1977 Legislative Session: 2nd Session, 31st Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, AUGUST 9, 1977

Afternoon Sitting

[ Page

4403 ]

CONTENTS

Routine proceedings

Oral questions

Assistance to grape growers. Mrs. Wallace –– 4403

Federal subsidy for coastal transportation. Mr. Wallace 4403

Duties of Mr. Lenko. Mrs. Dailly –– 4404

Gas scrubbing plant contract. Mr. Skelly –– 4404

Discrepancies of Hudgins statement. Mr. Macdonald –– 4404

Request for employment statistics. Ms. Brown –– 4405

Problems of hog producers. Mrs. Wallace –– 4405

Salmon derby discrimination. Mr. Kahl –– 4405

Matter of urgent public importance

Construction of Alcan pipeline. Mr. Gibson –– 4406

Mr. Barrett –– 4414

Mr. Wallace –– 4421

Mr. Bennett –– 4428

The House met at 2 p.m.

Prayers.

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs) : Mr. Speaker, I have three special guests in the Speaker's gallery today: Mr. Hugh Bardon, his wife, Frances, and their daughter Lisa. In a rare incident of national nepotism, I might say that Mr. Bardon is an Assistant Deputy Minister of Consumer and Corporate Affairs in Ottawa and is my first cousin. I would ask the House to make them welcome.

HON. J.A. NIELSEN (Minister of the Environment) : Mr. Speaker, two friends from Vancouver are visiting the House today: Mr. Terry Stewart and Mr. John Norton.

Oral questions.

ASSISTANCE TO GRAPE GROWERS

MRS. B.B. WALLACE (Cowichan-Malahat) : Mr. Speaker, my question is for the Minister of Agriculture. Today I want to talk about grapes. It has been estimated that there will be 13,500 tons of production this year yet the B.C. wineries are able to contract for only some 8,700 tons, a figure which is down from last year.

The wineries' president has indicated that one of the major causes is the time delay in programmes now in place under the Minister of Consumer and Corporate Affairs (Hon. Mr. Mair) , and also the government policy which has cut back B.C. winery listing from 100 to some 66.

MR. SPEAKER : Hon. member, would you please approach the question?

MRS. WALLACE : My question is, Mr. Speaker: Is the Minister of Agriculture prepared to assist the grape growers this year to ensure they continue to produce when the programmes now in place widen the distribution of B.C. wines?

HON. J.J. HEWITT (Minister of Agriculture) : Mr. Speaker, the problem

basically is that the wineries have not yet recovered from their reduced sales

in British Columbia. The grape growers are producing substantial quantities

of grapes; I think the figure estimated now is 12,500 tons. I am in constant

contact with the grape growers and the wine industry. We're trying to do

our best, Mr. Speaker, to ensure that both industries survive and prosper in

this province. However, it is a situation that has to be dealt with, I think,

between those two industries, and I don't believe the province of British

Columbia should be in the middle.

We've done our bit with regard to the wine policy. I'm hopeful that these two industries will negotiate and will come to a conclusion that will benefit both of them.

MRS. WALLACE : On a supplementary, Mr. Speaker, do I take it that the minister is saying that while he has been in consultation he is not prepared to give any assistance to ensure that the grape growers are able to continue in production so they will be there when his colleague's programmes come into fruition?

HON. MR. HEWITT : Mr. Speaker, the matter hasn't come to that situation yet. I understand that what is happening now is that the Grape Marketing Board and the wineries will be meeting, if I'm not mistaken, this Friday, to discuss the purchase. But, Mr. Speaker, I don't believe that when a product has been overproduced and there is not a sale for it, the government should be picking up those losses. I think that the industries have to recognize that it will take time for the wine policy to take effect and they should be working together to solve their problems jointly.

MRS. WALLACE : By that time there won't be any grape growers.

FEDERAL SUBSIDY FOR

COASTAL TRANSPORTATION

MR. G.S. WALLACE (Oak Bay) : Mr. Speaker, my question is to the Minister of Energy. With regard to the announcement on April 18 of the $8 million subsidy from the federal government for coastal transportation, can the minister tell the House whether he has received any or all of the $8 million? If not, when does he expect that he will be receiving it?

HON. J. DAVIS (Minister of Energy, Transport and Communications) : Mr. Speaker, according to the agreement between Canada and British Columbia, the $8 million a year - which, incidentally, escalates with inflation - is to be paid quarterly. The first payment was made shortly after July 1 of this year to British Columbia.

MR. WALLACE : On a supplementary, can the minister tell the House whether the $10.8 million subsidy to the B.C. Ferry Corporation listed in the first quarter financial report includes any of that portion of the $8 million subsidy which the minister has just referred to?

[ Page 4404 ]

HON. MR. DAVIS : The answer, Mr. Speaker, essentially is no. The provincial subsidy is being increased so that the amount available to B.C. Ferries in total will increase in two stages, the provincial subsidy substantially covering the fare reductions and the $8 million a year escalating to cover the middle and upper coast.

MR. WALLACE : Following on the minister's answer, Mr. Speaker, about the $8 million being used for coastal transportation on the mid and north coast, can the minister tell the House why he has not introduced a bill to enable the government to pass this federal money on to the B.C. Ferries, as was done with B.C. Railway in the form of Bill 47?

HON. MR. DAVIS : Mr. Speaker, my understanding is that these moneys can be passed on by order-in-council.

MR. D.F. LOCKSTEAD (Mackenzie) : Supplemental. In view of the discussions now taking place between CP Rail and Northland Navigation, how much subsidy is the government considering paying to this new proposed consortium?

HON. MR. DAVIS : None, Mr. Speaker.

MR. LOCKSTEAD : Well, if such a request were received by the government from this consortium, would the government consider paying a subsidy to this consortium?

MR. SPEAKER : Hon. member, the question is hypothetical.

DUTIES OF MR. LENKO

MRS. E.E. DAILLY (Burnaby North) : To the hon. Provincial Secretary. Order-in-council 2502 of July 29 shows the Provincial Secretary as taking a second executive assistant in addition to Dianne Hartwick at a salary of $19,500 per year. Now in addition, the Provincial Secretary, Mr. Speaker, also employs Dick Lillico at $22,000 and John Plul at $25,000. This now makes four political appointments for a total salary of $86,000. My question is, Mr. Speaker: what ministry will Mr. Lenko be working in and what will be the terms of his reference for work?

HON. G.M. McCARTHY (Provincial Secretary) : Mr. Speaker, Mr. Lenko's duties will be attached to the office of the Provincial Secretary.

GAS SCRUBBING PLANT CONTRACT

MR. R.E. SKELLY (Alberni) : A question to the Minister of Economic Development (Hon. Mr.

Phillips) . Has B.C. Rail or any other government agency or Crown corporation entered into any contractual arrangements with Westcoast Transmission to provide land and/or services for a gas scrubbing plant at Hasler Flats near Chetwynd?

HON. D.M. PHILLIPS (Minister of Economic Development) : Mr. Speaker, I will have to take that question as notice.

DISCREPANCIES OF

HUDGINS STATEMENT

MR. A.B. MACDONALD (Vancouver East) : Mr. Speaker, a question to the Attorney-General (Hon. Mr. Gardom) . I have here the affidavit filed with the Legislature of Mr. Hudgins on July 20 and the statement of Mr. Hudgins that he made on March 25,1976, where there are clear discrepancies. I'm asking the Attorney-General: will he take a look at this matter and report back to the House?

HON. G.B. GARDOM (Attorney-General) : I'd respond to the hon. member from Vancouver East more charitably than my colleague did, but with exactly the same tenor of response. This matter is under investigation, as you should know.

MR. MACDONALD : On a supplementary, Mr. Speaker, will the Attorney-General, who now knows about the matter - and he's made it clear to the House and I appreciate that - undertake to report back to the House what disposition is going to be made in this case?

HON. MR. GARDOM : No, I don't undertake to report the results of investigations. You should well know, being a former Attorney-General, that's not part of the province or the responsibility of the job.

MR. MACDONALD : Oh, certainly it is.

MR. G.V. LAUK (Vancouver Centre) : On a supplementary to the Attorney-General, Mr. Speaker, the information is before the Attorney-General with a view to possible perjury charges. Is the Attorney-General, or his officer, going to interview Mr. Hudgins with respect to which statement is true? If so, has that interview taken place and when can we expect a report?

HON. MR. GARDOM : I cannot respond as to whether or not an interview has or has not taken place, but I can inform you, as has done my colleague, that the matter is under investigation. That will be the answer you're getting today, period.

MR. LAUK : Mr. Speaker, on a further

[ Page 4405 ]

supplementary to the Attorney-General, there is an investigation and there is an investigation. Is the Attorney-General suggesting that all that's being done is a perusal of the available documents, or are witnesses being interviewed? If so, when can we expect the results of that investigation?

REQUEST FOR EMPLOYMENT

STATISTICS

MS. R. BROWN (Vancouver-Burrard) : This question is for the Minister of Human Resources. Mr. Speaker, on January 17, almost eight months ago, the second member from Vancouver-Burrard asked the Minister of Human Resources whether he would be willing to tell us the number of employable people who were receiving assistance in 1976 and 1977, as well as the number of persons under 60 who were receiving assistance in 1975-1976,1976-1977. Those are very, very simple statistics, Mr. Speaker, which his ministry keeps.

My question to the Minister of Human Resources is: why is the minister so reluctant to make these figures public? When will he be willing to table the answers to questions 18 and 20 which were asked of him eight months ago?

MR. SPEAKER : Hon. member, it's improper in oral question period to refer to questions which are already on the order paper.

MS. BROWN : This was an oral question which was on January 17. 1 was referring to the date of an oral question. We've had eight months of this legislative session since then.

HON. W.N. VANDER ZALM (Minister of Human Resources) : It wilt give me great pleasure to determine very quickly what happened to the reply or response to that particular question. I'll make it known to the House at that time.

MS. BROWN : What does that mean?

PROBLEMS OF HOG PRODUCERS

MRS. WALLACE : Mr. Speaker, I have another question for the Minister of Agriculture. Some two weeks ago I asked him about the hog situation and -I quote his words - he said he "would be giving any assistance" he could. Now in the two-week period since the federally inspected plant closed, the hog producers have shipped out of province some seven loads of hog - it's probably more than that now - at a cost of something in excess of $14,000. His department's response, I understand, has been an offer to adjust freight-cost allowance under income assurance.

My question is: will the minister now make good his commitment by giving the hog producers of this province some immediate financial assistance to cover this freight differential until the federally inspected plant is available?

HON. MR. HEWITT : Mr. Speaker, the hog situation, I think, has improved somewhat. One of the previously provincially inspected plants has now gone to federal inspection, which gives a facility that can take the production of hogs. We have agreed to pick up a $3 per hundredweight cost for the period July through August, or part of July and August, as assistance. That has certainly met with agreement, as I understand, from the hog producers.

We - are working on a contractual arrangement between a processor and the hog producers and I hope we'll be able to arrive at a conclusion whereby all hog production will be able to be funnelled through that organization, which will resolve the problem hog producers have faced in the past.

MR. D. BARRETT (Leader of the Opposition) : Mr. Speaker, a question to the Minister of Energy, Transport and Communications. I'd like to ask the minister if the provincial government had a direct intervener at any of the NEB hearings related to the possible roots of the natural gas pipeline from either the arctic area or from Prudhoe to the lower 48.

HON. MR. DAVIS : The answer is, yes, Mr. Speaker, through the British Columbia Energy Commission representation by the Attorney-General.

MR. BARRETT : A supplementary, Mr. Speaker. Could you give me the name of the intervener and how they intervene?

