1979 Legislative Session: ist Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JULY 12, 1979

Night Sitting

[ Page

727 ]

CONTENTS

Night sitting

Petition

An Act to Amend the Cultus Lake Park Act.

Mr. Ritchie –– 727

Routine Proceedings

Committee of Supply: Ministry of Forests estimates.

On vote 117.

Mr. King –– 727

Hon. Mr. Waterland –– 730

Mr. Kin F –– 732

Mr. Lorimer –– 736

Hon. Mr. Waterland –– 737

Mr. Mitchell –– 738

Mr. Nicolson –– 739

Hon. Mr. Waterland –– 741

Presenting Reports

B.C. Systems Corp. annual report as at March 31, 1979.

Hon. Mr. Wolfe –– 741

THURSDAY, JULY 12, 1979

The House met at 8:30 p.m.

MRS. JORDAN: Mr. Speaker, it may come as news to the

members of this House, but over the last month they've been observed

many days by a young lady, Necol Kelly, 10 years old, who has been

visiting our country from Clearwater, Florida. Necol is in the gallery

this evening with her grandmother, Mrs. Evelyn Allen from Victoria. I'd

ask the full benches on the Social Credit side of the House and the

smattering of members on the NDP side of the House to give this young

lady a very warm welcome.

HON. MR. WATERLAND: Mr.

Speaker, I see in the gallery tonight the former member for

Yale-Lillooet, Mr. Bill Hartley. I would ask the House to make him

welcome.

Presenting Petitions

MR. RITCHIE: Mr. Speaker, I beg leave to present a petition.

Leave granted.

MR. RITCHIE: The petition is

an Act to Amend the Cultus Lake Park Act.

MR. SPEAKER: Is there an attending motion, hon. member?

MR. RITCHIE: With leave, I move that the petition be received.

Motion approved.

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

(continued)

On vote 117: minister's office, $115,544 — continued.

MR. KING: Mr. Chairman, before adjournment I had just a brief opportunity

to say a few words. To capsulize my remarks on that occasion, I would like to

say that the predictions of many people on this side of the House and the predictions

of many people in the forest industry all over the province have come to pass

after viewing the operation of the new Forest Act and the administration of

the Ministry of Forests for the year since the new Forest Act was passed. The

concerns expressed, Mr. Chairman, were with respect to the increased monopolization

of the forest resource in British Columbia, basically by the eight large integrated

licence-holders in the province of British Columbia, all of which are foreign

multinationals, with the exception of one. The new Act, we predicted, would

intensify and complete the monopoly control of those corporations to the exclusion

of British Columbia entrepreneurs; that, in the view of most independent people

in the industry today, seems to be the case.

Mr. Chairman, if I were politically

motivated in this debate today, I wouldn't enter the debate at all. I'd

remain aloof from it and probably just let the minister stew in his own juices.

I can predict that we are going to witness increasing failures of small entrepreneurs

of the kinds of specialty mills in British Columbia which are employment-intensive

and which contribute greatly to the economic fabric of many of the communities

of the province. If we were politically motivated, we would sit back and probably

let all that fall on the minister's head, secure in the knowledge that we'd

win the next election by default. But, Mr. Chairman, at the risk of forfeiting

the next election, we will fight from this day on for a proper forest policy,

and for an administration that does not pamper and favour foreign-controlled

monopoly.

We will fight to assist the dispossessed British Columbia

citizen to gain a role in the life of the forest industry in British

Columbia. Mr. Chairman, I want to detail why this side of the House

will not be prepared to grant this minister his supply without a full

accounting from him in terms of coming to grips with the rather

scandalous direction his ministry has taken over the past year. We are

not going to be anxious to grant supply to this minister, not because

we don't support funding to the Ministry of Forests, but because we

stand for policies and procedures that are going to break up the

pampering and the monopolization of the forest industry. We are going

to oppose the policies this minister has so far pursued which, as the

one letter I read out earlier indicated, have made the small

entrepreneur in British Columbia a foreigner in his own land.

