1977 Legislative Session: 2nd Session, 31st Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, AUGUST 31, 1977

Afternoon Sitting

[ Page

5125 ]

CONTENTS

Routine proceedings

Oral questions

Jericho Hill School phase-down. Mr. Cocke –– 5125

Stabilization of copper prices. Mr. Gibson –– 5126

Former president of B.C. Medical Centre. Hon. Mr. McClelland replies ––

Possibility of supplementary budget. Mr. Wallace –– 5127

Crown Corporation Reporting Act (Bill 52) Committee stage.

Report and third reading –– 5128

British Columbia Resources Investment Corporation Act (Bill 87) Second reading.

Hon. MR. Bennett –– 5128

Mr. Barrett –– 5132

Mr. Gibson –– 5140

Mr. Wallace –– 5143

Hon. Mr. Bennett –– 5147

Division on second reading –– 5151

Metric Conversion Act (Bill 78) Second reading.

Hon. Mr. McGeer –– 5152

Mr. Cocke –– 5153

Mr. Wallace –– 5153

Mr. Nicolson –– 5154

Hon. MR. McGeer –– 5154

Metric Conversion Act (Bill 78) Committee stage.

section 1.

Mr. Lauk –– 5155

Hon. Mr. McGeei –– 5155

section 7.

Hon. Mr. McGeer –– 5155

Mr. Wallace –– 5155

Report and third reading –– 5156

British Columbia Railway Company Grant Act, 1977 (Bill 47) . Second reading.

Mr. Wallace adjourns debate .

Appendix –– 5157

The House met at 2 p.m.

Prayers.

Mr. G.S. Wallace (Oak Bay) : Mr. Speaker, I would like the House to welcome one of my personal friends from Oak Bay, who is also a hard worker for our cause in Oak Bay, Mrs. Muriel Andrews.

Mr. H.J. Lloyd (Fort George) : Mr. Speaker, I would like the House to join me in welcoming my oldest brother from Prince George, Merl Lloyd, who is down here visiting the Legislature this afternoon to see all the hard work that everybody does.

Hon. A.V. Fraser (Minister of Highways and Public Works) : Mr. Speaker, in the gallery today is a friend of mine from my home town of Quesnel, Mr. Leo Donahue. He is the chairman of the G.R. Baker Memorial Hospital board, and also the vice-president of the B.C. Health Association. I would like the House to welcome him to Victoria.

Hon. T.M. Waterland (Minister, of Forests) : Mr. Speaker, in the gallery this afternoon is a member of the forest policy advisory committee, Mr. Mike Apsey, who is accompanied by his wife. They are accompanied by their teenage daughter, Susan, and their younger daughter, Jill. I would ask the House to welcome them.

Oral questions.

JERICHO HILL SCHOOL PHASE-DOWN

Mr. D.G. Cocke (New Westminster) : Mr. Speaker, I have a question for the Minister of Education. I would like to ask the Minister if he will inform the House if he would rescind his decision to phase out or phase down Jericho Hill School in light of parents threatening to deliver children to the door of that school.

Hon. P.L. McGeer (Minister of Education) : Mr. Speaker, there's no

intention on the part of the ministry to phase out Jericho Hill. There is an

intention on the part of the ministry to provide superior educational and social

opportunities to those with hearing and sight impairment by developing local

facilities. The member is no doubt referring to the case of a Mr. McDonald which

was reported on the front pages of the newspapers yesterday, and to which I

have made inquiries today. Mr. McDonald is the father of an adopted hearing-impaired

child who's an immigrant to this country. Last year, there was a dispute

between Mr. McDonald and the administration of Jericho Hill School regarding

transportation costs. That matter is now in the hands of the lawyers.

Whatever the situation last year, it has improved remarkably this year for Mr. McDonald's adopted son, Rommel. Although Mr. McDonald has never appeared before the locally elected board of school trustees in Langley, his case has been reviewed by the education review committee for hearing-impaired children at Jericho Hill School. The recommendation of those responsible for hearing-impaired education in our province is that Mr. McDonald enroll Rommel in a Jericho Hill School off-campus class at Sperling Elementary in Langley this September.

The school is within a half-hour drive of his home and he will have one of the best-qualified teachers of the deaf in our province providing instruction for his child along with three others from that area. The class will be supervised by Jericho Hill School in Vancouver and will have all the equipment needed for Rommel's education as a hearing-imp aired child in British Columbia.

Mr. McDonald's case has received considerable attention by the special programmes branch of the Ministry of Education in spite of his somewhat unorthodox methods these past few months. Normally parents who want their child educated appear before their local school and ask for their child to be enrolled in the programme available. If the programme is unavailable at the local school, then the superintendent of the school district tries to fit the child into a programme available elsewhere in the district.

If suitable services are still unavailable in the district, then the superintendent of that district asks the special programmes branch to review the needs of the child and enrol the child in a provincial institution or in a suitable school in an adjoining district. In Mr. McDonald's case, he was informed that all involved at the local level are satisfied that the best programme, in their educational opinion, for Rommel this September is the one available at Sperling Elementary in Langley.

What more can the ministry say? We're being asked to take over the responsibility to provide a home for this particular child during the week, for reasons other than educational ones, and to adhere to that request would be irresponsible in the opinion of all professional educators.

Mr. Cocke : Mr. Speaker, a supplementary. The spontaneous reply was obviously a little bit of guilt; among other things. The fact is that the minister in his reply indicated that the child will be with three other children in Langley. That is exactly the thing that we were talking about in estimates and it is not a social environment for a communicatively

[ Page 5126 ]

impaired child.

I ask the minister another thing, Mr. Speaker: what has "adopted" or "immigrant" got to do with this case? He used the word twice.

Mr. E.O. Barnes (Vancouver Centre) : Irresponsible.

Mr. Cocke : Mr. Speaker, I ask the minister if he will confirm his original policy to phase out Jericho Hill School, or if he will suggest that Jericho Hill School, among other schools, should be added to our learning scene in this province.

Hon. Mr. McGeer : Mr. Speaker, the report I received this morning as a result of inquiries from the press was a situation that I had not heard about before, but I firmly support the policy of the Ministry of Education. The dispute in this case is not that the youngster should go to Jericho Hill School because it's the advice of those at that school that he be educated at the local level. It is a unanimous opinion on the part of the professional educators of the hearing-impaired.

I might say, in repetition of what I said during estimates, that the policy of the Ministry of Education to provide services at the local level is one that is enthusiastically endorsed throughout North America. It has not been accepted by some of the parents of the hearing-impaired children, but it's a very small minority who, in league with the press, have tried to discredit what is the best programme in North America for hearing-impaired children.

Mr. Speaker : Order, please.

Mr. Cocke : On a supplementary, Mr. Speaker, the minister didn't answer one question that I think was relevant. Why did he ignore the question on the adoptive aspect of the child? One other question is that I would like to know where the minister gets this body of opinion which is not shared internationally or nationally and certainly not shared by those people who are participating in this programme.

Hon. Mr. McGeer : In response to that question I can only say that the member for New Westminster has – been a fountain of misinformation to the House and to the public of British Columbia on every issue during this session of the Legislature.

I read into the record on Hansard the opinions of people who are expert in this field, throughout North America, and I say explicitly in this particular case that it's the unanimous opinion of those who are professionals in the education of the hearing-impaired that this is the correct route to go. The ministry has no intention of changing its policies to suit the political purposes of the member for New Westminster.

Mrs. E.E. Dailly (Burnaby North) : On a supplementary to the Minister of Education, if you are determined to pursue this policy – you have just said that you are determined to pursue it – my next question to you, then, is: are you going to provide supplementary financing to the school boards of this province who are going to have to put in extra equipment and very professionally trained teachers?

Hon. Mr. McGeer : Mr. Speaker, I can only say that the former minister couldn't have been aware of what was going on in her department when she was the Minister of Education, because this is precisely what the ministry is doing now and was doing when she was the minister.

Mrs. Dailly : No, that is incorrect. I have a question on that statement. I want to ask the minister if he would go back and check over the actual progress of our policy on decentralization. He would find out that we put the children first and what the parents wanted first. But he has still not answered my specific question. If he wants to, he could take it as notice, but he said nothing. My specific question to the minister is: are you going to provide supplementary funds to the board?

Hon. Mr. McGeer : The answer is: we have been, we are, and we will be.

Mrs. Dailly : Nonsense!

STABILIZATION OF COPPER PRICES

Mr. G.F. Gibson (North Vancouver-Capilano) : I have a question to the Minister of Mines. I'm sure that the minister is aware of the recent low prices for copper and the fact that these prices have declined even more in recent weeks to the point where there are problems in maintaining employment in the British Columbia copper industry and some serious prospect for the future. What I want to know from the minister is if he has made any representations to the federal government with a view to taking

part in international negotiations to adopt some kind of an international stabilization scheme which would make more security employment in this industry.

.Hon. J.R. Chabot (Minister of Mines and Petroleum Resources) : No.

Mr. Gibson : On a supplementary, Mr. Speaker, will the minister then give consideration to doing

[ Page 5127 ]

so?

Hon. Mr. Chabot : I'll take it under consideration.

FORMER PRESIDENT OF

B.C. MEDICAL CENTRE

Hon. R.H. McClelland (Minister of Health) : Mr. Speaker, on August 25, the hon. member for Oak Bay (Mr. Wallace) asked me a question: "Is it a fact that the president of the now defunct B.C. Medical Centre is still drawing a salary?" I said no, and the member then asked me when those services were discontinued. I would like to answer, Mr. Speaker, that Mr. Weaver's employment ceased to be effective July 31 this year.

POSSIBILITY OF

SUPPLEMENTARY BUDGET

MR. WALLACE : Could I ask the Premier with regard to figures from Statistics Canada for April, May and June showing a decline in the gross national product and raising fears of a new recession ...? Part of the reason for the weakness in the economy is sharply reduced personal spending.

Since the Premier stated on June 9 that personal savings accounts in 1976 grew by $1 billion, and since British Columbia's surplus for April, May and June was $196 million, including a $36 million increase in sales tax revenue; since the report tabled with the House following the New Brunswick Premiers' conference states that for the short run, the Premier has discussed a number of actions including tax cuts; in view of all these economic factors and persisting unemployment at 8.5 per cent, has the Premier taken any initiative since the New Brunswick conference to advise the Minister of Finance (Hon. Mr.

Wolfe) to prepare a supplementary budget?

Hon. W.R. Bennett (Premier) : Mr. Speaker, the member for Oak Bay brings

out facts, some of which deal with the national economy and some with the provincial

economy, which highlight what I've, been saying for some time – that

the provincial economy is growing against the grain of the Canadian economy,

which is dropping. The gross provincial Product has been growing at a rate of

over 5 per cent during this period. At the same time, the national economy,

which is beyond our control – although we've offered advice as to how

they can get the same strong results as British Columbia – has been declining.

Now this is consistent with British Columbia going against the grain when the

former government was in power when we were going down while the Canadian economy

was going up. I'm pleased to tell the member for Oak Bay that rather than

make. . . .

Mr. Cocke : Why don't you tell the facts?

Hon. Mr. Bennett : To the member for New Westminster, who's speaking front his seat without gaining the attention of the Speaker, I might tell you that these are the facts and have been.... Unlike the member for Alberni (Mr. Skelly) on his side, who said that they make up facts over there.... He's on record in this House as stating that. These are the facts.

