October 29, 1981 ALBERTA HANSARD 1313 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Thursday, October 29, 1981 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: INTRODUCTION OF BILLS Bill 85 Labour Relations Amendment Act, 1981 MR. YOUNG: Mr. Speaker, I request leave to introduce Bill 85, the Labour Relations Amendment Act, 1981. Mr. Speaker, the Bill contains several amendments, two of particular significance.

In the case of a newly certified union, neither the employer nor the union may cause a work stoppage for 60 days following certification if a notice to commence collective bargaining is served. Secondly, in the event of an application for union certifi­ cation by petition, these amendments would assure that the Labour Relations Board would maintain in confi­ dence the names of the petitioners. [Leave granted; Bill 85 read a first time] Bill 87 Mines and Minerals Amendment Act, 1981 (No. 2) MR. LEITCH: Mr. Speaker, I request leave to introduce a Bill, being the Mines and Minerals Amendment Act, 1981 (No. 2). Mr.

Speaker, the principal purpose of this Bill is to make changes in the system of registration of financial transactions which is now in the legislation. [Leave granted; Bill 87 read a first time] Bill 88 Natural Gas Pricing Agreement Amendment Act, 1981 MR. LEITCH: Mr. Speaker, I also request leave to introduce Bill 88, the Natural Gas Pricing Agreement Amendment Act, 1981. This being a money Bill, His Honour the Honourable the Lieutenant-Governor, having been informed of the contents of this Bill, recommends the same to the Assem­ bly. Mr.

Speaker, the principal purpose of the Bill is to enable the Alberta Petroleum Marketing Commission to make payments to the federal government of the market development incentive payments that were part of the energy agreement of September 1, 1981. [Leave granted; Bill 88 read a first time] head: INTRODUCTION OF SPECIAL GUESTS MR. ISLEY: Mr. Speaker, it is my pleasure to introduce to you, and through you to members of the House, a group of five people from the constituency of Bonnyville associated with the St. Louis hospital board. They're seated in the public gallery.

The individuals are provincial superior of the Sisters of Charity and a member of the St. Louis hospital board, Sister Mary Ellen O'Neill; chair­ man of the St. Louis hospital board, Mr. Marcel Du- charme; member of the St. Louis hospital board, Mr. Norman Ouellette; member of the board and member of the provincial hospital's privileges appeals committee, Mr. Ted Bodnar; and administrator Mr. Simon Dallaire. The hon.

Minister of Hospitals and Medical Care will be pleased to hear they had a very pleasant and productive meeting with members of his staff this morning, hence will not be asking for an audience with him. [interjec­ tions] I ask that they rise and receive the welcome of the House. MR. TRYNCHY: Mr. Speaker, it's my pleasure today to introduce to you and to the members of the House some 40 grades 7 and 9 students on travel option from the Whitecourt Hilltop school in the constituency of White- court. Seated in the members gallery, they are accom­ panied by their teacher, bus driver, and parents.

I ask them to rise and receive the welcome of the House. MR. WOO: Mr. Speaker, I am pleased to introduce to you, and through you to members of this Assembly, a class of 68 grade 6 students from Brentwood elementary school located in the constituency of Sherwood Park. Accompanying the students this afternoon are their group leader Mrs. Keith, teachers Mrs. Hughes and Mr. Ebert, and three parents, Mrs. McBride, Mrs. Ostermeyer, and Mrs. Tenaka.

It will be of great interest to the Minister of Tourism and Small Business, the Member for Peace River, to know that these students had the opportunity this morn­ ing to visit the habitat of an endangered species in the province of Alberta. They spent the morning at the VIA Rail yards. The group is seated in the public gallery. I ask the students, teachers, and parents to rise, in order that they might receive the warm welcome of all members. MR. GOGO: Mr. Speaker, I would like to introduce to you, and through you to members of the Assembly, some special visitors from the province of Newfoundland. We have Mr.

Tom Doyle, who is the new chairman of the Alcohol and Drug Addiction Foundation of Newfound­ land and a former minister of tourism in that province, and with him Mr. Wayne Smith, the new executive direc­ tor. They're out here in Alberta looking at AADAC as perhaps a means of developing some programs. They're seated in the members gallery. I ask them to rise now and be recognized by the Assembly. Mr. Speaker, there are additional people in the House I'd like to introduce to you and to members of the House.

We have the chief magistrate of the city of Lethbridge, Mayor Anderson, and Alderman Martin and Alderman Carpenter from the city of Lethbridge. They're also in the members gallery. I ask that they rise and be welcomed by the Assembly. head: MINISTERIAL STATEMENTS Department of Culture MRS. LeMESSURIER: Mr. Speaker, I take great pleas­

1314 ALBERTA HANSARD October 29, 1981 ure in advising members of the Legislative Assembly that Head-Smashed-ln Buffalo Jump, located 12 miles west of Fort Macleod, was nominated to the UNESCO World Heritage List by the world heritage committee at their meeting in Australia on October 27, 1981. Head-Smashed-ln is the finest surviving buffalo jump in North America. It's located at the south end of the Porcupine Hills.

It consists of three components: a gath­ ering basin where the herd gathered; a steep cliff and kill area, over which the buffalo were run; and a campsite below the cliff, where the people camped and butchered the animals. The site covers about 15 square miles and provides a nearly continuous record of the use of a sophisticated communal hunting technique by native peoples for the past 5,700 years. The site had previously been designated a provincial historic resource in 1979. The site is exceptionally well preserved, and one of the oldest of its kind.

Considering the excellent opportunity to reconstruct the cultural his­ tory of the site, and the impressive appearance of the locality, Head-Smashed-ln is a prime candidate for de­ velopment of an on-site public

interpretation program. Twenty-four new sites were nominated to the World Heritage List, bringing the total number of designated sites throughout the world to 112. Two Alberta sites, the Dinosaur Provincial Park, near Brooks, and Head- Smashed-In, join five other Canadian sites on the list. Four of the sites are provincially owned, and three fall under federal jurisdiction. Sites are nominated to the World Heritage List because of their natural beauty, his­ torical significance, or both.

Two other sites nominated at the same meeting were the Great Barrier Reef in Austra­ lia and the old city of Jerusalem and its wall. head: ORAL QUESTION PERIOD Royalty Tax Credit Program MR. R. SPEAKER: Mr. Speaker, my question is to the Minister of Energy and Natural Resources. It's with re­ gard to the royalty tax credit program. We welcome that announcement by the minister in terms of hopefully help­ ing some of the small oil businesses in Alberta at the present time.

We also feel that the tax program is an addendum to the energy agreement, and indicates the shortage that was in that and the mishandling of complet­ ing that agreement. [interjections] My question to the hon. minister is: at this point in time, what across-the-board effect with regard to industry netbacks does the minister see on announcing this pro­ gram? Acknowledging that this program will certainly benefit various companies in a different manner, what, in the mind of the minister, is the average effect? MR. LEITCH: Mr. Speaker, before I deal with the average effect, I can't let the gibe of the hon.

Leader of the Opposition about what should or shouldn't be in­ cluded in the agreement go unresponded to, and simply point out to him that it was very clear that that agree­ ment dealt with the very broad energy issues, and could only do so in a broad, general way. We knew at the time we were negotiating the agreement, and stated immediate­ ly after it was completed, that we recognized it would have a differing impact upon differing segments of the industry.

We anticipated that there would be inequities or anomalies within the industry flowing from the agree­ ment, and that we were then undertaking a complete review of our programs and policies with the object of taking such action as appeared appropriate. As to impact, Mr. Speaker, I don't know if one can give an average impact across the industry, in the sense of company impact.

I can say the production to which the program would apply, and that is the production to which the royalty deduction would be applicable — for that production, if it is old oil and natural gas, the increase would be between 30 and 50 per cent of the netback. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion. Could the minister indicate what effect this an­ nounced support program will have with regard to the increase in drilling, the decrease in the number of rigs going into the United States, or the increase in new rigs being purchased here in Alberta for exploration? MR. LEITCH: Well, Mr.

Speaker, the hon. Leader of the Opposition has asked me to do some forecasting. We will certainly come to that. I would respond to the use of the words "support program". I think that is quite an inaccurate description of the program. We have a royalty and taxation system in place within the province designed to determine what level of revenue the industry ought to pay to the province, in the case of the royalty system, with respect to produc­ tion from Crown-owned lands. In the case of non-Crown- owned lands, a levy is imposed through taxation.

In a broad way, that determines what level of revenue the industry ought to pay the province. Because royalty sys­ tems and taxation systems are broad policy documents, they require some adjustments to be most effective. Mr. Speaker, we've effected those adjustments through a variety of incentive programs: drilling incentive pro­ grams: geophysical incentive programs; royalty holidays, in the case of discovery of wells and new oil pools; and components of ALPEP. That really is the mechanism for adjusting the revenue flow, established on a broad basis by the royalty and taxation system. Now, Mr.

Speaker, we come to the question of what impact this most recent adjustment would have on indus­ try activity in the province. That's really the question of the hon. Leader of the Opposition. I have no doubt it will have a positive impact, in the sense that it will improve it. But I certainly wouldn't want to leave in the Assembly any impression that that program by itself was going to restore activity to levels of some years ago. Mr. Speaker, there's no question that one of the major problems, and in my judgment the most serious problem facing the industry, is the lack of natural gas markets.

Now that we have an agreement in place with the federal government, I am hopeful that that has established a framework within which we can explore various ways of dealing with that problem of natural gas marketing — the major problem facing the industry — in co-operation with the federal government. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion to the minister. I believe I used the word "support", and the minister took exception to it. I was wondering why. I didn't think there was anything wrong with that. The minister has indicated there is concern with regard to the markets relative to natural gas.

As well, I wonder if the minister could comment on the fact that our cut­ backs, that took place in the last few months during the period of negotiation, have also caused slumps in demand for Alberta oil. I understand other markets — Mexico

October 29, 1981 ALBERTA HANSARD 1315 and other countries — are filling those eastern Canada markets. What effect has that lack of demand with regard to the tax incentive program? Because as I understand the explanation, the producers must sell the oil in order to benefit relative to tax benefits. MR. LEITCH: Mr. Speaker, the hon. Leader of the Opposition is correct in his assessment that today there is not a market for the total volume of oil that could be produced in Alberta.

I think it accurate to say that that situation developed, in part, because of our restrictions on production imposed prior to the agreement of Sep­ tember 1, 1981. Incidentally, as has been said in this House and elsewhere, we regarded that as a very impor­ tant action by this government in response to the national energy policy and budget of October 28, 1980, and very significant in our ultimately being able to conclude a successful energy agreement. The marketing problem for Alberta oil arose because the suppliers then made alternative arrangements for oil supplies.

I don't have the details of the period covered by the contracts they made for alternative supplies, so I'm not exactly sure when those contracts would expire. Also, there was an inventory build-up by refiners during this time. It's going to take a while — I would think a matter of a few months — before the system re-adjusts and gets back to where it was prior to the restrictions on produc­ tion, which essentially was that the refiners in Canada were taking all the oil we were able to produce, some small quantities going to the United States, principally from Saskatchewan, but a bit from Alberta as well. Mr.

Speaker, I would anticipate that we would be back to that normal situation in a matter of months. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion. The minister indicated that the government is look­ ing at other areas that may provide incentive to the oil industry and the producers at the present time. I wonder if the minister could comment further on that matter; and secondly, with regard to the proposed cost of this pro­ gram, in terms of a one-year cost and the five-year, rela­ tive to the agreement. MR. LEITCH: Mr. Speaker, I would respond to the use by the hon.

