1980 Legislative Session: 2nd 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)

THURSDAY, MAY 29, 1980

Afternoon Sitting

[ Page

2685 ]

CONTENTS

Tabling Reports

Garibaldi advisory panel report. Hon. Mr. Fraser –– 2685

Oral Questions.

Victoria trade and convention centre. Mr. Barber –– 2685

Stikine-Iskut and Liard dam projects. Mr. Passarell –– 2687

Orders of the Day

Committee of Supply; Ministry of Forests estimates. Hon. Mr. Waterland

On vote 103 –– 2687

Mr. King

Mr. Howard

Mr. Lockstead

Mr. Macdonald

Ms. Brown

Mr. Levi

Appendix

Appendix –– 2709

THURSDAY, MAY 29, 1980

The House met at 2 p.m.

[Mr. Davidson in the chair.]

Prayers.

HON. MRS. McCARTHY: I would like the House to welcome a good friend

who is in the gallery, Mrs. Helen McIntosh. It is nice to see her with us today.

HON. MR. NIELSEN: There are a number of municipal officers,

who are members of the Municipal Officers Association of B.C., visiting

the precincts today. I would like the House to welcome six people who

are with us. From the municipality of Richmond are: Mr. Jack Brooks,

Mr. Andy Inglis and Mrs. Inglis, and Paul Kendrick. Visiting us from

Dewdney is Lila Cresewell. The wife of the deputy director of financial

services for North Vancouver, Mrs. Hoskins, is also in the gallery.

MR. LOCKSTEAD: We have in the gallery the administrator for

the municipality of Gibsons, Mr. Jack Copland, who is attending that

same meeting. I ask the House to join me in welcoming him.

HON. MR. PHILLIPS: In the gallery today from the great riding

of South Peace River is Harald Hansen, clerk of the city of Dawson

Creek, his wife Janice, his son Trevor, his baby daughter Inga Jean,

who is only four months old, and his mother Inga Hansen. I hope the

House will join me in giving them a good welcome.

MR. KING: Also visiting in the gallery today is a young

gentleman whose parents are old friends of mine from the city of

Kamloops. Mr. Kenton Robinson, a student at the University of Victoria,

is visiting today. I would ask the House to join me in welcoming him.

HON. MR. SMITH: This week being more or less education week,

I have great pleasure in introducing the president of the B.C. School

Trustees Association, Mr. Gary Begin, who is here in the gallery. He is

also the chairman of the Burnaby board.

Hon. Mr. Fraser tabled a report of the Garibaldi advisory panel.

Oral Questions

VICTORIA TRADE AND CONVENTION CENTRE

MR. BARBER: Mr. Speaker, I have a question for the Minister of Finance

in his capacity as minister responsible for the Provincial Capital Commission.

It is a question concerning apparent conflict of interest.

It has been revealed this morning that Mr. Arnie Lane, president of

the Pan Pacific Society, owned for some four months a 25 percent

interest in Hartwig Court, which is a building located immediately

adjacent to and north of the convention centre site on Wharf Street.

During these four months Pan Pacific was promoting the Wharf Street

site over all other possible sites for a convention centre. It now

appears that Mr. Lane owned this interest through a company called

Shadee-Lane Ltd. [Laughter.] That's what it's called, Mr. Speaker.

That's what the registrar of companies tells us. A very odd sense of

humour there.

On May 20 this year Mr. Lane concluded sale of his interest in

Hartwig Court. Two days later the city of Victoria voted to accept the

Pan Pacific and Capital Commission proposal to locate the convention

centre at Wharf Street. My first question is: what steps did the

minister take, if any, to ascertain whether or not any director of Pan

Pacific owned a beneficial interest in land or buildings adjoining the

proposed convention centre site at Wharf Street?

HON. MR. CURTIS: Mr. Speaker, the member has referred to an

organization by the name of Pan Pacific which was in fact mentioned in

debate in committee stage of a bill just two or three weeks weeks ago.

It is important in answering any question on this topic to make it very

clear that there is no contractual arrangement between an organization

known as Pan Pacific or some derivation of Pan Pacific and this

government or the Provincial Capital Commission..

MR. BARBER: Yet.

HON. MR. CURTIS: The member interjects: "Yet." I would hope

the member will realize that this government will act to the very best

of its ability to ensure that anyone who is involved in the operation

of that centre has no conflict of interest whatsoever.

MR. BARBER: Mr. Speaker, the problem is the minister didn't

answer my question. What I asked was whether or not the minister

himself — as minister responsible for the Capital Commission, which has

been negotiating with Pan Pacific for months as to the locale and

design of a convention centre — himself took any steps to determine

whether or not any member of the board of Pan Pacific, the proposed

operating authority for the convention centre, was himself or herself

in ownership of a beneficial interest in land or buildings adjacent to

the convention centre site. That's all. Did you do that?

HON. MR. CURTIS: When that report first reached my desk, I

expressed very grave concern for the reason given to the member just at

the conclusion of the earlier answer. I asked that this matter be

investigated and I was informed that the individual under discussion

today had in fact divested himself of any interest in an adjacent piece

of property.

However, this matter continues to unfold, and I reiterate the

statement made to the member at the end of the first question this

afternoon to the effect that…. I must correct him; he has indicated Pan

Pacific has been alone in promoting that particular site for a

conference centre — to be operated for the benefit of the people of

Greater Victoria and British Columbia as a whole. I think that the

record will show that many others, other than a very small group known

as Pan Pacific Society, have in fact been promoting that site and the

idea that we should have a conference centre at all. The member has

drawn certain points into the questions thus far, Mr. Speaker, which

would appear to take the situation further than it actually has gone in

terms of contractual arrangements, if any are in fact to be negotiated.

MR. BARBER: Did the minister, or anyone acting on his behalf, at any point request a statutory declaration from any

[ Page 2686 ]

member of the board of Pan Pacific as to their

interests, if any, in land or buildings immediately adjacent? As part

of the same question, could the minister inform the House when he

learned of the beneficial interest owned by the president of Pan

Pacific in land immediately adjacent to the convention centre?

HON. MR. CURTIS: Mr. Speaker, I am unable to assist the

member today in terms of the second part of his question — that is, the

precise date on which I learned of a reported interest on the part of a

member of Pan Pacific in adjacent property. My notes will show that. I

don't have it available in this House today and would not want to guess

and therefore perhaps create difficulties for members of the House.

But, you see, the first part of the question assumes that there is an

agreement in place which would require or suggest to any responsible

minister that such a statutory declaration be sought. Clearly, if, when

and as any agreement is entered into with a society now known as Pan

Pacific regarding the operation of a conference centre, then I think

such statutory declaration would be most appropriate for consideration.

The member, by the very fact that he has raised the questions today —

and the press have raised the matter for public interest — suggests

that the thing is already locked in place. That is not the case. Among

the many people in greater Victoria who have been working for a

conference centre in this area — and, admittedly, the government of

British Columbia has a significant investment in that conference centre

— are those who for one reason or another have attracted a great deal

of interest on the part of some members of the opposition and the press.

MR. BARBER: There has been, therefore, no statutory

declaration. I appreciate the minister hasn't taken that as notice. I

take it you will take as notice my question as to when precisely you

learned of Mr. Lane's ownership, and I thank you for that. I wonder if

the minister is familiar with the minutes of the Capital Commission

dated October 3, 1979, which I'd like to quote from briefly, because

they appear to contradict the minister's previous answer.

DEPUTY SPEAKER: Order please, hon. member.

MR. BARBER: I have a question. I'm asking if he's familiar

with the minutes, and I have another question as well. That's in order,

I believe.

At page 4, under "recommendations," it says — and I quote very

briefly: "The commission recommends to the minister" three items not

related, and then item 4: "that the commission be authorized to lease

the completed facility to the operating agency Pan Pacific Conference

and Trade Centre Society for the sum of $1 with appropriate safeguards

to protect the interest of the province." Is the minister familiar with

that recommendation of the Capital Commission dated October 3, 1979?

HON. MR. CURTIS: Mr. Speaker, yes. I think the member, having

served as a member of the predecessor commission, the Capital

Improvement District Commission, would know that the commission indeed

recommends, and the minister in most cases — infrequently the

Lieutenant Governor-in-Council — would either endorse or reject any

particular recommendation.

MR. BARBER: Did the minister responsible for the Capital

Commission reject this particular recommendation, or has no decision

been made yet as to it since it was put forward on October 3 of last

year?

HON. MR. CURTIS: Mr. Speaker, I indicated earlier that there

is no statutory agreement or any agreement with respect to the Pan

Pacific Society and the government of British Columbia. I've assisted

the member to the best of my ability at this point.

MR. BARBER: So that I understand perfectly clearly, the

minister himself is saying that he personally has not approved any

operating agreement, at this stage, between the Capital Commission and

Pan Pacific for management of the convention centre. Is that the

minister's personal position on the matter?

HON. MR. CURTIS: Earlier this week in the course of routine

discussion with the solicitor for the Provincial Capital Commission, I

put precisely the same question. Not "have I…?" Because my records

obviously would show what I would or would not have done. My question

to the solicitor was: is there any legal agreement between the

organization known as Pan Pacific and the government of the province of

British Columbia? The answer, I was informed at that time, is no.

MR. BARBER: Unfortunately the Capital Commission reports

otherwise. I quote from its minutes of February 5, 1980, page 2: "Mr.

Giles" — George Giles — "reported that the recommendations made to the

minister under the date of October 3, 1979" — which I just quoted in

part — "have been approved and will be confirmed in writing by the

minister. Mr. Holmes requested that the appointment of the Pan Pacific

Society and the budget be considered at the next meeting," Mr. Holmes

being a member of the Capital Commission. There's a contradiction here.

AN HON. MEMBER: The question!

MR. BARBER: I'll get to the question. I appreciate the

government's discomfiture with this. It's perfectly clear why. There is

a contradiction here between the minutes of the Capital Commission of

October and the minutes of the Capital Commission of January. I wonder

if the minister can explain the conflict between Mr. Giles' report to

the Capital Commission, dated February 5, 1980, which says that the

minister did approve an agreement with Pan Pacific, and the answer the

minister just gave a moment ago. There is a contradiction. How does he

explain the contradiction?

HON. MR. CURTIS: Mr. Speaker, I stand by the answers I gave

earlier, particularly the last answer I gave the member with respect to

a legal agreement between the government of the province of British

Columbia and the group known as Pan Pacific. So that's about all I can

do to assist the member this afternoon on that point.

MR. BARBER: As of this date, has the minister requested the resignation of any member of the board of Pan Pacific?

HON. MR. CURTIS: No, I have not.

[ Page 2687 ]

MR. BARBER: Has the minister now decided to dismiss the Pan

Pacific Society, to thank them for their efforts and to create instead

an open and community-based public operating authority, representing

the whole of the community, to manage the convention centre?

HON. MR. CURTIS: While the question would impinge on future

policy of government, I would refer the member to the debate in which

he and I participated some two to two and a half weeks ago, which dealt

with that very point, when I indicated that I believed that the

operating organization for the conference centre — Hansard will assist the member if he wishes to be reminded of that — should be much more broadly based than had been proposed.

MR. BARBER: I have a final question to the same minister. Is

the minister familiar with a prospectus issued by the owner of the new

condominium now under construction north of the convention centre at

the Reid site?

HON. MR. CURTIS: No, I don't believe that I'm aware of any such prospectus.

STIKINE-ISKUT AND

LIARD DAM PROJECTS

MR. PASSARELL: I have a question for the Minister of Energy,

Mines and Petroleum Resources. Yesterday I asked the minister whether

B.C. Hydro had commissioned any northern transmission studies which, by

design, excluded consultation with affected groups. The minister

refused to answer.