But I would tell the member for Oak Bay, if those who would interrupt will be silent for a moment, that indeed the measures that we are taking and have been taking in this province, measures which show our employment growing at 3 per cent – that's twice the national average.... All of the things that we have been doing, Mr. Member, don't need correction now.

These are part of the things we advised the other Premiers that they could do to help them achieve the growth rate that British Columbia is achieving at the present time – that indeed will prevent this national economic slip.

Over and above that, Mr. Member, you will know that the Premiers and the provinces cannot move in isolation. We are part of a national economic policy – or lack of a national economic policy – that needs the co-operation of the 10 provincial governments and the federal government. Our plea from that conference was that we get together, Mr. Member, and co-operate in developing an economic blueprint for this country, one which could be based on the success we are having in British Columbia.

Mr. Wallace : Mr. Speaker, with regard to the provincial scene, since the Premier makes a very strong point that federal measures are outside the control of this chamber, I would refer again to Statistics Canada's emphasis on sharply reduced personal spending, and say that one of the factors governing personal spending would have to be sales tax in this province, at a time when, according to the Premier, the economy is growing. Has the Premier taken any specific steps or held any discussions with his Minister of Finance (Hon. Mr.

Wolfe) with a view to reducing the 7 per cent provincial sales tax, so as to stimulate consumer spending and stimulate employment through increased purchasing of goods and services?

Hon. Mr. Bennett : The question from the member goes against the statement that you made in the beginning, and that is that sales tax collections are up in British Columbia over this period last

[ Page 5128 ]

year. In fact, we have more spending than we had in this period last year. Are you suggesting that. . . ? One thing we have got is a growth in spending at the retail level at the present time in British Columbia. The very fact that sales tax collections are up indicates more spending.

Mr. E.O. Barnes (Vancouver Centre) : No, it doesn't.

Mr. Wallace : No way. Even in his own quarterly statement, it says it's up because of the lower rate before.

Orders of the day.

Hon. G.B. Gardom (Attorney-General) : Mr. Speaker, first of all, I'd call report on Bill 73, the Mineral Act.

I have just been informed by the Clerk, Mr. Speaker, that it is not printed, so we will let that wait until tomorrow. I therefore call committee on Bill 52.

CROWN CORPORATION REPORTING ACT

The House in committee on Bill 52; Mr. Veitch in the chair.

section 1.

Mr. G.V. Lauk (Vancouver Centre) ; I was just going to say, Mr. Chairman, that from now on in question period, I think we should just ask the Premier if he has his afternoon speech ready, instead of asking anything specific. I'll defer to whoever wants to speak on this bill. (Laughter.)

Sections 1 to 10 inclusive approved,

Schedule approved.

Title approved.

Hon. Mr. Bennett : Mr. Chairman, I move that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 52, Crown Corporation Reporting Act, reported complete without amendment, read a third time and passed.

Hon. Mr. Gardom : Mr. Speaker, second reading of Bill 87.

BRITISH COLUMBIA RESOURCES

INVESTMENT CORPORATION ACT

Hon. Mr. Bennett : Mr. Speaker, in speaking to second reading of Bill 87, British Columbia Resources Investment Corporation Act, let me say that this bill fulfils two very great commitments this party and this government made.

One was to provide great opportunity for the people of this province to invest in their province and help get it moving again. The second was to make a commitment toward the denationalization of some of the Crown corporations or companies in which the former government invested that were involuntary investments by the people of this province, the prime requisite for the investment being the philosophical commitment of that party and that government.

I would say, Mr. Speaker, that this bill before us today, in meeting our philosophical commitment, may be one of the few times we have in this Legislature this session, in which two different philosophies can clash over the best way for this province to develop and grow, and the best opportunity that can be developed for people and corporations to build this province.... What about the rights and the opportunities for individuals in the private sector? Or should the province be developed by government ownership through complete nationalization of our resource companies and other companies that would build this province?

Our commitment and, indeed, our very strong belief, is that this province can only be developed and grow as it has in the past, and that is by government providing a climate and regulations allowing our resource companies to develop in a private way. They create employment and sell our products both internally and on export. The government benefits by having more employment and also through the logging tax on stumpage and other taxes that are directly related to the operations of those private sector companies.

We believe that our people can have an opportunity to be employed and to help develop this province. But we will not have them compromised by being part of a government corporation. I do not believe governments can separate themselves from the natural conflict of interest where they are called upon to set the rules by which the private sector companies must operate – as governments must – such as how timber is to be cut and the allocation of timber, and then

[ Page 5129 ]

administer those rules and make sure no one abuses them.

The government must also ensure it is getting its fair due in logging tax and stumpage tax. So all firms will pay their fair share and will be players in the game as they were when these companies.... As they are now – and until this bill is passed, as hopefully it will be passed – the government is also a player in the game and thus has a conflict of interest.

I do not believe that any government of any political philosophy can remove itself completely from the type of conflict of interest that develops. Governments have a tendency to become protective of what they consider their own, particularly if it's their own brainchild or their own company that they've nationalized at that particular time. As such, it is in their particular interest, whether it's in the economic interest of the province or the people at that time, to protect it, create a hothouse atmosphere around it, and have it do well.

Yet we know that these companies must be allowed, as they will be in the resource industries in this province. . . . The resource industries are subject to fluctuation where they can rise and fall. Yet when you have a government whose main interest is being politically sensitive to themselves and their own desires, you have the tendency to protect these companies and, in fact, not deal fairly with them in relationship to other forest sector companies, as in the case of Plateau Mills.

The president of that company, Mr. Martens, has publicly stated that he was given an assurance beyond the traditional practice of allocation of timber in the forest by the then Department of Forests in order to build a new mill on the direction of the former Minister of Forests, Bob Williams, He was given an assurance beyond traditional and accepted procedures in writing a special sale and a guarantee of receiving that timber before it was advertised and before it was made available to competing companies. That is not acceptable from any government or any Forests minister.

It's not acceptable, but it only outlines and highlights the type of conflict of interest that can develop when the government places itself in this position.

This bill, Mr. Speaker, creates a public company operating in the private sector.

This company will not be an arm of government. This company will not be a Crown

corporation. Steps are taken within this bill to guarantee that difference,

in fact. It even has strong differences from the corporations that perhaps it

was modelled after – the Alberta Energy Corporation and the CDC –

in allowing the interim board of directors to make up their own regulations

rather than have a preconceived set of regulations from the government as to

how that company should operate. It is being given the same opportunity as any

public company operating in the private sector to function and to have all of

the opportunities of any private sector company, and all of the responsibilities.

This will not be an arm of government. In fact, when members read the bill, as I'm sure they all have.... In response to the interjection by the leader of the Liberal Party (Mr. Gibson) , steps have been taken so that the government cannot control the directorate, no matter what its shareholdings are. The intent of this bill is that the government will own less than 50 per cent of the shares. In fact, provision is indicated in the bill that the government can reduce its shareholdings from time to time in the corporation. In fact, it even provides for the provision for when the government takes its shareholding position to less than 10 per cent.

This is the intent of the bill – to remove these corporations from the direct conflict of interest that has existed while they were government corporations, and to provide a public company operating in the private sector that can operate these companies, but over and above that, that can be a vehicle for great expansion, growth and economic development in this province. That is the greatest plus in this bill, Mr.

Speaker: the opportunity that it is creating for the almost 2.5 million British Columbians to make a voluntary investment in the future growth in their province, a voluntary investment in a company that will not be hampered – and I mean hampered – by the type of control that governments exert when they run Crown corporations.

I do not believe that government, at any time, can operate a company as well or successfully as those who have an interest in it and those who provide sound and professional management. The forest industry is not an area of natural monopoly. It's an area in which hundreds of companies operate and participate in developing this part of our province today, Mr. Speaker. It's an area from which British Columbia receives approximately 50 per cent of its economic income. It's an area that has not yet been taken to its full potential. It's an area where this company will have a great opportunity to help develop further growth.

But over and above that, this B.C. Resources Investment Corporation will not just be a holding company for those assets of transfer of the moment, because it is intended that the share offering made to the people of this province, the 'voluntary investment that the people have been searching for and wish to make in a corporation such as this so that they can have their own opportunity to build and develop this province. . . . The figures indicate that from December, 1975, to December, 1976, the savings of the people of

[ Page 5130 ]

British Columbia grew by over $1 billion of capital waiting and looking for such an opportunity. The people of this province had been waiting for just such a chance to invest in and develop their province.

Mr. Speaker, the people of this province have been looking for the individual opportunity to make a choice on their investment – not a choice directed by government – not an arbitrary choice like the leader of the Liberal Party suggests, that if they have money, tell them to invest in Hydro and put up the money to lend to Hydro. That's the type of direction we don't want to give. We want to give opportunity, but we don't want to tell the people they have to invest in Hydro or lend their money to Hydro. That's not the way we're trying to go, Mr. Leader of the Liberal Party. What we want to do is create a voluntary opportunity of investment.

Mr. Gibson : Remember, I've got a speech coming up too, Bill.

Hon. Mr. Bennett : Mr. Speaker, the response we've had since we first announced this corporation would be the subject of legislation in June. On the legislation we now have before us in the Legislature, we've received many requests of inquiry from all over this province of British Columbia from people wishing to participate and take up this opportunity. These people have great expectations of what this corporation can do, great expectations on the opportunities that this corporation will give, not only for them as investors, but on what it can do for British Columbia.

I know that we'll have opposition to this bill in the Legislature. I know, because the former Forests minister, Bob Williams, has already come out against this bill philosophically, "'B.C. Development Corporation Only for Rich, ' says Bob Williams." I disagree with him.

The experience of the Alberta Energy Corporation and the size of units indicate that it is within the reach of everyone, and these units and shares will be offered in small denominations so that every British Columbian will have an opportunity to buy on a voluntary basis. It's not a forced investment by a government or a Finance minister whose own frustration in wanting to play the stock market can only be realized when he or she gets to the seat of government power. That's not a gamble. They're not even gambling their own money; they're gambling with your money.

If they lose, they say, "tough luck, " and if they win, they say, "see how smart we are." The tendency is to hide the losers and crow about the winners. In this case, this government has been indiscriminate. We've told you about the losers – the Swan Valleys and the others – that have come to the public's attention. Here we're giving the public an opportunity in the denationalization of this area, not only to utilize these companies that have a forest base, but also to have a further opportunity to develop other resource and manufacturing areas of the province.

Along with these companies, and for one time only, there will be transferred oil and gas leases – that's an area that's receiving a lot of attention, an area that has a lot of optimism about it in this province right now – so that this corporation can take

part in the exploration and development of the oil and gas lands in this province, and be a part of the development of the areas where we're getting record prices to the treasury of this province from the big companies given an opportunity to develop this province. Along with the Westcoast Transmission shares and along with these forest companies, this company will also have an opportunity in oil and gas lands.

I want to say quite clearly that whether it's the oil and gas lands that will be transferred, or the shares of Plateau Mills, or the shares of Kootenay Forest Products, or the shareholding in Can-Cel, all of these areas will be done by independent appraisal, and all of the transfers will be done after independent appraisal is done, Evaluations will be negotiated with the interim provisional board of directors, along with the advice of the financial management consultants. All of it will be subject to the Securities Commission that must approve such transactions contained in any prospectus.

