1976 Legislative Session: 1st Session, 31st Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, MAY 6, 1976

Night Sitting

[ Page

1479 ]

CONTENTS

Routine Proceedings

Committee of Supply: Department of Agriculture estimates.

On vote 3.

Mr. Cocke — 1479

Hon. Mr. Phillips — 1479

Division on vote 3 — 1479

Department of Economic Development estimates.

On vote 36.

Mr. Lauk — 1479

Hon. Mr. Phillips — 1484

Mr. Gibson — 1487

Hon. Mr. Phillips — 1492

Mr. Nicolson — 1494

Hon. Mr. Phillips — 1496

Mr. Lauk — 1497

The House met at 8:30 p.m.

MR. L.B. KAHL (Esquimalt): Mr. Speaker, in the gallery this

evening I have three friends: Mr. and Mrs. Charles Danbrook and their

niece, Kathy Thompson. I'd like the House to bid them welcome, please.

Orders of the day.

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

ESTIMATES: DEPARTMENT OF AGRICULTURE

(continued)

On vote 3: minister's office, $50,728 — continued.

MR. D.G. COCKE (New Westminster): Mr. Chairman, just some

clarification — the next vote, I understand, is 36. Okay. The minister

wants to say a few words, I understand.

HON. D.M. PHILLIPS (Minister of Agriculture): I just wanted

to say, Mr. Chairman, that the member for Prince Rupert (Mr. Lea) has

brought up a very interesting subject. I'd like to give it some

consideration.

Vote 3 approved on the following division:

YEAS — 28

McCarthy

Gardom

Wolfe

McGeer

Phillips

Curtis

Calder

Shelford

Chabot

Jordan

Bawlf

Bawtree

Fraser

McClelland

Waterland

Mair

Nielsen

Vander Zalm

Davidson

Haddad

Hewitt

Kahl

Kerster

Loewen

Mussallem

Rogers

Strongman

Veitch

NAYS — 16

Macdonald

King

Stupich

Dailly

Cocke

Lea

Nicolson

Lauk

Levi

Sanford

Skelly

D'Arcy

Lockstead

Brown

Barber

Wallace

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

ESTIMATES: DEPARTMENT

OF ECONOMIC DEVELOPMENT

On vote 36: minister's office, $95,304.

MR. G.V. LAUK (Vancouver Centre): You know, Mr: Chairman, I

feel that it's appropriate for the Minister of Economic Development

(Hon. Mr. Phillips) not to take his place in his estimates and give the

usual review of what he has done in the last four months, because you

know what I am going to say, don't you? He hasn't done anything, has

he? And you and I both know that. The minister knows it, and out of

shame and out of a feeling of guilt he will not stand in this House and

tell us, and admit to us, and admit to the people of this province: "I

haven't done anything!"

MR. L.B. KAHL (Esquimalt): You took the files; he couldn't do anything! (Laughter.)

Interjections.

MR. LAUK: Is that the kind of help you want? (Laughter.)

MR. L. NICOLSON (Nelson-Creston): I move the member for Esquimalt be now heard.

MR. CHAIRMAN: Order, please.

MR. LAUK: The member for Esquimalt may not be too clever with words, Mr. Chairman, but he knows the minister didn't do anything.

AN HON. MEMBER: That's right.

Interjections.

MR. LAUK: He says that's right.

MR. KAHL: You need some help over there, Gary!

MR. LAUK: Mr. Chairman, I feel that the minister should have made a few opening remarks. He has the only indication of policy….

HON. G.B. GARDOM (Attorney-General): Tell us about your Japanese garden!

MR. LAUK: I'll get to that in a moment (laughter) if you promise to talk a little bit about the Skagit Valley a little later.

It's appropriate for a minister in the beginning, especially when we

are discussing his salary, that he stand up and indicate to the House,

if he hasn't done so already as a new government, the industrial

[ Page 1480 ]

strategy or the new approach that he is going to

take. The only indication of policy from the minister was an

article

written by Bob McMurray where he interviewed the minister and the

minister read out a few of my own press releases to Bob McMurray.

Either that, Mr. Chairman, or Bob McMurray got an old

article out

concerning an interview between he and I…

AN HON. MEMBER: Between him and I.

MR. LAUK: …between him and I…

HON. K.R. MAIR (Minister of Consumer Services): Him and me.

MR. LAUK: …between him and me. (Laughter.) I recall the press release that I gave; I won't read it all — but most of it.

SOME HON. MEMBERS: Ohhh!

MR. LAUK: It had to do with the major coal development in the

northeast. It discussed, in greater detail than I noticed in the

McMurray

article with the current minister, the industrial strategy for

British Columbia.

Now that came as a bit of a surprise, because I felt, Mr. Chairman,

that the clarion call of the coalition party when it was running in the

campaign in December last was that it was the NDP's mismanagement,

inability to cope with economic problems and strategy that they were

campaigning on. In four months the new minister has given us my old

press release.

HON. MR. GARDOM: Like you left in his office.

MR. LAUK: No, I'm complimented. I should have left a few

more, Mr. Attorney-General, through you, Mr. Chairman, so at least

he'll have something to do.

Now as I said some months ago, if the hon. minister would like to

call me and have lunch, we'll sit down, we'll have a little discussion

and I'll outline to him further details…

Interjections.

MR. LAUK: …further details of the industrial and…. I've got lots of time, Mr. Chairman. I wonder if the minister has.

MR. G.H. KERSTER (Coquitlam): Should you bring your own thermos?

MR. LAUK: Whenever we adjourn, Mr. Chairman, to 8:30 we're all a little bit frisky in the House.

I'd be glad to provide him with the ideas and the strategies that

were developed in the three years of the NDP administration so he could

carry on with them. But he knows them well enough, because it was clear

from the McMurray

article that this is the strategy he is going to

continue. It's a wise one. I compliment him for espousing that strategy

and for carrying through with it. It's the most logical one for the

province and it's the one that has the most chance of success. By

success I mean jobs, income, tax revenue, social and economic

development in the north, and so on, those kinds of things that I know

he and I share. It's our common ground. But I found it a bit amusing

because he wasn't saying that prior to December 11. Now was he, Mr.

Chairman? But anyway I take compliments wherever I can get them and

this is one area where I'm pleased that the Minister of Economic

Development followed the correct path.

I have a few comments to make about the Crown corporations and Crown

agencies under the minister's charge, and want to ask a few questions

as I go along. I hope and I know the minister will make notes, or

somebody will for him.

Now the BCDC, the development corporation, as everyone knows, was

established under the NDP administration. It was designed to deal

fairly with private industry, the small businessman with respect to the

making of loans in various communities.

An independent board of directors was established. An independent

chairman of the board and policy was arrived at by this independent

board, one or two of whom the Minister of Economic Development sacked.

He was a little bit greedy for blood at the beginning, Mr. Chairman,

and he started thrashing and hacking away and he didn't realize that

the personalities on this board were not NDPers. One or two of them

might even have supported the coalition. They were independent

businessmen, some of them, all of them from different experiences and

different backgrounds that could provide the new development

corporation with a unique thrust in British Columbia, not one of these

development corporations that we see in other provinces under any

political stripe that falls flat on its face because it slides into the

park barrel. It starts making those friendly little loans to friendly

little communities, and so on. It starts getting involved in projects

way above their heads, that kind of thing.

It was for that reason that the NDP established a corporation with

an independent chairman of the board and an independent board. At no

time did political appointees, ministers of the Crown, exceed in number

two on this board. There were only two ministers on the board. The

majority of the board of directors was independent of the government. I

can assure you that on very many occasions those two ministers were

outvoted. I think, using some hindsight, it was rightly so.

[ Page 1481 ]

The policies that were established were fair. The criteria for loans

were fair. The way of dealing with applications was efficient and it

was the only Crown corporation in the history of the province of

British Columbia that paid a dividend to the people of the province. It

was small for the first year of operation, I grant you, but the symbol

of paying that dividend was important to me and I hope as important to

the new minister.

AN HON. MEMBER: Where did the money go?

MR. LAUK: It went into consolidated revenue. There was a

design for some of that money to be used for the international trade

fair. There's nothing wrong with that. Is the minister against

international trade fairs? I didn't write a rubber cheque for it. Well,

you'll be able to talk about international trade fairs. The

international trade fair was a good concept and I think I'll mark that

down and talk about that for half an hour.

Now as I say, I want to carefully catalogue the history of….

Would you go over and sit beside Lyle, please? (Laughter.)

lnterjections.

MR. LAUK: He says no thanks.

Mr. Chairman, I think it's important to catalogue carefully the

history of this development corporation so we understand how it was

established and so that if there is any falling off the track, or the

straight and narrow, by the current minister in the coalition

government, we can point that out to him and the public can be aware

where he is swerving off to the left or the right of the straight and

narrow. We can point that out to him — affectionately and without

malice.

But one of the first mistakes the minister made, I suppose, in

riding very high and being uplifted by his election victory, was that

he fired, as chairman of the board, one of the most respected and

capable business people in the province, and without any reason,

without substantial notice. The chairman, as he then was, was not even

in the province to be notified. He didn't even wait until the chairman

got back.

I won't comment on the rudeness and the bad taste of that move at

this stage; I will pass it over as being, in the first few days of

office, an unfortunate oversight. It became clear that the hon.

minister was not even aware of this gentleman and his background,

because it was rumoured out of the official rumour department in the

minister's staff that they weren't aware of who he was — they say.

AN HON. MEMBER: Is that an official department?

MR. LAUK: Or is it an unofficial one? I'm sorry — it was unofficial rumour from the leak department.

Fine, that's not a problem. But who did he replace this

distinguished gentleman with? Who did this minister, part of the

coalition party which promised to be at arm's length from its Crown

corporations if they gained office…? Himself; he appointed himself. A

corporation that is a very delicate corporation in the public's eye, a

fledgling corporation just starting to grow and have its presence felt

in the economy of British Columbia — it should have gotten off on the

right foot. We feel it did. This minister made a fatal blunder — he

made himself chairman of the board of directors. How can it now be said

that this corporation, which makes important loans, albeit some of them

small, but important to the small businessmen of this province…? He

made himself chairman of the board.

MR. G.F. GIBSON (North Vancouver–Capilano): What is it they say about a man who is his own lawyer?

MR. LAUK: They say a man who acts as his own counsel has a

fool for a lawyer. Now I'm not going to be that harsh. I'm not going to

say and suggest to you, Mr. Chairman, that the minister, as chairman of

the board, will act improperly. But, you see, that's not the issue;

that's not the issue. The people of this province must not only feel

assured that fair play is the order of the day with such a corporation,

but it must be seen that way. There must be absolutely no suggestion

that that person can be reached or influenced by the government of the

day. In other words, although the government may be the only

shareholder of such a corporation, there must be a strong….

MR. G.H. KERSTER (Coquitlam): Gary, you don't believe all that, do you?

MR. LAUK: You see, the hon. member for Coquitlam doesn't

understand the concept. This is one of the failings of British Columbia

politics: people like that come into this House and they don't

understand the basic ethical concepts of this kind of operation.