For

the benefit of the minister I want to outline the issues on this

occasion that I propose to deal with. It's mainly in the coastal

section at this particular time. I do intend at a later date, along

with some of my colleagues, to outline similar circumstances that are

taking place in the Interior. The coastal industry is basically divided

into three sectors: pulp and paper companies, independent or

non-integrated companies, and manufacturing companies.

The

pulp and paper group comprises eight companies, all dominated by

foreign investment. They control all the tree-farm licences at the

present time, except the odd small one, such as the one at Mission,

which is controlled by the district municipality. Under the tender

auspices of this ministry, they control all the old temporary tenures,

now made continuous under the new Forest Act. They substantially

control all the forest land not now in the Esquimalt and Nanaimo

Railway grant. They control about 50 percent of the annual allowable

cut within public sustained yield units; this was the area that was

presumably going to provide the supply for the small independents, and,

as I understand, it was originally set up for groups 2 and 3 of the

small-business program.

They also control bidder reserves —

and here is where we start to get into what I believe is the major

scandal in the resource sector of British Columbia today. These are

undeclared and not accounted for in Forest Service records, and arise

mainly from their ability to block access by others by understating

timber inventories, and by depreciating growth rate and elongated

rotation age — another deliberate manipulation, causing grossly and

flagrantly understated annual allowable cut.

There is also wastage of annual allowable cut by leaving log volumes unscaled in the slash of the forest and allowing

[ Page 728 ]

sinkage

of logs in transit and in storage, coupled with replacement of this

wastage by cutting of additional logs of higher quality, which are then

scaled in place of the logs lost to sinkage and left in the slash. And

they undercut with impunity the allowable cut allocated for current

usage, thus distorting the supply for the future. These methods are

allowed by the ministry and used by the large companies to manipulate

the huge tracts of Crown timber on which they have perpetual tenure,

and it is nothing short of a scandal.

Excluding these hidden

reserves, this group already controls 80 percent of all committed and

allocated allowable cut. They have a surplus to their needs. This is

not just my allegation. This same data was contained in the report of

the Royal Commission on Forest Resources by Dr. Peter Pearse. I

understand that it's being viewed from the Forests ministry's own

records.

I asked the minister the other day if he was

prepared to release the Thomson report, which, I understand, was

commissioned by the Truck Loggers' Association; but I also understand

that there were certain conditions that the minister imposed on

allowing the truck loggers' independent consultants access to the

minister's files. I understand that there were certain restrictions

which the minister insisted upon before opening up those files to this

independent appraisal. I believe that it is incumbent upon the minister

to indicate publicly that he is prepared to release that information,

and to authorize the Truck Loggers' Association of British Columbia to

release their findings — the report that was compiled for them by the

Thomson consulting firm.

I have talked about the control and

the vast area that the large, integrated foreign-dominated firms have

unto themselves. The second group, of course, are locally owned and

managed citizen-entrepreneurs. They occupy the vacuums and the corners

which the oligopoly does not choose to operate in. They fit into the

corners and the vacuums which are left by the almost total allocation

to the major firms. They are the people who eke out an existence in the

forest industry by being highly efficient, by developing high

utilization, by using material that in most circumstances would be

wasted or ground up for pulp by the large firms. They have to be

efficient. This is the group which is being shafted by this minister,

by his ministry and by this government. They are being completely

shafted because there is no firm future for them. They have been

waiting now for a year, with all kinds of expressions of sympathy from

the minister and his staff, and with all kinds of undertakings that,

yes, timber will be made available. But they can't go to the bank with

sympathy. They cannot continue to operate day by day not knowing

whether next week they are going to have a timber supply to maintain

their milling operation and to maintain secure employment for their

work force.

No business can operate in that fashion, and

that is the kind of situation that obtains in all parts of this

province. I have talked to and received submissions from the East

Kootenay. I've received similar submissions from the Prince George area

in the north, and from Vancouver Island. I want to tell you it's a

general problem of major proportion.

The third group, also

locally owned, there's really no provision for. They operate as

contractors, basically, and they are completely subservient to the big

multinationals. They operate as contractors to the multinationals who

have tenure on the forests. They can't rock the boat too much, because

they are indeed subservient and reliant upon the majors for their

supply.

