1979 Legislative Session: ist Session, 32nd 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, JULY 3, 1979

Afternoon Sitting

[ Page

459 ]

CONTENTS

Routine Proceedings

Oral questions.

Native traplines. Mr. Passarell –– 459

Sale of Crown land through realtors. Hon. Mr. Chabot –– 459

British Columbia Government News. Hon. Mr. Curtis replies –– 461

Radiology safety procedures. Mr. Macdonald –– 461

Committee of Supply: Ministry of Energy, Mines and Petroleum Resources estimate s.

On vote 75.

Mr. Skelly –– 462

Hon. Mr. Hewitt –– 462

Mr. Skelly –– 462

Mr. D'Arcy –– 463

Hon. Mr. Hewitt –– 465

Mr. Davis –– 467

Mr. Skelly –– 468

Hon. Mr. Hewitt –– 469

Mr. Lockstead –– 470

Hon. Mr. Hewitt –– 472

Mr. Skelly –– 473

Hon. Mr. Hewitt –– 474

Mr. Lockstead –– 474

Hon. Mr. Hewitt –– 474

Mr. Mussallem –– 475

Mr. Nicolson –– 476

Mr. King –– 477

Mr. Passarell –– 478

Hon. Mr. Hewitt –– 478

Mr. King –– 479

Hon. Mr. Hewitt –– 479

Mr. Lockstead –– 480

Hon. Mr. Hewitt –– 480

Mr. Leggatt –– 480

Hon. Mr. Hewitt –– 480

Mr. King –– 480

Hon. Mr. Hewitt –– 481

On vote 82.

Mr. King –– 481

Hon. Mr. Hewitt –– 481

Mr. Skelly –– 481

Hon. Mr. Hewitt –– 481

Mr. Hanson –– 481

Hon. Mr. Hewitt –– 481

On vote 88.

Mr. Hanson –– 482

Hon. Mr. Hewitt –– 482

Committee of Supply: Ministry of Attorney-General estimates.

On vote 19.

Hon. Mr. Gardom –– 482

Introduction of Bills

New Westminster Redevelopment Act, 1979 (Bill 21). Hon Mr. Vander Zalm.

Introduction and first reading –– 484

Education Statutes Amendment Act, 1979 (Bill 18). Hon. Mr. McGeer.

Introduction and first reading –– 484

Provincial Homeowner Grant Amendment Act, 1979 (Bill 19). Hon. Mr. Vander

Zalm.

Introduction and first reading –– 484

Presenting Reports

Audited

financial statements for the year ending March 31, 1979, of the British

Columbia Educational Institutions Capital Financing Authority.

Hon. Mr. Wolfe –– 484

Ministry of Environment annual report for the year ending December 31, 1978.

Hon. Mr. Mair –– 484

The House met at 2 p.m.

Prayers.

MR. KING:

Visiting from the fair city of Prince George are Mr. and Mrs. Dan

Wolsfeld and Mr. and Mrs. Bill Weir. I ask the House to join me in

extending a warm welcome.

HON. MR. WATERLAND: Mr.

Speaker, in the gallery today is a good friend of mine and my family's.

He helped our three children through their various childhood diseases

and I ask the House to please welcome Dr. Gordon Tomm.

MR. BARNES:

Mr. Speaker, in the gallery with us this afternoon are some good

friends of mine, Mr. and Mrs. Armando Boullon. The ladies are my mother

and my sister, Ethel Williams from Portland, Oregon.

I would

like to make one brief comment without getting into any speech. As you

know, I would never abuse the rules of the House. My mother and her

husband have travelled from Los Angeles to be with us on this occasion.

She made a very wise decision when she brought my sister and I up north

from New Orleans back in 1941. I made a very important decision when I

left where she brought us to to came to British Columbia. I would like

to congratulate her on her wise judgment and my decision to go on even

further. That's why you are blessed with my presence today, Mr.

Speaker. [Laughter.]

MR. DAVIDSON: In the gallery

this afternoon are Mayor Ernie Burnett of Delta and the administrator

for Delta, Mr. Mike Allen. I would ask the House to give them a very

warm welcome.

MR. BARBER: Another couple here are the

parents of the president of the Victoria New Democratic Party, Bob

Milne. I'd ask the House to welcome Gordon and Beth Milne come from the

Continent.

Oral Questions

NATIVE TRAPLINES

MR. PASSARELL:

I'd like to address this to the Minister of Environment. Our native

people are becoming a little disfranchised with the trap line

regulations — and I know we talked about this a bit last week. Certain

individuals are losing their livelihood through the loss of traplines,

and the question is: is the minister going to allow native traplines to

be put up to the highest bidder?

MR. SPEAKER: The question is not in order. Does the minister wish to reply?

HON. MR. MAIR:

Yes, and I would say the member brought the situation to my attention

last week. I told him I would look into it, and my ministry is looking

into it.

MR. PASSARELL: On a supplementary question, the other day the wildlife

commission in Fort St. James made a public statement about trap line bidding.

I'm wondering if the minister can assure the native people of this province

their traplines will be secure.

MR. SPEAKER: This is part of a question taken on notice. Does the minister wish to reply?

HON. MR. MAIR:

I can only repeat what I said before. The ministry will look into the

matter, and I don't know what more I can say to the member. I certainly

don't want to see anybody put out of business, but until I know the

parameters of the problem and what solutions might be brought to bear,

I can hardly answer.

SALE OF CROWN

LAND THROUGH REALTORS

HON. MR. CHABOT: Mr. Speaker,

the member for Prince Rupert (Mr. Lea) asked questions regarding the

Hayesville mobile-home park in Prince Rupert and the allocation of

Crown land to the real estate industry for speculative purposes.

The

Hayesville mobile-home park, with a total of 100 pads, was developed in

1974 by Dunhill Development Corporation, a development firm acquired by

the former government. The mobile-home park is one of the many bungled

projects inherited by this government. Not only was the project in

excess of market requirements, but it was developed with no detailed

cost estimates, no feasibility studies and no accurate or useful soil

studies. The market value for these mobile-home pads in Prince Rupert

is estimated to be $12,000 each: the inherited cost is $21,000 per pad,

with additional remedial work required on 17 vacant pads to improve

drainage and sewage disposal. These 17 vacant mobile-home pads have not

yet been listed for sale.

In his questions the member

attempted to convey the impression that the Crown is disposing of raw

land in Prince Rupert to the real estate industry for speculative

purposes. He knows that this is inaccurate, but persists in his

distorted questions.

Interjections.

MR. SPEAKER: Order, please, hon. members.

MR. KING:

On a point of order, Mr. Speaker, the minister is completely distorting

the purpose of question period by entering into debate and answering in

a very argumentative fashion to specific questions. I suggest to you,

sir, that he's out of order.

MR. SPEAKER: If the hon.

member would please direct us to the measure that puts him out of

order. I'd be happy to draw it to his attention. I would suggest,

however, that the manner of speech chosen, both in questions and in

answers, should be that kind of speech which is perhaps best described

as moderate. Perhaps the hon. minister could keep this in mind.

HON. MR. CHABOT:

Continuing with the answer to the complex question asked, marketing

arrangements through the Housing Corporation of B.C. had become too

costly. In an attempt to recover a portion of the cost involved in this

Dunhill development, the Ministry of

[ Page 460 ]

Municipal

Affairs and Housing established marketing procedures in 1978. Those new

procedures were designed to more expeditiously effect sales of this

stagnant development.

Of the remaining 52 mobile-home pads,

35 were listed with the Multiple Listing Service of the Northwest Real

Estate Board. The balance of 17, which were subject to remedial work,

have not been listed. The normal sales commission for these

transactions is 10 percent. The ministry has negotiated a 5 percent

commission for the sale of the 35 pads that have been listed. The

current practice is to list with Multiple Listing Services properties

that are considered costly to dispose of through ministry or agency

services.

This mobile-home park that started in 1974

represents a capital outlay of over $2 million and, under the

circumstances, there is a need to consider recovering a part of this

expenditure at the earliest opportunity. All sales are contingent on a

mobile home being located on the site within six months of the sale

date. Some of the lots have been sold to Atlin Rentals, and they must

locate a mobile home on the site within six months.

This

procedure of selling mobile-home pads through Multiple Listing Services

is the most cost-effective for this project, and is an improvement over

previous arrangements. The previous government, through the acquisition

of Dunhill Development Corporation, acquired a subsidiary called

Venture Realty. It was common practice to utilize Venture Realty as

both a listing and buying broker. This generally resulted in the

payment of higher fees than we have presently been able to negotiate

with the real estate industry, as payments are governed by the standard

commission splits between listing and selling broker.

could give you many examples of sales and purchases through Venture

Realty which involved Wall and Redekop, Block Brothers and other majors

in the industry, all splitting commissions both ways. As an example, a

large condominium development called Passmore Place was marketed

directly by the ministry. This project was marketed prior to December

1975. At the conclusion of the marketing program, the last few units

were listed with the real estate industry, rather than have Dunhill

bear the direct cost of a full-time salesperson. The selective and

occasional use of the real estate industry made sense in the past, and

still does.

The member for Prince Rupert also asked whether

the ministry had accepted any down payments from Kaien Consumers Credit

Union for the following lots: 48, 49, 51, 52, 53, 55, 57, 61 and 73.

The answer to this question is yes. The Housing Corporation of B.C.

accepted deposits from Kaien on all the lots referred to, accept No.

73, but there were no negotiated contracts on the sale of these lots.

These

were accepted in November 1977. In November 1978, pursuant to advice

from Kaien's solicitor, the Housing Corporation of B.C. advised the

ministry that Kaien had no further interest in the lots referred to,

except for lot 57, which was subsequently sold to Kaien.

The

ministry was not aware that the Housing Corporation of B.C. had not

returned the credit union deposits until late April 1979. Arrangements

are now being made for the return of these deposits to Kaien Consumers

Credit Union.

To summarize, the whole project started in

1974 by Dunhill was premature and costly and there is a desire to

dispose of these mobile-home pads as soon as possible to recover costs

incurred. The approach does not deviate from methods 'Utilized by

previous governments.

MR. LEA: Can the minister tell

me whether there was Crown land from Hayesville sold to real estate

firms on which they would put on a mobile-home unit, and then before

six months they were allowed to sell it? If they're allowed to buy it

and then sell it later for more money, would the minister say that this

is speculative on the part of the buyers?

MR. SPEAKER: Order, please. A further question?

MR. LEA:

The minister went to great lengths to say that when we were in

government, we had also utilized real estate agents to sell land on a

commission basis. Is the minister now saying that we allowed real

estate firms to buy land for speculative purposes? Is the minister

saying we did that when we were in government?

HON. MR. CHABOT: The answer is yes.

MR. LEA: Would the minister then be willing to tell me now exactly where that took place?

HON. MR. CHABOT: Mr. Speaker, I will be glad to bring a list of the properties involved, the purchasers and the sellers.

MR. LEA: One more question. I would like to get one other thing straight. I think that the real estate firm

MR. SPEAKER: This is question period, hon. member.

MR. LEA:

Yes, that's right. The real estate firm that the minister said the

Housing Corporation had utilized was a subsidiary of Dunhill, did he

not?

HON. MR. CHABOT: It was acquired at the same time Dunhill was acquired.

MR. LEA:

Would the minister then say that any money that went to that real

estate firm which was acquired by Dunhill would have ended back in the

hands of the people through a Crown corporation?

HON. MR. CHABOT:

Mr. Speaker, their deals with Wall and Redekop, Block Brothers and

other major real estate firms in the Vancouver area did not return any

revenue to the Crown.

MR. LEA: One final supplementary question.

MR. SPEAKER: We had already concluded that the last one was the final question.

MR. LEA:

I'd like to get it clear: is the minister saying that when we were in

government, through the real estate firms he mentioned — Wall and

Redekop — we actually sold land for speculative purposes?

