Alberta Hansard — 30 November 1981, Afternoon sitting (14:30) (Legislature 19, Session 3)

19811130

Alberta — Debates (Hansard)

November 30, 1981 ALBERTA HANSARD 1933 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Monday, November 30, 1981 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: PRESENTING REPORTS BY STANDING AND SELECT COMMITTEES MR. KOWALSKI: Mr. Speaker, on May 22, 1980, the Legislative Assembly approved a motion setting up a select committee to review matters pertaining to surface rights in Alberta. The motion also directed that the report of the select committee was to be tabled during the 1981 fall sittings of the Legislature.

I am pleased to table the report today and, in doing so, would as well like to acknowledge the very important contributions made to the people of Alberta by the eight members of the Assembly who served on the committee with me. Thank you. head: TABLING RETURNS AND REPORTS MR. LOUGHEED: Mr. Speaker, on Friday in the Legis lative Assembly, I agreed to table a document I was referring to on a matter before the House that day, which was the actual request for decision P7-81 of the Depart ment of Environment with regard to water and land resource development.

I file these copies with the Assem bly on the understanding that they're not filed by way of precedent, in that they are internal management docu ments of the government, but because documents that were draft documents of the same nature were in posses sion of members. This is the actual document presented to the priorities committee of cabinet on November 16. It's tabled on that basis and not with any precedent in mind. head: INTRODUCTION OF SPECIAL GUESTS MR. BOGLE: Mr.

Speaker, it's a privilege for me today to introduce to you, and through you to members of the Assembly, a second-generation Albertan who has been involved in preserving our heritage and our past. I'm referring to the operator and curator of the Altamont Museum at Coutts who has devoted his life to preserving artifacts in Alberta, and his parents did the same. Before asking Mr. Schultz to stand and receive the welcome of this Assembly, I might mention in addition that his re staurant, which is attached to the museum, makes the best darned hamburgers in southern Alberta. Mr. Schultz, would you please stand? MR. R.

SPEAKER: Mr. Speaker, I'd like to take the opportunity to introduce three guests who are very spe cial people in the heart of a member who I understand is going to retire or be in the Legislature for the last time today. I know that the three people, who are sitting in your gallery, Mr. Speaker, have been very special to Bob Clark in his responsibilities as a member of this Legisla ture. I'd like to very quickly introduce them to all members. I'm sure most members are familiar with these people, but I'd like to place it on the record as well. First of all, I'd like to have Norma Clark stand.

As we all know, Norma is Bob's wife. At this point in time, we know Norma is going to have Bob home a little more. But after the first day, she really doesn't know what she is going to do with him. I'd appreciate very much if Norma would stand at this time. The other two people have worked very closely with Bob in his legislative responsibilities. Jan McKee has worked for a number of years with Bob since the time he was Minister of Youth, and has been an excellent help and public servant in that responsibility. I'd like Jan McKee to stand. The third person, Miss Dorothy Hope, was secretary to Mr. Aberhart, Mr.

Manning, Mr. Strom, and as well Mr. Clark. She served four Social Credit leaders in the province of Alberta, and knows all the behind-the-scenes stories and the stories that have been in the public. She tells me they're all good. I'd like Miss Dorothy Hope to stand and have the Assembly recognize her at this time. head: MINISTERIAL STATEMENTS Office of the Premier MR. LOUGHEED: Mr. Speaker, today I wish to an nounce a $136 million beef cattle and sheep support program. This program is designed to assist a sector of the livestock industry which has faced a critical situation over the past two years.

Alberta is endowed with a number of natural advan tages which enable our producers to provide over 43 per cent of the beef for Canada, and we have no intention of allowing the farmers of our province to lose their compet itive position to other regions in the country. We recog nize that support programs have been established in other provinces and, in the absence of any meaningful national stabilization program, we feel it is essential to implement a program that will provide stability and will reinforce the long-term viability of the Alberta beef industry. Agriculture is basic to the Alberta economy.

Our live stock industry is an essential part of it and makes up over 40 per cent of the gross income of our agricultural economy in Alberta. We rely on livestock as well to consume a significant part of our feed grain production. In respect to processing, the packing plant industry em ploys over 5,000 people in this province. In their constitu encies, many members of this Assembly are involved with that industry and that employment factor. The govern ment has been concerned that cattle feeders, confronted with declining cattle prices, have suffered serious financial losses over the past two years.

Cow-calf producers are facing a similar situation this fall, with calf prices well below last year's level. In recognition of this situation, a major objective of the program is to maintain the breed ing herd and bring some stability to the cattle industry. Details of the beef cattle and sheep support program, developed by the Minister of Agriculture together with the government caucus agriculture committee, are as fol lows. First, with regard to the cow-calf operators, pro ducers will receive $50 for each bred cow and bred heifer, based on 90 per cent of the herd number as of September 1, 1981.

1934 ALBERTA HANSARD November 30, 1981 Yearling feeders: a payment of $4 per hundredweight will apply to feeder cattle and calves that were purchased and owned for a minimum of 150 days, and then resold as feeder cattle between December 1, 1980, and Novem ber 30, 1981. These have come to be known by a new term: "backgrounders". Third, fat cattle feeders: a payment of $4 per hundred weight will apply to all grade A, B, or C slaughter cattle sold between December 1, 1980, and November 30, 1981.

Fourth, sheep producers: a payment of $10 per head will be made to eligible producers on all lambs sold for slaughter between December 1, 1980, and November 30, 1981. Further details and requirements will be provided forthwith by the Minister of Agriculture. Mr. Speaker, I would stress that this one-time support program, which addresses a short-term problem, is not a solution in itself. Cattle industry representatives have stressed the need to work on a long-term strategy, and this government is prepared to assist wherever possible.

Beef market development and market promotion is one important long-term program, and the Alberta govern ment will provide $3 million over the next three years to assist the cattle industry in this important endeavor. Steady improvement in Canadian consumer demand is an essential factor in the recovery of the cattle industry. In conclusion, the beef cattle and sheep support pro gram was developed in co-operation with producer repre sentatives, and we feel the program will provide stability to an important part of Alberta's agriculture industry. [applause] MR. MANDEVILLE: Mr.

Speaker, I want to say that we on this side of the House appreciate this announce ment. I'm certain it is really going to help our cattle industry in this province. I'm pleased that it covers all aspects of the industry, including the sheep industry. I think it was very wise to take that into consideration. We are now supporting some of our red meats, and if you support one industry, you have to support them all. We on this side of the House certainly appreciate it. We think it's timely and will certainly help the industry in the province of Alberta, and to retain the beef in Alberta.

I was very concerned, and I've taken many surveys in this province on the effect other provinces' programs were going to have. We have 42 per cent of the beef here. With a program like this, we'll be able to retain the beef in Alberta. It's a very important industry in the province of Alberta. I don't know whether it was intentional by the hon. Minister of Social Services and Community Health, but I'm pleased to see Mr. Shultz here today. Possibly he will be able to provide us with some cheap hamburgers in the future, or some hamburgers anyway.

We on this side of the House appreciate the an nouncement, and I'm sure it's going to be appreciated not only by the cattle industry in Alberta but by all Albertans. head: ORAL QUESTION PERIOD MR. R. SPEAKER: Mr. Speaker, I don't want to start question period with any kind of rumors, but on the way to the Legislature Building I heard that the hon. Minister of Education got caught in one of his computers. [laugh ter] [A reference to Mr. King's hair style] MR. DIACHUK: Mr. Speaker, may I assure the hon. Leader of the Opposition that my office has not received a work-related accident report to this time.

Health Care Insurance — Doctors' Fees MR. R. SPEAKER: Mr. Speaker, in a more serious vein, I'd like to direct my first question, with regard to the negotiations going on between the medical people of Alberta and the government at the present time, to the Minister of Hospitals and Medical Care. Can the minister indicate the status of the negotiations? Are they even continuing since the start-up from the stalemate last Friday? MR. RUSSELL: Mr. Speaker, all I can say is that they're ongoing. They had a good meeting on Friday, and they have scheduled another meeting. MR. R. SPEAKER: Mr.

Speaker, a supplementary ques tion. Could the minister indicate whether the meetings are continuing today? Secondly, one request of the AMA is for recognition as a permanent bargaining agent for Alberta doctors. Is the government reconsidering its stand with regard to that matter? Will it be a matter injected into the negotiations? MR. RUSSELL: Mr. Speaker, I think everybody in the province understands that the negotiations have reached an important point. For that reason, I think it would be inappropriate for me to comment in detail on any specific item, other than to say that both sides are at the table.

They're scheduled to meet again Friday afternoon of this week. They have been meeting regularly on Fridays since the middle of September, and negotiations are ongoing. MR. R. SPEAKER: Mr. Speaker, a supplementary ques tion to the minister, with regard to the workshops going on and the concern that there may be a lack of medical care in the province of Alberta. Is the minister monitor ing that work slowdown? Could the minister report what implications there have been with regard to medical care, relative to the work slowdown? MR. RUSSELL: Mr.

Speaker, the AMA itself has said they won't take any actions that will endanger the health of Albertans, and I have to accept that. I recognize there has been some inconvenience and annoyance in certain parts of the province. As far as monitoring the situation is concerned, we have not done that. I'm only going by the calls I get in my office, and I'd have to say there are people who are annoyed to a degree, but nobody's health care seems to be suffering. Two instances have been re ferred to the College of Physicians and Surgeons, and they've responded very positively. Programs for the Disabled MR. R.

SPEAKER: Mr. Speaker, my second question is to the Minister of Social Services and Community Health. I've had some consumers of programs relative to the disabled speak to me in the last week. I raised this question with the minister earlier. One of their concerns still is the involvement of the disabled consumers in estab lishment of programs. The minister has indicated that the caucus committee would serve part of that purpose, and that the minister's office would as well. I wonder if the minister has reconsi

November 30, 1981 ALBERTA HANSARD 1935 dered that matter in light of the concerns that come to me, and I'm sure to his office, that there is inadequate communication and consultation at the present time. Has the minister considered looking at other formats? MR. BOGLE: Mr. Speaker, I believe it was November 13 that the hon. Leader of the Opposition asked similar questions in this Assembly. At that time, I indicated that correspondence had gone from my office to the president of one such group. To date, no reply or response has been given relative to that letter.

I will reiterate my willingness, as one of the ministers involved, to meet with representatives of that particular group, as I have in the past. I would also be prepared, with the permission of the organization in question, to make copies of their correspondence available to this Assembly. In it they have very clearly indicated there are a number of practices and procedures which they haven't found acceptable, including meeting ministers one on one as well as caucus committees. I'd like to further discuss with the members of that group exactly what part of the procedure they aren't happy with.

I can't do that, Mr. Speaker, until I hear from the said organization. MR. R. SPEAKER: Mr. Speaker, a supplementary ques tion to the minister. Recommendation 101 of their report is to change that format. The hon. minister has men tioned the matter with regard to the caucus committee. In my checking, I understand that the caucus committee has met with the various groups only once a year, and often only two or three members of the caucus committee are in attendance. It seems like it's very sporadic and not regular, and not regular membership.

I wonder if the minister is reviewing that matter in looking at recom mendations by which this group can better communicate with government. MR. BOGLE: Mr. Speaker, I'll certainly take that as advisement and discuss the matter more fully with the chairman of the said caucus committee. I have been involved in parts of at least two meetings with the said group, and I can assure the hon. member that the atten dance was considerably higher than two or three. MR. R. SPEAKER: Mr. Speaker, I would appreciate if the minister would check the latest caucus committee that met with the group.

