1979 Legislative Session: 1st Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 21, 1979

Afternoon Sitting

[ Page

279 ]

CONTENTS

Routine proceedings

Oral questions.

Nuclear power. Mr. Barrett –– 279

Ambulance services. Mr. Cocke –– 280

Sale of railcar plant equipment. Mr. Leggatt –– 281

Matter of Urgent Public Importance

Protection of fishing boundaries. Mr. Lea –– 281

Public Schools Amendment Act, 1979 (Bill 13). Committee stage.

section 1.

Mrs. Wallace –– 282

Mr. Cocke –– 283

Hon. Mr. McGeer –– 283

Mr. Skelly –– 284

Mr. Ritchie –– 284

Mrs. Wallace –– 284

Division –– 284

Report and third reading –– 285

British Columbia Hydro and Power Authority

(1964) Amendment Act, 1979 (Bill 11).

Second reading.

Hon. Mr. Wolfe –– 285

Mr. Skelly –– 286

Mr. Davis –– 288

Mr. King –– 291

Mr. Brummet –– 294

Mr. Leggatt –– 295

Mr. Barrett –– 296

Mr. Cocke –– 300

Hon. Mr. Hewitt –– 301

Presenting Reports

Ministry of Highways and Public Works. Hon. Mr. Fraser –– 304

Auditor-general audit report.

Mr. Speaker —304

THURSDAY, JUNE 21, 1979

The House met at 2 p.m.

Prayers.

MR. ROGERS: On the floor of the

House today we have a special guest, a parliamentarian from the state

of South Australia who is on a round-the-world tour. He happened to be

in Seattle yesterday and took the Marguerite

up today just to see this legislative session, and is going back at 4

o'clock. I know the members will want to make especially welcome Mr.

Graham Gunn from South Australia.

MR. BARBER: Mr.

Speaker, I should first of all, on behalf of my colleague for Victoria

(Mr. Hanson), like to introduce and welcome to the House today Mr. and

Mrs. Fred Baturin. I would like also, if I may, to introduce a couple

of people whom I had the privilege of meeting in Montreal in March of

this year when I was back for the Vanier Award ceremony. These are two

people very active with the West Island Jaycees in the city of

Montreal, and they have since become good friends of mine. They are

visiting on the west coast. Their names are Norm and Pat Goudet, and I

ask the House to make them especially welcome.

HON. MR. McGEER:

Mr. Speaker, in your gallery today we have some visitors from the

University of British Columbia, with Dr. Hindmarch, five lovely young

ladies and a gentleman. Unfortunately for you, they are in your gallery

and out of your sight: Dianne Abbott, Colleen Kirk, Yvonne Magnusson,

Barbara Panton and Brenda Luck, along with David Hindmarch. They are

doing a study this summer on physical education in our post-secondary

schools, and will be tendering a report at the end of the summer.

HON. MR. NIELSEN:

Mr. Speaker, we have some guests visiting the House today from Richmond

and Manitoba. I would like to introduce a very dedicated Richmond

citizen, Mrs. Helen Mytko, and her children Karen, Kevin and Terry, and

Mrs. Mytko's aunt from Manitoba, Mrs. Isobel Nackoney, and her grandson

David. I would like to welcome them.

HON. MR. WILLIAMS:

Mr. Speaker, I would ask you and the members to welcome two visitors

from Shropshire, hard by the Welsh border, who are visiting our

province. They are Phillipa Webb and Sion Kealy from Church Stretton.

These two charming young ladies are attending the University of Ottawa.

They are visiting British Columbia to make up their own minds as to why

the west is reputed to be better than the east in this nation of ours.

After

a few days in Victoria they're going to Long Beach, and then they hope

to reach the Yukon before they return to the east. In the course of

their visit here they are meeting with Mr. Jim Hume of the press

gallery and other oddities in our province. Perhaps the House will

welcome them and Mr. Roy Temple, who is escorting them today.

MR. RITCHIE: I have someone in the House today whom I'm very proud

of. Mr. Speaker, I'd like to welcome to this House one of my nephews, Jim

Ritchie, and his friend Elaine.

Oral Questions

NUCLEAR POWER

MR. BARRETT:

Mr. Speaker, I'd like to address my question to the Minister of

Education, Science and Technology. Could he tell me whether or not he

agrees with the statement by the head of B.C. Hydro that nuclear power

is both desirable and inevitable for British Columbia?

HON. MR. McGEER:

Mr. Speaker, the Leader of the Opposition woke me out of a hibernation

from the time the session started. With respect to policies on nuclear

power for the province of British Columbia, they've been expressed by

the Premier and I would refer the Leader of the Opposition to the

Premier.

MR. BARRETT: And supplementary, is it the

opinion of the minister that nuclear power is necessary and desirable

for British Columbia — as Minister of Science and Technology and out of

hibernation?

HON. MR. McGEER: I've already explained that the Premier will announce government policies with respect to nuclear power for British Columbia.

MR. BARRETT:

I have a further supplementary, for the member of the cabinet who's on

the board, the Minister of Energy, Mines and Petroleum Resources,

Agriculture, et cetera, et cetera. I would ask that minister if Mr.

Bonner has been authorized by the board of directors of B.C. Hydro to

state the position that B.C. Hydro would be in favour of nuclear power

being developed in British Columbia. As a member of the board of

directors of B.C. Hydro, can you say if that is the position of the

board of directors?

HON. MR. HEWITT: The decision as to whether nuclear power ever comes to British Columbia will be the decision of government.

MR. BARRETT: On a supplementary. Is the minister saying, then, that all hydro policies on future developments will be made by government?

Interjection.

HON. MR. HEWITT:

I was waiting for my colleague on my right to give me an expression

that was suitable for the Leader of the Opposition, but I didn't quite

hear him; besides, that is unparliamentary.

The Leader of

the Opposition is well aware of the concern this government has — and I

guess any government would have — in regard to power projects in the

province. B.C. Hydro, when they took at future power requirements for

this province to meet the demand of industry, trade, commerce and

residences, realize certain procedures are to be followed. Statements

being made don't necessarily bind this government.

MR. BARRETT: My question to the minister was: will all decisions on future power developments be made by the government?

[ Page 280 ]

Interjection.

MR. BARRETT: In British Columbia, by B.C. Hydro.

HON. MR. HEWITT: Yes, I guess, Mr. Speaker, the government determines government policy. That should be a sufficient answer.

MR. BARRETT:

Mr. Speaker, I'm trying to find out who determines B.C. Hydro policy. I

know who determines government policy. Would the minister inform me to

who determines the ultimate decision-making process and who is

responsible for the decision as to whether or not nuclear power or any

other power source will be developed by B.C. Hydro in British Columbia?

HON. MR. HEWITT:

Yes, Mr. Speaker, B.C. Hydro, as the Leader of the Opposition is well

aware, is a government Crown corporation, and no development would be

contrary to stated government policy. He is also aware that any

determinations in regard to B.C. Hydro power projects have to clear

various hearings, regulations, et cetera, before they can proceed.

MR. BARRETT:

On a further supplementary question. Mr. Speaker, I am thus able to

read into the minister's convoluted answer that, yes, the government is

responsible for saying yes or no to specific hydro projects. Is that

correct?

Having assumed it is correct and that the

government is responsible, would the minister...? Is the government

responsible, ultimately, to say yes or no to a specific Hydro project'?

AN HON. MEMBER: We're the shareholders, obviously.

MR. BARRETT:

Yes. Therefore I would like to ask the minister if he will be asking

for the resignation of Robert Bonner for continuing to espouse the

development of nuclear power in the province of British Columbia. Who

runs the show here?

Interjections.

MR. SPEAKER: Order, please. The question "will he?" is out of order. The question "has he?" is in order.

MR. BARRETT: Has he?

HON. MR. HEWITT:

First of all, the government sets the policy; B.C. Hydro is a Crown

corporation. B.C. Hydro cannot proceed on any avenue which is contrary

to government policy — nod your head, Mr. Lea of the opposition, if you

agree with that response. He's not sure; he scratches his ear. In

regard to Robert Bonner's statements, they do not commit this

government, and the Leader of the Opposition knows that. You asked if I

have asked for Robert Bonner's resignation. The answer is no.

MR. BARRETT: Has the question whether to go ahead with nuclear power ever been discussed at a B.C. Hydro board of directors meeting?

I have not an answer whether it has been discussed at the board of

directors, would the minister inform me whether he question has been

discussed at cabinet level?

MR. SPEAKER: That's not in order.

MR. BARRETT: Has it been discussed? It's not a question of policy. I just want to know what's on the agenda.

MR. SPEAKER:

Hon. member, the question is not in order because matters which pertain

to cabinet confidentiality must not be asked during question period. So

that the Leader of the Opposition understands, perhaps I should refer

him to

section 171(g)(g).

MR. BARRETT: Thank you, Mr. Speaker.

final question to the minister on the B.C. Hydro board of directors.

Would he inform this House what his position is on the question of

nuclear power for British Columbia?

AN HON. MEMBER: Order! What's that got to do with his ministerial responsibilities?

MR. BARRETT: What is his position? It's not a question of government policy. What is your position on nuclear power for British Columbia?

SOME HON. MEMBERS: Read the throne speech.

MR. SPEAKER: It's a question that the minister has discretion whether he wishes to answer.

HON. MR. HEWITT:

As a member of cabinet I want to indicate to the Leader of the

Opposition that statements are made which reflect on cabinet. Personal

opinions, in my opinion, are not necessary to be expressed in this

House. I ask him if he has ever read the throne speech; that is a

statement of government.

MR. BARRETT: Thank you, Mr. Minister. You're in favour of nuclear power.

AMBULANCE SERVICES

MR. COCKE: I got so entranced with the minister's answers, Mr. Speaker, that I forgot that I had a question to ask the Minister of Health.

Interjection.

MR. COCKE: That's probably more than I could expect from this minister. I agree with you, Madam Member.

The

ambulance service is a growing service which was only put in place a

few years ago. In Vancouver, for example, there are 249 ambulance crews

— that is 249 people for the whole Vancouver regional district. In the

city of Vancouver alone there are 804 firefighters but there are many

more ambulance calls than there are fire calls.

Will the

minister indicate to us whether he is going to correct the shortage of

ambulance personnel in this province which, incidentally, now is 200

personnel short?

[ Page 281 ]

MR. SPEAKER: If the question were couched in the language of "what has the minister done?" then it would be in order.

HON. MR. McCLELLAND:

Mr. Speaker, I would hope that the member would speed up the

proceedings of this House so that we could get to my estimates, because

they include a fairly substantial increase for the Emergency Health

Services Commission. Once we do that, then we'll be able to continue

the business of the growing ambulance service in the province.

MR. COCKE:

I have had the distinct privilege of reading his estimates, and I see a

5 percent increase which doesn't increase the number at all, in my

view. Has the minister done anything in terms of his discussions with

the Treasury Board or anyone else to increase the number of ambulance

crews?

HON. MR. McCLELLAND: Mr. Speaker, the answer is yes.

SALE OF RAILCAR PLANT EQUIPMENT

MR. LEGGATT:

My question is directed to the Minister of Economic Development and I

think I gave him some notice of it. It concerns the sale of surplus

equipment from the Squamish railcar plant of B.C. Rail. Could the

minister advise whether the equipment that was declared surplus in the

tender of May 15 — when it closed — was sold to any American purchasers?

HON. MR. PHILLIPS:

Mr. Speaker, in an endeavour to run the British Columbia Railway on an

economical basis, the tender went to the highest bidder, which was an

American firm.

SOME HON. MEMBERS: Oh, oh!

HON. MR. PHILLIPS: Oh, you want to give the taxpayers' money away, do you?

Interjection.

HON. MR. PHILLIPS: How much money did they lose the last year you were president?

MR. SPEAKER: Order, please, hon. members. We are trying to protect the rights of the member for Coquitlam-Moody. Please proceed.

