1985 Legislative Session: 3rd Session, 33rd 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 26, 1985

Afternoon Sitting

[ Page

6885 ]

CONTENTS

Motor Fuel Tax Act (Bill 63). Hon. Mr. Curtis

Introduction and first reading –– 6885

Municipal Amendment Act, 1985 (Bill 62). Hon. Mr. Ritchie

Introduction and first reading –– 6885

Presenting Reports –– 6885

Motor Vehicle Amendment Act (No –– 2), 1985 (Bill 60). Hon. A. Fraser

Introduction and first reading –– 6886

Holiday Shopping Hours Freedom Of Choice Act (Bill M224). Mrs. Johnston

Introduction and first reading –– 6886

Tabling Documents –– 6886

Motor Vehicle Amendment Act (No –– 1), 1985 (Bill 58). Hon. Mr. Smith

Introduction and first reading –– 6886

Tabling Documents –– 6886

Oral Questions

Hospital bed closures. Mrs. Dailly –– 6886

Mr. Blencoe

LNG project. Mr. Williams –– 6888

Ministerial Statement

Airport security. Hon. Mr. Smith –– 6888

Travel Agents Amendment Act, 1985 (Bill 36). Committee stage –– 6889

Mr. MacWilliam

Mr. Howard

Third reading

Revenue Sharing Amendment Act, 1985 (Bill 22). Committee stage –– 6890

Third reading

Forest Amendment Act, 1985 (Bill 3). Committee stage –– 6891

Mr. Howard

Mr. Williams

Mrs. Wallace

Mr. Lockstead

Hon. Mr. Gardom

Miscellaneous Statutes Amendment Act (No. 3), 1985 (Bill 56). Committee stage

Mr. Howard

Mrs. Wallace

Mr. Williams

Forest Amendment Act, 1985 (Bill 3). Committee stage –– 6911

Mr. Howard

Third reading

WEDNESDAY, JUNE 26, 1985

The House met at 2:04 p.m.

Prayers.

HON. MR. GARDOM: I'm sure all of us in the assembly, as

western Canadians — and certainly very much so on the government side —

would wish to extend both our congratulations and our thanks to Alberta

Premier Peter Lougheed for his valued contribution over the years. Mr.

Lougheed always strongly articulated the aspirations of western Canada

in a very positive sense. He always said that the realities of change

in our country's fiscal structure and economic evolution must reflect

Canada as it is and as it should be, and indeed, western Canada as it

is and as it should be, which is not to be subject in perpetuity to the

majority, if not all, the levers within central Canada. Mr. Lougheed

was a very tough dealer, and he was fortunate in having great cards —

all that oil and gas the good Lord provided Alberta.

Of most recent significance, certainly from my personal perspective,

was his very firm and concise stand concerning free trade one-on-one

with the United States — and the sooner the better; it's Canada's

salvation. We certainly hope his retirement will not dull his

enthusiasm concerning that issue, because time is indeed running out.

We wish him very well in his retirement.

MR. HOWARD: Her Majesty's Loyal Opposition also want to

express, as we express to anyone who spends a good part of their life

in the public service of a province or of Canada, especially someone

who has been the Premier of a province for such a long period of

time.... Mr. Lougheed will leave behind him a legacy and a pair of

shoes that will be difficult to fill. We do appreciate the contribution

he has made to the political life of western Canada, and of Canada, and

wish him every success in his years ahead as well.

MR. VEITCH: In the galleries today are some very interesting

people: first, Dr. Jeff Burns, archivist for the Catholic Archdiocese

of San Francisco; the wife of one of our very good government caucus

researchers, Dr. Rajani Lippert, a new resident of Victoria currently

working on a study of women in the Indian independence movement with

the Indian Council of Social Sciences; also Dr. John Nerone, assistant

professor of communications at the University of Illinois located at

Champaign-Urbana. I would ask the House to bid them welcome.

HON. MR. HEINRICH: I would like the members of the House

today to welcome two people from Prince George: Mr. Jim Imrich, the

superintendent of schools, and Mr. Don Dunaway, the secretary-treasurer.

Introduction of Bills

MOTOR FUEL TAX ACT

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Motor Fuel Tax Act.

HON. MR. CURTIS: One of the frequently repeated requests from individuals

who made presentations during the public meetings on taxation last fall was

for please, all levels of government to simplify tax legislation. I spoke about

this in the March budget. Therefore I am pleased to be able to table Bill 63,

the Motor Fuel Tax Act, for the members to consider over the coming weeks. It's

a consolidation of the following statutes: the Gasoline Tax Act, which was first

introduced in 1923; the Gasoline (Coloured) Tax Act, introduced in 1946, which

provides for a lower rate of tax on fuels used off public highways; and the

Motive Fuel Use Tax Act, introduced in 1959, which provides for a higher rate

of tax for on-highway use of diesel fuel.

I can assure the House, as members will note, that Bill 63 simply

consolidates the three acts into one statute. It contains no tax policy

changes whatsoever, and only very minor administrative provisions to

make them consistent, to restructure them, and to enhance individual

ease of working with the statute. It is a step in the direction of

simplified legislation, and I trust that it will in time have the

support of all members.

Bill 63 introduced, read a first time and ordered to be placed on

orders of the day for second reading at the next sitting of the House

after today.

MUNICIPAL AMENDMENT ACT, 1985

Hon. Mr. Ritchie presented a message from his Honour the Lieutenant-Governor:

a bill intituled Municipal Amendment Act, 1985.

HON. MR. RITCHIE: Mr. Speaker. there has been a great deal of

work go into the preparation of this bill. It is really another

component part of our economic recovery at the municipal level,

designed to deregulate where possible, to streamline and to give more

accountability to those who are making the decisions at the municipal

level.

I should point out, in view of the fact that a letter was circulated

by the opposition in respect to how legislation of this nature is

arrived at, that this legislation is the result of a great deal of work

put in by a committee that fully represented all municipalities and

regional districts in this province. Not only were they fully

represented, but we also took into consideration recommendations by

municipalities who had certain things they wished to see changed in the

land-use

section of the Municipal Act. In addition to that, Mr.

Speaker, we also consulted throughout with the private sector — those

who had anything to do with the Municipal Act, particularly the

land-use sections. The people I speak of are those who, along with

municipalities and regional districts, have a role to play in

developing the kind of communities that we require and wish to see for

our residents.

So I do want to assure the House, Mr. Speaker, particularly those on

the other side, that indeed this is the result of a great deal of study

and work by people at the municipal level and the regional level, and

indeed from the private sector as well.

Bill 62, Municipal Amendment Act, 1985, introduced, read a first

time and ordered to be placed on orders of the day for second reading

at the next sitting of the House after today.

Presenting Reports

Mr. Veitch, Chairman of the Select Standing Committee on Standing Orders, Private Bills and Members' Services,

[ Page 6886 ]

presented a committee report which was read as follows and received:

"Report, Legislative Committee Room, June 26, 1985.

"Mr. Speaker, your Select Standing Committee on

Standing Orders, Private Bills and Members' Services begs leave to

report as follows:

"The

preamble to Bill PR401 has been approved, and the bill ordered to be reported as amended in committee.

"Respectfully submitted, Elwood Veitch, Chairman.

MR. VEITCH: Thank you, Mr. Speaker. By leave, I move that the rules be suspended and the report adopted.

Leave granted.

Introduction of Bills

MOTOR VEHICLE AMENDMENT

ACT (NO. 2), 1985

Hon. A. Fraser presented a message from His Honour the Lieutenant-Governor:

a bill intituled Motor Vehicle Amendment Act (No. 2), 1985.

[2:15]

HON. A. FRASER: Mr. Speaker, I move the bill be introduced and read a first time now.

I have a few comments. The provision of this bill contains a number

of amendments to the Motor Vehicle Act that allow for administrative

simplicity. For example, a person must now notify the superintendent of

motor vehicles of a change of address in writing. This amendment allows

the superintendent to accept other forms of notice, such as a verbal

notice given by a driver when he attends a motor licence office.

Other provisions include the clarification of the term "legal

entity," the setting of a minimum fine where a person uses another

driver's licence, the setting of a maximum fine for corporations where

a corporation's vehicle is involved in a serious accident, and the

removal of the prohibition of having TVs in cars to allow, under

certain conditions, the installation of these units when used as a

safety device.

Bill 60 introduced, read a first time, and ordered to be placed on

orders of the day for second reading at the next sitting of the House

after today.

HOLIDAY SHOPPING HOURS

FREEDOM OF CHOICE ACT

Mrs. Johnston presented a bill intituled Holiday Shopping Hours Freedom of Choice Act.

MRS. JOHNSTON: Mr. Speaker, the purpose of this bill is to

give operators of businesses situated in shopping malls the freedom to

set their own hours of operation on Sundays and holidays. Many of these

people, who, incidentally, represent the largest employers in British

Columbia, are locked into leases which were entered into long before

Sunday and holiday shopping was a factor in this province.

Whether or not we support wide-open Sunday shopping, I believe all merchants

should be free to decide their hours of operation on holidays. I would ask the

House to consider giving this their support.

Bill M224 introduced, read a first time and ordered to be placed on

orders of the day for second reading at the next sitting of the House

after today.

Mrs. Johnston tabled the annual report of the B.C. Petroleum Corporation for 1984-85.

MOTOR VEHICLE AMENDMENT

ACT (NO. 1), 1985

Hon. Mr. Smith presented a message from His Honour the Lieutenant-Governor:

a bill intituled Motor Vehicle Amendment Act (No. 1), 1985.

HON. MR. SMITH: Mr. Speaker, Bill 58 is primarily designed to

strengthen the enforcement part of the Motor Vehicle Act and

particularly to close a loophole which was used by persons who had been

convicted of driving offences involving alcohol in avoiding the

statutory prohibition by launching an appeal which had the statutory

effect of staying the driving suspension. So what we're doing now is

closing that loophole. The amendment will require a person appealing a

conviction to apply to the court to have the court order a stay. It

will not be an automatic stay and will not be just simply a device. The

court will then have the authority to stay the prohibition and to set

limits on the length of the stay. It's expected that this procedure

will both reduce the number of frivolous appeals launched in impaired

driving cases and improve traffic safety.

Bill 58, Motor Vehicle Amendment Act (No. 1), 1985, introduced, read a first

time, and ordered to be placed on orders of the day for second reading at the

next sitting of the House after today.

Mr. Speaker tabled special report No. 15 from the ombudsman.

Oral Questions

HOSPITAL BED CLOSURES

MRS. DAILLY: A question to the Minister of Health. The

hospitals throughout B.C. have signalled the closure of 783 acute care

beds this summer. As the minister knows, the Hospital Act requires your

permission, Mr. Minister, to close those beds. Have you decided to

close those beds this summer?

HON. MR. NIELSEN: Mr. Speaker, a number of hospitals have

indicated to our ministry that they will be putting forward

propositions — some have — to close a number of acute care beds during

the summer, an annual occurrence. I have not as yet received in written

form requests from the hospitals in question. They have been in

communication with representatives of the ministry and they are being

reviewed. I can't offer you a prediction as to how many will be

approved, because we are processing the applications as they are

received.

There has been a tradition in British Columbia and in most provinces and in many other countries as well that they

[ Page 6887 ]

take advantage of the slack time during the summer

to provide the opportunity for staff members to vacation along with the

medical people, and to do it at one time rather than spread it out

throughout the year. It's been historical fact that they do close beds

in summer, and 783 acute care beds.... There are approximately 11,000

acute care beds in operation, of which today there will be 1,500 open

but not being used. So we can see there still remains an ample supply

of beds available for emergency or urgent cases.

