1976 Legislative Session: 1st Session, 31st

Parliament

HANSARD

The following electronic version is

for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JUNE 29, 1976

Afternoon Sitting

[ Page 3241 ]

CONTENTS

Routine proceedings

Oral questions

Ferries advertising campaign. Mr. Lea –– 3241

Guidelines on high-speed pursuit. Mr. Wallace –– 3241

Farm-to-retail chicken price gap. Mr. Gibson –– 3242

Travel assistance for canoe club. Mrs. Wallace –– 3243

Closure of Richmond private hospital. Mr. Wallace –– 3243

Propane gas sales tax. Ms. Sanford –– 3243

Field price of natural gas. Mr. Macdonald –– 3243

Statement

Move of PWA head office to Alberta. Hon. Mr. Gardom –– 3244

Mr. Gibson –– 3245

Routine proceedings

Committee of Supply: Department of Transport and

Communications estimates.

On vote 198.

Mr. Macdonald –– 3245

Hon. Mr. Davis –– 3245

Mr. Gibson –– 3247

Hon. Mr. Davis –– 3250

Mr. Lockstead –– 3251

Mr. Skelly –– 3252

Mr. Wallace –– 3255

Mrs. Wallace –– 3259

Ms. Sanford –– 3261

Mr. Gibson –– 3263

Mr. King –– 3265

Mr. Lea –– 3270

Mr. Barber –– 3271

Hon. Mr. Davis –– 3273

TUESDAY, JUNE 29, 1976

The House met at 2 p.m.

MS. K.E. SANFORD (Comox): Mr. Speaker, I would like to

introduce to the House this afternoon my daughter, Donna Sanford, who,

now that school has adjourned, has come to see the House in session

before it adjourns. I'd like the House to join me in welcoming her.

HON. H.A. CURTIS (Minister of Municipal Affairs): Mr.

Speaker, a constituent from Saanich and the Islands in the House this

afternoon is Mr. Mel Knudsen of Sidney who has two claims to fame. He

was the founding conductor of the Victoria Symphony Orchestra from 1940

to 1948 and he is also Scott Dixon's uncle. Would the House welcome him

today?

Oral questions.

FERRIES ADVERTISING CAMPAIGN

MR. G.R. LEA (Prince Rupert): Mr. Speaker, a question to the

hon. Provincial Secretary. In regard to the advertising campaign to get

customers for the B.C. Ferries, could the Provincial Secretary tell me

which firm has the contract or has been awarded the job for government

in doing that advertising campaign?

HON. G.M. McCARTHY (Provincial Secretary): Mr. Speaker, there

were three advertising agencies that a week ago Friday were invited to

give presentations to a selection panel including the Vancouver Island

Publicity Bureau representative, an industry representative, a

representative from Travel Industry and a representative from B.C.

Ferries. Three people were asked to make presentations. One of them was

James Lovick, the others were Ehrig Corp. and Truman Glover. The

selection committee chose the Lovick firm and the Lovick firm was

granted the contract.

MR. LEA: Supplementary. Could the minister inform me, in

either the civil service or by order-in-council, who represented the

government in selecting and recommending to government which firm got

that job?

HON. MRS. McCARTHY: I mentioned the ones who did the actual

choosing, and David Livingstone, the Assistant Deputy Minister of my

Department of Travel Industry, was one of them from our department of

government. One was Mr. Balderson, who is manager of the Empress Hotel,

representing the travel industry and the private sector. I'm sorry

for...memory but I can get for you the name of the representative of

the provincial travel industry publicity bureau for Vancouver Island.

I'm sorry, the name escapes me at the moment. There was one of the

officials from the ferry service. Again I don't know the name but I'd

be pleased to make that available to you. Those were the ones who voted

on the actual selection.

MR. LEA: Supplementary. At the time the proposals were

presented to the selection committee, was Dave Brown present?

HON. MRS. McCARTHY: Yes, Mr. Speaker. David Brown was there

as a representative of my department in terms of communication. He did

not cast a vote on the selection committee. He was simply there in his

role as communications for the government and in reporting to

government on communications.

MR. LEA: Supplementary. I would like to ask the Provincial

Secretary if the firm that received the job is the same firm that Dave

Brown worked for prior to coming to government.

HON. MRS. McCARTHY: No, the firm that David Brown worked for

prior to coming into making the study on communications for government

was his own firm. Prior to that time, after he was a year and a half to

two years on a freelance basis, on his own, he was employed by the

firm. That is true.

GUIDELINES ON HIGH-SPEED PURSUIT

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, to the

Attorney-General, with respect to the death of an 80-year-old man in

Port Coquitlam on June 14 who was killed when an unmarked RCMP police

car taking

part in pursuit of another vehicle collided with the vehicle

in which the elderly gentleman was riding, can the minister tell the

House what guidelines the RCMP are following in determining the

procedures that can be used in pursuing a vehicle where there is

clearly great danger to other motorists and pedestrians?

HON. G.B. GARDOM (Attorney-General): Well, I assume the hon.

member wishes a specific answer to his specific question, so I shall

check with the RCMP. But I would anticipate, Mr. Member, that they

would be following the normal and accepted guidelines to do their level

best to catch the person they intended to apprehend and also do

whatever they can along the line to protect the interest of citizens

and drive safely and as carefully as possible.

MR. WALLACE: Supplementary, Mr. Speaker, I wonder, since the

offence of the person being

[ Page 3242 ]

pursued often appears to be less than serious

compared to the great danger to the public from high-speed pursuit,

will the Attorney-General undertake to initiate an inquiry and review

the present basic rules and regulations under which all police forces

operate with regard to the pursuit of vehicles in areas of high traffic

density.

HON. MR. GARDOM: It's a terribly regretful thing that

happened, Mr. Member, but I'm not convinced that an inquiry per se is

required. But I shall look into the matter and report further to you,

and if the House is not in session I'll be happy to give you the

information.

MR. WALLACE: A quick follow-up, Mr. Speaker. I wasn't asking

for a specific inquiry into just this case; there's evidence that

police cars often go through red lights and break other laws in pursuit

of other vehicles, and sometimes the offender being pursued is of much

less significance in terms of his crime than the innocent third parties

who may be killed. We've had numerous incidents in the last few years.

I'm just wondering if the Attorney-General isn't prepared to make a

general inquiry as to the basic procedures followed by the RCMP.

HON. MR. GARDOM: As I've said, Hon. Member, I'll look into it.

FARM-TO-RETAIL CHICKEN PRICE GAP

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Speaker, I

have a question for the Minister of Agriculture. In the June 21 edition

of Viewpoint ,

a publication of the B.C. Federation of Agriculture, it states that

B.C. had the largest gap between the farm price of chickens and the

retail price of all the provinces in Canada. I wonder if the minister

could tell us what he's proposing to do about that.

HON. D.M. PHILLIPS (Minister of Agriculture): Mr. Speaker, in

answer to the member's question, which I know he voiced in all

sincerity, I haven't noticed the particular article, but I have stated

that there are many excessive costs to doing business in British

Columbia. I outlined to the House during the throne speech or the

budget speech — either one — the costs of producing products in British

Columbia, but I'd be quite happy to look into it for the member.

But when we talk about the costs and what I can do about them, Mr.

Member, we have the same situation in many industries in British

Columbia. As a matter of fact, today now, Mr. Member, as you well know,

in the United States of America, just a hop and a skip and a jump away

from us, old teapots that were retired years ago that used to produce

pulp and paper and lumber products are now being brought on stream

again...

Interjections.

MR. SPEAKER: Order, please.

HON. MR. PHILLIPS: ...because of the difference in the labour

rate. Therefore we are unable to compete in our industry...

Interjections.

MR. SPEAKER: Order, please!

HON. MR. PHILLIPS: ...and this may be the same with the

poultry industry, Mr. Speaker.

Interjections.

MR. SPEAKER: Order!

HON. MR. PHILLIPS: And the sooner that all of us in British

Columbia come to grips with this problem, the sooner we are...

Interjections.

MR. SPEAKER: Order, please!

HON. MR. PHILLIPS: ...going to prevent this economy going

down the drain, Mr. Speaker. I'd like all members on all sides of the

House to join together to....

AN HON. MEMBER: It's already gone down the drain.

MR. SPEAKER: Hon. Minister, I believe the question had

something to do with the price of poultry.

MR. GIBSON: Mr. Speaker, would you give him his "yes" or "no"

cards back? He did better with them.

Mr. Speaker, this is supplementary. The minister said that he'd be

glad to look into it. In view of the fact that, additional to this, we

learned in a recent survey that British Columbia still has the highest

food prices in North America, will the minister now finally appoint a

royal commission into agriculture and food prices in this province?

HON. MR. PHILLIPS: Mr. Speaker, the member knows that this is

a matter of policy. I've stated very clearly and emphatically in this

House that we will take a look at certain regulations and certain

legislation which exist with regard to food prices and

[ Page 3243 ]

marketing boards. Certainly we're going to take a

look at it; the member knows we're going to take a look at it.

Certainly we're going to take a look at it because we realize the

problem exists and we want the people of British Columbia to know the

facts, and that's why we're here to point out to the people of British

Columbia so they'll all know the facts.

MR. GIBSON: Answer the question!

MR. SPEAKER: Order, please.

TRAVEL ASSISTANCE FOR CANOE CLUB

MRS. B.B. WALLACE (Cowichan-Malahat): Mr Speaker, my question

is for the Provincial Secretary. There is in my area a group of young

people who are connected with the White Raven Canoe Club. I think the

Provincial Secretary is aware that through her department canoes have

been made available to these people for a championship competition.

I have been contacted by these people, and the one particular team

from the Ladysmith-Chemainus area tells me that in order to take their

canoe and their crew to White Rock to compete in the championships on

July 4 it's going to cost them $190 to travel by B.C. ferry. They are

just not able to afford this, Madam Minister, through you, Mr. Speaker.

I'm wondering whether the minister has any funds at her disposal

that she can assist them, or, failing that, would she be willing to

work through the Minister of Transport and Communications (Hon. Mr.

Davis) in an attempt to find some solution so these young people can

participate?

HON. MRS. McCARTHY: Mr. Speaker, I thank the member for

bringing it to my attention, and I'll be pleased to look into it this

afternoon. If she would like to meet with me this afternoon we'll see

what we can do to assist.

CLOSURE OF RICHMOND PRIVATE HOSPITAL

MR. WALLACE: Mr. Speaker, to the Minister of Human Resources

with reference to the pending closure of Richmond Private Hospital: in

view of the minister's earlier answer on June 17 that the government

was considering purchasing the hospital, could I ask the minister if he

has received from the owners of Richmond Private Hospital a figure at

which they would consider selling the hospital?

HON. W.N. VANDER ZALM (Minister of Human Resources): Mr.

Speaker, the answer is no, we've not received a figure from the owner

of the hospital. He did ask us to make an offer, and we've simply asked

him to give us his figure.

PROPANE GAS SALES TAX

MS. SANFORD: My question is to the Minister of Finance. There

are about 100,000 residents in B.C. who use propane gas as their prime

source of heating and cooking fuel and they are now paying some 600 per

cent more in sales tax than are the users of fuel oil. I'm wondering

what the Minister of Finance is prepared to do in order to relieve

these people of this inequitable tax.

HON. E.M. WOLFE (Minister of Finance): Mr. Speaker, through

you to the member, I'm not aware that the sales tax increase involved

in a product of that kind would be 100 per cent.

MS. SANFORD: For the information of the Minister of Finance,

the sales tax on fuel oil is now set at 0.5 cents,

whereas the full

sales tax of 7 per cent — gone up from 5 to 7 per cent — is applied to

the propane gas. The users of this particular product are very unhappy,

and I'm wondering what the minister is prepared to do in order to

relieve the situation for the users of propane gas.

HON. MR. WOLFE: Mr. Speaker, through you to the member, we'll

be happy to review the matter. I wasn't aware that there was any

discrepancy where propane tax was concerned.