That will make shares available to the ordinary people of this province, as they will be out of this corporation.

Mr. Speaker, I've said that this legislation is indeed based on philosophy and commitment. It's based on wanting to provide opportunity and growth for this province, because I believe this company can provide a further role. Besides being a great investment opportunity for our people, it will provide a truly British Columbia private sector corporation that can take

part in all of these developments.

It will be a chance to beat our heads against the dependency of large corporations from elsewhere with the expertise, technology and sometimes the money to be able to develop these areas of our province. It will be a chance for British Columbia, because in this legislation, Mr. Speaker, it is spelled out very clearly that the offering is restricted to Canadians, but over and above that, the first offering will be made only to British Columbians. If we have the same success that Alberta had, and I know we will, the total first offering will be picked up by the people of British Columbia, and they will be clamouring for more.

There has been some question of whether this corporation will pay income tax. Yes, it will, Mr. Speaker. It will be truly a private corporation, or a

[ Page 5131 ]

public corporation operating in the private sector. Can-Cel operates on that basis, and it will be similar to but different from the position Can-Cel is in now of having used up former losses and having to pay income tax. It will operate in the same way that Can-Cel has except for one difference: Can-Cel is perceived to be a Crown corporation. Many people outside of and inside government feel that because the government has owned over 80 per cent, it was indeed a Crown corporation, and could operate independently without reference to the minority shareholders of the company.

That is one of the difficulties when you have a corporation that doesn't have the restrictions that are written into this bill so the government cannot dominate this corporation by electing directors or appointing them.

That is the problem that could have developed with Can-Cel. We don't want this corporation to be an arm of government. It must operate freely and independently from government. The Forests, Mines and Petroleum Resources, or Finance ministries that are called upon from time to time to enforce regulations on this company, as they do for any other private sector corporation, must be free to bring down the regulations with authority and not to be compromised by it being a Crown corporation. They will enforce the regulations on behalf of the people of the province to make sure that this company abides by the rules and pays its fair share of taxes to the province of British Columbia.

Mr. Speaker, this corporation is unique in British Columbia; it's even unique in some of the provisions that I say make it slightly different from the models of the Alberta Energy Corporation and the Canadian Development Corporation. It has more opportunity now because of the less than 50 per cent interest that the government will hold at first offering. It is clearly stated by implication in the bill that the intention is to reduce the government's holding.

Over and above that, there are guarantees that while the government's holding is in the majority position, the government cannot dominate the board of directors or control that corporation. That is implicit in this legislation, meeting our obligation that this corporation shall be truly independent from government influence and direction, and the conflict of interest that develops around Crown corporations.

Mr. Speaker, I might further suggest that this corporation is more than just

a corporation to transfer these assets. It will have millions of dollars of

new capital from the people of this province to undertake new developments in

other areas. I perceive it as becoming an instrument for a major stimulant in

the economy of this province. I see it as a catalyst. I see it as being a vehicle

in which no area is restricted in its opportunity to help build this province.

We can see that right now it is part of one of the greatest projects ever perceived

for this part of Canada and North America – and that is the great Alcan

pipeline project – through its interest in Westcoast Transmission. It may

wish – and this would depend on the board of directors – to participate

in a greater equity position in parts of that line. That would not be at the

direction of this government, but of its board of directors and the people running

this private sector corporation.

It will have great opportunity in oil and gas, as I've said, and in the great coal developments in this province, should it wish to participate. It will have great opportunity in the area of secondary manufacturing, and to work not only on its own, but with other small private corporations arid individuals in developing vehicles in all parts of the province that will help this province to grow.

The government will benefit because of the economic activity that will take place. Our people will benefit by employment and through the money that flows to government through taxation created by the expanding economy in which this company can be a leader. This is an economy in which the direction and the thrust is coming from the private sector; an economy that will grow; an economy that is waiting for just such a leading company with all of the opportunities available to this corporation.

I was reading just recently an editorial that was written on this corporation that suggests it is different from the Alberta Energy Corporation. The

article suggested it had much wider powers. I would point out, Mr. Speaker, that the Alberta Energy Corporation hasn't restricted itself to oil and gas. It has been part of a major stimulus in Alberta, working with other companies in other areas.

I can remember the Alberta Energy Corporation looking at forest companies. The Alberta Energy Corporation is not restrictive. This company is not restricted, but this company has wider horizons than the Alberta Energy Corporation ever had because of the wider horizons for greater development that British Columbia has. We are not related just to oil and gas. This province has great opportunity in its forests, its coal reserves, its minerals, and it has great opportunity, yes, in its petroleum products, but it also has a great opportunity in being Canada's window to the Pacific Rim.

This corporation can be part of creating the value-added goods built from a strong resource base that become part of the growing export that will feed the economy of this province. Mr. Speaker, this corporation has a role to play in building this province. It has a role to play in satisfying the investment needs of the people of this province. It has a role to play in the future of British Columbia, and the stronger its role, the greater the rewards for

[ Page 5132 ]

our people and for government in taxation that will flow and help us provide the type of benefits our people have come to expect.

Mr. Speaker, this corporation can be not just the most positive and strongest move this government could make, but any government could make to harness the capital of the people, the will of the people, and the interest of the people in building their province. Mr. Speaker, this is a positive move for a province that is on the go and on the grow, growing faster than any other part of Canada.

Mr. Speaker, I move second reading.

Mr. D. Barrett (Leader of the Opposition) : Mr. Speaker, it is probably true that on rare occasions there is a clear-cut distinction of philosophy, as the Premier said. This kind of debate, on occasion, I think, raises the level of public expectation in terms of what should go on in this House.

Mr. Speaker, first of all, I want to deal with a number of statements made by the Premier. I want to outline to the citizens of this province exactly what is taking place today so we understand what our rhetoric is fitting into. The Premier has his rhetoric and I will give you mine, but let us understand, before we go into all the full-blown rhetoric, what we are dealing with. We are dealing with a unique situation here. The people of this province are now being given the opportunity to sell off something to themselves that they already own.

Some Hon. Members : Right on!

Mr. Barrett : I want you to understand exactly what I am saying. We own these assets and we are going to sell them to ourselves for the second time.

Mr. Gibson : Just the sum of them.

Mr. Barrett : Just the sum of them. I'm coming to that point, Mr. Member. What we are dealing with is the opportunity to sell to ourselves something we have already paid for once. I have given great consideration to this and I have come to the conclusion of how they arrived at this decision. Only a government dominated by used car dealers could come up with a philosophy like this. Who else tries to sell you something the same way, that you already own? Step onto any used car lot and it is an extension of used-car-lot philosophy.

Mr. A.B. Macdonald (Vancouver East) : Well, some guy tried to sell the Brooklyn Bridge.

Mr. Barrett : Well, this is not, indeed, the Brooklyn Bridge. It was once described – and I will come to that – by this government as the Brooklyn Bridge, or commodities of it. What are we dealing with here? We're dealing with four companies. In all seriousness, it took some years off the lives of the individual MLAs who were part of the government at that time to show the courage, the guts and the commitment to buy these companies on behalf of the people of British Columbia. I want to praise that government for doing that.

During every single move of these four companies named in this bill, Mr. Speaker, it should be recalled, at least by the people who are sitting here in this House – Canadian Cellulose Co., Plateau Mills Ltd., Kootenay Forest Products, and Westcoast Transmission Co. – that we took a heap of personal vilification, abuse and insult, unmatched and unparalleled in the history of this province, here in this chamber.

Mr. Speaker, among the personal insults thrown at me as Premier, and at my cabinet colleague, there are ones that should be printed on the front page of every newspaper in this province to make those words be eaten by the present government. I will deal with each particular instance.

We are dealing here, Mr. Speaker, with 848,453 shares of the Canadian Cellulose Company, now worth on the present market, $73 million. We bought that company for a dollar down and its assets, and we have assumed the responsibility of paying on a mortgage of $79 million $6 million a year. The people of this province every man, every woman, every child, every senior citizen, and they were indeed the pioneers of this province – now own that company. The government of the day had the guts to buy it, and that company today is worth $73 million. Who said that isn't good business?

We own that company; it's ours. It's one of our treasures and, Mr. Speaker, I want to make it very clear and very emphatic that I don't intend to stand by idle and see our company, owned by every citizen in this province, sold off to the few rich who can afford to buy that stuff up.

Mr. Speaker, the next company on the list is Westcoast Transmission, a carrier of our natural gas. That natural gas was put in the ground by God, not by Social Credit or the NDP, and it is the responsibility of the government of the day to see that the people who live in this jurisdiction have a fair share of God's resources in this province, They're not to be given away to the private corporations and not to be given away to the privileged few. They're to be shared by every citizen of this province on an equal and fair basis because they live here as people of this province.

Mr. Speaker, because of the moves by the New Democratic Party government, we now own 157,125 shares – for 10.75 per cent of Westcoast

[ Page 5133 ]

Transmission – worth $35 million. We paid, Mr. Speaker, on behalf of the people of this province, $23 million for those shares. Yes, we did. And we've made $6 million profit and the money back on revenue from those shares. That money has gone back into the people of this province, to pay for Mincome and Pharmacare and social services-and aid to the blind and deaf children of this province, as that money should be spent, Mr. Speaker.

Mr. Speaker, I want to read back some words of the Leader of the Opposition,

now the present Premier of this province. When we bought Westcoast Transmission,

we were accused of playing at the Nevada crap tables. The Premier said today,

and I quote back his words: "The government of the day went into involuntary

investment, " Mr. Speaker, I hate to remind the Premier of this, but it

was my predecessor, W.A.C. Bennett, who was Premier of this province, who first

bought shares in a company. It was the B.C. Bank, Mr. Speaker. Not only did

he buy shares, but he went out and touted those shares. So don't talk to

me in selective memory, Mr. Speaker. It was an involuntary purchase when we

did it, but everybody gave consent when W.A.C. Bennett did it.

Mr. W.S. King (Revelstoke-Slocan) : He did that so he could put his son on the board.

Mr. Barrett : Oh, his son on the board? I make no comment about that. Is that conflict of interest? I don't know.

Mr. Speaker, I want to.

Mr. N. Levi (Vancouver-Burrard) : It wasn't that son.

Mr. Barrett : No, it was the brother.

An Hon. Member : The bright one.

An Hon. Member : The one he liked best.

Mr. Barrett : Mr. Speaker, when we bought Westcoast Transmission, we were vilified; we were attacked; we were called all kinds of names, This is a comment made by the present Premier of the day on February 4,1974, just two and a half years ago, and I hope every citizen in this province will understand exactly the hypocrisy which we were dealing with then and we're dealing with now. When we bought Westcoast Transmission, that group over there, in opposition, said through the mouth of its leader – February 4,1974:

MR. BENNETT : Let us not, therefore, hear any more of this overblown twaddle about windfall profits from the Premier's forays into the stock market Because unless this government is going to abandon even the pretence of prudent, cautious investment, unless it's going to stop that, unless it is going to take us on the next hair-raising step of using public funds to play the market in a day-to-day speculation. . . .

Who would have predicted that two and a half years after he made those statements, he would be touting that investment as a good investment for all the people of British Columbia to buy again?

He said it was twaddle. It's no longer twaddle, Mr. Speaker, when he presents it in a bill and says it's making money. But when it serves his purposes, for political reasons only, to directly misinterpret to the people of this province what was going on under our administration, he calls it twaddle; today, he calls it a great opportunity.