MR. LEGGATT: Thank you, Mr. Speaker.

Given

the fact that this equipment went to an American firm, and given that

the minister knows very well that there are a number of small B.C.

firms which were quite desperate to keep that equipment in the province

of British Columbia for specialty manufacturing, has the minister

considered putting on a kind of special reserve in cases like this?

Since the tender said the highest bid might not necessarily be

accepted, has the minister considered giving B.C. firms a preference in

this kind of bidding'?

HON. MR. PHILLIPS: Mr.

Speaker, as most people understand, while we had a socialist government

in the province of British Columbia inflation escalated in this

province higher than in any other province in Canada, and higher than

the national average. We were faced, Mr. Speaker, with that problem

when we started cleaning up the mess left behind by that bungling

government over there, and we almost immediately instigated a policy —

through the Ministry of Finance — to change the preference for bids

from British Columbia firms from 5 percent to 10 percent to try and

compensate for the inflation that had been created by the socialists

while they were government.

However, in answer to your

question, Mr. Member, we put this out to bid in three categories. We

put it out as a complete package; we put it out in six categories,

grouping together certain kinds of equipment; and we put it out on an

individual basis. In assessing all of the bids that came in, it worked

out that the American bid was highest by $189,000. Being very concerned

about the economical operation of that railway, which lost $23 million

while the socialists were in charge of it — of course, as you know, Mr.

Speaker, last year it made some $6 million being run on an economic

basis — and having due regard for the independent board of directors,

which is made up of businessmen who have put in many long hours and got

the railway operating on an efficient basis, the management took this

problem to the independent board of directors and a decision was made

on that basis.

MR. LEGGATT: Mr. Speaker, on a point

of order, I appeal to you to try to keep the minister under control.

There should be, surely, some reasonable time limit given, and no

political speeches given in regard to reasonable questions.

MR. SPEAKER:

On that point of order — by the way, we will hold the clock for a

moment, until I give an explanation — whenever a question is asked, and

it is an open-ended question couched in language such as, "Has the

minister considered...?" that leaves the Chair nearly powerless to

control the scope of the question, although I have, on numerous

occasions, warned members giving answers that the answers should not be

beyond the scope of the question. Let us continue with question period.

HON. MR. PHILLIPS:

On a point of order, Mr. Speaker, I just wanted to make sure that the

House saw the full circle — the full answer. It was in the interests of

good government that I wanted to see that they had understood the full

circumstance.

MR. SPEAKER: Question period has concluded.

MR. LEA: I'd like to ask leave to move adjournment of the House for the purpose of discussing a definite matter of public importance.

MR. SPEAKER: Please state the matter briefly.

MR. LEA:

Mr. Speaker, the matter is the urgency revealed in a telegram received

from the Cooperative Fishermen's Guild, indicating that the Fisheries

and B line, which is the international boundary between the Alaska

panhandle and British Columbia. This means that literally thousands of

pounds of fish may be lost to

[ Page 282 ]

British

Columbia fisherman from our own waters due to the dereliction of the

federal government in enforcing existing boundaries to protect the

interests of British Columbia. This disturbing situation calls for

immediate emergency discussions by the government of this province with

federal Fisheries department to enforce the international boundary by

preventing American boats from fishing in British Columbia waters.

have checked with the minister's office in Ottawa, and I've had two

confirming phone calls that, indeed, the policy of the federal

government is that American fish boats will be allowed to fish in

Canadian waters off British Columbia and that the Fisheries department

has been ordered not to do a thing about it under their agreement. I

believe that this motion is in order.

MR. SPEAKER: It

remains the responsibility of the Chair to determine several facets of

urgency. In order to give it proper consideration, I trust it will meet

with the acceptance of the House if I reserve decision for a few

moments until it can be determined without prejudice to the member's

position.

Orders of the Day

HON. MR. GARDOM: With leave, I move we proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Committee on Bill 13, Mr. Speaker.

PUBLIC SCHOOLS AMENDMENT ACT, 1979

The House in committee on Bill 13; Mr. Davidson in the chair.

MR. CHAIRMAN: The member for Cowichan-Malahat (Mrs. Wallace) last evening was about to move an amendment, I believe, when we adjourned.

MRS. WALLACE:

As requested by the House Leader (Hon. Mr. Gardom), I forwarded to the

Clerk copies of two amendments which I had. Unfortunately they have

been lumped together in Orders of the Day .

While they amend the same section,

section 1, they deal with separate

topics. I understand that the procedure should be that I now move just

one part of those and forward a copy to the Clerk.

The

amendment I propose to move has to do with a situation that has

developed since the agricultural land reserve was established. That

land reserve has not been made a secure thing. There have been many,

many areas of property removed from that agricultural land reserve,

with resultant windfall profits to the people who were the owners of

that property.

During the many, many days the Select

Standing Committee on Agriculture sat during the last session, we heard

many briefs and we had many discussions. The member for Delta (Mr.

Davidson) will recall those discussions. I recall the member for Delta

commenting that one of the problems was the ability to make windfall

profits, that that was putting a pressure on that agricultural land,

and I certainly agree with that.

This tax concession is

simply going to encourage that particular aspect of developers holding

land and trying to get it out of the agricultural land reserve for

purposes other than agriculture, where there is a much greater monetary

value for that land. Because of that, I believe that this act provides

an ideal opportunity to establish some deterrent. It is with that in

mind that I move the second part of the amendment which is on the order

paper — it is to be added as subsection (5) to

section 1: "An applicant

who is successful in having land removed from the agricultural land

reserve" — that is, an applicant — "shall pay to the Crown an amount

equal to the benefit accrued under this Act by either the applicant or

the owner for a period not in excess of ten years immediately prior to

the removal of such land from the agricultural land reserve."

MR. CHAIRMAN: Hon. member, your amendment is out of order under standing order 67.

MRS. WALLACE: On what grounds is that, Mr. Chairman?

MR. CHAIRMAN: It imposes an impost.

MRS. WALLACE: No, it doesn't impose an impost.

MR. CHAIRMAN: There is only one member standing; please wait until you're recognized.

MR. NICOLSON:

On a point of order, had the motion been moved in its entirety as it

sits on the order paper, it would have perhaps imposed an impost. But

the member has submitted a motion which only contains, I believe, the

second paragraph, which says that the applicant shall pay to the Crown;

that is not an impost against the Crown.

MR. CHAIRMAN:

That is in fact an impost. It's not a question of whether it is against

the Crown. It is an impost and that makes the amendment out of order.

If you read standing order 67, it says: "It shall not be lawful for the

House to adopt or pass any vote, resolution, address or bill for the

appropriation of any part of the public revenue, or of any tax or

impost...."

MR. NICOLSON: Appropriation of revenue or appropriation of tax or appropriation of impost....

MR. CHAIRMAN: It's a separate part of the section, hon. member.

MR. NICOLSON: Well, Mr. Chairman, I would hope that you would reserve your decision.

MR. CHAIRMAN: The option of the member is to challenge the Chair.

MR. NICOLSON: Well, if we challenge the Chair, then we'd have a new rule in the House, and I'd prefer not to do that.

MR. CHAIRMAN: This is not a change of the rules of the House. If you wish to challenge the Chair, that is fine;

[ Page 283 ]

otherwise the ruling of the Chair is that this particular amendment is out of order.

MRS. WALLACE:

I regret your decision, Mr. Chairman. In connection with

section 11

think the government is remiss in leaving the door open to this kind of

handout to developers. They will now be able to afford to hold land for

longer periods of time and continue their attempt to put pressure on

the agricultural land reserve to have that land removed. There are a

great many people in this province who are more concerned with their

own profit than they are concerned with the conservation of

agricultural land. I'm concerned that this act simply makes it much

easier for them.

We're talking about a fair sum of money

here; we're talking about cutting in half the school taxes, which can

range.... My tax notice for my area is something like 92-plus mills.

We're talking about almost 10 cents on the dollar. If you have a

$100,000 estate — and it doesn't take much land to come up with that —

you're talking about a fair handout to developers. I'm concerned, Mr.

Chairman, that this bill makes no attempt to correct that, and I'm

shocked that the government benches would not.... If the amendment is

out of order, I urge the government to include this amendment from the

government side.

While it may well be out of order, I still

intend to move the second part of the amendment which is on the order

paper. The minister has said it is nothing; that it's not going to

amount to peanuts; that it isn't going to affect the assessment rolls;

that it isn't going to affect income. If it isn't going to cost the

school districts anything, and if it isn't going to reduce the income

of regional hospital districts, then certainly it isn't going to be an

expense for this government to reimburse those school districts and

hospital districts for the reduction in their income. The minister

stood in this House and said that it isn't going to affect those school

districts.

I move this amendment, even though it talks about

revenue. The minister has said that it isn’t going to be any amount of

money at all, it isn't going to amount to any change to school

districts or to regional districts. If what he says is true, it isn't

going to affect the dollars out of the Crown either. I move, Mr.

Chairman, that any loss of revenue to school districts and our regional

hospital districts, by reason of this section, shall be refunded to

those bodies from the general revenue of the province.

MR. CHAIRMAN:

Hon. member, I'm sure you're aware that the amendment is out of order

because it violates standing order 66, in refunding general revenue of

the province to those bodies. It leaves it wide open; that's an impost

on the Crown.

MRS. WALLACE: Mr. Chairman, I was sure that would be your ruling. I had hoped it would be otherwise on the first amendment.

The

minister says there isn't going to be any cost. That's what he told us

yesterday — that it wasn't going to reduce the income of those school

districts. If that is the case, then there's going to be no dollars

involved in this one.

MR. CHAIRMAN: Hon. member, the

minister can accept it or it can come in by message, but it cannot be

accepted by the Chair in the order it was presented.

MRS. WALLACE:

Mr. Chairman, I have attempted to have three amendments added to

section 1 which would have indicated to our party and to the public of

the province that this government's intentions were not just simply to

help the developers and the foreign owners. Their intentions are to

help anyone, really, except the farmers. We have no choice except to

vote against this section.

MR. COCKE: The minister

said yesterday that he wanted a little time to think things over. Now

that he's got some amendments — he had one yesterday on

foreign-controlled land and now he has another one today — it strikes

me that the minister could stand up now and say: "Yes, we'll put these

amendments forward on behalf of the government." The minister can do

that, while you rule the opposition can't. Let the minister stand up

and indicate to us that he's prepared to amend the

section himself,

because it was very poorly thought out in the first place, Mr. Chairman.

HON. MR. McGEER:

On the contrary, the bill before this House was very carefully thought

out, and while the member for Cowichan-Malahat has made some

interesting points and while I've certainly given an undertaking to

study those, it was that very member, Mr. Chairman, before she began

introducing all of these complicated amendments, who stood before the

House and said it was going to be an administrative nightmare. Now you

can't have it both ways. What you're attempting to do with all of these

amendments is to introduce something that would be an administrative

nightmare.

One thing you have to do about taxes,

notwithstanding.... I didn't want to interfere with the debate

yesterday. It was so entertaining. It would have spoiled it to

introduce some logic. The member for Alberni (Mr. Skelly) yesterday was

pleading with us for more time; he wanted information before he was

able to undertake any kind of vote or consideration. When we said we

would answer any specific questions that he had, it turned out that he

didn't have any specific questions, but he felt that if we gave him

reams of information he might be able to think of some. Yet he was

quite prepared to vote for an amendment introduced by the member for

Cowichan-Malahat (Mrs. Wallace) brought forward so hastily it wasn't

even signed before it went up to the Chair; no time to put it on the

order paper, so he didn't need to think over that. But when it came

down, something that had been carefully prepared where we did have

documented answers to any specific questions that he would have, then

he wanted more time because he couldn't think of any questions to ask

on the basis of all the information he was being given.

Mr.

Chairman, we're not going to rush in like fools, the way the NDP did

when they were in power. If you've got suggestions here — and you've

made them — we'll undertake to study them and consider them carefully.

