1975 Legislative Session: 5th Session, 30th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MARCH 17, 1975

Afternoon Sitting

[ Page

665 ]

CONTENTS

Privilege

Alteration of letter. Mr. McClelland —

Speaker's ruling

Broadcast not a breach of privilege — 665

Routine proceedings

Oral Questions

Correctional centres overflow. Mr. Bennett

— 665

Gifts to Ministers. Mr. Gibson — 666

Seattle-Victoria ferry service. Mr. Wallace — 666

Fraudulent welfare applications. Hon. Mr. Levi answers — 667

Juveniles raised to adult court. Mr. Wallace — 668

Selection of juvenile centre house parents. Mrs. Jordan — 668

Lowered property tax. Mr. Curtis — 668

Minister's answers requested. Mr. Gibson — 668

Co-educational correctional facilities. Mr. McClelland — 668

Facilities for drug addicts. Mr. McClelland — 668

Committee of Supply: Premier's estimates

On vote 2.

Mr. Bennett — 669

Hon. Mr. Barrett — 671

Mr. Bennett — 674

Hon. Mr. Barrett — 676

Mr. McGeer — 677

Hon. Mr. Barrett — 679

Mr. McGeer — 681

Hon. Mr. Barrett — 681

Mr. McGeer — 681

Hon. Mr. Barrett — 682

Mr. Bennett — 682

Hon. Mr. Barrett — 684

Mr. Bennett — 685

Hon. Mr. Barrett — 685

Mr. Bennett — 686

Hon. Mr. Barrett — 686

Mr. Bennett — 686

Hon. Mr. Barrett — 687

Mr. Gibson — 687

Hon. Mr. Barrett — 687

Mr. Gibson — 687

Hon. Mr. Barrett — 688

Mr. Wallace — 688

Hon. Mr. Barrett — 690

Mr. Phillips — 693

Hon. Mr. Barrett — 694

Mr. Phillips — 694

Hon. Mr. Barrett — 696

Mr. Phillips — 696

Mr. D.A. Anderson — 698

Hon. Mr. Barrett — 699

Mr. D.A. Anderson — 700

Hon. Mr. Barrett — 700

Mr. D.A. Anderson — 700

Mr. Curtis — 701

Hon. Mr. Barrett — 702

Mr. Curtis — 704

Hon. Mr. Barrett — 704

Mr. Curtis — 705

Hon. Mr. Barrett — 705

Mr. Bennett — 705

Hon. Mr. Bennett — 706

Appendix — 707

The House met at 2 p.m.

Prayers.

MR. D.E. LEWIS (Shuswap): Mr. Speaker, seated in the

Speaker's gallery today are two long-time residents of Shuswap;

Mary and Charles Reilly. Mr. and Mrs. Reilly were among the

first settlers to settle in the Shuswap area and carved a home

out of the wilderness with a team of oxen. I would like the

House to welcome these very good B.C. citizens.

HON. P.F. YOUNG (Minister of Consumer Services): Mr.

Speaker, I'm very pleased to have with us today in the gallery

two very good and stalwart and hard-working members of my

constituency association in Vancouver–Little Mountain: Mrs. Pat

Fisher and Mrs. Marge Smith. I would ask the House to welcome

them, please.

MS. R. BROWN (Vancouver-Burrard): Mr. Speaker, seated in the

gallery is a class from Kitsilano High School with their

teacher, Mr. Ippen. As you know, this class is a tradition now,

so I hope that the House will join me in welcoming them.

MS. K. SANFORD (Comox): Mr. Speaker, seated in your gallery

today are Mayor Bill Moore of the City of Courtenay, Mayor Bill

Moncrief of the Village of Cumberland and Mr. Ron Ellis,

chairman of the regional board of Comox-Strathcona. I would ask

everyone to make them welcome.

HON. D. BARRETT (Premier): Mr. Speaker, seated in the

gallery today is a group of government agents. These are agents

who carry on in the various communities of this province an

explanation of government programmes and provide services. They

have a long history in this province. We are one of the few

jurisdictions that still have government agents. They

originated when British Columbia first became a province to

serve the far-flung areas away from Victoria and provide

government services throughout the province.

Today's group includes Mr. Peter Newell from Atlin, Mr. Art

McLean from Ashcroft, Mr. Art Milton from Smithers, Mr. George

Broomfield from Dawson Creek, Mr. Wally Anderson from Clinton,

Mr. Jim Baker from Courtenay, Mr. Bill Ketchum from Campbell

River and Ivor Williams from Chilliwack. I'd like the House to

welcome them.

MR. R.H. McCLELLAND (Langley): Mr. Speaker, I rise on a point of privilege.

On Thursday last I read a letter in the House which had the letterhead of the

Minister of Housing (Hon. Mr. Nicolson) on it. While this letter came to me

from a very reputable source, it appears now that that letter was altered. Some

additions were made to the letter to make it look as though all of the letter

came from the Housing department. It appears now that it didn't.

On other occasions in the House this session there have been

altered documents presented, and extra typewriters have clouded

very serious issues. I wish to apologize to the Minister of

Housing and to anyone else who may have been connected with

this. I find it very unfortunate, and I do apologize.

Interjections.

MR. SPEAKER: Order. I think that whenever we get apologies

in the House we should all welcome them.

MR. P.C. ROLSTON (Dewdney): Mr. Speaker, I just want to

welcome members of the Northern Collegiate Concert Band from

Sarnia. They're here with their conductor, Scott Milligan, and

Mr. York and Mr. Al Lothier, all from Sarnia Collegiate.

MR. SPEAKER: Hon. Members, I have dealt with the request of

the Hon. Member for West Vancouver–Howe Sound (Mr. L.A.

Williams). I've produced a lengthy document which comes to the

inevitable conclusion that there is no matter of privilege,

prima facie , that could be raised on the matter of the

broadcast, or any threats in relation to a broadcast, of the

proceedings or privileges of the House. I am tabling it with

the House, with a copy to the Hon. Member who raised it or

anyone else who wants a copy, if that's agreed. (See

appendix.)

Oral questions.

CORRECTIONAL CENTRES OVERFLOW

MR. W.R. BENNETT (Leader of the Opposition): To the Minister

of Human Resources in regard to community correctional centres.

Can the Minister advise the House whether the department,

through the community correctional centres, farms out residents

to private institutions when the community correction centres

are full?

HON. N. LEVI (Minister of Human Resources): I don't

understand the question. Community correctional centres are

within the jurisdiction of the Attorney-General.

MR. BENNETT: All right, I will ask the question of the

Attorney-General.

HON. A.B. MACDONALD (Attorney-General): Quite frankly, I

didn't understand the question.

[ Page 666 ]

MR. BENNETT: The question to the Attorney-General is: when

community correctional centres are full, do they farm out

residents to private institutions?

HON. MR. MACDONALD: Well, Mr. Speaker, I'll check, but I don't know

of any of our community correctional centres that are full at the moment. I

don't know of any cases of anybody being farmed out, but I'll check the matter

further. If it is the case, I'll take the matter as notice. I don't think so.

MR. BENNETT: A supplemental. If you take it as notice, will

you advise at the same time whether X-Kalay is a receiving

centre for residents of any community correctional centre?

HON. MR. MACDONALD: Well, they're on their own.

GIFTS TO MINISTERS

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Speaker, a

question to the Premier. Pursuant to some statements that have

been made in this House recently, I would ask the Premier how

many Ministers have reported to him on the question of gifts

that they may have accepted in any way.

HON. MR. BARRETT: I don't have a standard method of asking

them to report on gifts, but I have never been approached by

cabinet Ministers receiving an extraordinary gift except in the

case of the Attorney-General (Hon. Mr. Macdonald), who did,

upon our election, receive a gift from Mr. Ben Ginter of a box

of apples and some wine. The Attorney-General said at that time

that if it was a bribe it was not enough, and if it was a gift

it was too much, and he returned it, minus one apple which his

daughter ate. Other than that, Mr. Speaker, I know of no other

similar incident.

I don't know what happened to the wine. Was the wine all

sent back?

HON. MR. MACDONALD: Yes.

HON. MR. BARRETT: Thank you. I take his word on that.

MR. GIBSON: On a supplementary, Mr. Speaker — and perhaps

with the exception of apples — I'd ask the Premier whether he

has any plans to establish guidelines for the acceptance of

gifts by Ministers, and any procedures....

HON. MR. BARRETT: I think that's a very valid question. We

have not done so at this point, but I think it's a very valid

question. We can look into it.

To my knowledge, there has not been, beyond the kind of

token things....

HON. R.M. STRACHAN (Minister of Transport and Communications): I received

some calendars.

HON. MR. BARRETT: Calendars? What were the pictures?

I'll certainly take that as notice.

SEATTLE-VICTORIA FERRY SERVICE

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I'd like to ask the

Minister of Transport and Communications, in light of the fact

that we are within just a few months of the tourist season and

there is great concern in our community regarding the tourists

who normally come from Seattle by ferry, whether the Minister

can tell us the most up-to-date information regarding the

possibility of the continuation of a ferry service between

Seattle and Victoria this summer.

HON. MR. STRACHAN: I'm still hopeful.

MR. WALLACE: Well, Mr. Speaker, I think a supplementary

question would include our statement from this side of the

House that we are all hopeful also. But we read a great deal,

for example, that an American ship called the Avalon has

considered providing passenger service only and that they have

met with Victoria city council. In discussion with one of the

aldermen I learned that there is a deadline involved in the

decision by the owners of Avalon which, of course, has to be

contingent upon the possibility of the Marguerite being put

back in service. I wonder if the Minister could tell us at

least if he is negotiating with the owners of the Avalon or

aware of the situation.

HON. MR. STRACHAN: I am informed there have been discussions

with all parties involved in every aspect of the continuation

of transit between Seattle and Victoria.

MR. WALLACE: A final supplementary, Mr. Speaker. Could the

community perhaps be reassured that there is some deadline by

which time they will know when negotiations will either be

fruitful or be abandoned? There seems to be a great degree of

uncertainty as to whether there is even a deadline with regard

to the government's position. There is a deadline with regard

to the ship.

HON. MR. STRACHAN: As soon as there is a clear-cut picture

as to whether they are fruitful or should be abandoned, then a

public statement will be made.

[ Page 667 ]

FRAUDULENT WELFARE APPLICATIONS

HON. MR. LEVI: Mr. Speaker, on Thursday I took as notice a

question from the Member for North Peace River (Mr. Smith). I

am dealing now with the Duncan matter. He asked at that time:

"Is the Minister aware that one Mr. Kenneth Mayea of Duncan

applied for and received welfare benefits from his department

shortly after receiving a cheque for $25,000 as a result of a

raffle or that type of windfall profit?"

First of all, I think it is very unfortunate that the Member

used the name of a citizen, particularly as that citizen is not

presently on welfare. As a result of the statement made in the

House and, as I understand, some other statements made outside

of the House, this family in Duncan was caused a great deal of

harassment and embarrassment.

I have a report: Mr. Mayea won $25,000 in a fishing derby at

Cowichan Bay in August, 1973. On October 4, 1973, Mrs. Mayea

applied for social assistance. Her husband was away fishing.

Before any issue, the worker requested all receipts for

expenditures out of winnings, as the wife declared that they

were destitute due to paying off all their debts pressured by

creditors.

I have in front of me a list of all of the debts that were

paid off, among them $6,500 given to the fishing partner, which

I understood is the usual process, and a further $3,500 to a

second fishing partner. Then he apparently went to all of his

creditors in Duncan, and those were considerable, because he

paid off $628 to Household Finance, $2,000 to the Bank of

Montreal, $250 to the credit bureau, $2,164 to Avco Finance,

$447 to Gary Hall Motors, $600 to Pete Henry — money borrowed —

a whole list representing an attempt on the part of this man to

clear his indebtedness to his creditors to a total $23,929.

They came into the office and Mrs. Mayea was subsequently

put on welfare as a unit 3 — that is, the wife, the husband and

the child. They remained on welfare until February, 1974. Since

that time Mr. Mayea has not been on welfare. The couple

separated and are now back together again. Between February,

1974, and January, 1975, cheques were issued: January — $48;

December — $155; and in January — $152. Both people are now

working. I understand there was some reference made to a luxury

car being driven. A car was purchased, a 1974 GMC pickup,

for $4,700, of which $3,600 is still owing. Mr. Mayea is a

fisherman. He is presently employed, as is his wife.