I believe there were only three in attendance. My supplementary question to the minister is with regard to a broader representation of government to the handicapped consumer groups in the province. My un derstanding is that other areas such as Public Works, Education, and Housing are areas and departments that do not meet with the consumer groups. There isn't a format by which they can meet with these special areas where handicapped consumer groups have problems. Is the minister considering a change of format that would include these kinds of groups, so that better communica tion and representation can be made?

MR. BOGLE: Mr. Speaker, I think the hon. member should be aware that no one group speaks for all the physically handicapped within this province. Several groups indicate that they represent a portion of the handicapped. But we have requests coming to govern ment — some through the Department of Social Services and Community Health, others through other depart ments — from a variety of organizations all purporting to speak for consumer groups of disabled Albertans. There fore, we try very hard to work with the various groups that have been established over the years.

In our depart ment, I'm speaking primarily of the Alberta Rehabilita tion Council for the Disabled, a group that has a history of some 25 to 30 years of providing services in this province, as well as the consumer groups for the disabled, a more recent endeavor which receives funding from the provincial government, as does ARCD. MR. R. SPEAKER: Mr. Speaker, a supplementary ques tion to the minister. One concern I have is that the report was in February 1981; its concern was the lack of communication. Today we still find the minister saying, I'm waiting for someone to tell me what to do, and a format.

In the international year of the disabled, how soon will the consumer groups of Alberta know exactly what the well-oiled communication system is, instead of this bureaucratic approach of letters back and forth? When will direct communication occur, and when will the minister deal with the problem that has existed all this year? MR. BOGLE: Mr. Speaker, very clearly, if the hon. member is referring to a report commissioned by the federal Parliament of this country . . . MR. R. SPEAKER: It doesn't matter. MR. BOGLE: It matters a great deal, Mr.

Speaker, if, on one hand, the hon. member stands in his place to ask a question relating to a provincial organization, and then relates and refers to a report commissioned by the Minis ter of National Health and Welfare, and made up of federal MPs. I suggest the hon. member direct his con cerns with regard to that report through his Member of Parliament. We'll continue to meet with provincial or ganizations that deal with the provincial government, as we have in the past. MR. R. SPEAKER: Mr.

Speaker, the provincial people are dissatisfied with the way the department has met with them, and their concern is illustrated through this docu ment. The minister should read it for information as to how the communication system can better be worked in this province. A supplementary to the minister. What immediate steps will be taken to take into consideration and put in place a management procedure that meets the needs of the handicapped consumers of this province? At present, it isn't there. MR. BOGLE: Mr.

Speaker, two very important pro grams were introduced early in 1979 to meet the needs of handicapped Albertans. The aids to daily living program was developed to help Albertans between the ages of 18 and 65 and to provide a level of care second to none in this country. In addition to that, the assured income for the severely handicapped program was developed, and is currently meeting the needs of some 9,000 Albertans at a total cost of some $60 million a year.

The maximum benefits accruing to an individual who benefits under that program equal the combined income of a senior citizen who receives the old age security and guaranteed income supplement, both of which are federal programs, and the assured income plan from this province. That benefit totals some $527 per month; again, Mr. Speaker, a figure

1936 ALBERTA HANSARD November 30, 1981 that cannot be attained in any other province in this country. MR. R. SPEAKER: Mr. Speaker, a supplementary. My question is very clear: how will disabled consumer groups be able to communicate with this government in the future, not only with the minister, not only through a caucus committee, but with other departments of gov ernment with which they wish to communicate? No for mal system is established at the present time, no consist ent pattern. Once a year . . . MR. SPEAKER: Order please.

If the hon. leader finds that the very ample debate he is offering is an essential part of the question, then may I respectfully suggest that that be transferred to another time when there is oppor tunity for debate so that, in fairness, other members who may agree or disagree with him may have an opportunity to prepare for such a debate and also take

part in it. As it is, in both his last questions we have the hon. leader going very extensively into debate, making charges about which other hon. members may or may not have some fairly vigorous opinions. In any event, fairness would require that they have an opportunity to debate as well. May I therefore respectfully suggest to the hon. [mem ber] that he separate the two functions, and that when he's in the question period he might deal with matters which are really questions and not debate. MR. BOGLE: If I may respond, Mr. Speaker. Very clear ly, communication is a two-way street.

I have written to the particular organization the hon. member has referred to on November 13. To my knowledge I have not yet received a reply to that request, which asks for an agenda so that we might sit down and discuss the concerns of the consumer group. MR. R. SPEAKER: Mr. Speaker, a supplementary ques tion to the minister. Will the mechanism be put in place before the end of 1981, before the international year of the handicapped is over? MR. BOGLE: Mr. Speaker, a mechanism is in place and all groups seem to find it satisfactory with the exception of, I believe, the Alberta Federation of Labour.

Nursing Shortage MR. FJORDBOTTEN: Mr. Speaker, my question is to the Minister of Advanced Education and Manpower. It's come to my attention that there's a nursing shortage in Alberta. Could the minister indicate if he or his depart ment is taking any action to resolve the shortage? MR. HORSMAN: Mr. Speaker, this matter has been before the Assembly earlier. At the present time there is a vacancy rate of approximately 5 per cent in the province with respect to nursing. Of course, a number of new programs have been introduced in the last year.

I should point out that a number of refresher courses have been instituted, in which I think over 500 nurses who have been out of the active practice of the profession have enrolled and will regain their status with the Alberta Association of Registered Nurses. As well, I pointed out the intention to introduce two new nursing schools at Grande Prairie Regional College and Keyano College. As I indicated sometime during the last few weeks, a special warrant has been obtained to start the program at Grande Prairie Regional College a year in advance of their anticipated enrolment.

We hope that that, along with increased enrolments at the University of Lethbridge and the University of Alberta, will substantially alleviate the shortage which has been appearing in the last few months. MR. FJORDBOTTEN: Mr. Speaker, a supplementary to the minister. The recent report is right: there's probably about a 5 per cent shortage of nurses; that's about 573.

Considering the hospital construction program we have under way and the number of nurses in our communities who aren't active, could the minister advise whether he is considering making a mobile refresher course available in the smaller communities, because a lot of women aren't able to come to the cities to take a refresher course. MR. HORSMAN: Mr. Speaker, as I indicated, the inten tion is to provide refresher courses, particularly through the colleges system. Those are located in smaller commu nities outside Edmonton and Calgary.

If the hon. member has some practical suggestions as to how mobile courses might be provided, I'd be glad to hear those. I know that the directors of the various nursing schools in the prov ince would be interested as well. As I indicated in my earlier response, though, the refresher courses have been very well attended. If they continue, we expect that in the next few months they will attract more nurses back into active practice of the profession. I should point out that while there are just under 11,000 positions for registered nurses, there are in fact over 17,000 registered nurses in Alberta.

You will see, therefore, that a number of them are not actually practis ing their profession. MRS. EMBURY: A supplementary question, Mr. Speaker. Could the minister please indicate if the generous funding given by the department for refresher courses this past year will continue next year? MR. HORSMAN: Mr. Speaker, I'm always an optimist, but the budget for 1982-83 has not been concluded yet. MRS. EMBURY: A supplementary question, Mr. Speaker.

Could the minister advise the Assembly if there's any difference in basic cost per student for a nurse taking a refresher course at a community college vis-a-vis in the hospital setting? MR. HORSMAN: Mr. Speaker, I'm afraid I don't have an answer to that particular question, but I can certainly find out. Needless to say, the actual cost per student in the refresher course is far below the training of new nurses. The cost has been quite reasonable.

But as to the differentiation between the college program as opposed to the hospital-based program, I'd have to take that ques tion as notice and try to ascertain whether there is a differential. Psychiatrist Shortage MR. D. ANDERSON: Mr. Speaker, a supplementary question to the hon. minister on the issue of a shortage of health care professionals. Is the minister as yet in a position to indicate to this House what projections exist with respect to the psychiatric shortage now faced in the province, and what we can expect over the next few year?

November 30, 1981 ALBERTA HANSARD 1937 MR. HORSMAN: Yes, Mr. Speaker, I am. The hon. member raised that question in the House. I have re ceived a preliminary report on that. I was going to put that in the form of a memorandum to the hon. member and circulate it to members of the Assembly for their information. MR. D. ANDERSON: Mr. Speaker, I'd like to thank the minister for preparing that material. A supplementary to the hon. minister.

Has his depart ment any plans which would increase the number of psychiatrists in Alberta in coming years, to deal with the psychiatric shortage that now exists and which I suspect might be projected? MR. HORSMAN: Mr. Speaker, that becomes a more difficult order for my department, as a department of government. Really, it relates to the opportunities of the medical schools within the province to provide that type of training and to attract students into that particular specialty of the profession of medicine.

That is a very worth-while question, but it must be addressed in large measure to the university communities. Of course, it will be up to the universities to make the necessary decisions and allocations of funds within their own global budgets to try to deal with that particular aspect of the need for health manpower in the next decade. MR. D. ANDERSON: Mr. Speaker, one final supple mentary question on that topic.

Is the minister suggesting that a budget adequate to encourage people to move specifically into the psychiatric field will be available in the universities, in particular in the areas of medical training? MR. HORSMAN: Mr. Speaker, as hon. members are aware, the department does not direct funding to specific faculties, except that in the last two years provision have been made, at the request of the universities, for what we have called professional faculty enhancement funding. I will have to review the circumstances with respect to requests from the universities for such additional funding in the next while.

I can't and really shouldn't answer this question, because I don't know whether there have been specific requests from the institutions with respect to additional funding for that particular purpose, through the professional faculties enhancement grants. I'd have to check that matter for the hon. member. Nursing Shortage (continued) MRS. FYFE: Mr. Speaker, a supplementary flowing from a previous question.

Based on the consideration that nursing is somewhat unique, in that persons who have not been working in the profession for some time have to take refresher courses; and, secondly, in the rural health areas it is often difficult for nurses with families to travel to where a refresher course is being given, I wonder if the minister could advise the Assembly if any consideration has been given to a distance learning refresher course, such as through Athabasca University? MR. HORSMAN: Yes, Mr.

Speaker, a number of new approaches are being taken by various institutions in the province to provide distance learning opportunities. For example, the University of Alberta is proposing to offer some additional courses in Grande Prairie. This is sepa rate and apart from the new nursing school which is being established there. Athabasca University has given some consideration to this type of program development. I expect that many additional and innovative steps will be taken by the insti tutions themselves in ensuing years, through their own global funding that we as a government provide.

Beef Cattle and Sheep Support Program MR. MANDEVILLE: Mr. Speaker, I would like to direct a question to the hon. Minister of Agriculture with regard to the announcement the Premier made today. Could the minister indicate what form of applications are going to be available, and where and when they'll be available for ranchers and people feeding cattle who will make application for the grants or subsidy announced today? MR. SCHMIDT: Mr. Speaker, it will be a day or two before the applications are available.

It's our intention to have them available to all those across the province, in the district agriculturists' offices in their area, and through the department. MR. MANDEVILLE: A supplementary question for clarification. One program announced, where there will be $50 for any cow in possession of a rancher on September 1: does the department monitor the herds in the province? Does it have any record of the number of cows on hand with any particular rancher or farmer at the date indicated in the announcement? MR. SCHMIDT: Mr.

