1985 Legislative Session: 3rd Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 20, 1985

Morning Sitting

[ Page

6751 ]

CONTENTS

An Act Establishing The Right To Public Information And The Protection Of Individual

Privacy (Bill M222). Mrs. Dailly

Introduction and first reading –– 6751

Committee of Supply: Ministry of Tourism estimates. (Hon. Mr. Richmond)

On vote 65: minister's office –– 6751

Mr. MacWilliam

Ms. Brown

Hon. Mr. McGeer

Mr. Williams

THURSDAY, JUNE 20, 1985

The House met at 10:03 a.m.

Prayers.

HON. MR. RICHMOND: In the precincts this morning is a group

of students from Aberdeen Elementary School in Kamloops, and I would

like this House to make them very welcome.

Also, Mr. Speaker, today is the final day of employment for one of

our Sergeant-At-Arms members, Mr. Ron Emmerson, He is in the Speaker's

corridor down on the right-hand end near the government caucus. I would

urge all members to wish Ron well in his retirement.

MR. LOCKSTEAD: Mr. Speaker, seated on the floor of the House

today is Mr. Tony Gargrave, who served as an MLA in this Legislature —

and, I might add, as an outstanding MLA for the riding of Mackenzie —

for 14 straight years, from 1952. It's my pleasure to introduce him,

and I ask the House to join me in welcoming him.

MR. SPEAKER: Hon. members, also visiting with us today, from

the state of Alaska, are Senator and Mrs. Richard Eliason. I would ask

the House to make them welcome.

Introduction of Bills

AN ACT ESTABLISHING THE RIGHT TO

PUBLIC INFORMATION AND THE

PROTECTION OF INDIVIDUAL PRIVACY

Mrs. Dailly presented a bill intituled

An Act Establishing the Right

to Public Information and the Protection of Individual Privacy.

MRS. DAILLY: Mr. Speaker, I believe the title explains the message of this bill. I would like to add just a couple of brief comments.

Today, in our complicated society, never was such a bill needed

more. Only four other provinces and the federal government have bills

such as the one I'm introducing today. Knowledge is power, and without

knowledge an inequitable situation exists when the public attempts to

understand the role and policies of government. Government is for the

people, and if we're going to follow that through, you have to give

people the right to access of information. Also, with information banks

and the increased complexities of society, more and more people find

there is an invasion of their privacy when it comes to personal

records. This bill would alleviate — hopefully — some of these problems

which exist today in our society.

Bill M222 introduced, read a first time and ordered to be placed on

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

after today.

Orders of the Day

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

ESTIMATES: MINISTRY OF TOURISM

(continued)

On vote 65: minister's office, $151,996.

MR. MacWILLIAM: Mr. Chairman, I was hoping that we'd get a

little more opportunity to discuss the Premier's estimates, but I guess

we're back on this one. However, there's a lot of material to clear up

that hasn't been addressed yet.

I mentioned that we would take a two-phase approach to the

discussions in Tourism, one dealing with tourism in general and the

second dealing with Expo 86. We still have a couple of loose ends to

clear up in terms of the general thrust of tourism and a couple of

points I'd like to address in particular.

It seems the minister let loose a bit of a bombshell, Mr. Chairman, some time back. As reported in the April 24 edition of the Nelson Daily News ,

the minister mentioned his favouring the privatization of campsites.

The statement as it appears does raise a lot of questions as to just

what the minister does mean in terms of privatization.

I think there are two possibilities here. The minister may have been

discussing the full privatization of campsites involving the sale of

these campsite facilities, as has happened in Manning Park, which would

be basically a sellout of the entire public resource; or perhaps in his

philosophizing he was discussing merely the contracting-out of

services. I know that his statement has caused quite a bit of concern

in the tourism area. Perhaps the minister would like to clarify just

what he means by the privatization of these provincial campsites.

Because the other questions are significantly different, perhaps the minister would like to respond to this one at this time.

Perhaps the minister would like to listen to the question.

MR. CHAIRMAN: The member continues.

MR. MacWILLIAM: Well, I think the lack of response from the

minister on that one certainly puts a lot of confusion into the issue.

I would suggest that in order to clarify it for the tourism industry an

appropriate response should be forthcoming.

The second piece of information that still is left hanging and I

would like to go back to — we touched on it the other day — is the

supply of tourist brochures on B.C. Ferries, Perhaps I'll just refresh

everyone's memory on the discussion that did take place, in leading

into the questions I have.

The other day in the debates the minister confirmed that Tourism

B.C. had been in contract with Vancouver Island Tourist Services Ltd.

for the period including January 1, 1985, to April 30, 1985. In

addition, the minister confirmed that that contract was for the supply

of brochures for the B. C. ferries. The minister also confirmed that

the contract was subsidized to the tune of $25,000 by Tourism B.C. The

other day I revealed evidence that at the same time this same firm had

been awarded a contract on an unsubsidized basis, beginning on May 1,

1985 — a contract, again, for the supply of brochures. The contract

would not be subsidized. The critical question here is that there seems

to be a four-month interval of overlap there where the company, even

though its contract had not started until May 1, had been advertising

for clients on the unsubsidized rate structure as of January 1, 1985. So

[ Page 6752 ]

there's a four-month overlap where the company

appears to be charging a full rate to put the brochures on the ferry

and yet still seems to be receiving the subsidy from Tourism B.C. I

raised the issue of whether it's a case of purposeful or perhaps

inadvertent double-billing or possibly of misleading advertising. There

are a lot of questions regarding this.

I'd like to bring some further information to the minister's

attention. The proposal for the new contract with B.C. Ferries was

apparently advertised in the fall, while the contract was still in

effect with Tourism B.C. A number of other firms apparently submitted

detailed bids. One of the bidders asked if he could solicit clients in

the Washington-Oregon area, and was advised that this would not be

possible. The other day I provided proof to the minister that this is

in taking place; that they are soliciting clients from these areas. The

bidder in question — one of the unsuccessful bidders — felt that they

were supplied, basically, with the wrong information regarding the

solicitation of clients, and it affected the details of their bid.

[10:15]

In addition, B.C. Ferry Corporation advised that the main reason

VITS was awarded the contract was that they would, apparently,

distribute the ferry

schedule for free. I think this amounts to about

$13,000 in kickback. This was not part of the original proposal, and it

appears to have given Vancouver Island Tourist Services an unfair

advantage.

I realize we're on a hazy edge here. We're dealing with two

ministries, but because the minister's subsidization does affect this

period of time, I think it's well within order in providing the

minister with this information.

So there are some questions that arise as to whether any unfair

advantage was given in the awarding of the VITS contract. Questions

arise as to the possibility of this double billing — receiving a

subsidy while charging clients the full rate. The minister has agreed

to look into the matter, and I would ask if he would pursue an

investigation and supply a complete answer to the House. I would also

ask that the minister, if infractions are found, would recommend the

cancellation of the present contract and resubmission of tenders.

HON. MR. RICHMOND: I'll deal with the member's last question

first. He is correct. The other day in my estimates I agreed to

undertake to look into that ferry contract and bring an answer back to

the House, and I have, Mr. Chairman. First of all, the contract is with

the British Columbia Ferry Corporation and not with the Ministry of

Tourism, so any detail will have to be brought up during the estimates

of the Minister of Transportation and Highways. But upon looking into

the alleged wrongdoing of Vancouver Island Tourist Services Ltd., I

find there is none. What has happened is that Vancouver Island Tourist

Services sent a letter to all their customers on April 2, 1985,

explaining the situation. I won't read the entire letter, but I would

be happy to table it with the House. I don't believe I can table

documents in committee, Mr. Chairman. Is that correct?

MR. CHAIRMAN: That is correct. Documents will have to be tabled when the House reconvenes.

HON. MR. RICHMOND: Thank you. I'll table the documents at some later time when the House is sitting.

What took place exactly was that their contract runs from May 1 of each year.

The start of their fiscal year is May 1, and they had inadvertently left that

out of the letter previously sent to their customers. They've corrected

that with this letter. The subsidy from my ministry that the member talks about

merely extended that contract up to the end of their fiscal year, which was

April 30. So they were not double charging, as was alleged the other day in

the House. I will table the document to clear that up. Any further contract

details required will have to be taken up with either the B.C. Ferry Corporation

or the minister responsible, the Minister of Transportation and Highways (Hon.

A. Fraser).

On the first question, I think the member knows full well that when

I made that speech — which is roughly a year and a half ago — I said

very clearly, I thought, that we were speaking of the privatization of

some of the campsite services. I think that any thinking British

Columbian would know full well that we would never privatize — in other

words, "sell off" — the beautiful campsites of British Columbia. But

the minister of Lands, Parks and Housing (Hon. Mr. Brummet), under

whose jurisdiction this falls, has had many contracts tendered — I

don't have the exact number — for the privatization of some of the

services offered at the campsites, such as cleaning them up, providing

firewood, looking after the washrooms, and making sure that the

amenities, whatever they are, are there for the visiting public. That

is exactly what was meant and implied by the privatization of services

involving campsites — nothing more, nothing less.