Leader of the Opposition of the word "cost" in the same way I did to "support". I want to draw the distinction, because I think it's important. This is different from a cost program where the gov­ ernment pays out funds, because what we're really dealing with is a system that determines how much revenue the industry should be paying to the government, as the trustees for the people who own the resource, in exchange for the right to produce and sell the resource.

So we're dealing with a much different situation and, obviously, it's a judgment call, one you're going to have to monitor very closely and continuously review to make sure you have the right revenue flow coming to the province that represents a fair return to the people who own the re­ source, yet provides a sufficient incentive for the industry to do the kind of exploration and development work we want. Now, the range of things we are doing is everything that relates to that revenue flow: ALPEP, the royalty system, and all the incentive programs. That's an ongoing process. As a matter of fact, Mr.

Speaker, that's a process that's been held in abeyance for the past two years or so. It was one of the top priorities when I first assumed this portfolio, but I had to set it aside because there was no point in doing that kind of review when we didn't have an energy agreement in place. We had to get that agreement in place so we knew what the broad, general terms were going to be, then do the review of the other things I've covered. That's what we're now in the process of doing. MR. NOTLEY: Mr. Speaker, a supplementary question, if I may, to the hon. minister.

The question relates to whether there is any dollar figure in terms of the foregone revenue, both on a yearly basis and over the next five and a half years of the agreement. I raise that because esti­ mates were supplied in the figures to be borne by the province of Alberta with respect to incentive programs that accompanied the agreement in early September. Is this in addition to, or are they included in, those figures, and what would it come to? MR. LEITCH: Mr. Speaker, that in

part is the question asked by the hon. Leader of the Opposition, and I didn't answer it in my response to his question, which was: what really is the reduction in revenue flow? Mr. Speaker, I would estimate it to be approximately $140 million dol­ lars for the year 1982. To go beyond that, one could pick any period of time, because while we have these programs in place we don't put an end to the program on them. So if the question is to estimate the overall reduction in revenue, one would have to fix the time when it was going to end, and we haven't done that with any of those programs.

We put them in place; they're always under review and changes would be made. But with respect to next year, the number is the one I have mentioned. To answer the second half of the question of the hon. Member for Spirit River-Fairview, that this alteration in the program was not included in the numbers that formed a

schedule to the energy agreement, as I said earlier, during the course of negotiating that agreement we had contemplated the likelihood of changes in our various programs. But without knowing what those changes were going to be, we wouldn't be able to calculate the figure. But certainly when we were negotiating the agreement, we contemplated there would be some changes in the various programs and policies I've mentioned. MR. SPEAKER: Order please. We've spent a great deal of time on this subject, considering its importance. I have eight members who would like to ask a question.

Could we have one further supplementary by the hon. Member for Spirit River-Fairview, followed by one by the hon. Member for Bow Valley, then the hon. Member for Edmonton Mill Woods. Then, if there's time, we can come back to the topic. MR. NOTLEY: MR. Speaker, my supplementary ques­ tion to the minister flows from his answer. The figures that accompany the energy agreement are presumably over five years and include ALPEP, which presumably is going to cover five years.

My question is: because it is essentially an adjustment, or an enrichment if you like, of a previous program, is it the government's intention that this $140 million should take place over the five years? Because other aspects of ALPEP were calculated over the five years in the figures that accompanied the energy agreement. MR. LEITCH: Mr. Speaker, these things would be under continuous review and adjustments would be made, but certainly at this moment I would not contemplate any circumstances that would lead us to alter this program, or

1316 ALBERTA HANSARD October 29, 1981 the change in it that was announced yesterday, over the term of the agreement. MR. MANDEVILLE: Mr. Speaker, I appreciate that the program announced yesterday is going to enable the oil companies with contracts to market their oil and gas. But will any program be put in place for some of the smaller companies? For example, there are approximately 10,000 capped gas wells facing cash flow problems. Will any program be in place for people in this situation? MR. LEITCH: Mr.

Speaker, that question really refers to what I mentioned in my earlier answers as being, in our judgment, the principal problem facing the industry, which is a lack of natural gas markets. We're considering what action might be taken in that respect. As I men­ tioned earlier, I'm contemplating some discussions with the federal government in that area, to see whether we cannot improve the opportunity for increased natural gas markets. Other proposals are being put forward.

None of them, of course, would involve a change in existing programs or policies because, as the question quite properly notes, we do not have any policy in place dealing with the problems of producers who have discovered natural gas but are unable to market it. Certainly it is an area that concerns us, and we are examining possible solutions. Clearly, the most obvious solution is to get an additional export market. MR. PAHL: Mr. Speaker, a supplementary to the minis­ ter.

In designing this program in effect to reduce the take and help, if you will, the producers at the bottom end, has the minister any calculations or estimates available for the House in terms of the numbers of oil companies that would be helped and, in percentage terms, in what way in terms of their total royalty payments? MR. LEITCH: Mr. Speaker, the accurate answer to the question of who would be helped is: all — because the program is applicable to all producers. But I think the far more important question is implied in the latter part, which is to what extent.

The 40 or so largest producers in the province would produce some­ thing like 80 or 85 per cent of the province's Crown natural gas and oil production. So the assistance to those companies, by way of reducing the sums they would pay the provincial government, is on a percentage basis very nominal. All the balance of the fund, of the reduction in revenue flow to the province, would be applicable across a very large number of companies that produce a relative­ ly small percentage of Crown oil and natural gas produc­ tion.

And for those companies, the percentage improve­ ment in their revenue flow would be very significant. Government Assistance MR. R. SPEAKER: Mr. Speaker, my second question is related to the first question, and it's to the Minister of Agriculture. The minister confirmed in this Assembly today that revenue of some $140 million in 1982 has been foregone and, over a television broadcast yesterday, indi­ cated that $850 million in the next five years will be foregone revenue in this province. Whether it's foregone, spent, or used for support programs, is a question of semantics.

But could the minister indicate, under the present circumstances where the small oil companies of this province have received support from the government, that at this point in time another industry in this prov­ ince, the cattle industry, should receive some equal treat­ ment and the same opportunity? MR. SCHMIDT: Mr.

Speaker, on behalf of the agricul­ tural industry in this province, we look forward to the incentive program, recognizing that the industry it repre­ sents and agriculture have worked hand in hand and had the opportunity to share, mainly to those in agriculture and the off-farm income — I suppose because the activi­ ties take place mainly within communities where there is a balance of both agriculture and the oil industry. As far as the announcement and the incentive program to the oil industry is concerned, as I say, we look forward its results.

That announcement should in no way hinder any decision in regard to the other industry the hon. members mentions, the total package of the livestock industry, both cow-calf and fat cattle. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion to the minister.

The question was: when will the government be putting in place a program of equal access to small business men — that is, cattlemen in this prov­ ince — where we can have either a stop-loss or an ongoing program that will assure the farmers and cattle­ men in this province that we will have a cattle industry in a few years; that they haven't left the business, just as the oil companies? Can the minister assure us that a program will be in place, and that the cattlemen of this province will have equal treatment? When will that assurance be given? MR. SCHMIDT: Mr.

Speaker, I think the same question was asked yesterday and the day before. The reply has to be basically the same. The province will be making its intentions known in regard to the livestock industry in all its phases before the end of this year. MR. R. SPEAKER: Mr. Speaker, in the same vein, a supplementary question to the Minister of Housing and Public Works. It's with regard to renegotiating mortgages and young families, even those without children, having all opportunities of purchasing homes.

Can the minister indicate whether a new program is being put in place, with additional revenue from resources, that can enable these people not only to renew mortgages but to have their first home? Is the minister considering a new pro­ gram in light of the announcement yesterday and today? MR. CHAMBERS: Mr. Speaker, I've gone over this ground before. I don't mind repeating it, if you'd like me to do that, sir. Recently we announced a $200 million addition to our funding for this year, which brings our total expenditure in housing in all areas to $1.7 billion.

There is no other province that even comes close to that number. MR. MANDEVILLE: Mr. Speaker . . . MR. SPEAKER: Followed by a supplementary by the hon. Member for Edmonton Mill Woods. MR. MANDEVILLE: Mr. Speaker, my supplementary question is: has the minister had the opportunity to review the new regulation the minister put into effect, where a family has to have one dependent child to quali­ fy? Is it temporary, or is it going to stay in effect?

October 29, 1981 ALBERTA HANSARD 1317 MR. CHAMBERS: Mr. Speaker, I think I indicated ear­ lier that when we looked at the increase of $200 million — and I think $200 million is very, very significant — for the balance of this year, we had to look at prioritization. As part of prioritization, we said, okay, families or single parents with children should have the higher priority, the greatest need. While that will apply for the balance of this year, I can't say at this stage whether or not it will apply for next year. It will all depend on the size of our budget and so forth. MR.

MANDEVILLE: A supplementary question, Mr. Speaker. As a result of our interest rates dropping ap­ proximately 2 per cent with the Bank of Canada, is the minister anticipating any drop in interest rates for Home Mortgage from the 19.5 per cent at the present time? MR. CHAMBERS: Mr. Speaker, it's probably worth while underlining that point again. The rate the Home Mortgage Corporation sets is one point over the borrow­ ing rate. Our criterion is that it's one point over the borrowing rate, which just covers administrative costs, or the low end of market.

Therefore, if the rate goes down by more than half a point — we use a half-point movement as the criterion, so we're not moving it every day — then of course the rate of the Home Mortgage Corporation would be adjusted accordingly. The subsidies, which are very, very large indeed at the current rate — the last I saw they were $565 a month direct payment to the home-owner as the maximum sub­ sidy available.

Again, those subsidies, which are straight line subsidies between the minimum income of $12,000 and where they come off at $38,000 a family income, of course are retained according to the interest rate so that the affordability always remains the same. MR. PAHL: Mr. Speaker, my supplementary is on the question of the hon. Leader of the Opposition to the Minister of Agriculture. I wonder whether the Minister of Agriculture would agree to review this province's royalty

schedule on beef production and, in view of the concerns raised by the hon. Leader of the Opposition, if he would agree to slash them at least in half. MR. R. SPEAKER: Go tell the cattlemen that. Mr. Speaker, my supplementary question is to the Provincial Treasurer, with regard to priorities established by this government, the procedures used in supporting not only small oil companies or small businesses. I want to say that I do support the royalty tax credit program. I've no problem with that. But in my mind, there is . . . MR. SPEAKER: Order please. I thought we had finished with that question.

I'm very much concerned about reach­ ing a number of members who have yet to ask their first question. MR. R. SPEAKER: Mr. Speaker, they have a caucus twice a week. [interjections] MR. SPEAKER: Order please. Does the hon. leader wish to ask a question or does he not? MR. R. SPEAKER: Mr. Speaker, could the Provincial Treasurer justify the procedure used whereby one seg­ ment of the industry of this province is given support — call it support whether it's by foregone revenue or other­ wise . . . MR. SPEAKER: Order please. We're obviously going to get into a debate. To justify anything requires debate. The hon.

Member for Macleod followed by the hon. Member for Calgary Forest Lawn. MR. R. SPEAKER: Mr. Speaker, the question to the Provincial Treasurer . . . SOME HON. MEMBERS: Order. MR. SPEAKER: Order please. If there's time, we'll come back to the topic with questions that come within the parameters of the question period. The hon. Member for Macleod. MR. R. SPEAKER: On a point of order, I want to take exception to that ruling. I feel that when we try to start a question area, that area should be concluded. The conclu­ sion to this question area I've started is my question to the Provincial Treasurer. I feel that . . .