The first issue is that we have an oligopoly here in

British Columbia — a monopoly — and they have far too great control of

the resource supply. There is absolutely no justification for this kind

of monopoly control; it is directly contrary to the public interest. It

is contrary to the stated objectives and philosophy which the minister

enunciated when he introduced the new Forest Act a year ago.

Mr.

Chairman, the second issue is that despite the slogans and claims to

the contrary, the new Forest Act does not deal with correcting this

monopoly situation. On the contrary, it moves to commit to longer term

and perpetual tenure the monopoly control of those very companies that

created major problems in the industry in the past in terms of failing

to properly reforest, failing to apply adequate silviculture, and

certainly by playing games in many cases with the inventory that was

assigned to them on the annual allowable cut.

The third

issue is that the administrative procedures initiated under the new

Forest Act are reducing allowable cuts and cutting back supply from the

public sustained yield units. This is the only supply available to

support companies other than the large monopoly group. Concurrent with

that, priority is being given to reissuing to further entrench the

monopoly control of the allowable cut in the public sector by the large

monopoly companies.

There have been charges from people in

the industry that there has been deliberate falsification of the

allocation of the inventories — deliberate falsification. There has

been the charge similarly that the ministry as it stands lacks both the

staff to adequately supervise and check these kinds of procedures that

are open to the monopolies in controlling their own bookkeeping, and

also that there is inadequate expertise to do the job adequately and

thus protect the public interest.

I'm not sure that we lack

the expertise. I think what we do lack is the political direction and

the financial allocation from the ministry to make sure that there is

an adequate check of inventory control on the procedures for setting

the allowable cut and for ensuring that there's an adequate return to

the public coffers. That's where the failure is, in my view, Mr.

Chairman.

Access to the allowable cut is the fuel that

really supports the economy of British Columbia. If there is going to

be activity, if there is going to be a continuing expansion with job

creation in the forest industry, then there has to be access for

entrepreneurial competition, if you will, to the annual allowable cut.

MR. KEMPF: You should use smaller words, Bill.

MR. KING:

Well, sometimes I get hung up in the jargon that the minister and his

staff uses. If I stumble over the odd one, I don't feel too bad,

because I would rather see some frank discussion and some frank debate

about the forest resource that the public can understand than get hung

up on cliches and phrases.

Under the new Act, it is the

chief forester who calculates and allocates the allowable cut. The

industry relies on him to give effect to the policy of the statute. The

only innovation in the new Act is a program of set-asides for the small

business program. That's the only innovation and

[ Page

7297 ]

the only hope that was held out so that small business would have an area in

which to compete for access to public timber without being undercut by the large

multinationals. In other words, they'd have a niche with some protection

in which they could bid on a fairly equal basis.

This

has been going on in the United States for some time. The U.S. has a

small business set-aside program, and they've been effectively

utilizing it to establish a role for locally based community businesses

for quite a number of years. It's not a new and unique brainchild of

this minister, but it was the only hope, in my view, for some rational

control and some much-needed competition in the forest industry.

I understand it, in the States they set aside, within a number of

categories like the minister's proposing to do here, a much larger

proportion of the resource than the minister proposed to do in his new

Forest Act. Only the companies designated as small business can compete

for it. But I believe in some of the states it's something like 30

percent that is available to the small business program.

B.C., in spite of all the experience in the U.S., the Forests ministry

has not yet defined small business, and every application for timber so

far submitted under the small business program has been given the

brush-off by the minister and his staff. The minister has stated for a

year that he's developing the program. One would think that by this

time he would be prepared to deal with some of those applications. But

he gives them the brush-off, basically with the excuse that allowable

cuts in the public sustained yield units are being reduced, so there is

nothing available.

The other excuse that is used by the

minister and his staff is that even if it is available, money to

develop the timber and service is not budgeted in the ministry. If

other money is used, other programs must be reduced. In other words,

the ministry must rob Peter to pay Paul, as it were.

Mr.