What statement is to be believed, Mr. Speaker? I leave that question with the people of the province.

That investment is now worth some $35 million. My research staff were very kind to present to me pages and pages and pages of hypocritical statements made by the Premier and the present Minister of Economic Development (Hon. Mr. Phillips) when he fought in this House against every single move made by our government, I'm anxious, Mr. Speaker, to hear the words of the member for South Peace River (Hon. Mr. Phillips) praising these corporations that he is now selling off as being good investments, when he previously attacked every single one of them.

Mr. Speaker, the next one is Kootenay Forest Products, representing a capital investment of $14.3 million. In the constituency of Nelson-Creston, as in other areas of this province, they were experiencing the threat of the loss of the major industry in their area. It became a matter of bargaining among the international forest companies as to how to squeeze Kootenay Forest Products down to the ground to allow outside capital investors the opportunity to shut down the mill and pick up their assets at fire and bankruptcy sale prices.

They would then re-open with absolutely no thought to the humble, working people or small businessmen of that community who would have lost their investments, their life savings and their homes, waiting for this international manipulation of ownership of an asset.

We didn't stand idly by. We moved into that community, we bought Kootenay Forest Products and we put the workers on the board. The production of that plant has gone up 100 per cent by those working people. Those jobs were saved, those businesses were saved and that community was saved. It was a direct result of the action of the government of the day, the New Democratic Party, and we took abuse for that. There were long-winded speeches attacking the intrusion – they called it – of government into the marketplace. Had it not been for the government in terms of having guts to

[ Page 5134 ]

protect its citizens, those people wouldn't be working today. That's what a government is elected for – to protect its citizens.

I now come to Plateau Mills. Oh, do you remember the Plateau Mills scare headlines in The Vancouver Sun? I will never forget that in a most irresponsible headline they attacked the New Democratic Party for buying Plateau Mills. The headline of the day was: "Terror Tactics Used by Socialists" – absolute, utter rot and nonsense. One phone call to Mr. Martens, the then and present manager, would have proven, as he stated then, that there were no terror tactics used. The government of the day was open, aboveboard, fair and frank in negotiations. I phoned Mr.

Keate of The Vancouver Sun and had a conversation with him about that headline, and he said the reporter couldn't get hold of Mr. Martens. I said that was strange. I had never met Mr. Martens, never spoken to Mr. Martens, but I picked up the phone and got him within 20 minutes. I said to Mr. Martens: "Have you ever talked to me before?" He said: "No." "Have I ever used terror tactics, bulldozed you or threatened you in any way or has our government?" He said: "No." I read him the headline in The Vancouver Sun.

He said he could not believe why such a headline would be written and no one from The Vancouver Sun had contacted him for his comments.

That was the accumulated atmosphere of hostility, outright political opportunism and, frankly, hate at the time we bought these four companies. People should be reminded too, Mr. Speaker, that Ocean Falls was going to close down in the constituency of my good friend, the member for Mackenzie (Mr. Lockstead) . People who had 20 and 25 years on the job, labouring for Crown Zellerbach Corp., were being given a notice: "Get out of town. We're not making money anymore." We bought Ocean Falls, we kept that town alive and that, too, is part and parcel of the surviving economic development of this province.

The Premier is correct that the province of British Columbia is holding its own against the national economy. But what is the major factor? The major factor is that the economic moves made in those regions of this province by the New Democratic Party kept those jobs going.

Mr. Speaker, to pick up the four companies and operate them, we spent a total of $25 million of tax money. That amount, $25 million, was less than what we used to collect from the wealthy estates in this province from succession duties. I want to remind the people of this province that since Social Credit was elected we no longer collect that money from the rich people who made their money out of the resources of this province. Those taxes at that time went right back to protect the jobs and investments of workers and small businessmen in the province. For that $25 million, Mr. Speaker, we took $100 billion worth of abuse.

I remember coming home and sitting at my supper table, turning on the radio and listening to the wild and hysterical comments of the opposition of the day, wondering what kind of monster I was, wondering if I had the right to face my children after having spent the $25 million this way on behalf of the people of this province. Oh, what a disastrous ruin we were going to bring the people of this province! Political lies were told throughout this province about these corporations, Mr. Speaker.

On just these four we spend $25 million. Today the value of the assets of these four companies is not $25 million, not $75 million. The value of what you own, you people of this province, through the purchase of those companies, is now $143 million. In close to three years, Mr. Speaker, a total of $118 million of value in four companies alone has been added to the jewels and the treasures of our home here in British Columbia that every single citizen owns as a result of our decisions.

And you stand up today, sir, through you, Mr. Speaker, and tell us that you're going to give the people the opportunity to sell off to themselves what they've already owned and made money on. I don't understand it other than it's politics. And politics does interfere on occasion with sanity – some people may say 100 per cent of the time, I think it's frequent, but not 100 per cent of the time.

I want to make a couple of other comments before I go on to some other detail. The Premier made an allusion that somehow Can-Cel was getting favouritism from the government. He quoted Mr. Martens, who said Plateau Mills was getting an assurance of timber. Well, my dear friends, if the government wants to share with the people their own resources by guaranteeing that they have a crack at those resources on a permanent basis, I ask you: what is wrong with that?

If it's conflict of interest to protect and fight for the ordinary citizens of British Columbia, then I plead guilty to that kind of conflict of interest. Every woman, man and child, every senior citizen of the province, has the right to expect nothing less from the government of the day but to fight to protect the ordinary citizen. But what is it when it comes to companies, Mr. Speaker?

[ Page 5135 ]

Let the people of this province be reminded again of the sordid history of Social Credit when it comes to giving away resources. I hold in my hand, Mr. Speaker, volume one of the timber rights and forest policy review of the royal commission done by Peter H. Pearse. The whole 100-year history of this province is a catalogue of giveaways, scandals and throwaways of resources. It is a catalogue.

This is the last happy hunting ground of every economic buccaneer who was ever spawned in North America from the great beginnings of the Pacific Great Eastern Railway right down to the present companies like MacMillan Bloedel. Yes, Mr. Speaker, MacMillan Bloedel. The stench is still in the nostrils of history readers in this province about the Sommers case and the giveaway of forest licences when a minister of the Crown went to jail because tree forest licences were given away. Don't talk to me about conflict of interest. A Social Credit cabinet minister went to jail! The only one in the commonwealth.

You want to send me to jail for fighting on behalf of the ordinary citizens of this province? Go ahead and charge me with it.

Ms. K.E. Sanford (Comox) : Did they give the licences to the people?

Mr. Barrett : No, not to the people.

Mr. Speaker, in this whole report Pearse goes through a number of instances where special permits and special commitments were given to private corporations by the former Minister of Forests, Ray Williston, who is now, ironically, the head of Can-Cel.

The Premier shakes his head. Is the Premier denying that Mr. Pearse is telling the truth, that special privileges were given and certain licences that were not present in other licences? Does the Premier deny that Pearse says in his report that certain private companies got certain privileges and benefits that no other private companies got?

Mr. W.S. King (Revelstoke-Slocan) : And that the minister didn't have the legal authority to give it.

Mr. Barrett : And you reward that same minister with the post of head of Can-Cel.

Mr. Speaker, the Premier talks about involuntary investment. Has he written

a letter to his Dad against the B.C. bank investments? Has he written MacMillan

Bloedel and said: "We're now going to implement the Pearse report.

Give back those privileges that you got as a private company that are unfair."

Not on your life! Those are two letters he'll never write.

What about the B. C. Electric seizure? Denationalization – what a cruel joke! What he's saying is that the people of this province don't have the right to own resources; only the private companies have that right. When you allow the people to have the right to own their own resources, you're giving them something they don't know how to handle.

Are we to be permanently serfs in our own homes? This is our province. Yes, it is a great philosophical debate. At the crux of that philosophical debate is a single belief that we have, and that is that the people of this province have the ability, the potential – and yes – the nerve and the intelligence to run their own affairs without the interference of international capital, international ownership and international manipulation. We are only two and a half million people. We are a humble people. We ask for no favours. We just ask for the decent opportunity to do for ourselves, instead of going cap in hand to the New York money markets for private investment.

My dear friend, the member for North Vancouver-Capilano (Mr. Gibson) , with whom I disagree in philosophy – but at least he's a gentleman – threw a challenge across the floor to the Premier. When he talks about involuntary investment, and he talks about the billion dollars in the savings banks, why doesn't he make B.C. Hydro bonds available in this bill to those people too? Why? I'll tell you why, Mr. Speaker. What is omitted....

An Hon. Member : Do you want to read that?

Mr. Barrett : I'll read that section. He has omitted to put a single losing corporation in this bill. Do you know what this means? Instead of all of us citizens benefiting in both the risks of losing and the benefits of winning, only the rich will have access to the winners, while the ordinary taxpayers will be stuck with the losers.

The Premier talks about Swan Valley. Yes, if you take the government's word – for it, $12 million or $14 million of the taxpayers' money was lost on Swan Valley. Deduct that from the $118 million that we made on these four companies, Mr. Premier, and we still are ahead by $106 million worth of assets on four companies alone.

But I want to talk about real losers that are not on this list. Who were they started by? Social Credit. Mr. Speaker, the Premier has been settling court cases and trying to put out fires on a disaster agreement he signed on B.C. Railway. He's been squandering tens of millions of taxpayers' dollars in out-of-court settlements to pay off the contractors and the loss-of-revenue potential because of the shutdown of that railway, and signing an agreement with Ottawa that cost the taxpayers of this province $37 million because of bumbling handling of that

[ Page 5136 ]

contract, Then boldfacedly, saying it as if it were the truth, at a press conference the Premier said: "Why, there are no strings attached to this agreement." We found out later from the contract and from the minister that strings were attached, and the string was: close down the line. This is a boldfaced absence of fact of that negotiation. Who is to believe the statements?

An Hon. Member : Nobody!

Mr. Barrett : B.C. Rail is a loser, and it's a loser because of that government.

The B.C. Ferries is also a stupid agreement signed by Ottawa that now obligates us to provide coastal services that will have to be paid for and subsidized out of general revenue that Ottawa cleverly manipulated themselves out of. That's a loser; it's not in this bill. We're leasing back our own ferries and we're going to pay double the cost for those. The people of this province are leasing back their own ferries that were already paid for from a Toronto firm under the political and financial wizardry of that group over there.

Mr. Speaker, what hypocrisy! There's not one Social Credit loser thrown in this bag. The only Crown corporations – and I want to say this clearly – that show up as winners and profit-makers are ones that were started by the New Democrat Party. Yes, it's true. You name one profit-maker started by Social Credit. There's not one.

I must say, Mr. Speaker, it also galls me on occasion when I turn on the TV and see a lovely smile on a plastic badge attached to the Royal Hudson. Yes, I confess, my dear friends. We started the Royal Hudson too. It's the only money-maker on B.C. Rail. It did grieve me a bit to see that whole kit and caboodle and cabal on its way down to California on the socialist train.

Interjections.

Mr. Barrett : There's a lot more dancing to be paid for for the tunes that that government is playing to the people of this province.

