1980 Legislative Session: 2nd Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, AUGUST 15, 1980

Morning Sitting

[ Page

3967 ]

CONTENTS

Routine Proceedings

Bikeways Development Act (Bill M215). Mr. Barber.

Introduction and first reading –– 3967

Committee of Supply; Ministry of Attorney-General estimates. (Hon. Mr. Williams)

On vote 26: corrections –– 3967

Mrs. Dailly

Mr. Nicolson

Mr. Lorimer

Mr. Hanson

On vote 34: Law Reform Commission –– 3971

Mr. Hanson

On vote 37: fire commission

Mrs. Wallace

Votes 37 to 43 approved –– 3972

Committee of Supply; Ministry of Energy, Mines and Petroleum Resources estimates. (Hon. Mr. McClelland)

On vote 64: minister's office –– 3972

Mr. D'Arcy

Mr. King

Mr. Hanson

On vote 66: finance and administration branch –– 3981

Mr. Barrett

Votes 66 to 74 approved –– 3981

Pension (Public Service) Amendment Act, 1980 (Bill 43). Second reading.

Mr. Howard –– 3981

Hon. Mr. Wolfe –– 3982

Pension (Teachers) Amendment Act, 1980 (Bill 29). Second reading.

Hon. Mr. Wolfe –– 3982

Mr. Howard –– 3984

Ministerial Statement

Financial Administration Act.

Hon. Mr. Curtis –– 3985

Routine Proceedings

Tabling Documents

Travel Assurance Board report for the year ending March 31, 1980.

Hon. Mr. Nielsen –– 3986

Trade Practices Act annual report, 1979.

Hon. Mr. Nielsen –– 3986

Appendix –– 3986

FRIDAY, AUGUST 15, 1980

The House met at 10 a.m.

[Mr. Davidson in the chair.]

Prayers.

MR. KING:

Mr. Speaker, with us in the gallery today, visiting from Salmon Arm, is

Mr. Dave Hadley. I would ask the House to extend a warm welcome to him.

MR. RITCHIE:

Mr. Speaker, I am always proud to introduce to the Legislature friends

of mine from Central Fraser Valley, and today is no exception. We have

with us today Joyce and Len Greer of Abbotsford. Joyce is secretary to

our Member of Parliament for Fraser Valley East, Alex Patterson. Would

the House please welcome Joyce and Len.

MS. BROWN: Mr. Speaker, I wonder if the House would join me in bidding welcome to Mr. John Bowman, who is visiting us from Ontario.

Hon. Mr. Mair tabled answers to questions on the order paper.

Introduction of Bills

BIKEWAYS DEVELOPMENT ACT

a motion by Mr. Barber, Bill M215, Bikeways Development Act,

introduced, read a first time and ordered to be placed on orders of the

day for second reading at the next sitting of the House after today.

Orders of the Day

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

ESTIMATES: MINISTRY OF

ATTORNEY-GENERAL

(continued)

Vote 22: administration and support, $4,538,565 — approved.

Vote 23: court services, $34,558,563 — approved.

Vote 24: criminal justice division, $9,139,726 — approved.

Vote 25: police services, $46,035,075 — approved.

On vote 26: corrections, $63,679,321.

MRS. DAILLY: Mr. Chairman, under this vote we have the expenditures for

the Lakeside Correctional Centre, which, for the information perhaps of some

of the members of the House, formerly was called the women's

section of

Oakalla. I just have a few brief comments on this vote and a few specific questions

to the Attorney-General. We're all aware, of course, of the considerable

amount of publicity that was focused on the Lakeside Correctional Centre during

the last year. We were aware that the Proudfoot report was commissioned, which

I think was a fairly good report, through the Attorney-General's department.

I think the main point that I want to bring to the attention of the Attorney-General

is that we are very pleased that there was apparently a fairly extensive report

by Justice Proudfoot on the problems in the women's

section of Oakalla,

but I think the thing that concerns me and many others is what has happened

with the recommendations since. In the past the Attorney-General was quite satisfied

— I may be open for correction here — that many of the recommendations were being

fulfilled. I think that's about all I've heard the Attorney-General

comment on it.

question to him is: how do you know what recommendations have taken

place at the women's

section 1n Oakalla? Are you just getting advice

from the people who work within the institution? Frankly, without any

disrespect for the people who operate and manage the Oakalla women's

section, I think that we would all agree that when there is massive

public investigation of an institution and recommendations are

suggested, the public has a right to know if those recommendations have

been fulfilled. I'm asking the Attorney-General if he is just accepting

internal memos which state that everything is fine there now, or has he

actually monitored through outside agencies what is going on in that

section of Oakalla?

HON. MR. GARDOM: That's last year's speech.

MRS. DAILLY:

No, not really, because it's still there, former Attorney-General. I

believe Proudfoot recommended a monitoring committee, and I think there

were several very distinguished women in B.C. who were willing to serve

on that committee to see if the recommendations were being implemented.

Was that committee ever set up? To my knowledge it never was. Therefore

I want to ask him why not.

The basic thrust of my questions

is that if things are much better at Oakalla, we're all very pleased to

hear it, but really how do we know unless you have set up a monitoring

committee made up of people who are not just involved very directly

with the institution?

Secondly, I understand that a

considerable amount of money has been spent on the women's

section of

Oakalla. My information tells me that it's over a million dollars for

renovations. I think I asked the former Attorney-General the same

question last year. The money is being spent on Lakeside Correctional

Centre, the women's

section of Oakalla. I'd like to ask the

Attorney-General if this means that the millions of dollars spent on

that

section is intended to make Lakeside Correctional Centre

permanent. Is it going to stay there permanently? If it is not going to

be there in the future, I really want to ask the Attorney-General why

so much of the taxpayers' money is being spent on an institution which

is apparently supposed to be temporary.

Mr. Chairman, at

this time those are the two basic questions on Lakeside Correctional

that I'd like to pose to the Attorney-General.

HON. MR. WILLIAMS:

I thank the member for Burnaby North for raising this matter. It gives

me an opportunity to say that since the report that was given many

months ago with respect to the implementation of those matters — the

Proudfoot report — the recommendations with regard to the physical

plant have been completed; the recommendations

[ Page 3968 ]

with

regard to program upgrading and division of teachers has been

completed; the new library is in place; the new visiting areas have

been developed. We have indications from the Elizabeth Fry Society

expressing general approval with respect to the changes that have been

implemented.

The question of the citizens' committee. My

colleague and my predecessor, the previous Attorney-General, as you

know, rejected the concept of a watchdog citizens' committee. But we

have in place a citizens' committee which is advisory to the director

of Lakeside and which concerns itself with necessary redevelopment of

the facilities required there.

The point was raised about

whether the facility is going to be permanent, and therefore whether we

can justify the continuing expenditures of moneys. We propose to have a

new women's facility. Whether it will be on that site or at some other

location is a question we have not been able to resolve at this time.

the provision of new women's facilities I had meetings with the

Solicitor General of Canada to discuss with him the plans that the

penitentiary service might have in phasing out the women's facility at

Kingston. We are concerned not only that women from British Columbia

who become inmates of the institutions in the provincial sphere be in

British Columbia, but also that those from British Columbia who go to

Kingston be brought back here. I met with him when he was here about

two and a half months ago, together with the commissioner of

corrections and his staff. We made strong proposals for the federal

government to become involved in the construction of a new women's

institution with us, so that we would be able to provide facilities in

the same institution for women who are sentenced to a provincial or a

federal institution — separated, but a shared capital and operating

expense arrangement. This is in line with arrangements which are being

developed between the federal government and the province of Alberta.

I'm pleased to say that just in the last week I've had a response from

Mr. Kaplan, saying that his officials are prepared to discuss with us

and to cooperate in the construction of a new women's facility in

British Columbia, so that when they phase out Kingston there will be

modern facilities here.

Why are we spending the money on

Lakeside? Unfortunately, in the development of institutions such as

this the time-lag in planning and development is about five years. I am

concerned that the time is so long, but it appears that from the time

you say go until all the designs can be done and construction is over,

about five years is expended. This is not helped by the fact that we

will be discussing with the federal government their needs as well as

ours. Therefore we wish to ensure that the facilities we have at

Lakeside Correctional Centre are kept up, and that we don't fall into

the circumstances we've experienced in the past, whereby, due to

inadequate facilities, the inmates are distressed and create

circumstances with which we have to deal. Therefore we will continue,

during the period required to plan, design and construct the new

facility, to maintain the facilities at Lakeside at the highest level

we can.

MRS. DAILLY: Mr. Chairman, I thank the Attorney-General for that explanation.

There is just one further point I want to make. There is confusion between a

monitoring committee and a citizens' advisory committee. You see, the citizens'

advisory committee is not what I was talking about, Mr. Attorney-General. I

was talking about the recommendation for a monitoring committee to see if the

recommendations of the Proudfoot report have truly been implemented. I would

just hope that you would give it consideration. I believe there are a number

of distinguished women in B.C. — politicians and non-politicians — who have

offered to serve on it, who would be willing to go in and assist management

to see if the recommendations of the Proudfoot report have been implemented.

I wonder if the Attorney-General would give consideration to setting up this

monitoring committee.

was interested in his remarks about the phasing out of and the movement

from the Kingston federal penitentiary to one unit in B.C. I just

wanted to ask the Attorney-General if he is philosophically in favour

of that phasing out. Does that mean the provincial government has a

cost-sharing process with the federal government? Is that how it works?

I don't quite understand how the setup would finally end up.

HON. MR. WILLIAMS:

Philosophically, it is our position in the ministry that no distinction

should be made in the facilities required for a person who is sentenced

to a period of imprisonment, whether he is sentenced for a period of

two years or less, or two years or more. The arrangement that was

discussed with the federal government is that they will share in the

capital cost of the facilities, which will meet our needs and theirs,

and that the matter of operation will be something which will be

handled on a contract basis under our service.

MR. NICOLSON:

At this time in the deliberations it gives me great pleasure to

introduce a member of this House who has made a career of the Oakalla

Prison Farm institution and its repatriation as a useful, liveable

space to the people of Burnaby. I give you the member for

Burnaby-Willingdon.

MR. LORIMER: I want to thank the member for Nelson Creston for the very kind introduction.

want to say that I have spoken many times about Oakalla. I guess there

have been about seven or eight talks over the years on Oakalla Prison

Farm, and I would merely refer the Attorney-General to my past

statements. Over the years I have had a number of occasions to visit

Oakalla and discuss the problems of Oakalla with directors, the warden

and so on. I had a long visit with them a few months back.

everyone knows, when Oakalla was built, it was built out in the country

in the center of the bushland. Now we find the antiquated prison in the

centre of a large metropolitan area and in the centre of my riding.

Over the years, I might say, there has been a phasing out. During our

term we had the farmlands transferred out of the prison section, but

there is still the prison there. And that is what we want to talk about

this morning.

It would appear to me from the advice I

received that no matter what you do in the present facility you're

still not going to have a modern penal institution. So I think the

question of making a decision to phase out Oakalla completely has to be

made. The sooner it is made the better, because there is no way, I am

told, that a proper prison establishment can be now built from the

ruins of Oakalla. That is also the case in the women's section. So I

might say that Oakalla has been very kind to me in a political sense in

that it's the major issue in that particular riding, and as long as it

stays there it should certainly help my stay here. I certainly think —

and I'm sure the Attorney-General is aware of Oakalla — some effort

should be made to close out Oakalla — phase it out over a period of one

or two years.