Speaker, each municipality, through its local government, has a pretty good record of the cow-calf producers throughout the province, because of the animals being involved in warble treatments on an annual basis. They have a pretty good idea as to the numbers of cows that fit each basic herd. It would be our intention to also have an affidavit with the application, stating the size of the basic herd as of September. ORDERS OF THE DAY MR. LOUGHEED: Mr. Speaker, I wonder if I may say a few words on this occasion, because I was unfortunately absent at the time the hon.

Member for Olds-Didsbury was paid very appropriate tribute in this Legislature. I am aware that this is the last day, and I wish to make some personal comments. I want to say how much I believe that the hon. Member for Olds-Didsbury has contributed to the public service and to the public life of this province. Because I feel that I've been here for a number of years, I find it rather interesting to be paying tribute to an hon. member who has been in this Assembly longer than I. Also, Mr.

Speaker, I recall being here as the Leader of the Opposition for four years, and having the very interesting and challenging time of directing questions to the hon. member when he served the gov ernment of Alberta very well in a number of important portfolios. Then, of course, when situations were re versed, I was on the receiving end of the questions. It speaks highly of the Legislative Assembly and for the parliamentary system that those of us privileged to be involved in it understand the nature of the cut and thrust of debate, understand the process here, and can do so in a

1938 ALBERTA HANSARD November 30, 1981 way that on an occasion like this we can, in fact, respond as we wish to respond to the hon. member, and wish him, his wife, and his family the very best of health and happiness. But more particularly, we can have him leave this Assembly knowing that he's made a contribution he can be extremely proud of, that his constituents can be proud of, and we're all proud of it for him. [applause] Resignation of Seat MR. R. CLARK: Mr.

Speaker, before I do what I'm going to do, perhaps you would allow me to say to the Premier my sincere thanks for his most generous com ments on this occasion. Thank you very much. Mr. Speaker, as has been known for some time, it's my intention to leave this Assembly on November 30 of this year. When I checked my calendar this morning, I noted that this was Monday, November 30. On November 5, when members were extremely kind to me in this Assem bly, members may recall that in my remarks I made some comments that some members thought were perhaps somewhat facetious.

I said I knew where I was going on November 30, but I wasn't sure many others did. Mr. Speaker, this may be one of the few occasions when I have been on the proper side of the issue. Might I say once again that I want to thank the people of the riding of Olds-Didsbury, who have done me honor on so many occasions. Secondly, I want to thank my colleagues in this Assembly, whether they are my imme diate colleagues in the caucus it has been my privilege to be a part of, or members wherever they may sit in this Assembly. I regard all of you as friends in this Assembly, friends in the legislative process.

And wherever we may sit or wherever we may go in the future, I trust we will be able to have that kind of relationship. Mr. Speaker, I would be remiss if I didn't say to the staff of the Assembly — the Clerk, the Clerk Assistant, and the legislative staff — how much I've appreciated their help and co-operation. And now, without any fur ther ado, it's my privilege, my honor, and my responsibil ity to say to you, Mr. Speaker, that I wish to resign my seat as the Member of the Legislative Assembly for the riding of Olds-Didsbury for the reasons I explained on November 5. I wish you, Mr.

Speaker, members of the staff, and members of the Assembly, God's richest bless ing. Thank you very much. [applause] [Mr. R. Clark left the Chamber] MR. R. SPEAKER: Mr. Speaker, in a very short man ner, I'd like to reiterate the appreciation of my colleagues for Mr. Bob Clark and his contribution to Albertans and, specifically, to this Legislature. It has been a great con tribution and one to be long remembered. It's nice to be able to leave the Legislature with such dignity and respect.

I'd like to say that I think the greatest contribution of Bob Clark, the thing I've learned from him, and the thing I recognize in his work is that he will be recalled as a master of grass-roots representation. He knew how to listen to people and how to act on their behalf. As history records it, I think that will be the great contribution he has made in his lifetime as a public servant. MR. SPEAKER: May I assure the Assembly and espe cially the hon. Premier and the hon.

Leader of the Opposition that the staff of the Assembly is assembling a booklet which will contain tributes and perhaps some photographs of the occasion in the House on November 5, and will most certainly also contain the kind tributes paid to the hon. Member for Olds-Didsbury this after noon by the hon. Premier and the hon. Leader of the Opposition. MR. KING: Mr. Speaker, under the circumstances I wonder if I could revert to Oral Question Period for just a moment, because I hoped to be able to reply to a question asked of me by the hon. former Member for Olds-Didsbury.

I would still like to provide the informa tion the hon. gentleman requested. MR. SPEAKER: In asking the Assembly for unanimous consent, I must confess that I was remiss, because the hon. Minister of Education had asked to be recognized before the close of the question period, and I regret that I overlooked that. Does the Assembly agree that we may revert momen tarily to Oral Question Period, so that the hon. Minister of Education may deal further with a topic raised in a previous question period? HON. MEMBERS: Agreed. head: ORAL QUESTION PERIOD (reversion) Computer Technology in Schools MR. KING: Mr.

Speaker, some 10 days ago, in an exchange during question period, the hon. Member for Olds-Didsbury asked if I would file with the Assembly the contract between the government of Alberta and the Bell & Howell corporation of Canada respecting the sale of microcomputers to Alberta Education. I wish now to table copies of that for the information of members. ORDERS OF THE DAY (continued) MR. CRAWFORD: Mr.

Speaker, before moving that you leave the Chair in order that the House might be in Committee of the Whole for consideration of some Bills, I should note that Bill No. 99, the Legislative Assembly Amendment Act, 1981 (No. 2), should revert to commit tee in order that the members can consider a proposed amendment. I move that Bill No. 99 not now be read a third time, but ask unanimous leave to have it revert to Committee of the Whole. MR. SPEAKER: Is there unanimous leave to entertain the motion made by the hon. Government House Leader? HON. MEMBERS: Agreed. MR. SPEAKER: Is the motion agreed with? HON.

MEMBERS: Agreed. MR. SPEAKER: It is so ordered. [On motion, the Assembly resolved itself into Committee of the Whole]

November 30, 1981 ALBERTA HANSARD 1939 head: GOVERNMENT BILLS AND ORDERS (Committee of the Whole) [Mr. Appleby in the Chair] MR. CHAIRMAN: The Committee of the Whole As sembly will now come to order. Bill 92 Electric Energy Marketing Act MR. CHAIRMAN: There is an amendment to this Bill. The amendment has been circulated. Are there any ques tions or comments regarding the amendment? MR. R. SPEAKER: I haven't my amendment in front of me right now. It's coming. Could the minister just men tion what it is and possibly the explanation for the change? MR. SHABEN: The amendment referred to by the Chairman of committee is to

Section 9(1). It simply changes slightly the process for handling the subsidies. Initially, the Provincial Treasurer was to respond [to] a request from the agency. The amendment requires that the Provincial Treasurer respond to a request from the minister, rather than the agency. That's the extent of the amendment. [Motion on amendment carried] MR. CHAIRMAN: Are there any questions or com ments on Bill 92 as amended? MR. R. SPEAKER: Mr. Chairman, to the minister. In the debate on second reading, I raised the concern with regard to the two and a half years of studies by the department.

I think it's a good idea to have done that much study and background work. Over the weekend, I raised the matter with a few of my constituents at meetings, very informally at functions I was at. I don't say it was a sophisticated kind of discus sion. No one had heard about the Bill. That was the first point. They had not heard about the Bill or the effect it may have on electrical rates in the future. That is a concern of mine. Albertans really didn't know we were passing that kind of legislation. It's a kind of surprise to them.

In light of that, I've made the request that we hold this until spring; let the Bill sit over, and let people talk about it. In response to a question from the press, I understand the hon. minister indicated that if we provided the study and allowed this discussion to go on in public, 60 per cent of the people who would be affected and have increased power rates would most likely vote against this kind of legislation, because who wants their rates to go up? Maybe that is correct.

But in the democratic system or in the representative electoral system we've got in this prov ince, I think that's one of the things government has to face: one, people out there have to have the information; two, they have to have input. If the government can sell it to those who will be directly affected, either negatively or positively, then it is a good idea. But at the present time, Mr. Minister, there really has not been a public discus sion on this kind of format, this agency, to be placed across the province of Alberta.

Secondly, there isn't enough information out there at the present time for the people of Alberta to have a good rational discussion. Maybe after the reports were re leased, the news media made the information available to Albertans — I was trying to recall whether the minister raised this concept in the various meetings in the southern Alberta cabinet tour. I was trying to think about the agenda; whether the matter was raised at Vauxhall, where I was in attendance. I don't recall the matter. If it was on the agenda, then it's been an oversight or something I've forgotten. But I don't recall it at that time.

I don't recall any team of people going to the public. I know there was a discussion with the association of REAs and their respective executive. That was good, and I appreciate that. But often the REA executive members do not transmit the information back to the people. Nor, as I recall, was there any kind of announcement in the REA executive meetings that the government was con templating this, and there should be a discussion back at the grass roots of the various REAs across the province. Maybe that request was there.

I know that in terms of the kinds of meetings REAs have across the province, there is often small attendance, and it's very difficult to get a meeting because people have electricity delivered to their homes. They know it's there; the service is good. They are concerned about the bills, but they don't think about going to their REA and complaining. It's usually via the MLA or a letter to the minister. So I'd like the minister to comment on that. I don't know whether there has been any feedback or reconsideration since we had our discussion in second reading.

But two points: one, there's a lack of informa tion out there; two, I haven't seen any formal format that the minister or his department officials have used to transmit the message out to the grass roots for a good discussion. Maybe the idea will hold water and get 100 per cent support. Then it's a lot easier to move ahead, and the people won't feel something's imposed on them, which they may at this point. I don't know how they totally feel. My very preliminary investigation is that they don't know anything about it, so they don't know how to react. MR. SINDLINGER: Mr.

Chairman, I might echo some of the things just mentioned by the Member for Little Bow, in that the Bill's been out for only a very short period of time. I suspect that if I went to all my constituents and said, how would you like to have an increase in your power rates over the next five years, most of them would say right away, well, we don't think that would be a very good idea.

However, with further elaboration and explanation of the long-term benefits of such a power scheme, they might be more amenable to it, if there could be a demonstration that over the long term their power rates would be less than they would be in the absence of something like this. The difficulty is that there has not been that much public discussion about the power in creases, so it's difficult to convince people that this is in fact a good thing over the long term.

Perhaps from that point of view, it might be worth while giving considera tion to extending the period over which this program would be announced and pronounced or whatever and, second, the phase-in period. The city council of Calgary is concerned about the phase-in period. I understand that last week they were considering asking the minister if consideration could be given to a 10-year phase-in period as opposed to a five- year phase-in period. What struck me about their deliber ations was the short period of time they had to consider something like that. I'm aware of course that consultation

1940 ALBERTA HANSARD November 30, 1981 had gone on prior to that, over an extended period of time. But their reaction seemed to be very brief. They didn't seem to have much time to prepare something definite. To me, that also demonstrates there hasn't been that much time available for consideration of this. I would ask the minister if, since last Monday when city council did consider this, he has had representation from the city of Calgary; what consideration has been given to it; and what is the minister's inclination at this particular time in regard to the request for an extended phase-in? MR. OMAN: Mr.