But we're not going to walk into an administrative nightmare. We're not

going to follow Brave Dave into the tax jungles; they're just a little

bit too dangerous. He did that when he was in government, but he didn't

learn his lesson then. He urges all of you to follow when you're in

opposition, to do the same sort of things with your amendments, and I

would just advise you, as a party, to give careful consideration to the

things you bring forward, because taxation particularly has all kinds

of complicated ramifications. The opposition

[ Page 284 ]

has

got to understand that there are administrative problems with any tax.

The tax jungles are dangerous terrain, because it's quite easy to

introduce tit-for-tat, and you've got to be pretty careful what you do.

But

we'll give consideration to these proposals, all of them, and perhaps

some of them, next year at some future time, might be enacted into

legislation. I'm well aware that one of the amendments was quite close

to one of the recommendations made by the agricultural committee when

it toured British Columbia. So the answer is yes, we'll think about

them. But it really wouldn't be wise, quite seriously, to rush in and

accept some of these so quickly.

MR. COCKE: I just

love to hear the minister standing up and proclaiming his virtue. The

fact of the matter is that we see the midnight oil being burnt during a

session in the Cedar Room and the Maple Room where the cabinet

committee on legislation are working up to the last minute on

everything. Talk about a smokescreen, Mr. Chairman! I can't believe it.

They don't prepare their legislation before we get in here, and that's

the unsatisfactory part of the whole situation.

MR. SKELLY:

Mr. Chairman, I'm surprised at the minister for criticizing me for

asking for detailed information about a statute. Surely, if we are to

have any kind of cooperation at all in this House on the basis of

informed legislators, one of the minimal things that the government can

do — and it is done in many other jurisdictions — is to present

information in the form of explanatory notes about legislation in much

more detail than we have them presented to us here. It simply doesn't

make sense for legislators on either side of the House to pass

legislation without that information in front of them. And I mean in

front of them, so that they can check the details, school board by

school board, throughout the province.

Now the minister

expects me to take at face value statements he makes across the House

about what effect it's going to have on certain specific school

districts. Well, I've never been able to take that minister's

statements at face value, Mr. Chairman. That's why we would like to

have the information in front of us, so that we can check it with the

school districts and with the local governments involved.

Now

the first amendment, which the member for Cowichan-Malahat (Mrs.

Wallace) mentioned, obliges a person who takes land out of the

agricultural land reserve on his own initiative to pay back-taxes at

the full rate. That is not an unusual procedure. I believe that under

section 328 (

a) of the Municipal Act arrangements are made between

municipalities and the owners of golf courses and cemeteries for a tax

or assessment exemption; and if that land is taken out of that use,

then they must pay the back-taxes on it.

So I don't think

there's any administrative nightmare involved, Mr. Chairman. It's

something that could easily be developed by the minister, given a few

days to read the statutes and to consult his staff. Perhaps the

minister would agree to take this statute back to his staff, take a

look at it, and bring it back to the House at a later date with full

information, at which time I'm sure he would find this opposition most

cooperative.

MR. RITCHIE: First of all, Mr. Speaker,

I would like to say that there could be some merit to the proposed

amendments, but I would like to tell the House that from my experience,

before we start adding any more problems to the agricultural land

reserve, and before we start applying any more legislation such as was

applied whenever the Act came in in the first place, what is required

first is a major fine-tuning job on the agricultural land reserve. I

would say that before we start adding any more costly exercises we

should make sure that we are removing land presently in the reserve

that doesn't really belong there.

So I would have to be

opposed to these proposed amendments only because we would be trying to

correct something that it is really not possible to correct in this

way. It's something that is only going to add extra cost and confusion

to the whole situation we have concerning our agricultural lands.

MRS. WALLACE:

Mr. Chairman, the minister in his response spoke about the bureaucratic

problems that are involved with this act. Let me tell you that the

amendments which I have moved would not have the effect of making that

a greater bureaucratic nightmare. The problem, Mr. Minister, is in the

classification of farmland. You and your government have not come up

with an answer to that situation — that's where the bureaucratic

nightmare is. When you add trying to calculate something that you have

no rules for, and then relating it to a portion of a farm, some of

which is in the ALR and some of which is not, then you have a

bureaucratic nightmare. I doubt you're going to solve it by 1980, or

even

Section 1 approved on the following division:

YEAS — 28

Waterland

Nielsen

Chabot

McClelland

Williams

Hewitt

Mair

Vander Zalm

Heinrich

Ritchie

Strachan

Brummet

Ree

Segarty

Curtis

McCarthy

Phillips

Gardom

Wolfe

McGeer

Fraser

Jordan

Kempf

Davis

Davidson

Smith

Mussallem

Hyndman

NAYS — 19

Barrett

Stupich

Dailly

Cocke

Lea

Nicolson

Hall

Lorimer

Leggatt

Passarell

Mitchell

Hanson

Gabelmann

Wallace

Brown

Lockstead

Skelly

Sanford

King

MR. COCKE: On a point of

order, when the names were read one of the members was not in his seat.

It was very difficult to check the name Waterland. I looked over and

there was no Waterland sitting in his seat.

MR. CHAIRMAN:

The point of order is well taken, and I would ask that all members

assist the Chair and the Clerks, when they are asked to return to their

seats when divisions are called, by remaining there until such time as

not only the division but also the reading of the list has taken place.

[ Page 285 ]

Sections 2 to 4 inclusive approved.

Title approved.

HON. MR. McGEER: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Division ordered to be recorded in the Journals of the House.

Bill 13, Public Schools Amendment Act, 1979, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Second reading of Bill 11. Mr. Speaker.

BRITISH COLUMBIA HYDRO

AND POWER AUTHORITY

(1964) AMENDMENT ACT, 1979

HON. MR. WOLFE: Mr. Speaker, as

the members are well aware, the sole purpose of this bill is to

increase the borrowing authorization of the British Columbia Hydro and

Power Authority from $4.9 billion to $5.65 billion, an increase of $750

million. This will allow the Authority to borrow the necessary funds to

meet its requirements for capital construction costs in the coming year.

The major projects involved, and the estimated costs for 1979-80 year are:

First

of all, the Revelstoke project, to cover continuing engineering, design

and construction of a dam and generating station on the Columbia River,

for service by June 1984. The amount budgeted for this project in

1979-80 is $167 million.

Secondly, Mr. Speaker, the Seven Mile project, to cover continuing

engineering, design and construction of a dam and generating station on

the Pend-d'Oreille River, with related substation and transmission

facilities, for service by October 1980. On this project $115 million

is expected to be spent in the year 1979-80 on this project.

Thirdly, the Peace Canyon project: to continue engineering,

design and construction of a dam and generating station on the Peace

River, with related substation and transmission facilities, for service

by September 1980. The work is budgeted for $114 million in 1979-80.

Fourthly,

the G.M. Shrum Generating Station: to complete the installation of the

tenth unit at the G.M. Shrum Generating Station, for service by

February 1980. The final unit is estimated to cost $15 million in

1979-80.

Fifthly, the Peace Site C development studies: to

continue environmental studies and engineering in preparation for a

water licence; to maintain a possible 1986 in-service date for a

proposed hydro generating station on the Peace River. On this project

$13 million is expected to be spent in 1979-80.

Sixthly, for

the Hat Creek developmental studies: to continue line feasibility

studies and powerhouse optimization studies for a thermal generating

plant, as a viable option for 1989, at a cost of $8 million for 1979-80.

Seventhly,

for the Vancouver Island 500 kilovolt transmission system: to continue

construction of a 500 kilovolt transmission system, including

substation and microwave facilities for service in 1981. This project

is budgeted at $25 million for the 1979-80 fiscal year.

For

the mainland–Vancouver Island 500 kilovolt transmission interconnection

to continue engineering, route survey, right-of-way acquisition and

clearing for a 500 kilovolt transmission interconnection to Vancouver

Island for service by 1983, the cost will be $20 million by 1983.

Mr.

Speaker, $20 million is to be spent on this project in the 1979-80

fiscal year. As I conclude these remarks I will be sending across to

the member for Alberni a complete rundown on this detail.

Next

under the headline "Other Generation," including other major project

developmental studies, to continue environmental engineering and

developmental studies to determine feasibility of various proposed

generating projects, and also provide for various additions and

improvements on other generating facilities, the budget is $26 million

for 1979-80.

For other transmission work, for construction

on other transmission lines, to provide facilities to transmit energy

at high voltage from generating stations to transformation stations,

$43 million has been budgeted for 1979-80.

For other

transformation — that is, construction of other transformation plants

and substations needed for switching, termination and the protection

and control of electrical energy during the transformation to

distribution voltage — the budget is $52 million for the year 1979-80.

Under

the heading "Distribution Systems," improvements and extensions to the

electric distribution system which is below 60 kilovolts to serve

additional customers, the budget is $87 million in the year 1979-80.

For

other electric, which includes service buildings, control centres,

research laboratory, vehicles, tools and equipment, the budget is $62

million for the year 1979-80.

Under the heading "Gas

Service," you have distribution systems. For this, and to provide for

the recurring cost of improving and expanding the gas distribution

system and other facilities, and additions needed to provide gas

service to customers, including an amount of $8 million to continue the

exploration program for an underground reservoir, the budget is $40

million for 1979-80.

Under the heading "Transportation

Service," for improvements and additions to transit facilities required

for the operation and maintenance of the transit fleet, there is a

budget of $7 million during 1979-80.

Under the heading "Rail

Freight Service," for improvements to rail freight plant required for

operation and maintenance of the service, we have an estimated cost of

$3 million in the year 1979-80.

Mr. Speaker, all these

capital projects total $797 million. Of the borrowing picture of B.C.

Hydro, $274 million of the present borrowing authority still remains.

This amount, plus the $750 million proposed in this bill, will enable

the British Columbia Hydro and Power Authority to proceed with these

projects, and still leave about $200 million borrowing authority

available for unforeseen events.

I should say it is

considered most opportune and economic to have a borrowing latitude

ahead rather than to be borrowed up to the extreme limit of any

authority which a large enterprise like this has. It gives them

flexibility in

[ Page 286 ]

picking the proper moment when they may wish to go to markets,

or otherwise, when the interest rates are most appropriate. I'm stating

that as a case simply for having some increased latitude, or borrowing

ahead, in policy for that corporation.

I might say that I

should remind members, Mr. Speaker, that, notwithstanding this

authority to borrow being provided by the Legislature, any individual

borrowing requires approval of the provincial government, or the

cabinet through order-in-council, whether it is an internal borrowing

or an external borrowing. In other words, you can feel safe in saying

that this corporation will only be borrowing against this increased

authority as is really necessary.

I'll provide the members

with the details I've just given and I'd be pleased to hear their

comments. Mr. Speaker, I move second reading.

MR. SKELLY:

Mr. Speaker, traditionally, over the past decades in this Legislature,

the opposition party has taken a look at this bill which is designed to

extend the borrowing authority of B.C. Hydro, and traditionally, except

for the last three years, they have supported the bill.

accept the need, as stated by the Minister of Finance, to provide some

advance authority for borrowing for a company such as B.C. Hydro, so

that it won't be caught short and have to call a session of the

Legislature in order to provide itself with borrowing authority.

don't derive any comfort from the fact that individual borrowings have

to be approved by cabinet, because cabinet appears to have approved, in

the past, anything that Hydro has asked for, without seemingly giving

much thought to a total, comprehensive energy policy for this province.

Time after time, year after year, over the past three years, we've

asked the members of the government opposite: "When are you going to

produce a comprehensive energy policy for the province of British

Columbia?" We've got answers, and half answers, and half promises and

promises, but they've never delivered on a comprehensive policy. In the

meantime, Mr. Speaker, Hydro seems to be getting more and more into the

glue. More and more horror stories come out about potential brownouts

and curtailment of industrial expansion because of the fact that Hydro

is unable to provide the power needed for the growth of industry in

British Columbia.