Mr. Speaker, I think I should clear the record in terms of the Premier's

statements about favours to Plateau Mills. I want to read this into the record

from the Pearse report. Mr. Williston was responsible for this. Page 111: "In

the cases of the two licences issued to pulp mills at Kamloops and Skookumchuck,

the then minister attached a letter. . . ." I want my free-enterprise friend,

who believes in open competition, the member for North Vancouver-Capilano (Mr.

Gibson) , who is the one spokesman for the Liberal Party, and the one spokesman

for the Conservative Party (Mr. Wallace) , to listen to this, because I do not

believe, even though we have a difference of philosophy, that you two would

agree with this kind of chicanery.

This is what the Pearse report brought out.

"In the cases of the two licences issued for pulp mills at Kamloops and Skookumchuck, the then minister attached a letter indicating that he would direct chips . . ." The minister of the Crown would direct chips to the licensee from sawmills in a specified public sustained yield unit area. If these proved insufficient, he would direct additional chips from elsewhere. "If necessary, to meet the needs of the pulp mill, he would revoke third-band timber sale licence and make roundwood available." He would take away from other private competitors in a free enterprise system their right and give it to these two big companies. It's a conflict of interest, Mr. Speaker.

This is what Mr. Pearse has to say about it: "No limit was put on the duration of these arrangements. The third licensee, the owner of a particle-board plant, was given a similar, but less definite assurance. He knows of no other situation where this went on." Is that free enterprise? Is that private enterprise? It's sheer conflict of interest and favouritism.

Mr. Macdonald : The next

section says there's no legislative authority.

Mr. Barrett : There was no legislative authority for the minister of the day to interfere on behalf of that private corporation. The Premier gets up today and wrings his hands and says: "Oh, the NDP tried to give the people of this province a favour back through its own company." That reeks of hypocrisy.

Mr. Speaker, the speech by the Premier today was one of selective memory. It was selective on the basis of trying to say to the people of this province that the companies set up by the NDP all lost money. That's what they went around this province saying: "They all lost money."

Mr. Lauk : He didn't tell the truth though.

Mr. Barrett : Now just a minute, Mr. Member. I want to take you through a logical sequence of events. During the election campaign, they went around saying that they all lost money. Today we are presented with a bill that says: "You remember the NDP lost money. Now is your chance, folks, to buy into four companies that are money-losers." Do you think he will say that on television when he explains this in the press conference that will be down behind the blue drapes below? "Folks! Guess what? The NDP companies all lost money, and now we're giving you

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a chance to invest in four of those losers."

Why, no, my good friend, Mr. Member for Vancouver East, he's not going to say that at all. He's going to erase it from his memory. What he's going to do is go on television and say: "Folks! Look what a good boy I am. I stuck my finger in the political pie and pulled out this plum. Four of the companies that I said were losing money are now big money-makers, and you can have a chance to buy them away from the people of this province."

Now if that isn't going to be hard to explain! I am sure there will be a front-page editorial in the Sun, in the Province, in the Times and in the Colonist explaining the hypocrisy of that position.

Some Hon. Members : And The Victorian.

Mr. Barrett : And The Victorian. Yes, there will be stories on the front pages telling how to turn a lemon into a political Cadillac. During the election campaign, he said the investments were a disaster. Now they are turning around and saying: "Come and join in that disaster."

Mr. Premier, you are going to be forced to admit.... I'm going to enjoy it. Yes, I am. I am allowed some personal satisfactions. Whether I am allowed them or not I am going to take them. I am going to see the Premier of this province, shave and all, look into that television camera and say to the people of British Columbia: "Invest in this, folks. It's a good deal." Guess who gave them the good deal? It was the socialists. Can't you see him on television now saying: "Invest in this. It's a good deal"?

An Hon. Member : "Trust me."

Mr. Barrett : "Trust me. What I said before wasn't true, but what I am saying now is true. However, if I need to change it tomorrow, you will have another selection of what is true or what isn't true."

An Hon. Member : That's the Liberal influence,

Mr. Barrett : No, that's not a Liberal influence. I wouldn't blame the Liberals for that. That's a Nixonesque influence.

The argument during the election campaign is inoperative now. "Inoperative" was the word; do you remember that, my friends? During the election campaign they were all losers, but now, by magic, they are all winners. Nixon called it "inoperative phrases." You figure it out from there.

Mr. Speaker, what about some of the hidden aspects of this bill which we must

deal with? First of all, Mr. Speaker, I want to bring to the House's attention.

. . . The Premier makes grandiose statements about keeping the people of this

province informed. Mr. Speaker, on March 10 of this year, the auditors for the

British Columbia Cellulose Corporation submitted the financial statements for

that corporation. The Premier of this province is responsible, by statute, for

filing with this House the statements of such Crown corporations. To this day,

to my knowledge – and I checked with the Clerk’s office before I

came in the House – this document has not yet been filed with the House.

This is the annual auditor's report of the British Columbia Cellulose Corporation

that is now being offered to the rich.

An Hon. Member : Why wouldn't he file it?

Mr. Barrett : I don't know why he wouldn't file it. It is an embarrassingly healthy statement. The corporation is making gobs of money!

An Hon. Member : He doesn't like black ink.

Interjections.

Mr. Barrett : He voted against this corporation; that's right.

An Hon. Member : Table it, then.

Mr. Barrett : Certainly I will table it. Let the people know how much money they have made before it is given away. Let the people know. Mr. Speaker, our own corporation in 1975 – and I'm talking about the capital outlay for four corporations, which was $25 million – had retained earnings of $60,602, 000. In one year, Mr. Speaker, the people of this province reaped a golden harvest of an increase. What is that embarrassing increase, my dear friends, of the company that you own? At least, to this day you own it.

The present balance sheet as of December 31,1976 – not yet filed in this House – from Coopers & Lybrand, shows that the retained earnings in 1976 went from $60,602, 882 to $81 million.

Mr. Speaker, that's much too good for the common people. It's much too good for the ordinary people to have your own company – that you own, folks – increase its worth from $60 million in retained earnings to $81 million in one year. It's no wonder he didn't want to bring this document in. It's an embarrassing success. But, oh, my goodness, gracious me. What ruins it all is the word "socialism". If nothing else is left, Mr. Speaker, then evoke the fear-trigger words: it's socialism. It's almost immoral for socialists to earn a profit.

[ Page 5138 ]

Oh, yes, we now discovered what the Premier's definition of morality is. It has nothing to do with philosophy of life. It has nothing to do with evaluating human behaviour on the basic of ethics and mores. In a newspaper article, we learn that you are not morally sound if you can't keep a balanced book. Yes, that is what we were accused of. No moral values. That's what I and my colleagues were accused of. I have not raped anyone; I'm not charged with that. I haven't abandoned my wife; I'm not charged with that. I haven't stolen money from anyone; I'm not charged with that. This government never paid off anyone when we were a government; I'm not charged with that.

Do you know where we lost our morality, friends, according to the Premier of the day of this province? We didn't balance a book. That's the morality of this government: if you can't balance a book, you're immoral. Well, I want to ask you: when it comes to immorality, what category should be defined when this information that their own company's retained earnings went up from $61 million to $81 million in one year, is hidden from the people? The Premier had this information back in March and it still hasn't been filed in the House. Let's talk about morality. Humbug!

An Hon. Member : Ah, he was going to file it.

Mr. Barrett : Let him make up his own story, friends. I'm sure it will be contradictory.

Mr. Speaker, the reason I bring this to the attention of the House is to deal with a very important point for the taxpayers of this province to understand. When these four corporations are removed from public ownership by this bill, they will no longer be exempt from paying corporation tax to that nasty old government in Ottawa.

Interjections.

Mr. Barrett : They don't. Columbia Cellulose isn't, Can-Cel isn't, but Plateau Mills....

Hon. Mr. Bennett : You said four.

Mr. Barrett : These four will be removed all four. Two of them are now removed and the other two will be removed.

Hon. Mr. Bennett : They always were removed.

Mr. Barrett : Mr. Premier, would you please get up and tell me now if you're going to admit that these are money-losers or money-earners?

Hon. Mr. Bennett : Can-Cel's never had to pay. . . -

Mr. Barrett : I know, but now you are putting two other companies in the same position. All four will not be exempt from taxes. Two of them are, but all four will not be. In other words, Mr. Speaker, we're going to burden, out of the profits of these companies that the people of this province have a right to claim and a right to spend and a right to share. . . We're going to hand over taxation to Ottawa as a mechanism of "denationalization".

Mr. Speaker, we're going to hand over to Ottawa millions and millions of dollars that could have been better spent for drugs and vitamins for a young person in this province whose whole sorry story had to be told on the front page of a paper. We're going to send taxes back to Ottawa because we've been robbing old-age pensioners of $1.83 a month for their cost-of-living increase. But it's all good business, my friend.

Now what does the loss of that tax revenue or earned income mean? I'll tell you what it means. It means that when you remove these four earners from contributing to general revenue, and you take that profit and give it to rich people who have had the chance to buy into this company, we're still saddled with the losers. We have to service the debt of the losers – hundreds of millions of dollars in B.C. Hydro, hundreds of millions of dollars in B.C., Rail – and pay back the lease that they sold out on the ferries.

If we don't make the money from these companies, then we're going to have to get the money from somewhere else. The taxpayers will lose the money they're earning on this and will face increased taxation to pay off the debts on the losers still held by that government. And you tell us that you're fighting on behalf of the little people of this province?

Mr. Speaker, I want you to understand one thing that the Premier says. In his

speech he said: "We designated it so that the rich can't really dominate

this corporation."

Mr. L. Nicolson (Nelson-Creston) : They can only get 3 per cent.

Mr. Barrett : No, 1 per cent each. Now that is good news for every old-age pensioner, every student, every IWA worker, every small businessman and every entrepreneur that's operating on a business in this province. You've got news out there, folks. You're not going to be allowed to be greedy. All you can buy is 1 per cent.

An Hon. Member : One million dollars.

Mr. Barrett : No, no, no. One per cent of

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$140 million worth of assets, gang, is $1.4 million. If any one of you old-age pensioners, you students or you small businessmen attempts to spend more than $1.4 million for your share of this company, you're going to be stopped by this government. I want to give fair warning to those folks who are going to open up their cookie jar tonight, and who think that they're going to get a fair share of this operation. When you folks finish counting out the money in your cookie jar and find that you're over $1.4 million, you can't buy any more of it.

Mr. G.R. Lea (Prince Rupert) : That affects most of the cabinet. (Laughter.)

Mr. Barrett : My good friend, we know that 14 of them have cookie jars that are worth more than $1 million. From 14 millionaires and 12 used-car dealers, what else do you expect?

The taxpayers of this province who sweated, the pioneers who led to the development of this and the resources that were placed here by God, combine to allow the people of this province to have four companies bought by their government with $143 million a little over three years after they paid $25 million for them, It was attacked as socialist; it was attacked as evil; it was attacked as money-losing. Today we have to suffer through the hypocrisy of hearing a speech from the Premier saying: "Okay, gang. Now it's all clean. You can invest in these winners and you can buy up to $1.4 million worth. That's what we're going to limit you to.”

Mr. Speaker, when I used to work in prisons they had vernacular words for everything. When something was acquired by an unreasonable argument or perhaps even by theft – and I'm not suggesting that here – it had to go through a process before it was resold. When it was theft, it was called "going through a fence." When it was a switch of money, it was called "laundering.”

