1988 Legislative Session: 2nd Session, 34th 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)

THURSDAY, JUNE 2, 1988

Afternoon Sitting

[ Page

4809 ]

CONTENTS

Routine Proceedings

Oral Questions

Lunch programs in schools. Mr. Cashore –– 4809

Social assistance rates. Mr. Cashore –– 4809

Privatization of university libraries. Ms. Marzari –– 4809

Adult ESL programs. Mr. Barnes –– 4810

Economic development regions. Mr. Blencoe –– 4810

Transit fare increases. Mr. Rose –– 4811

Ministerial Statement

Access Awareness Week. Hon. Mr. Veitch –– 4811

Mr. D’Arcy

Hon. Mr. Reid

Mr. Rose

Committee of Supply: Ministry of Forests and Lands estimates. (Hon. Mr. Parker)

On vote 40: minister's office –– 4812

Mr. Miller

Mrs. Boone

Mr. Williams

Mr. Michael

Mr. Guno

Mr. Rose

On vote 44: North Coast development region –– 4820

Mr. Blencoe

Mr. Michael

Committee of Supply: Ministry of Agriculture and Fisheries estimates.

(Hon. Mr. Savage)

On vote 9: minister's office –– 4823

Hon. Mr. Savage

Mr. Rose

Mr. Guno

Ms. Smallwood

Mr. R. Fraser

The House met at 2: 10 p.m.

HON. MR. REID :

Mr. Speaker, I'd like the House to welcome today the Council of B.C.

Regional Tourist Associations representatives, who are in the members'

gallery. We have with us Garry Sharpe, the chairman; Jean Anderson, the

vice-chairman; Trudy Bennett, one of the directors; Mike Smith, a

director; and Don McIntosh, a consultant. Would the House give these

people a very special welcome.

HON. S. HAGEN : It's

my pleasure today to introduce from the Comox riding Bruce and Georgia

Thompson. Bruce is the superintendent of schools for School District

71; he's here with the secretary-treasurer, Mr. Bill Burns.

also have in the House today as a guest Mr. George Hobson, a former

mayor of the city of Courtenay, a great community worker. Would the

House please assist me in bidding him welcome.

MR. SIHOTA :

I'm pleased to say that in my riding sits the Royal Roads Military

College, which this year, interestingly, for the first time actually

graduated women. In any event, in the gallery today are a number of

students from Royal Roads. I wonder if the members of the House would

join me in welcoming them here today.

HON. MR. BRUMMET :

We have some very special guests in the gallery today, at least in my

estimation. We have Mrs. Dixon from London, England, who is visiting

the south end of Vancouver Island, and with us in the members' gallery;

and with her, her daughter Susan Anderson from Vancouver. Hosting them

and joining them is my wife, Lois, who also has a second purpose for

being here: since I'm so seldom home, she wanted to ascertain that I am

actually here. I'd like the House to make them very welcome.

MR. JANSEN :

We have some great grade 9 students from a great community that you

know, Mr. Speaker, from Timothy Christian School. They're here with

Theo Vandeweg, Mr. and Mrs. Chris Neels, Mr. Bill Boesterd and Miss

Cathy Vroegindewey. Would you please make them welcome.

MR. PELTON :

Hon. members, our Speaker has a number of guests in the House today,

and I would like to mention them to you: Mr. Issa Fahel from Vancouver;

Mr. and Mrs. Awarnin Dahar from London, England; Mrs. Mimi Costa from

Victoria; Mr. T.K. and Mrs. Pauline Campbell, Mrs. Alvina Heath and our

Speaker's wife, Yvonne Reynolds. Would you welcome them please.

MR. SIHOTA :

I've just been handed a note, and in furtherance of my introduction I

should indicate to the House the names of the six student officer

cadets who are here from Royal Roads. Actually they're from the College

program at Royal Roads. In attendance are Officer Cadet Ainsley,

Officer Cadet Fortin, Officer Cadet Graveline, Officer Cadet Larose,

Officer Cadet L'Italien and Officer Cadet Therien. Joining them is

Merry Connor, their instructor.

Oral Questions

LUNCH PROGRAMS IN SCHOOLS

MR. CASHORE : Mr. Speaker, my question is to the Minister of Social Services

and Housing. The Vancouver doctors have recognized the need to feed hungry school-children

and have donated $10,000 towards this. Will the minister now quit his rhetoric

and own up to his moral and legal obligations to feed hungry kids?

HON. MR. RICHMOND :

The member opposite and I have canvassed this subject at length in this

House, both in question period and during my estimates. He knows full

well that the philosophy of this government is to make sure that all

children in the province are fed — not just a few selected by the

Vancouver School Board. However, should the Vancouver School Board and

others feel it necessary to enter into a school lunch or breakfast

program, then I commend them for that. I commend the doctors for their

decision, if they wish to help out in that,

[2:15]

SOCIAL ASSISTANCE RATES

MR. CASHORE :

A supplementary question, Mr. Speaker, The minister knows that the

philosophy isn't working. The recently released SPARC report uses the

ministry's own figures, which show that many families on income

assistance must use part of their food money to pay for their shelter.

Will the minister. in the name of strengthening the family, now raise

income assistance rates to meet the basic needs — not frills — such as

food, clothing and shelter for people on income assistance.

HON. MR. RICHMOND :

I too have read the SPARC report, which arrived in my office yesterday.

It reads very much like the SPARC report of last year and the year

before that. Nonetheless, we go to great lengths to make sure that we

are in the median of services and payments when it comes to welfare or

GAIN. When we compare our numbers with the provinces across Canada, in

most categories we are almost exactly in the middle. There are some

categories such as GAIN for the Handicapped where we are far out in

front of the rest of the provinces. There are some categories where we

may be slightly lower than the median; I'm thinking of those who are

employable. But for the most part, we are about in the centre of

payments being made across the country.

MR. CASHORE :

Supplementary, Mr. Speaker. The minister says he has read the SPARC

report for the last three years. Obviously he is a slow learner and he

doesn't have very good reading comprehension. One has to wonder what in

God's name the minister's justification is for keeping income

assistance rates below subsistence. I would like to ask the minister:

would he not agree that it is not the parents of hungry children who

are guilty of child abuse, but his own ministry?

HON. MR. RICHMOND :

That was more in the form of a political speech than a question, Mr.

Speaker, but I would urge that member to not only listen to advocacy

groups such as SPARC, End Legislated Poverty and those who are always

advocating on behalf of people on GAIN. I would urge him to get out

into the community sometime and talk to some of the people around this

province, and to hold a town hall meeting or two and see what the

people in the province think, rather than just listening to advocacy

groups all the time.

PRIVATIZATION OF UNIVERSITY LIBRARIES

MS. MARZARI :

I have a question for the Minister of Advanced Education. Because of

the general underfunding of universities in this province and in this

country, we have

[ Page 4810 ]

discovered

that universities are looking at selling their library collections —

their libraries — and leasing them back. We know that this is happening

in B.C. as well. Simon Fraser seems to be well on the path. Will the

minister state categorically that this government will not allow B.C.

universities to sell off their public libraries in order to raise cash?

HON. S. HAGEN :

I'm pleased to address that issue. As a matter of fact, I'm sure the

hon. member opposite is aware that this government just announced one

of the largest capital funding programs ever to be announced in this

country. We announced a six-year program of $110 million to be matched

by the private sector, which will increase the amount of money spent on

capital construction over the next six years by $220 million, in

addition to the regular annually budgeted amount for capital

construction. There is no other province in Canada that can match this

record.

MS. MARZARI : What is the minister going to say when the universities

come to him to lobby for them to the federal government for this particular

program: selling off the W.A.C. Bennett Library at Simon Fraser University — privatizing

that library? What are you going to say when the universities come to you and

ask for your assistance in selling off the library so that they can lease it

back?

HON. S. HAGEN : I have had no correspondence or verbal discussion with the universities on that question.

ADULT ESL PROGRAMS

MR. BARNES :

I have a question to the Minister of Advanced Education. It's very

distressing to learn that the Ministry of Education has announced that

transferred to Advanced Education to be delivered by community

colleges. Adult ESL programs offered by school districts in the lower

mainland area are overwhelmingly successful at reaching mothers with

small children and senior citizens. Can the minister clarify how this

move has improved the situation with respect to delivery of this

service to these needy individuals?

HON. S. HAGEN :

Could I ask for the question again? The speaker stated that the program

was being transferred from the Ministry of Education to my ministry. Is

that what you said?

MR. BARNES : Yes.

HON. S. HAGEN :

Okay. We not only have programs in our colleges that deal with this, we

have many joint programs with high schools in various communities —

Haney is one that I can think of — where these programs are operating

very successfully.

MR. BARNES : It may be true that

the programs are available at the present time to the ordinary person

is that these are families, mothers quite often. Most of them are

females who have young children, senior citizens, new Canadians, people

who do not have the dollars and are now going to have to travel to a

community college facility, of which you know there are not that many

compared to the 38 or so outlets presently available in the community —

schools and community centres. So there is quite a difference. As well,

there's a cost factor involved.

I'm wondering if this is an

example of the government's future multicultural policy in terms of

to people who need it; or is it going to be on the basis of those who

can afford to pay, as is the case with community colleges?

HON. S. HAGEN : The member asked a question with regard to multicultural policy, and I'm not the minister in charge of multicultural policy.

MR. BARNES :

I'm asking the minister: is this going to improve the situation? Will

second language? That's what I'm asking you, because at the present

time the program is doing very well as it is. Are you improving the

situation by making it more expensive for those people in need by going

to the community colleges with it?

HON. S. HAGEN :

Our desire as a government is to make these programs as available as

possible to the people who need them. I recognize the importance of

offering these programs to all of the individuals who come here who

that they can get that training.

MR. BARNES : I'll

just say that this is a backward step and it's unfortunate. I think you

will find your experience will be that there will be many people who

will no longer be able to travel those distances, as will be the case.

ECONOMIC DEVELOPMENT REGIONS

MR. BLENCOE :

I have a question for the Minister of Advanced Education, in his other

role as the governor of Vancouver Island. Yesterday the Premier, in his

tirade, dismissed the mayor of Kelowna's comments about

decentralization, dismissed the mayor's concern about tension and

confrontation being continued in the province of British Columbia. Yet

Jim Matkin has said it's hard to understand what this program is

supposed to do. The mayor of Kamloops has said: "I think there's a

hidden agenda with decentralization."

The question to the

governor of Vancouver Island: unlike the Premier, are you prepared to

listen? Are you prepared to recommend and respect British Columbians

and recommend that this undemocratic experiment in confrontation once

and for all come to an end in the province of British Columbia?

HON. S. HAGEN :

I'm very pleased to address that question, because only three short

weeks ago, we had a meeting of representatives from the entire minister

of state region one — the number one region in the province — and the

only person who wasn't there was the hon. member, who had been invited

and didn't show up to represent the people he represents. I want to

tell you that we had mayors, aldermen, regional district people, labour

people, chambers of commerce and people from all over this region there

to discuss the issues they wanted to discuss.

We set up

committees. Every one of these 80 people is very happy; they're

thrilled to be in this group. We had representation from south of the

Malahat, north of the Malahat, the Bella Coola area, Bella Bella,

northern Vancouver Island, the east and west coast of Vancouver Island.

I want to

[ Page

4811 ]

tell you, Mr. Speaker, that these people are very

happy with the system that's been laid out and very happy to play a

role and take part.