Interjections.

MR. LAUK: He just said from his seat, Mr. Chairman: "You

don't believe all that, do you?" That's the quality of people we have

running this province. It's a shame! It's a real crying shame that

someone in his seat would say: "You don't believe all

[ Page 1482 ]

that stuff." In other words, you don't accept ethics; you don't

accept the concept that these kinds of almost-banking or financial

institutions should not be controlled and politically directed. Do you

want to know something, Mr. Chairman? That's a sad way to do business;

it's an inherently unethical way to do business.

What I would suggest to the minister is that he still has time to

rectify this blunder — relieve himself of that post and find an

independent chairman of the board. I will not for the moment comment on

other personnel that he did not see fit to renew. I want Mr. Chairman

to realize that I did not resign, and I didn't have notice of my

firing. I don't resent that at all. I heard through the press that I

was fired.

HON. MR. PHILLIPS: No kidding!

MR. LAUK: That was fair enough.

HON. MR. PHILLIPS: I was going to send you a message, but I couldn't find your address in the files. (Laughter.)

MR. LAUK: We shredded the telephone book. (Laughter.)

Mr. Chairman, in all seriousness, though, I do urge the minister to take himself out of that delicate position.

AN HON. MEMBER: Perhaps you should remove yourself.

MR. LAUK: Don't be rude.

It would only bring him into disrepute with the public. It will call

into question the ethics — the apparent independence of the

corporation. It should be at arm's length. I agree it should. It was

established that way. There should be at least one minister appointed

to the board but never in a position to dominate the board, and it

should be run as an independent institution, not as an arm of the

government of the day, because it's important. The projects that were

undertaken, Mr. Chairman, by this corporation were good projects and,

I'm sure, will be carried through by the minister — at least I hope

they will. I hope that loans that are made are loans that are fairly

make, without interference with the criteria that were originally

established by that board. If they're not, he, as chairman of the

board, is especially susceptible to public criticism. I think that it

should never be opined that a person got a loan because they had a

membership in the party.

Now as far as the corporation's activities, let me make some comment

by way of reports, seeing that the minister did not. The development

corporation has been increasing its number of loans to small businesses

throughout the province. Among its criteria is that it usually

emphasizes small industries that are unique and, hopefully, not within

the lower mainland region, which, it was the view of the board, was

considered to be in need of less assistance of that type than regions

in the north and in central British Columbia and some parts of

Vancouver Island and so on — worthy objectives, I am sure you will

agree. As I say, an ever-increasing number of loans have been made, in

a totally unbiased way, to all applicants who have fulfilled the

criteria of the corporation. I think the minister has found the

corporation's loan department is efficient, that its analysis of

economic viability was second to none, and that the moneys placed in

its hands by the sole shareholder were well invested and well utilized.

The other project that was very important to me when I was minister

was the industrial land project. The philosophy behind the government

involving itself in exemplary industrial parks is manyfold, not the

least of which is in assisting in decentralizing industry not only from

the lower mainland to other regions of the province but within various

regions themselves — away from urban centres to more suburban areas and

so on, making access to work places shorter and easier.

HON. MR. PHILLIPS: Like Tilbury Island.

MR. LAUK: Like Tilbury Island. I really regret that the

minister thinks that's funny. I really regret it because he's missed

the point, and if he's missed the point that means the Tilbury project

may not proceed. If the Tilbury project does not proceed it will not

only be a tremendous loss of investment but it will mean the failure of

this government and this minister to understand the vary basic thing

here on the lower mainland, and that is that these industrial parks are

absolutely necessary to decentralize industry — to relieve the pressure

from the urban area. They're very important, Mr. Chairman — absolutely

important — and the minister should realize that.

He shouldn't just, with a wave of the hand — a partisan wave of the

hand, I might say — dismiss these projects and say: "Oh, well, we

attacked it in the House. We voted against the bill and we voted

against the project and we spoke against it — therefore we can't

support it now." I hope he can bury the old election hatchet and become

a minister for all the people of this province. Don't destroy what is

good. Don't throw out the baby with the bath water. Don't get caught up

on rhetoric, Mr. Chairman.

I'm sorry the minister is bored and looking around the House, but I

mean what I say with dead seriousness. I hope that he takes the matter

to heart. The land department of the British Columbia Development Corp.

is second to none — small and efficient. It's an excellent land

department. I hope he

[ Page 1483 ]

understands that.

As far as the British Columbia Railway is concerned, the minister is

again on the board and I think that he should be thinking seriously of

getting that board to an independent position to help solve, among

other things, the extension problems it's having, construction costs,

and its labour-management disputes, which are constant. I don't

think you can come down with a guillotine in this matter. I think if

the Minister of Labour (Hon. Mr. Williams) has done so it's incumbent

upon this minister to intervene — not for the sake of political

expediency but for the sake of the public of British Columbia and for

the sake of the railway itself. He must establish a new management, an

efficient one. It's under-managed as it is.

He must take on or appoint a new financial officer — I understand

there isn't one there now — and perhaps even a committee of finance to

undertake the very difficult and delicate but absolutely necessary task

of refinancing the railway. I think that perhaps the BCR should look

outside of internal financing in a very substantial way. I think that

should be done.

The board of directors, as I say, should be completely independent,

and I would ask the minister — I know he is committed to that concept —

what his timetable is with respect to an independent board and for

changes in management. I know he can't comment specifically on changes,

but…what his timetable is. I assume that it would follow appointment of

an independent board of directors.

Mr. Chairman, dealing with the minister's department — and I'll be

very brief — I would like his views on the trade mission programme as

established by the NDP administration. It only just got started. As you

know, trade missions are very important. They have some immediate

successes, but a lot of their success depends on a long-term,

consistent approach. I hope that that trade mission programme is

continued. I'm not satisfied — as I wasn't under my administration —

with the amount of money that was available for the trade mission

programme, but I hope it continues to grow and that it's regarded not

as a cocktail circuit for various people on the public purse, but

regarded as I regard it, and as the NDP administration regarded the

trade mission programme, as sending capable people abroad, businessmen,

salesmen of their own enterprises, to other jurisdictions to sell the

very valuable products that we make here in British Columbia. I think

it was beneficial; it only just got started and I hope it's continued.

I would like some comment from the minister with respect to that. It

can be a feather in his cap as we felt it was a feather in ours.

The Vancouver office was established under my ministry, Mr.

Chairman, and it was designed to be based in Vancouver to service the

bulk of the lower mainland industries, as well as the interior, but

mostly the lower mainland. It also had the trade mission headquarters

there, but the Vancouver office was also designed to serve the

small-businessman public. It had a series of programmes and

information, a lot of information there for the small businessman. Some

of the simplest things that small businessmen, because they are so busy

on a daily basis, tend to miss can be pointed out by the trade

development officers and the other officers in that Vancouver office.

They have some expertise that I know was very helpful to the small

businesses throughout the lower mainland and throughout the province.

Their seminars, their management seminars that also the Economic

Development department and the BCDC did jointly, were very well

received throughout the province, and I would ask the minister to

comment on whether those will be continued.

Now to get into the great industrial strategy — but just before I

do, I said I was going to comment on the international trade fair. I

regret very much that the minister cancelled the trade fair. I don't

know what their problems were at the point that he was cancelling it.

There wasn't much of a press statement on it. I don't know whether or

not I can sympathize with the minister's decision. It only just got

started. I recognize it may have been a little late to get all of the

countries in that we wanted to get in. We were trying to accommodate

the People's Republic of China. But I was informed during the election,

in the last report that I received, Mr. Chairman, that there were a

number of countries that indicated interest and were about to commit.

That may have been delayed somewhat as of December 11, and not for any

reason of the change in government of itself, but simply by the normal

delays that take place.

If there's a reason or explanation, then certainly I wouldn't

criticize the minister for cancelling the trade fair. But the concept

was an excellent one. Yes, it was established under the previous Social

Credit administration….

Mr. Chairman, can I have your undivided attention? I just want at least one.

As far as the international trade fair is concerned, could the

minister indicate whether he is planning one for next year? I think it

would be appropriate. I don't know whether China would be still

involved, but one has been long overdue. They're good — trade fairs.

They bring businessmen from all over the world here, and they can be

quite a good project indeed for the minister's department.

As far as the industrial strategy is concerned, Mr. Chairman, I was

looking at the

article written by Bob McMurray, as I stated. I say,

quite seriously, that it's just a reiteration of the industrial

strategy of the NDP administration, and I think that that's good. I

have my old press release here, for example, and there are many others

I have that I am sure the minister has

[ Page 1484 ]

available to him where I outline the strategy as it was developing

of economic development in the province. I remember announcing a $1

billion programme to develop the coal resources of northeastern British

Columbia, to be shared by governments and the private sector.

There's been a great deal of speculation — I said at that time, Mr.

Chairman — in recent weeks about prospective multi-million dollar

projects in the northeast, and I went on to describe how studies that

had been made by the Economic Development department had led to the

inescapable conclusion that the coal resource development in the

northeast must be accelerated. I talked about coalition mining, some of

their problems, discussed briefly — no, this is a private company —

talked about Quintette coal and the B.C. Rail, Canadian National

Railway. I described the Neptune Terminals feasibility study and how

they're proceeding at Prince Rupert. I discussed the role of the

Department of Mines and many other things. And I would certainly be

delighted to carry on in a moment about some of the details of that

programme.

But, Mr. Chairman, one of the things I did not announce, and that I

hope this minister takes very seriously, with the Alberta government,

is cooperation in the coal development of that great northern area. It

was discussed between our government and theirs, that the British

Columbia Railway build a line, roughly, through the Monkman pass and

connecting up to the Alberta resource railway. This would not only

avoid the competitive struggle that may ensue with our railway and the

two national lines, but it would be a tremendous demonstration of

cooperation between Alberta and British Columbia.

I had discussed it briefly with BCR officials, and we were about to

embark on a surveying programme through the Monkman Pass, in

cooperation with the Alberta resource railway, and connect up with them

at a point on the border, ship their coal west and some of ours east.

I think it was a major project. I wonder if the minister would be

prepared to comment on that idea we had some year or so ago and see if

it's a distinct possibility, because I think it would be an excellent

idea.

We did not have time to study its economic viability, but the crews

of BCR surveyors were being lined up to go into the Monkman Pass area,

when weather permits, to do such a survey. I know I've asked the

minister a number of questions and made a few points to him. I wonder

if he's prepared to reply.

HON. MR. PHILLIPS: I see that the ex-Minister of Economic

Development is in a very conciliatory mood this evening. I guess he

should be because he did have some ideas when he was Minister of

Economic Development, but unfortunately — and I told this to the

former minister before — while that man held that portfolio his hands

were tied by the real minister of non-economic development, the

Minister of Lands, Forests and Water Resources (Mr. R.A. Williams), who

actually ran the government.

