1986 Legislative Session: 4th

Session, 33rd Parliament

HANSARD

The

following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JUNE 10, 1986

Morning Sitting

[ Page 8637 ]

CONTENTS

Committee of Supply: Ministry of International Trade, Science

and Investment estimates. (Hon. Mr. McGeer)

On vote 49: minister's office — 8637

Mr. Williams

Hon. Mr. Bennett

Mr. Stupich

Mr. Cocke

Mr. Davis

Mr. Macdonald

Mr. D'Arcy

On vote 51: government telecommunication services — 8648

Mr. Williams

TUESDAY, JUNE 10, 1986

The House met at 10:05 a.m.

Prayers.

HON. MR. KEMPF: Mr. Speaker, with us in the

gallery this

morning from Terrace is Mr. Dave Parker, and I would ask the House to

make him very welcome.

MR. HOWARD: I join my colleague from

Omineca in welcoming the next Social Credit candidate in Skeena.

MR. BLENCOE: Mr. Speaker, I would like the

House to welcome

16 grade 8, grade 9 and grade 10 students under their instructor, Mr.

Bill Preston. These students are from the uptown challenge education

program of S.J. Willis Education Centre here in Victoria. Would the

House please make them welcome.

Orders of the Day

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

ESTIMATES: MINISTRY OF INTERNATIONAL

TRADE, SCIENCE AND INVESTMENT

(continued)

On vote 49: minister's office, $169,768.

MR. WILLIAMS: Mr. Chairman, I would like to

commend the

minister for his decision of yesterday with respect to the stunning

success of northeast coal and his willingness to debate that issue in a

region of the province that is now facing a depression as a result of

the decisions made by this administration with respect to northeast

coal. So I look forward to a debate in the near future in the towns of

Cranbrook and Sparwood, in the towns of the southeast of British

Columbia that have been most negatively affected. I commend the

minister for his courage and his willingness to go to a region that has

been so negatively affected by this government's lemon of the decade,

northeast coal. The communities that need the greatest help with

respect to that decision are in the southeast part of British Columbia.

Thank you, Mr. Minister. I look forward to those debates in

the coal country of southeastern British Columbia.

HON. MR. McGEER: Mr. Chairman, not only am

I delighted to

debate that member in the southeast, the northeast, the northwest, the

southwest and Vancouver East; I would like to debate the Leader of the

Opposition and all of you put together on television anywhere in

British Columbia at any time. I would like to expose the socialist

policies for what they are. I would like to tell the people of British

Columbia what your record was when you were Minister of Lands and

Forests, when you were Minister of Health, when you were Minister of

Finance, when your disastrous leader who has become an open-liner

wrecked the economy of British Columbia — and the incompetence of

performance here over ten years in opposition.

You learned nothing when you were in government. You learned

nothing when you were in opposition. That's why you were defeated in

1933. That's why you were defeated in 1937. That's why you were

defeated in 1941. That's why you were defeated in 1945. That's why you

were defeated in 1949, 1952, 1953, 1960, 1963, 1966 and 1969. And when

nine members of the press gallery went to work for the Leader of the

Opposition in 1972, you know what happened then, but even they learned:

1976, 1979, 1983. Yes, and 1986: you'll be defeated again.

MR. WILLIAMS: That speech had so much more

spark when W.A.C.

Bennett gave it. It was a great speech given by W.A.C. Bennett, but at

this stage of the game it's just a little dated. I prefer to look at

the last decade of this administration in terms of what the

unemployment rate was when you took office and what it is currently —

more than double. I prefer to look at the last decade in terms of the

number of people on welfare when you took office and now — more than

double. You're the party of misery, the party of depression. You're the

ones that have wrecked the provincial economy. You're the ones that

have invested in every lemon going. You invested in a lemon like

northeast coal. Your soon-to-go Premier over there is the one who

invested in BCRIC, a monstrous failure that you’re now bailing out with

$100 million — a $75 million loan from BCDC to take it off their hands.

This was a new enterprise that was supposed to create jobs in British

Columbia. It's now selling out in order to bail out of its monstrous

problems in North Sea oil in the Brae field. And when we asked the

Premier yesterday, he didn't even have any answers. He deferred to a

minister. A $75 million loan for your failing mess in BCRIC.

Yes indeed, let's have the debate. Let's have it now. And

let's not

debate with some carbon copy junior from the Premier's office of

yesterday. Let's deal with the real McCoy right here. Let's deal with

the one who's abandoning the ship. If there was real courage on that

side of the House, we would be going to the people of British Columbia

now. There would not be that nonsensical exercise in Whistler.

MR. CHAIRMAN: Hon. member, I think we're

straying a bit from the minister's vote, although some latitude has

obviously been allowed.

MR. WILLIAMS: It's going to be a pleasure

debating with that

minister. We'll see that he lives up to his promise, which is a rare

thing for this administration. Nevertheless, the work will be done in

terms of making those arrangements; you can be assured of that.

I just want to look back again at the question of the major

negotiations going on between Canada and the United States with respect

to freer trade. I'd like the minister to respond on the issue of the

countervail duty threat that we currently face. It seems to me that if

the Americans retain the countervail — and it seems clear that they

intend to do that....

Interjection.

MR. WILLIAMS: No, that has to be the number

one bargaining

item in terms of.... Have we conveyed the message to Ambassador Reisman

that the number one issue is the countervail, and that there is nothing

to talk about in terms of freer trade if the Americans retain the

countervail? Because that's what threatens the entire provincial

economy today.

[10:15]

[ Page 8638 ]

HON. MR. BENNETT: Mr. Chairman, I was

disturbed when I heard

the member for Vancouver East once again attack the workers who are

mining the coal in the northeastern part of British Columbia. If it

weren't such an obvious case of regional politics, trying to play one

region off against the other in the most despicable way, in the most

cynical type of politics, then perhaps he should not be answered. It is

obvious what this member and his leader have tried to do. Just this

last weekend I was talking to two of the young men who work at Tumbler

Ridge, who have jobs there as part of a growing mining workforce, and

they're thankful that they have an opportunity to contribute to

production in British Columbia. The member for Vancouver East would

somehow blame this government, and deny the international recession

that hit resource values.

But let's talk about coal, because he's preoccupied with coal.

Even

though it had no quotas to protect it, as central Canadian

manufacturing has — and the products that Ed Broadbent and the NDP

still want protected at the expense of western Canada, supported by

their little me-too group here in the Legislature in British

Columbia.... Coal is the one resource that had no duties to protect it.

There was no OPEC in 1981 to put a floor under coal, or other mining or

forest products. They had to adjust and compete on world markets. What

is the one resource that since 1981, on behalf of this province and our

country, has doubled its exports in tonnage? What other resource has

been able to do that during the recession, going from less than 10

million tonnes to 20 million tonnes, providing jobs in all parts of

British Columbia?

Quite frankly, that member — and I don't believe it's

inadvertent —

is causing uncertainty in parts of this province with the statements he

makes. I want to say that the one commodity without protection facing

world competition that has doubled its sales, its tonnage, and

therefore created more jobs in British Columbia, has been the

development of the coal mines in the southeast and the northeast.

Do not let this member use this Legislature to create

uncertainty

and fear in parts of this province among those workers, because right

now in Tumbler Ridge they're saying that if the NDP ever got into

power, they'd shut down the mines and they'd lose their jobs. That's

what they're saying, and they're saying it because they've heard what

that member has been saying as he attacks one part of the province in

order to try to gain some shaky political advantage in the other.

But I'll tell you what. Coal development, of all the resources

that

have had to face tough international competition for price and markets,

is the only resource during the recession that has doubled the volume

and therefore created more jobs. Coal development and mining and sales

from the southeast have increased as well during that period. They have

not gone down.

I look forward to watching that member try to debate on a

factual

basis — which may be impossible for him — with the Minister of

International Trade, Science and Investment. I don't think he would

selectively pick the one area where he feels comfortable. I think he

should go, as part of this, to Tumbler Ridge. I think he should go to

Tumbler Ridge. It would take

an act of courage and, perhaps, whether

you attend or not, will be very telling on how the people should view

you — that member — if he only wants to selectively pick the place in

which he's tried to play politics with the development of our resources.

