1982 Legislative Session: 4th Session, 32nd Parliament

Hansard

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

( Hansard )

WEDNESDAY, JUNE 2, 1982

Afternoon Sitting

[ Page

7923 ]

CONTENTS

Routine Proceedings

Oral Questions

Expenses of Minister of Energy. Mr. Howard –– 7924

Fraser bridge closure and forest industry layoffs. Mr. Nicolson –– 7924

Alleged export of Prince Rupert groundfish. Mr. Lea –– 7925

Resource Revenue Stabilization Fund Act (Bill 16). Committee stage. (Hon. Mr. Curtis)

section 2 –– 7926

Mr. Stupich

section 4 –– 7928

Mr. Stupich

Third reading –– 7930

Corporation Capital Tax (Bank Rate Increase) Amendment Act, 1982 (Bill 38). Committee stage. (Hon. Mr. Curtis)

section 2 –– 7930

Mr. Lea

Hon. Mr. Gardom

Mr. Stupich

Third reading –– 7932

Forest Amendment Act, 1982 (Bill 42). Committee stage. (Hon. Mr. Waterland)

On

Section I –– 7932

Mr. King

section 4 –– 7933

Mr. King

section 7 –– 7934

Mr. King

section 8 –– 7934

Mr. King

Mr. Gabelmann

section 13 as amended –– 7936

Mr. King

section 14 –– 7937

Mr. King

section 16 –– 7937

Mr. King

Committee of Supply: Ministry of Energy, Mines and Petroleum Resources estimates.

(Hon. Mr. McClelland)

On vote 28: minister's office (continued) –– 7937

Mr. D'Arcy

On the amendment to vote 28 –– 7937

Mr. Barber

Mr. Brummet

Mr. Howard

Mr. Ritchie

Mr. Barrett

Mr. D'Arcy

Mr. Skelly

Mr. Levi

Mr. King

Mr. Mussallem

Appendix –– 7953

The House met at 2 p.m.

Prayers.

HON. MRS. McCARTHY:

We have in the gallery today two visitors who originally lived in

Vancouver and now reside in West Vancouver. Will the House please

welcome Mr. and Mrs. John Emerson.

MR. KING: I would

like the House to join me in extending a belated welcome to a class of

elementary school students from Falkland Elementary School who visited

the House yesterday with their teacher, Mr. Hatch. Today we have a

class from the Silver Creek Elementary School, here with their teacher

Mrs. Georgette Clayton. I would ask the House to extend a welcome to

them all.

HON. MRS. JORDAN: We're honoured to have in

the House today a rare visitor, although he does come from time to

time. He is a renowned B.C. television personality and a great tourism

promoter for British Columbia, Mr. Jack Webster. I don't know whether

or not this augurs well for the House, but I would ask you to welcome

him.

I would also ask the record to show that this is the first time Mr. Webster has been known to blush.

MR. RITCHIE:

It's always a pleasure for me to introduce guests from the Central

Fraser Valley and it's a special pleasure today because we have with us

in the members' gallery three wonderful ambassadors: the Miss

Abbotsford-Matsqui Queen, Sandy Friesen, and her two princesses, Cindy

Martens and Lisa Aleksic, accompanied by two of their mothers, Mrs.

Friesen and Mrs. Martens. Would the House please extend a warm welcome

to these girls.

MR. STRACHAN: Mr. Speaker, I'd like

all members to welcome a good friend of our caucus, Mr. Fred Trestain,

president of the Denturists Society of B.C.

HON. MR. McCLELLAND: Mr. Speaker, I rise on a point of personal privilege.

MR. SPEAKER: Please state the matter.

HON. MR. McCLELLAND:

One reason I am rising on this matter is that I believe my estimates

will be up reasonably shortly, and I'd like to have this matter of

privilege dealt with before that. During a debate on a bill under my

responsibility on May 27, there was some reference made to a petition

and two proposed hydroelectric developments — the Keenleyside Dam and

the Murphy Creek dam. I referred to the petition and mentioned that the

petition had to do with both of those dams. I have had a chance to look

at Hansard , and I do not dispute that those were the words I used.

MR. BARRETT:

Mr. Speaker, on a point of order, the matter raised by the member is

now in the hands of the Speaker for a ruling. It would be improper for

this matter to be dealt with in any manner before the House until that

ruling is down.

MR. SPEAKER: Hon. members, when a

member stands under a matter of privilege to make a statement in the

House, the Speaker is duty bound to hear the matter.

MR. BARRETT:

There's no dispute that under standing orders anyone has the right to

make a statement on a matter of privilege. The subject of the statement

is a matter before the Chair at this time, and I am pointing that out

to the Chair. The House is awaiting the ruling from the Chair on that

matter stated by the minister in terms of the date and the subject.

MR. SPEAKER:

Order, please, hon. members. Standing order 39 does make a provision

for a matter to be raised. Standing order 39 says: "If anything shall

come in question touching the conduct of any member, or his right to

hold his seat, he may make a statement, and shall withdraw during the

time the matter is in debate." I commend that standing order to you; it

is your standing order.

MR. BARRETT: On that point of

order, the minister referred to the date that this matter came to the

attention of the House and then proceeded to make a statement. As a

consequence, a motion was made for Your Honour's consideration. In the

midst of Your Honour's considering that matter of privilege, the matter

is not to be reopened under standing order 39 when that opportunity was

not taken at that time to deal with the issue, consequently leading to

the matter before the table at this time.

MR. SPEAKER:

Hon. members, in Sir Erskine May's seventeenth edition, page 373

provision is made in regard to explanation of personal matters. May I

just read it for you: "In regard to the explanation of personal

matters, the House is usually indulgent and will permit a statement of

that character to be made without any question being before the House

provided that the Speaker has been informed of what the member proposes

to say," and it has been given leave. Before the commencement of public

business is the proper place for such statement to be made, and "no

debate should ensue thereon." Hon. members, I'm not sure that this is

exactly the area under which the minister seeks the floor. However, at

least until we determine whether or not that is the area, we should

hear the matter.

MR. BARRETT: I did not rise under a

point of order until the matter was heard. First, there was no leave

asked, as you point out Sir Erskine May requests. Secondly, once

raised, the matter became of concern to me as a member, due to the fact

that standing order 39 and the reference from Sir Erkine May do not

deal with a matter that has already been formally presented to the

Chair to deal with.

The Chair has not dealt with this

matter. In the midst of the Chair's deliberating on this matter, the

minister wishes to raise a matter that is presently in front of the

Chair. In my opinion it is out of order. No standing order or ruling

that I'm aware of allows any member to raise a matter that is under

consideration under a motion of privilege, without that motion first

having been heard.

MR. SPEAKER: I appreciate the

observations of the hon. Leader of the Opposition. In order that we

comply with the precedents that have been established, perhaps what we

[ Page 7924 ]

should

do, under the provisions of page 373 of the seventeenth edition, is at

least comply with this other recommendation of Sir Erskine May: that

is, to ask whether or not leave can be granted to proceed with the

matter.

Leave not granted.

Oral Questions

EXPENSES OF MINISTER OF ENERGY

MR. HOWARD:

Mr. Speaker, I'd like to direct a question to the Minister of Energy,

Mines and Petroleum Resources. Inasmuch as he made a visit to the city

of New York on June 11, 1980, I ask the minister if on that day he was

met at the airport by a chauffeur-driven Cadillac and transported

therefrom to the Plaza Hotel.

HON. MR. McCLELLAND:

Mr. Speaker, as the members could recognize, that's a reasonably long

time ago. I would like to be able to check through all of my records

for the various days in question, take that question as notice and

bring back an answer at the earliest possible opportunity.

MR. HOWARD:

I have an additional question, then, Mr. Speaker. Could the minister

tell the House if the limousine was kept on standby by the minister for

a period of 10 3/4 hours on that day at a total cost of $317.93, and

whether the minister would not have found it cheaper to get in from the

airport by regular transportation — say by a taxi?

HON. MR. McCLELLAND:

Mr. Speaker, since the member is obviously — or at least appears to be

— quoting from vouchers which he has obtained in one way or another, I

would like the opportunity to have those vouchers as well and have a

look at them. It would have been possible to have had those vouchers on

the table at the public accounts committee so that we could all have

discussed them. But since I haven't had that opportunity, Mr. Speaker,

I'll take that question as notice, and I make a pledge to the House to

bring back an answer as quickly as possible.

MR. HOWARD: It's passing strange that the minister was the one responsible for blocking access to the vouchers.

MR. SPEAKER: No debate; the question, please.

MR. HOWARD:

I'll ask the minister another question: on that particular day in

question did the minister host a group of New York residents at a

Broadway show at a cost to the taxpayers of British Columbia of some

$373.69?

HON. MR. McCLELLAND: Mr. Speaker, obviously,

since the member is quoting from those vouchers, access has not been

blocked, or he wouldn't have them. I have not had the same opportunity.

I would like to study them all and I will come back to the Rouse with

an answer to that question at the earliest opportunity.

MR. HOWARD:

I ask the minister another question to which I'm sure he will know the

answer out of his memory without having to check documents. Does the

minister recall that the Broadway show in question was called Sugar

Babies and was identified and described by one of the stars therein as

a burlesque?

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please. Is there a question there or is that information?

MR. HOWARD: That's a question, Mr. Speaker.

HON. MR. McCLELLAND:

Mr. Speaker, the questions which I would like to take on notice are

those which refer directly to the ministerial responsibility of my

office. I have taken some of those questions as notice and will bring

those answers back to the House at the very earliest opportunity.

MR. HOWARD:

I ask another question of the minister, then. I ask the minister if he

was aware at the time or is now aware that the tickets for that

particular Broadway show, "Sugar Babies," were acquired through and

from the firm of Herman Agar Co.

HON. MR. McCLELLAND:

Mr. Speaker, I don't have access to the material from which the member

is reading. As soon as I am able to get access to that material I will

bring an answer to this House at the earliest opportunity.

MR. HOWARD:

I ask another question of the minister, then. I wonder if the minister,

in his examination of those matters, could indicate his awareness that

the Herman Agar Co. is a scalper that charges double the regular price

for such tickets.

There's no answer to that question. I see the minister declines to answer that particular question.

Well,

Mr. Speaker, the indications are that we know what the minister really

did in New York on June 11, at a cost of $1,298 of the taxpayers' money

for a one-night stand. I wonder if the minister could tell the House

what business was discussed during the "Sugar Babies" show.

HON. MR. McCLELLAND:

I don't have access at this moment to any of the vouchers which that

member has had full and free access to. I have guaranteed that I will

get access to them, study them and bring a full answer to this House at

the earliest opportunity.

MR. HOWARD: I just have one

other question. While it may be that the minister was not in New York

for a very long time on that occasion, are we entitled to assume that

he was there for a good time?

FRASER BRIDGE CLOSURE AND FOREST INDUSTRY LAYOFFS

MR. NICOLSON:

Is the Minister of Forests there? Oh, he is there. Sit up straight,

lad. I would like to ask the Minister of Forests a question concerning

last Saturday's fire on the railway bridge at New Westminster, which

resulted in the swing bridge being closed for an undetermined length of

time for the convenience of inspectors, thereby stopping barge traffic

travelling up and down the river. Because this closure has rendered the

Fraser unnavigable, a result has been the imminent shutdown of the

Whonnock's Mackenzie Mills and the Hammond mill, employing 500 workers.

It also affects the shutdown at the Crown Zellerbach plant, which

employs 750 workers. In view of the fact that this amounts to an

additional 1,250 workers being laid off in the province, why has the

minister not taken steps to ensure that the swing bridge remains in the

open position?

HON. MR. WATERLAND: Surely the member

is not asking me, as the Minister of Forests, to see that a Canadian

National bridge is kept open on the Fraser River.