Can the minister now assure the House that the native people of the

north will be consulted in all the critical background studies?

HON. MR. McCLELLAND: I wonder if the member would like to

tell me which background studies he is concerned about, and

particularly if he'd like to send a letter to my office and express the

concerns that they have. I said in this House yesterday that no energy

projects will be approved in this province until full public hearings

are held. I've also said that there will be legislation before this

House in a couple of weeks which will develop that prospect. If the

member has some serious concerns, I think he has an obligation — not

only to this House but to his constituents — to come to my office and

tell me what those concerns are. He hasn't done that to this point, and

I have the feeling that perhaps he's not serving his constituents as

well as he might. I would be happy to have him in my office at any time

to express those concerns.

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

(continued)

On vote 103: minister's office, $123,272.

MR. KING: I have a few more comments to make on the

minister's vote before we allow it go through. The minister will recall

that last year….

Mr. Chairman, perhaps I should wait until I have the attention of the House; it's fairly difficult to make oneself heard.

MR. CHAIRMAN: Perhaps all hon. members will remember that

while one member has the floor it is impolite and against our standing

orders to impede his progress or his speech.

MR. KING: It's not only impolite, Mr. Chairman, it's very difficult to hear.

I think the minister will recall that last year I questioned him in

a fairly detailed fashion about a report into the forest industry

commissioned by the British Columbia Truck Loggers Association,

commonly referred to as the Thompson report. I am sure the minister

will recall some of the contents of that report, but just to refresh

his memory and the memories of all members of the House regarding the

basis of that report, I want to quote briefly from it as it pertains to

the alleged manipulation in the forest industry of the annual allowable

cut, and consequently the inventory of fibre assigned to the major

integrated forest companies in the province of British Columbia. I

quote from the first page — it's an analysis of cut control.

"This report was prepared for the Truck Loggers

Association to provide information on selected tree-farm licensees'

performances with respect to cut control, contractor clauses,

calculation of annual allowable cuts. This report is divided into three

sections as noted above. The report is not intended to be an

exhaustive, definitive analysis of the subjects covered; to have

prepared such a report would have taken an excessive amount of time and

money. It was intended this report present background data collected

from Forest Service administration division files with summaries and

analyses of the various aspects of the three subject areas.

"The report serves four purposes:

a) it highlights

problems inherent in the three subject areas as they relate to small

independent loggers and manufacturers as well as to the coastal timber

supply;

b) it provides direction and focus for the further studies that

should clarify and standardize annual allowable cut calculation

procedures and that should review specific TFLs with extraordinary

deductions built into their annual allowable cut calculations. The TFLs

with obviously poor contractor clauses and cut control performance

records are pointed out."

Further on in the same introduction it points out that a very large

amount of variation takes place in meeting the annual allowable cut,

which allows some of the major integrated companies to in fact bank the

resource — hold it in the bank — without utilizing it at the same time

small loggers and small entrepreneurs throughout the province are being

denied a supply of timber.

That report is available — it's a public document — for all to see.

The minister's response was that this was not a major problem, that

really it was overemphasized by Thompson, who is an independent

professional who had no reason to try to doctor the figures in any way.

Indeed, the figures were taken from the ministry's own files. However,

the minister discounted the very serious revelations that were

[ Page 2688 ]

brought forward in the Thompson report. This is not

a factor and the ministry has a good handle on inventory and on the

annual allowable cut in the forest industry.

My colleague, the member for Skeena (Mr. Howard), referred yesterday to an

article in the Vancouver Sun

on May 9 which outlines how a forestry firm planned overcutting. Now

that's in conflict with the allegations contained in the Thompson

report. One the one hand there was undercutting, and in the case

referred to by Moira Farrow in the Vancouver Sun

there was overcutting. But the principle is the same, Mr. Chairman; in

both cases there was an attempt to manipulate the utilization of the

resource by a large integrated forest company in the province of

British Columbia. To refresh the minister's memory, let me read just

briefly from the

article that my colleague referred to yesterday:

"Canadian Forest Products Ltd. made plans to overcut

part of Vancouver Island forests to prove to the government that a

controversial logging ban would result in lost jobs, according to a

partial internal company report obtained by the Vancouver Sun .

The cutting was to be as much as 15 percent over the company's annual

allowable cut. The document is a typed but not photocopied duplicate of

one page of an internal report prepared by Canadian Forest Products

Ltd. staff.

"CFP spokesman Doug Rickson confirmed that the report

was prepared by one of the company's divisional engineers, Jim

Mitchell, on the subject of a five-year logging plan. Rickson released

the entire report, which was prepared in 1976, several years after the

provincial government placed a logging moratorium on the Tsitika-Schoen

watershed on northern Vancouver Island. Several forest companies,

including CFP, wanted to log this area.

"The page obtained by the Sun lists five logging objectives for the company, including overcutting on some parts of the Island."

"It concludes with this paragraph."

And I want all members of the House to pay attention to this particular paragraph because I think it's highly significant.

"'The obvious objectives will allow the company to

indicate to the government, through their overcutting, that the

Tsitika-Schoen area indefinitely required for logging and that removing

its quota from the tree-farm licence would reduce the available quota

to such an extent that labour reduction would occur.'"

In other words, here is a major integrated firm in the province

contriving, through deliberately overcutting and violating the

regulations of the ministry and through breaching of the regulations,

to show that this area of the province could not be released to serve

the policy of the government. On the one hand, as I say, in the

Thompson report evidence is produced to show undercutting so that the

allocation to those large, integrated, mainly foreign firms can be

manipulated and controlled to the exclusion of the small entrepreneur

in the province of British Columbia.

Mr. Chairman, yesterday in the Vancouver Sun

we have an

article appearing on page A-11: "Ex-MacMillan Bloedel

Official Convicted in Log Trading Case. The former manager of MacMillan

Bloedel's log trading division was convicted in assize court late

Tuesday of corruptly accepting benefits of more than $180,000 for

favouring certain buyers."

Mr. Chairman, what we have here is a pattern of conduct by the large operators

in the province of British Columbia of flaunting the regulations that the minister

is duty-bound, legally and morally, to enforce. Apparently, as is evident in

the Thompson report, they are ignoring and violating and breaching those regulations

with impunity, free from any charge, free from any penalty, free from the initiation

of any sanctions by the Ministry of Forests. If the minister can demonstrate

one case in which such conduct has brought a sanction such as the reduction

of quota, the reduction of a tree-farm licence or inventory against a large

integrated firm in the province of British Columbia, I'd be very happy to hear

about it. I challenge him in the Legislature today to reveal such penalties

against people who have obviously been in violation of the regulations that

the minister is sworn to uphold. The minister answers blithely: "Everything's

fine in the forest industry."

We have evidence that the large, integrated firms are indeed

manipulating their annual allowable cut, that they are hoarding more

inventory than that to which they are entitled, to the exclusion of

small, homogeneous firms in the province of British Columbia — Canadian

operators. We have evidence that there is manipulation and kickbacks

and payoffs on the Vancouver log market, which is the basis for the

stumpage system for most coastal operators. And the minister tells us

that everything is rosy in the forest industry.

I say that it is a disaster area presided over by a disaster. Not

since the fifties have we had the kind of serious concentration and

centralization of control with all of the propensity for the kind of

thing that the person in the Vancouver log market was convicted for.

And that minister seems to feel that he can blithely ignore all of

these things and assure the Legislature, without any basis of fact or

documentation, that everything is rosy in the forest industry.

What has the minister done? What steps has he taken to come to grips

with these abuses? I would like to hear more than clichés from the

minister, more than pale, anemic assurances. I would like some evidence

that that minister has taken strong and decisive action to ensure that

this kind of tampering with the public interest, this kind of

discrimination against the Canadian entrepreneur, is not going to occur

again. I am going to give the minister a chance to respond to that

question which is at the root of the problems I have enumerated. I look

forward to a positive response from the minister.

MR. CHAIRMAN: Shall vote 103 pass?

MR. KING: Come on, Mr. Minister, get on your feet.

MR. HOWARD: Noticing that the minister was gradually getting

to his feet, I didn't want the vote to pass before he had an

opportunity to reply. I was just rising to give the minister that

opportunity, if he so desires.

MR. BARRETT: What are you covering up?

MS. BROWN: Are you covering up his incompetence? Is that it?

HON. MR. WATERLAND: Mr. Chairman, that vicious attack from

the lady member opposite — goodness gracious! I think the present tack

the member for Shuswap-Revelstoke (Mr. King) is on is on the same lines

as that raised

[ Page 2689 ]

by the member for Skeena (Mr. Howard) yesterday. A

few specific points have been raised. I will try to respond to them.

First of all, on the matter of the Thompson report, as the member

discovered last year, it was commissioned by the Truck Loggers

Association. He asked me for a copy of it at that time. Of course, it

was not my report. I understand that he has since received a copy from

the Truck Loggers Association.

We have no argument with the statistical data presented in that

report. It is the same data that we have within our files. As a matter

of fact, that is where the information came from, because we as a

ministry are running an open forest service. Any information related to

the public timber resource and the use of it is freely available to

anyone who may wish it.

We did have some disagreements with the Thompson report in the

interpretation of some of the data. This disagreement centred primarily

around periods of time which were used by Thompson consultants in

placing a certain

interpretation on the information. Since that time we

have invited the Truck Loggers Association and their consultant to meet

with my ministry staff. This has been done. Any discrepancies in

interpretation, I think, have been largely resolved.

The truck loggers, the consultants and we are in agreement as to the

way the information should be interpreted and that it is accurate

information. Anything, of course, can be done with data, depending upon

what you may wish to prove. When we sat down together these differences

were, by and large, resolved. One of the things that we pointed out to

them, as I believe I mentioned in the Legislature, is the material; the

methods of gathering material, the format of inventory and

interpretation are slightly different from TFL to TFL. That leads to

some of the problems in

interpretation which we have had. We as a

ministry are now almost at a point of agreement with all TFL holders,

that there will be a compatibility of information. We're not insisting

that exactly the same techniques and procedures be used by each TFL

holder. All we are wanting to be assured of is that the information,

the method of gathering the information and the

interpretation of it is

compatible with that used by the ministry — on Crown land — and that

the same computerization system can be used to interpret the

information. That information is, by and large, in place now.

As a result of meeting with the Truck Loggers Association, and their

concern with tree-farm licence cuts and so on — at the last meeting we

had, which was about six weeks ago — it was agreed by them that it is

not the

interpretation of the information they are concerned about; it

is the accuracy of the base data. As a result of that we have agreed….

Actually, a few days ago, we announced that we will now begin to move

into the tree-farm licences, as we have staff time, as we continue with

our timber supply area analyses, and that we will ourselves begin

assessments of the data they use to make sure that it is in fact

compatible with the guidelines we have established.

I announced a few days ago that we will be beginning with the older

tree-farm licences. The first one we will start with is tree-farm

licence No. 6, which is held by ITT-Rayonier. I am satisfied that we

are working in the right direction. Once we have been through all the

tree-farm licences, if we in fact determine that anyone has made any

attempt to — as the member puts it — hide or horde allowable cut, then

the Forest Act is very clear as to what our options are. The member

seems to be under the misconception that a tree-farm licence allowable

cut, once established, is firm for all time — at least that is what he

implied, and I'm sure that's what most members here assumed from his

discussion. The member, I think, does realize that the allowable cut is

determined for each five-year cut-control period. The large companies

which have tree-farm licences — ten years in taxation tree farms, ten

years in the Crown units, the public sustained yield units and, in the

future, in timber supply areas — must plan their timber flow to try to

sustain as uniform a level of economic activity and employment as

possible. We try to do that in our timber production forecast, which we

now are doing in public units as well. Some stability of employment and

uniformity, I think, is in the best interest of all British Columbians.