There again we have a unique opportunity now with the

invitation of

the Minister of International Trade and Investment, now taken up by the

member for Vancouver East (Mr. Williams). I will today go out and send

a telegram to Tumbler Ridge announcing the debate that will take place.

I will send a message to Fernie and to Elkford announcing the

forthcoming debate. I will send a letter to any other part of the

province, particularly into the Skeena area and through the northwest

where the Mount Klappan coal developments will take place, because I

believe they should be included; their prospects and the new tonnage

that's going to be initiated there should be part of the debate. I will

be pleased to arrange and announce the meetings on behalf of the

Minister of International Trade and Investment and the member for

Vancouver East, and I look forward in fact to providing an opportunity

for a multiple set of dates so that nobody would be able to back out

because they somehow have a busy schedule.

I believe this debate can be one of the most important, and I

will

certainly extend the invitation to the Leader of the Opposition (Mr.

Skelly) as well; and if he will accept, I will also be there along with

the Minister of International Trade and Investment to undertake this

very important public discussion, because I do believe it is important.

The member for Vancouver East has said — and I was shocked

that he

would comment on the way in which the Minister of International Trade

and Investment made that very historic speech about the political

record in this province. He said that that speech was made better by

W.A.C. Bennett....

HON. MR. McGEER: He made an excellent

speech, but he....

HON. MR. BENNETT: He did make an excellent

speech, and he

made it at a time in which the quality of the opposition drew out the

very best. But today there is no quality to make the Minister of

International Trade and Investment rise to great heights; there's only

that little group over there who are seldom here, seldom offer

alternatives, often offer incorrect criticism and facts. So, Mr.

Speaker, let's see some spark in the debate and perhaps the Minister of

International Trade and Investment can get up and feel the urge to give

that speech once more during this debate.

MR. WILLIAMS: No, spare us! Please spare us

that speech again.

Well, the departing Premier literally and figuratively talks

about

attacking the workers. What we're attacking is the maladministration of

ten long, long years. It's the maladministration of ten miserable years

of unemployment and welfare in British Columbia. That's what we are

attacking.

The Premier talks about the international recession. Well,

folks,

I've got news for you. The international recession doesn't exist

anywhere other than in British Columbia. The recession is still here,

and it is a home-grown one. It's a Socred recession that we've got in

British Columbia.

The Premier talks about double the tonnage, but, you know, the

issue

is again — just as the issue was yesterday with the minister — a matter

of whether there is any money in it for us. It's a question of whether

there is a rate of return for the companies. It's a matter of whether

you can pay your bank loans in indebtedness. That's the test. The lemon

problem we've got in terms of that project is that it cannot. It cannot

[ Page 8639 ]

pay for the railway, it cannot pay for

the power

line, it cannot pay for the highway, it cannot pay the bank loans.

That's the reality in northeastern British Columbia, and it has had

that negative impact in the southeast in terms of jobs that would have

been there in the southeast had you not gone ahead with the

northeastern project.

The Premier talks about protectionism for the industries of

central

Canada. If you had had only a little bit of foresight, you might have

protected our interest in terms of the resource industries dealing with

Japan in this province, but you did not. A prudent manager, a prudent

government would work to see that that indeed was the case. If there

had been some joint bargaining with the Japanese, if government had

been at the bargaining table with our smaller coal companies, I am sure

we would have had a better deal and we would all be better off today.

But that has not happened.

And the Premier talks about jobs. Well, the question is: where

are they? There are people in food-bank lineups, there are people in

unemployment lineups, there are people on welfare like we've never seen

before in the history of this province.

Just in terms of jobs in the coal fields, they have

disappeared as

well. The president of Fording Coal, owned by Cominco and the CPR, Mr.

Moorish, said: "Each job that we lost in the southeast was taken from

the northeast as a result of the government's investment in the

northeast fields." That's the president of Fording Coal, a prominent

industrialist in the province, one who initiated their activities in

the southeast some time ago. So it doesn't fly. What we've got is an

industry where the bank bills can't be paid, where interest isn't being

paid, and where they can't pay the principal that is coming due. That

is the reality in that area.

I am pleased that the Premier is willing to arrange meetings

for a

debate. I am very pleased. All I can say, however, is how the mighty

have fallen. How the mighty have fallen. He is the secretary to Dr.

McGeer. If ten years ago you told that man from Kelowna that he was

going to be reduced to being the secretary to Dr. Pat McGeer, he would

have laughed. Now all of British Columbia can laugh.

MR. CHAIRMAN: Order, please. No names,

please. Refer to the minister as the minister.

MR. WILLIAMS: Okay — secretary to the

minister. That is

indeed an indication of how the mighty have fallen. I took forward to

those debates, and I look forward to the departure of the member for

Kootenay (Hon. Mr. Segarty), because that will follow, as surely as

night after day, from that full discussion in that part of the province.

HON. MR. McGEER: I wonder if I could

introduce to the House

my deputy, Mr. Jack McKeown, who has arrived from Vancouver this

morning, because it's evidently the wish of the House that we carry on

with some of the debate on the economic development of British

Columbia, and the promise of the coal industry in particular, which has

been our brightest export commodity, doubling its output since 1980.

The development of a new town in British Columbia, total

infrastructure, thousand-year supply of raw material.... While there

has been doom and gloom on the part of the member, let me give you some

of the coal production figures from the southeast of British Columbia.

A total of 10.2 million tonnes in 1980, 11.7 million tonnes in 1981,

11. 8 million tonnes in 1982, 11.7 million tonnes in 1983 and 20.7

million tonnes in 1984 — double in the southeast between 1980 and 1984.

That brings wealth and jobs to the province of British Columbia.

This has all been done while the opposition on that side of

the

House has been decrying coal and coal developments, just as you decried

electricity and electricity developments when we're selling a million

dollars a day worth of power south of the border, our most reliable

export commodity in the future. You were against that development from

the beginning, just as you were against northeast coal. You've been

against everything productive in British Columbia. Yes, the former

Premier, W.A.C. Bennett, pointed out how often the socialists have been

defeated. But there's one thing: he said it was a disaster if the NDP

were elected, and he knew it. Then you were elected, and everybody

knows it. That's the difference between 1969 and 1986. Everybody now

knows it, and every day with your speeches and with your policies you

make it evident why you are so unfit to hold office in this province.

[Mr. Ree in the chair.]

Mr. Chairman, the basic reason is not just a misunderstanding

of the

economy and economic forces, wanting to trash the free enterprise

system in British Columbia in favour of government intervention; it is

a failure to recognize the place British Columbia holds in the world,

the necessity for us to understand and anticipate by our infrastructure

developments what the world trends are going to be for commodities and

other products — to recognize where the markets in the world will

develop and be prepared to take advantage of them.

[10:30]

Our exports to Japan in the last 20 years have grown from 7

percent

to over 25 percent. We have put in place coal fields recognizing that

there are market economies that will require new output of coal to fuel

the steel mills. What's happened in crude steel production? Let me give

you some figures here so you will recognize the shifting forces that

are taking place in the world.

Between 1974 and 1983 the United States' steel production went

down

43 percent, European steel production went down 33 percent, Australian

steel production went down 28 percent and Canadian steel production

went down 6 percent. In that time Brazilian steel production went up 95

percent, Mexican 35 percent, the Republic of Korea 512 percent and

Taiwan 740 percent. New steel mills are coming on stream around the

world. Those steel mills will require coal. You need to know where the

steel production is going to be in the future. You need to lay the

groundwork with both international trade discussion and infrastructure

to be able to supply these new world markets.

In the future the same will apply to our forest industry.

