1977 Legislative Session: 2nd Session, 31st 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, JULY 15, 1977

Morning Sitting

[ Page

3723 ]

CONTENTS

Routine proceedings

Committee of Supply: Ministry of Forests estimates

On vote 129.

Hon. Mr. Waterland –– 3723

Mr. King –– 3725

Hon. Mr. Waterland –– 3729

Mr. Gibson –– 3731

Hon. Mr. Waterland –– 3735

Mr. Barrett –– 3739

Mr. Lauk –– 3740

Mr. Barrett –– 3741

Hon. Mr. Waterland –– 3742

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

On vote 129.

Mr. Lauk –– 3743

Division on the motion that the Chairman leave the chair –– 3744

Statement

Allegations against MLAs sitting on joint housing committee.

Hon. Mr. Gardom –– 3747

Mr. Barrett –– 3750

Mr. Gibson –– 3751

Mr. Wallace –– 3752

The House met at 10 a.m.

Prayers.

MR. E, N. VEITCH (Burnaby-Willingdon) : Seated in the gallery this morning is a constituent of mine from the great municipality of Burnaby, Mr. Ken Kellett. I would ask this House to bid him welcome.

MR. C.S. ROGERS (Vancouver South) : Two youngsters from Oak Bay are here today to watch the proceedings as guests of mine, Mr. Jordy Smith and Mr. Ken Roberts. I ask the House to make them welcome.

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing) : Mr. Speaker, in the gallery today are Mr. and Mrs. Vogelaar, who are neighbours of ours in the greater Victoria area. With them, visiting British Columbia for a few weeks, are Mr. and Mrs. Vander Spek from Holland. Also accompanying the Vander Speks and Mrs. Vogelaar is Mrs. Rose from Victoria, Would the House welcome them?

MR. D. BARRETT (Leader of the Opposition) : Mr. Speaker, I ask leave of the House to call motion 13 standing in my name on the order paper.

Leave not granted.

MR. BARRETT : I'm surprised, Mr. Speaker.

Orders of the day.

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

ESTIMATES: MINISTRY OF FORESTS

On vote 129: minister's office, $101,012.

HON. T.M. WATERLAND (Minister of Forests) : Mr. Chairman, let us spray.

SOME HON. MEMBERS : Oh, oh!

HON. MR. WATERLAND : Mr. Chairman, in opening my estimates this year I'd like to make a few comments about what's been happening within my ministry and within the forest industry.

First, I would like to thank the staff of the Ministry of Forests for the continuing

excellent work they are doing, I realize this staff is presently undergoing

a period of uncertainty because of the fact that Dr. Pearse's royal commission

report has been presented and they realize that the forest policy advisory committee

is studying this report with a view to making some very major changes in forest

policy and Forests staff organization.

The year 1976 has been a relatively good year for the forest industry in British Columbia. Our lumber production was up 30 per cent over the previous year and accounted for 67 per cent of Canada's total lumber production. Our plywood production was up 20 per cent over the previous year and, in spite of continuing soft markets, our pulp production was also up about 32 per cent over the previous year. This, however, has been primarily due to the long work stoppages in the year 1975.

Prices of pulp are soft; world inventories are very high. So over the next year or so we'll probably not see a great increase in the price of market pulp. We did produce in British Columbia over two million tons of paper as well in 1976.

But in spite of the fact that we have had a relatively good year in production, government revenues are still not very high as compared to the late '60s and early '70s, the reason for this, of course, being the dramatically increased costs which this industry has faced over the last several years. As you know, the government revenue is determined to a great extent by the cost of production within the industry.

We must keep in mind that our forest-based industry in British Columbia competes on world markets and we must do everything as a government and as a society that we can to make sure that our basic industry - our No. 1 industry in British Columbia - remains competitive.

Costs imposed upon this industry by governments through tax burdens; costs due in some cases to a lack of corporate efficiency both at management and operating levels; costs brought upon us by the gradual increasing obsolescence of our coastal forest industry; costs brought about by higher labour and material costs; and the unreliability of this industry as it is seen from our market countries due to constant work stoppages, both within the industry and within the transportation systems which serve this industry, have made it difficult for many of our forestry companies to maintain the world market position.

1 am sure that everyone is aware of the wood-chip problem which we have - that's my nickname - and the government has been taking steps to try to alleviate this problem. The short-term help that we are trying to bring about for this wood-chip problem is to encourage the export of chips. However, the long-term solution in the best interests of British Columbia can only be to encourage the establishment of additional pulping facilities in this province.

We, as 1 said, have tried to encourage export by removing the export levy. Through the Ministry of Economic Development, a group is set up to try to bring about a means or a facility for exporting wood

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chips and an organization to do that for the independent companies. We have, on a site-specific basis, been modifying utilization standards so as to decrease the production of chips, which usually wind up piled in the various communities in any event.

I think, Mr. Chairman, that we must keep very firmly in mind that British Columbia has had for a number of years, and will continue to base, its forest industry on a sustained-yield concept, That is, we want to be sure that we are not harvesting any more wood from our forests than we can sustain and continue to harvest indefinitely.

In this line of thinking, we must keep in mind that sustained yield means balancing the growth of our forests with the total losses of our forests, which are brought about by logging, by single-use alienation, by fire loss, and by insect and disease loss. If any of these losses increase, all it can mean is that our sustained yield has to be abandoned or else we have to cut down on the activity of the industry.

Insect and disease loss, for example, in the year 1975-76 was the equivalent of 30 per cent of our total wood harvest in British Columbia. We harvested in that year about 17.6 million cunits of wood in this province and we lost to insects and diseases about six million. If we could eliminate all of that loss - and we never can - we could increase the yield of our forests in the order of 25 to 30 per cent, We must work towards doing that.

In order to even maintain the present yield of our forests over the next number of years, because we will be having alienations of forest land for other uses, we in this province must get into much more intensive forestry practices. We must manage our forests better and we must see that the forest land base is used to its best advantage in the growing of trees through better forest management, We must practise intensive forestry.

Probably the most significant thing that has happened this year, insofar as the Forest Service, the Forests ministry and the forest industry are concerned, is the Pearse royal commission report which was brought down late last fall. I'm sure all of you have read it many times now and understand it thoroughly. If you do, I wish you would please explain it to me.

There will be no shifts in forest policy until our analysis of that report is completed. I think it would be irresponsible to begin to implement pieces of the Dr. Pearse royal commission report without having a thorough study of the total impact of any changes on other policies which are in place now.

The forest policy advisory committee was struck late December or early January, and I'm sure you are all aware of who was on that committee. The chairman is Bob Wood, who has been acting as a consultant to me since I became the Minister of Forests, Bob Wood was also acting as a consultant for the previous Minister of Forests. Mike Apsey is a forestry economist. He is also on this committee, as is John Stokes, who for many years has been the Deputy Minister of Forests in British Columbia. John brings to this committee a very large number of years of experience in administration of Crown forest policy.

Wes Cheston and Jack Reid, also members of the Forest Service, make up the balance of this committee.

The committee has also hired Price Waterhouse to do a complete analysis of the organization of the Forest Service and to integrate this analysis with the ongoing policy decisions which will be coming forth in the not too distant future. Rick Campbell is being retained as legal counsel to advise the policy, committee on legal matters. Rick Campbell worked with the royal commissioner during his studies.

We are developing new forest policy now and we will have a new Forest Act in place by next spring. Therefore our forest policy must be resolved in the very near future in order to get

an Act ready by next spring.

The work of this committee involves a complete analysis of the Pearse royal commission report. There are over 400 different recommendations in this report, each one of which affects others, so even analysing the report initially is a monumental task, which was the first order of business for the committee. They then invited comment from any and all sectors of the public who are interested in forestry matters, either directly or indirectly. They asked them to submit briefs to the forest policy advisory committee on this report and the committee now is almost at the end of sitting down and discussing the briefs with the various sectors of our society who submitted briefs.

At the present time, they have met with over 120 different groups and have had very good discussions, There is another week and a half of these meetings to go. These meetings are not public. They're held in camera so that no one will feel reluctant to speak their true mind perhaps because of adverse publicity created by that. Very good input has been received by the forest policy advisory committee and it's an exceptionally hard-working group. I have to congratulate them for their dedication to this task.

As I said, new forest policy is being established. A new Forest Act will be introduced into this House next spring, as will a new Grazing Act and a new Forest Service organization Act.

Forest fires last year were relatively good to us. Our 1976 fire season was probably the best we've had in many years. This year, so far, it's not too bad, but weather conditions will dictate to a great extent what happens from here on in. People in the protection division are a bit nervous. It will depend on the weather, but so far this year we have had more fires but less acreage than we had last year, which I said

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was a good year.

One of the major roles, or thrusts, of the Forest Service for many years has been reforestation. In 1956, we planted three million trees; 10 years later, a goal was established that we would try to achieve the planting of 75 million trees in British Columbia which, for all practical purposes, we achieved last year. Future reforestation will depend upon establishing a new goal to reach, deciding what that goal should be, and putting in place those facilities required to meet such a goal. Reforestation will continue to be a very important function and receive a great deal of attention from the Ministry of Forests.

As I mentioned previously - and it has been brought out in both the Pearse report and the forest policy advisory committee's work - the fact is that in British Columbia, even to maintain our present levels of cut, we must practise intensive forestry. We must do thinning work on new stands. We must do juvenile spacing and fertilization. We must develop superior species of trees. It's only by doing this that we can continue our forest industry in the present place it has in our economy. Intensive forestry will be a major thrust of new forest policy.

We must also get into the better utilization of the forests that we are harvesting, Over the last several months, I have had a group of scalers traveling up and down the coast observing what is happening to the logs which are being harvested. Quite frankly, we're not too happy with what we have found. Too much of our good sawlog material is going to pulp mills, is being ground up in wood rooms, and we cannot allow this to happen. In certain areas there are very good economic reasons why it is happening, but we must give the industry every encouragement and incentive to change this, and we must provide, in new legislation, penalties for not making the best use of our logs.

A $4 billion forest industry in British Columbia is comprised of many, many different sizes of companies and many different degrees of immigration. We need all sizes of companies in British Columbia. We need the large companies and we need the small companies. A new forest policy will find a way of removing some of the biases which do exist at the present time in favour of the larger companies in giving some smaller companies - the aggressive companies - a chance to compete on a more equitable basis with the larger firms. Large is not necessarily bad and small is not necessarily good. We need all sizes of companies and all degrees of integration in British Columbia.

The modernization of our coastal forest industry is underway. We have quite a commitment of dollars now over and above ongoing maintenance commitments; I think we have in the order of $450 million more committed this year than we had last year, excluding ongoing maintenance type of work. If we don't get our forest industry in shape, if we don't have good, realistic forest policy in place and underway, when the next downturn comes in our lumber markets - and it will come - then our industry will be in real trouble. But I'm very optimistic. I feel that the industry is doing the thing it has to do.

We as a government are moving very rapidly toward establishing a new forest policy which will set the trend of forestry activity in this province for the next decade or two. With those opening remarks, Mr. Chairman, I'm sure that the committee would now like to pass my vote.

MR. W.S. KING (Revelstoke-Slocan) : The committee would like to pass the minister's vote but not until he earns his salary, MR. Chairman. I was quite frankly not amused by the minister's opening comments, I don't view it as sacrilegious, Mr. Chairman, but the pun "let us spray" is a comment that, I think, deserves some attention. The minister has been making quite a number of speeches throughout the province before various tribunals and forums, and he's quite a prolific writer, He writes a lot of letters. He doesn't sign those letters "Mr. Chips, " but we all know who they're from.

