1981 Legislative Session: 3rd Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, MARCH 20, 19811

Morning Sitting

[ Page

4673 ]

CONTENTS

Routine Proceedings

Committee of Supply: Ministry of Forests, estimates (Hon. Mr. Waterland).

On vote 98.

Mr. King –– 4674

Mr. Skelly –– 4686

FRIDAY, MARCH 20, 1981

The House met at 10 a.m.

Prayers.

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

On vote 98: minister's office, $160,231.

HON. MR. WATERLAND:

Before the swift passage of my estimates I'm sure the opposition would

like me to make some comments on what has been happening over the last

year and what we plan for the next year in the management of our most

important forest resource. I know all the members recall the fact that

in the Ministry of Forests Act, which was passed in 1978, there was a

requirement that each year we present to the Legislature a new

five-year program for the management of the forest and range resources

of the province. Our first program was introduced a year ago, and since

that time we have been working on that plan and developing our second

plan, which was introduced here in the Legislature about a week ago.

The

new program we have introduced has raised our sights considerably on

the things we hope to accomplish over the next five-year period. I hope

that all members have studied the program which was introduced, and

will recognize and accept the fact that the moneys which are stated in

the blue-book budget are but a part of the total funds available to my

ministry for forest management in British Columbia. We do have

allocation from the Forest and Range Resource Fund which was set up

last year, and I believe this year we'll be using in the order of $35

million of that money to augment our blue-book budget. In addition we

have our

section 88 funds which are foregone revenue and which are used

directly by the forest industry at our direction to accomplish in any

of the things we will be doing in the management of our forests in

British Columbia.

The tabling of the five-year management

program was accompanied by a brief press release which outlines, very

briefly, some of the accomplishments we have had over this last year. I

think I should mention a few of these. At the end of this current year

we will have harvested 75 million cubic metres of timber in British

Columbia, which is, I believe, about the second highest it's been, and

is about the limit of allowable cut available to us, as we practise

sustained yield forestry. Last year the ministry collected well over

$500 million in revenue — a record amount — and this again is the cost

the forest industry pays for using that resource which belongs to the

people of the province of British Columbia.

This year will

see substantial reductions in that income for a couple of reasons. One

will be on lower stumpage levels because of the low-priced markets that

exist: secondly. we'll probably see some reduction in volumes

harvested, at least in the first part of the year, because of the high

levels of inventory in both logs and lumber which has been manufactured.

One of the most significant things last year is that we finally achieved the

level of 75 million seedlings planted in British Columbia, which has been a

goal for quite some years now, and which has been worked towards by three different

governments. That was accomplished, and I think that is a milestone. It is also

interesting to note that, according to the program which we have presented,

we will have doubled that capacity within five years, and that will be done

through the cooperation of both the industry and the government.

think we have made an excellent start in intensive forest management in

British Columbia. The speed with which we can increase the level of

management is dependent upon knowledge of the forest, the availability

of qualified and trained people to carry out the work which we have to

do and, of course, the availability of funding. The funding is assured

at the optimum level of expansion of this type of work, and this has

been committed to both in the budget, in my

section 88 offset

approvals, and in the funds from the Forest and Range Resource Fund for

this year. There was also a commitment by the government for a

continuing increase of this type of work over the next five years.

Mr.

Speaker, we have approvals in our budget in our blue book and in our

range funds for $300,356,000 for expenditures over this year. The

Minister of Finance (Hon. Mr. Curtis) has requested all ministries to

provide efficiency savings; he has asked my ministry to provide savings

in administrative efficiencies to the tune of $7 million. Seven million

dollars is a large number when taken in isolation, but I would point

out that that is 2½ percent of my total approved expenditures for the

year, and I'm sure that the ministry can accomplish those savings

without reducing any of the specific programs we have to work with.

Mr.

Speaker, here are just a couple of numbers on the things we will be

accomplishing this year and how that will change within the five-year

program period. Our basic silviculture — and basic silviculture is

primarily planting and site preparation surveys for current logged

areas — will increase slightly from, for example, 70,600 hectares a

year planted in this next fiscal year to 86,000 by 1985-86. That

increase appears modest because we will not be increasing the areas

that we harvest, and by that time we will have achieved a level of

planting of about 50 percent of the areas clear-cut in the province,

natural regeneration doing an adequate job on the balance of it.

The

most apparent increases are in our intensive silviculture. Planting the

backlog of NSR — not satisfactorily restocked — lands will increase

from this next fiscal year of 8,200 hectares to over 41,000 by the end

of the program period. That is a very significant increase. By that

time we will be spacing over 66,000 hectares as compared to 21,000 this

year. We will be increasing our efforts in fertilization, fitting,

conifer release and site rehabilitation. It has taken up about 20 years

or more to achieve a level of planting 75 million seedlings a year.

That will be doubled over the next five years. I think that's quite an

ambitious undertaking.

I'd like to make one other point, Mr.

Speaker, before I allow the opposition to question me on my activities,

just to re-emphasize where our direction and our efforts will be. Last

year we spent 28 percent of our total ministry budget on silvicultural

work. By the end of the program period we will be spending 40 percent

of a much larger budget on silviculture. Our budget over that period of

time will rise in fixed dollars from $300 million to over $418 million.

We will be spending 40 percent of that budget on actual forest

management, stand-tending and planting work. I think that's a very

significant undertaking, constrained by our ability to provide the

people and to have the knowledge of just how the forest responds to the

things we will be doing.

[ Page 4674 ]

think we have a good start in the more intensive management which we

identified as one of the ways we must overcome the natural biological

falldown effect in the years ahead. We have a long way to go, but we do

have a plan. A new plan will be presented again next year. With the

additional knowledge that we will have at that time, I am sure that

once again we'll be indicating to the people of British Columbia that

we do indeed have to invest heavily in dollars and in expertise in our

forests if they are to maintain their present position in the economy

and also in the esthetic and recreational benefits which flow to B.C.

as a result of the management of that resource.

I'm sure

that we'll have some interesting discussion on my estimates. I hope

that we can address the plan to some extent, because I'm excited about

it. I think it's an excellent plan. I would like to congratulate the

managers in my ministry for the excellent job they have done in

managing last year's program and also in putting forward a very

comprehensive five-year plan this year.

MR. KING: Mr.

Chairman, it's obvious to me that the Minister of Forests was taken by

surprise when his estimates were called totally out of order, which

violates the practice over the last number of years in this Legislature.

MR. CHAIRMAN:

Order, please, hon. member. Hon. members, in Committee of Supply we

discuss the administrative responsibility of the minister concerned.

Clearly, hon. member, while the point you raised may be a valid one,

this is not the appropriate time to raise that point.

MR. KING:

It's obvious to me that the minister was not prepared to bring his

estimates before the House this morning. He offered such a pale and

weak description of the activities of his ministry over the past years

that I know he was taken by surprise. We should be dealing with the

Premier's estimates this morning, but as usual he's running away. He's

afraid to face the House and the people of this province.

MR. CHAIRMAN: Order, please!

MR. KING:

As usual, when he feels some heat he runs away either to Asia or some

other far foreign place rather than face the issues in this province.

MR. CHAIRMAN: Order, please.

MR. KING: Mr. Chairman, there is no cooperation in this House.

[Mr. Chairman rose.]

Interjections.

MR. CHAIRMAN:

I will remind all hon. members that when the Chair rises, all hon.

members will take their seats at that time or will be removed from this

assembly.

[Mr. Chairman resumed his seat.]

MR. CHAIRMAN:

Hon. members, clearly it is the right of the government to call

estimates in whatever order the government so desires. It is the

responsibility of the members when debating the estimates that they

relate to the administrative responsibility of the minister concerned.

The opening remarks by the spokesman for the opposition did not so

relate. I would ask the member, in continuing, to relate to the

administrative responsibility of the minister concerned.

MR. KING:

Mr. Chairman, I intend to relate to the minister's administrative

responsibilities. Indeed I do. The point is that the minister is

obviously totally unprepared to come before the Legislature this

morning. I cannot help but observe that this move is totally without

precedent in this Legislature. To allow it to go by without

observation, in my view, would be remiss on the part of the opposition.

We're prepared to deal with the Forests estimates. I'm most prepared

and most enthusiastic about dealing with the Forests estimates. But

that Premier should be facing the House. We're tired of "run away and

hide, " so I move that the Chairman do now leave the chair.

Motion negatived on the following division:

YEAS –– 21

Macdonald

Barrett

King

Lea

Stupich

Dailly

Cocke

Hall

Lorimer

Leggatt

Levi

Sanford

Gabelmann

Skelly

D'Arcy

Lockstead

Brown

Wallace

Hanson

Mitchell

Passarell

NAYS — 27

Waterland

Hyndman

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Ritchie

Brummet

Ree

Wolfe

McCarthy

Williams

Gardom

Curtis

Phillips

McGeer

Fraser

Nielsen

Kempf

Davis

Strachan

Segarty

Mussallem

Hon. Mr. Gardom requested that leave be asked to record the division in the Journals of the House.

MR. KING: I think it should indeed be recorded in the Journals that the Premier was absent for the vote.

Mr.

Chairman, look at them run. They're following the leader now. I assume

that they're afraid to deal in alphabetical order because of the issues

that are embarrassing them publicly at the moment. Before I get on to

the estimates of the hon. minister, which I intend to do now, Mr.

Chairman....

MR. CHAIRMAN: Order, please.

MR. KING:

They're a gang of jackals, Mr. Chairman; listen to the interruptions.

They're only going to be here for a few minutes, and then they'll skulk

back to their offices like their Premier does, and in the meantime all

they do is interrupt with nothing positive to contribute whatsoever.

They take the lead from their Premier, who runs away and hides on every

occasion.

[ Page 4675 ]

MR. CHAIRMAN:

Order, please, hon. member. Again, I must ask the member either to

return to vote 98, which is the estimates of the Minister of

Forests.... Please continue.

MR. KING: Mr. Chairman,

I assume that you shall protect me against the gang of catcallers from

across the way so that I can address myself properly to the estimates

of the minister.