MR. SPEAKER: I'm sorry, I can't agree with the hon. leader that the question should be concluded, because it could be of such a nature that it would monopolize the whole question period. We have now used at least two- thirds of the question period on the first two questions of the hon. leader. I have eight members who would like to ask their first question. There has to be some fairness in the situation. MR. R. SPEAKER: On the point of order. I'd like to know what your ruling is. Is the ruling on the matter of the kind of question I was going to ask, or is it on the time factor?

If it's on the kind of question, I haven't even been able to word the question at this point. [interjections] MR. SPEAKER: I don't wish to take up the question period with a debate with the hon. leader, and I won't do it any further. But the question started out, whether somebody was going to justify something. Now that is out of order to begin with. I realize there has been very substantial latitude in the question period. The hon. Minister of Energy and Natural Resources has been asked to make predictions of various kinds and so on. There has been an exceptional amount of latitude in the question period.

I felt it was appropriate in view of the importance of the subject, but there do have to be reasonable limits. We do have to be fair to other members who want to ask their questions. The answer to the hon. leader is twofold. Firstly, the question was out of order. Secondly, we're taking up an excessive amount of time. MR. R. SPEAKER: Mr. Speaker, on the point of order. In this Assembly, time after time, I've seen where a member who worded a question that was out of order had the opportunity of rewording it and putting it into an acceptable form. MR.

SPEAKER: If there is time at the end of the question period, the hon. leader will have that opportunity. Head-Smashed-In Buffalo Jump MR. FJORDBOTTEN: Mr. Speaker, my question is to the Minister of Culture. But may I first say how proud we

1318 ALBERTA HANSARD October 29, 1981 as Albertans are to have another designated world herit­ age site within our borders. In view of the international significance of the site, what steps are being taken by the minister and her department to preserve it? MRS. LeMESSURIER: Mr. Speaker, as I said earlier in the ministerial statement, Head-Smashed-ln Buffalo is registered as a provincial historical site; as such, we try to prevent vandalism and unwarranted digging.

At this time, I must add that we have had the co­ operation of the Piegan Reserve, which is right beside the site, and the local people, who have also taken their turns in policing this area. MR. FJORDBOTTEN: Supplementary, Mr. Speaker. If we're preserving the site, do we now own the land? What is being prepared in the way of public access and interpre­ tation of the site? MRS. LeMESSURIER: Mr. Speaker, there were two farming families around the area of Head-Smashed-ln — Mr. Dersch and Mr. Calderwood, I think — who very generously donated the 15 square miles that Head- Smashed-In is on.

I would like to point out to the Assembly, though, that there is a proposal for a major interpretive centre at the top of Head-Smashed-ln which will have the same type of facilities as our Strathcona Science Park. MR. FJORDBOTTEN: Mr. Speaker, a supplementary. What time frame are we looking at in developing that site, now that it has received its designation? Would the minister be looking at moving quickly in developing the site? MRS. LeMESSURIER: Mr.

Speaker, if the program is agreed to as we propose, and things can travel through the routine, we would like to have the interpretive centre open to the public by 1985. I think it will become a major tourist attraction to that area. Early Childhood Services Funding MR. ZAOZIRNY: Mr. Speaker, my question to the hon. Minister of Education is on the rather well-worn but unresolved issue of financial assistance for community early childhood services operators.

The question arises from the minister's most recent assurance to this Assem­ bly on May 29, 1981, that the matter was under consider­ ation and help was on the way. The minister made a similar assurance on June 6, 1979. Can the minister advise the Assembly if help has finally found its way to the community ECS operators and, if so, what form it takes? MR. KING: The answer is that help has not found its way to the community ECS operators at the present time. MR. ZAOZIRNY: Mr. Speaker, just for the record, I will ask the supplementary question.

Can the minister give any indication as to when this matter might finally be resolved? MR. KING: Well, the hon. member will recall that, subsequent to the comment quoted, in May 1979, help was indeed delivered to the community operators in Calgary and in other communities throughout the prov­ ince. The hon. member is indicating for the record that it was not as much help as he had hoped it would be. Nevertheless, there was help. So I'd like to separate the undertaking of May 1979 from the undertaking of May 1980.

With respect to the undertaking of May 1980, I can only say that a proposal has been developed, it has left the Department of Education, and it is under considera­ tion within the government. Condominium Conversions MR. NOTLEY: Mr. Speaker, I'd like to direct this ques­ tion to the Minister of Housing and Public Works. To preface, last Friday the hon.

Minister of Consumer and Corporate Affairs indicated that the provisions with respect to condominiums were of course amended last year to include not only the row or town house concept of condominium, where they're built side by side, but was expanded to in­ clude stack housing also.

Is the minister in a position to advise the Assembly whether the policy change identified by his colleague last Friday applies only to stack housing condominiums built under a specific agreement with the Alberta Home Mort­ gage Corporation, or does it apply in a broader sense to existing stack housing rental units being converted to condominiums? MR. CHAMBERS: Mr. Speaker, I don't understand the question. Perhaps it could be elaborated on. MR. NOTLEY: Mr. Speaker, I advise the hon. minister to read his Alberta family home purchase program book­ let.

The question relates to whether or not this particular program of funding under the Alberta family home pur­ chase program applies to apartment units now being converted to condominiums, or only those units built as condominiums in the first place. MR. CHAMBERS: Again, I'm not sure as to the specific reference. I point out though — whether or not I'm interpreting the question correctly — that most condo­ minium types of units would be built under builder spec loans. Otherwise it would require every individual unit being sold.

So our revisions would essentially result in single family, semi-detached, and smaller sizes of units, rather than large stack condos. MR. NOTLEY: Mr. Speaker, I'm referring specifically to information given in this House by the hon. minister's colleague. Since the hon.

Minister of Consumer and Corporate Affairs seemed to have knowledge of this new program, my question really applies to whether or not any program is presently in place in this province, through the family home purchase program, so those many Albertans facing the prospect of condominium conversion, and having their apartment units sold out from under them, can come to the Alberta Home Mort­ gage Corporation and apply for funds to purchase their condominiums where condominium conversion in exist­ ing stack apartments or buildings is occurring. MR. CHAMBERS: Mr.

Speaker, it hasn't been the poli­ cy to encourage condominium conversion by the Home Mortgage Corporation. Obviously, the basic intent has been to encourage new construction. MR. NOTLEY: Mr. Speaker, in the absence of rent controls, in the absence of any program prohibiting

October 29, 1981 ALBERTA HANSARD 1319 condominium conversion, as we had for some time in this province — but this government did away with that program — what protection does the individual have where there is a very tight market situation in both major cities, but especially in the city of Calgary, where condo­ minium conversion takes place, other than going out on the street? MR. CHAMBERS: Mr. Speaker, I think that question would be more appropriately referred to my colleague the Minister of Consumer and Corporate Affairs. MR. NOTLEY: I refer that directly then.

What protec­ tion does the individual have who now lives in an apartment where condominium conversion has been ap­ proved? No program is available from the government through the Home Mortgage Corporation to purchase that condominium. What protection does the individual have where the market situation is less than 1 per cent vacancy rate? MR. KOZIAK: Mr.

Speaker, first of all, I don't want to pull the rug out from under the hon. member's questions, but if he will look at the transcript of the Hansard proceedings on the day he posed the question, I suggested to the hon. member that he might ask my colleague for details of the Alberta family home purchase program as it applies to stacked condominiums. I made no suggestions in that regard, and I'm sure the hon. member now asking those details and getting those answers had not intended to suggest that I'd made any suggestions in that regard.

Secondly, when we get to the question the hon. member posed, the individual who lives in an apartment being converted into condominiums would have the addi­ tional protection, over and above an individual who is given notice to vacate under normal circumstances, of three months' notice. So unless you have a lease — if there's a lease, the lease governs the terms of the tenancy — there may be no provision for notice and there may be no provision for breach of that lease in advance of its required life expectancy.

But under normal circumstances where there's just a month-to-month tenancy, a tenant's security of tenure, if one wants to use that phrase, would be three months. If the apartment were being converted into a condominium, the security of tenure would be extended by an additional three months to a total of six months. So an individual tenant in an apartment building that's being converted to a condominium would have three months' more security of tenure than an individual tenant under normal circumstances. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister.

Then am I to take it that the only protection for tenants where condominium conversion takes place is that it's six months before they're out on the street, instead of three months? Is this government providing any kind of program to protect tenants, partic­ ularly older people, on fixed incomes who now face the prospect of condominium conversion with a good deal of fear? A massive program is under way in Calgary — over 9,000 applications for condominium conversion. Is there any program at all that will protect that kind of tenant? MR. KOZIAK: Mr.

Speaker, the hon. member huffs and puffs, and he waves his program at me — or whatever it is he has in his hand. He neglects — or his memory doesn't serve him well — to recall all the information I've shared with him, just in the scant two weeks of this fall session, to assist him in those answers. He neglects to remember, for example, that 42 per cent of senior citizens who rent are in government-subsidized accommodation.

He neglects to remember that the senior citizen accom­ modation, being built by this government in conjunction with non-profit organizations throughout the province, has been expanded and is proceeding at a marvellous rate. He neglects to recall that. In terms of the individual he raises, that's just one program. There's the $1,000 we're providing for senior citizens, to assist them with their rents. There was the 60 per cent increase in the assured income for senior citizens. And I seem to recall, Mr.

Speaker, that I mentioned something about the core housing incentive program, where half the units built under that program are pro­ vided at controlled rentals to those who need it. So we are providing for these. What concerns me is that the hon. member, with his question, has the gall to suggest that perhaps we're not. Here we are in this province with 8 per cent of Canada's population, and we are doing more in the area of housing than the other 92 per cent of Canada's popula­ tion. [interjections] MR. NOTLEY: A supplementary question to the hon. minister. MR. R. SPEAKER: Mr. Speaker, on a point of order. MR.

NOTLEY: On a point of order, go ahead. MR. R. SPEAKER: Mr. Speaker, on a point of order. I think the hon. dramatization that went on the last few moments . . . [interjections] In reflecting on the earlier part of the question period, where you called me up short in terms of questions and then allowed that to go when people are being put out of their homes, I think we should think in terms of a little equity in this House. [interjections] MR. KING: On a point of order.

If the hon. member opposite is going to rise on what he purports to be points of order, could he do us the courtesy of referring to the standing order or the annotation which he says is being violated. AN HON. MEMBER: That's the least he could do. MR. KING: Reference might help him to learn a little bit about the rules. MR. R. SPEAKER: Mr. Speaker, the hon. Minister of Education should look after his responsibilities in this province. [interjections] AN HON. MEMBER: What about the hon. Leader of the Opposition? MR. SPEAKER: Order please.

It would appear to me that the question should not have been permitted in the first place. When a question asks, what are the programs or what is being done, that kind of question is just so obviously an invitation to give a long catalogue of what is being done. If the question is allowed, it would be manifestly unfair not to allow the answer. Therefore, I must accept the fault. I realize that if I had not allowed the question, I would have been condemned. And I am now being condemned because I did allow it. Neverthe­

1320 ALBERTA HANSARD October 29, 1981 less, in that no-win situation, would the hon. member, if he has another brief question, get on with it. I'm afraid that we're not going to cover our list. MR. NOTLEY: Mr. Speaker, I'm sure I wouldn't want to offend the wounded pride of the hon. minister across the way. [interjections] This is the "now" government when it comes to oil companies, and "later" when it comes to the rest of us.