Speaker, the truth is that this government and the Forests minister

both have no intention whatsoever, in my view, of initiating a genuine

small business set-aside program, because all licences and contracts

issued under the old Act are terminated and replaced with the same

amount of annual allowable cut, whether needed or not, for the monopoly

boys, for the large integrated companies. They are not called upon to

justify utilization, efficiency, job-intensive programs, which

the Act itself calls for. None of those things was scrutinized by the

minister's department in the turnover of existing tree farm licences.

They were provided without even a public hearing, Mr. Chairman.

Everything was available on the day the new Act was proclaimed to the

existing licence holders, the people holding the monopoly. But for a

whole year now the independent people seeking some access to timber

have been waiting for administrative procedures so that they can get

some timber to sustain their plants.

The minister says on the one hand there's going to be a reduction in the

allowable cut, and the public sustained yield unit, or there's not enough

money budgeted for in the department to deal with your application. Why the

indecent haste on the one hand, when it came to renewing and securing the monopoly

of the Big Eight. and the complete brush-off, the excuses and the delay in providing

any administrative mechanism to deal with the needs of the small business, the

independents, for the past year? That's a question the minister has to answer

in this House.

all cases, when it's dealing with the large monopolies, the Act

provides that the minister shall replace the tree farm licence now in

force in the same area, subject to the existing licence. The minister

is compelled by the Act; he shall replace it. The manager shall replace

existing timber sale harvesting licences, forest licences, et cetera.

But when it comes to the small business program, the set-aside program,

the mandatory language disappears. There are two different

philosophies: one for the big boys, and quite another for the small

independents. When it comes to the small one there is no mandatory

language in the Act; the minister "may" and the regional manager "may."

The independents have been waiting for a year, and that discretionary

authority of the minister and his staff has brought precious little to

them thus far.

Mr. Chairman, there are major problems I am

going to deal with at a little later time. I would like the minister to

answer some specific questions, though. He put forward the proposition

to small independents that he could do nothing in terms of fulfilling

the small business program until he had amended the Forest Act, and

until he had developed the regulations setting up an administrative

procedure.

I have viewed the amendments to the Forest Act

which are now on the floor of the Legislature, and they will be debated

later. I see nothing in there that really prevented the minister from

acting to set up the administrative procedure, at least, and nothing to

prevent him from starting to allocate timber, from starting to set

aside and make available a firm source of timber supply to the small

independents. Nothing has been done to develop an inventory of

acceptable timber for the independents in British Columbia. The

minister didn't need an amendment to the Act to accomplish that. He

didn't even need the regulations to accomplish that. That could have

been an internal strategy of the ministry prior to giving effect to and

initiating the administrative apparatus for the actual applications.

defy the minister to identify timber in British Columbia that he has,

in any volume, set aside for the small business program to date. I want

to ask him where it is. I want to ask him to identify it. Mr. Chairman,

there's been more timber wasted in many areas through sloppy logging

practices, through inadequate logging of rights-of-way on transmission

lines, and so on, than would have been required to keep many of the

small mills going for a couple of years. This is the kind of thing that

is so frustrating to the people who are trying to make a go of their

enterprise, and who want to maintain some employment security in the

province.

There are a whole variety of other issues I'm

going to bring up, but I'm going to pause now, because I think I'm just

about at the end of my time anyway, Mr. Chairman, and let the minister

respond to some of the issues I've raised. I've made some really fairly

serious charges, and used some fairly strong language. I would like the

minister to respond to those complaints that have been brought to me by

people in the industry. I would like him to say if, in fact, he feels

his ministry is adequately monitoring the proper inventory procedures

in the province. I would like him to assure this House that he is

prepared to provide the statistical data to the public and to this

Legislature, to either confirm or to repudiate the claims that are

being made by independent people in this province. These are very

serious matters because they have much more wide-reaching implications,

which I propose to deal with a little bit later

[ Page 730 ]

on.

Suffice it at this point to give the minister a chance to respond and

see whether or not he is concerned about these particular issues, to

see whether he is aware of the implications that are inherent in the

kind of charges that are being made.