The member mentioned a CFP memo which was discussed in newspaper

articles. According to the

article I read — the same one the member

read from today — an attempt was made by them to demonstrate to the

Forest Service that they really can't block up that timber in the

Tsitika-Schoen areas. The member knows that the resolution of those

studies and that moratorium was that there will be a multi-use resource

plan in place. Certain areas have been tied up indefinitely, and a

multi-use resource plan is established for the balance.

One of the points we brought up in our discussion on Bill 7 was that

the forest land base is important and must be maintained. As long as we

approach it with a multi-use concept in mind we can ensure this

stability for our most important industry.

I'm sure that the member for Skeena will realize that, yes, large

companies in British Columbia are very important to us. We like to try

to maintain a balance between the large and small companies. That is

why we have very specific programs brought forward as a result of the

new Forest Act, which will provide assurance that these small companies

will continue. Our policy, based upon these programs, is that there

will be a significant portion of the cut in all public units available

to the small independent operator. There are two classes, of course:

one for those with sawmills, one for those without sawmills. People who

hold a "quota" in public units will not be eligible, so these

independent companies will not have to compete with the larger

companies for their wood supply.

I think we're turning towards a reasonable balance with size and

degree of integration of companies. Members, I think, imply that all

the cut should be in the hands of smaller companies. I'm sure that

members of the IWA would not agree with you. Their Jack Munro, who we

all know, certainly doesn't agree with that. The members realize that

security and stability of employment does depend to a certain extent on

the very stable, larger companies, who must be large to compete in the

very competitive international marketplace they deal in.

There is the constant suggestion that companies are constantly

flouting the regulations and manipulating regulations with impunity to

achieve their own ends. We in the ministry have good control

procedures. The member asked for an example of anyone who ever lost cut

as a result of being undercut. The one example that comes first to my

mind is Can-Cel, where their TFL was reduced by roughly 50 percent

because they had not kept up their cut commitment. But there is a

variation allowed in annual cut — as much as 50 percent in any one year

— because the industry does have to adjust to external factors, such as

market conditions. As long as the cut is within a certain limit in the

five-year cut-control period, that's quite acceptable and I think

necessary. We

[ Page 2690 ]

have enunciated very clearly the use-it-or-lose-it

policy: if it's not being used, it will be made available to others. We

have done a rather detailed study of people in public units who have

not used their cut. Strangely enough, the greatest violators of the cut

control are not the large companies at all, but the smaller companies.

A lot of this is due perhaps to inadequate financing and the fact that

some of their cuts are so small that it's difficult for them to keep

them in exact balance. These things we have to consider.

I think that covers the points raised by the member for Skeena and the member for Shuswap-Revelstoke.

MR. KING: I think my colleague from Skeena is going to have

something to say with respect to the minister's understanding of his

presentation yesterday. I was interested in listening to the minister's

response. Once again, everything is okay; they're reviewing the TFLs

and are started on the first one, TFL 6. He said that basically,

despite evidence to the contrary, they really have a handle on what's

going on in the industry; there's no basic manipulation. He said that

there's a change in the annual allowable cut on the basis of every

five-year plan; I appreciate that — changing conditions.

But I don't think the minister has a handle on what's going on. I

think that nice little cliché he uses, "use it or lose it," is just

that — a cliché. It's interesting that the only TFL that has been

reduced at all was a public one — Can-Cel's TFL 23. I understand the

reduction was voluntarily negotiated. I'm not aware of any other.

If the minister feels he has a handle on what's going on, that

there's no room for manipulation, I wonder if he's aware of an

interoffice memo with the letterhead of MacMillan Bloedel Ltd., dated

just last fall, September 16, 1979 — not very long ago, Mr. Minister.

It relates to TFL 39 renewal coming up for one of those famous

rollovers — the evergreen rollover that the minister parroted. This is

an interoffice memo to R.V. Ennis from D.N. Ratcliff at Woodland

Services, copies to Marlow, Dent, Peterson, Johnson, Richardson,

Waatainin, and Williams. The reference is: RVE, memo to DNR, and the

numbers of the file. I hope the members of the House listen very

carefully to this interoffice memo by this small firm which is living

up the the minister's regulations — as he tells it.

Interjections.

MR. KING: The member for Kamloops (Hon. Mr. Mair) usually

gets highly exercised, Mr. Chairman. I understand that the Minister of

Health has a bit of a blood pressure problem, but I can tolerate his

intervention.

The memo states:

"In general the steps outlined in your memo to handle

public participation are sound." This is talking about the rollover

renewal of TFL 39. "As I see it, our job here is to coordinate the

overall effort to satisfy public involvement in the TFL renewal in the

several communities that must be involved. I would rank the intensity

of public interest and involvement in this order: BK 6, Queen Charlotte

Islands; BK 4, Port McNeill, Port Hardy; BK 2, Sayward; BK 1, Powell

River. We may have some surprises in the other non-community blocks,

but public involvement at Namu and Phillips Arm, etc., should not be

too brisk.

"Above all else, we must be consistent in our approach

to the public in each community presentation, and it will be a part of

my job to ensure a free flow of information between divisions involved"

— not to the public, but between divisions of the company. "Some

comments on specific items:

"1) Develop an operability plan.

"2) Recalculate annual allowable cut based on

operability plan. A word of caution here: in our last annual allowable

cut calculation we withdrew some 650 million cubic feet of low-volume

timber from inventory" — and the acres are listed. "This was done to

reduce the annual allowable cut. This time around, though, we will have

to include it. Otherwise the Forest Service may well be inclined to

classify it as unused inventory suitable for small business

opportunities."

What's that, 39,000 acres of land that they're all of a sudden going

to have to put back into their annual allowable cut? Did you know about

that, Mr. Minister, if you're on top of it? If you knew about it, and

they arbitrarily withdrew it from their inventory, why did not your

famous "manage it, use it, or lose it" theory come into play? Why did

you not take it away from them, Mr. Minister? Why didn't you give it to

that much-vaunted small-business program of yours, which you say you

were going to use to keep the small independent Canadian operator in

business in this province, when in fact they're going down like

dominoes for lack of timber supply and because of arbitrarily and

discriminatorily high stumpage rates as compared to the large ones?

Mr. Chairman, what we have here is a major scandal in the

administration of the forest industry. We have manipulation with

impunity from any sanction or regulation by the ministry, if indeed

that minister is competent enough to know what's going on. Whether it

be ignorance or design, it is equally unacceptable to the public

interest and to the interest of our private sector.

I'm going to go on and read some more of this memo.

"This time around we will have to include it.

Otherwise the Forest Service may well be inclined to classify it as

unused inventory suitable for small business opportunities. Therefore,

uneconomic and sensitive site exclusions must be site-specific and

substantiated.

"3) Training session to review all aspects of annual

allowable cut calculations. Woodland services will certainly run

sessions on annual allowable cut calculations, Forest Act and

regulations and whatever else is needed."

On and on it goes, telling all of the things that have to be done

basically to dupe the public, to minimize public participation and

debate, and also to dupe the ministry so that they can hang on to

timber that they apparently don't need and that should be utilized by

other operators in the private sector.

This interoffice memo ends with this classic, immortal line. It's

not quite as good as W.C. Fields, but it's similar to old Texas Guinan,

who said: "Hello, suckers." It reads thus: "Ernie Waatainin and I will

get up to the Charlottes to see you people just as soon as the dust

settles from the 1980 plan." It's signed D.N. Radcliffe.

Isn't that lovely, Mr. Chairman. This chronicles the

maladministration, abuse, manipulation and discrimination that is

rampant throughout the Ministry of Forests, and that pathetic little

minister stands there and tells us that everything is peaches and cream.

[ Page 2691 ]

MR. CHAIRMAN: Hon. member, I can't accept the personal attack on the minister. Would the member please….

MR. KING: I wasn't attacking him personally; I was attacking him intellectually. However, I withdraw the remark.

Mr. Chairman, I have absolutely no confidence in the minister in his

direction. I don't think he knows what's going on. I think this is an

absolute scandal in terms of the public evidence that the large

integrated forest companies of this province, and not the minister, are

running the forest industry in the province of British Columbia.

I and my colleagues are receiving literally dozens and dozens of

letters from small operators all over this province complaining about

the very things that I've articulated here.

MR. KEMPF: Name names.

MR. KING: Sure, I have files on them. I'd be happy to read some of the letters-many from that member's riding.

MR. CHAIRMAN: Mr. Member, I wonder if I might just have the

attention of the committee for a minute. There's an awful lot of

discussion going on on both sides of the House — discussion which is

entirely out of order. The member for Shuswap-Revelstoke has the floor

and I will ask the member to continue.

MR. KING: I want to thank you, Mr. Chairman, and I agree that

there's a good deal of bad order around this institution, but there's

more bad order in the Ministry of Forests. That's where the bad order

really exists. I don't know what we do about it — I really don't.

What we have is a government and a minister that are so recalcitrant

and so stubborn that they will not accept a case which is founded on

fact and evidence available for everyone to see. They stick myopically

and stubbornly to their direction, which as everyone knows is

delivering control of the forest industry into fewer and fewer hands,

most of those being foreign hands. This is the issue. I could go on and

chronicle the discrimination that exists against the small independent

operators in the province of British Columbia while the large

integrated boys have carte blanche. They name their own ticket, they

control and manipulate their own inventory, they enjoy preferred

stumpage rates. I chronicled those in the House a couple of weeks ago

and Ftll do so again for that minister's edification, Mr. Chairman.

Here is a foreign firm — not a U.S. one, a different one; this one

happens to be Japanese — and two independent British Columbia operators

in the coastal forest area, and here are the stumpage rates that apply

to the species which they log. For balsam, per cubic metre, the

Japanese firm pays $2.69; operator A, British Columbia firm, $2.69;

operator B, British Columbia firm, $11.77 stumpage. For hemlock, the

Japanese firm pays $2.69; operator A, the British Columbia independent

operator, $10.00; operator B, $8.36. For cedar the Japanese firm pays

$7.00; operator A pays $17.00; operator B pays $22.25 stumpage. For

spruce the Japanese firm pays $48.60 stumpage; operator A, the only

B.C. one that logs that species, $86.00. How do you explain that

disparity? How do you explain the discrimination?

This is not the only case I have. I have here literally dozens of

work sheets mailed out by the ministry which chronicle the fact that

many small independent operators in British Columbia cannot possibly

log at a profit when their operating costs and the discriminatory

stumpage rates applied against them are considered. Hence they're going

out of business. They're shutting down. I had two more in my office

this morning. They're closing down — they're laying off 30 men here, 50

men there,100 men there. And we wonder why we have an unemployment

crisis. We wonder why we have a crisis in the forest industry today.

I don't know what more I can say about the rank discrimination and

the incompetence that characterizes that minister's administration. I

don't know what more I can say about it, but you cannot refute the

facts. These working plans are from your own ministry. The evidence is

here. Either it's ignorance and incompetence or it's some conspiracy to

ensure, for consideration, that the large integrated, mostly foreign

firms in the province of British Columbia gain a complete and absolute

stranglehold over all fibre in the province of British Columbia. Either

one is, in my view, equally evil.

HON. MR. WATERLAND: The member's discussion about

discriminatory stumpage rates, bringing out examples where foreign

companies, Japanese companies, apparently get a break in stumpage when

Canadian companies — and it's always the poor, small Canadian operator

— don't get a break and are discriminated against…. I think his

dialogue is typical of that member and that party taking in for….