[ Page 3969 ]

One

of the previous Social Credit Attorneys-General, Mr. Bonner, promised

the removal of Oakalla around 1966, and it's been a good promise over

the years. As I say, I won't spend any time on it this morning. If you

want to have further information, just refer to my previous speeches on

Oakalla. Let's get rid of it.

HON. MR. WILLIAMS: I

want to thank the member for his comments. As he is aware, the

government has already transferred 158 acres of that site to the

municipality. The phasing out of Oakalla has been before the government

for decades. The tenders will be called for the new 150-bed remand

centre for men in the first week of September, which will allow us to

move towards the reduction of the population at Oakalla, which is

necessary when one is considering the concept of new facilities,

wherever they may be. Currently there are 48 women and 480 men in the

facilities at Oakalla. The capacity is much greater than that. With the

new remand centre in place we'll be able to reduce that by 150 and it

will enable us to take the consideration necessary to find a new

location and build the new facilities — maybe in the same place.

MR. LORIMER:

I didn't quite hear the Attorney-General's opening remarks. Did he

state that he had transferred the properties or given the farmlands to

the municipality of Burnaby? Because if that is what he said I would

like to carry on further on this subject.

HON. MR. WILLIAMS:

The acreage to which I refer was transferred to the municipality early

in 1979. I'm sure the member is aware of that. What the municipality

proposes to do with that is up to them.

MR. LORIMER:

I'll go through the history of this removal of the farmland. In early

1975 there was an agreement to lease, which was signed by myself, the

mayor of the municipality of Burnaby and Mr. Hartley of the Department

of Public Works, agreeing to lease the property for 99 years at the fee

of $1. The agreement to lease was that the lease would be executed

within a year. The reason for the delay was the fact that it was agreed

that there should be a second fence built to separate the remaining

part of the prison from the land that was to be used for a park. Also,

there was still some farm stock in Oakalla which had to be sold,

disposed of or transferred in some manner in order that the lands could

then be used as parkland. The agreement was that the municipality could

enter onto the lands, use the lands to prepare them for parkland, but

they wouldn't be open to the public for a period of a year. In the

intervening time there was an election in which the Social Credit Party

was elected. The Social Credit government then refused to execute or

comply with the terms of the lease, and as a result it wasn't until

election day in 1979 that the lease was actually signed. It was signed

on election day in 1979.

The whole thrust — the whole

operation of the transferring of this land — was done through the

efforts of the New Democratic Party at that particular period. I will

not accept the view that, because the final signing of the lease took

place in 1979, the action was taken by anyone else other than the New

Democratic Party in the agreements that were reached in 1975.

MR. HANSON:

I, too, would like to reiterate some of the comments I made during the

last session under this particular vote. It is a concern I have

regarding the disproportionate number of Indian people who are in

prison in British Columbia.

As the minister knows, a very

large percentage of the female inmate population is native people. The

number increases as you move out of the lower mainland. I would imagine

the figures, for example, for Prince George, to be rather high. I don't

have the report in front of me at the moment, but I have followed this

particular issue now for some time.

This Attorney-General is

in the position of having the responsibility for Indian people in this

province, and, at the same time, having the responsibility for the

correctional institutions. My question to him is: in his term as

Attorney-General — and I know there are native court workers, and I

know he has people...? He has a Mr. Exell in his department, who has

some function as a liaison with Indian people. I question the

effectiveness of that liaison. But I would like to ask the

Attorney-General: in your time as the Attorney-General, what action

have you taken to address the problem of the disproportionate number of

native people incarcerated in British Columbia?

HON. MR. WILLIAMS:

Of course, the member will be aware that the number of persons who are

inmates of institutions directly reflects the number of persons who

find themselves offending the law. I don't have the statistics with me

in this book this morning, but I'll be happy to provide them to the

member.

The general inmate population of our correctional

centres is decreasing. The proportion of those inmates who are native

Indians is also decreasing. As a matter of fact, compared with other

jurisdictions the proportion of native Indian persons incarcerated is

less than in other jurisdictions in Canada.

I'm not

suggesting, by any means, that we've reached the limit of what can be

done. In corrections we are moving more and more to providing

facilities in local communities which will make it unnecessary for

persons to be transferred to major institutions for the period that

their sentence provides. These are being expanded, particularly in the

outlying regions of the province, and therefore would be more

accessible to members of the native Indian population.

The

problem of native Indians in conflict with the law is not, however, I

think, a matter for corrections. It is a much larger problem which

needs to be addressed throughout this country, because this is one of

the aspects of the native Indians' position in Canada which must give

all of us concern: the extent to which they find themselves in

circumstances where they are in conflict with the law.

MR. HANSON:

Mr. Chairman, I found it very difficult to accept the opening remarks

of that minister when he pointed out that the number of people

incarcerated is in direct proportion to those who violate the law. The

point I'm making, Mr. Chairman, is that when you have a population that

represents perhaps less than 5 percent of the total population and you

look at the female inmate population which is approaching 40 percent,

there is a sociological problem, there is a cultural problem. There is

a culture of poverty there, and I'm telling this minister it's not good

enough to say: "It goes beyond my ministry." That minister is

responsible, at the provincial level, for Indian people in this

province. I'm asking him what representation he has made to

[ Page 3970 ]

the

Minister of Health (Hon. Mr. Mair), the Minister of Human Resources

(Hon. Mrs. McCarthy), or the other ministers, advocating on behalf of

Indian people who in many instances are in jail because of language

problems, because of a culture of poverty. It just so happens that his

ministry is the interface institution between Indian people and the

larger community.

Now that, to me, is not acceptable; there

have to be progressive, innovative, creative approaches — sitting down

with Indian people and trying to find out the reasons why and what

actions can be taken to keep Indian people out of jail who are in there

unnecessarily. It is a pointless, circuitous route. I'm saying that it

is unnecessary. Many Indian people are there because they are Indian

people and because their language may be Carrier or it may be Chilcotin

— it may be another language. They don't understand their rights; they

don't understand that they would have a better opportunity of staying

out of jail if they went directly to a lawyer.

Often there

are not enough native court workers; there are not enough facilities

and programs directly related to this specific problem. It's a

high-cost aspect of our correction system. It costs a lot of money to

incarcerate people for long periods of time, and I'm saying that money

would be better spent giving people opportunities to lead a healthy and

happy life outside of a corrections institution, rather than pouring

money into jails and the kinds of institutions that my colleague from

Burnaby is trying to get rid of. I would like some specific answers on

what representation you've made to other ministers to get them to

address this problem.

HON. MR. WILLIAMS: Mr. Speaker,

with respect to the general condition of the native Indian population,

I wish to assure the member that with my colleagues, the Minister of

Health, the Minister of Human Resources and the Minister of Education

(Hon. Mr. Smith), I continue to press to ensure that the programs of

government, which are available throughout this province to all

citizens, are also available specifically to the native Indian people.

This is a slow process, and one which requires the cooperation of the

Indian people and of the national government. This is the direction in

which we're moving in this regard.

Unfortunately, the

national government sometimes deems it their responsibility to move in

their own direction without consultation or cooperation with the

provincial government. I think this is most unfortunate, and in my

discussions with the federal minister I've urged him to move in

directions which involve us directly in those services which we can

provide and that he can provide. We think that the delivery of services

can be dealt with more effectively at the provincial level than it can

be through the federal agency. There is a continuing difference of

opinion with respect to that.

Those persons who come in

direct conflict with the law are served — and served extremely well —

by the Native Courtworkers and Counselling Association, which, I'm sure

the member knows, has been subjected to a major reorganization inside

the last 12 to 18 months. This is funded through the Legal Services

Society and I will be meeting with the Legal Services Society and the

Native Courtworkers and Counselling Association in the next few weeks

to discuss with them the level of the program which is being conducted.

In addition to the Native Courtworkers and Counselling Association, the

Legal Services Society has its own native Indian program. That program

is one which, I believe, must be reviewed to determine whether or not

it should not be entirely taken over by the NCCA.

MR. HANSON:

I have another question of the minister, Mr. Chairman, and that relates

to Wilkinson Road jail. Wilkinson Road jail is a provincial jail for

people who are serving terms of under two years. My understanding is

that many "offenders" for more serious crimes are remanded there

awaiting trial. On numerous occasions, concerns have come to my

attention that people with relatively minor offences — short-duration

offences — are being subjected to other people charged with much more

serious crimes and long-term offenders. Now that's a concern of mine. I

would like the minister to respond to me and give me his thoughts on

whether that, in his judgment, is an appropriate situation.

Secondly,

at one time there were activities at Wilkinson Road jail; there were

activities outside of the institution that people with under two-year

terms could involve themselves in; there were farming programs; there

were trades programs. These are all gone now. So people just cool their

heels in a cell, eat their meals and walk around a recreation area. I

mean, is that the idea of rehabilitative, reformative approaches to

corrections? I mean, is this what you call corrections, or is this just

incarceration? I would like the minister to give me some answers on the

kinds of programs he envisages for Wilkinson Road jail.

HON. MR. WILLIAMS:

First of all, with respect to the question of persons under sentence

and persons in remand at Wilkinson Road, they are maintained

separately. While they're in the same facility there isn't the mingling

of persons sentenced to terms of less than two years and those who may

be under remand for more serious crimes.

The program of

corrections is one of rehabilitation, and those sentenced persons who

are at Wilkinson Road are transferred as quickly as possible to two

camp systems which we operate on Vancouver Island in order that they

are not just left in Wilkinson Road without the facilities to engage

them in a productive effort, which hopefully will serve them when they

return to the community.

Wilkinson Road is a facility which

must be replaced. It ranks equally, in my mind, with the need to move

Oakalla. We will be doing so with both of them this next year.

Vote 26 approved.

Vote 27: Legal Services Society, $11 715,293 — approved.

Vote 28: justice development fund, $1,022,486 — approved.

Vote 29: legal services to government, $4,826,766 — approved.

Vote 30: superior and county judiciary, $1,342,993 — approved.

Vote 31: provincial judiciary, $6,009,712 — approved.

Vote 32: coroners, $2,557,118 — approved.

Vote 33: British Columbia parole board, $382,506 approved.

[ Page 3971 ]

On vote 34: Law Reform Commission, $329,314.

MR. HANSON: I have a question of the minister. Could he tell me how many native people are on the Law Reform Commission?

HON. MR. WILLIAMS:

There are no native people on the Law Reform Commission, Mr. Member. If

you don't have the names of the people, I'd be happy to provide them to

you. They're all senior lawyers in the province, both practising at the

bar and at universities, under the distinguished leadership of their

new chairman. The staff are also legally trained people.

MR. HANSON:

Do you not think that the consumers of the so-called corrections

justice system should have a place on that Law Reform Commission?

Following from my earlier remarks regarding the disproportionate number

of native people incarcerated and native people coming in contact with

the law, would it not be appropriate to appoint a number of native

people whose names were put forward by the Indian organizations to

assist you in finding the real reasons why this is occurring and the

remedial steps and corrective action that could be taken to help native

people and get them out of jails in British Columbia? Would you not

consider appointing a number of people?

HON. MR. WILLIAMS:

I think the member is confused as to the role of the Law Reform

Commission. It does not deal with the matters which the member would

wish to have addressed. They look far into the future with respect to

changes in the laws which may be required because of changing

circumstances. They deal with very specific project tasks, and it's not

the kind of organization to which the member is addressing his mind.

think perhaps he may be concerned about membership on the Legal

Services Society, which is in the business of delivering legal

services. I'd like to draw the members' attention to the fact that one

of the directors of the Legal Services Society is native Indian, Alfred

Scow.

