Mr.

Horne and Mr. Maingot. and considering the nature of privilege which

the member holds in trust for the public, it is the unanimous opinion

of the committee that the described actions of the Royal Canadian

Mounted Police constitute a breach of privilege and a contempt of this

House.

[ Page 2850 ]

"This finding relates to the interception of a member's

communications from his office telephones within the legislative precincts and

the telephones in his constituency office in the period of January 13, 1977,

to and including September 27, 1977, and for the period October 19 to and including

October 21, 1977, being the dates on which this Legislative Assembly was sitting.

"Your

committee further recommends that no action be taken against the RCMP

in this instance, as there is no evidence before your committee upon

which they could conclude the police were aware that their actions

might constitute a breach of privilege or a contempt of the Legislature.

"Your

committee wishes to further add that they have made no specific finding

in relation to the interception of the member's communications while

the House is not sitting or the intercept of communications to and from

the member's home. The committee, however, emphasizes the 12-month role

of the modern legislator, and further emphasizes that his legislative

and constituency duties extend beyond the session, and in many

instances into his home. This committee therefore wishes to go on

record, in the strongest possible terms, as disapproving of these

practices, particularly bearing in mind the right of the public to have

free and uninhibited access to their elected members.

"Your

committee members were unanimous in their opinion that fear of

intercepts such as the one examined by your committee obstructed

members in the performance of their legislative duties. The committee

accepts Mr. Maingot's evidence that the test of obstruction is a

subjective test.

"Your committee emphasizes that members of this Legislature

cannot receive special immunity from an investigation where there is evidence

that the member is directly implicated in the commission of a crime. In this

case there was no evidence that the member was under investigation or suspected

of criminal activity.

"In

conclusion, your committee restates that the beneficiary of the law of

privilege is the constituent and the public at large. A member does not

have special status. The member holds his privilege in trust for those

who have elected him, and privilege exists only to the extent it is

interwoven with his role as a legislator.

"Your

committee believes that parliamentary democracies flourish only when

member and constituent can communicate freely, openly and candidly

without having the spectre of interception, such as the one recently

examined by your committee, interfering with such communications.

"All of which is respectfully submitted. Brian R.D. Smith, MLA, Chairman; Stuart M. Leggatt, MLA, Secretary. "

HON. MR. SMITH: Mr. Speaker, I ask leave to move that the rules be suspended and the report adopted, and adjourn debate on this motion.

Leave granted.

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:55 p.m.

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