MR. BLENCOE: A question to the same minister. The Royal

Jubilee is forced to close 31 beds in July. In March of this year Dr.

John McCaw, head of general practice at the hospital, wrote a report

stating that the present situation is "at times a danger to patient

care." Will the minister advise what consideration Dr. McCaw's report

has been given in the ministry?

AN HON. MEMBER: Did the hospital keep unoccupied beds open?

MR. BLENCOE: They are occupied.

HON. MR. NIELSEN: Mr. Speaker, I have not discussed the

matter with that particular doctor, nor do I believe I have received

any communication from him. We discuss matters of hospital

administration with those responsible for hospital administration — the

administrator and the representatives on their board. It is for the

hospital board to discuss with staff difficulties identified or

suggested by a staff member.

We work with the hospitals with those people who have the

responsibility of management. If a specific doctor has difficulties or

believes there are certain problems, then I think it is quite obvious

that he should bring that to the attention of the chief of medical

staff — unless he happens to hold that position himself — or the

administrator or representatives on the board. If they believe the

situation exists, obviously they will then communicate that to the

ministry officials, and we will possibly do an audit or a review of the

case. But we seldom communicate directly with an independent or

individual doctor when it is to do with a hospital problem.

MR. BLENCOE: In March of this year, Dr. McCaw who is, as I

indicated, head of general practice at the hospital, wrote that several

close calls had been recorded up to that time. I can tell the minister

today that we're getting close calls again. The corridors are getting

filled up again and we have a really unfortunate situation at the

hospital. Dr. McCaw stated: "Seriously injured patients have to use

corridors for bed space overnight and for many hours the next day." Dr.

McCaw has also stated to me that some of the sickest people in the

hospital are being put on stretchers in the corridors in an emergency

department.

AN HON. MEMBER: What's the question?

MR. BLENCOE: What action has the minister taken to monitor

the situation at the Royal Jubilee in light of the unfortunate

necessity of closing more beds in a matter of days?

HON. MR. NIELSEN: It is the care a patient receives in the

hospital that is paramount. If the member is suggesting, because there

is a blockage in a certain ward, that the patient be denied access to

medical care in the hospital rather than be placed in a corridor where

they may be receiving the medical care.... If that member is suggesting

that if there is no immediate bed available we send the patient

away.... The responsibility of those in the hospital is to care for the

patients.

Mr. Speaker, each emergency ward has a capacity. Frequently that

capacity is used and further admissions come in. They are treated by

the staff at the hospital to the best of their ability at that time. If

a person is on a stretcher or on a bed in a corridor, but is receiving

proper medical care, that is paramount. The person then would be placed

in a bed when one became available. It is a very difficult real world

in running a major hospital. You do not have the luxury of deciding

when patients are going to need care. The hospitals in British Columbia

— Royal Jubilee included — offer an incredible service to the citizens

of our province. I have not heard that member speak out when there

perhaps are empty beds, surplus beds waiting for someone to use. We are

looking at a system whereby we try to accommodate the maximum number of

people in a given year. An individual doctor may have some difficulties

with management of a hospital; that's for him to resolve. It is the

patient who comes first, not an independent medical practitioner.

MR. BLENCOE: He's warning you.

HON. MR. NIELSEN: I'm not sure if the member is speaking of

the incident where he barged into the hospital with a television crew,

annoying a great number of patients, without permission from the

hospital....

Interjections.

HON. MR. NIELSEN: If the member tries it again, I've advised

the management to kick him in the butt and tell him to mind his own

business and leave patients alone. The member may think it's funny or

humorous for a television camera to be trained on a person who is very

ill, intruding into their privacy for some cheap political trick.

Interjections.

MR. SPEAKER: Order, please.

MR. BLENCOE: Supplementary, Mr. Speaker. The leading doctors

in this community.... The chief of general practice, Dr. Scott Wallace,

one of the most respected surgeons and doctors in this province, is

telling you you have a dangerous situation at Jubilee Hospital, and you

have patients who are the sickest who are stacked up in corridors for

30 to 40 hours. It's totally intolerable. Does the minister regard

seriously ill and injured patients lying about corridors in emergency

wards as an adequate standard of care for our citizens? Particularly in

this community senior citizens fie on these stretchers for 30 or 40

hours, and the doctors and nurses are saying they cannot guarantee

their safety. The report says it: they cannot guarantee the safety of

these patients. Do you consider that adequate care, Mr. Minister?

[2:30]

MR. SPEAKER: Order, please. Hon. members, if questions are addressed to the Chair and through the Chair to the

[ Page 6888 ]

individuals responsible, we take away from the

personality aspect of it and we conduct a generally orderly question

period. If members follow that course, we will find that our results

are much more effective.

HON. MR. NIELSEN: Mr. Speaker, in keeping with the purpose of

question period, I wonder why, since it's almost the end of June and

the member is speaking about something apparently with reference to

March, how it becomes of such importance that it should be asked in

question period today. The member has not raised that issue since March.

The management of the Royal Jubilee Hospital and the other hospitals

in our province retain the expertise they have had for many years. I

believe the board of the hospital is going about managing the affairs

of the institution in a responsible manner. It's fine for the member to

second-guess board management's decisions. It's regrettable when any

patient is in a hospital and unable to receive optimum care at that

moment. But, Mr. Member, we are dealing in hospitals with emergency

situations frequently, unpredictable situations, and I believe the

staff almost all of the time respond with their professional

capability. You cannot predict.... You cannot guarantee optimum

conditions in every circumstance. Such is the nature of a major general

hospital.

The member speaks of some people who are required to be out of a

ward for a period of time. That is regrettable. We're not running the

Holiday Inn; we don't take reservations only. But, Mr. Speaker, there

are 11,000 people in acute-care beds in the hospital today. You are

dealing with thousands of people who require treatment, frequently

under unforeseen circumstances. The hospitals practise in a

professional way.

There are going to be situations, just as there are in every other

avenue of life, in which optimum conditions cannot be met. They are

exceptions. The boards of management of the hospitals review such

occurrences. They are responsible people, and they accept that

responsibility. Our system of hospital care in B.C. is excellent; but

there are exceptions to every rule.

I know the member is not criticizing the staff of the hospital or

the management of the hospital or the board of directors. I believe

they are attempting to resolve their problems in the best possible way.

It has been a tradition to close beds during the summer months.

Frequently it is inconvenient for the patient to be in hospital during

the summer months. Frequently it is difficult to staff hospitals when

staff members are taking vacations during the summer months. Frequently

the physician wishes to take a vacation during the summer months. Beds

have been closed every year in the summer. Beds are closed over the

Christmas holidays every year. It would be irresponsible to have a

massive number of beds sitting empty yet staffed when people are not

using them. Mr. Speaker, as I mentioned, approximately 1,500 acute-care

beds are empty in the province today, waiting for patients.

LNG PROJECT

MR. WILLIAMS: A question for the Minister of Industry. In recent weeks

the Minister of Energy (Hon. Mr. Rogers) has indicated that the LNG project

estimated to be worth $2 billion is getting close to fruition, and that they

are simply arguing about price with respect to gas. Can the minister advise

the House whether he has been involved in those discussions, and can he assure

the House that if this project is approved, all the fabrication and construction

will take place in British Columbia, that there will not be fabrication abroad

with only assembly in British Columbia?

HON. MR. McCLELLAND: That is a private sector project, and it

will be treated as a private sector project. I can't make those

guarantees, nor would I attempt it.

MR. WILLIAMS: We have 50 percent to 70 percent of our

tradesmen idle: the boilermakers, the iron workers, the pipefitters,

the electricians. What is being offered in this deal is gas at a price

of a quarter of what we're charging the Americans. There are major

concessions in terms of public sector policy. Surely the trade-off is

work in British Columbia. Can the minister not guarantee that the

government will demand that all of this construction takes place here

in British Columbia?

HON. MR. McCLELLAND: If the project goes ahead, Mr. Speaker,

it will be built at Grassy Point, and I can guarantee that all the

construction will take place there.

MR. NICOLSON: Mr. Speaker, under standing order 47A(

b) it

says that questions and answers shall be brief and precise, and stated

without argument or opinion. I can well appreciate Mr. Speaker's

difficulty in allowing a fair, interesting game to take place and in

not intruding too much into the question period, as it makes it rather

impossible for it to have any real meaning if we adhere strictly to

these rules. But I would wish that Mr. Speaker would review the amount

of time taken up, particularly by the Minister of Health in answer to a

question which was reasonably precise, because it has severely hampered

other questions being asked in this House.

MR. SPEAKER: Hon. Members, as the Chair has observed on many

occasions, if the strict rules that govern us in question period were

applied, there would virtually be no question that would be allowed

under those strict guidelines. Nonetheless, again, the spirit of

question period is one that must prevail as well. I would recommend

this to all members, both in the questions and in the answers.

AIRPORT SECURITY

HON. MR. SMITH: I would like to make a ministerial statement

on the subject of airport security, and I will touch upon the security

at Victoria International Airport as well.

Arising out of the terrible air disaster of the weekend and the

investigation into that disaster, and also the investigation of an

explosion that occurred on another aircraft in the Orient, the RCMP,

nationally, have launched a major investigation in Vancouver which

involves municipal, provincial and federal RCMP working together under

the direction of a senior RCMP officer. They are operating under the

Security Intelligence Service Act. As a result of this investigation,

security at Vancouver International Airport has increased considerably

in its intensity, particularly for all baggage destined for

international flights directly or indirectly through connecting

flights. There has also been an increase in manpower to handle airport

security, for which the RCMP is responsible, and there has been

increased security from

[ Page 6889 ]

private security agencies for security checks of passengers prior to their entry into a secure area.

One of the offshoots of this security beef-up and investigation has

been that the federal government has postponed a decision that it made

in January to withdraw RCMP from a number of secondary airports — they

are considered by volume to be secondary airports. Those airports

included Victoria, Quebec City, Charlottetown, I think Regina, and a

number of others. When that decision was announced in January, I

protested that decision and wrote to the federal Minister of Transport

on February 7, 1985, and expressed the opinion that to lessen the

security is unwise and creates an unnecessary risk to the personal

safety of our senior air travelers, and recommended that Victoria

airport, which serves the capital city of our province, particularly in

view of it being Expo year, 1986, should continue to have RCMP

I might say that I've had two or three meetings since then both with

Mr. Mazankowski and last week with Mr. Elmer McKay, the

Solicitor-General, who's in charge of the RCMP in Ottawa. Mr. McKay

told me before there was a security problem arising out of the terrible

disaster at the weekend that he was now advocating a review of the

policy of removing the RCMP from the airport in Victoria and the other

secondary airports. We received notification today that in fact the

Minister of Transport has put a hold on the removal of the security

service from Victoria airport which was scheduled for July 30 of this

year. The five men were going to be transferred to other duties, and

they were going to use a commissionaire service for security. That is

on hold, and for the time being the RCMP will remain at Victoria

International Airport. So our representation seemed to have had effect.

But I guess it's a sad commentary on life that there has to be a tragic

disaster before policies are reviewed. Anyway, I have that good news:

the RCMP will remain at Victoria International Airport for the time

being. I commend the federal government for that.

Orders of the Day

HON. MR. GARDOM: Committee on Bill 36, Mr. Speaker.

TRAVEL AGENTS AMENDMENT ACT, 1985

The House in committee on Bill 36; Mr. Strachan in the chair.

section 1.

MR. MacWILLIAM: Mr. Chairman, there are a number of questions

that remain unanswered as a result of second reading of the bill. I'd

like to reiterate some of these questions and some of the concerns. The

first question is: what is the amount of the loan that the minister

wishes to advance through this bill? I might point out that the cost of

meeting the Century Tours failure has been estimated at approximately

$280,000. About $130,000 was paid out to get the stranded tourists

home. So it will be interesting to see whether the proposed loan is

large enough to restore the fund, or whether it is a bare minimum and

the costs are still to be borne by the anticipated travel agent levies.