He wrote a letter to Beale's newsletter, an industry newsletter that deals with forestry industry problems. I just want to quote one or two paragraphs from that letter that the minister wrote to Colin Beale:

"One of the ongoing problems faced by your Ministry of Forests is the demand for single-use alienations of forest lands by special interest groups. Your forest minister has constantly resisted the single-use alienation of such valuable forest land. Examples are the Valhalla wilderness proposal, the Tsitika-Schoen wilderness proposal and the Stein River Valley wilderness proposal. It would appear, however, that you and many members of your industry are quite willing to let the government fight these battles on its own with little support from members of your industry.

"You also mentioned in your newsletter the budworm fiasco. However, representation and support from members of the forest industry and from your newsletter was conspicuous by its absence. Once again, you and members of the forest industry are quite willing to let these battles be carried out singly by your government when the going gets tough. It is a part of the responsibility of those in the forest industry and those who purport to write about it to take a stand and to make the public aware of the serious implications of forest losses to insects and diseases."

Mr. Chairman, by his comments the minister apparently stands for the multi--use approach to the

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forest industry and to land in this province, yet he has an obsession with spraying budworms on the basis that the forest resource is the only interest to be considered.

I recognize and I respect that the Minister of Forests holds his primary responsibility as the administration of the forests of the province. I suggest however, Mr. Chairman, that that does not relieve or absolve that minister any more than any other member of the government or the executive council from the responsibility to pay heed to environmental matters, to public health matters and the whole breadth of public issues that are involved in the forests or any other natural resource of the province.

Yet we see this minister with a single-minded obsession to spray the trees and by that means attempt to deal with the budworm menace that our forest is suffering from in the Fraser Canyon. Now it's not up to me as a politician - and I suggest it's not up to the minister as a politician - to make the determination as to whether or not the toxic chemicals that were proposed for spraying of the forests are hazardous, and injurious to health.

We have professional people in the various sciences and the public health field to make that kind of determination, I suggest it is the responsibility of politicians, though, to weigh the evidence and the opinion of such professional people and to come up with balanced decisions which respect all interests in the province of British Columbia.

Instead, we have the minister taking the position that because he is the Minister of Forests he has a total obligation to defend the industry at any cost. He goes beyond that, Mr. Chairman, and he kicks out at Beale's newsletter for not supporting him. He checks off the industry for failing to support him when the going got rough. He made public statements that he disagreed with the rest of his cabinet colleagues. I presume that he is provoked at Beale's and the industry for failing to assist him to persuade his cabinet colleagues that the spraying programme should have been undertaken.

The minister makes a lot of suggestions in what I suggest is his overzealous reaction to this budworm problem. He wrote a column for the Merritt Herald of June 8 which I want to briefly quote from. He had this to say, Mr. Chairman:

"The price of postponing the spray programme is at least another year's damage to immature timber. Translated into everyday terms, this means loss of jobs in the future and probably loss of aesthetic values very soon. I hope it will not happen but I believe you will see dramatic evidence of budworm destruction in the Fraser Canyon by the end of July. Maybe then the doubters will have second thoughts and the silent majority will be demanding that the government do something about it."

Where did we first hear that phrase "silent majority"? I think it was south of the border and I think it was by a politician who is less than renowned today, shall we say. I think that is a rather presumptuous position for the minister to take and I don't think it is responsible.

In my view, government policy with respect to protection of resources, with respect to development and exploitation of resources, should not necessarily be proffered and put forward on the basis of what the majority of the public thinks. The majority of the public does not have access to the technical and the professional analysis and counsel that the minister has. To ignore the very serious questions that were raised by the SPEC group regarding the possible damages to the watershed from the toxic materials that were proposed for spraying in the Fraser Canyon is irresponsible.

The suggestion is inherent here that if the public had rallied to the minister's support out of concern for jobs, then that majority would have been able to override all of the other very serious scientific and public health concerns that were raised by professionally competent people.

I suggest to the minister that that is inconsistent with the position he puts forward. He opposes the single-use concept he says, yet he is completely unwilling . to recognize that there is more than one dimension to his responsibility in terms of husbanding the resources of this province. I think it is highly inconsistent and irresponsible, Mr. Chairman.

The minister's comments were interesting but he said one thing that alarmed me very much. A year ago in the last session I questioned the minister regarding his intentions with respect to the Pearse royal commission recommendations. I accept what the minister says - that those recommendations are voluminous, detailed and complicated. But the minister has staff in his department who can analyse the recommendations and advise on the best approach for implementation.

After all, the Pearse commission held hearings all around the province and invited the broadest possible input from industry, the public, the trade unions involved and so on, Now instead of moving ahead with a programme of implementation of at least the most pressing and important recommendations the Pearse committee has made, the minister uses the escape hatch of appointing Bob Wood as an internal task force to hear further representations which appear, from the minister's comments, to be heavily weighted from the industry alone.

On top of that, Mr. Chairman, the minister has just announced that the Wood committee hearings are held in camera. They are secret committee hearings to consider the public royal commission recommendations, secret committee hearings in consultation with the industry which has a vested interest in avoiding some of the recommendations

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which Dr. Peter Pearse made, Certainly I question the propriety of that approach, Mr. Chairman.

The public of British Columbia paid for the Pearse royal commission report. Many public groups and citizens made representation to the Pearse royal commission. Now we find some interdepartmental secret committee proceeding on what are certainly more restricted terms of reference than the Pearse royal commission, and advising the minister on drafting of a new Forest Act and the possible implementation of some of the recommendations which Dr. Peter Pearse put forward, I think this is a scandalous approach to the minister's responsibilities.

The minister has indicated that he has commissioned yet another investigation of his ministry. He has retained Price Waterhouse, presumably, as I understand it, to do an internal appraisal of the Ministry of Forests. I don't know what the terms of reference are-1 I don't know what the

schedule is for a report by Price Waterhouse. But I would certainly appreciate it if the minister would be a little less secretive about his intentions in that regard and clearly outline for the House what the Price Waterhouse terms of reference and objectives are in terms of commissioning that investigation. Further, I hope the minister will give an undertaking to table in this House both the recommendations of the secret Wood committee and also the Price Waterhouse investigation which he has commissioned.

I think we've had enough of secret government. I think we've had enough of ministerial discretion in terms of dispensing allocations of resources in the f or est industry. The minister's Social Credit predecessor, Mr. Williston, was dealt with in very severe terms in the Pearse royal commission report for taking unto himself the illegal discretion, Mr. Chairman, to increase supply to various forest companies in this province. That approach, which is documented in the Pearse royal commission report and which I will refer to later, flies completely in the face of the recommendations of the Pearse report in terms of generating more competition in the industry.

I suggest that should be the objective of this minister. Surely, if he is interested in profiting by previous mistakes, that's one of the directions that he should be taking. If he is interested in diminishing ministerial discretion which leaves many questions open, if he is interested in dealing in an open way with the granting of resource rights in this province, if he is interested in demonstrating to the public that they have a role and an interest in knowing precisely how the resources are apportioned, then he should start by being open in terms of his ministerial studies that are underway.

I think the admission the minister has made here this morning - that the Wood committee is conducting its meetings in secret -- is absolutely scandalous. It's a complete undercutting of the Pearse royal commission, which this province paid dearly for and which many people, as I said previously, participated in in good faith.

For the minister now to set up a secret, in-camera, internal committee to invite further advice - certainly not from the breadth of the public that the royal commission undertook -makes a mockery of the submissions that hundreds of citizens and organizations in this province made to the Pearse royal commission. It makes a complete mockery of their invitation to appear in good faith before that royal commission and to make their submissions and their recommendations for better administration of the forest industry in the province.

I hope that the minister will review that decision to commission the Wood force in an in-camera fashion. I hope he opens it up. There are dangerous implications, and again I refer to the Pearse royal commission report, where he deals with the manner in which the former Social Credit Minister of Lands, Forests and Water Resources, Mr. Ray Williston, undertook his responsibilities. It was pointed out in the Pearse report that Williston again and again put the law in his own hands and simply ignored the Forest Act of that day. He was giving away a significant part of the forests, not in compliance with the law that he was obliged to administer but simply on the basis of ministerial discretion.

Interjection.

MR. KING : That's quite correct. The 'legality of this ministerial discretion is very, very much in question. But quite aside from the strict legality of it, I suggest - and I'm sure that my good friend the Liberal leader (Mr. Gibson) agrees - that wherever we're dealing with the development of public resources by government, there should not even be the vaguest suggestion that the politician has the right to dispense favours or favouritism without competition for the resource. That's precisely the issue.

I'm afraid this minister is making a very poor start when we see him ignoring and refusing to implement the latest royal commission recommendation but setting up instead an internal departmental committee conducting further hearings in camera, inviting representation from the forest industry and presumably preparing a new Forest Act based upon this internal, in camera, secret hearing rather than on the open public input of the royal commission process.

It's almost contempt of the Pearse commission. I'm not suggesting that the minister has done this deliberately. I don't know - perhaps he doesn't understand the principles involved, He calls himself a political neophyte, and perhaps that's the problem, but there are serious principles involved that the minister should recognize. I think he started out on a

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very, very dangerous path here - one that may well lead him in the same direction as Mr. Williston's questionable administration of the Ministry of Forests.

I would point out that under Williston's stewardship of the Ministry of Forests the quota increases were very substantial, based on strictly ministerial discretion. In the interior, the quota was increased by some two million cunits and in the coastal area by 1.5 million cunits - about a 3.5 million cunit increase in quotas in all. This was not in compliance with the Forest Act but on the basis of a wink and a nod from the Minister of Forests.

As has been indicated earlier, without, in my view, the statutory authority to take that as his administrative responsibility, cutting rights of 3.5 million cunits were granted across the board, with no reference to the bidding requirements stipulated in the Forest Act. All of this went by unnoticed by the public; it certainly wasn't reported very widely in the press in that era. I know this minister is not responsible for Mr.

Williston's stewardship, but at the same time, this partly explains why we are in the dilemma we are in now, with not enough competition in the forest industry, certainly with many of the smaller and middle-sized operators squeezed out of the industry. Certainly it lays a background for the problems that this minister faces today.

I think we could put a dollar value on the political favours which Mr. Williston dispensed. Without statutory authority, they were nothing more than political favours. It's been pointed out that 3.5 million cunits were dispensed at the whim of the minister. The quotas were trading in that day at around $20 to $40 per cunit. If we accept the higher level, the $40 per cunit level, the increased quota that the minister dispensed was $80 million of our resource, with a wink and a nod by the minister. If we accept the lower figure of the trading in that era of about $20 per cunit, the minister, with questionable statutory authority and in a private meeting across his desk, dispensed $60 million.

MR. CHAIRMAN : Hon. member, vote 129 is the administrative responsibility of this minister. I hope that you will move toward that goal.

MR. KING : That's right, Mr. Chairman. I'm laying the background

for the dilemma that the minister faces at the moment. I am concerned that in

the absence of a new Forest Act and with the approach that the minister is taking

- a secret internal approach to developing a new Forest Act, through major consultation

with the industry and not through open public hearing, through the duplication

to some extent and the contempt that this approach shows for the Pearse royal

commission - he is heading precisely down the same road as his predecessor Social

Credit Minister of Forests, Mr. Williston.