This time again we simply cannot support

an increase in the borrowing authority of B.C. Hydro without justifying

that increase in some kind of comprehensive energy policy document

issuing from that government. Hydro appears to know where they are

going; they're going in the direction of nuclear power for the province

of B.C. Hydro appears to know where they are going, but the government

seems to be waffling and wavering all over the ballpark. They know

where Hydro is going. They know it is politically unsuitable to their

needs that Hydro is making these statements, but we still do not have

any comprehensive energy policy issuing from that government over there.

Mr.

Speaker, this borrowing authority for $750 million represents about

one-sixth of the value of the total budget of the province of British

Columbia in this fiscal year, a budget that is laid out in estimates in

hundreds, almost thousands, of pages that we can go through

section by

section and analyse to find out just what the government is doing, and

criticize it when we find it to be wrong and support it when we find it

to be right.

In the case of Hydro, we're asked to give a

rubber stamp to $750 million in borrowing authority on the basis of two

lines in a piece of legislation. We have no opportunity to question

Hydro as to the details of their projects, as to the details of their

policies and their plans for expansion. We have no opportunity to

question Hydro on the basis of its projection of future energy

requirements for the province. We simply do not have a correct base on

which to responsibly vote Hydro, which is not responsible to this

Legislature, $750 million in debt-creation authority.

I do

appreciate the facts, by the way, Mr. Speaker, that the minister does

prepare. I don't seem to have it this time, but last time I received a

three-page document outlining some of the projects that Hydro intended

to follow this year. This year we've gone up to four pages, and yet we

have hundreds of pages in estimates, as well as the throne speech,

outlining in some detail and giving some idea of what the government's

policy and what the government's main thrusts are for the year. From

Hydro we get nothing at all, except the odd statement by Robert Bonner

saying that Hydro is going in the direction of nuclear power. We on

this side of the House cannot accept that, Mr. Speaker.

Interjection.

MR. SKELLY: He said nuclear power is inevitable.

MR. KEMPF: I was there yesterday; I heard his speech.

MR. SKELLY: You should have stayed over there. Nuclear power, he said, was inevitable for the province of British Columbia.

It's

also of some concern to us, Mr. Speaker, when we examine the reports of

Crown corporations committee, especially the report of the gentleman

who has just left his seat here, on the performance of Hydro in the

past in completing their obligations in building large generation and

transmission projects. I'd just like to read a

section of page 76 of

the Crown corporations committee's report on B.C. Hydro:

"If

there is one point on which the committee is not only unanimous but

adamant, it is the following: that construction projects now being

undertaken by Hydro — projects which during the course of the next five

years or less will, in effect, double the size of the authority — must

be carried out in a very different manner than that which the committee

observed during the inquiry."

We've had no indication, Mr.

Speaker, from B.C. Hydro or from the government that any changes have

taken place in the management of B.C. Hydro, other than rumours of

sacking Robert Bonner, and no indication that the way in which Hydro is

going to carry out these projects has changed at all. In fact, the

stories coming out of the Revelstoke Dam construction project indicate

that Hydro is wasting even more money and blowing even more money on

that construction project because of inadequate pre-engineering and

inadequate management.

I'I continue with the quote from the Crown corporations committee's report:

"The

potential consequences of Hydro implementing currently conceived

projects in the same manner as those which were the subject of this

inquiry is of utmost concern, as it carries with it the

[ Page 287 ]

risk of debasing the financial credibility of this province."

there is one thing we're concerned about on this side of the House, Mr.

Speaker, it's that government debasing the financial credibility of

this province by continuing to rubber-stamp allocations to B.C. Hydro

in the form of borrowing authority equal to one-sixth of the value of

the total provincial budget. All you're asking us for is one yes or one

no. There's no detailed examination of what Hydro is intending to do

with this money that's going to be guaranteed by the taxpayers and by

the ratepayers of this province.

Mr. Speaker, one of the

problems is the fact that Hydro is a large, centralized, secretive kind

of bureaucracy. Nobody who has any access to the organization can get

out of Hydro the actual facts of what's going on. It's difficult to get

the facts on which they base their pricing structure; it's difficult to

get the facts on which they base their engineering and pre-engineering

for power projects; it's difficult to get the facts on which they base

their need for various types of generating and transmission systems.

Even the Premier has stated that Hydro — as far as he can see — is out

of control. He stammers and mutters around saying: "I don't know what

I'm going to do about Hydro; it really appears to be out of control."

And he does nothing.

One of the things he could do would be

to generate a comprehensive energy policy for this province or instruct

his Minister of Energy, Mines and Petroleum Resources (Hon. Mr. Hewitt)

to do so. But his Minister of Energy, Mines and Petroleum Resources

seems to have the same problem — he's wandering around in the dark

without a policy and no seeming inclination to develop one.

What

Hydro really needs, Mr. Speaker, is a legislative watchdog that can

take this bill and analyse it; call representatives of B.C. Hydro

before the committee; call representatives of the Energy Commission

before that committee; call energy users in the province before the

committee; and call public opinion groups before the committee to see

what Hydro really needs and how Hydro's call energy use management

should really be changed in order to meet the energy needs of this

province. At the moment Hydro seems incapable of doing it, and

incapable of justifying itself to the people of this province.

I'd

like to say a few words about the question of projected demand, which

Hydro uses to justify a number of these projects which were issued to

us by the Minister of Finance. The basis of Hydro's energy-requirement

projections has been attacked by a number of authorities throughout

British Columbia, including a representative of the B.C. Energy

Commission. And I'd like to quote from a periodical called Relay , which

is put out by the Electrical Contractors' Association of British

Columbia. On page 9 it compares the B.C. Energy Commission projections

for energy demand with the means that Hydro uses to develop its

projections:

"Evans said that the two

organizations appear to arrive at their figures in different ways.

Hydro's latest forecast of 5.5 percent demand growth is based, he felt,

on what customers think might be the maximum required. I think in some

cases industry will throw in everything they might possibly require

over the next ten years in order inflate possible energy requirements.

On the other hand, the B.C. Energy Commission derives its figures from

a detailed econometric study which takes into account such factors as

growth in population and households. Our forecasts reflect fewer

population and, accordingly, fewer household increases simply because

fewer people are entering the province and fewer people are having

children."

So Hydro does a slapdash kind of guessing as to

what energy projections are going to be,

whereas the B.C. Energy

Commission uses, according to their terms, "detailed econometric

analyses." Who are we to believe? We know that Hydro is attempting to

build a huge electrical generating and transmission empire throughout

the province of British Columbia in order to justify their own

estimates, which even Energy Commission denies are accurate. There are

some real problems here.

The Crown corporation committee

suggested, among other things, that Hydro is too large and too unwieldy

at the present time. This creates mismanagement problems. It creates

wastage. In order to avoid this waste and mismanagement, they suggested

that Hydro be broken up into a number of operating subsidies. I'd like

to read from the findings and conclusions of the Committee on Crown

Corporations:

"For the future, in order to

strengthen Hydro, the committee thinks that consideration should be

give to a possible restructuring of the B.C. Hydro and Power Authority.

Some major organizational changes are already underway, notably the

transfer of passenger transportation to the Urban Transit Authority,

and possibly the removal of the British Columbia Electric Railway.

Perhaps it would be appropriate and desirable to carry this

reorganization through to a greater extent. One way this could be done

is by dividing existing Hydro operations on a functional basis into

several autonomous subsidiary companies with responsibility along the

following lines: construction, electrical sales, gas distribution,

administrative services. Done in this way, B.C. Hydro, as we now know

it, would remain as a non-operating holding company and financial agent."

I suggested this to the previous Minister of Energy some

time ago, when he refused to answer my letter to the Premier, who also

refused to answer the letter in any decent way. I suggested that as a

result of what was taking place around the Site C dam, where B.C.

Hydro was attempting to eliminate opposition to the granting of a water

licence by buying up properties that would be affected by the dam,

Hydro was attempting to eliminate opposition to the application and

granting of a water licence for the Site C dam by buying up the

opposition.

I recommended to the government that what they

should do is separate the planning authority in B.C. Hydro and assign

that authority to the B.C. Energy Commission, leaving Hydro as simply

an operating company which carries out the power requirement goals

established by the province of British Columbia through the Energy

Commission. That is the way Hydro should be separated in order to

prevent the kind of abuses that were taking place around the Site C

dam. Of course, the minister refused to get involved in that.

suspect there is some kind of a relationship between the chairman of

B.C. Hydro and Power Authority and the Premier, where the Premier is

reluctant to issue orders to

[ Page 288 ]

Mr. Bonner because of some service as a bagman that Mr. Bonner may have performed for the Premier in the past.

There

have been other criticisms from informed and educated people throughout

this province about the way B.C. Hydro develops its energy demand

projection in order to justify the huge construction program they have

in the province.

I think that one of my colleagues will be

speaking further on Bonner's proposal for a presentation to the

National Energy Board on firm energy exports to the United States. We

know that Bonner is proposing this out of his allegiance to the

Canadian Nuclear Association, which has been asking member utilities to

develop firm energy exports to the United States in order to accelerate

the nuclear reactor construction program throughout Canada. The report

that was recently done for the Canadian Nuclear Association showed that

if they don't accelerate the construction of nuclear reactors, then

those industries involved in the nuclear business are going to be going

out of business because of drying-up exports and lack of demand for

their products and services in Canada. So Bonner is advocating firm

power exports to the United States more out of allegiance to the

Canadian Nuclear Association than out of allegiance to this province

and its own power and energy requirements.

To sum up, the

reasons we have to oppose this bill are not that we would like to see

some of these projects stopped, projects such as the Seven Mile Dam,

which is already underway, and the Peace Canyon dam, which is already

under construction, or the installation of additional generating

facilities at G.M. Shrum; all of those things we recognize are ongoing

projects that have to be continued and should be continued.

[Mr. Davidson in the chair.]

What

we are concerned about is Hydro's plans for the future and their

studies for the future — on Site C, for example, and on the

Cheekye-Dunsmuir project. It's not one or the other, Mr. Minister of

Energy. If you are confused by that notion, then possibly you should

expand your lines of communication and talk to people who know a little

more about energy than you do. It's not one thing or the other, but in

Hydro's terms, it's either massive generation projects, massive

transmission projects or nothing at all. Bonner talks about "the

big-ticket answer" and all he can see is the big-ticket answer. He

can't

see that there are other options: soft energy path options and

intermediate technology options. Bonner can't see it because Bonner is

connected with the Canadian Nuclear Association, and Hydro is tied to

an old style of public utility management that is now going out along

with the dinosaurs.

Mr. Speaker, Hydro could do a number of

things to change the way energy is produced and transmitted in this

province. They could encourage cogeneration, and encourage the use of

waste energy by changing their pricing systems. Or they could do it by

spending some of this $750 million that we're being asked to vote on

lower on intermediate technology systems which Hydro seems reluctant to

look into. Hydro pays little attention to those solutions.

The

Minister of Energy boasts that he's just signed an agreement with the

federal government to the tune of $27 million, $13.5 million of which

will be provided by the British Columbia government and the

balance by the federal government. But it is to be spent over a long

period — five years — so maybe $6 million a year will be going into

alternative technologies and demonstration projects and that kind of

thing. Six million dollars a year, and it says in the agreement:

"provided the Legislature votes for it."

Well, this year and

last year and the year before we've been asked to vote in the range of

a billion dollars a year, or half a billion dollars a year, to B.C.

Hydro to continue along the old conventional energy path which just

leads to more and more expenditures, to more and more debt. And all

we're spending on other technologies is $6 million a year.

So it just isn't satisfactory to this caucus. No attempt on the part of this government to....

Interjection.

MR. SKELLY:

You're in government now, Mr. Member. Whether you choose to exercise it

or not — and it's pretty clear that you haven't — you have the

responsibility to develop a comprehensive energy policy for the

province of British Columbia.