HON. MR. CHABOT: The member is asking to utilize another question period. I'I be glad to bring a list, and

[ Page 461 ]

when I've compiled it I'I use the full question period to give the answer, because it's massive.

MR. LEA: Yes, I'm sure it is. [Laughter.]

B.C. GOVERNMENT NEWS

HON. MR. CURTIS: In answer to a previous question of the second member for Vancouver East (Mr. Macdonald) with respect to the mailing of B.C. Government News ,

I am informed that four public service employees were engaged in the

Vancouver area during the period mentioned by the hon. member with

respect to distribution of B.C. Government News .

Overtime amounted to 4 hours and 30 minutes, and travel expenses for

these employees amounted to $530.92. The overtime was incurred only by

the acting supervisor. I trust that is the information the member

sought.

RADIOLOGY SAFETY PROCEDURES

MR. MACDONALD: I want to ask a question of the Minister of Health.

view of the widespread concern that the public is being exposed to

unnecessary and excessive doses of x-rays in dental, hospital,

chiropractic and private clinics, is the minister considering a study

by the B.C. Research Council on all aspects relating to the training

and licensing of all operators, the safety and inspection of x-ray

equipment, and other related safety procedures?

HON. MR. McCLELLAND: No, I haven't been considering that study by the B.C. Research Council.

MR. MACDONALD:

In view of the seriousness of the situation, and the report in Ontario

of Dr. Kenneth Taylor that excessive radiation has caused 20 needless

leukemia deaths — I don't know whether it's true or not — it obviously

indicates a dangerous situation when the head of their radiation

hospital in Toronto can make that statement. In view of reports that

there have been such fatalities in British Columbia, will the minister

reconsider and be prepared to advise the House as to whether he is

prepared to look into the safety aspects of radiation procedures?

HON. MR. McCLELLAND:

Mr. Speaker, I didn't say that I wasn't prepared to look into the

safety aspects of radiation procedures. I simply said that I wasn't

contemplating, at the present time, a study by the B.C. Research

Council. I'm not so sure that that would be the agency to carry out

such a study.

Yes, I'm prepared to consider such a study.

I'd want to talk to the officials in my ministry and get their

opinions. We do have, in my opinion, a better method of making sure

that the proliferation of radiology in the province is handled well

through the Radiology Advisory Council and through other ways, so we're

fairly careful about where radiology equipment goes and how it is used.

But, yes, I'I take those questions under advisement and perhaps I could

comment again on them during my estimates or at some future time.

MR. COCKE:

Mr. Speaker, I rise on a point of order. The Minister of Lands, Parks

and Housing (Hon. Mr. Chabot) abused question period today beyond, I

think, any precedent in this House — 8 minutes and 45 seconds to give

an utterly irrelevant answer. I wonder if he could be directed to

contain himself, because not only did he do that, Mr. Speaker, but he

threatened the House by suggesting that next time he'I take up the

entire question period. What kind of nonsense do we have to put up with

in this House!

MR. SPEAKER: On the point of order,

perhaps I could give the House some insight into the previous rulings

of the Chair into this very same matter. We have at least four pages of

instructions to the Chair as to how to conduct questions in question

period, but I must say that my hands are tied with regard to

instructions as to how to handle answers. Whoever designed the concept

of question period for our House simply says this: "It is my

recommendation that whenever an hon. minister has a lengthy answer to

any question taken on notice, the minister concerned advise the House

of the same and file an answer outside of question period." It is a

recommendation, not a ruling, and on many occasions I think we've heard

the Chair make that same recommendation to hon. members.

Hon.

members, if there are to be further rulings by which answers are to be

regulated, then those will have to be made a matter of discussion,

either through a committee or by this House, and put into the hands of

the Chair so that the Chair can be empowered to do something about it.

HON. MR. CHABOT:

On the same point of order, Mr. Speaker. I recall that at the time the

question was put by the member for Prince Rupert (Mr. Lea), you had

suggested that the question was a detailed and technical one, and

therefore would involve a detailed and technical answer. You had

suggested at that time that the question might be more appropriately

put on the order paper for a written answer to be conveyed to the

member. I think your advice was wise at that time and is still wise

today, Mr. Speaker.

MR. COCKE: On the same point of

order, Mr. Speaker, the minister could not have put a political speech

on the order paper — and that's what we're talking about.

MR. SPEAKER:

Order, please. Hon. members, may I point out an abuse that is taking

place at the moment? We are using points of order to carry on a debate.

I can accept another observation on the point of order.

MR. LEA:

Mr. Speaker, possibly in helping you to decipher the rules we should

have the facts in front of us. Yes, it was a lengthy answer, and I

appreciate the answer. But at the same time I think it should be

pointed out to you, Mr. Speaker, that the answers were an accumulation

of questions over a three-week period. Had the minister answered each

question more promptly, he wouldn't have had the need to do that. He

accumulated all the questions and then chose to come in and try to

answer them all in one day.

MR. SPEAKER: Hon.

members, I would remind the House about the provisions that are made.

Provisions are made that a minister of the Crown may, at his

discretion, take a question as notice and return the answer at his

discretion. I think that is what we have witnessed here today.

[ Page 462 ]

Orders of the Day

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

ESTIMATES: MINISTRY OF ENERGY,

MINES AND PETROLEUM RESOURCES

(continued)

On vote 75: minister's office, $91,533 — continued.

MR. SKELLY:

Mr. Chairman, I believe the minister had collected a series of

questions from us at the end of Thursday's sitting, and he was planning

to answer them today.

HON. MR. HEWITT: The first

point raised by the member for Alberni (Mr. Skelly) had to do with the

500-kilovolt line from the mainland to Vancouver Island. I think he

questioned its need. Also, he referred to a Helliwell and Cox report

indicating there was a plentiful supply of energy from the use of wood

waste.

The 500-kilovolt line is needed because of a number

of developments. As the member knows, there are Crown Zellerbach's

proposed Elk Falls construction, Doman Industries at Duke Point and

MacMillan Bloedel's proposed expansion at Alberni in the member's

riding — I'm sure he'd want that to go ahead.

The Helliwell

Cox report was reviewed by the industry and by the Ministry of Energy.

I believe — and the member can correct me — that the Helliwell Cox

report talked about 163 megawatts of power that could be generated from

wood waste. But there is some question whether there is that amount of

hog fuel available on the Island. When you look at the practicality of

it, it's somewhere between 50 and maybe 100 megawatts of power

production. Crown Zellerbach is already planning a 25-megawatt unit at

Elk Falls, and B.C. Forest Products is planning somewhere between 20

and 40 megawatts capacity at Crofton. That uses up a substantial amount

of energy that can be generated from wood waste.

The Crown

Zellerbach announcement of not too long ago said that they felt they

could handle their power requirements, but the member will recall it

was conditional on the Hydro transmission line getting to Vancouver

Island.

The Helliwell Cox report indicates that we can use

wood waste as an alternative source of energy. As a matter of fact, we

are taking advantage of it. Approximately 17 percent of the total

energy generated in this province comes from wood waste at the present

time. But that is not a substitute for the Hydro 500-kilovolt line.

think the member also mentioned the cost of the 500-kilovolt line, that

originally it was estimated at about $375 million, and now the figures

are over $600 million. The original estimate of B.C. Hydro was

approximately $480 million and the latest estimate is about $640

million. The major part of that increase is the cable costs, but B.C.

Hydro is working with the makeup of the estimate. We feel that we

should be able to bring in the 500-kilovolt line at something

considerably less than $640 million.

You raised a point

about who is responsible for the forecasting of energy demand. The new

Ministry of Energy, Mines and Petroleum Resources will be responsible

for developing some basic assumptions to go into that detailed

forecast. We will provide some of the overall direction in the

forecasting, and will consider factors such as the gross provincial

product, the rate of our economic development in the province and

population growth in the province. We don't want to end up with the

public debate that we've had over the past years with the B.C. Energy

Commission coming up with some basic facts on which they start to do

their forecasting, while B.C. Hydro is doing the same thing. Through

input from my ministry, Economic Development, B.C. Hydro and the Energy

Commission we could come up with some basic facts which would bring

that 10- to 15-year forecast closer. We're not trying to hide anything,

nor would we be trying to end up with, you might say, one that would

make everybody happy.

What I would see is that we could come

in with those common denominators. But then you're going to see

variances because of the involvement of Hydro and the Energy

Commission, or the ministry, in all sources of energy in the province.

So there's merit in having Hydro doing its study, starting from the

same point as the ministry, with some basic assumptions.

You mentioned solar energy or solar technology, and you said you're going to send me articles. I think they're from the New Yorker

magazine, and my staff has provided me with them. I don't know whether

they got them from you or whether they had them on file. I haven't had

the opportunity to read them yet, but I have them here.

regard to energy conservation, you're aware that we signed a $27

million agreement. This, I think, will go a long way in assisting us to

become more energy-efficient in looking at the solar energy scene, the

geothermal research that is going on, wind energy, wood waste and tidal

sources. All are areas we can look at in regard to research,

technology, demonstration, et cetera.

The member for Nanaimo

(Mr. Stupich) is probably familiar with the organization — Wooex

Systems Limited — which deals with wood waste pellets. I met with that

company some months ago, and I asked them to send me some more

information. It's the same process as dehy pellets for alfalfa. One

plant in British Columbia is producing some 75,000 tons of these wood

waste pellets, which is equivalent to some 200,000 barrels of oil, and

is a process being used in the United States, where their sales are

going.

I've had them meet with an outfit called Kootenay

Dehy Products who work some of the alfalfa pellets. This is the same

concept, and maybe we can have a dual purpose for that plant that

suffers some financial difficulties.

I'm not sure, Mr. Member, whether I've answered all your questions but those are the ones I made notes on.

MR. SKELLY:

The minister mentioned economic problems with hog fuel and the

availability of hog fuel on Vancouver Island — that was also outlined

in the Helliwell and Cox report. Some of the problems they were facing

with the economic area are presented by B.C. Hydro and the fact that

Hydro wouldn't pay a sufficient price for power generated on Vancouver

Island by using hog fuel. Because Hydro refused to purchase at the cost

of production — and Hydro themselves sell below the cost of production

— that was an economic barrier to the production of energy or to the

co-generation on Vancouver Island, using hog fuel. Helliwell and Cox's

report also mentioned that because of certain changes taking place in

the industry on Vancouver

[ Page 463 ]

Island

it's likely that more hog fuel will be made available. For example, in

the Alberni Valley, due to the fact that they're changing to a more

efficient process — two of the sawmills are now being revamped — more

hog fuel should be available as a result of those changes.

[Mr. Davidson in the chair.]

article came to me from an information newsletter published by the

Swedish Pulp and Paper Association in April 1979. A plant in Sweden is

changing over by 1980 to complete wood energy generation — and I

hesitate to try to pronounce the names of the companies involved — but

the cost of capital to change over is about 80 million Swedish crowns.

They're using wood waste, bark shavings and sawdust, as well as peat.

They're also developing energy forests; that is, timber that's

non-merchantable, that can't be converted to liner board, which is the

production of this mill. They estimate they'll be saving some 50,000

cubic meters of oil, which they presently use annually. I don't know

why it's possible to do this kind of thing in Sweden; the Swedes boast

that they're far ahead of our forest industry in environment protection

and in the generation of energy from wood waste. I can't see why we

can't develop in British Columbia the same technologies that are being

put in place in Sweden now, and will be competing with us, even though

our forest industry continues to rely on high-cost electricity, on

high-cost oil and on high-cost natural gas.

Eventually the

economics are going to dictate that we have to switch over to burning

an indigenous fuel like wood and using wood wastes. Yet it seems to me

that we are delaying to the point where it's going to cost our forest

industry even more, and we may lose the competitive advantage as a

result.

The minister mentioned Woodex industries. It's

interesting that about two years ago I wrote to Woodex, in Brownsville,

Oregon, asking them about their process, and they sent me quite a bit

of material on it. I then wrote to the Economic Development minister

and to the B.C. Development Corporation, who said that the process was

partially workable but the gasification process was a waste of time.