MR. CHAIRMAN: With respect to the minister's last comment,

the minister is responsible for the administration of his department

and cannot comment on the administration of another ministry.

MR. MacWILLIAM: Going back to the question about Vancouver

Island Tourist Services, I'm well aware of the letter that was put out

afterward. However, the original application form for 1985 — this one

right here — very clearly indicates January 1, 1985 to December 31,

1985, and it has the rate structure clearly outlined. The rate

structure is approximately double what it was the year before,

indicating that the subsidy had been taken off for this period of time.

I would say that, as it is written, the application is at best very

misleading. I know that there were a number of concerns addressed by

members of the industry about just what is going on here. I don't

really think, in rebuttal to the minister, that that explanatory letter

that came afterwards offers a complete explanation. Apparently around

1980, VITS changed the term of their contract from a calendar-year

period, January 1 to December 31, which apparently resulted in a double

billing to their clients for the period of January 1 to March 31.

However, that's going back a few years, so I guess it depends what end

of the scale you are looking at. But it seems that there is a

four-month overlap in this period of time where there is a possibility

of a double payment having been made. I have also, I might add,

approached the Minister of Transportation and Highways (Hon. A. Fraser)

on this and made the same information available to him.

I hope that this can be clarified, and I also hope that the other

questions involving the letting of the contract, the problems that have

been brought up at this point, can also be clarified. I would hope that

because it is an overlapping responsibility and your subsidy was in

effect for that time, you would pursue the investigation as to whether

the contract was fairly tendered.

[ Page

6753 ]

HON. MR. RICHMOND: Mr. Chairman, I'd be happy to, and I think it

can be clarified right now. It's quite plain and simple that there was no

overlap. There was an error on the original form that you have just held up,

which is freely admitted. It was detected by my ministry and pointed out to

them that the contract should have read May 1. It was corrected, and there was

no overlap; there was no double billing. We have investigated it thoroughly,

and I think that clears it up: a mistake made and freely admitted after being

detected, and corrected.

I will table this letter, as I said, at some future time, which I think clears the whole situation up.

MR. MacWILLIAM: Mr. Chairman, I'd like to change focus a

little bit now and move into discussion of Expo 86 and talk about it as

a business venture, about fiscal policy and also about some historical

antecedents of the fair.

I think through projects such as Expo the current government has as

much as admitted that it has to engage in deficit financing as a means

of economic stimulation in this province. It is really practising what

we've been saying all along: that a major function of the government

has to be to prime the pump and smooth out some fluctuations in

economic activity by engaging in what economists call countercyclical

fiscal policy; as I mentioned, basically priming the pump during bad

times to get economic activity rolling.

The problem this government seems to have ignored is the other side

of the equation, the flip side of the coin. It doesn't seem to have

learned to conserve revenues during the good times in order to create a

rainy-day fund, so that we don't have to go into heavy borrowing to

prime the pump in bad times. As a result, we're having to borrow for a

lot of these projects, such as northeast coal and the other

megaprojects, Expo 86 being one of them. This is resulting in an

increasing deficit; there's no question about it. When this government

took power a decade ago, the accumulated deficit up to that time — for

104 years — was $4.2 billion. In the last ten years that deficit has

spiralled to $17 billion. So there's no question in my mind that

there's a lot of borrowing going on.

In some ways I guess Expo 86 is the government's attempt to solve a

problem by throwing money at it. It's generating a certain amount of

economic activity, and I give it full credit for that. It's generating

a considerable amount of employment in the coastal area, and I give it

credit for that. For those reasons we do support it in principle. We do

support the fair; there's no question about that. Because it's the big

egg in the basket of our immediate economic prospects, members on this

side of the House want to make sure that the fair generates as much

economic impact in this province as is humanly possible. We want to see

Expo succeed, no question about it. All of our attempts at raising

questions about or criticisms of the fair are not to the point of going

against the concept, but ensuring that we run it in a way to guarantee

that we succeed as much as we can.

[Mr. Ree in the chair.]

We're deeply concerned about the economic impact of Expo. My feeling —

and I'm sure the feeling of many of my colleagues — is that the economic

impact of the fair will be small when you compare it to an equivalent expenditure

of money: $802 million on the government side; a total, I think, of about $1.5

billion. If you put that money into a number of community-based job-creation

programs, reforestation programs, community works programs, the impact of that

expenditure would be much greater and more equitably distributed throughout

the province. So the question is not one of whether Expo will generate economic

activity; it certainly will. But will it create as much as if we spent that

money elsewhere? I think that's a question that hasn't been answered.

Are we getting good value for our investment dollar?

As I mentioned, because the construction phase of Expo is so capital

intensive, it may not create the number of jobs that equivalent

expenditures would create in, for example, our small business or

service sector. The question remains: just what will be the economic

impact of Expo 86? Let's analyze that on three levels: an historical

perspective on some other world fairs; Expo as a business venture; and

fiscal policy. Let's break it down into those three areas.

I'd like to point out some historical factors that do raise some

questions. A recent economic impact analysis by UBC's Economic Policy

Institute shows that 15 of the last 18 fairs have lost money.

Interjection.

MR. MacWILLIAM: The Minister of Education has some disagreement with me. There are other reports, Mr. Minister, that I will be discussing.

Let's take a look at some of the fairs in North America since 1962.

Seattle in 1962 was a rarity in that it didn't lose money. Gate passes

exceeded estimates, with a revenue surplus of $12 million. But actual

profits of only $5 million indicate that if the fair had gone as

planned, they would probably have ended up about $7 million in the

hole. New York in 1964 was introduced as an exciting way to create

economic growth and turn a profit, but attendance estimates were wildly

optimistic. Losses of $71 million were reported; decommissioning costs

of over $104 million.

[10:30]

Interjection.

MR. MacWILLIAM: No, it's not doom and gloom; it's reality, Mr. Member. Losses of $200 million were actually incurred.

Expo 67, heralded as one of the most successful fairs: initial

production estimates of $401 million blossomed into a $1.4 billion

expenditure. There was an expected gain of $700 million, but the actual

deficit was $957 million. There's a similarity between Expo 67 and Expo

86. That similarity is the assumption that the sale of buildings, or

the decommissioning of the site, from Expo will cover the costs of

decommissioning. I think in these other cases it has been shown not to

be the case. I'll get back to the decommissioning a little bit later.

San Antonio in 1968 finished in the red, again because of overly

optimistic attendance estimates. It heralded the promise of economic

stimulation and job creation, but turned into a $24 million deficit.

Expo 74 in Spokane was forecast to turn a handsome profit, and the

projected attendance or gate pass estimates never materialized. It lost

$2 million, and had decommissioning costs — unexpected costs — of $21

million. In 1982 at the Knoxville Fair the gate passes, again, fell far

short of the estimates. Financial figures were misrepresented. Expo 82

in Knoxville was so successful it resulted in the third-largest bank

failure in U.S. history. New Orleans in 1984: another recurring

financial disaster with a loss of

[ Page 6754 ]

millions of dollars. Again — I repeat: again — in

looking at the historical aspects, one of the problems was that the

attendance estimates were wildly optimistic.

Now where do these historical factors lead in terms of the financial

aspects of the fair? First, it seems a recurring problem that the

escalation of construction and production costs develop as a result of

unplanned expansion. In other words, they start off small and they get

bigger and bigger and bigger. Expo 86 began — I might remind everyone —

as a $127 million celebration. Now it has blown into a $1.5 billion

megaproject. So there's a cautionary note in that regard.

Attendance forecasts tend to be optimistic. I think our initial

estimates of the fair were around 20 million visitors. I know that's

been revised after the minister has taken a look at New Orleans in '84;

they've been sliced to, I think, about 13.75 million. But there is

still some question as to the method of analysis that the ministry has

used, or the fair has used, in arriving at this gate pass estimate. I

would ask the minister what the method of analysis was in arriving at

this gate pass figure. Did the analysis actually involve the standard

technique of linear regression analysis? If so, then the analysis must

have included ticket price, size of fair and number of exhibits. But

did the analysis also include the current disposable income of British

Columbia citizens, the geographic dispersion factors of our population

and the current unemployment level? Did it include these economic and

geographic factors? I think consideration of these variables may have a

moderating influence on the attendance estimates. I hope not. I hope

we're being conservative with our attendance estimates. I really do. I

hope that the gate passes exceed those projections. But the question

still does remain.

Thirdly, expenses relating to operating and auxiliary services for

past fairs have tended to be underestimated. I think with Expo 86 there

are a number of costs that have not been adequately accounted for. I

suggest the opportunity cost of the land which Expo is sitting on —

roughly, if the land could have been utilized for other activities, a

cost of around $140 million in value. There are policing, fire and

health costs, the associated costs with improving highways and

construction of auxiliary transportation and the costs of

decommissioning the site, which don't seem to have been adequately

addressed. Unless there's been a change in that area, it seems that the

present position — you might want to correct me on this, Mr. Minister —

is that the sale of the buildings will pay for the decommissioning

costs. Historically it has been shown that the decommissioning costs of

a world-scale exposition such as Expo is approximately 10 percent of

the fair, perhaps in the area of $56 million.