I think what we have here is an attempt by a young couple to first of all

pay off a large amount of indebtedness and get themselves on their feet, which

they are. But, unfortunately, because the Member decided to mention their name

before coming to me they are undergoing a great deal of embarrassment in the

community where they live. I think that is extremely unfortunate.

HON. MR. STRACHAN: Harassment.

MR. D.E. SMITH (North Peace River): I have listened intently to the

words of the Minister. I apologize for any embarrassment I caused the couple.

But without bringing a specific case to the mind of the Minister, it was impossible

to impress upon him the point I was trying to make.

SOME HON. MEMBERS: Oh, oh!

MR. SMITH: The point is this: what is the position...?

MR. SPEAKER: Order, I think the Hon. Member is....

MR. SMITH: What is the position of a windfall profit? It is

considered as income as is anything else when considering the

payment of welfare benefits? Unfortunately, it is extremely

difficult to get any information on welfare benefits or

recipient payments...

HON. D. BARRETT (Premier): Did you phone the Minister?

MR. SMITH: ...at any time, when contacting the department.

HON. MR. LEVI: Mr. Speaker, I don't accept that it is

difficult to get this kind of information. The House is sitting. I am

here. First of all, in this case where you were not sure — you did not

know that they were not on welfare at the time — you made a great deal

of trouble for these people. I would have been quite prepared to share

the information with you and subsequently, if you felt you had to

answer the question, you could have asked it. But I don't accept that

it is difficult to get information.

You should understand one thing: we are participants in the Canada

Assistance Plan, which is federal legislation. We are required to keep

as confidential all matters relating to clients. You blew that

confidentiality when you mentioned the name of these people.

Fortunately they are not on welfare, but they are, as I said,

undergoing a great deal of embarrassment. For the interest of the

House, Mr. Speaker, I will table a copy of the document from which I

was reading, which was a telegram.

I would like to say one little thing, Mr. Speaker. I was concerned

about this this morning and I put a call in to Mr. Mayea himself and

reached him at his lawyer's office — he is evidently talking to a

lawyer. I informed the lawyer that I was going to have to

[ Page 668 ]

answer this question in the House and I wanted him to

understand that, while I was not intending to make worse the

embarrassment he was undergoing, I was simply explaining the

situation that exists, particularly in respect to the payment

of the $23,000 to creditors. I think that is extremely

important to know.

JUVENILES RAISED TO ADULT COURT

MR. WALLACE: I would like to follow up on a question that

was asked of the Minister of Human Resources the other day

regarding some of the juvenile problems in the province. I

wonder if the Minister could tell the House if any specific

instructions have been issued by his department that juveniles

be not raised to adult court.

HON. MR. LEVI: That's not something that is in my

jurisdiction. That matter would have to be dealt with entirely

by the Attorney-General (Hon. Mr. Macdonald), not by me. I have

never issued such instructions.

MR. WALLACE: Could I follow up by asking of the

Attorney-General, who was unavoidably absent last week, if,

regarding the particular juvenile who caused problems up-island

last weekend, a previous request to raise him to adult court

was denied by the Attorney-General's department?

I realize that perhaps the Minister would want to check into

that, but the information has been publicized that attempts to

raise the juvenile to adult court had been denied.

HON. MR. MACDONALD: Generally we try not to raise juveniles

to adult court, but if you will send me the name of this

particular person I will have the file checked. Some are,

nevertheless, being raised but we try and keep it to a

minimum.

SELECTION OF

JUVENILE CENTRE HOUSE PARENTS

MRS. P.J. JORDAN (North Okanagan): To the Minister of Human

Resources regarding house parents for various juvenile centres

in the province: does the Minister have a procedure for

selecting these house parents, and what is this procedure?

HON. MR. LEVI: Usually, if it's in relation to a non-profit

society, the society, in consultation with the local department

people, form an interviewing team in respect of the hiring of

these house parents.

LOWERED PROPERTY TAX

MR. H.A. CURTIS (Saanich and the Islands): To the Premier and Minister

of Finance: I wonder if the Minister of Finance has been advised that many British

Columbians, property owners' of average means, will probably receive lower provincial

government grants relating to their property tax in 1975 compared with 1974

as a result of actions taken by this government in recent days.

HON. MR. BARRETT: I'll take the question under

advisement.

MINISTER'S ANSWERS REQUESTED

MR. GIBSON: To the Minister of Lands, Forests and Water

Resources — sort of a double-barrelled question. Last session

he took as notice a question I asked him about the tabling of

the old Gottesman-International contract. This session he took

as notice the question about the tabling of the 10 pages of

questions and answers from CBC and B.C. Hydro. Could he answer

either of those questions now?

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources):

I think I might report later on that.

COEDUCATIONAL

CORRECTIONAL FACILITIES

MR. McCLELLAND: To the Attorney-General: could he advise us

if it is true that both the male and female offenders are being

housed at the community correctional centre in Marpole with

only male supervisors in attendance?

HON. MR. MACDONALD: Well, I am not sure about that. In

Prince George — yes, we have a coeducational custody facility

there. In Marpole — it's possible, but I would have to check.

Incidentally, we had a male warden in the women's unit at

Oakalla. It went fairly well and it was welcomed by all

concerned. I was thinking of getting that job myself.

(Laughter.)

FACILITIES FOR DRUG ADDICTS

MR. McCLELLAND: A supplementary, Mr. Speaker. Could the

Attorney-General advise us whether or not convicted drug

addicts are now being admitted to community correctional

centres?

HON. MR. MACDONALD: I will take it as notice.

Orders of the day.

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

[ Page 669 ]

ESTIMATES: PREMIER'S OFFICE

On vote 2: Premier's office, $286,290.

MR. W.R. BENNETT (Leader of the Opposition): To the Premier

as financial agent for the province: lately there has been a

lot of controversy about large sums of money being borrowed on

behalf of the Crown agencies, and this is one of the functions

of the Premier — to act as fiscal agent for these areas.

In looking back we can see that after 1967 there was

apparently no outside borrowing for these agencies. Most of the

financing was handled internally within the framework of the

accounts and the pension funds that the government had at its

disposal. But last year the Premier did announce that he was

going to go to the outside market. In fact, if we go back to

Hansard , he did say, when he was seeking the authority,

that he would go for $100 million only.

AN HON. MEMBER: Oh, oh!

MR. BENNETT: That was on June 18, 1974, in Hansard .

He, as the fiscal agent, would go for no more than $100 million

of the $500 million authorization that they were asking for.

Yet, subsequently, we've seen borrowings in the nature of $375

million on behalf of Hydro, the first of which was a borrowing

of $100 million through The First Boston Corp. and others at

10.25 per cent interest. This offering is dated in September,

1974, which would be approximately six or seven or eight months

ago. The 10.25 per cent rate at that time appears to have been

the peak of a very expensive money market.

I would like the Premier, as the fiscal agent, to explain

how he arrived at going to the money market at a time when

other jurisdictions both in the public and the private sector,

unless forced to, were withholding offerings of a much lesser

nature, particularly in amounts such as this.

This $100 million was for 25 years, due in 1999. That interest rate of 10.25

per cent is a fantastic interest rate to commit Hydro and, ultimately, the users

— the people of this province — to when you realize the amount of extra money

they will pay just in extra interest than if they had gone at this particular

time now.

If the government with the funds it had at its disposal, both the pension funds

and others that had provided the bulk of the financing over the past few years,

had anticipated — as surely the Finance Minister (Hon. Mr. Barrett) should know

— that the market would drop and that we were at the peak (surely the historical

financial ups and downs of the bond market are there to guide them), then this

government above all governments didn't have to go at this particular time.

If they were committed to a new principle of going outside their own funds for

financing for Crown corporations, at least they would withhold it to a time

when money was cheaper and our citizens, who are the users of Hydro, wouldn't

pay these extra interest charges.

I contrast the rate of September 26 of 10.25 per cent for

the $100 million for Hydro, which utilizes the credit of this

province, with a recent issue of the Province of Ontario for

$200 million. I believe that British Columbia has a very

favourable credit rating, a credit rating that would be the

Yet here we have, dated March 1 of this year, the Province of

Ontario going for $200 million. They've gone for $200 million —

30-year money — at 8.875. When you consider that this, in just

these few short months, is 1.375 per cent difference in a

mortgage rate, it doesn't sound like much until you start to do

the mathematics of just how much that's going to cost the

citizens of this province and how much it will cost the

citizens as Hydro users.

Take 1.375 on a $100 million issue. Take the fact that this

money, if it's paid every year, is $1.3 million every year. But

also realize that in paying this money out, it's a loss of

capital from the people of this province and from Hydro. If we

have that $1.3 million and invested it on a compound basis — because

that, in effect, is what its investment value is worth — over the

25-year period, it's a benefit that works out to

$116 million. That's what the people of this province are

losing; that's what they're losing from Hydro by paying an

extra 1.375 per cent on an issue that didn't have to happen.

This province could have gone and waited for a better financial

period, a better financial climate in order to raise their

long-term capital.

I question the reasoning and the ability of the financing of

the Finance Minister as fiscal agent when he will commit our

Crown corporation of Hydro and ultimately the users of Hydro,

the people of British Columbia, to an extra loss over that

25-year period of the value of that 1.375 per cent which, if

invested, would work out to $116 million. That's what is lost

from the value to British Columbians just on 1.375, and that's

a lot of money for a decision that could have been made to

consciously hold back going to any market rather than go at a

time of the highest price in history.

Other governments were publicly announcing that they were

withholding offerings. And in British Columbia, a favoured

province, a province that has been able to finance internally

on behalf of its corporations for the last eight years, or

seven years, a province that is in a cash position, that had a

cash position, that could have financed over the short term and

waited for a more presentable and lower financial market....

It's unusual for this to have happened in British Columbia.

[ Page 670 ]

I'm concerned, then, about the total research that's going

into this province's presentation of public financing. We not

only have this $100 million that's obviously going to cost our

people a lot of money and a loss in benefits, but we have an

issue of $50 million at 10 per cent, due January 2, 2000; that

was a 25-year issue. That, again, would cost us the same type

of excessive loss in extra interest as if we had waited to go

to the market now.

We have the middle-term money, the eight-year term money, or

the other term money that is questionable as to the rates they

pay. We also have those loans from unusual sources, or unnamed

sources.

Many of us believe that when you're dealing with public

money and borrowing on behalf of the people of the province,

the lender should be identified. I know that we've had an area

outlined as being the lender of these loans — that they came

from the Middle East and that it was petro-dollars. But I

notice that Ontario has borrowed money and they have made

available the name of the lender the country who lent the money

to Ontario. Yet in British Columbia the Premier and Minister of

Finance, as fiscal agent, hasn't shared with the people of this

province who the lender is. I wonder if that is because we have

a very unusual situation.

The Premier announced that on the first, loosely connected

Arabian loan the commission was $75,000, and there was

considerable controversy surrounding who should get the

commission, or any commission. I think that in the newspaper

reports the announcement was that the commission was $75,000.

This is a very unusual fee. It was mentioned that this loan was

arranged, once again, through The First Boston Corporation. Now

in the first $100 million loan I noticed The First Boston

Corporation charged $875,000 commission: a commission of 0.875

per cent. Yet on the other $100 million loan, from an

undisclosed source, they're talking about a commission of

$75,000.

HON. D. BARRETT (Premier): What are you quoting?

MR. BENNETT: I was quoting a newspaper account of what the

commission rate was. The Premier can advise if there was a

higher commission rate. I'd be pleased right now if the Premier

could advise the commission rate. What was the...?

MR. CHAIRMAN: Order, please. When the Hon. Leader has

finished his questions, then the Hon. Premier can answer;

otherwise, will the Hon. Leader continue?

MR. BENNETT: Yes, then the newspaper report was in error. I will leave

my argument on this particular part of the borrowings until later, because there

was a newspaper account that said it was $75,000.

HON. MR. BARRETT: It's not unusual for the newspapers to be

incorrect.

MR. BENNETT: Yes, well, I'm prepared to believe that. That's

why we are allowed this opportunity to question the Finance

Minister to get the facts.

I also question, then, after saying that we were just going

to go for $100 million, whether we had to go for $375 million

in a period of high interest rates. We'll come back to the

amounts of commission after.