HON. MR. DAVIS : Mr. Speaker, I'll have to take the questions as notice but I will get those details.

SALMON DERBY DISCRIMINATION

MR. L.B. KAHL (Esquimalt) : I have a question of the Minister of Consumer and Corporate Affairs. Will the minister investigate the awarding of the $25,000 cash prize in the B.C. Salmon Derby to an individual who did not in fact, catch the largest fish, and also investigate the fact that a great fishing area in my constituency is being discriminated against by virtue of making all fishermen in that area fish under a 10-pound handicap?

AN HON. MEMBER : They're already labouring under a political handicap.

HON. MR. MAIR : Well, Mr. Speaker, 1, unlike my colleagues in the House, take this very seriously, however fishy the story may seem to be. The fact of

[ Page 4406 ]

the matter is that in beautiful southern Vancouver Island we are blessed with the largest fish in the area.

In order to make this particular derby something which people will enter, it has been necessary to create a handicap situation, so I am instructed. Like golfing or like horseracing, there would be no contest unless there were this handicap, and only people in Pedder Bay and Sooke and places like that would enter. So unfortunately, my colleague from Esquimalt's (Mr. Kahl'

s) constituent, while he did catch the biggest fish, did not get the prize because his fish had to have a certain poundage subtracted from it. I very much regret that, but.... Oh, Mr. Speaker, I was just beginning.

MR. SPEAKER : Sorry, hon. minister, the bell terminated the question period.

Interjections.

MR. SPEAKER : Let me suggest to the hon. members of the House that there is nothing improper about members from all sides of the House asking questions in question period.

The hon. member for Prince Rupert on a point of order.

MR. G.R. LEA (Prince Rupert) : On a point of order, I think that all sides of the House can take the question from Esquimalt in good fun, as it was meant.

MR. SPEAKER : What is your point of order, hon member?

MR. LEA : I wonder why the Speaker didn't rule it either frivolous, as he has questions from this side of the House, or facetious, as he has from this side of the House. What special rights do they have on that side of the House?

MR. SPEAKER : Anytime, hon. member, that a minister indicates he or she wishes to answer a question, you'll notice, as I have in the past and I will in the future, that I allow them to answer the questions.

MR. LEA : No, you haven't.

MR. SPEAKER : I have too, hon. member.

[Mr. Speaker rises. ]

MR. SPEAKER : It is the duty and the obligation of the Speaker in question period to use some discretion in the number of supplementals that will be asked in the questions as to whether they are out of order or in order as they are presented to the

House. It's also my duty to rule on questions. But I have, and you all will have observed, on many occasions suggested a question is out of order, only to have the person to whom the question was directed indicate they would answer. It is not the position of the Speaker to interfere with the right of a minister, if he so desires, to answer a question even though it may appear to me that the question is irregular or out of order. That's for the minister to decide. The only thing I can do in question period is give you the directions according to the rules that are before the House.

[Mr. Speaker resumes his seat.]

MR. G.F. GIBSON (North Vancouver-Capilano) : Mr. Speaker, having asked leave to move a certain motion last night, and having received your concurrence that it was in order to ask for leave, should I once again read the motion or would I simply ask for leave at this stage?

MR. SPEAKER : In order to have the motion before the House, I think it would be proper to have it read to the House and then ask leave.

MR. GIBSON : Mr. Speaker, I ask leave to move the adjournment of the House for the purpose of discussing a matter of urgent public importance, namely the position of the province of British Columbia and the immediate communication to the federal government of that position in respect to conditions we would wish to see implemented or sought for the province from the federal government and by the federal government on behalf of the province in respect of the negotiations with the United States on the matter of the Alcan gas pipeline.

MR. SPEAKER : I presume the hon. member will now ask for leave.

MR. GIBSON : I would ask for leave to move that motion, Mr. Speaker.

Leave granted.

MR. GIBSON : Mr. Speaker, might I commence by expressing appreciation to you, sir, and to the House for the opportunity to bring to the floor a question that I think is one of great urgency and importance to this province.

We are talking about the impact on British Columbia of the largest single project, with the exception, perhaps, of the initial link of the CPR, to be undertaken here. It is a project of a magnitude of expenditure in the province of British Columbia of $1.3 billion. It is imminent in terms of years, if it is finally decided upon, and the conditions upon which

[ Page 4407 ]

that line will pass through British Columbia are very shortly to be negotiated between Ottawa and Washington.

Any debate under the terms of standing order 35, 1 suppose, is a bit unusual, Mr. Speaker. They tend, I imagine, to be advisory rather than adversary, with no particular action being supported or condemned -mostly suggestions on a common problem and an opportunity. I think this is a problem and an opportunity for British Columbia.

In moving the motion, I recognize that raising the topic at all in a public forum is fraught with some danger. 111-chosen words or ill-advised positions, were they taken on behalf of the whole House, certainly could give assistance to our competitor - the competitor of the Canadian alternative, which is, of course, El Paso Natural Gas - or could prejudice the Canadian position with our friendly bargaining power, the United States. El Paso, as you are aware, sit, is basically saying that Canadians are not to be trusted, and is using some historical quotes in that regard.

I'll be getting into the bargaining position later. I'm confident in this particular debate common sense will avoid any dangers there might be, and will hopefully achieve the goal of good advice being given to the government for speedy implementation.

There's one other perhaps unusual feature of this debate. British Columbia has all too little leverage in law with respect to these affairs that affect us in such a consequential way. We have virtually no leverage in law with the United States, of course, and little even with Ottawa on this particular subject because of the interprovincial and international nature of the project. So again we will have to rely on common sense and fair play and the continuing relationship we have with Ottawa to ensure that the interests of British Columbia are protected.

For that reason, as much as anything else, it is important that this whole House state its sense, its viewpoint on this particular project as it affects our province.

Here, as in few other cases, the quality of our ideas and the excellence of the presentation will be the deciding factor in how well British Columbia's interests are looked after.

Every member, I suppose, might see the purpose of the debate a little differently. I would hope to give the government my own advice as to how they should advise the federal government with respect to British Columbia's interests. It is not my purpose in any way to attempt to restrict the negotiating freedom of the federal government with the United States. I think that's tremendously important. We must not lessen their bargaining flexibility. But we do need to make B.C. views known.

It is not my purpose to in any way restrict the provincial government in dealing with Ottawa. Again, the flexibility of our government in their negotiations is of greatest importance in securing the greatest advantages for our citizens in this province and, if anything, I want us to strengthen that particular posture. We have to realize that there is a certain maximum in the benefits in respect of this project that Ottawa can win from the United States and we must do all that we can, from a British Columbia point of view, to ensure that those benefits are secured in a way which benefits us in this province as well.

We can't solve everything in this debate and in this issue, large as the issue is, Mr. Speaker. There certainly are those in the province who would wish to import other questions of our relationship with United States, questions of an international kind. There are those who would wish to, through the means of our negotiations on the Alcan pipeline, solve the matter of the flooding of the Skagit Valley, let us say, in a manner that is appropriate to Canada or redress ancient grievances on the Columbia River Treaty or open up Panhandle access or solve problems with respect to the Trident nuclear base, and so on.

I don't think that we can go too far in attempting to resolve international questions through any leverage that the Alcan agreement might give us, but there are some items that are more directly related, items directly relating to energy, for example, and the importation of oil products through Cherry Point or items directly related in a physical sense to the Alcan pipeline, such as the paving of the Alaska Highway, that we might usefully touch on in this debate, particularly since those things that I noted are much sought after, in one case by the state of Alaska, and in the other case by the Washington state Legislature, in common with British Columbia.

I want to say a little bit about our bargaining position with the United States. There are two options open to the transmission of natural gas from the Prudhoe Bay fields to the lower 48. One is the Alcan Pipeline. Let me quickly mention its advantages. It has a lower cost. The estimates vary widely. The most general estimates are between 30 and 45 cents per thousand cubic feet, a lower cost than the El Paso alternative. This is something like a 20 per cent lower transmission cost; it's an important factor.

The Alcan alternative offers the advantage of a more rapid connection between the Alaska gas and the lower 48. It avoids, in particular, the very serious regulatory approval problems that the El Paso-LNG tanker alternative would meet in the state of California. Governor Brown of California has raised this particular point and has himself come out in favour of a pipeline link.

The Alcan route makes possible the arrangement of an interim swap of gas from the province of Alberta to the Americans to solve their short-term energy problems in exchange for an ironclad guarantee, which would have to be ironclad that that

[ Page 4408 ]

swapped gas would be returned from Alaskan sources when the day came that that pipeline was put in place.

Without the Alcan pipeline that's impossible, for a very simple reason: without the Alcan pipeline we will not have the possibility of the Dempster link to reach the five trillion feet of gas in the Mackenzie Delta so far proven. That five trillion feet would then be locked in. It would not be deliverable. It would not be available for southern Canadian requirements, and therefore we would not have gas for short-term swapping with the United States, and perhaps even our long-term exports would have to be reviewed.

The Alcan route has the very practical advantage of a midwest delivery point, which is where the United States needs the energy, and it has the important advantage of conserving energy in a transportation sense. The energy lost in transmission in the pipeline is only 6 per cent. The energy lost in transmission through the LNG tanker route is on the order of 20 per cent, a very serious and substantial difference in this day when we are pointing towards conservation in every way we possibly can.

So in a bargaining sense - in a context of Canada sitting down with the Americans across the table and saying: "here are the advantages for you; now what's in it for us?" - Canada has a good hand in the Alcan route.

The El Paso arguments are mostly of a negative nature. Their first argument in the bargaining scale is a political one based on the state of Alaska. They say there is more in the El Paso route for the state of Alaska. That is true, but I would suggest it's not a great deal more. The length of the pipeline through Alaska is not terribly different - or 150-some miles -and the major difference is the location of an LNG terminal, which would be a costly thing, but most of the capital plant would come from the lower 48. So I don't think that's a terribly strong argument.

The argument that El Paso depends on more than anything else is the argument of national security -security of supply of the energy from one American state, namely Alaska, to the main continental body of the country. They state, and they have stated in letters to congressmen and to the President, that Canadians cannot be trusted. They cite certain historical remarks, particularly out of British Columbia, in evidencing that position. I have no wish to go into those particular remarks, but....

MR. LAUK : Was it something your father said?

MR. GIBSON : No. I don't want to go into those particular remarks, but I will say that it is possible in this debate, if the House chooses to do so, to lay the El Paso arguments to rest - to say that there is not, in fact, a security problem, if it is possible between our two countries to enter into a treaty or into an arrangement in respect of the Alcan pipeline that is mutually advantageous. And it must be mutually advantageous. We cannot and will not be in a position of entering into an agreement with the United States which is in any way prejudicial to the interests of Canada.

That's up to our negotiators in the national government to look after that and up to us to the extent we choose to do so from British Columbia to advise them on that.

What can we in this Legislature do to advance the Alcan proposal, at least those who agree with the proposal? First of all we can state agreement and the conditions under which we agree, because nobody is going to say: "I'm a very strong supporter of the Alcan proposal myself, but I am not going to say I agree with the Alcan proposal - period." I agree that the Alcan proposal is a good arrangement for British Columbia and for Canada only if we can receive certain stipulated recognitions in financial and other terms from the federal government and from the United States.

The Prime Minister put it well when he was describing his talk with, I think, President Carter. He said that it might not be possible to reach agreement, that there might just be too many things demanded of us. Nevertheless he considered that Canada was going to negotiate this in good faith and President Carter made a positive response to that.

When I say that we in British Columbia can state agreement with this proposal under certain conditions, I want to enter at this point a specific congratulation of the Premier.

AN HON. MEMBER : Hear, hear!