My question very directly to the hon. minister: in view of the fact that much of the housing he and his colleague have referred to is not going to be in place, and that there is a vacancy rate below 1 per cent in the city of Calgary, is any single identifiable program in place to protect those people in units that are subject to condominium conversion? MR. SPEAKER: With great respect, that is a repetition of the previous question. I would be unable to muster sufficient courage to have the answer repeated. The hon. Member for Calgary McKnight, followed by the hon. Member for Calgary Currie.

Home Conversion Program MR. MUSGREAVE: Mr. Speaker, I'm almost afraid to ask this question after what you've just been saying to us. However, I would like to ask a question of the Minister of Housing and Public Works, to do with a program that's not involving new housing but involving the present housing stock. I wonder if the minister could tell us what success he's having with the Alberta home conversion program. The reason I ask him this is that I'm a member of the Calgary housing commission. I was at a meeting last week with some city aldermen, and they seemed to be totally unaware of this program. MR.

CHAMBERS: Mr. Speaker, I regret that the city is completely unaware of the program, because we have advertised it. We have what I think is an attractive brochure, which has been circulated. I would confess, though, with regret, that the program has not had much take-up. That appears to be related primarily to munici­ pal building codes. I don't want to get into the history of Alberta, but if you go back to the end of the Second World War, an awful lot of people moved into this province. At a time when . . . MR.

SPEAKER: With great respect to the hon. minister, I must express some apprehension about the history les­ son which is about to be given. MR. CHAMBERS: Mr. Speaker, I'll try to abbreviate the history. A lot of people moved into Alberta then, and there wasn't much new housing constructed. MR. SPEAKER: Order please. The hon. Member for Calgary Currie. Psychiatrist Shortage MR. D. ANDERSON: Mr. Speaker, my question is to the hon. Minister of Advanced Education and Manpow­ er.

Can the minister indicate if his department has any projections as to the needs of Albertans with respect to psychiatrists in the coming five years, and what our capacity as a province will be to deal with those needs? MR. HORSMAN: Mr. Speaker, there are projections, but I don't have them readily at hand. A number of interdepartmental committees have been reviewing those matters with the medical profession, with various institu­ tions, and with government departments such as the Department of Social Services and Community Health.

I really would have to take the question as notice and try to respond with some statistical information for the hon. member. MR. SPEAKER: The time for the question period has elapsed. I realize we haven't spent all of it on questions. Three hon. ministers have indicated their willingness to supplement information previously given. Does the House wish to deal with that, or would it be the prefer­ ence of the House . . . I must say candidly that an extension of the question period requires unanimous con­ sent. Is it the wish of the House that these three matters be dealt with now? HON. MEMBERS: Agreed. MR.

SPEAKER: Would the hon. Solicitor General wish to start, followed by the hon. Minister of Government Services, then the hon. Minister of Environment. Suspended Driver Licences MR. HARLE: Thank you, Mr. Speaker and members of the House. Yesterday I was asked a question that related to whether or not there was an increased number of drivers who might have had their licences suspended. I gave the figure at December 31, 1980, as being 31,077. As of September 30, 1981, the number was 41,598. So that is a considerable increase.

I might also say that at the end of 1980, December 31, there were 1,597,419 drivers licences issued, of which 31,077, or 1.95 per cent, were suspended. We did carry out check stops of vehicles during 1980 and stopped some 543,170 vehicles, of which 347 were discovered to be suspended drivers, which is 0.064 per cent of the total. Air Travel by Cabinet Ministers MR. McCRAE: Mr. Speaker, during question period yesterday, when the hon.

Leader of the Opposition was challenging the use of commercial private-sector aircraft by the government for necessary travel, he asked a ques­ tion about a couple of flights on April 25, 1981. He wanted to know the purpose of two Bell helicopter flights. Mr.

Speaker, I want to assure him in the House that they were for the purpose of assisting members of Executive Council and Edmonton and area members of the Assembly in touring the proposed annexation area to assist them on that Saturday morning in visiting the area so they could come to the responsible and very fair conclusion they came to on the annexation question. I thank you for the opportunity of responding to that, Mr. Speaker. Water Quality — Bow River MR. COOKSON: Mr.

Speaker, the question by the Member for Calgary Forest Lawn, which dealt with poly- chlorinated biphenyls and our checking of the Bow River to date. The content within fish muscle is between 0.1 and 1.8 parts per million. The safe level for human consump­ tion is 2 parts per million. At the present time, we can

October 29, 1981 ALBERTA HANSARD 1321 detect no measurable amount of PCB in the water. However, we will continue to monitor the fish in the river. Hazardous Chemicals MR. COOKSON: The question from the Member for Olds-Didsbury, I think, with regard to Roundup and 2,4-D, the response with regard to Roundup, which is also known as glyphosate: the use of Roundup has been increasing over the past few years. It is now being used domestically. We estimated our licensed applicators are using about 4,000 pounds of the material. In 1981, it's estimated this figure would be considerably higher — domestic and farm use.

In 1976, the IBT industrial biotest lab studies included this chemical as one of the tested chemicals. Ottawa has made it mandatory that certain chemicals, including Roundup at this time, must have a special warning label on the front panel of the container stating the safety. It would be Ottawa that will continue to monitor and review. It's important that the user who is using Roundup at the present time clearly understands the directions on the label. MR. SPEAKER: I overlooked the hon. Minister of Cul­ ture. With the indulgence of the Assembly, I'd like to recognize that hon. minister. HON. MEMBERS: Agreed.

Head-Smashed-In Buffalo Jump (continued) MRS. LeMESSURIER: Thank you, Mr. Speaker. In my enthusiasm, I stated that 15 miles was the amount of land donated by the two families. It was 10 acres, but the overall site is 15 acres. MR. STEVENS: That's 15 square miles. MRS. LeMESSURIER: Excuse me, 15 square miles. ORDERS OF THE DAY head: MOTIONS FOR RETURNS MR. HORSMAN: Mr. Speaker, I move that Motion for a Return 138 stand on the Order Paper. [Motion carried] head: MOTIONS OTHER THAN GOVERNMENT MOTIONS 213. Moved by Mr. Kowalski:

Be it resolved that the Legislative Assembly urge the government of Alberta to consider the adoption of a system of regionalized purchasing as a means of extend­ ing its successful policy of decentralization and of provid­ ing additional opportunities to local and small businesses. MR. KOWALSKI: Mr. Speaker, I'm extremely pleased that Motion 213 has found its way on the agenda of the House so as to be introduced during Alberta's first ever Small Business Week, which runs from October 26 to October 31 this year. Motion 213 has three main purposes.

The first is to highlight the role of local and small business in the province of Alberta; secondly, to raise a discussion on current government purchasing procedures; and thirdly, to create a positive environment for the proliferation of thought as to how the present system can be improved and expanded upon. In my view, Motion 213 is most compatible with the government's very well-known com­ mitment to decentralization of service and the promotion of economic diversification in our province. [Mr.

Appleby in the Chair] This week has been designated Small Business Week with the intent of highlighting the very important con­ tributions that small business makes to the vibrant Alber­ ta economy. It's dedicated to small business throughout Alberta and within the community, and without doubt it's a tribute to the vital and essential role played by small business in our economic, social, and community lives. Mr. Speaker, this sector forms a vital part of the provincial economy and literally touches the lives of every Albertan on a day to day basis.

Often, small business is taken for granted, with little recognition given to the role it plays in our social/economic fabric. As a member of this Assembly, I am very pleased with the support and the drive given to Small Business Week by the Hon. Al Adair, the Minister of Tourism and Small Business. He and his department have worked hand in hand with the private sector, who have assumed the leadership and have provided the spark and the drive to put on this week.

In particular, all members have to be very thankful to the Alberta Chamber of Commerce and the hundreds of member chambers throughout Alberta, the Alberta Construction Association, the Calgary and Edmonton chambers of commerce, the Canadian Federa­ tion of Independent Business, the Canadian Manufac­ turers' Association, the Canadian Organization of Small Business, the Federal Business Development Bank, the Management Advisory Institute, and the Retail Mer­ chants Association. Small Business Week is a joint action of all the above under chairperson Catherine Pearmaine.

Motion 213 is directed to local and small business. It's within this context that we perhaps remind ourselves again of the

definitions of small business within Alberta and look at some of the very important facts associated with small business in this province. Mr. Speaker, when we look at the

definitions, they are very interesting. One basic definition of a small business is that it's an owner- managed enterprise which is not dominant in its field of endeavor. Size can vary from one sector to another, but generally in manufacturing, small business employs fewer than 100 people and in other sectors fewer than 50. Annual sales are less than $2 million. Based on this, some 97 per cent of the nearly 100,000 businesses in Alberta are small. Most important of all in the definition of small business, the majority are family owned and operated.

The contributions of small business to our economy are very, very significant. To repeat: 97 per cent of all busi­ ness is small business. Small business in Alberta provides jobs for some 42 per cent of the work force. Two-thirds of all new jobs are created by small business. Small business contributes some 30 per cent to our gross na­ tional product. Small business is the largest employer in this province outside the government itself. Agriculture, as a renewable resource, is Alberta's number one industry and is comprised almost totally of small business. Small

1322 ALBERTA HANSARD October 29, 1981 business in this province develops more new products and services, builds more new outlying communities, replaces more imports and generates more exports than any other segment in our provincial economy. In the year 1980, some 27,760 business incorporations occurred in this province. In that same year, 450 business bankruptcies were registered. Small business has been here since the creation of this province, and it's here to stay. Essentially, it's the soul of every community. Of course without it, communities large or small would not have been created in the first place.

Small business is a catalyst in the community. It pro­ vides more funding and volunteer public service than any other source. No matter what town, village, or commu­ nity in the province of Alberta, we all understand and appreciate the role our small businessmen provide to that particular community. Small business fills the need of all persons, whether they be resident or visitor to that community. Small business tends to be interdependent and self-supporting. It's involved in new enterprises, new volunteer creations and activities within the community.

It provides the greatest source for improved skills train­ ing, more than any other segment in the business world of Alberta. Of course, it unites the spirit of every community and provides a common bond to all the residents within those communities. The majority of revenue produced by small business is recycled within its own trading area. Small business is competitive by its very nature, and it's responsible for the creation of more competition than any other source with­ in our many and varied communities.

Of course, it pro­ vides the greatest opportunity that exists for innovation, because it is based on innovation and competition. As well, Mr. Speaker, when you look at small business in Alberta, it's of interest to note the various segments we have. Agriculture accounts for approximately 10 per cent of the number of small businesses in our province; forest­ ry, approximately 1 per cent; fishing and trapping, slight­ ly less than 1 per cent.

Mines, quarries, and oil wells account for approximately 2 per cent of those types of small businesses; manufacturing, approximately 3 per cent; the construction industry, 18 per cent. Transporta­ tion, communications, and other utilities of that nature account for approximately 6 per cent. Our businessmen involved in trade account for some 22 per cent of the number of Alberta businesses; finance, insurance, and real estate, approximately 7 per cent; community business and personal services, 31 per cent; and public administra­ tion, approximately 1 per cent. Small business is very dynamic.

Of course, when we talk about it in a Legislature of the type we have, we always have to ask ourselves what the role of government is with respect to small business. In my view, the primary role government can play is essentially one of ensuring that a positive economic climate exists for the fairest degree of competition to exist in this province. It is one of ensuring that the citizens of Alberta have the highest disposal income of any citizen in the country. If citizens do not have to forward their income to government by way of taxes, both direct and indirect, then they are the masters of their own house.