Here we have the money market dropping; we have it dropping

in just six months after the first $100 million loan. We have

an equally wealthy province, the Province of Ontario, going for

30-year money at 8.875, yet here we are committed to loans at

10.25 per cent, at 10 per cent — and money that's paid to

people outside our country. I'm wondering whether the

capability of this province, which I believe is great, to

internally finance is not still there. I know, as the Premier

has suggested, that we've had overruns on the Columbia, and

that's fine. But those overruns have been....

HON. MR. BARRETT: That's not fine; that's a mess!

MR. BENNETT: Those overruns have been continual — for

instance, inflation has caused many projects to cost more than

their original estimates. So it didn't come as a sudden shock

that...

HON. MR. BARRETT: Oh!

MR. BENNETT: ...from within Hydro, all of a sudden, extra

money was needed. We've gone through the major part of the

construction without having to go outside our own financial

boundaries, or even outside the capabilities of the funds

managed by government. But here we are going outside the

capabilities of the government and outside of the province for

money at the most expensive time in history.

I think that the Finance Minister, in view of the declining

interest rates that were predicted and what other governments

have done in Canada, has to be accountable for committing the

citizens of this province and Hydro to this excessive interest

rate at a time when this province had the capability of

delaying that decision to a more favourable financial

period.

As I mentioned before and as the Premier has said, they

don't want to finance through parity bonds. Nobody is

suggesting that major long-term financing has to be done

through parities. Long-term financing

[ Page 671 ]

was being done through funds under the control of the

Minister of Finance from the pension funds, and parities were a

limited offering on behalf of different government agencies

that were allowing the citizens of the province to participate

in the growth of their province and to give our citizens

flexibility. They can cash those bonds.

Yet we have the Premier — and I look back in Hansard

— talking as though he was saving the country by calling in

parity bonds. In fact, on more than one occasion he said: "I

disagree with parity bonds. They're a system of printing

money." So he says that he called them in. Well, nobody calls

in parity bonds. Parity bonds belong to the people who have

purchased them until their due date. The government doesn't

have the right or the authority to call them in; parity bonds

only come in when the owner of the parity bond, the citizen of

this province, wishes to cash them in. Parity bonds are only as

strong as the confidence in the Finance Minister and the

confidence in the government. I have no doubt that with this

Minister of Finance and his present record, perhaps all parity

bonds will eventually end up being cashed in. But for him to

suggest that you call them in is irresponsible. It's not true

because parity bonds are turned in by the citizens of the

province. They weren't called in; they were turned in. They

were turned in because they had no confidence in this Minister

of Finance.

MR. D.M. PHILLIPS (South Peace River): That's right.

MR. BENNETT: I think they must have anticipated that he was

going to be making loans at 10.25 per cent. I think they must

have anticipated that he had no understanding of the financial

market and that he would not have the ability to predict and to

go on behalf of the corporations of this province at a time

when money was low rather than taking $375 million worth of

issues for high-priced money that didn't have to happen.

We see a declining market; we see the price dropping. We see

Ontario moving at a time when prices are low while we're

committed at high prices. I think the details and the

consideration that went into the borrowing of this money.... I

would ask the Premier to advise the House why this was done.

Were we short of money? Would he advise us of the amounts of

the commission rates surrounding the mysterious money for which

we still do not know who the lender was?

HON. MR. BARRETT: I have to start off by saying to the

Leader of the Opposition (Mr. Bennett) that you're not only

incompetent but you're irresponsible.

MR. CHAIRMAN: Order, please. I would ask the Hon. Premier to

withdraw the imputation that any Member of this House is

irresponsible.

HON. MR. BARRETT: Well, Mr. Chairman, he just accused me of

being irresponsible, and you don't call him to order. I'm

going to prove that he's not only irresponsible but that he's

incompetent. I think I'm able to say that in this House.

MR. CHAIRMAN: Order, please.

HON. MR. BARRETT: Mr. Chairman, I withdraw the word

"incompetent." I withdraw the word "irresponsible." I say that

the Member is a stranger from the truth and has done no

research.

Now let's deal with his words. He attempted to leave with

this House the impression that no one else was in the market

when the rate was 10.25 per cent; no other province was. The

words that I noted — and they'll show up on Hansard —

were that no other jurisdiction was borrowing.

MR. BENNETT: I didn't say that.

HON. MR. BARRETT: What did you say, then? You said other

provinces were holding back.

Interjections.

HON. MR. BARRETT: Yes. Your words were that other provinces

were holding back. Right?

Interjection.

HON. MR. BARRETT: Oh! At the same time that we were

borrowing (and he's quoting Ontario) Ontario borrowed a week

before we did in New York at those current rates — not at 8.25

but at 10.25 per cent, which was the going rate at the date.

You can't come into this House and say today's rates were

applicable to four or five months ago. Don't you leave the

impression that Ontario and other provinces weren't borrowing

at the same time. I say shame. You're trying to create a

situation that you didn't even research or check out.

I expect a third apology today after having two already

Interjections.

HON. MR. BARRETT: Now we're coming to other statements from

the Leader of the Opposition.

Ontario borrowed $150 million one week from us in New York at 10.25 per

cent. Ontario is going back to New York now that there are new rates, and

so are we. That's a matter of record. Mr. Member, you were wrong there.

We did short-term some money for Hydro, and then we long-termed it out

because we had an

[ Page 672 ]

opportunity of doing that.

You say cut back and borrow within. You say that inflation

has caused the problem with Columbia River and that was

predictable all along. Those were your words. Well, Mr. Member,

I want you to know that your party saddled this province with

close to $840 million worth of additional expenditures on the

Columbia River because the former Minister of Finance (Hon. Mr.

Bennett) did not include inflation as a factor in the Columbia

River treaty.

If you have the nerve and the gall to come to this House and

blame the present government for the massive borrowings we have

to make because of the Columbia River treaty, you're really

doing something.

MR. PHILLIPS: Why don't you put on a mask to keep your smile

back when you talk like that?

HON. MR. BARRETT: Mr. Chairman, we have said that there will

be an inquiry, at the request of the opposition, on those

costs.

MR. G.F. GIBSON (North Vancouver-Capilano): How soon?

HON. MR. BARRETT: As soon as we can bring forth the name of

the Member who will do the inquiry. You know, we had an inquiry

arranged for the Commonwealth Trust, and they resigned. Do you

remember that? We want to make sure that when we gather

together those people, the inquiry is properly launched and

done on a basis of the public having the information.

Now, Mr. Chairman, let's also deal with a record that some

of the Members in this House have some memory of — not the

present Leader of the Opposition — internal borrowing. When

Hydro made demands internally in the past, there wasn't enough

money to cover all the borrowings, so a municipal authority was

established and some other areas suffered. What were those

areas? The Member for West Vancouver–Howe Sound (Mr. L.A.

Williams) will remember, the Member for Oak Bay (Mr. Wallace)

will remember, and the Member for Saanich and the Islands (Mr.

Curtis) will remember, because he used to decry that.

The first thing that was cut back in this province, Mr.

Chairman, was schools and hospitals. I remember sitting in this

House having the former Minister of Education saying the kids

could exercise right beside their seats. We couldn't afford

gyms in British Columbia under Social Credit — it was a

frill.

MR. PHILLIPS: Why don't you get down to your everyday

capabilities as a Minister of Finance?

HON. MR. BARRETT: Mr. Member, you want to come to this House and make

statements? You want to come in here and be responsible? Then just remember

the lag in school construction and hospital construction that went on in this

province. In 1975, trying to make up for all those years of neglect....

Interjections.

HON. MR. BARRETT: You know, Mr. Chairman, the louder they

yell, the less sense they make. The other question about

....

Interjections.

HON. MR. BARRETT: Along the Columbia....

MR. BENNETT: What's the commission on those?

HON. MR. BARRETT: The commission was 0.75 per cent, which is

normal, and the newspaper

article is incorrect.

MR. BENNETT: It was 0.75 per cent on both?

HON. MR. BARRETT: On both, and the newspaper

article is

incorrect.

You also mentioned, Mr. Member, that you were concerned

about the further borrowings of Hydro and, you said, other

Crown agencies.

MR. BENNETT: Yes, the BCR.

HON. MR. BARRETT: No outside borrowing is taking place by

other Crown agencies — none. Now you didn't know that, did you?

All you had to do was ask. You come in here and leave the

impression that other Crown agencies are borrowing outside, and

you haven't done a lick of homework — not a lick of

homework.

MR. BENNETT: Don't be silly.

HON. MR. BARRETT: He's telling me not to be silly. He's the

one that made the statement that Crown agencies were borrowing

outside, and they're not.

MR. BENNETT: Read the Blues.

HON. MR. BARRETT: "Read the Blues." You've got the blues,

Mr. Member. You've got the blues. (Laughter.)

Now the other question about the continuation of borrowing —

yes, we wanted to limit Hydro borrowings. Then the Minister of

Lands, Forests and Water Resources (Hon. R.A. Williams)

informed us that the Pend-d'Oreille project could go ahead,

that we needed the work. So we made a decision: when we were

faced with an economic slowdown in other

[ Page 673 ]

areas in North America, we would continue employment in the

Province of British Columbia, and we went ahead with the

Pend-d'Oreille. We had a winner.

Mr. Member, if you want to go throughout this province and

tell people to cut back on the expenditures for the

Pend-d'Oreille....

MR. PHILLIPS: What price?

HON. MR. BARRETT: At what price? At a price of high

unemployment, as we had under Social Credit. Well, we won't

operate that way.

Interjections.

HON. MR. BARRETT: Mr. Chairman, let's deal with the parity

bonds. There was $255 million out there in parity bonds. Never

once in the history of this province, in the terms of the 15

years that I've been around, had I ever heard the former Leader

of the Opposition ever get up and attack the parity bonds —

never take that irresponsible position — but today the present

official Leader of the Opposition left the impression that the

parity bonds were not a good investment.

Interjection.

HON. MR. BARRETT: You did too, Mr. Member — $60 million were

cashed in during that particular period.

HON. R.M. STRACHAN (Minister of Transport and Communications): That's

right, and where did it get Daddy?

Interjections.

HON. MR. BARRETT: Well, you know, Mr. Member, you came in

here and left the impression that Ontario was not borrowing

when everybody else was borrowing, and they were. Quebec and

Ontario were borrowing at the same time we were. You didn't

name one Canadian jurisdiction which was not in the market. You

made a general statement that you did not back up with facts.

That's one.

No. 2, you dismissed the problem of inflation with the

Columbia River by saying that anybody could have predicted

that. Well, your Dad didn't, and he was the Premier of the

province at the time. So if you're criticizing your father,

you've finally made some sense in your argument today.

In terms of the kind of commitments we have in Hydro, we

will borrow more, but we will not let the schools and hospitals

suffer as they did in the past. Do I need to read the Member

for Saanich and the Islands' (Mr. Curtis) speech on this very

point?

MR. H.A. CURTIS (Saanich and the Islands): If you enjoy

reading them, go ahead.

HON. MR. BARRETT: I don't enjoy reading them, considering

the embarrassment they must give you when you attacked the

former government for short-changing schools.

MR. PHILLIPS: You'll never change your image by talking.

HON. MR. BARRETT: Mr. Member, there is no way that I need to

change my image with you — you're in trouble up in the Peace

River.

MR. PHILLIPS: I was just up there. Sales have never been

better since you were up there. Please go up again.

HON. MR. BARRETT: There is the only man who doesn't need to

use a telephone to contact his constituents.

Mr. Leader of the Opposition, the question of further

borrowing is relevant. We intend to continue the obligations of

the province on the Columbia River Treaty. We have a commitment

to Site 1 and a commitment to Pend-d'Oreille.

MR. J.R. CHABOT (Columbia River): A costly one.

HON. MR. BARRETT: Yes, we have a very costly commitment on

the Columbia — you bet your life. And there is not a thing we

can do about it. The Columbia River is a financial disaster to

this province. There is nothing we can do about it.

MR. CHABOT: So are your programmes — much more of a

disaster.

HON. MR. BARRETT: In terms of the availability of

Arab-country dollars, I notice that the UBCM, the finance

authority of the municipalities of British Columbia, is looking

at petro-dollars. I would advise them to look closely, because

perhaps they could have a good deal out of those petro-dollars.

I hope they don't take the advice of the Leader of the

Opposition and not look for those funds, because they haven't

done so well in other markets, and you will admit that

publicly.

MR. CURTIS: It remains to be seen.

HON. MR. BARRETT: At this point it doesn't look too good.

But they should look to alternate markets.