I'm showing, Mr. Chairman, hopefully, the value, the dollars involved in the forest industry in this province, and the ability of the Minister of Forests to affect the profit level of industries in this province. My friend, the hon. Liberal leader, certainly has great knowledge about the danger of favours being dispensed with respect to the forest industry in this province.

AN HON. MEMBER : Would you clarify that?

MR. KING : I'll clarify that. It was his father, who was an MLA in this House, and a very vocal and active one, who revealed in the past that there were favours occurring in the forest industry that should not have been occurring.

I'm not suggesting that anything like that is happening today, but what 1 am suggesting, Mr. Chairman, is that the minister must be very careful and very conscious in his approach to administering this resource because that ability to dispense favours and to receive favours in return should not, of course, be a factor, nor should it even be available to the minister for consideration at all. He must be above reproach in that regard.

The main point is that the 3.5 million cunits of wood that Mr. Williston dispensed on the basis of ministerial discretion should have been bid for. There should have been open tender. This is one of the prime recommendations of the Pearse royal commission now in dealing with the problems that the forest industry faces.

The government we have in office today claims to be a free-enterprise government. They claim to believe in free, competitive enterprise. I certainly subscribe to that principle. 1 do not subscribe to monopoly enterprise where there is no level of competition. 1 suggest, Mr. Chairman, that one of the real illnesses in the forest industry today is the lack of real competition, the lack of open bidding. That is something that 1 honestly believe the minister should have come to grips with immediately he took office, immediately the Pearse royal commission report was handed down.

That is one aspect of the report which is demonstrably true. That is one aspect of the report which this government says they stand for, and that is competitive, free enterprise. I suggest that is one aspect and one dimension of the report that the forest industry themselves - who claim to be great free enterprisers -- could not argue with and oppose.

So why did the minister not move in terms of implementation, particularly in that one direction? He had the opportunity to do so. Instead he has set up an internal committee which I suspect the minister has great p political control over - they're departmental officials - conducting meetings and h hearings and consulting in secret. Now the

[ Page 3729 ]

recommendations of the Wood task force are going to become the basis for legislation. They're going to become the basis for administrative change in policy direction. It's absolutely scandalous.

I don't know whether it's naivete on the minister's part or whether it's simply an unwillingness to deal in an open way with a royal commission report that industry admits is one of the most intelligent and comprehensive royal commission reports ever written in this province.

So the minister has a good deal more to answer for. I certainly have more comments to make with respect to his policy direction before we finish with his estimates. I'm a very patient man, but I do hope the minister deals in a more detailed way with some of these problems rather than the cursory comments he had to make when introducing his office vote, Mr. Chairman.

HON. MR. WATERLAND : I'll respond to some of the comments made by the member for Revelstoke-Slocan. He started off by commenting on my obsession with spraying. He said I felt the only value to be protected was the forest value. Well, he knows and I know that that is not the way I think. There are many, many values within forest land that must be protected.

The spruce budworm infestation is a very serious infestation indeed and is attacking the trees. It is attacking and destroying the fish and wildlife habitat. It has very serious implications for water quality in the area. It has very serious implications for fire hazards and, yes, indeed, it does have very serious implications for the resource base and the jobs which depend on that resource base.

I say that I resist single-use alienation, and I do, because it's my responsibility as the Minister of Forests to do what I can to maintain the forest resource base. I do believe in multi-use. Most of our forest land should be used for the benefit of the forest industry, the people employed in that industry, and those interested in outdoor recreation and many other aspects of our land use.

In saying that I resist single-use alienations, I must also say there is a need for setting aside specific areas of our province for wilderness areas. We have many, many of these in the southern half of B.C. We don't have too many at this time in the north. I'm sure as time goes on we'll have more. But I think we must be very, very careful how much of our land we set aside for single-use, because there are many other values to forest land other than just wilderness areas.

He commented on my ignoring the advice of professional people and my obsession, as he put it, with doing what I think necessary in protecting our forest environment. I did seek the advice of many, many professionals, and the overwhelming consensus of such professionals is that the use of insecticides to control such infestations as the spruce budworm is in the best interest of everyone. I will not deny that there are some adverse impacts of using chemical sprays some nomarget organisms and insects are affected but there's very little evidence to indicate that there is any hazard to mammals or to water quality.

On balance, some of the disadvantages brought about by the use of chemical sprays are in fact there, but the overwhelming consensus is that in balance you are much, much wiser to use this type of protection measure then not to use it.

Many people say: "Let nature take its course. Let nature look after the problem, or use the bacterial control methods." None of these other methods have yet been proven. They have been tried; they are in experimental stage and I hope that they are developed. So far they are not, operational and they are not effective.

What is nature's way of protecting our forest environment, as many promote? The natural course of events with nature - and this has happened in the history of British Columbia - is that when an infestation of this magnitude takes place, the trees become weakened and many of them do die as a result of the budworm itself. Many don't, but the trees are then very subject to infestation by other insects, such as bark-boring, beetles, and these do kill the trees. Once trees are killed and defoliated, they become a very, very serious fire hazard.

We have in British Columbia today uniform-age stands covering many hundreds of thousands of acres, which very clearly indicate that at some time in history there were massive wildfires in this province probably brought about by such insect infestations and the greater fire hazard thereby created. Nature's way was much, much more severe than the way we intend to protect our forests.

You say that SPEC has much professional advice, and indeed they do. One of the people who has been speaking on behalf of SPEC is Mrs. Merriam Doucet, one of the greatest adversaries of our proposed spray programme. That is why Merriam Doucet, together with other people who oppose this spray programme, were invited to the public hearing here in Victoria. The matter was aired for two days in discussion.

We had representatives from the national forest service and the provincial Forest Service. We had people from the chemical companies who produce the chemical so that they could give us the background and details of the development and use of these chemicals. We had people from Agriculture Canada who were involved in developing the registration for these chemicals. The committee which I struck to hear these matters was very well balanced, and, if anything, it was balanced in favour of those who opposed spraying. It was a good hearing and everyone at that hearing, with one exception, commented on how good they thought it was, how

[ Page 3730 ]

informative they thought it was and how unbiased they thought it was.

MR. R.S. SKELLY (Alberni) : Hall Leiren didn't say that.

HON. MR. WATERLAND : Hall Leiren didn't say that, no. Hall was at the meeting for a total of 40 minutes out of two days.

Moving ahead quickly. On implementing the Pearse royal commission report, I say again that all the recommendations made by Dr. Pearse are very interrelated.

You comment on hiring Price Waterhouse as an outside adviser on Forest Service organization. Well, that indeed was one of the recommendations made by Dr. Pearse in his report. If you will refer to page 349, he says: "I therefore propose that the government initiate a full external review of the Forest Service administrative structure and organization." Now if you want to immediately initiate recommendations by Pearse, there is one with which we started off.

Dr. Pearse himself in his report said that "I do not expect this report to be wholly implemented." He takes it as a starting point for very serious discussion on developing new forest policy. Dr. Pearse is very, very pleased with the approach we have taken. He is very pleased with the work that the forest policy advisory committee is doing. He personally feels that this is the right way to handle this report.

You talk about in-camera meetings and the terrible cloak of secrecy surrounding these meetings. You were invited to make a submission to the forest policy advisory committee, Mr. Member, and I don't believe you did. You had every right to appear before this committee and have yourself heard in private so that you could say what you really thought. Everyone in British Columbia who submitted briefs to the royal commission was personally invited to submit comments on the Pearse report, which was developed as a result of those. In addition, everyone else was invited as well.

Notices were put in the media, press releases were issued, inviting anyone and everyone with any interest whatsoever to appear before the forest policy advisory committee.

It's not just industry people who are appearing. The IWA has appeared, SPEC has appeared, the Sierra Club has appeared, fish and game clubs have appeared, all sectors of our public have appeared and have had very good meetings with the committee. All are very pleased with the frankness of the discussion and the objectivity of the things that are happening there. Dr. Pearse never expected, and he states in his report that he did not expect this report to be adopted holus-bolus as forest policy. It's not within the competence of any one man, regardless of how knowledgeable he is, to single-handedly develop meaningful, realistic forest policy.

You made some comment about the previous Social Credit Minister of Forests. I do not feel it is my responsibility to answer for things which happened in the past. Mr. Williston was the Minister of Forests in this province for many years. Hindsight is always 20-20. Sure some things were done which, with hindsight, may have been done better at that time. However, hindsight, as I say, is 20-20,

Mr. Williston brought forth, with the assistance of his staff, some of whom are with me here today, some very, very innovative things in the forest industry and in forest policy, If we look at what happened to our forest industry during the tenure of that minister, I'm sure that we will see, on balance, the industry and the province of British Columbia have benefited from his administration. He did make mistakes, and I will make mistakes, just as that member opposite made mistakes when he was a minister. But if you don't make mistakes, you don't do anything.

I think this covers the general scope of things which that member discussed, Mr. Chairman.

MR. KING : In the first place, I want to say to the minister that no one is suggesting the Pearse commission report be implemented holus-bolus, I simply indicated to the minister that there were certain areas that were so crucial, in my view, to the health of the forest industry and the protection of the public interest that initiatives should have been taken immediately. Those high public-interest issues w ere hardly the implementation of a Price Waterhouse study of the minister's ministry. Nor did I criticize that initiative; I simply asked that the minister, once that report is completed, give an undertaking that it will be tabled in this House.

I certainly was invited to the, Wood committee to make a submission. Mr. Chairman, I do not believe it is appropriate for elected public officials to appear before ministry staff to make submissions on public policy in this province. I do not believe that at all. I believe that when anyone in, the public - elected officials and private citizens - had an opportunity to make recommendations and to make any contribution, that should be before a public royal commission. That had already occurred.

If the minister wishes to set up an internal ministry committee to advise him, I do not think it is incumbent upon me, as a publicly elected official , where I have the forum in which I'm now debating to come before the minister's staff and discuss public policy. The minister was elected to this institution in the same way I was, and he is responsible to the public through. this chamber for public policy, not through secret ministry committee hearings. That's a principle the minister doesn't seem to understand.

[ Page 3731 ]

MR. G.F. GIBSON (North Vancouver-Capilano) : Mr. Chairman, just before I start to talk about the minister, I wonder if the House would join me in welcoming an old family friend from the island of Maui, Mr. David Kaalakea, accompanied by Audrey Gordon. He's known there as Big Dave. It's good to see him here in British Columbia.

Mr. Chairman, I feel a lot better about the forestry situation this year, and I'll tell you why. There's a new sense of realism around. We've seen a lot of the heads of the large companies making speeches about how tough things are. Well, maybe there's a certain amount of jockeying for position in that, but maybe there's also some kind of a realization that the job hasn't been done quite as well in the past as it ought to have been done.

The Truck Loggers Association brief to the forest policy advisory committee had something to say about how these larger companies had managed the resource that was put in their hands in large blocks 25 years ago in these tree farm licences, then called forest management licences. It says:

"Now, 25 years later, not one of these companies reports satisfactory return on investment, and their chief executive officers tell us the industrial structure is obsolete and so damaged as to require hundreds of millions of dollars to restore it."

What kind of a use is that of the resource they were granted?

The brief goes on to say: "If big business is so good, why are things so bad?" Well, that's a reasonable question from the truck loggers, and I do think that in those larger companies there is some recognition of that.