It is they who determine their own economic priorities. In this regard, Mr. Speaker, the record of this govern­ ment is very well known. Our government can assist small businesses and its citizens, and it does. It assists in a very dramatic way, by providing information and counselling services of a varied nature. In this regard, the role of the Department of Tourism and Small Business is a com­ mendable one.

Pamphlets such as Counselling Assistance for Small Business, Assisting Small Business throughout Alberta, and The Alberta Industrial Land Program cover a series of programs that are important to businessmen in all parts of the province of Alberta.

When you open one of these pamphlets — as an example, Counselling Assistance for Small Business — go through the types of activities available, and look at the list of the kinds of services provided to those in the process of establishing a new business, you run across such headings as the provision of information on business licences, the provision of forms of business organizations, the preparation of business plans, the preparation for potential start-up and operat­ ing difficulties, information provided with respect to the question of tax requirements, information provided with respect to the particular types of business or appropriate sources of data for decision-making — and the list goes on.

For those already in business, general business coun­ selling services are provided. A series of very excellent pamphlets have been printed over the past several years from the Department of Tourism and Small Business, outlining a series of -discussion papers and topics with respect to a variety of subjects in small business. Only this week, a new document was issued by that department, circulated to all members, and now available to all busi­ ness people in the province of Alberta.

In addition to counselling, I think it's also very impor­ tant that all businessmen in this province be cognizant of a very excellent program provided by the Alberta Hous­ ing Corporation called the Alberta industrial land pro­ gram. Essentially, the purpose of that program is to assist communities that wish to provide land for their current and future industrial development. It's extremely impor­ tant that the business community in this province realize and understand that their towns and villages can grow and expand further business opportunities and industries with participation in this particular program.

This pro­ gram does not exclude the private sector from participat­ ing in industrial development. Mr. Speaker, what is the current procedure used by the province in the purchase of supplies? Again, I think it would be very helpful if every business person in this province had two documents in their possession, and had them all the time. One of these documents is known as Selling to the Government of Alberta, a very short, sweet pamphlet that outlines the process of dealing with the province of Alberta. A second is the pamphlet entitled Standing Offer Information for Vendors.

Included in these two documents are the general purchasing policies of this government. I think it important that we all review them, because they outline a system that allows the business community in this province to get really involved. Under our general purchasing policies, it's important for us to recognize that the primary aspect of any government policy should be that purchasing strive for economy in the buying of goods and services. Inherent in that economy comes the competitive aspect.

Secondly, if quality service and price are equal, preference is given to products manufactured or produced in whole or in

part in Alberta. Thirdly, purchases by the Alberta government are exempt from federal sales and excise taxes, in most cases. Fourthly, emergency purchasing privileges may be delegated to departments of the Alberta government, but all purchases are subject to review and approval by the purchasing branch prior to payment. This allows for an overall, continuous review of these purchasing plans.

October 29, 1981 ALBERTA HANSARD 1323 In its general policy guidelines, the province demands that a very high standard of business ethics be followed in conducting business. Inherent in that ethic development, of course, comes the right to be restrictive as well, in terms of selecting products from unsavory business peo­ ple. Heaven knows that their percentage in our province is very, very small and very, very remote. All businessmen in our province should know that they can get started in dealing with the province and selling to the government of Alberta. It's a very simple process, for the most part.

For a businessman in any part of Alberta who wants to get involved in attempting to bid or to sell his products to the government, he simply has to have his name included on a series of source lists provided, as­ sembled, and published by the purchasing office of the Department of Government Services. Mr. Speaker, I amplify those two documents and raise them specifically because the government of Alberta shopping list is very broad. It contains literally thousands of items, from paper clips to cars. Perhaps over 25,000 specific items are purchased annually by this government. The totals are very significant.

My best guess is that an annual expenditure level of some $350 million of supplies is purchased. If you were to add the agencies, corpora­ tions, and commissions associated with the province, that figure could very easily rise to some $1 billion in annual expenditures. My best research suggests that 70 per cent of the purchases occur in the Edmonton/Calgary areas, and the remaining 30 per cent are purchased elsewhere in the province.

But it's interesting to note that while 30 per cent of government purchases are made outside the two major urban areas, we also have approximately 30 per cent of provincial public employees located outside these two major urban areas. The Alberta government's supply requirements are huge. They provide a cash market, and in my view it's a market that all small business in this province should be going after.

When I placed Motion 213 on the Order Paper this spring, the dollar limit for delegated purchasing authority — that is, the limit under which public employees could purchase goods at the local level without a sophisticated tender procedure — was $100. On June 10 this year the Hon. Stu McCrae, Minister of Government Services, announced what is in my view a most significant increase in this delegated purchasing limit. That limit has now been increased to $250 per purchase. That simple change is very important to small business because a very sub­ stantial amount of government aquisitions fall below the $250 limit.

When you look at it on the basis of some $350 million a year in purchases and see that aggressive busi­ ness people in all parts of Alberta understand the very simple rules in dealing with the province, there is a market that in my view has not been exploited to the extent it should have been to this date. That change, Mr. Speaker, very significantly extends the concept of region­ alized purchasing that Motion 213 talks about and will offer an increasing number of regional and local entre­ preneurs improved business opportunities.

While I'm pleased with that initiative, I also want to suggest that we can do more, but what we do must come about after feedback from the business community in this province. We really shouldn't move in opening new direc­ tions in the market place until we have actually received this feedback from Alberta business. In this regard I want to advance the following ideas for discussion and raise these ideas by way of questions. It should also be clear that the concepts raised do not complement one another.

They outline different ap­ proaches which might be followed in further enhancing the concept of regionalized purchasing in this province. The first idea by way of question is: should the Alberta government initiate a policy that would stipulate that all purchase transactions under a certain dollar limit be made in the region of use? We have several departments in our government which have already regionalized them­ selves from an administrative point of view. That ques­ tion basically says, then, should purchases for service within that region be made from firms located within that region?

A second idea by way of question: should the Alberta government institute a small business preference, whereby certain products under a certain value would be tendered only to defined small business within a particu­ lar region? The third concept I want to raise by way of question is: should the Alberta government assume purchasing re­ sponsibility on a regional basis for all major items for various agencies, boards, and commissions funded by the government, including education boards, hospitals, col­ leges, and universities, within a particular region?

The fourth idea I want to raise by way of question is: should the Alberta government institute a policy whereby Alberta-based firms bidding on contracts funded by the province receive a percentage preference in the bidding? Mr. Speaker, I want to make it very clear that I'm advancing these concepts for discussion and in the hope of raising debate both inside and outside the House. On this day in October I have raised these ideas in the House.

It's my intent, within a matter of several weeks, to send a letter to every chamber of commerce in Alberta outlining Motion 213 and asking their chamber to send me their comments and views so I can report to the Assembly in the spring of 1982 during the estimates of the Minister of Government Services. Mr. Speaker, small business is big business. It is the backbone of life in Alberta, and I'm looking forward to a proliferation of ideas and a renaissance of thought in this regard. Thank you. MR. ISLEY: Mr. Speaker, first I'd like to congratulate the hon. Member for Barrhead for introducing Motion 213 for debate.

It may come as a surprise to the hon. member, after our many debates this summer on different issues when we disagreed on a certain committee, that I am in agreement with him on this one. As I interpret the purpose of Motion 213, it's to promote regionalized purchasing to encourage economic diversification across the province. I must agree with the hon. member that I feel this is compatible with this government's general policy of decentralization. In some departments we have seen a move toward regionalization which appears to be serving the province well.

I'm thinking particularly of the regionalization that has occurred under the Department of Agriculture with its six regions throughout the province, the Department of Transportation with its six regions throughout the province, and recent moves taken by Social Services and Community Health, which I as a rural member appreciate. However, if we review the present practice of govern­ ment purchasing, we find we have centralized purchasing under the Department of Government Services, and one of the goals this purchasing strives for is economy.

I think you could interpret that as large quantity buying, which can make it very difficult for small businessmen and small retailers to get a piece of the action. There's also encour­

1324 ALBERTA HANSARD October 29, 1981 agement of competition in our purchasing policies through the tender procedure, and this I have no problem with. However, Mr. Speaker, in discussions with local businessmen in my constituency about the purchasing practices of our provincial government, large corpora­ tions, and small corporations, a distinctive difference in their practices and policies is revealed. In my particular constituency, the companies or corporations I'm mainly referring to are oil companies operating in the heavy oil sands.

A small oil company operating a pilot project in the heavy oil sands tends to buy locally. This tends to strengthen the local economy and ensures better relation­ ships with the business community. Local automobile dealers, welding shops, office supplies stores, oil field service companies, and construction firms appreciate and thrive on companies that employ local, decentralized buy­ ing practices. However, the centralized purchasing poli­ cies of large companies and of our provincial government contribute little to the local businessmen and hence to the local economy.

Granted, in June 1981 the Minister of Government Services announced an increase in the limit of delegated purchasing authority from $100 to $250, and this I ap­ plaud as a move in the right direction. My question to this Assembly is: could we not go further? Let's look briefly at one of our regionalized departments. Transpor­ tation, I mentioned earlier, has six regions in this prov­ ince.

I would submit that the Department of Transporta­ tion annually probably buys hundreds of cars and trucks, a number of snow plows, other items of road building equipment, in addition to office furniture, office supplies, and a whole array of other items. Could we not set up a system where we buy in the same region we're serving? For example, if we're buying 120 trucks, split that into six tenders and tender it on a regional basis. Critics of this concept will argue that we won't get as good a unit price, and I would have to agree with that.

But I think we will get a stronger and more diversified business economy in the regions and, I submit, the possi­ bility of better and cheaper service contracts on equip­ ment, because a local retailer is much more receptive to the servicing of a piece of equipment he is selling. Critics will also argue that there may not be enough competition in the tendering practice, and I suggest that if this were to occur you would simply have to expand the size of the region to ensure you were getting competitive bids.

I don't think you'd find too many areas of government purchasing where, if you looked at a region of this province, you wouldn't have enough suppliers to get competition. But I'm suggesting you identify areas and expand the region to ensure you're getting competition. Mr. Speaker, our government has an excellent policy of decentralization or, to use a term I heard coined the other day by the hon. Minister of Advanced Education and Manpower, regional enhancement.

There are many examples of this, recent examples being the Athabasca University that went to Athabasca, the correspondence school branch to Barrhead, the agricultural research cen­ tre we're developing in Leduc, and the new technology school going into Stony Plain. We're all familiar with older examples: the Agricultural Development Corpora­ tion services coming out of Camrose, AOC out of Ponoka, and the new environment centre that opened this year in Vegreville. As I mentioned earlier, we've had the example of regionalization of the services of two, and now going into three, departments.

Fellow members, I suggest that what we're encouraging here is an extension of an existing policy which is working well. We are encouraging that in addition to decentralization of facili­ ties, or regional enhancement through facilities, we also extend the concept to decision-making, and in this par­ ticular debate to decision-making with respect to purchasing. In closing, Mr. Speaker, I state my support for Motion 213 and encourage other hon. members of this Assembly to support the direction initiated by this resolution. MR. WEISS: Mr. Speaker, I would like to thank the hon.

Member for Barrhead for bringing forth this motion today. As the hon. member has pointed out, I think it is very timely, in view of Small Business Week, and very essential to all Alberta, not just urban or rural Alberta but all Alberta. Without reading it through, Mr. Speaker, I would like to clarify that the motion does say: "Be it resolved that the Legislative Assembly urge the Government of Alberta to consider . . ." I would like to point out to all members of the Assembly that "to consider" is the most important point here. If all members cannot support this motion, I think something is wrong.

