1973 Legislative Session: 3rd Session, 30th 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, OCTOBER 23, 1973

Afternoon Sitting

[ Page

847 ]

CONTENTS

Afternoon sitting Statement Progress on settlement of BCR strike.

Hon. Mr. Barrett — 847

Mr. Chabot — 847

Mr. D.A. Anderson — 847

Mr. Wallace — 848

Routine proceedings

Oral Questions

Auto insurance companies list. Mr. Wallace

— 848

Handling of insurance claims in areas lacking claim

centres.

Mr. Phillips — 848

Government title to Shaughnessy Hospital lands. Mr. McGeer — 849

Relocation of B.C. Rail headquarters to Prince George.

Mr. Curtis — 849

Future of Shaughnessy Hospital. Mr. McGeer — 849

Availability of auto insurance with 1974 licence plate

renewal.

Mr. Fraser — 849

Effect on domestic shortage of Ocean Falls newsprint

exports.

Mr. Wallace — 849

Cost of Shaughnessy site. Mr. McGeer — 850

Raise for B.C. Ferries manager. Mr. McClelland — 850

Additional community boards. Mrs. Jordan — 850

Presidency of B.C. Rail. Mr. D.A. Anderson — 851

Canadian Cellulose. Mr. Smith — 851

Natural gas problem. Mr. Wallace — 851

An Act to Amend the Mines Regulation Act. (Bill 80).

Hon. Mr. Nimsick. Introduction and first reading — 851

Petroleum Corporation Act. (Bill 70). Second reading.

Hon. Mr. Macdonald — 852

Mr. Smith — 854

Mr. D.A. Anderson — 858

Hon. Mr. Barrett — 863

Mr. Wallace — 867

Mr. Phillips — 873

Mr. McGeer — 875

Hon. Mr. Macdonald — 879

Division on second reading — 880

An Act to Amend the Mental Health Act, 1964. (Bill 82).

Hon. Mr. Cocke. Introduction and first reading — 880

Statement Further progress on BCR strike settlement. Hon. Mr. Barrett — 880

The House met at 2 p.m.

Prayers.

HON. A.B. MACDONALD (Attorney General): Mr. Speaker, I'd

like to introduce to the House the man that was good enough to

lead us in prayer today: one of our honoured Clerk's

youngsters, the Reverend Ward DeBeck.

HON. E.E. DAILLY (Minister of Education): Mr. Speaker, I'd

like the House to join me in welcoming a group of students from

a junior secondary and senior high school in North Burnaby:

Alpha. Thank you very much.

MS. K. SANFORD (Comox): Mr. Speaker, I would like to

introduce to the House this afternoon Mr. and Mrs. Sid

Williams, two distinguished residents from the City of

Courtenay.

Mr. Williams — Sid Williams — is known to thousands of

British Columbians through the role that he has played with the

Barkerville troupe. He is also a freeman of the City of

Courtenay, but is probably best known and best loved by the

people of British Columbia as "Century Sam." I would like the

House this afternoon to join me in welcoming Century Sam, Mr.

Sid Williams, and his wife Lillian.

MR. SPEAKER: Hon. Members, I also have the opportunity, for

a change, to introduce to the Members two very distinguished

artists who distinguished themselves both on Sunday and on

Monday with the Victoria Symphony Orchestra in concert. One is

a product of Victoria, a very fine pianist, Miss Lynn Hendry,

who played the Rachmaninoff concerto last night; and also in

concert, Miss Anna Chornodolska, from Montreal who sang Madame

Butterfly, among other great accomplishments. I would ask the

House to welcome them both; they are a credit to their art.

I should say also that they are accompanied by Mrs.

McGee.

HON. W.S. KING (Minister of Labour): Mr. Speaker, we have in

the gallery today a distinguished gentleman who for many years

acted as secretary-treasurer of the B.C. Federation of Labour.

He is now the education director of the Canadian Labour

Congress. I would ask the House to welcome Mr. George Home.

MR. F.X. RICHTER (Leader of the Opposition): Mr. Speaker, I would like

to join with yourself and others who welcomed Lynn Hendry. I'm particularly

interested in Miss Hendry's success; after all, she was a product of Penticton

and my constituency.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Mr. Speaker,

I just want to say that I don't know whether all the Members know, but H.W.

Herridge passed away last Friday. He was a former Member of this House from

1941 to 1945 and in the federal House from 1945 to 1966. He contributed a lot

to the people of British Columbia and to Canada, and I would just like the House

to know that.

HON. D. BARRETT (Premier): Mr. Speaker, I ask leave of the

House to make a brief statement.

Leave granted.

HON. MR. BARRETT: Mr. Speaker, at 11 o'clock this morning I

was advised by the Minister of Labour that a new initiative was

presented to bring about the direct negotiations between the

shop craft unions and B.C. Rail. The nature of the initiative

is such to leave hope that there will be an imminent settlement

of this rail strike. Because of that I will now wait a number

of hours for the outcome of this intense negotiation that's

taking place that has some immediate hope of settlement.

MR. J.R. CHABOT (Columbia River): Mr. Speaker, we welcome

the proposal which the Premier has outlined. It is very general

in context and doesn't say too much — what he means by

initiative. Just yesterday when I asked about the efforts on

the part of the Associate Deputy Minister of Labour to get the

parties to bargain collectively, I was informed that he was

unable to get the parties together at the bargaining table.

That was the purpose of his going to meet with the parties.

I hope that they will get back to the bargaining table and I

hope that later today, before 6 p.m., the Premier will be in a

position to give us a further statement on the developments of

this most critical economic dispute.

HON. MR. BARRETT: Mr. Speaker, I want to thank the Member.

The information I have was that the initiative has brought the

parties together. My information is that there is imminent hope

of settlement. They are in negotiations now, and as soon as I

receive word one way or the other I will inform the House. I

thank the Member for raising it.

MR. D.A. ANDERSON (Victoria): Mr. Speaker, we thank the

Premier for informing us that a new initiative has been

presented, although we regret that more details were not given

on this.

We trust, Mr. Speaker, that the difficulties that have

surrounded this dispute will lead to a

[ Page 848 ]

re-examination of the question of conflict of interest

between directors of the BCR who have, of course,

responsibilities elsewhere. The conflict of interest exists

when a man whose job it is to impartially judge between labour

and management in disputes in this province finds himself

entirely in the management camp as a director and a member of

the management of B.C. Rail.

We trust that these things will be considered in the future.

We regret they have not been considered to date. We trust

something will be done on this.

HON. MR. BARRETT: Mr. Speaker, I know of no jurisdiction

where law requires that a shareholder not be the director of a

company. The people of British Columbia are shareholders in

that Crown corporation set up by the former administration. As

representatives of the shareholders we must be present. There's

no question about that.

MR. SPEAKER: I don't think, really, that it has a thing to

do with the question that was raised in the statement and any

contributing advice that other Members can give. I think that

that's a subject matter altogether that should not be gone

into.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, we also welcome the

Premier's statement. In view of his stress on the word

"imminent" I hope that we would at least have a progress report

before 6 p.m. as to the state of the negotiations which he's

described.

Oral questions.

AUTO INSURANCE COMPANIES LIST

MR. WALLACE: Mr. Speaker, I'd like to ask the Minister of

Transport and Communications a question regarding the

memorandum sent to MLAs on October 19 listing insurance

companies which are continuing to offer automobile insurance.

I'd like to ask the Minister two things.

Does the list include all such companies who are continuing

to issue insurance? If the list does not include all companies,

does the Minister not consider it discriminatory to circulate a

list where the implication is that those not on the list are

not any longer selling insurance?

HON. R.M. STRACHAN (Minister of Transport and Communications): The

list that was circulated was of the companies that we know are continuing to

sell insurance. Some, we know, are not continuing to sell insurance. It was

not a public list; therefore, we are not discriminating against anyone. We were

simply letting the Members know because you, like us, must be getting calls

from people asking from which companies they can obtain insurance. This is an

attempt to help you help your constituents. It doesn't necessarily include all

the ones we know of. That's as far as I can go.

MR. WALLACE: A supplemental question, Mr. Speaker. I've also

had phone calls from companies who issue insurance who are not

on this list and who feel that that is a very unfair

implication by absence of their names. Could I perhaps ask the

Minister if it would be possible to expand the list to be sure

that all companies who are still issuing policies can be

included on that list?

HON. MR. STRACHAN: Well, as I say, it wasn't a public list.

It was one that was sent to you to help you answer questions. I

don't know why they didn't phone me. I don't know how they got

hold of the list, as a matter of fact. I just don't know how

they got hold of the list, unless perhaps some Member gave it

to some of them. I didn't.

MR. H.A. CURTIS (Saanich and the Islands): Was it marked

confidential?

HON. MR. STRACHAN: No, it wasn't, but it was for your help.

Nevertheless, I have no objection to including them on the

list. Had there been more names on the list we wouldn't have

some of the problems that the people are facing today.

HANDLING OF INSURANCE CLAIMS

IN AREAS LACKING CLAIM CENTRES

MR. D.M. PHILLIPS (South Peace River): I would like to

address a question to the Hon. Minister of Transport and

Communications (Hon. Mr. Strachan). Would the Minister advise

me who is going to handle insurance adjustment claims in areas

of the province where there will be no claim centres

established at this time?

HON. MR. STRACHAN: It will be handled by travelling

adjusters.

MR. PHILLIPS: Has the Minister of Insurance made any deal

with any group of adjusters in this province to travel around

the province and handle it?

HON. MR. STRACHAN: I am not aware of any deal that has been

made yet.

MR. PHILLIPS: A supplementary question, Mr. Speaker. Will it

be on order and will the independent individual adjusters of

the province have the opportunity to work for the new insurance

corporation?

HON. MR. STRACHAN: I would expect so.

[ Page 849 ]

GOVERNMENT TITLE TO

SHAUGHNESSY HOSPITAL LANDS

MR. P.L. McGEER (Vancouver–Point Grey): Some days ago I

asked the Minister of Public Works whether the provincial

government had title to all the Shaughnessy Hospital lands

proposed for the B.C. Medical Centre. He took it as notice.

HON. W.L. HARTLEY (Minister of Public Works): The matter is

being handled by the Department of Health and as yet hasn't

been turned over to us.

MR. McGEER: Supplementary question, then, to the Minister of

Health.

MR. SPEAKER: Oh, you can't have a supplementary on that.

MR. McGEER: He's told me that the jurisdiction is that of

the Minister of Health.

MR. SPEAKER: What you want is a second question to another

Minister.

RELOCATION OF B.C. RAIL

HEADQUARTERS TO PRINCE GEORGE

MR. CURTIS: Mr. Speaker, a question to the Premier. Has any

recommendation been received by him with respect to relocating

the headquarters of the British Columbia Railway in Prince

George from the present location in the greater Vancouver

area?

HON. MR. BARRETT: No.

MR. CURTIS: A supplementary. Is any consideration being

given to the possibility of relocating the headquarters to

Prince George?

HON. MR. BARRETT: No. That's the first time I have heard

that suggestion.

FUTURE OF SHAUGHNESSY HOSPITAL

MR. McGEER: I would like to ask the Minister of Health

Services and Hospital Insurance (Hon. Mr. Cocke) if it is true

that the Shortliffe report recommended that the Shaughnessy

Hospital become just a community hospital in the future of

British Columbia health services.

HON. D.G. COCKE (Minister of Health Services and Hospital Insurance):

We are dealing with the Shortliffe report again. I indicated that the Shortliffe

report was a report that was not made to me. It was made to assist the Dr. Foulkes

committee with the health security project in their discussions of the future.

What they discussed for Shaughnessy Hospital was along that

line; that is correct. I unfortunately couldn't follow that

kind of direction.

MR. SPEAKER: Hon. Members, according to Beauchesne, page

148, it says, "The Member must not seek information about

matters which are in their nature secret such as decisions or

proceedings of cabinet, advice given to the Crown by law

officers," et cetera.