HON. MR. WATERLAND:

Thank you, to the member for Shuswap-Revelstoke, for your comments this

evening and this afternoon. You have covered a rather wide range of

subject matter, and quite frankly I am a little bit surprised that you

are not more aware of what is really going on within the Ministry of

Forests. You have had a short, two-day crash course in forestry matters

from the former minister, I understand, and he has provided you with a

number of notes together with a number which you have accumulated

yourself over the last year. But many of the things you say are being

handled and done within the ministry, or are things which you are

misinformed about.

For the first time in the history of

forestry in British Columbia there are very specific provisions in the

Forest Act, in forest policy and in forest regulations to assure the

so-called small business sector in the forest industry that they will

have access to Crown timber, and that they will have access to Crown

timber without having to compete with these terrible multinational

companies which you seem to despise so. You mentioned EugeneSchmidt ,

who has been carrying on quite a lobby. I don't blame him for doing

that, because he is one of the many small operators who are somewhat

frustrated at what they see as the slowness of getting the small

business program underway. The small business program is a fact of

life, and it does require the amendments which are proposed in the

Forest Amendment Act before it can be fully operational.

Yes,

the staff of the Forests ministry have identified areas to be used as

sales in the small business program. The administrative procedures are

in place. The staff of the Forest Service have been working very long

hours in order to make sure that this program will get underway

immediately these amendments are passed. But, you know, within the

small business sector there are various types of small business, and

there can be unfair competition among the various sectors of that small

business community as well. That is why before we get fully operational

on that program, we want to have this amendment in place so that we

will not have cut-throat bidding between, perhaps, very large logging

contractors, who are in fact large companies, and the small,

independent sawmill owners who can't compete fiscally with them. But

that program is well established and will be underway and operational

in a very short time indeed.

Mr. Member, there will never be

enough wood available in British Columbia to satisfy all the demands

put upon it. If we believe in sustained yield forestry, then we must

limit the amount of timber which is harvested each year. I could be a

hero and make timber available over the short term to anyone in British

Columbia who might want it. Anyone and everyone who wanted to have his

timber supply for, perhaps, a period of 10 or 15 years could be

accommodated, if we wanted to abandon the concept of sustained yield.

But we cannot do that, because there are many future generations of

British Columbians who will depend upon a continuing flow of raw

material. So we must be very careful in the amount of timber we commit.

have inherited a large problem. Some areas of our province are over

committed right now. Some areas still have unallocated timber to be

made available. Even those areas which are over committed right now

will have provision made for the small business sector. But I don't see

any sense in taking away from a sawmilling company, a pulp mill company

or a large integrated company the raw material they need to provide the

employment for their many thousands of employees. There is room for

both; both are accommodated and provided for in the Forest Act, and

both will be accommodated in the future administration of the forest

resources.

You mentioned complete disarray within the forest

ministry, and the fact that everybody is saying there is a terrible

administrative inefficiency, that nobody is happy with what's going on

in the Forest Service. Yes, there has been some uncertainty over this

last year, as we have been studying the organization. But if everybody

in the Forests ministry is unhappy with what's going on, and is

disillusioned, how can you explain the fact that in the competitions

for the new positions that are being created we have, in many cases,

more than 300 applications from within the Forests ministry itself for

these jobs? The people in the Forests ministry can see that tremendous

career opportunities are before them in our restructured Forests

ministry. There are going to be more career opportunities for

professionals and technical and administrative people than there have

ever been before. They're going to have the responsibility, the

accountability and the authority to do their job as they would like to

see it done. There's great excitement within the Forest Service, and,

yes, there is some uncertainty. We're doing what we can to dismiss that.

Mr.

Chairman, the member for Shuswap-Revelstoke (Mr. King) mentioned the

fact that everybody in British Columbia is dead against the Forest Act,

that it's a terrible piece of legislation. Well, I have letters on file

from all the different associations within the forest industry,

including the labour unions, which recognize the great things in that

legislation and what it means to the future of forest management in

B.C. I have correspondence from the unions. I have correspondence from

the Council of Forest Industries. I have correspondence from the Truck

Loggers' Association, the B.C. Independent Loggers' Association, the

CLMA — all these associations — and particularly from the Registered

Professional Foresters' Association, who, above all, understand that

this Act is a Forestry Act and that it demands good forestry in B.C.