That kind of record is maybe one of the reasons that I tend to put a lot of faith in some of the smaller companies like Lignum, headed up by John Kerr, the Doman companies, and Whormock, with Ches Johnson, where you've still got some scrambling and some activity and some new ideas and some mills being put in place to use what is around rather than sitting on a great, big, fat asset and not exploiting it as thoroughly as might be done.

[Mr. Rogers in the chair. ]

I want to pay tribute to the labour leaders in the industry. Even this year I would mention the pulp unions, who are getting together in a very responsible way and negotiating. I especially pay tribute to people like Jack Munro and Syd Thompson and the fine economic work of Doug Smythe. They are giving leadership to the employee side of this industry in a way that has been needed for many, many years and is working to the benefit of all British Columbians.

Interjection.

MR. GIBSON : No, that's not a campaign speech. The Premier said yesterday he didn't expect an election for a while. I'm just telling the truth, Mr. Member. I do in campaign speeches, too.

MR. Chairman, I'm only going to retain that feeling of relative confidence if somebody goes around questioning the industry all the time, pushing for maximum return on the public asset. That has got to be the minister. We in the House here have to push him. Not that he won't do it anyway, but if we push a little harder he might get activated a bit more. So I'm going to try and ask him some questions today in that regard.

First of all, Mr. Chairman, I want the minister to take us into his confidence in certain regards. We know that things have changed dramatically in the forest industry in the last two or three years. There are profound changes. It i~ no longer a growth industry. For British Columbia this is a terribly important development. The forest industry was the engine that fuelled our economic development for a past generation and as far back as anyone can remember. Now in the early '70s and from there on, it has not been a growth industry in terms of jobs.

The government knew something about that and they called for a study. It was done by Pemberton Securities. It was turned into the government last fall, around October. There was a certain quantity of numbered copies and they have never gotten out. Rumours about what was in that report have gotten out, and I don't think any member of the press has been able to get their hands on one. I wish I could.

One of the rumours that came out was that there was going to be a considerable decline in the coastal forest industry employment, the way things were going. When that heated up one day and I said a few things in the House about it and some of the rumours I'd heard, the author of the report was asked by the press if it was that bad and he said: "Oh, no, it's not that bad. We think it will only be a decline of 20 to 25 per cent in the coastal forest employment."

That's what Murray Leith said. That is a pretty serious statement if that is the fact. So I say to the minister, so we can help him: will he not take us into his confidence and table that Pemberton Securities report on the forest industry in British Columbia? If there is confidential data in it, Mr. Minister, disguise it one way or another. Aggregate things. We're not asking for corporate secrets. We just want to know the general trend and conclusion, and we want to know what kind of good advice you might have gotten from Pemberton Securities.

Here is the situation, Mr. Chairman. There are a lot of new investments being talked about in the industry today. We hear MacMillan talking about $450 million and Crown $250 million. What's Can-Cel talking about? I forget - $70 million or something. They add up to a lot of money. But I've been in touch with

[ Page 3732 ]

these companies and I've read the reports carefully of their investment. It is essential that this investment be made to protect existing jobs. I'm not complaining about that one little bit. Much of our plant is obsolete and has to be modernized for a modern world and for new sources of wood supply and different kinds of wood as our mature forests get mined out, so to speak.

MR. J.J. KEMPF (Omineca) : Price yourself out of the market.

MR. GIBSON : We have, in a certain sense. I'll get to that, Mr. Member.

This investment, which is important, is not creating new jobs. Next there is a terrible return on investment. There is a Peat Marwick study done to show that in the last decade the 15 principal forest-product companies operating on the coast achieved an average return on invested capital of only 4.6 per cent in 1975 and 5.8 per cent over the last decade. Maybe some of that was mismanagement, I don't know. I'm sure some of it was. But it's still not a very good base on which to build for the future. We know that there is a falling market share.

We know that in 1961 Canada had 25.4 per cent of the total value of export trade in forest products. By 1972 that had fallen to 22.9 per cent, and I'd say it has been heading down since because we've had no significant new plant onstream since then.

We know that there is a position of deteriorating competitive costs. It's a more proper argument between union management as to exactly what the magnitude of that deterioration is and what the causes are, but it's unarguable that it has been there to some degree. We do know that we have had in our industry a low investment, compared with the United States and particularly in British Columbia, as compared with the Pacific Northwest, over the past few years.

We know that capital costs have become immensely higher, A pulp mill that in 1971, say, might have cost $80 million to put in place, in 1976-77 cost more like $300 million to put in place with higher capital charges than that, of course, because the rate of interest paid back in 1971 might have been 8 or 9 per cent and now would be something over 10 per cent. So what you might call capital charges for new plant and equipment in British Columbia are maybe four times as much as they were back then.

We know that we have considerably lower public revenues from our forest resource. Now it's not fair to compare them to, say, an extraordinary year like 1974. But when you adjust the value of our stumpage revenues and take into account the rise in prices, we have a declining return from that public asset. In a sense, Mr. Chairman, I don't criticize that because that has been one of the few things which has kept our industry in British Columbia competitive.

In other words, the public has been, to a certain extent, subsidizing the continuation of jobs in this province by declining charges for the fibre resource as compared to the Pacific Northwest. Still, it's not a nice thing to contemplate and we would rather see those charges higher.

We know, in terms of what you might call the fundamental competitive position, that the Soviet Union has tremendous, unexploited softwood resources that, one of these days, it is going to find convenient to exploit in ways that will put a lot of pressure on us. And we know that developing countries like Brazil and we know that the southern part of the United States all have better growing conditions and lower-cost harvesting conditions. So those are all problems in the industry.

Now I don't mean to say that there aren't pluses -such as the kind of research that the minister mentioned earlier on today, and that's been done. I have an interesting

article here - perhaps I've thrown my notes in the wastebasket - from the Fir Newsletter with respect to the breeding of supertrees, which will be trees of a better standard that mature more quickly. This is terribly important; this is British Columbia's future in this kind of research, and I was glad to hear the minister say that there would be emphasis on it.

There is another asset we have that came about in the last few months and that is the decline in the exchange value of the Canadian dollar, which went, roughly speaking, from $1.03 a year ago down to 94.5 cents or so on. It is essential, Mr. Chairman, that that declining exchange rate be recognized as a one-shot phenomenon. We are not going to have that happening year after year to support escalating, inflationary costs in Canada as opposed to the rest of the world.

If we try and play that game then we get into the British game, where you support your domestic inflation by a continually declining pound or dollar, whatever it may be. And I don't think we want that here in Canada. I think we have to look on this as a one-shot opportunity in our forest industry to improve the competitive position, and the improvement of that competitive position can only be done if the additional returns as a result of that decline in exchange value go into capital improvements.

Now there is a legitimate area of discussion and negotiation and argument between labour and management as to who should own the capital improvements that come about from a result of what is essentially a windfall - the declining exchange value of the dollar. There may well be a place for the employees to come along and say: "Listen, we deserve a share of the ownership of that." That's not for me to judge or for this committee to judge. But I

[ Page 3733 ]

say it is essential that the bulk of that windfall resulting from the exchange rate, after taking into account the protection of people from the increase in inflation that will result because of that exchange rate drop, should go into productive improvement of the facilities in the province of British Columbia.

Mr. Chairman, given these difficult circumstances in which we find ourselves, 1 would like the minister's list of, say, the most urgent half-dozen steps, taken in a specific and concrete way, to improve our competitive position in the province of British Columbia, to protect the competitive future and to make us more efficient now. Everybody has the same common interest here - the employee, the employer and people in the public sector. How can we make this industry more efficient so it will survive, at least protect the jobs we have, and, if possible, obtain more jobs and pay more revenue into the public sector for all of the social purposes that members of this House support?

Mr. Chairman, 1 would like to move on briefly to the question of the Pearse report. Depending on the minister's answer, I will come back to it at greater length or not. The Pearse report is an absolutely monumental document, as the minister suggested, and it is an excellent overall report in my opinion. I can understand why the minister found it necessary to appoint a committee to assess the Pearse report, because persons in the industry, be they labour or management, didn't have any idea of the exact recommendations that would come out.

Therefore, all that they could put in during the term of the royal commission were suggestions as to what they thought would be good. They couldn't comment on any specific direction because they didn't know what that direction was going to be at that time. So 1 think there had to be an assessment committee.

The minister has decided that the proceedings of that committee will not be public. Well, 1 don't know that 1 agree with that, but anyway that's what's being done. Since it is being done, it is essential that whatever comes out of that committee must have an opportunity of review in some public way before policy is finally made by the government. We know, Mr. Chairman, that in our system of government, we h ave an unfortunate system that, once the government has frozen something into a policy document or into legislation, that's it.

There's no point in talking about it any further except to wave your arms and object and try and draw some of the drawbacks to the public's attention. But it's not going to change anything at that stage.

I'd like the minister to give us an undertaking that the work of the Wood committee.... That's a confusing name, isn't it? What do you call it - the forest policy advisory committee? I'd like an undertaking that, No. 1, it will be made public, and, No. 2, it will be the subject of public dialogue. There are various ways in which it could be the subject of public dialogue. I'll tell you the one that I would prefer: the reference of the forest policy advisory report and the Pearse report, as far as that goes, to the legislative committee on environment and resources.

I would like to see that done before any legislation is drafted. The minister would refer to that committee a set of questions, the questions that he finds most vexing. For example, should we continue the tree farm licence procedure? What are we going to do about quota, which is perhaps the most vexing question of all, and other points of this kind?

There are certain recommendations, it seems to me, of the Pearse commission that aren't really the subject of a great deal of debate, and there would be no need for the committee to look at those. But I believe the sort of core industrial-tenure economic questions arising out of that investigation and out of the Wood committee meetings should go to a legislative committee for discussion sometime next fall.

If the minister would stand up and tell us that, I think it would certainly shorten these estimates, because then we could rest secure in the knowledge that we were going to get a shot at this Pearse commission question in a form that's really more suited to discussing it than the formality of this committee as a whole. I'll withhold at this time any further comment on the Pearse report until he answers that.

Now there are some various statements that the minister has made in the last few months that I think need clarifying. I'd ask him if he would, when he stands up, give some response to them.

The first is his statement - and he made it again today - that there has been a quantity of sawlogs and peelers that have been wrongly utilized by conversion companies. That's a very important statement; one in all of the companies that I have spoken to deny it. The minister smiles at that. Perhaps it's to be expected that they would deny it, but I'd like him to quantify that statement a little bit. Give us some order of magnitude as to the percentage. Any percentage is wrong, but is it I per cent or 10 per cent?

Next I want the minister to give the committee some enlightenment on a statement he made in mid-April that made me very happy. He said, and it seems more or less categorically, that a new pulp mill would be "underway" within 12 months. Now exactly how is this to come to pass, Mr. Chairman? That's what I'd like some enlightenment from the minister on, because one of the stories that describes this says: "Forest industry executives digesting this news along with their Hotel Vancouver chicken at the annual meeting of the Council of Forest Industries of B.C. were all saying 'It's not us.' "

Well, if it's not them - if it's not the B.C.

[ Page 3734 ]

companies - who is it? Is the, minister bringing somebody else in from abroad? How is he planning that this great investment, which I would very much welcome, is going to be made? He was very specific about it, Mr. Chairman. He said it's going to be within the next 12 months, and that was talking in April. He said it was going to be underway at that time, so therefore he must have some pretty fair details in his hands right now.