There are a number of questions I have for

the Minister of Forests, and I might say I was very disappointed in his

initial dissertation. It was a very brief and pallid statement from an

important ministry that, allegedly anyway, has a large budget to deal

with the number one resource of the province of British Columbia,

forestry. I'm going to try to elicit more specific information from the

minister, because as I see it there are quite a number of conflicts

that exist between the minister's stated objectives and the reports

that have been filed in the Legislature this year. There are some very

serious conflicts, as was pointed out by the budget speech read in the

House some months ago by the Minister of Finance, wherein he predicted,

and in fact indicated, there had been a major reduction in revenue from

the forest industry in the current fiscal year, 1980-81.

think it might be wise just to paraphrase the budget and to ask the

minister how he might account for the discrepancy between this

particular reference and the reference in his own annual report, which

was tabled a few days later. On page 8 of the budget, it has this to

say: "While forestry revenue declined as expected, log prices have held

up better than anticipated. Timber sales revenue in 1980-81 is now

forecast to be $341 million, $107 million above the original budget

estimate. To put it in perspective, however, this is still almost $200

million below 1979-80 timber sales revenue." In the budget, which we

are expected to believe, Mr. Chairman, it's indicated that there was a

$200 million loss in forest revenue to the Crown in this current fiscal

year. A few days later the minister tabled the report of the Ministry

of Forests for the year ended December 31, 1980, and it has this to say

in the deputy minister's message on page 1:

"The year 1980 was a mixed one for the province's

forest industry. The timber harvest in creased slightly to $75 million

cubic metres, approximately $1 million less than the record harvest of

1979, but" — and this is the significant part — "forest revenues in the

province increased to $514 million, surpassing the 1979 record by $55

million."

It's obvious

we can't believe both reports; one of them is wrong. I appreciate that

there might be a discrepancy in the fiscal year, but there's certainly

no indication, according to that, that revenue for the current fiscal

year is down. Indeed, although there was a slight reduction in the

harvest, revenue was up for the bulk of that year.

That

being the case, and it also being the case that the government has

based a great portion of their very large tax increases on the

proposition that there was going to be a continuing decrease in revenue

from the natural resource sector, I ask the minister if he can explain

to the Legislature the discrepancy between the budget as introduced by

his colleague the Minister of Finance (Hon. Mr. Curtis) and the annual

report tabled by himself a few days later. I would be very interested

in having the minister explain this precise discrepancy before we go

further into the broader interests of his ministry's responsibilities.

HON. MR. WATERLAND:

I think the member opposite, as he was asking the question, by and

large provided his own answer. Our annual report, as he well knows, up

until this year has been based upon a calendar year, and the Minister

of Finance's and our projection for budgetary purposes is based upon a

fiscal year.

The member recalls very well that at the end of

the last calendar year we still had fairly substantial levels of

stumpage because of the lag effect on the stumpage system, and prices

were beginning to fall off at that time. So although we had a record in

stumpage revenue, we already had the beginning of a decline in stumpage

prices. We are anticipating a reduction in revenue this year because

that lag effect has already taken place, and by and large, the industry

will be on minimum stumpages — at least for the interior and a lot of

the coast — this next fiscal year.

There is a bit of an

anomaly in the level of stumpage on the coast because the log market,

as the member knows, is the base upon which we establish our coastal

stumpage charges, and the log market tends to distort prices and

artificially buoy the estimated stumpage level when you have a

reduction in sales, because it's only the better quality logs which are

sold. That's one of the reasons that last year we felt it wise to put

the small businessmen and independent loggers on special minimum

stumpage. They weren't selling these high-quality logs, and the higher

stumpage indicated really didn't reflect what they were getting.

But

this year, by and large, we'll be on minimums. As I mentioned in my

opening remarks, prices will probably remain low for most of the year.

Even if they were to come back towards the end of the year, we also

have that lag effect on the upswing in stumpage charges as well, and if

there is an increase towards the end of the year, that won't be

reflected in increased stumpage revenue until three months after the

rise starts. Also this next year we'll probably see a reduction in the

volume harvested, because as I mentioned in my opening remarks, the

pipeline is full, the log inventories are high and lumber inventories

are high as well.

In making forecasts of revenue, we and the

Ministry of Finance have to recognize all the possibilities that can

happen in that year as best as possible. We are in a year of very

intense negotiations with pulp unions and the IWA. There is a

possibility that there could be some labour interruption. We hope that

doesn't happen, but we would be fools indeed if we were to carry on, as

was done in 1974, and ignore that possibility and think that we are

guaranteed that continuous level of harvesting. So a factor has been

introduced, and I, the Minister of Finance and the Premier have all

stated there is a factor which would recognize the possibility — even

though I hope it's a remote possibility — of labour disruption and thus

a reduction in our revenues during a period of time when harvesting is

not taking place.

MR. KING: I think it's a rather sad

commentary when the budgeting forecast for the province of British

Columbia forecasts labour disputes in our basic industries. I think

that does nothing to instil confidence in industrial relations in this

province, in responsibility by the forest industry itself and by the

unions involved in the forest industry, that they are responsible

people and will negotiate in good faith to achieve a collective

agreement. When we have budgeting forecasts based on the probability of

an interruption, I think it is a very sad commentary and it shows a

real lack of confidence. not only in the government in terms of its own

Ministry of

[ Page 4676 ]

Labour's

ability to head off this kind of thing, but it shows a lack of

confidence in the industry as well. That's a sad thing, in my view.

The

explanation that the minister gives for the disparity between the

revenue shown in the budget and that in the annual report of the

ministry does not explain it all away, of course. I appreciate that

there is a different year involved. The annual report is the calendar

year; the fiscal year ends at March 31. But it seems highly unlikely

that the kind of performance that is noted in the annual report from

December of the previous year to December of last year could be altered

in the dramatic fashion that the minister suggests for the last four or

five months of the fiscal year.

I think there is another

purpose, quite frankly, in the pessimistic forecast of revenue. I think

that pessimistic forecast has a great deal more to do with the

political objectives of the government than it does with any reality or

any scientific forecasting. I think this government has been shown in

the previous budget debate to be more interested in creating surpluses

now so that they might be able to buy the votes of the people at some

election down the road. I think that's the real objective. It's sad

when we see the budgets of important ministries such as Forests

manipulated for those political objectives. It's a sad thing indeed.

The

minister makes much of the five-year plan that was introduced in the

House and the creation of the Forest and Range Resource Fund to induce

and encourage intensive forest management and intensive silvicultural

treatments over the next five years. I want to trace, along with the

minister, if I might, my understanding of the handling of that fund in

the first year of its existence. It was set up in March 1980, funded

with $146.6 million. The first outline of the five-year program

forecast that expenditures from the fund would be $19.4 million for the

year that we're now discussing, for its first year of operation.

actual fact what we see from an examination of the third-quarter

financial statements, filed December 31, 1980, is that $14.5 million

had been spent. That left a balance of $132.1 million in the overall

fund. The 1981-82 budget shows that the balance of the fund at March

31, the end of this fiscal year, is $119.6 million. In other words, $13

million of that fund was spent in the last three months of the fiscal

year. That seems an inordinately high amount of money when we consider

that only $14 million was spent in the first nine months of the year.

Total expenditures then from the fund were originally estimated to be

$19 million in the first year. In fact, $27 million was spent from the

Forest and Range Resource Fund. In other words, it was overspent by $8

million. Obviously that does something to the five-year forecasting of

the fund. We have an overexpenditure of $8 million in the first year.

Obviously the fund is going to be inadequate to meet the forecast

financial commitments from it each year in the next five for intensive

forest management — replanting, nurseries, silviculture, thinning and

so on.

I submit, Mr. Chairman, that there was an

overexpenditure in the Forest and Range Resource Fund to compensate for

the reduction in the ministry's spending for the same year. There was a

$3.5 million surplus left in the minister's budge — it was budgeted for

but not expended in the same year. So it seems to me that we're seeing

a trend develop here where in actual fact the ministry's own budget is

not keeping pace with inflation — is not even being fully expended —

but rather we are seeing the Forest and Range Resource Fund drawn upon

to, in effect, subsidize the Ministry of Forests' declining budgetary

allocation. The forecast is that in the fiscal year 1981-82 the Forest

and Range Resource Fund will furnish $36 million, leaving a balance of

$83.7 million at the end of the fiscal year. Now this may vary

according to interest that accrues off that fund — I'm not sure what

the minister does with the interest which accrues — but you don't

receive interest on a fund of $146 million when you are spending $27

million and $30 million each year. It is a declining amount, in other

words, that is available to draw revenue from in the way of interest.

I understand it, and as the minister explained it, there is a new era

in forest management in the province. The fund of $146 million that was

set up was to be an extra injection of funds to meet the looming

falldown in the forest resource — the falldown that was predicted in

his range and resource analysis that was tabled in the House, I think,

at about the same time. In fact it appears to me that this fund is

being utilized to provide a subsidy for a reduced budgetary allocation

to the minister's own department, I don't say this idly; I say it with,

I think, the ability to demonstrate that the ministry's own budget is,

in fact, declining.

When I look at the estimates of the

minister's department for 1981-82, I see an overall increase in the

budget from roughly $157 million in 1980-81. The estimates for the

coming fiscal year show a budget of $162.5 million. That's an overall

increase of pretty near $6 million — not a large amount when viewed in

the large range of services that the ministry offers if we're to

believe the minister's statements that he is going to have his staff

people involved in greater research, in more intensive management, in

the expansion of nursery capacity and a whole variety of functions that

he has espoused as the objectives of his ministry for the coming years.

A $6 million increase is not a great amount when viewed against

inflation and against an expansion of staff that I would expect in the

Ministry of Forests would be necessary to satisfactorily administer

some of the new functions and responsibilities imposed by the Forest

Act.

But what is more shocking, Mr. Chairman, is that we

find in the same budget estimates that the largest increase is in

building occupancy and computer services. Those two particular votes

are up by $10.5 million. The total budget increase is only $6 million,

yet building occupancy and computer services are up $10.5 million.

find that there's no increase at all left in the field services, in the

silvicultural area and in the vital votes of the minister's budget for

really managing the forest resource. Vote 101 is the district forest

and range resource management. What happened to that vote? It's down by

$2,798,000 — almost $3 million. The only thing that went up in the

minister's own estimates are votes that are completely redundant to

managing the forest resource. This seems to suggest to me that with a

declining budgetary allocation within the ministry itself the forest

and range resource fund is going to be drawn on in a much heavier

fashion to, in effect, supplant the shortage that is occurring in the

minister's own budget. I hope I'm wrong. On the face of the figures

presented to the Legislature, I'll be most interested in hearing the

minister's explanation of the obvious conflicts that are apparent in

the material provided to the House by the minister. I look forward to

his comments in this respect.

'HON. MR. WATERLAND: The member for Shuswap Revelstoke said that

he hopes he's wrong, and as usual he is.

[ Page 4677 ]

mentioned again in my opening remarks — and I guess I'm going to have

to keep saying it — that the total funding available to the ministry

consists of those funds provided for in the blue book, the funds we use

from the forest and range resource management fund and from

section 88.