MR. BLENCOE : That was my next

question — the 80 people that attended in Campbell River. My

understanding and the information I have received is that 80 people

came away frustrated with that meeting. There was no money for

programs. When they asked about specific programs, the minister

referred them to line ministries, and they were told there was no

program through this minister of state system.

Mr. Speaker,

to this governor of Vancouver Island, when are we going to end this red

tape, this frustrating business in the province of British Columbia and

get back to normalcy in terms of governing the province of British

Columbia?

HON. S. HAGEN : Mr. Speaker, I have no idea

how the hon. member opposite would even know what happened at the

meeting, because he wasn't there. He was invited but he didn't show up.

I can tell you that every one of the people who were at that meeting is

serving on one of the subcommittees and very anxious to play a role.

The grass roots in this province have come alive, and people are really

anxious to take

part in the governing of this province. I tell you that

he is really missing out on something by not playing a role.

TRANSIT FARE INCREASES

MR. ROSE :

Perhaps we could leave the governor of Vancouver Island for a minute;

I'd like to address my question to the lord of the lower mainland. As

one MLA who represents Vancouver suburbia, I'd like to ask the

government how it can justify the transit fare increases that took

effect yesterday at a time when the Transit Commission is expecting

B.C. Transit to earn a pretty good profit next year.

HON. MR. VEITCH :

I am very pleased that the hon. member asked that question, and I am so

sure that he will want to receive an answer that I will take it on

notice for the hon. minister responsible for transportation.

Ministerial Statement

ACCESS AWARENESS WEEK

HON. MR. VEITCH :

I rise to make a ministerial statement. This week is Access Awareness

Week in British Columbia, an opportunity to celebrate what we have

accomplished in providing services and facilities for the disabled.

It's also a time to assess what remains to be done and to set goals for

removing barriers that isolate disabled people, and thereby improve

their quality of life.

[2:30]

The idea for an access awareness week sprang from Rick Hansen's Man

in Motion tour, which ended in Vancouver in May 1987 with an emotional

gathering in British Columbia Place. Mr. Hansen felt very strongly that

the momentum created by his epic journey should be maintained. This was

done in several ways.

The first was by designating a special week each year, at the end of May, to

allow Canadians to take stock of the status of those with disabilities. Another

was to establish local mayors or municipal committees to represent the interests

of the disabled. The third was setting up a special Premier's advisory council

for the disabled.

I would

like to take this occasion to report to you and the House on

initiatives this government has taken in all three areas, First of all,

there is National Access Awareness Week. My ministry has provided

financial support for a B.C. group working on stimulating activities

for the week. We had a representative of this committee, which had

members from various levels of government and disabled organizations. I

would like to congratulate that British Columbia group and all those

involved for a job well done.

Contacts have been made, and

Access Awareness Week activities were organized in 95 British Columbia

communities. Earlier this week, the government released a video

presentation called, "A Shared Experience," which was produced as our

contribution to the week. The purpose of this video, which has been

widely circulated, is to show what has been accomplished in British

Columbia in terms of removing barriers that isolate those with

disabilities and help them improve their quality of life.

Most

of the projects featured in the video were financed in part by the

British Columbia Lottery Fund. They included a Maple Ridge preschool

which mixed children with disabilities and so-called typical children;

a group of disabled who use specially equipped ultra light aircraft and

all-terrain vehicles to gain a feeling of independence; a special

transit service in Prince George which allows those with disabilities

to leave their homes and join in community activities; computers and

special equipment which help a group of people with disabilities at

Vancouver Pearson Hospital express their musical talents.

These

are just a few examples used in the video to illustrate what can be

done with the cooperation of government, charitable organizations and

community groups to improve the quality of life for the disabled in the

province of British Columbia.

My ministry was given the

responsibility for setting up the Premier's Advisory Council for

Persons with Disabilities. That process is well underway. In

conjunction with that activity, we have also been working to establish

local, municipal advisory committees which will provide a grassroots

network for the council. We now have more than 70 of those local groups

organized in cities, towns and villages around the province. As far as

the council itself, last summer I established a steering committee

chaired by the hon. second member for Vancouver-Little Mountain (Mr.

Mowat).

When I think of advocacy, I think of Rick Hansen, I

think of Fonyo and sometimes the late Terry Fox. But the greatest

advocate that we have for the disabled is here in this House, the

second member for Vancouver-Little Mountain.

That

six-member government committee recently completed a tour of 11 British

Columbia communities to receive input on such issues as the role,

membership and operational structure of the Premier's council. About

250 written or oral presentations were received from nearly 800 people

who attended the meetings in Nanaimo, Chilliwack, Prince George,

Kamloops, Terrace, Kelowna, Dawson Creek, Vancouver, Smithers,

Castlegar and Victoria.

The committee is now preparing a

report based on what the members heard. That report will be made public

and will form the basis of recommendations to the government on the

role of the council and how it should operate. Sometime soon after the

release of that report, Mr. Speaker, legislation authorizing the

establishment of the council will be introduced to this House, as was

indicated in the Speech from the Throne which opened this session.

[ Page 4812 ]

summary, Mr. Speaker, I think the government can be proud of its

initiatives in this area. We are working to keep alive that spark of

awareness and enthusiasm generated by Rick Hansen's wheelchair tour

around the world. We hope, through activities like this and subsequent

access awareness weeks, as well as eventually through the work of the

Premier's advisory council, that British Columbia will become a great

place for the disabled to live and a model community for others to

imitate.

Thank you, Mr. Speaker. I enjoyed bringing this to the House.

MR. D'ARCY : First of all, I want to thank the minister for making a copy available before his statement.

reply, I have to say that any initiative on the part of the government

to assist the disabled is welcome on this side of the House. I have to

make a couple of comments, though. At this stage it has all the

appearances of a top-down program, when it's quite clear to all of us,

from all of our communities, that the primary problems disabled people

have in the province of British Columbia, or indeed anywhere.... First

of all, a great many of them live in deep poverty. We all know that the

provincial government's track record on deducting federal pension

increases from provincial assistance is unblemished. It's consistent:

whenever the federal government — usually before an election —

increases the amount of money it makes available to the disabled,

without exception the province simply deducts it from GAIN payments.

Secondly,

a major problem throughout the province is transportation. As the

minister has stated, there are some transit services and societies

providing transportation for the disabled in some of the larger

centres. The fact is that those services are still, shall we say,

rather crude, and need to be expanded in a major way if disabled people

are indeed going to have transportation, and provide the ability for

them to get out and use their talents, which are considerable in most

cases, for the betterment not only of themselves but society at large.

These

initiatives are welcome. I have to repeat that, but we have a very long

way to go in this country, and the awareness of government is greatly

appreciated. We will all hope to work together in seeing that this

awareness actually filters down into real benefits for the increased

number of people who are disabled out there and who could live much

more satisfactorily and have a much higher quality of life,

particularly those who live in a great deal of poverty.

MR. SPEAKER :

I would like to advise members, apropos the minister's statement and

the opposition's response, that two members of this House and the

Speaker attended Ottawa last weekend regarding national awareness for

the disabled and attended a committee hearing all day Monday. I will

make sure that the Hansards

from that committee hearing are made available to all members. It was

very impressive and the British Columbia members participated actively

in those hearings.

HON. MR. REID : I'd like to

commend the minister for his announcement of Access Awareness Week, but

also pay a special tribute to a community in British Columbia. In the

tourism component of physically challenged access, the Powell River

Kinsmen Club commenced in 1987, and are just completing this year a

physically challenged campsite and trail development program for

physically challenged tours from around North America. It certainly is

commendable that we mention that today in recognition of a community

that has in the past developed this program, but it is certainly a

tribute to that community to be mentioned in the context of Access

Awareness Week today.

MR. ROSE : As a former Kinsman I'd like to respond to that and add my congratulations to those of the minister, and they are sincere.

would just like, though, to remind the House and perhaps to ask the

Speaker — although I don't know what vehicle I can use to do that from

this position — whether or not statements by ministers welcome

multi-responses. In some Houses they do and in others they don't. A

little guidance from the Chair through an announcement at some future

time might be helpful; but my information on this particular point of

order is that they are for conveying information on government policy

and that they should be brief, precise and non-argumentative. I think

the minister's statement faltered on at least a couple of those

guidelines.

Orders of the Day

HON. MR. STRACHAN :

If I could respond as well to my hon. colleague opposite, I think the

way the ministers' statements today were handled was appropriate. The

Provincial Secretary made a statement which was responded to; the

Minister of Tourism made a statement which was also responded to. Those

are the guidelines: one and one.

With that, I call Committee of Supply.

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

ESTIMATES: MINISTRY OF

FORESTS AND LANDS

(continued)

On vote 40: minister's office, $304,458.

MR. MILLER :

Before we adjourned we had been discussing the stumpage system, and I

had posed a question to the minister which I assume he may now be in a

position to answer. Just to quickly cover the ground, the minister

admitted that despite the announcement of the major change in the way

that we collect stumpage in this province and the reaction to that

change that's been made known in the province by the people in the

industry in terms of the question of market sensitivity and the

assurances given by the minister on numerous occasions that the system

is market-sensitive, that it's based on adjustments and based on a

quarterly review.... The minister admitted that no quarterly review was

done. For whatever reason, the ministry was unable to conduct a key

component of the stumpage system.

My next question was

whether or not, when they do get around to conducting that review, any

changes to the system based on it will be retroactive.

HON. MR. PARKER :

The first quarter under the CVP system was considered for adjustment.

The information we had from the StatsCan source.... The index excluded

a portion attributable to the softwood lumber tax. This has since been

corrected and we're in a position to make adjustments, but the

indication of the price fluctuations in that first quarter.... The

staff advised me that it did not make it necessary to make an

adjustment, so we were fortunate in the

[ Page 4813 ]

circumstances.

Of course, the softwood lumber index we're looking at here is all

softwood lumber sales, not just U.S. rail sales. We believe that for

the second quarter any adjustment will be relatively small and any

retroactivity that may be indicated is probably going to be unnecessary.

MR. MILLER : In any event, retroactivity would be applicable in the event that adjustments were made.

MR. CHAIRMAN : The minister.

HON. MR. PARKER : Thank you, Mr. Chairman, and I thank you for not calling the vote while I was conferring with my deputy.

The

procedure is one where if things are improperly collected, then

retroactivity may be indicated. If it's indicated to be necessary,

we'll consider it and most likely implement it.

[2:45]

MR. MILLER : That's a good, straightforward answer.

The

minister is of course aware of the Prince George situation. I assume

that most people in the province are aware of it, through the

submissions that have been made, but more particularly the minister and

people in his ministry. Certainly the Premier commented that he thought

that they should get a break.

There are previous comments

by the deputy minister that the ministry is not in a position to offer

stumpage breaks on a regional basis and that to do so in one area would

require an increase in another area; there is no flexibility within the

system to make those kinds of adjustments; and further, if we did that,

we would be in violation of our agreement with the United States with

respect to the new stumpage system. Given that and given that the

Prince George situation is under review, I'm wondering if the minister

could advise just what options may be available to the government if

what has been reported is correct. I quote the minister from the Prince

George Citizen of April 14.

Responding to the Thomson report, he says: "It tells us they" —

northern interior sawmills — "are making considerably less than they

were before new timber-cutting fees were brought in last October, and

it wouldn't take much of a downturn in the market to put them in a loss

position."

That suggests a potentially serious situation.

I'm wondering what flexibility the minister has, given what I've

previously stated and I believe is correct — it's been confirmed by the

minister — in terms of the options to move by the ministry.