Then, interestingly enough, one of the directors of the Development

Corporation formed into a partnership with Mr. Madill to buy up the

process. He received the licensing for it in Canada — a bit of a

conflict of interest, it appeared on the surface. But then they set up

Western Industries Ltd., which operates out of Duncan or Nanaimo to

develop the process and use it here in British Columbia, and set up a

plant in the Interior, although I believe the ownership has now changed

on that. Doman may be out of it.

The minister also touched

very lightly on solar power, and the availability of solar technology.

It seems to me that this minister has an orientation towards nuclear

power. He said so himself, and there's an

article in the Osoyoos Times , a reputable newspaper, in the minister's own writing, I believe.

any case, the minister said that he was one of three in that cabinet

who is in favour of the development of nuclear power. He included the

Minister of Education. Science and Technology (Hon. Mr. McGeer) and the

Minister of Municipal Affairs (Hon. Mr. Vander Zalm), who's easily

intimidated, but he's not here at the moment.

One of the

things we are concerned about is that if the Minister of Energy, Mines

and Petroleum Resources and this government are predisposed to the kind

of energy technologies we've had in British Columbia up to the present

time — large. centralized generating facilities, extremely expensive

transmission facilities that are increasing rapidly in cost — they are

eventually going to price British Columbia out of the energy market.

pointed out to the minister that

article in the New Yorker to show that

some solar technologies have an advantage. By increased utilization of

those technologies, the price goes down. The

article written by Barry

Commoner mentions that a study done in the United States, under the

Photovoltaics Research Development and Demonstration Act of 1978, shows

that by government involvement in that technology the cost for a peak

watt — using photovoltaic cells — goes down from $8 to $12 a watt when

the program first starts, to something like 50 percent for a peak watt

after five years. The idea of that was just to demonstrate that while

the cost of some energy technologies is increasing, and the cost of

non-renewable energy fuels is increasing at a geometric rate, the cost

of solar technology is declining. Certainly in British Columbia we

should be taking advantage of low-cost solar technologies if they are

available to us.

The other advantage of these technologies

is this: those technologies will be far more exportable to Third World

countries because of the fact that they don't already have in place the

electric grid systems and the centralized generating systems that we

have here. There's a tremendous trade and market advantage — in fact

the exact reverse of what's going on now — to sell these technologies

in the Third World countries because of their better adaptability in

those countries. The thing is that now we're spending something like

$90 million a year through government research and development on

nuclear energy. On renewable energy we're only spending something like

$13 million. On conservation we're spending S16 million. So there's a

tremendous bias in the way we spend money in this country on research

and development in favour of nuclear power and centralized generating

technologies, which really don't have that much of a market in the

Third World.

If we were to concentrate on solar technologies

— wind, Photovoltaics and passive solar systems — we could be

developing products which would have a tremendous market in those Third

World countries in the future, and it would mean tremendous business

generation here in British Columbia and Canada in the form of exports

to those countries. So I'd just like to encourage the minister, when

he's considering developing an energy policy, to took at that aspect of

solar technologies.

MR. D'ARCY: I would like to welcome the minister to his portfolio.

have just a few questions, some of them actually involving Mines and

Petroleum Resources as well as Energy. I know the minister is one of

the few on that side of the House who usually answers questions in a

reasonably forthright and articulate way.

Mr. Chairman, for

three and a half years now we've been hearing from the minister and his

two or three predecessors as Energy minister that the government was in

the process of establishing an energy policy. Are we going to be in a

position where the government doesn't want to ruin a good announcement

by actually doing something about it? Are they actually going to

formulate an energy

[ Page 464 ]

policy?

Or are they going to authorize some other competent body, perhaps

including the B.C. Energy Commission, to bring in recommendations on

energy policy that the government and even the Legislature can have a

look at? Certainly when we look around the province and around North

America today, a comprehensive energy policy is something that is of

premier importance, particularly when we look at the increasing

shortages in North American supplies of liquid fossil fuels, petroleum

resources, our undeveloped coal resources and the various non-glamorous

options that my friend from Alberni (Mr. Skelly) was recently

mentioning in the House, which have not had research and development

put into them in any way, shape or form.

Mr. Chairman, I

would like to ask the minister whether he and the government that he is

representing in this capacity in the House have any policy for

facilitating the delivery of either offshore oil to North America or

the delivery of Alaskan oil to what is commonly known as the "lower

48." Or do they simply plan to drift along and wait until British

Columbia gets into the kind of crunch that we have south of the border?

think we in B.C. certainly want and need an alternate source to Alberta

crude not only from the point of view of assuring an energy supply, but

also in terms of our bargaining power with the government of Alberta,

whoever it is. It's rather important that we have alternate sources,

either Alaskan or our own Canadian North Slope oil, both of which are,

geologically speaking, substantial reserves, although they are unproven

as yet. And we should certainly be looking at any offshore oil that may

be available to us from Asiatic countries.

[Mr. Rogers in the chair.]

Mr.

Chairman, I would also like to ask the minister whether or not he has

any knowledge of an application by Westcoast Transmission Co. to the

National Energy Board for the right to complete the looping of their

major gas line from the Peace River country into the lower mainland.

The province has a pecuniary interest in this company through BCRIC,

and the Premier, I believe, is attempting to negotiate an even greater

pecuniary interest through acquisition of the interest held by

Petro-Canada in Pacific Petroleum. I'm wondering if the minister can

give us any indication whether, when Westcoast Transmission applies to

complete the looping of their major line to secure natural gas supplies

not just to British Columbia, but also to satisfy contracts which they

already have with our neighbours to the south, the government is going

to support that application, or whether it will do as it did last year

and go before the National Energy Board and oppose the application of

Westcoast Transmission to complete that looping, thereby denying

substantial sales of natural gas that were already under contract to

the United States.

Mr. Chairman, I want to make some rather

brief comments regarding potentials for thermal power. Certainly the

subject has already been covered to some degree by my colleague from

Alberni. If we look at the existing pulp and paper operations on

Vancouver Island, we have six potential major biomass sites. I use

"biomass" as being the currently popular term for energy derived from

wood waste and garbage.

Mr. Chairman, I think the House and

the people of B.C. would have an interest in knowing whether or not the

actual development of industrial bulk-use energy from these sites as

well as the recovery of base metals from garbage, both in the lower

mainland and on Vancouver Island, should be looked at, particularly in

view of the much higher base-metal prices that we are currently

enjoying in British Columbia. I hope that they continue for the sake of

our mining industry; and I hope that the reasonable advantage of the

international exchange rate continues as well.

Can the

minister indicate to us whether or not we really have an accurate

assessment of what is available, or what could be available, in terms

of biomass energy resources on Vancouver Island located near to source

and near to load centre, and what the potential for recovery of base

metals from these operations is? Perhaps the minister could also give

us some indication of whether there has been, or whether he is doing,

any investigation into the potential for biomass energy within the

lower mainland. We already have two major thermal operations in the

lower mainland — they don't run all the time, maybe only part of the

time — the Burrard thermal plant and the one at Port Mann.

Perhaps

the minister could tell the House if he is considering at least

investigating the maximization of our energy sources, particularly from

renewable energy priorities near load centres. It has, Mr. Chairman,

long been a concern of mine — and this is going back through two or

three governments — that British Columbia Hydro has never done an

accurate assessment of the cost of transmitting power. We know what it

costs to generate power at the site of the Shrum powerhouse, say, on

the Peace River, or at the Mica powerhouse; we know how much of that

actually arrives in load centres such as the lower mainland through the

500-kilovolt lines; and we know what it costs to distribute. But there

has never been an accurate analysis of what it actually costs to

transmit that power, in losses in the line, in the capital cost, in

depreciation and in maintenance costs of the powerlines. Unless we have

that figure, we can never look at the relative economic feasibility of

biomass generation close to load centre.

Mr. Chairman, I

believe that the time is overdue when we have to maximize all potential

power sources, especially if they are near load centres. Certainly we

would not be in the situation that we now are in on Vancouver Island —

or are going to be in on Vancouver Island — if that had been done in

the past.

Staying briefly with Vancouver Island — because,

in a way, it is a microcosm of the provincial energy problem — can the

minister give us any indication as to whether or not B.C. Hydro is

seriously considering the potential hydroelectric sites on Vancouver

Island? I'm not recommending them at this point; I don't think there is

enough information at hand. If, as my colleague for Alberni (Mr.

Skelly) says, the Cheekye-Dunsmuir line is not attractive, desirable or

necessary, then perhaps the minister could give us some indication

where the Kokish, Ladore 3 and Duncan Bay projects stand. Certainly

there are fishing and environmental considerations with any of these;

but they also produce energy near at least one of the major requirers

of bulk power, that being the Duncan Bay expansion of Crown Zellerbach

Ltd. near Campbell River.

Mr. Chairman, looking at other

energy resources around the province, I would like to ask the minister

whether they are continuing to examine potential geothermal sites — and

[ Page 465 ]

one

in particular near Terrace — on which reserves were put during the

former government's time in office. Perhaps we could have some

indication of where the Kemano 2 project stands.

I would also like to ask the minister, since he is the minister reporting to the

Legislature for British Columbia Hydro, when the government is going to

take a fair position on the question of real property taxation from

British Columbia Hydro. Certainly the government last year, in a very

creditable move, removed any special privilege that government-owned

property had from the point of view of real property taxation.

Government-owned property in B.C. now pays its taxes exactly the same

way as privately owned property. It may come as a shock to those on the

other side that I've always felt that government should never take or

keep unto itself privileges which they are not prepared to extend to

the private sector. I would also say that the time is long since past

when Crown corporations in this province should take or keep privileges

which they are riot prepared to extend to the private sector.

particular, Mr. Chairman, my complaint — and it is the complaint of

many people in the Kootenay area and in the Peace River — against the

government's policy regarding B.C. Hydro has been that B.C. Hydro,

while it does pay full taxes on most of its property in the province —

certainly it does in your constituency, or anywhere else in the lower

mainland — only pays school taxes and not general purpose taxes in

other parts of the province. And on a few projects, Mr. Chairman, they

don't pay any taxes whatsoever.

I would like the government

to keep its act together when it comes to B.C. Hydro property taxation.

There are private companies producing power in this province that pay

full taxes, and always have. There are major Hydro owned properties

that also pay full taxes, and there are a few that don't. Most of those

that don't are in the Kootenays, and one major project is in the Peace.

A very liberal estimate of what it would cost B.C. Hydro to equal up

the ante would be I percent of the total gross revenue. The recently

issued B.C. Hydro annual report showed that the corporation's net

return after all costs was up substantially over the year before. I see

absolutely no reason why this continued discrimination against certain

parts of the province should continue to be allowed to exist. I hope

the minister has something to say on that subject.

Mr.

Chairman, I'm wondering if the minister, in his capacity of being

responsible for the B.C. Petroleum Corporation, can give us any

indication whether Mr. Lechner may be resigning. If he is, can the

minister tell the House who his replacement may be? Certainly the B.C.

Petroleum Corporation with its huge staff of around 24 has been a very

worthwhile endeavour for the province, and I would like to see a firm

hand at the helm. I wish, if indeed the rumours are correct that Mr.

Lechner is resigning, to see that there's a firm hand going to be at

the helm there.

I have one last item. I referred to it

earlier before I invited the minister to answer some of these points.

Can the minister give us some assurance, on this side of the House and

his own party as well and all the people of B.C. that we are not likely

to run into a serious gasoline or heating oil shortage in the

foreseeable future in British Columbia? What steps are he and his

ministry taking to ensure that this kind of situation is not likely to

arise?

HON. MR. HEWITT: Mr. Chairman, maybe I can answer some of these questions before the next speaker gets up.

