1977 Legislative Session: 2nd Session, 3ist Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, FEBRUARY 9, 1977

Afternoon Sitting

[ Page

765 ]

CONTENTS

Statement

Review of procedures in question period. Mr. Speaker — 765

Routine proceedings

Oral questions

Handicapped persons' allowance. Hon. Mr. Vander Zalm answers —

Royal commission on BCR operations. Mr. King — 766

Continuance of wiretaps. Mr. Wallace — 768

Committee of Supply: Ministry of Economic Development estimates

On vote 79.

Hon. Mr. Phillips — 769

Mr. Macdonald — 769

Mr. Wallace — 774

Hon. Mr. Phillips — 777

Mr. Macdonald — 779

Hon. Mr. Phillips — 780

Mr. Gibson — 782

Division on the motion that the committee rise and report progress —

Mr. Gibson — 782

Hon. Mr. Phillips — 785

Mr. Lea — 789

Hon. Mr. Phillips — 790

Mr. Nicolson — 791

Mr. Lauk — 791

Mr. Nicolson — 793

Mr. Barber — 794

Hon. Mr. Phillips — 797

WEDNESDAY, FEBRUARY 9, 1977

The House met at 2 p.m.

Prayers.

HON. G.M. McCARTHY (Provincial Secretary and Minister of Travel Industry):

Mr. Speaker, I am pleased to present to the House today some visitors

from the United States of America. They are here to view the city of

Victoria and the province of British Columbia in anticipation of a

post-convention tour that they will be making after their 1977 American

Hotel and Motel Association convention that will convene in Seattle,

Washington, in October, 1977, with an anticipated attendance of 1,000

persons. Seated in the gallery today are the representatives of the

association, who are going to be viewing this most blessed part of the

North American continent with a view to holding a post-convention

meeting here in the city of Victoria. I'd like to introduce to the

House Mr. and Mrs. Neil Messick, Jr., James J. Groome, and Katherine

Martin, all of the American Hotel and Motel Association and Mr. Jack

Rayburn, president of the Washington State Hotel and Motel Association.

I know the House will want to give them a warm and gracious welcome.

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker, I'd

like to advise the House of an accomplishment of a team of lady curlers

from the Richmond Winter Club who have the distinction of being the

winners of the 1976 B.C. Ladies Curling Championships. The team is made

up of the skip, Heather Kerr of Richmond, Una Goodyear of Richmond,

Shirley Snihur of Delta, and Bernice McCallan of Vancouver. I'd like

the House to congratulate these ladies and wish them the best of luck

in the national finals in Halifax on February 27.

MR. C.M. SHELFORD (Skeena): Mr. Speaker, I would like the

House to welcome a good friend of mine and a former member of the

Legislature — a hard-working member — Isabel Dawson from Mackenzie.

MR. SPEAKER: Hon. members, if I may beg your indulgence for a few moments before we start the oral question period today

Interjections.

MR. SPEAKER: It is not being taken from the time of the

question period, and that is why I beg your indulgence now, rather than

during the question period.

I thought it would be good for the benefit of all of the members of

the House if I were to review the procedures within our oral question

period, as laid out by a committee of the House that met on legislative

procedures and practices some time ago. As a matter of fact, in 1973

they tabled a report with recommendations concerning, first of all, the

oral question period.

The first suggestion and proposal was to have an oral question

period with notice being posted with the office of the Clerk, and the

question being posted with the office of the Clerk. The second proposal

was to have an oral question period without notice commencing on each

day of the session, except Friday, the questions being on urgent and

important matters.

Following the tabling of that report, the Legislature adopted a

committee report by the chairman. I would like to read the content of

that report. It is brief:

"Your Select, — Standing Committee on Standing Orders and Private Bills begs leave to report as follows:

"Your committee has considered the matter of an oral

question period contained in recommendation (1), proposal (2) of Mr.

Speaker's first report made pursuant to the Legislative Procedure and

Practice Inquiry Act, and recommends as follows:

"That the reference in standing order 25 to 'questions

put by members' be interpreted by Mr. Speaker as permitting a 15-minute

oral question period for urgent and important questions without notice,

commencing at the opening of each day's session, except Fridays.

"Your committee further recommends that the following provision be applied to the oral question period:

"

(1) Only questions considered by the Speaker to be urgent and important shall be permitted, and his decision shall be final;

"

(2) No debate shall be permitted during questions.

Supplementary questions from members may be allowed by permission of

Mr. Speaker;

"

(3) Question period will be dispensed with on Fridays.

"All of which is respectfully submitted,

"G.V. Lauk,

"Chairman."

The report was read and received, the rules were suspended and the report was adopted.

That basically explains the procedure within the oral question

period and I think you can appreciate the fact that, without notice, it

requires immediate decisions on the part of the Chair as to whether the

question is urgent and important and, in fact, whether it's in order

with respect to Beauchesne and the other rules of the Legislature. I just make this comment for the refreshment of the memories of all

[ Page 766 ]

of the members of the House and I hope that we'll keep that in mind in asking questions.

MR. G.V. LAUK (Vancouver Centre): As I recall, the hon.

member for Columbia River (Hon. Mr. Chabot) was on that committee and

he submitted a minority report asking for 40 minutes. I wish now to

suggest that if the hon. member for Columbia River wishes to submit

that kind of resolution this side of the House will support it. We've

had a change of heart.

Oral questions

HANDICAPPED PERSONS' ALLOWANCE

HON. W.N. VANDER ZALM (Minister of Human Resources): Mr.

Speaker, I would like to provide a response to an oral question from

Mr. Gibson, the member for North Vancouver-Capilano, regarding

cost-sharing for handicapped persons' income assistance.

AN HON. MEMBER: Table it.

MR. SPEAKER: Order, please.

HON. MR. VANDER ZALM: On October 1, 1976, the Ministry of

Human Resources increased income assistance rates for specific

categories of recipients. This naturally increased cost-sharing for

income assistance in all programmes that come under the same financial

umbrella. Total anticipated revenue due to the change is approximately

$5 million, which is received in general revenue of the province.

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

don't really think the minister has answered my question. My question

at that time was why the $22.50 additional cost-sharing in respect of

handicapped persons had not been passed on to them. That was my

question. Why was that not passed on?

HON. MR. VANDER ZALM: Well, Mr. Speaker, as the rates are

adjusted for whatever category, be it handicapped people or families or

single-parent families or single people, then there may be a change in

revenue due to the province from the federal government, but I don't

think we should adjust our rates on the basis of what revenue comes to

what category. I think instead we should assess the needs and then take

the whole of the revenues, along with what amount is provided in the

budget, and provide the increases according to need. All of these

programmes are constantly being reviewed with a view to according,

through the legislation, the greatest help to those in need.

MR. GIBSON: I even may take it then, may I, Mr. Minister,

that you are confirming that you received an additional $22.50 per

month in respect of handicapped persons and did not pass it on to them?

Is that right?

MS. R. BROWN (Vancouver-Burrard): You didn't pass it on.

HON. MR. VANDER ZALM: The answer to the question, Mr.

Speaker, is that whenever rates are adjusted, there are additional

revenues received, and they are received in bulk according to the

billing provided to the federal government by the province. It's not

fair to say that it wasn't passed on, therefore creating the impression

as if something was being withheld from a particular category of people.

I would suggest to the member that, again, all of the programmes are

being reviewed. Specifically with regard to the handicapped, we've had

a review going on. We, incidentally, asked an organization in Vancouver

being funded through the ministry to provide us with their

recommendations as to how we could best provide greater benefits in the

long run to those people. Since we have not received this input from

the group that we had requested the information from, we had ourselves

proceeded with this study. I can assure the member and all members on

the other side that British Columbia will have the best programme for

handicapped people on the whole continent.

ROYAL COMMISSION ON BCR OPERATIONS

MR. W.S. KING (Revelstoke-Slocan): A question to the

Attorney-General: in view of the fact that Dave Chapman, a member of

the royal commission on the B.C. Railway, told CJOR News last night

that (1) he doubts that the MEL Paving court case will be dealt with by

the commission, and (2) he does not expect the commission will call

witnesses involved in the MEL case, and in view of the fact that

another member of the commission, Mr. Syd Welsh, has admitted he is a

member of the Social Credit Party, will the government now amend and

clarify the order setting up the commission so that terms of reference

specifically include the MEL Paving case?

HON. G.B. GARDOM, (Attorney-General): This is a question, Mr.

Speaker, that was raised essentially yesterday, and I would like to

respond to it with some degree of depth.

HON. MR. GARDOM: I don't think there is really the

requirement to do that, my dear colleague. We've already filed it and

I'm sure that the members of the government have read the

order-in-council, but it appears that the official opposition has not.

[ Page

767 ]

Now it is abundantly clear, Mr. Member, from the terms of the royal

commission that the government was desirous that there be a full and

complete inquiry into the overall operations of the B.C. Railway. The

commission has received extremely wide, broad, encompassing and a

general mandate to inquire into all facets of the overall operations of

the railway. There is therefore no question, Mr. Member, that the royal

commission has sufficient scope to look into all aspects.

It is empowered to fully inquire into the overall operation of the

railway and, as I said yesterday — perhaps somewhat an unparliamentary

statement — it has the power to consider the complete "bag." This

certainly encompasses a great deal more than engines and cars and

cabooses running from point A to point B. There is scope, Mr. Member,

under the commission to consider the matters that have been raised in

this House.

I must stipulate, though, that the government will not and cannot

dictate to this independent commission its definition of its powers,

procedures, modus operandi and which matters will come before it, or

when, or in what manner. That is the job and that is the responsibility

of the commission. But I'm sure every member here will agree that the

royal commission will not be unmindful of the many issues and concerns

that present themselves, of the job that they will have to perform and

of the large responsibility that they will have to discharge. Further,

I'm sure that the commission will be open to receive comments,

recommendations and briefs, and that it will solicit expertise —

technical, administrative and professional. It has full and complete

power to hold meetings, to summon and compel attendance of witnesses,

to call for the production of documents, and has the responsibility to

report to this Legislature.

So I'd say in short and in

summary, the powers within the terms of

this commission are abundant to cover all of the matters and it is not

proper for the government to now start spelling additional specifics

into the order. The broad powers permit broad inquiry. The powers are

extremely broad, and we as government would naturally assume that the

commission inquiry will be similarly broad.

MR. KING: It's painful to see the wild thrashing of a drowning man, Mr. Speaker.

Mr. Speaker, I wonder if the Attorney-General would answer the question that

I posed to him, in light of the fact that a member of that commission has indicated

that there is no intention to study the MEL Paving court case. Will the government

consider specifically developing within the terms of reference the authority

to do so? Secondly, does the Attorney-General not think it is improper to appoint

a member of the Social Credit Party to an allegedly impartial royal commission

set up to study the government's administration of a Crown corporation?

HON. MR. GARDOM: Again, Mr. Member, it is not incumbent upon

me to comment upon your

interpretation of a remark made by a member of

the commission. I don't know what the remark was. I haven't the

foggiest idea. That's point one.

Point two: with every respect to this hon. member, I think it's a

somewhat scurrilous suggestion to say in a democratic society that by

virtue of the fact that an individual happens to belong to a particular

political party he will not perform his proper duty.

MR. KING: Mr. Speaker, I'm interested in the

Attorney-General's remarks with respect to the administration of

justice. If there happen to be political labels on that administration

of justice that he is content with, perhaps he could have a word with

the Minister of Environment (Hon. Mr. Nielsen) and tell him about it.

MR. SPEAKER: Order, please.

MR. KING: But I wish he would answer the question: will the

government or will it not amend the terms of reference requiring the

commission to specifically examine the MEL Paving case and to call

witnesses to give testimony?

HON. MR. GARDOM: The terms of reference, Mr. Member, are sufficiently wide for the commission to do just that, as you know.

MR. LAUK: On a supplementary, Mr. Speaker, to the

Attorney-General, I'm instructed that he met with the proposed

commissioners, as they then were last week. Could the Attorney-General

inform the House whether or not he discussed the terms of reference

outlined in the order-in-council with those gentlemen at that time? If

so, did it include a discussion of the out-of-court settlement in the

MEL Paving case?