ANSWERS TO QUESTIONS

ON THE ORDER PAPER

MR. W.S. KING (Revelstoke-Slocan): Mr. Speaker, in the

Premier's absence, I wonder if the House Leader would draw to the

Premier's attention that he has failed to answer questions 26 and 27 on

the order paper, which have been there since the start of the session.

I wonder if the Provincial Secretary would ask the Premier to kindly

answer the questions.

MR. SPEAKER: Order! That is not a question to be posed in

question period.

Interjections.

FIELD PRICE OF NATURAL GAS

MR. A.B. MACDONALD (Vancouver East): Mr. Speaker, this is a

question to the Minister of Mines, who's in charge of the B.C.

Petroleum Corp. and sits on the board.

Did the minister agree with the decision whereby the B.C. Petroleum

Corp., which is the buyer of natural gas and represents the public

interest, made no recommendation whatsoever on the field price of

natural gas at the current energy commission hearings? Did the minister

make that

[ Page 3244 ]

recommendation? Does the minister know that the

B.C. Petroleum Corp.

took no position as to what the field price of natural gas should be

when it made its representations to the energy commission the other day?

HON. T.M. WATERLAND (Minister of Mines and Petroleum Resources):

Yes, I am aware, Mr. Speaker, but I don't believe it's the function of

the B.C. Petroleum Corp. to recommend prices. They sat in on the

meetings to hear the advice granted at the meeting by many people

involved in the petroleum and natural gas business, and recommendations

for price increases will be forthcoming from the government to be

implemented by the B.C. Petroleum Corp.

MR. MACDONALD: A supplementary, Mr. Speaker.

MR. SPEAKER: I'm sorry, Hon. Member. The bell terminated the

question period.

AN HON. MEMBER: It ran out of gas.

MR. MACDONALD: You're turning it into a tabby cat for the

industry.

Interjections.

MR. SPEAKER: Order, please!

MR. D.G. COCKE (New Westminster): Mr. Speaker, on a point of

order, I feel that the question period should be extended today because

of the disgraceful performance of the Minister of Agriculture (Hon. Mr.

Phillips) who every time he stands up in this House wrecks question

period.

MR. SPEAKER: Order, please. I think there are sometimes....

MR. COCKE: That wasn't an answer, and there never has been an

answer from that man — ever.

Interjections.

MR. COCKE: Well, Mr. Speaker, on my point of order?

MR. SPEAKER: On your point of order, Hon. Member, it's the

duty of the Speaker of the House to recognize people who asks questions

and ministers who answer them. It's been the experience of the Chair

that often we listen to statement rather than questions; we listen to

an explanation rather than a question. On the other side of the House,

there is a tendency on behalf of the ministers and members answering

questions to extend the answer sometimes longer than it should be. What

I try to do as the Speaker of the House is to control the question

period by bringing the members to order as quickly as I see that it's

apparent.

I would hope that members on all sides of the House will appreciate

the fact that in this House there is no advance warning of the question

that will be asked, and I have to listen to it as well as the answer

before I can ascertain whether the question or the answer is out of

order.

MR. COCKE: Mr. Speaker, the one thing I would like to draw to

your attention, however, is that there hasn't been criticism of the

other government members. It's been that one minister who has totally

and completely fouled up every question period that he ever gets

involved in.

SOME HON. MEMBERS: Oh, oh!

Interjections.

MR. SPEAKER: Order, please.

MS. SANFORD: Mr. Speaker, on that same point of order raised

by the member for New Westminster who asked for an extension of the

question period time today, I would like to point out to you, Mr.

Speaker, that you did your job in trying to call that member to order,

but that member went on for at least a minute after you had drawn to

his attention that he was out of order. It seems to me that the

opposition today should be granted at least a minute extension of

question period.

MR. SPEAKER: Hon. members, the Speaker tries to determine

what is fair and just for everyone. I am sure there have been abuses,

as I have seen, from all sides of the House in question period, which I

try to keep to a minimum.

HON. MR. GARDOM: I'm not too sure I will get it, Mr. Speaker,

but, with leave, I would like to make a statement.

Leave granted.

MOVE OF PWA HEAD OFFICE TO ALBERTA

HON. MR. GARDOM: I thought the hon. members would like to be

brought up to date concerning B.C.'s application to the Canadian

Transport Commission for an order restraining the move of PWA

operations from the province to Alberta, pending the ultimate

determination by CTC on the question of whether or not the acquisition

of the majority of the airline's shares by Alberta was

[ Page 3245 ]

prejudicial to the public interest.

Some three weeks ago we

received information to the effect that the

CTC might not deal with our application before September 1 of

this

year, which was the date that Pacific Western had set for the

conclusion of the move of its executive head office from Vancouver to

Calgary. That was a totally unsatisfactory state of affairs for this

province. As a result, we initiated proceedings in the federal court to

compel a decision from the Air Transport Committee of the Canadian

Transport Commission on the question of restraining this move.

Within a day of commencing these proceedings in the federal court,

we were advised by the Air Transport Committee that they would deal

with our application at a meeting to be held in Ottawa on Thursday,

June 24. Our application to the federal court was therefore dismissed

on the basis that the CTC was proceeding to consider the matter.

On Wednesday last, June 23, Pacific Western, which had not

previously replied to our application for the restraining order filed

on March 23, asked the CTC for leave to file a reply and put forward

arguments against B.C.'s application. British Columbia was given a

further 24 hours to respond to the Pacific Western Airline's reply,

which we did.

With B.C.'s response, therefore, Mr. Speaker, the case before the

Air Transport Committee of the Canadian Transport Commission is closed.

We've been advised that it is the intention of the committee to proceed

with its deliberations on British Columbia's application for the

restraining order tomorrow, Wednesday, June 30.

We have on numerous occasions, Mr. Speaker, reiterated to the

commission our very serious concern that the matter be dealt with

expeditiously in light of the September 1 target date which PWA says it

set for the conclusion of its move, and we are therefore most hopeful

that the Air Transport Committee will very quickly reach a

determination on our application.

MR. GIBSON: The Attorney-General brings us interim good news.

This has been a very vigorous prosecution on the part of the

government, for which I commend them. If by any chance the ATC should

rule against British Columbia's application, I would ask that the

Attorney-General immediately take the case back to the federal court or

the supreme court, as may be, with an attempt to receive an injunction

to preserve the status quo until a final ruling is made which is

essential to B.C.'s interests.

Presenting reports.

Hon. Mr. Waterland presents the British Columbia Petroleum Corp.

financial statement for the year ending March 31, 1976.

Orders of the day.

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

ESTIMATES: DEPARTMENT OF

TRANSPORT AND COMMUNICATIONS

(continued)

On vote 198: minister's office, $153,642 — continued.

MR. A.B. MACDONALD (Vancouver East): Mr. Chairman, I want to

ask the minister whether when he and the Premier went to the energy

conference about two months ago, and he was reported in the paper as

taking the position that the national price for a barrel of crude oil

should go up from its present roughly $8 by at least $2 and in the long

run it should go up to the world price, he was serious in making that

representation. Did he realize what the effect would be on the

consumers of the province of British Columbia? In addition to answering

that question, do they still believe that the price of crude oil

produced in British Columbia...?

We have about 40,000 barrels to 50,000 barrels a day of old oil. Is

the minister serious about having that priced for the sake of the oil

companies, particularly Imperial Oil, that produce that oil at the Arab

price, and having the consumers of Canada pay the Arab price for the

B.C.-produced old oil, without any guarantee whatsoever that they'll

put the surplus funds which they will have, which will be very

significant — at least $100,000 a day — back into exploration and

drilling?

I suggest that the government, when they went along with the

province of Alberta and supported...without any guarantee that the

money would be put into an investment fund for future development and

conservation of supplies, was selling short the consumers not only of

British Columbia but of Canada.

Another question I'd like to ask the minister is whether he

supported the alternate plan from Saskatchewan, which was, if the oil

companies should get an additional price per barrel, that a large

portion of that increased sum should go into a national conservation

fund for reinvestment back into oil-producing properties in Canada

through a public agency.

So I would ask the minister: was he really serious in proposing that

the oil companies that produce in B.C. should receive the Arab price —

in effect, the world price — for their oil, even though their costs and

expenses have not risen? It's old oil.

HON. J. DAVIS (Minister of Transport and Communications): Mr.

Chairman, in answer to the

[ Page 3246 ]

first member for Vancouver East, Canada's basic

problem is that it's

not self-sufficient any longer in oil. Exploration and development in

this country isn't sufficient to ensure that we can meet our own

requirements. So to an increasing degree we're having to pay the world

price. We're certainly having to pay the world price for oil imported

into eastern Canada. The basic approach of the Canadian government —

and to this extent, certainly the British Columbia government supports

it — was therefore to provide sufficient incentive to look for

additional supplies of oil in this country by increasing the wellhead

price — increasing it in steps from $8 to $10 and on towards $12 or

$13, the world price.

The British Columbia position, however, included another

stipulation, which was not accepted by the federal government. The

difference between the Canadian price and the world price of imported

oil is diluted by a tax on all Canadians. It amounts to 10 cents at the

pump. We're all paying 10 cents additional per gallon for gasoline in

British Columbia, across the Prairies, Ontario, Quebec and so on, to

buy this expensive foreign oil and lay it down to the refiners at this

low average Canadian price.

British Columbia proposed that Ottawa eliminate that 10-cent tax.

This would cushion the increase, which would otherwise flow to the

consumer, of a rise in the wellhead price of Canadian oil. So we were

attempting — taking a two-step approach — first, to make Canada more

self-sufficient in oil and, secondly, reduce the impact on the consumer

to the extent of at least 10 cents a gallon by eliminating the federal

tax which, as I said before, simply goes to reduce the price of foreign

oil which Canadians, in effect, pay so it's equal to the refiners to

the low price of Canadian oil.

Before sitting down, Mr. Chairman, I would like to comment further

on a question raised by the same member. He is concerned about the

return to shareholders of Westcoast Transmission. The return to

shareholders of Westcoast Transmission — according to his statements of

this morning — more than trebled when the NDP were the government. Last

year the return to shareholders amounted to roughly 15 per cent on

equity. In arriving at the overall 10.5 per cent rate of return which

we recommended this April, we were working on the assumption that

shareholders would get not 15 per cent but 14 per cent before income

tax.

MR. MACDONALD: Mr. Chairman, on the question of the price of

oil, the minister's made it very clear that British Columbia is

supporting a move whereby Canadians will pay the world price for oil,

first $10 and then on toward the world price. Presumably this is

because we — and not so much in British Columbia where we import

practically nothing — import some in eastern Canada, which doesn't

affect us at all.

The effect of that, Mr. Chairman, is simply that the consumer in

Canada is going to pay in the next few years about another 25 cents per

gallon of gas in the tank of his car. We know the effects of it — about

5 cents for every dollar increase on the barrel of crude. Some people

say 4.5, but it's around in that area. The government of British

Columbia is telling us this bad news, eh? The price of gasoline is

going to go up — and they're supporting it — by about 25 cents for the

consumers of Canada. The question I want to raise is whether this is

necessary.

AN HON. MEMBER: Hear, hear!

MR. MACDONALD: This government has given no thought

whatsoever to a two-price system. The crude oil that we produce in

Canada doesn't justify the increase to the world price whatsoever in

terms of costs. Why shouldn't we have a two-price system in Canada

instead of loading onto the consumer another 25 cents in the next few

years in the cost of a gallon of gas in the tank of his car? That's

what we're facing.

I want to say without any hesitation, Mr. Chairman, that an NDP

government in British Columbia and an NDP government nationally would

protect against the international off companies the consumers of Canada

and the industries of Canada. This is simply a sellout — the idea that

because, say, the Arab states have increased the price of oil to their

immense richness to levels of $14 and $15 we in Canada should jump on

that bandwagon and give that money to the international oil companies,

even though over a period of time their exploration and drilling costs

have gone down and their profits have gone up at the same time over the

last three or four years in every case of the big companies. I say

that's absolutely disastrous so far as the welfare, the economy and the

consumers of Canada and British Columbia are concerned.

MR. D. BARRETT (Leader of the

Opposition): The profits leave Canada and cause unemployment.