You know, I used to tell the minister, when I was sitting over on

that side of the House, that I actually felt sorry for him because he

was just like a puppet on a string. When the Minister of Lands, Forests

and Water Resources pulled the string, he danced. But the minister

didn't very often pull the string, so he didn't dance very much, and he

really wasn't able to carry out some of the programmes that he did have

in mind.

Now he mentioned a number of things. One thing he failed to mention,

Mr. Chairman, was some of the areas in the province where industry

really wanted to go, and they were held back….

MR. G.R. LEA (Prince Rupert): Pourquoi?

HON. MR. PHILLIPS: Oh, various items. I don't want to bring all of them up now. (Laughter.)

Interjection.

HON. MR. PHILLIPS: Well, certainly. When I was up in Kamloops, I travelled north of Kamloops to a little Savonna.

AN HON. MEMBER: It's Savona!

HON. MR. PHILLIPS: Savona? Okay, Savona. People in that area

were very upset because a certain industrial group wanted to put a ball

plant in there for making steel balls to service the mining industry in

the Highland valley.

AN HON. MEMBER: Quebec Steel.

HON. MR. PHILLIPS: Yes, Quebec iron foundries. That industry did not come into British Columbia.

MR. LEA: Do you know why?

HON. MR. PHILLIPS: Yes, I know why — because of certain rulings from a certain department, the Department of Highways.

Interjection.

HON. MR. PHILLIPS: But, Mr. Chairman, the ironic part of it

is that that minister stood idly by; he didn't fight for that industry.

He didn't try and do anything. That minister should have gone and

fought for the industry for that area. Now it's too late. I've

contacted them; they were frustrated with British

[ Page 1485 ]

Columbia. That minister stood idly by and somebody else was doing the planning. That minister really had his hands tied.

Interjections.

HON. MR. PHILLIPS: You know, Mr. Chairman, there was a strong

economy in British Columbia in 1972, and it carried on because even

that government couldn't stop it, but it was gradually grinding to a

halt.

It's interesting to hear the ex-Attorney-General (Mr. Macdonald) who

was minister of energy. I listened to his comments this afternoon, and

I'll have to tell the people of British Columbia at the appropriate

time…. But there's a man who drove more industry out of British

Columbia, as minister of energy, than any other…well, no, I won't say

more than Mr. Williams, the ex-Minister of Lands, Forests and Water

Resources.

But I want to tell you, Mr. Chairman, that already there are strong

indications that the attitude toward British Columbia is changing;

industry is coming back, and we're establishing strong policies that

will see this great province again be an economically viable province.

MR. LAUK: We've heard that speech. What else have you got to offer?

MR. MR. PHILLIPS: Now the minister mentioned trade missions.

Yes, we're going to continue the trade mission policy. We're going to

enlarge it, but we're going to make some changes in it. We're going

to make a few changes in it. We're going to improve on it.

AN HON. MEMBER: How are you going to improve it?

HON. MR. PHILLIPS: Well, you mentioned a few things, but we

have some ideas and we're going to make some improvements. You

mentioned certain aspects of it that we're…. You know, we're going to

make some improvements. It's a good policy, because I want to tell you,

Mr. Chairman, that British Columbia and, indeed, Canada has to be a

trading nation or economically we will fail. We have to be a trading

nation and we have to become more aggressive in that area. It's sort of

ironic to talk of building up a secondary manufacturing base in the

province of British Columbia unless we're prepared to go out and

capture those markets. But I'll talk about that. I'm sure it will come

up and we'll have more discussions on it later.

With regard to the trade fair, yes, we had to cancel the trade fair,

Mr. Chairman, through you, to the member, because we couldn't get

enough of the nations of the world to participate. You realize that the

trade fair was called a year ahead of when it should have been, and

would normally have been, because of the former Premier (Mr. Barrett)

coming back from China. It was his desire, and he actually ordered the

trade fair.

Interjection.

HON. MR. PHILLIPS: Well, all right, but the Premier actually

ordered the trade fair. He ordered it a year ahead of time and the

nations just couldn't get ready, so it had to be cancelled. It was

unfortunate, but it shouldn't have been called ahead of time. It should

have been called in the normal year and it probably would have gone

ahead with success. But there, Mr. Chairman, is a case of interference

by the Premier, and I guess if it had been a success we would have said

"great deal," but it was a failure and we just couldn't carry it

through. But we will take another look at trade fairs.

Mr. Chairman, the former Minister of Economic Development (Mr. Lauk)

was talking about the northeast coal study. Oh, yes, Mr. Chairman,

there were great announcements made during the election about a

billion-dollar coal development in the northeast part of the province.

Somebody alluded to that this afternoon — I think it was the member for

Oak Bay (Mr. Wallace) — that it was going ahead just because it was in

my constituency.

MR. G.S. WALLACE (Oak Bay): Right.

HON. MR. PHILLIPS: Well, Mr. Chairman, I want to tell you the

history of that project. That project had been going ahead and was all

set to go in 1972 and would have been in production today. It would

have been supplying tax dollars to the Province of British Columbia; it

would have been supplying jobs, but there was a change of government

and the whole thing was brought to a grinding halt. So it seems a

little bit ironic that….

Interjection.

HON. MR. PHILLIPS: You'll have your chance, Mr. Member. It

seems just a little bit ironic that just before the next election this

member would announce a billion-dollar coal deal in the northeast. When

I came to Victoria, I started endeavouring to find out when this

project was going to go ahead, when the coal was going to start moving.

I found, Mr. Chairman, that there really hadn't been all that much

study done. There were no deals made, although you did say there were

no deals signed. We had to put together a task force, a committee of

cabinet to start doing some studies, which we are doing now, Mr.

Chairman.

[ Page 1486 ]

Interjection.

HON. MR. PHILLIPS: You didn't do any studies. That's just

about the point I was going to bring up. There were really no studies

done at all. It was just political mish-mash that he was trying to

bring out in the heat of an election campaign. I won't hold you

responsible for that, because the ex-Premier probably told you to do

that. But we are progressing solidly and soundly, doing the proper

studies so that we can determine whether it's going to be an

economically viable project. We're doing it in conjunction with all the

departments of government which will be involved. Those studies, Mr.

Chairman, are presently going on. We're not only involving the

Department of Highways and Transport and Communications; we're

involving the Department of Labour, the Department of….

Interjection.

MR. PHILLIPS: . Yes, but you didn't do anything. You might

have been going to do something, but the point is, Mr. Chairman, they

didn't really do anything.

MR. LAUK: We did it.

HON. MR. PHILLIPS: No studies were done.

Now, Mr. Chairman, the member got Vancouver Centre (Mr. Lauk) spoke

about the British Columbia Development Corp. and chastised me somewhat,

although he was not too rough about the British Columbia Development

Corp. He said that I was trying to influence the board and he hoped

that I wouldn't, and so on. Now I want the member to know that, as

chairman of the board, you don't have a vote. In other words, I have

less to say and have less influence on that board than if I were a

director, because I don't have a vote. The member also knows that when

a subject comes up on that board, I can't really discuss it. It's

merely for me to sit there and see that the deliberations carry on and….

MR. WALLACE: Shame! Shame!

HON. MR. PHILLIPS: Mr. Chairman, the member knows that I

can't exercise any influence over that board, because I don't even have

a vote on the board.

SOME HON. MEMBERS: Oh, oh!

Interjections.

HON. MR. PHILLIPS: Mr. Chairman, as a director — and I want

you to know, Mr. Chairman, that there's only one director. It's a

completely independent board and I, as chairman, do not even have a

vote on that board. Now how much further out on the limb at arm's

length politically could you get that corporation?

AN HON. MEMBER: Try it again.

AN HON. MEMBER: Is that the way Bonner is with Hydro, too?

HON. MR. PHILLIPS: I want to tell you I don't even have a vote on that board.

MR. WALLACE: Poor Don!

HON. MR. PHILLIPS: Not two cabinet ministers; one with no

vote. I tell you we've got a good board, but I'm not condemning your

previous board. We've got a good board.

MR. LAUK: Why didn't you call him up before you fired him — pick up the phone and say: "I'm sorry"?

HON. MR. PHILLIPS: Hawaii's a long way away. (Laughter.)

I want to tell you that the British Columbia Development Corp. will

play a very important role in the future development. But it will be at

arm's length and it will be complete…from political interference.

Interjections.

HON. MR. PHILLIPS: Mr. Chairman, there was some mention of

the British Columbia Railway. When we think of the British Columbia

Railway, we have said that that will be apart from political

interference. There will be only one cabinet minister on board; no

cabinet minister will be the president of…. We won't have three of four

others on there. I want to tell you that if anything in the history of

British Columbia was under the influence of political interference for

the last three and a half years, it was certainly the British Columbia

Railway, of which that member was once the vice-president.

The Minister of Labour was the vice-president, the Premier was the

president, the member for Fort George was a director. That railway, Mr.

Chairman, was just about on the rocks — not the rails, on the rocks —

in December of 1975 because of political interference. The morale of

management was low; the morale of the workers on the railway was worse

than low. We're moving slowly but steadily to put the British Columbia

Railway back on the rails and to make it once again so the workers on

that railway and the management are proud of that railway.

Mr. Chairman, it…

[ Page 1487 ]

AN HON. MEMBER: Is that what Bill 22 is all about?

HON. MR. PHILLIPS: …was very, very disappointing to learn of

the amount of political interference that was exercised over the

management of that railway in the last three and a half years. I'm not

going to go into all the details, but I do want to assure the House….

Maybe we're not moving as swiftly as we should, but we're moving surely

and progressively and making good, solid decisions that will once again

make that railway a great movement in the economy of the province of

British Columbia.

I want to tell you, Mr. Chairman, that there is the Hall royal

commission on railways that is doing a survey of all railways in

western Canada. I hope that there will be some progressive major steps

come out of that for rail traffic in all of western Canada. I'm not

just sure how that Hall royal commission will fit into the British

Columbia Railway, but it certainly should be considered. It's not in

their terms of reference but there are some ideas that may have a

bearing on the future of the British Columbia Railway.

MR. W.S. KING (Leader of the Opposition): Which Hall was that, Don?

HON. MR. PHILLIPS: Mr. Justice Emmett Hall.

AN HON. MEMBER: A professor?

HON. MR. PHILLIPS: Yes.

AN HON. MEMBER: That's the long haul.

HON. MR. PHILLIPS: A very learned gentleman….

MR. KING: There was another Hall over here.

HON. MR. PHILLIPS: No, no, Mr. Justice Emmett Hall.

I want to say, Mr. Chairman, that we are making some very positive

moves because that railway probably more than any other single factor

outside of a policy decision affects the economy of the province of

British Columbia. I can see in future years that that railway will have

even a greater impact on the economy of British Columbia. As we move to

complete a new northwest rail agreement with Ottawa, as we move to

have the spur lines to move that coal out of the northeast part of the

province, and as we move to negotiate to see that the Ashcroft-Clinton

line is brought into being, that railway will have even a greater

impact, probably greater, as I say, than any other single factor other

than a policy. It is very important.

It must be well run; it must be away from political interference.