Some specific questions. Again, in addition to the questions I've

just laid out, has the ministry done a detailed cost benefit analysis

of the fair? If it has been done, why has the minister refused to make

this cost-benefit analysis available to the public? If it has been

done, will the minister agree to table copies of that cost-benefit

analysis? It's very hard to deal with the figures for Expo when you

can't get your hands on the pertinent information.

I think I'll sit down at this point and let the minister address those questions.

HON. MR. RICHMOND: It's a pleasure to at last have an opportunity

to stand up and talk about Expo 86 in some detail. I thank the member for his

question and, I suppose, his concern. First of all, I want to start by giving

a rough outline of the magnitude and complexity of an exposition like Expo 86.

I'll be very brief, but I would like the member and this House and the people

of B.C. to know that to date we have signed up 41 countries, some of the leading

nations and some of the developing nations of the earth, who will be participating

on that fairground. They will literally be in our back yard in 1986. For the

first time anywhere in North America, the U.S.S.R., the People's Republic

of China and the United States will be on the same fairground at the same time.

They are not there just for the sake of being there, but to display,

to show off, the very best they have to offer, not only in technology

but also in culture, cuisine and folklore — in everything that they do,

right from space-age technology back into their past. They're not there

spending millions of dollars just for the sake of making British

Columbians feel good. They are there for the benefits that they can get

from Expo 86. That's exactly the reason the province of Ontario is

there, spending about $26 million on a pavilion so that they can take

advantage of the people who are going to be in downtown British

Columbia for five and a half months in 1986.

1 think people tend to lose sight of the impact that an exposition

like this is going to have. Let me talk for a moment about the

industrial and business opportunities. Through the Minister of

International Trade (Hon. Mr. Phillips) we are making sure that every

leading industrialist and business person in the world will be at Expo

86 at one time or another. He is sending out some 30,000 invitations to

the leading movers and shakers around the world, who are the

industrialists and businessmen, so that we make sure they are here.

Having got them here, we are not going to be content to just let them

see a world exposition. Many of them have seen those. We want to show

them British Columbia. I don't want anyone over there, or in British

Columbia, to lose sight of the fact that we're going to be taking these

people throughout our province and showing them why they should be

relocating or expanding or moving into British Columbia with their

factory or research company or whatever it is they happen to do.

I don't want people to think that we're just putting on a fair for

the sake of showing off and putting on a fair. This will have

far-reaching, long-range industrial and business impact in this

province. Couple that with the benefits to tourism. The multiplier

effect — people going back to where they live and telling other people

what it's like in British Columbia — is incredible, as has been proven

at other world's fairs. We want to do business with these people, these

tourists, these visitors to our province, in 1987, 1988 and 1989 — and

we will.

Yesterday the second member for Vancouver East (Mr. Williams) got up

and said — I'm paraphrasing — that we are not getting return on our

investment in Expo 86. Mr. Chairman, that is patently untrue. I'm sure

that the member is not looking at the positive side of the ledger of

this fair. Here's one example. He mentioned the unemployment in the

construction industry. Let's talk about that, and I'll quote from that

party's leading source of research, the Vancouver Sun ,

of two or three months ago. At this time there is $900 million worth of

construction going on in the city of Vancouver alone that is related to

Expo but being done by the private sector — unrelated financially, but

triggered by the fact that we're putting on a world exposition. This is

in addition to the $400 million worth of construction that Expo is

doing. I think that comes out to $1.3 billion in the construction

industry alone in Vancouver. If the unemployment figures are too high

in the construction industry — and I believe they are; I think we all

believe they are — think of where they would be without this

[ Page 6755 ]

project going on in downtown Vancouver. Take that

$1.3 billion out of that construction economy and see where the

unemployment figures would be, Mr. Chairman.

We planned this fair far in advance of the global recession that hit

us in 1982. This fair was planned in 1979, but from a work-creating

standpoint we couldn't have planned it better if we had tried. I

shudder to think where a lot of those people down on that fair site and

throughout this province would be working today if we hadn't made the

decision to go ahead with Expo 86.

The economic impact, the member says, is small. All I can do, I

guess, is quote some figures. If $3 billion in economic activity in

this province is small, then I guess that's small. The independent

studies that have been done — and the one firm that comes to mind is

Coopers and Lybrand — have told us that in British Columbia alone Expo

86 will generate $3.2 billion in economic activity. That's a

conservative estimate based on 13,750,000 visits. If that is small, I

would like the member to explain to me what is large. In direct jobs

63,000 person-years of employment will be provided by Expo 86. That

doesn't even take into account the spinoff jobs and all the people who

are supplying goods and services to Expo. The young people will have an

opportunity next year to work at a world exposition, something that

comes along once in a lifetime. I'm very proud and happy to say as a

member of this House that we're providing that opportunity for

thousands of young people to work on that fair site and gain an

experience that they couldn't possibly ever get by any other means.

The member, I think in all sincerity, and the media speak constantly

of world expositions losing money. I contend, Mr. Chairman, that they

look only at one side of the ledger. I'm not an accountant, but I think

I can read a financial statement; I had to at one time to survive. But

I think that anyone who reads a financial statement has to look at both

sides of the ledger: the profit side and the loss side, or the expense

side and the benefit side of that ledger. Too often people look only at

the expense side of the ledger of a project like Expo 86 –– I think

that they tend to ignore the benefit side. I think that if that party

or any other one could put on a make-work project for the dollars that

we are going to put into Expo, and generate what we're going to

generate, they'd be standing up on top of their desks bragging about

it. If they could put in the dollars we're going to, and generate $3.2

billion in economic activity, they'd be the first ones to be bragging

about it.

They talk about the deficit in Montreal, just for an example, which,

up until now, was probably Canada's finest moment. Expo 67 was

magnificent. It was a fair that made every Canadian feel proud. I spent

a week there, and it was just absolutely incredible. Their projected

attendance, for example, was in the order of 20 million, and they ended

up with 52 million visits to that fair.

Interjection.

HON. MR. RICHMOND: The member says that it just about

bankrupted Montreal. He's making a mistake that many others make, Mr.

Chairman; he's confusing it with the 1976 Olympics. Expo 67 was a

success in every sense of the word — financially as well. Sure, there

was a deficit, but when you weigh it against the benefits, the deficit

was insignificant compared to what that did for Canada, for Quebec and

for Montreal. On the other hand, the 1976 Olympics, which was a

two-week event, was a financial disaster, an absolute disaster. We all

know that, and I'm not going to go into the money that that cost the

Canadian taxpayer. Expo 67 was anything but, and Expo 86, although not

as large a plant — we don't have the physical site that Montreal had —

will be every bit as successful, if not more so. The quality will be

every bit as high, if not better, than Expo 67.

[10:45]

I'm not putting down Expo 67; it was one of the finest world's fairs

ever put on. It was a different class of fair. It was an open-category

fair, which is totally different. In those — just briefly — the

internationals build their own pavilions. In our fair they don't; we

build them and turn them over to them.

That brings me to the member's next statement about the

decommissioning of the buildings. These buildings are of modular

construction and have been built by the Expo 86 Corporation — I'm

talking about the buildings for the foreign participants. They will be

turned over to those participants in November of this year — a full six

months ahead of the fair opening — so that the foreign participants can

get their exhibitry ready and be ready to open on time. I'll tell you,

Expo 86 will be ready. We're on schedule, we're on budget, and in fact

even the Japanese at Tsukuda have to admit that we're further along in

our planning and our construction than any world's fair that they've

seen to date, including their own. They even had some buildings that

weren't finished the day before they opened. Again, I'm not putting

down their fair; I understand that it is a good world's fair. It's not

as exciting as ours is going to be, but it's taking a totally different

approach to the subject.

There has never been any mention or thought of selling those modular

buildings, Mr. Chairman, so I want to correct the member there. I think

that's what I heard him say: "the sale of those buildings." There has

never been any talk of selling those buildings. I want to set him very

straight on that.

I want to go now into the advanced sale of tickets. The advanced

ticket sales on Expo 86 are far ahead of even our expectations and far

ahead of any other world's fair to this date. I can't give you a

precise number at the moment, but I can tell you it's in the millions

of dollars. In Vancouver alone the payroll deduction scheme is working

beyond our expectations, and I thank the city of Vancouver, whose

mayor, in 1981, Mr. Chairman, sent a telegram to the BIE in Paris

asking them to cancel the fair. Since then I'll give him full credit.

As the Premier said, he got back on board before it became popular to

do so, so I give Mike Harcourt full credit. He's one of the best

boosters now that Expo 86 has. He is pushing it wherever and whenever

he can. I'll give him full marks for that. We have a good spirit of

cooperation between Mr. Harcourt, me and the Expo 86 Corporation.