[ Page 7925 ]

MR. SPEAKER: The member for Nelson-Creston has a further question?

MR. NICOLSON:

I am giving answers to questions, Mr. Speaker. The answer is yes, I do

expect that the Minister of Forests would be concerned about the layoff

of a further 1,250 workers.

Has the minister decided that he

will undertake, on behalf of the forest industry — which he represents

— to point out to the authorities responsible for the closure of this

bridge that while it may be convenient for their inspections to leave

it in a closed position, it is further hampering the economy of British

Columbians, and that it is in the best interests of the industry that

it be left open and inspected, even if by helicopter?

BON. MR. WATERLAND: The member is completely in error. I do not represent

the forest industry. I represent the people of British Columbia in the Legislature,

and I represent the forest resource of British Columbia. I'll have that

member know that we are in the process of creating 10,000 short-term jobs in

the forest industry by the expenditure of $40 million in federal and provincial

funds in order to help people during these difficult times.

Interjections.

MR. SPEAKER: Order, please. May we have order so that we can proceed with another question.

ALLEGED EXPORT OF PRINCE RUPERT GROUNDFISH

MR. LEA:

The Minister of Environment who informed the House last week that the

economic development committee of cabinet would be meeting yesterday to

discuss the closure of the groundfish operation in Prince Rupert. Did

the meeting take place? Does the minister have anything to report today

to the House?

BON. MR. ROGERS: Yes, the economic development committee did meet. However,

there wasn't sufficient time to discuss all the matters. In addition, there

has been a further complication in the issue because of the shutdown of the

Prince Rupert Fishermen's Cooperative's groundfish processing line in

Prince Rupert. With the shutdown of that particular line and their decision

to export their groundfish from Canada to the United States, which is going

on right now. I have asked staff in my ministry to investigate. It is contrary

to the policy of the government to allow groundfish to be exported for processing

while there are processing facilities in British Columbia which could handle

that particular product. Additionally, I have been in contact with federal Fisheries

and Oceans, and they are checking their regulations to find out whether or not

it is possible.

is also further complicated by the fact that the labour negotiations

that have taken place in Prince Rupert to deal with the Prince Rupert

Fishermen's Cooperative may have had some bearing on their decision to

shut down their groundfish line on a temporary basis, rather than on

the permanent basis which they are insinuating. I am at this time

getting more information on it; maybe I can be of more assistance to

the member.

MR. LEA: I'd like to thank the minister

for the answers that he's given, but I point out that what was a grave

situation in Prince Rupert is now a desperate situation. The reason

that the companies gave for closing down those groundfish operations

were that it wasn't profitable, as there was no market. We now find out

that there is a market, that they are processing the fish at Imperial

in Vancouver, and yes, the minister is absolutely correct, they are

taking fish across into Bellingham, Washington and processing it down

there. Obviously there is a market.

I ask the minister the

question that I asked before: has the government now decided that it is

the policy of the government of British Columbia to stop the

high-grading of fish in this province? Has the government reached that

conclusion?

BON. MR. ROGERS: No, but perhaps I could assist the member with a misleading

statement that he makes — or maybe it is just a confusion. The fact is that

fish can be exported from the lower mainland into the fresh-fish market in the

United States, which cannot be done from Prince Rupert under the present transportation

arrangements that we have. The difficulty that they have in transporting fish

by truck from Prince Rupert to the markets in California is not the same as

the situation that exists with transportation from the Imperial plant in Steveston

— or so I am advised. At the present time we are checking to see if that is

the case, because it may be that those fish could be transported from Prince

Rupert. But that is the information the company is giving me. We have two conflicting

areas of legislation. Officials of both the federal and provincial governments

are working on the problem today.

MR. LEA:

I don't think that it matters much whether they are shipping it to

Washington from Prince Rupert or from Vancouver. I can tell the

minister that they are shipping it from Vancouver.

MR. SPEAKER: Order. please. It is not a matter of debate at this time.

MR. LEA: We are not debating it.

MR. SPEAKER: Please proceed with the question.

MR. LEA:

The trucking company that is hauling the fish down into Bellingham,

Washington is called Emde Trucking Ltd. of Burnaby. The Sunnfjord

unloaded on May 26 in Vancouver, and those fish were loaded onto the

truck and taken down to Bellingham, Washington. I am not much

interested in whether it was shipped by truck, rail or boat. I am

asking whether the government has decided that they are going to stop

this practice, that they are going to have a policy of stopping

high-grading in the fishing industry, and that the groundfish are going

to be processed here. That is what I want to know.

MR. SPEAKER:

Order. please. This has never occurred before, that a minister was on

his feet with the answer when the bell rang. Shall we accept the answer?

SOME BON. MEMBERS: Yes.

BON. MR. ROGERS: The member for Prince Rupert continues to try to confuse

the issue. Yes, there are fish being

[ Page 7926 ]

exported.

We agree to that. No, the government has not made a decision as to

whether or not they will continue to allow this to happen. As I have

said, we are checking to see whether or not the matter is legal, and we

are going to check to see whether it is federal or provincial

legislation. I am informed that we will have an opinion on that very

shortly.

MRS. WALLACE: I rise under the provisions of

standing order 35 to seek leave to move adjournment of the House to

debate a definite matter of urgent public importance.

MR. SPEAKER: Please state the matter briefly.

MRS. WALLACE:

I have this hour received from the B.C. Federation of Agriculture a

copy of a letter sent to them on May 7, 1982, by the minister of

Agriculture (Hon. Mr. Hewitt). I understand that the B.C. Federation of

Agriculture have been unable to arrange the courtesy of a meeting with

the minister to discuss the contents of the letter. They have therefore

asked me to raise the matter in the House. The letter reads, in part,

as follows:

"The history of some of the plans"

— that is, the farm income assurance plan — "illustrates that the

relationship between the calculated basic cost and the market return is

far from satisfactory. The relationship could lead one to conclude that

the production of these commodities is not viable. I am disappointed

that despite this knowledge the federation continues to press for more

and more benefits."

The implication is clear. The minister

is at a minimum considering abolition of farm income assurance for

certain commodities, because the government is unwilling or unable to

to make up the deficit in the plan. I therefore urge that this House do

now adjourn to discuss this matter, which is of grave concern to the

agricultural community. I have a motion prepared.

Mr. Speaker, I would remind you that the estimates for the Ministry of Agriculture were concluded last night.

MR. SPEAKER:

We will review the matter to be sure that it qualifies under standing

order 35, and, without prejudice to the member, we will bring a

decision.

Orders of the Day

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

Leave granted.

HON. MR. GARDOM: I call committee on Bill 16, Mr. Speaker.

RESOURCE REVENUE STABILIZATION FUND ACT

The House in committee on Bill 16; Mr. Davidson in the chair.

Section 1 approved.

section 2.

MR. STUPICH:

I indicated yesterday we might want to say something in committee

stage. While we can all applaud the principle espoused in

section 2,

particularly subsection (3) — "The purpose of the fund is to stabilize

the annual growth of revenue paid into the general fund" — one has to

wonder whether there is a bit of hypocrisy behind presenting this

legislation at this particular point in time.

Had the

legislation been presented to the Legislature in 1980, there would have

been some sense to it. It was a good year; resource revenue was very

high that year. In spite of the fact that resource revenue was very

high, the government dipped into cash funds and depleted cash resources

to the extent of some $300 million. I don't have a copy of the budget

speech with me, but the material is in there. In a year when resource

revenue was at an all-time high, when there might have been some

opportunity to start this fund, the government talked about it. The

Minister of Finance spoke of it, I think, in the budget speech. Perhaps

even in the opening speech there was some reference to setting up this

kind of fund. So when the money was there to do it, there was talk

about it but no action.

Even in the following year there

could have been some money there; 1981 was not that bad a year — that

is, up to March 31, 1981 — from the point of view of resource revenues.

As I recall, resource revenues were very high in that period. Once

again there might have been some opportunity to bring in this kind of

legislation, to set up a resource revenue stabilization fund, as the

bill before us reads, to stabilize the annual growth of revenue and put

it in this fund. But the government chose not to do it. I believe the

government did refer to this idea of establishing some kind of fund

along those lines — possibly it was in the opening speech; certainly it

was in the budget speech.

This year, when the government

doesn't have any cash left over, when the budget indicated to us that

the government will have used up in three years almost $1 billion of

cash reserves, they're now presenting legislation that says they're

going to put money into a revenue stabilization fund. It's a great

idea. Why wasn't it brought forward in the form of legislation at a

time when there was some cash to put into this fund? What's the point

in bringing it forward now, when the government has no cash to put into

this fund? I'd like the minister to tell us something about the timing

of this particular section.

HON. MR. CURTIS: It is

correct that in 1980 and 1981 I made reference to the desirability of a

resource revenue stabilization fund. I don't have the material in front

of me. I think the reference in the spring of 1980 was relatively

brief. Certainly on the two previous budget occasions, in the budget

debate or the budget itself, and in background papers accompanying the

budget, I indicated that this was one of the policies I had developed

upon assuming the portfolio of the Ministry of Finance. I indicated in

second reading that we are' establishing this for the years to come,

not just for this year.

The new fiscal year for this

government commenced just over one month ago, and while there are many

pessimistic signs in the very short term I submit that no one on either

side of the House can accurately predict precisely how resource

revenues will fare in the remaining 11 months of this fiscal year. We

did not bring this into the Legislature for this year or next year

alone. We brought it in as a matter of government policy for a good

number of years, recognizing that in the fiscal history of this

province there have been tremendous swings in resource revenues. I

would happily share with that

[ Page 7927 ]

member,

or with any member who is interested, the graphically illustrated

documentations of those swings. They look very much like the Coast

range, the Selkirk range and the Rockies together on a single page —

tremendous rises and falls in terms of resource revenue, whether from

forestry, minerals or other sources.

This is not legislation

for this month or this year only; rather, it is the final delivery of a

desire to which I alluded on at least two previous occasions. It can be

argued with some validity, since that member is a thoughtful member of

this House, that it might be better to bring it in during a year when

resource revenues are at a higher point rather than a lower point.

Frankly, however, having decided some two years ago that I wanted this

as a matter of policy within the Ministry of Finance, within the

government of British Columbia, to delay it for yet another year in the

expectation of better economic conditions would, I think, have invited

criticism to the effect that "You've talked about this for three years,

Mr. Minister, where's the legislation?" So I decided that once the

draft legislation was in an acceptable form insofar as I was concerned,

and was approved by my colleagues in cabinet and in government, this

would be the appropriate time to introduce it. The member may disagree;

nonetheless, having decided upon it as a policy, having worked on it

and made it ready, the fact that we are in a slow economic period is no

excuse to delay this legislation for one year, bearing in mind that it

is to be in place, I trust, for a good many years to come.

MR. STUPICH:

The minister talks about this as a policy for several years in the

future. Unfortunately, the voters of this province and the

organizations representing the people in this province have come to

distrust the long-term plans of this particular administration. The

legislation should properly have come in when there was cash to start

if off. If that couldn't be done because the legislation wasn't ready,

then it should have been held back until there was some cash to start

the fund, providing some degree of certainty that the government was

really going to to do something, rather than simply issue another

political statement.

I have a letter from the Union of B.C.

Municipalities, dated May 18, 1982. I'm going to read briefly from it

because it has some bearing, I think, on why people generally do not

feel that this administration can be trusted to do anything other than

make a political statement:

"Returning from a

tour of interior B.C. municipalities, Tonn stated that the five area

associations of the UBCM are united in their opposition to the

province's 1982 program. 'Local government has never been more united

and more angry than at any time before that I can recall,' said Tonn.

"Local government opposition could have been avoided if the province had been upfront in its dealings with local government."