MR. MACDONALD: We have no guarantee whatsoever, Mr. Chairman,

that when you give these large additional sums to the international oil

companies they will be spent in Canada, in the Arctic or elsewhere in

exploration or drilling. There is no incentive plan such as we

introduced as an NDP government in British Columbia for natural gas

whereby if they got an increase it had to be reinvested to restore the

stocks that were being depleted. I don't know how we can argue any more

on this, Mr. Chairman; I guess we can go back and forth. But there is a

real philosophical, political and economic difference between this side

of the House and the government.

[ Page 3247 ]

MR. BARRETT: You're causing unemployment.

MR. MACDONALD: What energy do we produce now? Maybe 95 per

cent of our needs; maybe that will decline, until the Arctic comes in,

to 80 or 85 per cent. We still produce our basic crude and natural gas

supplies in this country. To jack those costs up to Arab prices, I

think, is absolutely fatal for the economy of Canada and British

Columbia and is a terrible imposition on the consumers of this country.

I say that you've just become a tabbycat for the international oil

companies. You've bought everything they say. They're very plausible

and persuasive; they're very ready with their campaign funds. Those

campaign funds from Imperial Oil, as we know, have flowed into the

Social Credit Party. With that kind of money in your till as a

political party you sell out and say to the oil companies: "You want

the Arab price? We'll give you the Arab price." I say that's a complete

sellout. It's very black news for the Canadian economy and the Canadian

consumer.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Chairman, I

hadn't intended to talk about that particular issue just raised by the

hon. member for Vancouver East, but I do have to point out to him that

our energy resources in Canada are part of the birthright of every

Canadian.

MR. MACDONALD: Hear, hear!

MR. GIBSON: To the extent that the birthright of every

Canadian is sold at a rate well under the going rate to the largest

user, that means that the ordinary Canadian is subsidizing the person

with the largest car and the biggest air conditioner and so on. I don't

think that that is a part of the society that the hon. first member for

Vancouver East (Mr. Macdonald) wants to see. I don't know, but I don't

think somehow that that quite fits in with at least my idea of social

justice. It seems to me that that, being a part of the birthright of

every Canadian, should adhere to every Canadian, which is best done by

the owners of the wealth through their government recapturing every bit

of economic rent that is available out of it and then processing it

through the regular governmental systems. So there's just a little bit

of a difference of opinion there.

MR. BARRETT: Like BCPC?

MR. GIBSON: BCPC is an excellent move — no question about it.

MR. BARRETT: They fought against it.

MR. GIBSON: Mr. Chairman, the point that I particularly

wanted to raise at this time was the question of the Alcan pipeline —

what it means to British Columbia and how we in British Columbia can

advance that cause if it is a good one. I think before that action is

taken too formally and vigorously by the government they have to give

all British Columbians a chance to put forward their views through some

form of public hearing, but I can tell the government that at this

point I support it. I think the Alcan pipeline is the right way to get

the Alaskan gas down to the United States — the right way for just

about everybody concerned. I hope that our government of the province

of British Columbia, once they have held the hearings that I think are

essential, will take the most vigorous action possible before the

National Energy Board to support that concept for the benefit of the

people of this province and for the benefit of others.

I want to say why it solves everybody's problems. We should always

think of our customers. For our U.S. customers it solves their problems

because they get their own gas — that Alaska gas — in a lower-cost way

and sooner by going the Alcan route than by the much more expensive and

complex Mackenzie Valley route. As far as Canada is concerned, it

doesn't force the Mackenzie issue.

The Mackenzie issue is a very touchy question in our country, and

properly so — bound up with many complex social and economic issues. It

doesn't disturb the Canadian capital markets to anything except a very

minor fraction of what the Mackenzie Valley pipeline would do. It

retains Canadian ownership of the various pipelining systems in a far

better way. It leaves the so-called maple-leaf option open, which is a

very largely Canadian-owned pipeline to bring the delta gas down the

Mackenzie Valley at the time when that is necessary — whenever that may

be — under Canadian ownership and at a time, some years removed, when

our capital markets can stand it. In the meantime it's demonstrable —

it's been proven many times — that the reserves of gas in Alberta are

quite sufficient for Canadian use for some years to come.

The Alcan route also, Mr. Chairman, makes it possible for Canadian

suppliers to get a real piece of this action. The Alcan route is

42-inch pipe. The Canadian Arctic gas pipe route is 48-inch pipe. The

Alcan route is 1,250 lbs. pressure. The Mackenzie Valley CAGPL route is

1,680 lbs. pressure with really unproven technology, in other words,

and technology that Canadian suppliers would have very great difficulty

getting a piece of — let alone British Columbia suppliers.

As far as solving British Columbia's problems is concerned, it

increases the security of our own natural gas supplies because to the

extent that Alaska gas is brought down through that route, and through

British Columbia, it makes it feasible to the extent we wish to do so —

to displace existing contracts with

[ Page 3248 ]

United States. Naturally we would negotiate, I

would think, with our

American customer on that. It would increase, to some extent, economic

activity in this province and it would generate tax revenues in this

province — not only property tax revenues, Mr. Chairman, but revenues

that a lot of people wouldn't think of, like the gas that's used in the

compressor stations to speed the natural gas along its route, which

would be worth something like $10 million a year to our revenues in

terms of the coloured Gasoline Tax Act

under which it would be taxed.

It would reduce the pipelining costs to British Columbians of our own

gas brought from our northern regions down to our southern markets,

because naturally when you have a greater throughput through an

existing piping system, you've got a lower unit cost.

MR. MACDONALD: You'd have to loop and you'd have to expand

there.

MR. GIBSON: You'd have to loop up a good deal, that's right.

But it would still lower the unit cost of the throughput, I think. It

would as well provide an incentive to upgrade the Alaska Highway; it

would provide access to exploration possibilities and tie-ins to

exploration possibilities. All things of very great merit.

Mr. Chairman, the expenditures in British Columbia on this

particular project would be slightly over $1 billion at today's

predictions — expenditures in Alberta about $700 million, almost $800

million; Yukon, $1.1 billion; Alaska, $2.3 billion — which is one of

the reasons that it solves the Alaskans' problems, too, because they

naturally want the route out for their natural gas to have as much

Alaskan economic input into it as possible. And they've been very

concerned about taking it out over their wildlife reserve which lies

east of Prudhoe Bay as you move down towards the Canadian delta. This

Alcan route solves that problem for them, too. To me, Mr. Chairman, it

is a natural.

I mentioned the Canadian equity required. The Canadian equity on the

Canadian Arctic gas pipeline proposal would be something like $700

million out of our capital markets for the so-called maple-leaf line,

which would in any case be later; it would be only half of that. And as

far as the Alcan route is concerned, there would be very little direct

charge on the capital markets because most of it would come out of the

cash flow of partners which are Westcoast Transmission and Alberta Gas

Trunk — companies with very substantial cash flows.

I mentioned the ownership. The ownership of the Canadian Arctic gas

pipe route is largely U.S. companies or Canadian companies controlled

by U.S. companies, with the exception of Union Consumers, Northern

Central Gas in Ontario and Trans Canada Pipe Line. The ownership of the other route...of course AGTL

(Alberta Gas Trunk Line) is virtually 100 per cent Canadian.

Westcoast Transmission has an ownership pattern a little more

complicated to figure out. By some figures it's 90 per cent Canadian,

but you certainly have to deduct from that the 35 per cent that's owned

by Pacific Pete, which in turn is 48 per cent owned by Phillips

Petroleum for a beneficial further U.S. ownership there of 17 per cent.

But Westcoast has a good strong Canadian component in it — over 50 per

cent beneficial ownership of the equity, I would say, and to that

extent also better from that point of view than the Canadian Arctic Gas

pipeline route.

So for all of these reasons, Mr. Chairman, I hope that our

provincial government, which to its credit has already expressed

support of this concept, will, after the holding of public hearings and

if justified thereby, vigorously prosecute this British Columbia route

before the National Energy Board. I think that by so doing they can be

doing the right thing, not just for British Columbians, but for

Canadians and for our American neighbours both to the north and to the

south.

There are a few problems to be solved along this route. We must

appreciate that the land claims in the Yukon territory are not entirely

settled, but they are further advanced than in the Mackenzie Valley

route, and this is another example of how it buys time to work with

these exceedingly difficult problems with which, for example, Mr.

Justice Berger is seized in his inquiry.

I want to move on from that topic, Mr. Chairman, to the question of

the forecast energy needs of our province. There is an extraordinary

difference between the needed electrical energy as forecast by B.C.

Hydro — and we had an opportunity in the public accounts committee to

examine Mr. Bonner on this question — and the figures released by the

B.C. Energy Commission a couple of weeks ago. Now when we examined Mr.

Bonner, he said, quite properly, that it was his job to plan in a way

that makes sure that whatever the load was — the highest reasonably

expectable load — B.C. Hydro would be geared up to meet it. Dr.

Thompson has a rather different job. He has to make the best estimate

of what British Columbia is likely to need, in his view.

The minister doesn't have that luxury of taking one view or the

other, because both of these men report to him, and the minister is the

man who, in the end, has to say, "we think the B.C. electrical load is

going to go up at something closer to 9.2 per cent annum," which is

what B.C. Hydro says, or something closer to 5.4 per cent per annum,

which is the way that the B.C. Energy Commission views the situation

for the next 15 years.

Mr. Chairman, this is not a small question. At the end of 15 years

the higher growth projection would

[ Page 3249 ]

produce a system which is more than 70 per

cent larger than the smaller growth projection. Another way of putting

it is that the larger growth projection would require investment in

electrical generation facilities of more than double what the smaller

projection would require. I hope that the minister, at this point, has

done sufficient of his homework to be able to stand up and say, "I am

tending one way or the other," or at least "this is how I am going to

get the answer."

Now, Mr. Chairman, British Columbia Hydro, a year ago — in May of

1975 — produced a document called "Alternatives, 1975 to 1990." I've no

doubt the minister is familiar with the publication. In order that the

public debate can best be carried on in the fields of required Hydro

power, I wonder if the minister could tell us if we can still use this

as a basic reference. It was produced, of course, under the last

government, but can we still use this as the basic plan of B.C. Hydro,

which of course implies Revelstoke Dam and Hat Creek and so on? There

are all kinds of options set out here, but there's a preferred

schedule

that's set out. Is that preferred

schedule still the one that we should

be thinking about when we are looking down the road, appreciating that

the timing might be varied depending upon what growth rate the minister

comes up with as the appropriate one?

I would next ask him if he has had, or proposes to have, or proposes

to ask British Columbia Hydro to enter into any discussions with Atomic

Energy of Canada or the federal government with respect to the

installation of a heavy-water plant anywhere in British Columbia,

perhaps in connection with the Hat Creek deposits. This is one of the

possibilities that has been noised about. Perhaps the minister could

tell us today whether or not there is any reality to that.

Finally, at this particular stage, I would like to urge upon the

minister and receive his opinions on the need for a change in the

fundamental way in which we price our electrical energy in this

province. The minister will be familiar with the institute in the

United States known as Resources for the Future, a group which over the

years has done some of the most excellent studies on energy and the

environment of any body anywhere in the world.

In their winter regular publication they canvassed the situation

around the country and around the world of what they call "time-of-day"

electricity rates. They point out that most of our systems — and that

includes B.C. Hydro — have the so-called "declining block-rate

structure." In other words, the more energy you use the less you pay

for it per unit.

They advocate — and I would advocate — what you call marginal cost

pricing. In other words, at the moment, bills are technically based on

total consumption and no account is taken of the time of day at which

that consumption is incurred. But we all know that B.C. Hydro has to

have a large reserve in place for peaking loads, and that means, if

you're going to be using power at the busiest time of day, in fact you

should be paying more for that power than at a slack time of day. The

same thing's true on the B.C. Ferries, incidentally, but we'll get to

that later. You should be paying more at a busy time of day because

that's when the extra capital cost has to be there to provide that

standby power that's only required at that time of day.