All of these moneys are used to provide for the management objectives

we have. The member mentioned that certain votes appeared to be going

down and that those are areas which should be going up. Once again by

looking at the blue book, the member realizes that there's quite a

rearrangement of the votes. This is as a result of our reorganization

of the ministry staff and the reorganization of our reporting and

accounting processes in order to be compatible with that reorganization.

Last

year the Minister of Finance put up an early warning sign, saying that

revenues this year are not going to be as high as they had originally

been projected to be. Each ministry was asked to provide savings. We

had a $3 million saving in

section 88, which was the industry sector.

It involved various things that the savings were realized in. However,

the industry was apparently not ready or able to use that funding last

year for various reasons. We used the fund to offset most of those

savings that the Minister of Finance required. The purpose of the fund

is that we do not have to give up essential management programs when

there are difficulties with the government's revenues. The very purpose

of the fund is to allow us to carry on with our programs without

radical reductions in the actual management efforts we were making in

the forests.

The member asked: "Where is the increase in

funding for increased nursery capacity?" He doesn't see it in the blue

book. I'll say again that most of that funding will be coming from

section 88. The ministry is going to level off its nursery capacity at

about 100 million seedlings a year. The industry will be providing

nursery capacity for 50 million plantable seedlings a year. That is a

part of the partnership that we have between the private sector and the

government in the management of the forests.

The member says

that he sees a substantial increase in computer services. Somehow he

rationalizes that that is not in any way related to forest management.

I think he said it was "redundant" to forest management. The use of

computers in the Forest Service is a very real part of our forest

management. I hope that the member has visited our computer facilities.

We have our mapping and inventory system computerized. The maintenance

of the inventory and mapping records of our forests are in up-to-date

condition as to what we're harvesting and also to what treatments we're

applying, and it's an essential part of our total forestry management

work. I don't know if that member realizes this, but B.C. has the most

advanced forest inventory system of any jursidiction in the world. In

fact it's being copied by many other countries — countries which have

been noted for their forest management expertise. Finland, Sweden and

the United States are all copying the IGDS system, which we have

developed for the management of statistics on the state of our forest

and range resource. It provides us with a great advantage in knowing

what to do, where to do it and when to do it,

I have to

re-emphasize, Mr. Chairman, that the forestry critic, I'm sure, will

get on this wicket again and again, but our funding for our total

management programs comes from three sources: our blue book, our

section 88 and our fund. Our fund will be used whenever we have to use

it in order to make sure that we can carry on with our programs. The

fund was not set up for five years to be run parallel with the program.

The fund can be enhanced. In future years as revenue increases we can

replenish the fund, so we will have this constant level of commitment

of dollars. We won't have to change our management objectives as

funding for the provincial government as a whole changes. I think

that's a very worthwhile project. I believe I've covered those points,

Mr. Chairman, that the critic has raised in his last session. If I

haven't, I'm sure that he will remind me.

I have one final

point. In our first five-year program — I think the member has one in

his hands right now; if he will look at page 29, year two of our first

five-year program — the total figure amounts to $266 million. Those

moneys are provided through our blue book, our fund and our

section 88

offset. Those were in 1980 dollars. If you add inflation to that amount

you will come out with a figure of $293 million, which is the bottom

line in year one of our second five-year plan. That level of

expenditure is right on target. We also had several issue papers which

we went to the Minister of Finance with and had approvals for $7

million. That brought our total bottom line for year one of this

program to just over, $300 million. The Minister of Finance then said

that we must provide management efficiency savings to the tune of 2⅓

percent of our total allocation, which brings it down to $293 million —

exactly where we had projected we should be in our first five-year

program. So we are right on target. I'm sure that a ministry the size

of the one that I have the pleasure of being the minister of, and with

the people we have, can provide efficiency savings to that amount

without having an adverse effect on any of our essential forest

management programs.

MR. KING: Mr. Chairman, the

minister's response to his ministry's budget and his accent on

computers being so important to the administration of the Forest

Service is understandable. I appreciate that you need a modern system

to deal effectively with the inventory of the province particularly.

However, despite his sophisticated computer system, the inventory

reports that he promised along with the new act have been very slow in

coming in some parts of the province.

[Mr. Strachan in the chair.]

The

fact of the matter is that the largest increase here, up from $3

million to $10 million, is for building occupancy charges, not

computers at all. The ministry hasn't grown that much. I don't see any,

large explosion in staff. In fact, I think one of the concerns is the

tremendous turnover in staff within the Forests ministry. I appreciate

that the facilities, staff and functions of the ministry have to be

housed, but I seem to get the impression from the budgetary allocations

in his own estimates that there is a greater priority set on this

mundane function, rather than the intensive management of the forests,

which he said was his priority and his objective.

That

priority is not reflected in the increased budgetary allocations. The

highest priority here and the highest single increase is for building

occupancy charges. Are you taking that out of our Forest and Range

Reserve Fund too, Mr. Minister? For the first time the minister has

admitted in his response that, yes, the fund will be used to offset any

deficiencies in his ministry budget so programs can continue. That was

not what he said at the outset, Mr. Chairman. He said at the outset

that this large fund of $146 million was going to be available for

intensive forest management and

[ Page 4678 ]

nothing

else. I might have more confidence and I might be a little bit more

assuaged in my concern by the minister's references to the write-offs

section 88 if I had confidence that the ministry had either the

staff or the capability to monitor adequately those claims coming in

under

section 88. I think it was something like $94 million last year

in write-offs against stumpage.

It seems to me what the

minister is doing is playing games again with figures. He is claiming

that write-off to industry from stumpage as dollars allocated from his

ministry for intensive management. That's one way of doing it. I guess

that's fair game in his form of bookkeeping. But I have little

confidence that the ministry has the capacity at this time to

adequately monitor those tax write-off claims, to ensure that the

public is receiving value for the claims. I have some evidence — at

least in some cases — that indeed they are not, that intensive forest

management is being claimed in some instances as a means of reducing a

company's stumpage allocation where the work is really not done.

have no confidence in the staff ability. It's not a criticism of the

staff; it's a criticism of the fact that there's no new hiring; there's

no new provision or accent on developing a capacity to do this

monitoring. Most of the field offices I've been in touch with are fully

involved and committed in terms of staff and in terms of the

traditional functions of the ministry in monitoring the industry's

performance in harvesting, inventory and planning for reforestation.

But they haven't got the staff capacity to go out and check adequately

whether these claims under

section 88 by the private sector are

actually justified or not — whether they are accurate, whether they

should be cut down, or whether they should be allowed at all. I

honestly do not believe that in many cases, in many areas of the

province, any monitoring whatsoever is taking place.

Yet we

have the expenditure or write-off of $94 million in taxes that the

private sector is claiming. Now we also have the minister claiming that

amount as an expenditure by his ministry. In my view, it's a convoluted

way of demonstrating his commitment to a new, intensified

forest-management posture in the province. I just have no confidence

whatsoever.

I want to tell the minister that people from the

private sector say privately that there's no way the ministry has the

capacity at this time to monitor those write-offs under

section 88.

They are concerned too that some companies will take unfair advantage

of that write-off opportunity without performing the work that they are

claiming the write-off for. I'm sure that many — I would say a majority

— of the companies are responsible, would do a good job and give an

honest accounting of the work they're claiming for.

Nevertheless,

if we're losing anything in value, then it's injuring the public

interest, and it's certainly injuring and eroding the objectives which

the minister states he has — that is, to harvest effectively, to manage

and farm the resource in the province of British Columbia. I have no

confidence that the grand-sounding program with the high-budgetary

allocation that was announced along with the first five-year plan is

indeed going to achieve the increased plantings, the increased nursery

capacity, and the increased intensive management that the minister

assured us it would.

It's not only my own opinion in this

regard. It seems to be borne out by concern in specific areas of the

province. I note an

article from the Prince George Citizen ,

dated back in January of this year, which was based on interviews with

local Ministry of Forests officers. It stated that the Prince George

region needs 56.4 million seedlings per year just to maintain a balance

between wood growth and harvesting. The ministry's allocation to the

district is just 30.4 million seedlings. In other words, the five-year

plan, as it is called, does not include any backlog reforestation, and

the stated target of halting the growth of NSR land — not sufficiently

restocked or replanted land — will not even be approached. There are

currently around two million acres of NSR land in the province. The

number of seedlings available in the Prince George region is inadequate

to keep pace with the annual allowable cut, much less to start catching

up on this very large backlog of NSR land.

The local

officers up there concede that it would not be an easy task to

significantly increase seedling production in the short term, but they

argue that the budget of the five-year plan needs to be dramatically

increased if the region is to escape future timber shortages. This is

the view that's reported of the minister's own staff in that region. It

seems to confirm what I fear, that if you sift through all the

rhetoric, if you sift through all the brave statements that the

minister makes, when it comes down to the harsh reality, the financial

commitment is not really there to meet the objectives that minister

himself has set.

I can tell the minister that in my own

area, in the Revelstoke forest area, there is a major shortfall of

seedlings to meet the projected needs of the local forest service.

There are two widely separated districts, Revelstoke and Prince George,

both far below their needed seedling requests. If they're not receiving

adequate seedlings to keep pace with the annual harvest, how on earth

are we going to recapture all this land in the province of British

Columbia which has not been adequately restocked and which is growing

up with weed species and being taken out of commercial forest

production as a consequence, land that will accordingly be far more

difficult to get back into production once it has been taken over by

species of trees that are not merchantable? It becomes a very expensive

proposition to get involved in heavy site clearing and site preparation

after this area has been left to the ravages of the weed species.

far as I can see from the ministry's projections, from the handling of

the fund, and from the very large write-offs in the

section 88 claims

by the private sector, at the end of this five-year plan I don't see us

coming near the point where we will be recapturing much of this land

that is now nonproductive forest land. We may start to reach a point

where we have sufficient capacity to keep pace with the annual harvest,

although that's questionable, in my view. But I certainly can't see any

aggressive program that is going to start catching up on the NSR land.

The

minister talks about natural regeneration. It's true that a percentage

of the land harvested each year might be satisfactorily restocked in a

natural way, but I think it's pretty sparse territory in the province

of British Columbia where one could rely solely on natural regeneration

to adequately restock the land. There are not that many areas. Indeed,

many of the areas that are replanted with carefully selected

genetically superior seedlings have to be replanted a number of times

before they are adequately stocked. I think the same is true in natural

regeneration. It's a bit of a hit-and-miss program. Certainly there are

areas where it's much more possible, but the minister indicated

something like 30 percent expectation of natural regeneration, if I

heard him correctly; and I think that's extremely optimistic, if that

is his view.