We've

anticipated where the electricity demand will come from, and we have

anticipated as well where our scientific industries will be able to

supply to the world. This is the basis for recognizing international

trade. It's the basis for economic policy in a government. It's the

kind of thing that we have never grasped even the tiniest insight of

from the members opposite, but it is vital to our future; it's vital to

the wealth of British Columbia; it's vital to the jobs of our existing

labour force and the young people who are coming along. That's what

forward thinking is all about, and it's

[ Page 8640 ]

simply impossible to do it when we've

got the kind of policies and the kind of insight that we see from the

member opposite.

I would advise, of course, if you're going to have a debate —

and it

appears as if we are — to put the member for Vancouver East forward in

that debate. For heaven's sakes, don't let the Leader of the Opposition

out in front of the public with his ideas and his grasp of the future.

He used to be the understudy for the member for Vancouver East, and

better to send the organ grinder out there than the monkey.

Nonetheless, whether it's the Leader of the Opposition or the member

for Vancouver East....

MR. CHAIRMAN: Order, please. Hon. member,

with reference to

other members of the chamber, I think such comments are

unparliamentary, and I'd ask you to withdraw them.

HON. MR. McGEER: Certainly. It was just a

little bit of

allegory, and if the member in the chair took offence, of course I

withdraw. I do maintain that the minister, disastrous as he was when he

led the lands and forest department in that government, had as his

understudy the current Leader of the Opposition. I don't think the

relationship has particularly changed, and certainly the policies have

not changed. Nonetheless, the fact remains that coal is our brightest

export in the period of 1980 to 1986, doubling its production, bringing

wealth to British Columbia.

I tell you now that electricity is going to be one of the

bright

export commodities for the next decade. Because we are poised to take

advantage of both coal and electricity, this will bring wealth and

prosperity to British Columbia. I say the same for our scientific

industries in this province, growing at 20 percent a year with the new

technologies that are being introduced as a result of the Science

Council and discovery enterprise grants beginning to bring those

businesses on.

The future is very bright indeed. We do have this cloud on our

horizon because of the countervail application, but members opposite

should recognize that this is a private industry initiative in the

United States, commenced by avowed protectionists: the U.S. softwood

lumber industry, which for 25 years has been attempting to set up

barricades against our forest products in their markets in the United

States. They're not capable of exporting; they're not capable of

efficiently providing low-cost housing, even to their domestic market.

There is a reliance on British Columbia on the part of consumers in the

United States who want high-quality softwood products at a reasonable

price.

We have always been able to supply that, and we have done it

despite

cries from that protectionist clique in the Unites States that has said

the sky has been falling on their industry for the past 25 years. The

rhetoric is no different in 1986 than when I first entered the House in

1963, and senators from Washington and Oregon were saying exactly the

same things that senators from Washington and Oregon are now saying.

They were prompted by the industry in 1963; they're being prompted by

the industry in 1986. On the basis of merit, there is absolutely no

difficulty with our case.

On its merits, it has been dismissed repeatedly over the past

years, and if merits count, again it will be dismissed. I suspect that

as before there will be a sufficient number of fair-minded people in

Washington, D.C., to recognize that this protectionist wave in the

United States is without merit, is against the long-term interests of

their country. They got a sample with the 35 percent tariff on shakes

and shingles, immediately causing an increase in the price of that

commodity to consumers in the United States and a counterproductive

increase in log prices south of the border.

These are things that presage, if you like, what would happen

on a

much larger scale were there to be any kind of countervail introduced

against Canadian softwood lumber, so we hope, we anticipate, that cool

heads will prevail in Washington, D.C., and similarly that cool heads

will prevail in Canada. The response that our Canadian government made

was a measured response. It was not a signal that they wished any kind

of trade war, but only to say that the industries in Canada, and

specifically those in British Columbia, cannot be crushed as some

insignificant ant; that there are real people out there whose crime has

been being efficient, productive and bringing low-cost housing to

residents of North America.

Those sorts of people should be praised; those sorts of people

should be encouraged; those sorts of people should be protected from

counter-productive arbitrary measures such as were introduced in that

countervailing tariff. We've got to continue to hold the shake and

shingle up as an example of precisely the wrong thing for any country

to do at any time, particularly now when we want to begin to become

greater friends and more reliable trading partners.

I'm not going to answer any iffy questions based on the

typical

doom-and-gloom proposals always made by the New Democratic Party. I

will say that now is the time when Canadians need to speak as one,

because that's how a small nation can become stronger. I plead again

today, as I pleaded yesterday, to get your caucus on the telephone to

Mr. Ed Broadbent in Ottawa and get him on board supporting our Prime

Minister. It's all very well for us to have debates in our Legislature

and to differ in policy, but there are times when.... Certainly if I

were in opposition today, I would be strongly supporting the government

and the Prime Minister, saying that we must stand together as a country

when we're threatened by an arbitrary external force. That's what we

require the NDP members opposite to do now. This is what we require the

NDP nationally to do, because that kind of strength makes it possible

for us to have a force in Washington stemming this tide of

protectionism. As we all know — we're learning now — those things are

extremely bad for us. What they have to learn is that it's bad for them

as well.

MR. STUPICH: Mr. Chairman, the debate — the

minister now says

"if" it takes place — might be very informative under the right

circumstances. Certainly the whole story of government involvement in

northeast coal — what it has cost the people of British Columbia so far

and what it's going to cost them for an indefinite future — has never

been told. We've tried time after time to get the story in the House;

we've been unable to get proper answers from the people who should have

them.

As far as debating with that particular minister, I'd be

cautious,

Mr. Chairman, because I know something about the way in which he

operates. He never plays unless he has an opportunity to stack the

deck. You may recall the incident when he set out to prove that B.C.

wines are inferior to imports. He selected three particularly

low-quality B.C. wines, three particularly high-quality imports, and

insisted, according to reports at the time, on having two weeks to

sample these before he went on TV; then, wonder of wonders, he was able

to identify them. I wonder just how much

[ Page 8641 ]

that kind of person debating would add

to human

knowledge, Mr. Chairman. A debate with everything out would be good for

the people of British Columbia, but I fear that that minister would add

little to the debate.

MR. WILLIAMS: As W.A.C. Bennett was wont to

say, Mr.

Chairman, this doctor couldn't even tell the sex of a whale, so maybe

we don't have too much to worry about after all.

I'd like to look at the southeast again in terms of the

numbers, the

shutdown, the cutback, and talk about the realities. The northeast is

selling 100 percent of contract, but the southeast is selling 50

percent of contract. There's no doubt that the northeast has had that

kind of impact on the southeast. In southeastern B.C., 1,100 direct

mining jobs have been lost since 1981. That's the impact of northeast

coal on the southeast — make no bones about it. Unemployment rates in

the southeast are about the highest in the province. That's the price

they're paying for your lemon program in the northeast. What's going to

happen? Byron Creek Collieries, owned by Esso, will be laying off 139

employees, most of them in July of this year. Their total labour force

at present is 250 people — they're laying off 56 percent of their

labour force in that one operation this summer. Crows Nest Resources,

owned by Shell, is going to lay off 100 of a total workforce of 500;

that's a 25 percent layoff. So it's abundantly clear what has been

happening and is continuing to happen in the southeastern part of the

province. They're paying the price for your program in the northeast.

The member for Point Grey can talk all he likes about our

efforts

now being joint efforts with respect to American countervail duties on

softwood lumber, but very little was going on six, eight, ten months

ago in terms of cleaning up that problem before it got to this stage.

The letter from the Premier's office with respect to shake and shingle

took place six weeks after all the alarm bells were ringing loudly. Zip

from your office, and you're supposed to be responsible for trade

issues; sweet nothing from the trade office on the shake and shingle

issue at an earlier stage. Six weeks late out of the Premier's office

on the shake and shingle issue. A fair amount of the blame simply sits

at your doorstep with respect to the loss of a $250 million industry.

Just this last weekend I listened to Senator Slade Gorton, the senator

from Washington state, talking about his meetings at an earlier stage

with Premier Bennett and saying that it was impossible to deal with

this man, in effect, that the rational arguments weren't dealt with in

terms of those discussions at an earlier stage. That was on CBC last

weekend.