Now if we had some means of saying during the busiest hours — let's

say it's 4 to 6 in the afternoon or 5 to 7 or whenever it might be —

that people wouldn't use dishwashers or they wouldn't use electric

dryers, that might be one way round it. But in our society people would

probably prefer to go through the market mechanism and say that you can

use your appliances any time you like but at some times they will be

cheaper and at other times they will be more expensive.

I'll just quote Resources for the Future here:

"The marginal cost rule demands that all customers be

charged for the marginal or additional costs they impose on society and

that no customer willing to pay the full marginal cost of his or her

consumption be turned away."

In a practical sense what that gets you into is more sophisticated

metering whereby, depending on the time of day, an electrical impulse

is sent down the system. The meter clicks over and a different rate

structure goes into effect for electricity used during that period.

I think that's the kind of thing we should be getting into. The same

article quotes regulatory commission decisions recently in Michigan,

Wisconsin and California, and they quote California specifically:

"We desire that progress be made in implementing the

concept of peak-load pricing. In furtherance of that end the respondent

electric utilities should file specific proposed peak-load tariffs by

applications or advice letters for review by our staff and interested

parties."

Mr. Chairman, we do not have the same shortage or relative scarcity

of electrical energy as does California, but at the same time it is

very costly for us. We have a system that already has to be larger than

one would expect because of our rather unpredictable water availability

for our hydro installations. We have a wide variation in our streamflow

available to go through our dams. To add to that unpredictability the

very high additional peaking capacity we require is a great charge on

society. In my opinion, Mr. Chairman, that charge on society should be

explicitly recognized in the rate structure and — I would venture to

predict — therefore be moderated to a considerable degree by the rate

structure as well, and I would make that

[ Page 3250 ]

submission to the minister.

HON. MR. DAVIS: Mr. Chairman, the hon. member for North

Vancouver–Capilano raised five different points, and I'll attempt to

deal with them briefly.

First, the Alcan or Alaska Highway gas project — it has attracted

increasing attention in the United States for several reasons. First,

environmentally it's much cleaner than the Gas Arctic project coming

down the Mackenzie or the gas tanker project which would take Alaskan

gas by sea down the west coast.

It's also less expensive to build — in other words, economically

more attractive — and being economically more attractive will pay a

better return for the gas at the source in Alaska. This has attractions

as far as the state of Alaska is concerned.

I think another aspect of this project which should appeal to

Canadians as well as Americans is that it could be built more rapidly.

It could come on stream much earlier. It could be built, in effect, in

stages rather than having to be built full scale all at once. Because

of its earlier timing it would mean that Alaskan gas could be

available, for example, in the U.S. Pacific Northwest several years

earlier than via the other projects. This could take pressure off us,

pressure off British Columbia to continue to deliver very large volumes

of difficult-to-get B.C. gas to consumers in Washington state, Oregon

and so on. So it has these advantages to British Columbia over and

above the jobs, over and above the possibilities of encouraging

exploration in the northeastern corner of this province.

As to the several different forecasts of power demand — one, B.C.

Hydro's forecast of higher than 9 per cent a year compounded and the

other the B.C. Energy Commission's forecast of less than 6 per cent.

One's more than 9, the other less than 6 per cent. One certainly has to

agree that projected out over a time, especially out over 10 or IS

years, this results in very different orders of magnitude of

development, very great differences in the amount of capital needed,

for example, to develop the plants to supply those needs.

B.C. Hydro's job, as the hon. member said, is to be ahead of the

needs so we don't have brownouts or blackouts. The B.C. Energy

Commission's job is to be as objective as possible and try and call the

shot right on the nose. It doesn't have to make sure that supplies are

always there, merely to choose the most probable outcome.

One fundamental difference between the two forecasts is the

population projection. The B.C. Hydro projection rests essentially on a

continuation of our historic roughly 3 per cent a year population

growth rate. The B.C. Energy Commission, on the other hand, sees a big

drop in our population growth rate to less than 2 per cent. Those

different projections of population growth rate in this province

explain in very large part the difference in the projections of power

demand. One is, if you like, optimistic about continued population

growth in the province, and the other sees a sharp decline in the

growth rate, the Energy Commission projecting a growth rate of the

order of 2 per cent, which is roughly, in line with Canada's population

projections — at least the official population projections for Canada.

Assuming that B.C. Hydro proceeds and build the plants which are

related to the higher growth rate, it won't continue to build this

additional plant — a plant which, in the short run at least, would be

surplus. It won't continue to do that indefinitely. It may do this for

a year or two or three, but then it slows down its construction

programme or postpones a second or third power project. It corrects

itself. If the growth rate turned out to be less than 6 per cent rather

than 9 per cent, the correction would occur. The point can still be

made that there would be some overbuilding in the short run,

unnecessary raising of capital at high interest rates — unnecessary

cost.

I think the Revelstoke project, which is large, would be the next

project to go ahead regardless of which projection one used, whether it

was a 6 per cent compounded or a better than 9 per cent compounded

growth rate, because it's the next most logical development. It'll be

fully utilized in the early 1980s in any case, and if the projection is

one or two years out, there is also the aspect of it being a Hydro

project. If it comes on early we'll simply use running water — water

that's going to the ocean anyway — rather than burning natural gas

which is in short supply at our thermal plants.

B.C. Hydro is arguing that it should proceed at a reasonable pace to

build the Revelstoke project and complete other Hydro projects

generally in the Columbia basin on its present projections. If it's

right, then less gas will be burned at the thermal plants. If it's

wrong, those Hydro facilities will be useful in the long run in any

case.

We're not forced, at this moment in time, to say one forecast is

right for planning purposes and the other is definitely wrong and that

our planning in terms of constructing plants must be altered

accordingly. I think the decision to go ahead with the Revelstoke

project is correct and that its timing of completion can be adjusted to

look after events regardless of whether the growth rate is 6 per cent

or 9 per cent.

As for the heavy-water plant, there have been no discussions, not

even any inquiries, about the possibility of a heavy-water plant being

built in British Columbia. It's a possible user of energy. Our

position, in the short run in any case, is that we're not really long

on energy; we're not long on electricity. We have a tight corner to get

around as far

[ Page 3251 ]

as natural gas is concerned, so we're not really looking for large

power-consuming industries such as the manufacture of heavy water.

The member for North Vancouver–Capilano also mentioned marginal

pricing. He's right, I think, that North American consumers have to

live with systems which ration their demands more in the future, meter

their demands. The best way to do this is through price, and pricing

systems should involve, at some point in time, a sharp rise in price.

Historically, and the member alluded to this, rate structures were such

that the price dropped as consumption increased. The curve trended

always downward. The assumption always was that if you consumed more,

the system was bigger, and if the system was bigger, on the average the

cost of production, transmission and distribution was less.

This is no longer true, especially with inflation, especially with

more distant sources involved, and at some point in time the cost of

increased consumption rises. The rate curves in the future should have

a hook in them; they should be rising after some optimum point of

consumption. The consumer, facing that increased price, should feel the

results and will tailor his demands accordingly.

MR. GIBSON: Just to follow that up very briefly, then, since

the minister seems to agree in theory with the marginal pricing

concept, will he issue instructions to B.C. Hydro to do something about

it?

HON. MR. DAVIS: Mr. Chairman, this matter is under active

investigation in B.C. Hydro, and I think it will apply eventually also

to gas and electricity in other systems in the province.

MR. D.F. LOCKSTEAD (Mackenzie): Mr. Chairman, I think that we

would be remiss in not discussing under this vote the minister's

administration of the B.C. ferry system and the effects of the most

recent and horrendous fare increases that have been put onto the users

of the service by the government starting June 1 of this year — the

effects on the users, Mr. Chairman, the effects to the ordinary people

of this province.

These horrendous fare increases on top of huge 200 or 300 per cent

ICBC rates, increase in sales tax and the other punitive and

unnecessary measures inflicted on the people of this province and these

huge, tremendous fare increases on top of all of that, taking money out

of the economy — money that will not be recirculated and fares that

people can't afford....

I know that some concessions have been made by the minister and we

appreciate the small concessions that were made in some areas — the

Gulf Islands, the Sunshine Coast — but I want to tell you that the

people are not happy with these concessions. Even to residents fare

increases have been doubled. To non-residents in those areas the fares

at the moment are tripled, but to residents they are still doubled. The

usage of the ferry service and the traffic volumes are down by, in some

areas, 60 per cent in spite of the fact that we hear that the traffic

is picking up. I am sure it will because we are in the summer months.

But the effects on the economy of this coastal area have been

disastrous.

Interjection.

MR. LOCKSTEAD: No other word will do but disastrous. We have

many articles. I won't read them but here are a couple of headlines. In

The Victorian of June 16: "Tourist Trade Facing Disaster." Here's a

clipping from the Powell River News , June 9: "Business Lost for Local

Motel Owners." From the Victoria Times , June 15: "Forty Per Cent Fall

Off in Tourists. Ferries' Fault." Here is one from the Victoria Times ,

as well June 3: "New Rates Whack Farmers." I suppose we could go on and

on, Mr. Chairman, but I hope the minister, when he is answering

questions, will perhaps give us some indication of how he intends to

proceed in this matter.

I would also be interested in knowing, Mr. Chairman.... We do know

that the two large ferries will be placed in service some time this

month, and perhaps the minister could tell us exactly when and on what

routes, but because these two new ferries will be placed in service in

the near future and because of the reduced volume, will the minister be

decreasing the hourly service that people on Vancouver Island now enjoy

— the presently hourly service, which I think is a necessity? The

ferries are, as a matter of fact, running at perhaps 40 to 50 per cent

capacity on an average, if that. I doubt that they are running at that

rate. I would be interested to know if these horrendous fare increases

are going to affect the scheduling on those two routes, Mr. Chairman.

I would like to explain briefly to you some of the effects that the

fare increases are having in my area. Higher ferry fares have reduced

the number of visitors to the Sunshine Coast and Powell River region

thereby depressing the economy and adding to the already high rate of

unemployment and imperiling the investment of small businesses in the

area. Small businesses, Mr. Chairman, are suffering in my area, as I

have just explained, and some of them are suffering terribly. I have

never seen so many small businesses up for sale on the Sunshine Coast

and in the Powell River area, and I have heard about areas on Vancouver

Island where there are literally hundreds of small businesses up for

sale at this point in time.

[Mr. Veitch in the chair.]

[ Page 3252 ]

Employers who have been able to attract high calibre employees in my

facilities of the lower mainland, will lose some of their competitive

edge. Many specialized services, medical, educational and governmental

as well as commercial, are not available in the areas I represent.

Residents, for example, who must visit a medical specialist or attend

college classes on the lower mainland at regular intervals are severely

penalized by the fare increases, Mr. Chairman.

Oh, we have a new Chairman. The alternative of moving to a new home

on the lower mainland is no alternative at all, since reasonably priced

housing is virtually unobtainable there. Moreover such migration to

urban centres is directly contrary to established federal government

policy of encouraging decentralization of populated areas.

There appears to be recognition in the community that an increase in

ferry fares is justified. The introduction of the increases of this

magnitude in a single step is having serious ramifications in the

region. Ferry fares have been constant for many years and people have

made decisions concerning location, investment, employment and

commitments based on lower fares, Mr.Chairman.

When all the criticism of the changes in fares are examined, it

becomes apparent that there are many important aspects to consider in

establishing a ferry policy. It is also apparent that the existing

policy has not led to a satisfactory service. It is most unfortunate

that the establishment of a new fare structure for our ferries was not

used as an opportunity for a thorough review, rationalization and

improvement of all ferry services in British Columbia, with references

to other public transport in the province. Instead, considerations

appear to have been limited to recovering a certain amount of extra

revenue from the users of the service, without reference to the true

potential of a new fare, a new fare structure for implementing valuable

social and economic change, Mr. Chairman.

I think that a general reconsideration should be given to the social

goals being pursued through a provision of ferry service and the ways

in which the fare structure chosen can be effectively used to achieve

these goals.

You know, Mr. Chairman, the other day the first member for Victoria

(Mr. Bawlf) suggested that perhaps the Queen of Surrey

should be utilized on the Victoria-Seattle route. But I don't think

that was the reason the vessel was purchased in the first place. Some

time ago, the former Minister of Transport and Communications (Mr.