Secondly, can the minister assure the House that the amount

forwarded to replenish the fund will in fact be sufficient for

foreseeable future needs — if in fact the loan is made?

A third question that comes up deals with a previous statement that the minister made in the Times-Colonist

on March 29, 1985, and the minister is quoted as saying: "This loan

should cope with the present emergency; however, the government

certainly does not expect to be called on to do this again." In the

context of his statement, it begs the question as to why there is no

provision or sunset clause in this bill, if that in fact is his

intention.

[2:45]

Fourthly, given that the travel agents Mr. Addison and Esther Smith had notified

the ministry way back last fall, when there was still time to avert the collapse

of Century Tours, steps were not taken. The question is why should an agent-generated

fund now pick up the tab for customers' losses? The minister may argue that

there was insufficient time or ability for action to be taken. If that is the

argument, the fact is that this bill doesn't change that; it's only

basically a legislative change brought in by the minister — despite, I might

add, comprehensive recommendations that had been made some time back in the

Shandro report that was compiled about four years ago.

I'd like to remind

the minister of some of the comments made in that report — comments, I might

add, that the government has not acted on. Some of the concerns were that the

government should consider: increasing the level of the travel assurance fund

from a base of $500,000 to $1 million; an immediate assessment to bring the

fund up to the $500 mark; increased initial contributions; excess insurance

being obtained to ensure that if the fund were ever depleted there would be

moneys available to cover all claims — instead, the government seems to want

to make loans directly to the fund; and, lastly, that bonding of security requirements

be instituted for extraprovincial companies if there are any further claims

against the fund as the result of the failure of such companies. Had these recommendations

been acted upon, SPIA, the.... I'll have to go back and.... Well,

the company involved, anyway, would have been bonded in fact, and the taxpayers

would not now be held responsible for bailing out the fund with a loan to that

fund. I think those recommendations were made way back in 1981; not much has

been done with regard to implementing them. This legislation certainly doesn't

seem to address that fact.

Some more questions to the minister. The necessity of this bill

hinges on information that has not really been made public by the

minister. On January 10 the Times-Colonist reported that the

provincial government had taken control of the financial aspects of

Century Tours. Stewart Goodings said, basically: "We're in control of

the company's finances." The House, I think, Mr. Minister — through

you, Mr. Speaker — is entitled to basic information, such as what were

the assets and liabilities of Century when the government did take

control? Does the government still have control of Century's assets?

What has been the net change in the company's worth in the six months

of control? What payments were authorized and why? Has the minister

decided to table Century's accounts for fiscal 1983 and '84, as well as

'84 and '85? What steps has the government taken to protect the public

interest either by getting Century Tours to claim against the airline

or by directly suing South Pacific Island Airways, since the failure is

their direct responsibility? So there are quite a number of questions

that were raised. As I mentioned, these questions were hit upon during

second reading. The minister didn't furnish answers to all of them, and

I wonder if he'd like to comment on them now.

[ Page 6890 ]

HON. MR. HEWITT: I have a great deal of difficulty finding

out whether we're in second reading or committee. The member is to be

dealing with the structure of the section, not reviewing second

reading. However, I will take the opportunity to respond as best I can

to the member to satisfy his concerns. But I would suggest to him that

he read Hansard for second reading, from which he will get most if not all the answers to the questions he has raised.

The reason for

Section 1 is the fact that there are insufficient

funds in the travel assurance fund to pay claims. Therefore

Section 1

allows the government to make an advance or a loan. The future funding

of the travel agents' assurance fund will be through assessment, as it

has been in the past. The loans should cope with the present emergency,

which is the reason for this bill, and it's not the government making

the advance or the loan, as the member made mention; it's the taxpayer.

The

section is worded the way that it is because we want assurance that

the taxpayer is reimbursed, along with any interest that may be

allocated to that advance or loan from the Minister of Finance. There's

no sunset clause because the piece of legislation allows the

flexibility, should there be another crisis in the travel industry

where assistance is required, to use this ongoing vehicle to protect

the traveling public. The advance or loan would be made, Mr. Chairman,

but at the same time the industry itself would have to reimburse the

taxpayer of this province. So that's why there's no sunset clause.

The member went on to talk about Century Tours' problem: that we had

notice of it, and had we acted, the problem would not be as severe as

it is. I would correct the member. Had we acted the way the member

indicates upon the first advice that there was a problem, the loss

would have been substantially more. We worked with the travel agency,

with the people in the industry, and as a result reduced the exposure

of the taxpayer in assisting this fund.

He mentions the Shandro report, which of course has nothing to do

with this

section at all. However, Mr. Chairman, we must recognize that

the recommendations to increase the level of the fund automatically

mean increased assessment to the travel agents themselves, because they

fund this assurance fund. We have the vehicle to increase their

assessment or to make special assessments from time to time if so

desired. To have increased the level of assessments at a time when the

economy is not as buoyant as in previous years would mean that some

travel agents would have been sorely pressed to meet those increased

assessments. So we were taking into consideration the impact on the

travel agents themselves.

I think the member raised the issue of the necessity of the bill:

that had we acted there wouldn't have been any necessity for it. He

talked about Mr. Goodings. Mr. Goodings took control of the situation,

he had investigators in to audit the books and review the

circumstances, and then after we were fully informed, he suspended the

company.

MR. CHAIRMAN: Just before recognizing the member for Skeena,

let me as your Chairman observe that some considerable latitude has

been allowed the member for Okanagan North (Mr. MacWilliam), as well as

the Minister of Consumer and Corporate Affairs. But we are in committee

stage now and this act, specifically in this section, enables the

government to make advance or loans. I think we should limit our debate

to that ability of what the

section says.

MR. HOWARD: Mr. Chairman, the minister was quite correct when

he said it's the taxpayers who will be lending the money. I wish the

minister and the government would always remember that, because when

it's to their political advantage I notice they run around saying it's

the government that's doing things. But this is true; it is the

taxpayer through the agent of the taxpayer, who is becoming a banker.

When government borrows money on behalf of the taxpayers, they pay

the market rates for those borrowings, whatever they might be —

long-term bonds, T-bills or the like. When the government, acting as

agent for the taxpayers in a banking capacity, lends money out, it

would seem to me that taxpayers are entitled to get market rates for

the money so loaned. That has not always been the case. The Minister of

Finance — who is referred to in this

section — approved by the Minister

of Consumer and Corporate Affairs at the time, proceeded last year to

authorize the lending of $445,000, I believe it was, to a gold mine at

no interest. I hope that is not going to be the practice here. If we

are going to lend money, then taxpayers are entitled to get correct

market rates for the money they're lending.

Section 1 approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 36, Travel Agents Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 22, Mr. Speaker.

REVENUE SHARING AMENDMENT ACT, 1985

The House in committee on Bill 22; Mr. Strachan in the chair.

Section 1 approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 22, Revenue Sharing Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 3, Mr. Speaker.

[ Page

6891 ]

FOREST AMENDMENT ACT, 1985

The House in committee on Bill 3; Mr. Strachan in the chair.

Section 1 approved.

section 2.

MR. HOWARD:

Section 2 is the provision that permits a holder

of a forest licence basically to roll it over into a tree-farm licence,

which is permitted under the Forest Act at the moment. What the

amendment seeks to do is to say that the holder of the forest licence

can select that portion which he wants to roll over into a TFL, and

either abandon the portion that he doesn't want that has been used up

or contains timber that in the eyes of the holder of the forest licence

is not suitable to be included in a TFL — in other words, he doesn't

want it — and thus have that revert to the Crown, or to enter into

another arrangement; in other words, to keep the balance in his

possession and under his control in the form of a forest licence or a

timber sale licence.

[3:00]

In simpler terms, what that means is that the holder of the forest

licence can do whatever the holder of that licence wants to do with

respect to keeping timber or letting it revert to the Crown or putting

it into a TFL or doing whatever that person likes, subject to approval,

of course. But under the provisions of the Forest Act the basic force

of it is that holders of licences to cut timber can basically do

whatever they feel like. That's the force and effect of the

administration of forestry under this government and under this

minister. I understand this minister has been the consistent minister

ever since the government was formed, more or less, so he's been the

Minister of Forests for the past ten years; so while we're talking

about the attitude of government, we're also talking about the attitude

of the minister.

It doesn't seem to me appropriate that we should be continuing to

alter the laws of this province with respect to a public property

called timber simply to suit the convenience of companies that have

licences to cut that timber under the Forest Act. That's what this is

doing: simply endorsing and approving further the idea that the

government has abandoned its responsibility in terms of protecting the

public interest, and is subjecting the law and the development of

statutes with respect to forest licences to suit those who want to cut

the timber. That's wrong in principle.

Secondly, the minister, during second reading in talking about TFLs

and seeking to establish more of them, or allowing for more of them

under this particular amendment, said that it was not the intention of

the government to issue TFLs that would result in further concentration

of control. He referred to the Pearse commission report in that regard

and was saying that's what Professor Pearse said as well. Well, that's

just a lot of nonsense, and the minister knows full well that it is,

because while it may be the intention and the desire at any given time

to keep an eye on concentration of authority with respect to the

ownership and control over public forest lands in the province, in no

way does this act or this bill or any declaration of government

interfere with or intrude upon the opportunity for companies to sell

themselves, one to another.

As an example, Noranda now controls Mac and Blo. MacMillan Bloedel is no longer

that home-grown company existing in British Columbia that the Premier identified

as being not for sale at some time in the future. But Noranda entered into the

game and bought a controlling interest in Mac and Blo. There's a concentration

for you. The minister has not indicated in any legislative stance or policy

statement that he is going to prevent one company taking over another, that

he is going to prevent one company buying additional common shares in another

company, and thus effectively controlling it, depending on the distribution

of shares in the market and how widely they are held; nor is he moving to prevent

one company from owning more than 50 percent of another, and thus having effective

concentration of control over it.

A number of years ago, when the original forest management licences,

the predecessor of tree-farm licences, were brought into this

Legislature, the government of the day declared unequivocally that

forest management licences were not for sale; they would not become a

saleable commodity; there would not be a concentration of power and

authority within the forest industry into fewer and fewer hands having

a greater and greater domination and control over the forest land. One

company in that period of time, B.C. Pulp and Paper, I believe it was,

acquired a forest management licence. No sooner was the ink dry on the

licence than they sold the company. The company was bought out, I

believe, by Alaska Pine and Cellulose — I may have the names of the

companies a little mixed there. So the declaration of government that

forest management licences were not for sale suddenly became

meaningless. The company was for sale and the company was bought, and

B.C. Pulp and Paper's forest management licence went along with the

sale. We had a concentration, and that's exactly what's going to occur

with this.

The comment of the minister that there's going to be no

concentration of power and control in the industry is just balderdash.

He doesn't appreciate what's involved here. And there isn't any way in

which his government, or any government in Canada, has taken steps to

compress the takeover activity that has been prevalent throughout North

America in the last few years, the result of which has been

concentration of control.

This is simply a bill that once again exhibits the attitude of the

government that whatever industry wants, industry gets, and the public

good be damned. That's the hallmark of this government; that's the

hallmark of this minister's administration. It's regrettable. It's a

sad commentary on the democratic institution called the Legislature

when government policy responds favourably to the requests and the

demands of the group that is supposed to be regulated in the public

interest. It's a sad commentary upon government's perception of what

its role is when it becomes the handmaiden to the group that it is

supposed to regulate. When the government becomes the regulated agency

and industry becomes the control factor, then the public interest is

not served. It is not served by this minister, and hasn't been for the

last ten years. I see nothing at all in this particular legislative

proposal before us to dilute that impression; it substantiates it

completely, and indicates this government's barrenness of attitude

about protecting the public interest.