And that is what we must have.

That member said that all the

timber cut, all the tree farm licences on the coast, all the prime

timber is in the hands of eight foreign-controlled, multinational

companies. Well, that is absolute nonsense. Sure, large companies are

necessary on the coast, and large companies have perhaps more than

their fair share of timber allocations at this time. But they're not

all foreign-controlled companies. Canadian Forest Products, MacMillan

Bloedel, BCFP, B.C. Resources Investment Corporation, Pacific Logging —

these are not foreign-controlled companies; they're Canadian companies,

and they all have timber allocations. I don't say that in the forest

industry the big company is necessarily bad, or that a small company is

necessarily good, because there are good and bad operators in both

small and large companies. We have some bad small companies and some

good small companies, and similarly in the large sector.

[ Page 731 ]

What

we want are companies that are responsible and will manage the forests

in a responsible manner. According to Dr. Pearse, the control of our

forest resources by foreign companies is not at this time a matter for

concern. He said that in his report, Mr. Member. If you've read the

report, you know that's true. But he says it's something that must be

monitored, and, indeed, it is being monitored.

The same

degree of control in the forest industry exists, roughly, now as

existed in the years when your party was the government. You took no

steps to change that.

Interjection.

HON. MR. WATERLAND:

You're saying, Mr. Member, that these companies are holding massive

amounts of hidden reserves. If you are right — and I hope you are —

that cut will not be left in their hands. I hope you are right —

because if you are — then there is a great deal of room for expansion

in the forest industry in British Columbia. Now there aren't massive

undercut situations, there aren't massive hidden reserves, but perhaps

there are some. I have said, and I'm very sincere when I say it, that

cuts which are underestimated, these hidden reserves that you talk

about — and probably there are some there.... When we identify them,

they'll be returned to the Crown. That is part of the wood we're going

to be making available to the small companies. Determining the real

allowable cut of a large tree farm licence is no simple matter. There's

a lot of room in there for professional judgment as to what the cut is;

and, yes, our professionals in the forest ministry are equally, and in

some cases more competent and much more objective than those foresters

in the private sector. We will be making these calculations ourselves,

but they're not simple matters.

The difference between a

yield of half a cunit per acre per year up to one and a half — which is

perhaps what the range is in our coastal forest — is something that

takes a lot of judgment to determine. We will be doing that. We can

identify this cut you're talking about, and that's what we will have in

addition to unallocated wood and increased growth through intensive

management. That wood will be available to the small sector. I hope

you're right when you say there are massive amounts of cut not being

used; I really do.

You talked about the perpetual tenure

provided under the new Forest Act for these terrible, large companies.

There is no such thing as perpetual tenure in the new Forest Act. There

has been a replacement of tree farm licences after their first 15

years. Yes, a new tree farm licence will be offered under the terms and

conditions as set down by the government. If the licensee does not wish

its 25-year licence to run out and then it's finished. But, Mr. Member,

you say that Dr. Pearse was going to end all of this perpetual tenure

right now. Well, if you'll read the Pearse royal commission report,

you'll see that under the terms in which he was going to change the

tenure of tree farm licences, some of those licences would run on for

another 80 years without change before they would expire. He had them

being replaced once, replaced twice and then they would run out. Mr.

Chairman, we were much more severe in ending the old type of forest

licence than was Dr. Pearse.

MR. COCKE: How come you're blushing?

HON. MR. WATERLAND: Because you embarrassed me, my friend.

MR. CHAIRMAN: Order, please.

HON. MR. WATERLAND:

The Thomson report was commissioned by the Truck Loggers Association

with access to information in the Forest Service files. I have no

objection to that report being released now or at any other time. In

fact, we have been doing a great deal of soul-searching within the

ministry as to what our position is going to be as far as access by

anyone and everyone to the records we have. Our policy is very clear.

Any information dealing with Crown timber, which is owned by the people

of British Columbia, should and will be available to them. The only

information that we must be somewhat selective with is that information

which is sensitive to a corporation's financial affairs. But that

information won't deal with the allocations or use of Crown timber, and

that information will not be made available from one company to its

competitor, because it is a very competitive industry indeed.