Strachan), because there was no forward-looking planning by the former

Socred government, had to purchase a ship immediately to relieve the

traffic pressures from the lower mainland to Vancouver Island, and the

vessel he chose was the Queen of Surrey .

Interjection.

MR. LOCKSTEAD: But there were two good reasons for choosing

that vessel. It was big enough to handle the traffic volume from

Departure Bay to Horseshoe Bay and relieve the pressures on that route.

But thinking ahead, we were looking at the possibility of placing that

vessel on the northern coastal route.

I would suggest to you, Mr. Chairman, that the Queen of Surrey

should be replaced. The present Queen of Prince Rupert

is on the Kelsey Bay to Prince Rupert route, and the present Queen

of Prince Rupert

should be placed on a route from Vancouver serving northern Vancouver

Island, the central coast and the northern coast of this province.

I believe as well that the Comox Queen, which is a 28-car vessel,

should be placed on a route from Bella Coola, Ocean Falls and Bella

Bella, connecting with the Queen of Prince Rupert on

that route to give those people some access too. That area is very

isolated and I believe that a daily ferry service into that area would

also help the area economically, because at the moment those areas are

virtually isolated and it's presumed that the community of Ocean Falls

will expand in future times.

As well I would like to see a direct route from Saltery Bay, which

is the terminal at Powell River, to Horseshoe Bay. I would like to see

a direct route which would accomplish a number of things. People using

the present service.... I believe the present Queen of Powell River

should remain on its present route between Saltery Bay and Earls Cove,

but I think it should accomplish a number of things. First of all,

people wouldn't have to make that horrendous drive down the Sunshine

Coast. It would relieve the necessity of putting a second vessel on

that route in the summertime or at peak periods, although with the new

fare increases, I don't think there's been a lineup there for almost a

month, Mr. Chairman. And it would be a faster and more convenient way

for the 30,000 people living in the Powell River regional area to get

to Vancouver.

So I would hope that the minister would look at some of these items,

and I think we'll probably have more to say under this vote in a short

while.

MR. R.E. SKELLY (Alberni): I also have something I would like

to say about the ferries before the Premier attempts to ram this vote

through — I heard him say "aye" there. (Laughter.)

But we on central Vancouver Island are also concerned about the

exorbitant increases in the ferry rates and the impact these increases

have had on the hospitality industry and the retail industry on central

Vancouver Island.

[ Page 3253 ]

I had a call from one of my constituents, who's a motel owner in

Parksville, just a few days ago when I was up on the weekend. He said

that his revenue for the month of June was down something like 50 per

cent. From $2,600 last year in the month of June, under the NDP

government which had a favourable attitude towards small business, it

was down 50 per cent to $1,000 revenue — not even enough to pay the

mortgage on his motel. In fact, this person is being driven out of

business; he attributes it directly to the increase in ferry rates and

the fact that there's resistance by tourists to going on the ferries as

a result of those exorbitant increases in ferry rates.

Most of these people in the hospitality industry on central

Vancouver Island did vote Social Credit last time, and a lot of them

are calling me up and saying "Never again!" They voted for Social

Credit on the assumption that this was the party of small business. No

way! No way is it the party of small business. The New Democratic

Party, when it was in office, reduced corporate taxes on small

business, assisted small business by maintaining ferry rates at a lower

rate and encouraging people to use the ferries.

Never before, never under the New Democratic Party did you see signs

on the ferries: "Don't blame the catering staff for the crummy

service." Only under Social Credit. People are staying away from the

ferries in droves in spite of the fact that border crossings into

British Columbia from the United States are at roughly the same level

as last year, and in spite of the fact that when you listen to the

radio they advise you that there's a half-hour wait at the border

crossing into British Columbia from Blaine, Washington.

Last year they used to say there was a three- or four-hour lineup on

the ferry system. Not this year — no more lineups. That's what the

Socreds promised, no more lineups on the ferry system — and they

certainly delivered that. But not only have they eliminated lineups on

the ferry system, they've also eliminated lineups for motel

accommodation on Vancouver Island, for hotel accommodation, campsite

accommodation — and they've driven people in the hospitality industry

on central Vancouver Island to the verge of bankruptcy as a result of

their change and their increases in the ferry rates.

MR. C. D'ARCY (Rossland-Trail): They're doing fine in Spokane

and Calgary, though.

MR. SKELLY: And I'm sure they're doing fine in the Okanagan,

and maybe that's the reason. And this is....

MR. D'ARCY: Spokane and Calgary — they are all going to

Calgary.

MR. SKELLY: Again, this has taken place. Even though

estimates of border crossings are up, people are coming in from the

United States. In fact, there was an

article recently in the newspaper

that....

Interjection.

MR. SKELLY: I'll send you a copy. I'll table it after we're

out of committee.

HON. L.A. WILLIAMS (Minister of Labour): Table the report.

Don't make these speeches out of thin air.

MR. SKELLY: Okay, I'll table the report. Doesn't Mr. Tozer

get this information for you? Or are you paying him under the In-laws

Act?

Interjections.

MR. CHAIRMAN: The hon. member for Alberni has the floor.

Order, please.

MR. SKELLY: Okay, Daily Colonist , Victoria, B.C., Sunday,

June 27, 1976: "Almost 20,000 passengers have stomped the hardwood

floors of the Marguerite so far this month, compared to just

more than 15,000 last year."

So traffic is increasing from the United States, increasing on the Marguerite ,

which your party was going to scuttle. But traffic is off on the B.C.

ferry system because of a decline in service....

HON. W.R. BENNETT (Premier): We've got lifeboats this year.

MR. SKELLY: Lifeboats but no passengers to use them.

A decline in service on the B.C. ferry routes, and a decline in

patronage by tourists. This wouldn't be so bad, but the motel owners on

Vancouver Island are facing bankruptcy — restaurateurs, people in the

hospitality industry...retail trade has dropped back. Even Woodward's

stores reported that the government has taken something like $500

million out of regional economies in this province, centralized it in

Vancouver and, as a result, retail business is down, tourist business

is down and a lot of this is directly attributable to government

policy, and particularly on central Vancouver Island, to the exorbitant

increase in ferry rates and a cutback in service.

What is worse is that these people are being forced to pay their

taxpayers' money — money they pay out in taxes, even though they can't

afford to pay their mortgages now — to advertise in the United States

for tourists to come to Vancouver Island. Last year you didn't have to

advertise; there were lineups at all the

[ Page 3254 ]

ferry terminals. People couldn't wait to get to Vancouver Island,

couldn't wait to enjoy the beauties of Pacific Rim National Park, the

central Vancouver Island area — a lot of the hiking, fishing and

recreation opportunities in that area. Now they are not coming. Now

they are not patronizing those motels and those restaurants. It's

directly attributable to the increase in ferry rates under this

government.

It was reported in one of the newspapers recently — I see the

Premier's left the room, so he won't ask me to table a copy of that,

but I have it in front of me — that the tourist industry in southern

Vancouver Island is losing something in the neighbourhood of $250,000 a

week. Or is that a day? Yes, $250,000 a day the tourist industry in

southern Vancouver Island is losing.

MS. K.E. SANFORD (Comox): Shocking!

MR. SKELLY: Yes, $250,000 a day. In the first 20 days of

June, the first three weeks of June — a loss of $5 million to the

tourist industry in southern Vancouver Island, and, again, directly

attributable to the increase in ferry fares.

Many summer students who would have been employed in the tourist

industry in the Victoria area, in the central Vancouver Island area....

And I'm sure the member for Comox and the member for Mackenzie (Mr.

Lockstead) will concur that in those areas as well many summer

students, people requiring money to go to university, will now not be

employed in the tourist industry because of the increase in fares and

the cutback in the industry on central Vancouver Island.

It's typical of the Socred concern, this coalition concern for the

bottom line in the government operations — an attempt to get into the

black on the ferry service. They admit that they're not going to get

into the black on the ferry service...but while they're attempting to

get into the black on that service, to produce a profit on it.

There's just no vision at all, no understanding at all as to what is

happening to the people on central Vancouver Island and southern

Vancouver Island who rely on a 120-day tourist season to make their

income and to make their profit for the whole year.

They don't understand the full cost-benefit analysis of what the

total impact is going to be on the province. That's not only on the

ferry system alone but in other areas as well. They are destroying a

major tourist industry on Vancouver Island, and they don't seem to have

any understanding, any compassion, any concern for the fact that they

are destroying that industry.

MR. W.S. KING (Revelstoke-Slocan): They've only got one small

businessman over there.

MR. SKELLY: The member for Kootenay (Mr. Haddad) chuckles

about this. He can chuckle about this because he lacks concern as well

for the tourist industry on Vancouver Island.

Mr Chairman, they used to accuse us a government, when we passed

mineral royalties legislation imposing a 5 per cent sales tax on

minerals, of killing the goose that lays the golden egg. They said we

were driving the mining industry out of the province. This is precisely

what they are doing to the tourist industry on Vancouver Island. They

are driving those people to the verge of bankruptcy; they are killing

the goose that lays the golden egg as far as the tourist industry is

concerned on central Vancouver Island. You're discriminating against

one of the finest parts of the province, a part of the province that I

am very proud of.

I am asking the Minister of Transport and Communications to

reconsider an increase in ferry rates, to lower the fares to a more

reasonable level and to conduct a study of the impact of the increase

in those ferry rates before any change takes place or any increase

takes place. I am asking for a rollback in those ferry rates and a

complete detailed study of the economic impact on small businesses on

Vancouver Island before those ferry rates are tampered with again. What

he's done is to drive the retail and the tourist industry on Vancouver

Island to the verge of bankruptcy.

A second thing that I would like to discuss — again, I have brought

this up under another minister's estimates, the Minister of Forests and

Mines and a few other things (Hon. Mr. Waterland) — is the McGregor

River diversion. This minister is particularly responsible as the

minister who has jurisdiction over B.C. Hydro and Power Authority. He

was also at one time, when he was a Liberal, the minister responsible

for fisheries for the whole of Canada.

I realize that the McGregor diversion is an attractive project from

the point of view of B.C. Hydro because it involves no installation of

generating capacity. The W.A.C. Bennett Dam on Williston Lake has

already installed the generating capacity that would be derived from

the McGregor River diversion. So it's a very attractive project from

the point of view of B.C. Hydro in that the capital outlay for power

production would be a lot less than, for example, the Hat Creek power

project. I can understand that 292,000 kilowatts with a minimal capital

outlay would be attractive to B.C. Hydro; 488,000 kilowatts when other

dams are constructed on the Peace River.

A report has recently been issued by the Fraser River ecology

committee on the ecological and other consequences of the proposed

system E dams on the Fraser River basin. The kind of blase statements

in that report about the impact of particularly the

[ Page 3255 ]

McGregor diversion on the fisheries in the Fraser River system are

frightening. I would just like to read for the benefit of the record

and for the benefit of the House some of the statements made in that

ecological subcommittee report concerning the impact on the Fraser

River salmon industry. That industry is valued, according to the

report, at roughly $40 million wholesale net value to this province

each year in 1972 dollars. I'll start with page 57 of the report.

"Attempts to remove squawfish population from

existing reservoirs have proved ineffective to date. Squawfish are

distributed throughout the Fraser River system. The improved

environment that would be created for these fish in reservoirs would

probably encourage increases in existing populations and in predation

of salmon fry. Thus it may be assumed that the increased number of

predators, the increased travel time through the reservoir and the

reduced turbidity should cause downstream-migrating juvenile chinook to

experience high losses due to reservoir predation."

On parasites and disease transfer from the Arctic drainage into the

Fraser River system that ecology subcommittee report states on page 125:

"Northern pike, which are host to a tapeworm, could

possibly swim from the Arctic drainage into the McGregor reservoir if

the McGregor were diverted. If such transfer of pike did occur, the

tapeworm would infest salmon stocks. This would cause mortality to

juvenile salmon. In addition, the appearance of the encysted larval

form of the tapeworm in the muscles of the adult salmon would

drastically reduce the marketability and possibly completely eliminate

the commercial fishery in the Fraser River."