That's the kind of things we hear, and it is clear that you

people

weren't doing your homework when it was absolutely necessary. You don't

solve a crisis when it gets to this stage very readily. You solve those

crises at an earlier stage in terms of dealing with real problems in a

fundamental way at an earlier stage when the risk is not so high. Now

the risk is very high indeed, and the prospects look dismal. I suggest

to you, Mr. Minister, the very reason is your inactivity, your

lateness, your lack of concern at an earlier stage. In this ministry we

have had a bumbler who finally got dumped out of cabinet, finally left

as an MLA and belatedly was taken over by yourself. So the problem is

clearly there in this ministry in terms of the job not being done at an

earlier stage.

[10:45]

HON. MR. McGEER: Well, again, Mr. Chairman,

we want to

summarize very clearly where we stand. You have had overall figures of

the increase in coal exports from British Columbia, northeast and

southeast, our brightest export commodity from 1980 to 1986. The

northeast coal development was one which was non-competitive, in terms

of markets, with southeast. Had we not put the northeast coal complex

together, those markets would have gone to other nations. As it is,

there is an infrastructure in place with 1,000 years' supply of coal.

When I listened to the economic nonsense of Mr. Leggatt, who

sat as

the member for Port Moody–Coquitlam before we got a good free

enterprise member in that seat, day after day after day he got up with

economic nonsense about northeast coal. So finally I said one day:

"After all of this railroad is in place which you say needs to be

written off in the first 25 years, then can the people have that

railroad from the CNR for nothing?"

No, there was no suggestion that that would come forward. Of

course,

if you couldn't pay it all off and then hand over a railroad that was

good for 1,000 years, far more than when you put it in, of course they

wouldn't want to give that up. So when you build a railroad as the CPR

was built 100 years ago, you didn't build that railroad to be paid off

and thrown away in 20 years like some kind of a used car. That railroad

becomes the commercial centre for moving goods and services across the

nation, and particularly to carry the goods of a quarter of a continent

down into the Vancouver harbour to be shipped to growing markets in the

Far East.

That railroad, is it worth more today than it was in terms of

cash

50 years ago? Should we have written it off and thrown it away? What

about the railroads that were built into the southeast of British

Columbia? About that same time they provided the basis for an economy

which now thrives in the southeast part of British Columbia and which

would not exist at all had the railroads not been there. I remember the

days when the NDP opposite didn't want to see the railroad improved so

that we could ship out of Roberts Bank. No, sir. Do you know what they

wanted? They wanted the railroad to be built through the United States

and to have the coal shipped out of Seattle. That was the policy of the

NDP at the time.

Don't tell me you have had any vision for any kind of

development

ever in the history of British Columbia, because I have sat in this

House a long time and heard your debates and all the members come

forward. The problem is that the public, too many of them, have

forgotten the things that you used to stand for in the past. They have

forgotten the things that you did when you were in power, and they are

inclined not to believe, because they can't believe the things that you

are saying today.

You were against that coal development. You were against the

power

developments. You were against the improvement of the railroad to

southeast coal. You were against Roberts Bank. You've been against

every progressive development that I have witnessed in the 25 years

that I have been in this House, and you haven't changed one bit. You

haven't changed one bit.

MR. COCKE: Mr. Chairman, sometimes over the

last number of

years that I have been a member of this Legislature, I have been

rewarded by sitting through a debate that made sense. But every time I

see a debate with the minister

[ Page 8642 ]

from Point Grey I see one that

resolves itself into

personalities, into insults from a minister who's so terribly

underinformed about not only that portfolio but everything that I've

seen him endeavour since I've been here.

He says: "Let's speak as one voice." He wants us to mouth what

Brian

Mulroney has done to us. Brian Mulroney is the same kind of marauder as

the Socreds in British Columbia. Here we are jeopardized, threatened by

the American countervail. And what does Brian Mulroney provide as a

counter?

MR. WILLIAMS: Irish eyes are smiling.

MR. COCKE: Irish eyes are smiling. "Dear

Ronnie, I don't like

what you're doing. It's hurting me politically." And then he puts a

tariff on books, for crying out loud. The only thing it's going to do

is raise the price of books for Canadians. It isn't going to make one

iota of difference to the Americans. Brian had an opportunity, though.

He could have put a tariff on pharmaceuticals, had he had enough guts.

But he didn't. No, and his great mentor over here, the minister of

industrial trade, or whatever he's called, says we should speak with

one voice.

MR. REID: You should at least know the

title.

MR. COCKE: Know the title! They change

titles in the Socreds

faster than they change their colours, for crying out loud. Who can

keep track of them? Chameleons, one and all.

Mr. Chairman, he is so well-informed that he didn't even know

who

replaced Stu Leggatt as the member for Coquitlam-Moody. "The great

free-enterpriser," he calls Mark Rose. I'm sure that Mark is going to

be very delighted with that, but not coming from that minister. The

fact of the matter is that this minister and all of the other ministers

who jump to his defence and to the defence of his predecessor can say

all they want about how good they are, and how bad we were by

comparison. I believe that our government from '72 to '75 was the best

this province has ever seen. [Applause.]

AN HON. MEMBER: A lot of enthusiasm over

there.

MR. COCKE: You wouldn't have much

enthusiasm, but you know it too, deep down in your poor little heart.

But that's neither here nor there.

Interjection.

MR. COCKE: Yes. And things got done then,

didn't they? We

didn't have ambulances out cruising. This province was in good hands

for three years and four months. But what have we had since? We have

had a government that has pulled us into a bog never before seen in

this province. We have a hopeless young generation out there because

we've got a government, for crying out loud, that won't work for them.

MR. REID: Be positive for a change.

MR. COCKE: The member for Surrey, who sits

on his can, who

sits on his prat, never says a word in debate, only from his chair, has

nothing to say, and he asks me to get up and be something else.

MR. CHAIRMAN: Order, please. We are not in

debate on the

budget. We are not in debate on the throne speech. We are in debate on

the estimates of the Minister of International Trade, Science and

Investment.

Interjection.

MR. COCKE: Well, let's hear you say that

again. The minister

of ignorance, he calls his colleague. I can't believe it. He now

believes what we're saying.

Mr. Chairman, it would be a delight to get up in this

committee and

speak as one. We have before us some of the most important issues that

we've ever faced, in terms of trade. We should be speaking as one from

here. We should be speaking as one from Ottawa. We should be speaking

as one in Washington, where rumour has it — and very high-placed rumour

at that — that despite the commission, Ronald Reagan is going to impose

tariffs on our softwoods. We should be fighting that off right here and

now.

I agree with the minister to this extent, that they do not

have a

case. But the fact of the matter is, when you get out there, as poor

old Brian did.... Let me tell you what the mistake was. He went out on

an international stage and said that we Canadians, 25 million strong,

are going to debate, are going to discuss freer trade or free trade to

begin with, dealing with a nation of 250 million, known in trading

circles as international bullies, who were not going to be pushed

around by 25 million of us here and who to show us that they're not

going to be pushed around started hitting us where it hurt. That was

our problem. We got into this thing, we were over our head before we

knew it, and now look at us. And where is it hurting worst? In poor old

British Columbia in the forest industry. Now somehow or another we're

going to have to get our act together in this country and get somebody

working for us down in the United States to indicate that in the long

run they're on the wrong course.

You see what the United States is afraid of is that Japan is

going

to take a look at what's happening here and say: "Oh, we've got to show

Japan that Canada — that little nation — can't push us around;

otherwise Japan might start trying, or West Germany or France, or even

Brazil." That's what the United States worries about, and that's why we

have to really get it together, and somebody's going to have to talk to

Brian Mulroney, and talk to him real hard, and show him that he's been

really badly representing the people, particularly in British Columbia.

And the Minister of International Trade here tells us that

we've got to jump on that bandwagon.

MR. HOWARD: Retaliate, that's what he said.