Mr.

Chairman, I believe it was the minister who is introducing this

legislation before us right now who was then the minister of

municipalities and brought in the revenue-sharing program that served

the municipalities and served the government well for a number of years

— until this year, when the government arbitrarily decided that they

were going to change the formula because it suited them to do it....

That

is why the voters and the organizations don't really have any faith in

the long-term plans; that is why the government, if it were to regain

any measure of faith, should have waited until it had some money to put

into the program.

I would just like to read a little further:

"'Instead,

they have chosen to change the rules and move the goalposts in the

middle of the game without bothering to talk to us,' Tonn explained.

'The province is naive if it expects local government to roll over and

play dead on this issue. The wrath of local government is aroused and

won't be quelled until the province makes good on its previous

commitments. The province has welshed on its commitments to local

government, and in the process they have shaken the confidence of local

government in this administration.'"

Mr. Chairman, as I

remind you, this very minister was the one who started that program,

changed it arbitrarily without any discussion and is now telling us the

legislation he is bringing in today may be in effect next year, the

year after...or three years down the road there may be an opportunity

to actually put some money into this fund that is being established by

the legislation we're discussing today.

No one will have any

faith in that legislation on the basis of the record of this government

and of this minister. The incident that was raised that the Speaker is

now considering with respect to an emergency debate, the apparent

attempt to kill the farm income insurance program, is another example

of lack of faith in the long term. Mr. Chairman, I would submit that

this particular administration is not serving the citizens of this

province well by bringing in legislation that says we're going to do

something good some number of years down the road because it is a good

idea to do it. Certainly it is a good idea to do it; there is no

question about that. We supported the bill in second reading and we're

supporting it today. But we have no faith that this particular

administration will do anything about this legislation, unless at some

point down the road, for political reasons only, they feel that there

is some advantage to be gained in actually doing something in line with

the terms of this

section before us now.

HON. MR. CURTIS:

Well, Mr. Chairman, I'm sorry that the member for Nanaimo does not

believe what I have said in second reading and in response to his first

question. However, there is nothing to compel him to accept what I have

said. I pointed out in second reading.... Incidentally, I might say,

Mr. Chairman. that the reference by the member to the municipal

revenue-sharing program and fund can, I suppose, be used as a

comparison in a slight stretch of the rules, but it isn't dealt with in

this bill nor is it dealt with in this

section in particular. However,

inasmuch as the Chair allowed some latitude with that reference, I will

take a few moments to respond.

What has been forgotten by

local government in terms of that fund is that it was said very

clearly, in this House and outside, that as the province — that is, the

people of British Columbia — prospered through its government revenues,

local government would prosper; in the event that revenues flattened

out at some time in the future, similarly revenues would flatten out

for local government; and in the event that revenues dropped, similarly

revenues for local government would drop. So the reference, I think,

should end there. But that is another bill.

However, to

return to the section, I pointed out in second reading — and it is

therefore, I feel, appropriate to repeat — that we have had

historically, and the member knows this.... Any member on either side

of this House who has examined revenues in British Columbia over the

last 30, 40,

[ Page 7928 ]

or 80 years will know that revenues increase and decrease quite

dramatically, unlike the case in some other jurisdictions in Canada and

in the United States. In 1979-80 resource revenue peaked at nearly $1.3

billion and accounted for 24 percent of that year's operating revenue.

By 1981-82 revenue from the same source — resources — is estimated to

have dropped 53 percent to $613 million, representing 9 percent of

operating revenue. But the point is, Mr. Chairman — and the members

opposite know — that revenues are going to increase again.

This

is not a political statement, and it is not correct and it is, I think,

unfair to dismiss this as a political statement. This is a policy

statement. This is legislation which, I believe, will remain in place

in British Columbia for many years to come. As governments alter, as

governments change over many years, I would like to think that, because

of the nature of the resource revenues in British Columbia, with their

cyclical history and, therefore, the predictability of further cyclical

swings, hollows, and peaks and valleys, this legislation will be

required by succeeding governments in the province of British Columbia.

Sections 2 and 3 approved.

section 4.

MR. STUPICH:

Mr. Chairman, as I understand this section, it means that the cabinet

alone will decide how much money is to come out of this fund. They

might leave a substantial balance in it, but is it possible that this

fund might even be thrown into a debit balance by drawing out of the

fund more money than is in it simply because it is one of a group of

funds? That's really my question. Is it in the same category as the

special funds that we were dealing with in other legislation, where all

of the cash in the province is sort of thrown into one pot where some

of the funds may have a credit balance and others may have a debit

balance? Is it possible that this particular fund may have a

substantial debit balance as long as the total in all of the funds does

not get into an overdraft position? Is that the intention of the

minister?

HON. MR. CURTIS: Mr. Chairman, that is not

the intention. However, I would not want to mislead the committee. I

would expect that that could occur at some time, perhaps within a

particular fiscal year. That is not the intention, but it might occur

in the course of a fiscal year. Clearly, the whole purpose of this bill

is to raise the valley floors — if I may continue with the analogy —

and to lower the peaks, in terms of revenues, which accrue to the

government of British Columbia.

[Mr. Strachan in the chair.]

Obviously

we are not going to set out deliberately to take money out of a fund

which is in a debit condition. It could happen in the short term. I

want to be very clear to the member who has raised the question. It

could happen in the short term. I think that would be very unlikely,

and certainly that is not the policy thrust of the establishing of the

fund.

MR. STUPICH: Mr. Chairman, I just want to be

clear on this. I think the minister has given me the answer, and I'll

just ask it once more. I'm missing figures; I'm not sure what the

balance is in all of the funds at this point of time. But the

section

before us is giving the cabinet, the Lieutenant-Governor-in-Council,

the authority to take all of the money out of all of the special funds

— in other words, the total cash reserves of the province — and bring

them into the operating accounts of the province in the fiscal year

ended March 31, 1983. They would have that authority, with this

section

and with this whole bill, to use up all the cash of the province in

order to balance the books in the fiscal year ended March 31, 1983. I'm

not saying that they would, wouldn't, should or shouldn't do that, but

as I read this

Section it does give them the legislative authority to

throw everything into the pot, if it is needed, and make sure that this

year balances.

HON. MR. CURTIS: Mr. Chairman, I think

that this is useful discussion. I hope I can now satisfy the member by

stating in another way that which I attempted to explain just a few

moments ago. First of all, this is not like the heritage fund in

Alberta or Saskatchewan, and I made that point particularly clear. This

must not be seen as a companion piece to the heritage fund in those two

provinces. The estimates of revenue for the fund would be presented to

the Legislature as part of the official estimates of the province. That

would occur, and there would be no expenditure from the fund other than

transfers to the general fund. That is where the significant difference

between this and the Alberta and Saskatchewan examples exist. They can,

as the member and the committee know, make direct expenditures and

investments.

So the Resource Revenue Stabilization Fund, as

before us today, is designed to permit us, in periods of significant

revenue health, to utilize that money either in the year in which we

find ourselves or in preparation for the following fiscal year.

HON. MR. GARDOM: It's fiscal husbandry.

HON. MR. CURTIS: I think that is one way of putting it, Mr. House Leader.

MR. STUPICH:

Mr. Chairman, as the hon. member for Cowichan-Malahat (Mrs. Wallace)

says, it is different from the Saskatchewan and Alberta heritage funds

in that there is no money in this fund and the others have funds.

Saskatchewan's may not last long the way things are going. It appears

as though they are going to use up the money very quickly. The minister

talked, and yet I don't know that he actually completely agreed with

what I said. This particular legislation, together with other

legislation that is in the course of passage through this House....

Almost all the cash of the special funds — I think it leaves out five

perpetual funds — has been merged with the general account cash. This

legislation, along with the legislation that wipes out the separate

funds as such and keeps the amount separate, would make it possible for

the cabinet.... I think that is another difference between this and the

heritage funds. I am not sure, but I believe that in the case of the

heritage funds the Legislature, while it may not make decisions as to

investments by the heritage funds, does vote on the transfers from the

heritage funds to the general accounts. I believe that is the case in

Saskatchewan, at least. I think it is part of the budget and at least

is voted on that way.

As I read this bill before us now, the

Legislature will have absolutely no opportunity to discuss the amount

that is being transferred from the fund to operating accounts. It will

[ Page 7929 ]

done

by the cabinet at a time and in the amounts chosen by cabinet. This

legislation, with the other legislation before us, does give the

cabinet the opportunity to use every cent of cash that the government

has to make the books balance for the March 31, 1983 year, or any other

year. At the moment I am thinking particularly of the March 31, 1983

year. I am not making any particular judgment on that. I am simply

pointing out that, as I read it, the government is going to make it

possible to get legal access through legislative authority to every

cent of cash that is available to make sure that we don't go into

deficit in the current year-end, using up everything that was

accumulated by several previous administrations. Is that the authority

given to the cabinet with this legislation?

HON. MR. CURTIS:

With respect to the attempt to draw the comparison between heritage

funds in other provinces and this fund, clearly the Legislature will

have the opportunity to debate that which has been done with revenues

from the funds. The member surely appreciates that. He nods his head in

agreement. We debate revenues from whatever source may be in question.

Perhaps I did leave the member with a mistaken impression when I

indicated that there could be variations in the fund from time to time.

The resource revenue stabilization fund cannot legally incur a debit

balance at the time of a reporting period. That is quite clearly the

case. That is actually in

section 4, the

section which is before us.

The

member said: "I don't know if it's going to be right or wrong or if

it's that serious." Very definitely the Legislature will have the

right, as with any other fund, to debate how much has been taken from

the fund, for what purpose and under what conditions. That clearly is

allowed in the course of the budget debate process and other debates

which occur every year.

MR. STUPICH: Just pursuing

that last bit for a moment, the minister says we can debate what the

money has been spent on. I'm not sure just exactly how we manage that,

but in any case the difference that I am trying to point out now is

that this is in advance of spending. Up to this point in time the

cabinet hasn't taken unto itself the authority to set the sales tax at

a particular limit or to set income tax rates. They may do that with

the way legislation is going, but they haven't done that kind of thing

yet with respect to revenue items. But in this instance it will be a

revenue item coming into the general accounts from a special fund.

While we may have opportunities to ask questions and debate it after

the fact — as I understand it now — at no time will the Minister of

Finance come before the House and say that we are proposing to take so

many dollars out of the resource revenue fund and put it into general

revenue. That is the way I see it.

HON. MR. CURTIS: Mr. Chairman, I wonder if you would determine if we have a quorum.

MR. CHAIRMAN: You are absolutely correct. Under standing order 6 I will ring the division bells and summon members to the House.

Please proceed. We have a quorum now.

MR. STUPICH: Mr. Chairman, I think maybe the minister was going to answer a question now.

HON. MR. CURTIS:

Mr. Chairman, we may be getting too far from the purpose of the

Resource Revenue Stabilization Fund. It is rainy day money. That was

the point made by the member for Nanaimo (Mr. Stupich) when he first

rose in committee this afternoon.

AN HON. MEMBER: Election day money.

HON. MR. CURTIS: No, rainy day money, Mr. Member.

MS. SANFORD: It will be a rainy day for you.

HON. MR. CURTIS:

The member interjects. It is simply a recognition of the volatility

which occurs in this province, and of the need, therefore, to have an

opportunity to set aside, in periods of very high revenue growth, in

order to raise up when there are inevitable periods of low resource

revenue figures. That's it, pure and simple.

MR. STUPICH:

I'd like to return to the thesis I was advancing earlier when I said it

does give the minister access to all of the money. He said that this

particular fund could not be thrown into a debit balance. In the list

of funds in the budget speech and the revised estimate for the year

ended March 31, 1982, there is a total of $528.5 million in special

funds. That includes those set aside to the extent of $241 million, but

it does leave $287 million....