In terms of the particular country, part of their

stipulation was not to identify the country. That was

[ Page 674 ]

their request and I honour their request; it is a private

loan.

Interjections.

HON. MR. BARRETT: It is a public loan at this end, private

at that end.

Interjection.

HON. MR. BARRETT: Well, Mr. Member, that is part of the

agreement. It is a private placement of the loan. Am I happy

with it? I'm not unhappy with that request. I'm not unhappy. It

is not criminal dollars. We have checked that out.

MR. CHABOT: Why won't you tell us?

HON. MR. BARRETT: Because that was part of the agreement and

I'll honour that agreement.

AN HON. MEMBER: Why has it never been done with any

others?

HON. MR. BARRETT: Well, Mr. Member, that was part of the

agreement with us, and that is the way it is. If you want to

see the agreement, I can show you the agreement confidentially

if you want. That's fine.

MR. PHILLIPS: Open government under the table.

HON. MR. BARRETT: Well, Mr. Member, that's not....

Interjection.

HON. MR. BARRETT: Oh, come on, Mr. Member, you know the

details. I don't know if you want answers or if you just want

to yak.

MR. PHILLIPS: We want answers but we want....

HON. MR. BARRETT: You want to yak?

MR. CHAIRMAN: Order, please. The Hon. Premier has the

floor.

HON. MR. BARRETT: Mr. Chairman, I know that the Leader of

the Opposition will correct that statement about other

borrowings at 10.25 per cent.

In terms of other commitments I have told my cabinet

colleagues that there will not be, under this administration,

any cutback on school or hospital construction.

SOME HON. MEMBERS: Hear, hear!

HON. MR. BARRETT: As a matter of fact, we will continue the

building programme we initiated some two years ago.

Interjection.

HON. MR. BARRETT: There will be no cutbacks under us. There

will not be cutbacks on schools or hospitals! There will not be

cutbacks on schools and hospitals under this government!

MR. CHABOT: From 30 per cent to 23.5 per cent!

HON. MR. BARRETT: Oh, Mr. Member, how you can sit there and

forget your own history is most interesting.

We are in the market now for another borrowing. You will be

asked to debate two bills that are in front of the House now,

two bills dealing with the expansion of borrowing of B.C. Hydro

and B.C. Rail. In terms of B.C. Rail I will have a major

statement about problems with current contracts that we

inherited. I will have a major statement on those during the

debate of the bill. There are also court cases related to those

contracts, and I will have to be very careful in stating the

circumstances around those court cases and the contracts that

we inherited.

The First Member for Vancouver–Point Grey (Mr. McGeer) asked

some very important questions on those contracts over a year

ago. I think it is very good....

MR. D.A. ANDERSON (Victoria): Time for answers.

HON. MR. BARRETT: Yes, they got answers then with the

studies, and there will be more information available when we

debate that bill. But it is a situation not of our making.

Those court cases out of contracts are not of our making.

MR. CHABOT: How about the Bremer case?

HON. MR. BARRETT: Mr. Member, I think it is appropriate that

we discuss those very carefully during that particular

aspect.

MR. BENNETT: Perhaps the Premier will listen more closely

when I talk about the way in which I talked about the credit

rating and other provinces. I said that British Columbia's

credit rating was similar to Ontario's. And it is in Canada,

that's right. It still is.

I used the rate that many jurisdictions had withdrawn

borrowing from the market. I can bring news accounts....

[ Page 675 ]

HON. MR. BARRETT: You quoted Ontario, and tried to leave the

impression that Ontario was borrowing.

AN HON. MEMBER: Sit down! Shame!

MR. CHAIRMAN: Order, please.

MR. BENNETT: I used the name "Ontario" to give an idea of

what rate we could borrow money at now, if we had held off this

borrowing for six months. I believe the province should have

had the capability to delay that borrowing. By not delaying it,

the Premier has cost the province and the citizens a lot of

money. I took out that 1.38 per cent extra interest by not

waiting for a lower-price market.

This Premier has cost our citizens, through Hydro, millions

and millions of dollars. There is no doubt that the Premier

will have to say that he absolutely had no ability to

manoeuvre, that he had to go to the market then, that he had no

option. Then his explanation would be more presentable.

I believe that if this province didn't have to go, it

shouldn't have gone.

HON. MR. BARRETT : I never said that.

MR. BENNETT: Listen, I know that this province has had the

financial ability to wait for more favourable markets. That is

something that isn't there for other governments that have debt

to finance, that have a lot of expenditures, that didn't have

surpluses — governments coming in that didn't inherit surplus

funds to give them flexibility. But this Premier did, and he

had flexibility. I'm saying that with that flexibility why did

he go at 10.25 per cent when the market was going to drop? Why

did he commit Hydro to 10.25 per cent when the market has

already dropped down to 8.875? That is fact. Ontario has just

put an offering out at 8.875 with a similar credit rating to

British Columbia, and we paid 10.25. Obviously British Columbia

could have got 8.875 if they had held that issue off until

today. Obviously.

That's the point I was trying to make: that this Premier and

Minister of Finance committed us for an extra 1.375 per cent

interest by not delaying the borrowing, by not being able to

predict the market, by not watching the financial market and

using his position, a position that should have had

flexibility, that's always had flexibility, to wait for a more

favourable market.

British Columbia has been favoured. This Premier was fortunate. He had surpluses

there that gave him that flexibility. Perhaps even other provinces with the

same credit rating don't have the flexibility that he inherited when he came

to government. He had a flexibility of funds that allowed him to wait for more

favourable markets, if indeed the policy of British Columbia was going to change

and we were, for the first time in six or seven years, going outside our own

internal financing to borrow money for our Crown corporations — if indeed that

was going to happen.

I was pleased that the Premier was able to tell me that the

rate — and I listened carefully — was 0.75 per cent on that

$100,000. That's a little cheaper than the rate....

HON. MR. BARRETT: $100 million.

MR. BENNETT: Yes, that $100 million. That's a little cheaper

than the 0.875 we paid on the first $100 million; so obviously

as you do more and more business, you get a more favourable

rate. Instead of 0.875 it is 0.75 on those two $100 million

loans. That's correct, is it? Very good.

Now one of the statements the Premier made was that he had

to pay extra money for school and hospital construction. Going

back in the public accounts, we see that bonds floated for

construction for educational purposes actually dropped in 1973.

These are tabled in the Legislature. They dropped from $55

million in 1972 to $39 million in 1973. We see that the figure

was $45 million in 1970, $51 million in 1971, $55 million in

1972; but it actually dropped. This is the increase that the

Minister of Finance, who is worried about accuracy.... He's

telling us that he had these excessive expenditures — but they

dropped to $39,853,000 in 1973.

The great expenditures in health that he talks about: in

1971 the province issues were $19,862,000; in 1972,

$17,724,000; in 1973, $20 million. But that's no gigantic,

fantastic increase dealing in hundreds of millions of

dollars. When we talk about accuracy as to the reasons for borrowing,

and what happened in this province, I think we have to be

accurate as to how much the province did raise in the way of

money. And hearing the expenditures as filed as answers to

questions in the Legislature and published — a drop from $55

million in 1972 to $39 million in 1973.

Now we also have the question of the Municipal Finance

Authority. Perhaps the Minister of Finance can advise me

whether governments in other areas, other provincial

governments, have ever borrowed or do borrow all of the money

on behalf of their municipalities. I know that the MFA has been

able, by pooling their borrowing power, to achieve a better

borrowing rate for municipalities. I know that the government

has an involvement for those poorer communities that need a

government guarantee. I would hope that some day the provincial

government can extend guarantees to the MFA to help them, if

they cannot arrive at a credit rating similar to the province,

to achieve cheaper borrowings. But I don't think that the

Premier and Minister of Finance

[ Page 676 ]

recognizes how municipalities borrow in other areas in

Canada when he says that the MFA were being ripped off by the

....

HON. MR. BARRETT: I never said they were being ripped

off.

MR. BENNETT: Whatever you said, which was along with your

statement on the capital construction costs for hospital and

school facilities.

I'd still like to find out what the policy is for going to

the money markets, and whether British Columbia was forced to

go to the market last September, whether it had the capability

of holding off to this March, and whether we are paying that

extra 1.375 because of a mistake in judgment and not because we

were forced to go to the markets.

HON. MR. BARRETT: Mr. Member, first of all, I ask you to

listen closely, please. I did not say that the Municipal

Finance Authority was ripped off.

MR. BENNETT: What did you say?

HON. MR. BARRETT: I never made that statement. I said that

they may be in trouble with two of the borrowings.

As a matter of fact, the Member for Saanich (Mr. Curtis), if

I remember correctly, was chairman of the fund at that time, so

all you have to do is turn around to him and he'll give you the

details. They made borrowings in foreign currencies that may

not be a boon; it appears to have been a mistake. But if he had

that kind of hindsight, Mr. Member, he'd be a financial

genius.

You make a statement that we hold off until the rates come

down lower. You tell the House right now what the rates will be

six months from now. You tell us.

MR. G.S. WALLACE (Oak Bay): Six days from now.

HON. MR. BARRETT: If you're leaving the impression with this

House that somebody in the world knew what the rates were going

to be six months ahead of time, you have an obligation to share

that wisdom with all of us. I challenge you to tell us right

now what the rates are going to be six months from now.

MR. BENNETT: I'll bring in the financial articles....

MR. CHAIRMAN: Order, please!

HON. MR. BARRETT: Mr. Chairman, hindsight is a great thing,

but you tell me....

MR. PHILLIPS: Use a little foresight once in a while.

MR. CHAIRMAN: Order, please!

HON. MR. BARRETT: Mr. Chairman, the challenge to the Leader

of the Opposition is to state in this House, with all the

reading he does and with all the financial advisers he has, and

the wisdom that he obviously cares to impart, what the interest

rates are going to be six months from now.

Interjections.

HON. MR. BARRETT: If I may continue, Mr. Chairman. I know

that they're always happy to hear me.

MRS. P.J. JORDAN (North Okanagan): Well, say something.

HON. MR. BARRETT: Madam, would you please shut up.

MR. CHAIRMAN: Order, please!

HON. MR. BARRETT: There are standing rules in this

House.

MR. CHAIRMAN: Order, please! I would draw to the attention

of the Hon. Members that there is....

Interjections.

MR. CHAIRMAN: Order, please! Order! I would draw to the

attention of all Hon. Members that there is a rule that says

you're not to interrupt the person who has the floor. So I

would just remind you of that rule.

Would the Hon. Premier continue, please?

Interjections.

HON. MR. BARRETT: She wasn't very ladylike. (Laughter.)

The projection for 1974 on school spending is $91 million

approved — $91 million approved in 1974. Now, in 1975, the

projection for 1975-76 is over $100 million.

Interjection.

HON. MR. BARRETT: Okay, Mr. Member, I'm giving you the

information you asked for. If you don't want the information,

forget it.

In 1974, the approved spending for schools is $91 million.

Write it down so you don't forget. In 1975-76, it will be over

$100 million.

[ Page 677 ]

MR. BENNETT: Mostly guesswork.

HON. MR. BARRETT: Well, Mr. Member, you accuse me of saying

it's guesswork. You just adjust the answers to anything you

want. Oh, look....

Interjection.

MR. CHAIRMAN: Order, please. The Hon. Premier has the

floor.

HON. MR. BARRETT: We're talking about what's approved in

1974. I'll go over it again slowly so you'll listen.

In 1974, $91 million has been approved. In 1974, $91 million

has been approved for capital spending.

Interjection.

HON. MR. BARRETT: Just be quiet.

In 1975, it is estimated that over $100 million will be

approved. What is actually spent and what is approved are two

different things. Okay, now you've got that figure.

MR. BENNETT: What was spent in 1973?

HON. MR. BARRETT: All right.

MR. CHAIRMAN: Order, please! I would ask the Hon. Leader of

the Opposition to save his questions until he has the

floor.

HON. MR. BARRETT: Mr. Chairman, what the Leader of the

Opposition does not recognize again is that he is quoting

current interest rates that Ontario is out at, leaving the

impression that somehow Ontario borrowed money six months ago

at those current rates.

Mr. Member, Ontario does not have preferred rates. We will

go to market and we will get the same rate that Ontario is

getting, as we did six months ago. I want you to acknowledge

the fact that Ontario borrowed $150 million six months ago at

10.25 per cent. You cannot leave the impression in this House

that we paid 1.75 per cent more than Ontario did, and that's

what you're doing.