In any event, there's the essential question. What news has he to give us on that pulp mill? He stated at that time that there would be no government subsidy and he said that any operation that required a government subsidy just shouldn't go forward. That may be. As a principle I don't think it's too bad. There are exceptions, but as a broad principle, all right. But that doesn't say that there can't be government leadership. I've advocated that in this Legislature.

Let the government say: "We have determined that there is going to be a pulp mill here, " wherever that may be. I suggest that there is a sufficient chip supply for one on the coast and one on the interior. Let's look at the economics and see which is the one to go first.

I'd then let the government say: "Now through one agency or another - and take your pick which it should be - the government is going to make this project go. It's going to take financial leadership in it, " Then say to private industry: "Come on, come all; say what share you want to take of this and we hope you'll say 100 per cent. But if you say 75 per cent, that's fine. If you say only 25 per cent, that's fine, too, because this pulp mill is going to exist. In due course we will sell it off or put it into this new Crown holding corporation or whatever it might be. But there is going to be a new pulp mill in this province."

If you don't do that, Mr. Chairman, we are going to be in a position where British Columbia's or Canada's share of the world market, as I was citing a little bit ago, will continue to decline. We have forecasts. This particular forecast came at the excellent forestry policy planning conference at the end of the March. Speaking was Mr. Risto Eklund of Helsinki; he had this to say: "B.C.'s exports in the international pulp market may expand only slightly up to 1980, but prospects will be better following this, " That's the general buzz I've been getting.

Things will be fairly soft up until then, and then things will improve markedly. That's more or less exactly the time it takes to build a new pulp mill, starting from a standing start, which is, I presume, where we're at now.

So now is the time to be, moving. I suggest it's a good business proposition. I suggest that if we don't pre-empt that expanding market after 1980 - or our fair share of it - somebody else will. There are times when you have to take gambles; I think this is a good one and I think it should be taken.

Moving on to the question of current chip supply: the Minister has backed off on utilization standards in some of the forest districts in the province. I wonder if he could give us an account of where this has been done and what difference it's been making to the volume of chips,

I'd like the minister to clarify some of the statements he's made about requiring companies to make use of the forest assets they have. There used to be a slogan in British Columbia: "Cut and get out." I guess that slogan is gone now but what it should be now is: "Cut or get out." In other words, if you aren't going to make use of that resource, why should you have it? I support the minister in that philosophy and I want him to be a little bit more specific as to what it's going to mean in operational terms.

If he can at this time, I would like him to give us some idea as to the degree of overallocation of timber in various parts of this province. One of the greatest furors that's been caused in some time in the industry was caused by Beale's newsletter No. 134, where Colin Beale quoted the log supply allocations to coastal integrated companies relative to needs. This date came from ... where? I think it was from some kind of a Truck Loggers Association working paper. It showed that the majors, according to this documentation, had very considerable overallocation of allowable cut.

So the newsletter was then buzzing for the next several issues with the majors writing in - a different one in each issue - saying: "Well, it may be somebody else but it's not us, " and offering figures to document how the Beale figures were wrong. Beale, incidentally, said that he wasn't sure of these figures when he printed them. He invited comment.

I would like the minister specifically to refer to that and to tell us which side he's on. How much overallocation of allowable cut is there to the major companies in the industry now?

How much time have I got left, Mr. Chairman? Do you know?

MR. CHAIRMAN : The light isn't on yet, I'll give you three minutes warning when it's appropriate.

MR. GIBSON : Well, I've got a lot more things to say.

I want to talk to him about his muzzling-the-ministry move back in February. Now I can understand how politicians feel a little bit touchy sometimes. They don't want their departmental people, particularly their senior people, making statements which somebody might get up in this House and embarrass them about and so on. But we're in, a new age, Mr. Minister. You're going to be embarrassed in the House anyway, so it might as well

[ Page 3735 ]

be on the basis of informed comment.

The Forest Service bureaucracy is a little bit like a coastal rain forest jungle, you know. Open it up a bit. Let the air blow through it; let the sun shine into it. Let's get a real dialogue between your bureaucracy and the industry, with a few of us outsiders able to look in and say: "Well, what do we think about all this in the public interest?" I don't want to be critical about that, I just want to say to the minister, be expansive in this regard. Give the public a greater chance to know what's going on, Much of the complaint about the bureaucracy that the industry makes could, I think, be relieved with that kind of an attitude.

I'd like the minister to explain a comment that he made on or about March 15: "Future expansion of the industry must be either to the north into pioneer country, or into a modernization and expansion of the products base on which the southern interior and coastal sawmill and pulp and paper industries are based."

MR. CHAIRMAN : Hon. member, the three-minute light is now on.

MR. GIBSON : I agree with the latter part of the minister's statement. I'd like him to tell us a little bit more about the northern situation, because some of the things that have been coming before the BCR commission suggest that there's not too much up there. I'd like an indication on that.

I want to congratulate the minister for the efforts he made in terms of the Stewart plywood initiative, The little town of Stewart - just 1,200 people or so - did a study which they paid for themselves, unlike Prince Rupert, which is getting a subsidy. I wish Stewart had gotten a subsidy, too. They've got so many problems there with the Grandue mine retrenching a bit. The minister has given them some assistance towards the possibility of a plywood mill. Can he do more? What are the chances, as you see them?

The final thing, before I sit down, Mr. Chairman, is to commend to the minister and to this committee the kind of forestry exposition centre that we see down in Portland, the so-called "Western Forestry Centre." Oregon, like British Columbia, makes its living out of forestry. We need a major kind of museum or centre where school children and all others who are interested can go and learn about this basic industry in our province, so that as questions about the forest industry come into the public arena to be discussed, people have a basic understanding and can discuss it more intelligently.

There are a lot of good things in this Western Forestry Centre. There's a talking tree, which is particularly good for kids; they push the button and the tree describes what it does in various places.

There's a dramatization of the Tillamook burn, which was a devastating burn in Oregon many years ago. There are models of tree farming and reforestation and multiple land use and different kinds of trees of the world. There are slices of trees from around the world; there must be literally hundreds of them, It's one of the most amazing things I've ever seen.

Mr. Chairman, the industry and the ministry should get together on it and say:

"Let's start planning now for some kind of a forestry centre somewhere

in British Columbia on a major scale like this that would allow British Columbians

and particularly school children to come on a routine basis and better understand

this great industry for which the minister is responsible and which pays so

many of our bills in this province."

HON. MR. WATERLAND : Mr. Chairman, the member for North Vancouver-Capilano has brought up very many interesting points and I would like to respond to them.

Initially he mentions some of the very aggressive, smaller companies we have in B.C. and the leadership which is provided by the labour leaders. I have to agree that indeed we do have a number of very, very aggressive smaller companies in this province.

I believe lie mentioned Doman Industries Ltd. That company is aggressive; it's done a great deal. I believe they stated in their annual report this last year they had a return on investment of something in the area of 18 per cent, without anything in the way of timber tenure. That company is to be congratulated. They are innovative; they are now building sawmills on the coast adapted to the profile of the forest which we have to work with. What they are doing is what I hope will be being done by many other companies on the coast - that is, adapting new plants to the new forest profile we have to work with.

I must agree, too, that some of our labour leaders are showing a very responsible approach to problems this year. I must also point out that the rank and file of the labour movement are the ones who really, I guess, determine what happens. I visited many forestry operations in the last year. I'm very impressed with the degree of dedication that most people working in the forests have. I'm sure that people in the labour movement realize that the health of the forest industry to a large extent determines their job futures.

You mentioned the Pemberton Securities report, Mr. Member. That report, of course, was commissioned by the Minister of Economic Development (HON. Mr. Phillips) . I'm not at liberty to table it. I have not read the entire report, although I have scanned it. I am too aware of the things that Murray Leith has been saying publicly in his speeches. He was, I understand, party to the preparation of that report.

[ Page 3736 ]

In a meeting 1 was at, he said: 'Ye will see this 20 per cent decline in the coastal forest industry again, unless certain things happen." Well, 1 think some of these "certain things" are happening. As the member said, a lot of the investment announcements made by the major companies do not create jobs. 1 do agree with him that it's equally important that we protect the resource industry base we have now and protect those jobs which exist now as a first step in the creation of new jobs. Expansion in that industry should come when those we have now are protected. 1 think this is generally what is happening within the industry.

The member talks about the return on investment for forestry-based companies in the province, that it has not been adequate. 1 don't think we can just look at the return on investment; we have to look at the total economic pie of that industry. Of course, in order for industry to be encouraged to increase their investment, to put some of their profit and new capital back into that industry, they must be able to see a return on investment. The government too must have a return for the resources. Labour must have a return.

This is generally how that economic pie must be divided - between the government, between the investors and with labour. In many cases, the investor and labour are one and the same, because many of our people who work in our resource industries also own shares in the companies. If they don't, even if they have money in the bank, they are, in effect, by receiving interest from a bank, getting returns from our resource industries because that money does get into the system down the road. Falling government revenues from the forest industry are a part of this total economic pie and the way it is divided.

That member is fully aware of the appraisal systems we have in British Columbia. On the coast, it's based on log prices; in the interior, it's based on the in-value appraisal. And as the costs of manufacturing lumber and forest products in this province increase, the share of that pie that government has has to decrease, because a pie does not expand. So in order to increase government revenue under the system we have now, we have to encourage and set the proper environment for a more efficient, profitable industry, because if the cost of manufacturing is too close to the selling price, then there's no government revenue. That's what has been happening in the last number of years.

We do have advantages in British Columbia. We still have one of the best softwood timber supplies in the world. We do have transportation systems largely in place. We do have community infrastructure. We do have, especially in the interior, a relatively sophisticated sawmilling industry. Our pulp industry is, in the interior, relatively modern. On the coast, it's somewhat obsolete, but moves are being made in order to modernize this.

Our advantages, in addition, include a fairly aggressive labour force and, again, appearing now, more aggressive management. I do believe, too, that the management of our major companies in the forest industry, because they came through a long number of years of relatively good times, became a little bit sloppy or lax. I think some of the things that the new president of MacMillan Bloedel is doing are very sorely needed and I must congratulate him for taking some initiative in attempting to bring that company back into a more competitive position.

He asked what some of the things are that I think should be done in order to get our industry more competitive. Well, I think the things that must be done are rather obvious to everyone. We must, for one thing, make the maximum use of the timber supply we have. I mentioned the studies that we've done on the coast to see what's happening to the trees and where they're going. We weren't very happy to see so much of our sawlog and feeder log material going into wood rooms. I don't have any overall percentage figure. Some of our companies are very good, and the ones that are good, perhaps, are not the ones that you would think are good. Some of them are not very good.

Some of the companies are using as much as 30 per cent sawlog in their wood rooms and that is unacceptable; that has to change. Specific reasons may prevail at this time. Transportation costs of that sawlog from somewhere on the northern end of Vancouver Island down to where the sawmill is may be the difference in the value of that log as a sawlog or a pulp log. But we must make every effort in new government policy to encourage and to force the best utilization of a particular log in the best possible manufacturing plant.

We must expand our market base. We must do more research into forest products. We are limited right now primarily to plywood, lumber, market pulp and some paper manufacturing. There is a group, composed of industry and people in the Ministry of Forests - I don't recall the name of this group -interested in promoting research and directing research into the best possible areas for improving this product base and the utilization of our forest products.