MR. KING: You're darned right! I hate to see B.C. sold out.

HON. MR. WATERLAND: Mr. Member, I did you the courtesy of listening when you were talking. If you would return it, it would be very nice.

The member took numbers, which in themselves are meaningless, and

used them as proof of discrimination against Canadian companies. It is

typical of his attempts to take information and manipulate it to make

some fallacious point. The member knows full well that the

determination of stumpage depends upon a large number of factors,

including the quality and species of the wood that is being charged

for, its location and the cost of harvesting and transporting it. All

of these things work into the formula. It may well be that the lower

stumpage figures that the member mentioned — he shakes his head and I

can hear the rattling as he does that — may have been more

discriminatory than the higher one, depending on what all the costs

were. The member will never admit that, but I'm sure those who think

beyond the statements he made and understand the stumpage system and

what it means will realize that the price is determined by all these

factors. The bottom-line figure does not mean that the person who paid

the lesser stumpage got the best deal, because they are all based on

the same criteria.

The member will make a comeback, probably with additional examples.

I could give him at least as many examples where the terrible, foreign,

multinational companies paid higher stumpage than the poor, small,

Canadian operators. It depends on the location, the species, the grade,

the operating costs and many other factors.

The memo he read from Mr. Radcliff to Mr. Ennis, re

[ Page 2692 ]

TFL 39, points out that Mr. Radcliff stated that at

this time we must include that; otherwise the Forest Service may well

consider it as unused inventory, suitable for small business

opportunities. If, in the review of the five-year plan, when this TFL

is rolled over, wood has been hidden for that purpose, it may well be

made available for other types of tenure. The determination of what is

allowable cut, again, depends on many, many factors, which are

constantly changing. The operability of an area changes as economics

change, as harvesting techniques change and as other factors change.

The statement here by Mr. Radcliff that the Forest Service may well be

inclined to classify it as unused cut is quite a true statement. If

ever it is demonstrated to us that people are hiding wood, that the

means they use to determine cut are not in keeping with ours, the cut

may well be removed. I'm not privy to what other discussions took place

within MacMillan Bloedel regarding TFL 39, but as far as I know at this

time that TFL is not renewed. The working plan will be subject to

public discussion and scrutiny before it's presented for approval by

the ministry.

MR. KING: Public hearing?

HON. MR. WATERLAND: The working plans have public discussion. They are ongoing.

MR. KING: Public hearing?

HON. MR. WATERLAND: Yes. Mr. Chairman, the procedure that has

been followed and is being followed on the rollover of TFL is that

before the working plan can be approved, it is presented for public

scrutiny.

MR. KING: No, public hearing, and you know it.

AN HON. MEMBER: Public scrutiny — what's wrong with that?

HON. MR. WATERLAND: For public hearing and discussion. The

member is playing with words. The public has input and discussion. The

ultimate responsibility for approving the working plan and the rollover

of TFL lies with the ministry, the elected government.

The working plan for TFL 39, which expired some time ago, was

renewed during the term of office of that socialist government. I

didn't see them at that time taking any large volume of wood away from

MacMillan Bloedel, so they must have agreed that their determination of

allowable cut was quite adequate. Probably the cut was quite adequate.

Mr. Chairman, the tenures which were laid down in tree-farm

licences, when they were issued years ago, were not changed by that

government; that government knew full well what the terms were. The

tenures for tree-farm licences now are 25 years and they are renewable

with compliance with the Forest Act and with criteria which we, as a

government, established, and renewable only under those conditions —

time of renewal. So there is nothing sinister about stumpage rate, as

the member puts it, "discrimination," because the calculations are very

straightforward — rather complex, but straightforward.

What the final dollar figure per cunit of whatever species of wood

is, does not reflect discrimination but rather reflects the conditions

of harvest, transportation and quality, grade and species of wood which

are being harvested.

MR. HOWARD: Mr. Chairman, that was an incredible performance

by the minister that we just listened to. I wouldn't be a bit surprised

if the president of Mac-Blo, Calvin Knudson, writes you a letter of

thanks in appreciation for standing up so valiantly to support Mac-Blo

and the other large integrated companies in the forest industry.

[Mr. Hyndman in the chair.]

He took this question of public scrutiny, the public hearing. We had

on the southern portion of the Queen Charlotte Islands, on Moresby

Island, not too long ago a renewal of a TFL, and there was no public

hearing, even though there was a clamour and a demand for it; no public

input, no public concern except that which suited the convenience of, I

believe it was Crown Zellerbach. And the people in the Queen Charlottes

are still up in arms about that decision — never mind all this guff

about public input and public hearing.

In any event, Mr. Chairman, to the minister, the memo from MacMillan

Bloedel, which the member for Shuswap-Revelstoke, just read, points out

clearly in it that it's the intention of MacMillan Bloedel in that memo

so to influence public opinion on the side of Mac-Blo that they'll get

their way with the ministry. It clearly states that, steps are

outlined: "Our job here," says MacMillan Bloedel, "is to coordinate the

overall effort to satisfy public involvement in the TFL renewal in the

several communities that must be involved." In other words, MacMillan

Bloedel is going out on a PR job to convince the communities

affected-and they identify some of them — that Mac-Blo has got the

answer and Mac-Blo's TFL renewal should not be questioned. To juggle

and adjust the allowable cut figures, the inventory figures, and

pulling it in or out as suits MacMillan Bloedel…. The minister has the

unmitigated gall, in the face of that, to stand up here and give that

kind of defence on behalf of corporations that do that sort of thing.

By doing that they deny the position of the small logger or the small

operator in the whole scheme of things in the forest industry.

Nothing has changed over the years so long as Social Credit has been

the government, except the faces and the names of the ministers.

Corporations get larger, become more manipulative and find their

support in Ministers of Forests. The current minister is no different

that his predecessors in that party were either.

I raised this yesterday not knowing at the time that something else

was involved. Another memo by Canadian Forest Products saying that they

wanted to manipulate appeared in the Vancouver Sun .

It was their intention to adjust and juggle the situation to suit that

company's convenience. The document that is referred to in this Vancouver Sun

article, written by Moira Farrow, quotes a concluding paragraph. This

was quoted earlier and needs to be quoted again, obviously. It says:

"'The above objectives will allow the company to indicate to the

government through their overcutting that the Tsitika-Schoen area is

definitely required for logging and that removing its quota from the

TFL would reduce the available quota to such an extent that labour

reduction would occur.'"

Now that's Canadian Forest Products saying that they want to

manipulate the situation in order to convince the Forest Service or the

government that a certain course of action should be followed that is

convenient for Canadian Forest Products.

We have an internal memo today by MacMillan Bloedel

[ Page 2693 ]

saying it's their intention and purpose to adjust

the figures to pull stuff in or out of inventory to change the

allowable annual cut figures, in order to manipulate a situation and

convince the Forest Service and the people in those communities that

the interest of Macmillan Bloedel should be served.

Why do these companies do that, Mr. Chairman? Why do they do that,

Mr. Minister? Do you think they do this sort of thing as an exercise,

just to keep their hand in at writing memos? Do you think they do this

knowing full well that they're going to be defeated by the ministry and

the Forest Service? No way. They do this sort of manipulation and

juggling because they have hopes, based upon their past experience,

that a compliant minister and ministry will agree with their position.

They wouldn't bother with this sort of juggling of facts and figures if

they didn't expect that somewhere in the ministry, and maybe from the

minister himself, they were going to get favourable treatment. Why go

through the exercise if they don't have an expectation that what they

are trying to do will be satisfied?

The minister distorted what I said yesterday. He attempted to give

to my comments a connotation which was not there, and attempted to

leave an impression other than that which I enunciated and set forth.

That, of course, is not an activity confined exclusively to that member

of the cabinet. Other ministers in this House have done similar things

with other statements that people have made. I just want to put on the

record that the minister really does not advance his stature very much

when he engages in that type of distortion.

Interjection.

MR. HOWARD: Well, he laughs about it, but it's factual.

Yes, I have a concern about the big getting bigger. Yes, I have a

concern about the information that I read yesterday from the

article by

Eli Sopow, which I can't put my hands on immediately, but which showed

that over a 20-year period, from 1954 to 1974, control and

concentration in the industry moved from a little more than a third of

control of the cut in the industry in 1954 to over half in 1974. I have

a concern about that and about the small operator and the opportunity

that he might have to get into the field, operation or business. I have

a concern based upon two things: 1) a genuine interest in it; and 2) a

knowledge about what went on in the past — that with ministerial

policies in effect, the small operator hasn't got much of a chance to

make a go of it. That does not give the minister licence to twist that

kind of concern and attempt to identify it as wanting everything

removed from the hands of large corporations.

We know that there is a need — and it developed that way — for

integrated companies. We also know in that context that the only agency

that can place a compression against the excesses of large integrated

companies…. The only tranquilizer to them is the tranquilizer offered

by government, and it is statutory, legislative and administrative.

From what little I've been able to hear this afternoon, and have read

on earlier occasions, of things that have taken place in the ministry,

there doesn't appear to be that sort of dedication necessary to ensure

that the small entrepreneur has got a chance. That's what concerns me.

No amount of twisting or adjusting of that, to suit whatever obscure

intention the minister may have had, can deter that.

Mr. Chairman, the minister may want to comment about that. In my

view he did not adequately put forward any public policy statement to

deal with the substance and the essence of what the member for

Shuswap-Revelstoke (Mr. King) was saying, namely that there is evidence

— and that evidence must exist within the ministry — that large,

integrated — many of them foreign-dominated — corporations manipulate

the situation to suit their own convenience and their own ends;

otherwise they wouldn't waste their time doing it. The minister has not

responded to that, to identify to the public what is public policy

within his department to curtail and eliminate those excesses and make

sure that there's fair play and decent and honourable activity in the

forest industry; that's what he's failed to address himself to.

MR. LOCKSTEAD: I'm surprised the minister didn't wish to take the time to reply to the member for Skeena on the many questions he posed.

I was going to change the topic and discuss a new topic that's of

great concern in my riding. I had the opportunity of going through the

Blues and perusing the answers the minister gave to my questions

yesterday, in terms of the plight of the small, independent loggers in

my riding and, I would suspect, throughout the coast of British

Columbia if not all of British Columbia.

Interjection.

MR. LOCKSTEAD: I hear the member for Omineca (Mr. Kempf)

mumbling away in his seat, but he doesn't get out of his chair to

speak. I wish he'd get on his best behaviour, because I happen to know

his wife is on the premises today.

The minister replied to one of my questions yesterday, and he said,

to quote the Blues: "The plight of the small logger is not the result

of stumpage rates at all; it's the result of the climbing lumber

market." Yet hardly a day goes by that I don't receive a phone call or

correspondence from constituents who are being directly affected by

layoffs or small loggers who have to shut down because of stumpage

rates. I've taken the intervening time since yesterday to document some

of these cases for the minister's interest.

I'm sure that the minister has this information. I've got so many

examples here, I don't know which one to start with. Let's start with

the one on top. This particular independent happens to be working on

Texada Island, and on this particular boom of logs the stumpage rate

was 50 percent of the total value; this is what the government took

right off the top, before interest charges, towing expenses, cruising

fees and all of these other expenses that the small independent must

face. We're not taking into account his logging expenses.

By the way, at this time I might point out to the minister that the

ministry has a habit, after an application has gone in and the ministry

has cruised the proposed timber sale, of sending out a form to the

logger — not by registered mail, by the way — a long list detailing

what in their view logging costs are going to be in a certain location

for a certain species. If the logger does not reply to this missive

within ten days, then they proceed on the basis that this is what the

logging costs of that independent are going to be.