MR. COCKE: Zippo. And when they do

retaliate, my dear

colleague, what do they do? They put a tax on books, where it couldn't

possibly hurt. The only people that can hurt is the Canadians who are

going to be buying those books. On the other hand, particularly with

the generic drug situation emerging, had we given them a little nudge

on pharmaceuticals, and that minister knows that that was a lot better

than moving in on periodicals and books.... Oh, no, we didn't move in

that direction. No, my dear colleagues in this Legislative Assembly, we

moved right down the wrong course. Don't ask us to speak with one

tongue as one voice when you're making mistakes all over the board,

period.

[ Page 8643 ]

HON. MR. McGEER: Mr. Chairman, first of all

let me apologize

for accusing the member for Coquitlam-Moody (Mr. Rose) of being a

free-enterpriser. I had my members mixed up and I apologize for that.

I was pleased to hear what the member for New Westminster had

say, because I agree he perfectly grasps the problem. I also agree with

the member that the choices that were made for countervail were unhappy

choices. Certainly I can confirm these were not the recommendations

that I made to the federal government.

MR. HOWARD: It was your idea.

HON. MR. McGEER: Pardon me? Pharmaceuticals.

SOME HON. MEMBERS: It was your idea.

HON. MR. McGEER: No, no, no. I never

suggested....

Interjection.

HON. MR. McGEER: May we have order in this

disorderly debate, Mr. Chairman?

MR. CHAIRMAN: If the members will conduct

themselves with orderliness.

HON. MR. McGEER: I was having what I

thought was a rational

debate here with the member for New Westminster, but it's these inane

interjections that suddenly distract attention, and if we can minimize

these for the next few minutes, perhaps we can have some constructive

debate...

[11:00]

MR. CHAIRMAN: On the minister's estimates.

HON. MR. McGEER: ...because I see a little

bit of daylight

here for the first time with the members opposite, and I'd like to

pursue that if I may.

Setting aside the countervailing move, some gesture was

necessary,

and I hope members agree with that. If you don't agree with it, then

we've got a policy debate on our hands. If you do agree with it, then I

would certainly agree with you that the choices that were made were

unhappy choices, probably for all Canadians and perhaps for us, and I

confirm they were not the recommendations that I had made to the

national government. Nonetheless, what we hope is that these will all

be quickly dismissed as being silly and counter-productive — the move

made on both sides of the border.

Of course I agree that the member has correctly interpreted

the mood

in Washington, D.C. While it was stated publicly that the move against

our shakes and shingles and now the proposals for softwood lumber were

an exception to the direction of the United States, the softwood lumber

issue has been hanging over our heads for 25 years, and whenever there

is an intensely competitive market situation in the United States, it

intensifies. Of course, when lumber markets are good, there is a fear

on the other side of the border that somehow there will not be supply.

Ultimately that is going to be the situation in terms of lumber in

North America. People will be desperate for the kind of supply that

British Columbia can provide. While that is not the situation today, it

could very easily be the situation in the near future.

[Mr. Strachan in the chair.]

Now what we're doing as a province — and I think the members

opposite should recognize this — is we are pursuing alternative markets

for our traditional goods, and at the same time we are developing what

for us are new, non-traditional goods for export. When the member came

into the House, two-thirds of our production went to the United States.

The last year for which we have figures, it's gone down to 47 percent.

Our exports have quadrupled to Japan. They're going up sharply to

Korea, so what we are doing is we are putting our eggs in many baskets.

We anticipate, for example, in items like steel, that we're

not

going to look for markets for our coal to the United States. Their

steel production will not be going up, but steel production in the Far

East will be going up, and therefore we should be looking to those

markets. Heaven knows the people of Canada are delighted with the price

and the quality of consumer goods that they're getting from the Far

East. Whether it's Japanese television sets or Hyundai cars, there's no

question that the consumers of British Columbia can be supplied with

goods that are competitive in quality and competitive in price. All of

the moves that you would anticipate, if markets are closed off to us in

the United States, have been anticipated and developed by these new

markets in the Far East.

I can tell you that a heavy emphasis of the ministry that I

now head

is placed on that sort of development. Yes, that message needs to be

communicated to the United States, because these hostile moves are

bound to spur our determination in our own self-interest to develop

these alternative markets. What does one small nation do when it is

faced with a pick-off play for an industry that may be important to

that nation, but is an end in terms of international trade? What's the

shakes and shingles $250 million industry when two-way trade is $169

billion? In total terms, insignificant; in terms of our industry in

British Columbia, very, very significant.

I believe what needs to be done is that all the major trading

nations, above and beyond the safeguards of GATT, which come in too

slowly and which don't cover all items, should be seeking

self-protection against arbitrary measures that are started against

them. It might be a small industry in Switzerland, or it might be one

in Singapore where a market is removed because the industry in the

foreign nation becomes too efficient. You can't afford to have a world

standard-of-living increase if every time there's a super-efficient

industry in some nation or other it becomes a victim of protectionism

in all the markets that it is developing. How do you do that? What you

do is you develop, in effect, a worldwide tariff protective association

so that no single country or industry in that country can be picked off

because it's good. The shake and shingle situation in British Columbia

is the ideal example which illustrates everything that is wrong in

international trade and the necessity as to why we may have to look

beyond the borders of our own country to seek the kind of redress that

many nations would like to have.

What really is required in the world today is for each nation

to be

protected from its own internal politics, because always when there is

this intense competition.... We hear it every day from the members

opposite — and I don't want to start getting partisan again, but

everybody gains. Free trade is a win-win situation when you support the

efficient industries, no matter where they are in the world. The

problem is that internal politics.... I think there's no question where

the sentiments of President Reagan lie. He is faced with

[ Page 8644 ]

internal politics, and what we must do

is to try to

shift the internal politics by the way our politics respond to their

politics.

That's why countervail, unpleasant and distasteful as it is,

becomes

a necessary step to take. I can only say that if we had a world

self-protective mechanism to put down protectionists wherever they rear

their heads in any nation, we'd be the wealthier for it. We would have

more jobs and more industry in British Columbia, particularly a British

Columbia which seeks export markets.

MR. DAVIS: International trade and resource

development: in

Canada's history, the two have been linked very intimately. We've often

had a unique advantage in our resources, with high-grade minerals,

abundant forests and so on. Latterly the thrust in Canada for resource

development has really been in developing the northern half of

provinces; I'll call it the northern vision. Each province has been

involved in programs of this kind, with subsidies, usually in

transportation, to assist the development of the north.

Parties of different political stripes have been involved in

the

same process, helping industries develop in the north. Uranium mining

in NDP Saskatchewan: very extensive investments in both road and

processing facilities; public investment in the sense of Crown

corporation involvement in that province. That is typical of the

provincial attitude to development. In northern Manitoba, currently an

NDP government is engaged in hydroelectric development to assist

development of the northern part of that province, and directly

contracting outside of the province, in the United States, with markets

sufficient to launch a development which, in the initial stages, won't

pay its own way, but in the longer term will help develop the northern

half of the province.

In British Columbia the NDP government was very much involved

northern development. The hon. member from Vancouver East knows very

well that he was much involved in developing the northwestern comer of

the province. He was involved in public investments which were equal,

in current dollar terms, to the investments involved in northeast coal.

The biggest single difference was that he had no markets in mind; he

simply had public investment in mind. He did not have the market

studies sufficient to warrant that development as a commercial

development. He knows that very well. He didn't have the forest

resources on that line. He didn't have minerals, which had been

discovered along the so-called Dease Lake line. He involved the federal

government in what was to be a railway to Alaska. It was to traverse

not one main mountain chain but several, and was to parallel a much

more efficient transportation system, namely barges, shipping up and

down the west coast. Its economics were certainly suspect — there were

not markets — but the justification was opening up northern British

Columbia. It was a program to put infrastructure in place, principally

transportation, which would allow a large comer of the province to

develop.