I repeat, it's on time and it's on budget. The number of visits have

been projected at anywhere from 12 million to 28 million. We, the board

of Expo, decided several months ago for financial planning to use the

estimate of 13,750,000. We felt it was a conservative estimate; in fact

I think it's very conservative, but for financial planning we decided

to be on the conservative side, and that's why it is set at that. I

believe that we will do somewhere between 15 million and 18 million and

possibly even go as high as 20 million visits. I am being optimistic

perhaps, but not as optimistic as some. The word we get back from the

international travel agents and travel press is that Expo will be a

tremendous success.

The foreign participants can feel it already, Mr. Chairman. We are

becoming the victims of our own success in the sense that we are having

countries now trying to come on

[ Page 6756 ]

board at Expo, and we don't have the room for them.

They know that it's going to be successful. We will have to cut off the

number of countries at about 42 or 43. We're at 41 right now.

The member asked what studies took place. I can tell him that

several studies have taken place by experts in the field. Yes, they did

consider the economics of the time. They considered the geography, the

demographics. They have considered everything that people in their

profession consider. As I say, when you get the opinions of experts as

to what the attendance will be, they run all the way from 12 million to

28 million, so there is a large margin in there, I imagine, for

prognostication. I imagine if we did more surveys we would get more

numbers of attendance.

The land costs that the member referred to — I don't really know

what he was driving at. But I can tell you that the landlord on the

site is the B.C. Place Corporation. We have to turn the land back to

them when the exposition is finished. Only three buildings will remain:

the CPR roundhouse, which is a heritage building, the British Columbia

Pavilion and the Expo Centre. The rest will be turned back to the

corporation so that they can proceed with what will be the largest and

probably most exciting urban renewal project in North America, possibly

even in the world; I don't know. It will be about 173 acres right in

downtown Vancouver.

The other thing I can tell you is that the services that have been

put in for the fair will remain for the British Columbia Place

Corporation, to enable them to get on more quickly with their downtown

revitalization.

MR. MacWILLIAM: Just to go over some of the minister's

previous statements, the opportunity cost of the land is what they

could have gotten for that land had they developed it and rented it out

or.... I think those costs that I made mention of were the rental costs

for that land. I believe Expo is basically getting the land for

virtually nothing. We're essentially losing the opportunity cost of

renting that land for that period of time. That's a cost that hasn't

been accounted for.

I want to go back to some previous things that the minister has

said. He said that in criticizing the deficit of the fair, people

haven't considered the benefits. But I want to correct the minister,

Mr. Chairman, because any financial analysis shows that the deficit is

the result of the arithmetical calculation between benefits and costs.

You have to look at the costs and the benefits. You subtract one from

the other, and you get either a surplus or a deficit.

So we have looked at the benefits and at the costs as accurately as

we can for the information that we have available, which isn't an awful

lot, and you come out with a minus figure. Now that, I think, is called

a deficit. If the minister wants to argue that point, I guess he may do

so. But I'd advise him to have a look at what the word means.

The minister made mention of approximately $900 million of

construction in the Vancouver area related to the fair. I really think

the minister is stretching a point. I would like to see him justify

that that construction is indeed taking place solely because the fair

is coming to Vancouver. I don't think you can justify that, Mr.

Chairman. I think it really is stretching a point.

For example, I could say that the deficit of the fair must also

include the Coquihalla Highway and the Annacis Island Bridge, because

they are being constructed on a timetable in order to accommodate the

fair. If we want to play those kinds of word games, we could be here

all day. The Coquihalla Highway is $375 million; the phase 3 extension

to the Okanagan is another $100 million; the Annacis Island is $75

million. We can add that onto the deficit side of the equation, if you

want to play those kinds of games. You're stretching a point by saying

that that $900 million is directly related to the fair. I would take

you to task on that to justify it with some hard-nosed accounting

figures. What does that $900 million include? What is the construction?

Are you talking about ALRT or what? Let's not stretch the point. Let's

stay on the facts and figures of the fair itself and use some

hard-nosed calculations based on the projected costs and the deficits

of that.

The minister did not answer a question which I consider critical in

terms of an overall cost-benefit analysis. I haven't been able to get

my hands on any cost-benefit analysis done by Expo 86 Corporation. I do

believe that like any responsible body, they will have done one; they

may have done a number. I would ask if the minister would consider

making that information available so that people can come to deal with

the figures that the ministry is in fact dealing with. Would you please

consider making that information public, or tabling it here in the

House at a later time.

The point that the minister made about the gate-pass estimates I

don't quibble with. The figures I have from a recent linear regression

analysis showing the attendance estimates indicate that they're pretty

well on track with the 13.75 million. I'm certainly hopeful, as much as

the minister, that we go over that estimate, but you do seem to be on

track in terms of other studies that have been done. In terms of Expo

as a business venture, as I mentioned before, in looking at a

cost-benefit analysis of the fair it's really difficult to come to

terms with figures. It seems very difficult to get figures available on

it.

Statements have been made by the chairman of Expo 86 Corporation,

Mr. Pattison, that the fair will lose $311 million. That is a deficit,

I think you would agree. Now if you look at some of the hidden costs, I

think we may see that that cost or that deficit — if you want to deal

with semantics — may in fact be even greater. I mentioned the

decommissioning costs of the site. Has the minister included the

historical 10 percent of the construction costs in dealing with the

decommissioning? Previous studies, as I have said, show that the

decommissioning costs of the fair run approximately 10 percent.

The cost of the land — let me get back to what I was talking about

before. You're leasing 165 acres from B.C. Place for one dollar. It's

not exactly exorbitant rent. The actual cost is much greater. The

opportunity cost of the land is estimated to be about $139 million to

$140 million. This is the cost to the taxpayers of leasing the land for

Expo instead of either selling the land or investing it or leasing it

on the market. So we're losing that money; we are losing the

opportunity cost of the land. That can be justified in any analysis of

the value of the land.

Upgrading of B.C.'s transportation infrastructure and related

facilities, costs associated with strengthening local police forces,

expanding health and inspection services — these may not all be costs

incurred by the ministry or by Expo itself, but they are associated

costs of the fair. The B.C. Pavilion costs — estimated costs of

operation have not been disclosed, and perhaps that should be added

into the overall figures in dealing with the cost-benefit analysis of

the fair. The number of civil servants that are working virtually full

[ Page 6757 ]

time on the planning of the fair — those are costs

that I don't believe have been accounted for. If you start to include

some of those figures, it's possible, as has been suggested by a recent

analysis, that the deficit may be well over $300 million, maybe

somewhere between $500 million and $600 million.

Let's look on the other side of the equation — the benefit side. I

want to read a statement; it's actually a quotation which is rather an

interesting observation. If the minister will pay attention, perhaps he

will get the gist of the statement: "Our close interdependence with

other nations means that our industries, our jobs and our incomes

depend on export sales. As a result, we cannot significantly affect the

health of our economy by spending or consuming more ourselves." The

minister may not recall where that statement comes from, but it

actually comes right out of the 1984 budget speech. The primary source

of Expo's fiscal impact is going to be through local expenditures. The

Minister of Finance has said we cannot significantly affect the health

of our economy by spending or consuming more ourselves. The result of

Expo will be a possible transfer of economic activity from one area of

the province to the other, and just because a dollar is spent at Expo

doesn't mean that B.C. is going to realize a dollar's profit.

[11:00]

I'll give you an example. A Vancouver family that normally spends a

week's vacation in the Okanagan decides to stay home for Expo. It stays

home for Expo, it spends its money at Expo and it doesn't go the

Okanagan. No new expenditures are created. They only have X amount of

dollars in disposable income on their holidays. They blow it at Expo

rather than spending it up at Penticton or Vernon or somewhere. What

happens is a transfer of disposable income. People in the Okanagan

receive fewer tourist dollars, Vancouver receives more. So the

Okanagan's loss becomes Expo's gain. Such a distributional change does

not have any net benefit to the province as a whole. It's no new

generation of wealth.

By the same argument, if we attract non-resident visitors to British

Columbia, for example the person in California who normally goes up to

the Kootenays.... If he decides to come to Expo and spend his money

there, it's not going to create any new wealth for the province. It's

going to take the money that did go into the interior regions and put

it into the coast — into Expo.

The conclusion, and I think the minister would agree, is that the

profitability of Expo as a financial venture depends on attracting new

visitors who don't normally come to British Columbia. That is what's

going to create the positive economic impact of the fair. I might point

out that reports distributed by Expo claim the fair will attract a

million nonresident visitors. In a recent scathing reply to some

statements I made in the minister's hometown area, the minister.... You

remember those, do you? Totally taken out of context, but so be it. In

his reply the minister said Expo's going to bring in about two million

new visitors. I'd like to ask the minister how they've come to that

analysis of the number of new non-resident visitors to the fair. How is

the figure arrived at? Why have you doubled the figure all of a sudden?

I wonder if you can explain that.