Mr. Speaker, we have seen the greatest laundering speech of all time here today from the Premier of this province. That which was dirty, rotten, was socialism, or was losing; that which was filth, terrible and bad, has now been laundered and it comes out as an opportunity to invest, As I said at the outset, only used car dealers could figure out a way of selling you something you already own.

Hon. Member : No ticket, no laundry.

Mr. Barrett : No tickee, no laundry, my friend says. The Premier talks about editorials. . . .

An Hon. Member : Oxydol Bill.

An Hon. Member : Drip-dry Dave.

Mr. Barrett : Mr. Speaker, I want to bring to the attention of this House a lead editorial in the Victoria Times and good luck to them. They're not fooling the editorial pages, and I credit the Victoria Times for having the guts to print this. They've summed it up right there in the editorial when they speak about this bill. You want to read the headline on their editorial – and this is not a socialist paper – they figured it out, and the headline of their editorial is "Opportunity For The Rich. " The Victoria Times has labeled it right on the head.

I would hope that The Vancouver Sun will reprint it, perhaps under "Help Wanted, " or perhaps on page 812 of the daily Province. Oh, they don't have that many pages? Well, then it won't be seen.

Mr. Speaker, it's the old flim-flam game at its best, Laundering political arguments, twisting the truth, distorting the facts in the historical records, and then having the nerve to come into this chamber hoping that the members of this House would forget what went on. I learned long ago as a child in the Judiac-Cristian world that the best philosophy and morality, Mr. Speaker, besides money balancing, is to forgive and to forget, and I thank my parents and my educators for giving me that frame of reference. Mr. Speaker, in this particular situation I will forgive.

I do not wish to shorten my life by carrying any feelings of political argument beyond this room, but I'll tell you this, I won't forget, I won't forget the abuse my party and colleagues took on behalf of the citizens of this province in making the bold moves to buy these corporations. Yes, we'll all see the whimpers and the sarcasm of the government members who don't want to be reminded of their own words. I'll never forget the struggle we went through to make these benefits available to the people of this province, only to have that struggle verified today by the Premier saying that these are a good investment.

Yes, socialists bought them, and they're a good investment.

Interjection.

Mr. Barrett : Well, Mr. Member, we've had a lot of humorous moments this session. We've had a lot of interesting debate, and occasionally some bad temper. We've had accusations back and forth across the floor of this House, but never in my short time in politics did I ever believe that my theory about public ownership and the right of the people to share in their own resources would be proven by a free-enterpriser coming in and saying that the corporations you socialists started are making so much money that we're going to have to sell them back to the people who already own them. It is hypocrisy. It is a sell-out of the concept that every citizen, rich or poor, healthy or unhealthy, young

[ Page 5140 ]

or old, has the right to expect his fair share in the investment he's already made. You're taking that right away from them.

It will not be the old-age pensioners of this province, the pioneers in the nursing homes and receiving homes who will invest. It will not be the young, the working people, or, indeed, the small businessmen; this is another sop to the already rich in our community, with perhaps some crumbs of small investments to the small people. That to me, Mr. Speaker, is the height of hypocrisy. The audacity of a used car salesman, to be able to tell the folks who buy this little car that it's only a few years old and been driven by a widow, before she passed on and left her property to an unnamed minister, so buy this car.

The odometer has not been fiddled with, or at least we haven't been caught fiddling with it, and everybody knows how to trust a car dealer. Well, that's the same application that's going on in the speeches of that government on this bill.

I'm going to vote against this bill, because I want to make it clear in conclusion, Mr. Speaker, that we didn't struggle 40 years to come to power in this province, people didn't lose their jobs and contribute money to our party as an ordinary people's party, for us to sit idly by when we became government and not ensure the people of this province a fair crack at their own resources, and a fair share back for their hard work. We bought these companies, they made money, and that money should stay in the hands of the people of this province, for goods and services for those people.

I won't support this sell-out, Mr. Speaker – not on you life! I welcome the proof that we were right, I welcome the proof that our purchases were right, but I will not agree with selling off that first small move towards the people having a share in a co-operative society on an equal basis.

Mr. Gibson : Mr. Speaker, there has been a certain amount of what I think you could call "hype and puffery" about this bill. I think we should understand what it is and what it is not. The Premier's press release stated in the first paragraph that the purpose of this bill was: "To give the citizens of British Columbia greater opportunities to invest and participate in the economic development of the province.

Mr. Speaker, I want to remind the people of a former Premier who used to say:

"Nothing is freer than free." As far as that statement went, it's

right, but I'll remind this Premier: nothing is greater than 100 per cent.

How can you participate in more than 100 per cent when we're already participating

100 per cent in these particular investments? If it's the particular investments

that the Premier wants people to participate in in a greater way – Can-Cel

is the major asset we're talking about here – then they can go and

buy that on the open market. Go down to the stock exchange today and buy some

Can-Cel if you want. As I say, there's a lot of flim-flam about it, but

the bill does do some useful things. I'll say at the outset that it was

a policy I advocated in the last election campaign and I'm going to support

it today. I'm also going to suggest some improvements.

What does the bill do? First of all, it puts ownership positions in four Crown corporations at arm's length – at least, that's what the Premier tells it's going to do. There's no guarantee in the legislation that the government will hold less than 50 per cent, simply a statement of government intent, but we'll accept that intent at face value. This will put these ownership positions in these Crown-owned agencies at arm's length, managed in a way independent of the government. I support that. I think that's good.

The next thing it will do is throw certain natural resource rights into the pot. It will put oil and gas rights of an undetermined magnitude – and I wish the Premier, in closing second reading, would tell us something about the magnitude – into this natural resources corporation pot, I think that's a good thing, too. Although it's a terrible slap in the face to the Minister of Mines, who used to administer these oil and gas rights, it's probably a good thing this corporation should take them over.

Mr. Lauk : Anybody other than the Minister of Mines.

Mr. Gibson : The next thing it does is establish an investment vehicle, locked into British Columbia, for resource investment. That's important, too, because there's a natural wish for the citizens of British Columbia to have the money earned from natural resources in this province reinvested in this province. This corporation will have that kind of lock-in effect. I support that.

Finally, it provides a fund-raising vehicle for investment in natural resource areas, as the Premier said in his talk, without limiting the secondary area, and tertiary areas as well, perhaps. It provides a capital-accumulation device in the province. We need those in British Columbia for future growth – say a pulp mill. This might be the agency, if it accumulates enough money, raises enough new money, which could lead the way in that needed pulp mill that the Minister of Forests (Hon. Mr. Waterland) has promised this province within one year – an announcement within one year.

He made that statement in April, so we're going to have to get this corporation off the ground pretty quickly if it's going to do the thing on the pulp mill.

[ Page 5141 ]

How much money might it raise? It depends on how the government goes about it, Mr. Speaker. I want the Premier, when he closes debate on second reading, to assure this House that the new money is going to be raised on a primary financing and not on a secondary financing. By that, I mean the government is not simply going to take 100 per cent of the shares, sell off enough shares to the public to get its share below 50 per cent, and then put the money back into the government treasury, Well, if that's the intent, Mr. Member, I think that's wrong. I hope it's not the intent and I want the Premier to assure us of that.

Hon. Mr. Bennett : I already announced that's not the intent.

Mr. Gibson : By the bill, Mr. Premier, you could go either way. It's very clear that there will have to be some secondary offering somewhere down the road if the government share is, in fact, to be reduced below 10 per cent, as the Premier suggested was the policy. I just want to make sure that the first major offering is not a secondary one, but rather a primary one, in order to get new money into this company. It's terribly important.

The Premier suggested that he didn't want to tie, this corporation down with ground rules, but I think there should be a few. I think this corporation should be required to be tied to British Columbia investments. I think that's the intent of it, and this Legislature's looking at it, and I think that should be a ground rule. I think that it should be required to make investments on the basis of profitability and not on the basis of bail-out situations. Bail-out situations are sometimes required.

This government has looked at them; the former government looked at them, but when they are required they should be done directly by the government and not by this corporation that we're setting up here.

I think that there should be a guideline which calls on this new corporation to have a preference for new investment but not entirely ruling out highly profitable repatriation investments. In this regard, I am happy, as I always am, to congratulate the former government on the Can-Cel purchase, which is one of the great financial coups of the last generation in British Columbia, without question. There's no reason why this corporation shouldn't get into that kind of a deal if it can find one that good.

I think another ground rule that should be established – and I know the

Premier is in favour of it because he said it has already been established,

but I don't think it has – is no favouritism by government for this

particular corporation. The Premier says, "well, we will hold less than

50 per cent so it's at arm's length, " but it's only human

to care about something in which you have a 50 per cent ownership. I think somehow

this question of favouritism has to be guarded against very carefully. You have

to have that for confidence in the competing enterprises in the private sector

if they are to think they are to have a fair shake in dealing with the British

Columbia government in the natural resources field. If they think there's

some kind of a pre-emptive or matching-bid right on the part of the Resources

Investment Corporation, then that will discourage other private-sector investment

in this province.

Another ground rule and guideline should be very advanced forms of corporate democracy in this new instrument that is being set up. Some members in this House from time to time decry and criticize the internal democratic rules and dealings of certain unions in this province. Well, let me tell you, almost no union is as undemocratic in its internal procedure as are private corporations in terms of the powers of shareholders and information that ordinary shareholders can have.

It seems to me that the government should lay down guidelines which state that this Resources Investment Corporation will be some kind of a benchmark, some kind of a guiding light, as far as advanced forms of corporate democracy are concerned in our province – the extensive giving of information to shareholders, perhaps quarterly shareholders' meetings, and so on.

Now I have stated some of the good things I think this corporation will be doing. I have stated some of the ground rules I think it should have. I want to turn for a moment to the, arguments advanced by the Leader of the Opposition.

First of all, I can't buy his argument that leaving things as they were would have led to a freedom of income tax for these particular companies that are being transferred. That may be technically true, but you can't keep a country together in that way. One of the things we've been lacking in this nation is intergovernmental reciprocal taxation agreements.

As we see increased nationalization of companies, and as we see Saskatchewan going after most of the potash industry, we are going to see the day, if we aren't careful, when there's going to be a severe conflict between the federal and provincial governments over reciprocity of taxation. That, to me, is not an argument for retaining these existing companies, such as Kootenay Forest Products, in their present form.

The Leader of the Opposition, however, does put his finger on a serious flaw in this bill. It comes back to what I described as the flim-flam in the beginning. This bill is taking a share of what all of the people own equally now, through their government. I am speaking in terms of the shares in Canadian Cellulose – some $70 million worth – the shares in Plateau Mills, Kootenay Forest Products,

[ Page 5142 ]

the one million or so shares of Westcoast Transmission, and the oil and natural gas rights. Taking these things that all of us now own equally and selling them at first as to 50 per cent and gradually, in the intent of the Premier, over 90 per cent to the few who can afford it, that to me is wrong. It's not so terribly wrong that it overwhelms the principle of what is otherwise a good bill because while these assets are being transferred, value is being received for them. I acknowledge that.

[Mr. Haddad in the chair.]

Mr. Speaker, welcome.

Hon. Mr. Bennett : Is there no one in the chair?

Mr. Wallace : Can you make yourself disappear, Mr. Speaker?

Mr. Gibson : When all is said and done, in this bill we are selling out a part of the birthright of the many for the dollars of a few, and we are selling the winners and not the losers.