HON. MR. PARKER :

We have an agreement made with market partners in the United States

based on a process. We won't make any fundamental changes to that

process. Two parties made the agreement; we made the agreement with the

other party. So there won't be any fundamental changes to that without

destroying the agreement to determine that there will be replacement

for the softwood lumber tax on shipments out of British Columbia into

the United States.

But there are minor refinements that

need to be dealt with, and we deal with them as the information base

improves. Those are the sorts of changes we can make. The

market-sensitivity of the system is one of the items that has to be

fine-tuned. We have to fine-tune it on the basis of the Statistics

Canada indices that we receive, and we're working with the people

involved to come up with that information. Those are the sorts of

modifications that can be made.

MR. MILLER : There

can be some minor refinements. as the minister refers to them, but

there cannot be any major adjustments in the system even though that

system may result in — to quote the minister — the operators in that

region being put in a loss position. It would seem to me that the new

stumpage system, although it does increase revenue, tends to put the

government in a box in terms of responding to the economic situations

in this province and on the markets we sell to.

I do take

exception to the minister referring to the U.S. lumber lobby as our

market partners. Quite frankly, we're not partners with the Americans

in terms of competition for the products we produce out of this

province; we're not partners but competitors. Maybe it's viewing the

people in the United States as partners that led this government — at

least in terms of their atrocious record in collecting rents — to allow

the U.S. to get the upper hand and set in motion the wheels that

resulted in this current stumpage system.

My colleague from Prince George may want to come in at this point with some particular questions about that region.

MRS. BOONE :

On the same issue, obviously it's of concern to just about anybody who

depends a great deal on the forest industry, and without the forest

industry my community would be non-existent.

I want to make

it clear that we all acknowledge — and, I think, the industry

acknowledges as well — that there had to be some changes in the

stumpage rates, and we've certainly been calling for these for a long

time. But it appears that this has gone beyond what is acceptable. The

deputy minister said in an

article in the Prince George Citizen

in May that it is a matter of trial and error to see if the figure is

suitable. Some firms are saying that they will be in the red shortly,

and the minister acknowledged this when he was in Prince George. I

guess my question to you is, how many companies have to go bankrupt

before that area is termed not suitable?

HON. MR. PARKER :

There will be no bankruptcies due to the CVP system. But it's

interesting that the member is concerned about the pricing of timber,

when her colleague the first member for Vancouver East (Mr. Williams)

says we're not charging enough. There's a hell of a paradox from the

opposition benches.

MRS. BOONE : The minister said

there will be no bankruptcies. When the minister was in Prince George

he was on a television show. They asked you specifically whether some

companies would be going into the red in a short time, and you

indicated at that time that that was a possibility. What has changed

your mind, and what indications do you have now that there are going to

be no bankruptcies in the forest industry as a result of the stumpage

issues? What has changed your mind since you were in Prince George a

month and a half or two months ago?

HON. MR. PARKER :

The member talks about being in the red and talks about bankruptcy.

There's a substantial difference between having a loss in a certain

fiscal period and bankruptcy. She summed up by saying "bankruptcies." I

said that bankruptcies will not occur as a result of the comparative

value pricing system.

MRS. BOONE : I find this really

a little hard to understand. The minister is saying that some people

may be in the red, but that doesn't mean they're going to be bankrupt.

[ Page 4814 ]

they're

consistently in the red for several years, they are going to go

bankrupt. I have asked the minister what information he has had from

the industry to indicate that these stumpage rates are not going to put

them consistently in the red — I guess that's the word you're looking

for — so that they will not go bankrupt. What has changed so that you

are now saying that some of these companies won't be folding?

HON. MR. PARKER : The comparative value pricing system for stumpage appraisal will not force bankruptcies.

MRS. BOONE :

It's all very well and good for the minister to stand there and say

that comparative value.... What is it then that's going to create

bankruptcies? Our mills are efficient. We have the most efficient mills

in the province. We have some top-notch mills up there. If our sawmills

go bankrupt, if our sawmills go in the red, it is not because of

inefficiencies or any of those things; it is because of the stumpage

rates that have been imposed upon them within the last few months.

Can

the minister tell me, please, what has changed to indicate there will

be no problems with the financial aspect of companies in our area? Have

the companies told you this, Mr. Minister? Have they indicated to you

that their finances are okay and that they will not be in a deficit

situation?

HON. MR. PARKER : We've had a number of

meetings with different operators in the area, and they are paying a

great deal more for their timber. The member for Prince George North

tells us that they're going to be either in the red or going bankrupt.

She uses the terms interchangeably. I think there is a significant

difference there for most people, and the House would most likely

agree. The comparative value pricing system for stumpage appraisal will

not force bankruptcies, although forest bankruptcy is one of a number

of circumstances — they are variable. But we will not be a contributing

factor to bankruptcies.

MR. MILLER : The problem with

asking this minister questions is that you always get the same answers

— and they're not all that enlightening.

With regard to the

issue of the Prince George region in terms of stumpage and its impact

on the producers there, clearly some producers are in a better position

than others. If you look at the profits and gross sales of the major

companies in British Columbia, with some very few exceptions it's been

a pretty good year in terms of the market. They have made some good

profits, and they should pay their fair share of rent.

The

problem seems to be, however, with the unintegrated producers who, in

selling their residuals, are at the mercy of the major companies. I

note that in December of last year the deputy minister, Mr. Marr,

indicated that the government is considering changes in the way chips

are sold to pulp mills, in terms of increasing the value. I believe I

asked the minister during some debate last year what position he was

taking on that question of undervaluing chips, which was outlined most

significantly in the Nilsson report. Has the minister acted on the

recommendations or considerations of the deputy minister with regard to

the price of chips from the unintegrated companies to the pulp mills —

quite apart from the rather meagre increase announced in the middle of

May?

HON. MR. PARKER : Residual chip purchasing by

the pulp producers is normally through a long-term contract entered

into by the residual chip supplier. Both parties negotiate the

contract, and that's the case today. It was the case last year, and

it's the case today. What we have done is to try to determine from the

industry — both the suppliers and the consumers — how the formulas

work. I guess all of them are tied to the market, to mill nets realized

either as a group in some instances, as reported by StatsCan, or in

other instances by individual mills. We haven't interfered in the

contractual arrangements between the parties.

MR. MILLER :

It seems to me that the mills would be quite interested in the

solutions the ministry may offer. Your deputy clearly indicated that

the government is considering changes in the way the chips are sold to

pulp mills, in terms of evaluation.

Interjection.

MR. MILLER :

Is the minister saying that they do not intend to do anything, that the

deputy was wrong in indicating to the public, through the press, that

they were looking at that? Is that what the minister is saying — that

they have no intention? That's what you told me last year during debate

— that you had no intention of looking at it. What is it to be?

HON. MR. PARKER :

We haven't interfered in the contractual arrangements and we are not

now interfering. As to what the future policy will be, we'll deal with

it when the time comes.

MR. MILLER : It's cold

comfort, if you like, to the nonintegrated mills in the Prince George

region and other regions. Does the minister believe that there's a fair

market in terms of setting those prices and in terms of the

negotiations that take place between the unintegrated and integrated

companies?

HON. MR. PARKER : There's been no indication to me that any of those contracts should be broken.

[3:00]

MR. MILLER :

Can the minister advise if there's a significant difference between the

offshore market for those residuals and the domestic market?

HON. MR. PARKER :

Does the member opposite recognize the difference between regular

supply and incremental supply? That's what is reflected in offshore

markets.

MR. MILLER : Is the minister saying that

because there is a limited supply in the offshore markets the price is

higher? Is that what the minister is saying — that the offshore price

is not a true market value, because there is such a limited supply? Is

that what the minister is implying by his answer?

HON. MR. PARKER :

The chips that are bought by offshore purchasers are incremental supply

to those purchasers of the particular fibre that those chips offer.

MR. WILLIAMS :

Just look at the chip prices in the Pacific Northwest. Don't talk about

increments; don't talk about offshore. Just talk about the Puget Sound

area, the American northwest, versus British Columbia. What's the

difference in chip pricing?

HON. MR. PARKER : I don't have those figures at hand.

[ Page 4815 ]

MR. WILLIAMS :

A minute ago you're an expert on incremental supply, and the next

minute, when you are asked a specific question, it's ignorance that's

behind it all. It's just fundamental and grotesque dealing with this

minister.

The difference is something like this.

HON. MR. PARKER : Keep trying.

MR. WILLIAMS : Mr. Smug over there, dealing with the question of the Prince George region, is smug....

Interjection.

MR. WILLIAMS :

Do you want the floor? Are you going to calm down? Are you going to

settle down? The fact of the matter is that if you did your homework

and looked at the question of the integrated companies — that is, the

companies that own a pulp mill versus the companies that don't — you'd

find a significant difference in profitability. Right?

That's

the problem in the Prince George area and other areas, where the

companies that don't own a pulp mill are not as profitable, because

they don't get a full, true market value for the chips. If the company

is an integrated company that owns the pulp mill and the sawmill, then

they can transfer price, but the profits remain in the company. That's

the game. The minister knows that, and he turns a blind eye to the

discrimination that goes on with respect to the independent sawmillers

in this province.

At the same time, those independent

sawmillers have to pay Crown dues or stumpage for the timber — the same

price as the integrateds. They get hosed when it comes to the chips

they send to the pulp mill, because they're not getting full value or

full price. That is presumably why the deputy said to the press in

Prince George in December that the whole area was being reviewed. There

is a basic inequity in the system, clear and simple.

That's

the problem. There is discrimination against the independent sawmillers

in this province. They're getting belted with new, higher stumpage

rates — fair enough. They haven't been paying enough consistently — any

of these companies — over time. But now it's an unfair game, because

the integrated companies are able to do in these people and not pay

full value for the chips. That's a serious problem for them.

the first outfits to go into the red — which the member for Prince

George is concerned about — will be the unintegrateds. Even though

they're efficient — and many of them are more efficient than the

integrateds — they're getting hosed on chip prices; it's as simple as

that. One wonders at times how simple it has to be to get through to

this minister.

You know, you've got a serious problem here

in terms of this whole business of residuals and the whole question of

fairness within the system. It's a serious problem of fairness in the

system, and it is still unresolved.

Mr. Widman's management

firm, in a recent report, said: "The average cost of logging on the

coast, before stumpage, was $41.50 per cubic metre,

whereas the price

of both chips and pulp logs was around $32.50.... This would indicate

that the pulp industry was subsidized by the sawmilling sector for

about $9 a cubic metre." What we have are chip prices that are

unrealistically low. It is causing reverberations through the wood

economy of the province, causing distortions and consistently creating

problems in terms of marketing pulp logs in the downturns.

That's

part of the reason we get the kind of waste we have in British

Columbia. That's part of the reason we get these incredibly high levels

of waste. If there are chips being sold for less than what a pulp log

is, then of course they'll go for the chips. Then in turn, with the

integrated companies, they have it made because they get all of that

difference between what the integrateds get and how they are able to

transfer price internally.

So it's a serious problem. It is

one of the major things that twists the whole provincial forest

economy, and it's a bias against the independent sawmillers. It's an

unfair, twisted bias against them. The numbers in terms of chip prices

— the numbers I have here are 1987 numbers in the U.S. northwest — come

out to $94.87 per bone-dry unit versus B.C. at around $75. Then you

throw the exchange rate of 30 percent on top of that, which would add

another $28 on to the American number. That gets us up to $123 in the

U.S. per bone-dry unit and $75 per bone-dry unit in British Columbia.

That's a 60 percent difference. That 60 percent is a free ride for the

pulp industry. That load gets carried by the unintegrated companies

when you start pushing in terms of the stumpage rate. That's the

problem.