I have a case here where the logger never received, for whatever

reason — maybe it's the mails; put the blame where you wish — this

forestry assessment of logging costs for that

[ Page 2694 ]

particular timber sale. For the interest of the

minister, that particular timber sale number is A10626, cutting permit

C; so the minister should have no problem finding that one. The point

is that that particular independent, with an extremely small quota —

just barely surviving, in any case — didn't have the opportunity even

to reply and contest the ministry's estimates of logging costs for that

particular operation. They told him arbitrarily: that's just too darned

bad you didn't get it; too bad about the mail service, or whatever the

reason may have been — we don't know. But the fact is, we do know he

didn't receive this until sometime later. So he was assessed at this

rate. The fact is that by the time he paid the stumpage interest fees

that the ministry charges, all these other costs, that left this logger

$26.36 per ccf, including the payment of wages, to log this timber. Of

course, he was losing a great deal of money and obviously shut down and

laid off nine people in his own operation because of this type of

attitude by that incompetent minister.

Talking about interest rates as well, the minister must know that

under the Forest Act the Crown owns that timber until it's actually

sold. What happens to these guys after those logs are scaled but not

sold, particularly if it's small junk, saw and chip material — a lot of

which is being left in the bush because of your policies at the present

time — is that your ministry charges interest. Even though the logs are

sitting there in the water — or wherever they may be — unsold, you're

charging these independents interest on their unsold logs while they're

waiting and looking for a buyer. You know as well as I do, Mr.

Minister, what the situation on the log market is today in British

Columbia. Do you call that fair? Do you call that sticking up for the

independents? I don't. We document case after case.

I wasn't very happy with your answers yesterday, Mr. Minister,

because in a way you misled the House. You misled me, in my view, and I

wasn't very happy about that. We went over the Blues in detail with

some of the independents in my riding this morning. When you answer

questions in this House I think you ought to be a bit more direct and

fair. Do you want this documentation? I can send it to you — every inch

of it, every bit of it, every sheet of it, and a sack for it.

MR. CHAIRMAN: Order, for a moment. The Chair heard the member for Mackenzie suggest that the minister had misled the House yesterday.

MR. LOCKSTEAD: I didn't say he did it on purpose — he just did it.

MR. CHAIRMAN: You're not suggesting any form of deliberate or conscious…?

MR. LOCKSTEAD: No, he didn't do it deliberately. I'm assuming he just didn't know.

While I have the attention of the minister I'd like to list a few of

the complaints regarding this matter in terms of the independent

logger. The appraisal system doesn't work accurately, and I've listed a

few of these things. While I could have been watching the news last

night I wrote a few notes to myself. So I missed the news — I hope I

didn't miss much. In any event I'm going to read this list of items out

to the minister. I hope that he'll make a few notes and when he gets up

to reply I presume that perhaps we'll get more, better and direct

answers from the minister on this occasion.

The appraisal system doesn't work accurately because number 3 log

scale is not broken down into categories. The minister knows better

than I do — at least he should — that there are about five categories

in the number 3 log category situation. The minister knows exactly what

I'm talking about. This is not taken into account when the people in

your ministry are looking at any particular stand of timber anywhere

within a PSYU. The cruising system doesn't break down these categories.

The camps work only when higher priced logs are selling. At the present

time, as I mentioned earlier, the logger is, under certain

circumstances, compelled to take out the junk. You know you can't sell

that junk. You know very well that the loggers nowadays, under today's

market, can't sell that stuff, so they're leaving it in the woods. If

they're compelled to bring it in for some reason or other, do you know

what they're doing? They're shoving it out of the booming grounds into

the straits. This is another topic which we'll get into later. But

they're shoving the junk out into the straits. They're logging it;

they're bringing it down the hill, all right; but they're shoving it

out into the chuck because they can't sell it. The atrocious stumpage

rates that you charge on some of this junk at the present time…. This

is one of the reasons some of them are going broke, by the way. Loggers

are not even given enough time to argue the stumpage appraisal and

don't keep all the information that's needed. This is what I was

referring to earlier — this ten-day unregistered type of document that

they are supposed to receive so that they can have the opportunity to

contest the ministry's appraisals.

Talking about interest rates, interest is not considered an expense

in logging: interest on deposits to the independent; interest on

prelogging activities, which is moneys borrowed from the bank or other

sources, perhaps from a broker or wherever; interest on cruising and

preplanning, not taken into account; interest while logging — expenses,

the purchase of equipment, outlay of these funds; interest on the time

the logs are being towed and stored, usually in the lower mainland

somewhere or whatever storage ground there may be; and interest, of

course, while logs are sold and in storage, which I've just mentioned.

But interest is charged on stumpage and royalty accounts, even when the

boom is still at camp, while towing, while mills are inspecting booms,

as booms are turned down and, once again, while logs are in storage.

Storage charges and interest should be logging expenses. They really

should be charged, but it doesn't appear on your sheet; it doesn't

appear on these sheets that came out from your ministry to the logger,

if and when they receive them — particularly for those fellows who go

out to the bush for ten days and are home for four — if you give them

ten days to reply and contest this documentation you send to them. It

is pretty difficult to do that when you're out trying to make a living,

ten days on and four days off.

All other businesses deduct interest charges, etc., as part of their

operating expenses Yet you and your ministry don't allow even this

little bit of leeway to our small independents on the coast of British

Columbia. I suspect — although I'm not quite sure, honestly — that this

takes place in the interior as well. I'm not sure about that, because I

don't have that documentation.

The government does not take the following into its estimate of log

costs: storage, interest, moving to protect logs from weather, bugs,

stealing, extra inspection, log losses, weather deterioration when logs

are sitting around for months unsold while you're charging them

interest which

[ Page 2695 ]

they can't pay and have to borrow money from the bank to pay, brokerage fees, etc.

Interest charges on stumpage and royalty accounts should be after

two months. Then loggers should be able to apply for release of

interest, if not okay and logs are not able to be sold. The loggers

should have that right, in my view, Mr. Chairman.

While I am not a lawyer and I am not that familiar with the Forest

Act — though familiar enough with it to know what I'm talking about now

— I am beginning to wonder if what the ministry is doing is legal, and

if the government can charge interest rates on logs legally in their

name. Legally, under the Forest Act, the logs belong to the Crown until

they are sold. Interest is charged on these logs, to the independent,

while the independent is waiting to sell these logs, which can

sometimes take months, particularly if it's a poor grade of timber.

In the meantime, we have another topic. We're getting off the beam a

bit here, but the minister is very much aware of instances where good

sawlogs are being shipped to certain locations at the present time.

This accusation will be documented in this House under this debate at a

later date. In the meantime I think I've given the minister something

to think about for a few minutes, and I would be pleased to forward all

this information, and more, to the minister if he's at all interested

in the plight and the difficulties that the independent logger in

British Columbia is facing today.

HON. MR. WATERLAND: Most of the discussion upon which the

member for Mackenzie's arguments were based was built on a false

premise. He says that the government owns the logs until they are sold.

In fact, this question has come to me a number of times and I've had

several legal opinions on the matter. The title to the logs passes to

the licensee when the timber is felled, not when it is sold. Usually

immediately after it is felled, it is scaled, and the scale determines

the bill.

Here's a good parallel, I think. The member suggests that titles

only pass when it is sold and that that is the point in time when he

should become liable for the cost of it. Take the corner-store

operator. Wouldn't it be nice if he could get his inventory into his

store and not have to pay for it until such time as he sells his

groceries? We as the Crown are selling standing timber. When it is

felled the title passes.

However, the member brought up a number of questions related to the

appraisal system. Strangely, the member is saying we are charging too

much stumpage to the small operator. In fact, the small operator's

stumpage is based upon basically the same criteria other people's

stumpage is based on — with the various factors, which may be

different, taken into account in the appraisal system. The member is

suggesting we are charging too much stumpage. I don't know how many

times I've read and heard members of that party say that the government

should be getting four or five times as much revenue from the sale of

Crown timber as we are getting now.

MR. LOCKSTEAD: Why are those guys going broke and laying off people if you're not charging too much?

HON. MR. WATERLAND: Mr. Member, many companies, large and

small, within the forest sector, are currently adjusting to market

conditions. There is no way we can insulate the small operator, any

more than we can the large operator, from the market he has to deal

with. If the small operator cannot sell his wood, he is best to not

hire until such time as a market is available. To blindly continue

harvesting when you can't sell a product doesn't make much economic

sense to the small or the large operator. That is one of the reasons

we're having adjustments in the industry right now.

On the appraisal system, the member says that the grades are not

accurate and don't really reflect the value of the logs. I'm sure that

as a result of that member's discussion with my deputy today, together

with some of the loggers he was talking about, he understands that

we're at the point now of approving that new grading system. I think

this will help overcome the problem somewhat. Again, grading and

establishing categories of grades of logs is quite a complex

undertaking; grades are not easily and clearly defined for all species

of timber. This has been an ongoing process. It's been over a year now

that we've been attempting to solve these things, and I think we're

fairly close to it.

The member says that the appraisals are inadequate because the small

logger can't sell the junk, and he should be leaving it in the bush.

MR. LOCKSTEAD: I didn't say that he should be leaving it out in the bush. You're encouraging that practice.

HON. MR. WATERLAND: We're encouraging that? Well, then you're

suggesting that the stuff perhaps should be left there rather than

being pushed out in the saltchuck. I hope he is not suggesting that we

have a different set of utilization standards for the small operator

than the large one, because everybody works under the same conditions.

If a person doesn't bring out material to the utilization standards

which we insist upon, he's billed for it anyway. If he brings it out,

he can recover value for it. But utilization standards are set down,

and the tightening of these over the years to come will be one of the

factors which will help us to alleviate future potential wood shortages.

He says that interest rates are not allowed for in the appraisal.

Well, they are not, directly. If we were to allow the interest on the

money borrowed from the bank by a small or large operator as an expense

allowance directly, the person who has borrowed the most money would

get the most advantage from it. The person who manages his business

well and doesn't have to carry as large a debt load would have a

disadvantage. But these factors are considered in profit and risk and

overhead allowances in the appraisal. We can't possibly recognize the

borrowings of each individual operator in determining stumpage. It

would be, first of all, administratively impossible and it would be

very unfair to the better operators who have managed their business

without having to carry a large debt load. But they are allowed the

general allowances for profit, risk and overhead.

Now the member mentioned the problem of the time period allowed by

the Forests ministry to agree or disagree to a particular appraisal or

a determination of stumpage. The reason we have to do that is the very

reason the member for Shuswap-Revelstoke talked about yesterday when he

talked about the large amounts of unbilled accounts which we were

carrying a year or two years ago. They're up close to $100 million. We

were allowing too much time for discussion between operators of all

sizes to what the actual allowances should be for a specific site. So

we stopped issuing the individual cost items and we presented a final

figure and said: "If you can demonstrate to us that this is not right

within a

[ Page 2696 ]

certain period of time, we will accept it." And if

he doesn't, then we'll use the figure that we had and then we have a

rate for that account so that account can be billed as the timber is

harvested. If we don't do that sort of thing, then the amount of

unbilled accounts that we have will grow again, We're always willing to

listen to operators who have disagreements — and perhaps the technical

staff of the Forests ministry have erred in determining what a cost

allowance should be. For this reason if they can demonstrate to us that

we're wrong in the final figure by going through the various

allowances, we can negotiate. We can negotiate that with the small

operator, with the large operator, and with all licensees that are

working in Crown timber.

Now I think that fairly well covers the particular items the member

raised. If there is other information there that he hasn't presented,

I'd be very happy to look at it.