When we're asked to consider something, I think it's very important that we sit and look, listen, and be responsive, if that's what we're here and elected for. Specifically, when we talk about this particular item we realize that it has a strong bearing because we talked today about the affluence of the economy and how vibrant Alberta is. We do know that a lot of areas need an awful lot of help and assistance. In this particular field alone, we could be supportive and, as members, be responsive and listen. I would like to point out some of the general principles or purposes as I see they would be, Mr.

Speaker: to follow the government's decentralization policy, with its goal of providing a greater balance and distribution of growth throughout Alberta and, by replacing the present central office with several regional ones, bringing the purchasing administration closer to local communities and ensuring greater use of small businesses in meeting the ends of government.

I believe that autonomy and support by regionalization would be more effective, and it certainly would encourage people to live and relocate in all parts of Alberta, not just for some of the amenities or some of the more cultural aspects we believe only the urban centres can provide. I think we have an awful lot going for us in rural Alberta as well. Mr. Speaker, the situation at present is that the pur­ chasing of government supplies is handled through the office in Edmonton, staffed by the director of purchasing, the assistant director, two senior buyers, and 10 junior buyers.

For southern Alberta, this office is supplemented by a single buyer office in Calgary. Their workload in the 1979-80 volume of purchasing, excluding the standing offer of business and lease and contract work, was some $194 million, up approximately $14 million from '78 to '79. I believe this could be spread around more effective­ ly, more efficiently, and handled through regional centres. It is presently the branch's policy to accept local busi­ ness offers first, if all conditions of the tender are equal. Therefore, the policy is to favor regional businesses in­ directly.

However, this does not extend to the point of allowing a price edge. Mr. Speaker, I'd like to point out that I'm not speaking on behalf of small business people in asking or requesting that they receive any special factor or any precedent-setting in the way they should have an edge, or a 5 or 10 per cent factor, but only the opportuni­ ty to be competitive. I think it's most important that the

October 29, 1981 ALBERTA HANSARD 1325 small business people have that opportunity. The prob­ lem today is that they're having to compete against closed doors. All they ask for is the opportunity to be competitive. The 1979-80 annual report noted continued achieve­ ment of substantial cost savings from centralized purchas­ ing, and estimated these at 10 times the purchasing branch budget. Over 91.23 per cent of all purchase orders are filled by Alberta suppliers.

I think it's very important for all of us to recognize and know that we in government are at least responsible in trying to buy Alberta goods wherever possible. But I think we should extend that to buy local Alberta goods wherever possible. In the debate on the estimates in 1980, the minister indicated that decentralization was being considered.

To this end, I'm pleased that several steps have been taken: first, Calgary has been allowed to handle the purchasing of vehicles for government use in southern Alberta; se­ condly, the development of a computerized list of com­ panies working in areas of the province, to allow for quick access to firms for the purpose of inviting tenders on purchase orders; and third, an order in council was passed, delegating to various departments the authority to acquire without tender some items up to $50 in value.

While these three items are of a significant nature, I would like to stress that I believe we can improve on them. Mr. Speaker, as pointed out by the hon. Member for Barrhead and the hon. Member for Bonnyville, I believe the issue is that the decentralization policy of the gov­ ernment is, simply put, to allow for the movement of certain government operations to centres outside Edmon­ ton and Calgary, where feasible. And I believe it is feasi­ ble, Mr. Speaker.

The experiment of allowing the Calgary purchasing office to buy the vehicles required in southern Alberta has proved competitive on a cost basis with the previous centralization in Edmonton. Therefore, to an extent regionalization may also prove cost-competitive, as has been pointed out by the Member for Bonnyville. [Mr. Purdy in the Chair] A system where tenders are opened only to suppliers within the region serviced by a particular government facility would be a boost to the local businesses.

It would reduce the number of businesses competing for each order, and thus increase the chance of a local firm servic­ ing the order. With the number of government operations that have been decentralized to date, it makes administra­ tive sense to decentralize the means whereby they obtain their supplies. On the other hand, the restriction of ten­ ders to businesses within a certain region removes the assurance of obtaining the most favorable arrangement available. The amount government may end up paying out may be higher than it would have to if the competi­ tion were province-wide.

The government has a responsi­ bility to the taxpayers of Alberta to keep costs down. I believe we also have a responsibility to the taxpayers of Alberta to assure them of earning their livelihood. The government has already taken some steps toward decentralization, as I've pointed out, and the minister has indicated that he would study the issue. Therefore, the motion is very timely and deserves a commitment, a reassurance, and perhaps a strong reminder to the Minis­ ter of Government Services.

As has been pointed out, small businesses are a very important facet of our provin­ cial economy, accounting for 40 per cent of our gross provincial product. Especially with the present economic difficulties and the high interest rates, they deserve all the support government can give them. The present policy is quite favorable to small businesses in some areas. Where the offers are equal, local small businesses are favored over their larger competitors. That is appreciated, but I believe we should expand it to have an equal, favorable system throughout the province. Mr.

Speaker, I would like to refer to two particular references made in the past. In response to a question on May 2, 1980, in Alberta Hansard, the Minister of Gov­ ernment Services said: He talked about decentralization of purchases, Mr. Chairman, and that is something we're continu­ ally looking at. I think it's an important thing.

I can give you one example: when I first came to office, vehicles were all tendered out of Edmonton, and I had considerable representation from the other major metropolitan centre, Calgary, that there should be an opportunity at least to purchase the number of vehicles down there that were being used in that area. It goes on and on and makes reference to what we've already indicated has happened. Mr. Speaker, I'm saying that a precedent has been established, and the precedent has worked out. It is a favorable arrangement, and I believe we can expand on it.

He goes on to say that it requires lists when you're tendering particular contracts in a given area. I think that's cumbersome, Mr. Speaker, and is unfavorable to small businesses which perhaps aren't even aware of that practice today. I would also like to point out, Mr. Speaker, in that same Hansard of May 2, 1980, in reference to a question from the hon. member Mr. Bradley, the minister has replied: Mr. Chairman, I wouldn't want to give a bold commitment to do that. What I would give would be a bold commitment to study it. We study things rather dramatically and rather quickly. Mr.

Speaker, in speaking to the motion, my complaint at this point is that I'm not very pleased with the dramatics, and I'm not very pleased with the 'quickly' aspects. If we can be dramatic, let's proceed and let's be quick. Mr. Speaker, if we refer to some other areas in Canada, I believe we'll find that regional preference in provincial purchasing and tendering policies has taken place. I'd like to point out to you and to the Assembly that on March 12, 1980, the governments of New Bruns­ wick, Nova Scotia, and Prince Edward Island announced changes to their purchasing and tendering policies.

This resulted from the work of a ministerial committee of the Council of Maritime Premiers. The announcement went on about studying the success of the Atlantic Canada plus programs and so forth, to say that a new maritime purchasing policy was implemented and accepted by those provinces. I would like to indicate to the Assembly and to you, Mr. Speaker, that other areas are doing it and doing it very well, as I indicate here. The hon. Member for Bonnyville pointed out that there is a regionalization program. It was very well accepted, very, very pleased.

I as a rural member find a very good working relationship within the Department of Transpor­ tation, and particularly received, I might point out as well, by the media. A very acceptable report was made on regionalization. It was called and referred to as taking decision-making to the user. The particular regionaliza­ tion referred to in the Alberta Transportation report of October 1981 is very, very acceptable. I think you'll find

1326 ALBERTA HANSARD October 29, 1981 it is working very, very well, as indicated. Before closing my remarks, Mr. Speaker, I would also like to illustrate, and as indicated by the Member for Barrhead, that information packages are available to small business firms. I certainly hope they would avail themselves of these practices and procedures so they too can enjoy some of the marketing aspects we handle and some of the products of the some 25,000 items that may or may not be available to sell to our government.

Through Government Services, the introduction and purchasing branch has a lovely catalogue, Standing Offer Information for Vendors, and the brochure, Selling to the Government of Alberta. I would certainly encourage all businesses to research and ask their MLA for this material. Mr. Speaker, I encourage all members of this Assembly to support Motion 213. I appreciate the member sponsor­ ing the motion. Thank you kindly. MR. R. CLARK: Mr. Speaker, in those rather well-worn words: I hadn't planned to speak in this debate, but . . .

I would like to make four comments very quickly because I know members will have to put up with my voice at 4:30 this afternoon. I should perhaps advise the government that that will not be a very long speech, so I expect the Whip would conduct herself accordingly. Suffice for me to say, Mr. Speaker, there are really four points I'd like to make in reacting to the proposition put before the Assembly this afternoon by the Member for Barrhead. Number one: along with the Member for Bonnyville, I would like to commend the hon. member.

But in commending the hon. member, I would say that the hon. member shouldn't really feel he has it made. It would seem to me that a far greater test of having this proposition made would be if the members of this Assembly could vote in a positive manner on this motion prior to 4:30. That would be a far bigger indication of the member making it On this particular question. Having said that, I would like to make three more points. My colleagues and I support the concept before us. Frankly, though, I do not believe we need to have a great deal of consideration.

I recall the discussion with the minister during the estimates last year, and I believe the matter had also been raised on a previous occasion. It seems to me the time for studying is over; the time for some action is rather close at hand. I recall the Member for Grande Prairie also raising it during estimates on that other occasion. One of the other members has indicated that the Minis­ ter of Government Services has already taken some moves. I concur with the comments made by the Member for Lac La Biche-McMurray that the moves have not been nearly as dramatic as I think many of us from rural Alberta had hoped.

I for one, and this is strictly a personal point of view, would have no difficulty at all in supporting the concept of some special preference being given to small businesses in various regions of the prov­ ince. I think that should be something less than 5 per cent, but frankly I have no difficulty supporting that basic concept. I hope the Alberta chambers of commerce would express that point of view when they respond to the hon. member in the form of his questionnaire. The third comment I would make, Mr. Speaker, is this.

My constituency has had a little experience with some of the spinoff effects of regionalization, not through any activity taken by the Minister of Government Services but as a result of the college at Olds being put under a local board of governors. As a result, that college board has been able to make its own decisions with regard to purchasing. There has been a very beneficial and very positive effect to the business people not just in Olds but in that particular region. That's another reason I don't think we need a great deal more studying. We simply need some action. Now with that kind of enthusiasm, Mr.

Speaker, per­ haps I would be a little less than responsible if I didn't point out one caution to members. It's a caution that should not be used by the minister or anyone else for not moving on this suggestion. The caution is this: in follow­ ing the suggestions put out in this resolution by the hon. member, the possibility opens up of difficulties arising in the whole government purchasing area only from the point of view that the purchasing practice will be decen­ tralized and there's a possibility for some people using that system and abusing it.

Sometime down the road there will be difficulties and some character who will abuse the system, and some character may very well end up getting some kickbacks and so on. The point I want to make to members of the Assembly is this: that should not be used as an excuse not to move in this direction. If that happens, it will have to be dealt with at that particular time. If it's dealt with very forcibly, very straightforwardly, and very directly, the good bene­ fits of the program would not be lost. I commend the people in government purchasing. Dur­ ing the time I've been here, they've done an excellent job.

This should not be seen as a vote of non-confidence in them, but more of a vote of confidence in the various regions of the province. Despite that one caveat I filed. I think we should move quickly and deal with the problem that would arise when it arises. MR. STEWART: Mr. Speaker, I too want to rise in my place today and commend the Member for Barrhead for bringing forward this particular motion. I think there's a lot of merit in it. I support it.