HON. MR. WATERLAND: Dealing with

section 2, the member went

into a rather long discussion of the history of forest licences in

British Columbia. I'll try to confine my remarks to this section.

[ Page 6892 ]

The industry in British Columbia consists of those people who own

the companies — the shareholders, the proprietors — those people who

manage the industry, and those people who work in the industry. Somehow

this conglomeration of people is evil in the mind of the member for

Skeena. I've never taken that position at all. I've taken the position

that the industry, as I've described it, is an important part of the

economy of British Columbia, and it's my responsibility.... In fact,

it's laid out in the Ministry of Forests Act that we should, as a

government, have the responsibility of ensuring an economically viable

and competitive forest industry in British Columbia.

Mr. Chairman, the member referred again to Dr. Peter Pearse, and I

have reproduced a page from Dr. Pearse's report. As a matter of fact, I

had the pleasure of the company of Dr. Pearse at lunch time today. We

had an excellent discussion on many matters relating to forestry. We

discussed in some detail his comments in the report about tree-farm

licences.

Mr. Chairman, the Pearse report suggests that the

section which we are dealing

with is appropriate. We have made provision in a previous amendment to the act

for the rollover of other types of licences, mainly the forest licence into

the tree-farm licence. Dr. Pearse stated in his report: "Accordingly, the

government should consider sympathetically applications in these cases"

— referring to a change of form of tenure — "only if the applicant will

release other rights they hold in public sustained yield units equivalent in

annual volume to the allowable cut of the lands to be contributed to the TFL

by the Crown."

That is exactly what this

section proposes to do. I'll give an

example of what might happen, Mr. Chairman. Last year public hearings

were held in Quesnel on a tree-farm licence application by Dunkley

Lumber Ltd., which is a small family-owned corporation. It can hardly

be called a large corporation; they have a modest sawmill. They do an

excellent job of manufacturing lumber and marketing it.

They applied for a tree-farm licence and hearings were held. As it

happens, there is going to be a need at some time in the future of

transferring the cutting areas operated in by various licensees in that

general part of the province, the Quesnel area, to another area because

of an imbalance that we have right now in availability and access to

timber.

So in order to sustain that cut at some point, a part of the cut of

each licensee in that area is going to have to be transferred to

another area. If I defined a tree-farm licence and agreed that a

tree-farm licence for Dunkley, as suggested by them, is appropriate,

then I wouldn't have the ability to have them share in the need to move

to this other part of the province in a few years time when the cut has

to shift to another area.

So it may be appropriate for me, in considering this tree-farm

licence, to suggest that we do not issue them a tree-farm licence which

will include enough land area to support the total cut that they have

under forest licence. But perhaps it would be better to give them a

tree-farm licence supporting a part of that cut and retain some of it

under forest licence so that that

part can be transferred around to

help in such things as the shift of harvesting area that may be

necessary to have them take

part in the harvest of some bug-killed wood

as that becomes necessary.

The member suggested in his discussion that once a company — one of

these big, bad companies — have used up a part of their licence and

made it uneconomic, they can then turn that back and take up a new

area. In saying that, the member expresses a misunderstanding of the

nature of a forest licence. A forest licence is not site specific. A

forest licence is your right to harvest a certain volume of timber a

year within a timber supply area. A company cannot use up a part of

their licence in an area and then have it turned back to the Crown.

The member knows full well that the licensee is responsible for an

area until it is regenerated, and because it is not a site specific

licence, you can't use up a part of your licence and then turn it back

to the Crown. That just doesn't make any sense at all.

Mr. Chairman, the intent of this

section is to provide some

flexibility in dealing with the rollover exchange of forest licences

for tree-farm licences. Again, I will take exception to the remark made

yesterday by one of the members opposite when they said that Dr. Pearse

suggested that tree-farm licences should not be issued in the future,

because Dr. Pearse made no such statement. In context with the idea, he

said that they should not be issued in the future if it would lead to

further concentration in the industry. As a matter of fact, I'll read

another comment made by Dr. Pearse regarding tree-farm licences on page

118 of his report. He says:

"However, tree-farm licences were designed to promote

a high standard of management not only on Crown lands but also on

private lands and/or temporary tenders contributed by the licensee.

This touches on the unique advantages of this tenure form. Today, with

more than half of the old temporary tenures and almost one-fifth of the

Crown granted forest land incorporated into tree-farm licences with

sophisticated management plans, the system must be judged successful in

this respect."

Mr. Chairman, it is that success in management provided by the

tree-farm licence form of tenure which encourages me to carry on and,

where appropriate, have additional tree-farm licence tenures.

MR. HOWARD: The operative word in what the minister has just

said is "flexibility." Flexibility to do what? Flexibility to be able

to respond favourably to whatever industry wants; that's what

flexibility means in this minister's mind. The opportunity to be

flexible and respond. That's the whole history in the last ten years of

activity: flexibility to respond to what industry wants — not what the

general public deserves to have, but what industry wants.

The minister referred to the act setting up his ministry. He says

his duties and responsibilities are there. Let's have a look at what

some of them are. That in itself is revealing. I argued yesterday, and

I argue it again, that in the Ministry of Forests Act,

section 4(

e) says that the purpose of the ministry, under the direction of the

minister, is to "assert the financial interest of the Crown in its

forest and range resources in a systematic and equitable manner."

Whatever the Crown possesses — and that's trees — that's what is owned.

That's the asset that the people of this province own, administered by

the Crown.

[3:15]

[Mr. Ree in the chair.]

Over the years there has been an increase in the extending of

non-competitive timber to industry. That's what a TFL is —

non-competitive timber. Whenever you allocate timber on a

non-competitive basis and say to industry, to a corporation, "You don't

have to bid on this timber; it's yours for a long

[ Page

6893 ]

period of time at a fixed rate," then I submit that

the minister, when he's doing that, is not asserting the financial

interest of the Crown. He's asserting the financial interest of the

corporation when that happens. He is saying that the Crown's interest,

which is the people's interest, is going to be ignored.

The minister himself, not too many weeks ago, in response to some questions put to him by the Prince George Citizen ,

I believe it was, said: "Yes, competition is gone." It's gone because

he, the minister, gave it away. He participated in giving away that

competitive element. He said: "I suppose if we could do that with a

small operator, we could do that too if we wanted to." That's the

direction in which I submit we are heading.

The financial interest of the people of British Columbia as

represented by the Crown is to get the highest price they can for the

commodity and the asset that they possess when it's sold. That's the

capitalist system. That's the free enterprise system that this minister

wraps his arms around and loves to death. You get the best price you

can for the product that you're selling. But not when it comes to

timber. When it comes to timber, the attitude of the minister is get

the lowest price he can for the people of the province, for their

possession. Let industry get the benefit, not the people. I submit, as

I said yesterday, that in my view the minister is guilty of not

following the requirement of the law in that regard. Every time more

non-competitive timber is given away or allocated, the public interest

in respect to stumpage is not exerted, not asserted and not protected.

Secondly, the minister's reference to the Ministry of Forests Act, I

think, shows fairly well where his heart lies, because one of the other

provisions in

section 4 points out that it is the purpose and function,

"under the direction of the minister, to...encourage a vigorous,

efficient" — now those are good words, acceptable words — "and world

competitive timber processing industry in the province." What does

"world competitive" mean? World competitive implies large, integrated

forest companies. World competitive is to encourage "world competitive

timber processing industry in the province" that militates against the

opportunity of a small operator; that works to the detriment of the

small logger and the small sawmill operator — especially the small

logger, who has to find a market here for the timber that that logger

may log. He has to sell those logs to a sawmill or a pulp mill — to a

timber processing industry.

So long as those words remain in the Ministry of Forests Act and are not diluted

by any other reference to encouraging small business, then the minister's

force of law and the force of his own philosophy are going to work against the

interests of the public in British Columbia, because they work against the interests

of the small operator. The small operator gets what's left. He gets stepped

on every inch of the way. I know from my experience that the small logger, the

small sawmill operator, the small tie mill or whatever the processing unit is,

employs more workers per dollar of capital invested than does a large, integrated

corporation. They employ people in the smaller communities for longer periods

of time than does as large corporation, given certain economic factors coming

into play. They have less in the way of head-office deadwood to support, because

they manage their own affairs in the community and are able to expend their

cash flow in the community to a better extent than the large corporation; and

they are a greater part, generally speaking, of the social fabric of the community

than is a large corporation. The small operator is able to make decisions at

a moment's notice in responding to whatever market factors may exist; it

doesn't have to wait for an order from head office to come filtering down

through a corporate bureaucracy as to what to do or what not to do. So long

as that

section of the Ministry of Forests Act is barren of any reference to

encouraging small logging and small timber-processing facilities in this province,

the small logger and the small sawmill operator is going to get stepped on.

It all leads in one direction, where we've been going for at least

the last ten years; we started it ten years ago and it has intensified

every year since then. It is a catering to a large integrated forest

corporation, and not paying attention to the interests of the general

public and the small operator and the small logger. There is no

reference whatever, in this bill that's before us or in this

section

that gives any cognizance, except later on.... We'll deal with that in

another

section of the bill. I can't now, because it is in another

section. There is nothing here before us at the moment under this

section that gives any recognition or cognizance to the needs, the

requirements, the hopes and the destiny of the small operator in this

province, and I submit that what we've got to do, if we want to have

any viability and any growth and development in the logging, sawmilling

and timber-processing industry, is to pay attention to the small

operator and quit sucking up to the large integrated corporations all

the time.

MR. CHAIRMAN: The Chair would comment that under

section

61(2) of the standing orders of the House, agreed to by all members in

the House, speeches in the Committee of the Whole must be strictly

relevant to the item or clause under consideration. To allow something

that is not in a

section to be debated when trying to be relevant to

that

section would allow anything to be debated rather than the

section, because it would leave it wide open. If the members, in future

debate, would be relevant to what is in the

section and not relevant to

what is not in the section, debate might be more orderly.

MR. HOWARD: On a point of order, Mr. Chairman. I don't know

if you were the individual in the chair a moment ago, but I was simple

responding to precisely what the minister said.

MR. CHAIRMAN: I, regretfully, was not in the chair when the

minister was in his debate, and if he was guilty of the same omission —

if you can be guilty of omission — then possibly so, but the Blues

would reflect that. The Chair would ask that debate be relevant to the

specific

section and what is in the section, not what is not in the

section.

HON. MR. WATERLAND: In my response to the member's rather

broad-ranging initial remarks I made a passing reference to the

Ministry of Forests Act, which apparently, in his mind, opened the door

to discussing everything in that act.

I have said many times that basically competition for a big part or

the bulk of the timber harvest in British Columbia every year no longer

exists. That's a fact of life which has existed for a number of

decades. It's much like the situation in the United States. In the

United States 65 percent of the timber values are not subject to

competition because they're on lands that are owned in fee simple. The

balance of the lands under state and federal jurisdiction are auctioned

off in some cases, and in other cases they're disposed of in other ways.

[ Page 6894 ]

In British Columbia, even though we do not have a casino-like

auctioning system, we do acquire the Crown's interest in the timber

through our appraisal system. As a matter of fact, at times when our

appraisal system, based upon the value of the products that can be

produced, indicates a value below a certain minimum, then we acquire

more than the real appraised or actual value of the timber. The members

opposite don't seem to agree to that. However, it is a fact that's been

demonstrated here a number of times, and a couple of years ago during

the countervailing duty issue it was agreed by the international trade

court of the Department of Commerce in the United States that that is a

case where the appraisal system is appropriate, and it does acquire for

the Crown the appropriate values for timber.