Chairman, unfortunately, I wasn't pre sent at the debate that took place last Thursday on second reading of the Bill. I do have a couple of observa tions I would like to make, and some questions to pose to the minister. Of course, it's well recognized that the city of Calgary has had a very good position with regard to its purchase of electrical power from TransAlta Utilities. I recall that I was on council back in the early '70s when the present agreement was first entered into.

The city of Calgary was able to purchase electricity from Calgary Power for, I think, about 85 or 87 per cent of the actual production cost. So I suppose one can say that the rest of southern Alberta did subsidize Calgary. As a large consumer, it had the right or the power to make a very good deal, and we did. I recall specifically, because I was involved on the finance committee at that time. I'm also aware that the Public Utilities Board has, in later years, forced the city of Calgary to pay more, and that would probably increase closer to 100 per cent of the production cost over a period of a few years.

In that sense, I suppose there is a mitigating factor. Maybe the minister could comment on that aspect of it. I also believe that the city of Calgary's figures, which they have pub lished, are based on the present rate of about 87 to 88 per cent of the costs, as they're getting it right now. I suppose those figures would change if they went up to the 100 per cent figure over a period of, say, five to 10 years. It's a factor I've taken into consideration. I realize that in that sense, we in the city of Calgary are going to lose in this deal.

Perhaps the minister could also comment — because other members from the city of Calgary, including the Member for Calgary Buffalo, have mentioned the possi bility of extending the subsidy. I'm aware that the gov ernment could decide to do that after the five-year period.

One of the things that makes me think that that may be something we should look at rather positively, is that some of the future increased costs of power coming on stream, particularly Edmonton Power and it's Genesee plant, will begin to be felt about the end of that five-year period, or somewhere in that five-year period and maybe from there on. It may be that we should be looking at a decreasing subsidy from the five- to the 10-year period.

I'm aware that all power costs, and the capital costs particularly, are extremely high not only for Edmonton Power or Alberta Power but also for TransAlta, because I think they're coming on stream further down the line. So I suspect those rates would tend to come together to some extent over a period of time, except for the rural regions, where of course transmission costs are going to remain very high simply because of the lack of concentration.

So I want to express my concern that at the end of the five-year period, it may look like that's when some of the higher costs will come in before they begin to converge. I simply express my concern that we not close the door at the end of that five-year period. If I understand the minister correctly, he is saying that we are now, in a sense, guaranteeing a subsidy for the five-year period but not necessarily cutting off the possibility after that. Per haps the minister would like to comment. MR. SHABEN: Mr. Chairman, I'll respond in order to members who have raised issues with respect to Bill 92.

The Leader of the Opposition asked about additional information. If I understood the way the question was framed, it dealt with the concept of, as well as the impact on, rates. So there were two areas. I think that was implicit in the question by the Member for Calgary Buffalo. I think it would be useful for members to refer to Han sard of last Thursday evening, the discussion we had on second reading and approval in principle of Bill 92. I should elaborate. This relates to the difficulty in provid ing precise projections.

I would like members of commit tee to recall the debate last Thursday evening and consid er the method chosen by the various utilities to set rates. In the debate on Thursday evening, you'll recall I dis cussed how, first of all, the investor-owned utilities obtain approval on their revenue requirements from the Public Utilities Board. Then they file rates to achieve that re venue requirement for the utility. On the other hand, the cities, such as the city of Calgary, set a rate on a different basis. They purchase energy wholesale from TransAlta.

I'll go into the point the Member for Calgary North Hill made about arrangements that have been in place for a number of years between TransAlta and the city of Calgary on the purchase of electricity. Some years ago, when a new arrangement was negotiated with TransAlta, then Calgary Power, the city of Calgary very skilfully arranged a preferential wholesale rate for electric energy that at that time was about 88 per cent of the rolled-in cost of the cost of generation of Calgary Power's system.

They argued successfully before the Public Utilities Board that this was advantageous to TransAlta, to other cus tomers of TransAlta, and to Calgary because of the economies of scale of such a large buyer of electric energy, such a large block of power. It was advantageous in the sense that rather than the city of Calgary generat ing their own and investing in their own generating utili ties, the generating capacity was in place and the city of Calgary negotiated at preferential arrangement as far as purchase price of energy was concerned.

At the present time, and over the years, the city con tinues to buy at an advantageous rate, and purchases electric energy at about 94 per cent of the average rolled- in cost of generation. So that benefit accrues to the citizens of Calgary and is a result of circumstances. I think the Member for Calgary North Hill is correct in assuming that over the years that percentage would shrink, because it has from 88 per cent to 94 per cent in terms of price advantage, and would probably continue to do so.

Getting back to the point of rate setting for the cities — and of course the rates set in Calgary are influenced by a number of factors: number one, the purchase price of the energy; two, how they set the rates within the various classifications. On the advice of the commission board, the city council makes a political decision on how to set rates for different classes of customers. They follow a pattern of charging higher rates to industrial customers, not quite such high rates to commercial customers, and the lower rate categories to residential customers. They

November 30, 1981 ALBERTA HANSARD 1941 pursue that policy, and it's not unusual in the utility business. That takes me to the comment of the Leader of the Opposition about providing projections. Mr. Chairman, it's very difficult. I've advised members of the Assembly that our projections — and they're not mine; they're the projections of the Electric Utility Plan ning Council and the Energy Resources Conservation Board on the need for new generating plant and cost projections of those plants.

How that will reflect in the revenue requirement of the total utilities in the province means there will be a revenue requirement some two and one-half times greater than at the present time in order to meet the costs of these plants, to service wages, the costs of labor and fuel. All these factors will mean an overall increase in the cost of electric energy in the province.

How an individual utility obtains that revenue changes each time it applies to the Public Utilities Board and has its rates set, because relationships between industrial, commercial, and residential rates change from year to year in terms of how the city- or investor-owned utility chooses to recover that revenue requirement. So projections placed before members are based on the way the rate structure is at the moment. We will share that information with our implementation committee, made up of the utilities and the cities, as we move in the next months to implement the marketing agency on April 1.

That's one difficulty in laying out what people would believe to be precise projections. They're based on today's assumptions that can be influenced very dramatically by actions taken by a city or a utility, or by circumstances. In terms of the question of citizen awareness, I think members of the Assembly are the best barometer in the province of what citizen awareness there is. In our gov ernment caucus, we have spent a lot of hours receiving input from members of the Assembly on this particular piece of legislation.

There has been extensive discussion, particularly with the objectives I outlined during second reading. If members believe the objectives are not worthy, that's a different issue.

There's no need to repeat the objectives, but briefly: to rationalize rate problems, which the Leader of the Opposition is well aware of; to improve the opportunities for economic dispatch, and to some extent this goes to the question raised by the Member for Calgary Buffalo in terms of benefits that accrue to all Albertans over a period of time; the question of balanced economic growth; the question of integrating electric energy produced from high-cost hydro, whether it's ex- traprovincial or in northern parts of the province, where you have a high initial cost and long-term benefits; to deal with a question of export of electricity from the province, and how citizens of Alberta benefit from that export if it's undertaken by one utility.

All these ques tions were addressed very carefully. Solutions were sought that would be simple and non-bureaucratic, with minimum interference in a system that has worked very well. I can't provide precise rates for what will occur in 1990 for a particular class of customer; I've given the member some indication of what will occur if projections laid out by the Energy Resources Conservation Board and the Electric Utility Planning Council are likely to occur. But the overall effect will be that there will be cross- subsidization between consumers of utilities. That's not unusual in today's world.

About two years ago, the two major gas utilities applied to the Public Utilities Board for what were known as generic rates. The Public Utilities Board, which is at arm's length from government, dealt very carefully with those applications, which dealt with the request to cross-subsidize between their urban and rural customers. The Public Utilities Board studied that matter very carefully over a year and a half and ruled that that would be an acceptable practice. Subsequent to that, Northwestern and Canadian Western have applied for that sort of rate structure to serve their customers.

There are many other examples. For Gas Alberta, an agency within government that provides natural gas to the rural gas co-ops, we use precisely that practice. Simply because a rural gas co-op is located right next to a well and another is located 400 miles away doesn't mean they shouldn't have wholesale prices for natural gas. So we've structured Gas Alberta to provide rural gas co-ops across the province with the same wholesale rate for natural gas. Telephone service is another the citizens of Canada and North America accept, and it's become the norm.

So on the issue of resolving the issues I laid down as concerns of the government, the solutions were sought and a far-ranging number of options were considered. The government has chosen a marketing concept which provides minimum interference. Recognizing that there would be some impact on some consumers, the government has made a commitment to provide a phase-in period to provide a subsidy. This goes to the question raised by the members for Calgary North Hill and Calgary Buffalo.

I've indicated in the Assembly that we will be asking the Provincial Treasurer for approximately $100 million in year one, and will proceed with a five-year phase-in period. That five-year period is very important in terms of the length of time — and the Member for Calgary North Hill touched on it — in that the end of the five-year period is March 31, 1987. That's about the time Genesee will be commissioned and Ed monton will be moving off high-priced natural gas to coal.

Though the plant is new and expensive, with the long-term benefits to the interconnected system of coal versus natural gas and the uncertainty of the level of excise taxation by the federal government, it's an appro priate move for the city of Edmonton. Having those additional units and Sheerness, Battle River, Keephills 1 and 2, and the new units coming on, provides a greater opportunity for the fuller implementation of economic dispatch, which I dealt with at length last Thursday night. Mr. Chairman, those are some of the comments I had to make with respect to the matters raised by the three members. MR. R.

SPEAKER: Mr. Chairman, to the minister. I appreciate his sincerity in bringing forward the program. The only point is with regard to the concept. I can understand the impact of rates. I think the minister has explained fairly well that it is very difficult to project the exact rates in various areas because of the assumptions under this program. Each major consumer body, such as the cities of Lethbridge, Calgary, or Edmonton, buys it at a wholesale rate.

In turn, because of the spread they would like to have between the industrial, commercial, and residential rates, and depending on how much mix they make of each, they will determine the various rates in the different areas. I can understand that, and I think it's most likely proper. The concern I've had is with regard to public involve ment. I don't know whether the minister really addressed that question completely. We in the Legislature and on this side of the House — I would say I am like the Alberta public in the sense that I first heard the an nouncement here.

I'm sure there were many hours of discussion on the concept in your caucus committee and

1942 ALBERTA HANSARD November 30, 1981 in the cabinet committees before you initiated it here in the Legislature. But we heard about it on November 16 and had second reading on November 26: a 10-day period. Now, on the last day of November, we are in Committee of the Whole. Once it's through this stage, most likely it will be law in the province of Alberta. It's fairly well accepted that it will receive government sup port in the next two stages. For that reason, I think there should be more public discussion in terms of the concept, so people of Alberta know.

Some will be impacted in a negative way, some in a positive way. In terms of the government's own position of being open to public input and wanting to communicate with and involve the public, I'd certainly recommend that this should be one area where a little more time is taken. We can get it through the Legislature. And I still can't argue about the pros and cons of the program, because I can see some benefits. But in terms of public involvement, there's a shortfall. Maybe the minister should reconsider the matter on that basis.

The minister can explain that certain kinds of things will happen and there is still a chance for the public to say, look, we don't think we like this. I don't see it, though. Once we pass the legislation, on April 1 the law will be in effect and the department will implement it. At that point, the general public ac cepts what has happened. I would appreciate the minister reconsidering that, and arguing on what basis it's not necessary at this point in time, so the public knows why the input isn't necessary. MR. SINDLINGER: Mr.