I think that in that field it would not be a Ministerial

responsibility at this time if you were asking for what advice

somebody is giving to somebody else who is employed by the

Crown. I don't think that still falls within advice to the

Minister at this stage.

AVAILABILITY OF AUTO INSURANCE

WITH 1974 LICENCE PLATE RENEWAL

MR. A.V. FRASER (Cariboo): A question to the Minister of

Transport and Communications. Will the Insurance Corporation of

British Columbia be in a position to have car insurance

available to drivers purchasing licence plates on January 1,

1974, or will licence dates of renewal be pushed ahead for that

year?

HON. MR. STRACHAN: Yes.

SOME HON. MEMBERS: Yes, what?

MR. FRASER: A supplementary, Mr. Speaker. Has the government

established that car insurance rates will be no lower than 1972

rates, applying on an average in B.C.?

HON. MR. STRACHAN: No.

EFFECT ON DOMESTIC SHORTAGE

OF OCEAN FALLS NEWSPRINT EXPORTS

MR. WALLACE: I would like to ask the Minister of Lands,

Forests and Water Resources (Hon. Mr. Williams) a question

regarding a question I asked the Premier when you were absent,

Mr. Minister. I would like to follow it up by asking if the new

agreement between Ocean Falls and Godizman Central national

organization, which stated better financial terms than existed

between Crown Zellerbach — does it mean that we are exporting

more newsprint at a better price when there is a shortage of

newsprint in this province? — and to what degree do the terms

of the agreement impair the ability to supply the domestic

market?

HON. R.A. WILLIAMS (Minister of Lands, Forests

[ Page 850 ]

and Water Resources): The management at Ocean Falls

considered a range of alternatives. I believe the bulk of the

supply was, in fact, destined elsewhere under the arrangements

with Crown Zellerbach. As it stands, we are satisfied. It is a

considerable improvement and will improve the basic position of

the company. The company did consider the various options and

alternatives and discussed those alternatives with the other

Canadian marketers.

MR. WALLACE: Could I ask a supplementary to the Minister,

Mr. Speaker? Will he table the terms of the agreement as the

Premier suggested he might?

HON. MR. WILLIAMS: No.

COST OF SHAUGHNESSY SITE

MR. McGEER: To the Minister of Health Services and Hospital

Insurance (Hon. Mr. Cocke), could he give us some indication of

what the cost to the Crown will be of the purchase of the

Shaughnessy site for the B.C. Medical Centre?

HON. MR. COCKE: Well, I can't tell you other than that it's

not a cost. It's going to go the other way. As the Member

knows, the federal government has wanted out of the Veterans'

Affairs hospitals and has offered to upgrade the facilities, at

least to some degree, and that's where the negotiations are at

the present time — the extent of the upgrading and the extent

of their contribution to the overall plan.

RAISE FOR B.C. FERRIES MANAGER

MR. R.H. McCLELLAND (Langley): A question for the Minister

of Transport and Communications (Hon. Mr. Strachan). In view of

the government policy in relation to the new sideways-shuffle

programme for senior civil servants, has the Minister given

consideration to a raise for the manager of the ferry system,

Mr. Aldous?

HON. MR. STRACHAN: No.

MR. McCLELLAND: Is the Minister then announcing new

government policy or will he be considering a raise for the

former manager?

HON. MR. STRACHAN: Make up your mind.

AN HON. MEMBER: Oh, he's losing his cool,

ADDITIONAL COMMUNITY BOARDS

MRS. P.J. JORDAN (North Okanagan): I would like to address myself to

the Hon. Minister of Human Resources (Hon. Mr. Levi). In his statement yesterday

in response to a question that I made regarding the community boards that he

announced in Vancouver over the weekend he, in fact, said that this was not

a policy shift of the system in British Columbia. I would like to ask him today

if, by that statement, he means in fact that he is not considering setting up

community boards anywhere else in British Columbia but the one he addressed

himself to in Vancouver.

HON. N. LEVI (Minister of Human Resources): If I said that

it wasn't a policy shift…I don't recall I said that. I just

made reference to the fact that in Vancouver we had had a

number of public meetings and at the culmination of these

meetings was a report which we said we would issue in

cooperation with Alderman Rankin's committee and the Second

Member for Burrard (Ms. Brown) who represented us.

It seemed to me that it would be fitting to make an

announcement about those findings in the City of Vancouver, and

that's exactly what we did. We have gone on record in the

department as saying that we are interested in the development

of community resource boards. There is a great deal of

discussion going on throughout the province about the

development of community resource boards. That's something that

we are encouraging.

MRS. JORDAN: A supplementary, Mr. Speaker. I appreciate that

we got a speech today rather than a sarcastic answer from the

Minister…

MR. SPEAKER: Well, let's not have another one.

MRS. JORDAN: …but I would ask him now that he has

explained a little bit of this major announcement he made

outside the Legislature: how does he propose to finance this

board, and how is this board going to be elected or appointed?

Is it through the Municipal Act? Is he contemplating changes to

the Municipal Act or will it be, as I suggested yesterday, a

neighbourhood townhouse meeting type of appointment?

HON. MR. LEVI: The release that I said you would get is on

its way to you. We said in the release….

MRS. JORDAN: I haven't got it yet.

HON. MR. LEVI: Well, you will get it. It's on its way to

you.

MRS. JORDAN: Only four days late.

HON. MR. LEVI: Let me just say that this kind of policy was

announced way back in the spring session when we tabled the

document on the drug programme. We are just continuing those

kinds of

[ Page 851 ]

discussions. In terms of financing these kinds of

programmes, the provincial government finances about 90 per

cent of this kind of operation anyway throughout the

province.

MRS. JORDAN: He says that this, in fact, is a major policy

change, when he said today it wasn't. He said yesterday it was.

Now is it or is it not…

MR. SPEAKER: Order, please.

MRS. JORDAN: …the first step of a major policy change…

MR. SPEAKER: Order, please.

MRS. JORDAN: …in rehabilitation in the Province of

British Columbia?

MR. SPEAKER: Order, please. The Hon. Member cannot repeat a

question that has already in substance been asked.

PRESIDENCY OF B.C. RAIL

MR. D.A. ANDERSON: In view of the fact that the Premier's

telegram to the employees of B.C. Rail constitutes that type of

management influence and intimidation of a duly certified

labour union prohibited under the new labour code — and we

discussed this at some length yesterday with the Minister of

Labour (Hon. Mr. King) — may I ask the Premier whether and when

he intends to hand over the presidency of B.C. Rail to a person

outside the cabinet so that the Premier can carry out his

duties as Premier of the province without this conflict of

interest?

HON. MR. BARRETT: Mr. Speaker, I regret that any Member

would attempt to use this situation for the political statement

just made by that Member. I find it completely unnecessary.

Everybody in this province wants a settlement of that strike

and, while negotiations are going on, I find it difficult to

see how that kind of question could be helpful. Mr. Speaker, I

will take it as notice.

MR. D.A. ANDERSON: Mr. Speaker, the question is on the

conflict of interest, not on the strike. I asked the Minister

when his conflict of interest which leads to these difficulties

that we are in now is going to be resolved.

MR. SPEAKER: You are asking the government's opinion on a

matter of policy; you are also asking a question of what

advice the Minister will give the Crown. Those are both

forbidden under Beauchesne.

CANADIAN CELLULOSE

MR. D.E. SMITH (North Peace River): My question is to the

Premier. Has Canadian Cellulose advised the government that the

tax appeal on their assessment at Prince Rupert will be held up

pending a review of

section 37 of the Assessment Equalization

Act?

HON. MR. BARRETT: I'll take that as notice, Mr. Member.

NATURAL GAS PROBLEM

MR. WALLACE: Mr. Speaker, could I ask the Attorney General

(Hon. Mr. Macdonald) to comment further on the statement he

made yesterday about the natural gas problem, whether he has

heard from Donald Macdonald and whether he is anticipating any

change in policy as a result of Macdonald's meeting with the

energy tsar from the United States in Ottawa which took place

this morning?

HON. MR. MACDONALD: Mr. Speaker, I am hopeful that the

Premier will call Bill 70, if we proceed today to public bills

and orders, so that the Hon. Members can get fuller

information. But I have had no reply other than that one on the

weekend when it was suggested — whoever drafted it — that I was

in conflict with Mr. Rhodes, which I was not. I've had no reply

and I think it is very regrettable that the federal government,

after we have waited this length of time, has not so much as

said yes or no to the simple request we have addressed to

them.

Introduction of bills.

AN ACT TO AMEND

THE MINES REGULATION ACT

Hon. Mr. Nimsick moves introduction and first reading of

Bill 80 intituled

An Act to Amend the Mines Regulation Act.

Motion approved.

Bill 80 read a first time and ordered to be placed on orders

of the day for second reading at the next sitting of the House

after today.

Orders of the day.

HON. D. BARRETT (Premier): Mr. Speaker, I move that we

proceed to public bills and orders, Motion approved.

HON. MR. BARRETT: Second reading of Bill 70,

[ Page 852 ]

Mr. Speaker.

PETROLEUM CORPORATION ACT

HON. A.B. MACDONALD (Attorney General): Mr. Speaker, Bill 70

is intituled the Petroleum Corporation Act. It sets up a Crown

corporation which is not going to be large, either in terms of

its staffing or its budget, but it is going to be big in

promise for the people of British Columbia.

It is really a simple marketing mechanism and control

mechanism intended to lift this province out of decades of lack

of planning in terms of the conservation and recovery of our

natural resources. While the bill covers of course petroleum

resources as well as natural gas resources, its immediate

priority has to be natural gas. We have in this province a

precious, depleting resource of natural gas which has been sold

on the export market at fire-sale prices to the detriment of

the revenues of this province and the industry of this

province, which must compete with industries receiving that

cheap gas south of the border.

Too long have the profits of the natural resources of the

Province of British Columbia been siphoned off to

multi-national corporations. Too long have the levers of

economic power over the resources of British Columbia been

handled outside of this province. Too long have we allowed the

pace of our economic development to be set by big corporations,

who have their own economic interests to promote to the

detriment in many cases of the interests of this province, and

whose tentacles have reached in not only to equity ownership of

the natural resources of British Columbia but to ownership of

producing units, refining units, processing units, and

marketing units.

The energy report which this bill seeks to implement in part

states very flatly that the management of our natural gas

resources has not been in the interests of this province. It

points up the astronomical loss in return that all of the

people of the province have suffered by reason of the cheap

sale and the improvident export of this natural gas

resource.

It points up that that loss to all of the people of the

Province of British Columbia at the present time, based upon

our receipt of the gas we export over the border at true

competitive value compared with other fuels, amounts to $100

million per year. In other words, now our gas should be selling

in the American markets at 58 cents, and that is a rapidly

changing figure in arising market for these precious fuels.

Too long has the pace of exploration and development of our resources depended

upon the profit projections and needs of multi-national corporations rather

than the needs of British Columbia for orderly development of these resources

and supplies retained to service, in this province, our own homes and our own

industries.

So this is a simple marketing agency without vast powers.

They are not necessary. If they are necessary, the agency

should be given those powers by this Legislature. But I do not

expect they are necessary and they are not contained in this

bill.

There is not even a right of expropriation contained in this

bill.

Interjection.

HON. MR. MACDONALD: There is no power of expropriation

contained in this bill. There are company powers, enabling

powers of a corporation which are very similar, say, to the

powers of B.C. Hydro, but B.C. Hydro has expropriation powers

which this corporation does not have.

We must control, we must make sure — and this agency can

assist in all of these matters — that the improvident export of

essential energy resources is not allowed to continue from this

province as it has in the past. We must establish a fair price.

We must protect, as I think the consumers and industry of this

province can be protected, both industry and residences by

having a price differential in favour of the B.C.

consumers.

Now that, being an export matter, is something that falls

within federal jurisdiction, but the federal government has had

and does have today, under regulation 11(

A) of the national

energy Act the power to impose two prices. And we seek

supplemental assistance from the federal government in

implementing such a policy that will protect our consumers and

still enable this province to receive the true return that it

is entitled to expect from its natural resources.