Mr. Chairman, when referring to the portion of the Ministry of

Forests Act that requires the Crown to encourage and maintain a world

competitive forest industry, the member suggests that because a part of

the industry is world competitive, it can only be a large company. He

built his whole speech on saying that because a company is world

competitive, it has to be large, and that therefore that act refers

only to large companies.

That's rather a convoluted way of trying to support a mythical

position. Mr. Chairman, we have world competitive companies throughout

British Columbia that are both large and small. I do not think that

large is necessarily bad or good, nor is small necessarily bad or good.

There are some large companies which are not the most efficiently

managed companies, as there are some small companies. Size does not

determine efficiency in any way.

I have a small company in my constituency. I have referred to it a

number of times, Ardew Wood Products Ltd. It's a family-owned

operation, world competitive, and a great deal of the products that

they manufacture and sell go to Japan. They have developed a particular

market for their products. They are a world competitive company, and

they are small.

MR. CHAIRMAN: Order, please, Mr. Minister. I am still having

a great deal of difficulty relating your debate to

section 2 of Bill 3,

which reflects on

section 27.1 of the Forest Act, which deals with

surrender of forest and timber sale harvesting licences only.

HON. MR. WATERLAND: You're right, Mr. Chairman. Therefore I

am unable to respond to the comments made by the member for Skeena,

because his comments were obviously out of order and not referring to

section 2.

MR. HOWARD: In asserting the financial interests of the Crown

with respect to this, I am advised that what the ministry is now doing

is establishing its appraisal system on the basis of contract price for

logging.

HON. MR. WATERLAND: Mr. Chairman, what the member has just stated has nothing whatsoever to do with

section 2.

MR. HOWARD: No, it only has to do with truth.

MR. CHAIRMAN: Order, please. Hon. member, we are in committee

on Bill 3. The rules of this House, which are established by the

members of the House and not by the Chair, reflect that debate should

be relevant to the specific section. The Chair has no alternative but

to follow the rules set by the members of the House.

MR. HOWARD: I admire your determination in that regard. I

thought what I was saying was completely germane to this section. When

I said all I was doing was saying the truth, I was in no way casting

any reflection upon anyone else. I say it is factually so that the

contract price is what the appraisal system is based on.

MR. CHAIRMAN: Order, please. On

section 2.

[3:30]

MR. HOWARD: We are talking to

section 2 — with respect, Mr.

Chairman — about moving, under certain requirements, a forest licence

to a tree-farm licence. What do you do about that? Do you just

completely ignore what happens when that occurs? I submit not, because

they are amending

section 27.1. In order to have some understanding of

what it is we are doing, we obviously need to refer to the whole of the

section. I was simply saying that the minister is now embarking upon a

program of reducing the public interest by establishing an appraisal

system upon whatever the contract price is and not on the market price.

The public interest is not served by that process, and the public loses.

HON. MR. WATERLAND: Once again, the member's comments have nothing whatsoever to do with

section 2.

MR. HOWARD: But it's the truth.

MR. WILLIAMS: The naivety of this man who is Minister of

Forests leaves one aghast. I don't know if it's just plain thick or

just plain naive, but he seems to think that because there are these

various interests in the public's timber, they are all the same, all

equivalent, all equal. So the Bronfmans and Adam Zimmerman of Noranda

and the rest have the same interest as he should have or we as

protectors of the public interest should have, or the workers should

have or the managers should have.

I cannot believe the level of stupidity that we are getting here. This is what the minister was talking about.

Interjection.

MR. WILLIAMS: Don't you talk about the rules of order in the

House when you peddle those kinds of phony lines you did two minutes

ago, wanting a double standard applied by the Chairman of the House...

MR. CHAIRMAN: Order, please.

MR. WILLIAMS: ...every time he needs a double standard to protect himself.

MR. CHAIRMAN: Order, please. The Chair likes to give a member

an opportunity to develop his argument in debate, but sees little

relevance to possible personal references to the minister relating to

section 2 in developing your debate. Would the member continue on

section 2.

HON. MR. GARDOM: On a point of order, Mr. Chairman, it's

entirely up to the second member for Vancouver East if he wishes to get

himself heated up in this chamber;

[ Page

6895 ]

that's his prerogative. But I quite frankly object

to him utilizing the word "phony" or implying that I'm exercising any

influence over the Chairman. I ask him to withdraw those statements.

MR. CHAIRMAN: Would the second member for Vancouver East please withdraw.

MR. WILLIAMS: If the Chair requests it, I will withdraw, Mr. Chairman.

Interjection.

MR. CHAIRMAN: Order, please, hon. minister. The Chair has

requested the member to withdraw, and the member has withdrawn. The

member continues.

MR. WILLIAMS: It is the idea.... No wonder we are in the

trouble we're in in this industry, when this minister thinks that all

those interests are the same, and that everything is fine. That's the

General Bullmoose idea: if it's good for General Bullmoose, it's good

for the country. Well, it just ain't so. The people of British Columbia

own the forests of British Columbia. And only under this minister have

we got to the sorry state where it costs us more to sell our trees than

we get back. Running his slipshod ministry costs $259 million, and our

return is $150-odd million — $100 million. It takes real skill to be

the salesman for the forests of British Columbia and lose $100 million.

Only the member for Yale Lillooet (Hon. Mr. Waterland) could have that

abysmal level of competence.

MR. CHAIRMAN: Order, please. For the second time, the Chair

is asking the hon. member to be relevant in debate, pursuant to the

rules of this House,

section 61(2).

MR. WILLIAMS: We're dealing with changing the statute, in

terms of rolling over licences into tree-farm licences — commitments in

perpetuity of the public lands of British Columbia. This is no simple

trade-off, Mr. Minister, that you're talking about. You're talking

about committing forest lands to private companies forever, under the

terms of these statutes. That's nothing short of incredible. Why should

we consider this kind of evergreen idea that one corporation should

have the privilege of controlling and harvesting and owning, in effect,

the public lands of British Columbia?

You know, the Americans are a little swifter than we are. They

entertained this question of tree-farm licences a long time ago. And I

doubt if this minister even knows that there is the equivalent of a

tree-farm licence on the public forest lands in the United States. The

minister can nod his head: does he know that there is in fact the

equivalent of a tree-farm licence in the United States, under their

jurisdiction? No, I guess he doesn't; because we get zip comment from

the man who's had the job for ten years. Well, I'll tell you, Mr.

Minister: the equivalent....

HON. MR. HEWITT: The greatest minister this province has ever had.

MR. WILLIAMS: Yes. He has brought us to the level of Newfoundland.

The only equivalent in the United States is in Shelton, Washington —

for the benefit of the minister; I'm sure he doesn't know — the

tree-farm licence on the public lands in the southern part of the

Olympic Peninsula. They tried only one tree-farm licence in the United

States of America. They concluded quickly that it was a foolish public

policy, because it was not the best way to assert the public interest

with respect to the public forest lands. They abandoned it thereafter;

it's only in Shelton, Washington, with the Simpson Timber Co.

Well, we're slower learners here in Canada, with this minister,

obviously. We are continuing to transfer this great public heritage in

perpetuity. The intent of this legislation is to accelerate that

process and make it easier, so that existing licences that are not as

tight a tenure can be carved up in pieces, and a park can go into a

tree-farm licence. What that leaves, then, is the dog — you bet — with

respect to Westar in the northwest. They're very happy, indeed, to

abandon the dogs, the mess, the weeds and the waste they leave behind

for you and us to clean up, and then put the best lands into their TFL.

That's what this legislation is going to allow. And what kind of

protection of the public interest is that?

The minister has said they have managed the lands better generally

on the TFLs. Well, I guess so, because in effect it's public money that

pays for managing those lands, so it doesn't mean very much at all. Our

problem is that because he mismanages so badly, we don't have the money

to manage the rest of the lands that are left over that are our

responsibility. That's the problem. Don't say that's a problem of bad

public management. In terms of looking after lands, we can do as well

as the corporations if we want — or better, if the minister has the

will. He has never had the will and he has never demanded the funds.

The other question we should ask is: what is the result in

industrial efficiency and industrial plant under different types of

tenure? Now maybe we're in a territory the minister knows something

about. Where are the most efficient mills in British Columbia today?

Are they in the interior? Nod your head. Yes, they are in the interior.

All right. What type of licences do we have in the interior? The

licences in the interior are by and large not tree-farm licences. So we

have a more efficient industry in the interior and not as tight or

long-term a tenure. That should tell us something. If we're looking for

more efficient plant, we've got it where the tenure is not as tight as

the TFL system. That's the reality of the industrial structure in

British Columbia, but it doesn't seem to have registered on the

minister. As the member for Skeena (Mr. Howard) says, the mandate he

has is to see to it that we have a world-class industry. We do not have

a world-class industry. The weakest industry we have in British

Columbia by and large is on the coast, and that's where the TFL tenures

tend to prevail.

So what really are you doing? You're capitulating to the pressure

group. You think that because General Bullmoose says this is what he

wants, this is what's good for British Columbia. The world isn't that

way, and we shouldn't be jumping every time General Bullmoose or Adam

Zimmerman or his equivalent in the Council of Forest Industries, or

your former deputy of a few months ago, phones up lobbying for his

buddies in the industry, as has clearly been the case.

MR. CHAIRMAN: Order. Would all comments be directed through the Chair and not personally to the minister.

MR. WILLIAMS: Yes, Mr. Chairman.

[ Page 6896 ]

The minister refers to Dr. Pearse and says: "This is all okay by Dr.

Pearse." He chooses to ignore the basic thrust of the report of the

Pearse royal commission. What he ignores is the concern with respect to

some competition in terms of timber supply. If there is one underlying

theme throughout the entire royal commission report of Dr. Pearse, it

is that. He argues for the beginning of a return to competition for

public timber. He is not recommending tree-farm licences. The main

argument Pearse has put forward is for a competitive supply system, one

in which there is the beginnings and a gradual phasing in of greater

competition for the public's timber. Had you embarked on that kind of

proposal, which was the main argument in the Pearse report, we would

not today be....

MR. CHAIRMAN: Order, please. Existing legislation — the

Forest Act — provides for tree-farm licences, which have been approved

by this House in the past.

Section 2 provides, as the Chair reads it,

for the granting of forest licences under

section 14. The overall

debate about tree-farm licences has taken place in this House and would

not be directly relevant to

section 2. Would the member please continue.

MR. WILLIAMS: On a point of order, Mr. Chairman, with all

respect, what this

section does is accommodate the rollover from one

tenure system to the other, which is a tree-farm licence which is, in

effect, tenure in perpetuity. It is a very different type of tenure.

It's the closest thing to fee simple we have outside of fee simple

ownership. It allows the partial rollover of existing licences. So I

would make the point that what this will accommodate is the extension

of the tree-farm licence system in British Columbia.

MR. CHAIRMAN: The rollover, as the member aptly puts it, is

provided for in

section 27.1 of the present legislation. The amendment

is only with respect to a part where there is a surrender.

The member for Skeena on a point of order.

[3:45]

MR. HOWARD: I think what one needs to do in order for this to

be intelligible is to read

section 27.1, which you have in front of

you, and you and I can read it together. It says now: "The holder of

one or more, or a combination of, (

a) timber sale harvesting licences,

(

b) timber sale licences, and (

c) forest licences in one or more timber

supply areas may apply to the minister to surrender it or them for

replacement by a tree-farm licence under this section."