HON. MR. GARDOM: Would the hon. member be kind enough to inform me of his source?

SOME HON. MEMBERS: Oh, oh!

MS. BROWN: You can't ask questions! You're here to answer!

MR. LAUK: I will provide you with the source now, Mr.

Speaker, through you to the Attorney-General. I saw the gentlemen going

up to your office — Mr. Justice McKenzie and the two other

commissioners. So could the Attorney-General

[ Page 768 ]

inform this House as to what was discussed at that time?

HON. MR. GARDOM: Which other two commissioners did the hon. member see coming to my office?

SOME HON. MEMBERS: Oh, oh!

MR. LAUK: Did the hon. Attorney-General discuss with Mr. Justice McKenzie

the terms of reference that were outlined in the order-in-council? If so, did

it include a discussion of the out-of-court settlement in the MEL Paving case?

HON. MR. GARDOM: First, the hon. member claims to have seen

three gentlemen coming to my office. I assume, Mr. Speaker, that he is

referring to the three named commissioners. Is that correct?

Interjections.

MR. SPEAKER: Order, please.

HON. MR. GARDOM: I would tend to think that the hon. member

should have some degree of social and moral responsibility when he

poses a question such as that, first of all.

MR. LAUK: I know Mr. Justice McKenzie when I see him.

AN HON. MEMBER: He's sided against you enough times!

HON. MR. GARDOM: A few moments ago the hon. member indicated

that I had meetings last week with these three individuals. Then the

hon. member stated that the three individuals came to my office. Point

one: I did not have any meetings with any one of the three individuals

last week...

MR. KING: Did you this week?

HON.MR.GARDOM: ...so I wonder where the hon. member solicited

that information. Perhaps he should apologize. Point two: The hon.

member stated that these three individuals have come to my office. That

is totally incorrect and false. I did see Mr. Justice McKenzie, as one

has to do in the appropriate course when you're looking for a

commissioner and you are requesting, first of all, the permission of

the Chief Justice of the Supreme Court of British Columbia to

relinquish a judge. Yes, I did have a discussion with Mr. Justice

McKenzie informing him of the general tenor of the commission only.

Until such time as Mr. Justice McKenzie received the exact

order-in-council, I take it he was unaware of the essential specifics.

Really and truly, Mr. Member, I would tend to think you should do a

little more in this House as an elected representative than try this

kind of witch hunting.

MR. SPEAKER: Order, please.

MR. GIBSON: Mr. Speaker, I want to ask a supplementary to the

Attorney-General. He talks about the broad powers of the commission and

assumes that those are sufficient to ensure that the MEL Paving and

other such cases will be investigated.

I ask the Attorney-General what has happened to his sense of

history. Does he not recall that the Sloan commission of 1955 had

complete powers to look into the forest industry and refused to hear

the Sommers' case?

MR. SPEAKER: Hon. member, the hon. member for North

Vancouver–Capilano did not state a question. He stated, in his opinion,

an answer to a question. Yet you were given the opportunity of taking

the floor, not on the basis of a question.

MR. A.B. MACDONALD (Vancouver East): Mr. Speaker, a

supplementary to the Attorney-General: I ask the Attorney-General

specifically, as these so-called broad powers cover general operating

methods and tendering practices of the BCR, if he does not agree, as a

lawyer, that that would not enable the commission to consider

particular cases dating back to 1968, to 1972, and particularly the

underestimation and the conflicting testimony surrounding MEL Paving.

They're not included.

HON. MR. GARDOM: I would tend to think, Mr. Speaker, there

must be some rule in parliamentary authority to prevent constant

repetition of the same question on the same basis. But to the former

Attorney-General: it doesn't say "method" does it? Would you just read

about the overall operation? Now the former Attorney-General thinks

this talks about, I suppose, driving spikes into rail ties. I can

assure him it's more than that.

CONTINUANCE OF WIRETAPS

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

HON. MR. GARDOM: Ohhh!

MR. WALLACE: ...only temporarily — not the minister. This is

regarding wiretapping and is addressed to the Attorney-General. Can he

confirm that cases are on record where the wiretap was left in place

after the arrest of the suspect so that

[ Page

769 ]

conversations with the defence lawyer could be

monitored? If so, what steps has the Attorney-General taken to have

this practice stopped?

HON. MR. GARDOM: I will have to take the question as notice, hon. member.

Hon. Mr. McGeer files answers to questions. (See appendix.)

MR. KING: On a point of order, Mr. Speaker, I appreciate your

review of the rules surrounding question period for the House and I

would like to offer and suggest to you that it's possible for

ministers, particularly when they take questions as notice, to file

with the House their response when it's lengthy at all. That has been

the custom in the House over the past number of years, and I think

that, obviously, with a 15-minute question period, if lengthy

dissertations are given and argumentative statements made by ministers,

that detracts from the opportunity the opposition has to file their

questions. Therefore, Mr. Speaker, I would hope that you would suggest

to the cabinet benches that they consider tabling these long-winded

responses out of respect for question period.

Further, Mr. Speaker, with respect to your review of the committee which established

the question period, I would suggest to you that it might be propitious to

ask the same committee to review the rules again. After all, the form of this

chamber has changed a great deal since that question period was established,

both in terms of the numbers and so on, and I think that it's only reasonable

to review from time to time the general guidelines surrounding question period

so that we're assured there is a fair division of questioning opportunity

in terms of the numerical strength of the opposition. I think that would be

propitious at this time.

MR. SPEAKER: Thank you, hon. member. Your points are well taken and

it is a matter of concern to me on an ongoing basis.

Orders of the day.

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

ESTIMATES: MINISTRY

OF ECONOMIC DEVELOPMENT

(continued)

On vote 79: minister's office, $141,324 — continued.

HON. D.M. PHILLIPS (Minister of Economic Development): Mr. Chairman,

yesterday afternoon during the questioning on the railway, with regard to the

answer from the member for North Vancouver–Capilano (Mr. Gibson), I have the

projected loss that I will give at the same time.

As of December 31, 1976, the net loss was $53,245,000, and that is

an unaudited statement. Mr. Chairman, the projected loss for the year

is in the vicinity of $69 million. The year has been interpreted as the

year 1976, and that $69 million projected loss is for the year 1977.

The projected loss for the railway for the year 1976 in the amount of

$53,245,000 is correct. As I say, it's an unaudited statement.

AN HON. MEMBER: Is it for nine months?

HON. MR. PHILLIPS: Just let me continue, Mr. Member. B.C.

Railway's fiscal year ends on the nearest Friday to December 31 of any

year and, in his instance, December 31, 1976, happened to be a Friday

and was the fiscal year-end of the railway.

The latter figure of $69 million is the projected loss for 1977. I'm

sorry if that was misinterpreted. I should have stated at the time that

when I said the year, I meant the year ahead — 1977.

MR. MACDONALD: Mr. Chairman, I have a few questions to the

minister, and the first one will cause him no great expense of time in

this chamber but it is matter of great importance to the minister and

to the public.

I don't know if the minister reads the newspaper, but in the paper

of yesterday, February 8, there was the settlement of a libel action.

You may say: "What's that got to do with this minister?" It has a lot

to do with this minister. It was the case involving Dunhill Corporation.

On February 20, 1974, there was a very strange duet going on in the

province with Mr. Bannerman on the radio station engaged in the

singing, along with the minister, as part of the duet, singing under

the power of legislative immunity. They were both saying precisely the

same thing about allegations which have been found false and libelous

in the Supreme Court of British Columbia after the trial of the action

on Dunhill Corporation. I won't give all of what the minister told this

House, but it's all in Hansard . On February 20, 1974, he said this:

"...as a result of my coming into possession

of a record of shared transactions which establishes a prima facie case

that unreported insider trading took place with respect to the

government takeover of DunhillCorporation, which I will make available to this House. As these transfers are not recorded under the Securities Act, it becomes evident

that this House must immediately take action to cause the fullest investigation

of stock market activities by this

[ Page 770 ]

government to take place."

And then on the second page, about Dunhill:

"Mr. Speaker, we now learn that prior to the

order-in-council being passed there could have been leaks of the

proposed order-in-council to certain persons with privileged

information to make windfall profits at the expense of the taxpayers of

British Columbia."

Down a little lower, Mr. Speaker:

"I ask the House this afternoon: was there a leak of

information? Was there incompetence in the Minister of Housing? Was the

Minister of Finance incompetent? Was there dishonesty in this province?

That's what I want to know."

The minister then goes on to say:

"I would suggest that we are dealing with a very,

very, very serious matter this afternoon. As a representative of the

taxpayers of this great province, if indeed this did happen, I intend

to lay before the House certain facts which lead me to believe that

indeed it did happen."

Do you remember the Jones case, Mr. Chairman? You don't have to come

right out and say that there's dishonesty. You can leave the

suggestion, and it is libelous. All that the former Premier said about

Mr. Jones was, "I could speak about Mr. Jones but I'm not going to,"

and it was subject to damages in court. What the minister was saying

was clearly libelous — he knows it; we know it — and injurious. It

served his political interest, but let that go by the board, eh?

In the settlement of the damage action, you know, this was going on.

He was saying exactly the same thing. The defendants in the damage

action have now had to pay damages according to what the court was told

was suitable and make an apology in court. This member was saying the

same thing under legislative immunity.

In the report of the settlement of the action, the Vancouver Province

talks about the sad position that Mr. Bannerman found himself in. It's

funny how many little people — well, "little" comparatively — who are

not under the protection of that umbrella fall. People lose their jobs

under this minister; people are subject to damages for doing the very

same thing that the minister is doing. "Bannerman also stated that

there had been a ripoff in that the government had paid an excessive

price for the shares." That is exactly what this minister was also

saying at that time. Mr. McEachern says: "I am instructed, and I

understand my friend, the counsel for Bannerman on the radio station,

now agrees that these statements and suggestions about the four

plaintiffs are wholly and totally false."

MR. LAUK: Shocking!

MR. MACDONALD: McEachern went on to say: "Bannerman's allegation

that there was a ripoff in the price paid by the government, that the price

was excessive, is disproved by the subsequent profit performance of Dunhill

as reflected in its annual financial statements, which are a matter of public

record." He described the broadcasts as "an unjustified attack on

the Dunhill officials." That is precisely what, in addition to attacking

the minister and the government, this minister did in 1974. They were prepared

to go to trial but had agreed to accept the apology as given in court along

with a financial settlement in damages.

J.B. Clarke, who was the solicitor for Bannerman on the radio

station, told Mr. Justice Gould that "the defendants unreservedly

withdraw and apologize for any imputations which may have been cast on

their characters and reputations as a result of the broadcast."

I say, Mr. Chairman, the principle calumniator of February 20, 1974,

leading up to February 25, is the minister. I call upon that minister

not to pay damages, as the other people who have suffered in this have

done, but to stand up in this House and make an apology. Two little

words — that's all we're asking of a minister who has got the

protection of his office and legislative immunity.

Interjection.

MR. MACDONALD: Mr. Chairman, I listen to that member down

there, and if he says there is any statement of mine that's been made

outside of this House, I'd like to know what it is.

HON. J.R. CHABOT (Minister of Mines and Petroleum Resources): Yes, the MEL Paving case.

MR. MACDONALD: What did I suggest about MEL Paving?

HON. MR. CHABOT: Criminal fraud!

MR. MACDONALD: I did not!

HON. MR. CHABOT: You did so!

MR. MACDONALD: I did not! Quote the words! Mr. Chairman, call

that wild minister to order! He doesn't know what he's talking about.

He's talking through the top of his head. He goes up and down the

province of British Columbia. Quote the words, Mr. Minister. If I've

said something that....

Interjection.

MR. MACDONALD: Never, never, never! That's exactly what I didn't say!

HON. MR. CHABOT: Criminal fraud.

[ Page

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MR. CHAIRMAN: Order, please, hon. minister.

MR. MACDONALD: You don't know what you're talking about.

MR. CHAIRMAN: Order, please.

MR. MACDONALD: That member is poorly briefed.

MR. CHAIRMAN: The first member for Vancouver East has the

floor. Hon. minister, may I ask you please to refrain yourself from

interrupting a member who has the floor. Please proceed.