Vote 34 approved.

Vote 35: Criminal Injuries Compensation Act, $1,918,200 — approved.

Vote 36: public trustee, $1,820,944 — approved.

On vote 37: fire commission, $1,613,155.

MRS. WALLACE:

I would like to ask a few questions relative to the volunteer firemen

and firewomen who work in the province. I'm sure the minister is aware

that there are some difficulties in getting funding for these voluntary

people. I'm wondering whether or not he has considered the possibility

of including something in his budget to provide a little more

assistance, not in the way of manpower costs but in the costs of

equipment, which is getting more and more expensive all the time, and

in the need for buildings and those sorts of things.

Another

point which I would like to raise with him — I have raised it before —

is the difficulties that occur in rural areas in attempting to get a

burning permit, now that the volunteer firemen have been given this

responsibility rather than the Ministry of Forests. Those people have

to earn a living, and they are giving of their time voluntarily as far

as firefighting is concerned, but when it comes to trying to get a

permit to do some burning, it is almost impossible to contact them

because you may or may not know who actually serves on that volunteer

fire department. The only contact you have is the local firehall, which

is unmanned. They come in maybe once a week to have a fire drill, but

unless you are familiar with just when they are going to be there and

what they are going to be doing, it is almost impossible to contact

them to get a burning permit.

When it comes to burning you

time it with the weather; you want to go just before a heavy rain,

perhaps, so you can get the particular piece of property cleared and

burned; you have your piles stacked and ready to go. If you can't make

that contact it means the loss of a whole year. It is a real problem in

the rural area for people who are trying to get burning permits, apart

from the fact that it's putting an extra chore on those people who are

already volunteering a great deal of their time free gratis as a

community service. It just seems to me to put that extra load on them.

top of that, it just isn't working, because it is so impossible to try

to locate one of these people and get him to issue you a burning

permit. On top of that, once they issue that permit, if they are really

doing the job, they have to come out and check the site, they have to

be aware of when you are going to burn, and they have to be prepared to

come and do something about it if it gets out of hand. It is a

tremendously heavy responsibility to put on a volunteer group.

think the Attorney-General should talk to his colleague, the Minister

of Forests (Hon. Mr. Waterland), about taking that responsibility over

again because it worked much better. Those people are paid employees of

the government who have an opportunity to do it.

The other

point that I wanted to raise is the problem that we've had in the

issuing of a prospectus which has indicated that there is fire

protection from a volunteer fire department. We've had a big problem

with this in my constituency. It's one particular company. It was a

misunderstanding, I know. I've raised this before. I've had a lot of

correspondence — and a lot of cooperation, I would say — from the

Attorney-General's office in attempting to resolve this. But we still

have this situation.

I think there are about six people

involved in the first

section of this subdivision who were told that

they had fire protection. About six of the lots went over the boundary

of any volunteer fire department. Because this was pointed out, in the

next

section of the development the prospectus was changed to say that

there was no fire protection. So those people bought the lots knowing

that there was no fire protection. However, this leaves approximately

six people in there who were getting insurance based on the fact that

there was fire protection. Now that they have found that there isn't,

it has caused a terrific increase — about $600 a year in some instances

— in their costs of insurance.

The only out would be some

kind of class action against the company to try to recover this over

the next 10 or 20 years — whatever it might be estimated that that

extra cost would be — with not too great a chance of winning the court

case because the realtor could claim lack of knowledge. I think they

would be able to prove that it was very difficult to establish just

where those boundaries went.

What I am suggesting to the minister is that he take some kind of action to ensure that this doesn't happen in another

[ Page 3972 ]

instance,

that boundaries are firmly and clearly defined, and that he set up some

kind of liaison. Any realtor who is advertising that fire protection is

provided by a volunteer fire department must check with his ministry to

ensure that that is in fact the case.

HON. MR. WILLIAMS:

Mr. Chairman, with respect to the prospectus requirements for

subdivisions, the point that the member makes is well taken. The whole

process by which such prospectus material is prepared and filed is

under review by the Ministry of Consumer and Corporate Affairs. We hope

to have changes before this House in 1981 which I think will

accommodate the concerns that the member raises. In this matter there

will be the requirement from the fire commissioner's office that they

make sure that these matters are clearly spelled out.

On the

question of fire permits, I was aware that there was a particular

problem in the member's area. It was my information that the matter had

been resolved. If it has not been, then I would be very pleased if the

member would let me know. I'll take it up with the fire commissioner

and with the Minister Forests, because I certainly agree that the

citizen should have a place where he can go and get his permit from

some official who's there on the job on a regular daily basis, it not

being wise to chase after someone who happens to be a volunteer. If the

procedures that were put in place, as the member has raised before, are

not working, would she please let me know and we'll see that they are.

What happens if you don't facilitate the issuance of permits at the

appropriate time is that some people then will say: "Well, I'll go

ahead and burn without a permit." Then you've got, perhaps, a more

serious problem, and that's what we want to avoid.

MRS. WALLACE: What about financial assistance for the volunteer firemen?

HON. MR. WILLIAMS:

The question of financial assistance for capital works, with regard to

volunteer fire service, comes under the Ministry of Municipal Affairs.

My budget does not include that. If the member will look at the

description of the funding for the fire commissioner, it deals with

investigations and inquiries into fires, the conditions under which

fires occur, the study of fire prevention and fire suppression, and the

provision of advisory services. We aren't funded in my budget for

capital works.

MR. HANSON: I rise on a point of

order, Mr. Chairman. I wish to correct the response from the

Attorney-General regarding the Law Reform Commission. The Law Reform

Commission would have jurisdiction over sentencing policy, which would

have a very great effect over native people in terms of the cultural

dimension of the problem. I think that he could take it under

advisement and could, perhaps, make the necessary appointments to fill

that vacuum.

MR. CHAIRMAN: A point of order is not required, hon. member. You simply took your place in debate, which was quite in order.

Vote 37 approved.

Vote 38: British Columbia Racing Commission, $1,037,410 — approved.

Vote 39: film classification branch, $143,795 — approved.

Vote 40: land registry program, $7,110,955 — approved.

Vote 41: Order in Council Patients' Review Board, $102,350 — approved.

Vote 42: building occupancy charges, $37,903,000 — approved.

Vote 43: computer and consulting charges, $1,750,000 — approved.

HON. MR. GARDOM:

Mr. Chairman, I call vote 64. I would say, Mr. Chairman, there is, of

course, Bill 42 on the order paper, the Utilities Commission Act. We

are aware that there will be considerable policy discussion during that

debate.

ESTIMATES: MINISTRY OF ENERGY,

MINES AND PETROLEUM RESOURCES

On vote 64: minister's office, $153,841.

HON. MR. McCLELLAND:

It's my honour to be able to bring forward the debate on these

estimates for the budget of the ministry for the first time — for me at

least, having been appointed to this ministry last winter. Mr.

Chairman, I want to say first of all that I'd like to pay some tribute

to members of the ministry who have had some difficult and anxious

times over the last few months with major reorganization of the

ministry and the major policy statement regarding energy, the

preparation of which took up a good degree of time by those members of

the ministry, many of whom will be joining me in a short time on the

floor of the House. I just want them to know that all of the employees

of the ministry have the thanks and appreciation of the people of

British Columbia for the work they do on their behalf. It goes without

saying that they also have my thanks.

I'm going to take a

few minutes this morning, because it is the first chance I've had to

talk about energy in this House in a major way. I want to describe some

of the government's initiatives in the energy sector. If the House will

bear with me I will take 15 or 20 minutes before we open the estimates

up to general review.

I want also to outline some of the

government policy initiatives and ministry programs which have been put

in place to sustain the current levels of activity and productivity in

all of those vital areas of concern to this province in the years to

come.

We all know that mining is, and always has been,

extremely crucial to the economic prosperity of British Columbia.

Through the years, from the time of the Kootenay mining camps, the

Fraser and Cariboo gold fields, the Anyox and Britannia Mines, and a

host of other successful ventures, the health of the mining industry

has been directly reflected in the health of the British Columbia

economy.

It has worked the other way round too, Mr.

Chairman. During the early seventies, for instance, mining in British

Columbia went into severe decline and critical sectors of the economy

followed suit. The two are tied together and cannot

[ Page 3973 ]

divorced. In 1972 the mining industry was booming. Almost overnight,

however, things took a turn for the worse. Some of the symptoms were

that the number of new mineral claims staked annually went from 79,000

in 1972 to 35,000, then to 17,000 in 1974 and to a low of 11,000 in

1975. Exploration money spent in B.C. went from $38 million to $37

million in 1973, then to $25 million and $22 million in succeeding

years — this at a time of double-digit inflation. These declines had

far-reaching effects on the province as a whole. The lack of

exploration expenditures meant the loss of jobs for people and the loss

of revenues for the province. With less exploration, of course, fewer

mines were found, and still fewer were developed.

It's taken

some time to reverse that downward trend and to earn back the

confidence of the British Columbia mining interests. But exploration

and production figures since 1975 show that the industry has become

healthy again. From that low of 11,000 that I mentioned earlier, the

number of new mineral claims rose to more than 55,000 last year.

Exploration dollars show a similar rise, recovering their former level.

Mineral production figures of $2.8 billion have been estimated for

1979. My ministry is predicting that by 1982 new production will

contribute an additional $2 billion: production from newly announced

mines like the Carolin; from rejuvenated mines such as Kitsault and

Granduc; from mines which were known but uneconomic in 1975, such as

Goldstream, Highmont, and Sam Goosly; from extensions of producing

mines, like the Lornex mine doubling its production, and the extension

of operations at Similkameen's Ingerbell-Copper Mountain mine; not to

mention possible producers such as the Adanac, the Dolly Varden, the

huge Valley copper mine, and a host of others.

All this, Mr.

Chairman, is because the industry decided that the economics were right

and that British Columbia was again a good place to spend exploration

dollars and a good place to operate a mine. The net result for us as

British Columbians is a continuing influx of investment capital, new

ventures, expanding exploration and more jobs. There's more. It means

new and expanding communities meeting the needs of the mine personnel

and their families for housing, service and recreation and generating

their own revenues. It means new secondary manufacturing, along with

increased export of refined metals, broadening the province's economic

base. It means increased revenues to the people of British Columbia

through the government so that we can then return those revenues to the

owners of the resources in the form of improved social services, better

highways, improved educational facilities and better health care. In

fact, it means a better standard of living. It all adds up to increased

prosperity and continuing security for the people of this province in

the years to come.

The petroleum and natural gas industry of

B.C. also makes a significant and growing contribution to the economic

health of the province. Activity in exploration for oil and gas has

followed much the same pattern as mining in recent years. Total wells

drilled went from a high of 225 in 1972 to 178 in 1973 and 148 in 1974,

the year of OPEC, to a low of 82 in 1975. Mr. Chairman, you don't find

oil or gas unless you drill for it. Lease revenues, another indicator

of industrial activity in this sector, went from $21 million to $13

million over that same period. Not even the combined efforts of OPEC

and inflation could offset the decline caused by the policies of the

government of the day. Fortunately, though, the trend in oil and gas

exploration too has been reversed since 1975. Activity in the industry

reached record levels last year. For the fourth year in a row, drilling

operations exceeded the total for the preceding year. There were 82

wells drilled in 1975, some 175 in 1976, some 310 in 1977, then 393 in

1978 and 395 in 1979. In 1979 we reached what appears to be a peak in

annual operations potential for a number of reasons; the most important

probably is the Canada-wide shortage of drilling rigs and the

difficulty of gaining year-round access to parts of B.C.'s production

areas. The government is working to correct that deficiency.