When we turn to the question of conservation of these

resources and the present emergency — this was a matter that

was raised briefly during the question period — I'd like to say

that this provincial corporation becomes an urgent necessity at

this time because one of its first tasks may have to be to

alleviate, insofar as it can, the winter shortage of natural

gas which is familiar to all of the Members of this House.

When you look at the history of what the federal government

has done, and remember that as short a time ago as last

November that federal government authorized the further export

from the Province of British Columbia of 75 million cubic feet

per day on top of the existing exports in the West coast

contract, you can see how reckless and improvident that federal

government has been in terms of British Columbia's interest.

That was clearly an improvident decision which means….

MR. P.L. McGEER (Vancouver–Point Grey): British Columbia

opposed the application.

[ Page 853 ]

HON. MR. MACDONALD: That would have been a hearing before

the present government. I wouldn't imagine they did. Yes, our

policy is against it, but in terms of intervention, no. I don't

think there was physical intervention as far as I know — I'm

not sure of that. If the Members are defending that federal

government and defending the hon. energy Minister from Ottawa — who does not, so far as British Columbia is concerned, even

deign to give a reply to our request that that tap be turned

down — let them make that their business.

High noon has passed and we have had no reply from Donald

Macdonald. Instead of having the right to expect a strong

protective arm in the interests of this province and in the

interests of the country generally, we have found that there

remains a slack wrist on the export valve and no response

whatsoever from Ottawa to the simple request we have made that

Ottawa do its constitutional duty.

During this same period when the federal government has been

prepared to impose export controls on butane, propane and heavy

fuel oil, they have not seen fit in any way to protect this

province in terms of its threatened winter emergency.

I would like to say further, in terms of turning down the

tap, that in the United States they have far more extensive

means of meeting any shortages emergency in the winter months

than we have in British Columbia. They have inter-ties, they

have storage facilities and more flexibility in terms of their

sources of supply than is the case in British Columbia which

basically depends upon one carrier and one set of

producers.

It is not only equitable, but as I say, the constitutional

duty of the federal government to protect this province in that

kind of a situation. Private contracts and export permits are

always and should always be considered to be subsidiary to such

national laws as tariffs or export controls or limitations or

even export taxes such as was recently applied by the federal

government in the case of fuel oil.

Now, to point up how serious the present situation is for

this province we have the latest figures up to October 22

showing that of the nominated amounts the cutback, amounting to

about 8 per cent, is already in full swing.

It has not yet affected Inland Natural Gas or Pacific

Northern which are not at this moment taking their nominated

supplies. But B.C. Hydro has already been cut back from 266

million cubic feet per day to 241 million cubic feet per day.

The supplies flowing to El Paso have been cut down from 809

million cubic feet per day to 736 million cubic feet per day — roughly a prorate of approximately 8 per cent reduction in the

flow. It is on this basis that we have insisted that what is

essential for the domestic needs of British Columbia should

have priority.

We are not receiving that priority at the present time. Our

industry as a result, in many cases, is having to go out on the

market — in a seller's market — and attempt to locate supplies

of heavy oil which has been escalating in price and which is

now in the area of $6 per barrel.

In the case of B.C. Hydro, which is having to buy oil and

may have to buy more oil in terms of the thermal units to

generate electricity, they're having to go out and pay the $6

per barrel, where to get the equivalent BTU capacity they would

have to pay, if their natural gas contracts were being honoured

by West coast Transmission, something in the neighbourhood of

$3.

I think there is a very good case that Westcoast

Transmission in a period when its sales have gone up in the

last 9 months by 15 per cent, when its profits in the last 9

months have escalated by 49 per cent — there is a very good case

that they should, if they do not fulfill their delivery

contracts to industry and to Hydro they should be prepared to

pay to those British Columbia industries the loss they suffer

as a result of having to go out on the market and buy more

costly fuel oil.

Whatever alternatives we face in this province have been

canvassed very thoroughly in the past few weeks, particularly

through the offices of the Energy Commission and also through

B.C. Hydro. But the alternatives are costly and they involve

dangerous delay.

Let me first deal with the question of bringing in new

wells. I would think that the newest well that could be brought

into flow, in terms of our pipeline system, would be Pointed

Mountain which is in the Yukon where there are two wells and a

possibility that one of the two can be brought on tap by March

1 of next year, but not in terms of large quantities — potentially the two wells, perhaps, up to 20 million. Other

resources can be made available through a vigorous drilling

programme, but not before next year.

Now, when you look at the other alternatives, you see in the

south that Alberta and Southern could make additional supplies

of Alberta natural gas available to the Americans who are now

the APCO group, which is the severed twin of Westcoast

Transmission. But we run into real difficulties in that area

too because any such diversion requires approval of the Federal

Power Commission in the United States as well as our own

National Energy Board. The word we have is that that approval

might take 60 to 120 days.

Then we have the problem that the scrubbing or cleaning

capacity for that gas at Waterton is being utilized to the full

right now. They have pollution problems and there's a physical

problem of increasing the flow to APCO by that means.

Finally, we have the proposition, which I find

[ Page 854 ]

rather hard to accept, that the American companies are

insisting that if they receive additional supplies of gas, say

another 30 million flowing into their system south of the

border from Alberta, they will insist that we do not receive

the full benefit of the 30 million which is saved, but that too

must be prorated. We would not even get the benefit of the

Alberta gas during this winter emergency. We'd get the benefit

of 30 per cent of the 30 million or about 10 million off that.

So while that proposition in the south has to be actively

explored, it is a difficult and apparently lengthy process.

The other proposition, in terms of the shortage, is that we

move as quickly as we can in terms of Pan Alberta, which is a

wholly-owned subsidiary of Alberta Gas Trunk Line and is a

wholly Canadian company and prepared to do business with us.

There are problems about that gas too. The propositions that

have been made to us at the present time….

I'd like to say at this time that I hope the Premier will be

able to shake himself free from this House and his duties and

go to Alberta, because this becomes an urgent priority matter

for British Columbia to try to get that additional pipeline,

the Zamora link, created as quickly as possible in the North in

terms of possibly recovering for us up to 18 million cubic feet

per day for the winter emergency. And because Premier Lougheed

has a close interest in this Alberta company, he is the man

to see. We've had a proposition from them which is rather

long.

On top of a natural gas shortage I think we're apt to have a

pulp shortage following close on its heels.

The price is a problem because the price that we're getting

at wellhead might average around 13 cents,

whereas this new

Alberta gas is being offered to us at 44 cents, even though

Westcoast Transmission has offered to absorb most of the

transmission costs.

It has problems, too, in the term of the contract. How long

do we sign up for? It has problems in terms of the fact that we

have to take a supply for the whole year, including the summer

where it may be surplus to our needs and where it would have to

be resold — although I should think that would be quite

possible — to the United States in terms of their need at that

time for irrigation and air-conditioning.

If we have to bring in some of this expensive Alberta gas,

we can't hope to have it before December 15 and may not have it

until the end of the year, and only if all of the negotiations

go well. The effect of this is that the Americans will once

again be receiving our natural gas at a lower price than the

industries and consumers of the Province of British

Columbia.

Those are the unattractive alternatives that have been put

upon the people of British Columbia through lack of foresight

and planning over 20 years of Social Credit administration in

this province and through the years since the development of

the National Energy Board in Ottawa. Believe it or not, they

have calculated the amount of gas that should be exported from

the Province of British Columbia not by a British Columbia

formula in terms of the reserves and availability of that gas

but by the formula applied on a national basis. The result is

that they have been authorizing these improvident increases in

the export of our gas at a time when it is badly needed here in

the Province of British Columbia.

HON. MR. BARRETT: Same old give-away gang.

HON. MR. MACDONALD: So in introducing Bill 70 and speaking

only to the principle at this time, Mr. Speaker, it is intended

primarily in the long run, to recapture for the people of this

province the true return they should have for the natural

gas.

Secondly, it will be a chosen instrument of this government,

the immediate usefulness of which may be apparent to the House

in the next week or two in terms of the winter shortage we are

now facing. I move second reading of the bill.

MR. D.E. SMITH (North Peace River): Speaking to the

principle of this bill, the Petroleum Corporation Act, it is

very apparent when you read the bill that what the Attorney

General has done, perhaps on the advice of the Energy

Commission or perhaps just upon the advice of the Members of

his cabinet, is to create a piece of legislation designed to

take over the petroleum industry in the Province of British

Columbia.

AN HON. MEMBER: Oh, come on.

MR. SMITH: There are full powers within that bill to

completely take over the industry in this province. You're

using an energy shortage, which we all admit exists today, as

the smokescreen to cover up the true intent of what you have in

mind. This is an example of the type of legislation that we

have seen come before this House, not only in this bill but in

many other bills, which has provided the government with

extreme powers which they can exercise without recourse and

without ever calling the Legislature together again.

Part of the problem in the production of natural gas has

come about as a direct result of industry being very hesitant

about the position they will occupy in this province in the

future. For that reason they have been hesitant and reluctant

to invest multi-millions of dollars in exploration in the areas

where they have every reason to believe we have excess or

greater resources of natural gas than we have presently

discovered.

It is interesting, Mr. Speaker, to read the report of the

Energy Commission concerning the natural gas

[ Page 855 ]

business in the Province of British Columbia — and I've read

that report very thoroughly. As I read the report, particularly

the first parts of it prior to the recommendations, I couldn't

help but feel I was reading a report that I had seen in print

somewhere else. So I took the trouble to look up a copy of the

report that was published about six months ago by the Canadian

Petroleum Association. Would you believe that that report

presented by the B.C. Energy Commission was almost word for

word from the report previously published by the Canadian

Petroleum Association and which became a document widespread

throughout the petroleum industry in the province?

Interjection.

MR. SMITH: Not word for word, but very close to word for

word, Mr. Attorney General. So then, when you read the report

as I did, I had to conclude that as a report it did document

the problems and the development of the petroleum industry in

the Province of British Columbia.

But then you got to the recommendations end of the report

and you realized, if you read it closely as I did, that the

recommendations did not in any way follow the broad outline of

the report with respect to the petroleum and gas industry in

the Province of British Columbia. In other words, it would

appear to me that the recommendations were drafted completely

separate and apart from the report and probably by some other

people — perhaps the cabinet who said to the Energy Commission:

you write your report on the overview of the industry and we

will tell you what we want you to put into the report in the

way of recommendations that will be compatible with the

legislation we intend to introduce into this province.

The Attorney General has suggested that the business of

production and sale of natural gas is not being managed in the

public interest in the Province of British Columbia. Let's

examine that statement for a moment.

If it had not been originally for an export permit issued to

Westcoast Transmission to export gas to the United States,

there would not be a natural gas pipeline from the gas fields

of northeastern British Columbia to the lower mainland today.

No financial institution was prepared to finance that type of

an investment on the amount of gas that the Province of British

Columbia itself could consume. The only answer at that

particular time was to involve ourselves in an export

market.

The unfortunate part of that involvement, as I see it, is that there was no

provision for an escalation clause in the contract negotiated with El Paso.

Hindsight is always better than foresight, Mr. Speaker, and in this respect

it would have been provident had Westcoast Transmission been able to secure

that export market on the basis of a contract which could have been reviewed

every few years and which included an escalation clause. So when the price of

the products we were selling to the States became under priced in value in energy

terms there could have been a re-negotiation of the price of natural gas.

One of the main reasons we have a shortage of natural gas in

the Province of British Columbia right now is because the

exploration companies could see no future for them or no return

of their investment if they had to sell gas at 14 cents or

something close to that. Nowhere down the line was there an

economic return in terms of the costs of exploration in

northern B.C. today. The cost of every person engaged in any

line of business has escalated tremendously in the last 10

years, and the cost of looking for natural gas and tying in

new locations and new wells is no exception, The $100 million which the Attorney General suggests that we

are losing is a hypothetical figure at the present time. I

agree that we are losing $100 million a year if we can sell all

the energy that we have available at a price of somewhere

between 35 and 40 cents per mcf, because this is where the

energy is priced at today if you look at the prices that

Alberta receives.