Hon. members know that I've been critical of northeast coal,

basically because I have taken the view that the private sector should

finance more of this style of developments. But what northeast coal has

done is set up a transportation infrastructure for the northern half of

this province — indeed, for the northern parts of Alberta and

Saskatchewan as well — which will serve western Canada well for decades

to come. So there was some justification for that project, and

certainly much greater justification economically than for the Dease

Lake line, which this administration terminated in 1976. It had no

economics whatsoever.

So we have here in this House the pot calling the kettle

black. What

would another NDP administration do for the north? It would install

infrastructure, be it highways, power lines, some further rail line

extensions, but it would be doing this kind of thing. Our current

problem is trying to do these things without the Americans or others

saying that we're unfairly subsidizing a competitive industry. I hope

that government here, whatever its stripe, is wise enough to confine

its investments to infrastructure, not to engage in other and more

direct subsidies for industries, whether in the north or otherwise, and

that we not deliberately or even naively invite countervailing duties.

Whether we negotiate a free-trade arrangement across the board or

sectorally with the United States, countervail will continue. Americans

will always be looking for unfair competition and will penalize those

products flowing across the border which they feel will cause

unemployment there.

Finally, Mr. Chairman, I can't resist recalling an instance

where

when I visited Victoria and met with the former Premier of this

province, Mr. Barrett, he was concerned about pollution in Squamish. He

was telling me that his administration were determined to bring coal

from the northeast down to Squamish over the B.C. Rail line. They had

already invested in Sukunka coal. They were determined to make a

success of a large-volume coal export from the northeast to the coast

and to sell the product primarily to Japan.

Now it would be interesting to surmise what might have

happened had

the NDP continued in power. I suspect that there would be a coal-mining

industry in the northeast, that it would have been supported in large

measure by public funds, and that the coal would have been exported out

of Squamish or Britannia, out of Howe Sound. There would have been a

lot of opposition from environmentalists and so on, and the Premier of

the day said: "I am afraid I am going to take on the environmentalists

on this." Those were the ideas of that day, and they didn't come to

pass. But I think it is sanctimonious of members opposite to be talking

as if they would have done nothing in the north in the area of resource

development, and that they wouldn't have put public money into rail and

other transportation facilities.

I think we are just wasting our time, Mr. Chairman, because

this

matter of trade with the United States, countervailing duties, is much

more important, and we should be addressing those issues.

[11:15]

MR. MACDONALD: Mr. Chairman, I want to add

to a very

interesting debate what I hope is a new note, and welcome the

minister's deputy. Imports from Scotland are always acceptable in this

country, unless they play soccer or tear down a stadium.

I just wanted to put on the record the figures when we are

talking,

as we should be, about freer trade with the United States of America.

The other side of the picture to the Americans' argument that we have a

trade surplus with the United States is the invisible payments. The

Americans say to us Canadians: "Why are you getting so angry with us

about putting on countervailing duties when in 1984 you had a $19,727

million trade surplus?" That's commodities. That's Canadians working

hard in the bush and in the mines and all the other places to produce

export goods that flow across the

[ Page 8645 ]

border. But the counter fact of

Canadian life as a

nation is that we ran in that year a deficit of $13,047 million in

interest and dividends flowing south. While that still left us in that

year with a $6 billion overall surplus, which is pretty good in the

world as it is at the present time, it's not something you can count

on, and the permanent drain comes in that interest and dividend outflow

which is a permanent feature of the Canadian nation. It is a feature

that cannot be allowed to continue if Canadians are to have a nation

that is strong and free and of which they can be proud. Because what

those figures are telling us is that basically we don't own our own

country. We are not maitres chez nous.

I hope as we progress toward freer trade we will recognize....

Even

Pierre Elliott Trudeau did something about this in his national energy

policy. It is panned all over the place, but he was trying to bring a

greater measure of Canadian ownership into oil and gas. Now that has

been totally abandoned by the Mulroney government, forgetting this

other side of the coin: our debtor's status in terms of what we own.

The other thing that we have to consider is the power of

international floating capital. You may ask yourself why the Canadian

dollar should be so low in relation to the American when we have a $6

billion overall surplus in balance of payments. I guess the answer is

the wealthy cartels and individuals who can move their capital around

in the world as they please and break governments here if they want to;

or if they think they are engaging in social reform or spending too

freely, they can break them. Those people, the international power and

money brokers, don't think so much of the Canadian dollar as they do of

the sanctity of strength of the Reaganite America where the rich get

richer and the poor get poorer. So if we want to be a nation, we've got

to do something about owning our own country to a far greater extent

than we do at the present time. If we are going to call ourselves a

nation, we have also got to be able to stand up to the international

money and power brokers that can move their capital around and break

nations but will not be allowed in the future, if we do it properly, to

break Canada.

HON. MR. McGEER: Mr. Chairman, I certainly

agree with the

member opposite that the hidden transactions overwhelm the trade

surplus that we have with the United States. Of course, that is why our

dollar is at 71 or 72 cents, or whatever it is, as opposed to the $1.10

that it was before the nationalistic policies of the Liberal government

in energy and other areas began to bite rather deeply.

I do not agree with the member that we should turn our back on

foreign capital. Not all of it is equity capital — much of it, for

example, that used to build our dams in British Columbia, is debt

capital — but that still requires principal repayment and interest. I

led a trade delegation not too long ago to Hong Kong. Hong Kong has

more people on that tiny island than all of western Canada. We must

build, in order to tame and command this immense land, a costly

infrastructure covering a quarter of a continent. We must build the

power lines, the railroads, the highways, the transportation system,

the airports and all of the facilities that are required to build our

great cities and remove our immense resources. None of these

infrastructure costs exist on the island of Hong Kong — one airport, no

highways, no electricity or rail infrastructure, none of the things

that are an enormous cost in developing an immense nation with a small

population. British Columbia is one-quarter the size of western Europe,

larger than California, Washington, and Oregon combined, larger than

all of the east coast states in the United States, and there are 2.7

million people and this enormous infrastructure that must be built. Are

you proposing that all of that infrastructure should be attempted to be

built by the internal wealth of 2.7 million people?

The problem that Third World nations have is not a problem of

resources, not a problem of willing people; it's a problem of having

sufficient capital to develop the infrastructure so that they can work

productively. If we were to follow the policies of the member for

Vancouver East, we would quickly reduce ourselves to all of those

nations in the world that have population and resources, but no

infrastructure, no distribution system, no health system, no

transportation system and no means with which they can provide this by

themselves. We're different here in British Columbia, Mr. Chairman,

because we are international in our outlook, because we do not have the

silly parochial views of the member for Vancouver East, because people

have faith in British Columbia and British Columbians, and are willing

to bring their savings to this part of the world to help us develop

that infrastructure — and that member there would destroy it all.

MR. MACDONALD: Mr. Chairman, there are

nations in the world

that are not, like Brazil and Mexico, in vast financial difficulties.

They are principally in northern Europe, to be sure. They have exchange

controls, they control their national life, their standard of living

has been improving, and they do have a health plan and all these other

things. I don't know why this minister has such blinkered vision. He

sees the world in Reaganite terms, and he can't see anything else. Ever

since he left the Liberal Party he has had to put on these blinkers and

behave like a Reaganite. It's just ridiculous. Look at the whole world.

Where are the states that are progressing in that world? They're the

social democratic states. Where are the states with social services and

industrial activity? Which is the state that sends seven tennis players

to the international tournaments — seven out of seven million people —

and almost wins them? Where are they? That's the social democratic

future. Take off your blinkers.

HON. MR. McGEER: Mr. Chairman, I don't know

if there are

socialist tennis players or not in Sweden. I know their great star, who

made millions of dollars playing international tennis, soon moved to

Monte Carlo. I don't know about all this socialism that produces these

marvellous tennis players, but it seems to me after they've won a

little money, whether they're from Czechoslovakia or from Sweden,

they're looking for a more free enterprise-oriented country in which to

live. But that's by the by. We don't need to argue tennis players here

this morning, but what we do need to argue is whether or not there

should be foreign exchange controls on capital in this country. That

may be the New Democratic Party policy. If so, you should state it. It

is certainly not the policy of this government, and I hope it will

never be the policy of this country.