The

member for Alberni talked about wood waste and the Helliwell Cox

report. I think the report and the member said that maybe the price of

gas or electricity should be increased to force the forest industry to

use wood waste. If that happened, of course, that increased cost, to a

certain extent, would make it uneconomical. The use of wood waste has

to be competitive in the marketplace with other sources of energy. I

think you're seeing, probably, a move in that direction as the cost of

oil moves higher.

The reason that Sweden is moving to wood

waste, or making much more use of it than we do, is for that very

reason — the cost of alternative sources of energy. They haven't got, I

guess, the domestic protection for a barrel of oil that we have in

Canada. Our price for a barrel of oil is much lower than the world

price for a barrel of oil.

The member mentioned solar energy

or solar power on a number of occasions. That is really the key to the

$27 million agreement, and B.C. was the first province to enter into

that type of agreement with the federal government. It deals with

renewable energy sources, and the assistance research technology,

demonstration, et cetera. We can possibly make better use of those

renewable energy sources as opposed to making use of a non-renewable

resource such as natural gas or oil. In dealing with that subject — and

I did speak to the Solar Energy Association in Victoria not too long

ago — hot water heating is one of the areas where solar energy can be

used fairly efficiently. I'm going by memory, but hot water heating

only makes up, I think, about I percent of the total energy

requirement. In other words, it's all right for an individual residence

to make use of it, and some buildings, some apartments, et cetera. But

in the total picture, when you take all sources of energy or the need

for all sources of energy, it only makes up 1 percent.

Regarding

the fact that we have not specifically earmarked more dollars for solar

energy research in our energy agreement, the allocation of those funds

has not been definitely made. There have been suggested allocations,

but in that $27 million agreement, we can adjust.

In regard

to the member for Port Alberni's (Mr. Skelly’

s) question about the

energy policy, I recognize it's a long time in coming. Maybe I can look

back to the years 1973-75 and raise a question or two. I have made

statements generally outlining what I see for an energy policy for

British Columbia, and we have had a good cross-section of staff members

from my ministry, Economic Development, B.C. Hydro, the Energy

Commission, the Petroleum Corporation and consultants working to put it

together and, as opposed to having what I call a considerable amount of

verbiage on paper, attempting to bring in an energy policy because of

the pressures that are on us today to have more direct proposals for

action in British Columbia as opposed to some broad statement that

really doesn't give an indication to industry, trade, commerce, et

cetera, in this province as to what the future holds for them.

talk about the key elements to that policy, there's an

article in the

Oilweek magazine, Mr. Member for Rossland-Trail. You and I each wrote

one article.

MR. D'ARCY: I never saw mine.

[ Page 466 ]

HON. MR. HEWITT:

Well, I want to read you a paragraph from it because I found another

ally in regard to the famous quotations we have around this province

about nuclear power.

What I really wanted to touch on was

the item on the proposed policy statement on energy. It touches on

increasing the security of oil supply and reducing the demand for oil;

encouraging the economic development production of the provincial

energy resources leading to production of energy at realistic prices;

encouraging substitution of natural gas where practical, particularly

for oil; encouraging cogeneration; encouraging efficiency in the use of

all forms of energy; managing energy surplus in the best interests of

the province, including obtaining the best price for exported energy;

ensuring the energy future of the province is adequately protected

before future energy exports are authorized; and encouraging energy

research and developments. These are broad statements, but I'd like now

to put some meat on the bones and come out with some pretty definite

statements as to where we are going.

Just to refer to an

ally, Mr. Member, I'I just read this paragraph in "Natural Gas: Key to

B.C.'s Self-sufficiency." It's written by the MLA for Rossland-Trail.

There is one paragraph in here that talks about nuclear power:

"Evidence

of recent weeks in the United States put nuclear power generation in

British Columbia on the back burner. While we have viable alternative

sources of power, its use should not be contemplated. The unknowns are

many and the risks are great. Simply put, at this point in time it is

neither necessary nor desirable."

I'm not sure what I can

read into that. You're really not against it; it's just that at this

point in time we don't need it. Is that what you were trying to say,

Mr. Member? Nod your, head.

MR. D'ARCY: I'I answer in my estimates.

HON. MR. HEWITT: Anyway, it was a good article.

The

energy policy: I'm hoping that we will be able to "have the meat on the

bones" very shortly. I set a target before the election. By the end of

June I thought we would be in a position to have something down that

could be presented, but I've sort of backed off a bit and figured that

by September we should be in a good position — hopefully before then.

Delivery

of the offshore Alaskan oil: I think you talked about B.C. refineries.

Of course, Alaska oil is basically heavy crude as opposed to the sweet

crude we get from Alberta, but the security of supply of oil is a

concern. There are four oil ports that have been suggested for the west

coast of the North American continent. No decision, of course, has been

made on that as yet.

Concern about the tanker traffic along

the coast: The United States wants to get the Alaskan oil to the United

States, and there are a number of alternatives to be looked at. But

there is that reserve up there of Alaskan crude. However the final

decision is made, it will have to be made fairly soon because of the

pressures on the United States due to the cost of imported oil.

The

Westcoast Transmission Co. application for looping: They did make an

application and they withdrew it, Mr. Member, not too long ago. I think

you asked whether we would support it if there was an application put

in. We have expressed concern with regard to the load factor for our

export of natural gas to the United States. As you know, we've been

caught in that "take or pay" clause, and we feel that our load factor

should be improved if any additional exports go to the United States.

Biomass

in Vancouver Island and lower mainland: Again I refer to the $27

million agreement, and some of those studies will certainly be directed

in that area.

Vancouver Island hydroelectric sites: To my

knowledge there has been no presentation at the director level of B.C.

Hydro in regard to what I think you called Ladore 3 and the Duncan Bay

project.

Geothermal: You mentioned Terrace — are we talking

Meager Creek? I guess it's between Pemberton and Terrace. Where's that

project? Hydro has spent some dollars on the research of it. They've

done some test drilling and there'I be additional work done. Out of the

federal-provincial agreement, some of the first dollars to be spent

will be on that research to see whether or not it can be feasible.

I'm

attempting to get some information regarding B.C. Hydro and taxation or

assessment. I will certainly review the matter, Mr. Member, regarding

whether or not they're getting any unwarranted breaks. I'm looking at

the Minister of Finance (Hon. Mr. Wolfe) here because he's probably

made a note of it, too.

B.C. Petroleum Corporation: Mr.

George Lechner has advised he will be resigning. In the interim period,

I have had discussions with him that he may be able to carry on on a

per diem basis in order that the transition can be made smoothly.

Your

final question dealt with a gas shortage in B.C. The Energy Commission

and my ministry have done some studies on it and the position is that

we don't have a gas shortage in B.C. We can handle the demands for

gasoline and we've taken into consideration the amount of tourists that

may come into British Columbia because of the gas shortages in the

United States. But this year we can meet the demand. That's according

to the staff report that reported on that to me.

MR. D'ARCY: Mr. Chairman, I was interested in the minister's

statement that we have the potential for four oil ports in British Columbia.

Does that mean that one will be selected or none, or is there still a potential?

Can we perhaps have some clarification of what he means by that?

course, whenever an oil port is mentioned, there is some considerable

concern expressed by a number of private citizens and various groups in

British Columbia about economic and environmental impacts, not just of

the port on the coast but of the potential for spills and of the

problems which may or may not exist because of pipelines going through

certain areas of British Columbia. Perhaps the minister could clarify

the locations and where the discussions are at on that.

Mr.

Chairman, when I mentioned the potential Westcoast Transmission

application for looping, we weren't talking about increasing the load

factor. What we were talking about was the fact that Westcoast

Transmission's first requirements naturally are to supply its British

Columbia customers, particularly in the lower mainland.

When

we have a very high natural gas demand such as we had for a number of

months last winter because of the nature of the winter and the

increasing costs of other forms

[ Page 467 ]

energy, we find that Westcoast Transmission cannot meet its contractual

obligations for exports because of limitations in the line. It doesn't

have a shortage of gas in the Peace. It doesn't have an increased load

factor. It has a bottleneck because part of its line needs to be

looped; most of it, indeed, is already looped. It needs to complete the

looping in order to meet its contractual obligations to its American

customers.

So that's why we're not talking about increasing

its load factor; nor are we talking about increasing the contracts of

Westcoast Transmission. What we're doing is allowing them to meet their

contractual obligations with gas which is available in British

Columbia, as well as cut down not only the cost to them but the energy

requirements and pumping costs of getting the gas through a line.

Regarding

geothermal power, I was referring to any projects in British Columbia

that the minister may have knowledge of. It appears that neither he nor

B.C. Hydro have a significant interest in investigations, let alone

development, into geothermal power. Certainly there's a Meager Creek

site, the Lakelse site and several others that would be appear to have

had some potential a few years ago in B.C. I don't think geologically

British Columbia has changed significantly in the last few years. I'm

wondering why those investigations aren’t continuing in a significant

way.

HON. MR. HEWITT: Mr. Chairman, comment was made

in regard to load factor in the export of natural gas. I recognize

you're talking about the west coast looping. I mentioned to you that

they have withdrawn their looping application. It isn't before the NEB

at the present time. What we are concerned about, of course, is any

increase in export of natural gas from Canada to the United States. We

should get a better load factor because of the problem that we're in at

the present time with the "take or pay" situation. We always consider,

of course, that the domestic demands must be met in British Columbia

for British Columbians, so we're dealing with anything over and above

what our anticipated requirements are.

You mentioned the oil

ports. They're not all British Columbia oil ports. These have been

known for a number of years, and there's no decision on them, but there

is concern, as I'm sure you've read in the paper, down in the United

States regarding getting that Alaskan crude to the United States.

There

are the Skagway oil ports. Going through the Alcan, there is the

Kitimat proposal, which was studied some time ago. There is the

northern tier pipeline that crosses the northern United States. And

there is Transmountain. Those were the four. I think that answers the

question.

MR. DAVIS: Mr. Chairman, first I'd like to compliment the minister

for making a commitment to introduce a comprehensive energy policy by September

or October of this year. It's a big assignment; it requires a lot of technical

and economic information. But even more. a comprehensive energy policy requires

considerable input on the transportation side, on the environmental side and

particularly on the economic development side. There are a lot of jobs at issue

here. Any development in the energy field affects the local environment. Also

usually it involves long-distance transportation. So all of those aspects — environment,

transportation and economic development — have to be considered, and I'm

glad to hear that a committee, including representatives from the other ministries,

Transportation, Environment and Economic Development, will be making contributions

to this policy.

Also

a policy that's worthy of the name answers tough questions. It simply

doesn't describe the easy issues or the panaceas for the long-term

future; it deals with the issues which are current and which people in

the political arena don't often like to deal with in a forthright way.

For example, to what extent will we use price as a way of rationing

energy? That’s a very important issue it's been an issue in all

countries. It's been less of an issue on this continent because Canada

and the United States are unique in that they have prevented their

consumers from facing the world oil price. They've alternatively

allowed the internal price to rise slowly and in stages and used tax

money or subsidies to bridge the gap between their internal prices and

world prices. I think a policy paper that's worthy of the name must

address this question: will price be used to ration consumption?

Oil

is our biggest problem in British Columbia. We do produce a small

amount. But nearly half of all the energy we use — 45 percent — is in

the form of liquid petroleum products, oil. We bring it in from

Alberta. The Prime Minister of Canada in Tokyo said that Alberta's

production — at least from conventional sources — will be declining

over the next ten years. So hopefully British Columbia will be able to

draw all of its oil from Alberta, but that's a source which is

declining in terms of its volume of output. The tar sands will make a

contribution, but so far the performance of the plants at Fort McMurray

using the tar sands has been disappointing — hence, I think, there are

reasons for pessimism, as expressed by the Prime Minister in Tokyo.