You're the purist, and you say: "Oh well, these

are negotiated in the marketplace between rabbits and elephants" — the

rabbit being the small, unintegrated company, and the elephant being

the pulp buyer. That's not a free system at all. You get into

transportation costs, and there are monopoly advantages that these pulp

companies have. They use it to discriminate. The pulp companies have

never in their history in this province been so profitable — never.

Never have there been so many quarters where they were able to increase

pulp prices in this province and in the recent history of this

industry. They have consistently been able to make the now price levels

stick internationally,

It's been an incredibly profitable

period for these pulp companies. It's reasonable that the unintegrated

companies should get the benefit of these circumstances. You can say:

"Well, they're tied in, in a sense." But they're tied in from a low

base. It's the base that has to change. If that doesn't change, then in

Prince George and places like that where the unintegrateds face the

discrimination, they will indeed be in trouble. That area has to be

rectified, and that requires you and the ministry to deal with it.

HON. MR. PARKER :

Mr. Chairman, the first member for Vancouver East talks about prices in

the American northwest for wood chips, and then he talks about the $75

rate for wood chips in the interior. If he wants to compare wood chips

on the northwest coast of the States, then he should compare them with

the southwest coast of British Columbia. He'll find that the prices are

very much the same, and the difference in exchange would be about the

cost of moving the chips from British Columbia into the consuming areas

of the Pacific Northwest. That evens it up and discredits his whole

statement.

The agreements between suppliers and purchasers

of chips in the interior are negotiated by both parties, and the

suppliers have the option of not supplying chips to a particular plant

and of looking elsewhere.

Interjections.

HON. MR. PARKER :

Oh, yes, they most certainly do. As a matter of fact, some operators in

the interior have opted to ship their chips elsewhere. Some chips from

the interior come down to coastal mills, some go through to offshore

markets and some actually go into the Pacific Northwest of

[ Page 4816 ]

the

United States. So there is some commerce and opportunity around. The

intention of this government is not to get involved in the contractual

arrangements between the two parties.

MR. MICHAEL : I

have a question to the minister; it centres around accounts payable. I

know there has been discussion over the years since I've been an MLA

about certain accounts not being paid within a period of time, but

generally it's been with the Ministry of Finance. But this time, Mr.

Minister, I can say that there's a case in Revelstoke, where apparently

a system had been set up where people working for the Ministry of

Forests were paid out of Revelstoke. I'm assuming that if it was done

in the city of Revelstoke, it must have been done in other forest

districts as well. This year the policy has been changed again from the

way it used to be, and now the private entrepreneurs who do work for

the Ministry of Forests are having to submit their bills, which then go

on to Victoria.

Having worked in the private sector for

many years, Mr. Minister, I can say that it's a very common practice

among us all that once you get a bill, you pay it within 30 days. We're

finding that that is not the case with people submitting bills now from

the Revelstoke forest district, who are working in the private sector.

They're lucky if they get paid.... In fact, they don't get paid within

60 days, and oftentimes it's longer. This is creating quite a hardship.

Does the minister have any comments on that problem, or is perhaps the

situation in Revelstoke unique to what's going on in other areas of

British Columbia?

HON. MR. PARKER : Mr. Chairman, our

policy is to try to have these accounts settled between 30 and 60 days.

Of course, a number of things come into play: processing the documents

at the field office and then bringing them through the system to where

they can be paid by the Ministry of Finance. Delays do happen. But when

each of these issues has been brought to my attention, I have asked our

staff to pay particular attention to processing the accounts. As a

government employee, regardless of whether you get the paper processed

today or tomorrow, you are still employed;

whereas for the contractor,

it may mean the difference between making it and not making it if the

paper isn't processed in a timely fashion. Once in a while we have to

remind staff that it's most important to deal with these accounts

payable and get them addressed in a timely manner.

[3:15]

MR. MICHAEL :

To the minister, perhaps I should have given the name of the firm. It's

City Transfer in Revelstoke. It's my understanding that they have

current invoices totalling in the neighbourhood. of $10,000 to $12,000.

Turning

now to a new subject, I'd like to cover very briefly the

beetle-harvesting plan in the Penticton forest district. I certainly

appreciate the intention, strategy and plans of the ministry in

attempting to get as many companies and directing as many companies as

possible into that region in order to harvest this infested area.

However,

I'm somewhat concerned about the equity of the directives from your

ministry, because one of the plants in my constituency — and I'll name

the firm: it's Federated Cooperatives — has been directed to lay out a

logging plan to log some 40,000 cubic metres in the Penticton forest

district. That totals in the neighbourhood of 36 days of production,

operating on two shifts. The hardships that they are expressing sing to

me, Mr. Minister — and I understand, to your ministry — are that these

particular types of logs don't fit in with their cutting pattern.

They're very small pine logs. It does not lead to the type of

production that they're used to.

The other inequity, as I

understand it, Mr. Minister — and I would appreciate your comments — is

that they are not being given an equitable allowance for hauling. As I

understand it, there are no hauling allowances whatsoever between

Kelowna and Salmon Arm, and that doesn't sit right with me. I don't

understand why that would be the case, and it would be an example to

me, Mr. Minister, of where perhaps we haven't looked at the equity of

the hauling distances for those mills that have been directed to

harvest in that area.

I also understand that there are stud

allowances given to some of the southern mills, where those mills in

the northern part of the Okanagan normally would not qualify for stud

allowances, meaning that some firms can go in and log this

beetle-infested area and indeed get the timber for as low as 25 cents,

where a mill in my area, such as Federated, would have to pay about $8.

What

I'm saying in a nutshell, Mr. Minister, is that I am concerned about

the equity. I'm not sure whether you have been briefed on it up to now.

If you haven't, perhaps we can wait and get the answer later, but it's

of grave concern because it is certainly placing that particular firm

in a position where they are not going to be able to be competitive

with their counterparts, and that's just not fair. I'd like your

comments, Mr. Minister.

HON. MR. PARKER : As I

recall, there has been a requirement by the regional manager in the

Kamloops forest region for licensees in the Okanagan TSA to concentrate

on a beetle infestation area. If there are inequities, the operators,

in having to deal with this emergent situation, will have to deal with

them and I will follow it up with my ministry.

MR. MILLER :

I just wanted to briefly canvass with the minister his views on the

question of corporate concentration, which is of some concern to a fair

number of people in this province. The information that we have

currently indicates that there is an increasing level of concentration

among the major companies with buyouts and mergers, and I want to

briefly outline the situation.

On the coast, one firm —

MacMillan Bloedel — owns 28.2 percent of the total allocated annual

cut. This was a study done by Bill Wagner — a thesis. The largest four

on the coast — four major licensees — control 57 percent of the total

cut; the largest eight own 82.5 percent; the top 20 own 96.8 percent.

Obviously that has implications in terms of the question that we were

just talking about — markets for the residuals. It has been the subject

of some discussion of the Vancouver log market — whether or not a true

market exists. The consensus that I've been able to determine is that

it doesn't.

Does the minister have any concern about this

continuing and seemingly ongoing level of concentration that is taking

place, with existing firms being purchased from both outside the

country and outside British Columbia? Is there a level at which that

kind of concentration is bad for British Columbia? If there is one,

does the minister have any thoughts on that? At what particular level

would he like to see this kind of thing continue? Are there options for

the government in terms of dissuading this level of concentration in

the industry? Just generally I would like to know the minister's views

on that subject.

[ Page 4817 ]

HON. MR. PARKER :

I guess we're all concerned about corporate concentration, so whenever

acquisition opportunity is presented and we are asked for our

consideration and approval, we take it under close consideration and

deal with it accordingly. You have to deal with each case on its own

merit.

MR. MILLER : There appears to be a fair degree

of concentration now. I presume if the minister or the ministry has had

input into that figure, they are comfortable with it. Would the

minister see that level of concentration increasing? Would the minister

have any concern about the level that currently exists increasing?

HON. MR. PARKER : It is very difficult to say what the future may bring.

MR. MILLER : I certainly agree with this minister in places; it's very difficult to know what the future will bring.

want to canvass just very quickly a couple of local issues, but I

believe my colleague for Atlin wants to ask some questions of the

minister.

[Mr. Weisgerber in the chair.]

MR. GUNO :

I really have only a few questions to pose to the minister pertaining

to some particular developments in the Kalum timber supply area. Within

the last few months, the ministry has printed a notice inviting bids

for a forest licence in the Kalum timber supply area. As I understand

it, this licence is worth 50,000 cubic metres and is for an initial

15-year period, extendible upon, as I understand it, determination of

the regional manager.

The initial notice had a requirement

that the bidders commit to building a processing facility within two

years of getting that particular licence. I read the particular

requirement in the notice inviting applications for the forest licence.

It states: "The successful applicant will be required to construct and

commence operating a timber processing facility in the Nass River

valley on a location approved by the local regulatory authority, where

applicable, within two years of award of the licence." That

requirement, as I understand it, was subsequently removed when the

notice was reprinted. I just want to ask the minister why the

requirement for a timber processing facility was removed.

HON. MR. PARKER :

We had several forest licences advertised in the province at that

particular time which suggested that processing facilities would have

to be erected. In our discussions in getting the replacement to the

softwood lumber tax, it was considered by the other side of the table

to be an indirect subsidy, so we withdrew that requirement from those

forest licences that were out. It was on advice that we were

jeopardizing our memorandum of understanding that we withdrew those

requirements.

MR. GUNO : I'm still not sure whether

it was the source of that particular legal opinion or the fact that

this requirement would jeopardize the memorandum of understanding.

Would the minister elaborate on the source of that particular opinion?

HON. MR. PARKER : That advice came from Ministry staff, which includes several types of professionals, including legal professionals.

MR. GUNO :

Am I to understand that the freedom of our government to meet some very

serious socio-economic situations in the Nass has been hampered by this

kind of an agreement? Will the minister admit that in the Nass area

there is chronic unemployment, reaching up to 90 percent in each of the

four communities that are located in that area? Surely a response in

terms of providing that any harvesting of timber should have the

requirement that the processing facility be placed in that area so that

people that live in that area are not witnessing dozens and dozens of

trucks rolling out of the valley every day and yet having that chronic

unemployment going on.... Surely we have a right to meet and deal with

those kinds of situations.

HON. MR. PARKER : No, I'm

not aware of the levels of unemployment in the member's constituency.

but I imagine it's high. The forest licence called for bid proposals.

The criteria for bid proposals adjudication include the social and

economic impacts of the bid proposals, so if a party in the Nass valley

is interested in bidding on such a forest licence, then their bid

proposal will have to reflect the sort of impact that their purporting

to undertake would have in the valley and have for the province. If

it's a good, sound proposal, it would probably be successful. That's

the purpose of taking bid proposals.

MR. GUNO : Can the minister advise just what the response is to this application notice?

HON. MR. PARKER :

I don't know at this time, Mr. Chairman. That adjudication has to be

dealt with by the regional manager. I imagine I'll be apprised in due

course.

MR. GUNO : As I understand it, three

liquidation forest licences were awarded in the Kalum TSA in 1986. At

least one of these licences was awarded partly on the basis of a

promise to build a processing facility in the area to handle the timber

cut. The facility has not been built. Why has the ministry not required

the tenure-holder to fulfill the promises made in the bid for the

licence? I am referring to at least three licences that were awarded in

that period.

HON. MR. PARKER : I'll have to check into that and get back to the member.