[Mr. Davidson in the chair.]

However,

the 56 percent success rate of drilling ventures in our province

continues to spur exploration. Oil production for 1979 was up 7

percent, and gas production was up 14 percent over 1978. The total

wellhead value of oil and gas production during 1979 was $896 million,

compared to just under $600 million the year before, The industry

itself responded to that ongoing success by spending an estimated $800

million in this province in 1979 — a 25 percent increase over the

previous year. Revenues to the people of this province from Crown

reserve sales continued to increase from their low of $13 million in

1975 to a high last year of $191 million. Total revenue to the province

from the petroleum and natural gas industry — not including corporate

income tax — was $516 million, which was up $117 million from the year

before.

So all in all, Mr. Chairman, the prognosis is very

good for the mining, petroleum and natural gas industries. Mining, now

B.C.'s second industry, will soon gain pre-eminence and provide the

jobs, cash flow and revenues necessary for B.C.'s continuing prosperity

and security. Petroleum resources also bring in vital revenues. In the

first four months of this year bids on B.C. oil and gas rights are up

more than 25 percent over the same period last year, with four more

sales still to be held. Both the mining and petroleum industries

supply, of course, premium fossil fuels, on which our province's energy

security depends.

This last issue of energy security is our

prime and most immediate concern. The figures I have just quoted to you

on natural gas and oil replacement through exploration contain a

warning which we cannot afford to ignore. Twice the amount of natural

gas was added to the province's reserves as was taken out of

production. However, only half as much B.C. oil was added to the stocks

of reserves as was used up.

The health of our province, the

development of our mineral wealth and consequent manufacturing,

economic and export strength in the year 2000 depends very heavily on

how we face up to the energy issues in the meantime. I want to turn

just very briefly to a few descriptions of those issues.

have an energy policy statement which is some four months old now and

it's a framework upon which we can build for the future. Already we've

taken a number of steps which will flush out that framework — positive

steps which we hope will help us to put that security in place. The

statement points out our strengths and weaknesses, and, as we've seen,

our major weakness is oil. At present we bring in 75 percent of the oil

we consume and we'll need to bring in proportionately more as our own

small supply of oil is used up. The best answer to our oil dilemma is

to cut down on our consumption and learn to rely instead on the energy

strengths that we do have in our province.

The transportation industry and the private automobile

[ Page 3974 ]

account

for a large part of B.C.'s oil consumption. Therefore we are taking

steps and must continue to take steps to promote fuel efficiency in all

sectors. We hope to set an example for fleet operators by down-sizing

our own government fleet of automobiles. Crown corporations have been

asked to follow suit. Big cars can no longer be a status symbol in this

province.

For the general public we've gone through some

successful educational programs. One is called Operation Tune-up. We've

just published a booklet called "Fuel Economy and You." We feel that

it's one of the best of its type produced here or anywhere else, and we

hope the general public will take advantage of it.

Industry

too consumes more of our precious oil and natural gas than the province

can afford. The government, therefore, is encouraging industry to

switch to cheaper, more plentiful fuels. In support of this policy,

we've recently released a feasibility study on coal conversion at

B.C.'s cement plants. Some plants still use oil and some use natural

gas to power their operations. Coal conversion is a good possibility

for those high-energy users and it is in fact actively taking place in

other parts of this country, the Pacific Northwest and the world.

Clearly,

then, coal is one of the ways of the future in powering industry. It's

interesting that today in the northeastern United States, where ten

years ago the whole cement industry and others as well switched over to

oil because it was a cheaper and more plentiful fuel — at least that

was the thought process that went on in those days — those same

industries are now switching back to coal at great cost to them. A

similar kind of situation is presently happening in Japan. British

Columbia should benefit from those kinds of changes in corporate or

governmental philosophy in other countries, because our export market

will be well served because of them.

Not just the cement

industry, of course, but many other industries in British Columbia have

yet to explore the full possibilities of coal, wood waste, thermal coal

and other energy alternatives. It's time they did, and we will help

them as much as we can in providing incentives and encouragement to do

that.

Energy conservation is one of our most important

sources of energy. We cannot consider sources of energy without using

conservation as one of them. And that must be for everybody — not just

government, but individual and corporate citizens as well, who can help

us to achieve that end. We all know that energy conservation is the

issue on the tip of the world's tongue right now. It's a motherhood

issue, because everybody recognizes that our resources are limited. But

not everybody recognizes or realizes that we must start to act now. Not

everybody knows how to go about energy conservation either. We ask:

"What difference will my little contribution make? What can I do, if I

should be doing anything?" Well, we'll try, through government and the

Ministry of Energy, to provide some of the answers. What we have to do

is to attempt to connect people's understanding of the "whys" of energy

conservation with a set of "hows." If we can give the people that, then

the "whys" and the "what can I do's" will come easily.

Last

year our ministry sponsored a number of energy conservation programs,

ranging from lectures with prominent speakers to a computer program

display at the Pacific International Auto Show. Our energy bus program

is being continued by the ministry and has already identified potential

energy savings of $5 million dollars for its clients; that will

continue as well. Our conservation strategy will have to extend right

across the entire spectrum of B.C. society, so that the people of this

province then become one of our major energy strengths.

are also engaged in technological research through which we may realize

more energy strengths in British Columbia. The Energy Development

Agency, of which I am chairman and which has as its members as well the

Minister of Industry and Small Business Development (Hon. Mr. Phillips)

and the Minister of Universities, Science and Communications (Hon. Mr.

McGeer), along with our deputies and some other technical people who

are supportive of the agency, is currently looking into the

liquefaction of coal, as well as the development of feasible

alternatives to those traditional energy sources which we all know

about. For instance, coal, wood wastes and biomass could be treated to

produce gasohol or other gasoline additives. Natural gas liquids — at

present only a portion of these liquids is removed in processing, and

there's real merit in examining how we may make better use of our

natural gas resource. Propane might be used to a greater extent among

fleet operators, reducing our consumption of refined oil products.

Ethane can be upgraded to plastics for export or local consumption.

We're looking at natural gas in a major way, as an alternative to

gasoline for automobiles.

The technology division of the

ministry itself, outside of the Energy Development Fund Program, has

also undertaken studies to assess the potential for increased

co-generation of electricity and process heat at industrial operations

in the province. They are now administering a pilot project to place

solar hot water heating panels in a hundred British Columbia homes this

year, a project which has met with tremendous public response.

Recently I presided at the start-up operations of the wind power generating station at Rocky Point, here on Vancouver Island.

are also acting to strengthen our stock of traditional energy

resources. It is government policy to encourage a further expansion of

exploration activities for oil and natural gas, as well as to enhance a

secondary and tertiary recovery from well-known fields through a

favourable royalty structure.

We are also encouraging the

coal industry to expand its activities. Active exploration in the

northeast, as you all know, has been underway for some time, with

companies establishing reserves and extending their exploration

targets, assisted by studies undertaken by my ministry, the Ministry of

Industry and Small Business Development, and others. The recent

negotiations with Japan, and the negotiations which are presently

underway regarding northeast coal, will lead to the further activity

and development of our coal resources in this province, and will open a

huge area of this province to further economic development and growth.

In the southeast several new producers are anticipated in the near

future as the Crowsnest coalfields continue to be developed and

continue to find export markets and local markets for their commodities

as well. Studies are now underway at Hat Creek, which is the thickest

thermal coal seam in the world, with a view to developing an on-site

thermal generating plant there.

All of these developments

will benefit the province of British Columbia, but we recognize as well

that no development takes place without cost. Part of the government's

[ Page 3975 ]

mandate

then is to ensure that the benefits are worth the costs, and not just

in terms of dollars and cents. In developing our coal, hydro and other

natural resources we will ensure that we do not squander other less

tangible resources such as the quality of life and the integrity of our

environment. Therefore — and I don't want to reflect on a bill which is

before the House, Mr. Chairman — an energy project review process will

soon be in place to make sure that development is both necessary and

desirable from all of those points of view.

The review

process will present guidelines for expansion, not necessarily

impediments to growth. As I have said, growth is essential to British

Columbia's continuing prosperity — but not uncontrolled growth. An

adequate supply of appropriate energy stocks — whether they be gas,

coal or hydro — for people in all parts of our province, now and in the

future, is the essence of the government's overriding goal of energy

security.

Security of supply, then, is our chief and major

concern. This is the reasoning, Mr. Chairman, behind the government's

commitment to bring natural gas to Vancouver Island, so that the

Islanders too may come to benefit from this energy strength. The

government is all so aware of the special circumstances of weather and

geography which affect a northern British Columbian's use of energy as

well, and we are committed to establishing fair pricing policies and

reliable supply networks to meet their energy needs as well. In fact,

energy security has to be put in place on the basis of fairness and

reasonableness of access to every British Columbian, regardless of

where he or she might live.

Mr. Chairman, I would now take

great pleasure in moving these estimates for my ministry forward. I'd

be pleased to have the input of all members of the committee, because I

know that we need their input to help us to achieve our goal of energy

security for all citizens.

MR. D'ARCY: Mr. Chairman, I certainly welcome the minister's

statements of various intents in the energy field in British Columbia. Unfortunately

we on this side of the House have not seen too much evidence of the actual effect

of many of those intentions. However, we will continue to take the minister's

statements in good faith.

wish to deal with some of the items the minister raised, as well as to

throw a few things of my own into the hopper. First of all, Mr.

Chairman, I want to deal with the minister's recent statement that the

government has a commitment to bring natural gas to Vancouver Island.

We've been hearing this from several governments over a period of

years. In my discussions with two of the companies that are interested

in bringing gas to Vancouver Island — Westcoast Transmission and B.C.

Hydro — they have both indicated that they feel they may be looking at

as long as a two-year approval process from the time the minister gets

into place a streamlined modern two-stage structure, or whatever it is

he's planning to put into effect under his proposed utilities bill.

Mr.

Chairman, I would hope that the minister, when he's replying to my

remarks, will tell us that is not so, that we're not looking at a

further two-year lead time in the approval process, and that a decision

not only in principle but on the details of a natural gas line to

Vancouver Island and all of the servicing that it involves to the

various communities — transmission lines on the Island and the

servicing within the communities and to the industries involved — can

take place with all possible and deliberate speed. I feel that it's

been all too long that people on Vancouver Island have been deprived of

the use of a cheap and plentiful resource which we have in British

Columbia — we don't have to import it — a resource which has been

available to most of the other residents of British Columbia. Certainly

there are some communities in the interior and in the north that do not

have natural gas supplies, but as the price differential between other

forms of energy in the home, in industry and in business changes, we

have an even greater and greater argument as to why certain residents

of the province should not be deprived of this resource.

Mr.

Chairman, I would like to have the minister give us some idea of why

his ministry rejected a recommendation, approximately five years or

more in the making by the B.C. Energy Commission, regarding the

transfer of assets in the hydroelectric field from Cominco Ltd. to its

wholly owned subsidiary, West Kootenay Power and Light. As the minister

is well aware, there has been a great deal of concern about this in the

west Kootenay area and in the Okanagan area, because not only do these

areas wish to maintain their sources of low-cost industrial power — on

which, as I'm sure the minister knows, our economic well-being and the

location of industry, both present and future, is based almost entirely

— but we also wish to ensure that our utility base load for other

smaller industries and commercial and residential users is maintained.