Therefore

I think we as British Columbians must also look north and we must hope

that there are other developments in the Northwest Territories and

Canada, particularly in the Beaufort Sea, whereby Canadian oil can be

brought down using the Alaska Highway route. The British Columbia

government, I think, did more than anyone else to ensure that the

Alaska Highway route was the route to be used for Alaskan gas crossing

Canada for the lower 48 states. Fortunately Ottawa heeded that British

Columbia advice, and fortunately the United States agreed. So currently

we have Ottawa and Washington, D.C., both supporting the Alaska Highway

route for natural gas. But the Alaska Highway route also makes a lot of

sense for oil, particularly for oil which British Columbia may tap en

route. There is a lot to be said for an oil pipeline in the same

right-of-way as a natural-gas pipeline following the Alaska Highway

route, and a lot to be said in British Columbia for a development which

would see oil and gas crossing British Columbia territory before it

crossed that of other provinces. It would mean that British Columbia

would be the first on line, not only for Alaskan oil, but oil and gas

which, hopefully, will be found in considerable volume in the Northwest

Territories and off-shore in the Beaufort Sea. In other words, an

energy policy which is forward looking would not only look to Alberta

but look north, and I believe would look at the Alaska Highway route as

not only the route for a gas line, but also for an oil line which is

very much in the interests of the province of British Columbia.

Still

on the matter of oil transportation, we should press for oil to

continue to flow westward through the Transmountain oil line — Alberta

oil. Perhaps even oil from the

[ Page 468 ]

Northwest

Territories in the long run would flow down across British Columbia, as

it has for 25 years now. We should be concerned with increasing that

volume. If some of that oil is destined for the United States — being,

say, Alaskan oil — so much the better, because it will help to pay our

transportation charges down across British Columbia. In other words,

we'I get something of a free ride, as we did for many years on our oil

transportation costs across this province. We'd have our oil

transported along with other oil, U.S. oil, destined for the United

States.

Very few people in this province are aware of the

Canadian energy policy with respect to oil transportation. There's a

fantastic subsidy going into oil transportation to eastern Canada. We

don't get a subsidy to British Columbia. Alberta oil moving into

British Columbia pays all the costs, and the consumers pay that in the

price of gasoline, house-heating oil, et cetera. But eastern Canada is

subsidized because the whole cost of a new pipeline from Sarnia to

Montreal is home by the federal taxpayer. That transportation cost is

not in the price of oil in Montreal, for example. I believe we should

concern ourselves with equity in that respect. Either Montrealers

should pay the full cost of transportation of Alberta oil, or British

Columbians should receive federal tax dollars to defray the cost of

transporting Alberta oil to British Columbia.

Today the cost

of transporting oil from Edmonton to Vancouver is around 60 cents a

barrel. It's a lesser figure to Toronto and Montreal simply because of

a very heavy, federal tax-supported subsidy; and we help pay those

taxes. So I think we must be concerned with federal transportation

policy when we talk about oil movements, and particularly the cost of

moving oil in this country.

We've got many times the amount

of coal that we have of natural gas, and natural gas is, perhaps, our

next best resource after hydro power. Yet we're using only a tiny

amount of coal in this province; less than 2 percent of our consumption

is coal. Oil is 45 percent; natural gas and hydro are around 20 percent

each. We talk about this abundant coal resource. How are we going to

tap it? An energy policy worthy of the name sees a way of utilizing

that coal, and using it productively. The only acceptable way of using

that coal in any quantity, at least in the next decade or so, is in the

form of electricity.

We must begin to produce electricity

from coal. We've plenty of hydro power, so perhaps we don't have an

internal B.C. requirement in the short term. But in the middle term,

and in order to get experience with the generation of electricity from

coal, I still think we should be burning the waste coal available in

the Kootenays, and exporting it for a term, and always having it

available for our own domestic consumption. It's an environmental

problem now; it doesn't involve a transportation problem, because it

can be transmitted immediately across the border. There's no native

land claim problem; there's no fish problem. It's a type of development

which can provide jobs in the short run, and power and electricity from

a wasting resource in the long return. I think that's a valuable

project, and I think, along with the Alaska Highway development in

respect to oil and natural gas, it should be discussed in any

longer-term policy paper for this Legislature.

Finally, I'd

like to deal briefly with the question of forecasts. Forecasts are

central to any policy paper. A recent set of forecasts produced by the

B.C. Energy Commission showed oil consumption continuing to rise in

this province. That flies in the face, at least, of the forecast made

by the Prime Minister in Tokyo, so one wonders whether this will, in

fact, happen; whether oil consumption will continue to rise in British

Columbia. It shows natural gas consumption rising, but at a very modest

rate. I suggest an effective policy in this province would encourage

the use of natural gas, especially where that natural gas would allow

us to conserve oil. The forecast really shows no improvement in the use

of coal; in other words, we'll use very little coal 10 or 15 years from

now. That resource will remain relatively unused. I hope that policies

are developed whereby coal can be used. At least we can obtain some

experience through converting waste coal to electricity — and exporting

it, as long as it's surplus to our provincial needs.

[Mr. Strachan in the chair.]

There

are other issues that have to be addressed. I think one of the most

important, from a regional point of view, is energy supply for

Vancouver Island. The economics of gas transportation to Vancouver

Island are very lean. However, Vancouver Islanders, being the only

British Columbians who really don't have this alternative, and this

relatively secure source of energy, should have access to it; and that

problem should be addressed in an energy policy paper.

So in

conclusion, Mr. Chairman, I don't have pointed questions for the

minister. But I do look forward to a paper this fall in which all

members must be very interested — one which, I hope, will deal with

some of the more difficult energy issues in this province, particularly

the manner in which our future oil will be supplied, how it can be made

more secure, and how we can begin to use coal as a substantial source

not only of energy, but of jobs in British Columbia.

MR. SKELLY:

There were some points addressed by the minister, and by the member for

North–Vancouver Seymour (Mr. Davis). When the minister is answering

those questions, I hope he will enlarge on them.

I would

like to apologize, first of all, for reading a misquote out of the

Osoyoos Times which mentions the Minister of Municipal Affairs (Hon.

Mr. Vander Zalm) as one of those in that cabinet over there who

supports nuclear power.

Some discussion has transpired about

an energy policy for British Columbia that we can expect to see

produced some time later in the fall. Now the previous Minister of

Energy, or at least the one before the Premier, gave us some indication

that when this policy was produced, there would be circulation of a

White Paper around the province. The public would have an opportunity

to look at it, to discuss it, to comment on it, to criticize it and

perhaps to improve it. In what format does the minister plan to deliver

this energy policy? Will it be delivered as a White Paper for public

discussion and public input? Will the results of that public

information process then be incorporated into the policy and brought

back to this Legislature? Just how does the minister plan to do it? In

particular, as the policy applies to Vancouver Island, where we enjoy a

unique situation, will there be a regional orientation so that people

in various areas of the province can decide what type of energy they

would prefer to use or what type of system they would prefer imposed

upon them?

[ Page 469 ]

The

minister mentioned in passing that he could have asked the question why

an energy policy wasn't developed between 1973 and 1975. I think it's

easy enough to answer that question. When the NDP took office in 1972,

there was no minister responsible for energy. There was no Ministry of

Energy. There was no B.C. Energy Commission. There was no B.C.

Petroleum Corporation. The government at that point seemed to have no

concern about energy whatsoever, with the possible exception of a

division of the Ministry of Mines, which related to petroleum resources

and to natural gas. There was very little done, I think, prior to 1972.

I'm

not attacking the previous government. The fact was that energy costs

seemed to be declining all the time prior to 1973 and 1974. Up to that

point energy didn't appear to be a problem. It only become a problem

with the changes brought about by OPEC and by the American oil

companies in 1973 and 1974. But I would definitely like to hear the

minister's plans on how that energy policy will be presented.

Helliwell

and Cox in their report did say that price increases would have to take

place in order to justify a changeover from gas and oil used in process

needs and power generation in pulp mills, because at the present time

those fuels are subsidized. Also electricity is being sold to pulp

mills at lower than the cost of production, and that's a problem.

Helliwell and Cox mention that if those products were sold to pulp

mills at or near the cost of production, there would be problems

experienced by those mills, and they would have to switch over to

cheaper forms of power. They also mention that there might be

undesirable fuel substitutions, so the government would have to

establish a policy to assist those pulp mills — financially or whatever

— to change over to hog fuel energy production or waste wood energy

production. I think it probably would be a much better investment of

the capital that we're now borrowing to build transmission lines and

dams and that kind of thing instead to assist pulp mills to develop

more efficient means of energy generation. I definitely think that

prices have to increase.

If we are to remain competitive

with other countries, certainly we should, as a government, make it a

part of our public policy to encourage changes to more efficient energy

generation techniques.

The minister also mentioned hot water

heating and that this represents only 1 percent of the total energy

requirement in British Columbia. But even so, 1 percent is a

significant amount of energy that is used in this province. It's 5

percent of the electricity that we produce. It represents a fairly

significant percentage, and it's the largest user of residential energy

in the province. Very little is being done to decrease the cost or to

decrease the energy requirement in home hot water heating. Hydro should

be congratulated for what they're doing here in Victoria. They are

taking one circuit out of a substation in Victoria, and they are

putting a switching apparatus on volunteer residential homes on that

circuit. They're shutting those hot water heaters off during peak power

demand periods. I think that's a dammed good idea, but that's something

that we should be doing on a fairly broad scale in order to conserve

energy on Vancouver Island.

It appears that Hydro has done

very little except in crisis situations to handle the problem of peak

load here. Now Mr. Marzocco, who is one of our officials in B.C. Hydro

on Vancouver Island, has mentioned that at times he's had to

call the wood room at a pulp mill and ask them to shut down operations

because a crisis situation has developed over that 4 p.m. to 6 p.m.

peak period.

Interjection.

MR. SKELLY:

Well, no, the other way is to manage the load properly. It's not

necessary for the wood room in a pulp mill to operate all the time. It

can be managed across a 24-hour period so that the wood rooms aren't

operating on that small two- to three-hour peak load period — or in the

same way that Hydro recognizes that home hot water heaters should be

shut down during that period of high electrical demand. So we could be

doing much more at almost no cost to change our peak demand habits so

that we wouldn't require that 500-kilovolt line for some time.

The

member for North Vancouver mentioned the jobs that would be created by

shipping Alaska oil and gas across British Columbia and across Canada.

But I think that we should look at what our best investment is in

creating jobs. A number of authorities have discussed this, including

the Economic Council of Canada, and have shown that to create a single

job in one of these massive utility projects such as a pipeline or a

dam or a transmission line, it requires an investment of something like

a quarter of a million dollars per job or better. The only job-creation

effort that requires a higher capital investment across Canada is in

mining. To create a single job in mines requires a heck of a lot more

than $250,000. Yet to retrofit houses, to improve insulation, to

conserve electricity produces a job for every $19,500 invested. So

there's a significant improvement in the job-creating ability of

capital by selecting the lower technology alternatives. This is one

reason why this party is so concerned that the government's energy

policy reflect the ability of that energy policy to create jobs at the

same time that it saves the government money, and at the same time that

it makes use of the available renewable energy. So could the minister

possibly comment on some of those concerns?

HON. MR. HEWITT:

Mr. Chairman, I just want to comment on a few items that were raised by

the member for Rossland-Trail (Mr. D'Arcy), He asked about the Kokish,

Ladore and Duncan Bay hydro potentials on Vancouver Island. All those

have been studied, Mr. Member. They rank well below the 500-kilovolt

transmission project. They could provide a delay of that transmission

line project if they went ahead, but only for about one year, a very

small delay. They also, if they were to be built, would have, of

course, some significant environmental problems, and their unit costs

would be fairly high. So the research and investigation have been done

and they rank fairly low on the list.

In regard to taxes, on

page 5 of the annual report of B.C. Hydro, I'I just read the quote:

"Taxes, grants and water rentals paid to the provincial government,

municipalities and related school districts totalled $81 million in the

year ended March 31, 1978, up 16.8 percent from the previous year. "I

don't have the breakdown as to what went for property taxes and what

went elsewhere, but the increase in one year to B.C. Hydro was 16.8

percent, which is more, I think, than the inflationary rate.