MR. GUNO :

Another very short question. This relates to an order-in-council for

Kalum that was issued in 1985 and allowed for free export of logs from

the Kalum TSA. I understand that it's still in effect, in spite of the

fact that other similar orders-in-council have expired. Can the

minister update us as to the status of that particular order-in-council

pertaining to Kalum?

HON. MR. PARKER : As I recall, that order-in-council was for a five-year period.

MR. MILLER :

I note that, according to a release put out on May 27, the ministry has

advised of a decision by June 30 on the 50,000 cubic metres in the

Kalum TSA.

[3:30]

I want to go back and deal with the issue raised regarding the

public notice that the timber was available. Maybe I didn't try hard

enough, but we pursued this issue when it came to our attention that

the original notice as published, I believe, in January of this year

was withdrawn and a new notice issued

[ Page 4818 ]

March. The initial information we received was that it was a violation

of the memorandum of understanding. I want to confirm with the minister

that it is now a violation of the memorandum of understanding with the

United States for the province of British Columbia to advertise public

timber for bid and put in that advertisement that we require a

processing facility to be built in a certain location — that we are

prevented from doing that.

HON. MR. PARKER : Mr.

Chairman, the situation was one more of perception than anything else.

It was felt by our staff that direction of wood to any specific point

and a certain type of processing plant could be construed to be an

indirect subsidy. At that point we had just got replacement and we

didn't want to jeopardize what we had achieved. The advice was that we

should not show that sort of advertising, but that we should certainly

look in the bid proposal for local processing. So that's what we're

doing. It's that simple.

MR. MILLER : It's obvious by

the release of May 27 that we may be able to do through the back door

what we can't do through the front door, and that is just as disturbing

to me, even though we may be able to accomplish a socially desirable

objective. If the minister has legal opinions — or even non-legal

opinions — as to the decision taken by the ministry, I would appreciate

being given copies of any he might have, because to me, it strikes at

the issue of sovereignty. British Columbia is prevented, according to

the minister's

interpretation of the memorandum of understanding, from

saying that we deem it desirable to have wood directed towards a

certain end; that's considered by the Americans to be a subsidy, and we

do not have the right to do that. If the minister has that legal

opinion available, I would appreciate his making it available to me or

members of the opposition. That's fairly fundamental, and to this point

we had certainly not been award that the United States was able to

impose those kinds of constraints on forest policy in British Columbia.

MR. CHAIRMAN : Shall vote 40 pass?

MR. MILLER : No.

The minister did not respond. Or is the minister not prepared to make opinions available to members of the opposition?

HON. MR. PARKER : Sorry, Mr. Chairman. I was being handed off the House Leader's box and missed the question.

MR. CHAIRMAN : Would the member repeat it, please?

MR. MILLER :

I thought I was talking pretty loud. We're trying to get out of here

and allow somebody else to do their estimates. I asked the minister if

he had a legal opinion and, if he did, whether he would make it

available; and if he had a non-legal opinion, whether he would make

that available to the members on this side. The minister has confirmed

that it is his opinion, or his staff's opinion, that we can no longer

advertise a public resource in this province. We can't put an ad in the

paper and say we're prepared to dispose of the timber of this province,

and that we want it to be used for a certain thing, or that we want a

processing facility built in a certain place. We do not have the

sovereign right to dispose of the Crown timber of this province as we

see fit, because people in the United States would object to it. It

seems fairly fundamental. I'd like to see anything the minister has

that backs up that

interpretation.

HON. MR. PARKER :

That advice came in one of my many meetings with my staff. I don't have

any written opinions, so I haven't got anything written to share. The

matter is one of perception; what the member opposite is working on

right now is perception. He's all bent out of shape about perception:

what he thinks, what he perceives, what he guesses, and so on.

The

whole purpose of the exercise was to remove from the advertisement for

timber any situation that might cause some upset in the international

agreement that we have. There's no point in upsetting that

international agreement. We called for bid proposals. Those bid

proposals asked for proposals that consider social and economic

benefits, timber utilization, environmental concerns, revenue,

employment levels, and so on.

The licensed documents were

advertised in the newspapers in the northwest and in the southwest. If

you are interested, you can pick up the documents. The documents are

quite clear about what has to be included in the bid proposal, and the

best social and economic bid proposal will get the licence. That's the

way it works.

MR. MILLER : It's not that simple.

You've said yourself that it was your opinion, or your staff's opinion,

that to advertise that timber with conditions was a violation of the

memorandum of understanding. "We don't want to upset the Americans" —

those are the words you used. We wouldn't want to take a chance on

upsetting the Americans. We wouldn't want to put an ad in the paper and

advise people what we want to do with our own timber, because that

would somehow upset the Americans. That's quite disturbing.

don't think most citizens of this province realize that we are

hamstrung; that the relationship you so eagerly entered into — which

your government in fact caused, if you like — has put those kinds of

restrictions on a sovereign province's ability to dispose of timber and

to have it utilized in the manner it sees fit. Sure, maybe you can

achieve it through the back door. Your press release seems to make it

obvious that the Nass Valley is a serious consideration. I commend the

minister for that. But the overall policy is quite disturbing. The U.S.

dictates what we can do. If the minister is not worried about that, he

should be.

Interjection.

MR. MILLER : I'm

not telling the Yankee to go home, but I'm telling the Yankee that he

doesn't dictate forest policy in the province of British Columbia. We

don't dictate their forest policy. Why should they dictate ours?

Having finished, but not completely.... There are many more subjects that need to be canvassed.

MR. ROSE : The size of knotholes in plywood.

MR. MILLER : Yes. I'll have to go back and talk to COM about their position on that.

Nonetheless, there may be other members who wish to canvass issues with the minister.

MR. ROSE :

Everyone says, when they stand up: "I'll be brief." I'll be so brief

that I think the Minister of Agriculture (Hon. Mr. Savage) should

perhaps leave his loft and come

[ Page 4819 ]

down with his fisheries expert, because that's where we're moving very rapidly.

This

has been a long session for the Minister of Forests. I would just like

to have some clarification of a few little questions concerning the

conflicts that may arise in the multiple use of our forest lands by,

say, cattle and sheep producers, and forestry.

I met with a

group of cattlemen in Smithers last fall, and I've met with some around

Kamloops as well. They say it's lots of trouble dealing with forestry.

To put it simply, it's very difficult to deal with forestry because of

a number of reasons; other people have reported that to me as well. I

think that the nature of our province and its forest lands is — or

should be — one of multiple use, so we can maximize the benefits of

those mostly public lands for a lot of users, whether we're talking

about hunters and fishermen or cattle people or sheep grazers or just

hikers or whatever. I think there has been an opening up of those

lands, because if it were left to the forest companies.... And I know

why. They don't want people cluttering up what they regard as their

property and their responsibility. I understand that, but nevertheless

it's not acceptable any more than it is for us to close our building

here to the public. It's a public building; we have to keep it open,

although sometimes tripping over large crowds of people gets to be a

little problem — for somebody who's short, anyway, and trips rather

easily.

I wanted to ask you a number of questions. I don't expect these to take very long if there's clear policy on them.

These

cattlemen complained that there's no seeding of forestry lands so that

they could use those lands for multiple use — for cattle. When these

lands are cut and there's reforestation going on, there usually isn't

any seeding along with it. I wonder if it would be possible for you to

comment on whether that's true.

HON. MR. PARKER :

There are areas where range is seeded, and there are other areas that

are not to be used as range; they are planted. Cattle can be

devastating on a new plantation until the trees get to a reasonable

height. It's correct that some areas are not seeded, but there are

areas that are seeded. Some folks think that their neighbourhood is one

that should have range seed spread all over it because it's now been

logged and we should be growing grass on there. The economic analysis

of the area indicates that it should be growing trees as a higher-value

product and a higher-value end use, and so we grow trees. There's

always a bit of conflict that way.

The advice the member

has been getting is that it's difficult to deal with the Forest Service

when it comes to grazing issues. I'll take that under advisement and

deal with it, because our clients — ranchers and farmers and the

general public are as much our clients as the licensees — need to be

dealt with properly and with respect and in good order. I appreciate

receiving that information.

MR. ROSE : First of all,

it isn't just the idle talk of some ranchers. I have some pretty good

technical advice from members of the Department of Agriculture. It

isn't just an idle rumour of somebody complaining. There's a more

earthy word I could use than complaining, but in view of the lofty and

dignified nature of this place, I will not do that.

There

is some question whether certain animals grazing do ravage newly

planted forests. Is that not the case? I visited an area seeded with, I

think, white clover. I don't know the varieties, so I won’t go into it.

Ladino, I think it was. How's that, Harry? It was apparently saving the

trees, because where there*s foraging and forage available, the trees

are left alone. This was the case with sheep and cattle.

I'd

like to know if there's some prejudice based on nothing more than

merely an assumption that cattle-grazing is devastating to young

forests. The assertion by people I talked to is that if you seed them,

they will not eat the trees. Cows don't like eating trees and chewing

wood very much. They would prefer to chew clover or some other suitable

forage for ungulates.

HON. MR. PARKER : The

difficulty with cattle is the trampling of the plantations. Yes, sheep

can be used to help keep brush down in plantations. They have to be

watched closely and kept on the move. If you delay too much, they start

gnawing on all vegetation, including the plantation. It needs proper

foraging management if sheep are to be used effectively. They've been

used successfully in several areas of the province.

[3:45]

MR. ROSE :

I wonder if the minister could tell me whether or not it's the practice

of private corporations to avoid planting grass in clearcuts, or is it

just limited to public lands? I'm told that privately held lands — I

don't know whether it's privately owned fee-simple land or TFLs or

whatever they are; it doesn’t matter, they're in private hands — are

generally not seeded even though they may not be anywhere near cattle

ranges. Is that the case?

HON. MR. PARKER : I can't answer that at this time; I'll have to take that question under advisement, Mr. Chairman.

MR. ROSE :

Finally, I missed most of the deliberations and answers of the second

member for Cariboo (Mr. Vant) yesterday. So if this question was

answered, I apologize for that, but I'd like to ask the question.

What

is the status of range fees? There was a Green Paper out on this. Have

they in fact been raised? I've just been looking at the farm

income-farm assurance figures for the cattle industry, which indicate

that the largest payout for people in trouble — something like $12

million — was in the cattle industry in '86-87. I wondered whether that

is contributing to their problems, to their need for assistance — which

I imagine they're reluctant to take, given their usual ideological

bent; they don't want any government intrusion. I wondered if that's

the case. What's the status of the range fees?

HON. MR. PARKER :

Mr. Chairman, we've decided to postpone any increase in range fees for

one year in view of the drought conditions throughout the interior and

the difficulties they have placed on the range resource.

MR. ROSE :

I wonder if there are any studies in forestry or agriculture — I can't

ask about agriculture because the minister's not here now — indicating

the economic value of range compared to forestry, whether perhaps

certain lands would be better as ranges than replanted. Is there any

information on that at all?

Another concern.... This is not a skill-testing question.

Interjections.

MR. ROSE : Are you ready? Shall you answer that now, or shall I finish my question?

[ Page 4820 ]

Well,

first of all, it's a comparative economic advantage on specific lands,

one vis--vis the other. The other part of it is: what is the...?

Interjections.

MR. ROSE : I think I'll just sit down until the conference ends. Then I'll form my final question.

HON. MR. PARKER :

Mr. Chairman, my deputy is just trying to help me out here. I

understand that there are site-specific assessments done within

districts, but there are too many overall economic assessments of one

land use-versus another. Empirically speaking, I don't know of any.

MR. ROSE :

That, I think, is a reasonably critical decision for certain kinds of

lands — what their future will be. I think it would be worthwhile to

not just follow traditions because if you want to look at it that way,

everything was bush around here once. Some we cut down; some we didn't.