I am also pleased with the research previous speakers have gone into to identify the steps that have already been taken by this government to make the reality of decentralization in rural Alberta a fact of life in many areas and in many ways. Getting back to my own rural constituency, I'm more than pleased with our policy of decentralization of our college at Vermilion. Lakeland College concept is a de­ centralization of the whole process into the eastern region of this province. I think it has great merit. It's an opportunity for us as Albertans to take our educational process to the grass roots.

I certainly commend the phi­ losophy behind it. When we talk of decentralization of purchasing, I think we have to take the caution given by the previous speaker and the ramifications it can have. But I also am well aware, Mr. Speaker, that many of our construction firms of a smaller nature, and some of them not so small, are decentralized throughout the province. The spinoff effects of their tendering in competition with the firms in Edmonton and Calgary and the larger centres have been quite successful.

One of the most successful enterprises in the town I come from has been successful in sewer and water tenders throughout the province. Their name is well known. They started in Wainwright, expanded, and have become a province-wide operation as a result of that. It's an indica­ tion that there's a certain economy of scale you have to have in regional centres to make possible businesses that can be competitive. It's not necessarily a fact of life that you have to have your head office in Edmonton or

October 29, 1981 ALBERTA HANSARD 1327 Calgary to be competitive on many of the services that we as a government are purchasing today. I think we only have to look to the city of Wetaskiwin to realize that some of the most successful car sales enterprises in Alberta are centred there, 40 miles away from the major metropolitan area, and are quite success­ ful. I'm quite convinced that many other types of enter­ prises that can supply government with the goods we are purchasing can be established outside the main metropo­ litan areas and be competitive on bids throughout their region and possibly into other regions.

I think we realize that one of the most successful natural decentralization processes taking place is the mere fact that our energy is dispersed throughout almost the entire province. As a result, it's the stimulus to centres that serve both oil and gas. Our other resource industries are and will be developing outside the metropolitan areas. There's no doubt in my mind that agribusiness has a real plus from the point of view of locating in different geographical areas, because there are specific advantages in some areas. As a result, those agribusinesses are gravi­ tating and expanding in those areas.

I think of the de-hy plants, producing dehydrated alfalfa, dispersed through­ out the province. By natural design, they have to go where the product is. I think those are the types of things making decentrali­ zation of our province a reality. In its effort to decentral­ ize services, the regionalization of transportation, and many of the other services, the government has brought to the communities where they have been centred a real stimulus of additional people, and with that, creating an area that can provide additional services. By their very nature, small communities are limited in what they can serve.

But with the added numbers of people and the added services needed by our government and industries, certainly rural Alberta has seen a growth that we're all very proud of. With this motion this afternoon, I think we're just adding one more issue that will make regionali­ zation and decentralization a fact of life in Alberta. MR. BORSTAD: Mr. Speaker, this afternoon, especially during Small Business Week, I am pleased to have the opportunity to speak on Motion 213, proposed by the hon. Member for Barrhead, urging the government to consider a system of regionalized purchasing.

This government has been promoting economic diversi­ fication by regionalizing various departments across the province such as Transportation, Social Services, and others. So it follows that another department, which does purchasing, should also be decentralized so that small businessmen across the province have the opportunity to sell their products and services to this government. Even though we have decentralized some of the departments, their purchases are made by central purchasing. The motion suggests that regionalized departments would purchase in conjunction with regionalized purchas­ ing agents.

This is one way. But someone will say, this is going to add an extra cost to the item purchased because it may be purchased in Grande Prairie or Medicine Hat, or you will not have the competitive bidding of the larger centres. It does not have to be that way if you had seven or eight regional purchasing centres hooked up by telex or computer to a central purchasing in Edmonton. To make sure your prices were right, you could check these prices across the province when you do your local purchasing. I think there would be some advantages to it.

When they're doing regional purchasing, people in the local area would have the opportunity to get to know the purchas­ ing agent. The purchasing agent in that area would also get to know the suppliers who could supply various items in the area. This isn't the case right now. Regional purchasing could compare local bids with central pur­ chasing, and if the prices are not right, they just don't purchase. I think the main opportunity is for the local person to be able to tender or bid.

I do not believe that govern­ ment, just because it's government, should purchase in Grande Prairie because it's in Grande Prairie and we're trying to decentralize. I don't think the case could be made that they should pay more in Grande Prairie than they do any place else in the province. If the local businessman has the opportunity to compete, I don't be­ lieve you would have any complaints from the business­ men in the smaller areas. The main advantage is that they have the opportunity because they already have one advantage: less overhead, in many instances.

If they've had the opportunity and lost, I think the next time around they would sharpen their pencils and probably be able to get the tender. [Mr. Appleby in the Chair] With a province-wide bidding system as I have de­ scribed, in some instances, and probably in many cases, we would find the savings to the system we're now using. I've heard it said that local people cannot compete on larger centres, and I'd like to give you one example. A local Grande Prairie firm was able to get on the list and tender on the furniture for the Grande Prairie air termin­ al. They got it and installed the furniture.

Then they realized a new terminal was being built at Lethbridge and was opening. They were able to get in on the tenders on that and were able to supply the furniture to Lethbridge. So you can't tell me that a local bidder can't be competi­ tive across the province. I think all they need is to have the opportunity. Another example: a local supplier was asked to rent some typewriters to a local government department in Grande Prairie because the Edmonton supplier did not have the models they had tendered on in stock.

Well, the local supplier had them on his shelf, but he did not have the opportunity to bid or did not know that the tender was being called. So we rented the typewriters from the local businessman, waiting for the order to be filled by somebody from Edmonton. I do not think this is right. Ten chances to one, the price was higher than it would have been if they had been purchased locally. Other jurisdictions have moved the regional purchasing so purchasing is done as close to the use point as possible in order to stimulate the businesses in the various regions.

Some would say that you could have deals or patronage with local purchasing. I don't think this is necessarily so, and it wouldn't be any different than you find today in private enterprise. If all local tenders had to be compared or approved by a central control, there would be no difference than we have right now. But the local busi­ nessmen miles from the two major centres would have had the opportunity to bid. It will be said we are now moving towards local purchasing by allowing local purchasing to go up to $250.

This is a step in the right direction, but it does not give the opportunity for the local supplier to bid and supply on larger goods and service items. We should now move to further support this government's decentralization po­ licy, and decentralize purchasing.

1328 ALBERTA HANSARD October 29, 1981 I urge the members to support a very important and, I would say, very timely — during Small Business Week — motion brought forward by the hon. Member for Barr­ head, Motion 213, which will assist many small busi­ nesses across this province. MR. BRADLEY: Mr. Speaker, I would like to partici­ pate in this debate today and congratulate the hon. Member for Barrhead for moving this motion, particular­ ly on the fact that it came up during Small Business Week.

I just don't know how he had such an incredible sense of timing to provide us with this opportunity today to debate such an important issue. AN HON. MEMBER: Do you think he knew something we didn't? MR. BRADLEY: Well, he certainly was plugged into the right timing sequence.

In my remarks, I intended to deal extensively with regard to our policy of decentralization and regionaliza­ tion of government services in the province, the steps which have been taken to date, and congratulate our Minister of Government Services for what he has been able to do and encourage him to take further action, as several members have today.

I also wanted to explore the area with regard to assistance to small business, as to whether or not we shouldn't be considering a policy where we allocate a percentage of our purchases of goods and services to small businesses, based on the percentage of their assets or sales. Mr. Speaker, I see we're rapidly coming to the time when debate on this motion ceases. I beg leave to adjourn debate. MR.

DEPUTY SPEAKER: Since it has already reached 4:30, the member's place on the Order Paper will con­ tinue the next time the resolution appears. head: PUBLIC BILLS AND ORDERS OTHER THAN GOVERNMENT BILLS AND ORDERS (Second Reading) Bill 206

An Act to Amend The Alberta Energy Company Act MR. R. CLARK: Mr. Speaker, I move second reading of Bill 206. Mr. Speaker, I believe this is the twentieth Bill I've put before the Assembly in the course of the last four or five years. Due to a slip in the government ranks on one particular occasion, one of those Bills got past second reading. That dealt with having Indian representation on school boards. I don't think the Bill I have before the House this afternoon will suffer that fortunate fate.

But I ask that members look seriously at this question of accountability, which I see to be the central issue in Bill 206. Mr. Speaker, I might say that this Bill appears on the Order Paper at a rather fortuitous time for me, somewhat similar to the Member for Barrhead having his resolution before the House during Small Business Week. Whether or not the Assembly continues for some time, I notice on the Order Paper that the next Bill I have would be several weeks from now.

As members of this Assembly know — and it should now appear in Hansard — whether or not the Assembly is still sitting, I will not be a member of the Assembly after the end of November. So this is the last opportunity I'll have to speak to a private Bill in the Assembly. In doing that, I would like to preface my remarks by saying — and at a later time, I hope to be able to elaborate just a little on this in the Assembly. In the past 10 years in the Assembly, '71 to '81 — in fact, one could go back to '60 — we have made a number of changes which . . .

It may seem rather strange that I would say this, but given my present situation perhaps I can look at things from a little farther back than any other members of the Assembly: I would put it that way. I suggest to members, though, that we might consider making the whole proposition for private members' Bills a bit more meaningful if we were to consider the proposition they have in the province of Ontario, where at the end of the debate — in our case, it would be 5:30 — it isn't simply a matter of talking the Bill out. I've been a party to that on the other side of the House also.

But if we are to take the proposition of private members' Bills seriously, we would call a vote at 5:30. Now I know that can cause some difficulties from a government point of view because a government has to take a position, and for a variety of reasons that isn't always the most desirable thing. But once again, where you sit seems to have some influence on your attitude. But I say very seriously to members that the province of Ontario — and on occasion we in the Assembly would feel there aren't many things we would want to take from Ontario.

The province of Ontario has made a number of major changes in the way they handle private members' Bills. As I understand their process in the province of Ontario, one thing they do is that after the debate takes place in the House — for the one hour, or longer if it's agreed to — the Bill is dealt with in one manner or another. It would seem to me that that's one proposition members may want to consider. Obviously, Mr. Speaker, in fairness I don't expect that to happen on this particular Bill today.

But in the long run, I think it would make private members' day, as far as private Bills are con­ cerned, far more meaningful. In the long run, it might have a certain amount of sobering influence on members who put Bills on the paper too. Because at 5:30, they themselves have to stand up and vote pro or con on the proposition. I put the proposition to members of the House and say it's certainly worthy of consideration. But I say to members of the Assembly the same comments I made earlier, that consideration shouldn't take an ex­ tended period of time. Mr.

Speaker, looking specifically at Bill 206, the prime purpose behind the Bill is to build into the Alberta Energy Company — one could have taken PWA or perhaps some other government agencies, and talk in terms of the kind of accountability we have for very sizable government investments as far as the public is concerned. I first put the matter before the House several years ago, about the time the Alberta Energy Company got involved in the Willowglen proposition. Members will recall that Willowglen electronics was a firm in Calgary that borrowed money from the Alberta Opportunity Company.

Then, in due course, the Alberta Energy Company bought the thing from the Alberta Opportunity Company. To be quite frank, it was not the kind of success story that AEC or the Alberta Opportunity Company would point to. That being aside, what we're really talking about here is some kind of accountability.