The board of directors must be responsible not only to the government

but to the opposition as well. They must answer for their actions. It

must be run like a railway, and that is the way we are moving in that

direction.

I think I've answered, Mr. Chairman, all of the member's questions.

If I have missed any, I will try and pick them up again at another

opportunity.

MR. GIBSON: Mr. Chairman, I'm going to restrict my remarks

tonight to what you might call the background for economic development

in British Columbia. I think that Economic Development is about the

most important portfolio in British Columbia right now, because in

spite of all the starry-eyed phrases that a lot of people get off at

election time, the British Columbia economy is not in particularly good

circumstances.

I would have hoped that the minister in opening debate on this

estimate would have given some of his thoughts about the direction we

might be going. Once again, as I said earlier on, the Social Credit

Party was very voluble during their campaign as to where we might be

going, but once they actually got into office we aren't getting much in

the way of detail.

I'll try and sketch the situation as I see it. We start off, Mr.

Chairman, with an economy that is thoroughly polarized, just as our

politics is polarized, between management and labour, as the minister

is very well aware. That is one of the fundamental problems of British

Columbia.

Interjection.

MR. GIBSON: No, it is not unique to this province, Mr.

Member, but it is endemic in this province and it is more serious in

this province than in most parts of Canada, and far more so than in

most parts of North America. We can get on to the details of that in

the Labour estimates, Mr. Chairman, but I'll make that statement:

there's a definite….

Interjection.

MR. GIBSON: I'll get to that in a little bit, Mr. Minister. I want to set the scene, if I may.

And, of course, we have a polarization on the political side as well

between the right and the left, between two groups of people, each of

which thinks they have the answer. The only person in politics that I

will ever say is absolutely wrong is the person who knows they have the

answer. Anyone with an open mind, I say they might be right. But

anybody, who's sure they have the answer, I know they're wrong.

Our situation today, Mr. Chairman, is uncomfortably similar to the

situation in the United Kingdom. The United Kingdom has a terminal case

[ Page 1488 ]

a disease that British Columbia has right now. I'll tell you why

it's an identical situation. In both cases there was a competitive edge

that gradually started to slip away as the rest of the world moved on.

In the United Kingdom it was a competitive edge of capital investment

in technology and the whole outgrowth of the Industrial Revolution. The

United Kingdom was on top of the world. Gradually the rest of the world

moved on; the rest of the world's technology became better and its

productivity became better. A lot of this was because of the political

system which saw the energies of that great nation directed inward and

against itself, and one class against another. We see the same kind of

thing happening in British Columbia.

Our competitive edge, Mr. Chairman, is the resources of this

province. That's traditionally been our competitive edge: the resources

of fibre and the resources of mineral — hard rock coal and petroleum.

We're losing that resource competitive edge, Mr. Chairman, particularly

in per capita terms as the years go by while the rest of the world —

and I'll document this later — is building up around us. We're falling

behind.

Can things really be that bad? I want to cite a little evidence. I

tabled this in this House the other day: a study printed in the

Financial Times which showed that over the years 1963 to 1974 British

Columbia was 10th out of 10 provinces in terms of economic growth per

capita. I say that not as a political statement, Mr. Chairman. There

were two different governments in power over that period. Neither one

of them, in my opinion, did a good job of economic development in this

province.

AN HON. MEMBER: Over what years?

MR. GIBSON: From 1963 to 1974, Mr. Member. Over that period

B.C. was 10th out of 10 — the worst, the last in economic growth per

capita in this country. In the year 1975 our gross provincial product

per capita went down. While the rest of Canada, on average, was holding

about even, we went down. Is this a short-term trend? No, Mr. Member.

Let's go back 40 years — two generations. In 1936 the per capita income

per British Columbian was 133 per cent of the Canadian average. There's

a steady decline over the years up to 1974 when we're down to 107 per

cent.

British Columbia, in terms of income per capita, has been losing out

for the last two generations. I say it has something to do with our

development policy. It's about time that some government took hold of

that and looked at it.

Interjection.

MR. GIBSON: The hon. member suggests that labour strife in

the province of B.C. may have had something to do with that. I suggest

it may well have, Mr. Member, but it doesn't, through you, Mr.

Chairman, explain that tremendous discrepancy. Remember that British

Columbia was getting to be a unionized province even back then in 1936.

So we have to look to something else to explain that decline. The

something else, as I see it, is an increasing exploitation of

increasingly marginal resources. I'll come back to that later.

I say that's evidence, Mr. Chairman, that our economy has been run

not badly, but without understanding, for at least the last two

generations. We have been living in a phony economy; we have been

living in a fool's paradise. I suggest that the only thing we have to

sell in this world — because we are a trading nation, we do not make

most of the things that we consume — is our productivity, value

delivered per dollars received. That's the only thing that we have to

sell. When our productivity starts to get badly out of line, then we're

in trouble.

We are a very high-cost economy, Mr. Chairman. A recent study looked

at the average hourly earnings in manufacturing. Manufacturing, God

knows, is not our strong suit, Mr. Chairman. We are trying to develop

it. We'd like more of it. The average hourly earnings in manufacturing

in British Columbia were $6.53 while in Ontario they were only $5.17.

Let's be proud of that. Let's be glad we have the highest average

hourly earnings in B.C., but let's make sure that somehow we can

maintain that — because we're falling behind. The sooner we see it and

adjust, the easier our adjustment will be.

Let's go to some of the major industries — the forest industry. I'm

glad the Minister of Forests (Hon. Mr. Waterland) is here tonight, and

I'll be talking about mines in a minute, too. Our forest industry came

to an early development because we are proximate to a major market in

the United States, because we had a politically stable situation,

because there was capital in abundance available and because there were

good, coastal, low-cost stands available to be exploited. Our forest

industry built up very rapidly. That was the first wave of expansion —

through the war and up to the mid-50s.

The second tremendous wave of expansion was in the interior pulping

operations, through the 60s. It was another tremendous wave of

expansion fueled by the same things: political stability, proximity to

markets and easy capital availability.

Then things started to change a little bit. Our costs started to go

up — not just our labour costs, though they went up considerably, but

capital costs. Capital costs went up tremendously in the forest

industry. In the first half of this decade they tripled, and that made

an enormous difference to what wood was economic in this province and

what wasn't.

So we've reached the state now where the head of

[ Page 1489 ]

the British Columbia Investment Dealers Association makes a careful

submission to the Pearse Commission and claims in his remarks about it

that forestry is now a no-growth industry in British Columbia. Think of

the significance of that for a moment, Mr. Chairman. This is the

industry which has fueled our advance for the past generations. This is

the industry that's been providing the extra jobs that we need, the

trend line 5 per cent more jobs per year during the 70s — from 1970 to

If this is a no-growth industry, where do we turn? We aren't Arabs

of the world in terms of fibre or in terms of minerals, though a lot of

people think we are. Trees grow four to six times as fast in New

Zealand or Brazil; they grow three or four times as fast in the

southern United States in the pine stands there. They are more

accessible and cheaper to harvest. We have a high-cost product in our

fibres. It's a slow-growing product, it's a quality product, but it's

high-cost. There's no point in pretending we're Arabs of the forest

industry. That competition in previously undeveloped parts of the world

is going to hurt us badly.

Interjection.

MR. GIBSON: We're a small percentage of the American market.

You're not thinking of sawlogs, I don't think, Mr. Member, but we'll

get back to that.

Look at the mining industry. It's either static or in decline in

most of it, with the one special factor of coal — I'll come back to

that. In hard rock, Mr. Chairman, particularly copper, we have the same

magnificent kind of history we had in the forest industry where access

to market, a political stability, a capital access and, above all, a

tremendously skilled body of mining people in British Columbia combined

to allow us to build up a team that exploited the lowest grade copper

resources anywhere in the world — 0.5 per cent and below.

AN HON. MEMBER: Until 1974.

MR. GIBSON: Until 1971 or 1972, Mr. Member. I'm sorry I have

to say this now because that momentum was cut in 1972. I'm sorry to

have to say that, but it's true. That momentum which was built up over

a generation was killed in 1972 by Bill 31, by a new philosophy of

government. I'm convinced that it was done not deliberately, Mr. Member.

I'm convinced it was done in ignorance, not deliberately. Nevertheless,

it was done.

Let's not kid ourselves: the world has other copper deposits. When

you get down to the southwestern United States you have copper deposits

of double the grade. You work down through South America, as the

Minister of Mines knows, and it goes up to triple and quadruple the

grade. You get around to the Philippines and it's the same thing. As we lose that unique

advantage of political stability — and believe me, Mr. Chairman, we did

— and we lose that momentum, we're in difficult straits in the mining

industry.

I have sympathy for the Mines minister. I'm going to give him every

support I can. Coal is one bright spot but, Mr. Minister, even there I

would suggest you are going to have to put a lot of money into that

northeastern coal patch if you think you're going to make something

grow. While a firm like Kaiser Resources could bring their coal

production onstream in the late 60s — completing their plant in 1969 or

1970 for in the neighbourhood of, say, $30 per annual ton — it's triple

that now and more.

Where the Kaiser deposit came in it was serviced with the

infrastructure — the roads, the rail lines were all nearby, townsites

nearby — but not up in the northeast. All those things are going to

have to be built. It's not going to be easy, Mr. Chairman, and I beg

this government to tell that story. Don't say it's going to be easy,

because it's not. It's going to take a lot of hard work.

Petroleum and natural gas: a declining asset. We're living off

windfall profits that the Arabs bestowed on us a couple of years ago.

That's why I call our economy a bit of a fool's paradise, because

they're great profits, they're wonderful to have and they're windfall,

but they're going. They won't be around to fuel the British Columbia

economy in any great degree a generation from now. That's why I say we

have about a generation to change some ways our economy works. I'll get

back to that again later.

Agriculture we've just debated considerably. I won't go into that again.

Tourism, called by many our third industry, is static. It has hardly

moved at all from 1974 to 1975, and it has a political unpopularity

among some sectors of the population.

Retirement is a major industry in this province. In terms of

absolute growth, it is one of the great engines of our growth, but it

is not a solution for productivity — not by any means. It is a thing

that will build up the service industries in our province, as people

from other parts of the country bring their treasure and their transfer

payments to British Columbia, but it will not increase our

productivity, and that has to be the basic solution for the per capita

wealth of this province.

Government sector expansion as well has been an engine of our

growth, and that's another fool's paradise thing in the equation

because government sector expansion does not bring productivity, in

general terms. Some government activities do bring productivity — a new

highway or something like that — but, in general, government is a

necessary service and not an addition to productivity. It's a necessary

service that, in some fields, we've expanded too far.

[ Page 1490 ]

The greatest example of all of the fool's paradise is the wealth and

standard of living that British Columbians obtain from the sale of

their assets, be it their resources, or, above all, our land, which we

are selling off, either to foreigners or to newcomers — perhaps

newcomers from other parts of Canada or other parts of the world — at

good high prices, and living off that capital in very large degree.