Sometimes it costs more to clear land than it does to go out and buy

vacant land.

I wanted to know from the minister what the

status is on the department's policy of peddling vacant Crown land,

forested or otherwise. Is there an overall policy? What determines

whether land is put up for lease or for sale, for TFLs or grazing

leases or whatever?

HON. MR. PARKER : The Crown lands

available for sale are listed in a quarterly catalogue circulated

throughout the province. As often as not, any new lands offered for

sale are on the basis of an application by a member of the public.

MR. ROSE :

I was just wondering if there was an addendum to the answer, which

seemed rather brief and taciturn — or terse. Is there anything else

there?

HON. MR. PARKER : Mr. Chairman, the ministry

has a number of properties available for sale throughout the province.

Some are industrial, some recreational, some residential and some just

commercial. We list them in a very comprehensive catalogue and

distribute it throughout the province through government agents, Lands

offices, the Queen's Printer, real estate and to anybody else on the

mailing list who has expressed interest in such a catalogue in the past.

But

from time to time, we have an application from somebody in the public

who is interested in a particular piece of land. Probably most

commonly, it's agricultural lease with a view to proving it up and

purchasing it from the Crown through policy established in the Lands

branch. That particular piece of land gets a solid assessment by a land

inspector who is a person qualified either as an agrologist, an

agronomist or a forester to do these assessments. They do a thorough

investigation on that particular piece of land and determine whether or

not it has a reasonable agricultural chance. When it does, the lease

documents are processed and the lessee carries on. As he proves up the

land, it becomes an opportunity of purchase. He has that opportunity to

purchase — it's a public event; it's advertised — and he pays his money

and takes his deed, and that's the way it comes about.

Vote 40 approved.

Vote 41: ministry operations, $366,149,032 — approved.

Vote 42: fire suppression programs, $80 million — approved.

Vote 43: forest resource development subsidiary agreement, $69,403,505 — approved.

On vote 44: North Coast development region, $738,176.

MR. BLENCOE :

We want to continue our questions to the various governors of the

states of the province of British Columbia. As we know, over the last

few weeks there have been a number of people expressing concern with

this system that we have placed upon local government, and I just wish

to ask the minister responsible for this so-called North Coast

development region a number of questions.

First question: could he tell me how much money he has spent thus far out of his first allocation of $1 million?

HON. MR. PARKER : The sum of $122,660.

MR. BLENCOE : Could the minister tell this House what that money was spent upon.

HON. MR. PARKER : That's been spent in part on salaries, travel, courier services, business meetings and data processing.

MR. BLENCOE :

My only comment is that, as with a number of these ministers of state,

once again we find that this region also did not require the $1 million

special warrant, and once again we bring to the attention of this House

that there indeed was no emergency for that $1 million — only $120,000

has been spent thus far. There was, in our estimation, abuse of the

Financial Administration Act that governs us all in this Legislature.

That is certainly not a wise use of taxpayers' money.

I ask another question of the minister. What are the current priorities in your capacity as the governor of this region?

HON. MR. PARKER :

The priorities in the northwest are: transportation items, economic

development items, communication items, social services items, medical

services items and educational items.

MR. BLENCOE : Can the minister give us any specific things you have accomplished in nine months?

HON. MR. PARKER :

In early December we called the organizational meeting of the north

coast region where we invited senior elected representatives, a number

of community groups across the northwest, to join us in forming the

economic development group and the social services group for the

region. It was received with great enthusiasm throughout the northwest.

gathered in Kitimat and were well received by the city of Kitimat. We

had an attendance of mayors, presidents of tribal councils, chairmen of

regional districts, chairmen of hospital boards, chairmen of school

boards, presidents of employer councils. We invited the MLAs. The only

MLA that showed up, of course, was the government MLA. The labour

representatives were invited and they didn't show up.

also have a couple of situations in the northwest of constituencies

that need representation. The presidents of chambers of commerce were

invited and so were community

[ Page 4821 ]

association

presidents in unorganized areas. So we had a cross-section of people

through the northwest who had been elected to their position. There was

no attempt to select anybody by political stripe. It was the fact that

they were living in the northwest, committed to the northwest to the

point where they were prepared to spend their spare time in serving

their community and their constituents.

[4:00]

They

were considered right and proper to form these groups and deal with the

issues we have that are peculiar to our region. They are regional

issues; they are not constituency issues but regional district issues.

They're municipal issues, regional issues. The MLAs have to do their

job, the regional district people have to do their job, and so on. I'm

not trying to take that way; I don't want it anyway.

What

we need to do as residents in the northwest is get together and

determine what's affecting us in common, assess it, and come up with

what we consider to be solutions that would work best in the region in

which we live. We make these recommendations and I carry them directly

to cabinet. It's a pipeline, an excellent pipeline. The people from the

northwest are very pleased to participate.

The first thing

we decided was that we had to meet again, and quickly, because there

was concern over the GATT ruling on fisheries; and there was some

concern over the reorganization of CBC in Prince Rupert. I really

wanted the groups to focus in on their planning and priorities so we

could form our working groups and get on with the task of gleaning

northwest input.

The next meeting was in Prince Rupert. I

was unable to attend because I had responsibilities to meet with the

Western States Legislative Forestry Task Force, because we were trying

to work out an arrangement whereby we can get our firefighters paid for

undertaking fire protection in neighbouring states and vice versa. I

was caught up in that and unable to go. My parliamentary secretary, the

member for Cowichan-Malahat (Mr. Bruce), ably chaired the meeting.

That's the purpose of the exercise. That's why we have parliamentary

secretaries — to take charge and make sure everything flows readily and

the concerns of the people in the northwest are heard. That took place.

were able to get the Minister of Agriculture (Hon. Mr. Savage) and his

staff in Prince Rupert to deal with the people that were concerned

about the GATT ruling so they could have direct communication with

those people responsible and those people with the answers. That was

well received.

We had also senior management from CBC able

to attend to deal with that issue, and then the group was able to go on

to the planning and priority session, which was a good session. Since

then the working groups have been appointed and have been dealing with

their specific issues, as outlined by the planning and priorities

session. We will be meeting June 18, 1988, to discuss the progress that

the working groups are making. What we've been able to achieve so far

is funding for an airstrip in Masset and confirmation of the

construction of the transmission line to Stewart, which is an

incredible step forward for the northwest.

The process is

working well. What we did do, by the way, in January's meeting, was

invite all chief counsellors from the native community, not just the

presidents of the tribal councils, because there are a number of

villages that are not represented by tribal councils. We felt that the

chief counsellors should have the same opportunity to represent their

communities as the mayors and the chairmen of regional districts. We

were pleased to have the whole group in the northwest represented and

providing valuable input to the process.

MR. BLENCOE :

It appears, other than a few meetings and the Minister of Agriculture

(Mr. Savage) visiting, which I presume he would have done without this

lovely bureaucracy, that very little has been accomplished. We're nine

months into this program. The minister has a fair amount of money in

his back pocket. They're talking about regional district issues. I

would suggest to the minister that the regional districts are quite

capable of dealing with those issues and reporting to various line

ministries. You had the line minister up there. Did you need a minister

of state to call the Minister of Agriculture up into those communities?

Of course not.

The point our side has been making is that

this system that we've introduced is bringing the province to a

standstill in terms of economic development in British Columbia. We

have one big, gigantic hunk of red tape that has been placed over the

top of the province.

Interjections.

MR. BLENCOE :

It's not a solution, Mr. Chairman. Jim Matkin has said he doesn't

understand it. The small business community have said they don't

understand it. Various mayors are saying they don't understand it. Now

the minister of state reports that on one issue he got the Minister of

Agriculture up there anyway. We needed a minister of state to ask the

Minister of Agriculture to come up to the community? This whole process

becomes a bigger joke every day when we explore it more and more.

nine months we've had absolutely nothing accomplished. Local government

have already assessed their priorities. They could give those

priorities to the line ministers. As I said, one line minister has been

up there under the minister of state system.

I have a

further question to the minister. Can he tell me how many committees he

has working in this minister of state system? How many committees have

you struck?

HON. MR. PARKER : It seems to me it is

six working groups at this time. We can create others as the group

itself determines necessary. What we have is a means of bringing

together all the senior elected people in the whole region from time to

time so they can deal with issues of *common concern. There is no other

means for that to happen. I was most pleased when one of the gentlemen

from the Nass valley, a hereditary chief, stood and said this is the

first time that this province has ever asked the native community to be

part of an economic development initiative. He was most pleased to

participate and to continue to participate.

I think that's

the essence of the thrust of the regionalization program, one of

bringing all of the communities together on common ground to deal with

regional issues, because it's a very diverse and large province which

consists of more than Victoria. But the member opposite doesn't realize

that, and too often we find — when I say "we" I mean those of us that

live in the north, Mr. Chairman, and you can certainly understand that

— a sad lack of understanding of this province beyond the lower Fraser

Valley. This regional development initiative is the correct way to go

for the participation of the regions in the business of the province.

MR. BLENCOE : Would the minister concur — or put it on the record — that any decision that you make or any

[ Page 4822 ]

priority you come up with in terms of a loan or a policy, you have to get the agreement of the line minister?

HON. MR. PARKER :

Mr. Chairman, we don't propose to take on the duties of the line

ministry, the regional district, the hospital board or the MLA. We're

concerned about regional issues and regional solutions. We take those

recommendations from that group — what they think would work best for

their region — and carry it to cabinet. We have that discussion around

the table, and we deal with it. It's an incredibly good pipeline,

especially for the people in the northwest of British Columbia.

MR. BLENCOE :

With the small business community and councillors and mayors and all

sorts of people, the confusion continues to reign. You've just said

you're not taking on certain issues, yet earlier on you said you were

interested in health and economic issues. I have to ask the minister:

what are you going to take on? Again I ask: if you make a decision....

You just said in your earlier statement.... You were talking economic

initiatives, and then you were talking about social, health and

education issues. You said you're taking on those issues initially, and

then you said you're not taking them on.

Let's assume you

are going to take them on. How does that process impact on line

ministers? Will they be consulted, or will they have the final say in

any project that you come up with? Or will you have no consultation

with line ministers? You've already had the Minister of Agriculture up

there in your region already. I assume that could have happened without

you being there.

MR. MICHAEL : I would like to rise

and congratulate the minister and all of the ministers of state in the

province of British Columbia on their service to the province. I would

like to congratulate the parliamentary secretaries for the

extraordinary number of hours they put in serving the ministers of

state and trying to make things happen in the province.

The

signs of progress as a result of these initiatives are widespread;

they're all over the province. There are a lot of good things

happening, and a lot of jobs being created. Unfortunately, Mr.

Chairman, the problem with the second member for Victoria and many of

his colleagues over there is that they've never been involved in

economic development. Perhaps the first member for Nanaimo (Mr.

Stupich) and the first member for Vancouver East (Mr. Williams) could

set them straight on some of the complexities of economic development

when you're out there trying to make things happen, and when more than

one minister is involved.

That is one of the premises upon

which we have ministers of state. They are able to meet with the

people, understand the priorities, get involved in planning and then go

back to the Victoria area, meet with the ministers involved and pull

these projects together. It is an attempt by the government to cut

through the maze and the red tape. Anyone who has not been involved in

economic development, such as the second member for Victoria, just does

not understand what the problems and the complexities are out there.

would suggest, Mr. Chairman, rather than the members taking up the time

of the Legislature ridiculing and picking away, that he get out and get

involved in these meetings, be a part of the process, make his positive

suggestions to the committees while they're out there working.