[ Page 470 ]

The

member for North Vancouver–Seymour (Mr. Davis) asked a question in

regard to the energy policy. Yes, we have, as I mentioned before, the

Ministry of Economic Development and other ministries involved. In

regard to transportation, Mr. John Lewis, who I'm sure you're probably

familiar with, is our transportation expert and he has been adding his

expertise to it.

Regarding the use of gasoline, and how you

stop the trend, because the statistics indicate that our oil and

gasoline usage is climbing — and the Prime Minister of the country has

said we've got to curtail our usage — I think, Mr. Member, that price

is going to be a factor in the controlling or slowing down the demand

for oil-based products. I think we'I see at the end of this year,

December 31, instead of the dollar increase per barrel, when the

federal government's through reviewing it all, we'I probably come in

with a higher figure than that just to keep pace with the increase that

has come through from the OPEC nations.

Energy policy with

regard to the use of coal — that will also be considered. You have

mentioned before the use of coal waste in the East Kootenays. Those all

have to be measured up, I think, in regard to the cost benefits. One of

the costs, of course, may well be the environmental impacts and how we

overcome some of that.

Our policy also will indicate — and I

haven't made this statement before — that to some extent we will be

encouraging the use of natural gas in the province of British Columbia.

We do have those reserves and we are not self-reliant on oil. We will

find that we are going to have to give some encouragement, some

incentive, to residential homes and to industry for conversion to

natural gas, as well as to renewable energy resources such as wood

waste. We are going to have to stimulate that transition; along with

the cost of oil going up we may find a fairly reasonable trend away

from it as a source of energy.

The member for Alberni (Mr.

Skelly) raised a question in regard to the energy policy. I did make

some comments about the possibility of a White Paper myself. I think I

may have to reconsider that and possibly have a comprehensive statement

made by the ministry concerning the energy policy, and invite comment

on that statement.

The real concern I have is that we

haven't time to keep delaying this. Now is the time for action. If we

are going to turn around the reliance on oil-based products, we are

going to have to do it fairly quickly. So whether we take the approach

of a White Paper and float it out there for a while and then go back to

the drawing board and revamp that energy policy, or whether we make

some comprehensive statement and invite comment and proceed from there,

we have to move fairly quickly. I'm hopeful we will have that energy

policy available before September, but I've set that deadline.

The

B.C. Energy Commission and the B.C. Petroleum Corporation, which the

previous administration brought into being — they're there, and they're

a vehicle; they serve a purpose. In regard to the Energy Commission and

its forecast and regulatory performance, we had a regulatory body

before. It's doing a function and with the reorganization of the

ministry, that whole scheme is being looked at. But the Energy

Commission does play an important role in the province with regard to

energy matters.

The B.C. Petroleum Corporation is a

tax-collecting agency to a great extent. The system was in place before

it was brought into being, so it is not the be-all, end-all; but it too

does play an important role. With the reorganization we will be looking

at that also.

In regard to the slowdown of the wood room, he didn't mention where that was. Was that in Alberni or on Vancouver Island?

MR. SKELLY: At a number of the pulp mills.

HON. MR. HEWITT:

At a number of the pulp mills. I would say, Mr. Member, it seems that

would indicate a need for a reliable source of power. It indicates to

me that that 500-kilovolt line is needed on Vancouver Island, and that

we should have started it a little earlier than this, because I believe

it will be late '83 before that is available.

I think your

comments about having a representative of B.C. Hydro saying, "Close

down your wood room," affect not just the fact of saving energy; with

it you can see problems with shifts, employees and additional costs. If

you have to go to non-peak times you run into shift differentials and

all that, so there is an economic repercussion there. Your comments

have indicated we're well advised to proceed as quickly as possible

with that line.

MR. LOCKSTEAD: Mr. Chairman, the

minister has indicated there will be an overall energy policy for

British Columbia some time this fall. But what has to concern us is

that events in the world are overtaking us. By the time the minister

and the government have come up with a policy we will be locked into,

due to events in the world, an energy crisis involving the pricing of

petroleum products.

The minister has suggested the way to

regulate the use of energy in British Columbia is through pricing. What

worries me about that statement is that the wealthy and the people who

can afford to pay higher prices for petroleum products and energy use

will increase their profits, and will probably do quite well. But the

ordinary working people, the people who must drive automobiles to get

to work because of the terrible transit policy of this government,

will, in effect, use more of their disposable income in those policies.

What

is happening as the price of petroleum products in British Columbia

rises to meet world prices — which was a conscious decision made by the

federal government and this government — means windfall profits once

again for the multinational oil companies. That's what it really means.

wanted to spend a moment or two discussing Hydro. I won't take long;

I've discussed this in this House before. The fact is that Hydro is a

monster and we all know it. And now we have the opportunity to ask the

minister what he is planning to do about the managerial and

decision-making process of B.C. Hydro. What are you planning to do —

leave it the way it is, or add one or two more people to the board of

directors, which we know won't make any difference? Our party has

suggested, Mr. Minister — through you, Mr. Chairman — that the

functions of B.C. Hydro should be to install and supply the energy

requirements of British Columbia, but not to make the policy decisions.

Those policy decisions should be made by a separate and independent

body, such as, perhaps, the B.C. Energy Commission, or some other body.

Furthermore,

under the present setup — and this disturbs me greatly in a number of

projects which I'm going to be discussing very briefly in a few minutes

— Hydro

[ Page 471 ]

makes

their decisions; they know what they're going to do; they eventually

hold a few public meetings to comply with the Environment and Land Use

Committee secretariat's regulations; and then they go ahead and do what

they want anyway. That has been the pattern of Hydro.

The

whole system of public hearings is designed so that we can have public

input. And just to get back to your proposed energy policy for British

Columbia, Mr. Minister — through you, Mr. Chairman — you suggested that

certain ministries are involved in developing this policy. But I would

suggest to you, Mr. Minister, that the majority of people in British

Columbia are interested in having a voice in developing such a policy.

Are these groups — some of them environmental groups, and many, many

other groups in British Columbia — going to have a voice in helping to

formulate an overall energy policy for British Columbia? I doubt it.

I'm really concerned, and I hope that when the minister gets up he'I

give us a positive answer to these questions.

The other day

my colleague, the member for Alberni (Mr. Skelly), raised the question

of the proposed 500 kilovolt transmission line across the Sunshine

Coast to Vancouver Island. I've discussed this matter in this

Legislature on numerous occasions, and we'll spend a lot of time on it;

but I do wish to add my voice. As you know, we have asked as a party —

and my constituents along the Sunshine Coast requested well

over a year ago — that a two-year moratorium be placed on this

particular project. Certainly some of the figures that we have received

from the British Columbia Energy Commission have indicated that we can

wait two years while the B.C. Energy Commission and B.C. Hydro look at

energy alternatives for Vancouver Island — and I won't go through that

again.

But what I'm concerned about in this particular

question, Mr. Minister, is that I have a report that the Environment

and Land Use Committee is preparing an environmental impact report on

that proposed 500-kilovolt transmission line. I would like to know

whether the minister has a copy of that report in his possession. Has

that report been completed and forwarded to the minister? If not, how

can the government and B.C. Hydro decide to proceed with the line

without that report?

My information certainly indicates that

the Environment and Land Use Committee is calling for a moratorium, as

we have in this party. The people who are being directly affected by

this line, Mr. Minister — through you, Mr. Chairman — have asked for a

public inquiry as well. They've never received a reply to this

correspondence, as they were told verbally that it would be

time-consuming and of no value anyway. They're right, and I'I tell you

why it would be time-consuming and of no value. You've indicated that a

definite route for that proposed transmission line has not been agreed

upon, yet this morning I received a press release stating that you have

agreed on a route for that transmission line. Furthermore, in

correspondence I received from Mr. Bonner....

AN HON. MEMBER: Mr. who?

MR. LOCKSTEAD: The current chairman of B.C. Hydro, Mr. Bonner; he's the man who's going to put nuclear energy in Vancouver Island eventually.

HON. MR. HEWITT: Are you making up facts again, Don?

MR. LOCKSTEAD: Well, you won't give me any facts, Mr. Minister, or any answers, so I've got to make them up.

In any event, Mr. Bonner does state:

"Though we have met with groups and considered their opinions, up and down the Sunshine

Coast — environmental groups, energy experts from all over the province

— the fact is we are going ahead with the line, and it now appears that

we may not even be able to avoid the crossing of certain parks,

recreation centres, lake areas...."

In other words, what

Hydro is doing is going back to its original route in spite of the fact

that we were given assurances at a certain meeting that took place on

Pender Harbour some time ago. Attended by hundreds of people, the

meeting went on all day, and they were assured that the route would be

changed to comply with some of the concerns of the people living in

that area.

What Hydro is now saying is that they're going

back to the original route. All of those public information meetings

with the residents are a complete shaft. That's in effect what you're

saying.

I wonder if the minister could perhaps discuss that

matter briefly. I don't see how he can; obviously Mr. Bonner has made a

decision and that's it. But I would like to hear from the minister.

There's no question that Hydro has to be shaken up. I think the people

of this province have a right to know how you're going to handle Hydro

and how that operation is going to be brought to heel.

It's been public information that the government is considering a proposed natural gas line to Vancouver Island. I will just discuss that briefly.

AN HON. MEMBER: Why are you for that and against the other?

MR. LOCKSTEAD: Like my colleague, I'I answer your questions in question period.

want to set the record straight on one small item, if I can find it.

During the course of the last campaign, the Premier, particularly in

locations on Vancouver Island, made the statement that it was the NDP

who stopped the studies of the proposed natural gas line to Vancouver

Island. That is not true. That is complete nonsense and the Premier

knows it. He has the information and said if it hadn't been for the

NDP, the gas line would have been there some years ago. Mr. Minister,

you haven't been there that long, but certainly people in your ministry

know very well that the original proposal was scrapped because there

was not a security of supply of natural gas for the province at that

time.

I recall having long and serious discussions with Bob

Williams, the former Minister of Lands, Parks and Housing, on this

question. During our term in office studies were undertaken. We looked

at possible alternatives. It was not until late '74, going into '75 and

to '76, when these large new natural gas fields were discovered, that

it became possibly viable to have a natural gas line to Vancouver

Island.

The people on Vancouver Island do deserve the energy requirements to meet their rational economic development

[ Page 472 ]

plans

of the future. I'm with you on that. I have in my possession a study

which I'm sure you have, a prospectus issued by the British Columbia

Engineering and Power Authority, gas engineering division. It was

presented to the B.C. Energy Commission on December 1978. It discussed

and recommended that a natural gas line be built to serve Vancouver

Island.

I do have some difference of opinion on the root of

that proposal. This study, by the way, like many other studies that

this government has commissioned, was paid for with taxpayers' money,

one way or another, i.e. through B.C. Hydro. This is the same company

that is responsible for 71.5 percent of the debt in this province. This

study, which was never made public, indicates that the preferred route

is the southern route.

The minister has met with and

received submissions from the municipal council in Powell River and the

manpower adjustment committee. They have made a very sincere approach

to that minister to have the government consider routing that proposed

natural gas line through Powell River. There are a lot of good reasons,

both geographic and technical.

The initial cost may be

somewhat higher, somewhat more expensive, but what you'I be doing for

that whole area, which is economically depressed — particularly since

this government came to office — is to stimulate some rational economic

development. They presented a brief to the minister and myself. I won't

read the brief; it's a little lengthy. The minister's got the darned

thing, and the fact is that it would produce jobs for many of our

people. We have 14.5 percent unemployment in that area at the present

time. I think that route should be seriously considered.