But before we go on to that, I want to point out the importance of

looking at this statement that has been given by Expo that we will

generate one million new tourists to B.C. Let's go through an analysis

of that. Let's consider the cumulative totals — this is right out of

the minister's 1984 travel indicators — of U.S. resident entries, of

overseas entries and of Rogers Pass traffic for the months of May to

October, which is when the fair is in operation. The total of

non-resident visitors coming into the province for that period in 1984

was about — I think my arithmetic is accurate — 3.7 million. In order

to attract one million new visitors, that's going to be a 27 percent

increase in non-resident entries; a 27 percent jump in visitors who

haven't been here before. But now let's consider something else. The

minister has said that most people coming to Expo are going to stay for

a number of visits. In other words, it's not going to be a one-day

wonder. All right. The minister has stated that his analysis shows most

visitors will be here for more than one day. So let's consider only

those U.S. residents that are staying for more than one day. We'll also

plug into that the overseas and the Rogers Pass traffic, along with the

other indicators, using the 1984 figures. The total visitor influx in

1984 was 2.7 million for those visitors staying more than one day. You

tag on one million new non-residents and you need a 37 percent

increase. The minister is saying two million new non-resident visitors.

That is even a higher increase in tourist volume.

Let's go back to that more conservative estimate of one million new

visitors. A 30 percent increase virtually overnight is a very

optimistic figure. I hope that it proves to be right, but there is a

lot of concern as to the accuracy of that figure. Perhaps the minister

would like to address that in terms of the analysis I've just given.

If we assume that the average length of stay as was reported was

6.36 days, the average expenditure of $37 a day, the economic benefits

of one million new visitors is $238 million. As a business enterprise

Expo is forecast to lose over $500 million. If auxiliary highway

construction is considered, if the minister wants to play those word

games, we could probably make it over a billion dollars. We're getting

$238 million in new economic activity. So I think as a business venture

on a sound cost-benefit analysis, the fair is not justified in terms of

the deficit incurred.

If we want to look at jobs and what not, it is benefiting the

province; there's no question about it. But I think as a business

enterprise it's going to lose money; there's no question. The real

question is: how much?

HON. MR. RICHMOND: I guess I'll work backwards through the

questions. I don't know if there were questions there, but a lot of

statements. I think that the $500 million figure you've come up with is

from that questionable study done by the four people at UBC — I forget

what they call themselves. But I hasten to point out that they didn't

even have access to many of the figures regarding the Expo 86

Corporation.

MR. MacWILLIAM: They couldn't get access to them. That was the point.

HON. MR. RICHMOND: Why should they, at this point?

Interjection.

HON. MR. RICHMOND: That's right, and they are involved in the

planning process of Expo. When they need to have those figures, they

will have them. We're not being secretive at all, Mr. Chairman.

[ Page 6758 ]

We are doing things on a very sound business basis, and we have

hired consultants and economists to do the studies for us. If other

people want to do their own little studies on the limited information

they have, then let them do them. But don't take the figures they

publish as gospel.

I will tell you that they aren't even aware that we have done more

corporate participation in Expo 86 than any other world's fair that's

ever been done. We've even done more corporate participation than the

1984 Olympics, except for their television contract, which is very

television-intensive as you know; it's a two-week-long event that

receives tremendous television coverage. To date, Expo 86 has signed up

over $140 million in corporate participation alone. Just in corporate

participation, there's over $140 million.

I want to come back, though, because I really take exception to the

statements about the interior of this province not benefiting from

Expo. I personally have been urging communities to get on board and get

their Expo committees in place for over two years, and it has been very

successful. Working with Expo, with a division headed up by one Ms.

Maire Shaw, who has done an excellent job, we now have 83 communities

on board in British Columbia with their own independent Expo committees

planning events in their own areas and communities to take place to

coincide with Expo.

Why are they doing this, Mr. Chairman? So that we as Tourism B.C.,

when we're in the B.C. Pavilion, where we will have a large presence,

can encourage the people, the visitors to this province, once they have

spent their days at the fair — whatever that may be, maybe two days,

three days, four days.... I think the projection is that the average

family will spend three and a half days at the fair. But they will

spend a lot more than that in British Columbia. It ranges anywhere up

to 11 to 14 days, and some will even be here for three weeks, depending

on the distance they travel. We intend to keep those visitors in this

province, Mr. Chairman. And to get them throughout the four comers of

the province, if you like — into the Okanagan, into the north country,

into the Kootenays, to Vancouver Island — to spend the rest of their

holidays here, we have the assistance of 83 communities in this

province putting on special events and spending a lot of money that

they have raised themselves to entice the visitor into their area. Some

of them are going to be extremely successful. The Cariboo is recreating

the gold rush. Islands 86 have raised in the neighbourhood of

three-quarters of a million dollars by their lottery that they had,

raffling off an island or giving away an island in a lottery, just to

promote Vancouver Island next year.

So the spirit is there. These communities aren't sitting out there

with the doom and gloom message that I hear from over there saying:

"Expo is only going to benefit the lower mainland, and it's going to

drain all our visitors. They're going to go to Vancouver instead of

staying here." Maybe they're going to go to Vancouver instead of going

down to Washington and Oregon, Mr. Chairman. Maybe the Vancouver family

that is going to stay at Expo is going to stay instead of going

elsewhere. Maybe they wanted to go to Winnipeg, and they're going to

stay in Vancouver because Expo is on. They don't talk about that side

of it. It's only the doom and gloom that the family staying in

Vancouver is not going to benefit, because they're going to be spending

their own dollars. Of course they are; they're going to be spending

them here instead of somewhere else.

The member has talked twice about the decommissioning costs of the

fair. Surely he must know that the people putting on Expo 86 have

tremendous expertise in what they are doing. We're not trying to

reinvent the wheel, you know; the wheel was invented years ago. We are

learning from the mistakes and the wise moves of others, Mr. Chairman.

We've studied every world's fair and the Olympics, both in Montreal and

in Edmonton with the Commonwealth Games, to see what people have done

right and to see what they have done wrong. We hope not to repeat their

mistakes. I don't think we will. We hope to do things as well or better

than the best, and I think we are.

I spoke about the spinoff in the construction industry, Mr.

Chairman. I want to make it very clear that that $900 million figure

wasn't my own. It came out of the Vancouver Sun , and it does not include any public sector construction. That is private sector construction alone, triggered by Expo 86.

[Mr. Veitch in the chair.]

The other thing, just to clear up the costs of land that is owned by

the B.C. Place Corporation: that land cost the B.C. Place Corporation

roughly $8 a square foot. The going price of that land, when you can

sell it, Mr. Chairman, is in the neighbourhood of $300 a square foot.

The member says: "Would we be better off renting it at this time or

selling it rather than putting on Expo?" I think if you just think

about it a moment, the answer is obvious. I don't think it could be put

to a better use.

MR. MacWILLIAM: You haven't included that cost in your analysis.

HON. MR. RICHMOND: You don't know, Mr. Member, whether we have included it in our analysis or not.

MR. CHAIRMAN: Please address the Chair.

HON. MR. RICHMOND: I'm telling that member that at this

moment we couldn't be putting it to a better use. For the last two or

three years.... I don't know about you, Mr. Member, but I know that a

lot of people have had a lot of trouble disposing of land and property

in downtown Vancouver. So what better use to put it to than on a world

exposition — put in the required services and then late in 1986 turn it

back to the landlords so they can get on with probably the most

exciting urban renewal project ever undertaken. I guess that answers

most of the statements.

MR. MacWILLIAM: The minister continues to be so doggone

evasive about a lot of these things. As a person who is supposed to be

a hard-nosed businessman — apparently; I don't know, but he likes to

come on that way — he has been awfully dammed evasive in terms of hard

facts and figures on this whole dammed thing. I've asked the minister

to table the cost-benefit analysis. He keeps ignoring the question. He

refuses to deal with figures. I've come across here with some

reasonable analysis. All he wants to talk about is putting on the

rose-coloured glasses and how everything is going to be great. Come on,

Mr. Minister! Let's deal with the reality of facts and figures. When I

mentioned the opportunity cost of the land.... That's a simple

calculation made in any cost benefit analysis. You have to consider

that. I'm not saying go sell the land or rent it. I'm saying: have you

considered that in your overall analysis of the fair? I don't know. You

won't tell me. You won't tell anybody. All we're asking for are some

[ Page

6759 ]

facts and figures. We want to see the fair be

successful as much as anyone else. But goldarnit, Mr. Chairman, let's

deal with some facts and figures around here instead of a lot of hot

air, pomp and circumstance. It's time we got down to some hard-nosed

dealing here.

I maintain my statement that if we include these hidden costs —

decommissioning the site, the cost of the land, opportunity costs,

upgrading of the infrastructure, strengthening the local police, health

and safety, etc. — we're going to run a higher deficit than the

chairman has predicted, a deficit that may be in the neighbourhood of

$500 million to $600 million. We're going to add that deficit onto an

accumulated deficit of over $17 billion, which this government has

generated in the past decade throughout British Columbia. We've now got

the sixth consecutive deficit budget. There's no question about the

fact that this government is involved in deficit financing; they just

won't admit it.