HON. MR. CURTIS: In this bill?

MR. STUPICH:

Yes. My question earlier was whether this fund is in the same category

as the special purpose accounts. There's a whole list of special

purpose accounts with balances in each one of them. Those balances are

all merged into one figure that is sitting in cash and investments

along with government accounts. As I read it, the minister can exhaust

that total amount of money — because we are no longer keeping cash set

aside — including any money that's transferred from resource revenue

this year. According to this legislation, even the money that comes in

from resources in the year ending March 31. 1983, will all go into this

fund. Then there'll be a transfer out of the fund. I'm not quite sure

how that ties in with the budget that we've already approved, which

shows we're going to be getting certain amounts from resources this

year coming into revenue. This bill diverts those revenues into a

special fund and then gives the minister the opportunity to take those

revenues back out of the fund — more or less than the total amount. I

believe more. I believe more to the extent of the total amount going

in, plus the amount that's sitting in the special accounts. Mr.

Chairman, I'll probably have a lot more to say about this this year or

next year, depending upon whether or not an election intervenes.

HON. MR. CURTIS:

I may be able to assist the member. There are going to be large

variations in the fund at any particular time, but I think the member

will understand that any balance built up in the fund results from

rapid increases in revenue and not from undue retention of money in the

fund. In the future, the transfer from the resource revenue

stabilization fund to the general fund would show the same approximate

growth rate as all other revenue sources. So any attempt by any

Minister of Finance or any cabinet to manipulate the transfer from the

fund to general revenue would very quickly

[ Page 7930 ]

become apparent. I really want the committee to be quite assured on that point.

Section 4 approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 16, Resource Revenue Stabilization Fund Act, reported complete without amendment, read a third time and passed.

MR. NICOLSON: I seek the floor to ask leave of the House to make an introduction.

Leave granted.

MR. NICOLSON:

Mr. Speaker, I have just had the honour of talking with 23 grade 7

students from Canyon, British Columbia — near Creston — and their

principal, Bob Meredith. They are accompanied by Mr. Lee Brocklesby,

Elaine Alfoldy and Joyce Charest. I would bid the House to make them

welcome.

HON. MR. GARDOM: I call committee on Bill 38, Mr. Speaker.

CORPORATION CAPITAL TAX (BANK RATE

INCREASE) AMENDMENT ACT, 1982

The House in committee on Bill 38; Mr. Strachan in the chair.

Section 1 approved.

section 2.

MR. LEA:

Section 2 increases the tax to banks having an amount taxable that

exceeds $500 million, as I understand it. The rate goes up from 0.8

percent to 2 percent. I was wondering why only banks were singled out.

In the act itself, I know that up until now the trust companies, which

are also in the same business as the banks to all intents and

purposes....

Why were they left at .08 percent and the banks

taken to 2 percent? I'd like to ask the minister why the government

decided there should be a difference in the formula applied against

these two financial institutions.

HON. MR. CURTIS: To

the member for Prince Rupert, I indicated in second reading that we

quite clearly felt — and the government still feels — notwithstanding

comments to the contrary in the interval, that the major chartered

banks have enjoyed a status with respect to this corporation capital

tax which has not been enjoyed by others

In second reading I

dealt with the industrial sector and the commercial sector, not at

length and in great detail, but I indicated that we reviewed the

after-tax profits of a number of activity groups in the country and in

the province of British Columbia. Therefore the decision was taken by

me with respect to the major chartered banks — a host of banks and

trust companies. The Bank of British Columbia, as an example, is not

affected, as the member would know, because its paid-up capital is

significantly lower than the majors. A large number of trust companies

and other financial institutions, in the broad sense of the term, are

simply not in the position in which we believe the major chartered

banks found themselves.

MR. LEA: Does the minister

know whether any of the trust companies are in the same position as the

major chartered banks in terms of the over-$500 million? I would

suspect there are. Maybe the minister can answer that.

HON. MR. CURTIS:

I would be hesitant to give an off-the-cuff opinion with respect to

that without very careful checking. I think I made it very clear in

second reading that this was designed to recognize a particular

advantage which the major chartered banks in Canada have been enjoying.

MR. LEA:

I'm sure the minister would want to apply all taxation equally and

fairly. If there are trust companies that are over $500 million, then

it would seem to me that the banks are being treated unfairly. If

you're going to charge one lending institution a rate of tax, then all

lending institutions that have the same provisions....

Interjection.

MR. LEA: One is under British Columbia regulations, and one is under federal regulations.

The

charge that some people are making is that the only reason whatsoever

that the banks had an increase in taxation is that we all know that

almost everyone is angry at the banks, and it's good political fodder

to go after the banks these days. I think we should be going after

them, but it would be purely a political move and not a taxation move

to go after the banks and leave the trust companies out, if some of the

trust companies are in the same position as the banks. Would the

minister give an undertaking to take a look at the trust companies that

are under provincial legislation and see whether or not some of them

should be brought in? Otherwise, we're giving an unfair advantage to

some of the trust companies that may be in the same position.

HON. MR. CURTIS:

I did not want to answer with reference to a specific trust company

because I don't have those figures readily available, but certainly we

have them. If you're looking at groupings — banks, trust companies,

mortgage companies, consumer loan companies, leasing companies and life

insurance companies — the banks dealt with in this legislation have

been far more profitable than any other grouping of financial

institution. The banks, which are the subject of this section, this

bill, had after-tax rates of return of 16.8 percent; then there is a

significant drop before you hit the percentage for trust companies as a

group: 9.5 percent.

I think those two percentages are very

important. For mortgage companies, 8.9 percent; consumer loan

companies, 7.7 percent; leasing companies, 5.8 percent;.and life

insurance companies, 7 percent. I think that shows that this was not

taken in a frivolous or punitive way but, rather, recognized the very

high after-tax rate of return over a period

[ Page 7931 ]

of several years for a particular group of financial institutions.

MR. LEA:

I have two more questions; maybe I can put it all into one. Is the

minister satisfied, first of all, that this will not increase the

service charges that banks could apply to customers in British

Columbia? When you tax somebody they try to pass it on, and an easy way

for a bank to pass it on is to increase service charges to its

customers. Has the minister satisfied himself as to whether that could

be done provincially? I think it could be. I know they have a national

service charge structure, but they could change their rules to pass on

service charges just in the province of British Columbia, to make up

for this extra taxation.

The other point: as I understand

it, the money loaned by banks in British Columbia is a net amount of

money. In other words, more money is loaned out in British Columbia

than we deposit. The banks import money from other areas to lend out in

British Columbia. If they could lend this money out somewhere else and

avoid the tax, there could possibly be a shortage of money — for

instance, to the small business community. The banks would prefer to

lend their money out in another province in order to escape this

taxation.

HON. MR. CURTIS: The questions are related.

With respect to the risk of banks passing on this increase to British

Columbia consumers, I think that is very unlikely. The member will

know, or would expect, that I met with representatives of the Canadian

Bankers' Association after this bill was introduced. I had a long and,

I think, helpful meeting with them. I won't call it productive because

I suppose they would have been happiest if I had withdrawn the

legislation. Short of that, though, we discussed a number of their

concerns, and I've responded to them in writing.

The banks

would have a difficult time passing on this particular increase in

British Columbia because of the financial institution structure that we

enjoy in the province — smaller banks and other financial institutions

not subject to the tax: credit unions and trust companies. I would be

very surprised if those major banks affected by this increase in the

corporation capital tax rate made any attempt to retaliate. There was

absolutely no suggestion of that, directly or indirectly, when I met

with the bankers, and I would be extremely surprised. I just don't

expect that to happen.

Yes, the member speaks correctly of

the fact that money flows into British Columbia in the banking system.

Because this is a relatively small tax increase — from 0.8 percent, as

the member observed, to 2 percent for the major banks — I do not sense,

nor do my officials sense, any shortage of activity that the banks will

want to undertake. I indicated in second reading that — and I've told

them as well that this higher rate may not apply for a considerable

length of time, unlike the previous bill which we were discussing — if,

as and when interest rates lower and the tax paid under normal

conditions increases — taxes paid to the province — then there may be

no need for this higher rate for the major banks.

HON. MR. GARDOM: Mr. Chairman, I think both the hon. member for Prince

Rupert (Mr. Lea) and the Minister of Finance have articulated and developed

a good point concerning costs passed through. An item that I think is a concern

to the general public and pretty well every legislator in the country is the

comment from the banking community that they're proposing to charge for

the credit card service — or perhaps they're just flying kites. I think

it would be a fair thing to draw to the attention of the banking community that

they brought in this plastic money as a "service" for their customers.

They initiated it, and it's certainly true that it's become almost a

way of life in our country, and it is furthermore true that it has served to

fuel the fires of inflation. For the banks to suddenly now decide that this

service that they intended to provide to customers is going to be at the expense

of the customer is, I must frankly say, a bit of economic cheek. I think the

banks should be informed very carefully and very strongly that customers in

Canada are totally opposed to that. If any bank proposes to take such a course,

I think it should do so at its own risk, and I would certainly hope that those

banks that do not take such a course and provide that "service" at

non-cost would be where the customers flock to. The rate in question for late

payment is about 26.8 percent to about 32.9 percent on an annual basis. Indeed,

from any historic perspective that could certainly be considered as usurious,

notwithstanding the fact that there, are many factors today that the banking

community can with validity say have brought about such a rate.

Mr.

Chairman. If the credit card system is going to continue, and if it's

proving to be a loss leader for the banking community, then I'd say the

responsibility for the decision in the first place is the banking

community's, and the result is their responsibility as well. I find it

very difficult to accept the conclusion that the customer should have

to bear the full brunt of those kinds of charges. I do hope that we

will get some better leadership and some competition from the banking

industry, specifically in this area.

MR. STUPICH: Mr. Chairman, just for clarification, are we talking about Bill 38,

section 2?

MR. CHAIRMAN: Yes, we are.

MR. STUPICH: After listening to the previous speaker, I wonder whether he was talking about a different piece of legislation.

HON. MR. GARDOM: The other two members developed the premise.

MR. STUPICH: Not about credit cards.

Mr.

Chairman, the hon. member for Prince Rupert did raise a question of

concern that there might be special charges levied in the province of

British Columbia. I don't share his concern in that direction. I do

share his concern, though, that the banks might be less anxious to lend

in the province of British Columbia than in other provinces. I really

do share his concern there. If the banks are being pushed — and I think

they are this year; certainly there are indications that they are

suffering compared to what they are used to.... Suffering is a relative

term, I suppose. If it's more profitable for them to do business in

other provinces, then I would not be surprised if they considered doing

more of their lending out of B.C. and less in B.C. So I do share his

concern there.

At this point, I want to ask the minister a

question we discussed in second reading — he was going to bring the

answer back. He said today with respect to the Bank of B.C. that its

capital stock was substantially less than the $500 million figure. He

was going to tell us in committee stage just how much the Bank of B.C.

fell short of being caught by this legislation. I would point out that

it's not just capital stock

[ Page 7932 ]

that

is the base; it includes a number of reserves, which are all listed

here in the legislation before us in six descriptions of the kinds of

accounts. So it goes far beyond the capital of the bank, and I'm

wondering how far the Bank of B.C. falls short of being caught by this

legislation.

HON. MR. CURTIS: Mr. Chairman, I recall

that I undertook to have that information. I am informed that we're

comparing apples and apples, and $500 million is the cutoff; the Bank

of B.C. is, in that context, about $84.1 million. That is the answer to

the question I undertook to get.

Sections 2 to 6 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Davidson in the chair.

Bill

38, Corporation Capital Tax (Bank Rate Increase) Amendment Act, 1982,

reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Might I have leave to make an introduction.

Leave granted.