[ Page 4679 ]

The

fact of the matter is that it is not borne out by the two million acres

of land in the province of British Columbia that are out of forest

production, as it were, or designated NSR, because they were left

solely to natural regeneration. Obviously the bulk of that forest land

was not adequately restocked by natural regeneration and it wasn't

tended by any reforestation program. So what we have now is a very

large chunk of real estate in the province out of forest production — a

very large portion which should be productive forest land in effect

sitting there idle, and now we're being called on to come up with some

major budgetary allocations to try and recapture some of that.

don't know — between that rather deplorable situation where this land

is unproductive at the moment and the other pressures on forest base

land in the province, some coming from the minister's colleague, the

Minister of Land, Parks and Housing (Hon. Mr. Chabot), who is chipping

away at good productive forest land to accommodate the needs of hobby

farmers and other small private holdings.... Between those incursions

onto the forest land base and the incursions of urban growth and sprawl

eroding away productive forest land, it's no wonder that the ministry

is predicting a falldown in forest production over the next 15 years

unless something very radical happens to change this process. My

concern is that the minister is playing with figures now and holding

large sums up, in a way putting in a double claim for expenditure for

the portion that is claimed under

section 88 by the private sector for

intensive forest management when in fact we may be receiving 50 percent

value for that expenditure. I'm quite confident that the minister has

no more idea than you do, Mr. Chairman, as to whether or not full value

is being received for that kind of tax write-off claims.

I'd

be interested in hearing the minister address himself to these

questions, and I'd be interested in hearing him address himself to the

precise question I asked on his estimates about the building occupancy

charges. One of his explanations was: "Oh, well, there's been a

reorganization and everything's been changed around." I know that

because I've talked to many of the staff of the Forests ministry, and I

can say there's never been more disaffection and dissatisfaction among

the staff, who feel aggrieved because they feel they were treated

poorly in the new organization. They feel that the years of service

have not been adequately recognized and that many new people coming in

have received advantage and preferential treatment over the old-timers

— but that's an aside.

I'd like the minister to explain why

the building occupancy charges went up in such a dramatic fashion and

vote 101 has declined $3 million. The minister says the reorganization

has resulted in different things, but vote 101 has this to say. This

vote is to provide for a management program "to provide supervision and

control for implementation of approved forest and range resource

policies and programs in the 46 forest districts of the province,

including the district managers, operations superintendents, support

services supervisors, their salaries and expenses and those of their

immediate staff." The finance and support services program, harvesting

program, silviculture program, forest protection program, range program

and recreation program are all contained in vote 101, and there is a $3

million reduction over last year's budget. That's hardly enough to keep

up with inflation. Just to keep pace with the inflation factor one

would have expected, in this very crucial area of his ministry's

responsibilities, an 8 percent to 12 percent increase to accommodate

inflation. There's not even that. We see a cut of $3 million and at the

same time we see an increase of $6 million for building accommodation.

Where you did take over all the new buildings?

I'd like to

hear something from the minister. What does this mean? You set a higher

priority on buildings than you set on the management of the forests of

the province. Where are these buildings? Are they sitting here in

Victoria? Are they all occupied? Did Treasury Board tell you anything

about it? It's not good enough to come in with some bland statements:

"Everything's okay, we've changed around and gone to a new style of

administration." You're here to be responsible to the public of the

province of British Columbia for the expenditure of every one of the

dollars involved in your budget, and I want some specific explanations.

Mr.

Chairman, I shall await those explanations, and I want to assure the

minister that if they are not satisfactory, I and my colleagues are

very patient and insistent people. We want some satisfactory answers

because this is a most important area of the province's affairs.

HON. MR. WATERLAND:

Mr. Chairman. the member for Shuswap-Revelstoke made a rather shocking

remark. He says that he has indications or evidence, or something to

that effect, that

section 88 claims are being fraudulently used. If

that is the case, I would certainly hope that he would share with me

whatever information he has, because I'm not aware of that taking

place. First of all,

section 88 claims are all approved by the ministry

before funds can be expended by the private sector, which they hope to

claim back on

section 88, and we do audit all expenditures — actual

physical audits on what has happened. We don't, nor do I think we

should, go into each and every site of each and every seedling, but we

do audit what is taking place in a recognized system that assures us

that things are taking place in the proper manner. However, any audit

system can miss abuses, and I think that if the member for

Shuswap-Revelstoke has any evidence that fraudulent use is being made

section 88 he should share it with me. I wouldn't ask that he do it

here. If he has that information, I would either come to his office or

he could come to mine, so that we could have that information and

follow up on it. I think that would be his responsibility as a citizen

of the province, as it would be the responsibility of any citizen who

has such information.

Mr. Chairman, it is quite difficult to

make straight-line comparisons between last year's figures and this

year's because, as the member knows, there are changes in what the

votes include. However, the building occupancy charges are higher. This

is for a couple of reasons, one of which is our reorganization in which

we are moving people to other areas. The main reason, I guess, is the

change in many of our field operations from our actually owning and

managing the facilities; we have to B.C. Buildings Corporation doing

that. They are taking over some of our buildings. We are going into

areas where we do not have facilities, and we have to go directly to

BCBC for facilities. I understand from my staff that we have about 35

capital projects budgeted this year for either occupancy or change from

our owning and operating to BCBC's owning and operating and billing us

for it. I would not consider the provision of adequate working

facilities and office accommodation as a mundane function, as the

member for Shuswap-Revelstoke mentioned, because the proper housing,

facilities and working conditions for our staff are extremely important

both to them and to their ability to meet the workloads which they have.

[ Page 4680 ]

Once

again the member is getting into isolating numbers in the blue book

from the total projected expenditures. I really don't care whether the

money comes from the blue book, from the fund or from

section 88

offsets, as long as it is available to us to do the things that we must

do. The member says that

section 88 has nothing to do with forest

management and reforestation. We have quite a number of new private

nurseries coming on stream, which are allowed for under offsets in the

forest industry. That certainly has a great deal to do with forest

management. Forestry work after harvesting carried out by the industry

certainly has a great deal to do with forest management.

Concerning

the pace of implementation, we are expanding our ability to produce and

plant seedlings at quite a rapid rate. Of course, many people are

saying that we should go much more quickly, but we can set our target

so high that we'll achieve nothing. Yes, in years to come, perhaps, we

should have a level of seedling production at 200 million seedlings per

year. Last year we suggested that 117 million was the objective which

we could reach at the end of the first five-year period. Now, because

of the enthusiastic response from the private sector and the granting

of funds by the Minister of Finance, we have raised those sights

considerably. We have raised our objective from 117 million to 150

million seedlings in a five-year period.

I think, according

to those people who are going to be responsible for providing those

facilities, that that is their best estimate right now as to how fast

we can achieve that objective. Perhaps next year we can raise that

sight again, but right now we don't think we can. Many people in the

private sector and in government agree that that is the best rate of

increase that we should attempt to achieve right now. Certainly there

are individuals in the private sector and in government who say that

you should do it more quickly, but the general consensus is that that

is about the best rate of increase. Interestingly enough, the Okanagan

forestry association has presented a plan for their participation.

Their rate of increase is projected at a curve very similar to ours.

both recognize the fact that we'd like to do more, but it's not like

turning a switch. It takes some time to establish a nursery — to make

sure that you have the proper seed for it and that you can manage it

properly and actually produce plantable seedlings. Our actual nursery

capacity by the end of this program period will be 168 million

seedlings. From that we hope to achieve 150 million which are

plantable, because growing seedlings is much like an agricultural

operation — you are subject to weather conditions, losses, and every

seed you, plant doesn't develop into a seedling.

I guess I'm

no more competent, technically, than the member is to discuss what part

of the land harvested should be naturally planted — I have to take

advice from the Forest Service and professionals. The level of planting

of currently harvested areas will have increased to about 50 percent by

the end of the program period. We will still be relying on natural

regeneration for about 50 percent not 30 percent, as the member

mentioned. Natural regeneration is very effective in probably more

areas than he or I realize, according to the advice I get from the

professional foresters.

My chief forester advises me that in

the lodgepole pine stands in the central interior 98 percent of the

areas which have been designated for natural regeneration to lodgepole

pine are stocked or overstocked — some of them overstocked to such a

level that we're going to have to expend a great deal of money in

thinning. Their thought process now is: do we try to suppress natural

regeneration and go in and plant in order to avoid that expensive

thinning process later on, and if so, how? That's where our research

comes in. How do you do that? How do you suppress the natural

regeneration, and if you can, can we produce the seedlings to go on in

and plant it naturally? Then will there be undue competition of

seedlings you've planted with the stuff that will come along in any

event? There are lots of technical questions that need answering.

That's why, over this five-year period, we're more than doubling our

research budget and will be (carrying out our research under other

programs and votes as well.

The backlog NSR is a very

difficult thing to get a handle on. What regeneration delay is

acceptable? Is it three years, is it 10 years, is it 15 years? And, of

course, it depends on where you are. We will survey for restocking once

and go back seven or eight years later and find that land that was

previously NSR has now naturally restocked. I don't think it's good

enough to wait that long. I think we should be planting more, and our

program says we will be. Hopefully next year we'll be raising those

sights again, but let's not raise them to such an extent that we fall

flat on our faces, that we do it wrong or don't meet the objectives,

because that would be counterproductive.

The member

suggested again that

section 88 provides us only 50 percent of the

value of the credits we provide. I don't know how he arrived at that

figure, but I would suggest that we should be getting, and I hope we

are getting 100 percent of the value. I think that by and large the

private sector does a more efficient and cost-effective job than do

governments. That is why we are trying to encourage the private sector

as much as we possibly can in this type of work. We do audit.

Occasionally, I guess, our audits show inadequacies and we follow up on

them. Once again I would urge the member, if he has specific examples,

to give them to me in confidence. I will follow them up.

think that pretty well covers the questions asked recently, Mr.

Chairman. Again though, the pace of implementation is something that we

have to be very careful about. For example, in all the forest regions

in B.C., sowing requests of 209 million seedlings have been submitted

for a year and two years hence. Recall that last year, for the first

time ever, we planted 75 million. I don't think that we have the

capability in people — we certainly don't in seedling production — to

either plant or prepare the acreages required for that level of

planting. I don't think we could do an effective job. This is not my

opinion. It's the consensus of opinion by professional people in

forestry. So let's move ahead as aggressively as we can, but let's make

sure that we are doing it properly and not fall on our faces.