Mr. Speaker, I do give some

credit to Hydro for the ways they have looked into alternative

technologies, the way they have examined the problem of waste — and

we're one of the most wasteful users of energy on the globe. I commend

their thermography programs, where they've examined energy leakage from

homes and from institutional buildings throughout the province; their

advertising programs encouraging conservation of energy; and their

insulation loans. But much more has to be done to encourage energy

savings, and in fact, since energy savings is equivalent to energy

production, much more has to be done to encourage that form of energy

production than to continue to build new generating transmission plants

or new generating plants and transmission facilities.

appears that nothing has changed in the government's attitude since

last year. Nothing appears to have changed in Hydro's attitude since

last year. I can't see any reason why the New Democratic Party

opposition should support this bill.

I do recommend that the

minister consider placing this bill into a committee where we can

examine it in detail, examine Hydro's capital requirements in detail,

and summon before that committee members of B.C. Hydro's staff and

members of the public in order to justify borrowing an additional $750

million. I can't see that we can support this bill until the government

agrees to do that.

MR. DAVIS: Mr. Speaker, I support

this bill. I support it basically because I believe the B.C. Hydro and

Power Authority is on the right track. It's developing energy resources

which are internal to British Columbia. It's also placing the accent on

renewability, not nuclear power, as the opposition would have us

believe, but on hydroelectric power and to a much lesser extent on

natural gas. It's borrowing and spending this money for the generation,

transportation and distribution of water power. Water power is regarded

in many countries now — certainly by the academics who write about

energy — as perhaps the most effective way of collecting solar energy.

Solar power is renewable in the ultimate sense, and its power base is

the sun. It is power that will be there for as long as we keep the

[ Page

289 ]

dams and the transmission lines in good working order.

Eighty-five

percent of these moneys will go towards the development of hydro

resources in this province. Most of the remainder will go into the

construction of pipeline systems for the distribution of natural gas.

We've lots of natural gas in this province, at least adequate supplies

for our own use, We've enough to last us well into the next century. If

and when shortages develop, we'll have the facilities, the pipelines and

distribution systems, to distribute high-energy gas produced from coal.

In other words, not only is the money going into hydroelectric power

development, but also the money is going into gas-system development in

this province. We'll see the effective use for decades to come — 50

years, even 100 years. They will be used for the efficient movement of

energy resources which are essentially renewable resources. They are

British Columbia resources, not resources which have to be imported.

oil shortage is developing; it's developing worldwide. It now exists in

places on this continent. Canada is a big importer of foreign oil and

unless we manage our affairs better, we will become a larger importer.

The world price of oil is rising. It will continue to rise in the 1980s

and 1990s. This is another reason why we must continue to invest in our

own resources. Hydroelectric resources, natural gas and coal resources

are here in the province. Only in this way are we likely to develop a

reliable, secure, energy supplying system for the people of British

Columbia.

Conservation,

as everyone stresses, is very

important. Energy saved is a very valuable resource in itself, and

every attempt must be made to conserve energy. This doesn't remove the

necessity of developing our own energy resources, at least to replace

those which we would otherwise have to import from other parts of

Canada, and perhaps even from the rest of the world. We can cut back on

our own energy use; this is particularly true of oil. We must do our

utmost to move from an oil-based economy, where the supply and cost of

petroleum products are under foreign influence, to an electrical

energy– and gas-based economy where supply and cost, as much as

possible, are

under provincial control. In the long run we'll have to rely

essentially

on hydroelectric power and coal. In the medium term, however, we can

use natural gas as a bridge. Natural gas can help us adjust from our

present oil-based economy — at least 50 percent economy — to one which

is much more stable from a supply and price point of view.

British

Columbia's goal by 1990, in my opinion at least, should be to reduce

our oil consumption from 50 percent to say 30 percent of our total

energy use. This can be accomplished by increasing natural gas and

electricity shares from 20 percent each to 30 percent each. This will

cost money; it will cost more than $10 billion over the next decade.

This is a very large sum indeed, and members of this Legislature

certainly must be concerned about the way in which it is spent and the

efficiency with which it is spent. This request for $750 million in the

current year is part of this requirement. It's an annual payment; it's

one of the many instalments which we shall have to meet in order to

make ourselves more self-sufficient in energy.

Over the past decade our electricity and gas prices have risen in British Columbia,

but they haven't risen anything like the delivered price of energy in other

parts of Canada and the United States. They've risen much more slowly than

energy prices in western Europe and Japan, so our competitive position, at least

in terms of energy cost, has improved. It will continue to improve, especially

if we place our reliance on hydro power and coal and continue to develop our

resources in the relatively efficient manner which we have developed them in

the recent past.

The

request today before this House in Bill 11 is for $750 million.

Averaged out over the projects which are currently under development,

this works out to around $1,000 per kilowatt. In effect, we are raising

a mortgage, and that mortgage is against dams, transmission lines,

distribution systems which will serve us for many, many years to come.

We freeze the costs of these facilities as we build them, and in the

long term this kind of development tends, relatively, to be insulated

against inflation. We tend to fix our future cost of power now and this

gives us an advantage in the long-term future.

The projects

which the hon. Minister of Finance outlined and which were priced — at

least for this year — in his submission roughly double our ability to

produce power in this province. The peak requirement so far has been of

the order of five million kilowatts, reached this last January. The new

facilities currently under construction will approximately double that

ability to produce power, and if the forecasts of the Energy

Commission, B.C. Hydro and others are borne out, this capability, which

is currently under construction, will last us until the late 1980s. It

will last us for another decade. So we are really not talking about

other sources of power — other, that is, than the dams under

construction on the Pend-d'Oreille, at Revelstoke on the Columbia, and

on the Peace River. We certainly are not talking about nuclear energy;

we're not talking even about power generated on northern rivers like

the Liard, or energy from Hat Creek, or coal in the East Kootenays.

B.C.

Hydro has produced a publication called Power Perspectives 1979 , and I

believe this was distributed to all the members of the Legislative

Assembly. It lists the projects which are being considered for the long

term; that is, for the 1990s at least to the year 2000. That would

double our capability again, not only from five million kilowatts,

which we have presently, to ten million, which we will have when the

projects presently underway are completed, but to 20 million kilowatts

and that, essentially, is using conventional sources of power,

substantially hydroelectric sources of energy — solar energy in the

old-fashioned sense. So there is really no room in the next 20 years

for a nuclear power plant, even if the cost of nuclear power were in

any way competitive with these resources which we have in the province,

resources of a traditional kind.

The question if nuclear

power isn't one which we will have to face. It shouldn't be one for

political difference between the two sides of this House. It is

basically irrelevant in British Columbia. It shouldn't, basically, be a

matter for political dispute between parties. It isn't relevant because

it isn't economic. Certainly it isn't economic in British Columbia.

References have been made quite rightly to other sources of energy,

other sources of electricity, the combustion of wood wastes or garbage

— co-generation as it is called. There have been a number of studies

done in the province and there are applications certainly at pulp mills

and possibly at sawmills. Not only can this waste wood be used to

generate heat and make steam for process purposes, but surplus energy

can be used to produce electricity. That electricity in amount is

significant but not large. The studies so far indicate that 1, 2 or 3

percent of our power

[ Page 290 ]

requirements

could be supplied from co-generation by burning wood wastes at our pulp

and paper mills and our sawmills. It is not 5 percent and it is not 10

percent. It is significant; it is important. B.C. Hydro should

cooperate with industry in this respect. But it is not a major

solution, at least in the short run. It would look after a few months

of load growth in this province, but it wouldn't look after a year's

growth; it wouldn't look after a decade's growth. There are longer-term

possibilities, but the economics aren't there for co-generation to make

a major contribution to our power needs in British Columbia, at least

in the 1980s.

We need to change some legislation in this

regard. Any company, any corporation, indeed any individual, in this

province, that sells more than 15 percent of their output of

electricity automatically becomes a public utility. They are subject to

the scrutiny of the British Columbia Energy Commission, for example. In

order to encourage industry to generate electricity from waste heat, we

should remove that clause from the B.C. Energy Act. Industry should be

able to sell that surplus energy to anyone, other than for export, and

that should be subject to some scrutiny. And that anyone would include

the public utilities: B.C. Hydro, West Kootenay Power — a municipal

government if it wishes to set up its own generating and distribution

facilities. And they would be subject to public scrutiny. But the

industry supplying the energy should not automatically become a public

utility under our legislation. This sets a serious limit on capital

available for co-generation in British Columbia, and I think that

restriction should be removed.

We've lots of coal. We have

probably one of the finest coal deposits for power generation anywhere

in the world at Hat Creek. We've got a lot of waste coal left in the

Kootenays, stockpiled as a result of the export of the higher-quality

metallurgical coal, principally to Japan. I believe that we should, at

least shortly, be generating some electricity and using that waste coal

at the very least to help solve the local environmental problem. In the

medium term we could export that energy; in the long term we could also

feed it into our own power grid for our own purposes.

Vancouver

Island has a power problem; it has an energy problem. Vancouver Island

is the only part of British Columbia that is not supplied with natural

gas. British Columbia therefore is the only part of British Columbia

that isn't subsidized by the relatively low internal price of natural

gas in this province. Natural gas on world markets is worth twice what

it's being sold for here in British Columbia. I believe that that

opportunity should be made available to the residents of Vancouver

Island as a matter of broad policy. I believe it should be made

available for several other reasons. It's much cheaper, generally

speaking, to make gas available for heating, including the space

heating of homes, than it is to space-heat with electricity — perhaps

half as expensive. We're wasting a lot of resources if we're going to

heat our homes, stores, offices, schools and hospitals with electricity

in this province when natural gas could do the job as well and

synthetic gas and coal ultimately do the same job through the same

facilities.

Now it may not be economic in the private

enterprise sense to bring natural gas to Vancouver Island, and some

interim arrangements may have to be made because our big forest

products industries on the island by and large are self-sufficient in

respect to heat energy because they are using wood wastes more and

more. But in the long run I believe a pipeline to Vancouver Island will

be economic and is economic, even if a major transmission powerline

link is also built to this island.

I believe the powerline

link — at least the first link — is needed for a number of reasons.

There is very little hydro capacity left on Vancouver Island. The coal

at Comox is expensive to mine and very high in sulphur. Given the new

environmental protection guidelines which are being developed for

thermal plants in British Columbia, it's very doubtful whether a power

plant burning that coal would ever be economic. Those guidelines are

very strict; they're the strictest anywhere in the world, to my

knowledge. They will add substantially to the cost of coal-based power

in British Columbia and I think we should look at them very carefully

for that reason.

Finally, this bill asks for $750 million,

as I say — just one year's instalment as part of a much longer

determined program for the province. It's true that $750 million is a

lot of money, but relating B.C. Hydro's investments to the gross

provincial product, they are of the same order of magnitude as requests

in other years. Those requirements of B.C. Hydro for investment in new

power dams, transmission lines and the distribution of both electricity

and gas have been of the order of 4 percent or 5 percent of our gross

national product, and that's still the case with respect to this

request this year for $750 million.

I believe that members

of this Legislature should be vitally interested in how much money is

being spent for what purposes by B.C. Hydro and how well it's being

spent, and I think they can express that concern and get answers —

hopefully all the answers — to their questions, not only during the

discussion of this bill but in the Committee on Crown Corporations.

It's

very important that they discuss rising costs and the prospects of

rising power and gas rates, even though costs elsewhere in the world

are going to be going up even more rapidly. I think they should be

satisfied in respect to this question of nuclear power, which I believe

is purely academic for British Columbia. It's a waste of time to debate

it as if it's a major political issue in this province because it isn't.

think finally that we should be considering, at least as a short-term

policy, export of surplus energy, especially surplus water power in

medium- or high-water runoff years, to neighbouring areas of the United

States at world prices, arm's-length prices, prices which will yield us

revenue in this province, and which will be more easily obtained than

by pushing the development of other export industries.

MR. BARRETT: Sell everything.