Chairman, I also would like to reiterate that I think there has been a very short time for consideration of this Bill. I say it's short because it's a major change. It's quite a dramatic change. We all recog nize the importance of the Bill. Other administrations have gone through this same sort of thing over the years. The most recent I can think of is the Bonneville Power Administration, which is responsible for the distribution of hydro-electric power throughout the Pacific northwest. It gets its power mainly from the Columbia River basin and tributaries like the Snake River.

Until the 1960s, the Bonneville Power Administration was the largest hydro electric distribution system in the world. It was even greater than the Tennessee Valley Authority, which was the largest undertaking at the time it was constructed. The Bonneville Power Administration has now been ex ceeded by a transmission development system in Siberia. When they had the problem the minister is facing now, they went through many public phases, first of all in order to get input from the public and, secondly, to provide information back. It was a two-way flow, rather than one.

A considerable amount of time passed for the people in that area, which was essentially Washington, Montana, Idaho, Oregon, and the northern part of Cali fornia. First of all, they had the opportunity to provide input and, secondly, to find out what the decisions had been. They faced the same problem there in regard to ration alizing the rate system. Consumers in the major consum ing areas of Seattle, Tacoma, Portland, and Spokane found that their rates too would be increased over the short term. But they were convinced that over the long term, they would benefit from the project.

Over the long term, their rates would be lower than they normally would have been. Also, the heavy industrial consumers in that area, I believe they are the aluminum smelters, lo cated there in the first place because they could get rela tively inexpensive hydro-electric power. This is one point the minister made in regard to this program. If we can rationalize rates and lower the overall average throughout the province, the cost of power becomes a neutral factor in the location decision-making process.

Of course, we can't argue with the objectives of the program, but we can suggest that perhaps when there is something as major as this, more time be allowed for the change-over. This being a conservative province in na ture, I think people like to take things a little more slowly than abruptly going from one thing to the other. That's why I was a little concerned about the reaction of the Calgary city council.

The first question I asked was whether or not, since last Monday when the city council decided it would make representation in regard to a 10-year phase-in period as opposed to five, the minister has met with them and what consideration has been given to their representation. I'm not quite certain that was addressed in your remarks. I would pose it to you again, if I could, please. MR. OMAN: I have a couple of other matters of a general information nature that I'd like to raise with the minister. We talk about rate increase to the city of Calgary of some 8.5 or 8.9 per cent.

Even though some people in the city will dispute that and say it will be more, I gather there is clarity in this area that of course there will be regular inflationary increases which we've had in the past. Sometimes they've been 10 to 15 per cent per year. These will be increases above and beyond that, obviously. I noticed in Hansard that in his comments the other night, the minister indicated that Calgary would still re tain the right to add its own surcharge or transmission charge, if you will, to the customers of the city. As I see it, Mr.

Chairman, this is very important because the city of Calgary has raised many millions of dollars for its own revenue system through that transmission. I see this as a good thing because it dilutes some of the inequities of the property tax system which, in many cases, really isn't based on the ability to pay. I would certainly want to see the right of that system preserved. The question that comes to my mind is: would the increase in the rate mean any difference as far as adding on, so they would have to decrease their revenues in that area in order to stay competitive in some sense? [Mr. Purdy in the Chair] MR.

SHABEN: Mr. Chairman, the Leader of the Oppo sition again raised the question of timing. It's difficult to respond to in that we believe, and I think the hon. member is aware, that the issue has been before us as individual members of the Assembly and as a concern to successive governments. I outlined a number of the issues when I responded initially, and that issue remains. From the comments of the Leader of the Opposition, I under stood that he recognizes the need to deal with some of these issues outlined in the Assembly, but it's a matter of the timing.

That question that will probably be before us, and I'm prepared — and I know all members of the Assembly are prepared — to discuss with our constituents the principle, the phase-in, the massive subsidy in order to achieve the phase-in, and the objectives. I'm confident that Albertans believe this is sound legis lation. There are opportunities for us all to test that among our constituents, if all members are fully familiar with the principles and the objectives. I believe there has been public discussion in terms of the government ad

November 30, 1981 ALBERTA HANSARD 1943 dressing the issue for the past year and a half. It's been raised in the Assembly. I alluded to that when I com mented on questions raised on a number of occasions by the Member for Olds-Didsbury, who resigned his seat today, and by others. The issue has been before us, and I believe I responded in saying that the government was addressing it.

In terms of the actual implementation of the program, the five-year phase-in and the move to economic dispatch is a wise way of moving, in that the objective is to offset a great deal of the impact of achieving cross-subsidization without massive intervention by the government. There are other options to achieving it, which I'm sure people would consider, that would involve massive intervention. The Member for Calgary Buffalo referred to the Bon neville power authority and the process followed in that region when the Pacific northwest power marketing and conservation legislation was passed in December 1980.

The legislation was passed by Congress. Their system is very different from ours. Fortunately, in Canada the provinces own the resources,

whereas in the United States the federal government is the ultimate authority. The Bonneville power authority reports to the federal gov ernment. It's an agency of the U.S. federal government, as is the Tennessee Valley Authority. After considerable consideration of the problems outlined by the Member for Calgary Buffalo, they chose to move in a similar way to what we have chosen here, although I believe our legislation is much better. They also have a different policy with respect to new industrial development. If new industrial load develops, that new industry pays the full incremental cost of new energy.

They protect particularly their agricultural community as a result of this legislation passed by the U.S. Congress in December 1980. I went to Portland and visited with members of the authority to learn and adapt what I could to improve upon their initiatives, and we have presented this piece of legislation. We are aware of the course of action taken in those four states. This legislation, the marketing agency, is less interventionist than the U.S. federal legislation but provides much more benefit.

The further question from the Member for Calgary Buffalo: have I met since the most recent communication from the city of Calgary. On two previous occasions, I met with Commissioner Cornish and Alderman Lee, who is on the utilities committee, on precisely the same issue. I'm not able to change our position that the government makes a commitment for a five-year phase-in period. But I'm not prepared to suggest we commit future govern ments to extending that. That's the position the govern ment takes at this time. The Member for Calgary North Hill asked for clarifica tion on the rate situation.

Our examination of the figures indicated that a residential consumer would pay 8.5 per cent more for electricity on March 31, 1987, that would be attributed to the agency, than he now does. As they presented it to me, the Calgary position has been that the gross amount would be 13 per cent higher. I responded earlier to the Leader of the Opposition on the rate struc ture. We based our projections on the proportion on which the city of Calgary now sets its rates; that that impact on the residential consumer at the end of five years would be 8.5 per cent more than it would be without the agency.

But we have no control over how the city chooses to structure its rates in the future. They may choose a different proportion. So there continues to be room for cities that purchase electricity wholesale to set their rates, to take a markup, and to provide some relief for their taxpayers. We're not interfering with that capacity. In his first question, the Member for Calgary North Hill raised a very important one; that is, the rate at which the city of Calgary now buys its power at less than the average rolled-in cost.

Based on the decisions of the Public Utilities Board, that's an advantage they receive that we believe would ultimately slowly be removed, as it has over the past number of years. It's moved from 88 per cent of cost to 94 per cent of cost. Because the city of Calgary won't provide their figures to us, we don't know whether they're using that 6 per cent for 25 years in calculating their figures, or whether they're basing it on some other aspect.

So our commitment to the city, and to all the utilities and cities involved, is that as we work through the implementation plan in the months ahead, we will compare the basis of our figures, compare the sources and the data, so that we have a clear understand ing that we're comparing on the same basis. We believe the legislation is sound. It's practical legisla tion. It interferes virtually minimally in the operations of those cities that purchase and resell their electric energy.

It provides a large number of benefits that would be impossible to achieve unless other sorts of decisions were made to resolve those issues. MR. R. SPEAKER: Mr. Chairman, I make only this comment about the process that will go on between now and April 1, and the involvement of MLAs. I think the minister would agree that once this legislation is passed, it becomes a different format. When I go to my constitu ents, once this legislation is passed, I'm telling them what they're going to get. It's a foregone conclusion.

This law is in the province of Alberta, that's what they have to accept, and I'm trying to sell it to them. It's a "telling" format. I've never appreciated that kind of format. I'd rather have it the other way around; that I say, here is a concept I can present to you. I didn't have the opportuni ty to do that before I came to this Legislature. As I said, I really wasn't aware that the government was taking this position. Maybe your caucus members did know that, and fortunately I'm not in your caucus. One thing that has been missed in the process is public input, even in terms of your own caucus members.

If they held any kinds of public meetings, I certainly didn't see any discussion in public, in the press, or through the media. They must have been held somewhere behind closed doors. They were not public discussions. At this point in time, Mr. Minister, you're asking me, and I would say you're asking every one of your col leagues on that side of the Legislature, to go out and tell the people what they're going to get. That's not your format, Mr. Minister. MR. DEPUTY CHAIRMAN: Would the hon. Leader of the Opposition kindly come back to parliamentary rule. MR. R. SPEAKER: Mr.

Chairman, that's not the minis ter's format. As long as I have known him in this Legisla ture and in private life as a businessman, the minister has always been involved in public discussion before some decision has been made. I'm very surprised at the format the minister is using at this time. Yes, the government has the power to do it; yes, they have the majority; yes, they can do it in this Legislature before it closes, whenever that is; and yes, the public has to live with the impact, the ramifications. No question about that. They must live with it, because that's the Act that's going to get passed.

1944 ALBERTA HANSARD November 30, 1981 The people of Alberta are victims of the system, victims of the Legislature. That is not the democratic process. That's not the process where an idea goes out to the public, they discuss the idea, have their input in terms of the negatives and positives, and then we as members of the Legislature are able to come and discuss it on that basis. I have to admit, Mr. Chairman, and I say to the minister in all sincerity, that not hearing about the idea, not being involved in any caucus discussions or any discussions at all, I have not had any feedback.

I stand here as an individual person representing only myself, I guess, because I don't know what my constituents think. The few I've raised it with said, I never heard of that; I didn't know any equalization was going on in terms of wholesale power or rationalization of power across the province; I didn't know about it; what does it mean? Well, they ask a good question. They're saying, tell me what it means and then I'll be able to respond when I'm asked about it.

But I have only one alternative after this legislation is passed and they ask that question: here's what it means; you've got to accept it; it's either going to increase or decrease your power rates; and it's there forever after, unless maybe the government changes and the next government thinks it is not a good format. This government isn't quite humble enough to see a mistake later on and change it. We've seen a number of mistakes stay in place because the government has a majority and doesn't want to admit mistakes. Mr.

Chairman, there's a big difference between telling people what they're going to get and selling it to them, and going out and saying, what do you think of the program; do you think it's good or bad; if you think it's good, tell me and I'll go to the Legislature and make good representation. That format hasn't been followed. All the good will, all the selling out there after this legisla tion is passed and people are not clear on it and don't understand it — you deserve the reaction you will get.

There's no rush to have an election, unless you're going to have one in March and you're going into a different portfolio after March. This could be your mark in his tory. I can understand that you have a rush for that reason. But if you're not going to have an election in March and as minister you don't want your mark in history relative to this, maybe we can put this off till the spring Legislature and have a discussion.