Where it's invested, it tends to be invested again in real estate,

which drives the price up again further with no new wealth being

generated. That's a fool's paradise, Mr. Chairman, when you live by

selling your assets and call yourself rich, because you can't do that

long.

All of this comes back in the end, in British Columbia, to the

dilemma of growth in population. Our growth in population has been the

thing that has hurt our growth in income per capita. What are the

origins of British Columbia growth? What's the trend line, first of

all? It's around 3 per cent a year, and it doubles every 22 years,

roughly. This has gone on for quite a while in British Columbia. It

slacked off last year to about 2.6 per cent, but that was probably

because of the difficult economic year that all of Canada had, because

that's been a pretty good long-term trend line. That growth comes about

40 per cent from other parts of the world and about 60 per cent from

other parts of Canada, which means that really only 40 per cent is more

or less controllable, and that by the federal government, not by

British Columbia. As British Columbia's population grows and we are

forced into the utilization of more and more marginal resources,

there's less and less economic rent there and we're less and less able

to pay the high wages that we've been accustomed to.

We have changing settlement patterns in this province, and we should

have changing settlement patterns. I see where the minister in a press

statement the other day mentioned that settlement away from the lower

mainland is going to have to be encouraged, and it certainly is in our

various industries. I'll mention specifically the retirement industry,

which most people are not used to thinking of in those terms, but the

retirement industry is going to be increasingly concentrated on the

eastern slope of Vancouver Island. That's just natural. It's a nicer

place to live with more amenities. It's nicer for people who retire,

and it makes more sense rather than the increasingly crowded and

industrialized lower mainland. That's the kind of thinking I suggest

somebody in the cabinet has to do, and I hope this minister does it.

But let's look again at that growth rate, Mr. Chairman: 3 per cent per

year. If we were looking at an underdeveloped country, we would say: "Well,

my God, the poor devils, how can they ever help themselves and build up their

gross national product? They have a growth of 3 per cent per year. It's

impossible." Yet we have that here in British Columbia. This is a problem

that other parts of the world have tried to grapple with and it's been very,

very difficult for their economy. Here we have it right here, so let's not

sneer at any underdeveloped countries; we have their problem. Just because they

haven't found a solution to it, let's not feel we're very smart.

We haven't found a solution to it either. But it does give British Columbians

one very good reason not to be afraid to aid other parts of Canada and other

parts of the world because, believe me, to the extent that can make other parts

of Canada and other parts of the world more desirable to stay in and slow our

rate of growth, that's a good thing to do for all of us.

So our future, Mr. Chairman, is continued growth and fewer jobs out

of our traditional industries. I mentioned earlier a 1970 to 1975 trend

of 5 per cent per annum, which doubles in 14 years. What do we do? I

suggest that we have about one generation to convert our existing

competitive edge to another kind of competitive advantage.

Our competitive advantage has been, as I suggested earlier,

resources. That cannot continue to be our competitive advantage because

other parts of the world have richer resources per capita. You only

have to look at a country like Brazil of some of the other nations,

particularly round the rim of the Pacific, South-East Asia aside.

If resources are going to cease to be our competitive edge, the only

thing I can think of that can be our new competitive advantage is

people — skilled, educated, productive people, based on the existing

industries we have, the existing kind of training we have, naturally —

but, nevertheless, a tremendous change in the way our economy works.

That is a very, very great challenge, Mr. Chairman. And the first step

towards meeting that challenge is to recognize it, and to look for the

right solutions.

I suggest that the old proposed solution of resource upgrading is

not going to solve the problem. It will be of some help; I think we'll

have a copper smelter in British Columbia. But studies that are done on

things like what you might call the fabrication stream of copper

suggests that your highest employment per dollar invested is in your

final fabrication process. We're going to have very little of that here

in British Columbia, because you get into your lighter copper shapes,

and so on; these are very closely market-related because of

transportation factors.

Then the next step in terms of labour per capital dollar invested is

in the mining. Thank God we've already got that bite of the apple;

we've got it pretty well developed. After that comes smelting and the

drawing of wire. This is a setup where there are very high capital

costs for the amount of labour generated. It's not going to solve our

job problem. There'll be some of it — there may be a steel mill — I

think more

[ Page 1491 ]

likely a direct reduction, using B.C. scrap, or on a smaller scale

with direct reduction of our ores, but there may be some kind of….

Let's not kid ourselves. We can do some of this, but it's going to be

marginal.

I want to quote a man who is the vice-chairman of the Economic

Council of Canada — a very important speech, in my view, that was made

last June. He makes this statement — I don't want to quote him out of

context, but he makes this point often: "A generation hence I would

expect that a substantial slice of manufacturing activity, as we know

it in Canada, will have been relocated to other places."

His basic thesis is that Canada is going to increasingly get out of

the secondary manufacturing business; it's going to be taken up by

other parts of the world, by the less developed parts of the world. He

suggests that we are going to have to move into other areas: "Thus we

in developed nations must focus on the fields of high technology as

well as on other activities in which there is a large component of

educated labour, items that incorporate design skills or require

special skills of other kinds." I think that's right, Mr. Chairman; it

comes back to this idea of skilled people.

We have got to move into what some call the "knowledge" industries,

this whole area of high technology. It's so nebulous when you talk

about it that way, yet it's one of the jobs of this minister, as I see

it, to nail these things down and say that means exactly this industry,

and this one and, this one, or at least these are the possibilities;

let's develop some kind of a shopping list of these kinds of

industries, and then go out and get them.

The California of Canada, maybe. We've got the climate. We've got

the other things about being a desirable part of the country to live.

Somehow it hasn't grown here; maybe we have to try and use a little bit

of political clout, the way California did in the United States to get

some of that high-technology business located in that part of the

country.

You know, when you look at H.A. Simons, when you look at Sandwell

and when you look at Wright Engineers…we can do this kind of thing; we

can build on these kinds of skills. Around the world these companies

can compete, bar none.

I want to make a specific suggestion: I believe that the next great

frontier in the mining business is undersea mining, and that is

particularly going to start in the Pacific Ocean — roughly, off Hawaii,

between here and Hawaii. We are well situated in a geographic sense for

that.

As the minister may know, all those manganese nodules on the floor of the Pacific

contain something like a thousand years' supply of copper, nickel and cobalt,

and manganese in abundance — more than you could use. But those nodules grade

around 0.5 per cent copper — I think that's right, isn't it, Mr. Minister?

This is what we're mining now in British Columbia. We should be there, Mr.

Chairman, at the very advance of that frontier.

We have in British Columbia the B.C. Research Council that's doing

extensive work on undersea mining, some of it on a federal programme.

We have a firm like International Hydrodynamics in North Vancouver,

absolute leader in world technology in submersibles. We have

multinational mining firms, Canadian-owned and based, and operating

here in British Columbia, that can provide the springboard or be part

of the consortia that get working on this undersea mining out of

British Columbia. Some of the large mining firms are looking at this

right now, as you know. One or two of them have taken the plunge into

the undersea mining, so to speak.

My suggestion is: let the government provide whatever is necessary

to get this mobilized in terms of shared investment if necessary, in

terms of research if necessary, in terms of seed money if necessary.

Let's get that going because that could be another generation or two

resource technology for British Columbians. It's something we already

do very well. It's going to take a decade or more to develop; we have

to get started now. This is an example of moving our competitive

advantage from one area to another, with some relationship between them.

I mentioned earlier the Pacific Rim. How about a Pacific Rim trading

corporation acting out of British Columbia and fostered by the B.C.

government? We have some smaller companies working in segments of that

field right now. I'd like to know more about it. I'm just suggesting it

as an example that the minister might look at.

Here is the conclusion and recommendation I bring out of all of

this, Mr. Chairman. I'm not going to talk about any of the details of

the minister's department tonight; I'll do that later on. The

conclusion and recommendation I bring out of all this is: is now not

the time to have in British Columbia what Canada had a decade or more

ago in terms of a royal commission on the economic prospects of our

general industrial structure and the way people make their living?

I suggest that we are the watershed, Mr. Minister, through you, Mr.

Chairman. There is a point where you have to "grasp time by the

forelock," in the words of Shakespeare, and make sure that we know

where we are going. A royal commission could look into each of these

industries and ask: just where is the forestry going? What's our growth

going to be for the next year? How many jobs will it provide? How many

jobs will mining provide? How many jobs will secondary industry of

various kinds provide? How about the shopping list that the department

develops, and how many jobs will that provide? I think it's going to

need some kind of group like a royal commission or a task force or

whatever you want to

[ Page 1492 ]

call it to undertake this enormous, not just research project but conceptual project.

We have in the government, and in British Columbia, universities,

and in the labour and business community we have the brains to put

these ideas forward. What is needed is some kind of a mechanism to

bring them all together. I very sincerely ask the minister for his

earnest consideration of setting up and asking for a report within a

year or two — because this isn't a short-term problem — a royal

commission on the economic prospects of British Columbia.

HON. MR. PHILLIPS: Mr. Chairman, I'd just like to reply

briefly to some of the comments made by the member for North

Vancouver–Capilano. When he started out I thought he was going to give

me some solutions to some of the problems.

MR. GIBSON: I only had 30 minutes, Don.

HON. MR. PHILLIPS: I recognize the problem. I analysed this;

I have agonized over it. There are really four main problems that we

have insofar as developing a high-technology growth in British

Columbia, a high technology in our industrial sector, which we must

develop if our economy is really to progress. It will progress in

certain areas, but if we are really going to go out and compete in the

real world, in the Pacific Rim, we must have new highly technological

industries established here, not necessarily labour-intensive.

Now what are the drawbacks to this, really, in the real world? The

first thing we have to examine, Mr. Chairman, through you to the

member, is the present tax structure in Canada. You see, those

industries that are well established in the province of Ontario can

basically live with our income tax structure today because the majority

of them are old and established. They have their plants written off and

they have a cash flow. The plants they have were built on uninflated

dollars. But today our income tax system does not leave those dollars

in the hands of private industry. They haven't available the necessary

cash to do the research to build the plants because they have to build

them on inflated dollars — all of their profits would be siphoned off.

The industries that are established here just are not going to be able

to have that cash flow to do it. We have to talk to Ottawa; we have to

talk to the Economic Council of Canada.

Mr. Chairman, I smile to myself, not because I disagree with the

theory of Canadians owning Canada; but I want to tell you, I don't know

how Canadians are going to own Canada when the federal government takes

the bucks away from them that we need to own our own industry in Canada.

I think, Mr. Member, through the Chairman to you, that if you think

about that situation and if the Economic Council of Canada thinks about

that situation…and indeed

all governments must think of that situation. The thing applies to what

happened in England as well.

MR. GIBSON: Very much so.

[Mr. Veitch in the chair.]