[11:15]

The real question in terms of fiscal policy is: what's going to be

left after the fair? I fully agree that we are creating jobs, economic

impact and economic spinoff; I'm not arguing that point at all, Mr.

Minister. For that reason I reiterate that my colleagues and I support

the fair. My criticisms are not gloom and doom; they're based on some

hard-nosed figures which I think we have to deal with and which this

government refuses to deal with in terms of accountability to the

public purse. What remains after Expo, except the hollow shell?

Although the job creation benefits of Expo are there, they are

short-term. This government's entire fiscal policy is short-term. It

can't think in terms of long-term economic reconstruction. It can't

think past the next election agenda. That's the problem.

The minister says that we're going to pull all these international

businessmen from around the world to visit the fair, and that as a

result of that, they're going to be so attracted to British Columbia

they're going to make all their investments here, and we will be the

recipients of a massive influx of venture capital. Well, Mr. Chairman,

I might point out that the only way you're going to enhance a region's

trading position in the international market in the long run is through

that region producing higher quality goods at as low a cost as

possible. That's how you enhance a region's international trading

position. That's the only way you do it. We will become higher profile

as a result of Expo, but until the economic policies of this government

are such that they show the people of the world that the British

Columbia economy is on the right track, has some long-range planning,

and is set to diversify in a stable manner into secondary

manufacturing, the international investors of this world will not come

to British Columbia. They will not come because of any glitter and

gloss. Sound economic policy, that's what they want. Political

stabilization, that's what they want. Cooperation, that's what they

want. They don't need the glitter and gloss. It's nice. It'll bring

them here, but we need to offer them far more than that, and the

minister knows that very well. It's the only way we're going to enhance

our trading position, increase productivity, increase diversification

and increase political stability in this province. Let's get out of the

Third World dark ages.

Now the minister has also said that this side of the House is preaching gloom

and doom as a result of my statement suggesting that we may have a redistribution

of income in this province drawing tourist dollars away from other areas of

the province into Expo. That's a reality that has to be looked at. I fully

agree with the minister, even though he's not listening again, that we have

to make every attempt feasible, every attempt possible, to generate regional

projects, if you like, during that time of Expo to ensure that those regions,

as much as they possibly can, will entice that tourist dollar to also come up

and visit, for example, the Okanagan, the Kootenays or the Cariboo. Certainly

we have to do that. If we don't do that — if we don't make every attempt

to do that — my fear is that we will get a redistribution of income in the province.

I'm not saying that will happen, but the potential is certainly there.

Now in discussing that very problem with the member earlier in this

session of the House, I suggested that one of the problems in the

Okanagan area, as a result of environmental problems with groundwater

pollution and increased nutrient loading in the Okanagan Lakes basin,

is that we have a problem with water quality up there. The water

quality in the Okanagan Lakes basin is decreasing yearly.

Yes, I'm on track, Mr. Minister, because I'm just going to make reference to a statement....

MR. CHAIRMAN: Order, hon member. The Chair will listen to see if you are.

MR. MacWILLIAM: Thank you.

I had requested the member, in light of the fact that the Okanagan

is attempting to generate as much interest in light of Expo 86, and to

market itself as a tourist destination point.... I had asked the

minister if he would join me in attempting to resolve this problem we

have with the milfoil growth in Okanagan Lake. The minister refused to

come along with me and request that we consider expending more money to

clean up the lakes for Expo.

MR. CHAIRMAN: It is the Chair's opinion that you are straying

off the responsibilities.... It may be a personal situation between you

and the minister, but it is not appropriate at this point in time, hon.

member. That is the Chair's decision.

MR. MacWILLIAM: In response to the Chair's judgment, to clarify myself, what I am trying to attempt to do....

MR. CHAIRMAN: There is no response to the Chair's judgment.

MR. MacWILLIAM: Okay.

In light of the minister's statement of not giving consideration to

the other areas of the province, the point I'm trying to make is that

we must take every opportunity to create those regional tourist

promotion programs in order to ensure that the tourists we do attract

to British Columbia in fact do leave the lower mainland area and visit

these other areas. If we don't take every opportunity to do that, we

will be in a situation where the tourist dollar will leave those areas

and come down to Expo. That is my concern.

Just to summarize where we've come to at this point, we've looked at

three aspects of Expo 86: we've analyzed it in terms of its historical

antecedents, and we've analyzed it in terms of a business venture and

also as a fiscal policy. I think if you look at those three aspects,

Expo doesn't perform that well. Upon studying previous world's fairs we

found that they are money losers; 15 out of the 18 previous world's

fairs have

[ Page 6760 ]

been money losers. I might point out to the minister, through you, Mr. Chairman, that that is called a deficit.

As a business enterprise, I maintain that Expo may lose up to $500

million to $600 million when you consider the hidden costs and

auxiliary expenditures. Lastly, as a fiscal policy Expo 86 will have

immediate benefits of short-term job creation, but my fear is that it's

a quick fix and it has no long-term, lasting benefits in terms of

creating an investment climate in this province, economic

diversification or engendering any type of overall industrial

development strategy.

I think I'll let the minister respond to those comments at this point.

MR. CHAIRMAN: Shall vote 65 pass?

MS. BROWN: No, he's going to respond. He sat down so the minister....

MR. CHAIRMAN: Order, hon. member. I asked the question "shall vote 65 pass?" All right, the hon. member for Okanagan North.

MR. MacWILLIAM: Some specific questions to the minister,

questions that he has not responded to; I will address them once more.

When will the minister provide a detailed cost-benefit analysis — a

budget — of the fair? The

summary information attached to Mr.

Pattison's January 26 news release is incomplete and is impossible to

compare with other documents.

If we look at Currie, Coopers and Lybrand of Toronto, they've done a

series of economic studies for the fair. One such study tracks the

economic benefits, and that has been released. The figures contained in

it don't compare to the figures contained in Mr. Pattison's report, and

I ask the minister if he has decided to table the other Currie, Coopers

and Lybrand report, and make it available to the public.

One of the reports deals with the site decommissioning costs, and in

view of the finding of the Economic Policy Institute that such costs

have been cause for financial problems in a number of other world's

fairs, will the minister table this study?

Mr. Chairman, it will just be a long, hot summer if the minister

simply refuses to answer. I've asked him some very specific questions

in terms of public accountability of this fair, and the minister has

the audacity and the arrogance not to even answer.

MR. CHAIRMAN: Order, please, hon. member. Shall vote 65 pass? The hon. member for Burnaby-Edmonds.

MS. BROWN: Has the minister been instructed not to respond to

any more questions? Is he being coerced and bullied into sitting in his

seat and not participating in this debate? Is that what we're

witnessing?

Interjection.

MS. BROWN: Well, then, stand up and answer the questions if you're not being bullied.

HON. MR. McGEER: Mr. Chairman, it seems as though all three members

of the opposition present are outraged. I want to tell you that the turnout

of the opposition for this scintillating debate would embarrass the inside postal

workers' union of Canada. I think, really, what we should be considering

.... I see, Mr. Chairman, an honoured guest on the floor of the House today,

and I'm sure how embarrassed he would be to know that during a debate we

couldn't turn out more than three members of the opposition.

MR. CHAIRMAN: Hon. minister, could you reflect this upon the minister's vote? I'm waiting for that.

HON. MR. McGEER: I'm speaking not just to the minister's

vote, which of course is what the debate here is all about, but to the

absurdity of the process whereby the legislative time is absorbed in

estimates for the benefit of a couple of members who have expressed

their outrage, another who has wandered in, and one who is taking

part

in the debate.

MR. MacWILLIAM: On a point of order, Mr. Chairman, the hon. member is not talking to the estimates debate. He's standing up and making a....

AN HON. MEMBER: That's up to the Chair to decide.

Interjections.

MR. CHAIRMAN: Order, please. The comments are well taken, hon. minister. Would the minister please proceed.

HON. MR. McGEER: I think the big problem.... After we've had

some genuine debate on the estimates, maybe a few more of the members

will come in because there's something relevant and important to say.

But I would say to the member who is protesting loudly over there that

if he can't even get his own caucus to come out and listen to the

questions he's asked, it can't be very interesting or important. That's

the difficulty — even the NDP caucus thinks it's trivial. Should the

process of estimates appear before this Legislature at all, or should

it be before a committee? You get better turnouts to the committee.

Interjections.

[Mr. Chairman rose.]

MR. CHAIRMAN: Order, please. Please take your seat, hon.

minister. On vote 65, the hon. minister proceeds. The minister's

estimates and his responsibilities, please.

[Mr. Chairman resumed his seat.]

HON. MR. McGEER: Mr. Chairman, the tourist industry is one of the brightest spots for the future that we have in our province.

Interjection.

HON. MR. McGEER: Luckily we don't have the NDP in power, so

we don't have that tremendous fear for our resource industries that

existed when the member opposite had charge of the forest industry and

brought worldwide anguish and despair. There is the greatest threat to

our economy in British Columbia, saying that it's one of the few bright

spots. I tell you, if they were in power it might be the only industry

left in British Columbia.