The department people can go out in terms of public relations, press releases, community contact, and discuss the matter with the REAs out in the rural communities rather than with the central executive. Then when you come back, you'll have full endorsement, no endorsement, or maybe some thing in between. At that point in time, you have to make a decision. Now, the public may disagree because they just haven't been consulted. Maybe the program is good, and you will have a reverse effect that you may not appreciate, or you may have to backtrack later on. I don't think the minister wants to do that kind of thing.

So I think the minister should reconsider what he's doing with the public of Alberta in terms of the process of selling the concept. Right now, in a sense we're getting a unilateral move. A few days have passed in the Legisla ture, the public hasn't had time to react. They get it; that's it. I think we have more time than that to make changes as significant as this. This is a major change in the legislation. The minister said we're going to be responsible for selling the idea to the public and that figures could change later on. Mr.

Chairman, I note that the minister has indicated in some news articles that there would be certain costs. I'd like a comment from the minister on this. For example: Calgary will pay 8.5 per cent more at the end of five years than it would have without the agency. Is that still legitimate? That's most likely based on present-day policies, not on changing policies. Secondly, the minister said: For instance, the average monthly rate in Lethbridge ($23.52) fits between Calgary at $19.83 per month and Grande Prairie at $32.75. Are those acceptable figures out in the market place at the present time?

It goes on to say: Mr. Shaben said as of April 1, Calgary homeowners will pay an average of $22.50 a month and Grande Prairie bills will be about $27. This is key to the information: About one-third of Alberta customers will tem porarily enjoy a rate reduction. By that statement, does the minister mean that all rates will go up after this initial change in the agency, that for three or four months there'll be a rate reduction but after that they all go up anyway?

In another article, the minister indicates that: The province said its new wholesale rate for electrici ty will reduce current rate differentials by 80 per cent. The minister already commented that that was accurate. The remaining 20 per cent, representing distribution costs, will not be affected. I believe the minister responded to that already. The other area that I relate to the minister in terms of the reason behind the scenes for this kind of legislation, the reason we're trying to move ahead — the minister represents the Slave Lake area. I'm sure this will be one of the accusations. I note in an

article in The Calgary Herald of November 18, 1981 — and I'd certainly appre ciate the minister commenting on this, because this will come back at the minister at a later time: It has been suggested that the real objective is political — to cushion a threatened rapid increase in power rates in the northern part of the province. If that is the aim, let the government be frank about it, and let it find a method of achieving it which does not involve direct government intervention. That's the comment in this Calgary Herald article.

The minister, representing northern Alberta, leaves himself open to that kind of criticism, particularly right now. That's the point I make: Albertans aren't aware of the program or the legislation and, secondly, they are going to have to react after we pass it here in the Legislature. I think the minister leaves himself open to that kind of criticism. Mr. Chairman, I'd appreciate the minister's comments on those things. Is he ready and prepared to face that kind of onslaught after the fact? Once we pass the legisla tion, all these suspicions and concerns rest on the minis ter's shoulders. MR. SINDLINGER: Mr.

Chairman, I have several ques tions to ask but, before I do, I guess we seem bound to come back to this question of public input. I think the government caucus system works quite well, because it enables all the MLAs to provide input to government decision-making. I follow that same procedure now with my caucus. [interjections] But from time to time, when I walk into my caucus I have to ask myself whose point of view I'm representing and whom I have asked about these things. Even though I see myself sitting there and ask

November 30, 1981 ALBERTA HANSARD 1945 myself these questions, I sometimes have doubts about them, in that I recognize that I have a certain point of view and sometimes it's not representative of a broad spectrum. So what I have to do is ensure that I get input from other places as well. Certainly, I recognize that this other person in my caucus isn't infallible. I might be bold enough to suggest that from time to time the opinion expressed in the government caucus might not be infall ible either. It never does hurt to touch base with others outside the caucus and get broader representation.

Generally when there are rate increases, there's a facili ty for appealing those rate increases through the Public Utilities Board. The Public Utilities Board has the oppor tunity to review proposed rate increases and to hold public hearings for them. This situation is not too dissimi lar, because in effect we're talking about rate increase for a large sector of the population. I'd like to get into that a little later. Right now I have two questions. One is for greater certainty in regard to the representations made by the city of Calgary.

Has the city of Calgary made a representation since last Monday, or were they just considering it? If they did make the representation since last Monday, has the minister officially responded to it? The second ques tion I have is in regard to the subsidy of $100 million over the first year. Could the minister please give us a geo graphic breakdown of the distribution of that subsidy, with special consideration to the amount that would be allocated for Calgary and Edmonton? As a supplementa ry to that, I haven't heard any questions asked about the impact on ratepayers in Edmonton.

I understand that the government has assessed the potential impact for Calgary at about 8.5 per cent. Is that a similar figure for Edmonton as well? MRS. CRIPPS: Mr. Chairman, I'd like to make a couple of points about public input, because it's been mentioned a number of times. I think the Leader of the Opposition was correct in his first statement, that Alberta consumers don't really care how the power is delivered to them. What they want is a guaranteed supply at a reasonable price. I guess that's the key, because that's what this marketing agency is designed to do.

I'd like to say that I attended the Union of REAs meeting at Red Deer, where there were over 250 regis tered delegates and numerous people who weren't official delegates. I know the minister outlined the prospective we were looking at, the 10 points I enumerated the other day, alternatives for solving the problem. I hate to hazard a guess, but I imagine that we've probably had 10 to 15 meetings with different interest groups, some of them being REAs, and talked about their problems. I suppose the one thing this doesn't solve is the master contract and the line takeover. It doesn't solve those problems.

But it solves nine of the 10 other problems that we discussed and that I illustrated the other day. The only other alternative that solves the nine out of 10 is public power. I suppose it would solve the line takeover and the master contract, because you don't have to worry about a contract anymore. You are the contractor and the contra- ctee, and all the rest of it. I'd like to re-emphasize the positive aspects of this Bill. The 72 KVA point of resale was chosen as a compromise between administrative efficiency and the elimination of rate differentials.

At that point, the rate differential is going to increase in the province of Alberta. I really haven't heard any argument against that conclusion. There's no argument for that conclusion. I guess the argument I'm hearing is the method. I've talked to members of my own REA about the alternatives. Quite frankly, I don't think you're going to get any informed feedback until people have a substantive program out there, that this is what it is. As long as it's illusionary, there's not going to be any real public feedback; at least I've found it very difficult to get.

As has been mentioned, 80 per cent of this rate dif ferential would be eliminated. I guess the additional bene fits which would flow are that it simplifies integration of power purchased extraprovincially, encourages govern ment policy of balanced growth, and rectifies the discri minatory natural gas rebate to the city of Edmonton. I think you have to admit that the government is very much involved by way of the natural gas subsidy to the city of Edmonton and the ERCB's designation of who builds what power plant. Whether or not we want to admit it, I think we're indirectly or directly involved.

This helps take away the special benefits that one company or another might get from that involvement. In fact, the next point is that it reduces significance of decision on franchise and service area allocations. Next point: it equally distributes increased cost of production and transmission or introduction of new sup plies of high- or low-cost electric energy. I guess the costs of new plants coming on stream down the road may be horrendous to some of their users. It also optimizes the least cost energy supplies. It only partially resolves the REAs' concerns.

One of their concerns, by the way, was the different prices of power to different REAs within the province. [Mr. Appleby in the Chair] The next point is relatively simple administration, and it doesn't adversely affect the role of the ERCB. In fact, I think it would make the role of the ERCB much easier, because their decisions don't make such a basic difference to the consumers of Alberta. It temporarily reduces ener gy rates to one-third of provincial consumers. So I guess the pros, if you want to call it that, of the marketing agency far outweigh any detrimental effects it would have. DR. C. ANDERSON: Mr.

Chairman, I'd like to rise and say that I'm sure my constituency of St. Paul and my constituents will be pleased to see Bill 92 coming forward. There is an accusation that there hasn't been public input in the decision that has taken place on this Bill. For a number of years, there has been considerable interest in St. Paul. It recently surfaced again in late 1980 and the early part of '81, over the St. Paul regional school, which developed an electric bill of over $8,000 per month. That brought input to the St. Paul Chamber of Commerce, requesting that the government go to public ownership.

After four meetings of the Chamber of Commerce, public ownership was voted down but it was strongly recom mended that something be done. I guess really what we see here is a conflict between rural and urban. We usually see that. But in our process over the past several years, we have AGT to provide a service on an equitable basis to all our constituents throughout the province. I'd hate to see us have to change that, so that the rural areas really were handicapped on both economic and other means of communication. So I'd just like to add the support of the constituency of St.

Paul to the minister for the action he's taking at this time.

1946 ALBERTA HANSARD November 30, 1981 MR. BOGLE: Mr. Chairman, I want to make a few comments after hearing the Leader of the Opposition talk about public input and the need for more time. I think it might be enlightening if I were to review some of my own activities during the past few days. I attended public meetings in Warner, Vulcan, and Wrentham. Two of those communities are in the constit uency of Taber-Warner. Vulcan is in the constituency of Little Bow. I can assure the hon. Member for Little Bow that there were discussions at that meeting in Vulcan, a good cross

section of people from across the constitu ency. It's possible that the hon. member wasn't able to make it to his constituency this past weekend; I'm not sure. But I would like to assure the Assembly that in discussions at those three public meetings, as well as discussions I've had with two executive members of REAs from within the constituency, there's a great deal of interest and excitement about the concept and the basic principle of a program such as this. For some time in the Taber-Warner constituency, there has been an interest in finding an alternative to the current arrangements.

We have two major utility compa nies and several owned by municipalities. The moves in general were very well received at the meetings I attended, including the meeting in Vulcan. MR. SHABEN: Mr. Chairman, there have been some useful comments on this important piece of legislation, and I appreciate the comments of the members of the Assembly. The Member for Calgary Buffalo said that when he talks to himself, he doesn't always agree.

I think I'd have the same trouble if all I was doing was talking to myself, but having an advantage of discussing it at con siderable length with caucus colleagues has been helpful in developing the policy and the ultimate legislation. Those haven't been the only discussions taking place over the past couple of years, as the hon. member will recall. There has been a great deal of thought, debate, ex amination, and research before bringing this Bill forward.

As the Leader of the Opposition and the Minister of Social Services and Community Health have indicated, members of the government caucus recognize that this is a very important piece of legislation. There is no effort or attempt to slip anything over on anyone. Over the past two and a half years, there has been a thorough and careful examination, as evidenced by the comments of the Member for Drayton Valley in discussions with her con stituents on the issues, and then an examination of the options available to a government. And there are options that are extreme.

On the one hand, I would say there is the status quo which, if I'm not misreading the Leader of the Opposi tion, is what he's suggesting. Maybe we leave things as they are, with huge and growing rate differentials, with a lack of capacity to deal with the other issues we've dealt with at length.

I know the other option is the one that the leader hasn't advocated; that is, massive government in trusion into the utility sector, which would require ex propriation and the taking away of the capacity of Leth- bridge and Calgary to set their own electrical rates, forced takeover of Edmonton's utility and its generating capaci ty. That's an extreme. I believe the government has chosen a wise and reasonable course of action, which is a marketing agency with the subsidy injection to offset the effects of cross-subsidization as we move toward econom ic dispatch.