While

we're discussing studies, there is another study that the minister has

had on his desk for over three months now regarding this proposed

natural gas line. This study was commissioned by the B.C. Energy

Commission. I've asked the minister to make this study available to me,

to the people interested in this project and to the public of British

Columbia. Once again, it was a study paid for, one way or another, by

the taxpayers of this province. I'd like to know, Mr. Minister, now

that we have a chance to question you, why you will not make that study

public. What have you got to hide? I know it's a preliminary study, but

make the study public. It's our money and we have a right to know. We

had a member kicked out of this House the other day for demanding the

right to know. The people of this province have the right to know these

things.

Honestly and very seriously, Mr. Minister, I'm

deeply concerned. This government commissions these studies and they

hide them. Why can't our environmental groups, our chambers of

commerce, all of these people interested in these matters, have the

right to know what's happening in this province on these matters? I

hope the minister comes up with a suitable answer.

One last

question to you, Mr. Minister. As the minister is fully aware, there is

a proposal now that involves B.C. Hydro, the government and the Crown

corporation of Ocean Falls. The proposal originally is — and I'I just

bring you up to date very quickly — for a 110-mile transmission line

from Kitimat to Ocean Falls over some very rugged terrain. I want to

tell you right now, Mr. Minister, that I'm not necessarily opposed to

that transmission line. The original estimated cost for that line was

$18 million. The cost has escalated now to some $46 million. And I

suspect that if the line goes ahead, it will cost between $80 million

and $85 million in the final analysis. But if that community of Ocean

Falls is to survive and to grow, there is no question that that

transmission line will be required.

What I would like to

know, Mr. Minister, is whether your ministry or B.C. Hydro or whoever

has made an agreement with the Ocean Falls Corporation through its

chairman, Mr. Williston, to construct that transmission line at

government and corporation expense so that when the Kruger Corporation,

who are currently negotiating with the provincial government for the

purchase of that community.... Will this whole thing be turned over

to Kruger when that deal is completed, presumably within the next six

weeks? Will that transmission line be a cost, once again, to the

taxpayers of British Columbia for the benefit of a private corporation?

And do you have a time frame on the completion of that particular

transmission line?

I don't know if you've got any questions

out of that. I hope to get as many answers as you've got questions.

Thank you, Mr. Minister.

HON. MR. HEWITT: Mr.

Chairman, I'I try not to be too long. The comment about Hydro as a

monster.... I guess one of the problems Hydro faces is that it has to

supply energy pretty well for all of British Columbia. I think you

mentioned that all they should do is to provide the energy, and they

should not make policy decisions. Well, I don't know, but I'd be a

little worried if you relied on B.C. Hydro to supply power to British

Columbia on the longest and coldest night of the year and not have an

organization with an administration body, a policy-making body, and

executive decisions being made on a monumental task such a supplying

power. You know, if they have the responsibility to do it.... Any

business management course always indicated that if you gave the

responsibility, you should give the authority.

Interjection.

HON. MR. HEWITT:

And the accountability — right, Mr. Member. I'm not saying Hydro is

perfect, but for heaven's sakes, we have to recognize that we're not

talking about something that you can just go away and forget about.

You're talking about a corporation, an authority — it implies that in

its name — that has to provide that power, has to plan for that power

well in advance, as you know, and make sure that when the wheels of

industry want to turn, there is power there to turn them.

does have, under this administration, two additional watchdogs, you

might say. One is the Committee on Crown Corporations, which was

brought into being by this administration and which has come down with

some criticism on B.C. Hydro. But that's put into place to monitor such

organizations as B.C. Hydro. It has the auditor-general, who has that

responsibility as well. So there are two avenues that can be used to

ensure that they aren't the "monster" that you implied they are.

But

we always have the problem, Mr. Member, in regard to the alternative

you go to in supplying the power. B.C. Hydro has to look at some pretty

large installations to make sure that they can supply the power ten

years down the road.

If you look at Site C in the Peace River country, you've got a reaction there, because of the concern of the people in

[ Page 473 ]

the

area and the agricultural land that's involved. If you talk about Hat

Creek coal, you've got a problem there. There's concern about air

pollution and the ranching industry in that area — two major problems.

You talk about the 500 kilovolt transmission line. The member for

Alberni (Mr. Skelly) is talking about the fact that they have to shut

down a wood room. You've made some comments about the transmission line

coming across the Sechelt Peninsula.

The people in the

industry on Vancouver Island that creates the employment and improves

the economy on Vancouver Island are saying: "We need power." Crown

Zellerbach, in making their statement of their expansion, said its

announcement was subject to that transmission line coming across. So

there are demands here to have the power on the Sechelt Peninsula and

there's concern and demands to the effect that: "You don't put the line

across in our area." That's the unfortunate part: you have the impact

on people who live in one spot, and at the same time demands in another

area saying: "For goodness' sake, B.C. Hydro, do your job and provide

us with the power." If we took a two-year moratorium, as you suggest,

on that 500-kilovolt line, we would then be looking at 1985 or 1986,

and by that time you would have serious brownouts on Vancouver Island.

As you know, the time is very critical at the present time.

regard to the announcement that B.C. Hydro made on the 500-kilovolt

line, you made mention that Hydro's made the decision. Well, basically,

that's right. B.C. Hydro selected a preferred route for the Sechelt

Peninsula portion of the planned Cheekye-Dunsmuir transmission line to

Vancouver Island. That's their board's decision, but they also go on to

say:

"Hydro's decision has been communicated to the Sunshine

Coast Regional District and the secretariat to the provincial cabinet Environment

and Land Use Committee, and the secretariat has indicated to Hydro that the

Environment and Land Use Committee will meet to discuss the matter as soon as

possible, after comments on decisions are received from the regional district

and provincial government resource agencies."

So you know that the Environment and Land Use Committee is going to discuss

and express an opinion to cabinet in regard to whether or not the selection

that B.C. Hydro's board has taken is, in fact. the one that this government

considers to be in the public interest. So although the decision has been made

by B.C. Hydro, that doesn't necessarily follow that that is the end decision.

They still have to refer to the Environment and Land Use Committee for approval.

Regarding

the natural gas line to Vancouver Island. I did meet with the people

from Powell River and they did give me an excellent submission. We

discussed the fact that it is costly. I indicated to them that there

are two reports that my staff are studying, and to release one and/or

the other I think would only confuse the issue. So what we are doing is

weighing the advantages of the reports, and we'I be able to come out

with a decision or a comment as to what the economics are in providing

that power line.

It seems to me that when we're talking

about the public good you have to weigh up the costs and the benefits

of such a transmission line. If you find that the costs are just too

high at this time, then you have to consider delaying it until the

economics work out. It's the same problem we have in getting industry,

say, to convert from residual oil to natural gas, or competing in an

export market against residual oils and natural gas. The Leader of the

Opposition was talking about the $3.20 a thousand cubic feet for

natural gas in the United States. If they have a quantity of residual

oil down there, and you're competing with that in the marketplace, if

you raise the price of your product you can't sell it. That's the

problem we have with the natural gas exports. You've got to be

realistic in setting your price, and that's what the NEB is doing.

[Mr. Rogers in the chair.]

It's

the same with the natural gas pipeline to Vancouver Island. What are

the costs? If you say, "That's fine — the government should subsidize

it, and put it in anyway," that means all the people in the province

of British Columbia are picking up part of that cost. If the economics

work out close, then you can take those benefits of additional

industry, I think, on one of the islands. I think, Mr, Member, you

probably know where they were looking at a cement plant or something

like that.

AN HON. MEMBER: Right.

HON. MR. HEWITT:

If you took into consideration the additional employment, you could

say: "Okay, the costs aren't that far apart, and with this additional

benefit we can proceed at this time." I think that's the approach we

have to take; otherwise we're spending a lot of taxpayers' dollars and

we're not spending them wisely.

MR. SKELLY: This is

just to respond to a statement that the minister made. where I

suggested that Hydro shuts down loads during peak periods. One of the

major drawers on their supply is wood rooms at pulp mills, so those are

the first that get shut down. This results in no job losses, and what

Hydro could do, rather than attempting to manage loads at crisis

periods, is to manage the load in order to maximize the availability of

power on Vancouver Island. This they have chosen not to do.

You

talk about having to weigh the relative costs, and you mention shift

differential. Well, I can tell you, Mr. Minister, that the cost of

paying shift differential in all the pulp mills on Vancouver Island

won't come near equalling the $640 million that Hydro is now

considering as the cost of the Cheekye-Dunsmuir project. The cost of

shift differentials won't even approach that. Even if the various pulp

and paper companies on Vancouver Island change the wood room structures

in order to accommodate more wood and increase production at off-peak

periods, it still would not cost as much as building that 500-kilovolt

Cheekye-Dunsmuir project.

So I think that we have to look at

the other alternatives, and this is what Hydro appears to be refusing

to do. They're not looking at the need for power on Vancouver Island.

They're looking at the demand for power on Vancouver Island. I would

recommend to the minister another interesting piece of reading material

that came out of the Porter commission in Ontario. Porter agonizes over

whether we should be meeting actual needs for energy or whether we

should simply be responding to demands for energy. Hydro doesn’t seem

to feel that they have the mandate to seek out need for energy instead

of simply responding to demand. If

[ Page 474 ]

they

did so, they would be looking at reallocating loads so that they could

take some of these functions in industry off the system during peak

load periods and reallocate those to off-peak periods.

that was why I was referring to Hydro managing crisis loads by shutting

down wood rooms. I don't recommend that as a policy for Hydro but they

should be into the whole picture of allocating the load across the

whole 24-hour period. I don't think it would cost a tenth or a

thousandth or a millionth as much to pay shift differential in wood

rooms in pulp mills as it would to build that 500-kilovolt line.

HON. MR. HEWITT:

You're comparing apples and oranges, as you well know. Let me just

throw this out to you. Maybe I'm flying right in the face of disaster —

I don't know.

You're right in the sense that if we go by the

demands for energy we can overbuild. I sometimes wonder why we don't

take advantage of additional energy power and why we don't take

advantage of the export market of energy. At this time, considering the

need that the United States has for power sources, it seems to me that

if we have that source and we can sell that energy and sell it at a

price which is competitive but well above our cost, then it helps to

keep our domestic price down.

Hydroelectric power, it

seems to me, is one commodity that you can sell and get a good return

out of on the export market. It holds the cost down not just to our

industry but to our pensioners, our welfare people — everybody. Costs

of heating our homes are kept down because we are getting a good, fair

export market price. So let's not talk about holding down development.

Sometimes I wonder why we don't get more aggressive and why we don't go

out and develop some of our Hydro energy capacity and sell that for the

benefit of all British Columbians. I just told that point to you and

I'm sorry because I'm probably going to start a real good argument now,

but I think sometimes we should be a little more aggressive.

MR. SKELLY:

I'I say this and leave. Mr. Speaker, I agree 100 percent with the

minister that we should produce more energy and, if there is adequate

energy in the province of British Columbia, export that to the United

States to our best advantage, to help pay off our debts on B.C. Hydro's

system.

I agree with that 100 percent. What we're talking

about, though, is the best way to produce that surplus. The cost of

producing extra energy through nuclear power is $2,000 per installed

unit; the cost of releasing energy through conservation is $200 per

released unit. So when you're thinking about the cost of producing

energy to export to the United States, it's to our best advantage to

save energy and export that surplus. We can do that by proper load

management and by energy conservation, but it does require an

aggressive program which the government doesn't seem to have and which

Hydro definitely doesn't have. That's why our side differs from your

side. We would like to see Hydro develop a much more intensive and

aggressive energy conservation program in order to free up that

electricity for export if it is available. The more money that comes

back to this province from exporting surplus Hydro power, the better it

is for us here, certainly.

MR. LOCKSTEAD: I obviously

didn't make quite clear one of the points I attempted to make, Mr.

Minister, through you, Mr. Chairman. This is the matter of Hydro's

method of consulting with the interested parties when a project has

been proposed. Hydro comes up with a plan, or whatever; and Hydro has

been proved consistently wrong in its energy projections over 10- or

15-year periods. Even another government agency, the B.C. Energy

Commission, will tell you that, and they're supposed to be on the same

side — approximately. Hydro doesn't consult people, whether it be on

the Sunshine Coast, Lasqueti Island, Vancouver Island, or

anywhere else. They don't consult until after decisions have been made.