So we get back to the position of the National Energy Board

and what they are prepared to do. Even though they allow an

increase in price for natural gas, it will not immediately

solve our problem because of the simple fact that the only

place, to my knowledge, where we have excess volume of natural

gas which could be used this winter is in two locations, the

Yoyo field and the Cyprus field of northeastern British

Columbia. There's only one problem: the feeder lines from those

fields that tie into the main line are not large enough to push

any more natural gas through than we're presently doing — you

know that.

So we can build larger lines, probably as quickly as Alberta

could build lines to serve us from existing known resources,

but this will only solve the problem, Mr. Attorney General, if

those lines can be built in the fields that tie in to the

scrubbing plant at Fort Nelson because, as you must also know,

the only plant in British Columbia that has excess capacity to

scrub more gas than is presently going through the plant is at

Fort Nelson. We could draw extra gas from the Fort St. John

fields, but the scrubbing plant at Taylor is handling all the

gas that it can possibly handle in terms of volume right

now.

The only thing that could be done on a temporary basis is to

feed that raw gas, which still includes all the hydrocarbons

and the sulphur, into the transmission line on a temporary

basis in a raw form without scrubbing it. This could be done,

[ Page 856 ]

understand, if the amount of gas in relation to the total

volume was very, very small. That won't solve our problem

either because there's not enough available on that basis.

The other solution, of course, is to drill more wells as

quickly as possible in the Pointed Mountain area, and there is

a great problem, because the particular formation that they're

in is a very costly formation to get at. The companies estimate

that it costs them $2 million to drill one well in the Pointed

Mountain area. They can't afford that expenditure and neither

can the taxpayers of the Province of British Columbia if that

gas is going to wholesale at 14 cents per mcf or, as it is in

Fort Nelson, 11.3 cents.

It doesn't matter whether it's their money or the money of

the taxpayers of the Province of British Columbia through the

cabinet that drills those wells. If the wholesale price remains

at that level, neither private industry nor public industry

could ever recapture the cost of that additional expense. The

only way it would be recaptured, if you want to maintain the

price of natural gas at its present level in British Columbia,

is to subsidize it through huge infusions of capital that would

never be recaptured. You could bury, in other words, the costs

of actually bringing more wells into production.

It has been said that the pace of exploration in this

province and the development of our natural gas reserves are

dependent upon the profits to private development companies — this is how I would paraphrase what the Attorney General said.

In other words, if there is not a profit somewhere down the

line the companies are not prepared to develop the resource.

Then, I ask the Attorney General, how does the government

expect to develop those additional reserves unless they in turn

subsidize either the retail price of natural gas or the actual

cost of exploration and development in the Province of British

Columbia? Either way, it means an impost on the Crown and an

excess cost which should be known to the public before that

decision is made.

If we are to maintain the price we charge for natural gas to

domestic consumers and assume that they should get the break — I don't disagree with that — then the only alternative is to

increase the price of natural gas that we export and bring into

effect this matter of a two-price system. If there is to be a

differential, it must be in favour of the residents of the

Province of British Columbia. But the greatest problem in that

respect is the contract which was originally negotiated and

which is under the jurisdiction of the National Energy

Board.

It would seem to me, Mr. Attorney General, that we have

basically only two solutions to the present energy crisis in

the Province of British Columbia. One is to cut back

extensively the amount of gas that we export to the United

States.

The second is to purchase more gas, if it can be purchased from the Province

of Alberta on a temporary basis. It might even be possible, in my opinion, to

work that out on the basis of an emergency situation where we would take excess

volume of natural gas from the Province of Alberta now, in an emergency situation,

and return it to them from the gas that we will be able to produce out of the

Monkman Pass area at some future date — in other words, work the same sort of

a system that we presently use with regard to the supply of power to the United

States, where we have sort of a debit-credit situation where in some instances

we export our surplus power to the United States into Washington state, and

in other circumstances they allow their excess power to flow back into the Province

of British Columbia. On balance, over a period of time, I understand that the

export of power almost equals the import, so that really there's no net balance

involved.

I would suggest to the Hon. Minister, if he wishes to solve

this problem, that he actively try to negotiate with Alberta a

temporary agreement which would provide us with the additional

natural gas that we need now, provided of course that you can

get agreement from the National Energy Board to allow a

reduction in the amount of export that goes to the United

States. If you can get that, and go to Alberta on the basis of

a temporary need and take excess gas from them now on the basis

that you will return it to them in like form a few years down

the road, you may be able to solve the energy crisis in this

province.

Interjections.

MR. SMITH: I agree, this is a critical problem, Mr. Premier.

We have the potential for more natural gas in the province than

we need right now. The wells are there and they're known, but

it's a matter of tying those wells into a distribution system,

and the latest figures that I have indicate that we have at

least two trillion cubic feet of proven reserves over and above

what we have presently tied into our system, that are there and

are known to us. But they're in scattered fields, in very

difficult terrain, and to tie them into the gathering lines and

the main distribution line where they could be treated is a

complex problem, and we don't have that much time at our

disposal right at the moment.

Westcoast is presently looping the line to increase the

capacity that they can put through the compressors down to the

lower mainland. This would provide part of the solution as far

as the actual transmission of gas is concerned.

But the other thing that we must look at is that if the

increase and the demand for natural gas in the province

continues to escalate as it has in the past, and we retain the

same basic type of contract that we have presently with the

United States to export

[ Page 857 ]

natural gas, the capacity of the present pipeline is not

large enough to bring the product from the producing areas to

the areas where it will be distributed at the present time — not on a basis of peak demand in the winter months.

I would suggest to the Attorney General that one of the

solutions that he will have to look at in this whole problem of

natural gas production is the feasibility of taking natural gas

from producing fields in the summer months, when demand is at

its lowest level, and converting it into liquefied petroleum so

that the excess gas which is drawn out of the formation and fed

into the scrubbers and down the pipeline during the summer

months could be liquefied and stored and then fed back into the

system at a time when it is needed. This, naturally, is in the

winter months in our worst weather conditions.

It may be that we will have to look at that particular

process in order to ensure that we have an adequate supply.

Because if the demand continues to escalate, the existing

pipeline, which is the large pipeline from the producing fields

to the rest of British Columbia and the States, is not large

enough to accommodate the volume of gas that we would need in

the peak winter conditions when the demand is at its greatest

level.

I'll tell you another thing, Mr. Speaker, that is a problem

to the industry. For a long time B.C. Hydro have been the

greatest industrial customer in the Province of British

Columbia. Of the total consumption in the province, as I

understand it, 25 per cent goes to B.C. Hydro. They in turn use

that natural gas to manufacture electricity.

It is no secret that B.C. Hydro have made a tremendous

profit on the gas they purchased, converted to electrical

energy and then sold. True, that profit has been used for the

benefit of the taxpayers of the province. But the companies

which are in the exploration end and which hopefully will be

able to sell their natural gas somewhere down the road, have

indicated that they don't think it is really cricket for B.C.

Hydro to make a rip-off profit on the product that they supply

to them by using it for some other particular benefit and not

even allowing them to get a great enough price at the wellhead

to ensure, even at the most optimistic calculation of the

amount of gas that they'll be able to produce and sell, that it

will ever pay for their initial investment in that particular

field.

I can't impress upon the Attorney General too much the fact that we have the

most severe weather conditions, the roughest terrain and the highest costs of

exploring for natural gas of anywhere natural gas is known to exist. The costs

compared to Alberta are substantially higher. And not only that, a great number

of the fields that we have discovered are not prolific producers — some of them

are; the Beaver River field was a tremendous field, but some of our fields are

not prolific producers of natural gas. So we work on the basis that the average

life expectancy of a well will be quite short and the cost of producing that

gas will be extremely high.

If credit were to be given anywhere in British Columbia for

helping solve some of the production problems of natural gas in

this province, it should go to Imperial Oil who have, in their

production of gas and in their production of petroleum products

or oil in the Boundary Lake field, used a water-injection

system which has substantially increased the amount of product

that we could recover from the formation, and because of that

has helped at least to keep pace with the demands for energy in

this province.

We have a number of known fields which are merely wildcatted

at the present time. In other words, the wells drilled in the

locations are very minimal in number. We could have a

tremendous increase in the number of wells drilled there but

that will still hinge upon our ability to attract exploration

companies into the province on a basis that is competitive with

what they would receive for doing the same work in the Province

of Alberta or in the North West Territories.

The Attorney General has indicated in his opening remarks on

this bill that he does not intend to take over the petroleum

industry. But anyone in the petroleum industry who reads the

Petroleum Corporation Act and refers to the specific powers in

section 5, will realize that you certainly have the legislative

clout at your disposal if you desire to exercise it.

Everyone in the petroleum industry also knows that they must

come to the government for the right to explore, for the issue

of drilling leases, reservations and permits. And if it is the

practice of the government to be their opponent in bidding for

these leases, they have every reason to believe that private

industry will be the one to lose out in that particular

field.

You control the destiny of the industry with this bill. The

right to allow them to explore or not to explore is in the

hands and the power of the government.

HON. MR. MACDONALD: It's not in the bill.

MR. SMITH: Yes it is. It is in the companion bill to

this.

This is the sort of thing that they must look at when they

are considering their future in the Province of British

Columbia.

I would just like to sum up by saying, Mr. Speaker, that we

do have a critical energy crisis at the present time in the

province, mainly as a result of the wells in the Beaver River

area producing salt water instead of natural gas. That is the

common occurrence when

[ Page 858 ]

you draw down too heavily on producing zones. Obviously the

geologists are not quite accurate in their estimates of the

amount of natural gas that could be drawn down in any given

period of time without running into the problem of the

formation filling with salt water. So they have had to cut back

on the particular amount of gas they draw.

It is not possible to drill additional wells in that

particular area, in my estimation, in time to solve the energy

crisis for this winter. It is even problematical that we could

draw enough natural gas from the known reserves in the areas

where we do have excess capability to solve the energy crisis

for this year, because the gas really should be put through a

scrubbing plant to remove the sulphur-dioxide and the

impurities before it comes into the pipeline.

Our only solution is to convince the National Energy Board

that the first priority is to protect the people of the

Province of British Columbia. If that cannot be accomplished — and it should be accomplished — the other solution is, as I

suggested, to work out a deal with the Province of Alberta,

perhaps on the basis of a reciprocal agreement, where the gas

that we take now will be returned to them in future as we prove

up our reserves.

This bill was not required, in our opinion, to accomplish

that particular objective or goal. The bill will allow the

government of this province to become the producers,

wholesalers, explorers for gas and the actual owners of

pipelines in the province.

Because of that and the fact that we think you are

approaching the problem in the wrong manner and that this bill

will not accomplish what you wish to do, will not produce one

more cubic foot of natural gas at this time or in the future,

we do not support the bill.

MR. D.A. ANDERSON (Victoria): Over the last year we've seen

the government, this government, interfere, mostly by

statement, in the affairs of the oil and gas and transmission

industry of the province. We can remember back to the time when

the Premier had his first press conference with four financial

writers and talked about taking over transmission companies,

Westcoast Transmission and, of course, Transmountain Pipe, as

well as B.C. Tel.

The situation that resulted was very damaging to the economy

of British Columbia, in particular in the oil and gas and the

transmission field — quite rightly, too. If companies are under

the threat of imminent execution, then management quite

rightly, in protecting its shareholders — which is its sole

responsibility — tends to curb investment. They don't tend to

go to such an extent into long-term investment.

This happened not only in transmission, it happened in exploration. I need

not re-emphasize this; it has been emphasized by the Hon. Member for North Peace

River (Mr. Smith) before me and on a number of occasions in this House.

Interjection.

MR. D.A. ANDERSON: You can carry on, Mr. Premier. You can

make your speech when I am through. Okay?

Interjection.