I always find it difficult to respond to media comments. I would much sooner respond to comments from the Leader of the Opposition than to comments from the media. I seem to get into trouble when I respond to media, because they always have the last word. With constituents, it's much easier. If the Leader of the Opposi tion would like any assistance that I can provide in communicating with his constituents, I'd be happy to do so, as the Minister of Social Services and Community Health has done.

The temporary rate reduction — and I'm responding to that comment by the Leader of the Opposition because it was raised by the Member for Drayton Valley, and not as a result of a newspaper article. I thought I dealt with that at length during second reading on Thursday evening, when I indicated — and provided members with a copy of this document, "Power Generation in Alberta" in fu ture years — the impact of that new generation, and all the other factors that go into the new plant that's re quired, and the impact it's going to have on Albertans in terms of rate increases.

Because there are more people in Alberta, and each individual, family, and business is demanding more and more electricity, and because there seems to be a movement towards electricity providing a greater share of our energy requirements, the projections of the Electric Utility Planning Council and the other experts in the field is that electric energy prices are going to go up two and a half times in the next 10 years. That's the reason for the expression "temporarily re duces rates".

I wouldn't want to leave the citizens of Alberta with the impression that there is some magic capacity in this Chamber to reduce these costs to con sumers. We simply can't, because of all the factors that go into the cost. But there will be a temporary reduction for some consumers. The question by the Member for Calgary Buffalo of where the $100 million subsidy goes, and peripherally he asked how it impacts on the city of Edmonton as opposed to Calgary — I think that was the nature of one of the questions. The money will go into the pool. I described the pooling process.

The agency would purchase the power, own it for an instant, average the transmission and generating costs and, at that point, would inject the subsidy. So the subsidy goes back into the system, and the utilities buy back the power from the agency. The dollars go into the pool, and they go back to the utility that has supplied the energy to the agency. If the question is how it impacts on certain classes of customers, it's obvious that it impacts on those who presently have the higher rates, because it offsets those higher rates by the money being injected into the pool. That's how the subsidy will be moved in.

It goes into the pool, and then it goes back to the generating utility, which in turn resells it to its customer with their tradi tional relationship. The precise effect on any individual customer — I have dwelt at length, both in the Assembly and in discussions outside, on the impact on Calgary. The Member for Calgary North Hill really highlighted the reason there has been so much emphasis on the city of Calgary; that is, because of the relationship between the city of Calgary and TransAlta, and the fact that for a number of years Calgary has been able to purchase electric energy at less than cost.

Once the agency is in place, the city of Calgary will be buying at the pooled wholesale cost at the edge of their corporate limits. An example of what would happen to a residential customer who consumes 6,300 kilowatt hours in a year, a typical level of consumption for a residence, a Calgary resident would pay $238 in 1981. Without the agency, a

November 30, 1981 ALBERTA HANSARD 1947 typical Calgary resident would pay $270 in 1982, and that's based on what we expect the increases would be. With the agency, a Calgary resident would pay — and please let me make clear that these are our projections — $270 in 1982. That's the first year of the marketing agency being fully implemented. There will be zero impact on a Calgary customer. Now, in this response to the question by the Member for Calgary Buffalo, let me give you Edmonton. In 1981, a typical Edmonton customer who uses 6,300 kilowatt hours would pay $233.

In 1982, with the status quo, he would pay $285. With the marketing agency, based on our projections and the level of subsidy I proposed for the agency, a typical Edmonton customer would pay $270. In the very earliest question, the Leader of the Opposi tion mentioned Grande Prairie. The electric energy bill of a typical customer in Grande Prairie who consumes about 6,300 kilowatt hours is $393 in 1981. Without the agency, his bill would be $436 in 1982, based on our projections. With the agency, a Grande Prairie resident would pay $324 in 1982.

This points to the point I made in earlier debate and during committee study, that the differential is not being eliminated. The effect of the marketing agency is to pool the cost of generation and transmission, but distribution costs will be borne by the customers. It's a very simple procedure, although the implementation is going to be complex and it needs a lot of work over the next number of months. That work will go on.

In terms of the benefit to Albertans — not just Albertans who are being served by REAs, as referred to by the Member for Drayton Valley, but all Albertans — I believe the benefit will accrue over the years as we move toward what I've re ferred to as economic dispatch. Maybe I could elaborate on that in this way. The most recent approval for a new generating plant was Genesee 1 and 2, to be built by the city of Edmonton to serve Edmontonians.

When that plant is commissioned in 1987- 88, or 1986-87, depending on the decision by the Energy Resources Conservation Board, the full cost of the capital will be rolled into the rates for the consumers of the city of Edmonton, were we not implementing the marketing agency. Let me give the members of the Assembly anoth er plant: Keephills 1 and 2, a Calgary Power plant that is being built and will serve TransAlta's customers. I'd like to explain this so that the relative impacts of these two plants on the systems they serve are clear to all members.

If Keephills 1 and 2 is commissioned in '83-84, the accumulated capital cost of that plant — the interest, the cost of construction while being built — will go into the rate base of TransAlta's customers. But TransAlta's cus tomers will have the benefit of averaging the cost of that plant with all the previous plant that has been built since 1896, whether it's hydro on the Bow or a coal-fired plant at Wabamun. As a result, the impact of that plant going into the system is far less on TransAlta's customers than the impact of the Genesee plant going on stream for Edmonton.

Now, what happens with the marketing agency? The real result of the marketing agency is that you have the benefit of a single system, in that Genesee comes on stream, an 800 megawatt plant serving a portion of the Alberta interconnected system. But as a result of the pooling process, those higher costs that would have gone to Edmontonians become a part of the average pooled generating costs, and we have the benefits of a single system but without the massive government intervention of moving in and taking over them all. I hope this has been helpful to members in describing a little more what the system is about.

In terms of the government moving with this legislation, as I've said before, I think it's sound legislation. It addresses not only the concerns of rural Albertans but the long-term con cerns of those in urban centres. It addresses all the other issues I've mentioned: the possible benefits of export of surplus quantities, and the development of future hydro sources and a method of integrating them. At the same time, the government is offsetting the early effects of this move by committing itself to a five-year subsidy.

We achieve a sound system of providing Albertans with elec tric energy without massive intervention in the market place. The argument may be made by the Leader of the Opposition that we haven't talked in every corner of the province and tested the idea. But I'm confident it's a good program. It's not a parochial program to serve certain constituents in one part of the province or another. It is designed and developed to serve the entire province in a reasonable way. There are certain times when govern ments exhibit leadership, and I believe this is one of those times.

I'll repeat: I'd be comfortable to go into any part of the province and discuss the objectives and operating methods of this agency, and feel confident that Albertans believe that the government has made the right initiative and that it's sound legislation. MR. R. SPEAKER: Mr. Chairman, I really appreciate the last figures the minister presented to us, because they give an idea of what's happening in various areas. Are figures like that available, say, for my own constituency, for the cities of Medicine Hat and Lethbridge, so we can see what is happening in various areas? That helps to understand the plan.

It helps me to understand that under present circumstances, this is the kind of impact that will occur after the legislation is passed. If the minister can provide that type of material to us in the Legislature in terms of our respective constituencies, all the better. I know that Medicine Hat is just a little different situation. Maybe the minister could comment on that. It looks like the task we as members are taking on is to be able to talk intelligently about this matter in our constituencies. I think the questioning going on between us at this moment is providing the kind of material that's necessary.

But the new material you just raised in your last few remarks was not available to us before this discussion occurred in the last 15 or 20 minutes. So I think it's incumbent upon the minister to provide more details of that kind, and I'd like to know if they are there. Mr. Chairman, in terms of discussions with my con stituents, I want to say this to the Minister of Social Services and Community Health. Certainly, I think it's good that all input to this government occurs. And from my constituents directly to ministers, I think it's good to have that opportunity.

The Minister of Utilities and Tele phones was in my constituency in terms of the cabinet meetings, and I thought that was good. But we didn't discuss this item. I want to say, though, that that evening I was with one of the best Conservatives in my constitu ency, and this Conservative was visited by the Premier. The Premier, with the Minister of Agriculture, made a special trip by helicopter into my constituency to visit that good constituent.

Because that constituent was able to attend another function with me, I felt that maybe the meeting attended by the Minister of Social Services and Community Health and other members of this Assembly

1948 ALBERTA HANSARD November 30, 1981 wasn't as important. So I went to a meeting with the Premier's choice rather than other persons' choice. We had a good evening together. One discussion we didn't get into was with regard to rationalization of power rates. At this point, I'm sorry I didn't do that. We had some other excellent discussions as well. Mr. Chairman, to the minister: could you elaborate on any other material you may have with regard to other areas of the province? I think it's necessary for us as members of the Legislature to have that.

If it can't be provided today, is there a time when the minister is going to give that other background material, which I'm sure he has at his fingertips. MR. SINDLINGER: Mr. Chairman, it's not the concept we're discussing right now; it's more the details and elements of the proposed project. In regard to the $100 million subsidy, the minister gave us some examples for Calgary, Edmonton, and Grande Prairie. For Calgary, for a typical residential consumer consuming 6,300 kilo watt hours per year, the cost would be $270 in 1982 without the agency. But even with the agency, the cost would remain at $270 per year.

I understand that the $100 million subsidy for the first year is put into the pool at the point of generation or the point where the commis sion or marketing agency takes title and then sells back. It's not lost there, though, because initially when the project was considered, there had to be an identification of the problem areas; that is, those areas where it would be desirable to rationalize the rates. So to come up with $100 million, we could have made one of two decisions.

One, we could have said that in the first year, we'll subsidize various areas up to a limit of $100 million and arbitrarily have selected that. On the other hand, we could have identified the problem areas where there was a need for rate rationalization, set a target level, and then added them all together and said that it looks like this: all together in the first year will amount to $100 million. We had to come up with the $100 million in one of those two ways.

If we did it the second way, we must have been able to say that area A would have benefited by the amount of X dollars, area B would benefit by the amount of Y dollars, et cetera. On the other hand, offsetting those benefits in certain areas, costs would be incurred because what we benefit over here, we have to pay for over here. The total benefits would then be $100 million in the first year, if that's the level we reach. The question is, who is paying those costs? Now, where does this $100 million go?

Even though it's blended in the pool when the agency or commission takes title, there's going to be an area, or areas, that benefit to that degree, to $100 million. If that is the case, which areas in general will benefit from that $100 million? Rather than talking in percentage or per unit terms for the city of Calgary — for example, earlier we were talking about 8.5 per cent increases for the city of Calgary — what does that translate into in total dollars? Is that 8.5 per cent in the first year of the agency, or is it 8.5 per cent over five years?

If it's 8.5 per cent over five years, how does that translate into total costs over the five years for the city of Calgary? MR. SHABEN: Mr. Chairman, the Leader of the Oppo sition asked if we had figures for a number of communi ties. In our work over the years, we selected typical communities. We didn't test it for every community. But if a particular member wants information on how it impacts on a particular community, I could have the officials work it out. Their rates would be similar to one of the test communities we did. I'll just run over the communities we used in our examination: Edmonton, Calgary, St.

Albert, Grande Prairie, Lloydminster, Leth- bridge, Spring Coulee, and Acadia Valley. We looked at the entire province and tested the impact of the agency on those communities throughout the years. This flows to the question by the Member for Calgary Buffalo. We have projections of the dollar requirements of the provincial Treasury for the five-year phase-in. But be cause we budget from year to year, I've provided the members with an estimate of what we will be requesting in year one. From the figures I quoted for three centres, the hon. member already has an indication of where the funds flow.