So there is considerable concern about this. In view of the fact that

the Energy Commission, after a great deal of deliberation and a great

deal of expense on their part and on the part of the applicant over a

period of five years plus, made this recommendation, I believe this

House would be very interested in knowing why the minister saw fit to

turn it down, and perhaps some direction as to what the applicants may

consider doing if they wish to pursue this matter. As I mentioned, Mr.

Chairman, it's not that I wish to fight battles in this House for the

Canadian Pacific Railway and its subsidiaries; but the fact is that

there is considerable concern, economically and socially, in the

southern part of the province of British Columbia.

[Mr. Strachan in the chair.]

happen to believe that there is a great deal of room in the province

for a new government attitude towards investment in saving of energy in

the home, in industry and in commercial development. An old adage is: a

penny saved is a penny earned. Well, we certainly know now that a

kilowatt saved is many more kilowatts earned. Look at the absolutely

enormous capital cost, not just of new energy projects but of getting

the energy from A to B. I need only mention some of the major

transmission lines — across the southern part of the province, from the

northern part to the southern part, and from the mainland to Vancouver

Island — to illustrate what I mean. Since these funds have to be

borrowed at interest rates in the neighbourhood of 12 and 13 percent

now and in the foreseeable future, any way that capital can be spent

which would encourage or affect — if I can use a nasty term — the

marketplace regarding the desire of industry, business and residential

users to conserve energy is, I believe, money far better spent than on

massive new projects to transmit and generate electricity, until those

projects are absolutely necessary.

I was very encouraged to

hear the minister's remarks regarding a good co-generation policy with

industry. But once again I want to note that industry will be

completely governed by the marketplace, as it should be in these

matters.

[ Page 3976 ]

am quite sure that, given their druthers, other things being equal,

industry would prefer to be self-reliant when it comes to energy, from

the point of view of both protection from price increases and security

of supply. I might point out that B.C. Hydro and the other industrial

producers have had a very good record in that regard. Nonetheless, I am

sure that industry would prefer to have its own sources, were they

economic.

If the minister is serious about what he is saying

regarding co-generation with industry, rather than a stated government

policy by himself and from the government, the real agency of

government energy policy when it comes to delivering energy in this

province is not directly the government; it has been the government's

wish as carried out by the large Crown corporation, British Columbia

Hydro. I would be much more interested in hearing the minister tell us

that he is going to be directing the directors of B.C. Hydro, whom he

appoints, to adopt a policy change in this regard. To date, B.C. Hydro

tells me that they still have no policy except the traditional one

regarding co-generation, which is that they will buy industrial power

from industry at the same rate at which they are prepared to sell it.

As we know, this does not provide for the marginal cost of additional

generation to B.C. Hydro, nor does it provide for the marginal cost of

new transmission lines to supply that power. We have a postage stamp

rate all around the province, and that rate is based on capital costs

and operating costs everywhere, whether we are involved with a new

project or an old one.

By the way, this is in marked

contrast to at least one of the private utilities, West Kootenay — and

Cominco. Even though their industrial and residential rates are much

lower than B.C. Hydro's to start with, they are prepared to deal with

industry based on their marginal cost of adding new facilities, both

for generation and transmission. If the private sector can adopt such a

policy, I believe that there is room for it to at least be considered

by the public corporation involved in serving industry.

Perhaps

the minister could confirm as to whether or not, through his influence

as the minister responsible, he is going to be not just voicing

platitudes in the House regarding co-generation but actually doing

something about it through the major energy agency which he ultimately

controls.

I would also like to hear the minister make some

indication as to his approach and the government's approach regarding

sales of power on an east-west basis. Clearly we have had a policy of

selling power on an interruptible basis to our friends below the border

over a period of time, when that power is available, and getting the

best possible price for it. I don't argue with the sale of power on an

interruptible basis when it is available, but I would certainly like to

hear the minister's thoughts on selling power on an east-west basis. In

the national interests of our country, it certainly seems to be an

absurdity that our two neighbouring provinces to the east, which have

enormous amounts of fossil fuels but lack in hydroelectric power,

should be generating power from those fossil fuels when we in this

province have surpluses of a renewable resource, hydroelectric power.

I would also like to mention that it has been known for some time

that power moved on a north-south basis faces the same kind of peaking

problems. The high-demand period in Portland, Seattle or Los Angeles is

exactly the same high-demand period as in Vancouver or Prince George.

Naturally, the high-demand period in Edmonton or Saskatoon is different

due to time zone changes. So possibly some savings can be made there in

total generation capability, in peaking capacity, and possibly even in

some trade-offs on an east-west basis, depending on low water years and

that sort of. thing.

Mr. Chairman, there

has been considerable discussion in the construction industry and in

the housing and building development areas about mandatory energy

standards for new buildings. Certainly the federal government has made

noises in this regard over a period of years. In a time when there are

a number of accusations going back and forth on a number of issues

between federal and provincial governments, the federal government has

been claiming, rightly or wrongly, that the provinces, including

British Columbia, have been the major stumbling block for mandatory

energy standards for new buildings. I appreciate the fact, as does

everyone in this House, that this is going to add somewhat to the

capital costs of most new buildings. It's been estimated in the area of

4 to 5 percent, although we know that costs have been going up that

much and more every year.

However, it is my belief — and our

belief on this side of the House — that these kinds of reasonable

standards that can be met by individuals building homes and the private

sector when it constructs commercial and residential buildings need to

be established in this country. I would suggest that every other

developed country in the world has these kinds of mandatory standards.

It's one thing to talk about assistance for people to make more

energy-efficient existing buildings, older homes, older buildings, but

why do we have to continue to build structures which are going to give

us the same kinds of problems on an instant basis when it would be far

cheaper to do the job right in the early stages?

Perhaps the

minister has some thoughts on this through tax credits, or in some way

to at least allow some incentive and ease the burden so that

individuals or development companies building homes can ease their way

into energy-efficient standards. Clearly the standards have to be set

by government, because it's unfair in a marketplace situation to hope

that some builders will comply and face the costs in the marketplace

that other builders don't have to comply with.

Mr. Chairman,

I have some concerns that I've expressed publicly, and I would like to

express them in the House to the minister, regarding the level of

indebtedness that British Columbia Hydro is getting into. I appreciate

the fact that Hydro has to supply the energy demand in British Columbia

as it exists. We also know that should some major parts of the economy

decide to electrify — I'm thinking particularly of transit systems and

the railways of British Columbia — that electricity demand could

increase markedly. What I've been concerned about is the financial bite

that's being taken out of the economy of B.C. by virtue of the fact

that it has always been government policy for B.C. Hydro not to pay off

the principal of its indebtedness.

Most people in the

province, I suspect a number of people in this chamber, and certainly

many people in the media still operate under the illusion that British

Columbia Hydro pays off the capital. That is, when it makes its debt

repayment, it pays off principal plus interest. That is not the case.

The fact is that British Columbia Hydro pays only interest on its

indebtedness and when its bonds mature they simply go out and borrow

some more after coming, presumably, to this Legislature for permission

to do so. Although there is some money set aside for sinking funds and

parity development

[ Page 3977 ]

bond repayment, over the last ten years it amounts to only between 1.4 and 1.5 percent of the total amount owed by B.C. Hydro.

also see that last year — the fiscal year ending March 31 — for the

first time the interest paid by B.C. Hydro on long-term investment has

exceeded 50 percent of the gross revenue of that corporation. Mr.

Chairman, I think this has to be a concern for everyone in this

province, both on the basis of now and in the future. I'm not sure the

old bromide of why the present generation should pay for our future

generations' power needs was ever valid. Certainly there is some

concern if we were paying it or were paying part of it. For instance,

nowadays the money spent by our predecessors in the early and middle

'60s would be one thing. The fact is, as I pointed out, we are not

paying for that. We're merely paying the interest on it. But when our

predecessors borrowed that money they were paying 3, 3.5 or 5 percent.

It's hard to think about those days. Now, when B.C. Hydro goes into the

borrowing market, they are paying 12.5 or 12.75. It's much higher

percentages to refinance that money which was borrowed years and years

ago, in some cases by B.C. Electric and the B.C. Power Commission.

Mr.

Chairman, we on this side of the House have considerable concern that

when the government's new energy program is in effect there are going

to be some major delays in the decision-making process which could be a

major cause of problems in British Columbia regarding getting those

decisions made.

I'm not going to dwell on matters that, as

the government House Leader mentioned, may well be dealt with under the

utilities bill. However, I'm going to deal with some points which I

think are of significance.

The minister stated that it was

the government's policy to encourage exploration in B.C. for petroleum

and natural gas. Surely the minister must be aware that the amount of

oil available in British Columbia is decreasing as a portion of our

total demand. Just a year or so ago the industry was stating that we

were supplying perhaps 25 percent of our needs; now they're saying that

we're supplying only 22 percent of our needs. While there is the

occasional attempt at drilling an oil well, the fact is that there has

not been any oil discovered in B.C. because we're simply not

geologically suited to it.

Not only that, unlike some

provinces to the east of us we do not have the kind of heavy oil or oil

sands deposits which, though very expensive to develop, at some point

in the future offer some security of supply. Very rapidly, in fact, we

are getting into the same kind of petroleum supply situation that

provinces such as Manitoba and Ontario find themselves in, even though

at one time these provinces thought of themselves as being major

petroleum producers. They're still petroleum producers, but the amount

available is becoming an increasingly small part of their total

requirements. With that in mind, it's strange to me that the minister

still likes to talk about us as being a petroleum-producing province,

particularly in the strong support he gave Alberta in its unilateral

plans to raise the price of petroleum. Surely this is not only going to

have a great effect on the standard of living and cost of living in

British Columbia; it's also going to have an effect on our

competitiveness in international markets as far as industry goes.

this side of the House we accept the fact that the price of petroleum

in this country has to go up. However, we do not believe that the only

two provinces — Alberta and Saskatchewan — which at this point have

more petroleum within their own boundaries than they need domestically

should be able to make decisions unilaterally without the involvement

of the rest of Canada. I certainly believe that the minister, on behalf

of all the people of B.C., should be doing hard bargaining with those

provinces regarding the price of petroleum, rather than simply saying:

"Go ahead, raise the price; we support you." Clearly, if we were

talking about the price of manufactured goods imported to British

Columbia from some other part of Canada, I can't imagine the Minister

of Industry (Hon. Mr. Phillips) or the Minister of Finance (Hon. Mr.

Curtis) going to those companies and saying: "Go ahead, raise the

price. It's good for business in Canada. Keep shoving the prices up. We

don't care about the cost of living or the cost of doing business in

British Columbia." It's a strange attitude on the part of the

government of B.C.

Mr. Chairman, I had to smile a bit when the minister was talking about coal conversion. I always considered the term "conversion" attached to "coal" as a rather silly euphemism. Certainly I believe that if we have large amounts of both thermal

and metallurgical coal in B.C., we should be looking at greater utilization

of these resources. But when you talk about coal conversion — I suppose it is

a nice petrochemical sounding term; a nice clean industry — what you're

in fact talking about, Mr. Minister, is industry burning coal instead of using

wood, petroleum, natural gas or hydroelectric power. We're talking about

people burning coal, whether it be in their homes, businesses or industries.