MR. D.A. ANDERSON: Oh, come on, come on. Mr. Speaker, we

have this difficulty that when I begin speaking it excites the

poor Premier, who is smarting from the fact that his conflict

of interests in the B.C. Rail has been exposed, and he is

concerned about it. I understand that he should be concerned

because there is no way, under the new labour bill, that he can

continue to hold that position.

MR. SPEAKER: Carry on.

Interjections.

MR. D.A. ANDERSON: Oh, come on, come on, come on. Even your

own backbenchers are yelling "Order."

HON. MR. BARRETT: Stake your seat on what you say.

MR. D.A. ANDERSON: The fact is that investment in

exploration in the province, and discovery, has reached the

point where the Attorney General's only suggestion for a new

well to come into production is one in the Yukon.

HON. MR. BARRETT: That's not true.

MR. D.A. ANDERSON: That is the first one that he can see

coming into production which might assist us here in British

Columbia.

I would like to go on and point out — although I know that

it is a distress to the Premier to point out what the effect of

his statements to the press last year were — point out that

this situation did not come out of the blue, all of a sudden.

It has been developing over time. The problem of water being

found in wells, and the reduction in the amount that could be

supplied, was an unforeseen event. But there have been some

underlying factors which have carried on over the past few

months.

I would like to congratulate the Attorney General. All the

old villains were trotted out in this speech of his. You had

the tentacles of the multi-national corporations siphoning off

money from the poor people of British Columbia. You had the

detriment to the revenue of B.C. You had those two

favourite

[ Page 859 ]

whipping boys: the federal government and the former Social

Credit administration.

He brought out all the devils. It was a good speech — a good

devils speech. He discussed it all in great detail and then he

went on to all the motherhood issues about how we were

protecting the public and how this was so necessary to assist.

Indeed, if the Premier or the Minister of Health had not left

the room, I might suggest to them that in future, when

maternity wards are being opened in this province, Mr. Speaker,

we call upon the Attorney General. His motherhood statements

are just superb. He's clearly in favour of motherhood.

Now we get on to where he is attempting to go; and what is

the problem? Well, I point out that it is a new problem, but

one of the difficulties that we face is, of course, an Energy

Board which is less competent, technically, than the previous

one. With no disrespect to Mr. Rhodes, we have lost people of

the calibre of Dr. Shrum and Dr. Keenleyside. We have gained

defeated NDP MLAs. The exchange, I do not believe, has helped

us in dealing with the problems we are facing in the energy

field in British Columbia today.

It might well be that had we had more technically competent

people, had we had more of a carryover, this problem that has

come upon us suddenly, according to the Attorney General, might

well have been foreseen in a better sense. The problems, that

were definitely made worse by the Premier's statements, might

well have been foreseen by gentlemen of the calibre of the two

I mentioned a moment ago, and we might well have had better

contingency plans — than we apparently had.

It is quite clear that we have no contingency plans and the

floundering of the Attorney General is an indication of

this.

So, our problem: we have our problem which is essentially

the shortage of gas; and how is it to be handled? Well, it

would seem to me that the logical way of handling this problem

is to look first for alternative supplies. The Attorney General

put this last on his list. It would strike me that this is the

very first thing one should look for.

HON. MR. MACDONALD: What about turning down the tap? Where

do you stand on that?

MR. D.A. ANDERSON: We would approve of the concept of

reduction in consumption, Mr. Attorney General.

HON. MR. BARRETT: Oh, save the Americans at our expense.

MR. D.A. ANDERSON: Well, the Premier insists that this happens to be

a stand whereby we are depriving ourselves for the Americans. I do not believe,

in a world where energy in short, that you can adopt such a narrow, nationalistic

sense. We must all turn it down.

HON. MR. BARRETT: Oh.

MR. D.A. ANDERSON: We must all reduce our consumption. I

remember not so long ago a throne speech where we talked about

departing from acquisitive North American values — immediately

followed by a raise in the Premier's salary to that of the

highest publicly elected official.

HON. MR. BARRETT: We know where you stand.

MR. D.A. ANDERSON: We know full well the switches that have

taken place and that no longer is the NDP in favour of that

statement in their throne speech about getting away from

acquisitive values. It happens to be a fact that in an

energy-short world, we are all going to have to turn down the

tap at one stage or another.

HON. MR. BARRETT: Not at our expense for the Americans,

surely.

MR. D.A. ANDERSON: The only person suggesting that so far

has been you, Mr. Premier.

HON. MR. BARRETT: Oh, get on the phone to your federal

Minister.

AN HON. MEMBER: They won't talk to him.

MR. D.A. ANDERSON: We look at the alternatives that there

might be for increasing the sources of supply. There is

southern Alberta and, if I assume correctly, this was the area

where Mr. Rhodes was going to devote his attention initially.

He was going to look in southern Alberta for extra sources of

fuel which could be used here in British Columbia.

Secondly, and this was dealt with a little more at length by

the Hon. Member from the northern part of the province, there

is the source of supply in northern Alberta and the possibility

of getting some there. It is obvious that when you are dealing

with an area such as the Interior of British Columbia, which

doesn't have any real alternative, you are going to have to

protect that first. I would say that Inland Natural Gas should

be given, as a matter of prime urgency, the first

guarantee.

Then after considering the prospect, which has not yet been

done, of alternative supply — Yukon, northern Alberta or

southern Alberta — we swing to attempts to cut consumption.

This need not be, as the Premier so quickly and simplistically

states, a question of cutting off our own consumption so that

Americans can continue to waste theirs — waste gas

[ Page 860 ]

down south.

It's probably a case where we will all, in some degree or

another, have to make some sort of cutback if there is no

possibility of expanding supply from elsewhere. I would say

that's the proper and correct approach to it: to realize that

we are linked with them in a number of ways, particularly in

energy, and also in the question of peaking power for Hydro and

other things. We have opportunity of flexibility here and we

can, I think, approach this in a reasonable and sensible

way.

The Minister raised the question of price. He mentioned the

price perhaps being 44 cents per 1,000 for extra gas found in

Alberta. Well, earlier in his speech, he talked of gas — the

right price perhaps being 58 cents per 1,000. There appears to

me to be a differential there which is, indeed, in the favour

of the consumer.

The Hon. Premier has talked on other occasions of the right

price being something like 52 cents per 1,000. Once again, if

we are getting it for 44 cents, as was indicated by the

Attorney General, there is some flexibility there. It was

suggested by the Attorney General that we put on export taxes.

That is quite possible and it can be done quite quickly. He

pointed out that it was done effectively in the case of oil and

it was done effectively in the case of beef a short time

previous to that. These things can be done. We can restrict

exports. There is no question that this can be done.

I would think that the logical way of approaching the

problem is to try and find ways of increasing supply, if this

is a short-term problem, first, and then go after the question

of dealing with reducing consumption, wherever that production

and consumption might be.

Mr. Speaker, a fair bit was made of the discussions between

the Hon. Donald Macdonald and the Attorney General and, of

course, the third Macdonald, who happens to be the executive

assistant to the Hon. Donald Macdonald. I tend to think, as a

person who has had his run-ins with the Hon. Donald Macdonald

on a number of occasions, that if we had no Macdonalds at all

in this area, we would probably be better off.

HON. MR. BARRETT: Oh!

MR. D.A. ANDERSON: In any event, if the Attorney General is

serious about wishing to have this matter discussed seriously,

I would like to think that he would make every effort to

consider and discuss this with his opposite number in Ottawa,

and also with the National Energy Board, another body which, as

he knows — or at least I should say, should know, because

apparently he doesn't — is responsible for controlling gas

exports, and it is not the Minister.

I think it is inexcusable that we are dealing with this subject at this time

when we have had such a history in the last few days, indeed over the last months,

of attempting to…in the traditional provincial government response, of sending

telegrams — telegrams sent after business offices were closed in Ottawa.

HON. MR. MACDONALD: It was sent at 1 p.m. That's 4 p.m.

Ottawa time.

MR. D.A. ANDERSON: And it had not been received at 5:57 p.m.

Well, that's right — after you released the telegram in British

Columbia.

Interjection.

MR. D.A. ANDERSON: Well, maybe it is but in general

practice, when you are dealing with correspondence you at least

ask permission of the person to whom you are sending the

correspondence before releasing it. Or, at least, if you intend

to release it, make sure he receives it. It's simple to do. It

can be done by a phone call.

HON. MR. BARRETT: Where's the reply? If you are so right

about the telegram sent, where's the reply?

MR. D.A. ANDERSON: I'll get on to that in a moment.

HON. MR. BARRETT: Oh, they replied to you, not to the

government, is that it?

MR. D.A. ANDERSON: I'll get on to that in a moment.

HON. MR. BARRETT: Okay. Because I'm waiting with bated

breath.

MR. D.A. ANDERSON: We've got to stop, as I was suggesting to

the Attorney General…. The trouble is, Mr. Speaker, the

Attorney General's approach is apparently more reasonable than

that of the Premier's, but it's difficult to be critical of one

when the other is constantly interrupting as he is.

If we do have a serious problem on this, surely the way to

start is by frank exchange based on information received and

replied to, and not have a situation where the effort is made

to play games with the dates or times upon which offices open

and close and a three-hour time difference apart. That was done

last week and admitted in the press gallery by the Attorney

General; I happened accidentally to be there. We've got to get

away from that and get down to a serious discussion of what our

problems are.

We've got to stop the nonsense, for example, of starting a

debate on this subject in this House

[ Page 861 ]

deliberately at this time when we know full well that the

Hon. federal Minister started his first discussion with his

American opposite number, Mr. Love, this morning at 7:30 our

time and ended presumably when we were in question period in

the House.

If we are concerned about American exports, if we are

concerned about protecting the Canadian consumer and the

British Columbia consumer in particular, surely the way to go

about this is not to insist that we have these debates, as

we've done today, by the Attorney General when he knows full

well that in these discussions that have been taking place in

Ottawa this subject obviously comes up. If we are to deal

sensibly with energy questions, I suggest we've got to stop

playing games with times, as we have been doing, and start

dealing with these things sensibly on the basis of

information.

The question comes up of sending Jim Rhodes to Ottawa last

week. Now, what on earth did he say there? He had no press

conference when he came back and, in addition, he talked about

going to Alberta. The understanding you received was that they

would look for other sources of supply in Alberta. But whatever

it is, Mr. Attorney General, I think that if you cannot have

your chief energy assistant in Ottawa discussing this with any

of the officials of the Department of Energy, Mines and

Resources without his coming back and giving a totally

different

interpretation of what he said to what was said down

there, you're in some sort of communications problem, and in

British Columbia if this type of communications problem

continues. In British Columbia if this type of communications

problem continues….

We've had, I think, a calculated web throughout this whole

discussion of attempts to conceal more than has been revealed.

I think that's wrong. When Ministers make statements in the

House, when they bring forward subjects for debate, I would

like to think they would be on the best basis of information.

The best basis of information would obviously be following a

discussion by you over the telephone, for example, with your

opposite number in Ottawa as to what took place in today's

discussions with the Americans. Now, wouldn't that make sense

as a basis for the type of discussion that we've had this

afternoon?

Interjections.

MR. D.A. ANDERSON: Mr. Attorney General, what I'm commenting

on is your calling of this bill at this time, and you know,

that's totally within your control.

It's simple of you to make the facetious remarks that are

becoming traditional with this government when discussing

energy questions, but energy questions are not simple questions

and you should know that by now. If you don't, you should go

back to square one and start thinking about it again.

They are complicated; they involve the Americans to a very

large degree in this area. For you to pretend that this debate

can take place and we can seriously discuss the question of

"turning off the tap" on the Americans — what a marvellous,

simplistic phrase — when the discussions at the time you were

speaking were in all likelihood going on in Ottawa, is not

acting responsibly to the people of the province. It's the

people of the province, not your government and not us, who

suffer.

I think you should make every effort to try and deal with

the question in a reasonable way and get the information that

is available, and not continue with this shell game which

you've been carrying on over the last few days, dealing with

times and dates and telegrams sent, when there was no

possibility of them being delivered before a weekend. It's just

foolish to continue this way. It's idiotic and there's no

reason for us to stand in this House as opposition Members

discussing this matter when this type of approach is

adopted.