The amendment simply seeks to add the words "all or part" so they

can apply them all to roll them into a tree-farm licence. It's an

application for a tree-farm licence, in whole or in part of a

combination of any of the other licences, and it has to be examined in

the light of that. I submit that that's exactly what the member for

Vancouver East was doing: talking about the rollover, the effect of all

or part of this into a tree-farm licence — what's the result. It has to

be looked at in that way.

MR. CHAIRMAN: I thank the member for his comments, and agree

with him. It simply provides for a part to be rolled over. The whole is

already provided for in the legislation. So possibly on

section 2, the

member for Cowichan-Malahat.

MRS. WALLACE: We're talking about rollover in this particular

amendment, but we're talking about a rollover of something that was set

by legislation way back in 1906, and to say we can't talk about the

merits or demerits of that particular decision when we're talking about

increasing it maybe twice to what it is now.... I think we have to have

the ability and flexibility to discuss the pros and cons of what we're

proposing to roll over.

MR. CHAIRMAN: The merit of your argument is appropriate in

second reading. That is where it is permissible to go into the

historical part of it. When you are dealing with the

section in

committee, debate should be relevant to that

section and the wording of

that section, not a general debate on the historical creation of

existing legislation.

HON. MR. WATERLAND: Just some very brief comments. The member

for Vancouver East again got into the Pearse report, and I will say

again, in my discussions as recently as lunchtime today with Dr. Pearse

he told me, as he has in the past, how extremely pleased he has been

with just how the government reacted to his royal commission. As a

matter of fact, he uses the way we dealt with his report as an example

to other governments as to how they perhaps should react to other

reports that he has done for them.

The member draws a comparison between the coast and the interior and

states because tree-farm licences are more prevalent on the coast than

in the interior, therefore tree-farm licences have caused the coast

industry to be less efficient than the interior industry. I mean, that

is really stretching the imagination. There's a tremendous difference

between the coast and the interior — many factors which over the years

have caused a difference in these industries and in their efficiency.

The only real difference between a tree-farm licence and a forest

licence is the fact that the tree-farm licence is site-specific,

whereas the forest licence is the right to harvest a volume within a

broader area. They are both evergreen tenures, and they both are

standing and are renewable subject to satisfactory performance at

various spaces in time.

The member mentioned again Westar and the fact that they have

surrendered a part of their tree-farm licence after negotiations with

the province, and suggested that they left behind a mess which now is

our responsibility. In the surrender of a good portion of the Westar

TFL, they have a responsibility and have accepted the responsibility

and will discharge the responsibility of carrying out their

silviculture obligations on those parts which were surrendered.

[Mr. Strachan in the chair.]

The member for Vancouver East seems, when it's convenient, to want

us to be like the Americans and other times, when it's not convenient,

doesn't want us to be like the Americans. He suggested that the

Americans tried tree-farm licences and didn't like them. If he wants us

to be like the Americans, then perhaps we should do as they did and

give 65 percent of our forest land to the private sector. That's my

interpretation of what that member says, because he wants to be like

the Americans.

A few years ago when that member was a minister responsible for

forestry, he tried everything possible to bring the industry under his

control. He wanted it out there like a

[ Page 6897 ]

marionette dancing at the end of a string, and the result of that....

MR. CHAIRMAN: Just a moment, please. Order! To the minister:

there has been quite a bit of discussion in the committee about what is

relevant in

section 2, and many statements made by the Chairman. I

think at this point I must observe that the minister is straying

somewhat from the particular provisions of

section 2 in Bill 3. Could

we return to the section, please.

HON. MR. WATERLAND: Yes, Mr. Speaker. I was referring to that

member's tenure because we just discussed Westar Timber, a company

which was originally acquired by that member when he was the minister,

and that was a part of his attempt to gather upon the government all of

the industry practices, responsibilities and be dictating to them. In

fact, during this period, Mr. Speaker....

MR. CHAIRMAN: Order, please. Again, to the minister, there

have been considerable comments from the Chair with respect to what

section 2 says, what it does and what it allows the bill to do. If we

could please remain within the confines of

section 2 and avoid any

irrelevant comments, then the committee will be well served. Please

continue on

section 2.

HON. MR. WATERLAND: I am really attempting to do that. All I

was going to say was that the responsibilities and the practices of

that company today are far superior in terms of silvicultural

responsibilities than they were when it was owned by the Crown a few

years ago.

MRS. WALLACE: Mr. Chairman, I'll try to be relevant to

section 2, which talks about the rollover of various forms of tenure

into tree-farm licences, which means that we are rolling over the

control of those forest areas to major corporations that have a vested

interest in the forest industry. It's a strange situation, and it is

something that we have been saying on this side of the House for some

time: that government, which purports to represent free enterprise,

really doesn't represent free enterprise. It purports to represent the

whole idea of competition, and it really doesn't.

This is one of the examples that I think is very pertinent. This

example is indicating in no uncertain terms just where that government

is coming from. It is a government that represents the large corporate

interests and has no concern for the small independent businessman.

It's just really an example that can't be missed in this particular

instance, because it is right out there, right out front.

Here we are, making it impossible for independent operators to have

access to good timber by allowing that good

section to be rolled over

into a tree-farm licence and leaving the poorer

section for whatever

kind of direct sales or licences — cut or sales licences; whatever kind

of other tenure that those independents may have access to; putting it

up for auction; whatever.

It is just so blatant, and it is particularly interesting to note

that at the present time — and that is soon going to change — about 7

percent of the annual allowable cut is in the hands of independent

operators. What kind of percent of return? The return to the Crown of

those independent operators is 20 percent of the return to the Crown.

What kind of an economic policy does this government have? It doesn't

have any economic policy, because if it was looking at the dollars and

cents that would accrue from this land that they are going to roll

over, Mr. Chairman — and I'm right on the point — what it would be

looking at is how the Crown and the people of British Columbia could

get the greatest return. They would get the greatest return by letting

that land stay, as much as possible of it, available to the small

business enterprise, because that is where they get the return. For 7

percent of the total annual allowable cut, 20 percent of the

government's return comes from those operators.

But no, this government doesn't have an economic policy as far as

forestry goes. They have a policy that is dictated by the major

corporations in the forest industry. They are making the rules, and it

is ever so evident in this particular clause, because it is just

helping build up that long-term, secure tenure in the hands of a few

majors. It's the corporate concentration. and that is what that

government stands for. That's its economic policy, and that's not any

economic policy that is going to have any benefit to the people of

British Columbia. The only benefit that is going to have is for the

corporate enterprises in this province. It is to the detriment of the

small businessman. It is to the detriment of the people of B.C. and the

return that they get for their forest product, and it's no wonder that

that ministry has managed to sell our timber for $100 million minus.

HON. MR. WATERLAND: Mr. Chairman, repeating an incorrect

statement many times does not make that statement any more correct.

Section 2 deals with the change-in-tenure form from one type of licence

to another. It does not result in concentration of any kind. It does

not result in the selection of the better stands of timber in any way.

I don't know who wrote the member's speech for her, but she is

absolutely incorrect. I wish that she would perhaps do her own

research; I'm sure she can do a much better job.

Mr. Chairman, I don't know what the member was referring to when she

said only 7 percent of the cut is in the hands of independent

companies, because that is not true either. I don't know how she

defines independent companies, but I would assume that they are

companies that are not large and integrated. She is perhaps referring

to the small business enterprise program, which is in the order of 7

percent to 10 percent. I don't have an exact figure of the allowable

cut which has been set up in a program which I brought forward as a

member of this government specifically for the small, independent

logging sector and for the small mill operators who didn't have a

secure supply of timber.

It is true that that small percentage of timber does bring a higher

return percentage-wise than does the total basket that we dispose of.

That is simply because it is an incremental supply, and being so, is

worth more, just as in the United States their option brings higher

values, because they are, through the sale of federal and state timber,

providing an incremental supply of timber when the bulk of the timber

is owned in fee simple by private holders.

Major corporations do not have an option on tree-farm licences. I

mentioned yesterday that the first TFL issued since the sixties was to

the Tanizul Timber Co., which is a small company made up of an Indian

band. They are not for large companies; they are for operators who can

demonstrate responsibility. Dunkley Forest Products, which has not yet

been awarded a TFL but has gone through the hearing process, is a small

family-owned company. Large companies have had hearings as well. Canfor

did, but it resulted in no concentration because Canfor had forest

licences which they

[ Page 6898 ]

chose, through the hearing process and the

procedures provided for in the legislation, to have rolled over into a

TFL. No concentration or corner on the good timber resulted, because it

was worked out in such a way that they would have the average timber

chance and the average timber quality. So stating these things over and

over again in terms of corporate concentration — the big guys are the

bad guys, the small guys are the good guys — as has been the theme

throughout these debates...repeating incorrect statements over and

over again does not make them any more correct.

MR. HOWARD: I couldn't agree more with the minister about

incorrect statements. Repeating them does not make them correct. But in

any event, the minister seems bent on attempting to do that.

You talked about concentration: that this

section does not allow

greater concentration of power and control over the timber resource. I

submit that that's absolute nonsense; that's precisely what it permits.

I need only refer to the same company that the minister referred to,

now known as Westar, and tell you a few facts of life about it, Mr.

Minister, which you know full well are correct; but they need to be put

on the record to indicate how in error the minister was just a moment

ago.

Just a little while ago Westar relinquished 30 percent that's the

figure I've been told — of its TFL 1 in the northwestern part of the

province. In addition, Westar has a forest licence in the Kallum timber

supply area and another in the Kispiox timber supply area, all

contiguous to the area within which it holds the TFL 1. It has just

relinquished 30 percent of the area or the volume — I'm not sure which,

but 30 percent is the figure it has relinquished — that it gave back to

the Crown of junk timber which it, Westar, didn't want, couldn't use,

found uneconomic. They said: "It might be all right for somebody else

to give it a try but we don't want that junk area." They gave it up and

the minister said: "Thanks, give it back." So the Crown has now got it

back.

[4:00]

Under this section, Westar is perfectly at ease and perfectly

able.... Let me read

section 27.1: "The holder of one or more, or

a combination of, (

a) timber sale harvesting licences, (

b) timber sale

licences, and (

c) forest licences in one or more timber supply

areas...." That's Westar exactly. Westar is the holder of one or

more forest licences in one or more timber supply areas. You'd almost

think this was written for Westar. And under the provisions proposed

here for us now, Westar, knowing the area, having cut within those two

forest licence areas and knowing where its site-specific good quality

timber is, is in a better position than anybody else to apply under

this

section to roll over or to surrender that portion or those

portions of the forest licences which it does not want, and to receive

instead another TFL.

Having given up the junk timber that it didn't want, couldn't use

and couldn't make a profit over and having two forest licences in its

possession, it is in a beautiful position now to take the best quality

timber in the best quality land areas in those two timber supply areas

that I spoke about. They come to the minister and say: "Please, can we

have a tree-farm licence to cover these areas now?" The only one who

will roll over in that regard will be the minister, and he'll say:

"Yes." That's precisely what it permits: concentration of power and

authority in the hands of fewer and fewer companies. This could be

called the "Westar amendment" and be quite appropriate.

I'm not knocking Westar. They're in business to do a job, to make a

profit and to have their balance sheet turn out in their favour. That's

their purpose in being in business. But the minister shouldn't be the

one claiming to represent the public interest, the one who rolls over

and satisfies whatever Westar or any other company's interests are.

It's balderdash nonsense for him to stand up and say there's nothing in

here that permits concentration. That's exactly what it permits.

MR. WILLIAMS: Maybe the minister could advise us how many new

TFL applications he's entertaining at this time, and how many are

impacted by this section.

HON. MR. WATERLAND: At this time I'm not entertaining any.