MR. GIBSON : Wait till my speech is over.

He alone of the 10 premiers in this country offered open support to this project and even lobbied governments in adjacent states to attempt to secure their support as well, with some success. There was not sufficient follow-through, Mr. Speaker, of which more later. So one thing this Legislature can do - or members of it as they speak in this debate - is to give their view on whether or not this project ought to proceed and under what conditions.

The second thing that can arise from this debate, if members choose to do so, is a reassurance on security: specifically, support for the treaty which has been entered into between our two countries in respect of energy pipeline transit through the countries, and which gives certain guarantees as to the continuation of conditions and fair treatment of those pipelines. This is an advantageous treaty to Canada, let me say, because more Canadian energy passes through the United States - specifically south of Lake Superior and from Portland, Maine, up to Montreal - than American energy passes through Canada, even after this pipeline is built. So it is an

[ Page 4409 ]

advantageous treaty. I think it would be a useful thing, if members choose to do so in this debate, to indicate their views upon that particular document.

Within the scope of what Ottawa can win for Canada, it's our job to demand a fair share for British Columbia. British Columbia has apparently not at all been well represented to date in the continued hearings that have led up to the decision by the federal cabinet to under certain conditions, support the Alcan route.

Mr. Justice Berger, was commissioned and investigated this question in the Northwest Territories. He produced what has to be called a monumental report, though I don't agree with all its aspects. Dean Lysyk was commissioned to enter into hearings with respect to the Yukon Territory. He would have heard British Columbia. His terms of reference could have been modified to include British Columbia and, even without a specific modification of terms of reference, B.C. Indian bands and the mayor of Fort Nelson appeared before the Lysyk inquiry to give their testimony about the impact of a pipeline.

Mr. Speaker, British Columbia as a province was not represented in the most important capital work to be undertaken in this province for a century. It was not represented at the most logical commission to hear our views with respect to social and environmental questions. No change in terms of reference was requested.

Well then, what about the National Energy Board? The National Energy Board handed down its decision, I think it was in late June of this year, and its decision in effect decided the pipeline route as far as Canada was concerned. The politics of the situation were such that if the federal government wanted to disagree with the National Energy Board, it would have to reject the proposition entirely and introduce legislation into the House of Commons. That would have been politically very difficult. So the National Energy Board decision was for all intents and purposes the definitive judgment insofar as the shape of the pipeline and the conditions under which it would go through Canada.

Was British Columbia represented at the National Energy Board hearings? Well now, there was a question, I noticed, to the Minister of Energy, Transport and Communications (Hon. Mr. Davis) on that subject during the question period. He took it as notice but I can give him the answer.

MR. BARRETT : He said yes.

MR. GIBSON : Well, the answer was that in a technical, legal sense, British Columbia was represented.

MR. BARRETT : No, I asked if there was an intervener and he said yes.

MR. GIBSON : Well, this gentleman I don't think intervened very much. His name is J.G. Smith. He is listed in the NEB list of people who had something to do with the inquiry. He is listed as being a representative of the Minister of Energy, Transport and Communications. So he's listed.

MR. LAUK : Is that a son-in-law?

MR. GIBSON : My staff phoned up the National Energy Board and asked what had been British Columbia's involvement in the NEB hearing. Here's the answer we got back.

"I didn't know they had ever been there."

"I didn't even know they had ever been there."

MR. LEA : What a way to run a hardware store.

MR. GIBSON : Later we made some inquiries of the Energy Commission as to who this Mr. Smith was and we were told that he was an Ottawa lawyer hired by the Energy Commission to represent the minister. His involvement was "very brief." He simply made the statement that British Columbia favoured the Alcan route. The main purpose of his intervention was so that the B.C. government could get a full record of proceedings.

Now isn't that interesting? Isn't that a positive contribution by the government of the province of British Columbia to a decision which will condition the expenditure of some $1.3 billion in our province, will affect the life of northern communities, will affect northern employment, will have enormous effect on the southeast part of the province as well, where a line is to be built by Alberta Natural Gas? The main purpose of his intervention was so the B.C. government could get a full record of proceedings.

Well, Mr. Speaker, I don't think that's good enough. I don't think that's a very good record of the interest of the government of the province of British Columbia in this particular case. Have there been any representations to the Prime Minister or to federal members? I asked the Premier in the House yesterday. I thought it was just a routine question, Mr. Speaker. But the Premier said no, there hadn't been any such representations. -1 could hardly believe my ears. In the hall afterwards, the Premier is reported to have said: "Well, we haven't talked to anybody because there's nobody to talk to until the decision was made." Well, I hope I'm not misquoting

[ Page 4410 ]

the Premier or I hope the press didn't misquote him. I hope he'll stand up in this debate and say his piece on it too. But it's important to talk to the decision-makers before the decision is made and not after.

Listen to what the National Energy Board came up with as a protection for the Yukon people. There were a number of protections, but here's the one I specifically want to read. It's at page 10176 of the NEB reasons for decision. This is what is called the third agreement:

You know, it's just extraordinary, Mr. Speaker. The mileage in British Columbia is almost as great as the mileage in the Yukon.

Interjection.

MR. GIBSON : No, the mileage in B.C. is not more, but it's almost as great. Here we have specific protections granted to the Yukon Territory and to the people of the~ province of the Yukon, but no specific protections granted to the people along the route in B.C. because the government of the province of British Columbia didn't ask for them. Who was intervening in these hearings? The Ministry of Energy for Ontario had four people there headed by Robert

Macaulay, Q.C., and you can bet he wasn't sitting on his rear end and not talking during the hearings. He probably appeared more than once. The Attorney-General for Quebec was represented along with the Attorney-General for Saskatchewan, the city of Yellowknife, the Legislative Assembly of the Northwest Territories, the government of the Yukon Territory, and so on and so on.

These people, these governments, these organizations saw this enquiry as being of some substantial import to their communities and to their areas, and they did their duty and they were represented. British Columbia was represented by somebody who apparently appeared hardly at all and stood up and said that B.C. supported the project. The main purpose of his intervention was so the B.C. government could get a full record of proceedings. I wonder if anybody read that full record. I wonder whose file it's in.

Mr. Speaker, we thought we had reason to hope that the Premier was at least in touch with Ottawa on these things. I cited a column of May 14 in the Colonist in which the Premier was interviewed by Jim Hume, which gave us some reason to believe that. Yesterday he admitted not. He did say - or perhaps it was the Minister of Energy, Transport and Communications (Hon. Mr. Davis) who said it - that there was some person from the B.C. Energy Commission in Ottawa yesterday who was buzzing around the scene, representing British Columbia's interests.

MR. LAUK : Who's that?

MR. GIBSON : Bob Green I think was the gentleman's name.

MR. LAUK : Who's he?

MR. GIBSON : I don't know who he is.

Mr. Speaker, the fact of the matter is that forces are way beyond that level of intervention at this stage. There are enormously powerful national forces engaged here with two countries involved. With no disrespect to this gentleman who apparently was in Ottawa yesterday on the day when the decision was made, which was a bit late, this is like sending a moth to influence that three-alarm fire we had down at the docks last night. It's just a little bit beyond that stage.

This, of course, is not the first time this kind of thing has happened. The representation at Destiny Canada was of a similar ilk. This is so immediate and quantifiably important that the government's lack of representation to date, I think, is just disgraceful. The time is almost past to influence these questions. The parliamentary debate is over in Ottawa. The cabinet is decided on a route for negotiations. The Prime Minister, fortunately, has said that he is still open for

[ Page 4411 ]

consultation with provinces. Only the Premier intervening directly, with the weight of the Legislature behind him, can succeed at this point in getting some acceptable concessions for the province of British Columbia. In that spirit, Mr. Speaker, what are British Columbia's interests?

First, some facts and history. As members know, the oil strike at Prudhoe Bay 10 years ago turned up some 24 trillion feet of what's called solution gas with the oil. As the oil is pumped out, the gas is automatically produced. It is being reinjected into the wells for the time being to maintain reservoir pressure, but it has to be produced fairly soon. That, incidentally, is why the American ploy that the gas can be left in the ground is simply not correct.

A company was formed called the Alyeska Pipeline Company. Perhaps that oil should have moved other ways to avoid the tanker traffic, perhaps it should have been a train. Who knows? In any event that decision was made and it's history now.

Basically the same groups that started the oil pipeline down the Canadian Mackenzie Valley - or actually two groups - found the competition a little heavy and merged into one to cut costs. It was U.S. dominated and it was dominated by the U.S. so-called seven sisters, the major international oil companies.

By this group, environmental and native rights were considered simply as hurdles to be got over rather than walls to be paid serious attention to. I think they probably assumed government acquiescence too. It didn't work that way. As time evolved, this group alienated a large number of people. One of the first groups that they alienated was the province of Alberta by insisting on a fully controlled consortium line through the province of Alberta without hooking into the Alberta gas trunk line system, which Alberta is very proud of. They assumed that they had a monopoly on the transmission of gas which led them to take some very intemperate and arrogant positions.

As time went by, though, the gradual sensitization of southerners about the environmental and social difficulties of the Mackenzie pipeline led to the appointment of Mr. Justice Berger to study that particular gas pipeline route. There's no question it was a key appointment in the history of this development and it's what leads us to this debate today. I think one can safely say that without Justice Berger and his report, it is likely that we would not be debating this particular route today.

His report did the following things: It killed the Mackenzie route. At the same time, incidentally, it ended the strongest bargaining card of native groups in the territories. It ensured, in my view, probably a more "southern" north because now the Northwest Territories won't have the tremendous revenues that would have allowed them to go a somewhat more independent way, although the Polargas alternative down from the Arctic Islands may in due course give them those kinds of revenues. It ensured that the so-called Foothills Yukon route, the Alcan pipeline, would be the one that was built because that was the only real alternative, or at least the only alternative through Canada.

Westcoast Transmission had been monitoring the Alcan route for many years. They believed in it for a number of reasons which made sense then and makes sense now.

First of all, what the Alcan route does is not force the Canadian decision-making on the tapping of our own gas reserves. The only urgency in this problem relates to the American gas. Canadians at the moment have no problem with gas. As a matter of fact, we have an embarrassment of gas with the new discoveries in Alberta. So why should we be pressured into building a route which would prematurely tap Canadian reserves and then, finding no market for those Canadian reserves, force the export of the delta gas to the United States? This, of course, was part of the logic behind the U.S.-controlled consortium. It was part of the logic of the Alcan route that it avoids this.

The same logic allows us at a time of our choosing, whether by the so-called Maple Leaf route as it once was proposed or the newer Dempster connection, to tap our own delta gas at a time of convenience to Canada, not the United States. It avoids the very sensitive Alaska and Yukon wildlife reserve positions across the North Slope.

It allows Canadian control, and this is enormously important. The Alcan proposal is sufficiently smaller so that the Canadian companies can finance it without, incidentally, government guarantees of finance.

The Alcan logic gives the Alaskans a bigger bite of the transmission facilities of their own gas, which is one of the important political considerations in the United States. It goes along an established right-of-way, largely, which is important for questions of land claims and social impact and environment.

Because of its smaller size, economically it is far more digestible to Canada in terms of its impact on inflation rate, the value of our dollar and so on.

Finally, it protects the Polar Gas option, because we don't know which of our Northwest Territories gas is going to be in the national interest to tap first. There are about 5 trillion cubic feet proven in the Mackenzie delta; there are about 15 trillion proven in the Arctic Islands. We don't know which one is going lo be more advantageous to tap first. Had the Mackenzie line been built, we would no longer have had that option.