MR. MACDONALD: I hope the minister has got his pencil out,

because I'm asking in all seriousness that he stand up in this House

and simply apologize for the calumny that you, in that famous duet,

were also heaping upon those defendants and other persons — allegations

which are now proved to be libelous, slanderous, and false. So that is

my first question. I hope the minister has got his pencil out.

Possibly I could sit down and have that answered, and then I have

some other questions for the minister. Would you like to answer that

one now?

Do you prefer I carry on? You don't know what the other questions are, and yet you prefer I carry on.

MR. CHAIRMAN: Please proceed now, Mr. Member.

MR. MACDONALD: Okay, because I don't want to lose my place in this debate.

The second question involves the famous press release which the

Minister of Economic Development issued to the press on August 11,

1976, announcing the construction of a $100-million, 90-mile pipeline

into the Grizzly Valley. My first question is: why did the Minister of

Economic Development make that announcement? He wasn't a director of

BCPC. The announcement was the thing that helped those shares to rise.

You might as well have been shilling for the shares of Quasar Petroleum

when you made that announcement, Mr. Minister, because you know that it

put into their bank, in the added stock value, some $20 million. The

whole sequence of events, based upon four million shares outstanding,

and a rise during 1976, particularly the latter part, doubled those

shares. They went up about $5 on the average — which is $20 million —

most of it to American shareholders.

The minister had no business making that announcement. When we

announced the pipeline extention into Helmet.... No, I shouldn't say

"announced" because I deliberately didn't do that. I was the minister

of energy at that time. We were very careful not to assist those on the

stock market to profit out of a public announcement of that kind. Just

going back for a minute, on the Helmet one, where we did make an

advance to Atkinson Petroleum, we enjoined that it was confidential and

quiet, and that there should be no political announcements, for the

obvious reason that if you announce a development of that kind, as the

minister did on August 11, you are directly helping the private

shareholders to make a windfall profit. It was highly improper for this

minister, who isn't even a member of the board of directors of BCPC, to

make a Gabriel's horn announcement about this development. That

directly fed money into the pockets of the private shareholders.

What was the minister's interest in the Quasar Petroleum

corporation? Was it a new-found love that's in his own riding? Is it a

new-found interest in the Quasar Petroleum corporation? Not exactly.

In the palmy days of 1973, when British Columbia had the best

government that it had ever had in the history of this province — and

there are people yearning to go back, you know, to a sort of business

competence and a bit of honesty.... Well, I withdraw that word. We were

square, eh? We were at least square.

This is what the minister, who was then just an opposition

member.... He was not a disinterested man insofar as Quasar Petroleum

is concerned, or its big daddy, which is the American Quasar Petroleum

Company.

On page 181 of Hansard , February 2, 1973, the minister, then

an opposition member, was bucking hard for the road. There is a

forestry road in there, eh? And he wanted it paved for these people. He

said: "Well, you've got the money. You've got the...."

Interjection.

MR. MACDONALD: It's going to be a repetition until the public

of this province understands that that minister has got something to be

responsible for. Five ordinary employees have been discharged and lost

their living, and that minister sits there. When you see five bodies on

the floor, Mr. Chairman, you don't need Agatha Christie to answer who's

responsible.

MR. CHAIRMAN: I think, hon. member, that with great respect we ought....

MR, MACDONALD: The little people fall.

MR. CHAIRMAN: Order, please.

MR. MACDONALD: Bannerman falls. You don't care, eh?

MR. CHAIRMAN: Order, please!

[ Page 772 ]

MR. MACDONALD: I want to continue my remarks. There is such a thing as ministerial responsibility.

MR. CHAIRMAN: Order, please!

MR. MACDONALD: Please, Mr. Chairman, you have a point. (Laughter.) What is the point?

MR. CHAIRMAN: I think that it would be wise to reconsider

some of the remarks being made lest they could be interpreted to be

jeopardizing the work of a commission or of an inquiry that is

presently in progress. Therefore I would just like to warn the hon.

member. Please proceed.

MR. MACDONALD: Mr. Chairman, you know there is a doctrine in

parliamentary law and government of ministerial responsibility. That is

what I am referring to in no uncertain terms so far as that minister is

concerned. I make the point that other people have suffered, and the

minister sits there, as large as life, as if he had no responsibility

for the fate of these people who have lost their employment. He does

have some responsibility.

HON. MR. PHILLIPS: Put a little more enthusiasm into it.

MR. MACDONALD: All right, I have put enthusiasm in, because

I'll be quoting the hon. minister. He went on this road.... This was

read out, was it?

AN HON. MEMBER: Yes, last week.

MR. MACDONALD: But I want to read it to you again, because in 1973 you were bucking hard for the Quasar Petroleum corporation. You said in Hansard that:

"...we could alleviate this problem very

easily by having the Department of Lands, Forests and Water Resources

snowplough the road for the winter. They don't have to worry about base

because it's frozen hard. At the present time it's a forestry road...."

I also pointed out that he went right to the Premier, bucking for a road into the oil fields of Quasar Petroleum corporation.

"...that any of the civil servants who wanted

to go into this area had to write to Victoria to get permission to take

their car in through Alberta or hop a plane which is flying into the

area, because Quasar Petroleum built a very nice landing site out

there."

"And then when I phoned Victoria to try to see the Premier about it...." Now was this read out?

AN HON. MEMBER: Yup.

MR. MACDONALD: I want to ask you, Mr. Minister, whether this

was read out last night also. Because on November 1, 1973, well before

your announcement on August 11, you were plugging for the Quasar

Petroleum corporation. I ask you whether these words were read out last

night.

" MR. PHILLIPS: I would like to direct a

question to the Minister of Finance. In view of the energy crisis in

British Columbia, does the Minister of Finance plan to invest in the

Quasar corporation, who have the hottest gas field in British Columbia

in the Monkman Pass?"

Interjection.

MR. MACDONALD: I don't know if that was read out last night.

But here you are, this member is totally against the government being

involved in investing. You fought that. Your B.C. Development

Corporation — you said: "Gee, you might be able to invest in a private

company with that." You opposed the whole concept. And here you come

out and ask that the government invest in Quasar Petroleum in 1973.

Interjection.

MR. MACDONALD: I can't get enthusiastic about it.

AN HON. MEMBER: I guess not.

MR. MACDONALD: Then you come along, and you're not the

minister, and you make a big public announcement about this pipeline.

And at that time the government gives a $2 million advance through BCPC

to the Quasar Petroleum company for what is called testing and

recompletion work on Quasar's existing Grizzly Valley wells to ensure

deliverability. Now they're not the only company in there. There was

August, which is now Cheyenne; there's BP, which was in the field at

that time. But you give an advance of $2 million of taxpayers' money to

a private company, and there must be a contract, eh? And you're the one

who announces this. There must have been some agreement. I am asking

the minister, naturally, to table the agreement, because this is $2

million — not as big as the MEL settlement, maybe, but $2 million. What

was the security for that advance? Was there a contract under which the

advance was made? Will the minister table the contract in the House?

That's a lot of money to give a private company which is a

subsidiary of a big American oil company, American Quasar Petroleum, to

test and recomplete their wells. The government of the province of

British Columbia does the essential testing, or should, and did in the

past. Why would you give a private company this for "recompletion" — I

presume that

[ Page 773 ]

means there's some corrosion in the wells. Why

shouldn't that company pay for any cleanup necessary to make the wells

operable? That's a lot of money to be giving to a private company that

you had been so solicitous for in the past, Mr. Minister. There has to

be an agreement and we want the agreement tabled in this House. It

sounds to me like a very high amount of money to give to one of the

companies — the principal one, it's true — to do their own work that

they should be doing for themselves. But that's in your announcement.

Now you come along in the announcement and you say a few other

things. "A feasibility study on the Grizzly Valley pipeline has been

completed by Westcoast Transmission and is now in the hands of the

British Columbia Petroleum Corporation." I presume, but I don't know,

that the feasibility study was the study that Westcoast submitted to

the B.C. Energy Commission hearings. They said, in effect, that to

justify an 89-mile pipeline you need 10 billion cubic feet of proven

reserves for each mile of the line, which comes to 890 billion cubic

feet of proven reserves. But you should table that. Let the light of

day show what that feasibility study was, because on the reserves

you're running all over the place. Here you say Westcoast proved them

up. I dispute that.

Is that in French? Did you send that note to throw me off base? I don't know.

Anyway, you're all over the field on these reserves, Mr. Minister.

When you made your announcement, something which for the Quasar

Company, as I said, was $20 million before many months had passed, were

you accepting Westcoast Transmission's feasibility study about the

reserves? If you were, they weren't there. You have an opportunity to

table that in the House. When the Premier came along he said: "Oh, no,

it wasn't the Westcoast feasibility study; it was the other." It was

made under the supervision of B.C. Petroleum Corporation, and that's

what the Premier gave in answer to this House.

I put it to you, on that question, that the B.C. Petroleum

Corporation had no engineers in the field at all and you simply

accepted the private company's touted supplies of gas reserves and you

made the announcement.

Then you say no decision on the pipeline will be made at this time.

But you go on and you say this.... Think of the effect this is going to

have on the stock market. If you're a prudent investor and you believe

the minister is going to go ahead with this thing and yard the gas out,

whether it's going to cost the taxpayer too much in the long run or

not.... You go on to say: "However, all indications are that the

pipeline is economically viable."

Now that's your signal, eh, to the investing world: invest in Quasar

Petroleum. A lot of people did, and some of them made money; their

shares doubled.

MR. KING: Some of them waited for weeks.

MR. MACDONALD: Yes. Now we're getting too close, eh? I want

the background. You know, I have great respect for Mr. Justice Kirke

Smith. I want the background we should have.

I would like to ask the minister though — he's making a note of

these questions — have you received a letter to attend the inquiry

before Mr. Justice Kirke Smith, Mr. Minister?

HON. MR. PHILLIPS: You know everything else. You should have the answer to that!

MR. MACDONALD: Are you going to go? Well, write it down.

HON. MR. PHILLIPS: You should have the answer to that one.

MR. MACDONALD: Okay, so I'm a slow member. But would you mind

writing it down and giving me the answer? Did you get a letter and are

you going to go? It's two questions, eh?

Interjection.

MR. MACDONALD: Okay. I miss some of these things. You can

answer that when you get up because I'd like to hear the answer to that

because I think two members of the opposition have received letters. I

would have thought you could produce yours, and also answer the

question. Are you going? I would think it would be pretty hard to stage

Hamlet without Hamlet! (Laughter.)

AN HON. MEMBER: Good line!

AN HON. MEMBER: You're an unlikely Hamlet!

MR. MACDONALD: So here are the questions, to cut this short.

The minister's got his pencil out. The first is: will you apologize?

I'm serious about that.

The second is: on the $2 million — will you table the contract to which you're referring in your grand announcement?

The third is: when Mr. George Lechner gave evidence before the B.C.

Energy Commission hearings in 1976 — and he would never have said that,

in my estimation, in 1975, 1974 and 1973 when we were government — he

said that BCPC is just an arm of the government. I want to ask the

minister whether he agrees with that, because it seems to have been

just an arm of the government once this coalition came into office. I

think that's a mistake.

The fourth: will you say who supervised the proving of the reserves

in the Grizzly Valley as stated by the Premier to this House? What

engineers from

[ Page 774 ]

BCPC were there and what did they do? I suggest to

you they didn't supervise at all. They received the private company

figures that were at least twice as much as their own reserve figures.

Now the next question is also about your announcement on August 11.

Did the minister know at that time that Quasar Petroleum corporation

had a contract with Alberta and Southern Gas, a subsidiary of Pacific

Gas, to deliver its gas from the Grizzly Valley fields, as and when it

was deliverable, to Alberta and Southern, to go through Alberta and

then down into the United States? They'd given them that contract,

which was in effect for a long time and which gave them an exclusive on

the gas. Did the minister, when he made the announcement on August 11,

know that that gas had already been tied up to A and S of Alberta, and

therefore wouldn't be available to go through a pipeline unless that

contract was renegotiated or cancelled? What did you know about that?

What is the present situation with regard to the Alberta and Southern

contract?