The member is aware of the discussion recently in Vancouver, at the energy priorities conference or whatever it was called, encouraging the industry to make use of its waste products - the hog fuel - and to become more and more energy self-sufficient. This is something which I am sure will add a great deal to the competitive position of that industry. Instead of having to pay for the cost of disposing of this waste material, it can be used in the future to generate power and thereby free other sources of power for

[ Page 3737 ]

other industrial uses. I think one of the most important things, in order to get our industry competitive, is to have a realistic and predictable forest policy in British Columbia, and in partial response to the member for Revelstoke -Slocan (Mr. King) , to remove as much possible discretionary power from the forestry administration.

I brought in legislation last year when I was the Minister of Mines which removed a great deal of ministerial discretion from mining Acts. I intend to do the same thing with the new Forest Act. The Minister of Forests has a great deal of discretion, and this is brought about largely because we're working with the 1912 Forest Act which doesn't really suit the conditions we have today. This Act is just a basic Act and most of the things are done through regulation, and the regulations give a great deal of discretionary power, not only to me as a minister but to everyone throughout the Forest Service.

Even the rangers, the assistant district foresters, the district foresters, the appraisal officers - all of them have a tremendous amount of discretionary power. Long before I was elected to this government, when I first became interested in matters other than mining, I read the task force reports which had been produced by Pearse as my first exposure to how the forest industry is administered by the government. I was amazed, in reading those, at just how much discretion is in place throughout all levels of Forest Service management, I don't think that is right.

I think things must be predictable and as closely defined as possible within legislation, and we intend to work toward that. You can never eliminate all discretionary powers - it's physically impossible -but we must minimize them as much as possible.

You asked about the forest policy advisory committee and whether it is going to meet with, you suggested, the Select Standing Committee on Environment and Resources. Well, I think there are some specific questions, some of which the member outlined, which should be discussed by that committee - some of the general, broad positions such as tenure, tree farm licences, allowable cut, appraisal systems and so on. I'm sure the members on that committee can provide the forest policy advisory committee with some very valuable input and I would like to see that committee meet some time later this year.

They will be finishing up their hearings with other groups within a couple of weeks. We will then have a few weeks of very intensive study and discussion on what has developed in these hearings. I think there is a place for discussion of some of the key policy issues in the select standing committee and there are some things which we would now like to bring to that committee.

You mentioned my announcement that I feel there is going to be a new pulp mill underway within 12 months Jin British Columbia. I think there is going to be at least one. I'm not going to say where, I'm not going to say who. The industry, of course, will run around and say: "It's not Lis! It's not us!" Then they will immediately run back and say: "Well, let's get on with our studies. Somebody else might beat us to it." There is room for new pulp mills in B.C.

There is fibre supply, I think, for at least two mills and there is incremental supply which at the present time, even under relatively close utilization standards, is being left in the bush. If there is a market there for that material I believe it can be economically extracted, but we have to have a place to use it.

As far as our flexibility in utilization standards, I can't be specific and tell you who did what. It was all done on a site-specific basis at the option of companies. Their decisions had to be approved by the Forest Service based on not only their wood supply, but also the capability of their manufacturing plants. We didn't have a broad-brush relaxation of any standards but it worked out on specific areas. You cannot possibly compare what standards we should be using in some of the very small wood stands in the Prince George area with a large coastal timber stand.

It was on a site-specific basis and it is being continued for this year until we get away from this terrible surplus we have in wood chips.

Interjection.

HON. MR. WATERLAND : I really can't [illegible] that, Mr. Member. It's a very difficult thing and I really don't think all the answers are in one place right now-1 they are in the various district foresters' offices, I could research that for you, if you wish.

As for the "cut-or-get-out" policy as opposed to the "cut-and-run" policy, I have said in several public speeches that no company in British Columbia, whether it be a small company or a large, integrated company, will be allowed to embalm timber. If they cannot use it, it must be made available for someone else to use. When I say that, I don't think we can look at any specific year and say that the XYZ company used only 60 per cent of their allowable cut this year and therefore we're going to take 40 per cent away. I think we have to look at this through at least one complete economic cycle.

According to our Act now, a person must be within 10 per cent of their cut - in the public units at least -- over a five-year period. They're allowed to be out by as much as 50 per cent in any one year. I think this type of flexibility is necessary so that we can adjust to market conditions.

In conjunction with this, and as a part of the work of the forest policy advisory committee, the Forest Service has just completed a complete analysis of timber allocation and utilization for every sizeable licencee, within this province. This information will be used by the committee in order to determine just what we must do with our new forest policy, our new

[ Page 3738 ]

Act, to make sure that wood is not left standing when others need it. 1 think it's essential that we make the best use of all our allowable cut on that land which is forest land and it not be standing there, growing old, becoming decadent and useless because someone happens to have too much wood. There are lots of administrative problems and lots of problems with access to areas which have to be weighed and judged when you look at the total allocation problem.

MR. GIBSON : Will that study be made public?

HON. MR. WATERLAND : The intention was not to make it public. The intention was to use that in order to properly decide what has to be done. 1 don't think it would really be in the best interest of anyone to make it public. It's a tool being used by the committee, by the Forest Service, to find out who has what and how much they need.

AN HON. MEMBER : Create confusion.

HON. MR. WATERLAND : The member says "create confusion, " but it would give unrealistic ideas of what may be happening, or it could.

However, 1 do not have any objection - I never have - to members of the Forest Service getting into panel discussions on general subjects. In fact, the member, 1 believe, was at the planning policy conference in Vancouver when several members of the Forest Service did take

part in that discussion. It wasn't related specifically to the Pearse report. They added a great deal to the discussion, 1 think.

Public servants are free to discuss things as they wish, but as policy is being developed 1 don't think they should be speaking about those particular areas and have it misconstrued as public policy. As the member knows, 1 became politically involved when I was a civil servant. 1 was very, very careful that the things I did did not interfere with my work as a civil servant. 1 spoke against the mining policy - yet 1 was responsible for administering it as it was, which 1 did, much to my dislike.

Future expansion. The member mentioned comments 1 made that future expansion must be to the north or into new product lines. The southern half of British Columbia is, for all practical purposes, already allocated. There is some timber available on the northern coast, but for all practical purposes our allocation of allowable cut in the southern part of B.C. is fully committed. So therefore the only way we can expand there is by adding more value to what we do have.

To the north there is still timber available. The member mentioned BCR commission hearings and comments made there by the press over what people from my ministry had said. Our people did not say there was not a sizeable amount of timber available along the BCR extension. What they did try to convey was that the timber resource alone was not sufficient to justify the extension of that railway. I don't think anybody ever thought that it was. Nor is the mining resource alone sufficient to justify the extension of that railway. That's all we said. There is quite a lot of valuable wood there.

It's not economically harvestable unless transportation is in place. A railway there will make that wood more economical but it's not sufficient justification in itself for the railway extension.

The Stewart plywood proposal. Unfortunately I understand that the closing date has arrived for a submission and we haven't received any. We are talking about what initiatives we can take to perhaps renew interest In it. However, I think the reason they didn't come forth was the general economics of operating in a rather remote area like that and the massive. capital expenditures and the cost of power supply even in a, place like that. There's no hydro power at this time. So we're continuing to try to encourage actively there. We might have to take a different tack.

I liked the member's comments about a forestry exposition centre. He is doubtless aware of the Duncan Forest Museum, which exhibits some of the history of our forest industry. I think that's a well-used little museum; however, it is historical. I agree we should be making the general public and particularly our younger people more and more aware of just what our forest industry is and does, especially those who don't live in the more rural areas. In the interior we see logging trucks running through town, we see the plywood plants and we see the sawmill plants. If you look closely in some of the Chairman's constituency you can actually see manufacturing plants there as well.

But by and large, most of our people in British Columbia aren't aware of what the forest industry is. The only time you hear about it is when there's a major forest fire or someone wants to eliminate spruce budworm. That's the first you hear of the forest industry. It's very important to us, and I agree that we must do something to make our public more aware. We should be teaching our children in very early years in school something about our province. That industry is a very important part of our province.

[ Page 3739 ]

So I would like to further discuss with that member some ideas he may have on such a thing as he was talking about in Portland. I think it's a very good suggestion, something that we should address ourselves to.

MR. GIBSON : Mr. Chairman, I know that other members want to speak so I'll just take literally one minute at this point. I thank the minister very much for his answers. I would like to make a representation to him on that compendium that his department has drawn up describing, on the one hand, the utilization of fibre by major companies. On the other hand, the supply that has been allotted to them is one of the crucial measurements for a discussion of the revision of the tenure system in this province and an intelligent consideration of the Pearse report. I would ask him to study ways and means that lie might find of getting that information out in one way or another.

MR. BARRETT : Mr. Chairman, as the minister knows, a major part of the service on B.C. Rail is to the forest industry. As you mentioned in terms of railroads, one of the, difficulties was railcars - the kinds and types that essentially serve the forest industry.

We've just learned over the radio, Mr. Minister, that Senator Perrault has made a statement saying that 24 hours ago lie sent a wire to the Minister of Economic Development (Hon. Mr. Phillips) making an offer to keep Railwest open for the manufacture of cars, including for the Forest Service, and that lie's not had ail answer from the Minister of Economic Development.

Knowing how important car supply is to the industry, both for chips and for lumber, it comes as a surprise to me that this telegram has been announced publicly. Senator Perrault has said he hasn't had an answer in 24 hours, and here we are debating the minister's estimates in terms of moving chips and timber and other forest products. Now I find this a very serious situation and I would ask the minister if he would, after his conversation with the Minister of Economic Development, give an explanation why Mr. Perrault is on the air, in effect, attacking the minister for not responding to a telegram.

I have no comment to make of my own on this matter. I'm just asking the minister to please explain to us why Senator Perrault would be making this attack on the minister, who has enough problems as it is. It relates to the boxcars and the chip service.

MR. CHAIRMAN : [Ion. member, if I may interrupt you as the Chair, your line of questioning might probably be better put to the Minister of Economic Development, either in question period or at another time, rather than to the Minister of

Forests.

MR. BARRETT : No, we're talking about the need to move chips, the need to move lumber and the need to have a supply of cars to move chips and lumber, I asked the minister in terms of the supply of this equipment if he knew why the government has not responded to Senator Perrault's office. Could you tell us please?

AN HON. MEMBER : Has anybody read you the telegram?

MR. BARRETT : Did You wish to respond?

HON. MR. WATERLAND : I haven't seen the telegram.

MR. BARRETT : You haven't seen the telegram. Could you ask the minister in front of you if he's seen the telegram?

Interjections.

MR. CHAIRMAN : Order, please, I must ask the Leader of the Opposition to respect ~he fact that we're on vote 129, which is the minister's office. The debate should be specifically on the minister's office and not to do with telegrams between the federal senders and the Minister of Economic Development.

MR. BARRETT : You're absolutely Correct. We're talking about the need for chip cars and the need for bulkhead flats to carry timber products [illegible] province. 'There was a drastic shortage of those types of railcars that are centrally guided by navigators at the front of the engine, with which the Chairman, is familiar. They take forest goods throughout this province. Because of a lack of those chip cars and those bulkhead carriers, Railwest was started.