So it made a lot of sense. But this small western consortium was given almost no chance. The Canadian establishment was against it. TransCanada PipeLines, Imperial Oil, Toronto - you name it - if

[ Page 4412 ]

they were big in Canada, they were against the Alcan line and they were for the Arctic Gas line. The U.S. establishment was for the Arctic Gas line because, of course, they control it and, of course, it would have enabled them to prematurely siphon a lot of Canadian gas, which we would otherwise have been able to reserve here for our own needs. The big money was sure against the Alcan people. The Arctic Gas people spent $150 million on their application. They never dreamed they would lose.

I knew one of their lobbyists fairly well, an old friend of mine. It was just a subject we didn't talk about, because they just never dreamed that anything could happen other than these multinational corporations winning this one. But what happened in the end? Two relatively small - in this business -western Canadian companies put it together and won it.

Interjection.

MR. GIBSON : And not without the help of Mr. Justice Berger. That's right.

I want to pay an enormous tribute to Ed Phillips of Westcoast Transmission and Bob Blair of AGPL, ') because I think they've done a service to this country. That's my opinion.

So now the Ottawa-Washington negotiations are to commence and I personally am convinced that the Alcan project is in the U.S. interest, and it may be in the Canadian interest if we can attain sufficient conditions.

The scope and importance to British Columbia is as follows: the: total package of the Alcan pipeline will cost $7.3 billion, plus a further billion for the Dempster connection, if and when it is made. The cost of the

section of British Columbia will be $1.3 billion. The British Columbia mileage is 544 miles, of which 438 is in northeastern British Columbia and 106 in southeastern British Columbia. The labour-material breakdown is approximately 50-50. The average work force for the main two-year period will be about 1,600 in the construction period, with 2,400 peak.

MR. MACDONALD : In British Columbia or the whole country?

MR. GIBSON : In British Columbia.

The exact timing is still unclear, pending the negotiations between the two countries. Local purchases is a much more obscure question. This is one of the specific things the government of the province of British Columbia can do. What is the maximum form of local activity in the economy that we can get out of this particular project? For example, is there any way that any manufacturing or fabrication associated with this project might utilize the Squamish Railwest plant? There's a very good chance of that. What are going to be the revenues for the British Columbia Railway on northbound freight?

It would be tremendous. Even that Fort Nelson line might start to break even with that kind of break. The annual taxes that will be payable will be something in the neighbourhood of $30 million in British Columbia, most of which would be compressor gas, rising to something like $50 million after the Dempster link is completed, if and when it is.

A very important factor for us in this Legislature is to recognize that in only 12 years the authority we have to export 800 million cubic feet a day - to Washington primarily - will lapse. At that time, if there's no other gas to fill the Westcoast system, the public of the province of British Columbia starts to lose a lot of money, because the B.C. Petroleum Corporation, which is the effective beneficiary of the throughput revenues above and beyond the 10.6 per cent return on the rate base, will have their revenues cut drastically, as 800 million cubic feet a day is over half the capacity of that pipe.

So at that point, if the Alcan route is available, we would be able to divert Alaskan gas - not Canadian gas, because the export authority would have expired - coming down the Alcan pipeline at that point through the west coast system, and offer transportation to the Americans on a sort of short-cut route with a facility bought and paid for and now standing empty because of a lapse of export authority. That's worth something like $80 million a year to the province in terms of present revenue.

MR. MACDONALD : By that time we'll need the gas.

MR. GIBSON : Yes, but this will be American gas. This would not be Canadian gas. The export authority for Canadian gas at that point would have lapsed.

Now those are some of the positive impacts, Mr. Speaker. What are the negative impacts? There certainly are negative impacts. All you have to do is take a short look at some of the things Mr. Lysyk

[ Page 4413 ]

found up in the Yukon, and the recommendations he made. He made recommendations, first of all, for a delay to enable land claims to be settled. He made recommendations for a planning and regulatory commission which would oversee the difficulties of the impact of this new pipeline. He made extensive recommendations with respect to manpower training and the employment of northerners, so that they could be trained in the needed skills well in advance of the time the pipeline was coming through. He made recommendations for a $200 million heritage fund which would again help to cushion the negative effects that he foresaw.

What are these negative effects as they pertain to British Columbia? Well, we don't know because our government has never investigated them.

They haven't set up any kind of a commission to study it; they have made no statement on it themselves; they have made no statement to the National Energy Board; they haven't said that a construction programme of this kind, while it will bring some welcome features, will bring a lot of problems as well in terms of disruption of local communities by the influx of large numbers of construction workers, many of them outsiders - disruptions to the native groups along the pipeline route. I remind you again, Mr. Speaker, it's 500-and-some-odd miles of British Columbia that this pipeline passes through.

We know that there will be significant effect. We know that there will be social disruption and we do not know the amount, because the government has not seen fit to inquire into this.

Therefore the National Energy Board comes down with a finding which states the conditions upon which this pipeline may be built if agreement is reached. Those conditions say nothing about compensation for the province of British Columbia and the people of the province of British Columbia who will be affected by this pipeline route. So all of the positive things about the pipeline may not matter at all if the negative things are overwhelming enough. We don't have a measurement of our government as to whether or not that is the case.

I want to suggest four principles that I think on an urgent and immediate basis the province of British Columbia should communicate to Ottawa as the things we would like to see if this pipeline route is to go through our province.

First of all, there's a kind of minimum standard. Since we don't have our own inquiry, let us look to the inquiry that's been done in the Yukon and say: "Establish this principle." British Columbians will. not be less well treated than Yukoners. I think that's a fair principle. There are a number of areas in which you have to look at that: the question of environmental impact; the question of land claims; the question of social disruption and compensation assistance for community; the question of a manpower scheme, complete with training and hiring requirements that must be entered into; the question of the maximum purpose of British Columbia material through British Columbia suppliers.

British Columbia should be no less well treated than the people of the Yukon Territory. The people of the Yukon Territory, I might remind you, Mr. Speaker, in the report of the NEB as a condition of the granting of a certificate for the pipeline, are to be the beneficiaries of a fund of up to $200 million for social disruption assistance. British Columbia deserves at least as much.

As a second principle, I would suggest that British Columbia should receive its proportionate share of the Canadian economic dividend that comes out of this enormous project. Most members of this House refer in their speeches from time to time to the multiplier effect, by which economic expenditures rebound through the economy and end up being worth much more than the original amount.

The multiplier effect in the Canadian economy sends most of the eventual benefits back east, largely to Ontario, through the tax collection system and through, in particular, the fact that most of the material - 80 per cent of which is pipe, and much of the rest of which is valves - will be made in the province of Ontario.

Much of this should be returned to British Columbia on specific terms as our share of the national economic dividends. My own particular suggestion - and the government will have to arrive at its own conclusion on this - is a significant paving of the Alaska Highway as one of the means by which some of that economic dividend can be returned to British Columbia.

Interjection.

MR. GIBSON : He didn't have a pipeline to work with.

The third principle I suggest to the government is the achievement of any international objectives that can be legitimately tied to this particular project. This is a sensitive area into which I don't want to go in very much depth, but I would suggest to the government: get as much as you can.

We have a number of bilateral problems of which I know the Premier is well aware and on which he has been working. If any of those, such as, for example, tanker traffic in the Strait of Juan de Fuca, which is a directly related energy question, recalling the amount of gas that we deliver through the west coast to the state of Washington, can be legitimately and usefully put on the table by British Columbia in the successful prosecution of this negotiation, I would commend that third principle to the government.

I would suggest as a fourth principle that if, in the planning for this pipeline and its operation - the operation throughout future years will be very

[ Page 4414 ]

important - any measures can be taken which help B.C. and hurt others not at all or very little, then they should be taken for British Columbia. The prime example, of course, is the eventual use of American gas from Alaska, to utilize the under-capacity Westcoast Transmission system 10 or 12 years down the road for the transit of U.S. gas through Canadian territory and down through the United States at a profit to the government of the province of British Columbia, which is the effective beneficiary of the operating results of Westcoast Transmission, above and beyond their fixed rate of return.

I commend these four principles to the government as at least one set of thoughts on which they can approach the federal government, and I would hope on an urgent basis. The President and the Prime Minister, according to press reports, announced yesterday that negotiations between the two countries in great detail will be entered into in the next week, which is not surprising in view of the timetable of a September I decision date which both countries have been working towards.

That decision date can be extended; indeed, I personally expect that it will be. But there is a tremendous amount of urgency attached as we enter into the second week of August, looking at at least a pro forma September 1 decision date.

So I would suggest to the Premier that he put a team of ministers and officials on this, giving it the highest priority and giving it his personal attention; and that based on, among other things, the advice of this House today, the government as rapidly as possible formulate a position for communication to the federal government in a forceful and effective way.

I think that this is a responsibility, the successful achievement of which will be of great usefulness to the province in years to come, and the failure of which will result in a good deal less prosperity for our people and some very unnecessary, unfortunate, avoidable disruption, particularly in the northeastern part of the province. All in all, it is a tremendously important issue.

As I have said earlier on in the debate, I happen to be an Alcan route supporter. I share that opinion, I think, with the Premier, based on his earlier statement. But there must be conditions. B.C. and this Legislature can only be in favour of this route if we can look at the final account of the negotiations and say: Is this a net benefit to our people? We want, naturally, to be helpful to our neighbour to the south if we can possibly do that; but we also want, in doing that, to make certain that it does not detrimentally affect the interests of our province and hopefully affects them in a strongly positive way.

It is my personal opinion that with good faith and good information on both sides, there is sufficient overlapping of interests so that kind of result can be achieved between the two countries. For it to be achieved as well in terms of the domestic distribution of costs and benefits in a fair way to the province of British Columbia, it requires the most urgent and forceful intervention by the government of the province of B.C. with Ottawa. I put that to the Premier as the most important charge on his time at this point.

MR. BARRETT : Mr. Speaker, in this debate, I would like to be informed whether or not the government wishes to go on the normal ebb and flow of debate. Is the government going to participate?

MR. SPEAKER : The hon. Leader of the Opposition has the floor.

MR. BARRETT : I'm asking a question, Mr. Speaker. I'd like to know if the government is going to participate.

MR. SPEAKER : If the hon. member is not going to participate, I see the hon. member for Oak Bay (Mr. Wallace) ready to take his place.

MR. BARRETT : It would be helpful in this kind of debate if ordinary courtesies of debate were to be followed in terms of the fact that this is unique. It would be more helpful for more enlightened debate if the government position were stated prior to the opposition being forced into a situation where the government wants to withdraw and state its position without a sharing of opinions or attitudes.

This is not an adversary debate, as pointed out so well by the member for North Vancouver-Capilano (Mr. Gibson) . It is a debate that is not quite unique, but certainly one of a sharing of opinions rather than taking a position an any specific resolution in front of the House. I regret that the government has not seen fit to state its position early in the debate so there can be some sharing of opinions without being forced to a vote of any specific motion by that member.

I don't think it's necessary to play politics or to divide the House on a basis of politics on an issue like this. If the government chooses to take that direction, I think they miss the thrust of the opportunity presented by the member for North Vancouver.

[Mr. Rogers in the chair.]

I'd like to say at the outset that everybody goes through life with the necessity of making choices. I suppose that the best thing I could say at the beginning is that if I had my druthers I'd rather not be faced with this choice at this time. I believe that Mr. Phillips of Westcoast Transmission, in his speech of March, 1977, to the 27th annual meeting of Westcoast Transmission, echoed some concerns that were touched on very briefly and clearly by the

[ Page 4415 ]

member for North Vancouver-Capilano. Mr. Phillips opened his comments by saying: "Is the northern pipeline a power play - the first U.S. thrust for a continental energy-sharing policy?" I'd like to point out that the member for North Vancouver-Capilano made the point very clearly that had the federal government committed us to the Mackenzie Delta pipeline it would have been a major victory for those who believe in continental energy resources. I want to quote Mr. Phillips' opinion in terms of the issue in front of us. Mr. Phillips, who is not an NDPer, by the way, said:

That's an interesting choice of words - "the pipeline power play."