Let's call it burning coal. Of course, we don't like to talk specifically

about burning coal, because it means that we're going to have to get concerned

about the necessary pollution controls, particularly regarding sulphur dioxide

emissions. Acid rain is a major concern all over North America because of the

environmental and social effects of large amounts of sulphur dioxide released

into the atmosphere, largely from the burning of coal and residual fuel oils

with a high sulphur content.

While

I support the notion of using more coal in B.C. because we have lots of

it, I certainly don't support the idea of confusing and misleading the

public by using silly euphemisms which, I think, are primarily designed

to perhaps anesthetize the public from realizing that we're really

talking about burning more and more coal in fireboxes, fireplaces,

stoves and industrial boilers. Let's hope that at a reasonable price

modern technology can allow us to afford to put the correct pollution

abatement devices in place — to make this economically viable.

want to say just a few words about activity in the mining industry in

British Columbia, which we certainly welcome from both an exploration

and a productivity point of view. There are a number of mines which are

being developed and some which are being expanded at the moment. Of

course, we are aware, as the members on the other side of the House

are, that this activity is primarily based on the world prices of base

metals, which are very good right now, and the availability of

investment on an international basis. We, on this side of the House,

also welcome the fact that governments both at the provincial and

federal level have stopped their squabbling over who should get the

biggest or any piece of the action regarding royalties and taxation.

Certainly one of the major problems that existed in Canada in the early

part of the '70s was the fact that the industry was not only suffering

from depressed world prices but from a depression in the amount of

capital available on an international basis and, clearly, the

uncertainty based on the entry of the federal government into the

taxation field by the removal of certain write-offs which had existed

up to that time.

We on this side of the House are aware, even if the other

[ Page 3978 ]

side

doesn't want to admit it, that the drop-off in activity both in the

drilling field for petroleum and natural gas and in exploration for

mining took place universally at the same percentage across Canada — in

Ontario, Saskatchewan, Alberta, Manitoba, British Columbia and Quebec —

proportionately in the same amount at the same time. It had to do with

international conditions and the various attitudes of the provincial

and federal governments at the time. However, I don't wish to belabour

the point; I just want to make the minister and those on the other side

of the House aware that we certainly don't accept their ability to

predict the past in these regards, and we welcome the healthy

international conditions at the moment regarding world base metal

prices and the fact that the industry has responded to the

plentifulness of resources in British Columbia to take advantage of

that situation to the benefit of British Columbia.

Mr.

Chairman, to return for a moment to the minister's statement that they

were encouraging activity in the oil and natural gas drilling field in

British Columbia, the industry has been complaining for some time of

receiving a higher wellhead price for natural gas produced in Alberta,

and even the small amounts available in Saskatchewan, than they are

getting from the government of British Columbia. If the minister is

sincere about wanting to encourage the industry, surely he's going to

have to take some action in this regard in dealing with the industry,

because, once again, if the marketplace is to govern the actions, it

would only be normal....

Certainly if I was an investor in

that field I would be investing in that part of Canada which is more

likely to produce a significantly higher wellhead price and have a

significantly higher demand for the product. I suppose this is one of

the reasons why the B.C. Resources Investment Corporation is spending

its development money in oil and natural gas not in Canada but south of

the line, simply because they perceive a better climate for these kinds

of developments — using B.C. capital, I might point out — that we're

all aware of.

Not only that point, but if the minister is

sincere about encouraging this kind of activity in British Columbia,

surely he must have reconsidered his belatedly quiet opposition and

concern expressed about the pre-build and the so-called natural gas

pipeline from Alaska. In fact, there's an Alberta to United States

natural gas pipeline. With the activity that has already taken place in

the province of Alberta we have the industry telling us already that

they are pooling more and more of the capital that they have available

to them, and of course it's a limited supply of capital that the

industry has for drilling. As well, as the minister mentioned, there's

a limited number of drilling rigs available, and since they are

concentrating more of this activity in Alberta just since the

announcement on the pre-build, we must assume that this can only happen

to the detriment of activity in British Columbia. Certainly I would

like to have the minister's comments as to how he equates this with his

statement that he and his government intend to encourage this sort of

activity in British Columbia because he wishes to see self-sufficiency.

Mr. Chairman, the last point I want to raise is that I'd like to have the

minister's thoughts on what he and his government are prepared to do about

or whether they support the idea of electrification of railway services in British

Columbia. Not only does this save considerable amounts of petroleum energy,

but it could provide a whole new secondary and tertiary industry in British

Columbia. As we know as well, one of the values of electrification of rail services,

as the Europeans — particularly the Swiss and Italians — discovered years ago,

is that rather than braking and destroying or losing energy on the downgrade

you can generate almost as much power with the railway rolling downhill as it

took to get the train uphill in the first place.

Since

virtually all of B.C.'s railways go up one side of a mountain and down

the other side.... I'm thinking particularly of the CPR main line —

that company, by the way, has already done a major amount of work — and

the British Columbia Railway, more valid than the CN, perhaps. I would

like to have the minister's thoughts as to whether his government is in

fact going to look at this in a technical way and whether they have

looked at the economics of B.C.'s entering into this kind of activity

in a major way.

HON. MR. McCLELLAND: Mr. Chairman, I

would like to respond briefly to some of the questions and comments

that the member made. Electrification of railways has not come before

me, and it hasn't been one of the considerations I've made since I've

been minister. The government doesn't have a position on it at this

point, but we'd be glad to take that as notice and look into it. As

time goes by I'm sure the member will ask me further questions on it.

the matter of the pre-build and the so-called belated opposition by the

government, the government is on record quite clearly as having

developed its opposition, in fact to the point of intervening at the

National Energy Board hearings on the pre-build, through the Ministry

of the Attorney-General. Our opposition was reasoned and consistent

throughout the discussions. But there comes a time when you understand

— at least if you're at all a realist — that things are going to

happen. The federal government, perhaps with the exception of one

minister, was determined that the pre-build was going ahead, for its

own reasons, one being the economic incentive to many industries in

eastern Canada, Quebec and Ontario particularly. Once the realization

was made that the federal government was going to approve the

pre-build, it became important for the province of British Columbia to

set in place ways in which we could ensure that our future economic

stability would not be threatened. We have those things in place now.

We are attempting to secure new market operations and to secure

understandings with our neighbours, particularly Alberta, of ways in

which we can get that security.

The gas pricing question,

I'm sure the member knows, has been put before the B.C. Energy

Commission, soon to be known as the B.C. Utilities Commission. They

will be holding hearings, next month I believe, into all gas pricing,

both field and wholesale. I assume they will make recommendations to us

very quickly, after their hearings have commenced, as to price changes

which would satisfy both the domestic and industrial consumer and the

field producers.

The question of mineral activity — I made

some comments about activity in my opening remarks, and I think the

member and I will disagree about some of the reasons. They've all been

made, and the public make their own decision on that one. There's no

point in our getting into a debate on it; I think we've had it in this

House several times, among many members.

Coal conversion.

Sure, if you're going to burn coal it means burning coal, and it means

we have to take some important environmental safeguards if we get into

that in any major way in the future. I don't try to hide that. But coal

conversion can also mean liquefaction, various kinds of combustion —

[ Page 3979 ]

looking

very seriously at fluidized-bed combustion, which I'm told limits the

environmental consequences of using coal; it can mean many other things

as well. When I talk about conversion — sure, we talked about burning

coal, and I accept that.

The price of petroleum. The only

reason the government has supported the increased cost is that we

support it. We have the cheapest petroleum products in the world,

gasoline in particular. It is cheaper by far than in most countries of

the world, and a good deal cheaper than in the United States. We are

also the world's greatest hogs of gasoline. There are some other

reasons for that; our geography is one, I'm sure, Nevertheless, we far

outstrip the rest of the world in gasoline consumption, and while the

rest of the world's consumption is going down, including that of the

United States, ours is still going up. I'm sure the whole relationship

is not in price, but some of it is. So we support more sensible pricing

of petroleum products, and more sensible prices. That doesn't mean

we're in favour of seeing those prices necessarily tied to some

international cartel. We want the prices tied to something on which our

own society is based. We agree that prices must go up, Mr. Chairman,

and I think you agree with that as well.

We are finding some

oil in British Columbia. I said in my opening remarks that we added

some 7 percent to our reserves. But we are using more too. It's a

no-win situation, as it is in oil everywhere, I guess. There is some

opportunity, perhaps, for new oil discoveries. Canadian Hunter is on a

five-year, $25 million to $27 million exploration program in the

Nechako Basin in the Cariboo. While they're not overly optimistic, they

think they might find some oil. I suppose there's some chance,

somewhere in the future, of some offshore finds of oil as well. Those

things are not beyond the realm of possibility, but certainly oil is

our major weakness and we have to accept that.

The matter of

co-generation. Yes, I am a director of Hydro, and there has been some

difficulty with the incentives to co-generation. I would hope that we

will be able to set newer policies in place which will encourage

co-generation more than ever, particularly within industry.

The

Cominco problem that you raised in terms of the transfer of assets of

West Kootenay. It wasn't my ministry who didn't accept the

recommendations of the commission at that time; it was a cabinet

decision. Cabinet approval is necessary to make that acceptance for an

order. One of the problems was that — I don't want to be too vague on

this — the original proposal put forward by Cominco for a long-term

lease-to-purchase arrangement with West Kootenay was hardly an

arm's-length relationship. There were no guarantees built in that those

things would happen in the future. The Energy Commission

recommendations were good ones, certainly better than the offer we

originally got, but we felt, at least at this point, that there could

be some improvements made. I can guarantee the member that the

government's concerns are the same concerns that he has, and that is

that that major source of electrical power be secured for the people in

that area who are dependent upon it at the present time, and be secured

over the long term, not just on a short-term basis. I can say that

there are some further discussions going on with the principals at the

present time. I would hope that we'll be able to come up with a way in

which we can secure that power supply for the people of the West

Kootenays. We'll work towards that.

I think the first question that you touched upon, Mr. Member, was the matter

of the natural gas pipeline. Perhaps I could just deal with the conservation

thing a little bit more, because I said in my opening remarks that conservation

is probably one of the major sources of energy that we'll have in the future.

We can consider it in exactly the same light as we consider our natural gas,

hydroelectricity, and everything else. It's a source of energy, and it will

become increasingly important in the future. In the last 12 or 18 months we

have signed an agreement with the federal government on a joint conservation

and renewable program dealing with a number of various areas. Out of those programs

a significant part of the $27 million which will be spent in the next five years

will be in conservation programs — buildings, industry and transportation. They'll

be demonstration projects for which there'll be hard dollars made available.

I expect that in the $10 million that's available in this year's budget

for the Energy Development Agency, many of the proposals which will come forward

to that agency, both solicited and unsolicited, will also be dealing with conservation

programs. We're conscious and anxious to improve our track record there

as well.

The

matter of the natural gas pipeline to Vancouver Island. I have

committed that that will be built as quickly as we possibly can. We

have, as you may be aware, three proposals at the present time, each of

them from separate people. I'm told that there is at least one other

who wishes to make a proposal on the transmission line itself, not to

mention the distribution lines on the Island. So we will have four

proposals basically different in nature with different costs and

different routes. It will be my intention to, in one way or another,

deal with that as quickly as we can in order to choose the proponent. I

think I could guarantee that the hearing process will not take anything

like two years. The forecasts that we're making at the present time

would be that once the choice is made we should have gas on Vancouver

Island within a three-year period. That would include construction and

all of the approval processes that are necessary. Perhaps it'll be less

than three years, if possible. I think we can, as much as possible,

guarantee that that kind of delay will not be put in place.