HON. MR. PHILLIPS: Because as your bureaucracy in government

grows, then the cost of government grows and siphons off that cash that

is needed to build new industries. You know, we condemn our friendly

neighbour to the south, but they leave money in the hands of

individuals so they can own the United States instead of the

government owning it. I think if we really were to look at it…and I'm

not trying to make excuses for what we can't do, but we do have to

recognize these problems. I'm saying that the Economic Council of

Canada — and they have had some missions on this very point — are going

to have to go to Ottawa and they're going to have to say: "Look, if we

want to own Canada, if we want to build up a high technology in our

industry, if we really want to compete…." You know, Ontario is

practically the only province in Canada that has any secondary

manufacturing industry, and if it wasn't for the automobile industry

down there being in the close proximity that it is, and some of the

other industries that have been there for a long time, Ottawa would be

suffering too. That's one point.

My second point is that the province of British Columbia is

considered from the Ottawa front as a "have" province, Mr. Chairman, a

"have" province. But what Ottawa fails to realize is that in order for

us to grow, it takes more dollars to provide those infrastructures and

the railways and those roads than it does in some of the other

provinces in Canada. In order for us to grow, we must spend those

dollars today. Really, a dollar today doesn't build…. Well, I shouldn't

say a dollar doesn't build roads, but we'll say $1 million in British

Columbia today doesn't build very many roads. It doesn't build very

many railroads. Ottawa has to realize that, sure, British Columbia may

be considered a have province, but our cost of growth is severe today,

and even in our resource industries, where we have to build additional

railroads and additional roads, Ottawa has got to recognize that we are

not necessarily a have province when it comes to expanding.

During the past three and a half years, there have been practically

no agreements made to pick up those Ottawa DREE dollars, and I don't

say that I necessarily agree with that programme. I would far sooner

those tax dollars stay here in British Columbia in the first place.

[ Page 1493 ]

MR. GIBSON: We should opt out of a lot of the programmes and take tax points.

HON. MR. PHILLIPS: That's right, but why not leave… ? Now I'm

not saying that we shouldn't donate to the rest of Canada, but why

should we send those tax dollars down to Ottawa and then go down on our

hands and knees to get them back? Why not take a look at that? I

realize I'm treading on another jurisdiction, of federal-provincial

relations, but it all has to do with the economy of British Columbia.

Now we're going to go after those tax dollars. We're going to go after

them in four separate programmes, but we're not going to put those DREE

dollars in direct subsidy to industry, because if the industry goes

broke…. We've seen that's what happened in the Okanagan. You put

industry where they shouldn't be. We're going to use those DREE dollars

all we can to assist us with our infrastructures and our railroads and

our roads, those high-cost items, and we're going to go after them.

We're also going to ensure that where an industrial development goes

in, the people in that area and the local taxpayers who used to think,

"Oh, it's great; we're going to have industrial development…." But

there's an impost put on that local community. What I'm really saying,

Mr. Chairman, through you to the member, is that we've got to have

those Ottawa dollars. We've got to have lots of them, because even if

we're going to develop our primary resources, our coal…. Yes, in the

forest industry we're not completely developed yet. In the northern

part of the province the forests may not be as abundant as they are…but

those forests are not committed, particularly in the northeast and

certain parts of the north. But there again, our forest industry will

stagnate unless the industries are allowed to make a reasonable profit,

because there is new technology that can be brought into the forest

industry. Many of the products that we are burning today other

countries of the world — ones that do not have the abundant forests we

have — are using those byproducts through new technology so that

nothing is wasted. But that takes dollars. So I just want to discuss

with you those two areas. Now you could say: "What are you going to do

about it?"

Interjection.

HON. MR. PHILLIPS: Yes, where are we going to move? We're

going to have to move. We're going to have to make submissions to the

Economic Council of Canada. We're going to have to point this out to

them, even though it's been pointed out. We're going to have to get

away from the syndrome that every industry, if it makes a big,

fantastic profit, is ripping off the people.

We're got to get back and realize that industry has to make a profit

if it's going to have the money to provide that new technology, and to

provide the jobs. But first of all we must establish a policy that we

do want growth. And that policy has been kicked around in the last

three or four and a half years. I think the young children of today,

going to be the citizens of tomorrow, are entitled to grow up in a

healthy economy, and there are going to be limitations.

I want to tell you, Mr. Chairman, through you to the members of the

House, that we haven't finalized all of our economic policy at the

present time. We're working on it, but we haven't finalized it, One of

the reasons we haven't finalized it is because we want to make sure,

when we do bring it down, that there has been a lot of thought put into

it, that we don't make any mistakes and that we realize the parameters

in which we can grow in British Columbia.

You mention growth away from the lower mainland; we've recognized

that. We also recognize that there are certain growth factors that are

going to prevail on the lower mainland, and over which we have no

control, and that is the prairie immigration. I don't blame those

people for coming to want to live in British Columbia after working

hard and spending all their years in those rough winters on the

Prairies. I don't blame them for that.

AN HON. MEMBER: You got part of the prairies too.

HON. MR. PHILLIPS: Yes. And we can't move certain industries

out of the lower mainland; we can't move our ports; we can't move our

ship-building industry; we can't move a lot of the manufacturing that's

there. But we can assist in directing any industry that is economically

feasible to move away from the lower mainland — yes, we can assist. But

we're going to have to ensure that when those industries move to the

north there are amenities provided for the work force in that area.

So, as I say, we're working at it. We haven't finalized it, but I'd

be happy to discuss other aspects of it if you want to bring them up.

I just have to say this in closing, Mr. Chairman: what we're doing

in the department is not working in isolation; we are working with all

of the departments of government so everybody has a chance for input. I

just have to think of the Minister of Human Resources (Hon. Mr. Vander

Zalm), who is not in this House tonight. Some of his policies are going

to be a big factor in the economic growth in British Columbia. People

laugh at me when I say that because they say: "What has Human Resources

got to do with Economic Development?" It is all part and parcel of

establishing a climate where everybody is going to put their shoulder

to the wheel and everybody is going to work to make our economy vibrant

so we can all share in the benefits.

[ Page 1494 ]

MR. L. NICOLSON (Nelson-Creston): Well, I'm glad to hear the

minister talk in those terms. Maybe since he brought up the subject of

the Department of Human Resources, provision of jobs and involving

people in the economy in a positive way, I'd be interested to know what

the Minister of Economic Development's proposals are for the

handicapped.

Some people don't like to use the word "handicapped," you know —

they have other ways of describing themselves. In fact, I think the

word "handicapped" has become rather confusing because in housing it's

almost come to mean someone confined to a wheelchair. In other cases it

means mentally retarded. So a good word has fallen into some rather

disuse.

I would ask the minister, in terms of what he just said about the

Department of Human Resources and the aims and objectives of his

department, if he would care to elaborate on ways in which the

physically disabled — for instance, amputees who have skills — could be

brought into the labour force, perhaps with the government or maybe

some of the Crown corporations of which he is a director setting the

example.

We have in Nelson, Mr. Chairman, an organization of amputees. Now

one of the people, Mr. Kusma Poohachoff, who is heading this up…. I'm

sure that if I was to direct Mr. Poohachoff to the minister, he would

find out the determination that this individual has to make a

meaningful contribution in society. He has one artificial leg: he can

still run equipment; he still, of course, drives a truck. He can run a

backhoe and various types of equipment.

We have found there is no end of difficulties in terms of…. There

are problems in trying to parachute people into certain jobs where they

don't hold seniority and various things such as that. But has the

minister given any consideration when he's talking about the Department

of Human Resources and what they might do?

In Nelson there is an organization of at least 10 very active

members that would fall into this…who are amputees with maybe a leg or

an arm or a physical disability this way, an amputation or maybe

something that's been madly smashed up in an industrial accident and

virtually impaired.

I've tried — and, in fact, through some of those efforts there has

been a special person hired in the Public Service Commission, herself

an amputee or a handicapped person — to try to guide some of this in

government employment. But I would urge the minister to consider that.

One of the other things that I was quite surprised with was when I

often used to listen to the Minister of Economic Development, when he

was on this side of the House, and some of his concern was about what

was happening with the boxcar plant at Squamish. Now, of course, he's

the minister, and he has the opportunity to learn first-hand just what

is happening there, and this, of course, I see as a success. The things

I keep seeing…and I keep listening to the minister. Now he's the

minister and he's a director of B.C. Rail and during a recent bill he

seemed to give the impression that he wasn't happy with the boxcar

plant, that he still wasn't convinced.

I was taken aback. I thought that production was going ahead, and

everything else I'd heard, Mr. Chairman, had been favourable. But no,

the minister…. Perhaps I got the wrong impression from what he said

during the debate to extend the borrowing power of the B.C. Railway

into which this was brought. Of course we have a fuller opportunity to

discuss B.C. Rail now, because we're under the correct estimate and it

is the minister's responsibility.

Well, you can imagine my shock and my delight when I saw on

television the other evening Mr. Lloyd Bingham, the general manager of

B.C.'s railcar plant. The press had come up and they had looked at the

product that was being turned out, the new chip car, the first big run

from B.C. Rail's boxcar plant, and it turns out that they had estimated

about $30,000 per car — that was the estimate — and lo and behold, we

had an under-run in this Crown corporation that was started under the

NDP. The boxcars were coming out, in spite of the inflation which took

place, the unpredictable inflation which has not just caused some

troubles in things in which government's involved — but when one reads

reports of various private corporations' annual reports, one can't help

but see the role that they see played by inflation.

But here is the B.C. Rail boxcar plant — railcar plant as they call

it — and I understand that the cars were coming off the line at

something like $1,500 less. So I'm concerned that either I

misunderstood the minister or maybe he, too, is proud as a British

Columbian. Maybe he, too, is proud to be a part, especially to be a

director of B.C. Rail, and to be part of the B.C. Railway's railcar

plant — because, you know, they even loaned free to CP and CN Railways

one of these new $30,000 chip car products. They painted it white,

especially painted up, and it says: "Railwest Manufacturing Co.,

western brand of railcars." It is reported by Mark Wilson on the

Province business page, and it is something that I think we can point

to with some pride.

Of course, Mr. Bingham had a method in his madness. He's hoping that

the transcontinental railways of Canada and, indeed, the United States

and other countries, will show interest, and interest they are showing.

He'd be happy to see Victoria use some leverage in the way that other

provinces do. So I think there is a pretty subtle statement.

Well, I think the minister could carve out a very good career for

himself if he'd to into politics, the Minister of Economic Development.

I think he has the lungs for it!

[ Page 1495 ]

Interjections.

MR. NICOLSON: Now I have his attention.

What Mr. Bingham has said is: "I would be happy to see Victoria use

some leverage in the way that other provinces do." I think that's a

subtle little suggestion — communication. Has the minister met with Mr.

Bingham?

HON. MR. PHILLIPS: Yes, I went to the plant.

MR. NICOLSON: That's good. You have been through the plant. I

would ask, with your indulgence, whether maybe the minister could

interject and say….

Are you happy with the plant? What's happening there now, Mr.

Minister? That's one of the questions I'd like him to answer. If he

answered it now and it was out of order, I wouldn't object, Mr.

Chairman. But if he would answer it later…. What are your feelings now?