Interjection.

HON. MR. BARRETT: We could have waited, and the interest

could have been up.

MR. BENNETT: That's all I wanted to hear you say.

HON. MR. BARRETT: Oh, oh!

Interjection.

HON. MR. BARRETT: Mr. Member, would you please tell us what

the interest rate is going to be six months from now?

Interjection.

HON. MR. BARRETT: Oh! Thanks very much for your answer.

Mr. Chairman, the correct thing is that we are moving ahead

to cover the costs of the Columbia River. We have no options

but to go to the market — no options but to go to the market. We

have obligations under the Columbia River treaty. If you don't

want to face those, you go ahead and rationalize it any way you

want.

MR. P.L. McGEER (Vancouver–Point Grey): I just want to test

the Premier with a couple of short questions. We have been

discussing the borrowings of British Columbia and linking these

to the problems of the Columbia River. I would like to ask the

Premier if he could give us some indication of the advice he

received not to go to the public of British Columbia for the

borrowings for B.C. Hydro in preference to the Arabs.

I, for one, Mr. Chairman, do not want to have the Arab

nations with a first mortgage on the Province of British

Columbia. As a citizen of this province I dislike intensely any

secret money being loaned to this province which obliges the

public of British Columbia to return at some future date to

those unknown people who hold this first mortgage on the

province. It seems to me that the policy of British Columbia

should be: everything on top of the table. If nations don't

wish to do business with us on that basis, we should be very

glad not to have anything to do with them.

But, of course, Mr. Chairman, before we undertook such an

obligation by which we would have to keep the holders of this

first mortgage secret from the people of British Columbia, it

must have been known that a bond issue would not be accepted by

the public of this province. That must have been known.

Therefore I would like to ask the Premier, if he would, to tell

us who said that a public issue wouldn't go and why it was so

necessary for us to borrow money from Kuwait or wherever it

was.

The reason for this anonymous borrowing was to meet our

obligations on the Columbia River, and, of course, we

understand that the B.C. Hydro has very heavy capital

commitments for the next several years. If Site I is going to

be built and if the transmission lines and machining are to go

into Mica and if we are going to go ahead with the

Pend-d'Oreille, which we are, the B.C. Hydro is going to be up

in the $300 to $500 million a year range again for several

years. The

[ Page 678 ]

last couple of years we've had a little bit of hiatus in the

big capital requirements. A pattern that is established now is

certainly going to be expanded in future years. This is what

has me so concerned about the pattern of borrowing that we've

commenced. I frankly don't think they should keep their

petro-dollars, and the people of British Columbia should be

invited to hold the first mortgages on this province.

I'd like to ask some questions about the Columbia. The

Premier said that we had no choice. This is something that I

can't accept.

I want to know when this inquiry that was promised first by the Premier and

then by the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams)

— not to this Legislative Assembly — is going to be held. I am disappointed

that it's not a legislative inquiry because I think the people who should be

asking the questions about the Columbia are sitting right here in this House.

I think the appropriate witnesses should be brought before the elected Members

and not before some friend of the government who gets appointed to hold a commission

and to ask....

MR. CHAIRMAN: Order, please. I would ask the Hon. Member if

he is imputing an improper motive to members of the

cabinet.

Interjection.

MR. CHAIRMAN: Order, please. I am asking the Hon. Member if

by the phrase "friend of the government" he is imputing an

improper motive.

MR. McGEER: On the part of the government? Their motives are

all improper, Mr. Chairman; they are all improper. I want to

know why the government hasn't got the guts to order a

legislative inquiry. Bring the witnesses right here where we

can talk to them.

MR. CHAIRMAN: Order, please! In keeping with the rules, I

would ask the Hon. Member to withdraw any imputation that any

Members of this House had an improper motive.

MR. McGEER: It was partisan.

MR. CHAIRMAN: I would ask the Hon. Member to just withdraw

the imputation.

MR. McGEER: No, it was partisan, Mr. Chairman.

Interjection.

MR. CHAIRMAN: Order, please. I have asked the Hon. Member to

withdraw the imputation....

MR. McGEER: Wasn't it partisan? It was one-sided.

MR. D.A. ANDERSON: You can't have partisan politics

here.

AN HON. MEMBER: You are quite correct.

MR. CHAIRMAN: Order, please. I press the Hon. Member on this

point: he has made the suggestion that friends of the

government were receiving some benefit. This suggests an

improper motive and I would ask the Member to withdraw the

imputation.

MR. McGEER: It was the government that was looking for

benefit.

MR. CHAIRMAN: I am asking the Hon. Member to withdraw

unconditionally.

MR. McGEER: Certainly I withdraw unconditionally. Absolutely, Mr. Chairman.

MR. CHAIRMAN: Will the Hon. Member proceed then?

MR. McGEER: I was merely making the point that it was a

one-sided socialistic view that would want the Columbia held

with this kind of an inquiry instead of a legislative one that

would be bipartisan.

MR. CHAIRMAN: Would the Hon. Member continue, please?

MR. D.A. ANDERSON: Even the Premier is embarrassed by that

intervention by you.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): They have no

friends left.

MR. McGEER: They've all been appointed.

Mr. Chairman, if we had such an inquiry right here in this

Legislative Assembly where the witnesses could be brought

before the Members of the House, either to the bar of the House

or to one of the very fine committee rooms, we would have an

opportunity to get underneath it all as far as the Columbia

River is concerned and really learn what's going on for the

first time. We've been denied that. There was just a little

whiff of something in the air about this secret committee and

then suddenly the door was closed and we haven't been able to

learn anything more.

HON. MR. BARRETT: What are you dredging up now?

MR. McGEER: Well, what I want to know is really the details

of the negotiations and then how the government tried to cover

up what the true costs of the Columbia were going to be.

[ Page 679 ]

HON. MR. BARRETT: You're not accusing us of that.

MR. McGEER: No, I'm accusing you of not following through on

the responsibilities of the government of today.

HON. MR. BARRETT: It will be done.

MR. McGEER: Because those responsibilities require a

renegotiation of the Columbia River treaty as a first order of

business, and if the figures I have studied are correct, the

people of British Columbia might benefit by as much as a $100

million a year from that renegotiation. It's merely based on

the value of peaking benefits, something for which the people

of British Columbia are not receiving a penny today.

I don't think the people of British Columbia yet realize

that while the value of electricity is soaring, and while the

value of peaking-power benefits is rising out of proportion to

base-power benefits, what we're receiving in consideration

under the Columbia River treaty is declining year by year by

year. As that power becomes more valuable to the Americans, we

get less. That requires a renegotiation.

SOME HON. MEMBERS: Hear, bear!

MR. McGEER: That is why we want to have this inquiry now and

get it out in the open so we can begin to drive for the things

that ought to be done. I've said right along that the federal

government is not going to welcome pressure from us in this

direction. They're going to hate it.

HON. MR. BARRETT: They turned it down once already.

MR. McGEER: Yes, but you've got to keep after them. Whoever

expected Ottawa to say yes the first time to British Columbia?

Never.

HON. MR. BARRETT: And you're a Liberal.

MR. McGEER: We'll give you all the support on this that you

can use or want. You have our total support!

HON. MR. BARRETT: Don't give us your support — we'll lose

the case for sure.

MR. McGEER: No, no. I'm going to talk about another case

where the Premier is losing with Ottawa. We'll get to that

later, and that's with respect to natural gas.

But for the moment we want that legislative inquiry on the

Columbia River, and we want it now.

Since the government has not yet picked a commissioner, and

has not announced an inquiry, let's get it started tomorrow

right here in this building.

All the Premier has to do is announce that he is prepared to

go ahead with an inquiry now, give it broad terms of reference,

and we can begin to get to work on the Columbia.

If there's any one single thing that will be of greater

benefit to British Columbia than a renegotiation of the

Columbia, I don't know what it is because what we can get out

of the Columbia renegotiation would be far more than what we

could get out of an increase in the price of natural gas. The

stakes are that high. We should get on with the job and we've

got to focus the public spotlight on it before we can get

Ottawa to begin to pay some attention to what their

responsibilities in this matter are.

I hope that the Premier can give us more encouraging news

about future borrowing. I quite understand that with the

enormous commitments of B.C. Hydro we're going to have to

borrow from private sources, but I don't like this business of

borrowing from the Arabs. I hope we can go to the people of

British Columbia and Canada for our borrowings in the

future.

HON. MR. BARRETT: I know it wasn't a deliberate oversight.

You know that we went to the Canadian people for $75 million —

$25 million of it was for 7 years; $50 million of it was for 25

years. There's a limited amount that we can raise in Canada,

but we did raise that. I know it was an oversight on your part.

You knew that we had gone for that $75 million. So when you

said that we had not gone to the Canadian market, it was purely

an error on your part. Just an oversight. I appreciate that

because I know you wouldn't want to leave the impression that

it was anything other than that.

Secondly, I want to spend a couple of minutes very carefully

on what you're saying about a legislative committee.

Unfortunately, you weren't here earlier when I mentioned the

Commonwealth Trust, and that at that time we had set up in the

House a commission of inquiry, but the people named

resigned.

Mr. Member, you made a statement today that I think was

unfortunate. We are looking for competent people on a

non-political basis to give us an inquiry on the Columbia

River. I don't want that jeopardized by an intemperate

statement that somehow we're looking for politically motivated

people, because that's not so.

Now you talk about the legislative committee. You, yourself,

on occasion have said time and time again, when the matter

suits your fancy, that you don't want a legislative committee

because there's a

[ Page 680 ]

government majority on it and that would be political. But,

on the other hand, you wouldn't mind the legislative committee

on this, because politically it looks pretty good. Now, Mr.

Member, you can't have it both ways. I know that when you're in

a minority party position you can take any position you want;

but that doesn't do you much good in convincing people in here,

and I don't think it'll gather votes out there.

We need to find someone who is professionally recognized and

publicly recognized as being as non-partisan as possible and as

competent as possible to do this inquiry for us. I would hate

to think that intemperate statements made in the House will

limit that field for us. I think that that did cause us a

problem in the Commonwealth Trust case, and we never did get

the inquiry because of that. You will recall that the

commissioners resigned, and the government of the day never

went through with naming new commissioners. They never did.

They got off without any public record on the Commonwealth

Trust, because those commissioners — and I don't question their

motives at all, which were probably of the highest — walked

away because of the political atmosphere.

Now the question of the Columbia River treaty: there is no

question in my mind that the essence of your remarks is

correct. We were badly taken in the Columbia River treaty. We

were warned by General McNaughton. We were warned by others.

Mr. Member, you'll recall that some of the most thoughtful,

exciting, irrational and rational debates in this House were

round the Columbia River treaty. The government of the day was

hell-bent-for-leather to get that treaty through. It was

politically motivated. It took a calculated risk. It did not

consider inflation as a factor. And all the warnings that came

from the Liberal Members — some of the Liberal Members — and

the CCF/NDP Members of the day came true.

George Hobbs died, you'll recall, on the eve of the continuation of that debate.

If you go back and read the newspaper accounts — because we did not have a Hansard

then — time after time after time Members of this House, especially Ran Harding,

got up and warned and warned and warned what was going to happen. Harding even

predicted what the Members touched on today that is most valid: the Americans

are getting an increased cost benefit. There are secondary and tertiary benefits

from that electricity that will plague us and our economy for another two generations.

The fact that they were able to develop downstream economically viable industries

at the secondary and tertiary level beyond the same kind of resource market

that we had gives them a far greater opportunity to stabilize their economy

— out of our power! They were able to build a base throughout the whole Columbia

valley. Secondary industries that are year-round producers do not rely on cycles

of world markets in terms of our mines and our forests. That wasn't looked at

by the former government. There was inadequate research. It was a great, hoopla

move to commit us to development at any cost.

I asked the Prime Minister — I begged the Prime Minister —

on behalf of the people of this province, to use his good

office to ask the Americans to renegotiate the Columbia River

treaty. My first meeting with the Prime Minister was to discuss

this issue. And after discussion with the Prime Minister, he

told me that he would not initiate a reopening of that treaty.

The only avenue left to us was through the B.C./Canada accord,

and it's very limited. We have spent our time, since that

rebuff from the Prime Minister, trying to use the B.C./Canada

accord as a subsidiary of the Columbia River treaty as an

avenue of renegotiating. Mr. Member, if you have any influence

at all with the Prime Minister of this country, I ask you, on

behalf of the people of this province, through the Liberal

Party, to ask the Prime Minister to reconsider his position and

go along with asking the Americans to reopen that treaty.