"The key to that is deciding just one question: is Canada's independence and sovereignty respecting its own energy resources established more clearly by approving two Canadian-owned-and-controlled pipelines, or is it through the Mackenzie Delta, which would have forced the immediate export of Canadian gas? "

We have been spared that option by the federal government, through no fault of the federal government but through the wise counsel of Justice Berger.

I want to point out another warning given by Mr. Phillips. He points out the pressures that exist between Canadians and Americans in their desire to get the existing reserves to market. He said:

"Another substantial mismatch in the Arctic Gas proposal is the magnitude of the two nations' energy requirements. Even projected out to the mid-'80s when Canada may need northern supplies, sharing a joint venture pipeline with the United States would be illogical. The United States consumes an average of 59 billion cubic feet of gas per day; Canada only 4 billion. Fifteen to one is a manifestly improvident balance on which two nations would equally share the equity ownership of a pipeline and split its capacity at two-and-a-half billion cubic feet per day each.

"A single utility in Los Angeles serving southern California

has 3.4 million gas customers. In all the 10 Canadian provinces, there are only

2.4 million gas meters, a million fewer than in southern California alone. Expecting

Canada to have an equal voice in the operation and the future expansion of the

shared pipeline is not rational, considering the grossly different gas appetites

to be satisfied."

Mr. Speaker, the lessening of the chance of that happening took place when

the decision was not to go the Mackenzie route. The only saving grace of the

Mackenzie route in my opinion is the fact that the Dempster linkup becomes a

key factor for Canada's energy needs. Nothing in this bargain can be considered

exclusive to that key point. If British Columbia loses the opportunity of insisting

that it have a part to play in the timing of the linkup of the Dempster side

route to Arctic gas, or if British Columbia, through naivete or otherwise, loses

that bargaining position, it means that the major American oil companies, so

aptly referred to by my colleague from North Vancouver as the "seven sisters,

" will indeed have their way in any event. They may have lost the $150

million on the Mackenzie pipeline bump, but they will gain what they lost if

the Dempster hookup is made without strong intervention by the Canadian government

and by the British Columbia government. Not in my words, but in the words of

Ed Phillips of Westcoast Transmission company:

"The only thing that stops this pipeline from being a sellout of Canadian energy resources is the handling of the Dempster linkup. Once the Dempster linkup takes place and there is no commitment in treaty and in bargaining and the first call for Canadian gas is for British Columbians and other Canadians, for their industry, their homes and their jobs, then we will have abandoned a secure heritage for at least two generations of Canadians who expect the same standard of living we have now."

I was totally opposed to the Mackenzie Valley pipeline. In principle, I think it's a mistake to risk the Alcan route, but as I started out by saying, we don't have our druthers. If I had my druthers, I'd rather wait until we had a chance to do it on our own.

There is a possibility in this particular joint venture that we can make a fair deal for Canada, but there's been no historical, comparable negotiation with the United States where we have ever shown, either as a nation or as a province, the ability to go into a bargaining session well armed with facts, well buoyed with information, and committed to the long-term interest of Canada and British Columbia, not just some short term political announcement.

This is a complex matter, Mr. Speaker, and perhaps the easiest way in the brief time I have for me to simplify this for some of the British Columbia people who are listening is to make the comparison to the Columbia River Treaty. It is a good analogy. The Columbia River Treaty involved three participants -the federal government, the provincial government and, of course, the United States. I have never blamed the Americans for skinning us on the Columbia River Treaty. They were handed it on a platter. The idea that they would enter into international arrangements on the shared use of resources without any fiscal

[ Page 4416 ]

backup, without any engineering backup and without any environmental or long-term cost projections, was absolutely incredible in that day. But in this day, it's beyond incredible; it's insane.

My colleague, the member for North Vancouver, is at this stage of the game calling for the initiation of these studies. The people of this province have a right to ask, "why weren't these studies initiated before?"

If that member's information is correct - that at the National Energy Board hearings all British Columbia had was an occasional observer - then the answer in question period of the minister who is concerned, the Minister of Energy, Transportation and Communications, was incorrect. If the facts don't differ, the least we can say we have witnessed today is some confusion about what's going on.

I am very hopeful, Mr. Speaker, that we won't be treated in this House today to a lot of political rhetoric around jobs and investment without some substance in terms of what facts, what figures, what commitment, what position, and who is doing the bargaining around this very important issue. I don't blame the Prime Minister. He's a tough bargainer.

The Prime Minister and the federal government have made a decision to go along with the Alcan route. The Alcan route, as I have said, and as the member has said, gives us the option of delaying the entry of Canadian gas at our bargained-for time, if we wish to take that option. However, I do not see the Prime Minister of this country lifting any extra energy in the tough negotiations he has to go through fighting British Columbia's case unless British Columbia has presented a well-documented case to him to present to the Americans.

It can't be on the basis of public relations forms. It can't be on the basis of we wish or we hope this to happen. It has to be on the basis of well-informed, non-partisan, economic and social research that should be launched immediately with specific timetables given to those people who are charged with that responsibility.

We have been fortunate in another arena in terms of the speech of Mr. Phillips of Westcoast Transmission, Mr. Speaker. Like it or not, the government of the day has inherited a 10 per cent ownership of Westcoast Transmission. How ironic. I know the member for North Vancouver (Mr. Gibson) smiles because it was that socialist move of picking up El Paso shares that they were ordered to divest themselves of in a New York court that gave the people of British Columbia an opportunity to have a 10 per cent ownership in the pipeline that delivers 809 million cubic feet of gas to the Americans every single day. It was a socialist venture.

HON. MR. GARDOM : How much did it make? How much have we made on the shares?

MR. BARRETT : On the shares? I'm coming to that, Mr. Attorney-General.

It was a socialist government decision that was attacked by Social Credit. They said it was wrong, criticized it and voted against it, but it is out of that particular decision made by our government that we now have not only an opportunity to bargain on the Dempster line, but also a 10 per cent say at the shareholders' level of Westcoast Transmission.

For years and years Canadians had been hewers of wood and drawers of water. Major American capital investment made in this country has been made for one purpose and one purpose only. It is not the United Appeal. It is not a charity contribution. The only reason the Americans have made any major capital investment in this country is to export profits from whatever resource they've invested in. Not a bad idea, but let's recognize that we're talking about business and not brotherly love.

When we purchased that 10 per cent in Westcoast Transmission, people said: "What is your government doing - taking a flyer in the market?" I want to tell you, Mr. Speaker, when you buy a hunk of someone associated with the seven sisters, you're not taking a flyer in the market. Imperial Oil is not exactly the crying-towel group of the North American economy. We bought those shares - 1,157, 000 shares - at $22 a share. Where did we get the money from to buy those shares? Why, by gosh and by golly, we got the money to buy those shares because we became the sales managers for our own natural gas.

That's right, Mr. Speaker. My good friend, the former Attorney-General (Mr. Macdonald) , set up what was known as the "golden elbow." Yes, it was called "terrible socialism, " Mr. Speaker. I've noticed that in the fourth quarter review there's not a single word about the socialism. All they're doing is boasting about the profits. They don't call it socialist profits; they say "a little return." My friend, the former Attorney-General, said to all the gas producers: "We're going to give you an increase in your price of gas." That's what he did. He was a good fellow to those independent gas producers.

You're a good fellow. You moved their price from 9 cents to 16 cents so that little independent businessman out there in the gas field could make a few dollars. [illegible], were helping free enterprisers.

MR. MACDONALD : It was a socialist "profit."

MR. BARRETT : That's right - a socialist "profit."

After helping those little gas producers, what did we say to our American friends? The previous Social Credit administration had been selling natural gas to the United States at 32 cents per thousand cubic feet. Dumb!

My good friend the Attorney-General said to our

[ Page 4417 ]

American friends: "The price is going up to 62 cents." That's what my good friend said. The Americans said: "Naughty, naughty." We said: "Tough luck." They bought the gas and with the amount of money we made, we bought 10 per cent ownership in Westcoast Transmission and the people of the province now own it, and I'll tell you how much money we've made on that,

But our biggest struggle, Mr. Speaker, was not with the Americans. Lo and behold, the reason I am recounting this story is that our biggest struggle was from the nitpicking of Social Credit and a federal government that opposed a public share in ownership in our natural resources. There's been no change of federal government, my friends.

The member for North Vancouver-Capilano makes a very interesting point. He says we have to bargain tough. Who are we going to bargain with - a federal government that's got the philosophy to which the Americans call the tune as to price, delivery dates and quantities of natural gas? Once burnt, twice shy. Even my mother told me that ' just as late as last week.

What happened when we went into the natural gas business and we doubled the price to the Americans? My good friend the Attorney-General got on the telephone and discovered that while we were charging 60 cents to the Americans, Louisiana was charging other Americans $1.25; Texas was charging $1.30. My friend the Attorney-General said: "If it's good enough for Texas, it's good enough for British Columbia." We said to the Americans: "The price is now going up to 99 cents." That's what he said.

The point of this story is, through you, Mr. Speaker, to the government and to my friend, the Liberal member: who was it that opposed the 99 cent figure? It was your relative. Yes, another Macdonald! It was Donald Macdonald, your father.

MR. MACDONALD : Thumper?

MR. BARRETT : It was Thumper, who said to you from Ottawa. . . . Not from Ottawa did he attack this Macdonald, but from Washington, D.C., he issued a press release attacking this Macdonald by saying that he was being savage in asking for $1. How humiliated do we Canadians have to be? While Americans are charging $1.25, our own national Minister of Energy attacked his son by name for asking for 99 cents.

MR. MACDONALD : We fixed him through the clan.

MR. BARRETT : We certainly did fix him. Yes, we did. We went the bureaucratic route, didn't we? You know what we did? I don't want all these folks leaving this House without knowing these kind of little trade secrets. They will never read them in the paper, you see, because it's socialists who are talking. But this is what my friend did. He came back to me and he said: "Boss, they won't allow me to charge them 99 cents." And I said: "Well, if you were Texas you could charge $1.25. I'll tell you what, Alex. You go to the National Energy Board and you put in an application and ask for $1.35, the same as some Texas gas." He did, and this is what happened.

I want you to understand the sequence of events because they've got nothing to do with science, nothing to do with economics, and nothing to do with rational arguments. They've got everything to do with politics. He filed an application at the National Energy Board for $1.35. That required public hearings. We would have gone to those public hearing and made the case for British Columbia, but 10 days before the public hearings were to start we got a telegram from the other Macdonald saying: "You can charge $1." We were only asking for 99 cents. He said we could charge $1.

My friend Macdonald here said that they were afraid of the public hearing because the Canadians out in the bushes might find out that we were being forced to sell our gas to the Americans at 20 per cent less than what Americans charge each other.

So do you know what I did? After we found that we could have $1 instead of 99 cents, I sent Macdonald a telegram and I said: "A penny for your thoughts." It was a game. Yes, it was a game, folks. The game was to satisfy the international oil companies and their rapacious demands for resources, no matter where they came from, at the lowest possible price so that their profits could go up, up, up and up.

We bought in on the game. We became 10 per cent owners. I find it remarkable that that free-enterprise government over there to this day has not sold one of the shares of Westcoast Transmission. Here's why. My good colleagues, you supported this purchase and this is what it has benefited the people of British Columbia to own a little bit of your own action. Own a little bit of your own action, you serfs out there, and understand what it's all about.