However, there have been some 30 or 40 applications — something to that

extent — some of which will be considered at a later time, some of

which will not. But at this time I'm not entertaining any except those

two for which public hearings have already been held.

MRS. WALLACE: I think 45 is more accurate. Can the minister tell us how much Crown land that covers?

HON. MR. WATERLAND: No, I can't.

MR. HOWARD: And he doesn't care, either.

MR. WILLIAMS: So is the minister saying that he's not seriously entertaining the 45?

HON. MR. WATERLAND: Mr. Speaker, there are these number of

applications — whether it's 35 or 45 I don't know, but it's somewhere in

that area. At the present time none of them are being considered. They

may in the future. At the present time there are two that have had

hearings; one proposed by Dunkley and one by West Fraser. The others

have not been addressed yet, and I have no

schedule now as to which

ones shall come. At some time in the future some of them will be

considered.

MRS. WALLACE: Is the minister aware that those 45

applications, if they were all accepted, would put 56 percent of the

Crown forest land under tree-farm licences in this province? I'm

wondering if he has considered whether or not the fact that they are

not coming forward with applications just right now is that they're

simply waiting until their little piece of goods is dealt with here in

the Legislature, in the form of this bill?

HON. MR. WATERLAND: They're not coming ahead now because I

have not chosen to bring them ahead now. I have other matters that are

being dealt with. I have no idea what percentage of the forest land

would be included if they all were approved, but there is no

possibility that all of those which have been proposed will be

approved, because there are many overlapping areas involved and many of

them are simply not appropriate as tree-farm licences.

MR. WILLIAMS: Could the minister advise us how he determines

priorities with respect to these significant concessions? Dunkley and

West Fraser have somehow got to the top of the list. Can the minister

advise us how and why that happens?

[ Page

6899 ]

HON. MR. WATERLAND: The intention is to select those which

make the most sense outwardly in various parts of the province, and

proceed with those as examples of what can be done in those areas. At

some point I will have to develop a system for prioritizing, but that

hasn't been done yet. We are having these initial hearings in different

parts of the province so as to become more aware of the type of input

we'll be getting from the public so that we may act better to express

public needs and desires at these hearings.

MR. WILLIAMS: But could the minister explain why Dunkley and West Fraser had priority when he hasn't set up a system of priorities to date?

HON. MR. WATERLAND: Mr. Chairman, I just expressed that.

They're the ones in that particular area which made the most sense as

tree-farm licence tenures, and they were an example of one for a small

non-integrated company and one for a larger company. In my judgment

they made the most sense of those that had been applied for in that

area.

MR. WILLIAMS: The larger company — West Fraser — in court

cases of half a dozen years ago or less was found to be cheating in the

numbers that were crunched in terms of the appraisal system and buried

benefits to a subsidiary company in Seattle that only came out in the

court case. Given this kind of loss to the public that West Fraser was

able to achieve through those years by cheating and misleading the

Crown on stumpage, maybe the minister could explain why they should

have priority above others, in view of their dismal record of not

paying the Crown its full due.

HON. MR. WATERLAND: Mr. Speaker, the incident with West

Fraser was a matter between a former president of the company and the

way he reported the value received for timber sold. As it happens, the

reportings of timber values received did become a part of the formula

for determining the end value of the product. I was very concerned

about it at the time and did an investigation. The fact is that the

difference in reporting values that was received and that which should

have been received as a result of a sales charge by the parent company

in Seattle, had a non-effect, in effect, on the average end value for

sawmills in that area.

MR. WILLIAMS: What came out in court is that these people

were playing a double game, and they were misleading the Crown. They

were misleading your staff — the Ministry of Forests — by subterfuge,

giving you incorrect numbers, because there were not arm's-length

transactions between the two companies they owned. Your staff were

misled. Your staff were not given honest figures. Yet despite all this

you decide subsequently that these same people — the Ketchums, isn't

it? — with close links to Social Credit, some of whom have been

appointed to very nice positions with Expo and Crown corporations and

the like....

MR. CHAIRMAN: We are straying, hon. member.

MR. WILLIAMS: You make the decision that the benefit of this tenure

will go to this company despite that dismal record. That's the problem with

this kind of legislation, Mr. Chairman. We don't have a system of priorities.

You're transferring incredible tenure in perpetuity, and in this case it

clearly went to a corporation that has historically closely been linked to government,

and you admit that you don't really have a system of priorities in place

today. It's too clear what the priorities are.

MR. CHAIRMAN: Hon. members, with respect to the

section here

and how it deals with tree-farm licences, that debate is in order, but

we can't expand it to other things. We must be strictly relevant.

HON. MR. WATERLAND: Mr. Chairman, hearings have been held.

The company president and senior management at the time that this

incident took place and was corrected is different than it is now.

I think the member would perhaps wish to change his statement about

the Ketchum family. Jess Ketchum, who was formerly the administrative

assistant to the Minister of Transportation and Highways and was

subsequently appointed as one of the vice-presidents for Expo, is

absolutely no relationship whatsoever to the Ketchum family who are the

main principals of West Fraser. I would hope that the member would

correct in the statement — because he's quite wrong, and I think for

Mr. Jess Ketchum he should apologize — any implications of any

wrongdoing toward him at all.

MR. HOWARD: The minister said that a certain application made

the best sense, and therefore that was the reason for proceeding to a

hearing. Where is this best-sense criterion established? What are the

components of making the best sense?

HON. MR. WATERLAND: My interest, Mr. Chairman, is in proper

and good forest management. I, with the advice of my forestry people

within the ministry, concluded that these two would make good sense in

that part of the province.

MR. HOWARD: There isn't any sort of best-sense or good-sense requirement

that I can see in the Forest Act, saying this is the criterion of good sense.

It's an application to have control over a certain amount of forest land.

Does it, for argument's sake — say with respect to West Fraser — make good

sense to award West Fraser the TFL when the argument is put forward very cogently

that the awarding of the TFL "will not maximize employment and social benefits

for the city of Quesnel, the region or the province of British Columbia, and

will not ensure a vigorous, competitive forest industry"? How does the

minister reconcile his perception of good sense with that declaration cogently

made and supported?

[4:15]

HON. MR. WATERLAND: I find it rather curious that two TFLs

were heard within a few days of each other, and the one which gives

most problems to the opposition happens to be the one of the larger

company — getting back to their theme that big is bad.

[Mr. Ree in the chair.]

West Fraser has demonstrated over the years a keen interest in

forest management. In many cases they have gone far beyond the

requirements under the act, in terms of both silviculture operations

and establishing recreational facilities on lands on which they are

operating. They are a well managed company, probably one of the most

efficient lumber manufacturers in British Columbia. Their record in good

[ Page 6900 ]

forest management and in good, productive lumber manufacturing was

one of the factors that led to their application being considered; but

the overriding factor was that it makes sense in terms of forest

management. Those are the reasons why their application, together with

that of Dunkley, who also demonstrated a good level of management and

responsibility in both lumber manufacturing and marketing and in forest

management.... Those are the criteria that I and my staff discussed

when determining which one should come ahead at the earliest possible

time.

MR. HOWARD: I have no quarrel with the minister's opinion

about West Fraser. But surely, when the minister advances his

assessment — I think, an accurate one — of West Fraser and uses that as

part of the rationale for saying that their application makes good

sense, he is in fact admitting what we have been contending most of the

afternoon — that is, that the minister responds favourably to what the

industry wants, on the basis of his assessment of a segment of that

industry. That's not necessarily serving the public good.

The minister is saying that, in his view, the contention that the

award of the TFL to West Fraser "will not maximize employment and

social benefits for the city of Quesnel, the region or the province of

British Columbia, and will not ensure a vigorous, competitive forest

industry" is a contention not worth considering. Well, I ask the

minister how he reconciles his good-sense assessment with the argument

put forward at the hearings that the award of the TFL — and I read it

again — "will not maximize employment and social benefits for the city

of Quesnel, the region or the province of British Columbia, and will

not ensure a vigorous, competitive forest industry." The minister is

saying that is of no consequence.

How about the one that says that the award of the TFL — again, this is

West Fraser — "will provide an excessive share of the upper range of

the resource values in the TSA to the applicant, and therefore impose

an inequity on the majority of the remaining licensees"? Does that

make good sense? Is it within the criteria of good sense to give one

company "an excessive share of the upper range of the resource values

in the TSA...and therefore impose an inequity on the majority of

the remaining licensees"? Is that what good sense means in the

minister's lexicon, in the advice that he received?

What we're getting at is that the provision that we are dealing with

section 27.1 here — allows for an abuse to take place, especially

when there doesn't appear to be any, as the minister admitted a while

ago, established bases for setting priorities with respect to

applicants. It's whatever seems to make something called good sense.

Yet what makes good sense to West Fraser does not make good sense to

the city of Quesnel, the region or the province of British Columbia,

and will not ensure a vigorous, competitive forest industry. These

contentions were put forward to the minister, but they obviously didn't

mean anything. If they meant anything, then the people in the public

service who did the assessment of the application in the first place

would have come forward and said: "Here are some factors to consider

that do not make good sense." Either they did that, and the minister

completely ignored it and wanted to go along with whatever West Fraser

decided to do, or the judgment of the people giving the minister advice

was wrong in the first place.

Let me leave you with another one about that West Fraser

application, which the minister said made good sense. "The award of the

TFL will leave unresolved" — and this is a very important factor in

that area — "the issues of problem stands in the Quesnel TSA inventory

and magnify the effects of these problem stands on the remaining

operators." That's bug-infested timber that they're talking about, and

to leave the bug-infested timber stands to the remaining operators and

permit West Fraser to have the best quality stands.... Does that

make good sense? It may make good sense to West Fraser, but it doesn't

make good sense to the general public.

Good sense to the minister needs to be diluted somewhat by this

declaration: "That award of the TFL will not result in sound forest

management practice since excessive volumes of overmature timber are

included in the proposed area." Does it make good sense to include

excessive volumes of overmature timber within a TFL so that one company

has control and domination over them, to do with them as they wish?

If sound forest management practice is one of the criteria, which

the minister said it was, how then do these counter arguments about

that West Fraser application fit into the scheme of things? Did the

minister ignore them and say: "I don't care what those are; those don't

count; I'm going to pay attention to what West Fraser wants." Or did

the minister get bad advice in the first place? It should be one or the

other, if he bases his decision upon the advice he gets. He either pays

attention to the advice or he ignores it, but it cannot be both ways.

The concept of good sense that the minister says is his criteria to

follow does not encompass, in my mind, the idea.... It does not

make good sense to me if the granting of the TFL will not ensure a

vigorous, competitive forest industry. That does not make good sense.

It does not make good sense to me if there is an excessive share of the

upper range of the resource values in the TSA given to West Fraser,

thus imposing an inequity upon the remaining operators, or the

remaining licensees. It does not make good sense to me to leave

unresolved the horrendous problem of bug-infested timber, and leave

that in the hands of the Crown and to the remaining operators to deal

with. It does not make good sense to me if the awarding of a TFL does

not result in sound forest management practices.

There are some pretty substantive and substantiated arguments that

were presented, so either the minister's appreciation or understanding

of good sense is faulty, or he got bad advice, or he got good advice

and ignored it. But on balance, what the minister says does not make

good sense.

HON. MR. WATERLAND: The advice and discussion before we

decided to proceed with the hearings on this application indicated that

it made good sense to proceed with the hearings. The member for Skeena

is now bringing forward some of the comment made by interveners at the

hearings. He is, of course, because it happens to fit his particular

bias, assuming that those comments made both at the hearings and, I

think, afterwards by that particular intervener are absolutely correct,

and therefore our judgment should be based upon the opinion of one

particular member.