October 29, 1981 ALBERTA HANSARD 1329 [Mr. Speaker in the Chair] Lest members feel that what I am proposing here is the idea that government should become more and more involved in the day to day management of corporations like PWA or the Alberta Energy Company, that's not the proposition I'm putting forward. But if I had my 'dru­ thers', it would be a question of: we would sell the $75 million we have in the Alberta Energy Company to Albertans.

And if I had my 'druthers', we would sell PWA to Albertans, through an arrangement where Al­ bertans could buy shares in PWA and the Alberta Energy Company, and take some steps to see that those shares were resaleable only to Albertans. But quite candidly, Mr. Speaker, Albertans haven't bought that proposition, despite my very best efforts. Some members in this House have had a great deal to do with that. But I say to hon. members that this area of government getting more ac­ tively involved in business and the problem of accounta­ bility is becoming more and more of an issue.

Within Alberta itself, members might want to refer to Dr. Horner's announcements yesterday. One of Dr. Hor­ ner's suggestions, which I won't comment on the legiti­ macy of, is the concept of "Alberta meats", which in fact would become some kind of Crown corporation, and we have the problem of accountability.

Or if we look a bit further, at the conclusions and observations of the Foster Research report that was done on the economy of Alber­ ta, if members have the time to look at the bottom of page 50 of that particular report, it says: Normal market forces cannot be depended upon in a regional situation such as Alberta to accomplish this except over the very long run.

The project team therefore commends to the government of Alberta a quasi-interventionist approach, certainly not "Japan Incorporated", but rather the creation of a unique system of financial stimulation to the process of innovation and commercialization.

What that says to me is that Foster and Associates, after looking at the strengths and weaknesses of Alberta's economy, are really saying that the government or the heritage fund is going to have to become more deeply involved in some kind of venture capital arrangements or there's going to be an awful lot more government in­ volved in day to day business, from the standpoint of funds being involved corporately in all those companies. I've said my 'druthers' are that we don't move in that direction, but that isn't the direction we're moving. One has to be somewhat of a fool if one thinks we are.

Not just in Alberta but within the last two years, I can recall members in the Assembly lamenting terribly about the Canadian Development Corporation acquiring Aqui- taine. If we're to be perfectly honest ourselves, members in this Assembly will recall your colleagues in Ottawa belaboring the federal minister of energy as to how CDC was using the taxpayer's money in the acquisition of Aquitaine. Members will recall all the commissions paid to people and so on. I was as condemning of that as members in this Assembly were. Members will also recall the situation as far as Petro- Canada is concerned.

During the life of the time this proposition has been on the Order Paper, we've seen CDC acquire Aquitaine, and other things too. We've seen PetroCan appear upon the scene. We've seen the devel­ opment of a sizable number of these kinds of corpora­ tions in other provinces. It seems to me that at some time we have to come to grips with the problem of how we have accountability, how we govern, how we account for these new kinds of quasi-governmental corporations which are coming into being.

The proposition included in my Bill today simply says that the Minister of Energy and Natural Resources, as far as AEC is concerned, bring to the Assembly the instruc­ tions the minister is giving to the individual who is voting the government shares in the Alberta Energy Company, and that if the Assembly isn't in session and it can't be done, the minister himself go and exercise the govern­ ment proxy. I don't expect members this afternoon to enthusiastical­ ly support the proposition. There are other alternatives members can look at.

One alternative might very well be, and it is now being considered in some jurisdictions in North America, some kind of third party regulation or third party accountability. There are some groups, some governments, and certainly some people in the private sector who are looking very seriously at the idea of some kind of Public Utilities Board approach. I'm not propos­ ing that to members, Mr. Chairman, but the point I am trying to make in my remarks this afternoon is simply this: I think there are really three choices for us.

One is simply to say that we're going to continue the status quo; we're going to continue the approach — as far as Alberta Energy Company and PWA are concerned, and the approach the feds use as far as PetroCan or CDC is concerned — that we don't get involved in the day to day management decisions of the company and we're not prepared to answer for those decisions of the company; yet a sizable amount of public money is involved there. That's one approach. Basically over the long run, up to now that approach has served us rather well in Canada, I suggest.

The second approach would be for governments to sit and to continue what I call approach number one until we get to the stage where more and more public pressure builds for more and more political interference or politi­ cal involvement in these kinds of corporations. That real­ ly ends up in governments running these kinds of organi­ zations to a far greater extent. As I see it, the third option is to address ourselves now in this province to looking at some other kinds of ac­ countability mechanisms.

I guess the bottom line really is how we regulate the rapidly developing area of Crown corporations and quasi-government, private-sector corpo­ rations that are developing.

From my vantage point, I say to hon. members that the danger of our simply saying we're going to continue to do it the way we are now is that down the road, with the tremendous increase in the number of these kinds of corporations across this country and in the province of Alberta in the foreseeable future, I see us having some real difficulty convincing the voters in this province, the citizens of this province, that in fact real accountability is built in.

The next step is going to be for people to say that the only way to get real accountability is for the government to take these things over and run them totally themselves, to lose the private-sector expertise and involvement. If that happens, I think we'll lose much of what's gained by some of these quasi-government operations to date. So this afternoon, I put before the members the propo­ sition that in Bill 206,

An Act to Amend The Alberta Energy Company Act, we're trying to aim at some kind of built-in accountability. It may not be the best kind of built-in accountability, but it's a small step in that direc­ tion. In the course of the next three-quarters of an hour, if this debate could serve the purpose of stimulating or urging some members on the government side to think

1330 ALBERTA HANSARD October 29, 1981 seriously about this question of how we regulate this whole new group of quasi-government, corporate agen­ cies that are on our doorstep — they're not just in Ottawa; they're not just in the various provinces. If the government takes the advice of Dr. Horner, if the gov­ ernment takes seriously the advice of Foster and Asso­ ciates, there's going to be more of this kind of thing here in Alberta. I believe all members in the Assembly believe in the private sector.

I think we'd be very wise to try now to develop some techniques that will allow us to regulate those organizations from the standpoint of public ac­ countability, when there's not the great public pressure to do it as opposed to being forced into it from a political point of view some time down the road. If we wait until that happens, the easy political answer is to say, we'll take it over and do it ourselves. If we do that, we'll lose much of the benefit we have in those institutions at this time.

I look forward to comment by members of the Assem­ bly on the proposition in Bill 206, but I also ask members to consider seriously the broader question of not just accountability of AEC, not just the accountability of, one could say, PWA, but think in terms of the accountability of PetroCan, CDC, and other quasi-government corpora­ tions that are springing up across this country. Thank you very much. MR. GOGO: Mr. Speaker, speaking to Bill 206,

An Act to Amend The Alberta Energy Company Act, the hon. Member for Olds-Didsbury, who has a very proud and honorable record in this Assembly, today has put forward some arguments in support of the Bill that members will obviously have to consider. Frankly, I don't agree with him, and I'll give some reasons why. First of all, the member has pointed out that he'll be leaving the Assembly before we get to the next Bill he has sponsored, and I suppose in many ways it would be appropriate to give him a farewell gift. However, Mr.

Speaker, I question whether it would be a gift to the people of Alberta if in our altruistic attitude we consented to passing a Bill simply because it was a farewell gift to a member of the Assembly. MR. R. CLARK: I wasn't that hopeful, John. MR. GOGO: He should probably know, and I'm sure he is well aware, that there is a service club in the province of Alberta, indeed a service club of the world, that has a four-way test. One of the items in the four-way test asks the question: would it be fair to all concerned? I suppose one would have to make that judgment before he agreed with the hon.

Member for Olds-Didsbury that it would be fair to all concerned to agree with the principal changes he proposes in Bill 206. He goes on to say that there's a present practice in Ontario — although I don't think he's accurate when he uses the word "present" — that at the conclusion of the hour on private members' day, they vote on that Bill. I believe it was a practice for some time during that period of time when they had what was known in legislative or political terms as a minority government. I frankly don't think they had any option than to develop bringing matters to a vote as a positive strategy.

I don't think that's particularly applicable to this Assembly. Further to that, although I don't read Queen's Park Hansards, I just wonder whether or not the Ontario government's acquisi­ tion of 25 per cent of Suncor for almost three-quarters of a billion dollars, which I understand has to be borrowed in America, was debated in the Queen's Park Assembly prior to being implemented. That being said, Mr. Speaker, I'd like to come to the direct point of Bill 206. It really consists of adding after

Section 35 a new section, 35.1. Essentially, its purpose is to make an amendment to bestow limited authority upon the Legislative Assembly whereby they would direct the government's participation, how to vote their shares, in the annual meeting of the Alberta Energy Company. As members are well aware, it's now done by appointing some person through the Minister of Energy and Natural Resources. That person happens to be the chief executive officer and president of the company. It doesn't have to be; it could be anybody.

It should also probably be pointed out, with reference to the Member for Olds-Didsbury about government con­ trol and the free enterprise concept, that by virtue of ownership of 50-plus per cent of the company and the company having 10 directors, it would go without saying that the majority owners are entitled to representation on the board. It's interesting to look at The Alberta Energy Company Act, the statute, which states that out of 10 directors on the board, the government may appoint four members.

So I think the government has deliberately taken a position of only 40 per cent in terms of authority in the legislation. Indeed, Mr. Speaker, although au­ thorized to appoint four directors, in practice the gov­ ernment in fact only appoints three. I think that's a very clear indication that, first of all, although the owners of the company represented by the proxy vote at the annual meeting, i.e. the government portion of 50-plus per cent, only three directors sit there.

To me, this is a clear indication on behalf of the government or the majority owners, that the managing of a company should indeed be at arm's length from the government and not con­ trolled by government. In the final analysis, to quote the Minister of Economic Development: the success of a company is generally measured in the bottom line or the profit picture. If one of the goals of the company is to achieve profits for its shareholders, I think it's more than warranted to keep hands off if indeed you have good management of the company. I don't particularly want to go into the history of the company, Mr.

Speaker, other than to say that as a candidate in the provincial general election in this prov­ ince in 1975 — although The Alberta Energy Act was created in 1973 and brought in in 1974 — it really became a matter to put before the Alberta people whether or not they wished to participate, or have their government par­ ticipate on their behalf, in the Alberta Energy Company. In a very substantive way, the results of the 1975 election in putting some of us here were a direct result of the views of the people in response to those issues raised during the election campaign.

I'm sure all members are aware that as a result of that, the government of Alberta, on behalf of its people, provided by special warrant $75 million to set up that portion. It's also interesting to remember that the original intent was that here was an offering — I guess the only similar one prior to that was the Alberta Gas Trunk Line Company — that was avail­ able by design for everybody in Canada, with the one proviso that the needs of Albertans would be served first. What happened? Well, I think it's history.

Some 60,000 Albertans, representing 3 or 4 per cent of our population, acquired all the shares available, and as a result people in other parts of Canada did not have an opportunity to purchase other shares except through the stock exchanges

October 29, 1981 ALBERTA HANSARD 1331 Mr. Speaker, one only has to look at the series of annual reports of the Alberta Energy Company to see the very great success story. You can measure success in several ways. Some of us, I guess, tend to do it in terms of earnings. A company is created; it has its mandate set out, if only being profit. The mandate of this company is totally different. It is to provide an opportunity to all Albertans to participate in the very things they own in the province; namely, non-renewable resources.

If we look through the history, we've seen dramatic increases from the earnings point of view. I think it's gone from some $7 million or $8 million to about $58 million or $59 million in the latest year. It's also interesting in terms of payout, Mr. Speaker. Again, I'm addressing the question of the success of the company. Shares initially issued at $10 are now paying a dividend alone of 4.5 per cent, I think, of the original price.