Finally, since there have been fantastic increases in the price of

old and new gas in the Peace River area, paid to the producers since

this government came into office — and I refer to a 30-cent increase in

the price of old gas....

Interjection.

MR. MACDONALD: Thirty-five, was it? No, 30 cents. Old gas

increased from 35 cents per 1,000 cubic feet to 65 cents. In the case

of new gas, it increased from 55 cents to 85 cents. I ask the minister

whether he is going to pay to Quasar and Cheyenne and BP if they prove

up any gas for this pipeline, are they to pay these companies the old

gas price or the new gas price? Both have been put a way up there. But

I wouldn't think the minister would make this big announcement that the

thing is likely to go ahead without having that question cleared. So I

want the minister to answer that.

The minister may say I don't know much about this but he was the one

who made this announcement, with all its dire consequences, and so

these are the questions I've got to ask the minister. The first one is

about the Bannerman thing, and I just ask him, in two little words, to

say that he apologizes for himself engaging in that language at that

time.

MR. CHAIRMAN: Shall vote 79 pass?

Interjections.

MR. CHAIRMAN: I'm sorry. Are you on a point of order?

MR. MACDONALD: The minister is not going to answer?

MR. CHAIRMAN: Hon. members, the minister has...

MR. KING: Contempt — that's what he has.

MR. CHAIRMAN: ...the choice as to whether he wishes to answer

all questions at once or answer them one at a time, and I think we can

respect that.

MR. MACDONALD: Or not at all.

MR. CHAIRMAN: Yes, he has that option as well.

MR. LAUK: And you don't approve of that, do you?

MS. BROWN: What's the point of estimates then?

MR. WALLACE: Mr. Chairman, so much of the discussion on the

estimates of this minister must inevitably revolve around his role in

the B.C. Railway. Things in this debate get curiouser and curiouser,

and I found the question period most distressing today since, as each

day goes by, it becomes more clear that the inquiry which was announced

yesterday creates more questions than it answers. I'm particularly

distressed at the obvious double standard which this government

apparently attaches to the significance of membership in a political

party.

MR. KING: That's right. It's not good enough for Bierman, but it's good enough for Mr. Welsh. Drum out the cartoonist.

MR. WALLACE: We have an example where information was readily

passed from the department of intergovernmental affairs to a minister

of the Crown with certain notations which might or might not have done

serious damage to a person because of party affiliation. Apparently it

was all right to play that kind of game within the confines of one

particular ministry, affecting public service employees, when in fact

that notation should have ended up in the basket the minute it was read.

As a matter of fact, we haven't yet had a statement from the

Minister of Finance (Hon. Mr. Wolfe) to the effect that that notation

has even been destroyed. To this day it's probably still on his files.

But today we now learn that the government attaches no significance to

the particular party that a royal commissioner might be a member of,

and the Attorney-General (Hon. Mr. Gardom) may well be right in the

case of this particular individual, whom I don't know from a hole in

the ground, namely that he will do his job well and without political

bias. I can't answer that yes or no, but all I do know is that the

people of British Columbia are not going to be impressed by the

credibility of the royal commission.

[ Page

775 ]

I would suggest further that if we're to continue to get as few answers

about B.C. Rail as we've had in the last day or two, then I'm afraid

we're going to be here on this particular minister's estimates for a

very long time.

Yesterday I asked certain questions which I still feel any

responsible and knowledgeable minister would have been able to answer,

or would have found the answers to had he really been conscientious in

seeking them. I just want this House and the people in British Columbia

to know that this government, which talks about being an open

government, has to be the most farcical example of such a government.

It is about as open as a 10-ton tank 10,000 feet under the sea.

I just want to tell you, Mr. Chairman, the hours that my staff spent

this morning alone trying to get simple, public information out of BCR.

That's 69 million bucks in the hole in this coming year of taxpayers'

money, and I can't find out anything. Open government — what a farce!

MR. G. MUSSALLEM (Dewdney): Don't say that, Scotty.

MR. GIBSON: It's right, George.

MR. WALLACE: The member for Dewdney says: "Don't say that."

Maybe the reason he doesn't want me to say it is that it's not only

true but it's also so easily documented.

MR. KING: Right on!

MR. MUSSALLEM: It's not true.

MR. WALLACE: Okay, let's just recite

chapter and verse for the member for Dewdney.

At 9:30 this morning my secretary phoned Mr. Norris' office, the

vice-president of the railway, identified herself, and said she wanted

certain information. She spoke to Mr. Norris' secretary who said that

Mr. Norris was out of town but she would refer the question to someone

else who could help us and they would phone my office back.

By 12:45 no one had phoned us back. My assistant phoned Mr. Armstrong, who

is Mr. Norris's executive assistant and director of public relations, no

less. His secretary said that he would be back after 1 o'clock. My staff

phoned back at 1:15, and Mr. Armstrong's secretary said he would not be

in until sometime this afternoon and took my number. Then she suggested that

we call the purchasing department, because I'm still trying to find out

about that $600,000 that was spent on equipment owned by Ragan Construction,

which was 50 per cent of the settlement with the creditors in Dawson Creek and

elsewhere, I might say — not just in Dawson Creek.

Then my office phoned Mr. Norris' secretary again. She said that she

had not called us back because no one but Mr. Norris could give us the

information. Then my research assistant, in some frustration, followed

the advice and phoned the purchasing officer. The purchasing officer

referred my assistant to Mr. Hart, who referred him to Mr. Richmond in

the engineering department. Mr. Richmond said he had not been informed

of the purchase, although Mr. Hart had said that Mr. Richmond was

usually the person involved in such purchases. Mr. Richmond suggested

that we call Mr. Gordon Ritchie of the real estate and industrial

development section. Mr. Ritchie said he might be able to help, but he

would have to check.

So after hours and hours of phoning, I'm still no further forward in

trying to determine what exactly goes on when a citizen — and in this

case it happens to be an elected citizen — tries to find out public

information about a public Crown corporation which is losing money at

the rate we've just heard in the minister's own words. And this

government has the nerve to call itself an open government! The whole

morning has been totally frustrating from the point of view of trying

to find out what should be public information.

I notice that Mr. Norris is seated on the floor of this House at the

moment, and I notice that his secretary in no way, shape or form,

offered the least fragment of suggestion or advice that this is where I

would be likely to reach him, despite the fact that my office had

identified where the phone call was originating from and which member

of the House was seeking information.

MR. KING: The minister has put a muzzle on him.

MR. WALLACE: The word seems to be out, Mr. Chairman, to

everybody throughout the ranks of B.C. Railway: "Don't say anything to

anybody!" That seems to be the message loud and clear.

AN HON. MEMBER: Throughout the whole government.

MR. WALLACE: All I'm trying to find out is how $600,000 worth

of taxpayers' money was used to settle a dispute with a contractor on

the B.C. Railway, a dispute about which two other directors said there

was no obligation whatever to settle with Ragan Construction.

Mr. Chairman, I go out of my way to get as much evidence as I can on

any issue before I make any public comment. I think that's the kind of

responsibility that behooves all of us in this House. I've tried, and

my staff have tried, to find out some very basic facts and figures

which should readily be provided by the party responsible, namely the

British

[ Page 776 ]

Columbia Railway. I think the kind of treatment

that I have received, as an elected member of this House, and that my

staff has received, is not only shabby, but verges on a serious measure

of irresponsibility by the administration of B.C. Railway, not to

mention the minister's own dilatory attitude in trying to find out the

answers to my question yesterday. Even that overlooks the very serious

conflict of interest that he has already involved himself in through

this whole Ragan Construction settlement.

But apparently, Mr. Chairman, while members of this House can't find

basic information relating to the spending of public funds, we get

statements like this — that an unnamed cabinet minister says the

provincial cabinet is wondering whether one of its options is to sell

B.C. Railway to CNR. On the Telex this afternoon was a report of a

statement in The Vancouver Sun :

"An unnamed cabinet minister has been told that the

B.C. Railway will need $1 billion in capital in the next five years.

The cabinet minister is reported to have said that 'one of the major

reasons for the decision by Premier Bill Bennett to appoint a royal

commission into all facets of the railway relates to this capital

requirement.' The cabinet minister said: 'Another option for B.C. Rail

would be its sale to Canadian National Railways.'

"The cabinet source said that the government is

concerned that the vast expenditures by B.C. Rail that are anticipated

in the development of northern British Columbia should be justified.

Interest on the $1 billion, which would have to be borrowed over the

next five years, beginning immediately, would be about $100 million a

year. The cabinet minister, who is still unidentified at this moment,

said: 'We just have to be sure that we know what we are getting into.'"

The report goes on to mention some of the anticipated expenditures.

Mr. Chairman, I just want to pose a few questions to this minister.

First of all, apparently I cannot be given some very basic financial

facts and figures referring to a settlement that has already been

arrived at between BCR and the contractor, and yet a person in the

media apparently can have a private conversation with a cabinet

minister where the most vital and important information is made

available to that reporter while we, sitting in this House, with the

responsibility of scrutinizing this minister's responsibilities, are

kept, as far as is humanly possible, in the dark.

Mr. Chairman, I would wonder, first of all, if I could just ask a

few very clear, simple, direct questions. Can the minister tell the

House if he is the unnamed cabinet minister in The Vancouver Sun

report who made the statement that the cabinet has been asked to

authorize $1 billion in capital expenditure over the next five years?

I notice the minister is diligently reading some lengthy document

and appears to be perhaps less than listening to what I'm asking, so

maybe I should ask it again. Can the minister tell us if he is the

unnamed member of cabinet reported today in The Vancouver Sun

as having said that cabinet will be asked for $1 billion for capital

expenditure in the next five years? If he is not the unnamed cabinet

minister, it seems to me that it's a highly serious situation that some

other member of cabinet is apparently willing to give — through the

disguise of anonymity that I've mentioned — this kind of information

privately and secretly when it's not available to the House.

Secondly, I would like to ask the minister if, in fact, one of the

primary subjects that the Premier of this province is now in Ottawa to

discuss with the federal government is the purchase of the B.C. Railway

by CNR. I'm not asking him whether they will or they won't buy it. In

my view of the thing I can't imagine why anybody would want to buy the

B.C. Railway. But I would like to know at what stage negotiations are

with regard to the possible purchase of BCR by the CNR.

MR. G.R. LEA (Prince Rupert): They'll buy it if they get it for nothing.

MR. WALLACE: I suppose in the present situation, Mr. Member,

this government might even be willing to give them money to take it off

their hands.

AN HON. MEMBER: In lieu of a grant.

MR. WALLACE: There couldn't be a more inefficient management

of any railway than we've witnessed in BCR recently. But I would like

to know whether or not negotiations are underway for the CNR to

purchase BCR, or is it simply an option which the B.C. Railway and the

B.C. government are presently pondering in cabinet?

The other questions I would ask at this time relate to the issue I

raised yesterday. I'd like to know if the minister has discovered,

regarding the $600,000 paid for Ragan Construction equipment.... These

are simple questions which should take about five minutes for any

efficient business administration to find out. First, was an

independent appraisal sought in determining the value of that heavy

equipment? If an independent appraisal was sought, what was the figure

provided? Whatever that figure was, I would like to know how it relates

to the $600,000. Was that, in fact, the independent appraisal price,

and did BCR agree to pay more, less or exactly the appraisal price?

I notice the minister's gone into a huddle, which I

[ Page 777 ]

can understand if he hasn't taken the trouble to

find out the figures by 3:25 this afternoon. He's had all morning and

last night to find out.

Mr. Chairman, the next question is: if there was not an independent appraisal

of the value of that equipment, by what manner was the figure of $600,000 reached?

Who made the decision that, in fact, it was worth $600,000 if it was not reached

by an independent appraisal?

I think that the minister should also tell us which finance company

owned the equipment at the time Ragan Construction ran into financial

difficulties.

I hope the minister's making notes because these are very

straightforward questions but there are quite a few of them, one

contingent on the other.

What finance company had a part ownership in the equipment at the

time of the settlement? What part of the $600,000 went to the finance

company: all of it, half of it, 10 per cent?