It's an opportunity to have a constant supply of chip cars and bulkhead flats to carry chips and lumber that I raise this at this earliest opportunity and most appropriate moment - that is, under the estimates of the minister who is responsible for chips and lumber right now. I want to thank the Chairman for clarifying that particular aspect of this vote.

The question simply is this: with the possibility of supplying chip cars and bulkhead flats for lumber, which is related to the minister's department, is the minister aware that an offer has been made by the federal government to continue the possibility of production of chip cars and bulkhead flats, and that the offer was made 24 hours ago, and that Senator Perrault has been on the air condemning the fact that lie's not had an answer for 24 hours when we're all concerned about keeping the lumber industry growing and viable by providing home-built chip cars

[ Page 3740 ]

and bulkhead flats through Railwest? 1 want to thank the Chairman for determining that this indeed is a matter that should be brought up under this particular vote.

MR. G.V. LAUK (Vancouver-Centre) : 1 have just one point, Mr. Chairman. Perhaps Senator Perrault should have sent the telegram to Waldo Skillings. It seems to me that under this minister's estimates this is a very, very serious matter. The Pearse commission deals substantially with transportation and the movement of forest products. Part of that is the secondary or diversified industry of the manufacture of railcars. 1 think that the Minister of Economic Development....

MR. CHAIRMAN : Order, please. The subject of the manufacture of rail cars by Railwest or anyone else in this province does not come under the responsibility of the, Minister of Forests. He is indirectly responsible in that chips and lumber have to be carried in railcars but efforts by yourself and by the Leader of the Opposition to change the subject and use the Minister of Forests' estimates to bring up this latest issue are going to be ruled on by the Chair as being inappropriate.

MR. LAUK : Are you imputing an improper motive to the hon. Leader of the Opposition . . .

MR. CHAIRMAN : You are free to read the Blues.

MR. LAUK : ... the former Premier of this province? Mr. Chairman, have you read the Pearse commission report?

MR. CHAIRMAN : The Chair is not required to counsel the members on any matters. The Chair is merely to keep order in the House. 1 would advise you that we are on vote 129, which is the estimates of the Minister of Forests.

MR. LAUK : Well, 1 was just wondering whether you have read the Pearse commission report ...

MS. R. BROWN (Vancouver-Burrard) : The Chair does not have to read.

MR. LAUK : . . . because the Minister of Forests hasn't. 1 thought maybe you might have.

MR. CHAIRMAN : Order, please. 1 must ask the first member for Vancouver-Burrard to withdraw that remark.

MS. BROWN : What remark - that the Chair does not have to read?

MR. CHAIRMAN : That's the remark I understood you to say. 1 would ask you to withdraw it.

MS. BROWN : Does that upset you, Mr. Chairman - that the Chair does not have to read?

MR. CHAIRMAN : 1 ask you to withdraw the remark.

MS. BROWN : Well, 1 withdraw the remark but it's really strange that you could be so sensitive, Mr. Chairman.

MR. CHAIRMAN : I just asked you to withdraw the remark. You were imputing improper motive on the Chair in general. (Laughter.) Yes, you are, hon. member. 1 asked you to withdraw the remark.

MS. BROWN : Mr. Chairman, 1 know that the Chair can read. 1 did not say that it.... I have withdrawn the remark. 1 know that the Chair can read; I'm just saying that the Chair didn't have to read. But 1 withdrew the remark. The Chair must read if the Chair wants to.

MR. CHAIRMAN : Thank you, hon. member.

MR. LAUK : Sometimes it's a disadvantage if the Chair can read.

Mr. Chairman, under the Pearse commission report there is a

section dealing with the transportation costs of the movement of chips and lumber. If we manufactured our own cars we would never have a short supply of bulkhead flats and chip cars and we'd be able to keep the forest products rolling in this province. This is one of the ancillary reasons why Railwest was established in the first place.

But the history of this minister and particularly the Minister of Economic Development since this government has taken power is absolutely incredible. He has done nothing. He sat for 24 hours on a telegram sent by the federal cabinet....

MR. CHAIRMAN : Hon. member, order, please.

MR. LAUK : ... to act on Railwest manufacturing. It's absolutely incredible!

MR. CHAIRMAN : Order, please.

MR. LAUK : He sits here pretending it doesn't happen.

[Mr. Chairman rises.]

MR. CHAIRMAN : Order, please. Hon. member, we are not here to discuss the estimates of the Minister of Economic Development, nor

[ Page 3741 ]

developments that take place under his department. We are here to discuss the estimates of the Minister of Forests, minister's office, Efforts by yourself to get off the subject of the minister's office are inappropriate at this time. I would ask you to respect the Chair and keep your remarks to vote 129.

[Mr. Chairman resumes his seat.]

MR. LAUK : Mr. Chairman, I do respect the Chair.

Interjections.

MR. LAUK : I'm a little disturbed that people who are not in their seats are making noises. I think that the Chairman should bring the Chairman to order over in the corner there.

Mr. Chairman, I do respect the Chair and I'm glad you pointed that out. But I'll tell you who else I respect and who I am concerned about: the 200 or 300 families who are in danger because of the loss of employment at Railwest because of the total inaction and ineptitude on the part of the Minister of Economic Development. Those are the people I care about, not about formal debate rules in committee ...

MR. CHAIRMAN : Hon. member, I must call you to order.

MR. LAUK : ... but about 300 families who are going without work because of ineptitude on the part of that government.

MR. CHAIRMAN : Order!

[Mr. Chairman rises. ]

Hon. member, that is the second time I've had to stand in my place to bring you to order on this subject. You know perfectly well that you are violating the rules of this committee. I would ask you to come to order on the subject. We're on vote 129.

[Mr. Chairman resumes his seat.]

MR. BARRETT : Mr. Chairman, in the manufacture of equipment for the forest industry there has been developed in this province a great deal of indigenous skill. The Madill corporation is unfortunately moving part of its plant out of British Columbia since the advent of Social Credit, causing the loss of those skills which are going to the Pacific Northwest part of the United States rather than staying here in British Columbia. Related to those technical skills in the development of equipment for the forest industry is the carrying of forest products.

1 want to thank the Chairman for bringing it to the attention of the committee and for keeping this discussion relevant.

When we carry forest products we must look at a number of methods of transportation. One method is by shipping. We do carry forest products on ships and that seems to be successful. We also carry forest products on railroads. One of the reasons for the expenditure of money on the railroad was to expand the forest industry,

We cannot talk about and we have no desire to discuss the question of car construction as car construction. We're talking about the development and supply of unique cars necessary for this minister to see that the transportation needs of the industry he is responsible for are taken care of. Three years ago we had a serious shortage of chip cars and bulkhead flats to carry chips from the manufacturing mills in this province.

As a result of that, the forest industry was encouraged by the auxiliary supply of chip cars and the potential supply of chip cars and bulkhead flats from Railwest, which we will not discuss in terms of its overall operation but purely on the needs of the Ministry of Forests related to the movement of chips and lumber.

[Mr. Schroeder in the chair.]

We had a serious problem in the past of the shortage in competing circles, as we compete in the region with the Pacific Northwest for common markets in the United States, for our forest products. In competing for those common markets it has been difficult for us to provide adequate delivery dates. As a result some of our Arizona and midwest customers, and indeed some of our east coast customers who rely essentially on ocean transport, have had difficulty in maintaining orders, simply because of the supply problem related to B.C. Rail.

If the railroad doesn't have enough cars to carry the lumber to the ship site or into the infrastructure of rail in North America, we are at a disadvantage with the Pacific Northwest where competing American firms or multinationals that have branch plants here in British Columbia and in Washington and Oregon rely on the American producer as a more consistent base of supply. As a consequence, because of supply alone, not because of price, we find the American competitor is causing us to lose standard markets because we can't deliver on time due to a shortage of railcars.

That's a fact in that industry, Mr. Chairman. We discovered that when we were government. The minister would agree that delivery of the product is an important aspect of maintaining markets. Is that not correct, Mr. Minister? I mean, if you can't deliver the product on time, the customer gets mad. Has that not been a problem in the past, Mr. Minister? Would

[ Page 3742 ]

you like me to repeat the question? Has it not been a problem in the past in terms of the industry of this province in losing customers because they haven't been able to deliver on time? Is that correct? I don't know if that's a nod or a wink.

I think it's true. Industry has complained about it itself. As a matter of fact, many briefs to the Minister of Forests would indicate that the industry itself has suffered be cause of the lack of adequate transportation. My good friend from Vancouver Centre is correct when he points out that the Pearse report directly relating to this ministry points out that unless there is adequate transportation infrastructure, the industry suffers and jobs suffer here in British Columbia.

If you cut yourself a hunk of lumber and you can't load it on the train to the customer, then people are going to go without work in the forest industry. When we examine it on that simple basis we understand that this minister would be motivated to ensure that not only are our trees cut and hewn into lumber, but that they are placed on railcars, taken to the customer and delivered on time with a competitive price.

What is missing for the minister to do his job is a consistent supply of the technical material available on transportation --- i.e., chip cars and bulkhead flats. One of the ways of solving the problem of chronic shortage of bulkhead flats and chip cars is to lease them. Another way, through you, Mr. Chairman, is to build them. If you build them you have a constant guaranteed supply that you have complete control over so that you can deliver bulkhead flats and chip cars at a time when the minister and his industry needs those bulkhead flats and those chip cars.

So what is' the problem we're faced with? It is the question of the viability of providing those 'bulkhead flats and those chip cars from here in British Columbia produced by Railwest. The minister should be aware of the fact that the federal government has announced today through Senator Ray Perrault that 24 hours ago they sent a telegram to a colleague of his saying they have a method of keeping Railwest alive. If Railwest can be kept alive to provide bulkhead flats and chip cars to move the products of the forest industry that that minister is trying to sell, then we should be making every effort to co-operate with Senator Perrault and to respond to that telegram,

I'm asking the minister to tell us what the inventory is that is necessary in terms of rolling stock of bulkhead flats and chip cars to be standing by ready and'available for forest production. He has the technical staff in his department. They are competent; they are skilled; they have this information at their fingertips. How many bulkhead flats are necessary daily to be available on call by the interior forest product manufacturers? How many are necessary on call to be located in Prince George? How many chip cars is there a greater demand for now that this government has removed the ban on the export of chips?

Could the minister tell us what the effect of the removal of the ban oil chips has been in relation to transportation? Has there been any difficulty at all in providing the necessary number of chip cars to ship out the chips that have been bought under the new policy of this government to export chips?

Can the minister tell this House how the negotiations are proceeding with Sweden, with Finland and with other jurisdictions who wish to buy chips now under the government's new policy? It is a known fact that negotiations are going on now with Swedish interests to sell chips on a short-term basis. Could the minister tell this House the volume that. is being discussed related to the number of chips per ton or per unit that are being sold, and can the minister assure this [louse that the transportation infrastructure necessary to meet that sale's transportation consequences are available on supply in this province?

The other question 1 have is: is there a contingency plan if the market for chips all of a sudden turns around even more to our advantage? Is there a contingency plan to enable us through our railway transportation system to supply enough chip cars to deliver it for those sales to provide for jobs in this province?

Now those are serious, important questions related to jobs and the economy that are under the control of this minister. 1 would appreciate it if the minister would respond by giving me an inventory of the needs of transportation. 1 thank you for your patience, Mr. Chairman.

MR. CHAIRMAN : Shall vote 129 pass?