HON. MR. GARDOM:

Mr. Speaker, I'd ask all members to pay a cordial welcome to Mr. Jake

Brouwer, a gentleman well known to members of this assembly.

HON. MR. GARDOM: Mr. Speaker, I call committee on Bill 42.

FOREST AMENDMENT ACT, 1982

The House in committee on Bill 42; Mr. Strachan in the chair.

section 1.

MR. KING:

Mr. Chairman, I just have a question to put to the minister with

respect to this section. In terms of varying the annual allowable cut,

it says: "The forest licence may, for any of the first five years of

its term, provide for an allowable annual cut that differs from the

allowable annual cut determined under section (2)(c)." 1. wonder what

the point here is. Is this in connection with the transfer of timber

out of that particular unit, or is it with respect to variations that

may occur according to silvicultural treatment? What's the point of

requiring that flexibility to vary the annual allowable cut?

HON. MR. WATERLAND:

Mr. Chairman, the purpose is really to accommodate a phase-in of the

reductions in certain licences that were made as a result of the timber

allocation plan announced about six weeks ago. As the member is, I

think, aware, we are establishing a small business program which will

probably average in the order of 10 percent to 15 percent, varying from

timber supply area to timber supply area. In order to make it possible

for the small business sector — that is, those people in the logging

business — to be able to build up their forest to adapt to it, we're

not going to put that wood into place all at one time. At the same

time, it gives licensees a chance to sort of phase down the cut that we

did have. As the member realizes, under the act, timber sale harvesting

licences must be rolled over stick for stick, and timber sale licences

have a "may" clause, which means that the minister does not have to,

but can if he wishes. So all we're doing here is setting the allowable

cut, but in those areas where we have reduced the TSL part of it, we're

just phasing that reduction in over a five-year period rather than

doing it all at once.

MR. KING: I thank the minister

for his explanation. The only additional point I wanted to make before

we start passing some of the sections of this amendment act is just to

express a concern to the minister, which I expressed in second reading

as well, that not a great deal of time has been provided since these

amendments were introduced for reaction from the forest community. I've

had a number of queries out to different sections of the industry with

respect to various of these sections in the bill, and have found, by

and large, that not many of them were well informed on the specifics or

the intent of the amendments. In fact, many of them had not had an

opportunity to study the amendments. I sent some of them out, but

inadequate time existed between the time the bill was introduced and

committee stage consideration to get any analysis from those people in

the industry who are affected by it and allow time for their reactions.

I'm somewhat concerned about that. I would think the minister would be

too. I just wonder whether or not he has made any attempt through his

ministry to obtain some feedback from the forest community regarding

these amendments.

HON. MR. WATERLAND: Yes, Mr.

Chairman, we have had discussion with various people in the industry —

in particular, the forestry

section of the British Columbia bar

society. After having the intent of the legislation explained to them,

they had a few concerns, one of which is expressed in the amendment to

section 18 on the order paper. A few others which they had concerns

about were really because of lack of understanding of the intent of the

legislation. But by and large, we have had considerable feedback in a

relatively short time. Although they don't agree with everything we're

doing, at least they understand it, and understand the reason why.

MR. KING:

I can appreciate that the forest

section of the bar association would

be interested, but that's more from an academic legislative point of

view. Certainly I would have preferred, with all due deference to my

friend at the table.... Those practitioners in the field are the ones

who feel the consequence of this legislative change in terms of their

everyday dealing in the forest industry. While the legal niceties of

legislative language should by all means be scrutinized by the bar

association, I have more concern with respect to the practical

application in the field, and that's what I was directing my comments

to. I wonder how broadly the minister polled the forest industry and

all of its relative sections — the truck loggers, the contractors, the

small business sector, some of the medium and small companies — to

determine what their reaction was not just to the legislative

[ Page 7933 ]

language, but to the intent and purpose of these amendments. That's what I was getting at.

HON. MR. WATERLAND:

I didn't mean to imply that the only people we spoke to were the

forestry

section of the bar society. We have been discussing this with

various associations such as the the TLA, the BCILA, the Council of

Forest Industries and individuals in the industry. I think there's a

pretty general understanding and acceptance of the amendments we're

making.

Sections 1 to 3 inclusive approved.

section 4.

MR. KING:

Section 4 amends

section 16 of the act. I am concerned about the

changes that are proposed. Basically, as I understand it — and these

amendments are a little difficult to follow — the intent here is to

allow the minister to vary licences within a timber supply area so that

the quota, instead of being associated with a particular mill or

processing plant in that TSA, can now possibly be transferred out of

that TSA. This, if it's administered well, I think could be fine

because it can take stock of timber supply, but I'm concerned that if a

particular company has managed the timber quota poorly within that

timber supply area, and simply seeks a supply in another district, then

that certainly is not compatible with the spirit of the Forest Act

which requires some management and proper utilization of their supply,

and in effect directs that the supply be associated with a certain

local processing plant.

If there is, as I read it, some

possibility here that the supply customarily associated with the local

mill can be transferred to some other processing plant outside that

particular supply area, then I'd have some real concern. This concern,

Mr. Chairman, is heightened by the fact that we have had a number of

mergers or sales of existing companies over the past number of years,

many of which I've raised in the House with the minister. One in the

Kootenays that I referred to just as an example is Arco 's purchase of

Hadikin Bros. sawmills. In that particular case Hadikin Bros. sawmill

was closed down, and the timber supply that produced jobs in that local

area flowed to Atco's plant at Fruitvale. Now they're not very far away

— it's in the same general area — but the result was a net loss of jobs

associated with that timber supply. The minister has not acted very

strongly or definitively in the past with respect to his authority

under

section 50 to guarantee, as a caveat of transferring timber

licences, that jobs be preserved.

In fact, to my knowledge,

Mr. Chairman. the only particular case in which the minister has

exercised that authority was with respect to the one case where

Federated Co-ops of Canoe purchased Downie Street Sawmills of

Revelstoke. I don't know why that should have been the only purchase

where the minister insisted that the processing plant be maintained in

Revelstoke. Certainly I agree with that approach. I think it's one that

should be applied uniformly and not on some hit-and-miss basis, because

the Forest Act — the five year range and resource plan which states the

philosophy of the ministry — indicates that the resource will be

managed with a regard to maintaining economic stability on a regional

basis and to preserving jobs. So I'm concerned about this amendment.

[Mr. Davidson in the chair.]

If. In fact, provisions are

available for, say. a company which is badly overcut in one TSA to

apply to have the quota moved to a better timber stand elsewhere, then

that's bad news for the local communities and for the regional

economies. I would like some word from the minister in terms of what

precisely his intention is in this respect and to give an undertaking

that this flexibility which he seeks will not be used to benefit those

companies which have done a poor job of managing the timber resource

and perhaps overcut, and then have simply sought this provision to gain

a new supply. I would like that commitment from the minister.

HON . MR. 'WATERLAND: Mr. Chairman, many of the comments made by

the member were really relative to

section 3. However, the same theme comes

up in later sections as well. so it's best that I explain the intention

of the

section to the member, even though it's perhaps under the wrong section.

The

reason for allowing the movement of cutting rights between TSAs or

timber supply areas is that during the rollover process a number of

timber sale harvesting licences or timber sale licences will be rolled

into one forest licence. Prior to this rollover these licences would

have been operating in one or more of the old public sustained-yield

units or, in fact, one of the more current timber supply areas. This

section really allows us to stay more with what the harvesting pattern

has been, and perhaps to allow the licensee for a time to extract

timber from one timber supply area where he was operating in the past,

and then to allow him to operate in a separate area where, in fact, he

was also partially operating in the past.

It also gives us

the right to provide some efficiencies in the industry whereby one or

more licensees may find it to their economic advantage and also

therefore to the Crown's economic advantage to cooperate on the

development of roads, camps and so on on one particular drainage for a

period of time, and then move the whole operation to another. It

provides increased revenue for the Crown and increased efficiency for

the operators. So we're providing that flexibility in the

administration. There is no intent to allow anyone to abrogate their

responsibilities insofar as maintaining operating plants is concerned;

in fact, this should have the opposite effect.

Regarding

section 4. which is the

section we're on, the member has queried about

why we're allowing a replacement of licence on a non-competitive basis.

Generally under the Forest Act major licences are rolled over into

forest licences on a stick-for-stick basis without competition. What we

did in the Act was take those smaller licences, or what we called

designated applicant licences, and say that they would not have that

same right. These are — generally people with small quotas — usually

independent loggers. We've said that they will still have that same

matching bid privilege but that they're still subject to competition.

In thinking that through, and in discussion with that sector of the

industry, we accepted the fact that we were not being consistent; we

were not treating the small operator in the same manner, or as well, as

the larger operators. In this amendment we're simply providing our

authority to allow these smaller operators to have, without

competition, the same rollover as the others. Once the rollover process

takes place, then their licences will carry on, as will the forest

licences. They will in fact be the licensee and will not be subject to

competition every time the licence is replaced.

[ Page 7934 ]

MR. KING:

I apologize to the Chair and to the minister. I rose on

section 4, when

I was referring mainly to

section 3. However, as the minister

indicates, the same principle is contained further on.

With

respect to sections 4 and 5, which deal essentially with the same thing

— the rollover provisions and bringing some equality to the practice in

terms of there being a double standard, as it were, with respect to the

true forms of licence in the past — I understand that and appreciate it.

I'm

still concerned, though, about the extension of any tenure. I know

there are a number of rollover provisions. In my view, hearings should

be held before the tenure is extended on any form of licence. I wonder

what the minister plans in that respect. I know there has been a great

deal of public protest regarding some of the rollover provisions that

are already in the Forest Act. Now I'm wondering whether, by simply

adding another type of licence, with a smaller amount of timber

involved.... Any time Crown timber is awarded with tenure, it seems to

me there should be provision for local public input. I wonder what the

minister's intention is in this respect.

HON. MR. WATERLAND:

I think our actions in the ministry in the last few years have

demonstrated that we do indeed welcome public input. The place where it

takes place is not in the actual process of rolling over the licence,

but is in the development of the working plans for licences. This is

where the public has the opportunity to comment on and request changes

in the operational plans. We do have an very extensive

public-involvement process within the ministry. I think it's working

quite well, whereby people from all sectors who are affected by

harvesting plans can in fact have a dialogue with us. In many cases we

do indeed change plans as a result of such dialogue. We have always

taken the position that it's not appropriate during the rollover

process, because all we're really doing is extending, under a new act,

those contractual obligations that were entered into between the Crown

and the licensee under the former act.

Sections 4 to 6 inclusive approved.

section 7.

MR. KING:

On this particular section, a provision allows the holder of a

timber-sale forest licence to surrender it and obtain a tree-farm

licence. I wonder what the motivation is here. Is it simply the view

and the objective of gaining better management of the resource area, or

is there some other administrative reason the minister has as well?

HON. MR. WATERLAND:

Primarily, the reason is, as the member suggests, that the tree-farm

licence, where appropriate — and it's not always appropriate — does

provide us with the best level of forest management that we have

experienced in British Columbia. There are areas where a forest licence

would be a better licence if it were a tree-farm licence. In fact, in

many areas they are very close to it, in any event, because the

operating area is pretty well defined.

This

section provides

the holder of a forest licence with the opportunity to conditionally

surrender his licence for replacement by a tree-farm licence, if it is

appropriate, without actually putting into jeopardy the licence he now

holds. There would be great reluctance to do such a thing if they could

lose that licence. And it would be very disruptive to the manufacturing

plants that depend upon that timber supply.

We're simply

saying that if a tree-farm licence is more appropriate and is desired

by the applicant, he can conditionally surrender that forest licence.