The fact is that there's a question of split jurisdiction,

and the Minister knows it. We cannot deal with this in a way

which in my mind tries to conceal rather than reveal the

information.

Mr. Premier asked during this debate as to whether or not a

telegram was sent from Ottawa. Well, in actual fact it was,

according to Ian Macdonald, the Minister's executive assistant.

I don't know whether I'm quoting him exactly, but I believe he

said, "I handed it to the CN guy." I believe those are

virtually his exact words. He, of course, is a former member of

the press gallery — no doubt a man of very questionable

integrity, and I'm sure we're going to get that thrown at him

too.

The fact is that an effort has been made to inform you of

the views of the government in Ottawa and, if you have not

received it, it's a pretty simple thing to find out why or to

get one of your staff to phone. It's pretty simple to dial:

it's 112 and then you use the area code 613.

Interjection.

MR. D.A. ANDERSON: Why don't you ask your Attorney General?

Are you trying to suggest that we know your energy discussions

with the Minister? All I know is what is now public knowledge,

and that's the text of the reply.

HON. MR. BARRETT: What is their policy: for turning down

exports or not? Yes or no.

[ Page 862 ]

MR. D.A. ANDERSON: I am not privy to discussions between the

federal government and the Attorney General, and you know it,

Mr. Premier.

HON. MR. BARRETT: He has not given the Attorney General a

reply.

MR. D.A. ANDERSON: Well, okay. The reply signed by Donald S.

Macdonald went as follows:

YOUR TELEX OF TODAY DEMANDING IMMEDIATE CURTAILMENT OF EXPORTS

OF NATURAL GAS FROM BRITISH COLUMBIA IS IN DIRECT CONTRADICTION TO THE POSITION

TAKEN BY THE CHAIRMAN OF THE B.C. ENERGY COMMISSION IN MEETINGS WITH THE NATIONAL

ENERGY BOARD IN OTTAWA ON WEDNESDAY, OCTOBER 17 AND RE-AFFIRMED BY TELEPHONE

THIS AFTERNOON.

AN HON. MEMBER: We know all that; what is Ottawa….

MR. D.A. ANDERSON:

PLEASE CONFIRM IF, BY THIS DEMAND, YOU ARE NOW REPUDIATING THE

POSITION TAKEN BY YOUR PRINCIPAL ENERGY ADVISOR AND OPPOSING MEASURES TO FIND

ALTERNATIVE SUPPLIED FOR BRITISH COLUMBIA CONSUMERS BEFORE OTHER ACTION IS CONSIDERED.

That happens to be the reply to the telegram sent, and you know

it, Mr. Premier.

HON. MR. BARRETT: That doesn't answer the question. What is

Ottawa's position on stopping the export of gas so that we can

have supplies here in British Columbia.

MR. D.A. ANDERSON: Mr. Premier, I am not privy to the

discussions between your Attorney General or Jim Rhodes and

Ottawa. All I get are public documents.

The query I put was a query as to whether or not that

telegram was sent. I asked that because it was denied earlier

in this House, and we find out now that it actually has been

sent.

I'm sorry if you would prefer me to handle your energy

matters rather than your Attorney General. I would think that

the confidence he has displayed would indicate you're looking

for a switch.

But the fact of the matter is that we're not going to

get anything in this province in the way of a sensible

resolution of the problem for the people of British Columbia,

unless we get some serious discussion between the two

MacDonald's, who apparently are not on the best of

terms.

HON. MR. MACDONALD: We're on good terms; we just want an

answer to that question.

MR. D.A. ANDERSON: We cannot get a resolution of this

problem, in my mind, until such time as the approach of the

Americans has been considered and analyzed by you, Mr. Attorney

General, as well as by the Hon. Minister in Ottawa.

The first meeting ever between the principal energy advisor

to President Nixon and our Minister of Energy was today, and

you bring on this bill as a cover for your Petroleum

Corporation Act because you think that you can wrap it all up,

as I said earlier, in terms of motherhood and get the Act

through.

The Act, unlike the Attorney General's description of it,

does give very wide, sweeping powers to Ministers and to the

cabinet as such.

He mentioned, of course, there's no problem there about

expropriation, but there is:

"to acquire by purchase…or otherwise and hold lands

containing or thought or appearing to contain petroleum or

natural gas, drilling reservations, exploration permits,

geophysical licences, natural gas licences, petroleum leases,

natural gas leases and petroleum and natural gas leases, and

petroleum and natural gas rights of every description and to

work, develop, operate, turn to account, sell or otherwise

dispose thereof."

Well, those are pretty specific and wide-ranging powers.

Parts of that

section deal with specific powers on building,

buying, selling, exploring, developing and producing, I

personally think that you are giving that corporation very

extensive powers and I think that there's no argument put

forward by you today, Mr. Attorney General (Hon. Mr.

Macdonald), which would in any way justify it, except as I

said, the unstated premise that because a year ago the

statements of the Premier (Hon. Mr. Barrett) in this area led

to such concern in the industry, you now feel the only way out

of the box is for you to establish a Crown corporation to take

on, not the regulation, but the operation of this particular

industry.

I don't think it's necessary. I think that if the government

would restrict itself to regulation and do it properly, we

could have a private industry continuing in this field. The

arguments put forward by you are inadequate, in my view, to

support such wide-ranging legislation — legislation which also

talks about, of course, virtually unlimited financial

powers.

My own view is that under the circumstances of this

legislation brought in, in my mind, in a thoroughly underhanded

manner, covered by this discussion of energy, there is little

way that we could support such a bill in principle.

The fact is that it isn't necessary. There's no need for this bill; it should

not have been brought in. It would not have been necessary or even considered

and it would have been laughed out of the House had it not been, of course,

for the difficulties that the industry itself has being experiencing over the past

year due to Ministerial statements and the Premier's statements in particular.

We intend to oppose this bill on second reading and we intend to continue to

oppose any legislation which grants such wide-ranging powers to cabinet Ministers

or the cabinet itself.

HON. MR. BARRETT: I anticipated that there would be a

Conservative spokesman, Mr. Speaker, This is perhaps one of the

more important bills before this session.

AN HON. MEMBER: They're caucusing on the bill.

HON. MR. BARRETT: They're caucusing on the bill.

I must first of all make a number of comments about the

official opposition's position and the Liberal Party. The

spokesman for the official opposition at least has dropped the

argument that exploration is down in British Columbia or that

activity has decreased since the change of government. The

simple fact is, as that Member knows, that that's not the case.

There has been greater activity in exploration in the north

central and northeastern parts of British Columbia than at any

other time.

I think that the Member for North Peace River (Mr. Smith)

perhaps is one of the more knowledgeable people in the House

about the local conditions and I appreciate his explanation to

the House of the particular problem that the producers are

having. Also it must be noted that that problem arose after the

Energy Board report was filed. So it was the recommendation of

the Energy Board, prior to that problem rising, that we examine

the whole structure of the handling of natural gas.

The particular problem that has been dealt with extensively

and outlined by the Member for North Peace River in terms of

alternatives is one that was totally unexpected. The province

was not prepared for it and no previous administration, no

present administration and no future administration can be

blamed for that problem. That's the nature of the industry

itself and it's unpredictable.

It is true that there was a very thin margin of reserves

planned for in the Province of British Columbia. As a matter of

fact, relatively speaking, we had a better security margin with

B.C. Hydro than we ever had with natural gas. It appeared that

the major thinking on natural gas was that there seemed to be

an unlimited supply.

I appreciated the former Premier's statement last spring, when we discussed

this particular matter, that it was his philosophy that B.C.'s needs must be

taken care of first before we export. I share that opinion with him. The official

opposition and the government have a difference in philosophy as how to obtain

this goal.

I must say that the official opposition has not played

politics in the presentation of their point of view of this

particular issue in front of us. But I must also share with the

House a terrible sense of sharing the embarrassment with the

Liberal Party, because as a social worker I find it difficult

to take advantage of people who are suffering by way of

problems caused with the group they're associated with that

they have no control over.

It is my social work conscience, Mr. Speaker, that tempers

my remarks in terms of my analysis of that Member's position.

He would have been well advised halfway through the debate,

when he expressed the opinion that the debate was fruitless, to

have sat down at that point and given some validity to his

opinion. But after having said that the debate was fruitless,

he went on to continue his useless argument to what he

considered to be a fruitless debate. Now how do you justify

that? I have seen this kind of case before as a social worker,

and I want to tell you sometimes it's only a temporary

aberration, but when I see it continue over a period of time it

appears to be a chronic condition in that Member. I will do

whatever I can to help him; however it does take direct surgery

to correct the situation he's faced with.

The direct surgery that I would recommend as the first move

in this particular problem is to sever himself from any

connection with the federal Liberal government. After

accomplishing that particular separation, he could stop being a

whirling dervish in terms of trying to determine policy for

this important matter and settle down and accept the fact that

we're dealing with the Province of British Columbia, the

problems that we have here in terms of jobs and the problems

that we have here in terms of our economy and our

responsibility to provide for the people of this province

answers to the problems that exist in our jurisdiction.

AN HON. MEMBER: Hear, hear!

HON. MR. BARRETT: Now, the former Premier said, and I agree

with him, that British Columbia's needs come first. No one

predicted this problem. No one wants the problem, but the

problem is here and I say that it is our resource and we must

husband that resource for the benefit of the people of British

Columbia. It's just as simple as that.

The Member suggests that we should continue the export to

the Americans. Well, I don't accept that. We've made a request

to the federal government….

Interjection.

HON. MR. BARRETT: Yes, well, Mr. Member, if that means cut

it off, then by all means cut it off. We have supported that

position from, of all places, the

[ Page 864 ]

Premier of the Province of Alberta, who is a Conservative,

who is a fine man personally and a man who I respect a great

deal and with whom I hope to renew our personal friendship even

more closely this week. I don't agree with his political

philosophy….

AN HON. MEMBER: He calls you a socialist, too.

HON. MR. BARRETT: He calls me a socialist? I call him a red

Tory. He's a good Premier, a good guy, with a lot of common

sense….

AN HON. MEMBER: He's got a good philosophy.

HON. MR. BARRETT: No, his philosophy is messed up. The

profits that he wants to get out of the oil and gas he wants to

provide to private industry. That's the only difference between

he and I. We both want more profits, but he wants it to go to

private industry and we want it to go to the people. Other than

that, there's no real difference. Once we can resolve that, I'm

sure everything will be much better.

Now the question of cutting off the gas: Some people say,

"Well what about the contract?" And that's where the national

leader of the Conservative Party stumbled. He did take the

proposition, I must say, at the caucus meeting…. They at

least have caucus meetings here in British Columbia, let alone

the problem of not answering simple questions by wire,

telephone or letter; at least the Conservatives came out here

and had a caucus meeting. The federal Leader of the Opposition

had a caucus meeting here and made a statement on natural gas

and yet we can't get the federal government, the federal

Minister, to make a statement.

Interjection.

HON. MR. BARRETT: Well, I'd like to get along with those

guys but, you know, they keep on turning down my love embrace.

(Laughter.)

AN HON. MEMBER: Oh, oh!

Interjection.

HON. MR. BARRETT: Easy virtue! If anybody has had easy

virtue with the resources of this country it has been the

national Liberal Party.

Mr. Speaker, before I go on to spell out our answers to our

responsibilities in the provincial jurisdiction, let me spell

out my position in terms of Canadian energy policies.

I agree with the Premier of Alberta, who has called for the other provinces

and the federal government to seek a national conference of first Ministers

on energy before national energy policies have been finalized. This was issued

by the Premier of Alberta on October 4, 1973.