But just one final comment on the market logger. As I mentioned

yesterday, we did put the market logger on a separate appraisal system

as of April 1. This was to be determined by the actual selling price

that they have for logs. Now there are still problems there, and as a

result of our ongoing and continuous discussions with operators in that

classification of market loggers, perhaps there are additional things

we can do. But we have to make sure what we do is to his advantage. I

mentioned yesterday that we looked very closely at going to a one-month

average, thinking that this might help him as well. But as it turned

out, currently that would be a disadvantage to him, so we could not do

that. Perhaps there are other moves that we can make to help him

specifically, but we're not going to help him sell his logs unless

there is a market for them. If there is no market, he should perhaps

reduce his logging until such time as there is or accept the fact he's

going to have to carry the cost of maintaining that inventory until

such time as he can sell it. I can't insulate the market logger any

more than I can insulate a company in Fort Nelson or in the Kootenays

or Revelstoke or anywhere else from the realities of the marketplace in

which he must deal. That's not within the ability of any government.

MR. LOCKSTEAD: Just very briefly, I want to point out to the

minister his own scaling form No. 149756. It says right on it: "Terms.

Net payable upon receipt. Simple interest is charged at prescribed

rates to previous month's balance and on overdue accounts." This

indicates to me that the ministry knows very well that the logger,

under their act, does not own the tree when it is felled, but that the

ministry is in complete control of that until the log is actually sold.

Should they sell that boom of logs some eight months after it's been

put in the water, for example — but it's been scaled eight months prior

to the sale of that timber — an interest rate is being charged to that

independent during that eight-month period, or whatever the period of

time may be. That's just to clarify that point very briefly.

I've got another meeting at 4 o'clock so I won't be too long. But I'll be back.

Interjections.

MR. LOCKSTEAD: Oh, there is the Minister of Health (Hon. Mr.

Mair) chirping up again. Why doesn't he go to the meeting of the

doctors and leave us be here, instead of chirping from his seat? Why

doesn't he go over and meet with those guys? I'm sure they'd like to

meet with him.

Just very briefly, I want to put this on record. In the case of this

particular sale, after all expenses and deductions — computed by the

ministry, not by the logger — this particular individual is left with

$26.36 at current prices, to cover the cost of towing, insurance,

brokerage, interest and logging. He scrawled across the bottom of this

when he sent it to me: "Simply cannot do it." He can't make it. There's

no human way on God's green earth that he can possibly make a profit at

this kind of rate that you're charging him. As a consequence he shut

down. The reality at this moment, in spite of what you stand there and

tell us, Mr. Minister, is that this guy, this logger, has shut down

operations and laid people off. That's the reality, and what you're

telling us in this House today, with all your fancy finagling and

footwork, doesn't cover that fact. That reality applies to many loggers

on the coast of British Columbia. I will be back to talk to you further

about this in the near future — in half an hour, I hope.

MR. MACDONALD: I'm not posing as an expert in this field, but

I read paragraph 2 of the internal memorandum from MacMillan Bloedel,

which was already read to the minister. I want the minister to comment

upon it, because it seems to me to have very serious implications. I'm

going to read it fairly slowly for the minister. See if my

interpretation is correct.

The recommendation is that they should recalculate annual allowable

cut, based on operability plan. Then the memo goes on: "A word of

caution here. In our last annual allowable cut calculation, we withdrew

some 650 million cubic feet of low-volume timber from inventory."

I'll wait for that conversation to finish down there. The committee has lots of time.

I take that to mean, Mr. Chairman, that MacMillan Bloedel, in the

last calculation of inventory for the purpose of AAC, withdrew 650

million cubic feet. In other words, they falsified their inventory for

the purpose of setting the annual allowable cut. It seems to me, Mr.

Minister, that you should comment in detail upon that. I would think

they were hoodwinking the minister in terms of that last annual

allowable cut, to the extent of 650 million cubic feet. They then said:

"Well, we'll keep that hidden from the Forestry Service and from the

ministry. It's in our bank." The paragraph goes on to say: "But this

time around, because the TFL is coming up for renewal, we will have to

include it, otherwise the Forest Service may well be inclined to

classify it as unused inventory suitable for small business

opportunities." In other words: "If we don't put it in now, when

they're going to check us and our licence is up for renewal, we may

lose the timber to small business."

But if annual allowable cut calculations are to be made annually,

surely they should be made on the same inventory figures year after

year. What about the next time around, Mr. Minister? They say: "This

time around we're going to give you the true figures." Whether they're

really true or not, I have no way of knowing. "But the year before we

hoodwinked you," and the next time around, who knows! They may hoodwink

the Ministry of Forests and the minister again. I think that's a very

serious matter. I'm looking at it and listening to the debate as a

layman, and I think the minister should go through paragraph 2 of that

memorandum and tell us just what it means and whether my

interpretation

is correct — that this was an attempt, by happenstance revealed, by one

large company to hoodwink the minister. What about it, Mr. Minister? Am

I correct or not?

[ Page 2697 ]

Mr. Chairman, surely the committee is entitled to his explanation.

HON. MR. WATERLAND: The member for Mackenzie (Mr. Lockstead)

has left, but I have just one final comment on what he said. He said

that the reality is that the loggers can't sell their logs and people

are being laid off. Indeed, that is true. No amount of talking,

screaming or theatrics on his part will change that fact. It is a fact

that we are in very serious market conditions right now. Lumber sales

are down. But there are recent indications that they may be coming back

slightly. The industry, including the small loggers, is adjusting by

modifying their rate of harvest, and I think that is being reasonably

responsible. Unfortunately, it does lead to people being laid off. Most

of the layoffs that have been planned and which are underway now are

relatively short-term. I hope they will remain that way. I hope the

recovery that was indicated in the last week or so is a real recovery,

or the beginning of a recovery, and the worst is behind us. I'm not

sure of that, because it's too early to say yet.

I will agree with the second member for Vancouver East when he says

he is not an expert in these matters. He said that inventory was

falsified. Well, I don't think inventory was falsified. Inventory

changes, because the operability of areas changes constantly. Areas are

brought into inventory, and as the economic conditions dictate areas go

out.

MR. MACDONALD: They say they withdrew it.

HON. MR. WATERLAND: If the member will listen for a moment instead of flapping his jaws, he might become an expert.

A good example of this is the mid-coast area where we have put a

large area of timber outside of the allowable cut because it's not

operable. If it can be demonstrated that the technology, the conditions

or the value of the wood has changed, that material can be brought back

into inventory. What MacMillan Bloedel is saying, as I interpret it…. I

have had and am continuing to have extensive discussions with the

company about this memo, because in reading it, four particular words

disturb me immensely. Those words are "to reduce the AAC," which imply

some clandestine reduction.

What we are trying to determine is this. They said that they should

include that now, because they fear that the Forest Service, in its

interpretation of what is operable wood, will include it. Indeed, if we

find wood that is not within an allowable cut, in a reasonable

interpretation of what is operable, then we will say: "That should have

been in the allowable cut. You didn't include it. Unless you can give

us a factual reason why not, that allowable cut can well be removed

from your tree-farm licence to be made available for others." But the

interpretation of what is operable by the Forest Service may be

slightly different from the

interpretation of the operator who would

have to use it. So it's not a matter of willy-nilly putting material

into an allowable cut and taking it out. It does change, and the

interpretation of what is operable and what is not is also changing. At

the last time their inventory was done, they had determined, through

the means at their disposal, that it wasn't operable, and therefore it

should not be in the cut.

MR. MACDONALD: That's not what they say.

HON. MR. WATERLAND: Conditions have changed. That's exactly what the memo says, Mr. Member.

MR. MACDONALD: No, it says they did it to change their cut.

HON. MR. WATERLAND: Conditions have changed and they are

saying now: "Perhaps we should put it back in because last time it

reduced our cut. Maybe we should put it back in now," fearing that

perhaps the Forest Service's

interpretation will be different, knowing

that if the Forest Service determines it is operable, then they have a

good chance of losing it. That is the

interpretation I put on that

section. As I mentioned, my staff and I are continuing to have

discussions with MacMillan Bloedel on this subject and their other

tree-farm licences as well. Keep in mind, members, that annual

allowable cut is not a static thing, either in tree-farm licences or in

public units.

The member for Skeena is back. He was commenting again on tree-farm

licences. I'm afraid that through things said in this Legislature and

in public, tree-farm licences in British Columbia haat we have in the province. I am an advocate of tree-farm licences and

I want to see many more tree-farm licences. There is also the equation

of treefarm licences with large companies, and various people would

like to imply that big is bad. It's not necessarily so. We have good

large companies, bad large companies; good small companies and bad

small companies. But tree-farm licences have undeniably given us the

best level of forest management that we have had in British Columbia,

because, I think, of the area-based tenure. I would like to see more of

them and I would like to see a lot of small tree-farm licences in the hands of individual groups.

This gets back to what the member for Skeena was talking about

yesterday. Some of the native Indian bands have been approaching us for

tenures, and we are discussing very seriously with one or two bands the

possibility of them getting into a tree-farm licence tenure. But we do

have the problem of a very close relationship between the allowable cut

available and the manufacturing capacity in place in the industry,

which employs people in plants now in existence. I think it's very

possible and would be a good idea to have smaller tree-farm licences

manageable by, say, Indian bands or other groups that will provide

market logs for the existing manufacturing plants. If, in disposing of

a tenure in the way of a tree-farm licence, we remove that cut from the

industry which needs it, we could have a bad dislocating effect on

employment and opportunities within the manufacturing sector that now

exists. I don't think we should make moves that will disrupt employment

opportunities in established communities and also disrupt communities.

But that type of tenure, I think, has tremendous opportunity, and

another reason that it does is that new tree-farm licences are not

simply based upon a bid dollar amount. New tree-farm licences do

require public hearings and public input under the Forest Act, just as

new pulpwood harvesting agreements do. It's a good opportunity for,

say, an Indian band, to present a plan to us — and some of them are

doing excellent work working with consultants — together with a

management program, of what the economic, social and other benefits

would be. Others can still come in and compete with them, but through

the process of public hearing we don't

[ Page 2698 ]

necessarily have to take the highest bonus bid. If

managing the tree-farm licence is going to give a band a good

opportunity to improve their employment base — and many native people

have a tremendous aptitude for that outdoor type of life and managing

forests…. Some of them are doing excellent work now in forest

stand-tending work, and their lifestyles adapt to it and their

aptitudes adapt to it.

But please, let's not say that tree-farm licences are bad, even if

you think big companies are bad, because tree-farm licences give us a

good level of forest management. It's something that I want to try to

encourage in the future, and perhaps even during this year we'll get

into our first tree-farm licence hearings. Hopefully it will be with

either smaller companies or smaller organizations, such as Indian

bands. We can see greater opportunities for these smaller operators in

the very intensive management that benefits all of us by increasing the

cut that would be available from a given area.

MR. MACDONALD: Mr. Chairman, that minister, with all respect,

really frightens me if he is the custodian of the forest resources of

British Columbia. Of course, annual allowable cut may vary depending

upon other factors; but MacMillan Bloedel has spelled it right out very

clearly to the minister. They've said the reason they withdrew 650

million cubic feet from their inventory was to reduce the AAC. There's

nothing ambiguous about that. They did it not for the factors of

profitability or terrain or quality of wood; they did it to reduce the

AAC, and now they're going to put it back in. The minister then gets up

before this committee and says: "Well, in spite of that very plain

language which tells us exactly why they did it" — in other words, to

reduce their AAC, which they shouldn't have done; the wood was there….