Then, of course, he has to go through the public-hearing process — the

only difference being that if the licence is not awarded to him, it's

not awarded to anyone, and he reverts to his forest licence. The intent

is to encourage that higher level of forest management which is usually

associated with tree-farm licence tenure.

MR. KING: I

wonder if the minister could tell me whether there is any size

restriction on what might be turned into a tree-farm licence. Is there

a minimum number of hectares, or is there a minimum volume of timber

required, or does the minister anticipate very small tree-farm licences?

HON. MR. WATERLAND:

Mr. Chairman, from a practical standpoint, there is a minimum size that

really could be considered. It is related to both the size and age

class distribution of timber within an area. The member is aware that

we recently issued quite a small tree-farm licence to an Indian band up

in the northern part of British Columbia, in what we call the Tarnezell

Triangle. It happened that the type of timber — the age class

distribution and so on — made it a practical thing to do. In fact,

under this

section a tree-farm licence size would be limited by the

amount of timber that could be produced from it. That would have to be

compatible with the amount being surrendered under the forest licence.

Section 7 approved.

section 8.

MR. KING:

Mr. Chairman, I don't really understand the explanatory note on this

section. It simply states: "The amendment to paragraph (

i) of

section

28 enables the holder of a tree farm licence to contract for the

harvesting of a greater amount of timber by persons under contract with

him." I guess my question is whether this means that the holder of the

licence can exceed the annual allowable cut contained in the five-year

plan, or whether it simply means that he can award a greater percentage

to the contractor than the normal percentage set by the minister.

HON. MR. WATERLAND:

Mr. Chairman, this amendment is simply to clarify the intent under the

original act, which stated that the minister shall require that a

timber volume equal to 50 percent of the volume authorized under the

licences shall be harvested by contract. That was supposed to be a

minimum amount, not a maximum amount. The intent of the original

section was that a licensee could harvest any amount he wishes, but

with a minimum of 50 percent. This simply clarifies that they can go

over that, because some of them felt that that restricted them to 50

percent. In fact, many licensees harvest 100 percent of the timber in a

tree-farm licence by contract, and there was an

interpretation, I guess

from our legal friends, to the effect that somehow they were in

violation of the act by going over 50 because the act said "equal to

50."

MR. KING: In applying this provision, does the minister take into consideration unique circumstances such as those

[ Page 7935 ]

outlined

by my colleague the member for North Island (Mr. Gabelmann) with

respect to a situation in his riding where a company was moving from

its own logging crews to increased contractor activity? I don't think

that was as a choice by the company but rather some

collective-agreement provision. The net result was a loss of employment

to a very small community which was a single-industry town dependent on

that timber supply. It seems to me that in these cases, in exercising

the percentage that must be cut by contractors, the minister should

have some regard to those factors affecting the economic security of a

town like the one my friend outlined. I forget the name of it. Was it

Gold River? No. One of the northern communities on the island, anyway —

Tahsis.

AN HON. MEMBER: Zeballos.

MR. KING:

Zeballos, yes, but the Tahsis Co., I believe. It was a unique

situation, to a certain extent. As I understand it, it was a conflict

between two different locals of the IWA. They were caught in the bind

of the percentage allocation to contractors resulting in company

loggers being laid off who had their homes and all their investments in

the town of.... What was it again?

MR. BARBER: Zeballos.

MR. KING: I can never remember that name.

That

is the kind of situation that the minister should have some regard for.

I recall that when the question was asked, the minister shrugged it

off. I was sorry he did that, because the whole spirit and purpose of

awarding cutting rights, as stated in the act, is to try to stabilize

regional economies and employment opportunity. Here is a very tiny

community that, through the prospect of losing a lot of employment to

their local members, is certainly very negatively affected. Now I see

the minister seeking, through this amendment, to increase the

percentage that can be allocated to contractors. I have to ask: will

that not result in even greater circumstances where small, one-industry

towns are negatively affected, as was outlined by my friend for North

Island? I would like to hear the minister's response to that, because

it should be a matter of concern to him.

HON. MR. WATERLAND:

Mr. Chairman, this

section really has no effect on the point raised by

the member. Whether that harvesting was done by contractors or the

company's own logging division, it would not change the situation. This

section does not increase it; it just clarifies the fact that it is a

minimum, not a maximum. It's not a fixed amount. The company has not

requested any relief from that

section of the act. That in fact is a

possibility, if we can modify this to provide better chances for it —

either logging-camp or logging-community stability. We can do so and

have done so many times. As a matter of fact, we have a contract

advisory committee made up of representatives from the logging sector

of the IWA, the industry and others, who always adjudicate these

matters and provide recommendations to the minister. This particular

thing at Zeballos was not related to this

section at all.

MR. KING:

My point is — although it may not be the point in that specific case —

that I have, to a certain extent, the same problem in my own area with

what used to be CanCel, and is now B.C. Timber. Where there's a 50

percent allocation to contract loggers, and there's a slowdown in the

logging operation, who gets the work? Is it the company loggers, who

are employed by the company, or is it contractors? Now my proposition

is that there should be equity of opportunity for both the contractors

and the permanent logging work force. So the same thing that happened

in my colleague's constituency can very well happen — and indeed has

happened — in other areas.

Now the minister is proposing to

legally increase the portion of timber that can be allocated to

contract loggers. All I'm asking him to do, in giving effect to this

particular power, is to have regard for what percentage of the work

force is currently involved in the logging operation in that area, as

between company staff and contract loggers, and to be even-handed, in

effect, in allocating the percentage of cut that will take place by

contractors. That's the point that I'm trying to make.

HON. MR. WATERLAND:

Mr. Chairman, I agree absolutely with the member that those types of

things should be done in as equitable manner as possible if there are

cutbacks. In fact, generally they are accomplished through discussion

and dialogue between the contracting sector and the company logging

sector. I very seldom get involved in it; only if they can't come to an

agreement am I brought into it. Then I simply enforce the

section of

the act if there's a general reduction. The percentage should stay the

same, so that each is treated equally.

MR. GABELMANN: Mr. Chairman, I want to make a couple of quick points — a slightly different tack on the same issue.

When

the original Forest Act was brought in, I guess four years ago, with

the 50 percent contract clause, I, along with a lot of other people,

thought that that was a good thing, inasmuch as it would guarantee that

there would be some work for small contractors around the province in

various communities. One of the effects of that particular provision

has been to create situations that I think weren't intended by the

original intention of the legislation and are not corrected by this

particular amendment to the act.

I have a couple of

examples. In the Nimpkish Valley, the Canadian Forest Products

tree-farm licence was one in which there was significantly less than 50

percent contract operation. It was the kind of situation where the

operation was basically run from four camps — five if you count their

booming area. It was also a situation where they hauled the logs from

the valley to tidewater by their own railroad, except that some

particular provisions had been made because of that, in terms of the 50

percent contract clause. The effect of the clause has been, by not

allowing the minister to vary in significant ways the amount that is

contracted as opposed to company operations, to force the companies to

change the way in which they operate; to change dramatically, in some

cases by closure, existing communities that have been established, the

primary reason being to meet the imposed mandatory 50 percent contract

clause.

I think that if the minister had the ability in

legislation this amendment does not give it to him, because it talks

about flexibility on one side of the 50 percent, above it, but no

flexibility whatsoever on the other side of the 50 percent, below it —

to allow for, in certain cases, a lesser proportion than 50 percent....

He is giving himself, under this amendment, the ability to allow for a

greater proportion, in

[ Page 7936 ]

certain

cases, than 50 percent for contract, which, by my reading of the

existing act, is there anyway, because it's a minimum 50 percent

contract. Theoretically, I guess a company can go to 100 percent, but

the amendment clarifies that, presumably.

What the minister

is saying is that a company can go from anywhere from 50 percent to 100

percent contract, but can only go from 0 percent to 50 percent of their

own operation. That has a peculiar effect in some TFLs particularly,

and I cite the case of the Nimpkish Valley, where, I think, a 30

percent or 35 percent contract clause arrangement might have been very

appropriate. It would have had the impact of allowing people with many

years of seniority to keep their jobs, it would have allowed for

communities that have existed for many years to remain, and it would

have allowed for some stability in those communities. But because the

companies have to meet this mandatory limit while there are some

negotiations — and I can understand that, but the goal is always to try

to reach that 50 percent minimum contract — it has had a very

unsettling effect on the work force, and it has had an unsettling

effect on the communities. I won't make the point any further than to

say that I think that's not a desirable goal for this Legislature to

accomplish.

The Zeballos situation, with the Tahsis Co., is

a different situation. That company is already operating with, roughly,

80 percent contractors. They have a limited proportion of their cut

handled by their own logging divisions. What the minister is saying is

that the 50 percent provisions, or whatever the percentage is going to

be, is going to be TFL-wide. The minister does not choose to intervene

in cutting areas or in existing communities. I think the argument that

I would like to make on this

section on behalf of people who live in

Zeballos, where the company is cutting back one side each — one side of

the logging division and one side of the contractors — but it still

remains relatively equal between contractor and logging division, with

slightly more logging division loggers, is that in cutting back one

side of a contract they are laying off people with three, four and as

much as six months of seniority, but in laying off one side of the

logging division, they're laying off people with as much as ten years

of seniority. They're saying to the village of Zeballos: "You're going

to lose a certain number of your homeowners and your residents. They're

going to have to leave." In the meantime, a logging camp can operate

eight miles down the inlet, operated by a contractor. The

longest-practising contractor in that area is one with two years of

experience. Most of them last about an average of nine months before

the new contractor comes in. So workers from various parts of the

Island come in on Monday morning or late Sunday night and leave Friday

afternoon, and there's no advantage to the community whatsoever. That's

because the company is not required, either by the act or by this

amendment, to make provisions for contract and logging division

balances applicable within certain communities, which is a far more

meaningful place to make the decisions than over the entire tree-farm

licence and cutting area.

So while it is probably much more

of a technical amendment than anything else, I think the amendment

really does give an opportunity for us to discuss what is a very

important point, and which is, as I said, easily demonstrated by two

neighbouring tree-farm licences — one which has significantly had its

own operation and one which has significantly had contractor operation,

but neither of which suits the needs of the community or the people who

live there. The amendment doesn't solve that problem.

MR. KING:

I don't want to belabour this either, but this is a very serious local

matter. It's something that I think deserves the kind of discretion

that the minister is demanding for himself on the one side through

other sections of the act and through this

section 1'd like to hear his

response. This is a real human problem, and I would appreciate a

response from him.

HON. MR. WATERLAND: Mr. Chairman,

we are getting considerably beyond this section. I would point out to

the members that, under

section 28(

k) of the Forest Act, the minister

indeed does have flexibility to relieve tree-farm licensees of

compliance with that

section — indeed, many times we do. That's why I

was explaining the function of the contract advisory committee, which

provides advice and is made up of people from the IWA, from the

contractors themselves, and from the licensees. Many times we vary the

enforcement of that regulation, under the flexibility provided under

section 28(k). Indeed, I, as well as the members opposite, am concerned

about the stability of communities and we're doing whatever we can to

ensure that stability. I would also point out that the timber that must

be harvested, the 50 percent, refers only to the Crown portion of the

TFLs and does not include the private land contribution to the

allowable cut. So that flexibility is there; indeed, it is used many,

many times. I share the same concern as the members.

Sections 8 to 12 inclusive approved.

section 13.

HON. MR. WATERLAND: Mr. Chairman, I move the amendment standing under

my name on the order paper. [See appendix.]

Amendment approved.

section 13 as amended.

MR. KING:

I have a brief question; what does the minister have in mind by giving

the Lieutenant-Governor-in-Council order to reduce the stumpage rate

below the applicable formula? Does he contemplate an emergency power

for periods of serious economic downturn such as the one we're in at

the moment, or does he have something beyond that in mind here?