Certainly

what he says is correct. Certainly there are some mayors and

councillors who walk away from these meetings not particularly happy,

because there are people in our society — some, Mr. Chairman — who go

to meetings looking for quick answers. But answers don't come

overnight. It takes involvement, and it takes planning. Planning is

hard work. It takes a lot of time and effort, and it's not easy work.

It's not welcome work to get involved in the planning process. It's

easier to sit back and moan and groan and bellyache and whine and

snivel, as we hear from many of the members opposite whenever we get

talking about the minister of state's estimates.

I would

just like to conclude, once again, by thanking the ministers and the

parliamentary secretaries for the hundreds of extra hours I know they

put in traveling their region and working on behalf of the citizens of

the province.

MR. BLENCOE : Well, that was an

incredible attack on line ministers and MLAs. Are you basically saying

that line ministers and MLAs haven't been doing the job or are not

capable of doing the job, and therefore you're prepared to put a costly

bureaucracy on top of cabinet, cabinet committees, MLAs, line ministers

and local government to achieve your political ends? That's basically

what it's all about, Mr. Chairman. What an attack on line ministers!

want to ask the minister: what is your role in terms of working with

line ministers? You've heard the member for Shuswap-Revelstoke attack

line ministers and MLAs. Are you prepared to take over, as minister of

state, the work of line ministers, MLAs and local councils?

HON. MR. PARKER : Mr. Chairman, the member is clearly following in the footsteps of his colleagues in that he doesn't listen.

The

purpose of the regional development initiative is to gather regional

input on regional issues, and we carry that through to cabinet. The

process in the working groups includes those representatives from the

line ministries with which the topic is concerned. They get input from

the agencies and communities involved, and the working groups carry

that information and those recommendations to the regional economic

development group or the regional social services development group.

Out of that come recommendations that the minister of state carries to

cabinet.

[4:15]

We work with all

the agencies that are brought into play, whether federal, provincial,

municipal or otherwise, in determining these solutions. We get a great

deal of help from each of the line ministers, and I have no trouble

whatsoever working with them on regional development initiatives.

There's excellent cooperation between all members of this cabinet, this

government and this caucus. We're all working towards the best

interests and successful development of this province, for continuing

job opportunities and improved commercial opportunities. This

initiative is providing those.

The second member for

Victoria is invited to participate. He always has been, but he chooses

not to. Not having been there, not understanding the process and not

being part of the process, he'd much rather stand around and criticize

for criticism's sake. That is unproductive, Mr. Chairman.

MR. BLENCOE :

I would remind that minister and all the members on the other side that

I've just spent a number of days in the regions. I spent two days in

Kitimat talking to many of the northern mayors and aldermen who are

totally frustrated by this process. We won't participate in a system

that has no mandate and no legitimacy in law. We believe in local

government.

[ Page 4823 ]

I would

suggest to the minister and all the other ministers of state that if

you want the priorities and all the issues you're talking about, you

could save yourself the $14 million that you've put over for propaganda

of these ministries of state and ask, with a 37 cent letter to the

regional district and the key mayors in your regions, what their

priorities are — 37 cents instead of $14 million.

You don't

need another level of bureaucracy to take over control of the agenda of

local government. As many have said — not only on this side of the

House but in other parts of the province — this system is a political

con game, and we are not prepared to participate in such a system. We

believe in local government, and we won't endorse any system that

weakens its traditions.

The people of this province —

ordinary British Columbians — respect local government, and they're

tired of Big Brother government coming into local government and

dictating what should happen at that level. I've asked the Premier and

many other ministers of state in the last few days to end this

confrontation and tension and to get back to the normal ways of

governing the province, which we've accepted in British Columbia since

Confederation. It's another level of bureaucracy. It's costing us

millions of dollars. It's not necessary, and we will not endorse it.

Vote 44 approved on division.

ESTIMATES: MINISTRY OF

AGRICULTURE AND FISHERIES

On vote 9: minister's office, $254,982.

HON. MR. SAVAGE :

It is indeed a pleasure to rise in the assembly today to start debate

on our estimates. I'd like to start out with a bit of background on the

importance and the performance of the industry, if I may, Mr. Chairman.

you can well appreciate, and for the information of the House, B.C.'s

agriculture and fisheries industry — or, as we commonly like to refer

to it, our food industry — is serving us very well. In my judgment it

has been one of the solid performers in recent years and a stabilizing

influence on our provincial economy, creating steadily increasing

economic activity and more direct and indirect jobs in the line of

producing food at relatively stable prices by what I consider to be

some of our most efficient farmers and fisheries people and, from the

processing point of view, our processors and manufacturers.

have been contributing beyond B.C. borders, as you can well appreciate,

because not all our food or fish products are consumed within our

borders. We export a number of food products, and also quite a

substantial amount of technology.

I'd like to touch on how

the food industry fared during 1987, and it's a general overall

indicator. Farm cash receipts for 1987 were in excess of $1 billion,

and that marks the fourth straight year. That's up by 3.1 percent over

1986, and I would also like to say that we're expecting very close to a

3 percent increase for 1988. Grain and tree-fruit receipts are still

far below acceptable levels. I need not say that; it's probably been

referred to on many occasions. It is a fact that they are far below

what we consider acceptable levels for farm-gate receipts. Livestock

receipts continue to show strong growth. There has been record-high

realized net income — estimated for 1987 to be at $279 million, which

is an increase of 19.8 percent this year, as a result of operating

costs dropping slightly and farm cash receipts being up somewhat.

Primary

agriculture is still a leader among all our resource industries in

direct employment. In total employment , if you go to the end use of

the product, it swells to over 170 .000 when all aspects of the

industry, direct and indirect, are considered.

The

fisheries sector. I'd like to touch on the commercial fishery and on

the aquaculture side. Aquaculture sales for 1987 are estimated to

approach $10 million, and that's up from the $6 million we generated in

1986. Landed value in wild fish stock — or the commercial fishery — is

estimated to be in the vicinity of $402 million, compared to the 1986

landed value of $382 million. There is strong growth potential, in both

the aquaculture sector and the commercial fisheries sector.

Our

agriculture, fisheries and food sector is an example of the benefits of

economic diversification. The vast diversity within the food industry

gives overall stability to our sector and to the provincial economy as

a whole, and there has been consistent growth. This industry makes a

significant contribution to the provincial economy, and there is strong

potential for that growth to be further expanded. The industry offers

many strengths, and one of those, of course, is the diversity of

products. They can fit, as you can well appreciate, many special market

niches. There is a small-scale means for quick adaptation to new

markets whereby we can adapt to those opportunities in a relatively

quick time-frame.

We have highly respected technology,

recognized worldwide, in dairy genetics, range development, pest

management and food storage.

I'd like to touch on some of

our program successes and achievements. The ministry has cooperated on

a number of occasions in providing initiatives for farmers, fisheries

people and food processors that have shown positive results. The number

one area I'd like to cover is marketing. Food Pacific '88, which we

have been promoting for some time, will be held in B.C. Place Stadium

from August 30 through to September 2.

If I can refer back

to Food Pacific '86, it created an opportunity to market our B.C.

products to a large international audience and to see the new processes

and products exhibited by other participating countries. It worked out

to be a great success, and the overall impact on the Canadian economy

of Food Pacific '86 was $122 million. Sales stemming from the show for

the Canadian companies were worth more than $45 million, and for

British Columbia companies exceeded $30 million for the three months

subsequent to the show. Those contracts and opportunities are still

growing, Mr. Chairman. We look forward to even better results from Food

Pacific '88.

Our ministry staff are involved with industry

and export trade development missions and trade shows, all aimed at

capturing more of the export market potential that exists on the

Pacific Rim. Over the past year we have initiated a number of joint

ventures and the development of many agreements regarding dairy

production, seafood products, etc., with Thailand, China and other

Pacific Rim countries, and we feel there are many more opportunities on

the horizon.

The Aquaculture International '88 show, which

is being held September 6-9 at the trade and convention centre, will

help our aquaculture sector gain deserved international recognition as

a good example of a private initiative enhanced by

[ Page 4824 ]

some

government support. In productivity and competitiveness, several

programs have helped the industry develop more productive technology

and improve our competitive strength at home and in outside markets.

The

agrifood regional development subsidiary agreement, commonly called

ARDSA, a five-year federal-provincial agreement signed in July 1985,

has been very beneficial to the farming community. Three programs,

productivity enhancement, resource development and commodity

development, are part of the ARDSA agreement. As of October 1987 over

$11.4 million — and that was to be cost-shared 50-50 with the federal

government — has been committed for 84 projects. All have resulted in

improved industry productivity or capacity, which will increase our

effectiveness in the future.

We've made progress on a

national agricultural strategy, and that strategy is designed to

address the many challenges that face our industry. We have a

commitment to ensure growth and development of the sector and closer

cooperation between all those involved within the sector. British

Columbia, as you can well appreciate, played a major role in the

strategy development. The major components and implications for B.C.

are a commitment to review tripartite stabilization programs; these

involve the federal and provincial governments as well as producer

participation. What British Columbia has long been seeking in those

tripartite agreements is a fairer and more equitable share of the

federal expenditures in those programs.

We have looked at a

review of the national marketing schemes and we encourage greater

flexibility. You've heard the issue referred to on a number of

occasions, in the way of allocating market share quotas. We have made

some gains, as you can well appreciate, but we still feel there is a

long way to go. British Columbia stands to gain from the strategy,

particularly in the high-value production and value-added processing.

The diversity of B.C. products is an asset in our industry, and the

capacity to produce high-demand specialty products to meet those needs,

not only offshore but of our retail and food service outlets, will

continue to be pursued.

Our ministry's food industry

development program was begun in 1985 to provide financial assistance

for projects aimed at developing new or expanded markets, introducing

or improving food processing technology and developing new food

products. To the end of the 1987 fiscal year, about $1.5 million in

FIDP grants were approved for 82 projects which, those projects

indicate, will create 439 man-years of employment and stimulate some $6

million in private sector investment. Each government dollar spent in

FIDP stimulates about $3.90 in private investment. It's an excellent

return for that money invested by the taxpayer.

[4:30]

I'd like to touch on aquaculture. Aquaculture, as most of you know,

is the farming of salmon, and it is one of the more rapidly developing

industries in this province. It has a real economic potential and can

be a major component in the growth of our B.C. aquaculture sector. In

1984 there were ten operating salmon farms, and by the end of 1986 we

had 69 operating farms. Now there are 118 operating salmon farms with

another 34 about to begin, a strong sign of optimism for the future.

There are also over 380 licensed shellfish producers now operating.

addition to industry expansion, infrastructure is being established to

assist in the orderly development of the industry. During the year, we

established the Aquaculture Advisory Council to encourage orderly

development and to advise the minister on major issues of concern. We

have been developing health programs and brood-stock development

programs to improve genetic stock in conjunction with the industry. We

are working with industry and educational institutions to develop

extension education programs to facilitate the transfer of technology

and upgrade the skills of those people who work in the industry.

have discussed responsibilities — and I'm referring to protocol

agreements with other provincial ministers involved and with federal

agencies — to ensure coordinated, effective programming to both

commercial fishing and aquaculture sectors regarding research,

licensing and regulations. The objective is to encourage industry

growth and development, with appropriate controls regarding

environmental and other issues.

We have a lot of

challenges, which we readily recognize. Even though the food-production

industry in B.C. is growing steadily, it will continue to face many

challenges for years to come.