This is a fishery that has an annual net value to this province of

$40 million a year.

"It has not been possible to estimate the probability

of pike parasite transfer. The effects of this development have not

been included in the calculation of survival reductions.

"No assessment was carried out on the possibility of

other parasites, disease organisms or fish transferring from the Arctic

drainage into the Pacific drainage. Such transfers may include the

introduction of northern pike strictly as a predator fish. As they are

particularly voracious predators, juvenile salmon losses in the Fraser

would be increased if northern pike became established throughout the

Fraser River system.

"No assessment was made of the effects of the transfer

of disease or parasites from the Pacific drainage into the Arctic

drainage which could have a detrimental effect on future recreational

potential of the Peace River and the Mackenzie River system."

No work had been done at all on that type of assessment. Yet that

Fraser River fishery alone is worth $40 million net value. It's not

simply the $40 million that concerns us but the fishing industry as a

whole way of life in this province — a fishing industry that creates

employment, that provides subsistence for Indian communities, and that

provides industry for communities on the west coast of Vancouver Island

in my riding that rely directly on the salmon production in the Fraser

River system.

Since no adequate assessment has yet been done on the possible

impact of the McGregor River diversion and since the McGregor River

diversion appears to be such an attractive project for B.C. Hydro in

that the capital outlay required per kilowatt produced is less than a

few other projects he has on stream, I'd like to ask the minister if

Hydro has commissioned any impact studies, environmental or economic,

on the McGregor diversion. Have contracts been awarded for those

studies and, if so, to whom? Is it true that the McGregor diversion

project will be advanced from the target date of 1985 to a target date

of 1981? Thirdly, is it true, as reported by B.C. Hydro officials to

the Fraser-Fort George regional district, that the environmental impact

studies will not be complete until after construction has been started

on the McGregor River dams?

MR. G.S. WALLACE (Oak Bay): I just want to enlarge a little

bit on some of the comments that have already been made with regard to

the increased ferry rates and perhaps to mention two of the other

factors, one of which is safety on the ferries.

I think, Mr Chairman, some of the statements that were made at the

time the ferry rates were increased — such as comparing the rates to

the citizens of this province. When one travels from England to France

one does so for a holiday or a luxury. When one travels from Vancouver

Island to the mainland — most of the time for those of us who live on

the Island — it is very much a matter of business or carrying on some

economic activity, not a holiday going to the south of France. I think

it was less than fair to try and justify ferry rate increases in

British Columbia by drawing this kind of completely unsuitable

The fact is that the ferry fare increases in British Columbia,

though some increase was necessary, were done in a very cold,

calculating fashion, the consequences of which many members have

related this afternoon. I've got all kinds of letters that I've

received from citizens in this province involved in businesses of one

kind or another — and the tourist

[ Page 3256 ]

industry, as one of the other members has pointed out.

I think it is time to take that famous second look at the structure

of new ferry rates. I just want quickly to quote a typical one of the

many letters I have received. This person says:

"I am not a confirmed letter writer — in fact, this

letter is my first — but the announcement yesterday by Mr. Davis of the

changes in the ferry rates was just too much.

"I belong to that group of citizens who own and

operate over-height recreational vehicles. I have been forced to sit at

the ferry terminal and watch vehicles that arrived long after I did go

merrily on their way while I stayed behind.

"Now to add insult to injury, my transportation fee is

to be tripled, while the driver of an ordinary car has his cost

doubled. To me this is very unfair. Would you be so kind as to add your

voice and protest? Indeed, your voice may be only a voice crying in the

wilderness, but it may have some effect on Mr. Davis."

And if the hon. minister would like, I have probably got 50 letters

on the same theme. We've got columnists in the local newspapers

pointing out the price of a bale of hay on the Island compared to the

lower mainland. We've got the problems of recreation and sport.

I have great documentation here from the sports council of greater

Victoria who point out very fairly, I think, that a group of 25 is a

substantial number of people going to the mainland on a sports

endeavour and that surely the rates might be reviewed to reduce that

number to 12, giving them some preferential rates. The minister has

been in receipt of a letter from the mayor of Victoria supporting that

kind of concept.

There are just so many letters, Mr. Chairman, pointing out the

individual hardship to people on the Island who depend very much for

their livelihood in being able to travel back and forth. I think it is

absolutely incredible that even if the rates had to go up — and I

acknowledge that there had to be an increase — that there is no

particular consideration given to the permanent residents of Vancouver

Island who depend on travelling back and forth to the mainland for

their business and their livelihood. It seems to me that the least that

might have been done would have been to give some particular

consideration to the permanent residents of the Island.

I also want to touch on the ferry subject, Mr. Chairman, in regard

to the question of safety. The crews on the ferry have been reduced

quite drastically. The minister has pointed out in question period in

response to some of my questions that he's merely emulating the

Washington state ferries which have a much smaller crew than B.C.

ferries and that the category of vessel or the classification to be

used would be that of coastal waters rather than seagoing vessels.

Well, the point is, Mr. Chairman, that there is some real concern on

the part of ferry staff as a result of the reduction in crews to what I

believe to be a number of 31 on the large vessels, on routes 1 and 2. I

have been made aware, for example, of one of the reports by a captain,

which I would like to read into the record:

"I, the undersigned master, do not hereby indicate any

agreement on my part that the vessel is adequately manned to care for

any major emergency situation that might arise. Present manning

representations, in my opinion, only the barest possible minimum of

competent staff to cover normal operation and circumstances only, but

does not appear, in my opinion, to be sufficient to properly cope with

a major emergency."

Now, Mr. Chairman, we know that there have been at least two major

disasters or near-disasters on the ferry system, one when the Russian

freighter hit a ship in Active Pass and a year or two ago when there

was a fire on the Queen of Victoria . I doubt very much, on the evidence

I've been able to put together, that the present reduced crews on these

large ferries will be able to deal with any major emergency.

It is not really adequate, in my view, to say that most of the time

the ship is within sight of land and that actually, for all intents and

purposes, they should not be regarded in the same light as ocean-going

vessels. The fact is that when there is a fire on a ship or when there

is a collision, I don't think it matters that much whether you're 500

yards or five miles away from the shore if the crew are not in a

position, because of their numbers, to cope with the needs of the

moment.

I've just been made aware of some of the experiences that have been

encountered during emergency drills since the crews were reduced in

number. One of the reports that I have here states that two catering

attendants, one male and one female, cleared the liferaft station,

moved the cover from the liferaft box but were unable to remove the

liferaft from the box, to the designated position. The crew of liferaft

station No. 1 is made up of the chief engineer and two catering

attendants, the chief engineer not being available, as he is required

in the engine room.

I am of the opinion that with the reduced number of crew members it

is doubtful that we would be able to cope with a major emergency

situation unless some stations are eliminated or more crew members are

made available.

I notice the minister is smiling during my comments. I just hope he

is not smiling at the content

[ Page 3257 ]

of these reports regarding emergency drill on the B.C. ferries, in

which case he must have a very unusual sense of humour.

The fact is that these ships have had drastic reductions in crew,

and it is apparent from the emergency drills that have taken place that

some of the women serving on the ship in the ordinary capacity of

serving in the cafeteria are crucial to the adequate mobilization of

liferafts in the case of an emergency.

Another report states:

"A female cleaner — not a young lady — and two

diminutive male crewmen were unable to drag, much less carry, the

330-lb liferaft. Full boat drill was carried out at station No. 2. The

regular boat's crew lowered the boat to the water using the most

expeditious method. It took 15 minutes to reach the water."

Now these are official documents that have been submitted to ferry

management as a result of tests carried out on the ferries. I think

that this kind of evidence suggests that if the crew has to be reduced

to 31 for the sake of economics and the finances involved, at least a

larger number of the 31 should be able-bodied men who can lift and drag

liferafts from their position on the ship to their successful launching

onto the water in the case of an emergency. But it's quite obvious that

small-sized persons and certain female members of the crew are called

upon at times of emergency to carry out a physical function which they

are simply not able to do.

Another report here that's been made to the marine superintendent

states:

"I felt that three people were insufficient to

adequately launch a boat in an emergency. Due to weight and strength,

some female crew members are very inefficient at the work. I was

particularly concerned about the second officer's beat as there is only

he and two others. Traditionally, I feel that in the event of a

catastrophe the chief officer would be in charge of evacuation of one

side and the second officer in charge of the other side, which would

leave only two people at the boat. It would be a great advantage to

have additional seamen as they truly are the backbone of assistance to

the officers in this type of situation."

This report goes on to state instances where there have been people

overboard. Under the new circumstances where the crew is reduced this

particular officer has some doubt as to whether the matter could be

handled adequately, and lives which have been saved on past such

occasions may not be so fortunate in the future.

I would like to touch on one or two other areas of the minister's

portfolio, which I recognize is enormous. In particular, I wish to

refer to the Columbia River Treaty. Before the minister was elected to

the provincial House, he wrote a letter to the Victoria Times on March

31, 1975. He started off the letter by saying that Premier Dave Barrett

is missing the boat on the Columbia River Treaty:

"Instead of trying to change the treaty, he should

change the price. He should up the charges for downstream power which

is consumed in the United States."

He goes on in the letter to say several things which I think are

worth mentioning, and I'd like to know if the minister, since he has

now the opportunity to do what he was asking the former government to

do...whether in fact this has been implemented.

In his letter to the Victoria Times on that date, Mr. Davis stated:

"The price of alternate forms of energy has trebled

since the Columbia treaty was signed in the early 1960s and the United

States has followed different construction schedules and different

operating procedures from those on which the treaty estimates were

based."

He states:

"Now we have facts instead of forecast, hard data in

place of plans which weren't followed by the American utilities.

Whatever the reasons, things worked out differently, and the value of

downstream benefits from Canadian storage is greater than it was

thought to be in 1961."

Then Mr. Davis in this letter goes on to say:

"B.C. Hydro should calculate what these downstream

benefits really are and what they're worth to the United States and

take that information to Ottawa."

The point that seems to be central to the letter is not that the

treaty itself need to renegotiated, but that there should be a

renegotiation of the power-sale agreement which is appended to the

treaty.

I wonder, since the minister now has the opportunity in his very

responsible position of Minister of Transport and Communications and

responsible for Hydro, whether in fact, in accordance with the

suggestion that he was making to the former Premier, he has put B.C.

Hydro to work in calculating what the downstream benefits are proving

to be to the United States. Has his department made an approach to our

federal government hoping that changes can be negotiated to the

power-sale agreement which is appended to the Columbia River treaty?

The minister's letter read very logically back in March, 1975, and

now we're into June, 1976, and he has the power as a cabinet minister

to initiate some of these moves. I wonder if he could tell us whether

that has been done.

I was also very interested in another statement which the minister

made soon after taking office with regard to B.C. Telephone in the area

of communications. He was interviewed back in

[ Page 3258 ]

February and he said the first project which he would want to tackle

in the area of his communications responsibilities would be in regard

to B.C. Telephone. At that time he said that the first single thing is

to get B.C. Tel under provincial regulations rather than federal. He

said that the rates are determined in Ottawa and this doesn't mean that

they're based necessarily on a B.C. view, but rather on a detached

national view.

I know that this whole area of communications is a very sensitive

national/provincial problem of jurisdiction, and I suppose it's some of

the same kind of sensitivity as we've discussed in relation to the

federal-provincial financing and resource management and many other

similar issues.

I wonder, since the minister made this as a very clear goal, namely

that at least B.C. Telephone should come under provincial rather than

federal regulation, whether he has made any approach to the federal

government to seek to achieve that goal.

One of the final points I'd like to raise, Mr Chairman, relates to

the recent annual report of B.C. Hydro which shows that our debt ratio

to paid-up capital is 96 to 4. The chairman of B.C. Hydro pointed out

at about the same time that these figures were released that in places

such as Ontario the debt ratio to paid-up capital is 80 to 20.