The

constant theme of the member's discussion this evening was big versus

small, bad multinationals versus Canadian companies. I say that any

company which is operating in British Columbia which is a good

corporate citizen, is giving good value to the province for its wood

and is providing employment opportunities for the people of British

Columbia, can invest here and is investing here. In fact, right now the

forest industry as a whole, including these terrible multinational

companies, have commitments of well over $2 billion of investment in

this province, and it's growing every day.

But the "use it

or lose it" statement which I have made many times is one of the basic

philosophies upon which the Forest Service will be administrating Crown

timber. We don't want to shut down a company just because it happens to

be large. We're not going to shut it down because it's large. We will

be very severe with them if they're not making good use of the wood,

and we've been doing many investigations and studies as to the best

possible use of logs. I mentioned at the truck loggers' conference last

fall that these flying squads we've been dropping in on the various

companies were quite concerned about the amount of good round wood

that's been chipped in some areas and we have taken action on this, and

there's been a lot of cleaning up of that. But we have to recognize the

realities of the industry as it exists.

You say that the

contractors are afraid to rock the boat; they're subservient to the

large companies. Well, Mr. Chairman, a short time ago — it was just

after the election, I guess, when the regulations for the contractor

clause and the small business program were passed — I had a call from

senior people in the Truck Loggers' Association, and they said: "Gee,

thanks for the regulation, Mr. Minister. We sat down with you many

times and tried to tell you what we needed in order that we could be

independent of the control of the large companies, and you've fulfilled

our wishes."

They have tenure, and rightfully so. The

regulations require that a contractor, if he wishes, can demand a

five-year term contract from a licensee — more than they had really

thought they would get — and it's sufficient for the types of financing

they have to do. A subcontractor and even the major contractors can

demand a two-year term

[ Page 732 ]

contract.

We're in the process now of setting up a committee manned by those in

the contracting business and licensees, contractors of all sizes and

licensees, to constantly monitor the performance under the tree-farm

licence requirement for a contractor. These things and many others are

feasible. They recognize the fact that it does take time, that we're

not dealing with a very simple fact of going out and counting trees and

dividing them by a number — and saying that's what will be cut.

Allowable cut is a constantly fluctuating, fluid thing. It's changing

all the time because of alienation of land, because of ways and means

of using lower quality and smaller wood and ways of harvesting it.

There are many factors that go into determining allowable cut. These

are the things we're working on constantly. Yield calculation is not a

simple matter.

It would be unwise of us to all of a sudden

try to commit vast quantities of wood to any sector of the industry

before we have a good handle on what we have to work with. I have said

that we will be having a minimum of 15 percent of the allowable cut in

all our public units available to the small sector, and even that's

going to take some time to arrive at.

You mentioned the

programs in the United States where, you say, some of them have up to

30 percent. Well, some of our areas will have up to 30 percent too. But

the Americans do have problems with their small-business program. As a

matter of fact, when we were devising our program during the days of

the Forest Policy Advisory Committee and the study of the Pearse

report, we visited those jurisdictions in the United States. They told

us about their program, and they cautioned us about some of the

mistakes they had made. We took their advice, with their cautioning,

and adapted to our circumstances here in B.C. what they had done in

timber tenure situations. We have a good program, and it's just now

beginning to get underway; so don't condemn it until you see it working.

Interjections.

MR. CHAIRMAN: Order, please.

HON. MR. WATERLAND:

The member said that under the legislation all timber presently held by

large companies will be automatically replaced; that's not true. He

knows that.

In the Interior of British Columbia, for

example, their main tenure forms are timber sale licences and timber

sale harvesting licences, and probably the larger percentage is in the

form of timber sale licences. There's no guarantee that the volume

under timber sale licences will be automatically rolled over; there's

no guarantee at all. Under the tree-farm licensing program, we roll

over area for area. Then, as we have time, we determine what the real

cut should be, and we can adjust that after those determinations.