I suppose the next question really is the simplest one of all. Since

this was a substantial sum of public money being paid by BCR as a

result of negotiations in which the minister had compromised his own

neutrality, will he file in this House the agreement showing the

financial details by which the Ragan Construction settlement was

reached?

Mr. Chairman, I'm only asking for the most straightforward, basic

disclosure of financial dealings of a Crown corporation that functions

on the tax money that you and I pay every day in this province. I'm not

asking anything fancy or sophisticated, and the figures could be

produced very quickly if this minister and this government had any

desire to do so.

I don't find it quite as amusing as perhaps others do that there are

all kinds of contractors lining up at the wicket to get some of the

money that they think is due to them. I think it's just a shocking and

distressing indictment of the highly inefficient methods of the B.C.

Railway.

MR. GIBSON: They're shovelling it out the back of the caboose.

MR. WALLACE: I would like to know how many more contractors

are presently either in negotiation to try and retrieve further

payments for work done or have suspended or terminated negotiations

since they feel that negotiations will not finalize their problem,

leaving them with no option but to sue BCR in the same way that MEL

Paving did. How many other contractors are presently still seeking

redress from the BCR? Of those who are, what is the total value of the

claims which they are seeking to have satisfied by BCR?

There are many other questions, Mr. Chairman, that I think need to

be asked, but these are very simple and they're very direct. The

answers are readily available — and should be available — as a matter

of public information. The minister has had since approximately this

time yesterday afternoon to find out the answers. In fact he promised

that he would. So I won't waste the time of this House any further.

I'll just ask him if he would now be kind enough to give just the

straightforward, direct answers to equally straightforward, direct

question.

HON. MR. PHILLIPS: With regard to statements made by the

first member for Vancouver East (Mr. Macdonald), I'm not aware of the

statements in the press to which he's referring and I'll certainly take

a look at them.

MR. MACDONALD: I'd have read them out to you.

HON. MR. PHILLIPS: I'm not going to discuss at this time all of the Grizzly Valley deal. I'll have some more to say on that later.

I would suggest, Mr. Chairman, that the hon. member for Vancouver

East just be allowed to dig himself further into his own gluepot.

MS. BROWN: That sounds familiar.

HON. MR. PHILLIPS: Now in answer to some of the questions

from the member for Oak Bay (Mr. Wallace), it's very disappointing, I

know, to members of the opposition to see a government move so swiftly,

so solidly...

MR. LEA: Over the cliff.

HON. MR. PHILLIPS: ...and so surely to provide openness in

government. I know that the members opposite were very disappointed

when there were allegations made with regard to the Grizzly Valley and

the government moved swiftly and decisively. That disappointed them

because they couldn't find anything to criticize. So now they're going

back over the same old ground. After they called for a judicial inquiry

into the railway, their requests were met with. They're also very

disappointed about that. I think if I were in the opposition I'd share

that disappointment.

MR. WALLACE: Just answer the questions.

HON. MR. PHILLIPS: I would suggest that the member for Oak

Bay doesn't need to advise me of what I shall say in my estimates, Mr.

Chairman. I have not advised him as to what he should say in some of

the statements that that member has made today, with particular regard

to a slap against the management of the British Columbia Railway —

management who I have had the opportunity of dealing with in the past

year, management who are

[ Page 778 ]

not able to protect themselves in this House. So as I say, Mr. Chairman....

MS. BROWN: Answer the questions!

HON. MR. PHILLIPS: The members over there get very excited.

AN HON. MEMBER: You're not answering the questions.

MS. BROWN: Answer the questions!

HON. MR. PHILLIPS: I will answer the questions in due course.

As I said before I was so rudely interrupted by vibrations from the

opposite bench, I did not advise the hon. member for Oak Bay (Mr.

Wallace) as to what he should say. He did more than ask questions.

Maybe I don't think that he's in too much of a position to advise me as

to how I should answer the questions or what statements I should make

in answer to these questions.

MR. LEA: It doesn't matter how you do it; just do it!

MR. LAUK: Don't attack the member for Oak Bay; he's always fair.

HON. MR. PHILLIPS: I'm not attacking the member for Oak Bay; he is quite capable of looking after himself.

Now with regard to the question about an

article — again that I'm

not aware of, that I haven't seen — I will not answer any questions

with regard to something that I'm not aware of. So that's answer No. 1.

MR. WALLACE: I'll send you a copy.

HON. MR. PHILLIPS: I can't be responsible for articles

printed in the press. We have free press in this province and, God

bless, I hope we'll always have free press. I know the member for Oak

Bay hopes that we will have free press. I haven't seen the

article and

I can't be responsible, as I said, Mr. Chairman. And, God bless,

because I wouldn't want to be responsible. We have a free press and

democracy in British Columbia. And so be it always.

With regard to question No. 3 about what is going on in Ottawa, I

think the Premier is very capable of making his own announcements with

regard to the deliberations that he's having in Ottawa, and he will

probably do so on his return.

Now question No. 4 or 5 asked if there was an independent appraisal.

I stated yesterday that I would get that information for the member

and, yes, there was an independent appraisal. The equipment was also

appraised and valued by BCR construction personnel knowledgeable in the

area. The equipment included a camp; this will be used by BCR in place

of purchasing new equipment. It is the intention of the BCR to use the

equipment, particularly on the Fort Nelson fine where it would be

advantageous to use our own force as opposed to an outside contractor

at this particular time.

MR. WALLACE: What was the appraisal figure?

HON. MR. PHILLIPS: There were several finance companies

involved, Mr. Member for Oak Bay: Toronto-Dominion Bank, Wardley,

Firming, IAC, FMCC, Traders — just about every finance company that I'm

aware of was involved in it. I'm just studying the agreement. Anything

that I don't have here today you realize will be available to you in

public accounts.

MR. LEA: What was the independent appraisal?

HON. MR. PHILLIPS: I'm just studying the agreement. You want

to know exactly what the amount was paid out to the finance companies

and the banks and what was left over. As I say, I'm just into the

agreement now and I'll get that further information for you.

MR. CHAIRMAN: Hon. members, before we continue, I've withheld

making this statement until we were between speakers as I didn't wish

to interrupt anyone speaking. Perhaps the questions that are being

asked across the floor, without a member standing in his place and

being recognized, are creating a great deal of havoc with the Hansard

recording people. Perhaps all questions that you may have should be

asked after you have stood in your place and have been recognized. It

will certainly assist us greatly.

MR. WALLACE: I'll be very brief. I just want to follow up on

the minister's response. I appreciate the amount of detail that he has

given us today. I regret that we've had to drag it out of him, but we

do have the information.

What he was careful to avoid answering was, what was the appraisal

figure? Was it $600,000? I want to know the actual sum paid and how it

related to the appraisal figure.

Since he has all the information and the details there, once we move

out of committee and back into the House would he agree that we ask

leave to table these documents? The public accounts committee is one

arena; this is a more important arena than the public accounts

committee. I suggest that in respect to the rules and traditions of

this House, we should

[ Page 779 ]

have access to these documents.

HON.MR. PHILLIPS: With regard to the appraisal, I am trying

to obtain that figure for you, Mr. Member. You did not ask it

yesterday, or if you did, I missed it. I am trying to obtain that

figure for you now.

With regard to tabling the document in the House, as you know, I am

not a lawyer, and this is an internal document. I'll have to be honest

with you — I'll have to seek counsel. I don't know whether it can be

tabled or not. I think you'll have to accept that. As I say, it's an

internal railway document. I suppose it would be available to public

accounts, but anyway, I'll certainly seek counsel.

MR. MACDONALD: Mr. Chairman, I didn't do as well as the

member for Oak Bay (Mr. Wallace) . I've got seven questions here, and I

didn't get answers to any of them. I don't know what that member's got.

It must be his personality or his secretary.

Here's a simple question, Mr. Minister — one of the seven questions:

did you get a letter from the inquiry commission into the Grizzly

Valley affair asking whether you would give evidence, or anything to

that effect? If so, are you going to give evidence? There's a simple

one that is not from the newspapers.

HON. MR. PHILLIPS: Well, Mr. Chairman, I presume that the

judicial inquiry is able to run its own affairs. I'll abide by their

requests, as I have said from the very beginning. The first day this

was brought to my attention, I said that it certainly is my intention

to have the entire light of day shine in on this matter. That has been

my entire attitude from the very beginning, and I certainly haven't

changed.

MR. MACDONALD: That's not the question. Have you had a letter?

HON. MR. PHILLIPS: If there are people working for me or

influenced — I realize that I have a very touchy portfolio — I

certainly want to know all the ramifications of this. I'm certainly

glad it came up. I'm not glad it happened, but I am glad that it is

revealed. I think, as I said before, we will move very, very swiftly on

this and we move surely. My attitude has not changed since the very

first day I spoke to the press. I said: "Absolutely! Let the light of

day shine in on this whole matter."

MR. MACDONALD: Mr. Chairman, I asked the minister a very

simple question. Did he have a letter from commission counsel asking

about giving evidence? Can you nod your head? Can you indicate?

HON. MR. PHILLIPS: You know everything else. You must know that.

MR. MACDONALD: You are not answering, eh? Well, Mr. Chairman,

I am going to answer the questions on behalf of the minister because

it's pretty hard to get an answer out of that empty vessel over there.

HON. MR. PHILLIPS: If you know the answer, why did you ask the question?

MR. MACDONALD: Well, okay, I'll answer and then you can

confirm them later in the debate — maybe next Tuesday or something of

that kind. Can you waffle that long?

In answer to the first question, having considered it and having

seen that the press report was simply reporting a court proceeding, I

apologize on behalf of the minister and extend that to him.

The second question was: has he received a letter? I don't think he

has. You know, it's rather strange that he didn't get a letter when

opposition members did. That should be taken up with commission counsel.

The next question was: should you have made the announcement of

August 11? No, it was highly improper for the minister to have made

that announcement. He will confirm that to the House when he answers.

The next question was about the $2 million contract. The minister is

going to answer correctly, I am sure, that that was really a very

unprecedented handout to a private company with which the minister had

had long relations, and that it has not happened in that form to any

other company in the province of B.C. The minister is not going to

table the contract. He is going to resist that. He says, "Let the sun

shine in, " but whenever he can run down the blind, he's got a habit of

doing that, as we have seen in this debate.

I asked him whether he agreed with George Lechner that the B.C.

Petroleum Corporation had been made an arm of the government. On behalf

of the minister, I am answering yes. It has been under this Social

Credit administration. That is question four, so it will save your

answering that.

The next question was: did the BCPC supervise the testing of the

proven reserves in Grizzly Valley? The answer is no. It didn't

supervise those.

The sixth question was about the Alberta and Southern gas contract.

Was Quasar released from that when these big announcements were made?

The answer is no. It wasn't released at the time of the Premier's

answer either.

The next question was whether you are going to pay Quasar Petroleum

the new gas prices, which are 85 cents for 1,000 cubic feet, although

it's definitely old gas. You won't have any definitive statement about

that, but in the end result, the answer is going to be yes. They are

going to get new gas prices for

[ Page 780 ]

what is really old gas, wells that were developed before the last burst of inflation about 1970, 1971 and 1972.

I don't know whether I've missed anything. I have tried to cover all

the questions I've got here. I think I have answered them all.

HON. MR. PHILLIPS: Mr. Chairman, I don't propose to get into

matters surrounding the judicial inquiry because, as the

ex-Attorney-General knows, that wouldn't be wise. We don't want to

usurp their powers. I am sure, as I said, that the light of day will

shine in.

Now the ex-Attorney-General, the man who was once in charge of

energy for the province, seems to know a lot about gas prices and seems

to want to build some sort of web or something. I think his words were

that I was promoting for Quasar.

Mr. Chairman, maybe I should just relate to the House once again

that I was elected to this Legislature, after a brief recess, in

August, 1972. At that time, instead of being elected to the government,

I sat where the member for Vancouver East is sitting now, in the

opposition. However, at that time, Mr. Chairman, I did not shirk my

responsibility, even though in opposition, in trying to represent those

good people who had elected me to the Legislature.