As I mentioned in earlier debates, every time we sit in this House

we seem to be increasing the borrowing capacity of B.C. Hydro by a few

hundred million dollars. I think this relates very clearly and closely

to one of the other issues that's been raised already in this debate

this afternoon, and that is the predicting of the most appropriate rate

of expansion of facilities to generate electricity. The minister has

already acknowledged this afternoon that one estimate says they're just

over 9 per cent, and the B.C. Energy Commission says just a little

under.

While these figures on their own don't seem to be that far apart,

when you read the annual report of Hydro and look at the percentage of

B.C. Hydro costs that represent interest on debt — something like 28.9

cents out of every dollar — if we're continuing to expand at the higher

rate of 9 per cent, then the incredible cost of further borrowing for

Hydro just leaves me wondering whether or not it can be justified.

The minister said earlier on this afternoon that he doesn't want

brownouts and he doesn't want blackouts, and I agree with that. But

surely when our debt ratio is 96 to 4, it will be increasingly

difficult to borrow money anywhere, and if you can borrow it presumably

the lender looking at the enormous amount of outstanding debt already

incurred by Hydro will want a correspondingly higher interest rate to

lend the money in these circumstances. If not I stand to be corrected.

But it would seem to me that if I was a lender I would tend to give the

better rate to what appeared to be the better risk which is a very

obvious part of the whole rule of economics in the marketplace.

The chairman of B.C. Hydro has said: "Last year at times we weren't

even covering interest on loans in terms of earnings. If this rate of

deficit were to continue for two or three years we would wipe out the

balance of our equity and working capital. It's just about as thin as

you dare get." That was the quote by Mr. Bonner.

In fact, he went on to say further: "Frankly, if we didn't have a

provincial government, it is very questionable what we could borrow."

The fact is obvious, Mr. Chairman, that if a private company were in

the marketplace trying to borrow money when its debt ratio to paid-up

capital were 96 to 4 we probably wouldn't have a hope in you-know-where

of getting any funds at all. Because this particular B.C. Hydro has the

guarantee and backing of the provincial government, then, of course,

borrowing apparently can be carried out.

I think it isn't just a question of whether it's possible or not to

go on borrowing under these circumstances. It's a question of asking

whether the amount of borrowing is justified in order to, let us say,

expand at the rate of 9.2 per cent, which was the upper figure quoted.

It's all very well for Mr Bonner to say, "Well, we like to go over

the higher figure and then three or four years down the road, we can

always cut back," but in the meantime to proceed at the highest

projected figure means borrowing more and more money, and with the

financial picture of B.C. Hydro paying very substantial interest rates

on the borrowing, this can only be reflected, as far as the consumer is

concerned, in a continuing increase in rates, one of which we have just

had — around 16 per cent, and even that followed a rate increase not

too long ago in the latter part of last year.

I think it is about time there was some clear statement from either

this minister or from the government that while our expectations might

be that we always want all the electricity we need just at the moment

that we need it, that government has to show some leadership and

suggest that this is just costing too much to put the province in that

position.

Already the annual financial statement of B.C. Hydro gives some

clear indication of the fact that we are borrowing at a level and a

rate far in excess of the generally accepted ratio of 80 to 20 in

relation, let us say, to Ontario Hydro. Under these circumstances we

should certainly be taking a very long look at such enormous projects

as the Revelstoke dam and the Hat Creek coal project and many others

which I'm not convinced are being studied in a completely integrated

way.

It seems to me that there's some very substantial difference of

opinion between the B.C. Energy

[ Page 3259 ]

Commission and the B.C. Hydro. While I am always quite willing to

listen to differing opinions, when the mistakes that might be made

involve hundreds of millions of borrowed money at high interest rate,

then, indeed, I am sure the Premier, for example, who is listening very

intently and who was elected because of his sharp business sense and

his willingness to give this province a businesslike government.... I'm

just wondering where the business sense is in relation to the enormous

sums of money which are being borrowed year by year for Hydro at such

substantial cost.

This isn't just some citizen like myself who is concerned about his

Hydro rates which come in every two months in the form of a bill. I'm

quoting from the very real concern expressed by the chairman of Hydro

himself whose statistics, I think, in comparison with utility costs of

development in other jurisdictions, are quite impressive. I would hope

that it isn't just a guessing game of trying to decide whether 9.2 or

5.8 are the correct figures, but it's to try and put that in context in

relation to the cost of borrowing.

MRS. B.B. WALLACE (Cowichan-Malahat): I want to take the

minister back for a moment to the B.C. Ferries fleet. I would suggest

to the minister, through you, Mr. Chairman, that the increases which he

has initiated are not only having a financial effect on Vancouver

Island that is without precedent, but I am concerned about the effect

that those rate increases are having on the very employees of the B.C.

Ferries.

Some of the instances that have come to my attention relate to the

very first day that the new rates were introduced, and I think that

will show you the kind of abuse that the ferry workers are being faced

with. This particular incident occurred on a trip from Nanaimo to

Horseshoe Bay. There were 14 vehicles aboard that ferry on the morning

of June 1, Mr. Chairman — 14 vehicles. I think that itself is

indicative of what is happening to the B.C. Ferries. But in this

particular case, one of those 14 passengers happened to be a tourist.

It took something like 15 minutes for the staff unfamiliar with the

new regulations to measure him up, his height, his length, his

overweight to come to a conclusion as to how much to charge him. After

this was finally completed and he got on board, this tourist saw fit to

pin against the wall some poor little one-stripe member of the fleet

and tell him what he thought of Vancouver Island and its ferry system.

He said that it had cost him $10 to bring his outfit onto the

Island. He was not aware of any changes in the offing, and it had cost

him $38 to get off the Island. The language which the man used I would

not repeat in this House, but I would suggest, Mr. Chairman, that he

would be a very poor ambassador as far as the tourist business on

Vancouver Island is concerned.

That's the kind of thing that's been happening with the ferry fleet

and that's the kind of abuse the ferry workers are taking. It's no

wonder their morale is low, Mr. Chairman. And we know that when morale

gets low — because it's been proven over and over — service slips,

safety precautions slip and it becomes a very dangerous business. I

would urge the minister to have a good look at the situation on the

ferries with respect to the staffing, not only to the safety and the

service, and I would suggest that the very layoffs that are

contemplated and have been undergone by the ferry system are adding to

the very regressive circle of employment that we are facing here on the

Island.

Each employee laid off means just that much more load on our support

services that are required, that much less job opportunity available in

an already very low job-opportunity area. I am concerned about what's

happening to those ferry employees when they are off for a period of

time and their unemployment insurance is used up, Mr. Chairman. Because

when that happens, according to the rules now introduced by the

Minister of Human Resources (Hon. Mr. Vander Zalm), they will not be

eligible for social assistance in this area. I am wondering what

happens to those ferry workers at that point. I would urge the minister

responsible for these layoffs to reconsider that staffing on the

ferries and the needs of those ferries.

As far as the rates go, Mr. Chairman, naturally I am concerned. I am

concerned about what it's doing to Vancouver Island; I am concerned

about what it is doing to my constituency. The member for Oak Bay (Mr.

Wallace) has mentioned the situation with the farmers. This is the

headline: "New Rates Whack Farmers."

Bill Cameron is a well-known Vancouver Island farmer. He is the

president of the Arabian Horse Association. He says that in his opinion

the increased ferry rates are going to be directly responsible for

putting about 80 per cent of the small farmers on Vancouver Island out

of business. I know for a fact, Mr. Chairman, that the cost of hay has

gone up by $1 a bale at one feed store in Duncan as a direct result of

the increased ferry rates. This is the kind of thing that the farmers

are being faced with here on Vancouver Island where they have always

had that sort of detriment to work against because they are on an

island. There is no way they can continue to compete with these ferry

rates being introduced.

One of my constituents wrote me about an occasion that they had

recently to take their truck-camper for a holiday. They were half an

inch overlength — half an inch! As a result they were charged the next

step, which amounted to something like $30.

[ Page 3260 ]

MR. GIBSON: That's $60 an inch.

MRS. WALLACE: Yes, for half an inch overlength! I am drawing

this to the attention of the minister because I think he should realize

the effect his regulations are having on the people of Vancouver Island

and on the way they are being interpreted. I know that an employee out

on the job has to follow the letter of the law unless he is otherwise

ordered. But I would suggest that that sort of thing like half an inch

extra length should surely be looked at.

I have written the minister regarding the Brentwood–Mill Bay ferry.

I know he is a very busy man; I have not had an answer. But I just want

to raise this particular ferry again. The Mill Bay–Brentwood ferry, as

you probably are aware, goes across the end of Finlayson Arm joining

Mill Bay, which is in the Cowichan-Malahat constituency, with

Brentwood, which is on the Saanich peninsula.

There are quite a number of people, both teachers and manual

workers, who live on the Saanich peninsula and work in the Cobble

Hill–Duncan area. As a result of the increase in the ferry fares, those

people are finding it more economical to drive rather than use the

ferry, or if they are using the ferry, it's simple doubling the cost of

their transportation. Of course, to drive around is also increasing

their costs. I would suggest that they are driving because, for

example, yesterday morning coming from Brentwood to Mill Bay there were

five cars and one commercial vehicle on that ferry. Going back from

Mill Bay to Brentwood — there are some people who commute that way —

there was one passenger and a bicycle. That was the total load on that

ferry.

Now if you are talking economics, Mr. Chairman, then certainly you

are not running a paying operation when you have that kind of a

passenger load. I would suggest that these rates are really curtailing

the returns from the ferry rather than increasing them.

On the Brentwood ferry, Mr. Minister, through you, Mr. Chairman,

there are no commuter rates. We do have commuter rates on the Gulf

Islands but this privilege has not been extended to the Brentwood–Mill

Bay ferry. I find that very strange because the tickets that are used

on the Brentwood–Mill Bay ferry read "Gulf Island ferry receipt." Now

if we use the same tickets, surely we could also have commuter tickets

for that ferry, Mr Chairman. I would ask the minister to check into

that.

I want to talk now more generally about ferries — something that has

happened as far as the senior citizens are concerned with the ferries.

I have here a copy of a news release from the Department of Transport

and Communications, dated May 3, 1976. The fourth paragraph reads:

"Senior citizens will travel free on the ferries, though those who are

driving will still have to pay for their cars."

Senior citizens will travel free on the ferries — put out by the

Department of Transport and Communications. Again, on May 27 a release,

and to this release was attached the rates schedule. It said, on the

May 27 release:

"Senior citizens, B.C. residents over the age of 65,

will be able to travel free on individual ferry runs, Monday through

Thursday, but must disembark at the terminal. As proof of age and

residence they will, however, have to show B.C. Medical, Pharmacare and

so on and so forth. That was May 27.

Attached to that, Mr. Chairman, was a series of rate schedules.

Among those, I think it was the second page down, was the Queen

of Prince Rupert : passenger vehicles, summer season, adult —

$30 up to $45. Off-season was $22.50 up to $30. The Queen of

Prince Rupert

— B.C. Ferries. These are the brochures put out by that department:

"British Columbia Ferries, serving the sheltered waters of Canada's

Pacific coast — Motor-vehicle, Queen of Prince Rupert ,

British Columbia Ferries."

Now I would say that the Queen of Prince Rupert was a

B.C. ferry, according to that. I would say, according to that, that

this rate applied and I would say that this news release on May 27 and

May 3, indicating that senior citizens would be able to travel free,

certainly includes the Queen of Prince Rupert .

Fortunately, one of my constituents who has a brother at Prince

Rupert, and who had decided to go and visit that brother, had decided

to drive up-Island, leave his car and have a free ferry trip over to

Prince Rupert to visit his brother. Fortunately, Mr. Chairman, that

person, that constituent, mentioned it to me and said: "Is it really

true?"

I said: "Well, I think it's true, but I'll check." I checked, and

it's not true, Mr. Chairman. It's not true, Mr. Minister. The people

who are working in your department tell me that the Queen of

Prince Rupert

is not free to the senior citizens of this province. Now either, Mr.

Minister, this is false advertising at it's very worst or else your

staff doesn't know what it's doing.

One or the other, Mr. Minister. It's got to be one way or the other.