AN HON. MEMBER: He has no influence.

HON. MR. BARRETT: He has no influence? I think he has. He's

a prominent member of the Liberal Party. Next to him is the

Liberal leader. Behind him is a man who was in the Prime

Minister's office. Get together and get on the phone and say:

"For the sake of British Columbia, take up that treaty, Mr.

Prime Minister, and help the people of British Columbia." You

do that and you'll be doing a great service to the people of

this province.

Mr. Member, there is no doubt that Hydro is faced with

massive expenditures over the next few years. You're absolutely

correct. We have the capital commitments to Site 1, to the

Pend-d'Oreille, and we have commitments to transit and other

services. Those costs have to be borne by the people of this

province. Thankfully, we are in a position where we can be

competitive over the long haul in meeting the costs out there

in that world of borrowing. I don't like to stand here and talk

about the Columbia River. I don't. I sure don't like the idea

of the chickens for that deal coming home to roost when we're

in government.

AN HON. MEMBER: How about the chickens and eggs?

HON. MR. BARRETT: Mr. Chairman, I wonder, almost wistfully,

how the bombastic former Member for Kamloops (Mr. Gaglardi)

would have handled this debate if they were still in government

and the facts came out about the Columbia River treaty. What

would they have said? Thankfully for that group over

[ Page 681 ]

there, only one or two of them were around when that vote

took place.

Every child and every child's child in this province will be

paying for generations because of that stupid deal made by the

Social Credit government. I make the appeal again to the

federal Prime Minister to help us in re-opening that treaty, if

we can, to renegotiate it. Even the Americans are embarrassed

by the heritage that we were left with out of that treaty. And

that treaty was signed purely for political purposes. It was a

dream of the former Premier (Hon. Mr. Bennett) to announce a

two-river policy. That's why he sold out to the Americans.

None of us can eradicate history, but let's be careful in

terms of how we handle it, getting all the facts out. A

legislative committee would not do it, Mr. Member, and you know

it and I know it. There are politicians in this House, Mr.

Member, some who never forget it, some who take that into

committee activity with them. I'm not naming names, but there

are very few non-partisan MLAs in this House, Mr. Member, very

few. It all depends on whose ox is being gored, and I'm telling

you that a public inquiry with a publicly recognized

commissioner is the only way to go. If you can give us any help

to get the Prime Minister to change his mind, I'd welcome

that.

MR. McGEER: Mr. Chairman, I have no influence with the Prime

Minister. I think the Premier has, and should have quite

properly, because of his office. But certainly I'm sure that I

and my Liberal colleagues would give any support at all that we

could to the Government of British Columbia to move for

renegotiation of the Columbia River treaty.

It seems to me, though, Mr. Chairman, that what we're

lacking on this side of the House, and what the government can

provide, is the sort of detailed engineering information that

would allow us to put our impressions much more quantitatively.

When I talk about $100 million, I'm talking largely on the

basis of reports that were prepared by the Americans in the

late 1950s which indicated the alternative cost to them of

providing thermal peaking power as opposed to what it would

cost them to install Hydro peaking power with upstream storage

in Canada. Those kinds of figures need to be updated because

the Americans have not followed through on the plan of

construction that they proposed at the time the Columbia River

treaty was originally negotiated. Certainly, that's going to

alter substantially the kinds of economic arguments that Canada

would need to put forward.

What we need to have, Mr. Chairman, in my view, is a detailed case presentation.

Sooner or later, this is going to be required. Why don't we do our hard study

now? Why don't we collect all the facts and figures and then, when those are

assembled, take to the Prime Minister and to his cabinet in Ottawa the kind

of compelling argument from British Columbia that just

cannot be refused?

You don't go down trying to wield political influence,

whether you're a Liberal or whether you're an office holder,

but you go down with a hard case in facts and figures where

anybody with common sense would have to look at it and say:

"This must be responded to." That's what we need to take down

to the Prime Minister, and I for one would be the first to want

to hop on an airplane with that kind of information to build

our case.

HON. MR. BARRETT: Mr. Member, we did take hard information

with us to Ottawa. We took information that you used publicly.

You've already come to the conclusion that it should be

renegotiated, without the kind of detail that you're now asking

for. You are aware of the information that is at hand that has

led you to this conclusion where you've even said — and I don't

want to quote you too extensively — that we lacked the "guts to

pursue." You've got a firm conviction on information that you

already have that there needs to be renegotiation, but you are

altering it today by saying: "Well, we need to put the facts

down." You already have knowledge....

Interjection.

HON. MR. BARRETT: Intercede? You mean you were interceding

without facts before, Mr. Member. Are you telling us that you

arrived at your decision...?

MR. D.A. ANDERSON: You have, and that's what was

requested.

HON. MR. BARRETT: Well now, there it is. You want the best

of all possible worlds. Your Prime Minister has refused to give

us any indication that he would reconsider opening that treaty.

He said "absolutely not" to me. The only avenue left was the

Canada-B.C. treaty agreement, the sub-treaty. There's very

little meat in there for us to have a go with Ottawa, and that

means us fighting all the way and not getting down to the nub

of the problem between us and the Americans. If the Prime

Minister of this country would give us one signal, one plan,

one message, that he was interested in any way in receiving a

proposal that he would carry forward to the Americans, we would

be happy to meet him. But he has not given us that indication

to this very moment.

MR. McGEER: This is just a little bit of the chicken and the

egg, but frankly I wouldn't go down to Ottawa to try and

prepare a case for a delicate international negotiation,

whether it involves natural

[ Page 682 ]

gas or whether it involves power benefits, without doing the

maximum research and preparation that a government can produce

for that kind of thing. This is the way Quebec and Ontario

always win their cases with Ottawa. They go down with greater

detail and they go down with the kind of hard preparation

that's never been the practice of British Columbia to

provide.

HON. MR. BARRETT: Ha! Syncrude.

MR. McGEER: I'm suggesting to the Premier that we change our

ways from political bombast to facts and figures, and that we

should right now have teams of people in Hydro preparing the

kinds of cases factually that can be promoted politically.

If we've been rebuffed by Ottawa, I quite accept what the Premier says. That

would be the first reaction of any Prime Minister of any political stripe: "Don't

give me that headache." Fine. You say: "Well, that's not good enough an

answer." Then you would go and prepare an even better case and go back

and try again. If that fails, you come and prepare a better one and go

back a third time, and a fourth time, and a fifth time, until you get

it done. But each time in between you don't lie down and whine. You

prepare a better case.

HON. MR. BARRETT: Mr. Chairman, I get the distinct

impression that the Member is bordering on being political.

Interjection.

HON. MR. BARRETT : Partisan. Okay, that's acceptable.

Mr. Member, don't tell me or this House that the federal

government acts on an adequate research base before they make

energy policy. Oh, how did Syncrude win the sellout?

AN HON. MEMBER: Why didn't we invest?

HON. MR. BARRETT: Well, did we have the opportunity under a

public corporation? The answer is no. I made a speech in

Montreal over a year and a half ago asking for public ownership

of all oil and gas in this country. Then we're given the

spectacle of the national Minister of Energy, Mines and

Resources (Hon. Mr. Macdonald) on television saying: "I'm

waiting for the phone to ring from the oil companies."

Interjection.

HON. MR. BARRETT: Oh, tch, tch, tch. Syncrude was a bigger sellout than

the Columbia River treaty. Have you got any research that you want me to take

back on that deal, Mr. Member?

MR. D.A. ANDERSON: Leave that to Alberta and Ontario.

HON. MR. BARRETT: Leave that to Alberta and Ontario. It

involves every single Canadian, just the way the Columbia River

treaty did.

Interjection.

HON. MR. BARRETT: What's that? We'll come out in a

commission and we'll tell you how much money we lost on the

deal.

Interjection.

HON. MR. BARRETT: You don't want to know that, eh? Oh, you

know, Mr. Member....

MR. D.A. ANDERSON: You've asked us to intervene but you

won't give us the facts.

HON. MR. BARRETT: List all the questions and I'll give you

all the answers. What do you need to know? I'll give you a copy

of the treaty. I'll tell you how much money we owe and how much

we lost. You know what they'll give you, Mr. Member, in

response. Oh, you used to be a federal MP. Look what they've

done to you already. They dumped you out here and left you in

this wasteland for the Liberal Party — and you want to go back

again? (Laughter.) You want to go back again and be rebuffed

the way you were the first time? You don't learn.

Now, look, we're prepared to have the federal government

renegotiate that treaty. We're prepared to have a go at it

again and again and again. But when the Prime Minister tells me

no, then I think he means no. If you get an indication that

he's changed his mind, you let me know.

MR. BENNETT: Mr. Chairman, earlier I was pursuing a point

which might have got a little lost. It was over whether this

province had the capability of deferring its financing issue

last fall. I asked the question, and I question it because

obviously the Premier has announced we will be doing a lot of

external financing for Crown corporations. It is important to

the people of British Columbia to know how the decisions are

made to go to market, the timing, when we go to market, who is

making those decisions, whether we have the capability to pick

our spots, whether we have the capability to defer issues in

the public market until we get a favourable rate.

The question I asked the Premier earlier was whether we had

that capability to defer the issue in the fall of 1974. I've

said that many, many bond issues were contemplated by both the

private and

[ Page 683 ]

public sectors. Not all of them were forced to go to the

market; many of them had the capability of deferring their

offerings. One example is the First National City Bank, which

is an institution that does a lot of financing but

traditionally, because of their formula, has been bang on in

predicting interest rates. There were many, many issues that

were deferred by those institutions in the private sector and

perhaps some in the public sector that had the opportunity, the

flexibility and the financial position to defer going to the

market at that time.

I think in the Premier's answer was the admission that

British Columbia indeed had the flexibility and was financially

capable of making the decision at another date. In view of the

fact that there was a considerable body of opinion of those who

had offers ready to go to the bond market, of financial

institutions that deal regularly in the bond market, that many

of these institutions both in the banking industry and in the

financial industry were publicly predicting a decline in

interest rates.

Knowing that the Finance department is growing — it has been

announced that they have a new adviser, Mr. Eliesen — knowing

that they had the public financing to provide the experts to

research such a decision, if the Minister of Finance was not

forced to go to the market, I think it is up to the Minister of

Finance to let us know on what research and on what study it

was indicated that we should go then.

If we have the ability to withhold such an offering, in

light of the fact that many institutions, such as First

National City Bank.... I could bring in numerous financial

bond house information magazines and letters and papers from

July, August and September of last year that were giving advice

for those areas. The advice was that those in both the public

and the private sector that could withhold their offerings do

so because in the money market at that time it was an

inappropriate time to go.

I want to know how these decisions are arrived at in British Columbia if we

had the capability and if we were in a position of not having to go, because

it's in our interests to know how these decisions are made. Right now it has

been indicated to this House that we are going to the market for a considerable

amount of money.

I think the history of this loan, this $100 million through The First Boston

Corp. clearly indicates to us, the people of B.C., that perhaps the Minister

of Finance, if he is not making the decision in isolation, was taking poor advice.

If he had the capability of deferring that decision for a more favourable market

all current advice at that time, or most current reliable advice, would indicate

that he do so. The fact that he didn't do so has cost millions of dollars, and

will cost millions of dollars through the 25-year period of this loan, to the

hydro users who in their rates will have to pay the cost of this extra interest

of 1.375 points between last September and this month.

I think it is important that British Columbians know how and on what

basis the government researches when we have the flexibility and

capability of deferring decisions. I don't want to think that British

Columbia is in the same position as some corporations. There are some

places that have no alternative — they are starved for cash and have to

go.

We have been able to, I believe, predict the amounts of cash flow

needed for these corporations in the past, and it was provided in

advance by issues. I know that this is the sound way to go. There is

some latitude, however, and when you have that flexibility, certainly

when you're fortunate enough to be in a position of marketing those

securities for a wealthy province like British Columbia on behalf of

someone like Hydro and get the best possible interest rate.

That money is expensive. That money is costing us dearly. We see it

now but there's been a lot of talk in this Legislature about hindsight.

That hindsight goes back to 1964, but I am talking about six

months.That isn't so much hindsight as being aware of the current and

being able to predict the short- and long-term market on financing.