MR. WILLIAMS: The professor from Point Grey

once again

ignores the facts and the reality. What we've allowed to happen in this

country of ours is to have equity investment on an incredible scale,

unlike anything in the western world — by outsiders, primarily

Americans. As a result, our destiny is not in our own hands. We are

essentially a branch plant

[ Page 8646 ]

economy, and the dividends that are

paid out for

that equity ownership are huge. Had we instead simply accepted debt

capital, this nation would be profoundly better off.

There is no question about that. You check the data for the

last 20

or 30 years. Had we had debt capital instead of equity capital, we

would be in very good shape indeed, and we would be owners and masters

in our own house, the private sector and the public sector. That has

not happened. As a result, we are permanently indebted to these owners.

The surpluses that are needed for rebuilding the Canadian economy, the

surpluses that are needed for retooling plant and equipment and moving

into new technologies, in fact go south.

That is the pattern of this branch plant nation of ours. What

desperately need is a phasing-in of new policies over time, to see that

that kind of drainage of the surplus and the revenues that we need to

continue rebuilding anew this nation and this economy of ours.... Until

that happens, we will continue to have problems, we will continue to

deal with a business cycle that frustrates and creates problems for our

people, and we will lose the funds we need to rebuild ourselves in our

own nation. That's the reality of this branch plant nation of ours.

Don't say we don't have the savings; don't say we don't have

the

ability to do it ourselves; don't say we have to go abroad to build

these roads that we need in British Columbia and the infrastructure

that we have in British Columbia. I don't believe that for one minute.

I believe that we have the talent, the skills, the savings and the rest

of it to do it ourselves, and to do it better. That's the difference

between you and us. You don't have faith in this nation; you think

you've got to scurry around the globe to find somebody to drop some

money here on us. We don't need it at all. We can do it ourselves.

I remember a case involving Clearwater Timber in the small

town of

Clearwater on the Thompson River, north of Kamloops, wherein one of the

Big Five trading companies of the Japanese, the Marubem Corp., wanted

to take over that operation. I asked my staff then in the Forests

ministry what their opinion was of that. They thought, well, it was

probably okay. I responded by saying: "Why is it okay?" They said:

"Well, it's going to bring capital to Canada." I said: "How do you

know? You go back and you check out whether Marubeni buying Clearwater

will bring capital to Canada indeed."

They went back, and they came back and said: "Mr. Minister,

I'm

afraid we were wrong. Marubeni will not be bringing capital to Canada.

Five million dollars of the funding" — it was a $10 million acquisition

— "they're going to get from Canadian chartered banks" — that is, our

savings in Canada in this province — "and $5 million is going to be a

second mortgage by the Swanson family that currently owns the company."

They were bringing no capital to Canada at all, and yet by getting

equity ownership, all of the future surpluses out of those timber

operations, our public timber and those sawmill operations in

Clearwater, would go offshore.

It's that kind of economic nonsense that we don't need in this

country. It's that kind of economic nonsense that we don't need in

British Columbia. Clearly that could all be done internally in British

Columbia. There may be occasions when we do need to go offshore. There

may be occasions, but they should be thought about very carefully

indeed because of this loss of surplus that goes, in terms of profits,

dividends and payments, to the equity owners of those operations.

You have an ideological problem on your side: you think it's a

universal good. We will accept it where it's needed and where there is

clearly provincial benefit. But we do not have your ideological hangup,

where you say it is a universal good. The Clearwater example is a

classic one.

[11:30]

There are others that I can recall from those days, where

Japanese

companies held pulp operations in northern British Columbia. They had

internal pricing systems. They would sell their commodities, pulp, at

below market price to their offshore owners in Japan. As a result, they

never made a profit on the books; as a result they never paid corporate

tax in Canada. That goes on in terms of the games played by

international investors. That we don't need in British Columbia. That

we don't need in Canada. You with your old-time, Adam Smith ideology

have not caught up to the reality in terms of the major players in the

world scene. You're naive players that get suckered in every time. You

got suckered in on northeast coal, you were suckered in by

Louisiana-Pacific, and I hesitate to think of what will be next. We can

afford you no longer, Mr. Minister. We can afford this government no

longer, Mr. Minister. Let's go on with the job and get rid of you all.

HON. MR. McGEER: I can see, Mr. Chairman, a

cycle building up

again in the NDP. It's quite comparable to the cycle that built up in

the late sixties and early seventies — the member opposite was a

prominent part of that — railing against big international companies,

railing against the resource industries, and apparently persuading some

members of the caucus of that day. There was no problem when the NDP

was government with capital coming into British Columbia; it absolutely

ceased. But that wasn't the real difficulty. The real difficulty was

that every bit of capital that was available got out of British

Columbia; it got out of British Columbia.

The story I remember is when an NDP member from the Kamloops

riding

sat here. I remember two things. One, the Liberal member, Mr. Gibson,

stood up and said the NDP had created a miracle: they had turned the

mining industry into despair at a time of record mineral prices. This

is when copper was $1.20 a pound, not 62 cents to 65 cents as it is

today.

When I went into the Kamloops riding I was met by a man at the

airport who wanted a strong free enterprise party formed in this

province. He said: "You know, when the NDP came to power I had 150

people working for me." They were in the mining exploration business.

He said: "Do you know how many people I have working for me now?" I

said: "No." He said: "Zip! They've gone all over the world, most of

them to South America, many to the United States."

What you did was you drove people out of British Columbia. You

drove

capital out, and with that you drove skilled people out of the

province. You did it by saying exactly the same things you're saying

now, but instead of saying them in opposition you said them in

government. You brought in injudicious taxation moves to support that

rhetoric and you destroyed the number two industry in British Columbia.

We're building it back up, and we're building it back up in times of

intense international competition.

I like to hear all the members opposite say these things, and

I like

to remind the public of British Columbia that it isn't the first time

we've heard them. There's total unrepentance on that side of the House

despite the consequences of putting

[ Page 8647 ]

into practice their theories. They

haven't

abandoned them at all. It may be that the second member for Vancouver

East has contempt for Adam Smith; I don't. I think the more we can let

competitive market forces play, the more we can lower trade barriers.

As British Columbia has made its way in the world by exporting its

goods and having world competitive industries, so it will continue to

do so in the future. Narrow protectionism, whether it's in terms of

ownership, capital, jobs, tariffs, all the things the NDP says, in my

view is entirely wrong. They're no different than what they said in the

sixties; they're no different than what they put into practice between

1972 and 1975. Nothing was learned in the interim, and I say it would

be a disaster for British Columbia if that man and his caucus were ever

put into power again in this province.

[Mr. Ree in the chair.]

MR. COCKE: Mr. Chairman, I am utterly

amazed when I listen to

that rhetoric. Adam Smith indeed! My colleague offered a good example.

But why don't we take a look at one more example of where we were just

taken down the garden path.

Remember the name Kaiser? He was going to come up here and

develop

British Columbia. He was going to bring capital up from California to

save our souls in the southeast. So they moved in, and all of a sudden

we wondered where their money was. That was in the old W.A.C. Bennett

days, so there was a very open environment for them. We wanted that

coal developed at any cost, and don't ever think we didn't get it

developed at any cost. They brought their technicians up here, but they

didn't bring any money. They went to a consortium of Canadian banks and

borrowed our savings, and that's where the capitalization came from.

Years later there was a little bit of problem down in California with

the Kaiser Steel, and they needed a few dollars. So what did they do?

They sold out for millions and millions of dollars to BCRIC — $550

million to BCRIC, the creation of our illustrious Premier.

It was the biggest shame, as far as I am concerned, on the

face of

that Adam Smith theory. We look at this day after day, time after time,

and we say, we only ask you to do one thing: open your eyes; we're

being taken to the cleaners.

Let's remember the United States after World War I

particularly, and

partly after World War II. Britain was on her knees. Did you see them

make suggestions that would identify with what you are talking about?