But I take the position that in this sovereign nation, if we

are to keep Confederation alive, we have reached the point in

time and awareness where the basis of a national energy policy

should be the complete public ownership nationally of all

natural gas and oil resources in this country. Mr. Speaker, if

we are to survive as a nation and if our industrial development

is to be established at a pace that is good for this nation,

recognizing the situation in which the world finds itself in

terms of energy needs and energy demands, then it is my opinion

that it is the responsibility of any government, regardless of

political philosophy, to bite the bullet and say that the

natural resources in terms of energy in this country should be

husbanded by the national government of this country and should

be under the ownership of that government on behalf of the

people.

We don't have a clear-cut national energy policy, Mr.

Speaker; we have had stumbling, fumbling 36 months of change in

policy on energy by the federal government. We have seen them

change overnight and without consultation, especially with my

good friend in Alberta. My good friend, the Premier of Alberta,

has tried to cooperate with the federal government, and the

federal government announces energy policy changes without so

much as a by-your-leave or a telephone call or, "How are you

doing, Peter?"

Interjection.

HON. MR. BARRETT: We've asked a simple question: will the

federal government, on behalf of the people of British

Columbia, on behalf of jobs in the Province of British

Columbia, on behalf of the economy of British Columbia, turn

down the tap? And do you know what the answer has been, Mr.

Speaker? — a telegram accusing us of having conflict between

ourselves and a civil servant. Mr. Speaker, the Attorney

General said he had that telegram, but we still do not have an

answer to this question that we've been asking for over one

month.

And to give us the crippled excuse that they are meeting

with Mr. Love before they can announce a policy is to admit

that a foreign jurisdiction determines the national energy

policy of this federal government of ours! You don't meet with

the foreign jurisdiction and say: "By your leave, sir….

Excuse me, sir…. I beg your pardon, sir, but we're having a

little problem out there somewhere on the map called British

Columbia where we used to be a power but now we only have two

federal cabinet Ministers."

Now if we burned all the press releases of those federal

cabinet Ministers, there'd be enough energy to keep us going

for a long time, Mr. Speaker. But that's a threat to the pulp

and paper industry.

But here we have a situation where at this very

[ Page 865 ]

moment that governing party in Ottawa has its spokesman here

in this House saying, "Naughty, naughty — you're having a silly

debate because really we got to talk to Mr. Love first before

we can make up our minds." That is absolute nonsense, Mr.

Speaker. If that had been the case, pick up the phone and call

Mr. Love. A month ago! And you can't even use the excuse that

the civil servants are getting canned at a faster rate than

they're being fired in that country, Mr. Speaker. Mr. Love was

around a month ago. You can check the tapes on that one.

Mr. Speaker, the official opposition has taken what they

consider to be a valid position in terms of the philosophy of

this bill. We respect them for that and will oppose them in

terms of their philosophy as they'll oppose us. But at least

they've said in this House where they stand in terms of the use

of the resource, and it's a continuation of the position of the

former Premier and a position that I don't disagree with in

terms of that very mild exchange we had last spring.

What is the other situation we're faced with in terms of

setting up a marketing board? Before we had this B.C. Energy

Board report, there was a public cry for some vehicle of

assessing the strength and weaknesses that we had in this

province in terms of natural gas and in terms of other forms of

energy. When we came to office, we had in front of us the only

vehicle that was available which was the Public Utilities

Commission. We found that it was not equipped to give us the

information that we felt we needed as quickly as possible. So

we set up the provincial Energy Commission.

At the time that the Energy Commission was established,

there was great hope for it, there were welcome editorials,

there were critical editorials, but generally speaking

everybody recognized that we needed an energy commission in

this province. They went to work, they worked very hard, they

had extremely good hearings, and they brought forth a report

that has been received by all sections of the community on a

fairly positive basis. No one has disputed, basically, the

contents of the report or the method in which they came about

producing the report.

Now what is the first

summary that we find in this report?

We find this following statement:

"British Columbia natural gas, which is currently sold to distributors in British Columbia and the

United States at 31 to 32 cents per thousand cubic feet, is

priced at approximately 26 cents per thousand cubic feet below

its value based on prices of competing forms of energy,

hereafter referred to as competitive energy value."

Now this is a significant statement, Mr. Speaker. This is

what the Energy Commission told the people of British

Columbia.

"This under pricing results in a loss of revenue to British

Columbia producers and to the province which exceeds $100 million a year at

the present time."

If I wanted to be political, Mr. Speaker, which is really my

wont (laughter), I'd make some critical statement about what

kind of so-called business administration would allow us to

lose $100 million a year in the sale of our natural gas. What

kind of financial genius, what type of homespun money wizard,

what kind of Social Credit A-plus-B monetary system would allow

us to lose $100 million a year? I'll tell you what it was — a

lack of political and business ability to see the opportunity

of making a better deal on behalf of the people of British

Columbia.

I just don't care to go through the whole background of the

Frank McMahon connection with the former government. Far be it

from me to relate, as the Attorney General used to do as a

backbench member of the opposition, about the whole pipeline

deal, the overlapping of the leases, the building of that

pipeline and the windfall profits, and that famous

article that

appeared about Frank McMahon when he was living down in Florida

with his one hand on a racehorse and an idle future. The title

of the

article after the pipeline was built, as I recall it,

was "How to Have Your Cake and Eat It Too."

AN HON. MEMBER: He had good horses.

HON. MR. BARRETT: He left a few of the horses' rear ends

here in British Columbia, Mr. Speaker. Because that's who he

was dealing with when he made the deals — some kind of

businessmen. I can't put it any plainer — they were dumbbells,

Mr. Speaker — dumbbells! Frank would ring them every time, and

away the horses would go — one half in Florida with the head,

and the other half up here in B.C., Mr. Speaker.

$100 million a year — during that time we went through

school construction freezes, we went through hospital

construction freezes, we went through meaner means tests, we

went through people who are on welfare and were given excuses

that there was no money. When that Member who sits for Oak Bay

first came into the House and asked that there be chronic-care

facilities in the province, when he got to speak to the former

Premier on occasion, he was told, "Well, it costs too much

money." Now we have a commitment to build better hospitals, to

provide chronic care, to develop better schools, and the

money's going to come out of the natural resources of the

Province of British Columbia on behalf of the people of British

Columbia.

Philosophy is a matter of politics, Mr. Speaker. Philosophy

is a matter of politics, and the former Premier used to love to

simplify issues so that people

[ Page 866 ]

would understand it. So I'll simplify the issue here: this

natural gas belongs to the people of British Columbia and we're

going to, through this bill, sell it at a price to guarantee

better service to the people of British Columbia. If you want

an election on that issue, just stand up and I'll accommodate

you any single time.

Interjections.

HON. MR. BARRETT: Well, Mr. Speaker, now the question is:

who are we going to sell it to? Certainly we're going to sell

it to the States, but guess what — unlike your policy, in which

you allowed the gas to be sold to the Americans at less than it

was to British Columbians, we're going to say, "Listen fellows,

you're going to have to pay more for this gas because we're

getting short-changed in British Columbia."

Is that bad business? Let's go out into the hustings of this

whole province and say, "We're just country boys who don't

understand much about business" — like that old hardware

merchant used to — "but because we don't understand much about

business, we're going to ask for the full price rather than

selling at a fire price in the United States." I mean, I just

don't understand the complexity of economics that demand on the

basis of a political philosophy that says you must sell it

cheaper so that you can get money back some other way. I

haven't seen the money come back.

Leave it in the ground? Mr. Speaker, God put it in the

ground, and all these thousands of years that it's been there

it hasn't gone rotten yet. It hasn't gone rotten yet. And the

longer you leave it in the ground, the more money it seems to

be worth.

Of course the Americans want to buy our gas. Of course we'll

sell them some of our gas. But they're going to pay a fair

price for that gas, and this is the bill that will ensure that

we get our money back. When I go throughout this province and I

say to people, as they say to me, "Barrett, you socialist, you

got goofy ideas. Why, you want to give Mincome to people at age

60? You want to make life more secure, you want to have better

university education, you want to take the school tax off the

land.

"Where are you going to get the money back?" I'm going to

tell them: Right out here, out of the natural gas. The natural

gas you used to get from Social Credit wasn't worth a cent; the

natural gas of British Columbia will bring in another $100

million a year, Mr. Speaker.

I'm glad you are opposed to the bill. I hope you vote

against the bill. At least Alberta is under a Conservative with

some thought about the future. He's not afraid to put his

thoughts on the line and say exactly what he thinks about

energy resources. Why, he's gone further. You would almost

think he is a Bolshevik, Mr. Speaker.

I'd like to read some of the comments made by the Hon. Premier of Alberta,

a good friend of mine. A good friend of mine. This is what he said, here, "Lougheed

Goes All Out And Says Why," October 13, 1973, from the Financial Post , Mr.

Speaker. It quotes him here as saying:

"Lougheed is not only angry " — tut, tut, tut — "about the financial take of the federal government through

the oil export, he is also alarmed at a clear invasion, in our view, of a basic

jurisdictional mismanagement of our provincially-owned natural resources."

He's fighting Ottawa. Tut, tut, tut.

And what does he say here?

"The broader implications might be that this interference could go right to the wellhead price of gas as

well as oil. For this reason the Premier emphasizes, 'We are

forced, in fact we have no choice but to respond with major

revisions in Alberta's oil and gas policies, legislation and

royalty arrangements.'"

There it is. The five-year contract

with industry torn up as if it never existed. A Conservative

tearing up contracts. If we ever needed another vote for the

PNE bill we now know where to go, Mr. Speaker.

What is he saying further? He was questioned: did he not

break a contract, a firm contract in the process and break

faith with industry? A Tory? Did he not break a firm contract

and in the process break faith with industry? Why, Mr. Speaker,

only socialists are even considered capable of such a thing,

let alone act on it.

But look what happened. This is what his answer is: "No," he said, "since the Crown must reserve that right in

any case and because no one could have foreseen the federal

action when the contracts were signed last year." That's a

lawyer, breaking contracts, in the Province of Alberta. He's

not a Bolshevik, he's a Tory. And we haven't even done anything

like that.

Westcoast Transmission says to us, "We don't mind dealing

with you." Westcoast Transmission has said, "We'd even like

you to negotiate our contract." And I don't blame Westcoast

Transmission. They know a good business group when they see

one.

Now what are you going to do on an embarrassing day like

this? I ask you, when the vote comes on this bill, please do

not jest with the opposition. Please do not call across the

floor. It will be tough enough to defend their vote on the

hustings without them suffering here today, so let them walk

away from this House with heavy hearts, and heavy foot, as we

read the printed names, constituency by constituency, who had

the opportunity today to lay it on the line for British

Columbia.

And that's what it is. The vote on this bill and the

principle of the bill will be simply this: those in favour of

British Columbia, and British Columbia and its people first,

and the best deal for British

[ Page 867 ]

Columbia, vote for this bill; those for the private

entrepreneur still operating in Florida and the never-never

land vote against it. And then we'll tell the people what the

results are.

Thank you, Mr. Speaker, for this wonderful opportunity.

AN HON. MEMBER: I thought you were ill.

HON. MR. BARRETT: Oh, yes. I'm really ill from hearing the

opposition.

AN HON. MEMBER: Okay, now let's cool it. (Laughter.)

MR. G.S. WALLACE (Oak Bay): Unlike the Hon. Member for

Dewdney (Mr. Rolston), I don't need any prayer on this

particular bill.

One of the first things that a physician learns when he gets

out of medical school is not to be embarrassed. Contrary to the

Premier's fighting speech, he doesn't embarrass me as a Tory at

all. I think that he's just simply demonstrated the fact

that the Tory party, whichever province it might be in, does

have some independence of thought and some rather different new

and vigorous leaders, such as it has had in the past but which

it certainly exhibits in Alberta at the present time.

I think we have to look at this situation as objectively as

we can. I missed the earlier part of the debate, unfortunately,

but I heard the Premier's speech. The stand of this party in

British Columbia, this Tory part, is that we acknowledge the

problems as outlined by the Premier and we reject the

solutions; we accept the problems in terms of the short term

and the long term.