If he took note when I gave the specific numbers for those three centres — Edmonton, Calgary, and Grande Prairie — that gives him some idea. The percentages for different communities differ depending on their circumstances and how they're served by a utility. That's all part of the work. The basis on which we established the $100 million was not taking the figure the government wanted to put in, but developing a process that worked toward achieving the rationalization over a five-year period. As a basis, we took the two major population centres, Edmonton and Calgary.

It would be obvious to the member that this year, a typical consumer, as described, would pay $233 in Edmonton and $238 in Calgary. We felt that was the basis on which we would start our phase-in — the present typical residential consumer's bill in those two major ci ties — and move the phase-in from that point. If he noted the figures I provided, it would be obvious to the member that in 1982, under the agency, Edmontonians would be beneficiaries. So who does the $100 million go to in terms of where it ends up? It ends up all over the province, assisting consumers as we move into the phase-in.

I have dwelt at length on the city of Calgary, as a number of members properly have. In our projections, at the end of the five years a Calgary consumer would pay 8.5 per cent more with the agency than he would without. There is a disagreement on those numbers, as indicated earlier. We plan to work with the cities and the utilities to reconcile and work through the phase-in period. Beyond that, to give the hon. member a specific as to where each dollar goes would be virtually impossible except to re spond after doing some research on a particular commu nity.

We've tested these communities in order to get an understanding and to do our evaluation. They're typical in terms of distances from generating plant, size of transmission line, and so on. MR. SINDLINGER: Mr. Chairman, just a short ques tion to the minister. Is Calgary the only centre in the province that will be paying more with the agency? MR. SHABEN: Mr. Chairman, we go back to the very important earliest comment by the Member for Calgary North Hill, in terms of the relationship between TransAl ta and the city of Calgary and the bulk purchase ar rangement where the city has been buying at a preferred rate.

I described this on Thursday evening. Generally, 60 per cent of the generating and load of the province is provided by TransAlta Utilities. TransAlta happens to be the utility that serves Calgary. The effect on consumers served by TransAlta will be different from the effect on consumers served by Alberta Power and Edmonton Pow er. But the net impact on the overall system is a result of achieving what the hon. members knows and understands

November 30, 1981 ALBERTA HANSARD 1949 as economic dispatch, in that we will ultimately end up with optimum use of our generating capacity. It's difficult for me to convey this to members of the Assembly, but ultimately the consumers in all parts of the province will benefit from the program because we end up with a single system concept, but still the freedom of each utility to compete for various aspects of the busi ness. So the entire province benefits from the program because of the benefits of single system operation.

In terms of the precise dollars and cents, I have described it and it was an important comment, Mr. Chairman. Be cause of the growth in the province in terms of the number of people and their demands for electricity, and the growth in industry, there is going to be a growth and an increase in the new plant. If the member referred to the document that was filed, he will have a better under standing of the number of new plants the province re quires to meet its needs over the years.

If we can get optimum use of those plants by the marketing agency and economic dispatch, the beneficiaries of the program are the people of the entire province. MR. GOGO: For clarification, Mr. Chairman, when the hon. Member for Calgary Buffalo put the question to the minister about cities having increased rates, I think he responded that the only city that would have increased rates was Calgary. I'm sure that wasn't the intention, because as we discussed at second reading, there would be some degree of increase in rates for Lethbridge.

I would just ask the minister to clarify if indeed that was an accurate comment. MR. SHABEN: Mr. Chairman, since the Member for Lethbridge West has risen, it would be useful to provide information for him for his constituents. A typical Leth bridge resident who uses 6,300 kilowatt hours this year would pay $251 for his electric energy. Without the agency, a typical Lethbridge resident would pay $278 in 1982. With the agency, that Lethbridge resident would pay $275 in 1982. So in 1982, a Lethbridge resident would be pennies less.

But as the phase-in occurs, there would be some slight increase for Lethbridge residents, though less as a percentage than that experienced by Calgary. I should draw members' attention to the fact that the city council has the capacity to set rates, and we won't interfere with the rates it chooses to set. In his remarks Thursday night, the member indicated that Lethbridge made a net profit of $2 million from the sale of electricity that cost the city $8 million, which is a significant level of profit-taking. But it's up to the city as to what percentage profit they choose to take.

I can't guess what rates the city of Lethbridge may set in 1982, '86, or '90. MR. SINDLINGER: Mr. Chairman, coming back to this $100 million subsidy, I would imagine that one of the primary questions anyone will pose in any situation is what it costs in total. I understand the initial subsidy is $100 million in the first year, but I'm not too sure I've heard what the subsidy will be over the remaining four years. I know the minister just made reference to a five- year projection which has been made for the Provincial Treasurer so that he can do his budgeting and cash flow forecast.

I ask the minister if he could indicate to us what that subsidy will be over the subsequent four years. I know the minister earlier referred to the difficulty in making fore casts, but they have been done over 20-year periods for power consumption for all categories: commercial, resi dential, and industrial. So

whereas we cannot specifically pinpoint them, we can get an order of magnitude to know what they are in general. I concur in the comments made about the economies of scale that can be achieved by bringing all this together. Certainly that's what achieved the low costs for Calgary over the years. The minister talked about Calgary getting or winning a preferential rate: 88 per cent of the average roll-in cost over the early years, and now 94 per cent.

There are good arguments for a lower rate, and certainly there's a precedent for that in other situations too, not only for power but transportation rates; for example, railway freight rates. Preferential rates are given to those who can ship in bulk or large volumes over long periods. So I don't think the city of Calgary was really getting anything for nothing over those years. There was ample precedent for that. I would like to ask the minister what the projected total subsidy is for the total five years of the phase-in period.

The minister has indicated that a five-year projection has been done for the Provincial Treasurer. I know that an earlier comment was made about that subsidy, and the minister indicated that he didn't want to go past the five-year period because he didn't want to bind future governments. But it could be quite possible that the minister would be binding a future government if we have an election on March 10, 1982, because my colleagues on the right might take over the government or, if they're not up to it, perhaps I might take a shot at it.

So in terms of binding future governments, this five-year phase-in pro gram is a bind on the next government in any case. Even if the next general election isn't until 1983, we're still going over into the next term of the government. Perhaps I might ask the minister to address the ques tion of the total cost of the subsidy over the first five years of the program. Try as I might, I'm still having difficulty understanding the disposition of the benefits through the subsidy. The subsidy has to work itself throughout the system somewhere, and costs have to be incurred.

Notwithstanding the fact that there will be benefits to Calgary, and their rate increases could be greater than 8.5 per cent over five years without the rationalization of rates and the economies of scale that will result from all this, there has to be some way to put a figure on the costs rather than a per unit cost. If we can get down to a per unit basis with the numbers given for Edmonton, Grande Prairie, and Calgary on a comparison basis, then we should be able to come up with the total cost for all the cities. I have to admit that my particular interest right now is simply Calgary.

If I'm having diffi culty understanding this, I'm sure there's going to be a great deal of difficulty for the majority of constituents in Calgary to understand it too. Not that they don't have the ability to understand it, but simply because there's been such a short time frame for discussion and debate, and for the details of this program to filter down throughout the community. MR. SHABEN: Mr. Chairman, as I indicated earlier, we have prepared the five-year projections for the phase-in plan for the Provincial Treasurer.

The amount in year one, that I referred to earlier, wasn't an arbitrary amount; it was to achieve a certain objective. The calculations of the number of dollars required to achieve the phase-in over five years were done very carefully so that the phase-in would be reasonable and achieve the gradual move from the separate utilities into the benefits of the economies the hon. member referred to. It takes some

1950 ALBERTA HANSARD November 30, 1981 time for the utilities as a group to practise economic dispatch, as opposed to the individual utility doing it now. So we chose the five years because we felt that was a reasonable period to do it. Also, in terms of the length of period of committing a government, the subsidy is not unusual. I recall that each time the natural gas price protection plan has been brought forward, there has been a five-year commitment to the massive benefits of that plan, which are over $100 million a year.

The government has properly been reluc tant to commit governments beyond that period of time. So I don't believe it's unusual or not in the normal sort of practice not to go beyond five. In terms of providing the hon. member with the estimates, we have estimates of what it will cost, but I won't be providing them to members of the Assembly. I've provided the first year, and those will be dealt with each year in the normal budgetary sense. But the commitment of the Legislature, the minister, and the government to provide that phase-in four or five years is there. MR. SINDLINGER: Mr.

Chairman, I have no objection to the concept. The concept to rationalize energy costs and to attain large scale economies for the entire province is a good one. The question about the five-year phase-in period is a matter of opinion. One can argue five years, 10 years, or whatever. But I submit to the minister that it's rather unfair to ask the members in the Legislature to vote for a program that will extend over a number of years, yet not reveal to them how much that program will cost.

When the minister knows within a reasonable range and order of magnitude what the cost will be, I don't believe it's fair to ask the Legislature to make a commit ment for something over a number of years but not tell the Legislature the extent of that commitment. That too might be said to be a matter of opinion, or the opinion of the Member for Calgary Buffalo. I don't stand alone in that sentiment. The Auditor General has expressed the same concern in his annual report to the Legislature. He discusses it in relation not only to the heritage fund but to programs in general undertaken by the government.

The Auditor General has quite emphatically made the point that a number of programs are initiated each year which will have a lifes pan more than that budgetary period. In instances like that, it's incumbent upon the government, and is indeed their responsibility, to reveal to members of the Legisla tive Assembly exactly what it is they're getting into.

Notwithstanding the relative merits or value of this program — and it seems that the minister has unanimous support around the House, except for perhaps the process of public input and the matter of opinion about the five-year or 10-year phase-in — the only question left that I haven't resolved yet is how the benefits and costs are distributed throughout the province, particularly how they impact on Calgary. I would like a more satisfactory, detailed analysis of that than I've got so far. But the remaining question is, how much does it cost?

We can walk into a showroom or a used car lot and be sold on the merits of the car in front of us. It can be shiny, fast, powerful, or whatever. But the bottom line is, how much does it cost? The minister is getting a great deal of support for this program within the Legislative Assembly. But the last question again is, how much does it cost? We know who is paying the $100 million in the first instance: the taxpayer of the province, through us one way or another. When we go back to our constituents, are we to say to them: this is a great program; don't worry about anything.

And when the constituent asks us how much it costs, we're going to say, well, the minister knows but he hasn't told us yet; but you wait, and in his good judgment he'll tell us next year and perhaps the year after. I suggest that that's not good enough. If the minister has the information, it should be made available to the members of the Legislative Assembly, so that when they vote on this particular project they know precisely what they're voting on.

Please reconsider that and, if the minis ter is unable to take that into consideration, perhaps take into account the fact that some concern has been express ed about the process of public input and public — the Premier used the words "public awareness" the other day. Give concern to public awareness and how we make the public aware of this quite dramatic change that's going to be affecting them throughout the rest of their lives in this province. Give some consideration to holding thi

Document details

Collection	Alberta — Debates (Hansard)
Citation	19811130
Type	hansard
Volume / chapter	L19 S3 19811130 1430 01 han.pdf
Language	en
Format	json
Source	PROVINCIAL
Identifier	a5cbf18b5a766fe5ca93a0f03e8af15592fde213

Source file is stored in the law ingest library (json).