MR. DAVIS: The

hon. Leader of the Opposition says: "Sell everything." I'd much rather

sell some surplus water power than sell natural gas. The previous

government quite rightly concerned itself with the sale of natural gas.

That is at least a wasting resource, and if we're prepared to enter

into any export arrangements with gas, surely short-term — one, two or

three years at a time — export arrangements relative to Hydro power

make a lot of sense. It's the sort of thing that's been done across

international boundaries all over the world. It's been done

increasingly in Canada and it's been done with great security because

the export arrangements have time limits and the exports are terminated.

[ Page

291 ]

We've imported power from the United States, from the Pacific

Northwest, and we've exported it there. I believe that there is an

opportunity in high-runoff years to sell our surplus water to the

United States in the form of electricity. That's good business, and in

future years we may on occasion import power from their large power

plants.

MR. KING: Mr. Speaker, there are a variety of

reasons — which I want to discuss this afternoon — why I certainly don't

intend to support the ever-increasing borrowing authority of B.C. Hydro

and Power Authority. Let me note at the outset that there is still no

regulatory authority effectively controlling the power forecasts of

B.C. Hydro and Power Authority, their rating policy, or any of the

power-generation options that Hydro, through some strange kind of

relationship with the cabinet, goes through by a system of osmosis

rather than public discussion. I want to make the point that British

Columbia Hydro and Power Authority is the only public utility in all of

Canada that has the authority to set their rates for electrical

consumption without the need to justify an increase before some public

regulatory agency.

I submit that it is most inappropriate

that we be asked in this Legislature each year to grant to that

authority an ever-increasing debt burden on the citizens and taxpayers

of this province without any method whatsoever of calling that giant

monolith to account. I suggest that it is totally irresponsible for

members to get up and say that there is an effective mechanism by which

even members of this Legislature can gain the details from the top

officialdom of B.C. Hydro. That is a ruse; it's a shallow exercise. I

want to say that that's not just my conclusion, but is also the

conclusion of the Committee on Crown Corporations, which conducted an

inquiry last year into B.C. Hydro's construction-management practices

on the Columbia River Treaty projects.

I refer to a report

tabled in the Legislature over the signature of the MLA for Omineca,

Mr. J.J. Kempf. The report was filed with the Clerk of the House in

early April in accordance with standing order 72(

a) of the Legislative

Assembly of British Columbia. I want to quote from this report, and I

want to tell you that in so doing it's going to become very evident

that the member for Omineca, who was chairman of that committee, will

not be voting in support of this bill. He could not do so in good

conscience, Mr. Speaker, after preparing and filing with this House an

absolutely scathing indictment of the mismanagement, the lack of

financial control of B.C. Hydro and Power Authority. He could not

possibly vote for another $750 million of borrowing power to an

institution which is literally torn from stem to stern in his report to

this Legislature.

I want to go briefly through this report

and refer to some of its conclusions, and some of the statements made

by that committee, and more particularly by its chairman. On page 2

it's noted that as of March 31, 1978, the total cost of the

Duncan-Arrow and Mica reservoir storage projects was $560.2 million, or

24 percent higher than the estimated cost of $451.5 million. It notes

that there are inadequate cost-control mechanisms and that the whole

history of B.C. Hydro and Power Authority with respect to the

construction of storage and generating dams has been one of

unprecedented overruns and lack of proper cost accounting.

This paragraph on page 3 is one that's significant:

"Despite

seemingly sufficient time for Hydro to plan,

schedule and implement

these projects, this inquiry has disclosed some inability on the part

of Hydro management to deal effectively with the demands imposed by

these tasks. Specific problems noted include inadequate planning before

going to tender and weak financial control during construction."

Mr.

Speaker, this is not only the member for Omineca's (Mr. Kempf'

s) conclusion, as the chairman of that committee; this is the conclusion

of the committee which is composed of a majority of government members.

It goes on to make another reference:

"Nevertheless

this perception led to many business decisions being taken hastily at

the risk of incurring unnecessary additional costs. With respect to the

adequacy of planning, it's noted for certain pieces of Hydro work

specifications were either poorly conceived or incomplete at the time

of going to tender."

Mr. Speaker, I wonder if that could be

said to be true with respect to the engineering that went into the

Revelstoke Dam and the engineering that went into the stabilization

program on the Downie slide some 40 miles north of the Revelstoke Dam,

and is a hazard to be reckoned with.

Mr. Speaker, on page 5 the

committee notes: "In such circumstances cost-effectiveness, if and when

achieved, is more the result of luck than skill." More the result of

luck than skill, and now this government is proposing that we increase

the borrowing power to an institution which they have heaped a scathing

indictment on. In spite of this lack of financial competence, they want

to increase the borrowing power by $750 million. They come in here with

a one-line bill which is simply a blank cheque to increase the

borrowing power by $750 million, to unload and unleash on the taxpayers

of British Columbia an ever-increasing tax burden to support the debt

of this monolithic monstrosity out of control. I say that's

irresponsibility.

Let me continue with the report; there are

some gems in here, Mr. Speaker. They're commenting on the contract cost

estimation and financial control on page 7:

"Since

the original estimate was based on a very preliminary design bearing

very little resemblance to the power plant, no comparison of individual

items is meaningful."

That's the testimony of one of Hydro's senior staff. The committee concludes:

"These statements are disturbing. Doing major-scale business on an ad hoc basis is financially perilous...."

Financially

perilous — and yet they're asking us today, on the basis of a one-line

blank cheque bill, to extend an additional $750 million borrowing

authority; it's pouring good money after bad money. I'd be very

surprised if the committee members who made themselves a party to this

kind of an indictment of Hydro's management vote in support of

guaranteeing another $750 million borrowing to that kind of an

institution.

"The views expressed above by

Hydro seem typical and suggest that they did not have proper systems in

place so as to be aware of, let alone control, the burgeoning cost of

these projects. The committee has not seen evidence of a strong,

[ Page 292 ]

financially sensitive team at work in Hydro during the construction of the Columbia River Treaty projects."

Mr. Speaker, there is more. On page 9 the committee concludes:

"It

is all too obvious that if inadequate financial planning and control

were to exist today, in consideration of the enormous scale of Hydro

projects and their related costs, e.g. Revelstoke estimated at twice

the cost of Mica, the consequences for both Hydro and the province

could be severe.

That's strong stuff; that's indicating that

we are on thin ice financially in terms of the amount of debt burden we

can continue to accept on behalf of the taxpayers of British Columbia.

Mr. Speaker, I expect the member for Omineca to be on his feet to

defend the report which he chaired, and the very, very grave

implications of the conclusions that are achieved in this report.

On page 13 this paragraph appears:

"It

appears that the executive management committee acted in contravention

section 11(1) of the Hydro Act, which states that the executive

management committee shall manage the operations of the authority

subject to the direction and of Hydro's directors."

That's an accusation of breaching the laws, Mr. Speaker, a charge of breaching the laws by senior Hydro management.

MR. KEMPF: What year was that?

MR. KING: On page 14, Mr. Speaker, these conclusions are printed at the bottom of the page:

"(

a) the experience and skills of a substantially enlarged,

broadly drawn board of directors were available."

I should read the

preamble:

"While

the committee will not attempt in this report to suggest proposals to

deal with all such difficulties, it feels that significant improvements

in Hydro's operations would result if (

a) the experiences and skills of

a substantially enlarged, broadly drawn board of directors were

available, (

b) management and board practices and the continuing

business of the Authority were not shielded by a series of veils from

public scrutiny, (

c) mechanisms were found whereby the government as

steward of public money could meaningfully influence the various

courses taken by Hydro."

There's the chairman of the

committee admitting in this report that neither of his cabinet

colleagues who were directors on that board had the weight or the

authority to meaningfully influence policy decisions taken by Hydro.

That's interesting, isn't it? He's saying that neither of the cabinet

people have the weight and the influence to direct Hydro policy. If

that's the case, I guess we have to conclude that the person who really

enunciates policy with respect to energy matters in British Columbia is

none other than Robert Bonner. We know what Robert Bonner advocates.

He's on a nuclear kick. He says that nuclear power development in

British Columbia is inevitable; it's going to come. Here's the chairman

of the government's own committee which says — and I want to repeat

that last one: "...if mechanisms were found whereby the

government as steward of public money could meaningfully influence the

various courses taken by Hydro...." He's saying that they have no mechanism

right now to influence the policy of this Crown corporation. Either he

has no confidence in his two fellow ministers, or he knows that Bob

Bonner has a great deal more influence than either one of them.

The

report continues: "While this is important, it may be of even greater

importance that direction by government when exercised be overt." He

wants any direction by government to Hydro to be overt. That's what the

report says.

[Mr. Rogers in the chair.]

It sounds

to me like that line came from the Watergate affair: the overt

surveillance and the overt programs of destabilization. Remember those

lines? I think Woodward and Bernstein wrote about those things. We're

getting Nixonian stonewalling not only from this government but also

from Hydro. They're even resorting to those terms.

This

report is produced, for the benefit of the gallery, by a group of Social

Credit MLAs sitting on that side of the House. It's chaired by the

member for Omineca (Mr. Kempf). These are his conclusions. This is the

largest scandal and the largest bombshell that has hit British Columbia

in recent history. What an indictment, not only of B.C. Hydro and their

financial bungling and incompetence, their engineering incompetence,

but also a tremendous admission of political incompetence and political

ineptitude on the part of the member's colleagues. It goes on:

"If

the Authority was strengthened at the management level, a strong and

articulate management team composed of people with diverse talents —

e.g. legal, financial, engineering — headed by a chief executive

officer whose sole responsibility would be the management of the

Authority...."

In other words, this is a plaintive cry by the member for

Omineca that Robert Bonner should divest himself of other

responsibilities and address himself solely to the management of B.C.

Hydro.

The member didn't have the courage to get up in this

House and say: "I don't believe that Bob Bonner should be a member of

the Trilateral Commission, and I don't think Bob Bonner should be

serving on the boards of directors of a number of agencies and

enterprises in this province that do a great deal of business with B.C.

Hydro." He didn't have the courage to say that might be a conflict of

interest. Rather, he snuck in this little one-liner that Hydro should

be headed by a chief executive officer who has no other

responsibilities.

It's a very, very interesting report. On page 17 we find this gem:

"The

potential consequences of Hydro implementing currently conceived

projects in the same manner as those which were the subject of this

inquiry is of utmost concern, as it carries with it the risk of

debasing the financial credibility of the province."

That

is an alarming conclusion for a standing committee of this Legislature

to come to, and I find it absolutely appalling that on the heels of

this kind of indictment, we have before us a one-line bill suggesting

that we increase the borrowing power of that very agency by $750

million.

[ Page

293 ]

It's an additional tax burden to put on the backs of the people of British Columbia.

states on page 18, the final page: "It should be clearly understood

that the committee's overriding concern is to ensure that

unsatisfactory management practices disclosed by this inquiry are not

continued." Now I think that's a good report, and I think it should be

acted upon by the government. But for the government to come in with a

bill advocating that we increase that borrowing power again by $750 million, with no accountability to any regulatory agency, much less the

Legislature, is an insult to their own member who chaired that committee. It

shows contempt for the taxpayers of British Columbia and it shows lack of financial

control by this government. It's a government out of control; it's a

government that has no leadership; it's a government teetering on the brink

of financial disaster. Mr. Speaker, that is the conclusion of the member for

Omineca.

think it's a scandalous situation. What does this kind of borrowing

power mean? What does it mean to the average person in British Columbia?

want to tell you that it means we will be increasing the cost of

servicing the debt for B.C. Hydro, and will be paying about....

MR. KEMPF: He's been in the dark for so long he wouldn't know anyway.

MR. KING:

Mr. Speaker, the member is becoming uncomfortable. Here he writes this

kind of report, an indictment of his own colleagues, and I guess he

suspected that no one would read it. I guess he didn't realize that it

might be made a matter of public record and read into the Legislature. The only thing I can say, Mr. Chairman, is that either they're

going to put him in the cabinet to shut him up and buy him off, or he's

liable to be going the way of Jake Huhn and Ed Smith; he may not be around next

time.