The press seem to be quite impressed. Both on television and in the

Vancouver Province on the business page there was some coverage, and I think some well-deserved coverage.

The minister was complaining about the number of cars that were

being produced. I remember him saying just last year: "Oh, you haven't

produced one car over there. You haven't produced one car." Well, now

they've produced…. This one — I think the white one — was the 390th car

built at Squamish in the plant's newly completed initial run of 400

chip cars for B.C. Rail. Railwest has now embarked on a second run of

cars for the parent railway comprising 500 bulkhead flats for carrying

forest products.

I remember, Mr. Chairman, very well these people getting up,

particularly people like the Minister of Highways (Hon. Mr. Fraser) and

members who lived on the line, complaining about the shortage of cars

and how the major railways were not returning the B.C. Rail cars

through the pool and so on, how they would rather pay demurrage charges

and so on and tie up these railcars than build cars of their own, and

they were misusing them. These people, like the Minister of Highways,

were calling for more railcars on the B.C. Railway because it was

crippling the industry.

So not only is it providing jobs in Squamish, but it's stabilizing

the flow of products right from up in the North Peace through the South

Peace and down the line in terms of badly needed railcars, and we're

doing it ourselves. We've proved that we can have a major manufacturing

industry — a fairly heavy industry — right here in British Columbia,

that we don't have to be beholden to the eastern companies to do this

type of thing for us.

Now, indeed, we can start maybe selling this type of product to the

east, because the prices have done quite well. In fact, 70-ton capacity

chip cars will cost the BCR somewhat less than $30,000 apiece, as it

says here, and bulkhead flats, which have less steel in them, should

cost $27,000 each and possibly less. Bingham said that if steel prices

remain stable, other costs can be controlled and outside orders won.

The cars may be priced as low as $25,000, so the company appears to be

competitive, in the opinion of the manager.

Since then, employment at the plant has built up to 200, and another

50 will be recruited by midsummer when Railwest should be completing

four cars a day. You know, that's jobs. That's producing jobs in a very

primary industry, and when you produce a job in an industry like this,

the whole line of support for service stations and other services….

There's a ripple effect and, of course, there's a job multiplier, so we

know when we talk about 200 jobs we are talking about closer to 2,000.

The second order for the BCR should be filled by November and a further

order from the parent railway seems likely.

In addition, Railwest could land a major contract from offshore as

the company has gone selling in the Far East, South America and the

Caribbean. So they are looking into the Far East, South America and the

islands of the Caribbean. One possibility is that a South American

country may place an order for knocked-down parts for railway vehicles.

Under such an arrangement, Railwest would supply all the components and

pre-cut steel for cars which would finish assembled in the purchase

country. The sales opening may also develop in Mexico which, though

largely self-sufficient in rolling stock, does need specialty cars from

abroad. So here's the story. I am wondering if the minister, now that

he has had the opportunity, as he says, to talk with Mr. Bingham — he's

met with him; he's been through the plant, I think he said — have you

had a change of heart, Mr. Minister? Do you believe now that some cars

are being produced up there? Do you believe that jobs have been

produced? Is the minister big enough…? Is he going to change his role

from the unctuous…

Interjections.

MR. NICOLSON: …from the rodomontade stance that he's taken in

the past? Is he going to embark upon a new career of statesmanship and

be willing to admit that he's wrong when the evidence is out, when it's

clear? Will he take a positive attitude and not try to dismantle

everything that the NDP did? If he takes this positive attitude towards

B.C. Rail, I am hopeful that he will take a positive attitude in other

areas, other industries — like Swan Valley Foods.

I suppose he's visited, for instance, the entree plant which has

produced many jobs in Richmond, because it's pretty close by, but I

don't believe he's been up to Creston yet. Maybe after the session is

[ Page 1496 ]

over, next fall, you and I can go up to….

Mr. Chairman, when I say "you" I should say "he". I should use the

third person. When I say "you," I should mean you, Mr. Chairman.

I would hope, Mr. Chairman, that the minister might accompany me. He

was up in my riding once when he was a member of the Select Standing

Committee on Agriculture. He expressed interest in the fledgling

industry of Swan Valley Foods, which is an industry. It provides jobs.

MR. A.B. MACDONALD (Vancouver East): That's why you were re-elected. He helped you to be re-elected.

MR. NICOLSON: Well, I think that the Premier helped me to be re-elected more than the minister, but they all contributed, Mr. Chairman.

I would hope that the minister would come up to the riding and that

I could accompany him. I guess I shouldn't be so presumptuous to say

that he should accompany me, although I could maybe show him around a

little bit and help him find his way out to Swan Valley Foods. We could look through and see what's happening there,

look at some of the other industries in the riding and then go to Nelson and

look at the industrial parkland which the city was starting to assemble before

1972 and on which it got encouragement from us. He could see the needs in the

riding in terms of providing jobs, see the need for certain highway work to

be done and see that commitments which were made under the Department of Highways

be kept, because they are vital to providing an industrial site in a town like

Nelson, which has certain amounts of property.

I would like the minister, under his ministerial estimate, to get up

and reassure me he has had some change of heart, that he has confidence

in the railcar plant in Squamish, that he's not going to be

close-minded about things, and that he's going to become more

statesmanlike.

I would hope that he would give a commitment to come up to

Nelson-Creston and travel with me so that I could help familiarize him

with some of the problems and some of the tremendous possibilities

which lie in Nelson-Creston. Most of all he will have to show courage

and imagination, but I am sure that when he sees the tremendous things

that we have been able to accomplish — the turnaround of Kootenay

Forest Products, for instance, the kind of people that are there, the

experience, the expertise and the way in which they can contribute….

He mentioned the Department of Human Resources. We have a lot of

people who want jobs. I'm talking about women as well as men, Mr.

Chairman, who want jobs and who have to rely on the Department of Human

Resources for a livelihood.

If the minister would give an undertaking to come up to

Nelson-Creston with me and we could thoroughly travel through and meet

with the various councils, the industrial development commissions and

so on, and go through the plants, then perhaps we can cooperate

together as I cooperated with the present Minister of Municipal Affairs

(Hon. Mr. Curtis). He invited me to go out to his riding in Saanich.

We toured through and we looked at housing opportunities. I think that

is the kind of spirit that should prevail.

If he wants an undertaking from me, I promise that if he comes to my

riding, Mr. Chairman, I will go up to South Peace. I will go to Dawson

Creek and Rolla and Pouce and Kilcairne and Tornslake and Chetwynd.

I'll travel up there with the minister, too. I will tell the people

that he is not all bad, that he came to Nelson-Creston and that he is

interested in Nelson-Creston.

Mr. Chairman, I'll sit down now and I will eagerly await the words

of the Minister of Economic Development. What I'd like to hear are some

of your impressions of the B.C. railcar plant, Mr. Minister, and your

interests in some of the economic enterprises in Nelson-Creston and the

potentiality.

HON. MR. PHILLIPS: Mr. Chairman, I want to stand in the House and say I made an error.

MR. MACDONALD: Repent! Repent!

HON. MR. PHILLIPS: Yes, repent, repent! I made an error. I

thought when that member for Nelson-Creston stood up that he was going

to ask intelligent questions instead of making mistakes. Now I did made

an error — an error in judgment.

MR. NICOLSON: All seriousness aside.

HON. MR. PHILLIPS: Yes, all seriousness aside. I was very

interested indeed, Mr. Chairman, in the member's remarks about the

Railwest car plant, that great plant that was started by that previous

administration and brought to fruition and finished and given credit.

But the thing that bothered me about that plant, Mr. Chairman, is

this: they had the opportunity and good case to go to Ottawa and get

some of those dollars that I was talking about about a half-hour ago,

because Ottawa has those dollars available and by…. Yes, just take a

look through your DREE book and see some of the plants elsewhere in

Quebec and Ontario that are subsidized. Oh, yes, my friend, you look at

it. Now they had the opportunity. As a matter of fact, Ottawa dollars

have gone recently to help finance steel plants in England. So I'm sure

we would have a tremendous case.

But by not taking advantage and by not doing that, Mr. Chairman, they have cast over that Railwest

[ Page 1497 ]

car plant a problem, because that car plant was built with inflated

dollars and recent costs. They're going to have trouble competing with

those plants that were established years ago and have written their

plant costs off. Because as we determine the costs of those railcars,

we have to take into consideration interest. We have to take into

consideration the full capitalization of the plant. We have to take

into consideration….

MR. LAUK: Write it off.

HON. MR. PHILLIPS: Oh, you're telling me to write it off. I'm

glad you said that, because I just…. Yes, yes, I remember the

ex-Minister of Economic Development said to write it off and forget

about it and don't take it into consideration, because that's exactly

what we might have to do, Mr. Chairman.

MR. LAUK: That would be irresponsible.

HON. MR. PHILLIPS: No, it wouldn't be. If we're going to get

that car plant functioning…. I want to tell you, Mr. Chairman, it's

like a lot of other things the NDP did. You know, they got the car

plant functioning, but who's going to use the cars? Mr. Chairman, if we

don't go in the market and if we don't find sales for those cars, we

may have to close the plant down. As I say, we're faced with the

problem of the high costs, depreciation on the plant, the high interest

rates. We may just have to, for a while, in determining the cost of

those cars, forget about the interest rate and forget about writing off

until we get the thing rolling. Because it's going to be a case…. I

don't want to hear them standing in this House and saying that we

subsidized railcars for some other railway, because in essence we won't

be subsidizing. But we're going to have to take a real solid look, and

in order to get the plant going and in order to keep it going, we just

may have to take a look at the cost of producing those cars. Now it's

about $30,000 per car, depending on the car — yes, $30,000 per car.

MR. LAUK: What have you been doing in the last quarter?

HON. MR. PHILLIPS: I mean, $3,000 per car, I'm sorry, and we may just have to bring that price down to $2,500 to compete.

But I'm glad that the opposition has taken that realistic view, and

I give them credit for having some business sense. So if we do have to

put out some bids where maybe we don't take into consideration all of

the built-in costs like depreciation and interest, and start-up cost

and so forth, I know they'll be understanding, because that's about the

only thing they ever did that they completed. I know that they want it

to be a jewel that they can look back on and say: "We built that great

plant and we brought it into production, and look at the services

provided."

MR. LAUK: We'll be back in office.

HON. MR. PHILLIPS: Well, the plant will be…. By the time

you're back in office the plant will have run its day, and it will

probably be crumbling and we'll have to build a new one.

MR. G.R. LEA (Prince Rupert): Two years.

MR. LAUK: Mr. Chairman, briefly about the car plant, I think

that it is appropriate to underbid initially, and the minister knows

full well that I was a member of the board of directors that initiated

that proposal.

[Mr. Schroeder in the chair.]

Now as far as Ottawa dollars are concerned, the minister knows full

well…. I wish him well. If he can get money from Ottawa, then for

heaven's sake let's get it. But you know, the government in Ottawa — we

all know this — the government in Ottawa has a special place in its

heart — I think it's because of 75 per cent of the seats in the country

— for the Niagara peninsula and Quebec and Ontario. You know perfectly

well that they'll pour money into railcar plants, to finance this and

that and the other in central Canada, but to get the hard-earned

pennies that we contribute to Ottawa…dollars and only get pennies back

from Ottawa — you know the whole thing.