MR. KING:

I just wanted to raise briefly with the minister the frequent

complaints I have had from the interior of the province regarding the

lack of any natural gas supply as an alternative to oil-fired furnaces

and so on, mainly for heating and domestic use. I think the minister

has had some correspondence on this from representatives of the

regional district of Columbia-Shuswap as well. Certainly I've had a

great many letters and inquiries from individuals in that area. I know

some of the problems involved. I'm aware that the government is not a

direct supplier; that comes from the private sector. There are the

economics of the question. It's difficult to justify expensive trunk

lines to sparsely populated areas, and so on.

Nevertheless,

the question that citizens do ask — in my view, with a great degree of

validity — is: how is it that we can export such vast quantities of

natural gas, which it is suggested are excess to British Columbia's

needs, when vast areas, particularly of rural British Columbia, do not

have the opportunity to utilize this cheaper, and in many cases more

desirable, form of heating fuel and domestic supply of energy? It seems

to me that while the minister certainly may not be in a position to

dictate to the private companies in terms of the precise economics and

their plans in terms of extending

[ Page 3980 ]

their

service, he certainly is in a position to weigh the obligation that is

on them to provide this kind of service to British Columbians against

the justification for the export of what is allegedly excess natural

gas from the province of British Columbia.

I guess what I

want from the minister is some indication of what his thinking is. I

know he commented briefly on it — not precisely from this perspective,

I don't think — but I would appreciate it if the minister would give me

some indication of what approach he takes on this question and whether

or not he has any up-to-date information on new initiatives that may be

planned in terms of widening the supply of natural gas to areas like

Revelstoke. Salmon Arm has some now, but many of the rural communities

lack any opportunity to utilize that source of energy at all. So if the

minister could give me some indication I would certainly appreciate it.

HON. MR. McCLELLAND:

Yes, I recognize that concern. I know when I made the speech in

Victoria regarding the Vancouver Island natural gas pipeline, I also

said at that time that in saying we advocate a policy of making natural

gas available to British Columbians, we have to mean all British

Columbians; we can't just mean Vancouver Island. I believe the Premier,

in a speech recently, said much the same thing. So we accept that

responsibility, and it's a matter of how we do it next.

might say that in terms of the federal government, in what it's

calling, at the present time at least, its off-oil conversion program,

it contemplates some help for private industry and for homeowners in,

first of all, getting gas to them, and secondly, helping them with

conversion. We in the ministry are at the present time in the final

stages of preparation of a feasibility study on a rural gasification

program. That study should be available to me, I would expect, in the

next few weeks. It will be the subject of discussion by the Cabinet

Committee on Economic Development. So the province will, I would hope,

be able to get some guidelines from that program.

The

policy, though, can not be that we make natural gas available to only

stated parts of the province. I think if we're going to have that

policy, then it has to be a province-wide policy.

MR. HANSON:

Following the line of discussion of my colleague from

Shuswap-Revelstoke (Mr. King), I can't impress upon the minister enough

the concern of getting natural gas to Vancouver Island. We're about 24

years late compared with the lower mainland. I think they had it in

1956. The Hydro reports that I have read estimate that Hydro would take

something in the order of four years to bring it right to the consumer.

That is in a very recent report: "A Vancouver Island Natural Gas

Transmission Distribution System, May, 1979."

Also, on the

west coast line proposal, coming through from Williams Lake to a

junction on northern Vancouver Island, I would like to ask the minister

if he could be a bit more specific on a timetable that he's looking at

for the selection and then the go-ahead, construction and final

completion. Could he be more specific as to exactly what he's looking

at at the moment?

HON. MR. McCLELLAND: I would hope

that the selection could be made before the end of this year — route

and proponent — and that hearings into the process could begin

immediately, which would put us into shortly after the first of the

year. I would hope — and I can only guess at this because I don't

really know how long the hearing process will take — that unless some

very, very serious environmental concerns are discovered, they

shouldn't take long. I can tell you that the last time I talked with

one of the proponents — the latest proponent, Centennial Pipeline — we

sat in our office and we were looking at a 1983 completion date. Now

the distribution can go apace — we have, I think, four or five

applications from distribution companies as well — and the minute that

the gas is assured, those programs can be put in place immediately. Of

course, in Victoria and Nanaimo there is a pretty significant

distribution system in place already. So 1983, Mr. Member, is what

we've been looking at. If we can meet the timetable of taking some

action on choice of location and proponent by the end of this year, I

believe that we can meet that deadline.

MR. HANSON: I

thank the minister for his response. There is another aspect I would

like to deal with briefly, and that is that on Vancouver Island we have

an ideal situation for the utilization of wood waste, tying in on a

co-generation basis with some of the forest industry companies on the

Island. The private member's bill of my colleague for Alberni (Mr.

Skelly) before the House.... The concept that he's proposing there, of

having Vancouver Island looked at as an energy entity, I think warrants

a lot of merit.

Discussions that I've had with staff people

at B.C. Hydro indicate to me that there has never really been a

thorough review by Hydro of the long-range energy needs and

requirements of Vancouver Island. I was surprised to hear that, because

with these major projects like the Cheekye-Dunsmuir and the natural-gas

pipeline, it would seem to me that it should be a requirement that

there should be some overall review of what the needs are going to be

and how conversions could take place to perhaps reduce the long-range

amount of electricity transmission that we're going to require and move

into things with more of an ecological orientation towards the Island,

its biomass, its wood waste. I think there are possibilities for wind

power for smaller communities on the northwest coast of Vancouver

Island. I think that if we could look at Vancouver Island as an entity,

we want to make it as energy self-sufficient as possible and reduce our

reliance on synthetic gases like propane and so on, which are here and

stored — and they're a hazard and a problem. I think that that's the

long-range view we would like to see. So would the minister comment on

it, please?

HON. MR. McCLELLAND: Mr. Chairman, one of

the things that I was a bit surprised to discover when we were dealing

with our energy policy was that British Columbia now gets fully 18

percent of all of its energy from wood waste. Frankly that surprised me

a bit; I didn't think it was nearly that high. But anyway, I agree

that's not good enough, and the government is putting programs in

place. I mentioned earlier, I think — perhaps I didn't — that the

federal government, industry and ourselves are cooperating in the

funding of a new type of hog fuel burner at Port Alberni — designed and

manufactured by a British Columbia firm — which will be put in place

for two reasons: one, to achieve the objective you want us to achieve,

and secondly, to attempt to develop a new British Columbia industry for

the world. That's not in place yet, but it's about to be in place.

[ Page 3981 ]

Also,

Mr. Chairman, I understand that B.C. Forest Products at Crofton is

committed to a new hog fuel burner which will more fully utilize their

wastes. Hydro tells us that the hog fuel waste on the Island is almost

fully utilized at the present time, but there is certainly room for

improvement. I hope the use of wood wastes will become an even more

important source of energy, on the Island particularly.

MR. HANSON:

One last suggestion to the minister. A proposal that has been made

actively to deal specifically with the greater Victoria area is the

sewage treatment situation. Now in my investigations of various

solutions to sewage treatment, one of the problems with secondary or

tertiary treatment is that you're left with the sludge — and that is a

problem in itself. In some jurisdictions they are mixing that sludge

with wood chips and other organic material to make synthetic oil, and

that is something that, I think, the minister perhaps could take also

under advisement as a possible source of energy generation for this

area.

For example — hypothetically — if a secondary

treatment plant and power plant were built in conjunction on, say,

Trial Island or some other location in this area, that could utilize

that sludge mixed with wood chips to generate power for Victoria. I

think that would be a very desirable direction to move in and I think

it's worth exploring by your ministry and something that I would like

you to take under advisement.

HON. MR. McCLELLAND:

Sure, Mr. Chairman, I'd be happy to do that. I'd just suggest to the

member that if he has some knowledge in this area and is anxious to see

it go, he get together with Dr. Bob Evans in our conservation and

technology division. He can give his thoughts and suggestions to him

and we'll see where it goes from there.

Vote 64 approved.

Vote 65: executive management, $413,298 — approved.

On vote 66: finance and administration branch, $1,245,832.

MR. BARRETT:

Mr. Chairman, I have some questions under this particular vote. Perhaps

we can leave it open enough, as the House Leader said, that we will be

able to debate some of these related energy matters under the energy

bill itself.

HON. MR. McCLELLAND: Mr. Chairman, I

can't speak for the Speaker or anybody else, but I assume that if they

are contained in the policy of the bill we will be able to debate it at

that time.

Vote 66 approved.

Vote 67: British Columbia Energy Commission, $1,059,225 — approved.

Vote 68: energy resources branch, $5,021,213 — approved.

Vote 69: mineral resources branch, $7,370,570 — approved.

Vote 70: petroleum resources branch, $3,452,553 — approved.

Vote 71: Resource Access Program, $521,500 — approved.

Vote 72: office of coal research, $176,047 — approved.

Vote 73: building occupancy charges, $1,262,000 — approved.

Vote 74: computer and consulting charges, $450,000 — approved.

The House resumed; Mr. Davidson in the chair.

The committee, having reported resolution, was granted leave to sit again.

HON. MR. McCLELLAND: Mr. Speaker, I move public bills and orders.

DEPUTY SPEAKER: So ordered.

HON. MR. McCLELLAND: Adjourned debate on second reading of Bill 43.

PENSION (PUBLIC SERVICE)

AMENDMENT ACT, 1980

(continued)

MR. HOWARD:

Mr. Speaker, I adjourned the debate on this bill the other day. I had

at that time concluded one aspect of the consideration of the pension

fund itself which is administered by the government. I had set out for

the minister that I hoped the one person from the employees' section,

as I understood him to say, who would be appointed to the management

committee — or whatever it is that administers the pension fund — would

not be just simple tokenism. There is a necessity to have more people

from the employees'

section than from the management

section

administering that fund. After all, the employees are the ones who are

the beneficiaries or otherwise of the pension plan itself. They should

certainly have — and should have had before now — a greater say in it.

I also set up for the minister some specifics with respect to some of

the investments that are held in the fund.

As the House

knows, this bill is the replacement for the earlier bill which the

government had introduced and which has now been withdrawn — Bill 28, I

believe it was. I only make comment on that for reference purposes.

This bill is the result of a very intensive and properly oriented

objection to Bill 28 by employees in the public service in British

Columbia who felt, and rightly so, that Bill 28 impinged upon their

expectations of a proper and adequate pension for those who will be

retiring in the future. The public servants obviously amassed a very

successful campaign, because the bill before us now is the result of

negotiations which took place between BCGEU reps and the government

with respect to the earlier proposition contained in Bill 28.

regret very much, though, that government has not seen fit to take the

principal points contained in the bill before us and incorporate them

into other bills, notably Bill 29, relat-

[ Page 3982 ]

ing

to the teachers' pension plan. The teachers, as I understand the

situation, feel likewise disadvantaged as a result of a decision of

government to introduce legislation.

Our proposition is to

support this particular bill, because it does reflect the results of

the negotiations. I express the thought, in closing, that the

government should also see the errors of its ways with respect to the

other bills touching on pensions of people employed — and I use this

word in its broadest sense — in a service to the public, be they

teachers or working for the provincial government.

HON. MR. WOLFE:

I appreciate the remarks of the member for Skeena, and the fact that

their members appear to support this bill, Bill 43, which amends the

Pension (Public Service) Act.