He places a strained

interpretation upon those words and says: "Oh,

their motives were pretty good and I don't believe that they really

mean what their plain words say." Mr. Minister, you're being hoodwinked

by the large companies of this province.

I'm not going to speak at any length on this, Mr. Chairman. But when

you have a Minister of Forests who is this careless as custodian of the

forest resources of the province and can allow the large companies, as

evidenced by this memorandum — and there may be other cases; one would

think there would be — to manipulate the AAC to suit themselves, then

we have a very serious situation in forestry in British Columbia.

I find it very unfortunate that the Minister of Forests, rather than

saying that this has revealed a very serious situation and he is going

to take immediate action, puts on these words that are very plain…. A

lawyer for Mac-Blo might be able to make the

interpretation, but it

would never be upheld by any kind of a judge or tribunal. The words are

very clear. They reduced their inventory figures to manipulate their

AAC. They spell it out in the plainest words possible. When it is read

to this House, who is the defender for Mac-Blo? It's the Minister of

Forests. We need a Minister of Forests who will defend the public

interests.

[Mr. Strachan in the chair.]

MR. KING: Mr. Chairman, we've been treated to an absolutely

amazing performance by the Minister of Forests this afternoon on a

number of points. He said in response to my colleague, the member for

Mackenzie (Mr. Lockstead), that as far as he is concerned the small

independent operators in the province of British Columbia, despite

documentation that their stumpage rates are in many cases higher than

that of the large companies and are discriminatory for the same species

and for the same relative grade of material…. "If they can't make a

profit, let them go out of business. Let them close down." That's what

the minister said. He said: "If they can't afford to log it, quit

logging."

MR. HOWARD: That's what McGeer said about car ownership.

MR. KING: That's right. The Minister of Universities, Science

and Technology (Hon. Mr. McGeer) said: "Let them eat cake. Let them

walk if they can't afford the car insurance."

Now the Minister of Forests says to the small people in the industry

in British Columbia: "If they can't afford our stumpage, let them close

down." We only have about 12,000 or 14,000 unemployed people in the

forest industry today. The minister is apparently not content with

that; he wants to add to it. In fact, I guess his recent statement in

Prince George proves that. He said they'd just have to ride out the

slump and claim unemployment insurance. I believe that's absolutely

irresponsible and it's a dismal position for the Minister of Forests in

British Columbia to take.

The fact of the matter is that the majors in the province of British

Columbia who hold the choice tree-farm licences are fortunate enough to

control the high-quality timber in the province. Most of the small

operators who are having trouble with the stumpage 1n the period of

market decline, as the minister outlined, do not have the choice

material to log. They haven't got the flexibility of the large company.

They haven't got the capital of the large company.

I'm getting a little tired of the minister saying: "Oh, well, you're

anti-big business. You're just against them because they're large."

That's not true. The opposition recognizes that we need the large

integrated forest companies in the province of British Columbia. We

need a good mix of companies operating in the forest sector. What we do

not need is a monopoly stranglehold by those large integrated companies

to the exclusion of competition. That's what we object to. The minister

responds: "Well, let them close down. Let them quit logging for a

period of time." I guess there are not yet enough people unemployed in

the forest industry. I would think that the minister would be trying to

find ways to stimulate the industry, rather than watching it go down

the tube and sitting there fiddling and presiding over a sinking ship.

This is not the Social Credit Party you're running, Mr. Minister. It's

the forest industry of the province of British Columbia.

The minister gets up and defends MacMillan Bloedel on their

interoffice memo whereby they are clearly going to manipulate their

inventory. That's documented in the Thompson report. It's documented in

an

article in the Vancouver Sun

on another interoffice memo by Canadian Forest Products. Their

objective was a little bit different, but it was just as clearly and

just as surely manipulation with impunity, assured that there would be

no reaction from that passive ministry.

This guy wants to tell us that everything's hunky-dory in the

industry. Then he gets up and speaks glowingly about how there are

going to be public hearings on new tree-farm licences. Isn't that a

wonderful thing. Why, Mr. Minister, did you not allow for public

hearings on the rollover renewal

[ Page 2699 ]

of the existing tree-farm licences? That's where the bulk of the timber is in the province of British Columbia.

Interjection.

MR. KING: Yes, he did. He said it would be an emotional thing

if they held public hearings on the renewals of the tree-farm licences

for MacMillan Bloedel, Crown Zellerbach, Canadian Forest Products,

Rayonier, ITT — that struggling little free enterprise corporation that

has such great difficulty. He said there might be public emotionalism

if there was an open public hearing into the question of their

tree-farm licence renewal. He granted them an evergreen clause, so

there was an automatic renewal, virtually, of their licence, without

public hearing. He now stands up and pats himself on the back because,

in the future, he may carve out some smaller tree-farm licences that

would be available to smaller industries in the province.

What a sorry performance. What a shambles. The minister justifies

the stumpage rates. He says they're equitable. What the minister is

doing is forcing the small operators, as he says, either to close down

or to cream the forest; because all the small guy can afford to do

today is cut the solid trees, the prime trees, the ones that won't make

prime sawlogs, and leave the sound chip material in the forest. What

happens then, Mr. Minister? Who can afford to come back and log a

forest that has been creamed in the fashion that you are forcing the

small operators to do today?

It's a shambles from one end to the other. As I pointed out earlier,

we've had criminal manipulation on the Vancouver log market to the

point where a person is now being convicted for taking kickbacks on the

log market. The small guy can probably only get a sale for the boom of

logs on which he is being charged interest rates by your ministry if he

arranges to have those logs exported. I suspect, and I have some reason

to suspect, that there is manipulation of the log market in Vancouver

to the extent that corporations are scratching each other's backs. They

are trading logs on the basis of the species they require; they are

declining to bid for booms that could be sawn and utilized in British

Columbia. Once three offers have been declined, those logs are

available for export out of this province. That happens to be a bit

more profitable at this time. So it's taking place through

manipulation, as well, at the expense of lost jobs and lost revenue to

the Crown and to the province of British Columbia. The best that

minister can do is to get up and justify the kind of manipulation that

has been documented for him, try to apologize for it and try to excuse

the corporations that are in a position to strangle competition in the

industry today.

I don't know; I have no confidence in the direction of the ministry

or the commitment of the minister to try to bring about some fair play

and some competition in the industry in B.C. He doesn't want to answer

any questions in a rational way and come to grips with the real meat

that's contained in this memo, which in any reasonable person's

language and mind certainly indicates impropriety in terms of

manipulating the inventory they've been holding in the bank. I have no

confidence whatsoever in a minister who would do that. He doesn't want

to address himself in any substantive way to those issues.

I move the committee rise, report progress and ask leave to sit again.

[Mr. Davidson in the chair.]

Motion negatived on the following division:

YEAS — 19

Macdonald

Barrett

Howard

King

Lea

Lauk

Stupich

Dailly

Cocke

Hall

Levi

Sanford

Lockstead

Brown

Barber

Wallace

Hanson

Mitchell

Passarell

NAYS — 28

Waterland

Nielsen

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Brummet

Ree

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Mair

Kempf

Davis

Strachan

Segarty

Mussallem

Hyndman

Mr. King requested that leave be asked to record the division in the Journals

of the House.

MR. KING: Mr. Chairman, I'm waiting until the decibels die to

a point where I can hear myself. Hope springs eternal from the human

breast, and I know that eventually you shall bring the House to order

so that everyone can hear what I'm saying.

MR. SEGARTY: On a point of order. Mr. Chairman, there is a

lot of noise coming from the opposition side, and I would like to

listen to the member. Could you please bring them to order?

MR. KING: I want to give my thanks to the magic leprechaun

from Kootenay for protecting my interest, Mr. Chairman. He finally

silenced the Premier. He doesn't sparkle in debate, as the Minister of

Universities, Science and Communications used to say.

MR. CHAIRMAN: Hon. member, we're on vote 103.

MR. KING: Mr. Chairman, we have gone through some very, very

serious material this afternoon, and I think in all good conscience

presented a really very valid and well-documented case of abuse in the

forest industry. I don't know what else to do at this point, Mr.

Chairman, but to express my disappointment and the disappointment of

the opposition that the minister has responded in such a very

superficial way to the very serious charges that have been levelled

against certain firms in the forest industry and against the

maladministration of his ministry.

I had really hoped that he would view the evidence which we

presented much more seriously and indicate in very, very strong terms

that corrective action will be taken. He has not done that, he has

attempted rather to simply justify the abuse that has been documented

and say: "Well, things are going to improve in the future."

[ Page 2700 ]

[Mr. Strachan in the chair.]

I have a submission from a person in the forest industry that I'd

like to deal with just a little bit, because it too makes some very

serious charges against the current administration, and it comes not

from me in terms of political reaction, but rather from one in the

industry who, I think, should be in a position to know. I'm going to

read some of the quotes and follow up on some of the points that my

colleague from Mackenzie made in the approach that is taken to the

stumpage system in the province of British Columbia and how that

militates against the small independent operator, as opposed to the

larger company who is in a position to absorb some short-term costs

when the market is in decline and perhaps in a position to pay the kind

of interest on timber which has been logged but which is being held

either in booms or on dry land until a market is found for it.

That kind of interest cost, coupled with the stumpage rates that we

indicated earlier, makes it virtually impossible for a small operator

to survive. The large, public firm with a large capital flow can absorb

these costs. What I really had hoped to get from the minister was a

recognition that the two sectors of the industry have to be handled in

a little bit different way.

The minister says: "Look, it's sink or swim in the market. If they

can't hang on and meet the interest payments imposed by the ministry,

so be it. Let them close down; let them quit logging." That's like the

old Tommy Douglas line about the elephant dancing in the chicken coop

and shouting: "Every man for himself." It just guarantees that a lot of

the small guys are going to have to go out of operation and quit

logging. That which the minister so blithely suggests, that they simply

close down for a period of time until the market becomes better, is not

a realistic proposal at all, because many of these small operators are

in hock up to their necks in terms of their plant and equipment. They

have very large payments, and if they're not operating they can't

maintain those payments.

They simply cannot survive for that kind of time frame. What happens

then? If you are suggesting to them that they close down, they have to

surrender their plant and get out of the business, which will, I

imagine, result in their quota and their timber sales being taken over

by the larger companies that can survive from a capital point of view.

I guess if that's what we want, as a matter of public policy, then the

minister is heading down the right road. If he is really serious about

developing a viable small business sector in the industry and providing

it with the opportunity to survive and maintain some balance in the

industry, I think he has to look at them in a different way. He has

given no indication here today that he is prepared to do that.

I found his remarks that they just better quit logging particularly

cavalier. The minister must know that many of them can't afford to

close down. If they do, they will forfeit a great deal of their

equipment. I would appreciate it if the minister would deal with that

aspect of the problem the industry is facing at the moment. If you

would deal with that a bit more I would certainly appreciate it.

MR. CHAIRMAN: Shall vote 103 pass?

MR. KING: No, Mr. Chairman. I would hope that the minister

would respond to the point that I made. It is an important one for the

small sector of the industry. They are coming to me and asking what can

be done. I have indicated that I would do my best to voice their

concerns to the minister. Quite frankly, I had hoped for some kind of

sensitivity and sympathetic understanding. The minister just responds:

"Let them close down; let them quit operations." If that is the

response the minister wants me to carry back, so be it. I sincerely ask

him to give me some indication of whether he plans any particular

special approach to this problem.