Interjection.

MR. LAUK: The minister says we didn't try. Mr. Chairman, that

is absolutely incorrect. We tried to get money from Ottawa. We tried to

bring up that imbalance of the payment of our taxes. Something like 11

per cent of the federal budget comes from British Columbia and, you

know, we get 4 per cent back. It's another one of my press releases

that you gave out a couple of months ago. I've been saying that on

several occasions. You know as well as I that British Columbians are

British Columbians and the facts are the facts.

Interjection.

MR. LAUK: No, I don't think we should rush these estimates

through. I don't think we should rush these estimates through, Mr.

Chairman. You know, I've been looking over the press clippings. I've

been taking my magnifying glass. I've been trying to find out what is

the new policy. Not our policy, not the

[ Page 1498 ]

policy we were bringing about; what's the new policy?

I saw this smiling face in a local magazine. It says: "From the

Legislature: A Familiar Face Behind the Throne" — and in brackets,

"though we don't recognize the voice." And here we have comments about

the new Minister of Economic Development:

"In every cabinet there develops a power behind the

throne, a minister who gradually takes on more responsibility than his

ministry would normally dictate, whose department becomes the focus of

a wide range of governmental activities — the power behind the Social

Credit throne.

"It is becoming increasingly clear that the man who is

going to fulfil the same role in Bill Bennett's cabinet is Don

Phillips. Phillips will not retain both portfolios…"

Fascinating!

The minister has not commented on this, Mr. Chairman.

AN HON. MEMBER: Are you reading from your files?

MR. LAUK: It appeared in a relatively obscure publication of

local origin — I hope the second member for Victoria (Mr. Barber)

doesn't feel offended — but it was an interesting article. It was by

Barbara McClintock of the Province newspaper — an astute journalist,

not one who is easily deceived. She has inside information; she knows.

AN HON. MEMBER: What was in your basement?

MR. LAUK: What are you doing up so late, son? She knows that

the Minister of Economic Development is the Cardinal Richelieu of this

government, the éminence grise. (Laughter.)

He still hasn't commented. I want his comments. Does silence mean consent? Is he admitting that he's the man, the power?

MR. WALLACE: We decided that was the case with Rafe.

MR. LAUK: I'm glad you straightened that out.

MR. LEA: The power on the throne. (Laughter.)

MR. CHAIRMAN: Order, please.

MR. LAUK: Mr. Chairman, I think it would be appropriate for

the hon. minister to comment on that because very serious political

implications flow from that journalistic speculation — very serious

indeed.

I think it's appropriate that there be…. Because people are people,

and there are people with some talents and people with other talents,

and so on. If the natural leader, the intellectual and strategic

strength of the Bennett cabinet is going to be the Minister of Economic

Development, the people of British Columbia should know that — so we

could all pack our bags and run for the hills, because if he is the

mindermasse behind the throne, we're in trouble. (Laughter.) For four

months he's been whimpering about the files in my basement, reading old

press releases of mine, not answering any questions and refusing to

meet with agricultural groups. If that's the power behind the throne,

we're in trouble — a whole lot of trouble right here in River City, Mr.

Chairman. (Laughter.)

Interjections.

MR. LAUK: The only thing I could find was that comment that he was the power behind the throne, and now….

Interjection.

MR. LAUK: Would you stay out of my personal life?

Do you know, Mr. Chairman, the only comment, as I say, was Bob

McMurray's

article in the Province — "The Grand Industrial Strategy."

And what does it say? Dateline Victoria, April 21, 1976:

"The Social Credit government is working on an

industrial strategy for British Columbia, a document which would give

some idea of the direction that is wanted for development." I would

think the strategy is still in the study stage."

Interjections.

MR. CHAIRMAN: Proceed if you can, Hon. Member.

MR. LAUK: You know, the more things are changed, the more they stay the same, Mr. Chairman. (Laughter.)

Interjections.

MR. LAUK:

"The strategy is still in the study stage; could it be

tied in with a plan to use B.C.'s resources, particularly forests and

minerals" — that's very clever — "as trading bait for establishment of

further secondary industry here?"

Now where have we heard that before?

MR. NICOLSON: Waldo Skillings.

[ Page 1499 ]

Interjection.

MR. LAUK: Retract that. That was out of a rather well-put-together press release of mine in 1973.

1 think it's apparent to everyone in British Columbia now how much

that minister admires me, and the feeling is mutual. Any person who

could quickly pick up on my strategy like that and understand it,

especially the part about still being in the study stage, has got to be

a good minister.

It goes on to say: "This would mean that B.C. would try to get

resource customers to agree to buy secondary manufactured goods in

return for being guaranteed a long-term supply of" — and then he says

offhandedly — "coal." (Laughter.) My goodness, is that news! Hot off

the presses! What did he think I was doing with NKK for three years —

the Japanese trip, negotiations, the signing of the steel agreement?

Every time I got a chance I used to jump in front of a TV camera and

tell them this was because we were having a trade-off on the sale of

our resources.

"Various cabinet committees and sections of the

provincial civil service are working on the industrial strategy and

related ideas. The cabinet has set up a new committee structured to

expedite the work of planning.

" Some of the details were explained here during an

interview with Economic Development minister Don Phillips; others were

gained from other government sources. Phillips said he could not

provide any information on industrial strategy because it's still being

worked out. He said there were a number of major considerations in

determining how B.C. should be developed in order to provide jobs and

income. These include a need to slow down the growth…."

Here's another newsflash — are you ready for this?

"These include a

need to diversify from resource production into further secondary

manufacturing, and a need to remember environmental restraints."

Now haven't we heard that before someplace? Here we thought there

was going to be a vast new direction, a change in policy — again,

lifted entirely. Stolen! Stolen from one of my press releases — one of

my speeches. I don't resent that. No, I retract "stolen." Liberally

borrowed.

MR. WALLACE: The sincerest form of flattery.

MR. LAUK: I was flattered. "While he would not comment on the

trading bait idea being a key part of the industrial strategies,

neither would he deny that it was an integral part" — falling cleanly

between two stools, as they say, Mr. Chairman.

"This philosophy" — Bob McMurray hastens to add, because you know he's

been around — "was expressed by the former NDP administration." That's

kind of an understatement.

Well, anyway, I don't want to pick on the minister. I think that he's doing a good job following the programmes that I set up.

SOME HON. MEMBERS: Aye! Aye!

MR. LAUK: There's a group of sailors over there, Mr. Chairman.

I think that he's doing an excellent job and I think that it's

appropriate that he follow the industrial strategy of the NDP

administration. It took us three years to start the major industrial

strategy and planning for economic development in this province, after

20 years of ad hockery of a Premier of this province who had his

accounts receivable in one pocket and his accounts payable in the other

and his files in his hat, and nobody in cabinet knowing what on earth

he had planned next.

MR. C. BARBER (Victoria): And remember Wenner-Gren.

MR. LAUK: Oh, yes. He did bring us Wenner-Gren — another famous chapter, another magnificent Social Credit industrial strategy.

The only thing that the former Social Credit administration relied

upon was a yellowed copy — an old, dusty copy in the desk of the former

Premier. Remember the old reconstruction committee report? He dug that

our whenever a new election campaign rolled around. He'd look at that

and he'd tell old Broadbent: "Well, we'll put a railway way up here and

we'll put a sawmill there." It says right here in the report. Even that

was dominated by CCF members, as I recall — the 1947 reconstruction

committee report. It was a good one. Actually the good parts of

economic development in this province have been monitored and guided by

the wise and intelligent hand of the CCF-NDP for the past 25 years,

starting with the reconstruction report, an all-party committee. When

we took office, it then started to take off with the IPA studies, the

joint studies between the federal and provincial governments. An

increase in the staff in research and planning in economic development

and a joint cooperation between all departments made the tremendous

inroads that now this minister — and I'm glad he can — can take

advantage of for the benefit of all the people of this province.

Another part of this

article is interesting as well. The minister

revealed, still playing his cards close to his vest that there will be

a coal development in the northeast. He said: "While the policy has yet

to be developed on how much coal royalties we need now — they're now

$1.50 a ton — the government is considering a user fee to be paid by

mining companies to pay for

[ Page 1500 ]

townsites and their amenities that would be established by the

government" — another news flash. Well, I think that just to set the

record straight, Mr. Chairman, I'll read liberally from the press

release that the minister read liberally from when he was talking to

Bob McMurray. It's a press release under my name as the Minister of

Economic Development, as I then was.

"There has been a great deal of speculation," I said in this press

release….

"There's been a great deal of speculation in recent weeks…."

Well, then resign, Mr. Member.

Interjections.

MR. LAUK:

"…in recent weeks about prospective multi-million dollar

projects in the northeast. It is time the air was cleared and the whole development

viewed in its proper perspective. Lauk explained that he had just come from

a meeting with the Peace River representatives and that such meetings were

part of his government's commitment to continually work with the people

most directly affected during all phases of major developments in the province.

I presented him with an up-to-date progress report of our activities and explained

in detail the intentions of this government and the mining companies. All these

developments are in line with the alternatives that were first outlined in the

northeast report, 1975, and then reviewed by the representatives from the region,

the mining companies and the government agencies involved.

"The statement of overall intention that I make today

on behalf of the government is our response to these suggestions and

comments, and represents our firm commitment that the resources of this

province will be developed in an orderly and responsible manner,

consistent with our economic needs and the concerns of the people most

directly affected."

Sound familiar, Mr. Minister?

"The development and their status at this time are

listed below: Coalition Mining Company is completing preliminary

feasibility studies on their Sukunka property 38 miles south of

Chetwynd on the Sukunka River. We have commitments from the company

that these will lead to engineering and feasibility studies which will

be carried out in cooperation with the government.

"The company is currently contemplating a phase one

mine development, producing 750,000 tons per year of coal by 1979-80

and employing 350 to 400 people. Construction for the mine site,

coal-washing plant, access road and other facilities could begin in

1976-77 and employ up to 400 people.

"Quintette Coal Ltd., of which Denison Mines are the

major shareholders, has agreed to proceed to detailed feasibility and

engineering studies of its properties, again in full cooperation with

the government. Completion of this study is expected by December, 1976,

at which time a final decision concerning the timing of production will

be made. In the detailed engineering and feasibility…."

Interjections.

MR. LAUK: I think I've lost my place. I'll go to the beginning again, Mr. Chairman.

Interjections.

MR. LAUK:

"Quintette Coal" — as I say — "if the detailed

engineering and feasibility studies verify preliminary findings, production

could commence in late 1979 with an eventual output of five million tons of

clean coal annually. B.C. Rail is committed to constructing a rail line."

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress was granted leave to sit again.

Hon. Mrs. McCarthy moves adjournment of the House.

Motion approved.

The House adjourned at 10:59 p.m.

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