[ Page

6761 ]

MR. BARNES: On a point of order, Mr. Chairman, I think the

minister is abusing the rules of the House, and I would ask that you

have him come to order, please.

MR. CHAIRMAN: I would caution all hon. members that relevancy is most important in debate.

[11:30]

HON. MR. McGEER: Is it inappropriate, Mr. Chairman, to point

out that tourism might be one of the few industries that the NDP could

damage? I well recall the period when the NDP was in power, when the

Minister of Highways for the New Democratic government said that we

didn't want all those U.S. campers on our roads.

MR. WILLIAMS: What a hack you've become.

HON. MR. McGEER: Well, I tell you, Mr. Chairman, there's a

lot of difference between becoming a political hack and selling your

seat for $80,000, and becoming responsible ministers, asking for

responsible debate in the Legislature and asking people who come in and

take up the time of the House with estimates to have some important

messages to bring forward.

MR. CHAIRMAN: Order, please, hon. minister.

HON. MR. McGEER: Nothing is more important than tourism, and that's why I'm up here speaking for tourism in British Columbia.

MR. BARNES: Just as a matter of fairness, Mr. Chairman, I

think if the minister is going to reflect on the sale and value of

other members, he should remember that he sold his soul to go on that

side of the House.

MR. CHAIRMAN: Order, please. Is the hon. first member for Vancouver Centre imputing any wrongful act? You would withdraw that. Thank you.

MR. BARNES: No, no imputation, Mr. Chairman.

HON. MR. McGEER: Mr. Chairman, I don't take offence at the

remarks of the member for Vancouver Centre. But I can tell you that no

group in British Columbia could have better demonstrated the perils of

those who believe in the private enterprise system indulging in a

division...than the performance of that party in power. Even the

tourist industry....

MR. CHAIRMAN: Order, please. The Chair has tried to be

reasonably lax in its approach to this. Hon. minister, even the

economics of Expo perhaps would not be discussed, but perhaps the

administration of Expo would be closer to relevancy in debate here. So

would you become relevant please in this debate on vote 65.

HON. MR. McGEER: I want to say how pleased I am to learn that

there actually were some of the NDP members present in the House, and

they're here now to listen to the answers that I'm sure the Minister of

Tourism will give to those asked by the member opposite.

MR. MacWILLIAM: I find it interesting that we were involved

in a very detailed debate here, discussing the pros and cons, of a

budget analysis, and the hon. minister walks in here and throws el toro

poo-poo all over everyone. There's always a little bit that sticks,

though, when you throw it, Mr. Minister.

MR. CHAIRMAN: Order, please, hon. member. Back to relevancy in debate.

MR. MacWILLIAM: The comment that was made, that my colleagues

have no interest in it, is I think totally out of line. I feel it's a

vote of confidence from my caucus in my ability to handle the questions

and to handle that minister over there, and I'm proud of it.

MR. CHAIRMAN: Back to the relevancy of vote 65, the administrative responsibilities of the Minister of Tourism.

MR. MacWILLIAM: Once again, when is the minister going to

provide a detailed budget, cost-benefit analysis, for the fair? The

study by Currie, Coopers and Lybrand indicates that studies have been

released. These studies don't seem to be in agreement with statements

made by Mr. Pattison. Is the minister going to respond to my request

for the tabling of a cost-benefit analysis for Expo 86?

MS. BROWN: Answer the question.

MR. MacWILLIAM: Could be a long hot summer, Mr. Chairman.

AN HON. MEMBER: Keep going!

MR. MacWILLIAM: Why does the minister continue to withhold

critical evidence in terms of contract documents for Expo 86? Will he

come clean with the $75 million Specialty Mfg. contract and make that

part of public information? I discussed this issue with the Premier

yesterday during other discussions in the House. The Premier said that

he would investigate the matter. I wonder if the minister would care to

comment in light of those discussions that have now taken place. Will

he make public the full details of those contract documents with

Specialty Mfg., which have virtually given them a hammerlock on the

sale and servicing of souvenirs and materials for the fair?

MR. WILLIAMS: Maybe the minister could advise us, Mr.

Chairman. If my memory serves me right, Expo anticipates something like

$200 million in food revenues — sales in terms of food and the like.

Does my memory serve me well or not? It was some months ago that I

looked at those actual estimates, but it was a very substantial amount.

Those were sort of net returns, I believe.

When I reflect on that, it starts clarifying — for me, at least, a

resident of the city of Vancouver — the issue of the north gate in

terms of Chinatown. It becomes very clear to me that the primary reason

we don't have a north gate at Expo is the access it would provide to

probably the finest group of restaurants in greater Vancouver, and that

would be right at the north gate entrance/exit. Vancouver's Chinatown

would have been right there at the north gate. The gates for Expo are

in isolated parts of the downtown area and the False Creek rim. The

gates are in fact at Terminal Avenue, and if anybody

[ Page 6762 ]

knows the city, Terminal Avenue is not an area where you get any pedestrian traffic to speak of at all.

MR. REID: It's right on the ALRT.

MR. WILLIAMS: Yes, it'll work in terms of the ALRT, but it is

not a pedestrian area. For those who go to the American Hotel it's a

pedestrian area, but they generally don't walk very far.

MR. REID: You get on the buses right there.

MR. WILLIAMS: That's the member for Surrey talking. He

probably doesn't see that sophisticated city of Vancouver very often.

He bypasses it most of the time. That's understandable, because they

are a little sophisticated, and our redneck friend has trouble every

time he goes there.

At any rate, the other major gate is in the Yaletown area, again in

sort of the industrial fringe of the downtown at the bottom end of the

central business district; that's the major gate, near the roundhouse.

That leaves that huge gap, in terms of the whole swath of the fair

boundary in terms of Chinatown. I found myself asking: why has the

minister been willing to take the political flak that he received at an

earlier stage about the closing of the north gate? I had to reluctantly

come to the conclusion that it was for fiscal reasons internally at

Expo more than anything else, because he didn't want the competition

from Vancouver's Chinatown in terms of food sales at Expo. In fact I

think that's so.

So then you ask yourself: if you buy a ticket for Expo, do you have

in-and-out privileges? Because, I'll tell you, if I went into Expo and

I had in-and-out privileges, I would use that north gate and go and

have lunch or dinner in Chinatown and then go back into Expo. I think

tens of thousands of people would do the same. I think the people on

staff at Expo figured that out themselves. They didn't want that kind

of competition at all. You either drop those people out at Terminal

Avenue or you drop them out in Yaletown, and that's a long walk to

Chinatown. That's what's really happened in terms of that north gate.

So this important ethnic community, which could have been a significant

part of the whole Expo adventure, to a great extent has been closed

out. They've been closed out like the small businessmen that the member

for Okanagan North (Mr. MacWilliam) has been talking about. So the loss

is there; the loss is there in terms of Woodward's stores, Chinatown,

the historic area of Gastown, that north gate.

While most people have been enthusiastic about Expo, particularly

those in business who thought there would be the spinoff — spinoff

promised by the Premier and the minister — when the critical time comes

they're cut out. They're cut out by some foreign trader, by the Yankees

getting control of all of the concessions for the souvenirs; they're

closed out in terms of the north gate as well. While there could have

been far more spinoff, far more benefit outside the fair, in fact the

benefits are far less than people anticipated.

HON. MR. RICHMOND: I think I'll pick up on the last remarks that

the member made, and I quote I think fairly accurately: "The Yankees are

getting control of the souvenir market." They love to beat that one to

death. First of all, the firm in question is Specialty Mfg., which has been

doing business in British Columbia for many years. Granted, the control of that

corporation is in the United States, but I reiterate that the deal made with

them is far and away the best deal that could possibly be made for the corporation.

They quote the figure of $75 million continually, but neglect to say that that

contract will benefit the Expo 86 Corporation in the amount of about $22 million.

Now let me go on to talk about the British Columbia businesses that

will be doing business with Expo through Specialty Mfg. The member for

Okanagan North mentioned that. His term was: "Specialty Mfg. has a

hammerlock on the souvenirs." Having done just a little bit of research

in the last day or two, I'd like to share some information with the

House. I'd like to start with an

article that appeared in the

newspapers regarding the T-shirt sales and the imported T-shirts which

the opposition made so much of in the last few days. I want to put that

into the proper perspective.

First of all, when a firm such as Specialty wants to change the

quota on T-shirts coming from any foreign country, they must approach

the federal government for permission to increase their quota. Having

done that, the federal government tells them to approach the

manufacturers in Canada for permission to increase the quota.

[Mr. Ree in the chair.]

I wish to inform the House, Mr. Chairman, that Specialty Mfg. did

just that: they approached the federal government to increase their

quota of T-shirts coming from the Pacific Rim. They were told to deal

with firms and trade unions in the Canadian textile industry to get

their permission. They were flatly turned down by those corporations

and trade unions several weeks before the story appeared in the media

saying that they were going to buy a million and a half or more

T-shirts from Korea. The media, I submit, knew full well that that was

not the case, that their quota was 300,000 and that's where it was

going to stay. So any allegations or stories to the contrary — that

they were going to buy some millions of T-shirts offshore — are simply

not true and haven't been for some time.