HON. MR. WATERLAND:

We have in fact been doing what is provided for in this

section for

about the last year and a half. However, we've had to use another

section of the act, which is quite awkward to do. The member will

recall some discussion during my estimates last year about having

provided a designated minimum stumpage for the small loggers, those

people who are having difficulty marking their logs. They don't

generally receive the average market value because in many cases they

are actually selling lower-grade logs. What we have done in the past,

using another

section of the act, is designate them by individual

licences, and we have literally hundreds of those. This means that

every time a new licence is issued, we have to pass another

order-in-council to exempt that specific licence. This

section allows

us to do that

[ Page 7937 ]

a more administratively efficient manner by simply stating the class of

licence — for example, those people who are classified as small

business program people, market loggers and so on. We can say that a

class of licence is reduced without naming each and every licence. It's

administrative efficiency to do something that we have been doing for

the last year under these adverse market conditions.

MR. KING:

In exercising that discretion, presumably regard will be given to the

species and quality of the timber being logged. Even though they're

small, some of it could be very high-grade timber, and I presume that

in those cases regard would be given to the quality of the material

being logged.

Section 13 as amended approved.

section 14.

MR. KING:

This

section gives authority to enter and cross private land to obtain

access to a fire area. Why does the minister require this particular

power? I thought it was already contained in the act.

[Mr. Strachan in the chair.]

HON. MR. WATERLAND:

The act provides the right to enter onto private land for the purpose

of fighting a fire on the private land. However, in many cases we have

a fire on Crown land across the private land and we have to get through

it. I'd also point out that this

section provides payment for damages

that may be caused the private land due to entry.

Sections 14 and 15 approved.

section 16.

MR. KING: What is contemplated here by giving the district manager the flexibility to grant exemptions from the regulations?

HON. MR. WATERLAND:

It's just to be a bit more practical in the application of the

regulations. For example, the regulations spell out very specifically

what firefighting equipment is required, and it's a very broad basis.

It may say, for example, that your operator is required to have three

pumps, seventeen shovels and two buckets, when in fact there may be no

source of water to be pumped. We can relieve him of that need to have a

pump, and perhaps say that he must have five backpacks instead. It's a

little more application of the rules. If something cannot be used, it's

therefore not necessary; so we can vary the regulations without our

forest officer's being in violation of the act.

Sections 16 and 17 approved.

section 18.

HON. MR. WATERLAND: Mr. Chairman, I move the amendment standing under

my name on the order paper. [See appendix.]

Amendment approved.

Section 18 as amended approved.

Title approved.

HON. MR. WATERLAND: Mr. Chairman, I move the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed: Mr. Speaker in the chair.

Bill

42, Forest Amendment Act, 1982, reported complete with amendments to be

considered at the next sitting of the House after today.

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

HON. MR. GARDOM: Committee of Supply, Mr. Speaker.

ESTIMATES: MINISTRY OF ENERGY,

MINES AND PETROLEUM RESOURCES

(continued)

On vote 28: minister's office, $212,539.

MR. D'ARCY:

As with other ministerial estimates, this side of the House is dismayed

this year, as we were last year, with the profligate spending of the

minister on office expenses, travels and equipment. We have to wonder

why, in this time of restraint respecting all aspects of the economy in

British Columbia, the minister cannot, in terms of his personal

conduct, at least show an effort — not to cut back; that's not what

we're asking him to do. We're simply asking him to hold the line when

it comes to his own travel expenses, his own furniture and his own

equipment expenses. After all, one has to assume that equipment that

was ordered last year and usable last year is still going to be good

this year.

Because the minister has at this point shown no

indication that he desires to even hold the line in terms of his

personal expenses, I would like to move that vote 28 be reduced by the

amount of $7,900.

MR. CHAIRMAN: The amendment is in order.

On the amendment.

MR. BARBER:

Last year the New Democratic Party moved cuts totalling $82 million in

the budget that Social Credit put forward. We did so in the name of

real restraint. We did so in order to trim the fat, cut the waste and

end the extravagance of Socred cabinet ministers and their friends on

the public payroll. Last year we moved that $82 million be cut in

non-essential public spending from such areas as are now outlined in

the motion put forward by my colleague. These areas are not essential

to public safety, public health or public well-being. They are

apparently essential to the personal well-being of Socred cabinet

ministers, but that's another matter. If the $82 million which we

proposed in budget cuts last year had been accepted by Social Credit,

we would have money to guarantee that every single hospital bed in

British Columbia would be open today. Vote after vote, motion after

[ Page 7938 ]

motion,

cut after cut and division after division demonstrated last year that

the Socreds are not interested in real restraint. They are not

interested in cutting back the fat and the waste and the extravagance.

challenge the Minister of Energy to accept this motion in the name of

real restraint. We challenge him to set a personal example, to ask no

more of the public for the expenses of his office than he asked for and

was granted last year — not a dime more.

If the Socreds

believed in restraint they would be cutting back in areas of

non-essential public spending. Travel to New York and other places by

ministers is not exactly essential public spending in a year of

restraint. Public expenditure on booze and on fancy apartments and

hotel rooms is not acceptable in a year of restraint — or in any other

year.

What we are proposing by this motion — one of a few so

far this session, one of many to come — is that the Socreds actually do

what they say they want others to do: that is, exercise personal

restraint. We are not asking that moneys be reduced for essential areas

such as energy development, energy self-sufficiency and energy

conservation. We believe in those programs and support them. We're not

asking that a nickel be withdrawn from them. What we are asking,

though, is that Social Credit accept responsibility to cut in such

nonessential areas as travel, office expenditures, office furniture,

rent, and all that other stuff that cannot be rationally justified in a

year of restraint.

We proposed cuts totalling $82 million

last year. The Socreds voted against every single one of them. We are

now proposing a series of cuts this year. We did so in Agriculture, and

strangely enough they voted against all those cuts. We are now doing so

in this portfolio, and we ask the government to accept responsibility

to deal seriously with these motions and proposals for restraint. We

ask them to accept these proposals, for budget restraint in a year of

restraint, as serious gestures. If the cabinet ministers themselves are

not prepared to exercise restraint in their own offices, how on earth

can they persuade anyone else to do the same in theirs? If the Socred

cabinet ministers are not prepared to abandon their high living at

public expense, then there is no reason for them to expect the people

of British Columbia to think it justifiable that Social Credit is

shutting down hospitals and closing down schools. The money we would

have saved last year would have kept the hospitals open this year; the

money we propose to save in this motion will singly and cumulatively

help guarantee that hospitals and schools will be kept open. How you

keep these important services available to the public is a legitimate

matter of public debate, Mr. Chairman.

When we speak in

favour of keeping hospitals and schools open, people often ask how

we're going to pay for it. Through this motion, we're demonstrating how

you can pay for it. You pay for it by assigning correct and humane

priorities. You pay for it by cutting back in areas of inessential

public expenditure. You pay for it by accepting motions like this and

redesignating those moneys to important purposes like hospitals and

schools.

If this motion passes, it will save the taxpayers

of British Columbia several thousand dollars in inessential public

spending. The dozens upon dozens of other proposed cuts we will make in

inessential public spending will save the taxpayers millions upon

millions of dollars. We believe those dollars should be diverted from

ministerial spending to hospitals and schools. It's a matter of humane

priority, fiscal priority and real restraint that causes us to propose

the motion we have now proposed.

MR. BRUMMET: I don't

know what the first member for Victoria said this amendment

demonstrates, but I believe it demonstrates the hypocrisy of the

socialist opposition. I know he referred to last year when they moved

cut after cut through amendment, and that had to be one of the most

hypocritical demonstrations I've ever seen. In the preceding debate,

one after another their members made ever-increasing demands on what

the ministers should do and what they should deliver to the people, and

then at the end of that debate, having made a long list of requests,

they finished it off by asking for lower spending. We've had nothing

from this opposition this year but requests for greater spending in

various areas, yet here we have the same hypocritical procedure

repeated. When it comes to the motion, they make an amendment to make

cuts.

The cut proposed now is for the travel costs of the

minister. That member comes from Victoria, so I can understand why he

feels that everything happens or can be learned in Victoria. I don't

think it can; I think it is most important that the ministers visit the

areas. For instance, if travel costs have risen this year.... I would

like to see the minister able to visit the North Peace River more than

once in a year, because that is where a great deal of his

responsibility is in Energy. We have the Hydro dams there, which are

part of his responsibility, and we have the oil and gas industry. I

think it is most important for him and members of his ministry to come

on to the ground and actually see what is happening.

I can

tell you, Mr. Chairman, that coming from the area and being in direct

contact with the people in the oil and gas industry is quite different

than sitting in Victoria and pretending to be knowledgeable about the

oil and gas industry. That opposition certainly demonstrated that

during their reign in power in this province. They practically wiped

out the oil and gas industry for no other reason than that they didn't

understand it or know what was happening.

MR. BARBER: What about restraint?

MR. BRUMMET:

They talk about restraint. Yes, I can see restraint, but in every area

that restraint has been mentioned in this House, they're against it.

They're for spending more all the time. They try to attack it on the

basis of all of the taxpayers of this province sharing in the cost when

a minister travels. When people from our area have to come to Victoria,

they take the cost out of their own back pockets, so they try to twist

and turn this into a personal extravagance. No one is against the

personal extravagances, but let them use whatever legal or dirty

tactics that they want to attack that.

Interjections.

MR. CHAIRMAN:

Order, please. I'll remind the members of the committee that good

temper and moderation are the characteristics of parliamentary debate.

The Chair is finding some of the comments from the member for North

Peace River unparliamentary. Comments such as "hypocrisy" are not

parliamentary. I would ask the hon. member to remember that good temper

and moderation are the characteristics of our parliamentary language.

Please proceed.

[ Page 7939 ]

MR. BRUMMET:

Mr. Chairman, in terms of some of the expressions that I have heard in

this House, I would have thought that "hypocrisy" is certainly not an

unparliamentary term. I have heard "dirty tricks" said in this House

many times without being challenged. However, with respect to the Chair

I'll change my wording.

With whatever tactics they choose to

use, let them attack what they wish. I certainly resent their

amendments to try to tie the ministers down to Victoria when they

should be out in the field.

Rather than use the term

hypocritical.... Just prior to the amendment to cut travel on the

Agriculture minister's estimates, that same member who made the motion

was criticizing the Minister of Agriculture (Hon. Mr. Hewitt) for not

having attended a conference. We have heard criticisms in this House

about ministers not attending important conferences in Canada and in

various parts of the province, yet at the same time as they recognize

increased travel costs, they still maintain that travel should be cut.

certainly cannot accept this as a responsible amendment, because we

need more ministers to visit more parts of British Columbia in order to

properly understand what is actually happening.

MR. CHAIRMAN:

Before recognizing the next member, the Chair must observe that when an

amendment comes forward it is designed to reduce the amount of money in

a minister's vote. An amendment of that sort is acceptable, but of

course an amendment that changes the direction of money in a vote would

not be acceptable. I would remind all members that their speeches in

Committee of Supply should also take the same direction — pointing out

why the amount should be amended. The Chair would be acting improperly

if it allowed members to discuss changing the direction of the vote,

and the Chair would have to react if members do this in their debate.

I'm sure all members are aware of that.

MR. HOWARD: I'm not usually at a loss for words, Mr. Chairman

Interjections.

MR. CHAIRMAN: Order, please. I'll ask member for North Peace River and the Leader of the Opposition to please come to order.

MR. HOWARD:

Mr. Chairman, the absolute carelessness with which the member for North

Peace River approaches the spending of public money is amazing. This

member for North Peace River is a good friend of the minister and

supports him 100 percent. He wants to see this government continue on

its obscene course of spending public funds. The member for North Peace

River joyously and with great glee.... Could you see the tremor in his

voice when he said: "How lovely it is that the minister is going to

spend 14.7 percent more on travelling this year than he did last year"?