The short-term problem has been discussed at some length by

the Attorney General this afternoon and related, I understand,

to a particular problem of producing the resource and has

nothing at the moment to do with some of the basic principles,

underlying the whole question of the use of natural gas.

I regard the short-term problems as extremely serious, as I pointed

out by questioning the Minister in the House on several occasions. But

the much larger issue is the question, as the Premier has pointed out,

of the use of natural gas resources per se, whether it is natural gas,

or petroleum, or coal, or any of the other vital ingredients in our

natural resource chest. On this issue — and the Premier put it very

clearly and I will try to put our point of view equally clearly — there

must be a national energy policy and provincial rights to the natural

resources in provinces must be respected by the national government.

Where we differ lies in the solution which on your side of the House consists

of public ownership as the only way in which the overall national and the individual

provincial policies can be carried out intelligently for the best use of the

resource and for the greatest benefit of the people — in this case of British

Columbia or the people of Alberta in the case of Alberta.

Maybe this statement gets a little threadbare towards the

end of a session, but our philosophy is just that much

different from the government's philosophy, even although we

identify the essential problem as being quite clear and

distinct. And the problem indeed is distinct. I would say of

the many reports which an MLA has to read in the course of this

work, the Energy Commission report, while I disagree with the

method of solving the problem, is, I think, one of the clearest

and most easily read reports we have had in a long time, It

defines the problem very clearly.

I don't think it serves any purpose and it is a waste of

time to berate the sins of the past. It appears to any

objective person reading the report — in fact it makes the mind

boggle — that contracts could extend to 1989, with such limited

potential or distribution or sale of natural gas, to have so

little potential to increase the costs in the face of the rapid

changes occurring all across the world in the availability of

energy sources and in their market value. But that is

hindsight, and one of the speakers has already referred to the

fact that it is so easy in 1973 to notice the mistakes that

were made years ago.

I don't think there would be any party in this House who

would, for a second, try to dispute the fact that at the

present time the natural gas resources of British Columbia are

being sold outside its borders at a ridiculously low price.

That is not in dispute.

I think in the long term, Mr. Speaker, the questions that

have to be answered are two-fold: (1) how do we obtain the best

possible price for our natural gas; (2) how do we best

determine the continuing discovery of much-needed reserves of

gas and, in turn, obtain a proper price, or a fair price,

competitive energy value for that gas? These seem to me to be

the two very fundamental questions that have to be

answered.

Of course the big problem, as the energy commission report

points out, is that Westcoast Transmission Company is under

the federal jurisdiction and federal control the minute the gas

enters the pipeline. The ideal solution, in my view, would be

to be able to work out the kind of agreement which would ensure

federal authority to put up the price of the natural gas by one

mechanism or another.

But at least it has it, as I pointed out, under regulation

11(a), and I was interested to hear the Attorney General

confirm that my reading of the report was not in error. The

other day I asked this question and I presume the Attorney

General is awaiting an answer from Ottawa to that question

[ Page 868 ]

particular as to whether the federal government is

considering implementing the use of regulation 11(

a) in the

national energy Act.

Perhaps the government quite rightly shakes its head in

disbelief, because it is frustrated at the lack of federal

cooperation. I acknowledge that they would feel this way. But

ideally, if this country is a federation, we are not just

paying lip service to a national energy policy. I hope we're

not.

The Premier has just stated the importance of having a

conference to chart such a national policy. This party

certainly believes that energy sources and resources are vital

in a country such as ours which has so much in the way of

resources which other countries are desperate to import from

us. Under these circumstances a national energy policy is

vital.

But it calls for fair and realistic cooperation between the

federal and provincial levels. Surely that's what confederation

is all about.

I'm not ignoring, I repeat, I'm not ignoring the immediate

short-term problems of the natural gas supply in British

Columbia. I think that is a distinct problem in itself which

has to be tackled, but on a short-term basis, as the Attorney

General pointed out today the various alternatives. But on a

long-term policy — and by a long term we're talking about 20 or

30 or 40 years — I feel that the preferable alternative to

setting up a Crown corporation which will take complete control

of the resources, and not only the production but the

exploration — which I may say was not recommended by the Energy

Commission report — instead of a corporation which will take

total and complete control over production, transmission,

distribution and, right at the beginning, exploration….

Interjection.

MR. WALLACE: Oh yes, Mr. Attorney General, we always get

this answer from your side of the House, that there's power in

the bill that you don't plan to use. It can be used, but you're

not going to use it.

HON. MR. MACDONALD: If we have to, we will.

MR. WALLACE: Uh, huh. Exactly. Well, we don't think that

that is an approach or an attitude in legislation with which

this side of the House agrees. I don't care whether we're

talking about natural gas or apples or oranges or anything

else. We just believe that if government is to move into a

position in society of having this much control over a very

vital natural resource, there should be in the bill only the

amount of power that's needed to deal with the problem. This is

my second disagreement with the bill.

First of all I was trying to develop the argument that the ideal way to solve

the problem is in the spirit of confederation with cooperation between the

provincial and the national governments. While we have an emergency situation

which is of a specific short-term nature, I still believe that the problem should

be solved at the national-provincial level, hopefully with persistence on the

part of this government to seek negotiation and agreement with Ottawa.

I know you can't wait forever, but I'm saying that the

short-term problem must be handled as quickly and expeditiously

as possible.

But that short-term problem should not be used, in our

opinion — and again we're expressing different philosophies of

course — we do not believe, in this party, that the short-term

problem should be used as justification to set up a degree of

state control, total control over the industry, when in point

of fact we do not believe that this government has exhausted

all the possibilities for developing provincial-national

arrangements whereby we can get a realistic price for export of

natural gas to the United States or beyond the Canadian borders

and at the same time serve at least to limit the raise in price

to the domestic consumer to a level which will make it

comparable with other sources of energy, or other sources of

fuel.

I repeat, it is simply our opinion that this is one of the

most serious problems that each province in Canada as a whole

has to face — the whole question of its judicious use of

natural resources, and the fact that any that are available for

export should bring us a fair price; at the same time domestic

use should be at the lowest possible price comparable with the

price of other energy sources.

In that regard, we would have preferred that this government

continue negotiations at the federal level in the hope that by

the use of existing legislation, with particular reference to

regulation 11(a), we would obtain the cooperation of the

national government in raising the price of natural gas for

export to whatever price it appears to be comparable in value

to other sources of energy.

In these negotiations it would seem that the government

could, as indeed the Energy Commission report states, with any

negotiations with sites where the gas is to be exported, obtain

shorter terms with greater flexibility in negotiating prices at

shorter intervals.

If we've learned nothing else from this whole mess, I hope

we've learned the fact that whatever agreements we enter into

nationally or internationally, with the inflationary spiral

following a seemingly endless rise and with the increasing

value of natural resource, we must surely leave the situation

flexible enough that agreements can be renegotiated over

periods of one or two years and that the price must never be

seriously fixed to any great date in the future.

[ Page 869 ]

I repeat that the present agreements, I believe, extend to

1989 with the only hope to get a better price being that it

must be 105 per cent of the price available to domestic

consumers in British Columbia.

The Premier may jest about the Tory leader in Alberta who is

busy breaking contracts. Again, I don't disagree with the fact.

But as far as we're concerned on this side of the House, I

don't care who breaks contracts, whether it's Tories or

Liberals or NDP or Communists or Little Bo-Peep; the fact is

that it is no sound or valid argument to justify a breach of

contract just because it's of political benefit to that side of

the House to try to embarrass this side of the House. It does

not justify the breaking of contracts.

I'm not here either to defend or attack Peter Lougheed in

Alberta. I'm simply saying that it is not a justification — because we are not obtaining real value for the export of our

natural resources, or that Alberta is not getting a fair price

for its oil — that in itself justifies breaking of contracts.

Breaking of contracts is a little bit like breaking the

law.

We've had examples recently in the actions of this

government where it has condoned or given in to illegal acts. I

hope we're not approaching the day, either in national or

international agreements where, if you find you've made a bad

deal, you break the contract and you try to justify it by

saying, "Well, Peter Lougheed broke contracts," or "The

NDP government broke a contract over the PNE," or any other

example.

It's almost like saying, if somebody steals your purse, that

it justifies you in stealing somebody else's purse. I hope

that's not the kind of reasoning that the Premier was trying to

spread around the House and around this province when he

dragged up the fact that Peter Lougheed, the Premier of

Alberta, in attempting to get fair value for his resources in

Alberta was prepared to break contracts and implying that this

was perhaps the only solution.

When I say that we favour further efforts at

federal-provincial negotiations to solve this problem, I'm

suggesting that this hopefully would prevent either the

national government of this country or this provincial

government from being involved in breach of contract with

foreign powers — in this case, the United States.

It may well be a point to say that the sums of money involved are vast and

that our resources are precious; we know that. But I think the government side

of the House has just been a little off-hand. It has tried almost to ignore

the fact that regardless as to whether the national government or this provincial

government, through this proposed bill, will succeed in raising the price of

natural gas to El Paso, let this House and let the province know quite clearly

that either this province on its own, through this corporation, or the national

government will, in fact, be breaching a promise, a contract, that gas would

be sold to El Paso at a certain price for a certain stated time.

The Attorney General shakes his head. When he winds up the

debate I would like him to give the same assurance he's given

to certain other questions, that if…and I hope he's

listening carefully, Mr. Speaker; I'll make it very pointed. I

want to know, if either through this Crown corporation or

through the use of regulation 11(

a) the price of natural gas

at the border is increased to 44 cents, or whatever is now

considered to be its competitive value — and that was done the

day after this bill becomes law — would the Attorney General

please tell this House that we would then be suddenly charging

a price to El Paso far above the price we had promised in the

contract to a future period?

As I say, one of the debates quoted in the Energy Commission

report is 1989. I think this is very central to this whole

argument.

I doubt very much that the Americans would have, on their

account, in their interest, negotiated a supply of gas so far

into the future unless they felt that the price that had been

guaranteed, except for the 105 per cent clause, gave them

indeed a very good future of a stable price with minimal

escalation of costs for many years into the future. I am not

wishing to indulge in bitter recriminations against whoever it

was who agreed to that, but this really is why we have the

problem today.

AN HON. MEMBER: That's right.

MR. WALLACE: There's no question. I think every party in the

House has decided that whatever negotiations and prices were

reached were unrealistically low, and that the period over

which they were to apply were unrealistically long. All I'm

wanting to know from the Attorney General particularly is that,

if by one mechanism or another next week or next month we tell

the Americans that instead of it being 38 cents it's 58 cents

or whatever the price might be, are we or are we not breaching

solemn contracts previously made with El Paso? I think that's

pretty important.

There are other aspects to this which I would like to put

forward, which represents the differing philosophy which the

Premier outlined. The Energy Commission report mentions that it

does not recommend that the provincial government go into the

exploration business. And again we have an example of a bill

… and the Attorney General's already interrupted me once and

said, "Oh, yes, but we're not going to use that part; well,

it's in the bill but we're not going to use it."

HON. MR. MACDONALD: It's unlikely.

[ Page 870 ]

MR. WALLACE: I always remember that when Chamberlain came

back from Munich he said, "It's unlikely we'll ever have a

war." The whole nation thought, "Thank goodness; we can have

confidence in Mr. Chamberlain." Well, I don't have that much

confidence, frankly, in the way in which your government may

use the power in this bill.

The important thing about leadership and governments is that

the people, whether they voted for them or not, like to have

confidence in them and confidence in their word. It really

seems to me unreasonable, Mr. Speaker, that if all this

government wishes to do — and this leads me to the alternative

approach which we would suggest — that if all the government

wishes to do is to have control over the market price of

natural gas — and this is my understanding of the government's

aim — this could be done by the much simpler mechanism of

governing the price at the wellhead, without having control or

the power to build, purchase, lease or acquire pipeline

gathering systems, storage facilities and all the power

provided in

section 5.

Now if all we're trying to do — and I think perhaps even the

Premier made this very plain — if all we're trying to do is get

a fair price for our natural resources — and correct me if I'm