In closing the debate I might

just make one or two comments having to do with the pension investment

committee. Previous to now the investment superannuation fund has been

handled by experienced staff of the Ministry of Finance, dealing with

the placement of these funds. The placement of all superannuation funds

have been made from time to time at existing market rates. I think the

record of the pension fund investment has been creditable in the

interest of employees. The new departure here is that we have stated

publicly, on behalf of my ministry and the government, that we intend

to invite a representative or representatives to participate on the

pension investment committee. It would be impossible to have a great

many employee representatives on a committee of that type, because it

deals with investments of several different funds, both for teachers,

public service, and so on. I only wanted to say that for that reason we

have in this bill the creation of a consultative committee. I think

this is very significant in terms of public service employees per se,

in that we have established in the bill the creation by

order-in-council of a consultative committee relating to pensions. We

have already had a number of approaches and a great deal of interest

from the various employee representative groups on this matter. I feel

safe in saying that input can be provided on the matter of investments,

both from the consultative process and also from the pension investment

committee itself.

Secondly, I would say that the bill

itself, which has some further amendments to the original bill

proposed, was made possible certainly by discussions, but also by the

simple fact that the funding status of the public service pension plan

is considerably different from that which pertains with regard to the

teachers. In effect the public service pension plan has no unfunded

liability as such because, aside from the initial contributions by

employees and employer, in each case where a man retires the balance is

picked up at that time as a bulk payment. Therefore, from time to time,

there does not exist what is known as an unfunded liability. This plan

is funded in a different manner than comparable plans such as the

teachers' pension plan. Therefore it has become possible to slightly

amend the contribution going to the indexing fund, which has been a

matter of concern.

One further matter arises having to do

with the companion bill associated with the teachers. There is in fact

a substantial unfunded liability there. We have addressed that question

with the new funding policy related to teachers. There has been a

package proposal presented which has been a part of substantial

discussions, and agreement, by their group and the government

representatives. In effect, the contribution by the government to

individual teachers, where the teachers' plan is concerned, is

substantially more as a percentage of their payroll than pertains in

the case of the public service.

With those two things in

mind — first, the funding of the public service plan is different from

the other plans; secondly, the government has already accelerated the

contribution to the teachers' plan to some 10.2 percent of payroll — it

is therefore simple to say that it is not possible to have the two

plans exactly the same.

Mr. Speaker, I move second reading.

Motion approved.

Bill

43, Pension (Public Service) Amendment Act, 1980, read a second time

and referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

HON. MR. WILLIAMS: Mr. Speaker, second reading of Bill 29.

PENSION (TEACHERS)

AMENDMENT ACT, 1980

HON. MR. WOLFE: This bill

proposes fundamental changes to the basis of financing of basic

pensions and to the basis of determining and financing adjustments to

pensions already granted in response to increases in the cost of

living. Both these changes are proposed to ensure that teachers'

pension benefits will be secure in the future. In addition, a number of

minor amendments are included which are intended to make the plan more

equitable or to improve its administration. Finally, specific

adjustments are proposed in those retired teachers' pensions which were

calculated on a basis of a salary-averaging period of greater than the

five years which now applies, or on a basis of restricted earnings

because of the salary ceiling which applied to pensionable earnings

until the year 1972.

So I should say that all of the changes

included in Bill 29 represent a package of changes which have been

developed through a process of intensive discussions for more than two

years between government and the British Columbia Teachers' Federation.

I might add that the federation agreed to and requested this package of

changes last year.

With regard to the financing of the basic

pension benefits, the independent plan actuary has recommended that the

level of contributions to finance basic pension benefits should be

increased. This bill will increase total contributions to the

recommended level. I am pleased to say that government and the British

Columbia Teachers' Federation have worked together in developing this

strengthening of the plan's financing. Both sides brought to these

deliberations an attitude of genuine concern, both for the continuing

financial stability of the plan and for future generations of teachers

and British Columbia taxpayers.

Mr. Speaker, this bill

provides that teachers will contribute an additional 0.5 percent of

salary for basic benefits and that the government contributions will be

increased by well over 2 percent of teachers' salaries. In fact,

government contributions under this bill will be some 10.3 percent of

teachers' salaries in total compared to 7.6 percent contributed by

teachers. Employers' contributions to the teachers' pension plan will

be well above those required under the other British Columbia employee

pension statutes.

The over 2 percent increase in government contributions represents a budgetary increase of $13 million per year and

[ Page 3983 ]

reflects

government's determination to ensure that the excellent pension

benefits provided to teachers are soundly financed so that they will be

secure in the future.

Mr. Speaker, the Pension (Teachers)

Act and the other pension acts of this province presently provide for

unlimited quarterly cost-of-living indexing of pensions. The acts also

make provision for contributions of up to 1 percent by each of the

employees and the employer, to finance this indexing on what I call a

pay-after-you-go basis. The contributions which are collected to

finance the indexing benefit do not even cover the past indexing

payments that have been made. No funds have been set aside to support

the future pension payments which must be made to retired teachers in

respect of indexing increases granted between 1974 and now. This is an

intolerable situation and it endangers the future security of the past

indexing increases.

The present indexing arrangements were

enacted in 1974, apparently without regard for the long-term

consequences which can be predicted. The superannuation commissioner

has already had to trigger the maximum permissible contributions of 1

percent by each of the teachers and government to finance the indexing

which has taken place since 1974. He estimates that by 1985 this 2

percent of salary will not be sufficient to finance the present

indexing. At that time it will be necessary either to further increase

contributions or to severely limit future indexing increases.

Confirmation of the fact that action is required comes from the

independent plan actuary, who has advised that the present indexing

system is not stable and needs to be revised.

A similar

situation will develop before long under the other pension acts as

well. Obviously, such a situation is intolerable both from the points

of view of the employees and the employer, who will have to pay

completely unknown and ever-increasing contributions in the future if

the open indexing is retained. From the point of the view of the

pensioners, they will face the prospect of having the indexing

arrangements suspended or drastically curtailed for the future should

the employees and employer ever decide to limit their contributions for

indexing. This government has been wrestling for some time now with the

difficult question of how to reform the present indexing basis. We are

determined to ensure that pension adjustments, once granted to

pensioners, will be secure.

Accordingly, this bill amends

the indexing provision of the Pension (Teachers) Act as follows: first

of all, all pension indexing adjustments granted through to and

including January 1981, will be guaranteed and form part of the basic

obligations of the plan. Then, commencing October 1, 1980, teachers and

government will each contribute 1 percent of salary to a separate

inflation adjustment account to finance future pension adjustments. In

addition to these contributions the inflation adjustment account will

accumulate interest and will also be credited with excess interest from

the basic fund. These funds in the separate inflation adjustment

account, as at September 30 of each year, will be used to provide fully

funded pension adjustments as of the following January. The first

annual pension adjustment will be granted under the new system in

January 1982.

[Mr. Strachan in the chair.]

Mr.

Speaker, similar amendments in indexing provisions are proposed in the

public service, municipal and college pension acts. Under the new

system no unfunded liabilities will be created by the pension

supplements which are granted each year. The supplements will be fully

funded out of the separate account and supplements will only be granted

to the extent that funds are available.

Full cost-of-living

increases will not automatically result every year, but the adjustments

which are granted will be fully secure in the future. It is expected

that the new system will give effective protection against foreseeable

levels of inflation. The new system will give full protection against

annual cost-of-living increases of up to 8 percent or more.

the new system will still provide British Columbia teachers with one of

the very best indexing arrangements in any pension plan in North

America. Most other teacher pension plans in Canada place limits on the

indexing of their pensions or provide no formal indexing at all. For

example, Nova Scotia limits indexing to 4 percent per year; New

Brunswick to 6 percent; Ontario and Prince Edward Island to 8 percent;

Saskatchewan limits indexing to 80 percent of the cost of living, while

Manitoba uses a system like that proposed in Bill 29. Alberta and

Newfoundland have no automatic pension-indexing provision at all. Only

Quebec, of all of the provinces, provides open pension-indexing.

Finally,

I'm very hopeful that in moving to provide meaningful indexing on a

financially responsible basis, we will be making a contribution to the

future development of pension plans across the country.

Another

change proposed will increase the pensions of many retired teachers. In

1973 the Pension (Teachers) Act was amended to provide that future

pensions would be calculated on the basis of a teacher's highest

five-year average salary, and in 1971 it was amended to eliminate the

salary ceiling which was then imposed for pension purposes.

This

bill provides for adjustment of teachers' pensions which were

calculated on the basis of a highest average salary over more than five

years and/or were affected by the salary ceiling. Such adjustments were

recommended by the independent Wiggins report of 1975, which was

jointly financed by government and the British Columbia Teachers'

Federation. It is estimated that over 2,000 pensions will be increased,

in varying degree, by an average of $50 per month.

These adjustments correct what has been seen by the British Columbia Teachers'

Federation and many pensioners as inequitable treatment of those teachers who

retired between 1962 and 1972, relative to more recently retired teachers.

Government

and active teachers will share equally in the cost of financing these

pension adjustments. Active teachers will pay a special contribution of

one-tenth of one percent of payroll for eight years to finance their

share of this cost. The government share will be paid either in a lump

sum or over a number of years.

This bill also proposes a

number of relatively minor amendments which are designed to make plan

provisions more equitable and to improve plan administration. The

following specific changes are proposed by this bill. Teachers who are

on British Columbia teachers' fund sick leave benefits may elect to

contribute to the plan for up to one year. The reinstatement provision

will be broadened by eliminating the maximum ten-year period that a

teacher can be out of teaching. This change will ensure that teachers

who return after extended periods of child-rearing will be able to

reinstate previous teaching service, provided a refund of contributions

was not taken. The bill will permit teachers to qualify for a pension

after ten years of service, regardless of whether part-time or

full-time teaching was involved. This

[ Page 3984 ]

change

recognizes the growing significance of permanent part-time teaching

employment in the school system. It will permit eligible service with

an approved employer to count for eligibility purposes under the plan

for teachers coming into British Columbia teaching, in the same way as

it now counts for teachers who leave British Columbia for another

province. It will broaden the basis upon which superannuation

commissioners may enter reciprocal pension transfer agreements with

other pension plans. It will eliminate limitations that now exist,

which prohibit crediting of interest on teacher contributions in

certain cases. It will permit the Lieutenant-Governor-in-Council to

provide for interest on regular teaching contributions in the future,

which is higher than the 4 percent provided in the act.

Finally,

I would like to advise the House that I have recently invited the

British Columbia Teachers' Federation to nominate a teacher

representative to sit on the investment committee which oversees the

investment of the teachers' pension fund. This appointment will meet a

long-standing desire by teachers to be directly involved in the

investment process and will directly reflect this government's

conviction that teachers should be involved in this process. Mr.

Speaker, I move second reading.

MR. HOWARD: Mr.

Speaker, there is something seriously wrong in the information the

minister has given to the House. It's something that puts into question

what has taken place with respect to teachers' pensions.

The

minister tells us that this bill is basically a package, and that the

teachers' federation requested this package last fall. Then when the

bill was introduced, teachers from all over the province converged on

Victoria to lobby members, to lobby government, opposing the

introduction and passage of the bill. How can a group on one hand

request a package, and then when they see the package find that there

is something amiss in it? Obviously the package requested is not the

package that the minister has introduced. Obviously there is either

something missing or imposed.

The minister talked at length

about intensive discussions with the teachers a