We bought 1, 15 7 million shares. They were worth $22 a share on February 18,1974. At the present time the B. C. shareholdings in Westcoast Transmission represent 10.6 ownership. The government's stock in Westcoast Transmission has earned for the province of British Columbia $6,836, 806 to date. The Westcoast shares that we bought for $22 are now being traded for $32.25 on the open market. Why have those shares gone up, Mr. Speaker? They've gone up because Westcoast has got the winning lottery ticket on the pipeline sweepstake, and the winning lottery ticket, as my good friend from North Vancouver-Capilano pointed out, went to the unexpected winner, the Alcan route.

Okay, where does that take us?

We are now at the crossroads of being in a position to go to Ottawa and say: "We will go along with the

[ Page 4418 ]

Alcan route through British Columbia but we want some protection of our investment, we want some protection for the British Columbia people, and we want some protection of the future generations of people who will live in this province."

Pipelines in the north have only served as spearheads of southern development, Mr. Speaker. They don't carry commerce or trade or industry or people. They do not develop; they do not unify. They only carry a single resource southward at an enormous environmental, social and financial cost.

They will have to be abandoned in a relatively short period of time as oil and gas is drained from the north, leaving little behind but scars on the northern societies and landscape alike. While pipeline expenditures may fully serve their purpose for the oil industry, they can be viewed as lost or wasted money in terms of permanent value for all northerners.

What do they get out of it? A short-term employment boom? Let's deal with that. Alaska had the fantastic short-term employment boom with the Alyeska line. You go up and talk to Alaska politicians now, as I just did some two months ago, and -discover the social devastation. as a result of that major infusion of capital in a small population.

Devastating unemployment, devastating alcoholism, devastating family breakdown, devastating cultural upheaval of the native and indigenous people in the area, a destruction of a way of life for people who for centuries had found a method of survival compatible with the good things that God has placed around them, only to be disrupted by the international oil companies' greed.

The tragedy of the Alaska government situation is that its only recourse out of this devastation is to beg to have the El Paso route take natural gas across Alaska so that at least they can duplicate the boom and perhaps avoid the same mistakes.

Alaska is not going to get that natural gas pipeline - not because the Canadian government is for or against it, not because the American government is for or against it. Alaska is not going to get that natural gas pipeline because the international oil companies are not in favour of it. Whatever the oil companies want, the oil companies get, whether it's governments, whether it's political parties, whether it's campaigns. Whatever the oil companies want, the oil companies get.

One thing that the member from North Vancouver made clear, and I agree with him, is that in the Alcan route that we are going to get whether we like it or not, there is an opening bargaining position for the governments of British Columbia and the people of Canada. That is the control of the valve at the Dempster connection.

I've got no quarrel of Americans renting our space to take American gas through an American Pipeline built on Canadian soil. We've lost that fight. Yes, it will provide short-term benefit for Canadian small businesses and for Canadian workers.

But I tell you, Mr. Speaker, the catalogue of this mismanagement of Canadian resources is legion. We have an opportunity now, at this time in the nation's history to stand up nationally and provincially and say to our American friends and to the international oil companies that we want to control the flow of the Canadian arctic gas through that Dempster pipeline and into the Alcan route.

My friend, the Liberal leader, whom we disagree with philosophically, I do not think will disagree with me on that particular point. That is the key that's at stake.

If I may make the analogy, it's like every British Columbian having their handle on the tap for the controlling of water into their own home. You don't go to your neighbour and give him the control of water in your home; you control your own taps. That's what this debate is all about. Do we have the guts, the desire, the drive and the commitment to control our own taps on that natural gas from the arctic?

Mr. Speaker, I'm growing long in the tooth in this business. I'm growing a little bit grey. As the sun sets in the west for my political career, I hope to be part of some role in saying that we stopped one sell-out. We stopped for our children and our children's children the last attempt at continental energy resources of a non-renewable nature such as the sell-out on natural gas.

I plead with this government, and that's a certain loss of pride for me, I'll tell you. I plead to this government to take the position with our federal government and with the United States that that tap at the Dempster connection will never ever go into foreign control, that that tap at the Dempster connection will remain as a sovereign control point of the development of northern gas and Arctic gas. That has to be point No. I in all negotiations as to opening the possibility of allowing that pipeline to be built.

Without that request we are going like lambs to the slaughter on the same basis that we did on the Columbia River Treaty in a rush to say that we've created some jobs or that we've created some business.

Mr. Speaker, I want to refer the House to the "British Petroleum Statistical Review of the World Oil Industry." The last edition was in 1976. Incidentally, I don't want to scare the government, but British Petroleum is now a major negotiator in the coal fields. I know that they didn't do much research on it, but half of British Petroleum is socially owned. It's a socialist company, Mr. Speaker. I hope that doesn't scare them out of British Columbia, but I don't think they look at the dollar to see if they're socialist dollars or not.

On page 4 of their report we see a very interesting

[ Page 4419 ]

statistic. Of all the world's published proven reserves at the end of 1976, the United States of America had 216 trillion cubic feet, or 9.3 per cent of the total. In a later chart, it shows that the Americans use half of the world's daily consumption. Even though they only have 9.3 per cent of the world reserves, they use almost half of the current world production - 45 per cent. It tells you that the Americans have an insatiable desire for natural gas. They're going to get it from the easiest place they can, and that'll be us.

Canada, by contrast, has 2.5 per cent of the world Share of natural gas. That's not very much by world standards, Mr. Speaker, but by American standards, it is a little more than a quarter more than their known reserve.

So let us understand what the stakes are. The Americans see as our published known reserves of natural gas, over a quarter again of what they know as their continental supply within the borders of the United States. So we have a good bargaining position, Mr. Speaker. The bargaining position is the guarantee that we continue meeting our export commitments, as we did when we were a government, of 809 million cubic feet a day up till 1989.

I want to say that the member for North Vancouver was very gentle when he said that El Paso had some nervous skin condition about the pipeline on the surface in British Columbia. He was very cautious. He didn't say who it was in this House who gave El Paso the nervous condition. You know who it was, Mr. Speaker? I'm not as charitable as my friend. It was one of his former colleagues, the now Minister of Labour (Hon. Mr. Williams) , who stood in this House and said that we should threaten to cut off the natural gas supply to the Americans. It was a Liberal who did that. Yes, it's there in Hansard.

MR. GIBSON : Former Liberal.

MR. BARRETT : It was a former Liberal who made those hysterical comments.

MR. MACDONALD : An apostate Liberal.

MR. BARRETT : An apostate Liberal on his road to salvation by way of.... What was that word you used today - "pomposity"? That's the route.

It was that Minister of Labour who stood in this House and said that he would cut off the Americans' gas supply. I hope to hear from the government today and they renounce that position, because contracts should be honoured.

MR. LAUK : Did anybody else say that?

MR. BARRETT : No, it wasn't a socialist who said that. No, no, no!

Had it been a socialist, there would have been headlines in The Vancouver Sun:

"Reds Scare Yankees." But you don't need to worry about that headline.

Most people would have assumed that was a baseball score.

Mr. Speaker, am I for the treaty? I have no option. Yes, yes, yes. I am for honouring the contracts to 1989. 1 am for the Alaska route because we have no option. I accept the reality, but what I am pointing out is that in accepting that reality I am warning the people of this country what is involved - all 200 of them who are listening - that we are on the verge of a major sellout of our resources if we don't control the taps at Dempster.

Now let's deal with other specifics in terms of hard bargaining. I believe this. I believe, as the member for North Vancouver said, that it's the Premier's responsibility. The Premier has to take this initiative himself. I believe that one of the first conditions should clearly be that 90 per cent of all the labour, skilled and unskilled, to be applied to the construction of that pipeline through British Columbia jurisdiction should be British Columbian taxpayers.

I believe that British Columbian unemployed carpenters, unemployed plumbers, unemployed pipe welders, unemployed labourers should have first call on their jobs. It's more than chauvinism, and I'll tell you why. Not only is it necessary on the basis of providing British Columbians work, but it is the one key factor in giving us some influences over stabilizing the social structure of this province. When you have a massive itinerant work force, all social problems -alcoholism, prostitution, drugs, and crime - follow, such as was experienced in Alaska. If we don't learn from history, we're condemned to relive it.

The safest way to avoid those basic problems in a massive itinerant work force is to draw from the already stable social structure of skilled and unskilled people and say: "These are your jobs. Here. Buy your home in this province of British Columbia." It makes sense economically, and it makes sense socially. You will not be disrupting lifestyles; you will not be disrupting anybody's roots. As a matter of fact, you will be securing homes and futures for unemployed workers who do not have that security right now. No. 1: 90 per cent of all labour, skilled and unskilled, on the pipeline portion through British Columbia should go to British Columbia working men and women in this province.

Secondly, Mr. Speaker, do not be lulled by the $200 million figure held out as a carrot for the heritage fund. It sounds like a lot of money, but it was my good friend the member for North Vancouver-Capilano (Mr. Gibson) who said that the Mackenzie Delta people spent $150 million in public relations money alone to push the Mackenzie pipeline. If you can blow $150 million on PR, what are the stakes you're trying to blow the money on? Billions and billions and billions of dollars. So to be

[ Page 4420 ]

bought off by $200 billion, which is only a year and a half's liquor profits in this province, is not good enough, Mr. Speaker. Any buy off like that will drive people to drink in this province.

I've got a formula, so that people in this province will understand. When you go and buy a new suit in this province, as some cabinet ministers don't do because the sales tax is too high, if you go to buy a fridge or a stove or a car, you pay 7 per cent. Is that correct? Correct. It is shameful.

However, this is my formula: we say to the federal government that we want a permanent economic development fund set up and that the private oil companies that are investing in this pipeline put up 7 per cent of the total completed capital cost of the pipeline as a permanent economic development fund for the people of British Columbia. If it's good enough for the peasants of this province to pay 7 per cent sales tax, let the international oil companies pay a 7 per cent sales tax on their economic activity in this province.

You think about it out there, folks. If you have to pay 7 per cent and you're a resident and a British Columbia taxpayer, isn't it fair that a non-resident foreign oil company investing should also be charged that same 7 per cent? And I put something else to you, my friends, very clearly. It's not 7 per cent of today's projected cost - not on your life; 7 per cent on the completed cost of the pipeline. The estimated figures say it's going to cost $6.7 billion. My estimated guess here, and I'll bet anybody a cup of coffee and a doughnut....

Interjection.

MR. BARRETT : Black coffee for you, my friend. It'll go with the colour you'll be wearing after the next provincial election. Yes, my friend, a rolling doughnut. You know what to do with that.

I suggest that it be 7 per cent, because my prediction will be that that pipeline when completed will cost at least $12 billion. And I'll tell you why. Mr. Speaker, I don't want this to get around too much either, but there's some jiggery-pokery going on with the Canadian dollar right now. Oh, yes. Something funny's happening with the Canadian dollar. Six months it was $1.02 on the American market. All of a sudden it took a nosedive.

If you're holding a big scoop of capital, and you're going to make an investment in a foreign country, wouldn't it be wise to drive that foreign currency down by withholding balance of payments? Drive the dollar down to 92 cents; dump your $6 billion into the economy; goose the Canadian dollar up to $1.04 and $1.06 and walk away with a handsome profit.

I know it sounds strange. I know that there are no people on the international money market who would do things like that. But if I can figure it out, they can too. It should be 7 per cent on the completed capital cost because inflation will hit this country and this province like the tidal wave that we had in Port Alberni.