Let's deal with the cost of servicing this tremendous debt. In outstanding

bonds and debentures B.C. Hydro has about $5.1 billion now, according to the

annual report for 1978-79, up from $4.7 billion last year; in capital projects,

$722 million — up from $641 million last year surplus electricity sales, $34

million — $5 million in 1975. Let's get to the cost of servicing the debt.

I think it's going to cost something like $783,000 a day to service the

debt load on B.C. Hydro now, approximately, in round figures. That is about

$32,000 an hour in round figures: $543 per minute; $9 a second in round figures

is the cost to the taxpayers of British Columbia, in terms of the existing debt

of B.C. Hydro.

These people come in here now, in the face of this scathing indictment by

their own members — at least, a committee dominated by their own members....

We had representation on that committee.

Interjection.

MR. KING:

Oh, I made that point earlier, if the member would listen. Certainly

the committee is dominated and controlled by Social Credit, and their

members, such as they are.

We don't disagree with that report; we think it's a good one. We

think it should be acted on. We think it grossly irresponsible for the government

to come in here and advocate pouring good money after bad when the conclusions

of the committee should clearly be dealt with, when there should be a major

shake-up of the management of B.C. Hydro, when obviously there should be some

major restructuring of that particular organization.

give credibility to the committee report, I want to tell the House that

I have great concern regarding the Revelstoke Dam. I've talked about

those concerns previously in this Legislature. The dam happens to be

just three or four miles from the city centre of the town in which I

live. It towers some 500 or 600 feet over the city, and we have great

concerns regarding the impact of this dam. I've raised those before in

the House, and I'm not going to restate it all again.

want to read an article, Mr. Speaker, that deals with problems that

have been encountered on the Revelstoke Dam construction project,

problems which give credence and absolutely validate the criticisms

raised by the member for Omineca and his committee. It was carried in

the Colonist of March 22, and it is headed: "Major Weakness Found Under

Dam."

"B.C. Hydro has announced a major

weakness has been discovered in bedrock below the Revelstoke

hydroelectric dam which is under construction. Hydro said far more rock

would have to be excavated than originally planned. The extra

excavation is expected to total about 280,000 cubic yards of rock, with

a corresponding increase in the amount of concrete required to build

the dam and powerhouse, said Hydro spokesman John Sexton.

"Hydro

would not release any figures on the cost of the extra work because

tenders had already been called for the concrete work. Sexton said bids

on the work had been due April 4, but had been extended to May 1

because additional information had been added to the bidding

instructions, to include the extra excavation.

"However,

a construction company executive said the cost of excavating the

additional soft rock could run to about $15 a yard. He said cost of the

extra concrete needed to replace the rock could be in the range of $50

to $90 a yard, meaning total extra costs could be as much as $30

million.

"The cost of the dam, with four

turbines in place, is estimated at $1.5 billion. The project is

expected to go on stream with four units in 1983, and two additional

units will be installed in the 1990s. Hydro would not say whether the

extra work would delay completion."

Now, Mr. Speaker,

perhaps the members opposite don't think $30 million is very much money,

but I think it's a fantastic amount on a project that has just been

undertaken — we are just nicely into construction on the Revelstoke

Dam. That revelation demonstrates that there was inadequate

pre-engineering on the project. It demonstrates that not enough was

known about the bedrock below the dam site. It demonstrates that the

condemnations made by the legislative standing committee were

absolutely factual, that there's incompetence in the engineering staff

of Hydro, that there's inadequate pre-engineering into these kinds of

major contracts, and that the people of British Columbia have been

subsidizing that incompetence for years. Mr. Speaker, say it has to

stop.

There's another sideline to this thing that really worries me, and that is the safety of the whole structure. I don't

[ Page

294 ]

think I have to draw pictures for this Legislature again regarding

the implications of the Downie slide; but basically it's a slide about

40 miles north of the proposed dam site, containing about three billion

cubic yards of rock and material that has, in fact, been sliding

towards the reservoir for the last 100 years. It's now going to be

saturated with the increased level of the reservoir. When Hydro applied

for a water licence to build the Revelstoke Dam, they gave assurance

that they would come up with an engineering program to stabilize this

slide, to ensure that it didn't slip quickly into the reservoir,

possibly creating a tidal wave that could top the dam.

Mr.

Speaker, the water comptroller issued a condition licence on the basis

that Hydro should come back to him at some later date and provide a

plan for the stabilization of that slide. The cost of stabilizing the

slide was not even estimated, much less identified in any precise way,

because the engineering had not been done at that time. But a panel of

eminent, world-renowned engineers gave evidence and testimony at the

hearing that it might take up to ten miles of tunnelling to drain the

water from the Downie slide. But they said it was impossible to make

any cost estimates, because they didn't know what might have to be done

beyond the drainage of the slide to stabilize it.

question is, to all members of the Legislature: how can we be assured,

in light of the early cost overrun and the shoddy engineering that went

into the dam site itself, that Hydro's staff of engineers are going to

come up with an adequate plan to safely stabilize Downie slide and

prevent any chance whatsoever of a slippage into that reservoir with

the spectre of a large body of water topping the dam at Revelstoke? The

implications of that kind of thing happening are so horrendous to think

about that it is absolutely frightening.

AN HON. MEMBER: Are you calling for nuclear power, then?

MR. KING:

Certainly not. I think only a fool would say the choice is between

building a hydroelectric plant which is dangerous and unstable or a

nuclear power plant. That's an idiotic observation, my friend.

HON. MR. WOLFE: What's your alternative, then?

MR. KING:

My alternative, Mr. Speaker, is what I've been talking about for the

last 40 minutes, if the minister would open his ears. That is to comply

with the recommendations contained in the committee report by your own

member. We need to change the management of Hydro, to break down the

structure, to inject some new blood, and to bring in some competent

engineers, so that we are not subjected to ever-increasing overruns

because of poor engineering. It should be pretty obvious what is

necessary. I think you should fire Robert Bonner, too. He is just a

Socred political hack anyway. I don't believe that Crown corporations,

certainly ones crucial in dealing with the energy needs of the

province, should be the pasture or the senate for retired friends of

Social Credit. That's all it's been so far.

Interjections.

[Mr. Speaker in the chair.]

MR. KING: Mr, Speaker, let me get back to the gist of my arguments and concerns, and they are valid.

AN HON. MEMBER: That's your view.

MR. KING:

What an asinine statement for the Minister of Finance to make. If you

are not equally concerned, regarding the safety of British Columbia

citizens, and those south of the border, because of the security of the

dam system then you don't deserve to be a citizen of British Columbia,

much less a member of the House. What an asinine, stupid statement.

I'm

concerned about the adequacy of engineering that is required to

absolutely and safely ensure that the Downie slide does not slip into

the reservoir and compromise the safety of the dam. I'm concerned —

because of the cost overruns experienced already in the construction of

the dam site itself — that corners are not cut to recoup some of the

financial losses at the Downie slide. It is a major engineering

undertaking, and a major cost item.

I want to say that

anybody who doesn't understand the implications of an unsafe dam system

is thumbing their nose and disregarding what would be the major

catastrophe of world history, in terms of man-made catastrophes. If the

Revelstoke Dam was ever compromised by a major tidal wave and topped,

we are looking at the potential destruction of every dam on the

Columbia River chain.

The implications of that kind of

catastrophe should be pretty obvious to everyone. That is not just my

opinion; it is the opinion of professional engineers who say it is

probably a 50-50 proposition that if one dam on the Columbia River

chain went, they would all go. I think it is a reasonable proposition.

What I am saying is that we have to be absolutely assured that no such

possibility exists. Every attempt and every possible avenue must be

utilized to ensure that the dams are stable, and that the Downie Creek

slide is stabilized. With the kind of engineering that Hydro has

displayed so far, I cannot be other than very, very concerned and very

apprehensive. What I am suggesting, Mr. Speaker, is that all members of

the House should be equally concerned.

I am appalled and

amazed that the Minister of Finance would come in asking for a blank

cheque to finance Hydro's incompetence, to impose additional debt

burden on the taxpayers of British Columbia, with a two-line bill which

gives no justification, which gives no indication of a shake-up in

terms of Hydro's management, in terms of any change in their policy

direction, in terms of any better financial or cost control accounting

systems. I think it is

an act of irresponsibility, and I certainly do

not intend to support this kind of irresponsible document in this House.

MR. BRUMMET:

Mr. Speaker, again we seem to have an example where we start out on the

debate about some borrowing power to add some projects that Hydro

needs, and we end up with quite a digression from the original topic.

We get many, many words on record, Mr. Speaker, on a variety of topics.

We get dramatic and colourful debate raging on. Yet we do have to

consider what is happening in the real world. I think the members on

this side can certainly share the concerns that are expressed by the

member for Shuswap-Revelstoke (Mr. King) and certainly share the

concerns that were expressed in the report that was selectively quoted

from. However, while all this debate goes on, certain projects must

also go on.

[ Page

295 ]

I am always intrigued by the expertise that is so readily available

in retrospect rather than in advance of anything. I do know that it is

quite simple, Mr. Speaker, to guarantee that nothing wrong will ever

happen, that no problems will ever develop, if you very carefully

undertake nothing. I'm not even so sure of that. Those members should

remember, Mr. Speaker, that it was much more difficult when they had to

make decisions rather than just stand up and criticize and debate.

recall one quotation: "What did the critics ever build?" I wonder what

they actually did build. So when the opposition members are speaking

against this bill, I have to wonder at their motives. Are they simply

against this? Are they trying to delay it? I hesitate to use this

question, but are they trying to make political mileage out of this?

AN HON. MEMBER: Oh, no, no, no.

MR. BRUMMET:

Oh, I'm sorry. I should have realized that there would be no politics

involved. However, then I must assume that in speaking against the bill

they are trying to stop the projects which the Minister of Finance

spelled out. The Revelstoke project, notwithstanding the concerns that

were expressed.... Apparently if Hydro does not have any more funds to

use, then we stop the Revelstoke project, the Seven-Mile project, the

Peace Canyon or Site I project as it is more likely known there. It's

pretty well on the way to completion — I believe it's in its last year.

If this bill is rejected, does that mean that project stops, Mr.

Speaker, and nothing else goes on there, that the water is just allowed

to go by there, no power? Are they stopping the completion of the

Shrum generating station? Is this what the intent of speaking against

this is, to stop all these projects, and to stop all of the further

studies? Power seems to create other projects that create jobs. I find

that here we have opposition members — they made it very clear earlier

this afternoon, I believe in question period in various ways — that are

definitely against nuclear power. Certainly we share their concern

there.

MR. BARRETT: Are you for it or against it?

MR. BRUMMET: I don't like the idea of nuclear power at all. I just like to have an open mind.

stopping all of these power projects, stopping all of these projects

that result from further power development such as.... Are they

speaking against this and for stopping the power line to Vancouver

Island here? I thought that the members here had a lot of constituents

here that might be interested in further power and the jobs that you

keep talking about that you're going to give them. But you stop the

project and you stop this. And you promise more jobs. So I really am

intrigued, Mr. Speaker, with how they do this — that they stop all of

the things that create jobs an yet at the same time promise jobs. You

can't have everybody working for the civil service. There have to be

some productive jobs out there.

We do have to have power. We

do have to have projects that are created as a result of this power in

order to have jobs in order to carry on the economic stability and

progress of this province.

Mr. Speaker, unlike the member for Shuswap-Revelstoke, having nothing further to say, I believe I will stop talking.

MR. LEGGATT:

I will try to deal with some aspects that haven't been dealt with in

regard to the bill. One of the concerns I have in looking at this and

in thinking about approving this additional borrowing authority — we're

looking for another $750 million — is where we are going to go to get

that $750 million.