Now I would like to list just a few of the companies in British

Columbia and in Canada who are going to be doing business with the Expo

86 Corporation through Specialty Mfg. This is to counter the claim from

Vancouver East and the hammerlock from North Okanagan that the Yankees

are getting control. Great West Graphics of Vancouver will be doing the

graphic work for them. Pressed Metal Products will be making jewelry —

that's another Vancouver firm, Mr. Chairman. Maybe some of the members

from Vancouver aren't familiar with these firms, but they are from

Vancouver. Agency Press of Vancouver will be doing the postcards.

Evergreen Sportswear in Vancouver will be supplying T-shirts to

Specialty for Expo. Anglo-American Leather of Vancouver will be doing

the bulk of the leather products. Allied Store Equipment of Vancouver

will be doing the fixtures for Specialty Mfg. Procambium of Vancouver

will be doing the cabinets. Gerrebe Display Ltd. will be doing all

their displays. A well-known name in Vancouver, Ms. Susan Mendelson,

will be doing the cookbook for Specialty Mfg. She's a Vancouver

resident, in case I forgot to say that. Allied Office Supplies will be

supplying all the office equipment and supplies for Specialty. The

Canadian Mental Health Association in Vancouver will be doing all the

packaging for Specialty Mfg.

[11:45]

[ Page 6763 ]

If I want to move outside the province into other Canadian firms,

Century Promotions of Montreal will be doing the bronze work; the GH

Group of Toronto will be doing T-shirts; Libby St. Claire of Ontario

will be doing most of the glassware for Specialty Mfg.; Cutler Brands

of Toronto will be doing glass and T-shirts; Sovereign Inc. will be

doing jewelry — they're from Ontario; Trench Canada Ltd. will be doing

all the pennants — they're from Ontario — for Specialty Mfg;

International Insignia will be doing all the crests and patches for

jackets, etc.

Those are just a few of the companies. There are some that they have

asked me not to mention because they have...on an exclusive basis. But

I'm sure that if people wanted to phone the management of Specialty

Mfg., there are many more firms than this. That's only a partial list,

Mr. Chairman, of the firms in British Columbia and in Canada that will

be doing business with Expo through Specialty Mfg.

I am told by the management at Specialty that they will be choosing

about 1,500 items to market at Expo, both on and off the fair grounds.

They calculate that they will be reviewing some 15,000 items. They will

be reviewing and looking at some 15,000 and choosing 1,500. So I'm

sure, Mr. Chairman, that people can realize that it is virtually

impossible for everyone who makes something to do business with Expo

86. But it's hardly the doom and gloom picture that's been painted

across the way, that no B.C. firm or Canadian firms can do business

with Expo.

I don't have the figure at my fingertips on the food revenue that

the member asked. I will try to get that for him before my estimates

wrap up in a few minutes.

SOME HON. MEMBERS: Oh, oh!

HON. MR. RICHMOND: They're going to wrap up, as far as I'm concerned; maybe not as far as you're concerned, but they are as far as I'm concerned.

Interjections.

HON. MR. RICHMOND: No, I'm leaving. That's all I've got to tell you. I have important things to do elsewhere.

Interjections.

HON. MR. RICHMOND: I didn't say "more important." I said I

have other important things to do elsewhere. So if we don't get

finished today, I'll be happy to see you next week or the week after or

the week after. You won't hurt my feelings, Mr. Member, if we're here

in August. It won't bother me a bit.

MR. CHAIRMAN: Order, please. Remarks should be through the Chair, and not directed to other members.

HON. MR. RICHMOND: I'll be very happy to sit here through July, August and September to get through these pertinent questions.

The member for Vancouver East makes an allegation again that is

simply not true: that we decided not to proceed with a north gate

because of the restaurants in proximity to Expo. Nothing could be

further from the truth. I don't know where he dreams these up. I think

they must come to him in some kind of weird vision in the middle of the

night sometimes.

The north gate at Expo was cancelled strictly for fiscal reasons,

strictly because we did not have the budget to proceed with it. It was

made strictly for financial reasons. I don't have the figure at my

fingertips, but it was in the order of close to $50 million, and I

stand to be corrected, that we had to save by shutting down the whole

north

section of that fair — not just the gate, but the whole

section

from the Georgia Viaduct north, after taking a very close look at the

budget. It wasn't an easy decision to arrive at. These decisions aren't

taken lightly. It was decided to save that roughly $50 million by

shutting down the north side of the fair. Yes, the cost of only putting

in a gate was in the neighbourhood of $2 million, but it created many

other problems which the people and the engineers at Expo said we just

could not overcome by putting a gate there.

The member also forgets, conveniently, another gate. He leads the

House to believe that there's the Yaletown gate by the CPR roundhouse,

and the next one is way over on Terminal Avenue. He has forgotten the

stadium gate that is between those two, not very far from where the

north gate was. A little further, granted, but he conveniently forgets

the stadium gate, one of the largest gates at the fair. "Oh," he says —

very convenient — "I just forgot that." It's like forgetting to talk

about the $3 billion in economic activity when you talk about a cost of

$300 million. It's convenient to forget the other side of the ledger,

Mr. Member.

He talks about having the in-and-out pass privileges at the fair as

if we're going to go back to the first fair that was ever put on and

reinvent the wheel. Of course the people will be able to pass in and

out of the fair. Not only that, they'll be able to get on the ALRT and

ride it at no charge around to the Canada Pavilion on Burrard Inlet and

go back and forth as many times as they want. So I think questions like

that are of a very specious nature. I think they must come to him in

some kind of vision in the middle of the night.

I don't want to leave the impression with this House or with anyone

else that there are only two gates to the world's fair in 1986. He also

forgets about the gate at the Canada Pavilion that people can enter and

ride either by ferry or by ALRT at no charge, or take a leisurely

stroll through Gastown and Chinatown and arrive at the stadium gate at

the fair.

MR. MacWILLIAM: Mr. Chairman, we have a project here through

Expo 86 that has been a major economic thrust of this province for the

past few years, and will be until it closes. We have a public

expenditure of over $802 million going into this fair; an overall

budget of $1.5 billion. It's our one big apple in the economic pie, our

one big hope for a grasp at economic recovery, and this minister is

refusing — absolutely refusing — to table any of the details of the

cost benefit analysis of the fair that has been done. He is refusing to

table the details of contracts that have been let without competition

to Specialty Mfg. — a $75 million contract. He is refusing to table the

details of the cancellation of the bid for the opening of the fair when

they decided to hire the gentleman from California. He won't give us

any information as to why that decision was made. He will not show the

audited statements of the expenditures of Mr. Bartlett since the

incident with the purchase of the Mercedes-Benz and secret meetings

down in California. He has failed to make public the contracts for the

supply of the magazine for the fair. He is refusing to make public

those contracts and expenditures that

[ Page 6764 ]

should be made public, because Expo 86 is a Crown

corporation and he's indebted to the public for a full accounting of

his expenditures and carryings-on.

The minister has said that there's adequate Canadian participation

in the provision of souvenirs and supplies to the fair. I want to relay

to the minister an

article that appeared in the Sun only today, and I'm going to quote from it:

"A Korean delegation listened silently Tuesday while

B.C.'s garment manufacturers urged the Canadian government to restrict

an application to import 1. 5 million Korean T-shirts for Expo 86. To

the manufacturers, the T-shirt deal is one more blow to an industry

employing over 12,000 British Columbians. Henderson said layoffs are

increasing; manufacturing plants are running at 50 percent below

capacity.

"Expo Souvenirs, operated by U.S.-owned Specialty

Mfg., can obtain quota to import 300,000 T-shirts from Korea. The

U.S.-owned company has applied for the federal government to import an

additional 1.2 million shirts outside the normal quota restrictions."

That's only today, and the minister is saying that the British Columbia

industry has plenty of opportunity to bid. Well, here's the industry saying

that that is not correct, that they're losing out. Why should the Korean

firms have access to so much of the supply?

Going back to my original question, I want to re-emphasize this

question because I want to get some answers from this minister. When is

this minister going to table and make public a detailed cost-benefit

analysis of the fair? When is he going to make available the details of

the contract to Specialty Mfg.? When is he going to make public the

details of the contract to supply the souvenir magazine for the fair

which was let without full public bid? When is he going to make the

details of this information available? I reiterate to the minister that

it is of public concern; there is an outcry out there in both the media

and the public that you are hiding information from us. It raises a lot

of questions as to what the devil is going on. I think as a matter of

public responsibility you should supply this information.

Mr. Chairman, in light of the time, I would at this point move that

the committee rise, report progress and ask leave to sit again.

The House resumed; Mr. Strachan in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. Mr. Nielsen moved adjournment of the House.

Motion approved.

The House adjourned at 11:56 a.m.

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