A $6 billion to $10 billion capital infusion in this province's economy alone will drive inflation in this province up to double-digit figures. Those people who are on welfare, on fixed incomes and on pensions and on Mincome will find that within 18 months after the project is started, with no federal controls on prices, that food costs and living costs in this province, especially in the northern half, will soar dramatically.

What protection will there be for the northern MLAs and the northern residents of this province who are already paying over $1 a gallon for gas? What protection will there be for those northern residents when inflation hits with that kind of money pumped into the economy and their price of bread, food, clothing and everything else goes up? It will go up. Look at Alaska and see the costs rising dramatically in that jurisdiction.

1) Ninety per cent of labour from British Columbia. That applies as much as possible to B.C.'s secondary industry -and its total capability.

2) A 7 per cent payment on the total capital cost of the completion of that pipeline for an economic development fund with this proviso: all mitigating social and environmental costs be negotiated after the completion of the pipeline project so that we never again duplicate the folly of having to pay for the cleanup of the mess behind the Columbia River reservoirs on the Canadian side. Another analogy. My good friend the member for Port Alberni (Mr. Skelly) will be speaking about that. But mitigation of environmental and social costs have to be negotiated above and beyond the 7 per cent.

Environmentalists have the right to expect that cleanup; British Columbians have the right to expect that cleanup. That cost should go to the people who are putting up the capital - 7 per cent plus for the mitigation costs.

AN HON. MEMBER : On Canadian gas.

[ Page 4421 ]

Columbia sellout.

Three simple conditions, but they have to be in writing. I want to tell you, this is a new government. It is not vested by the sins of the former Social Credit administration, real or imaginary. It is not vested by the sins of the former NDP government, real or imaginary. But in every government's term of office there becomes a high-water mark as a test of principle and commitment to the well-being of all British Columbians. We've reached that day today in an unexpected fashion.

I had hoped that the Premier would have participated as the first speaker in this debate, not the last. Be that the case, Mr. Speaker, before I sit down, I want to make it loud and clear that anything less than these three conditions will be a sellout of British Columbia's interest.

The three conditions are:

(1) Ninety per cent of all labour from British Columbia. The same formula should apply to small businesses and suppliers of materials as much as possible.

(2) A 7 per cent, one-time cash payment for permanent rental of the corridor to be used by this pipeline, that 7 per cent figure to be based on the final, total capital cost of the project. An addendum to that: allowing a settlement of mitigating costs for social and environmental disruption to be tallied after the event. Leave that open.

(3) A complete, signed guarantee that British Columbians and Canadians will have the first right of refusal on the Dempster arctic gas pipeline.

MR. WALLACE : Mr. Speaker, I was really impressed by the Leader of the Opposition's non-partisan speech.

I just feel that there's a series of events. The Leader of the Official Opposition referred to it as a high-water mark in charting the future of British Columbia. I think he's correct that we have a major issue of transporting natural gas from Alaska and it has, in effect, become an enormous international poker game between Canada and the United States and the showdown is September 1.

I'm aware that President Carter can delay his decision for 90 days but, regardless of that possible delay, the outcome of negotiations will decide either who held the best cards in this poker game or, perhaps more ominously, which country plays poker best. The issue is of enormous significance for four or five reasons. I want to mention them quickly and say a little bit about each. The scope of the project, as the Liberal leader pointed out, matches - and far exceeds, in fact - any development project in the past.

We're talking about perhaps an $8 billion project with something on the order of $1.3 billion being spent in British Columbia. We have the economic implications, both during and after the possible construction of the pipeline.

Thirdly, an issue that I'm rather surprised was not accentuated in debate earlier this afternoon is the essential question of our good relationships with our very powerful neighbour, the United States, for good or bad, as the case might turn out to be.

It's been said so many times that it's very difficult for a mouse to sleep with an elephant and I think that we shouldn't lose sight of the fact that, regardless of whether we're negotiating on natural gas with the United States, any negotiation which is of such far-reaching economic importance to the United States must be approached, as the Liberal leader suggested, with the greatest degree of care, courtesy and diplomacy.

You might take a quick, simple example of the problems of agriculture and all the responses which the American nation can very quickly develop if they're unhappy with trading problems across the border of one kind or another.

The fourth element, which hasn't been mentioned at all this afternoon - or very little - is the whole problem of native land claims, which must surely be intimately involved in any project of this nature.

Last, but by no means least, is the environmental and social impact of the pipeline. I just want to mention very briefly the confusion with which Canadians, by and large, must be facing this very complex issue. I've listened to comments in this House this afternoon which I believe to have been well researched, and I'm talking particularly, Mr. Speaker, about the economic implications as they involve employment. I notice on the front page of tonight's Victoria Times there is an enormous. headline which says: "30,000 Jobs From Alcan Pipe." Now prior to today I haven't read anything closely resembling these figures.

So that the House may be aware of why I make that criticism, I would quote from The Financial Post of July 30,1977. Under the heading of "Unemployment, " this

article by a lady by the name of Margaret Laws states:

"Neither the Arctic gas nor the Alaska Highway route would do much to cut into unemployment, although the Arctic Gas proposal was estimated to be slightly more attractive from this point of view. At the peak of construction in 1980, foothills estimates that the pipeline would bring about a 0.22 per cent increase in man-years of employment. The reason why the positive impact on employment growth is so small compared to the impact on gross national product growth is because the pipeline is highly capital intensive rather than labour intensive."

So, Mr. Speaker, I just make that point in passing because some of the outrageous statements that are made in the Times tonight. I think I should say, in fairness, that the statement is made by Barry Brown, a spokesman for the Pipeline Construction Association of Canada. I think this is an important aspect of this whole problem to put into context. He

[ Page 4422 ]

says:

" 'Our first problem would be to locate the skilled workers for pipeline work and then to provide accommodation for them and the thousands of other workers who would stream into this province.'

"Brown said 8,000 workers would be needed to work directly on pipeline construction and about 22,000 would be needed in supporting services.

" 'I would say it would take 30,000 workers but it could be more than that. It is a very big project.'

"British Columbia has some highly skilled workers but not nearly enough to handle the $10 billion project.

"We would have to draw on the pool of skilled pipeline workers in Alberta and Ontario - and in the United States as well."

" 'Canadian companies are able to supply all the major construction equipment and material but the contracts will not be confined to B.C. firms. The project will be shared across Canada.' "

[Mr. Schroeder in the chair.]

At any rate, Mr. Speaker, this is the kind of confusion which must be engendered in the minds of the public when they read these figures and perhaps ask why any government - the British Columbia government or the Canadian government - would show any hesitation in getting into a deal on the pipeline if that kind of boost to employment was to be part of the deal.

I hope that within this debate or at an early date, the Premier, on behalf of this government, will come forward with the most reliable available figures as to what exactly the impact of the pipeline would be in regard to creating new jobs, when we know very well, as the Leader of the Opposition pointed out, that whatever jobs are created at the peak of employment, this will certainly be only over the time during which construction goes on and that there will be a return of all the skilled pipeline personnel to other parts of the world. I gather that it's a highly skilled job and these trained personnel travel all over the world.

I also received a telegram this afternoon which is a copy of one sent to Prime Minister Trudeau by the United Fishermen and Allied Workers' Union, and part of the telegram says:

URGE NO DECISION TO BE MADE ON PIPELINE ACROSS CANADIAN TERRITORY

CARRYING ALASKA NATURAL GAS. WILL RESULT IN FURTHER EROSION OF SOVEREIGNTY So

OBVIOUS IN OUR FISHERIES DISCUSSION. URGE B.C. GOVERNMENT TO DENY PERMISSION

FOR PIPELINE THROUGH BRITISH COLUMBIA UNTIL ADEQUATE ENVIRONMENT AND SOCIO-ECONOMIC

IMPACT STUDIES ARE CARRIED OUT AND A THOROUGH OPPORTUNITY FOR PUBLIC B.C. DEBATE.

And I would assume that the Premier has perhaps just in the last hour or so received the same telegram. This telegram was received at 15:40 hours in my office.

Interjection.

MR. WALLACE : No, Mr. member for Burnaby, it was signed by George Hewison, who is the secretary-treasurer of the United Fishermen and Allied Workers' Union.

I may say I've also received a telegram from the Communist Party of Canada which I'm not about to quote. I've been accused of being many things in this House but I've never yet been accused of being a communist.

Mr. Speaker, as Canada and the United States sit down to bargain, it must be very obvious that there are costs and benefits to both countries. Each country must balance the costs and the damages against the economic benefits in trying to reach an agreement which is mutually satisfactory to both countries.

While I've listened carefully to the Leader of the Opposition and the Liberal leader, I have to take issue with them on one fairly basic point. That crucial opinion, in my view, is that Canada has to consider whether it should participate in the Alcan project at all. After all, Mr. Speaker - and this is where I find some difficulty in following the line of argument of the Leader of the Opposition (Mr.

Barrett) - the whole purpose of the Alcan project, if we set aside the possible Dempster hookup for the moment, is to serve the interests of the United States in getting Alaskan gas to central and eastern United States. The Canadian government, in other words, has some options in looking at this very important international issue. The United States wants the gas and needs the gas.

I just want to emphasize that at this point in the development of B.C.'s natural resources and Canada's natural resources, we are not under some overwhelming pressure to go along with the development of the Alcan pipeline, which essentially is to distribute Alaskan gas to the central and eastern United States. But even if we do feel that there is self-interest involved - and there is, despite some of the possible costs involved - I was very interested to read our esteemed former member of the press gallery, Marjorie Nichols, who pointed out in a recent

article from Washington that the Americans are far more sensitive to the El Paso option than appears to be the general feeling among Canadians.

There were at least two recent statements by

[ Page 4423 ]

President Carter, neither of which he was really asked to make. He was being questioned in fact, on one occasion, about another issue altogether. He was talking about the possibility of a new Panama Canal. He was answering a question at a public meeting which I happened to see on television. President Carter, in citing the need for a new Panama Canal, stated two or three times that it had to be capable of accommodating very large ships. He went on to stress that this was essentially to accommodate liquified natural gas, which would be used to distribute that gas to other parts of the United States.

This statement was further repeated. He specifically referred to the need for these large tankers for the distribution of liquified natural gas.

I think it shouldn't be overlooked that he also has tremendous political support for the El Paso proposal. I'm talking about President Carter. For example, 30 major unions representing several million workers have endorsed the El Paso proposal, as has the executive council of the AFL-CIO. El Paso also has strong political support in the Deep South. It's interesting that El Paso is a major gas supplier to the President's own Georgia constituency.

So, Mr. Speaker, the situation, as I sense it in the media and in the comments of the Liberal leader and the leader of the official opposition, is that it's a foregone conclusion that there is going to be an Alcan pipeline. It seems to be the impression I've derived from listening to debate.

The first question I would like to ask the government of this province is whether, in general terms, the government believes that this is a foregone conclusion and that all that remains is for British Columbia and Canada to get the best deal it can in negotiations with the Americans. Is that the position we're in today? Or does the provincial government of British Columbia feel, as Mr. Trudeau obviously does, that it is only in the light of negotiations that we can really determine whether there is going to be a pipeline route along the Alaska Highway.

But certainly the Alcan route, as has been pointed out, crosses 542 miles of British Columbia territory, and it would have an enormous economic, social and environmental impact on British Columbia. It would seem to me that it's never been more vital than now that the British Columbia government, through this appropriate. forum - namely the Legislature -should make its position plain to Canada and to the United States prior to the onset of these historic negotiations. We must remember, Mr. Speaker, the aftermath of the Columbia River Treaty.

If early negotiations lead to a decision by the United States that the Alcan

route is preferable, Canada must be tough and articulate and clear-cut in presenting

its position. To do this in fairness to the interests of British Columbia and

it's citizens, our federal negotiators must be notified of the British Columbia

position now.