I am not asking for hindsight

because we've been in a volatile market and there is a historical picture on

bond financing that can be used. There are analysts who advise clients, and

those analysts who advise clients who have that flexibility were advising them

in the fall of 1974 not to go to market. Even in many of the private sectors

— those places that aren't as fortunate as this province to have the flexibility

— many were forced to go to the market and some of them were recalled because

the market couldn't take their issue. But British Columbia and our Hydro in

this province, certainly by the Premier's own admission, did have the ability

to defer the decision.

Secondly, when we are dealing in the area of public finance and

public borrowing by the Minister of behalf of the corporation, I

believe that all loans and all borrowings should be dealt with in the

same manner.

Now when we had a prospectus filed when we dealt on our first loan through

The First Boston Corp. — among others, Salomon Brothers and other taking lead

for the underwriting — I believe that we should also have available to the House

and to the people of B.C. a copy of the prospectus on all other borrowings.

So far we have borrowings from an unnamed source on which we would like to

have the prospectus available to the people of the province with the details

of the borrowing — the name of the lender, the amount of the interest rate....

HON. MR. BARRETT: Any prospectus we issue is available.

[ Page 684 ]

MR. BENNETT: Is the lender's name on that prospectus? On the

details of any financial borrowing on behalf of the Province of

British Columbia or its Crown corporations, when you are

dealing with $100 million from an Arabian — or a mysterious

source....

Interjection.

HON. MR. BARRETT: You don't know what you're talking

about.

MR. BENNETT: There should be a detailed accounting to the

public similar to those borrowings that go on in a prospectus

that deals with the same as were handled by The First Boston

Corp.

Let me tell you that The First Boston Corp. handled the

second $100 million and that the Premier....

HON. MR. BARRETT: You're worse than I thought.

MR. BENNETT: Are you through? If the Premier will listen, he

doesn't realize that he has an obligation to tell the people of

the province who they're borrowing from and all of the detailed

financial information such as would be in the prospectus on the

first $100 million borrowing. This is the people of the

Province of British Columbia who are liable to pay back this

money, both in a guarantee and as the users of B.C. Hydro. It

is unusual for any government body not to disclose the source

of the lender and not to provide that information to the

House.

MR. PHILLIPS: Where is it? We want to know.

MR. BENNETT: Will the Premier provide that information to

this House? Will the Premier provide, as Minister of Finance

and fiscal agent, that information that would normally be found

if we were doing a normal public financing, a financing in

which all the details are available to the people of the

province? We're the borrowers, not the Premier. We're the

borrowers. He's taking the attitude that: "I know what's good

for you, and I'll tell you that it doesn't matter who you

borrow from. Trust me." That attitude isn't good enough.

You're dealing with the public of British Columbia. You're

borrowing on their behalf, and we should know from whom we are

borrowing and the details of all borrowing, similar to any such

other public offer, yet we haven't had that information made

available. We have no explanation, except a lot of shouting, as

to what basis the government went to the market last September

on behalf of Hydro.

The opposition is asked to predict the interest rates for the government. Presumably

you're unsure of how to achieve the best possible rates, but I think we need

accountability for the financial transactions that have happened and the reasons

so that we will be assured that we won't be taken on excessive interest when

this province doesn't have to go to the market — when we have the flexibility

not to have to go, we won't be taken again on excessive interest such as this

borrowing of last September.

HON. MR. BARRETT: Mr. Member, you're certainly entitled to

know who our advisers are. We have exactly the same advisers

the former government had.

Interjection.

HON. MR. BARRETT: Yes, you did. If you'd do a little

research...

MR. PHILLIPS: Do you advise them?

HON. MR. BARRETT: ...they're available publicly. He came

after that loan was negotiated. You don't even check those

facts. Mr. Member, for your information, just go to the library....

MR. PHILLIPS: What about Gaffney?

MR. CHAIRMAN: Order, please.

MRS. JORDAN: What about Peter?

HON. MR. BARRETT: Do you want information or do you want to

look like babbling idiots?

MR. CHAIRMAN: Order, please!

MR. PHILLIPS: You didn't have Gaffney.

MR. CHAIRMAN: Order, please! I would point out to the Hon.

Member for South Peace River (Mr. Phillips) standing order

17(2), which requires that no Member interrupt the person who

has the floor.

HON. MR. BARRETT: The Leader of the Opposition asked who the

advisers are in New York. We have the same advisers that the

former administration had, except for two minor changes — the

same group of advisers. We use the same bank that has been used

by your government before — and all previous governments in

British Columbia. That's a matter of record. That information

is available in the library — that's where I got if from

before, and that's what we have now — the same New York group.

If you don't agree with that, just check it out and do some

research. There are two changes made, but it's essentially the

same group advising us in New York that the Socred

administration had.

[ Page 685 ]

That's true, and there's nothing you can say to change that.

It's a matter of record and I'll give you the whole list: Kuhn

and Loeb, the whole works.

Interjection.

HON. MR. BARRETT: They're the same ones that your Dad used —

the same advisers.

Okay, No. 2. We had the flexibility and we took $100 million

in short term. The advice we had at that time from the group

was not to go at 11 per cent. We picked it up in short term; we

used our flexibility. We went at 10.25 the same time Ontario

went at 10.25, with the same advisers, essentially, as the

former government had.

We go when money's available and when they're not jammed up

in the market. The same people who spoke and met with your

father met and spoke with me in the same office. Do you want

the names? They're all available.

We did defer the $100 million, as I said, to wait for the

rate to go down to 10.25. December was a month when everybody

was advised not to go; we didn't go in December. Our own

advisory group that we inherited from the former administration

said not to go.

MR. BENNETT: Who mentioned December?

HON. MR. BARRETT: You mentioned December.

MR. BENNETT: September.

HON. MR. BARRETT: You mentioned December as well. So, Mr.

Member, there you are. The New Democratic Party government is

using essentially the same New York advisers used by the former

administration, with two minor changes.

MR. BENNETT: The Premier is confusing the underwriters as

advisers. These are the people who underwrite the loan, who get

a commission....

HON. MR. BARRETT: They're a management syndicate.

MR. BENNETT: Just a second. They take a commission for

providing the money — underwriting the money. But to make the

decision to deal with them at that particular time, the Premier

and Minister of Finance takes financial advice from within the

department in the province.

These people are people who collect a commission for the

underwriting. I am asking about the people who advised you to

go then from within your department — people who are closest to

your ear. I am not talking about the people who would love to

see you go.

HON. MR. BARRETT: There he is sitting right beside me. He's

served this province faithfully for many, many years.

MR. CHAIRMAN: Order.

MR. BENNETT: I'm wondering if they are because of the advice

given at this particular time. It's a time when many people who

are financing, either in the private or public sector — if they

have the capability — were advised not to go. This doesn't seem

to be in keeping with what would happen in an area that had

that flexibility. Yet I see that the province went on behalf of

Hydro. I can't believe that it is these same people making the

decision. I can't believe you can say that just because the

underwriters who collect a commission say it is time to go....

That's like a bank turning you down for more business. They

want all the business they can get. I'm talking about the

unusual circumstance of the province going on behalf of Hydro

at a time when both the private and public sectors, if they had

the flexibility not to go, were advised not to go. It seems

unusual to me that British Columbia would go on behalf of Hydro

at a time contradictory to a lot of the best advice that was

available, and palming it off on the fact that any large issue

or underwriting usually contains the names Salomon Bros. and

A.E. Ames and First Boston Corp. Those are underwriters. I'm

talking about the advice from inside your department that tells

you to go. You are the one who knows if you have the

flexibility. They only underwrite for you after you have gone

to the market.

HON. MR. BARRETT: Mr. Member, if you are in any way

attacking the Finance people whom I inherited from the former

administration, you should be ashamed of yourself. You should

be ashamed of yourself!

Interjections.

HON. MR. BARRETT: Mr. Chairman, I have the floor.

MR. CHAIRMAN: Order, please.

HON. MR. BARRETT: Mr. Chairman, I take the advice of the

management group that I inherited from the former

administration, the same Finance staff that the former

government had and the same Deputy Minister of Finance. I will

not stand for that kind of innuendo. Not a bit of it! Not a bit

of it! If you are suggesting, sir, in any way that my staff are

incompetent, then I say that you are a disgrace to this

House.

[ Page 686 ]

AN HON. MEMBER: He is ruining the office!

MR. CHAIRMAN: Order, please.

MR. BENNETT: It is hard, Mr. Chairman, to get an answer. We

fall back on the silly buffoonery of the Minister of Finance

every time he gets in trouble. In no way was I attacking people

who have served this province well. But this Minister of

Finance is accountable. You are the Finance Minister of the

province. Stop trying to duck behind your staff. You are the

one who makes the final decision to go to the market. You are

accountable. And you have wasted millions of dollars on behalf

of the people of this province.

HON. MR. BARRETT: Oh!

MR. BENNETT: What a coward to duck behind your Deputy! What

a coward!

HON. MR. BARRETT: Oh!

MR. CHAIRMAN: Order, please. I would ask the Hon. Leader of

the Opposition to withdraw the word "coward" as applied to

another Hon. Member.

MR. BENNETT: I will withdraw. But it is unusual to see

people set up another target for the blame when they are

accountable. When they are accountable!

HON. MR. BARRETT: Oh, oh!

MR. BENNETT: He's great for taking the credit for the

taxpayers donating $3 billion. He's great for taking credit for

that. But in no way will he ever be accountable. To suggest

that the responsibility is that of his staff because he can't

explain going for an extra 0.3 per cent...

HON. MR. BARRETT: Oh!

MR. BENNETT: ...who can't explain why this province is

saddled with a loan of $100 million when six months later it

could have saved 1.3 on a percentage and could have saved this

province millions of dollars.... It's shocking that the

Premier has to try and hide behind his staff.

HON. MR. BARRETT: The ultimate decision is mine. If you read what the

Leader of the Opposition said, he wanted to know who my advisers were. That's

what his question was: "Who are your advisers?" When I told him who my advisers

were, he decided to say: "You can't hide behind your advisers." That is exactly

what you did, Mr. Member. You said in this House that you read the Blues. You

don't even remember what you said, you are so wrong. You are

so mixed up, Mr. Member, that you don't even remember from one

minute to the next.

MR. PHILLIPS: You don't know a grant from a loan.

HON. MR. BARRETT: You said very clearly in this House that

you wanted to know who my advisers were. I told you who my

advisers were. Then you said that they are on every prospectus.

The management team is the one we inherited from the former

administration. Then you weren't satisfied with that and you

said: "Who are your advisers in the Finance department?" I told

you who my advisers were in the Finance department and you

weren't satisfied with that. I tell you this, Mr. Member, or

Mr. Boy Wonder, or whatever it is....

MR. CHAIRMAN: Order, please. It is proper to address a

Member by his highest title in the House. (Laughter.) I would

ask the Hon. Member to refer to him by his title.

HON. MR. BARRETT: Yes, Mr. Chairman. The Hon. Leader of the

Opposition, in a non-nepotistic approach, wanted to know who

the advisers were to this government. I gave a non-nepotistic

answer by saying that the advisers were in New York — the

management team we inherited from the former administration,

with two minor changes. Then he asked and I named the same

staff who advised in the previous administration. Then he got

up and said I was hiding behind my advisers when all he asked

for was the name of my adviser.

Now I'm telling you that with the best advice available I

made a decision, and the advice given to me at that time was to

go. You asked me who gave me the advice and I told you that.

But to give us a sham and a mock sense of semi-hysteria in

response is little becoming because you haven't done a bit of

research to find out who these people were. Then when I give

you the information you want, you're not satisfied by me giving

you that information.

MR. CHAIRMAN: The Member for North Vancouver-Capilano.

MR. GIBSON: I'll defer.

MR. BENNETT: Just to briefly end this exchange, I asked the

advice because I questioned the decision that was made. I can't

believe that this decision would be made. At that time, in

asking that, before I had a chance to respond, the Premier and

Minister of Finance comes out with this wild charge that the

staff was being attacked. No way.

The final decision is the Premier's. Who knows

[ Page 687 ]

where he gets all of his advice? Who knows if he's like some

Prime Ministers of Canada and looks in a crystal ball? I can't

believe that he got that advice from anybody who knew British

Columbia's position and the flexibility we had. I think the

Premier as Minister of Finance has to take the accountability

for making that decision; he can't hide behind anyone else. It

was his decision.