I know that the hon. member for Vancouver Centre was very interested

in that area and shared a lot of the aspirations that the member for

South Peace River had in the development of the natural resources of

that particular area. I've talked to him on various occasions and I

know he shared a lot of the aspirations that I had, because he, among

very few of the members opposite, Mr. Chairman, wished to see economic

development in the province. I'll certainly give him credit for that.

MR. LAUK: Flattery will get you everywhere!

HON. MR. PHILLIPS: In the fall of 1972, in cooperation with

the Chamber of Commerce and the city of Dawson Creek, in order to bring

some attention to what was happening in the Monkman Pass area and the

Grizzly Valley area, we invited press from the lower mainland up. It

was an endeavour to bring to the government's attention exactly what

was happening there. I'll have to relate to the House once again, Mr.

Chairman, exactly what was happening there. There was a development

going on in there. Oil wells and gas wells were being drilled, and the

money that was being spent in the area was being spent in the

neighbouring province of Alberta. And that bothered the member for

South Peace River because he felt that any rewards or any economic

development or any business going from the development of the natural

resource in the area should be staying and be of benefit to the

citizens of British Columbia. So this, Mr. Chairman, was the reason for

having the CBC with their television cameras and business people from

various newspapers up there.

Somewhere along about that time or maybe later — I can't remember;

the member for Vancouver East has all the letters I wrote — I wrote to

the then Minister of Finance and said: "Look, for the small sum of" —

maybe at that time — "$500,000 you can extend a road in there from the

South Peace River area so that those businesses doing the work in

there" — and there had been about $35 million spent on exploration in

there at that time — "would give the business people of my constituency

some opportunity to share in those benefits which, in turn, would

benefit the finances of the province of British Columbia."

Now if the member for Vancouver East somehow wants to twist that

around to say that I was working for Quasar Petroleum, that's entirely

up to him. I can't keep him from wallowing in the gutter. That's his

business. I'm not going to advise him. He's been in this House for

quite some time.

Interjection.

HON. MR. PHILLIPS: Mr. Chairman, would you ask the member to

just try and calm himself? He has been in the House for quite a while

and he should be able to remain calm.

There was a northeast report put out in 1975. It was published by

the Department of Economic Development, under the leadership at that

time of the member for Vancouver Centre. What does that report say? You

see, Mr. Chairman, I'm being accused as the only one talking about the

Grizzly Valley pipeline. What does it say? It says oil and gas

production are forecast to decline in the northeast. I'll tell you why

that was, Mr. Chairman. That particular government had policies which

drove the oil companies and exploration, so that we wouldn't have any

natural resources in this province, out of the province. That's why

that statement is in there. They expected the decline.

I want to tell you right now — and I'll supply you with the figures

in a moment, Mr. Chairman — of the increased activity taking place in

that particular area. Drilling is up. Wells are up. Exploration is up.

Money coming into the coffers from bonus bids is up. But this report,

published in 1975, says they expect a decline without any changes in

government policy. In other words, Mr. Chairman, I think the Minister

of Economic Development was trying to talk to the member for Vancouver

East and telling him — the same as we were in opposition at the time —

the error of his ways. So that's why I think the statement was that

they're expected to decline without any changes in government policy.

And I know the member for

[ Page

781 ]

Vancouver Centre was pleading with the government and with the Minister of Finance.

Now he goes on to say: "The net reserves will seriously be depleted

in seven to ten years." That is presuming that the socialists remain in

power. I know that's why that statement was made in this particular

report.

MR. LAUK: Give me the name of the civil servant who wrote that report.

HON. MR. PHILLIPS: "Exploration activity and employment will

begin to decline in approximately 1980 with Fort St. John and Fort

Nelson carrying the brunt of these declines." Now I just have to inform

the House, Mr. Chairman, that under the great economic policies of this

government all phases of exploration for gas and oil in the

northeastern

section of our province are on the incline with the great

reward to the people of British Columbia that there will be no

artificial shortages. Thus they will be able to take advantage well

into the century of their own natural resources.

It goes on, Mr. Chairman, to say that assuming no major new

discoveries, the oil refineries at Taylor and Fort Nelson, unless more

gas is imported from the north or from the east, are going to bring gas

in from the Northwest Territories and from the Yukon and maybe from

Alberta. They're going to import gas because their own policies have

driven exploration out of the province.

MR. LAUK: With all this exploration, where is the new gas?

HON. MR. PHILLIPS: Exploration could decline and these

pipelines, it says, "unless more gas is imported from the north, could

decline after the year 2000. It is assumed in Profile 1 that a new gas

plant will be built at Chetwynd." Mr. Chairman, I want to draw to your

attention that it says here in this report in 1975: "It is assumed in

Profile 1 that a new gas plant will be built at Chetwynd as the

cheapest alternative for processing the gas from the Grizzly fields."

MR. MACDONALD: That's right, as it becomes proven as a site.

HON. MR. PHILLIPS: Yes. Now this report is 1975, and yet the member

from Vancouver Centre (Mr. Lauk) would try and make this House believe that

I was the first one to mention a pipeline from the Grizzly Valley. I know, Mr.

Chairman, that my hard work and my indulgence had some bearing on the government

of the day, and I'm pleased to see that they recognize there were some natural

resources in that area.

[Mr. Veitch in the chair.]

It says: "Profile 3 assumes much more positive government action in

the development of a new townsite south of Chetwynd." Mr. Chairman, I

have to ask the House who was going to build that new townsite. It says

that the new gas plant could be put in the new townsite, and the member

for Vancouver Centre knows that it goes on to talk about higher

wellhead prices for gas. I'm not going to spend the time of the House,

Mr. Chairman, reading the whole report, but it talks about a Grizzly

Valley pipeline, it talks about a processing plant, it talks about

roads, it talks about railroads, and it talks about coal development.

But that's all it was at that particular stage of the game — talk, Mr.

Chairman.

MR. LAUK: Still is.

HON. MR. PHILLIPS: Now when I was appointed to the position

of Economic Development minister, I said to myself and to a lot of

other people: "What's happening on that pipeline? Is it going to be

built or what?" Nobody seemed to know. As the member knows, there were

different counts on the reserves in that area because it's a very

difficult field. The terrain is rough and there are faults. We find

this in coal too, you know. It's a very difficult field.

So I said: "Well, what's up? Why isn't the pipeline built? When are

we going to get on with it?" The member for Vancouver East knows this.

So I called in the economic planning committee members from the

Department of Mines and Petroleum Resources and I called in people from

the British Columbia Petroleum Corporation, and I said: "When are you

going to build that pipeline down there that this report talks about

and I fought for? I think I even mentioned it in my election campaign.

When is it going to be built?" Well, they went on to say there are

varying aspects, as the member pointed out, various numbers....

MR. MACDONALD: Company figures.

HON. MR. PHILLIPS: Various numbers, sure. Well, I want to

tell you, the company had one figure, the B.C. Petroleum Corporation

had another figure, the Department of Mines had another figure, and the

same department of geology and oil in Calgary had another figure.

MR. LAUK: Table it!

MR. LEA: Which one did you use?

MR. MACDONALD: You used Quasar's.

HON. MR. PHILLIPS: I'm not a geologist, but anyway, to get this great province moving, we said:

[ Page 782 ]

"Let's get on with the job. Let's all come

together. Let's find out what is in there." I'm not telling you what's

in there, but if the reserves are in there, let's build the pipeline.

MR. LAUK: No reserves, and you know it!

HON. MR. PHILLIPS: Well, I want to tell you, Mr. Chairman,

the member says there are no reserves. If he supplied a little bit of

the gas that he has been espousing here in the House, there would be

enough to build three or four pipelines, but that's another matter.

MR. LAUK: There's none up there.

HON. MR. PHILLIPS: Now, Mr. Chairman, I said: "If there are

not sufficient reserves in there I would like you to tell me how much

more reserve we need before the pipeline can be built." So there was a

meeting of the minds and it was found that there were sufficient

reserves in there and, of course, the pipeline will be built.

I have to wonder and question, Mr. Chairman, what possible motive

the member could have in trying to criticize a corporation that was set

up under his ministry and the very capable employees who were hired

while he was in charge of that particular Crown corporation. I wonder

just what could possibly be that member's motive. He's turned against

the very people in whom he once had a lot of faith.

Now we have inherited, as the House well knows and as the province

well knows, a very good civil service. Sometimes they've agreed with

some of the ministers and the people; sometimes they haven't. When they

haven't, there has been a parting of the ways, which is normal in any

well-run operation. But for that member for Vancouver East to slander —

I'd almost say "slander" — and lose faith in those people whom he hired

and the corporation he set up....

MR. MACDONALD: Shall I answer now?

HON. MR. PHILLIPS: He talks about the guarantee and the

people, but that's the way he set it up. That's the way that member for

Vancouver East set the Petroleum Corporation up.

MR. MACDONALD: Wrong!

HON. MR. PHILLIPS: So Westcoast Transmission has been making

profits that were unheard of prior to the corporation being set up, and

that member knows it.

MR. LAUK: The member said you're wrong.

HON. MR. PHILLIPS: Mr. Chairman, I'm not going to spend any

more time of the House because the public at large understands. They

know what is going on, and I don't think they're too intrigued by the

spider web that this member for Vancouver East is trying to weave

around the Grizzly affair.

MR. GIBSON: You know, as I was listening to some of the

minister's remarks, I was trying to remember the name of the character

in the "Alice" books. It was possibly the Red Queen who said: "Words

mean what I choose them to mean."

HON. MR. PHILLIPS: Mr. Chairman, I don't know whether you'd

call this a point of order, but I'd like to ask leave of the House for

just a few moments to make a very important phone call. Could I have my

deputy please take some notes? Would that be agreeable with the members?

MR. CHAIRMAN: Is leave granted?

MR. GIBSON: Mr. Chairman, it seems to me that the minister should be here, so why don't we take a quick recess?

MR. CHAIRMAN: Unfortunately the committee has no power to recess.

MR. GIBSON: Well, in that case I'd move that the committee rise and report progress. The minister could make his phone call then.

Motion negatived on the following division:

YEAS — 15

Wallace G.S.

Gibson

Lauk

Nicolson

Dailly

Stupich

King

Macdonald

Levi

Sanford

Lockstead

Barnes

Brown

Barber

Wallace, B.B.

NAYS — 26

Waterland

Hewitt

McClelland

Williams

Mair

Bawlf

Vander Zalm

Davidson

Haddad

Kahl

Kerster

Lloyd

McCarthy

Phillips

Gardom

Wolfe

McGeer

Chabot

Curtis

Fraser

Calder

Bawtree

Rogers

Mussallem

Strongman

Lea

MR. GIBSON: Mr. Chairman, I certainly welcome the Hon. Member

for Prince Rupert (Mr. Lea) as the newest member of this coalition

government. (Laughter.)

[ Page

783 ]

I'm glad the minister has had a chance to complete his sudden phone

call. I hope it was satisfactorily completed and no bad news.

The point that we were discussing a few moments ago that I wanted to

raise was the question of the genuine openness of information in this

government. I couldn't believe my ears when I heard that minister

talking about letting the sun shine in. He's the original little black

cloud over information in this province. The hon. member for Oak Bay

(Mr. Wallace) discussed earlier on some of the difficulties he was

having getting information out of the British Columbia Railway. The

clam-up's not just in the BCR, Mr. Chairman; it's all through that

minister's department. It's the nearest thing to paranoia I've ever

seen when you try and get any proper information out of public servants.

Now I want to ask the minister a specific question about a specific

report that he's refusing to release. It's called the Pemberton report.

It was submitted to the government around about September of 1976. I

asked the Premier in the House a couple of days ago if he had read it.

The Premier said he was not sure whether he'd read it or not. Mr.

Chairman, that was a little bit like the Speaker not being sure he'd

read the standing orders.

That's a report that's of such incendiary consequence to this

government that they're sitting upon it because they're afraid of it. I

ask this minister about it specifically. Has he read it? Why was it

kept secret? Why were all the numbered copies recalled round about late

November of 1976? What's in it?

I suggest to the minister that, among other things in that report,

there is a prediction about the future of the coast forest industry.

There is a prediction that in the next few years, as costs go up on

their continuing trend, and without modernization, the jobs in the

coast forest industry will drop to 50 per cent of their current levels.