I would just repeat that Canada has only one option to consider if it believes that the gas should be transported at all and that's the Alcan proposal. But the United States still has two options, although, to be very accurate, I suppose the Americans have three options. Again quoting from The Financial Post of July 12 this year, there was a headline which reads: "United States Thinks About Just Leaving The Gas In The Ground." I know that the Liberal leader in his comments said that was not an option. But in trying to cover this subject, at least on a wide front, and to cover all the opinions that have been expressed, I think it's fair to mention that this was an

article out of Washington by Hymen Solomon - and I suppose with a name like that he should have wisdom. This deals with the fact that the cost overruns of the Alcan route, together with construction delays, could really boost the initial projected costs by 50 per cent. I won't go into all the details, Mr. Speaker, but the

article then goes on to point out:

"Under these circumstances, the gas which would finally be delivered to the middle and eastern United States would be so far out of line in regard to cost that, of course, it would make the whole expenditure of $10 billion just not feasible."

So maybe the Americans have three options: maybe it is Alcan, El Paso or leave it in the ground. But assuming that there is a lot of evidence that the Americans desperately wish to obtain the gas, it would seem that the two clear options are Alcan and El Paso. It's also clear, as has already been said, that Alaska itself, through the presentation made by Governor Hammond, would much prefer to have the El Paso route.

The reasons for that are numerous, but he has pointed out that it has the smallest risk of construction delay and cost overruns; it doesn't intrude on the unique wilderness area or pose threats to wild life; it would make maximum use of existing pipeline experience and data. The El Paso route parallels the oil pipeline for all but the last 40 miles of the 800-mile route, and an estimated $1 billion investment in work pads, access roads and construction camps could be used.

Governor Hammond also points out that it would afford Alaska the opportunity to use a portion of its royalty gas and offer substantial economic benefits to the state and the nation. On the other hand the Governor of Alaska points out that the Canadian route would mean a balance-of-payments deficit to the United States of more that $20 billion dollars over the life of the project. Last, but perhaps the most important point of all, Governor Hammond points out that it avoids the passage of the pipeline through a foreign country. Again, I would just say in passing that the Leader of the Opposition, while quite rightly emphasizing the importance of Canadians

[ Page 4424 ]

having first access to gas which might be obtained through a Dempster linkup, perhaps overlooked the point that if we don't have the Alcan pipeline in the first place which is designed to convey American gas, there may never be a Dempster pipeline or a separate Canadian pipeline required.

If I was an American, I would just be very, very careful of the concept of depending on getting one of your vital natural resources transferred from point A to point B, if a very large part of the intervening country to be traversed was susceptible to people who might just want to turn off the tap when it suited their convenience.

So I don't think that we should be in any way surprised or dismayed by the fact that the Governor of Alaska and the government of Alaska are obviously very sensitive to the problems that can arise when large volumes of the natural resources might have to be conveyed through another country. I think that if Canadians were facing that possibility, they would react in exactly the same way.

The point I'm trying to make, Mr. Speaker, is that the El Paso prospect is far from dead. In fact, it is very much alive. I just don't understand the kind of preconceived idea that seems to have pervaded much of the public response and much of the debate today that somehow or other the Alcan pipeline route is a foregone conclusion and that all we have to do is try and hammer out the best terms for British Columbia and for Canada.

The Leader of the Official Opposition says that if he had his "druthers, " he would prefer to wait for an all-Canadian product. I suppose we all would, as Canadians and patriots. But on the other hand, the Leader of the Official Opposition is saying that he has accepted as a fact of life that he has to support the Alcan proposal. I don't believe from all the reading I've done and from all the comments that have already been made in this debate, that that is an accurate summation.

At any rate, Mr. Speaker, the Canadian government and the American government are about to sit down and explore around a negotiating table the pros and cons of the Alcan pipeline proposal. There is one crucial aspect of the $10 billion poker game, because British Columbia has to let the federal government know now the costs - and I use the word "costs" in the wide sense: money, environmental, social, land claims - that it is prepared to pay for the economic benefit.

Since the British Columbia portion of the Alcan route would have a capital cost of $1 billion, with a large amount of provincial revenue annually, I'd like to ask the government the second question: is British Columbia prepared to co-operate in the Alcan route at any price? I hope not, because as has been mentioned earlier, we all know the social and environmental impact of many projects that have already proceeded, such as the Alaska oil pipeline, to which the Leader of the Official Opposition referred in talking about the social problems that have arisen and which I needn't repeat. We are all aware of the problems of alcoholism, crime, prostitution and many other serious social problems.

So I would like to know if the government of British Columbia has decided that it is committed to supporting the Alcan pipeline route at any cost. If it is not at any cost, how far is the government prepared to go in co-operating in the development?

I would suggest that the cost-benefit analysis must be weighed with great care and precision. I hope that British Columbia, if it hasn't already reached that point in its deliberations, would very quickly reach the point of spelling out just how far it's prepared to go - the price beyond which it will not go in seeking the benefits which the pipeline would obviously bring. Again, Mr. Speaker, in mentioning the seemingly preconceived notion many people have that this is a foregone conclusion, I would just like to quote Prime Minister Trudeau, who said yesterday that negotiations might be unsuccessful.

So I would suggest that it's clear the Canadian government realizes the price demanded by the United States may prove to be too high to justify the benefits we would receive. This is a very factual and realistic note, I would suggest, on which to begin negotiations, because we all still have memories of the Columbia River Treaty.

Prime Minister Trudeau also recognized the National Energy Board report, which pointed out that Mackenzie Delta gas reserves constitute the cheapest alternative source of new energy supplies available to Canada, and that a spurline to the Alcan pipeline could ensure that Canadian Mackenzie Delta gas would be piped to Canadian markets. I would suggest that this, as the Leader of the Official Opposition states, is the most important part of the equation in this whole international poker game. What British Columbians and Canadians must decide is to what degree they are prepared to let the Americans up the ante.

Foothills Ltd. proposed a future hooking-up of Mackenzie gas via a spur along the Dempster Highway. The National Energy Board proposed diverting the Alcan route near Dawson City to lower construction costs of the Dempster link. Again, I understand that that proposed diversion by the National Energy Board would add an extra 6 cents per thousand cubic feet to the American customers.

The Prime Minister said another interesting thing yesterday, Mr. Speaker, if he is being quoted correctly. He said: "There is a point beyond which it will cease to be in Canadian interests to build this pipeline. We're not going into this to take the Americans for a ride and we expect they're not coming in to take us for a ride."

I'm not one of Prime Minister Trudeau's greatest

[ Page 4425 ]

admirers, but I have to admit that on this issue, and on the basis of some of these very straightforward thoughtful comments, I am somewhat relieved to learn that the Prime Minister does not feel that somehow or other we must build the Alcan pipeline and simply get the best deal we can. He is saying very clearly that negotiations might be unsuccessful. He is saying there is a point beyond which it will cease to be in Canadian interests to build this pipeline.

What I'm trying to find out, and what I'd like to know from both the British Columbia government and the Canadian government, is: at: what point does it cease to be in our interest? How much are we prepared to pay - how much social damage, how much environmental damage, how much money? What are we prepared to put up with in order to gain in return certain benefits, the nature of which we are all very well aware?

Guarantees for the Dempster link would obviously be one of the strongest conditions that Canada could and should insist upon in negotiations. I would suggest that there are conditions that British Columbia must insist upon so that a point is not reached where the costs to British Columbia outweigh the benefits. Again, I would just refer to The Financial Post of July 30, where, as usual, economists differ in the degree to which they think there would be economic benefits.

I've already referred to the limited impact on unemployment, and I would just say that comments by certain economists make it plain that even the effect on the general economy would probably not be of the degree that many others have claimed. The National Energy Board estimated that the Arctic Gas project would have an annual positive impact on real gross national product growth of about 0.9 per cent from 1978 to 1985, compared to 0.5 per cent for the Alaska Highway project. So both in terms of dealing with unemployment and the economy in general, the economic benefits are perhaps not as extensive as so many authorities have claimed.

I would just ask three or four more questions of the British Columbia government. First of all, in the light of evidence both in the debate and in comments from the press, British Columbia has not been very active in letting the federal government know its position or the conditions that it would insist upon, if in fact this project were to proceed. The debate has shown very clearly that there have been some very important studies done. Again I won't take the time of the House to repeat all the information that the two former speakers have brought forward regarding, first of all, the Berger commission and then the Lysyk inquiry.

Nevertheless, Mr. Chairman, these were both federal inquiries initiated at the federal government, and I presume that the federal government was respecting jurisdiction by not appearing to poke its nose into British Columbia's affairs. But I would like to know why the British Columbia government either did not embark on one of its own inquiries or whether it did not take a more active role in participating in the Lysyk inquiry, which was confined primarily to the social and economic impacts in the Yukon.

While I'm no expert on northeastern British Columbia, I understand that in many respects the kind of problems that would be faced in northeastern B.C. would not be that greatly different from the Yukon. I can't recall the gentleman's name who was council to the Lysyk inquiry, but he stated the British Columbia representatives would be very welcome before his inquiry. It was something of a puzzle that British Columbia had played no active

part in the Lysyk hearings.

It really surprises me that we are now almost at the last moment, it would seem, hoping to inform the Canadian government as to the kind of concerns we have about this whole project and the conditions as we as British Columbians feel must be met before we would be willing to co-operate in the finalization of the agreement.

One disturbing element in all this, Mr. Speaker, that I would hope the government will clear up is that the Minister of Energy stated yesterday that there was no doubt that the federal government knew that British Columbia backed the Alcan route. Questions have been asked off and on in this House and outside of the House as to what the government's position is. Did it favour the Mackenzie Valley pipeline or the Alcan route? As far as I'm aware, there has not been until now, or until yesterday, any definitive statement of the position of the B.C. government.

Yet yesterday, we can open the newspapers and read that the Minister of Energy said there was no doubt that the federal government knew that British Columbia backed the Alcan route. Is not this an issue of the greatest public importance? If it is, why should the provincial government have been talking quietly and privately with the federal government as to what its policy is without at least giving this Legislature some insight into which particular proposal was favoured by the B.C. government?

And if the government has decided to support the Alcan route, might I ask, Mr. Speaker, if there have been studies done that are either not published or that we are unaware of on this side of the House? It would seem a little late to embark on them now. But if we haven't carried out the studies, how on earth can we enter negotiations or be a party to federal negotiations when we don't know what the cost is going to be?

The National Energy Board came up with the ballpark figure of $200 million for social and environmental damage vis-à-vis the Yukon. Has anybody on that side of the House got the foggiest

[ Page 4426 ]

idea of what the sum of money that might be appropriate to compensate British Columbia for the social and environmental impact of a pipe through 542 miles of northeastern B.C.? It's a very reasonable question, Mr. Speaker, in my view.

But many of the studies from which the Yukon and the National Energy Board are quoting statistics were done in a hurry and perhaps are less complete than one would wish. I am thinking particularly of the Lysyk inquiry which covered an enormous amount of mileage and put in many seven-day weeks in the course of trying to meet its terms of reference.

It would seem that British Columbia is even worse off than the Yukon, inasmuch that we either haven't participated in the inquiries that were conducted, or we have not tried to embark within our own provincial autonomy on studies relating directly to the particular way in which our province would be affected by a pipeline extending more than 500 miles across the northeast corner.

So I wonder if the government can bring the House and the people of British Columbia up to date right this afternoon with our knowledge - or the degree of our knowledge - as to the impact of this proposed pipeline, and the kind of figure for compensation that we are likely to convey to the federal government as some kind of basic