AN HON. MEMBER: He might even come up to his riding.

MR. HOWARD: He might even come up to North Peace River. More particularly,

I suggest to you, Mr. Chairman, that what the minister is not likely to do with

this extra 14 percent that he wants in travelling expense money is spend it coming

to North Peace River. He wants to visit Vancouver and spend his time in the

Vancouver Hotel. That is part of travelling expenses. That is what this money

is all about: an increase of 14 percent in squander money for the minister.

Everybody else tightens their belt, but not the Minister of Energy.

Office

expenses is another increase that the member for North Peace River just

rubbed his hands in glee over and said: "Isn't that lovely that the

minister is going to spend more money. Isn't that lovely that the

minister has his hands on these public funds. I want him to spend more

of it."

Office furnishings? That has nothing to do with

travel. That is for the minister while he is here. That is his luxury:

a 12 percent increase in office furnishings. The member for North Peace

River says: "That's beautiful. I want the minister to have the most

expensive couches and desks. I want the minister to have that furniture

that Jack Kinsella couldn't get. I want the minister to have Jack

Kinsella's furniture."

AN HON. MEMBER: Patrick Kinsella.

MR. HOWARD: Whatever that guy from Toronto's name is, in any event.

That

is what the member for North Peace River is advocating. That is what

all Social Crediters are advocating. "Get your hands in the till. Get

your snout in the public trough. Squander hundreds of thousands and

hundreds of millions of dollars of taxpayers' money." That is what the

member for North Peace River wants, and he's got the utmost gall to

stand in this House and use the word hypocrisy, which is out of order.

It's not out of order if he applies it to himself, and I notice he

didn't do that.

MR. CHAIRMAN: Order, please. The

Chair has already spoken on this word. I am sure the member knows

exactly what good temper and moderation are.

MR. HOWARD:

Yes, indeed, we need good temper and, more than that, we need

moderation in spending public money. We need moderation for the public.

We need moderation in squandering the taxpayers' money, and that is why

this motion seeks to reduce the amount by $7,900. That may not mean

very much to the member for North Peace River. What is $7,900? It may

not mean much to him, but it sure means a hell of a lot to thousands of

people who are out of work in this province.

I will gladly

stand up in this House and vote to reduce the minister's expenditure by

that amount of money. It won't affect one single, solitary program

available to the people of this province, but it will make $7,900

available for something other than high living, squandering public

funds and living in the most luxurious accommodation one can find. I

will be proud and pleased to stand up and vote for the reduction. I am

sure the member for North Peace River and the Minister of Energy

himself will just as cheerfully stand up to squander it. We will enter

that on the record and we'll remind the folks about it at the

appropriate time. The member for North Peace River can think about that

upon his retirement, as he contemplates his one term as an MLA, after

the next election.

MR. RITCHIE: Very briefly on the

amendment, I oppose this amendment, of course, and I oppose it on the

grounds that this minister can be greatly admired for the tremendous

[ Page 7940 ]

job

he has done on behalf of this province, and for the strong position

that he has taken with respect to protecting the gas and oil of this

province for the people of this province. It is rather coincidental,

but I received a telephone call here not too long ago from a person who

was rather dismayed and upset at some of the comments which have been

made by the opposition with respect to various things which they

attempt to use in order to pull people down into the gutter with them.

MR. SKELLY: How's Bob Thompson these days?

MR. RITCHIE: Bob Thompson, hon. member, is very fine indeed these days, and I'll pass along your regards to him.

MR. HOWARD: How's Bob Sommers these days?

MR. RITCHIE: Mr. Member, I would suggest to you that you just sit quietly, as I did while you spoke.

My father gave me a little advice many years ago, Mr. Chairman...

MR. BARRETT: On this motion?

MR. RITCHIE:

On this motion...that one should never get into the mud with the hogs,

because you'll all come up covered with mud and only the hogs have

enjoyed themselves. So I'm going to stay away from that.

Anyway,

Mr. Chairman, I feel compelled to stand here and make a few comments

because of the telephone call that I just received about an hour ago

from a Mr. Jack Ellison of Vancouver. Jack has asked me to bring up

this matter concerning travel, which the members are kicking around

here in regard to expenses. He asked me to remind this House and the

public out there of the way that the opposition so freely spent their

money when they were in office. One particular incident he wanted to

draw my attention to, Mr. Chairman, was the trip to Toronto and, I

believe, Ottawa by the Leader of the Opposition, then the Premier, and

one of his members, the first member for Vancouver Centre, who I

believe at that time....

AN HON. MEMBER: Did he go to Hull, and how do you spell it?

MR. RITCHIE: It was the trip east when he sat down with the Prime Minister, Pierre Elliott Trudeau....

MR. CHAIRMAN:

Order, please. Hon. member, at this point I must remind you that we are

on an amendment to vote 28 in the estimates of the Minister of Energy,

Mines and Petroleum Resources, and we must relate all of our remarks to

the amendment as it applies to that vote, and specifically to the

administrative actions of the ministry whose estimates are before us

now. Would the member please be relevant.

MR. RITCHIE:

I'm pleased that you draw my attention to that, Mr. Chairman. I'm

merely responding to comments made by the opposition. If we checked Hansard

we'd see that almost all of their talk has been around travel, and I'm

talking about travel and the purpose of travel, which, of course, is

the reason for the expenses.

Mr. Chairman, the travel of

those members, plus their staff, which I understand were a good many,

was to Ottawa to make the deal with Pierre Elliott Trudeau that he

would commit all of the natural energy resources of British Columbia to

Ottawa under the Trudeau administration, provided he nationalized all

of them. But that is only the side issue, Mr. Chairman; the issue I

wish to make is that they were travelling first class.

MR. BARRETT: False!

MR. CHAIRMAN:

Order, please. I would once again ask the member to please relate the

remarks to the amendment and to the Ministry of Energy, Mines and

Petroleum Resources.

MR. RITCHIE: On the amendment

and on the question of expenses and as they apply to travel, I just

want to remind the House, Mr. Chairman, that the things that they are

saying now against the minister in respect to his travel in his

portfolio really are the things that they should have been criticizing

themselves for in the past. I just wanted to bring this matter to the

House because I received the call to say that the Leader of the

Opposition and the member for Vancouver Centre were travelling on that

type of business and travelling first class. I know it's not proper in

this House for me to call them hypocrites, Mr. Chairman, and I won't do

that, although the word is very fitting.

MR. CHAIRMAN: Order, please.

MR. RITCHIE: Mr. Chairman, I certainly oppose this nonsense amendment.

MR. BARRETT:

Mr. Chairman, usually when members make statements they back them up

with facts. You bring facts in here and deal with them. If we are to be

attacked for quoting from government vouchers, then I would suggest the

remedy is not to take that action that caused those vouchers in the

first place. It was that minister — and why I speak to this motion —

who made allegations in this House, when we were in office, that

welfare recipients were being housed in the Empress Hotel. Did he have

any facts? No.

Interjection.

MR. CHAIRMAN:

Order, please. The Chair has already reminded the committee that we are

on the amendment to vote 28 and we must be relevant to the

administrative actions of the minister.

MR. BARRETT:

Mr. Chairman, it is that minister who is asking for money; it is that

minister who has been responsible for decisions in the Ministry of

Energy, Mines and Petroleum Resources. Why should we give him any money

at all when he announces decisions will be made about gas pipelines to

Vancouver Island, and the Premier announces an entirely different

policy and he didn't even know about it until he was told in a parking

lot? Do you want us to give money to a minister who doesn't even have

authority to make decisions? You want us to give money to a minister

who, when he is travelling, doesn't even know what is going on at home?

You want us to give money to a minister whose whole policy foundation

is pulled right out from under him by the Premier of this province? You

want us to give money to a minister who has promised to bring natural

gas to Vancouver Island, only

[ Page 7941 ]

have that whole policy destroyed by the Premier? You want us to give

money to him to travel so that he can get the news, in the parking lot,

of what his policies are? You want us to give money to that minister

who blew $14 million on a crazy heroin treatment program?

MR. CHAIRMAN: Order, please.

MR. BARRETT: I'm sorry, Mr. Chairman. That was $14 million on an unsubstantiated program.

MR. CHAIRMAN: Order, please. We are discussing the Ministry of Energy, Mines and Petroleum Resources.

MR. BARRETT: That is correct, Mr. Chairman.

That

minister no longer has the authority to announce policy decisions. The

minister has yet to explain to this House why he had announced the

policy decision on natural gas and the Premier announced an entirely

different one.

My friend the member for North Peace River

(Mr. Brummet) talked about the gas and oil fields in North Peace River.

They have never been as low and as shut down as they are this year

under that ministry. I am not opposed to the minister's travelling to

North Peace River. You admitted yourself that he went to North Peace

River only once. I am opposed to the Broadway Bob antics of this

minister which have been going on here. I am opposed to the Broadway

shows that the taxpayers of British Columbia and the residents of Fort

St. John have to pay for. I am opposed that I should have to explain to

the unemployed rig worker, the small businessman in Fort St. John and

the welfare recipient. I am ashamed that I have to explain to the WCC

followers, packing meetings by the hundreds. Why do they want to

separate? They want to separate from that minister, who is more

interested in Broadway than he is in Fort St. John.

I find

it kind of idiotic. Mr. Member, you should be fighting for the people

in Fort St. John, not defending that minister spending money on

limousines in New York. You tell us how much a limousine costs in Fort

St. John. Maybe we'll hire one for him to travel around up there so he

can visit your constituents. Don't you know what the welfare rate is up

there? Unemployment is higher in the oil and gas industry in British

Columbia than in the last 15 years, and it is directly because of the

inaction of that minister and this government. That member should be

down here fighting for the people of Fort St. John and Fort Nelson.

That member should praise the British Columbia Petroleum Corporation,

which that minister voted against and which is still functioning. If

you are so against socialism, then why do you support the Petroleum

Corporation? Stand up and explain that. I haven't heard that member

under this vote or any other vote stand up and say: "I've got

unemployed in my constituency. I've got trouble in my constituency.

I've got bankruptcies in my constituency. Mr. Minister, come up, and

I'll pay your way up there, but for God's sake do something to help the

people who are unemployed and losing their homes in my riding."

What

do we get under this? I'll tell the people in Fort St. John what we

get. We get the member for Fort St. John demanding that the minister be

given more travel money. Of all the issues and priorities in North

Peace River and in the oil and gas field, the last priority and issue

is for that minister to get more money to head for Broadway. That is

the last issue I expected to hear from you.

I find it

interesting that when the minister was asked those questions and we got

this amendment, he ran off down the hallway, running from the cameras.

He couldn't get down the hallway fast enough. Tough guy Bob! He is the

same guy who tried to block the vouchers. Now you would have a

debate here for us stop him, cutting his expenditures. What a bunch!

You are the worst of the bunch. There is more to come, too. The whole

works of you have been squandering money all over the world by avoiding

the problems here in the province of British Columbia.

this amendment, we've gone all the way from the Pouilly-Fuisse kid to

Broadway Bob, and there's more to come. They have no more sense of

responsibility to the public and the questions of public expenditures

than the most vicious wastrels in the history of the province of

British Columbia. And that member's got the nerve to ask for more money

for them!

Interjection.

MR. BARRETT: I

want to tell you, Mr. Chairman, I will not vote for another dime for

that minister. I don't see what single socially redeeming purpose is

served by spending $300 on a Broadway musical to entertain the minister

and by having a fat luxury limousine waiting for him outside so that he

could have a posh ride home to his hotel.

AN HON. MEMBER: Three blocks to a posh hotel.

MR.