I suggest that that specific prediction is in that report and the

government has been sitting on it for the last three or four months.

That report should be released. There are 30,000 jobs in the coast forest industry,

Mr. Minister. If 50 per cent of them are going to disappear on present trends,

what are you going to do about those present trends? Why aren't you going

to release the report that made that prediction in the first place — the report

that says how expensive it is to build new capital facilities in the forest

industry these days, how those costs have considerably more than tripled in

the past few years, how the ability of the declining stumpage payments to the

province to cushion some of these cost impacts has just about ended now, which

is one of the reasons the Minister of Finance (Hon, Mr. Wolfe) is having a little

trouble raising some of the revenue out of the natural resource side? Why doesn't

he table that report? Because he's afraid of what's in it, that's

why.

Why doesn't the minister, in fact, Mr. Chairman, table a list of all

the reports that his department has received in the last year and give

us

chapter and verse as to why the public that has paid for them cannot

have access to them? It's straight concealment of information that the

public has paid for and has every right to know. The forest industry is

our most important industry and we can't get that most important report.

As far as 1977 is concerned, the biggest economic decision this year

is going to be the question of northeast coal. Mr. Chairman, in

February of 1976, the group known as the Coal Task Force submitted a

document called "Coal in British Columbia: A Technical Appraisal." That

was made public. At the same time, they presented an economic and

policy overview. That was never made public. It has not yet been made

public. Other studies were commissioned at the instigation of the

Department of Economic Development.

Agreements were recently signed with Ottawa providing for $3 million

worth of studies. Some of them have already been completed. Not one of

those is available to the general public in this most important

economic decision to be taken this year in British Columbia, talking

about the expenditure of half a billion dollars of public funds for

various kinds of infrastructure, from housing through roadbed through

rolling stock, energy supply, and we can't get hold of it.

We have a report that deals with questions of the displacement of

coal production from southeastern British Columbia to northeastern

British Columbia, and reports that talk about matters that are worth

the livelihood of our future generations. It's that simple. The cabinet

is working on the decisions; the cabinet is negotiating with Ottawa.

Can the people who are being affected by these decisions get a look at

the numbers? No, sir, they cannot. They have to try and get the

information anywhere they can, and that's where you really run into the

paranoia, Mr. Chairman.

I have never seen people in the private and public sectors so

worried about anything as they are about providing information on this

coal thing. They are afraid of the minister and they are afraid of his

department and they are afraid for their futures if they breathe a word

of information that British Columbians ought to have the right to know.

And I say that's rotten.

Look at another little area of sunshine in that department. I

brought it up yesterday; it was with respect to the B.C. Development

Corporation. I am glad to see the head man is back here. Maybe he's had

a chance to think about it overnight. It has to do with the making

public of the names of the companies and persons to whom loans are

given.

Mr. Chairman, why shouldn't these loans be made

[ Page 784 ]

public? There's nothing wrong with getting a loan;

our largest and most powerful companies do it. It doesn't indicate any

weakness. All it indicates is that you've got good credit and you've

got a bit more money in the bank. There's nothing wrong with making

public the fact that you've got a loan. Why should it be such a

sensitive issue, which I think was the word the minister used

yesterday? It's not sensitive unless you're trying to conceal something

that's wrong. That's the only account I can give.

Mr. Minister, I wouldn't think this of you, but one of these days

somebody is going to say: "They're not telling you the names of the

companies that are getting loans because they might be friends of the

government." The only way you're going to protect yourself against that

kind of charge is to do the right and proper thing and make those names

public.

When you talk about open government, let's talk about the way

decisions are made on the British Columbia Railway. The hon. member for

Oak Bay (Mr. Wallace) yesterday brought up what to me is a clear case

of conflict of interest, and that is the Ragan Construction case — a

case whereby the minister, who is in charge of the British Columbia

Railway and reports to the House for the British Columbia Railway, had

a problem in his own constituency. It was a serious problem. The firm

concerned owed a tremendous number of debts in the minister's

constituency, and he was properly worried about that. He attended a

creditors' meeting and then he attended a board meeting. The initial

press report indicated that the board of directors didn't think there

were any particular obligations to the construction company. Then all

of a sudden we see a settlement with the company in excess of $1

million.

Now, Mr. Chairman, here are the questions I want to know about that

settlement, and they are the kind of public information that, I say

again, must be done to clear the air. Question 1: did the Ragan

settlement go to the board? I would hope and trust it did, in excess of

$1 million, but did it go to the board? No. 2: was the minister

present? No. 3: did he move or second or recommend or vote on the

question of that settlement to Ragan Construction that so affected so

many of his constituents? No. 4: did he disqualify himself as, for

example, even our Municipal Act suggests that councillors ought to do

in questions touching their own interests? Finally, if he's the

sunshine minister he says he is, will he file the appropriate corporate

minutes which disclose exactly how this settlement was made?

You can't talk about sunshine, Mr. Chairman, without being willing to disclose

the embarrassing things as well as the things that make you look good. The one

has to come with the other. You're either open or you're closed. You

can't choose what you let out. You have to let out the things that are properly

public.

I suggest to you, sir, that every study that has been done by every

consultant for your department should be a public document, subject

only to individual corporate confidential information being disguised

in some way or another, as Statistics Canada, for example, finds it

easy enough to do. We paid for these; the people of British Columbia

paid for these studies. This House has voted the money for these

studies and we can't get a look at them. And they have to do with the

most important decisions being made in this province this year. So much

for open information in that department.

Next, let's look again at the British Columbia Railway. Talk about

open government! Look at the Dease Lake rat hole that the money's going

down. How many million dollars a month, Mr. Minister, are going down

that rat hole? We can't get the money that's been spent to date out of

you. We can't get your estimated cost to completion; we can't get your

estimated revenue. How can we tell whether it is worth spending one

more dollar on that line the way things stand right now without those

figures? And yet we know from the budget of the Minister of Finance

(Hon. Mr. Wolfe) that we're going to be asked to authorize a good deal

more borrowing authority for that railway before this year is out.

Come clean on these things or resign your portfolio. You have to

account for the people on the agencies for which you're responsible.

That includes the BCR. The borrowings for the BCR over the past two

years have put a debt of $150 on the shoulder of every man, woman and

child in this province. You throw the millions of dollars around so

easily. Enough money has been borrowed there to lead the way in

constructing a couple of new pulp mills in this province, where you'd

have some guaranteed jobs. So I say to that minister, through you, Mr.

Chairman, if he's going to talk about open government he'd better

justify the money being spilled — maybe that's the right word — on that

Dease Lake line right now.

Then I want to go on and express a little bit of puzzlement about

the Terrace connection. It seems to me that the minister made a major

policy announcement yesterday because a couple of times in the

afternoon — I was talking about the Bear River Pass development — he

said this in answering: "That submission only becomes functional if a

line north of Terrace or Hazelton is built and that line is not

contemplated at the present time." In the evening, to underline that,

he said further: "I don't anticipate that any route will be built

immediately. It's left open and you could have a route north from

either Hazelton or Terrace and/or Stewart. I'm sorry I can't give you

any more definite information than that."

That's a funny thing, Mr. Chairman, because all along this grand

scheme for the Dease Lake has suggested that the ore and forest

products and other

[ Page

785 ]

produce of the hinterland being tapped by the Dease

Lake extension would basically be brought out through tidewater. The

port of Prince Rupert was always the idea. Now how do you get from

those northern resource areas to the port of Prince Rupert? Well, what

you do is either go all the way back to Prince George and come back out

to Prince Rupert — for an additional haulage of 600 miles, 300 miles

each way — or else you build that cutoff. If the minister is now

telling us that that cutoff has been dropped from the plans, then I

think he's made a major policy announcement. It would be a good thing

if he was to explain, particularly since the money was going to come

from the Canadian National. I think he'd better explain that.

There's another thing about the B.C. Railway I'd like him to

explain, Mr. Chairman. What happened in terms of a search for the

president last summer? It is my information that a president was chosen

from an eastern firm — and I will not name his name — and that a job

offer was made to him by either the minister or the Premier or both.

That man had told his firm and his partners about it, told them he

would be leaving. That could not have been an easy decision for him to

make nor an easy communication for him to make to his partners. At the

very last minute, just before the move, that man got a telephone call

from the minister saying: "Sorry, the deal's off. You haven't got the

job." What I want to know, Mr. Chairman, is why. That's pretty rough

treatment. I want to know why that was done.

Mr. Chairman, there are so many other questions on the BCR that we

should be getting into here. What is being done about general running

rights in the Vancouver port area? The minister knows what a foul-up

that is. He knows the situation that Vancouver Wharves Ltd. has, for

example, being just a few hundred yards in from the CN. Yet any time

there are any labour problems on the BCR, zap! — they're locked right

out. All of the produce that would normally go out through Vancouver

Wharves is hauled in on the CN trackage and except for a few hundred

yards it has no kind of access. Why can't there be some kind of a

reciprocal running rights agreement to get around that problem? Let the

BCR keep the revenue that they get from that

section of trackage, but

give them running rights over it so that some continuity of supply can

be maintained in those times.

We're good Canadians in this province. How much of the

BCR-originated lumber traffic is now going to the eastern United States

via U.S. mainline carriers? The vice-president of the BCR and the

public accounts committee gave us a figure last year. If I recall, it

was around 50 per cent to the eastern U.S. that was going via U.S.

carriers. Is there not some way, Mr. Chairman, that we can keep those

extra jobs in Canada; that we can make a deal with the Canadian

railroads to haul that over Canadian trackage and give Canadians jobs

and yet yield the same amount of revenue to the BCR? I know it's a

revenue question. I know the BCR wants the extra revenue for hauling it

down through North Vancouver, then interchanging there and down to the

U.S. roads, rather than backhauling it a relatively short way to Prince

George and interchanging with the CN there, or rather than building the

Clinton-Ashcroft cut-off and interchange there. But, Mr. Chairman,

there has to be some way of working out the revenue arrangements so

that BCR does not suffer and yet the rest of the country prospers.

That's a haywire situation.

I would like to know, as well, the minister's current view, or the

railroad's current view, on the question of the Ashcroft-Clinton

cut-off, which is one of those great ideas which seems to have sunk

into limbo in recent years. Mr. Chairman, the minister was talking

about open government. Here is his chance to open it up right now.

HON. MR. PHILLIPS: I listened with interest to the member for

North Vancouver–Capilano when he talked about secrecy in government. I

just want to inform him again that this is indeed an open government,

regardless of what he may say.

MR. GIBSON: File the Pemberton report,

HON. MR. PHILLIPS: Maybe the member forgets, Mr. Chairman,

that it was this government that brought in legislation to establish an

auditor-general.

MR. GIBSON: File the Pemberton report.

HON. MR. PHILLIPS: Maybe it was this member who forgot that we are establishing the position of ombudsman so everybody can have access.

MR. GIBSON: Yes, but file the Pemberton report.

HON. MR. PHILLIPS: Maybe this member forgets, Mr. Chairman,

that this government instigated quarterly fiscal reports so that all of

the taxpayers of British Columbia would know what was happening in the

affairs of not only the government, but all of the Crown corporations.

MR. GIBSON: All except in time for the budget — every other quarter.

HON. MR. PHILLIPS: Maybe this member forgets that it was this

government who has before this House — and I guess I can't talk about

it — disclosure legislation. I want to tell you, Mr. Chairman, that

maybe that member forgot that we just appointed a royal commission to

check into all aspects of the operation of the British Columbia

Railway. I believe I

[ Page 786 ]

recall, when the Premier made this announcement,

that this royal commission report, similar to the Sloan report on

forestry, would serve as a guide for not only this government, but

future governments. You know, I'm very pleased with this, because I

think that's really what's needed. All of the questions that the member

has been asking about the BCR are questions that a lot of people are

asking. I'm asking some of them myself.

With regard to the Pemberton report, I want the member to know that

we do a lot of in-house study reports here. Sometimes we don't have the

staff to do all of the reports that we would like to have with regard

to certain aspects of the economy of British Columbia. I want the

member to know, and he knows — he worked in Ottawa — that there are

sometimes in these reports that confidential information is given with

regard to financial statements of companies.

MR. GIBSON: You can disguise it.