It has not yet been decided exactly what will be done with that

application, but the hearings have been held and all of the

information, including that which the member has just quoted, is in the

mix and will be judged as we come to a decision on whether we will in

fact issue a tree-farm licence as a result of the hearings that were

held. West Fraser has probably done more in terms of directing its cut

into the bug

[ Page

6901 ]

than most other operators in the area. I said previously that they

are quite a responsible company and do accept their responsibilities in

terms of silviculture and that very serious bug infestation that exists

up there.

During the hearings, there were a number of other comments made by

different people who did not support the application. You mentioned the

city of Quesnel. If I recall correctly, the city of Quesnel came as an

intervener in support of West Fraser's application. West Fraser happens

to be a good employer there. The member did not read what they had to

say in support of the application. He chooses to read those things

brought forward by people who are perhaps in competition — are, in

fact, I know, in competition — with West Fraser.

So all of these things.... The purpose of the hearings is to

bring forward all these factors which of course we could not possibly

consider in judging who should come forward and who should not. So all

the many interveners come forward and provide information and advice to

me, the minister, because it is my decision in cooperation with my

colleagues; once I make a recommendation, my colleagues in cabinet have

to approve an order-in-council with me which provides me with the right

to offer a tree-farm licence. But all of this information comes ahead,

and that is the beauty of the process that we have. It does give a

balance of the opinion of the people in the area; and the procedure we

have set up — and the legislation which enables it — provides that

public input, to make sure that when we do it we have the best total

input and judgment of as many as possible as to what is good for the

area, what is good for the province and what is good for the industry

and their employees.

MR. HOWARD: What the minister is now very candidly admitting

is that his so-called good sense with respect to picking and choosing

isn't very good sense at all. Otherwise the advice that he got would

have pointed out those factors to him, and he might have qualified his

good-sense aspect of things.

All it proves again is that good sense to the minister is basically

as we have contended: what industry wants, industry gets, and the

public be damned.

Sections 2 and 3 approved.

[4:30]

section 4.

MR. HOWARD: This is going to be difficult, I think, for the

Chair to deal with, because

section 4 simply says what an official

scaler is, if you read it, and it makes a cross-reference to a person

being a licensed scaler appointed under another

section of the act,

namely 78(3)(c). But

section 78(3), which has the cross-reference in

it, is also referred to in

section 7 of the bill.

I submit that what we need to do is to deal with both of those

sections; otherwise, just dealing with one — if you follow with

precision that standing order — then we will have a relatively

meaningless debate, because we will just be talking about a

cross-reference without having the opportunity to proceed to deal with

the cross-reference. So I think we have to do that.

Secondly, the following section,

section 5, also says that official scalers

can do certain things, so we need to have a cross-reference in our debate on

this, I submit, to

section 5 as well, because it refers to official scalers

as well. Additionally.... Mr. Chairman, this is not my doing. This comes

about as a result of the foolishness of this government in trying to develop

legislation....

MR. CHAIRMAN: Order, please.

MR. HOWARD: Mr. Chairman, please, if you will, bear with me.

Bill 56, the omnibus bill — I don't have the clauses in front of me,

but I think clause 58 or whatever it is, or 28 probably; yes, the one

that we stopped at yesterday — talks about activities of scaling. We

need to have, in order to understand what is being proposed here, some

sort of reference crossways between four or five sections of this bill

and another bill which the government saw fit to bring into the

Legislature three months after this one, having some second thoughts

about what it was going to do with respect to scaling.

I think therefore, Mr. Chairman, that if the Chair will bear with

that kind of approach to it, we can have a reasonably rational

discussion in the committee, because if we don't do that, it will not

make sense as to what it is the committee is seeking to do.

MR. CHAIRMAN: The Chair appreciates your comments and your

concern for relevancy in debate and recognizes that members do have a

certain leeway in developing their debate, providing it stays within

reasonable relevance to these sections.

MR. HOWARD: It will stay within reasonable relevance.

MR. CHAIRMAN: The member for Skeena then, on

section 4.

MR. HOWARD: No. Sections 4, 5, 7 and Bill 56 have to be all

sort of cross-referred to in there. If the government had known what it

was doing in the first instance, we wouldn't have had this difficulty.

Even though the minister apologized to the House the other day upon

the close of second reading of this particular bill, I think I need to

emphasize at the outset that this is not a matter of casting aspersions

against licensed scalers who may work for the Crown, or who may work

for a consulting firm, or who may be employed by a licensee under the

Forest Act, or may be in business for themselves. Our arguments have

nothing whatever to do with casting aspersions about the honesty or

otherwise of any of the honoured people who are professional licensed

scalers. It has to do with the approach of government to the question

of scaling.

The main contention I made earlier with respect to this is that it

very regretfully places a licensee under the Forest Act in a

conflict-of-interest position. That certainly should not be the purpose

of this Legislature: to force people into a position where their

actions may be subject to question; to force people who apply for and

receive licences and become licensees under the Forest Act to harvest

timber into a doubtful position with respect to their primary interest,

and to leave them open to the accusation, if the question arises, that

a conflict of interest might have arisen, and therefore the licensee

saw fit to opt for one of those interests over the other.

One of the interests of a licensee is the licensee's own company. One of the interests — and I submit the primary

[ Page 6902 ]

interest — of a corporation, company, partnership or anybody engaged

in business is to come out ahead of the game with a balance sheet.

Their primary interest is bottom line. Their primary interest is to be

able to look at the end of the day or month — or whatever that period

is — and look at their bottom line and say: "We made a profit," or "We

incurred a loss." That's their primary interest: to look at that

profit-and-loss statement, to look at their balance sheet, and to

manage their company so that they come out ahead.

I don't think anybody in this chamber will disagree with that being

their primary interest; certainly not you, Mr. Chairman; certainly not

anybody who knows the purpose and the function of corporations. They

have some secondary interests in serving that primary one. One of the

interests is to employ people to produce the products to sell in order

to have the profit at the end of the day. In the process of making that

profit, or seeking to make that profit, they want to reduce their costs

as much as possible, because money that a corporation pays out, for

whatever it pays it out for — whether it's licence fees, wages, rent or

whether it's stumpage — they want to pay the least amount of money in

order to ensure that the profit at the end of the day is maximized.

Money that flows out doesn't show up on the balance sheet immediately.

Money that flows out in terms of capital investment has the possibility

of coming back later onto the balance sheet, but payments to third

parties, like the people of B.C. for stumpage, does not come back and

show up in the balance sheet.

I don't say this unkindly, just factually and absolutely; this is

the way the thing runs. It serves the interest of the corporation to

pay the least amount of stumpage possible. When we put that corporation

in the position of employing somebody to measure the logs, and thus on

the basis of that measurement make a determination as to how much money

they're going to pay out, they are in a conflict of interest right

away. It's regretful, but they are, and if doubt is raised, as doubt

has been raised from time to time in this assembly in recent days,

about the efficacy of privatizing the scaling system, then the question

is posed to the corporation as to what it did. Unfortunately there is

no one else to look at in that regard, and that's what is in question

here.

Reference has been made to Overwaiteas, Safeways, liquor stores and

the like. We wouldn't think of placing a customer of any of those

stores in a conflict-of-interest position by saying: "You can pick up

your groceries or your items in the liquor store. You determine how

much they're going to weigh, how many pounds of apples you have got or

how many bottles of whisky you have got. You make that determination,

and you tell the cashier on the way out that you've got X pounds and

are therefore going to pay Y dollars for that item." If a question

arises in the situation, who is suspect? The customer. We wouldn't

think of doing that. We would think that would be the most unfair

position in which to place a customer of any one of those stores, and

we should think the same way with respect to what is proposed here with

respect to scaling.

One of the people in the forest industry of great historical

remembrance was H.R. MacMillan. Another one was W.A.C. Bennett. Here's

a letter to the editor about scaling. I can't get the precise date of

it from the photocopy, and therefore am not able to give that to you,

but obviously it was during the time W.A.C. Bennett was Premier, and it

was during the time of Chief Justice Sloan's second royal commission on

forestry. In a brief to that 1956 royal commission, H.R. MacMillan

ardently recommended — I'm reading from the

article now — that the

W.A.C. Bennett administration "resist the industry call to take

log-scaling away from the Forest Service." That was only one of the

many recommendations he advanced to curb the rapidly growing power of

the forest companies, and it's one of the very few that were listened

to.

This is H.R. MacMillan, probably the person who most typifies the

development of the forest industry in this province, the person who

formed and headed what is now the largest forest company in the

province — its successor company, MacMillan Bloedel. But this is the

attitude of H.R. MacMillan with respect to private scaling. This was

the attitude of the late W.A.C. Bennett with respect to privatizing

scaling. They both said that they had to resist and would resist the

industry call to take log scaling away from the Forest Service.

Here we have the industry call, before us in this bill, to take log

scaling away from the Forest Service, and the minister is responding to

it. H.R. MacMillan and W.A.C. Bennett would roll over in their graves

in torture if they, knew what this government was doing with respect to

something they held to be sacred and inviolate, because they both

recognized what I've been saying up until now, and that is that this

bill, with its official scaler approach and its privatization of

scaling, is designed to heed the call of the forest industry and to

serve the interests of the forest industry against the interests of the

general public. In the process of doing that, it places the forest

industry in a conflict-of-interest position.

Maybe they don't mind being placed in that position, because they

want control of the scaling, but I would urge the minister to pay some

attention to what a highly honoured and well respected Premier of this

province, the late W.A.C. Bennett, thought about privatization of

scaling, and what the late H.R. MacMillan thought about the

privatization of scaling. Those distinguished gentlemen were correct.

They were correct then and they are correct now.

MR. CHAIRMAN: Time, hon. member.

MR. HOWARD: My time has expired. I'm sure the minister has thought about this. I'm just surprised that he didn't pay attention to it.

[4:45]

HON. MR. WATERLAND: Mr. Chairman,

section 4 simply defines

"official scaler." The member — and this is rather strange to me — is

quoting from H.R. MacMillan's letter to W.A.C. Bennett...

MR. HOWARD: Good friends of mine.

HON. MR. WATERLAND: Good friends of his, I'm sure.

...about situations that existed then and there. I'm dealing with

what we have here and now. I will read again what the current president

of regional council No. 1 of the International Woodworkers of America

says about the here and now in light of the recording, transportation

and communications systems for auditing which we have in place today.

Mr. Munro states: "The IWA and myself personally support your moves to

bring log-scaling back to where it belongs." Mr. Chairman, it's strange

that I should be gaining support from Jack Munro and that member from

H.R. MacMillan and W.A.C. Bennett, but I guess times do change.

[ Page

6903 ]

MR. HOWARD: I just want to tell the minister that Jack Munro and the IWA might control him, but they don't control me.

Interjections.

MR. CHAIRMAN: Order, please.

MR. WILLIAMS: Mr. Chairman, the kind of internal union

dispute which the BCGEU and the IWA might have is not critical in terms

of serving the public interest. I think the minister fully understands

the implications of the letter he received from Mr. Munro. It's simply

an interunion dispute and has little to do with the public interest per

se.

This minister has readily accepted material in measuring the public

interest in timber.... It might be interesting to reflect on

M&B itself in terms of this problem of scaling. M&B got burned

to the tune of $10 million diverted by one of their senior officials

because of unsealed logs, improperly scaled logs and various

arrangements. It was a matter before the courts. Since then MacMillan

Bloedel has accepted the need for 21 check scalers of their own, to be

assured of accuracy and honesty in the various transactions that they

must undertake as a private corporation. This company thinks it's in

their interest as a prudent operator and prudent corporate manager to

spend an extra million dollars a year for 2