HON. MR. WATERLAND: Mr. Chairman, I mentioned earlier this

afternoon that my ministry staff and I are discussing with all sectors

of the industry what things we may or may not do as far as providing

some encouragement in these difficult market times. I also mentioned

that very recently we put the market logger on a special stumpage rate

which gave him considerable advantage. It is impossible for any

government to completely insulate anyone in any sector of business from

the realities of the marketplace. I recognize the fact that many small

operators have payments to meet. I am sure that the financiers, banks

or institutions which they borrow from are doing what they can, because

it is to no one's advantage to see people go broke.

However, blind continuation of production by all sectors of an

industry in the face of markets in which you cannot sell your product

is not in the best interests of anyone. I think we had a very good

example of that in socialist Sweden a few years ago, when there was a

rather serious reduction in world demand for pulp and paper. That

country continued to produce pulp and almost ruined their own economy

as a result. It certainly had far-reaching, very serious effects on the

economy of that commodity throughout the world.

Adjustments have to take place. We are trying to make it as easy as

possible, and perhaps we can make additional moves — which are under

discussion now — to help particularly the small sector. We do, for the

first time ever in British Columbia, have a number of programs

specifically directed to the small sector. The member is aware of them,

and the small sector has more opportunities now than they have had in

the past, including the period of time when the socialists were in

government in British Columbia. I recognize the seriousness of the

problem and we will continue to work with that sector to try to relieve

some of those problems. This discussion is ongoing, and perhaps there

are moves which can be made; but I'm not prepared at this moment to say

just what they will be.

MS. BROWN: My colleague has allowed me to take his place

since I will not be here tomorrow. I just wanted to raise with the

minister the business of logging in the Brandywine area.

I think the minister has received some correspondence from me on

this and he has responded to it. However, the issue is that it is part

of the area that was being used by the school system in terms of the

environmental education program. Does the minister now remember? The

decision was made by the ministry to allow logging in this area, and a

number of schools — certainly School District 41 in Burnaby…. Mr. Dick

of that school district contacted the minister and me about the fact

that the area was going to be logged at a time when it still was very

necessary in terms of the environmental education program. The minister

responded saying that all the schools had been contacted and were told

to establish committees, which were to work with

[ Page 2701 ]

the Ministry of Forests and each forest district in terms of protecting the area.

That, in fact, has not happened. Since then I have received another

letter from Mr. Dick, saying that since 1974 the Burnaby school board

has been using this area for its environmental education program. He

has sent me copies of a whole file of letters between the department

and himself, dealing with the school system using this area in terms of

this program. He talks about the loss to the students who use it in a

number of different ways and wonders why the decision was made to

permit logging in that area without taking this into account, and about

why, once it was brought to the minister's attention by the school

system, the logging permit was not withdrawn.

Mr. Dick, the principal, who is the coordinator for this particular

program, talks about the resource-land and field experience which their

students have had — outdoor camping and work experience training. All

of this has been going on in the Brandywine Creek area not just for

Burnaby but for all of the lower mainland school districts. So it's an

area that has been used very extensively by students throughout the

entire lower mainland. He says that, of course, they will now have to

be more selective about areas as future development proceeds.

He specifically brought to my attention, and asked me to bring to

yours, three areas. One area is the western Pemberton Valley, on both

the north and south sides of the valley. Currently Meager Creek valley

is being sited for exploitation by B.C. Hydro for thermal power, so

they're probably going to lose that. He talks about the old Fort

Douglas to Pemberton

section of the Lillooet Valley, and he says

logging there will obliterate the remnants of the park. Again, students

are going to be denied the use of that particular area. He talks about

Callaghan valley, west of Whistler on Highway 99, and he says this

valley provides access to hiking, cross-country skiing and some very

spectacular volcanic remnants. Maybe we don't need it in terms of the

volcanic remnants now, since St. Helens; but for what it's worth, the

schools have been using it. He talks about the lakes which were

available for the students in terms of canoeing. Now he says there's

some suggestion that private interests are going to be permitted to

build a lodge on Callaghan Lake and the students are going to be denied

access to that. So the whole program in terms of environmental

education seems to be in jeopardy simply because the ministry is not

more aggressive in terms of protecting the areas which the students

have been using, as he points out, certainly since 1974.

I am wondering whether in responding, the minister would be willing

to give some kind of commitment through me to Mr. Dick of School

District 41 in Burnaby, who is the coordinator of this particular

program, which is done in conjunction with the Ministry of Education,

that that area will be protected and that, in fact, the permit which

permits logging will be withdrawn now that it has been brought to his

attention that the area is not used by just one school and not by just

one group of students, but in fact is used by students throughout the

lower mainland area.

If the minister has lost his file on this and does not have the

updated correspondence or the various reports that were done, I would

be very willing to share the information in my file with him. I could

probably give him the originals and he would be able to Xerox them for

his own use. I would like to have a response on that particular thing.

The second issue which I would like to deal with is the whole

business of employment of women in the forest industry. I want to quote

directly from a study that was done, and an interview that was done on

jobs and the forest industry in British Columbia. This is a Mr. Reg

Ginn:

"The employment of women in the industry is just

tokenism, despite the pictures of women working in sawmills and logging

operations which have appeared everywhere from company annual reports

to the Lifestyle

section of the Vancouver Sun . Women constitute only a tiny percentage of workers in the industry."

In fact, I know that Kate Braid, funded in terms of her master's

thesis by the Ministry of Labour to do research on women in

non-traditional occupations, certainly brought to our attention some

very incredible statistics about the very low percentage of women. It

said that 2 percent of the workforce in the industry were women.

Logging operations accounted for less than that, and in sawmills and

plywood mills and pulp and paper operations it was less than 5 percent.

The only

section of the industry where women represent more than a

token part of the workforce is in the processing paper industry, such

as in corrugated container plants, where women make up 16.4 percent of

the workforce. Of course, in the offices of these plants, as in offices

everywhere, they are probably 85 to 90 percent of the people doing the

clerical work.

I don't know whether the minister has a copy of the report which was

done, as I said, for her master's thesis, and funded by the Ministry of

Labour, but I would be very willing to share my copy of the report with

the minister. It certainly locks into all the studies on women and

poverty which are surfacing at the federal and provincial level. In

every instance there is a link between the kind of employment that

women have, the source of jobs that they have, the very low salaries

that they work for and, of course, the poor pensions they get when they

do retire, if they get any pension at all, and the fact that a large

number of them end up living below the poverty line.

One of the ways in which women are trying to deal with this, now

that the information has surfaced, is by trying to break into

non-traditional jobs. Certainly one of the areas of non-traditional

work where we are told by both the trade union movement and the

employers themselves that women can find employment is in the forestry

industry. Yet the statistics remain disgracefully low.

I just want to make a suggestion to the minister. That is to present

to him the idea of encouraging an affirmative action program in terms

of hiring in this particular industry. There was a resolution submitted

to the NDP convention — I know the minister is not interested in

resolutions submitted to the NDP convention, and the only reason I

raise it is that I'm quite sure that poverty among women is an issue

which interests everyone, regardless of political affiliation. No one

party corners the market in terms of their concern about poverty among

women. That's the only reason I'm suggesting to the minister that maybe

there are some ideas which he would be interested in, in terms of

trying to put into place, in conjunction with the Ministry of Labour

and the Ministry of Education, an affirmative action program in the

forestry industry. Plans would have to be worked out, certainly, in

conjunction with the trade unions involved, as well as with the

Ministry of Education and the Ministry of Labour, but there should be

target dates and there should be a timetable and there should be a goal

which the employer should be encouraged to achieve.

[ Page 2702 ]

I'm not speaking about coercion and I'm not saying that, in fact,

they should have their forest licence revoked or any of these things,

or that they should even have penalties to begin with, if they fail to

meet these goals. I am suggesting it to the minister in terms of

encouraging the industry to design a plan which takes into account

these very critical statistics which I pointed out to him. Less than 2

percent in logging is just not good enough. Less than 5 percent in

sawmills and plywood mills is not good enough. The fact that the

concentration is in the corrugated container plants or paper-bag plants

and these kinds of things…. Maybe he could start out initially by

suggesting the increase of those percentages and then gradually working

towards the goal, because a number of things have to happen at the same

time. There has to be training. There have to be support services put

into place. Obviously it's not going to happen all at once. But what

would be a major kind of step in the correct direction would be a

statement on the part of this minister that he would encourage the

forest industry and the trade union movement, in cooperation with the

Ministry of Education and the Ministry of Labour, to set certain

specific goals to increase that percentage over a number of years and

try, even as a pilot project, to realize those goals, set that plan

into place and generally see whether or not that works.

I'm quite sure that the minister is in total agreement that it is

not going to be possible to deal with the issue of poverty through

welfare. Welfare does not actually touch poverty. You cannot deal with

poverty by just handouts. That is not the way in which it's going to be

solved. We're never going to have a solution to the fact that most of

the people in our country, and certainly most of the people in this

province, who are living below the poverty line are poor, and in

particular that they are old and poor and women. We're not going to

deal with that until we can deal with getting women into the kinds of

employment where the jobs pay decent salaries, certainly where they'll

be paid better salaries than are being earned in the kind of

traditional female job ghettos that women find themselves in at this

time. I'm going to be appealing to other ministries, Mr. Chairman, not

just to forestry.

Specifically, since we're dealing with the Minister of Forests'

estimates, I am beginning my appeal to him in terms of making a public

statement, following it up with a commitment to look at the whole area

of the very small percentage of women employed in this particular

sector of the job market and a commitment to encourage the forest

industry to start doing something about this. Affirmative action is as

good a way as any to start.

HON. MR. WATERLAND: There were a couple of points mentioned

by the member for Burnaby-Edmonds. First of all, regarding Brandywine

Falls and Mr. Dick, I believe it was, I vaguely recall correspondence

from some time ago and have not had any correspondence from Mr. Dick or

the school board since. I would have assumed that the concerns he

expressed were being dealt with by the ministry because that is where

we make these kinds of decisions as to protection of areas and the

multi-use concept. If Mr. Dick has further concerns, maybe the member

could suggest that he contact me directly, or the regional manager of

my ministry responsible for that area. We in the ministry are always

sensitive to other needs of the forest base. However, we're also

sensitive to the need to protect the productive forest land base. We

can mesh the two in many instances. However, it does require some give

and take on both sides. But if Mr. Dick has further concerns he can

contact me directly, or my regional manager for Vancouver would

probably be more convenient for him for starters at least. I'm sure

that his needs and desires will be given every consideration.

Regarding women in the industry, Madam Member, I would like to

encourage career opportunities for women in every possible way. I have

a bit of a personal interest in the matter, as I happen to have three

daughters, two of whom are pursuing careers at the present time, and

one of whom is still in high school. I can't dictate to the industry.

It's really beyond my jurisdiction, but I'd be more than happy to

discuss it with the Minister of Education (Hon. Mr. Smith), the

Minister of Labour (Hon. Mr. Heinrich) and others to see if some

encouragement can't be given. As far as my ministry is concerned, I

would estimate that at least 30 percent of the employees in the

Ministry of Forests are women in various capacities. Probably the

largest part are in the more traditional roles that women play, but we

have a number of lady foresters in the ministry, professional

foresters, technicians, research scientists. We have women on, of

course, planting programs. Women are being employed more and more on

stand-tending work which is under the direct supervision and

administration of the ministry. We accept applications from women if

they're qualified for particular jobs. No preference is shown between

men or women. As long as they have equal qualifications the

opportunities are there.

AN HON. MEMBER: A lot of ladies are taking it in university now.

HON. MR. WATERLAND: Yes, and they are increasing enrolments

right now at universities and at BCIT in technical courses. There are

definitely clear opportunities there that are open to women equally as

they are to men. So I would sympathize with the member, and perhaps the

Minister of Labour, the Minister of Education, the Minister of Human

Resources and my