MR. KING:

Mr. Chairman, the minister's comment about companies fraudulently

claiming under

section 88.... Well "fraudulently" was his word, not

mine, but, you know, that's semantics; to some extent I agree. My main

point — and what the minister seems to miss — is that the system that

he has designed lends itself to abuse. Here is a system, and I ask the

House, Mr. Chairman, if it knows of any other area of endeavour in our

society and in our economy where a group of people — the private sector

forest industry in this respect — has the ability to write its own

ticket to the tune of $94 million in tax write-off claims.

The

minister makes the point that their plans for these tax write-offs have

to be approved by his field staff, by the district manager — that's

true. If it were just nursery capac-

[ Page 4681 ]

ity,

that's pretty easily dealt with — it's pretty easy to identify the cost

and the number of seedlings produced and so on — but it becomes much

more complicated than that. Intensive forest management, intensive

silviculture, means a whole variety of things. They come in with a plan

and the district forester says: "Yes, that's good. You've got a

thinning program on in this particular part of your licence. Go ahead,

and we'll approve the program."

My proposition is that the

ministry lacks the staff to get out in the field to investigate whether

or not this work is actually being done in the area of thinning,

replanting and possibly in the area of fertilization. There is a whole

variety of things; it's wide open. It allows virtually any program, I

believe, if I remember

section 88 correctly, that the district manager

approved. My proposition is — and it's supported by the point of view

of many people in the minister's own staff, certainly at the regional

level — that there is just not the capability within the ministry to

monitor these tax write-off claims. I

I have no evidence of

fraud. I do have the opinion of some field staff officials around the

province who have looked with a very jaundiced eye at some of these tax

write-off claims that have been submitted and have said: "Well, we

approved them because certainly we didn't have the staff to go out into

field and examine whether or not this work had been carried out and

whether the public was receiving value for this gift of tax money to

that particular company." That's a lot of money, Mr. Chairman — a $94

million tax write-off.

There is a larger question involved

here, and that larger question is: is the public receiving fair value

for the forest resource? The private sector, as the minister indicated,

is on minimum stumpage; last year they wrote off $94 million from their

stumpage costs — a claim against some form of intensive management. The

question is what the users of the forest resource should be asked to

contribute to the regeneration of that resource. Is it fair, is it

equitable, that the public purse underwrites the total cost for renewal

of the forest resource which is harvested by these various private

companies? Has the minister done any cost-benefit analysis to ascertain

what it is going to cost the public in terms of ensuring a new crop of

timber 10, 15 or 20 years down the road in terms of their public output

of dollars as opposed to the kind of revenue that is generated to the

Crown from the use by the private sector? There is a massive public

investment here. The question is: is the private sector meeting its

obligation in terms of ensuring that the resource that they live on is

regenerated and a new supply is available?

Is the revenue

that we receive from the private sector operation adequate to offset

the public investment in the forests of British Columbia? I'm concerned

in this regard. I don't know of many other industries where the raw

resource is renewed totally at public expense. The user of the resource

perhaps has a decreasing contribution to make in terms of revenue to

the Crown, through the wide-open characteristics of

section 88

particularly. I worry about that proposition, Mr. Chairman.

I would like the minister to comment on whether he has looked at this equation

or done any cost-benefit analysis. The whole question of the adequacy of stumpage

in the province of British Columbia has been debated long and loud in this province.

We on this side of the House do not believe that the private sector is making

an adequate contribution to the revenue of this province from their right to

use the people's resource. Academics from the University of British Columbia

who are familiar with forestry come to the same conclusion when any comparison

is drawn between the return of revenue to the Crown from British Columbia forest

resources and the return that the government south of the border receives in

the Pacific Northwest. There's a great disparity.

What

we're apparently seeing here is an ever-increasing public contribution

to the continuity of the forest industry to the sole benefit of the

private sector. It's in everyone's interest that we have a healthy

forest industry. The real question is: at what cost to the public and

at what benefit to the public in the long term? Is the private sector

receiving the sole benefit of this massive public investment? Surely

the minister would agree that the public demands a fair return on its

investment as well. Surely the minister would agree that that return on

investment should not just relate to jobs that accrue from the industry

when we're asked to put out hundreds of millions of dollars a year. In

terms of ensuring that the avaricious appetite of that forest monster

out there is fed adequately in the years to come, the public should

have some security and assurance that they are going to receive a fair

return on their investment in the supply equation too. I'd like to hear

the minister comment on that.

The minister has been fairly

cooperative this morning, but he hasn't satisfied me that he really has

a handle on the objectives of the ministry. He hasn't satisfied me that

he has a real handle on the

section 88 claims particularly, and that

one worries me greatly. I want to reiterate to him that when you set up

a program providing for that kind of claim by the private sector or

anyone else, there ought to be an effective system of policing that

fund. I'll ask my colleague from Vancouver East. Do you think this

government would allow the welfare recipients of this province to claim

$94 million in one year as a deduction on their income tax without a

program to go around and police, investigate and sleuth those claims to

make sure they were valid and had satisfied the program upon which

their claim for tax write-off was based? Ninety-four million dollars is

a lot of money.

The first member for Surrey (Hon. Mr. Vander

Zalm), the Minister of Municipal Affairs, when he was Minister of Human

Resources, hired a whole army of sleuths to go around and investigate

welfare recipients. They receive a cheque of $140 a week in some cases.

He didn't trust them to make these claims on the Crown without a system

of sleuths to go around and investigate the validity of those claims.

Here we have a Minister of Forests who has presided over $94 million in

claims on the Government coffers by the private forest industries of

this province without any system of monitoring by going out in the

field and investigating that their claims are valid. He says we have to

trust them. How is it you trust the corporations but not the people of

the province?

I'd like to hear some further explanation from

the minister on precisely what he has done. How does he ensure that

those claims are valid? I'm referring just to the accounting. I'm not

referring to someone getting out in the field and making sure that

those programs upon which the claims are based are fully implemented.

HON. MR. WATERLAND:

Mr. Chairman, I've been over this ground a number of times. I don't

know how often I have to say it. We do have what we consider to be an

effective auditing system for auditing programs carried out under

section 88. It has been improved tremendously over the last few years.

I’m not saying that it can't be further improved. The auditor-general

is currently reviewing the systems we

[ Page 4682 ]

use.

Perhaps she can make recommendations for further improvements. If she

can, we would certainly implement such recommendations. However, at the

present time the people in my ministry who are responsible for these

accounting processes are satisfied that we are doing a good job of

monitoring and auditing and that we are getting good value for the

moneys which are credited under

section 88.

I guess we will

get into the age-old arguments about stumpage revenue. We have said

each year, I guess, that we can't make simplistic comparisons between

the United States and here. You have academics who, you say, support

the fact that there should be higher revenues, and other academics

saying that that's not the case. I would hope that the member opposite

has responded to our White Paper on stumpage, because if he has any

advice I would certainly be willing and happy to look at it and, if he

had some good ideas, incorporate it into what could be a revised

stumpage appraisal system. I know this is not his function. He has no

more expertise in this area than I do, but perhaps he knows of people

who can assist him and help us devise an even better and more equitable

stumpage appraisal system.

On the revenue received by the

government, in the last, few years we have averaged about $9 per cubic

metre in direct revenue which can be attributable to the forest

industry for every cubic metre that we harvest in British Columbia.

This should be rising in the future as the value of our forest products

rises. But if we look at the total benefit of our forests to the

province of British Columbia, every cubic metre of wood that we harvest

in British Columbia provides about $70 in export value for our

province, over $30 in labour income in the province, and $9 in direct

government revenue. Our forest industry in British Columbia directly

supports 10 percent of our labour force and indirectly supports another

15 percent. There are 24 pulp and paper mills in the province and over

700 sawmills. Other plants....

Interjection.

HON. MR. WATERLAND: We seem to be getting some static from behind the bush over there, Mr. Chairman.

There

are 30 veneer and plywood plants and literally hundreds of smaller

shingle and shake plants in B.C. These provide many opportunities and

jobs in British Columbia. Our forest industry is vital to us. We do get

what we consider a fair and equitable return on the sale of Crown

timber. If we can get more we'll attempt to, but we're not going to do

that at the expense of crippling this industry which means so much to

the economy of British Columbia.

A short time ago Mr. Nixon

suggested that we're missing out on $2 billion a year in forgone

stumpage revenue. I would certainly like to see numbers which can prove

that point. I'd be very happy if he would prove it, because I know the

Minister of Finance could well use another $2 billion a year in

revenue. The simple fact of the matter is that it is not there. That

kind of revenue does not exist. The total value of forest products

exported from British Columbia last year was in the area of $7 billion,

and if somewhere in that $7 billion we're missing out on $2 billion I'd

sure like to know where it is. Perhaps the member can give me some

advice on that — not general, bland statements, but some specifics. I

wouldn't expect him to do it here, but once again I'd be very happy to

discuss it with him or with any experts who he might be able to come up

with.

MR. KING: The minister has requested that I

respond to the White Paper and come up with some information, advice

and guidance with respect to the stumpage appraisal system in the

province. I thank him for that, and I want to advise the minister that

if he has other functions in his ministry which he would like to

relinquish I would be glad to assume them also. If he wishes to leave

his office and find some other avocation in life I'll take over

completely. I'd be glad to cooperate in that fashion, and I should

think the people of the province of British Columbia would hail it as a

new era.

He says revenue from stumpage is pretty good. Well,

we get $9 here, $9 there. The problem in the value of the return to the

Crown is that we have nothing to compare it with. The minister hasn't

got a clue whether $9 is a fair return, the public hasn't, and people

in the industry don't really know. There's only one way to find out

whether we're receiving a fair return on the resource, and that's to

inject some competition back into the industry. That government, which

calls itself a free-enterprise government, has presided over a complete

and utter monopoly coming together in the forest industry with respect

to the right to harvest our resource. There's no competition any more.

If we want to find out the true value of the resource, let's have the

users compete on an open market for the availability of supply. That's

the way we have traditionally established the value of a commodity in

an open free-market system — is it not, you free-enterprisers over

there? They're not free-enterprisers, Mr. Chairman; they believe in

monopoly. They believe in allowing the giants to tie up and exercise a

monopoly control over the people's resource in this province. That's

why we don't know whether or not we're receiving a fair return through

stumpage. There's no competition whatsoever.