Mr. Speaker, I believe there's a way that all of these objectives can be met; that the solid points of the government, which I outlined earlier, can be obtained – the business of capital formation and putting the operation of these companies at arm's length – on the one hand and, on the other hand, we can avoid this sell-off of the birthright of which I spoke.

That can be done, first of all, by starting the new company with the stipulated assets plus a cash fund subscribed by the government, equivalent to what would be raised by the initial primary sale of shares. I wish the Premier, in closing second reading, would give us some idea of what this primary issue might bring in – if it is to bring the government's share to 50 per cent. That depends on the oil and gas valuation of course, but I suppose we are looking at something between $100 million and $200 million. That would be very difficult for the B.C. capital market to absorb in one particular offering.

Over a number of months, it might be sustained, but that's a technical point and I would appreciate the Minister's remarks on that. But set up this company, transfer the assets into it and give it a cash fund, put in by the government equivalent to what the first primary offering would achieve. I point out to the Premier that just in the first-quarter surplus of this Fiscal year, he has $100 million there, which he hadn't expected. This would be a good place to put it.

Then, Mr. Speaker, rather than selling off the birthright to the few who come

along with the dollar bills in their pocket and, say, buy the shares –

instead of that, distribute one share to each British Columbian at no charge.

That share has been paid for. The people own that share now. Now you're

just transferring it to them and registering it in their names. Make a date

of record – let's say August 31,1977 – and make that distribution

to every British Columbian of record as of that date. If the Premier says that

would be technically difficult, I'd point out to him such things as voters

lists and tax rolls and family allowance records. In this day of the computer,

that's well within the realm of possibility. That could easily be supplemented

by an individual application and registration procedure on the basis of individuals

who might otherwise have been overlooked.

Mr. Speaker, this would give everyone in the province a stake in this corporation. It would get it out of the government's hands entirely, not just 50 per cent. It would get it out entirely. Distribute all of the shares. It would allow every British Columbian to feel a very direct relationship with this particular birthright that the government is proposing to transfer here. It would allow every British Columbia to have a very direct, acute feeling about the adequacy of the management of his particular assets, as evidenced by his own particular piece of paper in that given year.

It would be a great example of the merits of our economy, and to each individual person, of capital accumulation. It would be far beyond the importance of this particular bill. It would be an educational lesson for every British Columbian. And young British Columbians, as they grew up, would have this certificate – their particular share of this particular publicly owned enterprise – which they could sell if they wished. But I'm going to suggest to you that most British Columbians would want to hold on to this particular share.

This would fully eliminate any question of conflict of interest, because the government would no longer own any of this corporation. It would certainly make it at arm's length. It would provide for some of the most interesting and exciting shareholders' meetings in the history of British Columbia. In my view, it would give people a sense of belonging to our economy and working for our economy in a sense that nothing else I can imagine would do.

The Premier said in his remarks that his proposal would give two and a half million British Columbians a chance to gain a voluntary stake in the economy, Mr. Speaker, they already have that stake; we already own these companies and we already own these oil and gas rights. Why charge people twice? Why not distribute the evidence of that ownership – a share to each British Columbian – to be not only a tangible indication, but a

[ Page 5143 ]

symbolic indication, of how we are all woven together in the economy of this great province?

I support the general intent and thrust of this bill, but I want to suggest to the Premier, in terms of the share distribution, that a little imagination could make it go a lot further and make it a lot more meaningful to all of his fellow citizens of British Columbia.

Mr. Wallace : Well, Mr. Speaker, I have no such radical, innovative ideas to bring to this debate, such as distributing one share to every citizen of British Columbia. But I must say the thought of trying to demonstrate and to implement, in a very practical way, the evidence of public ownership and make it meaningful to the individual British Columbian – I think it's an excellent idea. One of the overwhelming feelings that I have sitting listening to this debate today is that somehow I've heard it all before and I've heard it from both sides of the House.

Sometimes I have to shake my head to be sure which side of the House I'm hearing certain statements coming from. With respect, I just don't think that the so-called clash of philosophies which we have heard about today is in any way as distinct and well-defined as both sides of this House would try to make out to the public of British Columbia.

We have on the government side a repetition in the Premier's words today, of all the ills of having government involved in the marketplace. We have the refuting by the official opposition of all the ills which come from leaving resource development purely to the private enterpriser. I really think that this is getting to be a really stale kind of argument. If you really look at our developing western world these days it isn't this myth of free enterprise versus socialism. If anybody cares to take a real look at that argument, it's getting more and more difficult to determine what free enterprise is, and it's even more difficult to determine sometimes what socialism is.

When we had the former NDP government in this province, their motivations were

to provide greater social benefits by deriving revenue from resource development

of various kinds. Yet they chose the very prudent and proven capitalist approach

of buying shares in one of the best companies in tile province – in this

case, Westcoast Transmission. Furthermore, the NDP government of that day took

the position that the role of the government in the marketplace was not simply

and totally and at all times to consider what could make a buck, but to consider

some of the other benefits which would follow from having government involved

in the marketplace. The B.C. Cellulose Company Act was a good example of that.

I like to think that I take the position today that I took on that occasion.

I voted for that bill and took a great deal of flak from the free-enterprisers

who felt that it was ridiculous for anybody espousing the Progressive Conservative

cause to vote for a bill which we now find has made a very health profit for

the people of British Columbia. So this argument today revolves around the fact

that the free enterprisers are always right by staying out of the marketplace,

or that the free enterprisers should be left to be the only investors in the

marketplace and the government should stay completely out of it and never use

public funds to acquire investment for the public, then of course we could argue

till doomsday and we would both finish up in the same position. But what I am

saying is that in recent years, and in fact in our western economy, there has

been no clear-cut dividing line between so-called free enterprise and so-called

socialism.

Socialist governments make some very wise capitalist moves in the investments they make. We have seen that in Westcoast Transmission and Can-Cel. Free-enterprise governments, on the other hand, are getting more and more into the habit of developing practices that are supposed to be the handprint of socialism. We have seen it in the recent example of some of the legislation we've had this session, and I don't wish to impose on the rules of the House by quoting

chapter and verse.

My view is that there are clear examples, not only in this country, but in Europe, of the wisdom of having a blend of so-called free enterprise and so-called socialism where the government and the industry thrive in a mutually satisfactory way, and in what I thought everybody now realized was the so-called mixed economy of the 20th century. But for us in this chamber on this bill or on any other bill to go on trying to perpetuate the myth that we have either free enterprise or socialism in British Columbia is to be something less than frank, forward and honest with the public of British Columbia.

Yet to hear the Premier introduce the bill today, one would think that economic nirvana had arrived in British Columbia, and that this was the millennium for the voters of British Columbia. "Just put up your bucks, fellows, into this new corporation and we will have an economic revival like you have never seen in the last 100 years." That was the note behind the way tile Premier ended his comments before he moved second reading.

Now I would like to think that the Premier is right. I certainly am one of the first persons to acknowledge that what this province needs economically above all other things is investment capital. Any legislation which will encourage the investment of capital in British Columbia is certainly to be supported and applauded.

[ Page 5144 ]

What I do reject is the suggestion that everything the NDP did was all wrong and what the new government is now doing to encourage investment is all right, and that it's either/or black or white, right or wrong. That just doesn't answer the facts of the economic situation in British Columbia during the life of this government, or the last one, or the one before that. As a person who listens carefully to the man on the street, I find that many individuals in British Columbia are somewhat confused to see what particularly important difference there is between this concept and the more direct concept of the government owning shares in public corporations.

In introducing second reading the Premier, Mr. Speaker, put great emphasis on the fact that the government would own less than 50 per cent of the shares of this corporation. That may well be so, but he made the amazing statement by implication that the government, under this bill, would continue to reduce its participation in ownership, I'm wondering if this is a new historic event in this chamber – that we've got legislation by implication.

I'm convinced there are a lot of people in this province and a lot of people in Canada who aren't even convinced when a government puts it in writing that they'll live up to it, both provincially and federally. Perhaps we could say this more federally than provincially, but I was really surprised by the Premier's statement that by implication, this bill gives the public the message that the government will gradually reduce its percentage of ownership in this corporation.

Even if the Premier tries to get the impression across that there will not be direct government ownership, but simply that the government will own less than 50 per cent of the shares, it's very interesting to look at the part of the bill which deals with the directors. The number of the directors who can be appointed by the minister with the permission of the Lieutenant-Governor-in-Council is very clearly a constant proportion of the total number of directors. I'm no expert on corporate affairs, but I always thought that directors were elected by the votes of the shareholders.

In this particular

section of the bill dealing with directors.... I won't

quote

chapter and verse Mr. Speaker. We can do that in committee. But the number

of government-appointed directors depends on the size of the board of directors.

It's quite obvious. that the whole thrust of the bill is to maintain a very

strong and definitive presence of government-appointed directors on this board.

Again, all I'm saying is that it's a matter of degree. All the publicity

and speeches and statements by both sides of the House, both of whom, in my

view, are extreme in presenting their point of view....

We get the impression over on this side of the House that the government, through wise and very careful ownership, and when the NDP were government, have again produced nothing but success in the field of public ownership. Again, we know that that's not true. They've had some successes and they've bombed right out on others.

On the other hand, we have on the free-enterprise side of the House the claim that everything will be just great if the government gets completely and totally out of public ownership. What I'm saying again is that this very polarized, extreme position by the official opposition and the government in turn just doesn't really represent an intelligent and modern approach to the role of government in the marketplace.

There is a role for government in the marketplace, and perhaps its indirect role is through the vehicle of this kind of corporation. But it has a direct role, in my opinion. This is where I'll immediately be branded an NDP supporter again, I suppose, but it has a role far and beyond and above the one single criterion of whether this business in which we might become involved is making a buck.

When we look back at the history of the marketplace over the last several decades, and look at the standard of living we're enjoying today, we should not lose sight of two factors. Governments, federally and provincially, have in fact become involved in companies which otherwise were not making a profit, but where employment, and the sustaining of the workers in the same location, and a whole lot of other social factors were such as to justify government involvement, even if that company was losing money. The other factor that comes into place is that the taxpayer is otherwise saddled with paying more and more taxes to provide more and more UIC and welfare payments.

Now which is it to be, Mr. Speaker? Is it again an either/or situation? If the company's not making money, let it go broke and we'll just pay the workers UIC and welfare. Or is there not a role in a modern society for governments to selectively support or subsidize – use whatever word you want – in the way of financial participation of public money in order to sustain that particular industry and employment in that industry, in that location in the absence of which these people would be dislocated and would have to find employment elsewhere?

This would likely involve great suffering on their part, So it keeps coming back to the fact that it isn't just free enterprise versus socialism, it's very much a matter for modern governments to realize there's something to be said for both of these approaches. There are examples to prove not only that it can be a financial success, but that it can also achieve the social goals that I referred to a

[ Page 5145 ]

moment ago.

The Premier talked about this bill representing philosophy. All it seems to represent, really, is that the Premier says it's all right for the government to be involved in the marketplace, if it's just one step removed. Then he comes on with the argument that because the government would have less than 50 per cent of the shares, that somehow or other that makes the whole situation completely a free-enterprise situation. What a suggestion, as long as government has any substantial percentage of control over any company.

Is he trying to tell the public of B.C. that it's just like any other corporate shareholder if the government owns 49 per cent of some, company? That's asking us to stretch reality a little bit.