Not on your life. They got rid of the British equity in American

industrial society as quickly as they could, because they had them in a

real tight spot. We have welcomed that kind of stupidity.

They call us a saving nation. I blame your kind of government

and

our kind of financial institutions for keeping us away from equity.

That is what has happened here. We don't have a chance to own our own

economy, because we are open to those people who'll come in with their

paper equity and borrow the operating capital from us, from our banks,

from our life insurance companies, from our bloody trust companies.

MR. WILLIAMS: Pension fund.

MR. COCKE: And our pension fund. We are

selling ourselves

out. Adam Smith or no Adam Smith, if you don't recognize that, you and

your government are the worst thing that is happening and can happen to

the future of this province.

HON. MR. McGEER: Mr. Chairman, I have a

memory that goes back

a long way in this House. I can recall when the member for the

Kootenays, Leo Nimsick, was up pleading for an increase in the subsidy

to ship coal from the Kootenays to the coast. In those days — and this

was before Kaiser came along — there used to be money going out of this

provincial treasury to subsidize the shipment of coal, and it was all

underground. I was here when Kaiser proposed making an open-pit mine in

southeast British Columbia. What made that open-pit mine possible was

the selling of coal to Japan, the obtaining of the contracts that

justified an investment of hundreds of millions of dollars. I was here

when there was monstrous opposition from people on the New Democratic

side and the Vancouver

Sun

against this terrible development in the southeast that would despoil

the environment. I recall when the late Gordon Shrum said that there

are thousands of mountains in British Columbia and couldn't we please

just have one for industry. Now there are — what is it? — 4,000-plus

workers in the southeast coal of British Columbia; none of them are

subsidized; nobody is working underground. It's one of the biggest

industries of British Columbia, and you're knocking the capital that

made that development possible.

Interjections.

HON. MR. McGEER: All right, if you want to

say BCRIC was

suckered, you don't have to be very bright to recognize that. BCRIC

made a series of disastrous investments. If we'd had the brilliance of

the members opposite, probably there would have been no difficulty at

all. But don't blame that on Kaiser. Don't blame that on the people who

brought risk capital in and turned a coal industry that was subsidized

in this province.

What is your proposal? The proposal of the member opposite is

that

we bring no risk capital in from outside of British Columbia. His

proposal is that we put in foreign exchange controls. If it isn't his

proposal, it's the member for Vancouver East. Then you claim somebody

over on this side of the House is muddled. Where are you going to get

the capital? Of course you're going to get it by asking investors from

British Columbia to invest, like the successor to BCRIC. Is that your

proposal? Certainly if you were in power there would be the biggest

flight of capital out of British Columbia in the history of the

province.

MR. D'ARCY: Mr. Chairman, in listening to

this debate this

morning, I have the feeling that the minister is using yesterday's

rhetoric to fight yesterday's battles. The fact is, private investment

in this province under this government, and under his ministry,

continues to fall while it rises everywhere else in Canada. The fact is

that the mining industry in particular is suffering from his

government's royalties on electricity like it has never suffered from

royalties of any government before, and I hope never suffers again. Yet

he is doing nothing about it.

He wants to talk about the mining industry in 1972-75. How

many

mines have closed in the last few years, in part due to low commodity

prices but in major part due to the highest royalties and taxes, under

his Social Credit government, ever been seen in this province? He wants

to talk about capital

[ Page 8648 ]

investment, risk capital, private

capital. The

growth of private capital in this province was higher in 1974 than in

any year before or since. It was higher than the Canadian average, and

even in the recession year of 1975 there was real growth in British

Columbia, even though there was a decline in the rest of Canada. What's

happened since 1981 under this Social Credit government? There has been

a fall in gross provincial output at the same time that the rest of

Canada has recovered. What we used to have in the past, even under

Social Credit governments, was that the B.C. economy outperformed in

real terms. The Canadian average under this Social Credit government

has outperformed British Columbia consistently. What nonsense to hear

this minister talk about the strength in the B.C. economy under the

present Social Credit government! They are a disaster. They have driven

capital investment away from this province.

What have they done to shore it up? They have borrowed and

borrowed

and borrowed and put this province from $4 billion in debt to nearly

$20 billion in debt. What did they do it in? They borrowed hundreds and

hundreds of millions of dollars in U.S. funds in the late 1970s when

the Canadian dollar was worth more than the U.S. dollar. Then the

Canadian dollar dropped to 72 cents and they left a legacy for the

taxpayers of this province, and their children and their grandchildren

and their great-grandchildren, to pay off those billions of dollars of

debt in U.S. funds.

[11:45]

Even then, they borrowed that money and sank it into the B.C.

economy on some crackpot schemes. Even then, investment continued to

fall in total terms. W.A.C. Bennett didn't need to do that to make the

economy grow. Dave Barrett didn't need to do it. But you guys have

needed to do it, and you're still doing it. You're still borrowing, and

private investment is still falling in British Columbia relative to the

rest of Canada. In fact, it's falling compared to last year, period.

And the minister wants to get up and tell us about the sixties and the

early seventies, and the fifties for all I know. Maybe he's even

talking about the 1850s. I wish the minister would deal with 1986. Why

doesn't he deal with the economy in 1986 and show us some initiatives?

Because their policies are being disproved every time Stats Canada puts

out an economic growth bulletin. Every time Stats Canada puts out a

statement on private investment in British Columbia, their policies are

discredited.

Mr. Chairman, I don't want to fight the battles of the past or

use

the rhetoric of the past. I wish the minister and his government would

get off their rhetorical hobby-horses and start doing something for the

province of British Columbia so we can rejoin Canada and North America

in the economic recovery that's happening everywhere else except in

British Columbia.

MR. WILLIAMS: Well, we got some plain

talking from the

minister just a few minutes ago, Mr. Chairman, and I would like to just

make sure that everybody realizes what the minister said, and I

appreciate that little bit of plain talking that we got just a few

minutes ago. What this minister said was: "Of course BCRIC was suckered

in in terms of acquiring the Kaiser coal interests." Now I expect the Vancouver

Sun ,

his favourite newspaper, to have a headline tomorrow: "Of Course BCRIC

was Suckered in, " in terms of buying the southeast coal fields. Well,

yes, we agree, BCRIC was suckered in, but it was your creation, your

boss's creation, your administration's creation. Edgar walked away with

$500 million out of that whole exercise of suckering in BCRIC. The

management that was put in place and still is the residual of your

creation of that outfit is still in place. We now all bear the burden

of that in terms of the British Columbia Resources Investment

Corporation. Indeed they were suckered in. You agree, I agree, we

agree: they were suckered in. That was a $500 million loss to the

provincial economy: $500 million that should have been ploughed back

into the British Columbia economy. Instead it went to repairing old

steel mills in Fontana, California — another chunk of the Kaiser

interests — and elsewhere. And BCRIC foolishly carried on into the

North Sea, and we now bear the burden of that with a $75 million loan

to bail out this monstrous corporation that is floundering in debt, the

worst debt-equity ratio in the province.

So I'd like to commend the minister for his little bit of

plain

talking that we got just a few minutes ago. Indeed BCRIC was suckered

in; we were all suckered in, and we're all paying the price.

Vote 49 approved.

Vote 50: ministry operations, $14,546,387 — approved.

On vote 51: government telecommunication services, $10.

MR. WILLIAMS: I thought there was an error.

That's what we should be paying the minister. That's about what he's

worth.

Vote 51 approved.

Vote 52: science and technology, $7,785,000 — approved.

Vote 53: science and technology development subsidiary

agreement (ERDA), $4,200,000 — approved.

Hon. Mr. Gardom moved the committee rise, report resolutions

and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

The committee, having reported resolutions, was granted leave

to sit again.

HON. MR. GARDOM: Mr. Speaker, before I move

that the House do

now adjourn, it's just a lovely day; perhaps we could arrange to have

Hansard in Beacon Hill Park this afternoon; but I suppose we couldn't

do that, so that being the case, I move the House do now adjourn.

Motion approved.

The House adjourned at 11:51 a.m.

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