I get a kick

out of the Minister of Forests. He's a brave man who is going to inject

some competition into the the small operators' area of the forest

industry — the timber sale and harvesting areas. I understand that he

has a policy now that he's going to cut back some of these licences by

25 percent. Is that not correct, Mr. Deputy Minister? That's what I'm

told. Just nod if that's correct. There will be a 25 percent cutback

for the small operators on their licence holdings, but there'll be a

100 percent supply for MacMillan Bloedel, Crown Zellerbach and those

"big eight" integrated companies in the province. There'll be no

cutback or competition for supply there. After all, they've got

something like 80 percent of the resource tied up in the province of

British Columbia, if my memory serves me correctly.

It's

good enough to have some competition in the small enterprise arena. Why

is it not then with respect to the vast holdings within the tree-farm

licences of the province? If you want to establish the true value of

the resource and determine whether or not the public is receiving a

fair return, it's easy: cut them back 25 percent. Let them compete on

an open log market. Let them bid against each other to determine the

true value of the resource. What's wrong with that? The minister seems

brave enough to indicate that he's going to impose this on the small

concerns of the province of British Columbia. There is some grave

inconsistency in the minister's approach. That's one inconsistency. He

seems willing to inject some competition for the small holdings of the

province that exist on the periphery anyway.

The other

inconsistency is that when he brought in the new Forest Act and set up

new regulations and a new approach in the forest industry of the

province, the act provided for longer tenure — perpetual tenure, some

say — for the

[ Page 4683 ]

large

TFL holders. It provided no such continuity of supply for the small

entrepreneurs in the forest industry in the province. Mac-Blo and the

big five received their licence renewals without interruption, without

public hearing, without competitive bid — a smooth transition from one

structure of legislative administration to the new act. There was

absolutely no interruption in supply for the large industries in the

province. But the small industries all through the length and breadth

of this province — up in the interior in the riding of the Minister of

Lands, Parks and Housing (Hon. Mr. Chabot), in the Premier's riding,

and in my own riding — are still sitting around waiting to learn

whether they are going to have a supply of timber to sustain their

sawmill, their small plant or whatever it may be. The ministers know

that.

The minister says: "Oh, well, our inventory of that

area is not complete yet, and therefore we haven't been able to make

allocations; we haven't been able to determine whether one person has

too much; we may have to take some away." How was it that they provided

a smooth transition of monopoly control for the MacMillan Bloedels, the

Crown Zellerbachs, the CANFORs and the B.C. Forest Products? There was

no interruption whatsoever. The stock reply is: "Well, these large

investors have to know that they have continuity of supply to justify

their large investment in plant." There's no risk whatsoever. It's an

absolutely firm supply. I suggest that in many cases there has not been

adequate inventory there either to determine whether or not they have a

surplus to their needs. I make that suggestion. Out the door with you.

That minister from the north would never speak out in favour of small

business in this province; and he's supposed to be the Minister of

Small Business Development. It's in the monopoly grips of the large

corporations. There's no intent and no desire to inject some

competition into the forest industry of the province.

The

other area was that the large operators in this province were treated

in a very preferential way. As I indicated, many small operators from

the Premier's riding, from the Minister of Lands' riding and from my

own are writing letters to me. They're coming down to see me, asking if

we can learn from the Forests ministry whether or not they have any

future role to play. In some cases they've been operating for 25 years

with no firm timber supply — or very little. Many of them are faced

with large capital outlays for new plant, either to comply with

pollution-control standards or for a greater efficiency in utilization.

Before coming up with that capital investment, they want to know that

they have a role in the industry and that there is going to be a supply

of material available to them. The minister says: "Well, hang on. We

haven't finished the inventory." He just keeps you dangling like a

yo-yo. "Just hang on and maybe we'll have an answer for you at the end

of next month, next year or some other obscure time down the road." How

differently they are being treated by a government that claims to be

dedicated to small, competitive enterprise in this province. Nonsense!

It's a complete and utter sham.

That minister has the gall

to sit there and chew on his little pinch of Copenhagen and suggest to

us: "Well, we're probably receiving a fair return on the forest

resource; we get the jobs that accrue from it." The fact of the matter

is that there has never been any businesslike cost-benefit analysis

conducted by that minister or his government to determine whether the

large public investment in forest renewal is providing a decent return

to the investor — and the investor is the people of the province — or

whether in fact the return on normal harvesting of the province of

British Columbia is fair in comparison to the return received just

south of the border in Washington and Oregon. Complicated formulas, a

different approach, but there is a simple way to cut through that

bureaucracy, to cut through that red tape on those complicated

discrepancies in formula. and that is simply to create an open

competitive market and let every firm in this province compete — at

least for 25 percent of their needs — and see what happens to the bid

value of logs in the province of British Columbia. That's the answer.

All that is required is that that minister and his government screw up

the courage to apply this kind of policy to the forest giants in the

fashion that he apparently plans to apply it to the small enterprises

in the forest sector.

[Mr. Davidson in the chair.]

have one other simple question to ask the minister at the moment, and

I'd ask the minister's cooperation in responding specifically. What is

the policy of your ministry with respect to the size of forest

corporations in this province? Do you have a policy that sets an

optimum size for any forestry concern in this province? What is the

formula? What are the criteria? Where do I find a copy of this policy?

It's not contained in the Forest Act, as I understand it. Was it passed

by order-in-council, by regulation? How has it developed? And could the

minister tell me at the same time what firms in the province of British

Columbia have now achieved their maximum allowable size under the

guidelines, if indeed they exist?

HON. MR. WATERLAND:

Mr. Chairman, I could't really identify too many questions. In the last

remarks the member made he talked about open competition within TFLs,

outside of TFLs, the dastardly things that we are doing to the small

business people in the province. Actually the small business program is

developing quite well. We had well over 400 sales last year, and we

have identified a lot of administrative problem areas, which we're

addressing. We are making changes to avoid some of the abuses that have

taken place — both by the small independents and by the larger

companies — but I think there is a great level of self policing now

taking place. The industry knows that I'm going to make that program

work, and they are now becoming very involved in the policing of it; I

mean both the small sector and the larger sector.

cost-benefit analysis of return on investment in moneys invested in

forest management? Yes, we have such studies. I don't think that the

classic economist can apply the normal criteria he uses to justify

whether or not your return on investment in forest management is a good

investment in terms of dollars, because your time spans are so large,

but even in spite of that there is a positive return. It's probably not

sufficient to justify putting money in those places, but really you

can't afford not to invest in the forests of British Columbia. We have

to maintain a level of social and economic stability in the province,

and you can't attach dollars to that. You can't ask how much it is

worth to maintain that community out in British Columbia, which may

have difficulties in 40 years' time if we don't make the investment

now. So you can't put it in crass economic terms; it's the sort of

thing where you have to apply lesser demands on return on that

investment and recognize the social and other economic factors.

[ Page 4684 ]

Again,

on open competitive marketing, the member for Shuswap-Revelstoke is

suggesting that we do what is done in the northwestern United States. I

hope he's aware of the number of plant closures that have taken place

over the last year in that part of the United States; we certainly

wouldn't want to see that type of thing happening here in British

Columbia. Community stability and job continuity are important to us,

and the industry by and large, even in spite of very low lumber values

and markets, has had very few layoffs. There have been some short

market shutdowns, which adjustments are necessary from time to time,

but by and large we've maintained the level of activity — even through

this rather bad market year — very, very well.

Concentration

in the industry. I and the government have said there is an upper limit

to the size we would like to see companies in British Columbia become.

MacMillan Bloedel is now the largest forest company in B.C. In terms of

its control of allowable cut, and we have said that we wouldn't like to

see other companies become larger than M&B in terms of the

allowable cut they control. If they wish to become larger in terms of

values of products produced, we'd be more than happy to encourage that

because that means they're doing further manufacturing with the wood

flow they have to use. We would like to see more paper plants and more

added value in British Columbia, and we would encourage all of the

industry to do that. But we don't want to see too great a concentration

of the allowable cut in the hands of individual companies.

M&B

right now has just under 14 percent of the allowable cut of Crown lands

and private lands in British Columbia, and we're saying that this is

the upper limit. But we are saying — and I'll say it to you, because

that will be your next question — that we think the British Columbia

Resources Investment Corporation should be allowed to become larger

than that because it is owned, by and large, by people here in British

Columbia. We believe the control of the resources of British Columbia

should be in the hands of British Columbians as much as absolutely

possible. So we will allow BCRIC to get larger, but we won't allow

other companies to exceed the present controlled allowable cut that

M&B has. If M&B wanted to double the value of the products they

produce by doing more manufacturing and producing more expensive

products in B.C. that would benefit all of us; of course that would be

fine. It would create more jobs and opportunities here in British

Columbia.

There was some speculation in the media a couple

of days ago that we had a master list which listed the maximum size

that various individual companies could get to. There is no such list.

We, of course, have statistics which show the percentage of the

allowable cut currently controlled by various companies, and we use

this information when acquisitions are proposed to us to see what level

of concentration that type of acquisition would create in the industry

in B.C. Not only is there this upper limit on the size of companies,

but we also must address the problem of regional domination. A company

could well have less allowable cut than M&B but be tending to

concentrate too much of the economy in a specific region of the

province under one owner. We don't think that would be socially

acceptable or advisable in British Columbia. We like to keep a balance

in the various regions so that, one company is not the only employer in

a town or a part of the province. You then get into the company-town

syndrome where everybody works for the same person and is subject to

that person for his employment, and that could, perhaps, stretch into

domination in other aspects as well. That is our general policy on

concentration. I think it's a good policy and a policy which will

benefit the people of British Columbia.

MR. KING: I'm

particularly interested in this policy regarding the optimum size of a

company. I was not aware that MacMillan Bloedel was the model that the

government intended to use for deciding the growth potential of

industries in the province of British Columbia. I'd ask the minister

when this policy was developed and how it was developed — in fact I did

ask him that previously and he didn't respond. Does the industry know

about it? Did MacMillan Bloedel know about this policy prior to the

Premier's statement the other day? Did the minister know about it prior

to the Premier's statement the other day? I'm struck by the similarity

between this program and another program I've heard about. There's some

other country that I seem to know that is famous for five-year plans

relating to growth.

AN HON. MEMBER: No competition.

MR. KING:

No competition. I think there's also a policy over there in terms of

the optimum size of the communes, the size they're not allowed to

exceed. This secret policy drafted by a so-called free-enterprise

government is really something.

AN HON. MEMBER: You've gone so far right that you've gone commie.

MR. KING:

That's right. There is a natural evolution of the communists and the

Trotskyites or the neo-fascists. It spells the Trotskyite philosophy

when full cycle has been achieved and the ends become the same in terms

of obtaining those objectives.