I find this bill a difficult one to analyse because there is confusion. I happen to think that, as with most governments or enterprises in life, you get most publicity for your failures. The former NDP government, I think, showed some sound judgment in some of the share purchases they made. We've heard today that the purchases in Westcoast Transmission and Canada Cellulose were very successful. On the other hand, of course, the purchases into certain other areas of the private enterprise world were a disaster.

I don't think that we should finish up with this black or white image that everything the NDP did was wrong, and everything this government is doing is right, and that the philosophy separating the two is as clear-cut or definitive as both of these particular parties would want the public to believe. This perpetuates the polarized situation we have each election time. It suits this government, and it suits the official opposition to perpetuate this myth, simply because, when the government of the day is finally defeated, the official opposition succeeds to the government role, and vice versa.

I would like to quote one of the Premier's statements at election time

in 1975. 1 hope that he's not too busy chattering with the Minister of Economic

Development. I am quoting a report from the Vancouver Province of November 18,1975.

I'm glad that the member for Prince Rupert (Mr. Lea) is here, because it

relates to a statement that was made by the Premier in Prince Rupert, where

he said that the employees of companies purchased by the NDP will be offered

preferential stock options under a Social Credit government. The statement goes

on: "Bennett's announcement on open-line radio shows took a step further

in his plan for the NDP's forest and other firms. Earlier, when Premier

Bennett implied the Socreds would sell the companies and employees would lose

their jobs, Bennett said the jobs were guaranteed and confirmed that the firms

would only be sold after full financial studies." Later on Mr. Bennett

said that all employees of firms required by the NDP, such as the forest companies

and firms like Panco Poultry, would be given first crack at shares under a special

Socred low-interest employee participation plan.

It would seem that in this bill the Premier is keeping at least part of the commitment that was made, in that the NDP firms would be studied and after a financial accounting, the government would take some action, either to take them over, or to guarantee the jobs of those persons working there. The second part of the commitment, according to this report from November 18,1975, says that employees would be given first crack at the shares under a special Socred low-interest employee participation plan.

In this case, we're dealing with two Crown corporations and two companies, and in three of them, I guess the government has the amount of control it needs to implement some of these matters that I am going to ask about.

I suppose in the case of Westcoast Transmission, since the province owns only 10 per cent of the shares, it would be more difficult, if not impossible, to implement this proposal that was made by the Premier in the '75 election campaign.

Could I ask the Premier if, in fact, that commitment from the election will be kept? Will employees of Plateau Mills, Kootenay. Forest Products and Can-Cel be given some special access to shares under special circumstances and presumably with some low interest rate by which they can purchase the shares over a period of time? This, in my view, would be an excellent idea.

If the Premier wishes to set some new direction in these cases, not only for the economy of the province but for the image of industrial democracy – something that started in Europe and I hope will be progressively adopted in B.C. and in Canada – there is a greater degree of industrial peace where, as in the case of Kootenay Forest Products, workers are represented on the board and where, in many other companies, the worker is given a Teal sense of incentive to be productive where he is employed if he in fact owns shares and shares in the profits.

It would seem to me that this is a golden opportunity for the Premier, as leader of this new government, not only to keep his commitment that he made in Prince Rupert during the campaign but, in fact, to prove that lie really believes not only in the incentive value of giving workers a share in the company for which they work, but that he believes in this crucial need to accept the basic ideas of industrial democracy and to set an example for the whole of the private sector.

One of the comments that has been made about this bill is that it reflects the Premier's healthy distrust of big business. It's quite obvious from the kind of capital that the Premier expects to raise

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that it may place this corporation in a position of carrying out some resource development which the multinational companies would not carry out. Already this afternoon the Liberal leader (Mr. Gibson) referred to the need for a pulp mill in British Columbia. Where multinational companies are concerned, I guess they have their own priorities such as the particular countries where the next step in the development of that company should take place.

I applaud this bill inasmuch as it limits ownership of shares to Canadians and gives preference to British Columbians. That's an excellent idea. But then the motives and goals of British Columbians and Canadians must inevitably be somewhat different from the goals, let us say, of some large multinational corporation with investment and expansion going on in many corners of the globe.

It would seem quite a reasonable comment that this corporation will, in fact, get the message through to the large multinational corporations that the government of British Columbia wants the development of our resources to proceed in a manner that is in the best interests of the province and not in the best interests of the multinational corporations.

So here again, Mr. Speaker, I am saying: is this the evidence of the "free enterprise philosophy" where this government is giving the private sector and the giant multinational examples of the free enterprise system notice that this government recognizes some of the deficiencies of the free enterprise system? Where the free enterprise system appears to depend, as far as economic development is concerned, on the priority decisions of multinational corporations, these decisions may by no means be in the interest of British Columbia.

The Premier's proposal is an alternative to that. Is this kind of corporation, where shares can only be held by Canadians and British Columbians, to be used for the kind of development that will be in the best and foremost interests of the people of this province? When we talk in these terms and realize that the government is only going to be one stage removed from involvement compared to the direct involvement with the four companies that are being transferred in this bill, I think again we realize there isn't this dramatic either/or, free enterprise or socialism approach in British Columbia.

But that approach, that it's either free enterprise or socialism, has tremendous appeal to the politicians in B.C. because of its value at the polls. The great value of presenting the NDP as some ogres who can't count dollar bills up to 10 and their ineptness at handling the financial administration of the province makes for great speeches and great copy on the hustings, and, of course, vice versa.

It makes for great speeches and great copy when the NDP gets into an election

campaign and rails endlessly about the evils of big business and multinational

corporations, Indeed there are deficiencies in the way in which they hold so

much power and function within British Columbia and Canada. It's so easy,

depending on which party you're in in this House, to take a nice, rigid,

extreme position and point out that this bill today is remedying the "evils

of socialism" and bringing back all that's good in free enterprise.

Really, both of these assumptions, as I have said, are gross exaggerations of

the truth.

It would seem, as one looks around the western world, and particularly the European situation, and as one learns we hope, from history, that a modern, highly sophisticated and technological society will flourish best where you have a blend of what is best in both free enterprise and socialism. It is no longer, if it ever was, a matter of having one system where all the important economic decisions were either taken by free enterprise or by an overwhelmingly powerful, centralized socialist government.

I know I'll be misunderstood when I say this, but many of the economic decisions which the NDP took in government were good decisions and they were good for British Columbia. They made mistakes, and some of them, particularly mistakes like ICBC, were given such overwhelming publicity and criticism....

Perhaps they should have received a great deal of criticism, but many people who don't take enough time to look at the true nature of our society and the true needs of a modem economy, I think, went overboard in choosing to criticize and emphasize the negative aspects of the economic decisions that were made by the NDP. The economic millennium that the Premier suggested was just around the corner if we all just vote for the bill....

I hope that in winding up second reading the Premier will answer some of these criticisms about the true nature of the marketplace and the modern role of government in the marketplace. Above all, I hope the Premier will give us some comment on the possibility of giving preferred stock options to the workers who are in the four specific companies which are to be transferred to the jurisdiction of this new corporation. I strongly believe that industrial peace and progress in management, and industrial relations will depend a great deal on incentives rather than force or compulsion.

It seems to me that not only was the Premier thinking along these lines during the election campaign, as witnessed by his comments in Prince Rupert, but he obviously felt that it wasn't enough just for the government to get out of the ownership of companies, but in making the change to provide some real incentive to workers in these companies to become more productive and to share in the

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profits.

While we don't know and cannot know the full impact of this bill until more detail is known about the sum that's to be raised, and the appraised value of the shares, and many other specific details, I think there are many general principles that the Premier could give us information about, not the least of which is the question of providing the employees with some preferred position in acquiring the shares which the Premier has said will be within the reach of everyone, and not just within the reach of the rich.

Hon. Mr. Bennett : I'd like to comment on the remarks made by all of the party leaders. First of all, I'll start with the last first, because the Conservative leader (Mr. Wallace) is in the House. In regards to the employees of the particular facilities in the province, it's possible in the distribution to hold share blocks for them. That's merely a matter of distribution. But the member, if he looks closely at the bill, will see that there is a preference, first of all, for Canadians. But before that there's a preference for all British Columbians. All British Columbians are limited to 1 per cent.

But you'll notice that those that are primarily labour unions where you have benefit plans and pension plans and medical plans are allowed to buy up the 3 per cent. That preference is there for those companies and employee associations where they have these benefit plans to have a much larger interest than any other group. In fact, they do have first preference on purchase, they do have a preference on a larger amount of purchase collectively. That is made available to them.

So those employees – in fact, employees and working people in this province that are banded together in association, whether it be union or elsewhere, that have employee benefit plans.... Those funds have a preference in being allowed to buy up to 3 per cent of this corporation, where every other Canadian and Canadian business is restricted to only buying up to 1 per cent.

There's a preference in first right; there's a preference in the amount. That, I believe, is as it should be. We want them to participate; we want them to participate extensively. This corporation allows for the voluntary purchase of this corporation. Now many philosophies and many ideas have been expressed this afternoon. Sometimes, as the Conservative leader says, it's a mixed economy or a different economy and it's hard to tell the players without a programme.

I was especially interested to listen to the leader of the Liberal Party and

hear about his share-dividend plan, as first espoused by Major Douglas. I was

quite interested that he's reviving the theories of the major, who's

waited all these years to have a Liberal exponent, besides Mackenzie King. Perhaps

you're Mackenzie King reincarnate; who knows?

Anyhow, the Conservative leader is correct. We must first of all ... nobody deals with monopoly situations and he deals with our fear of them. That fear is of a monopoly, whether it's a government-owned monopoly or private monopoly. We're well aware and we've passed legislation in this Legislature to give us greater protection from government monopolies, the Crown corporations. We have just as much trouble dealing with private-sector telephone companies. So we've proven once and for all, with Hydro and all the rest, that government ownership versus private ownership doesn't protect the public any more from monopolies.

But governments of the day have at their disposal, either through legislative committee and public accounts committee or the legislation they've passed, the ability to control through regulation, through direction. In the case of forest companies, you have even more than that, because you have allocation of timber. In this province, Mr. Speaker, the government owns, in the name of the Crown, 95 per cent of the timber and the resources of this province.

As such, we have the ability not to sell, but to allow those resources to be harvested or extracted under rules and conditions and taxation and allocation as directed by the government of the day. That is the people's protection, and that is where the very greatest protection is. They can be partners in the profits and not have to share in any potential losses.

I'm sure the Conservative leader knows that the tax money we collect is for social purposes, not to satisfy the whim of playing the stockmarket and saying, "I had these winners, " or "Forget about those losers." If today's debate, especially the sterling defence not of their administration by the Leader of the Opposition (Mr. Barrett) , whose almost total speech didn't deal with the great possibilities of this bill but a defence of their purchase and the way they conducted government...

I realize that defeat creates a great psychological need to defend one's actions of the past, and perhaps that becomes a preoccupation. Perhaps it's a preoccupation as it is. That's fine. I'll deal with his comments later, after I've finished dealing with the comments that related to the bill and its possibilities by the Conservative leader, first of all.

He wanted to know, firstly, about the opportunity for employees. I said that great opportunity of 3 per cent to give them that extra opportunity, because this was done by study. We've always said that we should study before any assets were dealt with in making them a