I believe the province will spend millions of dollars in

extra money for those who are Hydro users, for citizens of B.C., because of this load. It's obvious that the money market

has dropped. Anybody who can see the change in just six months

knows that we have paid too much and that we'll be paying too

much for 25 years. We'll take that story to the people of the

province.

HON. MR. BARRETT: To the official Leader of the Opposition,

let me tell you very clearly that I took the advice of staff I

inherited and the management group. If you're trying to tell

this House that that's not the advice they gave me, then I say,

sir, you are wrong. You are wrong. If I made the wrong

decision, I take the responsibility for that. But don't you

tell me that my staff are not giving me the best possible

advice they can give. That's it.

Interjection.

HON. MR. BARRETT: You left the impression that somehow I

acted against advice I got. That's what you're trying to leave

in this House. I'm entitled to make the choice ultimately on

the advice I get, but I don't want anyone in this House to

leave the opinion that the advice I got was wrong. I make that

decision.

I find it absolutely shocking to be faced with that kind of

attack from the Leader of the Opposition which is, in my

opinion, a smear on staff. I take the responsibility for making

the decisions, but don't you stand in this House, Mr. Member,

and tell me that I'm not following the advice I got. It's a

direct smear on staff and I won't stand for it.

MR. BENNETT: Don't hide behind your staff.

MR. GIBSON: Mr. Chairman, just a couple of brief questions

at this point.

I'm interested in this shadowy $200 million that we have a little difficulty in knowing exactly where

it came from.

MR. BENNETT: Shocking.

MR. GIBSON: Somebody over there said shame. I say it's a

shame that we don't know where it came from.

Interjection.

MR. GIBSON: There were some nice folks who lent British

Columbians about $100 a head. Why can't we know who they are,

Mr. Premier?

How was it arranged? Was the Deputy Minister of Finance

(Mr. Bupon) walking home one evening and somebody with a

burnous jumped out from behind a tree and said: "I've got some

money for you"? Who was it arranged through? Exactly what

commissions were paid to whom?

At the bottom of it all, why can't we know? How do we know

that this money hasn't been somehow laundered through Swiss

banks? How do we know that this is money that British

Columbians would be proud of the source thereof?

HON. P.F. YOUNG (Minister of Consumer Services): Are you an

expert on laundering money?

MR. GIBSON: That's why it seems to me we have to know. A

public loan is different than a private loan. A public loan is

a loan that each one of us in British Columbia owes to some

mysterious person or foreign power.

Now I know that the Premier has told us that we can't know

because that was part of the deal. But I say, why was that part

of the deal? Why was that deal so good that we had to accept a

condition which, I think, is improper in any public borrowing

authority?

HON. MR. BARRETT: ...acknowledge that the first one was

arranged through First Boston, our traditional bankers for over

80 years for the Province of British Columbia.

AN HON. MEMBER: Over 100 years.

HON. MR. BARRETT: First Boston has been handling our banking

all this time. They arranged the first one. The second one was

White Weld of New York.

MR. GIBSON: No other finder involved?

HON. MR. BARRETT: No other finder involved. I know that

someone has said publicly that he was a finder. That is not,

indeed, a fact.

MR. GIBSON: We still didn't get an explanation from the

Premier as to why this deal was so good that of the many

sources in the world where British Columbia might borrow money,

it had to be borrowed from someone who is mysterious, whose

identity could not be revealed. It raises questions. I ask the

Premier why he thought it necessary to go for this particular

deal and have those questions raised from an anonymous

lender.

[ Page 688 ]

HON. MR. BARRETT: The Boston corporation approached us. We

were satisfied with the intermediary, Boston in this case, who, as I

say, we have been dealing with for over 80 years through the province.

It is an Arab nation. They asked, for their own reasons, that they not

be identified and we are respecting those reasons. The rest of the deal

is known and has been known publicly since it was announced.

MR. CHAIRMAN: The Hon. Member for Oak Bay...oh, the Hon.

Member for Saanich and the Islands.

MR. CURTIS: I defer, Mr. Chairman, but I am glad I finally

attracted your attention.

MR. WALLACE: I've listened very carefully to the long

discussion about one particular topic this afternoon. Something

really amazes me when I read journals and newspapers. This is

not much help to debate because it's purely non-partisan, but

it seems to me that if there is one group of professionals in

our society who have great difficulty in making predictions,

it's the economists. You read 100 different economists and you

get about 10 different answers as to the economic viability of

our monetary system, or whether we're in a recession or a

depression, or whether we're pulling out of a recession, or

whether we were ever in one, et cetera.

It really amuses me that we spent a long time in this House

today debating whether or not somebody can predict what the

interest rate will be six months from now. I just wish I could

get somebody to tell me that, if it's such a simple matter,

because I'm sure each of us privately could probably do a lot

better with our investments than we are doing at the present

time.

Interjections.

MR. WALLACE: Anyway, I just make that observation, because

regardless of whether we've made good or bad decisions, it

would seem to me that it's certainly anything but the

clear-cut, black and white situation that's being thrown back

and forth across the floor.

However, as I've said in an earlier debate, I would hope the

Minister would expedite the inquiry into the Columbia River

treaty controversy for the simple reason that enormous sums of

money are involved, and the public of British Columbia are

entitled to know from an objective inquiry, a non-political

inquiry, what the facts are. I wonder if the Minister could at

least give the House some idea of when this inquiry will be

undertaken.

I'd like to turn away from some of the issues which have been touched on today

and ask the Minister on some other subjects which were raised in the throne speech,

and which intimately affect his department.

In particular I'd like to learn if the Minister can give the

House some more information about the new proposed financial

institution which he is very eager to set up in this province. We feel that any such institution

which will improve the amount of financial decision-making that

can be taken within our own province, particularly any decision

which will make more money available, particularly mortgage

money, is certainly very much to be desired in British Columbia

particularly because of our housing problems.

But one of the statements which was included in the throne

speech regarding the new financial institution gave us a little

concern. The Minister states that it would be used to process

certain government business and government bills. Although he's

putting forward the concept of such a financial institution to

help the little guy, we would like to know to what degree

various arms of government will be using this new financial

institution and, for example, how much of the business of some

of the Crown corporations or Dunhill of ICBC will be channeled

through the new financial institution. It seems to us that if

that's done to any great degree, the little guy will soon get

lost in the enormous financial institution which will develop,

and the basic purpose for which the institution is proposed

would suffer.

The other question we would like to ask is related to the Minister's

statements in public about the involvement of a credit union. We

certainly have no objection to credit unions being given an

encouragement to contribute more to the financial institutions in the

province. But if they're to be put in some preferred position along

with a government-sponsored body, we would like to ask if there is not

a serious conflict of interest to arise in that we have the credit

union existing on the one hand in the private sector competing with

other private enterprise, but at the same time being incorporated or

involved in the new institution and obtaining certain benefits in that

regard.

The Minister has also implied, I believe, that this would be

a non-profit institution. One wonders whether....

Interjection.

MR. WALLACE: Well, we're very happy to make the Minister

shake his head and deny that because we feel that, indeed, it

should be an efficiently run, profit-making institution in

competition with other banks and similar financial institutions

and that if in fact it is to operate on any system of

subsidies, the interest rate should be marginally lower than

offered by other banks so that we may hopefully create the

[ Page

689 ]

most strenuous competition possible.

We would also like to ask if we could be assured that this

new financial institution will provide a full and detailed

accounting of figures in a way that we can make ready

comparisons with the existing private enterprise institutions

with which this one would be competing.

We also hope — and this perhaps relates to some of the area

we've been in in debate earlier this afternoon — that if the

new institution could provide service in obtaining funds

outside of British Columbia, and if the fees earned could be

earned here rather than in some of the centres that have been

described this afternoon, we would like to know whether this is

one of the essential ingredients of the institution that the

Premier plans to set up.

There are so many questions about this new financial

institution that perhaps the Minister would prefer to wait

until the bill is introduced. But these are some of the

questions that people are asking. I think, since the government

is likely to be deeply involved by providing guarantees of one

kind or another, guarantees of the people's money, that we

should hopefully have all the information possible before we

are asked to support such legislation.

The Minister has also committed himself to an election

expenses Act, which presumably will involve some measure of

funding of elections by the government, whatever government is

in power, and that it will also involve possibly tax credit.

Certainly we feel, in the way the democratic process has

evolved and the way in which the elections have been fought in

the past, that the time is long overdue to implement some of

these proposals. I wonder if the Minister would care to

comment on the whole question of whether or not, in fact, this

government agrees in principle with the provision of funding

from the state and ceilings on spending, or whether the

essential improvement, and the only one we can expect, is some

method of disclosure. We would think, while disclosure is

vital, that we've moved far enough in this field, federally at

least, that the example has been set for this province. We

would hope that there would not only be limits on spending and

disclosure, but that there would be government funding as well

as tax credits.

Looking at part of the Minister's statement in the budget, I think that we

should just comment on the table on page 25 and ask the Minister to comment.

On page 25 we have a comparison of the new 1975-76 B.C. rates with the old rates

for Alberta. I just think it should be made clear that before the printing of

the budget Alberta lowered its corporate and personal income tax to a level

well below British Columbia. In other words, the personal income tax in Alberta

is now 26 per cent. This may seem a small point, but it ties in with the position

we take in this House that with the budget surplus which was described as being

available we could better have followed the example of Alberta by introducing

an income tax cut, which would more readily have put money back in people's

pockets, particularly the low-income earners, giving them some real weapon to

minimize or mitigate in some respects the effects of inflation. We feel that

a tax cut does stimulate the economy, and it certainly doesn't cost a nickel

to distribute this kind of benefit. You just stop taking it out of the taxpayers'

pockets in the first place.

We would also like — at the risk of being repetitious — to

talk just for a moment about the Minister of Finance's policy

regarding the aid to municipalities. We've had a great deal of

discussion about the revenue to be derived from the sale of

natural gas, and we don't have to go into all the details

again. But I do feel at this stage in the game, after the

Premier has had the opportunity to realize the very great

distress among the municipalities in attempting to budget, that

he might, even at this late date, give some basic minimum

commitment of revenue which he believes will be available and

which he would guarantee to be available. The figure of $20

million seems to have been a minimum figure that's been

mentioned in many of the reports.

I wonder if the First Ministers' conference in April is to

be on the same scope as the original conference which dealt in

such detail with the whole question of natural resources in

Ottawa a year ago. Perhaps the Minister would care to mention

to the House what the format for that meeting will be and

whether, in fact, as on that occasion it will be possible for

leaders of the opposition parties to be observers at that

conference.

I gather that the Minister of Finance feels he has a very

definite commitment from the federal government. Yet it's quite

clear also that if that commitment, in the view of this

Minister of Finance, is in anyway welched upon it could well be

the election issue for an election to be held in May. While it

certainly isn't this Minister's choice as to whether the

meeting should be open to observers, I think that since we are

all preaching open government these days and since it would

certainly help the people of the province to get the facts very

clear and straight in their own mind.... This is going to be

an extremely important conference when the provincial Finance

Ministers meet in Ottawa. Certainly, as far as we're concerned

in British Columbia, the outcome might be a heated election

based on that one issue. I think it would help if we could all

have the opportunity to get the facts and figures straight from

the word go.

The only other points I would make in general, Mr. Chairman,

in looking at this Minister's estimates — the Premier's office

and the Minister of Finance — there seem to be very substantial

percentage increases in such matters as travel and office

furniture and contingencies of one kind or another.

Incidentally,

[ Page 690 ]

talking about furniture, I'd certainly like to make the

position of the Conservative Party very plain. Nobody's gone

out of their way to do any lavish furnishing in my office. We

have an old patched-up carpet with a hole in the middle. I am

not complaining about that — we didn't have an office a few

years ago — but the fact seems to be widely understood in the

news media and across the province that the politicians are

really living it up in great style. I just want to put it on

the record that the Conservative leader, while not complaining,

would want to make it very clear that I have an old carpet with

a hole in the middle and very ordinary furniture.

I also have the privilege of approximately four pipes at my

left elbow which run from ceiling to floor....

AN HON. MEMBER: I thought you liked to pipe, Scotty.

MR. WALLACE: Oh, not that kind of pipe, Mr. Member. The kind

of pipe that helps me to monitor the bowel and bladder habits

of the people in the Department of Housing, as a matter of

fact.

Anyway, I think that's a small point, but the fact is that

when we look through the estimates, particularly in certain of

the departments, there are some very substantial increases in

some of these items and I wonder if the Minister could tell us

whether he really means to spend all that money on these

particular items I m