I think it's interesting that

we had a brand new Forest Act introduced in 1978. We had a full and

lengthy debate in this Legislature on the provisions of that new Forest

Act, and nowhere was it indicated that there was some kind of secret

policy to limit the size of corporations in the province of British

Columbia. Nowhere was it indicated that the size and growth of the

industry would be dictated in secret behind cabinet doors, where the

favourite contributor, perhaps, to Social Credit coffers might get the

nod in terms of growth potential. What a system! It lends itself to

pork-barrelling of the old school — the old style. There were no

publicly stated criteria — just some secret whim of the cabinet and

some secret whim of the Premier, I suspect. He was the first one that

let the cat out of the bag. What does he know about forestry? What does

he know about British Columbia'? He's always on the road — always

running off to Asia or some other far-flung exotic place to escape his

responsibilities in this province. He spends more on travel expenses

than on the budget for the whole Forests ministry. What a gang,

These

people who claim that they're the devotees to free enterprise make

secret policy behind closed doors. They set up monopolies in the forest

industry and provide them with absolute tenure on a perpetual basis,

but then secretly wheel and deal behind closed doors as to who will be

allowed to grow and to what extent and how the resource will be dished

out in terms of feeding this growth potential. Then one day, very

secretly, the Premier lets it drop that there is such a policy.

[ Page 4685 ]

MR. LEA: Bob Sommers told you.

MR. KING: Yes, maybe Bob Sommers told the Premier about it. I think it's rather scandalous. Then the minister says....

Interjections.

MR. KING:

My colleague, I can put up with the Premier prattling and interrupting,

but I do want to get some more information out of the minister.

want to know a bit more about this policy. I want to know whether the

industry was advised when this policy was struck. The minister

responds: "I know what your next question is going to be. How come it

doesn't apply to BCRIC?" He says BCRIC is different; it's owned by the

public. I don't know about that. I thought it had become a private

company operating in the public sector. That was the description. On

that basis it's the same as any other company. The Premier said that he

would cut any strings that were attached to it. Now we find the

government providing preferential treatment to BCRIC. They are

relieving BCRIC of the same kind of strictures that they put on

MacMillan Bloedel. It's interesting, because BCRIC is probably

half-owned by eastern Canada now. Certainly not many people on the B.C.

investment scene seem to show a great deal of confidence in its stock.

It's

interesting that that is viewed as one of the favoured companies and is

allowed to grow beyond the scope of MacMillan Bloedel at this point in

time. MacMillan Bloedel, as I understood it, was a British Columbian

firm. I think MacMillan Bloedel is a good company. I think they're

pretty efficient. I disagree with some of their policies, particularly

their investment policies. I think they should be required to compete

for their supply of timber — and that's true of all of the companies in

the province — but I think it's a pretty responsible and efficient

company.

HON. MR. GARDOM: What about their investment policies?

MR. KING:

I don't agree with some of their investment policy regarding large

investments of funds earned in British Columbia in places like Alabama

and Brazil. I think the revenue generated from our resource should be

largely returned to the benefit of our own province. I find it rather

interesting that the government has decided to discriminate against

this company, which is a major British Columbia company. It is in

favour of a company that is the brain-child of the Premier, a company

which is limping along in crippled fashion and probably falling

constantly to a greater degree into the hands of those eastern

Canadians the Premier said could never buy a piece of British Columbia.

There's no consistency here whatsoever. It's a rather hypocritical

approach for the government to take. I want to ask the minister when

the forest industry of the province of British Columbia learned about

this policy. I'm most interested in what the minister has articulated

about it. When did this policy come into play, and when did the

industry learn of it? I want the minister to reply now.

HON. MR. WATERLAND:

The member just said that the Premier divulged a "secret" policy some

time ago, but it's been spoken of by myself and the Premier in public a

number of times. How one can publicly speak of a secret policy I really

don't know.

The member made reference to a five-year plan

and compared it to those of other countries which have five-year plans.

I hope he is not saying that, we shouldn't have a five year forest

management plan. We have a five-year plan; we have a 20-year-plan; we

have a 100-year-plan. I had lunch the other day with a gentleman from

Finland who had just come back from Russia, and he told me of a

particular machine that had been bought by the Russians, which they had

never got around to putting into place. It was a paper machine.

However, their five-year plan indicated that after three years certain

parts would be worn out and they must buy new parts. So the Finns got

orders for these new parts, because the five-year plan said new parts

should be ordered by then, in spite of the fact that they hadn't yet

put the paper machine in place. That is the general type of philosophy

to which these members opposite adhere — the socialist blind running

into oblivion.

I've said as clearly as I can what the policy

is. It has been in place for a number of years now. I can add no more

to it. I'm very surprised to hear the member opposite say that we

should have no limit on the size of companies in British Columbia and

they should be allowed to grow and to monopolize the province.

Personally I think that corporate monopolies are almost as bad as

socialism — not quite, but almost.

The member mentioned

these corporate giants coming into our cabinet rooms — these

contributors to a Social Credit fund to get special favours. I'll tell

you, Mr. Member, the people who contribute to the Social Credit funds

are the people of British Columbia. Thousands and thousands of people

of British Columbia contribute to our funds, and we are representing

those people now and we will be for many, many years to come.

Interjections.

MR. CHAIRMAN: Order, please. The member for Shuswap-Revelstoke has the floor.

MR. KING: Will the Premier try to contain himself, please. I hear a raucous voice spoiling my powers of concentration.

The

minister in no way answered my question. He distorted the question

completely. He said: "Oh, I didn't know the NDP was in favour of no

limitation on the size of a corporation: that would be monopoly." How

foolish. How childish. I don't care how big the company is. What I do

care about is them holding a monopoly grasp on timber supply in the

province of British Columbia. If the minister can't get that through

his head, he doesn't understand the difference. I don't care how large

the firm is. It should not hold a monopoly grip on the public resources

of this province. There should be some competition, regardless of the

size of the firm. If the minister doesn't understand that, I'm afraid

he will never perceive his responsibilities to the people in any

responsible fashion.

He didn't answer the question I put to

him, Mr. Chairman. If he says that that's always been the policy of the

government, it was certainly not known and was never articulated. It

was not contained in the legislation. It was not contained in the

five-year plan. It was not contained in the annual report. nor did the

minister ever announce it either in this Legislature or elsewhere. The

first that the media of this province or the opposition heard about it

was just a couple of

[ Page 4686 ]

days

ago when the Premier of the province said there was an optimum

allowable size for any forest industry corporation in the province.

That's the first we heard about it. The minister hasn't answered the

question. He's just evaded the real question, which is: how is that

program governed? What are the criteria for establishing these

questions? Because he is not very responsive to the questions that have

been put to him, Mr. Chairman, I move adjournment of this debate until

the next sitting of the House.

MR. CHAIRMAN: The motion is that the committee rise, report progress and ask leave to sit again.

HON. MR. GARDOM:

On a point of order, the motion was made earlier by the same hon.

member. We haven't had a transaction of business. I raise the question,

Mr. Chairman, as to whether or not the motion is in fact in order.

MR. CHAIRMAN: The previous motion by the committee was that the Chairman do now leave the chair. The motion is in order.

Motion negatived on the following division:

YEAS — 21

Barrett

King

Lea

Stupich

Dailly

Hall

Lorimer

Levi

Sanford

Gabelmann

Skelly

D'Arcy

Lockstead

Barnes

Brown

Barber

Wallace

Hanson

Mitchell

Passarell

Leggatt

NAYS — 28

Waterland

Hyndman

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Ritchie

Brummet

Ree

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Nielsen

Kempf

Davis

Strachan

Segarty

Mussallem

Hon. Mr. Gardom requested that leave be asked to record the division in the Journals of the House.

MR. SKELLY:

Mr. Chairman, just to change the subject a little bit and become a

little more specific, I'd like to ask the minister a few questions

about a problem in my riding. I know that the minister has responded to

some requests to take a look at the problem, along with the Minister of

Tourism (Hon. Mrs. Jordan) and even the Minister of Environment (Hon.

Mr. Rogers). It has to do with the west coast of Vancouver Island,

which I'm sure the minister will admit is one of the most beautiful

areas in British Columbia, if not in the world.

HON. MR. GARDOM: Where?

MR. SKELLY: On the west coast of Vancouver Island in what's left of Alberni constituency after Mr. Eckardt took a look at it.

contains the western most national park of Canada, beautiful beaches,

hot springs and some of the most beautiful scenery in Canada. The

potential is absolutely fantastic for the money that area could bring

into the province in terms of tourist dollars. Also, there is a

developing tourist and municipal infrastructure out there that

represents investments of tens of millions of dollars and a lot of time

and personal initiative on the part of many people in the area and even

some from Victoria.

I think the minister will admit that any

logging that takes place within the west coast region on the boundary

of Pacific Rim National Park has to be handled in a very sensitive

manner. Some of those areas are going to have to be forgone as

potential logging sites altogether, without risking the actual economic

benefits to people in the area — partly to protect the tourist industry

and its potential as a revenue generator for the province and partly to

protect the investments made by people in that tourist industry in

hopes that the industry will grow and thrive on the west coast of

Vancouver Island.

I'm talking about Meares Island, off

Tofino on the west coast of Vancouver Island. When it first came to the

attention of the people in that area that MacMillan Bloedel and B.C.

Forest Products planned to log Meares Island, many of the people in

Tofino were absolutely outraged that a place as beautiful as Clayoquot

Sound and Tofino harbour would be open for logging at all. They weren't

aware of the tenure arrangements that had been made in that area back

to the turn of the century, before the tourist industry was even

considered.

When the attention of people in Tofino and

Ucluelet was first drawn to the fact that Meares Island was proposed

for logging, thousands of them wrote in to the minister and signed

petitions. They were people from all over the world, from all

industries: loggers, fishermen, Indian people living in communities in

the area. Aldermen and local governments in the area have also been in

touch with the minister as well as residents of the area and tourists.

Let

me give you an example of some of the tourists who go to the Tofino

area and have signed a petition expressing their hope that Meares

Island can be reserved from logging for timber: people from France,

Pennsylvania, Thunder Bay, Berlin, Saskatoon, James Bay, Saskatchewan,

Alberta, Maryland — people from all over the world. At least a quarter

of a million people visit that area every year and bring in currencies

that are required by British Columbians in order to keep our economy

going, most of which is based on foreign trade. Those people have

expressed an interest in seeing the beauty of Clayoquot Sound remain

intact. They're not saying that there shouldn't be any logging at all

on the west coast of Vancouver Island — that simply isn't the case.

They are saying that certain areas can be left out of the government's

logging plan and left out of MacMillan Bloedel and B.C. Forest Products

logging plans in order to protect the investment and the

revenue-generation potential of the tourist industry.