They go through a routine, because they're obliged to under certain

regulations such as the Environment and Land Use Committee, et cetera.

But the fact is, even after consulting and getting well-informed

opinions from people in the community — experts from UBC, wherever —

they go ahead and do what they were going to do in the first place.

It's

a sham, Mr. Minister, through you, Mr. Chairman. The one thing you

could tell this Legislature today is that at least the process of

public information — gathering and respect for public opinion — will be

changed. If you're not prepared to change Hydro, if you're not prepared

to take into account the executives'

summary of the Committee on Crown

Corporations, if you're not prepared to do any of those things, at

least give us, the people who are paying the bills in this province,

the opportunity to comment on those changes before they are put into

effect.

One last question — very straightforward. Have you

assured the Crown Zellerbach Corp. at Elk Falls they will have the

required energy resources they say they require for 1982 so they can go

ahead and buy their $500 million, or whatever, machine No. 10? Have

they been given that assurance? I'd like to know.

HON. MR. HEWITT:

In regard to the energy policy we are developing you mention some

control on B.C. Hydro and its projects. I envision in that policy we

will have a project review committee made up of interested ministries —

for example, Environment, my ministry, Economic Development — where

Hydro projects will be reviewed to take a look at their need for it —

why they say they need it — and analyse it before final approval is

given. We will try to put a handle on it, which is your concern to

ensure that we don't get into the position of being overbuilt.

will be looking at a possible increase of B.C. Hydro's board of

directors to get a greater cross-section on that board. Those are two

things I mentioned to you....

MR. LOCKSTEAD: Will the public have input before decisions are made?

HON. MR. HEWITT:

In regard to the projects, yes. As you know, the B.C. Hydro dam at

Revelstoke had a tremendous amount of public input. You are also aware

that the 500-kilovolt line had public hearings on the Sechelt

Peninsula. One of the problems is, Mr. Member, people don't want their

environment changed. A transmission line does not have any pollution.

What it really has is a site impact. A line has to go across lands that

formerly were pristine, and a swath has to be cut through; it has to go

across a lake, or whatever, and, as a result, it does, you might say,

destroy the aesthetics of some of the summer and

[ Page 475 ]

permanent

homes in that area. Unfortunately that's one of the prices we have to

pay for ensuring that people on Vancouver Island will have power.

You

ask, finally, the comment about Crown Zellerbach. No, a guarantee

hasn't been given to Crown Zellerbach at this date, because B.C. Hydro

hasn't got the final approval. But they're attempting to meet that date

— and I think it was 1983, Mr. Member, not '82 — that the line should

be in place. They still have to get the final approval for that

location through the Environment and Land Use Committee. Once that is

given cabinet approval they will then be proceeding.

MR. LOCKSTEAD:

One last remark on the minister's analysis of environmental impact on a

proposed Hydro line. Everybody in this province knows that wherever

Hydro builds a line, particularly a transmission line of this

magnitude, widespread spraying takes place through watersheds. And this

particular line will be going through at least eight watersheds, Mr.

Minister. Chemicals will be used in these watersheds where people have

to drink the water, where fish are reared, or whatever. If that isn't

environmental impact, I'd like to know what the heck it is.

MR. MUSSALLEM:

I am quite concerned, especially when I hear the theorists at work, and

this afternoon we were again told that we need power but we don't have

to have it, and we're going to get power to the Island by burning

woodchips. I tell you that the theory is plausible, but it is not

factual. There is not enough power in the woodchips in Vancouver Island

to, in effect, give any substance whatever to the theory-and that's a

well-known fact. It's very nice to have power by wood waste, but there

is not enough power. It's only a trivial matter and it's not worthy of

consideration. I wish the theorists would stop talking about that; it's

a pointless discussion.

I am more concerned with our

government's position on nuclear power. It has been clearly stated in

the throne speech, and stated here in the House. Yet we hear from the

opposition that we are toying with nuclear power on the back burner, as

it were. Well, it has been clearly stated that we are not toying with

nuclear power. We have no intention of having nuclear power, and that

should go down. But it will never be accepted until we create the

alternatives.

One thing that concerns me very greatly is the

nuclear power plant that is proposed in Sedro Woolley, a very short

distance from our populated area. When this plant gets on line it will

be one of the dangerous factors we have to contend with. I hope we will

make some arrangements with the Americans and give them an alternative,

whereby they will find no need to establish the nuclear power station

at Sedro Woolley.

I make the following suggestions. First of

all, there is the Skagit Valley of long and arduous debate in this

House. I hope this government does not ever consider paying off the

Americans with power from our resources for not flooding the Skagit

Valley. I hope that we realize that this valley, if it is flooded and

when it is flooded, will be a benefit and will increase the value of

property in British Columbia and, at the same time, will give valuable

power to the Americans. Those who speak so highly of the Skagit Valley

— that beautiful, natural, pristine resource — are the ones who have

never been there. But those who have been there know that you could

flood that valley and it would be an asset to us in British Columbia,

according to the terms of the agreement previously created by this

government.

It is time that we recognized the importance of

developing power and did not fall flat on our face every time an

environmentalist got up and said: "You can't do it." I believe in the

environmentalists’ judgment in some cases, but we must not respond too

quickly. There is an immense supply of power there that was provided

for in an honourable treaty between the federal Canadian government and

the federal American government in 1941, and we should honour that

treaty without question and without beating around the bush and trying

to avoid it. That power should go to the Americans. We should flood

that valley. It would be of benefit to British Columbia.

Instead

of the Sedro Woolley atomic power plant, the next thing I would suggest

is that we make available to them, at a proper price, thermal coal by

the thousands of metric tons. Enormous amounts with no other use are

available in the East Kootenays — Fording and Kaiser. Give them a

corridor to take the coal to the United States by belt or whatever, and

use it to supply power. Across the East Kootenays the Americans have

what is known as a solid grid. They are right on the grid and they can

develop the power and send it to all their transmission systems.

Give

them an alternative. We have the alternative. Not only that, but we

sell our coal, and the coal has to have a sale. It's just piling up in

the East Kootenays.

Interjections.

MR. MUSSALLEM:

Our honourable friends will laugh. They might as well laugh about

something else. But at the same time I'I tell them that the

metallurgical coal is only a small percentage of the coal that is mined

in the East Kootenays. That must be used. and it can be used for making

power.

With those two things we could cancel the necessity

for an atomic power plant — if we got busy and presented the proper

alternative. and that could be done.

The next thing we

should do — and this is vital to get ourselves off this nuclear

kick.... May I say to the government that there is no use denying it:

we've got to give an alternative. And the alternative would be proof

that you could produce power at Hat Creek economically and properly. We

could produce a small pilot plant of 80 or 90 megawatts to produce

power and prove that the development of power at Hat Creek will work.

And then we could produce enormous quantities of power from that coal —

for 500 years, if necessary.

That is the course that should

be offered: no more theories, no more programs, no more talk; develop

the alternatives that are there for us to use. They can be used. It can

be done today. We should be on that road now. We should be saying to

Hydro: "Get your pilot plant going at Hat Creek. Let's see it work."

Then we could go on with a bigger program.

Furthermore, as

I've said before in this House, we have a greater resource than oil. We

have the northern rivers, with great potential for power, that we

should be developing now for sale. Just as Alberta is selling oil, we

should be selling electric power. Those enormous rivers flowing into

the Arctic Ocean promise enormous quantities of power — I don't know

how much. We have a resource more usable than oil, and we should be

developing that today.

[ Page 476 ]

should stop the talk and get on with the action, but first of all we

should give the Americans an alternative to Sedro Woolley. Let us get

out of the nuclear power age on our borders, and we can do it with that

one little step. I urge the minister to take some action in this regard.

MR. D'ARCY: Mr. Chairman, this committee is having some very important

deliberations this afternoon. I think there's a possibility that some committee

members who are on the treasury benches may inadvertently be missing some of

the discussions. Therefore I move the committee rise, report progress and ask

leave to sit again.

Motion negatived on the following division:

YEAS — 21

Macdonald

King

Stupich

Dailly

Cocke

Lea

Nicolson

Hall

Lorimer

Leggatt

Howard

Sanford

Skelly

D'Arcy

Lockstead

Brown

Wallace

Gabelmann

Hanson

Mitchell

Passarell

NAYS — 28

Waterland

Nielsen

Chabot

McClelland

Williams

Hewitt

Mair

Vander Zalm

Heinrich

Ritchie

Strachan

Brummet

Ree

Segarty

Curtis

McCarthy

Gardom

Bennett

Wolfe

McGeer

Fraser

Jordan

Kempf

Davis

Davidson

Smith

Mussallem

Hyndman

MR. NICOLSON: I have a couple of very brief questions. First of all,

I'd just like to draw the minister's attention to Hydro's lack of

respect for private property.

After all the public hearings are said and done, and things go

ahead, particularly with power line rights-of-way, the bulldozers go

in. Of course, they put themselves in an arm's-length situation by

having a contractor do the work. But I can think of two incidents

within maybe a mile of each other on the same power line.

One

was a case where they disturbed a water supply and have absolutely

refused to listen to the property owners about what has happened or to

offer any sort of remedy. They did completely disrupt a spring, and

this is a property right. When people get water rights and register

them with the water rights department, they have an individual property

right.

Perhaps it's a bit of a mistake that we should have moved that the committee

rise, because it did bring in some seat mates for the minister. I hope the minister

is listening to this because it is a very, to my mind, annoying type of a thing.

When people go to all of the trouble of registering their water rights and they

get their conditional water licence and then their permanent water licence,

they don't want to have B.C. Hydro come along blasting, bulldozing and,

in this one case, putting in an access road to look after the power line. And

then they refuse to negotiate in good faith with these people toward a resolution

of the problem.

Another

instance involved mining claims. Hydro did not research the titles

properly. They built a power line right over some existing mining

claims. The miner then went to the supreme court because Hydro, of

course, with all of its financial backing, could afford to go the

limit. For his rights, this poor, small miner was also forced to go to

the legal limit. This matter was finally resolved a couple of years ago

as far as the courts are concerned, yet the matter itself is not

resolved.

I think that as a director of Hydro, there should be some consideration given to a better way of handling these things.

contrast, another constituent of mine was similarly inconvenienced by

the construction of the Inland Natural Gas pipeline in the Creston

area. It was, of course, the fault of a contractor that was doing this

for Inland Natural Gas. I phoned Mr. Cadillac because the people lower

down were too busy. The president was the only person who had time to

talk to me.

In about three or four days he actually had a

negotiator at the home of the aggrieved person, and a settlement was

reached almost instantaneously. I feel that Hydro should treat these

things with a little bit more respect. Certainly other utilities have a

better track record as far as my experience is concerned.

I do have a couple of names here which I won't bother to bring out, but I would be interested in the minister's response.

The

other thing is in the field of mining. In the Kootenays there are

several small mines that do produce. Sometimes when we say how many

mines are producing in the Kootenays, we just tend to look at the

Sullivan mine, and we think of the HB mine which just closed. But there

are some small mines that do get out a few loads of ore. One thing that

seems to be a grievance of all of these small miners that I've met with

is that they only get 55 percent of the net smelter returns. There's a

system, if you take it into the smelter and so on.

I would

like to ask the minister to look into a couple of things that might

enhance the lot of the small mining company and the individual involved

in mining. Sometimes these are individual privately owned operations.

Could

the minister have a few thousand dollars set aside to look into a

feasibility study on custom milling and even possibly custom smelting?

The one might be dismissed out of hand, but I don't think it should be.

I suggest that it be publicly advertised, at least through the various

chambers of mines, and that it travel around and hear from interested

groups to see if there could be something done. I suspect that perhaps

thousands of jobs could be opened up if something c