MR. BARRETT : I've asked the minister some specific questions.

HON. MR. WATERLAND : As the member knows, there has been a study group working on developing chip export markets for excess chips in British Columbia. 1 understand that what they are looking at now is something in the order of 250,000 cunits of chips a year. In the immediate future they will be spot sales. They'll take a while to develop any longer-tern) sales contracts.

We must, of course, continually be cautious about committing too many of our chips for long-term. We must maintain a very delicate balance of being sure that we do not discourage the establishment of manufacturing plants here by exporting chips. But we do have a large incremental supply of chips which can be made available from the forests over and above the excess we have now, should that ever occur.

The transportation of chips is really not something

[ Page 3743 ]

which comes under my responsibility or authority. Provision of cars to transport the chips is something that must be handled by both the BCR and other railways. 1 know that those people involved in establishing markets now are equally concerned and involved in the transportation systems with which to get these chips to market.

1 can say that as far as I'm aware now there's no serious shortage of cars for lumber or chips. In the interior, the problem in the past has not so much been car shortage as an inability by BCR in particular to deliver these cars when and as they are required.

1 do not know the inventory of cars which we have available now, nor do 1 know the number of cars which may be required in the future. However, once again, this is not within my responsibility, although it is a concern to me that we do have the necessary transportation facilities to get our chips to market. However, details of such a question would best be put to those people who have authority and are responsible for that particular aspect of moving our materials to market.

MR. BARRETT : I appreciate the candid response of the minister and 1 also appreciate the fact that the minister is cautious about the policy of export of chips. If we build up too long-term a commitment to the export of chips, we will indeed be exporting jobs in the long run from this province. However, as the minister has pointed out, there is temporarily a glut of chips available in this province. The minister is anxious to assist the industry to sell those chips, and that is to be recognized as a policy of the government. But, Mr.

Minister, to say that it is someone else's responsibility to move the chips is incorrect, in my opinion. I'm attempting to be as charitable as possible. What is the point of your department's spending all of its time in any assignment of selling those chips if the sale is made and you can't move them to the market?

You cannot isolate yourself from the total responsibilities of your department,

and the total responsibilities include the availability and the ability - the

availability to transport and the ability to complete the project that you initiate.

We're spending taxpayers' dollars to promote the sale of those chips

on a temporary basis. You give advisory help to do that. That's a decision

that's yours. But what's the point of selling it if you can't deliver

it? To come to this House and tell us that you don't know how many bulkhead

flats are needed and how many chip cars are needed is to confess that there

is absolutely no integration between the departments in this government.

When decisions are made in absolute isolation, we find that there is no planning,

no co-ordination and we've got a government flying by the scat of its pants.

We have a situation now admittedly by the minister that he's for spraying, but other ministers are against it. We've got a minister who now admits that yes, we want to sell chips but it's not his job to know how many railcars are available and whether or not he can indeed deliver those chips. What started as a curious series of questions about the relationship to chip cars now comes out to expose a fact that the government has no indepth knowledge of the relationship of the need to transport those chips with the desire of this department to sell the chips.

Mr. Minister, I think it might be useful for the House to have this information. I would think it would be a lot more illuminating for everyone concerned if we had the kind of information that's necessary to make this debate realistic. Mr. Chairman, because of that, I am going to move that the committee rise, report progress and ask leave to sit again.

Motion negatived on the following division:

YEAS - 15

Barrett

King

Stupich

Dailly

Lea

Nicolson

Lauk

Gibson

Wallace, G.S.

Wallace, B.B.

Barber

Brown

Lockstead

Skelly

Sanford

NAYS - 25 .

Waterland

McClelland

Williams

Mair

Bawlf

Nielsen

Vander Zalm

Davidson

Haddad

Kahl

Kempf

Phillips

Bennett

Wolfe

Chabot

Curtis

Fraser

Calder

Shelford

Bawtree

Rogers

Mussallem

Loewen

Veitch

Strongman

Hon. Mr. Chabot requests that leave be asked to record the division in the Journals of the House.

MR. LAUK : Mr. Chairman, it should be explained to the Chairman and to the committee and to the majority of the Social Credit benches, because they were not present through most of the morning during this debate....

SOME HON. MEMBERS : Order!

MR. CHAIRMAN : Are you speaking on a point of order?

MR. LAUK : No, I'm speaking on this debate.

MR. CHAIRMAN : On vote 129.

[ Page 3744 ]

MR. LAUK : It should be pointed out why the Leader of the Opposition moved that the committee rise and report progress.

MR. CHAIRMAN : This is not on the vote, hon. member. Vote 129, please.

MR. LAUK : This is what took place, you see, so these people can know. Hansard Blues aren't out yet to them. The Leader of the Opposition has been apprised of a very critical situation involving Railwest. lie wished the committee rise so that an emergency motion could be placed before the House to debate those 250 families that are virtually going without employment and income.

MR. CHAIRMAN : Order, please.

MR. LAUK : The government majority has once again thwarted the opposition's efforts to speak on behalf of those families.

MR. CHAIRMAN : Order, please, Hon. member, let's proceed to vote 129.

MR. LAUK : I think this is just an example, Mr. Chairman, of this callous, arrogant attitude towards these families. The Minister of Economic Development is playing politics with those families, Mr. Chairman. He doesn't care whether they work or not. lie knows full well he's going to close down that plant. He....

[ Mr. Chairman rises. ]

MR. CHAIRMAN : Order, please. The Hon. member surely must recognize that he is an embarrassment to the Chair by not responding to the calls for order. May I remind the hon. member that standing order 43 says that "any member who persists in irrelevance" -- and I would think that what has just happened could be interpreted to the persistence - "may be directed to discontinue his speech."? Please don't make the Chair do that. Please read standing order 43 and then proceed with your speech.

[Mr. Chairman resumes his seat. ]

MR. LAUK : The critical factor here is the incompetence of this government, the ineptitude of this government and a history since December, 1975, of a complete abdication of responsibility and no creative thinking or input whatsoever on the part of the government towards Railwest. That's one of the problems. That's why the Leader of the Opposition moved that the committee rise.

MR. CHAIRMAN : Let me just remind the hon. member, who has been in this House for at least four years, that vote 129 has to do with the administrative responsibilities of the Minister of Forests and that the debate must be strictly relevant to either the administrative responsibilities, the philosophies or the policies of that ministry - not the government as a whole, but that ministry specifically. Please proceed.

MR. LAUK : Mr. Chairman, the opposition must debate the Railwest matter, and I move that the Chairman do now leave the chair.

Motion negatived on the following division:

YEAS - 15

Wallace, G.S.

Gibson

Lauk

Nicolson

Lea

Dailly

Stupich

King

Barrett

Sanford

Skelly

Lockstead

Brown

Barber

Wallace, B.B.

NAYS - 25

Waterland

McClelland

Mair

Bawlf

Nielsen

Vander Zalm

Davidson

Haddad

Kahl

Kempf

Phillips

Gardom

Bennett

Wolfe

Chabot

Curtis

Fraser

Calder

Shelford

Bawtree

Rogers

Mussallem

Loewen

Veitch

Strongman

MR. LAUK : On a point of order, the Clerk did not give the proper count as the division was taken, Mr. Chairman, The division should be taken again.

MR. CHAIRMAN : I don't know what the member's objection is.

MR. LAUK : The Clerk read out members that were not in the House for the division.

MR. CHAIRMAN : Would the hon. member make the proper correction?

MR. LAUK : That's the Clerk's responsibility. Mr. Chairman. The division has to be taken again.

CLERK ASSISTANT : Mr. Chairman, in calling the division a mistake was made. Mr. Bawlf and Mr. Curtis were counted as voting nay and should not have been. The correct vote should have been 23 nays, instead of 25.

MR. LAUK : The division must be taken again.

[ Page 3745 ]

MR. CHAIRMAN : Order, please. In order to absolve any confusion, shall we have the standing vote again?

MR. BARRETT : On a point of order, Mr. Chairman, the vote was not complete and the doors have been opened. I say that to complete the vote properly, those members who entered the chamber since that time should leave and we should take the vote over again.

MR. CHAIRMAN : Hon. members, in order that every member of the House be satisfied, we will turn the hourglass, we will allow for three minutes, which is the minimum time, and we will....

SOME HON. MEMBERS : Take the vote now.

MR. CHAIRMAN : Order, please. We will take the standing count again so that every member shall be satisfied.

MR. BARRETT : Mr. Chairman, on a point of order, it was agreed by all in the House that the vote proceed. What happened was that there were sonic unfortunate errors, clerical errors, in the reading of the result of the vote. As a consequence, objections were raised on points of order by members. I suggest the way to remedy is to no longer delay the House for the three minutes, but to put the vote forthwith with the same members who were here - that's all.

MR. CHAIRMAN : Hon. members, the clerical error was corrected by the Clerk, and therefore the House should be satisfied with a fresh count.

MR. BARRETT : Right now.

Motion negatived on the following division:

YEAS --- 15

Wallace, G.S.

Gibson

Lank

Nicolson

Lea

Dailly

Stupich

King

Barrett

Sanford

Skelly

Lockstead

Brown

Barber

Wallace, B.B.

NAYS -- 23

Waterland

McClelland

Mair

Nielsen

Vander Zalm

Davidson

Haddad

Kahl

Kempf

Phillips

Gardom

Bennett

Wolfe

Chabot

Fraser

Calder

Shelford

Bawtree

Rogers

Mussallem

Loewen

Veitch

Strongman

MR. CHAIRMAN : May I take this opportunity to remind every member of the House that the reading of the list is very important? We've had an indication of that this afternoon. Therefore, may I encourage the House to give us absolute order during the reading of the list from here on in?

Mr. Barrett requests that leave be asked to record the division in the Journals of the House.

HON. MR. McCLELLAND : Mr. Chairman, I move the committee rise, report progress, and ask leave to sit again.

SOME HON. MEMBERS : Oh, oh!

Motion approved.

MR. BARRETT : Talk about frivolous! You look silly.

MR. CHAIRMAN : Order, please.

Interjections.

MR. BARRETT : On a point of order, Mr. Chairman, that's out of order. There was no intervening business.

AN [ION. MEMBER : There was. There was a motion that the Chairman leave the chair.

MR. BARRETT : It's out of order.

MR. CHAIRMAN : Order, please. On the point of order by the Leader of the Opposition, intervening business did take place. It was the alternate motion, and therefore the new motion was out of order.

MR. BARRETT : There was no intervening business. It was another motion. Check the Blues! You want to go home on your terms. You don't want to talk about those workers. You're making a mockery of parliament.

The House resumed; Mr. Speaker in the chair,

MR. CHAIRMAN : Mr. Speaker, the committee reports progress and asks leave to sit again. It further reports that divisions took place while in committee and would ask leave to have them recorded in the Journals of the House.

Leave granted.

MR. SPEAKER : When shall the committee sit again?

[ Page 3746 ]

HON. MR. McCLELLAND : Next sitting, Mr. Speaker.

MR. L. NICOLSON (Nelson-Creston) : On a point of order, Mr. Speaker, the Chairman, in reporting to the Speaker, asked leave for the House to sit again. 1 ask that you request that leave be granted to sit again.

HON. MR. McCLELLAND : The motion was passed to sit again.

MR. NICOLSON : No, Mr. Speaker. In committee the motion was passed that the committee rise, report progress and ask leave to sit again.