The

minister responded to many of these letters and calls by setting up

what he calls the integrated resource management study for Meares

Island. He also appointed a public advisory committee in order to make

some comments on how the area should be logged and managed. But the

first assump-

[ Page 4687 ]

tion

by the minister was that the area shall be logged. There was never any

option there to take Meares Island out of the annual allowable cut for

the tree-farm licences involved and to consider it as a separate unit

and to make a decision as to whether the area should be logged or not.

It was always assumed by this minister that that area was to be logged

in the first place and all that people had the right to comment on was

how it was going to be logged, if that.

The minister also

set up what he calls a public advisory committee to study some of the

papers developed by the forest companies and by the B.C. Forest

Service. They recommend and advise the planning committee on how the

area should be logged. But those citizens, of course, aren't

represented on the planning committee, which leaves the ultimate

decision and recommendation to the minister. The only people on that

committee are the district forest manager, a representative of the

Ministry of Environment, the fish and wildlife branch, a representative

of federal Fisheries, the regional district and B.C. Forest Products

and MacMillan Bloedel — the two companies involved. Recently one of the

village governments and the Indian tribal council from the area were

added. But the citizens themselves and the citizens groups of the area

are not permitted to be on the planning committee that makes the

ultimate decisions and recommendations as to how Meares Island is going

to be logged. Nor are they allowed, as I mentioned in the first place,

to make a decision one way or the other or to contribute input to a

decision as to whether those areas should be logged or should be

reserved entirely.

Let me give the minister an example of

some of the comments that come from the local area about the integrated

resource management plan and the integrated resource management group.

Here is one from a long-time resident of Tofino: "In the Forests

ministry's integrated plan for Meares Island it seems to be a foregone

conclusion that Meares Island will be logged. What sort of serious

study can be realized in the time frame imposed? It seems to me a

smokescreen to lull the public into thinking all is well, which

convinces me even more that the decision is made and it's just a matter

of time." And that's the feeling of people in the area — that the

so-called integrated resource management plan for Meares Island has

already been done and the Forest Service is simply going through a scam

in the form of a public consultation process in order to appease the

citizens of the area and make them think their concerns are being

considered and that they will have effective input into the way that

area will be treated.

On February 13 I wrote to the minister

as a result of a number of letters I had been receiving from people in

the Tofino area — in fact people from all around the province — many of

which the minister himself, the Leader of the Opposition and the

Minister of Tourism (Hon. Mrs. Jordan) have been receiving. In response

to that letter I wrote to the Minister of Forests and asked him to

impose a moratorium on that small area in Clayoquot Sound just off the

village of Tofino. I asked him to impose a moratorium on that area

under the provisions of the Environment and Land Use Act and to hold a

public inquiry under the provisions of the same act. In other words I

asked him to take it out of the jurisdiction of the Forest Service

altogether and take a more integrated look at the proposals to either

log or not log Meares Island, and if a decision is made to log it then

how to log it.

The minister refused that suggestion; he

refused it, of course, because the intention of the two companies

involved is to log it. The minister wants to put the citizens of the

area through a process which is really not adequate for obtaining

effective citizen input. The minister is afraid to impose a moratorium

on that area under the Environment and Land Use Act because he knows it

will take it out of his hands and allow an independent and more

integrated view of how that area should be treated. The people in

Tofino aren't satisfied with the way the minister has been dealing with

Meares Island; they don't feel confident that the way the ministry is

looking into the proposals for Meares Island will result in that area

being treated the way the citizens want. They are concerned that the

logging of Meares Island is going to result in a loss of revenue in the

tourist industry in that area and a loss of their investment that they

have made in the tourist industry. It's absolutely impossible, in my

opinion, for this minister, who can hardly give adequate management to

his own ministry, to try to decide what's best for the tourist industry

and the public on the west coast of Vancouver Island.

order to get the best possible analysis of the problem of Meares

Island, the question should be the subject of a moratorium under the

Environment and Land Use Act. The public meetings and the inquiry on

whether or not to log Meares Island should be taken out of the hands of

the Forests ministry altogether and given over to someone who is more

independent of those resource exploitation ministries — someone who the

public can have confidence in and who will ensure that the views of the

people are going to be heard and heard effectively. I would ask the

minister again to reconsider the issue of Meares Island, to declare a

moratorium on that area under the Environment and Land Use Act, and to

hold an inquiry, under some independent chairman, into the advantages

of logging or not logging the area, the relative costs and benefits to

the people in the area and the environmental and social impacts on the

people of that area that will result should Meares Island be logged.

I'm asking the minister again to do that.

HON. MR. WATERLAND:

Meares Island is an area of concern, particularly to the people in

Tofino. It's an area of concern for myself as well. The Premier, the

Minister of Environment (Hon. Mr. Rogers) and I were in Tofino during

our trip up-Island. We talked to the the people. As a result of those

talks we have provided for public advice and input through a public

advisory committee. Please don't take those public advisory committees

lightly, because they work well if allowed to. There's a large number

of them in place and operating in the province of British Columbia

right now. The hon. member uses the words: "Will Meares Island be

logged?" This creates the impression in one's mind that every tree on

Meares Island would be removed if the island were logged. I have a

responsibility under the Ministry of Forests Act to make sure that all

values are recognized in planning the use of the forests of British

Columbia. Perhaps I should just read that

section back to the member.

It's

section 4(

c) of the Ministry of Forests Act, and it states:

"The

ministry has the responsibility to plan the use of the forests and

range resources of the Crown so that the production of timber and

forage, the harvesting of timber. the grazing of livestock and the

realization of fisheries, wildlife, water, outdoor recreation and other

natural resource values are coordinated and integrated in consultation

and cooperation with other ministries and agencies of the Crown and of

the private sector."

[ Page 4688 ]

Now that is my responsibility under the Ministry of Forests Act, and that is exactly what we are doing now.

don't think that you can assume that because we are doing this

integrated resource management study that any particular result will

come from those studies. I'm not going to prejudge what is going to

happen there. I'm going to wait and see what the integrated resource

management committee has to recommend after a lengthy and detailed

consultation with the public advisory group. I would caution the member

that Meares Island is a large island. I'm sure that there are ways that

we can make valuable use of all of the resources on that island without

adversely affecting other uses. My whole philosophy in the management

of Crown forests is the multi-use concept, where you balance the costs

and the benefits, the advantages and disadvantages and you manage the

resource for the best benefit of all of the people. Perhaps there are

ways that we can do some timber extraction on Meares Island without

adversely affecting the aesthetic and other environmental factors.

Perhaps there's not, but that's what we are attempting to determine

right now.

I hear every week of another last untouched area

in British Columbia, which are of a particular interest and concern for

various interest groups. If I were to accede to the requests every time

I receive them for the single-use alienation of specific areas of the

province, I'm afraid that it would not be to the best benefit of the

people of British Columbia. We do have moratoriums right now in various

parts of the province as we carry on with such studies. I don't think

the presence of the moratorium in any way adds to or detracts from the

studies that we will do, but I see no need for a moratorium. The

integrated resource management study is going on, and until that is

completed, we will not be using the resource for which we are

responsible on Meares Island. It's a very scenic part of the province.

It's a very beautiful area, as most of the province is. There is an

important tourist industry in Tofino and I don't want to see that

tourist industry harmed by forest industry activity, but I'm sure that

in most cases you will find that the two can live together in harmony —

that we can use our forests and use the other values as well. Perhaps

adding some well-controlled timber harvesting activity on Meares Island

can even enhance the recreational values of that island. I don't know.

It's certainly a possibility which we must consider in our planning.

I'm not going to prejudge what's going to happen there. I assured the

people in Tofino and Ucluelet, when we were there, that we would be

very sensitive and that we would have a public advisory committee to

work with the resource management committee and all agencies

responsible. That's just what we're doing.

MR. SKELLY:

I think that one of the problems is the fact that people have had

experience with the integrated management planning process in the past

and they've found out that after going through, in good faith, the

procedure in what the minister calls integrated-management plans, the

areas have ended up being logged in the same way that they've always

been logged — that is, with little regard to the public's input. Even

the minister's own staff, if you talk to them quietly, will admit that

they shouldn't be handling anything to do with integrated resource

management. It should be handled by an independent agency with a

broader view of how lands in the province should be managed for

multiple use.

I've read that

section that the minister or

the Premier had put in the Forest Act in 1977. That

section was the

cause of concern by people all over the province — that a minister who

was primarily responsible for the exploitation of the forest resource

and for turning the forests of this province essentially into tree

farms was using a single-use concept rather than a multiple-use

concept. Giving that minister the responsibility for other resource

values removed any protection that those resource values may have had.

The protection of those values belongs in other statutes of this

province. Those ministers responsible for those other statutes should

have equal rights with this minister in determining how forests should

be managed in the province of B.C. Unfortunately, your colleague the

Minister of Environment (Hon. Mr. Rogers) sacked the only opportunity

we had to do an integrated analysis of problems like these — that was

the Environment and Land Use secretariat. I'm sure you, as Minister of

Forests, had some comments and suggestions in favour of the sacking of

that integrated resource evaluation entity.

The people of

the province and the people of the Tofino area simply don't believe in

your platitudes, Mr. Minister, about multiple use. They resent the fact

that you say that when an area is allocated to park or recreational use

that it is a single-use alienation. At least the trees are still there,

and they can be used at some time in the future. At least they can be

used for wildlife. At least they can be used as sources of domestic

water. There are a number of uses that will still remain in that area —

multiple uses. It isn't a single-use alienation that the people of

Tofino are asking for; it's more uses than would be remaining if the

area is cut over as planned by the Forest Service. We're asking for a

more integrated approach. The moratorium and Environment and Land Use

Act provision will give the people of that area more confidence that

the values on Meares Island will be analyzed independently and that

equal weight will be given to other values in the area. They simply

don't have any confidence in the procedure you've tended to follow.

HON. MR. WATERLAND:

Mr. Chairman, I'm sure that member is doing his level best to convince

the people in the area that integrated resource management doesn't

work; and I'm sure he will continue to do that.

Again, I'll

only say that my ministry's responsibilities are not to simply extract

timber. Our responsibility is to manage the forests and everything that

that means. I believe it was that member who said a year ago that

foresters aren't competent to manage forests, because all they look at

is timber. One member over there said it; I don't know whether or not

it was that member. We have a responsibility to manage the multiple

resources in the province of British Columbia for the benefit of the

people of this province, and that is what we will do, regardless of how

much that member may try to undermine that process.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Divisions in committee ordered to be recorded in the Journals of the House.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:54 p.m.

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