HON. MR. PHILLIPS: This information is given in confidence.

MR. GIBSON: You can disguise it.

HON. MR. PHILLIPS: Oh, you want me to change the report!

Then, as soon as I change the report, he'd come down on me with 10 tons

of bricks and say I'd changed the report.

MR. GIBSON: Not if it's for that reason.

HON. MR. PHILLIPS: Now, Mr. Member, you can't have it both

ways. But that particular study, the Pemberton study, would have been

done by staff for certain information we want to know with regard to

the lumber industry. Now you'd think that if we were trying to hide

something, we'd have hidden the Pearse report. The Pearse report is a

report which was done on the lumber industry. It has been tabled in

this House and is accessible to everybody.

But when we go around and go into places of business to seek

information which we have to have to make certain decisions, it's

confidential information, as the member well knows. He worked in Ottawa

long enough to know. I don't know what his purpose is in weaving some

air of secrecy when he knows the facts. Information in the Pemberton

report, as I say, was received from the financial statements of

individual lumber companies, and it is not going to be made public

because it was given in confidence. It would have been, as I said, an

in-house report. We would have done it with our own staff, had we had

the staff, but, as you know, rather than build up a bureaucracy in this

department we keep it as thin as we can. When we have to have certain

information, we commission certain reports, and they're confidential

reports. You know, you have received the Pearse report, and we are

making reports public all the time, and this is indeed an open

government. I don't think that the member understands that.

With regard to the cost of the Dease Lake extension, the Dease Lake

cost prior to January 2, 1977, was $168,574,000. That is open

government. You asked for the information and I got it for you.

MR. GIBSON: You didn't give it to me yesterday.

HON. MR. PHILLIPS: Well, I don't have it at my fingertips, you know. I'm not a computer. Sometimes I wish I were.

MR. D.D. STUPICH (Nanaimo): You'd be a bit more human.

HON. MR. PHILLIPS: Well, thank you very much. I appreciate the compliment from the member for Nanaimo.

Now the costs from January 2 to completion are estimated to be

$95,436,000 for a total of $264,010,000. I want to explain to the

member that these costs, of course, include interest on moneys borrowed.

MR. GIBSON: How about revenues?

HON. MR. PHILLIPS: I haven't got the revenue figure because,

as you know, the revenue was only south of Leo Creek, and Leo Creek is

not included in what we term the Dease Lake extension. The Dease Lake

extension runs from Leo Creek, which is Mile 0, to Dease Lake, Mile

335. That is what is referred to in railway terms as the Dease Lake

extension.

MR. GIBSON: But you're expecting some revenue on that portion, aren't you?

HON. MR. PHILLIPS: I'll tell you, we expected a lot of

revenue when that extension was started. But you remember that we had

three years of socialism in this province.

AN HON. MEMBER: Oh, oh!

HON. MR. PHILLIPS: Nobody invested in the lumber industry

because they were afraid of being taken over. You realize that they

brought in that mining legislation, which ceased all activity. There

would probably be mines ready to be opened now had that three years....

We must remember we set the province back three years. It probably

should have a multiplier effect, Mr. Member, because recall that during

those three years copper markets were high and mineral markets were

high. During those

[ Page

787 ]

three years there would have been commitments made,

and you know how long it takes from the time of commitment to the time

the mine is open. There would have been commitments made during those

three years that once the flow starts to take place, the project has to

be brought on, whether the metal costs go up or down. So it's not only

three years that we've been set back. You use the multiplier effect due

to the fact that the metal prices are down at the present time. It

could be six or seven years that we have probably been set back for

receiving revenue on that line.

But getting back to the Dease Lake extension, it runs from Leo

Creek, Mile 0, to Dease Lake, Mile 335. I've given you the costs. There

has been a lot of talk in this House about increased costs on that

line. So I had my research department do a little research on the cost

of inflation from 1971 to 1977. I asked research to come up with the

increased cost of labour, the increased cost of machinery, the

increased cost of camps, and the increased cost of transportation — in

other words, anything related.

I want to tell you, Mr. Chairman, through you to the member, that

the inflation rate on road construction and so forth in those few years

— and we verified this right across the country, not only in British

Columbia — absolutely astronomical.

MR. LEA: What is it?

HON. MR. PHILLIPS: It's absolutely astronomical!

Mr. Chairman, there was a time prior to the coalition in British

Columbia in about 1954-56, if my memory serves me properly, where there

were contracts let for construction of roads in the province of British

Columbia.

I'd better go back. Sorry, it was in the late '40s. There was a

period of very high inflation, and the contractors were losing money on

the contracts that had been let. They were losing their shirts, as a

matter of fact, because of inflation. This was on a road contract that

was let, say, in 1946 and was not going to be finished until 1947.

You'll recall that this was just immediately after the war.

There was a motion brought into the Legislature here in British

Columbia, and I'll try to get some research on that. As a matter of

fact, I have it here but I can't put my finger on it right at the

moment. There was a motion brought in that those road contracts be

increased to keep up with the rate of inflation so that those

contractors who were working on those road contracts in the province of

British Columbia would not go broke.

Everybody says that all of a sudden everybody's running to BCR for settlements

because of a particular settlement that was made. When you talk about inflation

in the years since those contracts were originally let — from 1971-72 until

today — you must realize that when you talk about inflation in the 60 per cent

bracket, you realize what problems some of those contractors have had. Yet it's

all very good and easy for politicians to stand in this House and talk about

increased costs and blame it on poor engineering.

I know myself that maybe the railway wasn't thoroughly engineered.

In other words, every square cubic yard wasn't walked. But there are

some other factors. It's not only that that has caused the overrun, but

that's a portion of it — I'm not denying that. But in order to be fair

and reasonable and not to mislead the public of British Columbia,

additional costs have been incurred through inflation over which the

contractors had absolutely no control. I don't think the government of

the day could foresee the rapid rate of inflation we had, particularly

in the years 1973 and 1974. The member for North Vancouver–Capilano

(Mr. Gibson) knows full well what I'm talking about.

We also know that when those contracts were let they were let on the

same basis on which we built the railway to Fort Nelson from Fort St.

John.

MR. LEA: No basis at all.

HON. MR. PHILLIPS: Build her and get a train over it that can

move lumber and resources. If it goes over 10 miles an hour, it will

all be safe. I don't wish to belabour this point or get into it but,

you know, you build a basic road.

The House knows — it's been discussed here before and everybody

knows or should know that, and I'm not saying that it was good or bad,

but it's a fact of life — that some of the specifications on the Dease

line were changed. You know, we've got to have a little wider road base

and you're going to have a better road, and that means a change of

specifications. I think that the public and the people should also,

when they're considering the Dease Lake extension, fully understand

that at that time.... The letter was read in the House last night about

environmental aspects. When you start to dig burrow pits that you were

not digging before and moving the topsoil off and burying it, that is

also an additional cost. I'm just pointing that out to the member who

brought up the cost of the Dease line.

I also wish to tell the House that one of the reasons that we're

having this royal commission is to check into all of these aspects so

that the light of day will shine in. I'm looking forward to this report

because, as I say, it will be a guide not only to the management of the

railway and not only to the board of directors but to this government

or any government that may follow.

There has been a tremendous amount of talk about railways so I did a little more research and I

[ Page 788 ]

found that practically every railroad that has ever

been built anywhere in the world had been surrounded by political

controversy. I also did a little research about how much we, as

Canadians, subsidize the Canadian National and the Canadian Pacific and

how much we have over a period of years. So I just throw that out for

the members' edification, because sometimes we have a tendency, when we

got embroiled in hot political debates in this House and wish to make a

little bit of politics out of our British Columbia Railway, to forget

some of these basic facts.

But I do want to state once again that the management of the railway

is good management. We have a new board of directors. They're

conscientious men and they're working hard. I want to say again that

I'm very pleased that the morale is high on the railroad. The railway

is running well and those workers are once again starting to feel a

part of the railway. I hope this will continue because there is

dialogue between management and labour. I'm not condemning what has

happened in the past because I always have my eyes to the future, and

with regard to the railway I look forward to the future with a great

deal of confidence.

Now the member has talked about what I think he termed my conflict

of interest with regard to the Ragan settlement. Maybe the member for

North Vancouver–Capilano was out of the House yesterday, but, as I

said, there were a group of creditors and it so happened they were in

my riding. But as I said, I don't care whose riding it is. I am the

politician responsible for the railroad. I don't care whose riding it

is — it could have been in your riding. They were angry and they knew

that Ragan Construction had a claim against the railway. They called

me, as their MLA, to go and talk to them. As I said yesterday, had I

refused to talk to that angry group of small businessmen — and don't

also forget that I happen to be Minister of Economic Development,

responsible for the welfare of small businessmen in the province....

Had the member been in my place, would he have refused to talk to

those angry businessmen? I want to tell you, if I hadn't talked to

them, they'd have each had to pay $300, and you seem to forget that to

travel from the north down to Victoria, you're looking at $300 plus,

you know. It's not a case of the member for Vancouver taking a $20 ride

on the Air West and getting over here, you know. These people have to

spend at least three days travelling to get down here and that doesn't

leave them very much time while they're here, plus $300 cost. But

that's a penalty for living in the north. I didn't ask them to live

there and they live there and they know it and they anticipate this,

but it is a point. So they'd have had to spend a lot of money to travel

to Victoria to put a demonstration on the lawn out here.

So I felt, in all sincerity, that I was doing my best. You know, I

didn't consider it a conflict of interest. But I did tell them at that

meeting that I could not and would not influence the board of directors

on their behalf. Consequently, that settlement was made between the

lawyers. The railway lawyer was Mr. Eastman and the lawyer representing

creditors was Mr. Lewis.

AN HON. MEMBER: Did not the board endorse that settlement?

HON. MR. PHILLIPS: Well, certainly the board eventually had

to endorse it. I'll check through the minutes. I think I was probably

there when the settlement was endorsed by the board. Certainly. You did

not expect me not to be there.

AN HON. MEMBER: How did you vote? Did you vote on it? Did you influence it?

HON. MR. PHILLIPS: Well, I can't remember how I voted on it.

SOME HON. MEMBERS: Oh, oh!

HON. MR. PHILLIPS: You know, you're talking about a conflict

of interest. You can entwine some aspiration along that. As I said, the

only reason you're saying that is because it happened to be my riding.

MR. LEA: That's the point!

HON. MR. PHILLIPS: I would have acted the same on behalf of

creditors in the member for Fort George's riding, or Skeena riding.

It's all very well and good to say that we have an independent board of

directors, but I full well know — as you full well know — that the buck

stops here, right here on this desk. You know it and I know it.

Now what else were we asking about? Running rights in the lower

mainland. I'd like to tell the member that there was a submission made

to the Hall royal commission by the railway with regard to that

conglomeration of conflicts we have between all the railroads in the

lower mainland. I just call it a mess. You know it and I know it. That

submission is public knowledge. I'm looking forward to Justice Emmett

Hall's recommendations when they come out to see how he's going to

handle it. I've a lot of faith in the man. His reports to various

governments have been well thought out and, in many cases, the

recommendations made by him have been implemented. I'm looking forward

with a great deal of anticipation to his report.

[Mr. Schroeder in the chair.]

[ Page

789 ]

Again, I'll go back to another matter that the member raised, and

that is making public names of companies which have loans. I don't want

to keep reminding you of your past but you were in Ottawa, and you know

that the Federal Business Development Bank doesn't make public the

names of companies.

AN HON. MEMBER: That doesn't make it right.

HON. MR. PHILLIPS: It seems a little odd to me that the

Development Corporation has been operating for three or four years and

you never asked the other government to make names public. There are

certain matters that can be discussed at public accounts. That

information is available, and I'm sure that if the member finds

something in there that he feels is not right and proper, he'll advise

the public at large about it.

MR. GIBSON: Will those names be made available in public accounts, then?

HON. MR. PHILLIPS: Absolutely. You know full well that you can ask any question you want.

MR. GIBSON: The names of all those loans?

HON. MR. PHILLIPS: One of the reasons for having an

independent board on the Development Corporation is that they must be

responsible to not only the opposition but they must be responsible to

the government of the day as well.