Are we going to do what the Minister of

Finance did when he initially came here? He borrowed the money in the

United States when the Canadian dollar was trading at par. No doubt

he's now paying to the United States an additional 15 percent on that

loan. Is he going to go to the Arab market?

I wonder whether

the Premier was in Ottawa making a deal the other day with Joe Clark to

see if they had some influence left in the Arab market. I suspect there

aren't any left. That wonderful coalition has certainly dried up that

source of funds for the foreseeable future, I would think. That is a

source of funds that gives us a very reasonable rate on that return.

When we approve this particular borrowing, the question B.C. Hydro and

the minister are going to have to think about is: where are we going to

get $750 million? Apparently BCRIC have raised a fantastic amount of

capital out there somewhere. Maybe BCRIC is going to salt it away in

Hydro.

Interjections.

MR. LEGGATT: There

were a few people who recognized its value — maybe one thousand

recognized its value. Those few are going to make all the money in

regard to those shares. Keep that in mind.

Some people in this House have said that this is a blank cheque to B.C. Hydro

to proceed in the manner in which it has gone along. It is saying to B.C. Hydro:

"We're not really unhappy with the way you did the Columbia River Treaty."

My colleague has already read out what a committee of this House has said about

that.

I'd

like now to show you how they are operating internally. This is a memo

that I'm assured is a legitimate and accurate memo, an interoffice memo

in B.C. Hydro. It's dated January 19, 1979. The subject is executive

furniture in B.C. Hydro. Apparently this wonderful corporation has been

unhappy in the executive suites. Perhaps the cushions aren't quite as

soft as they used to be. It reads:

"Current

allowances for executive suites are as follows: senior officers,

$11,500; division managers, $7.500; department managers, $4,300 other

groups, $1,500. There are approximately 120 employees in Class D; the

cost of upgrading the furniture of Class D employees to Class C will be

in the order of $500,000."

That's why this corporation should not get a blank cheque out of this institution.

This

is the point: this is the tip of the iceberg. This is exactly what the

legislative committee found when they investigated the operation of

that corporation. As long as you simply roll over and play dead every

time Mr. Robert Bonner says we need another $750 million, you're going

to encourage that kind of stupidity and waste within that corporation.

That's what's going to happen.

You can't have it both ways.

This is a government that has always prided itself on balanced budgets.

In fact, the previous Premier of this province, W.A.C. Bennett, and the

previous Premier in the New Democratic Party were

[ Page 296 ]

wedded

pretty well to the balanced-budget concept, believe it or not. Examine

it. You'll find that it's true. One of the reasons W.A.C. Bennett was so

wedded to the balanced budget was that he didn't want to see

governments grow out of control. He believed that by balancing the

budget there was a way to control expenditures within that

organization. By voting in favour of that bill you're completely

abandoning that principle, because you are letting Hydro grow at its

own pace and its own rate, and you're letting it grow out of control.

cannot control energy consumption in this province as long as you let

that consumption be partially determined by the policies of Robert

Bonner and by the policies of Hydro. That's why this bill is so bad in

principle, and why it is that so many of us cannot vote for this — even

if it meant some temporary unhappiness within Hydro. It would force

them to look for different sources of funds and force them to

re-examine their rate structure, for example. It would force them to

put rates up for high consumption of energy, so that we can get into

the question of conservation.

By voting for this

legislation, you're going to change nothing whatsoever. You're not

going to give this province the opportunity to seriously examine

alternate energy forms.

The member for North

Vancouver–Seymour (Mr. Davis), in his usual rational and eloquent way,

was discussing the alternative of wood waste as a power source; but he

directed his attention to the existing systems for wood waste, and as

long as you simply provide Hydro with a blank cheque in terms of

energy, then, Mr. Speaker, no one is going to develop those new

technologies to deliver that kind of wood waste energy to everyone. We

need ways to move out of those traditional sources of power, to go back

into sawdust burners, back into wood use in all the homes and away from

this kind of energy consumption which is going to lead, in the long

run, to a financial disaster.

Mr. Speaker, I'm always amused

by a party that takes so long to talk about balanced budgets and debts,

chastising everyone else for waste, but when a bill like this comes

along, there's almost no comment. It's just "Ready, aye, ready. Let's

give them anything they want. Let's let them waste this money." I would

hope particularly that the member for Omineca (Mr. Kempf), whose

committee delivered such an excellent report, will back up that report

with his vote after this is called.

MR. BARRETT: Mr.

Speaker, I want to thank you for your patience in this debate, which in

many ways is perhaps the most important debate facing us in what

obviously will be, at the earnest desire of all members, a very short

session.

We've not really had an opportunity, as you know,

to debate such a bill as this for well over a year. For one reason or

another, the government has not been able to call the House together

for extensive questioning in estimates or financial matters, really,

since last spring. Now that we are finally here, we are being presented

with a bill in second reading that is to give to B.C. Hydro $750

million borrowing power without any further scrutiny.

want, first of all, to say a few words about the report by the

Committee on Crown Corporations. I voted against that committee. I felt

that the work that committee was undertaking could best be done by the

public accounts and economic affairs committee. I said so, and I voted

against the committee; much to my surprise, my prediction was

incorrect. The committee did set about doing their business, and I

don't mind admitting that I think the Crown Corporations Committee did

an excellent job in a new dimension of accounting for the expenditure

of public funds.

Now the government wishes they had taken my

position and they wish I had taken their position. For the first time,

we've had an opportunity of demonstrating to the people of British

Columbia what good work MLAs can do in a committee that's thoroughly

researched, that sets aside the necessary partisan debate that takes up

a lot of our time — which is our traditional and legal responsibility

in this House to participate in — and sets about on a specific project

on behalf of all the taxpayers of British Columbia and says: "Let's

look at what's happening with some of our tax money."

I'm

the first to say that although I argued against the committee, I've

never been afraid when I've had an opinion or a vote that has proven to

be wrong, to stand up and say: "I made a mistake. My judgment was

wrong." I want to publicly say that that committee, in my opinion, has

done a good job. I voted against the establishment of the committee,

and I must say I placed my vote, obviously after their work, in the

wrong direction. It doesn't make someone a lesser person to say they

made a mistake, in this business. I think the public would be well

served if a lot more of us, on occasion, would stand up and say that

perhaps our opinions held in the past were incorrect and time has

proven us wrong. Certainly, in the case of this committee, I admit it.

The committee has done a first-class job and deserves the

congratulations of every thinking taxpayer in the province of British

Columbia.

Now that I've been so generous and gracious, and

so thoughtful, in this particular debate it would be a welcome bit of

balm for some of my bruised feelings if someone on the other side, say

the member for North Vancouver–Seymour (Mr. Davis), would get up and

say that perhaps the Social Credit Party's opposition to the B.C.

Petroleum Corporation was a bad vote too. I would welcome that

statement.

MR. BRUMMET: What did you ever do?

MR. BARRETT:

For the information of the member for North Peace River, we withstood

14 hours of personal abuse from one member alone in establishing the

B.C. Petroleum Corporation — 14 hours of vituperative, vicious,

personal attack and a vote against the Petroleum Corporation.

Yesterday, unlike Hydro, that Petroleum Corporation returned to the

people of British Columbia, in one year, $228 million profit.

What

did we ever do? We had the guts to establish a marketing agency for

natural gas that allowed the member for North Vancouver–Seymour to

point out in this debate that B.C. Hydro has the ability to deliver

natural gas at half the world market price to the consumer in British

Columbia, simply because we were the government that demanded we get a

world price for our exports. We are therefore able to subsidize those

fortunate residents in this province who have access to natural gas

with a low-cost fuel to allow them to heat their homes at a lower rate

than the inflationary cost in terms of other forms of heat.

[ Page 297 ]

Mr. Speaker, I want to address my initial remarks directly to the statements

made by the former Minister of Energy, Mines and Petroleum Resources (Mr. Davis):

"While it may indeed be a desirable fiscal goal to allow

domestic natural gas rates to rise to the world price level — perhaps even aiming

toward equivalent Btu price levels vis-à-vis oil — it would be an extreme

hardship to do so for the average homeowner in British Columbia who, although

he is not aware he's being subsidized to quite a heavy extent by that low-cost

natural gas, his budget couldn't stand it."

I do appreciate the comments made by the member about the double pricing in

natural gas and the fact that we had to fight Ottawa to release ourselves,

as you well know from your own Ottawa experience, from the 10 percent — or

was it 15 percent? — gap that at one time existed in terms of the two pricing

systems.

AN HON. MEMBER: Five percent.

MR. BARRETT:

Five percent. Then they brought it up at the Western Economic

Opportunities Conference to 10 percent. When the federal government was

in a minority they were most receptive to changing things. It's just

like a few months ago; when Social Credit had a 17-seat majority, we

never heard the word "cooperation"; now, when they're down to five,

they want to make love and cooperate every day. It is funny, Mr.

Speaker, what a difference in attitude a few votes make.

must say that I cannot agree with the member for North

Vancouver–Seymour that we should begin to adjust the price on natural

gas for the domestic consumer. However, I do think — and it should be

seriously considered, and I advise the Minister of Finance (Hon. Mr.

Wolfe) to talk to his colleague who is on the board of B.C. Hydro —

that it would be worthwhile for Hydro to examine whether or not there

could be a modest and gradual system of increasing the price of natural

gas for our large industrial users in light of the fact that those

industrial users are benefiting from the current high exchange rate on

the Canadian dollar. They would be able to handle the increase in that

energy source in conditions that allow them to compete in the American

market with the advantage of the exchange on the dollar. So I flag to

the minister that it would be worthwhile to examine whether or not the

industry could handle some gradual increases, to increase the revenue

of the corporation. I'm not opposed to the lower prices of domestic

natural gas; I'm not opposed to the lower prices to industry. The

purpose of setting up the Petroleum Corporation was not only to sell

natural gas at its true market value, but also to give private industry

a little cushion that allows them to compete with their American

competitors with some leeway.

So, Mr. Member for North

Vancouver–Seymour, I agree that the private sector cannot take on the

natural-gas pipeline to Vancouver Island.

But why does it

take a generation of 25 years to get the unanimity in this House to

understand that it is important for the private sector to be a major

instrument not only in transportation but in the energy field as well,

for the competitive sector of the community that is still out there to

have an opportunity to compete with a stable source of energy as well

as transportation? Why does it take all this time to get over the

emotional word "socialism" which is such a barrier to rational,

logical, thoughtful economic planning? It should have been taking place

in this province many, many years before now.

In terms of

this borrowing in the energy field there is now a danger nationally, as

my colleague from the Coquitlam riding has pointed out, of there being

a restricted field for borrowing. If we pass this legislation today

there is still the now highly sensitive question of limiting fields of

borrowing. It is true that the Arab monetary fund has withdrawn access

to their borrowing facilities from the people of Canada. When we

borrowed money, through the advice of a number of excellent advisers,

from a number of mid-eastern states, we borrowed that money in Canadian

funds. In retrospect, when you get past all of the emotional yelling

about those borrowings, they are a prime source of funds compared to

what we now have to pay as taxpayers in servicing the American debt we

have.

The Americans are very clever. The loaned us the money

in American funds and we must repay in American funds. We did negotiate

wisely with the Arab money and we negotiated in Canadian money, the

difference being this: for every dollar borrowed from the Americans by

B.C. Hydro at 10 percent, we now must pay 25 cents to service, at this

time, annually. For every dollar we borrowed from the Arabs at 10

percent, we pay 10 cents.

I don't mind all the heaped abuse

we took at the time for the borrowings, but I'll bet you anything, Mr.

Speaker, that even the smiling Minister of Energy, Mines and Petroleum

Resources (Hon. Mr. Hewitt) would grab at $500 million in Canadian

funds, to be paid back in Canadian funds at 10 percent, anytime he

could get it. If someone came to you and offered you $500 million on

the strength of this bill at 10 percent in Canadian funds, you wouldn't

tolerate the giggles and chuckles about the source of the funds. You'd

be there with your pen to s