As you can well recollect,

the high interest rates in the 1970s and early 1980s, as well as bad

weather, have taken their toll. There is continued economic instability

both domestically and externally. There is intense world competition

and, lo and behold, as we've often said, continuing subsidy wars

between the EEC, the U.S. and others.

We have significant

shifts in consumer preferences that the industry has to respond very

aggressively to. As the consumer preference changes, the industry must

be prepared to adapt, and there are vast arrays of new products being

developed. It's this new packaging, etc., that will have to adhere to

the changing demand by the great number of consumers in the public.

The

grain producers have experienced some of the lowest prices since the

Depression. Countries must stop this trade war and reduce international

subsidies that have created these many surpluses. We must recognize

that excessive export and production subsidies are the cause of many of

the disastrous world grain prices that we face.

British

Columbia is a strong trading province, and we must develop policies to

ensure access to markets. We must guard against the continued wave of

protectionism that creates uncertainty about our future trade prospects

with many other countries. The free trade agreement is a hopeful sign

of a stronger trade prospect with the U.S., and it will remove some of

the past barriers to trade, which in the overall is good for British

Columbia. Under the free trade agreement B.C. agriculture will face

some problems, which we recognize, but will also have many

opportunities provided for them.

[Mr. Pelton in the chair.]

we have heard on a number of occasions, the grape and wine industry

will be hurt somewhat, but the federal government must commit to

developing adjustment programs to help the producers and the wineries

adjust to the realities of that new agreement and concentrate their

efforts on developing new products and markets where we are able to

compete more effectively.

Generally the free trade

agreement creates more secure access to a very large market heading

into the twenty-first century. Over the next few years there are many

optimistic aspects, but a good many farmers face increased challenges

and continued financial stress. They will face increased competition

and no doubt uncertain economic times.

[ Page 4825 ]

I'd

like to touch a little on areas for potential industry growth. We feel

that the B.C. agriculture, fish and food sector does have many

opportunities not only at home but also abroad. There are opportunities

for the products we presently export and for the development of new

products, and I'd like to touch on a few: berries, tree-fruits, nursery

stock, greenhouse products, game, specialty foods, etc. There are

further agricultural developments in the products and processing

services where we can sell the expertise or the technology and the

licensing and joint ventures that are taking place in other countries.

are trying to replace imports that come into the country, and a number

of those things are developing in machinery, poultry breeding stock,

consulting services, feed and fertilizer. We would love to be able to

replace as many products as possible with B.C.-produced products — for

example, industrial milk products, HRI products, confections, beef,

pork and lamb products, vegetables and specialty foods, etc. We must

also obviously be cognizant to exploit new opportunities as they come

before us, and a number of them are relatively new, as I touched on a

bit: aquaculture, game-farming, greenhouse products and many high

valueadded products. Our overall strategy is to provide the framework

to make a climate available to help the industry. We must achieve a

more level playing-field on the international and the national scene,

and as I stated before we must try to get all countries to reduce their

international subsidies. Also within our own country we must get the

provinces to try and harmonize programs. We also recognize that we must

aggressively market our products and encourage our industry people to

develop new market opportunities and new market products to meet the

increasing demand and competition.

We will do this in four

different areas. We will constantly monitor and make our industry aware

of the efforts that have to be put forward by our ministry and

government relative to being able to be competitive and adapt to the

markets that present themselves. We must integrate our food system and

approach a more competitive cost of production. We must become more

efficient. We feel we must also pursue a fair share of the national

programs — a fair treatment for B.C. in quota allocations. I can name

chicken, turkey, and certainly from the perspective of the industrial

milk, the MSQ, where we are a long way short of having a fair share.

the 1988-89 budget, given this economic climate, it is imperative that

B.C. remains able to establish the kinds of policies and programs that

are necessary for the maintenance of these important sectors and

programs that encourage sound growth and development of our industry.

Let me assure you we are working to reinforce the sound programs and to

improve where it is necessary to help our industry meet those

challenges. Emphasis will continue to be on helping the ministry

achieve a reasonable degree of stability, find and develop new markets,

produce new and innovative products that meet the needs of today's

consumer, maintain and adopt the use of the latest technology and

market and enhance our competitive position to produce those products

and technologies.

We will look at a number of programs to

address those challenges. The ministry programs are designed for the

farmers and processors. I'd like to touch on six major areas. Extension

and education, we feel, are very important. Food and industry market

development, as I touched on a bit, are also exceptionally important.

Financial assistance and incentives to reduce the risk to those

investing in the industry — we want them to be encouraged to invest in

the industry. Animal and plant health are definitely important.

Resource sustainability is also an important part of the thrust of our

ministry. Also, of course, a major

part is the fish industry

development.

Our gross budget allocation of $91.2 million,

while down slightly from last year, is not a reduced commitment. But

this government and the industry, the net budget — that is, the net

producer premiums of FII — is $71.22 million. That is up from $71.12

million in the FII budget. It reflects realistically a better market

condition for some sectors — for example, the livestock — and a lower

requirement for financial assistance program layouts on the '87 crops.

There have been lower input costs, and we have a continuing lower, more

stable interest rate than what we had a year or two earlier.

Major

federal-provincial initiatives are underway for tripartite funding

agreements, and they're being discussed for a number of commodities.

We've run the greenhouse technology assistance program, and it was very

successful; it has achieved its objective. It will not be offered in

'88-89. With a government allocation of about $2 million in three

years, more than $17.3 million was generated or invested in substantial

improvements in greenhouse operations, and they will reap the benefits

for years to come.

Our budget allocation for farm income

insurance is reduced to $40 million, and it was at $56 million in

'87-88. Fifty percent of that program is recoverable from producers'

premiums. So the net FII allocation is in the range of $20 million.

There again, it reflects the improved market conditions in some sectors

and anticipated lower payouts in 1987.

On the tripartite

issue, B.C. is still seeking access to a revised federal red-meat

tripartite program, and we have continued to negotiate with the federal

government and the other provinces to be participants in that

tripartite agreement. We have been successful in arranging for a

tripartite agreement for apples.

The free grain assistance

program, we have announced, will continue through to July '89 and will

be a very valuable program for not only the producer but also the user

of grains.

The food industry development program will be

increased to $750,000 from $500,000 to help private business develop

new markets and products. It will also include aquaculture and

fish-processing projects.

In keeping with improved

government efficiency, provincial food inspection programs — fish,

milk, milk-processing plants, meat and property management functions —

have been transferred to those government agencies already equipped and

mandated to do those jobs; that is, the Ministry of Health or the

Ministry of Forests and Lands.

Mr. Chairman. I now conclude

by saying that I am pleased to be the minister representing the

portfolio of Agriculture and Fisheries. I will now take the pleasure of

answering questions from the members opposite.

MR. ROSE :

I thank the minister I would just like to suggest to him, though, that

when he's talking about his new programs, he'd better be very careful

on how they are developed, because I asked the Minister of Economic

Development (Hon. Mrs. McCarthy) the other day whether under free trade

it will be legal to give preferential treatment to Canadian companies

as an industrial strategy — I presume to Canadian farmers as well. She

answered in part, "Any enhancement of those that are established or

accepted now," and that our grandfather would not be available after

the free

[ Page 4826 ]

trade

agreement. So I think the minister's flexibility on those grounds, if

the free trade agreement goes through, is going to be severely limited

— if they could be described as "preferential" or "subsidy" in any way.

Those are some things I think we should keep in mind.

As I

indicated to the minister earlier today, I thought we would deal in the

latter part of today with the aquaculture side of his ministry. We

prepared to do that, and my colleague from Atlin is going to speak on

this.

Perhaps, though, the minister would like to introduce his officials for us while they're here.

[4:45]

HON. MR. SAVAGE :

Mr. Chairman, to the hon. members, with me today are my acting deputy

minister, Mr. Bruce Hackett; the director of our marine branch, Gordon

Halsey; and David Davies from policy.

MR. GUNO : Mr.

Chairman, I want to thank my colleague the member for Coquitlam-Moody

(Mr. Rose) for allowing me to begin today. I suspect that he may be

using me as a form of stalking-horse, but that's fine; at least I'll

have tomorrow afternoon off. I thank the minister also for the

comprehensive overview of his ministry. I must agree with him that

there's no doubt that the food industry in British Columbia is vital to

our province's economic well-being.

I want to focus my

questions on the matter of the new, budding aquacultural industry and

more or less express some of my concerns about what you describe as an

orderly development. To put it in context.... You quoted some figures,

but my figures say that in 1984 there were ten licensed salmon farmers

in B.C., and by 1987 there were in the order of 152 licensed farmers

and 269 applications being reviewed. There's no doubt that there is a

tremendous growth in B.C. aquaculture.

This tremendous

growth has occurred in what I would describe as a legal vacuum, with

virtually no legislation and no regulations concerning such vital areas

as pollution, disease and stock vitality, facility and farming

standards, development and conservation of coastal lands and, lastly,

investments. I agree with the minister that British Columbians by and

large welcome the growth of the aquacultural industry, but I would

submit that to invite an industry to develop in the province without

setting any real ground rules is pure folly. We're really asking for a

lot of problems in the future.

If in the face of this legal

vacuum the industry pollutes our environment, destroys our wild stock

and exports the profits, I don't think that we can really fault the

industry for that. The blame should rest solely on the government

because of the lack of leadership in the growth of this industry. I

would like to give the analogy that if you invite a group of strangers

into your home and do not set any ground rules, then I don't think that

you can complain if they subsequently empty the refrigerator and mess

up the entire house.

According to your draft paper, the

objective of the provincial aquacultural policy is (1) to encourage and

facilitate the growth and development of aquaculture in an orderly and

responsible manner, and (2) to realize the economic benefits of

aquaculture in concert with environmental and social objectives. I

think these are laudable objectives, but there seems to be a consensus

of people who are intimately knowledgeable about the industry that the

government is failing to meet these objectives. I would submit that

with a staff of 17 professionals and a budget of something like $2.8

million — the minister can correct me if I'm off on these figures — in

the aquaculture and commercial fisheries branch, it's highly

questionable that all the needs of the industry are being met and the

objectives of the provincial aquaculture policy will be fulfilled.

Turning

to the area of pollution, the first area that I talked about, the

provincial aquacultural policy environmental objectives, as I

understand it, are to be met, according to this government, by ensuring

that environmental monitoring is undertaken to (1) evaluate the impact

of aquacultural activities on the environment, and (2) ascertain the

effects of discharges from other industries and human settlements on

aquacultural production.

There has been research on the

impact of fish-farms on human settlement and the environment. I read

some of the figures: feed loss from dry pellets is up to 15 percent;

feces can account for up to 50 percent of the feed consumed; the

estimated waste produced from rearing one kilogram of fish is in the

order of 0.7 kilograms; mortality makes up to 27 and 30 percent of the

smolt harvest. These are disturbing figures.

As an analogy,

to convert this into human terms, Prof. John Brookbank of the

University of Florida estimates that an acre of fish pens produces

waste that is equivalent to the sewage of 4,000 people.

question is: in light of these figures, what is being done to help

fish-farmers today in dealing with these pollution problems?

HON. MR. SAVAGE :

I'd like to thank the hon. member for the questions and his

observations relative to mortalities, pollution, feces, feed and so on.

Just to refer to the 27 to 30 percent mortality rate, in the wild

stocks less than 3 percent ever come back to the rivers. Whatever

happens to them all? There are obviously mortalities that go to the

bottom of the ocean that neither you nor I know anything about.

The

other thing is the food you talked about, the flushing systems, the

capability of those fish-farms. You referred to 152 licensed

operations. Because a pers