If it's false advertising, I wish the Minister of Consumer Services

(Hon. Mr. Mair) were here — I'd like him to have a look at it. He is,

as usual, not in the House. He's out consuming and consuming, as the

member for Burrard says.

MS. SANFORD: Tell the Premier.

MRS. WALLACE: The Premier's there, maybe he could stop

speaking long enough to hear what I'm saying. This is false

advertising. This is a serious charge, Mr. Chairman. It's either false

advertising or else the employees don't know the answers. I have

checked with two or three different depots, different

[ Page 3261 ]

areas, to check on this and they all tell me, no, it is not free to

senior citizens. Yet, the advertising certainly says that, Mr. Chairman.

MR. KING: He's got $1 million. He's not worrying about the

senior citizens.

MRS. WALLACE: I'm worried about senior citizens, Mr. Member

for Revelstoke (Mr. King), and I'm sure you are too. I suggest that

this is a very unfair thing to do to the senior citizens, to give this

form of advertising that indicates that they can travel free on B.C.

ferries, and then if they were to go there and try to get on that ferry

at Kelsey Bay, they would find that they would have to pay, not $5 or

$10 or $15, but $45, and that is a disgrace, Mr. Chairman.

I want to leave B.C. Ferries at that, and I hope the minister will

reply to those questions and points I have raised. But while I'm on my

feet I want to move on and talk a bit about B.C. Hydro, since this

seems to be the way we're approaching this particular estimate, by

dealing with the various companies and corporations under the purview

of the minister.

I want to talk about B.C. Hydro and the increases in the rates. Now

when those rates were increased, as we all know, they went up by about

12 or 14 per cent to the residential users. The excuse or the reason

that was used — one of the main reasons — was that for the first time

in history we were in bad trouble with the electrical returns from

Hydro, that for the first time in history we suffered a loss on our

returns from electrical customers.

I mentioned in my budget speech that I had some suspicions about how

those losses accrued. Now that I have the report from the minister on

B.C. Hydro, my suspicions are confirmed. I note on page 6 of the report

that it talks about the groups of customers. Residential customers were

increased, Mr. Chairman. The sales were increased this year by 8 per

cent. General customers increased by 3.7 per cent. The bulk sales

customers, Mr. Chairman, decreased 11.7 per cent.

I would suggest that that is where that portion of loss from Hydro

accrued. It accrued because we had labour unrest in the province last

summer, some fairly extensive labour unrest. Now for those of you who

may not know, those bulk sale customers are on a demand-billing basis.

Every month they pay according to their maximum net demand, and not

only that, but for the year preceding.

But those contracts have strike clauses and lockout clauses included

in them, and when we had the labour unrest for that extensive period

that we had last summer, the bulk-sales customers were not paying their

share. That's why the sales were down.

But who did we penalize, Mr. Chairman? We penalized the residential

customers. We penalized them because we couldn't penalize the

bulk-sales people. Their contracts run for two, or three, or four, or

five years. They were locked into a rate. There was no way those could

be increased.

So we used the loss that accrued from the bulk sales, like MacMillan

Bloedel, B.C. Forest Products — those big industrial consumers. That's

where the loss accrued and we made up for that loss by penalizing the

residential consumers in the province.

I suggest that that is a very unfair approach to use. Once again it

is a repetition of what this government has done over and over and

over. It hits the little guy every time and lets the big guy go free. I

would certainly urge on the minister to move to reduce those

residential rates, because that's not a continuing thing, Mr. Chairman;

we're not going to be faced with that kind of industrial upset — I hope

we're not.

I might have some reservations about that as a result of some of the

labour legislation before this House. But I would hope that we're not

going to be in that kind of a position continuously.

Yes, we have penalized the residential users to make up to a loss

accrued by reduction in the bulk sales contracts on that electrical

power supply, and we have penalized them very highly, very heavily and

very continuously to bring about a solution to something that is not a

continuing problem. I would certainly ask the minister to make some

comments on that.

MS. SANFORD: I would just like to add to the comments made by

various colleagues with respect to the increases in ferry rates.

People who have spoken ahead of me in this discussion on the

estimates, Mr. Chairman, have indicated that the effects of these

increases are going to be disastrous and ruinous to a large number of

people within our constituencies.

You know, I don't think this government understands, Mr. Chairman,

what effect that particular policy has had on the residents of

Vancouver Island. You know, when you have flags flying at half mast on

some of the motels on Vancouver Island, that should give you some

indication, Mr. Minister, what effect that particular decision has had.

Again, it represents the heartless approach that this government has

used time and time again — completely heartless. They lack

understanding, and once the deed has been done, Mr. Chairman, they are

not even interested in finding out what sort of impact their decision

has had on the people in the areas affected.

I've asked on several occasions the Minister of Consumer Services

(Hon. Mr. Mair) to carry out impact studies with respect to increases

in food costs on Vancouver Island as a result of these ferry increases.

"No," says the Minister of Consumer Services.

[ Page 3262 ]

I asked the Premier of the province if, at least, they won't

investigate to try to find out, to try to understand what their actions

have done to the small businesses and the people on Vancouver Island.

"No," says the Premier, a flat no.

I'm wondering if this minister has any concept about the particular

actions that he has taken of doubling the ferry rates overnight.

AN HON. MEMBER: He tripled them.

MS. SANFORD: Or tripling them, you're quite right — or

tripling them in some areas. I don't think they have any concept about

what their actions have done to those areas affected. I'd be really

interested to hear from the minister with respect to his understanding

and his appreciation of what these actions might have on the residents

and the small businesses in these various areas.

I think, Mr. Chairman, that the only thing they understand is money,

and if it's the black ink at the bottom of the balance sheet, as my

colleague from Alberni (Mr. Skelly) said, that's all that counts. Never

mind about the small motel owners and the increase in the cost of food

to the people of my riding.

I've mentioned several times about the cost to someone living at

Alert Bay or Sointula to travel from there to Vancouver. One trip for

car and driver, this is not even a vehicle which is above the allowable

height — $80 return. Now working people in those places want to take

their families to the lower mainland for a holiday during the summer.

They will be facing costs which they simply will not be able to meet —

they can't. I don't know if they have done any work in terms of trying

to find out or trying to understand, but based on the answers that I'm

getting in the House, I would think not.

I have had a lot of correspondence, Mr Minister, through you, Mr.

Chairman, on the vehicle size — that is, charging triple the rate for

those vehicles which are slightly above the 6-ft. 5-in. allowable

limit. I know that the minister has written back and said, "Well, they

have to fit under the ramps and therefore we have to charge more," but

it seems to me that particularly now the ferries are to underused, the

minister might reconsider that particular decision.

I have a letter, for instance, from someone who owns a Volkswagen

camper. The points that he makes in this letter are very valid, Mr.

Minister. He indicates that it makes far more sense to charge

additional sums for vehicles which take up more space on the ferry —

that is, charge by length rather than by height. He talks about all of

the vehicles that are bigger than his particular Volkswagen camper in

terms of length or width: a Chrysler Newport, a Cadillac, a Ford

Stationwagon, a Chevy pickup, a Ford pickup, a Chrysler stationwagon, a

Suburban...

MR. SKELLY: Sounds like the Socred fleet.

MS.SANFORD: ...all of these take up much more room on the

ferry and yet they are allowed to cross at Nanaimo for $10 rather than

the $15 that he's required to pay for his Volkswagen camper.

MR. GIBSON: The minister claimed in question period that a

Volkswagen camper got on for the regular rate.

MS. SANFORD: Well, this Volkswagen camper that he's talking

about apparently is above the allowable height and he has to pay this

extra amount. But what really worries him when he writes to me about

this and complains about it is that the minister, or the government,

might tell him back: "Well, sell your Volkswagen and buy a Cadillac."

That's what worries him, because that's the kind of response that that

government has been giving to people who are facing these exorbitant

increases.

AN HON. MEMBER: Right on.

MR. KING: Let them eat cake.

AN HON. MEMBER: They fly over anyway.

AN HON. MEMBER: Why six feet, six inches?

MS. SANFORD: Because they have to fit under the ramps. The

minister has said that they have to fit under the ramps and that's the

reason he's brought in this regulation. A lot of people are very

hostile about it, Mr. Minister, and I think that's one point you might

well consider because of the fact that the ferries are so underutilized

now anyway. That's the least you could consider.

AN HON. MEMBER: Park them on their sides.

[Mr. Schroeder in the chair.]

MS. SANFORD: I have more correspondence. This comes from the

Comox District Consumers' Group, an organization representing over

1,000 families in our area right now — largely those who are involved

in the agricultural industry — and they write complaining about the

very thing that the member for Cowichan-Malahat (Mrs. Wallace) raised:

the increase in cost to agricultural products as a result of this

overnight decision to double the ferry rates.

Then I'm getting correspondence from teachers saying: "Look, over

the years we have attempted to take our students on educational trips

to the lower mainland and we find that we are no longer able to do

this." Teachers from various schools in the district have written to me

on this and asked me please to

[ Page 3263 ]

"raise it with the minister to see whether or not you

can do something about group rates for these students so that they will

be able to take these trips," and they've been most beneficial. I've

talked to students who have been allowed to travel, or have had the

opportunity to travel to the lower mainland for three or four days.

It's beneficial for them — one of the best things they can do during

their educational years.

There's one specific ferry that I would like to refer to, Mr.

Minister, and that's the ferry which operates between Beaver Cove and

Kelsey Bay where it now costs $15 for the car and $6 for the driver.

This, you may be aware, Mr. Minister, is the ferry that services the

people in the north end of the Island who, as yet, do not have a public

road. According to the Minister of Highways (Hon. Mr. Fraser), there is

no money available this year in order to award the two remaining

contracts in order to complete the road, and I'm wondering if some

special consideration could be given to the rates there in view of the

fact that those highway contracts are not being awarded and the people

are going to have to rely on the ferry for some time to come.

The other point that I would like to raise, Mr. Minister, has to do

with free ferries. As you will recall, there was quite a ruckus from

the residents in the Gulf Islands that are serviced by the B.C. Ferry

fleet, and, as a result, the residents of those islands are now able to

travel free back and forth between the islands.

You're shaking your head, Mr. Minister. I hope I'm not incorrect in

this. My understanding is that residents on the various islands can now

travel back and forth between the islands without charge — without cost

for either the car or the driver or the passengers?

HON. MR. DAVIS: That was all part of the original scheme.

MS. SANFORD: Oh. Well, if it's part of the original scheme,

I'm wondering, then, Mr. Minister, through you, Mr. Chairman, whether

or not you might have taken the time to discuss with the colleague who

sits next to you in the House the possibility of a free ferry service

between the islands serviced by the Department of Highways ferries.

Within my riding there are many ferries that are under the Department

of Highways, but they must pay to travel between the islands. In order

to make it an equitable system, I would hope that you have taken the

opportunity to discuss with the Minister of Highways the possibility of

freeing up those ferries so people can travel back and forth between

the islands without charge.

There is one other point that I would like to raise. Mr. Chairman,

Vancouver Island is now an economically depressed area, and I think

that any motel owner, any small business operator, will tell you this.

I'm wondering, in view of the fact that the Premier has agreed to

discuss the possibility of some DREE funding for contracts to complete

the road to the north end of the Island, whether or not you, Mr.

Minister, through you, Mr. Chairman, might approach the federal

government in order to get some DREE funding which might act as a

subsidy for the operation of the ferries. In that way hopefully we

could cut the rates back to where they were before and you would be

able to obtain the additional amount of money that you are now seeking.

I state this very seriously. It seems to me that the whole DREE

programme is drawn up in order to assist areas that are economically

depressed. I'm wondering if you would take the initiative, Mr.

Minister, through you, Mr. Chairman, to discuss that possibility with

the federal government in order to obtain DREE funding.

It seems to me, Mr Chairman, that this government, instead of

spending $100,000 to advertise to bring tourists down to Vancouver

Island, should save that money, put it on the ferry system so you can

reduce the costs. If you do that and collect the royalties that should

be coming in on coal, for instance, and add that to the cost of the

operation of the ferries, then Vancouver Island and the other areas

affected by these astronomical increases would not be economically

depressed areas as they now are, as a result of the policies of