The

member mentioned waste of wood on rights-of-way and waste of wood on

harvesting sites. Yes, he's right; this happens. It can't be allowed to

happen any longer. Right now I have the Forest Service trying to

determine the best way, administratively, of making sure that any of

this so-called waste timber — and there is some — is not wasted. It can

be put into the hands of various operators.

First of all, I

don't think the small operators should be left with the guts and the

feathers and the leavings of the large companies. Our small-business

program is to allow the small operators an equal chance on the average

timber stand. They will be required to do as good job of utilization as

has been, and will be, the case in most areas with the larger

operators. There is opportunity for the very small salvagers to go in

there and get wood that can't be economically used by even those under

the small-business program. It's administratively difficult and it

takes a lot of man-time, but I think it's worthwhile to do. We're

trying to develop an efficient administrative process for doing this.

These are some of the points raised by the member. The last one he mentioned was access to data; I've covered that.

want to run as open a Forest Service as possible. Any information that

member has requested from the ministry he has received, except that

which is corporately confidential and relates to the finance of the

company. Neither you, nor I, nor anybody else should have that

particular information. We're running an open Forest Service; this is

one of our basic policies. We sent the member a binder with the

regulations, the Acts, and so on. We'll be adding our policy positions

on all of the administrative problems we have, the things which require

judgment in guiding the administration of the Forest Service. It will

be the first time there's ever been a clear policy position on all

these subjects provided by the ministry. When it's available, the

member will receive a copy of that as well.

We want the

public, all sectors of industry and everyone to understand very clearly

what we're trying to do. We will not be keeping secrets.

thank the member for his comments. I don't think that we are very far

apart on what we'd like to see happen in the forest industry. I happen

to be charged with the responsibility of making it happen. We're

working as quickly as we can, but we must be responsible. It's not as

easy as turning a switch. We must be sure what we are doing is right,

and we'll make every effort to do it correctly.

MR. CHAIRMAN:

Prior to recognizing the next member, the Chair has a slight

difficulty. In Sir Erskine May's eighteenth edition, on page 725, it

covers the general restrictions on debate of Supply. It mentions the

fact that we mustn't discuss items that require legislation, nor

legislation that's before the House. Bill 22, which is an amendment

bill, is so all-encompassing that it becomes very difficult for the

Chair to allow the debate without constantly hearing violations on both

sides of the House. I caution all members: if we can possibly try to

keep the debate relevant and not deal with matters involving

legislation — which is applicable to all ministries, I might add — then

it would be appropriate.

MR. KING: My one reference

to that bill was just a passing one, Basically, I'm talking about the

administration of the Forests ministry, and that's what I intend to

discuss.

The minister shouldn't come on with his rather

smart-alec remarks. I would be very proud to have the counsel of the

former Minister of Forests or indeed anyone else who has had experience

in the forest industry, in terms of helping me prepare for a discussion

on forest policy in this House. But a rather neophyte minister gets up

with that kind of smug allegation when that just happens not to be

true. So if the minister intended to score points....

Interjection.

[ Page 733 ]

MR. KING:

Bob Williams was over here the other day but he was meeting with

someone else, not me, quite frankly. I wish I had an opportunity to sit

down and talk some forest policy with Bob Williams. I might even

discuss it with Ray Williston on occasion. One must have an open mind,

and there's nothing wrong with that.

Mr. Chairman, the

problem that the minister doesn't seem to either recognize or want to

discuss is the fact that I'm not opposed to the major foreign

controlled monopolies having a role in British Columbia. What I am

opposed to is them maintaining monopoly control over the industry. What

I am opposed to is this minister pampering and tending to the major

multinationals while completely brushing aside the small, B.C.-based

entrepreneurs in this province. That's what it's all about. I'm not

trying to do the major integrated companies out of business. That would

be sheer madness. So why does the minister indulge in that kind of

rather asinine nonsense?

What I'm saying is that they do not

need a monopoly. They do not need 100 percent of their resource supply

assured to them. They certainly don't need an excess over their annual

allowable cut, which in many cases they have. The minister has just

acknowledged that is probably true. The minister and his government

talk about free competitive enterprise. Where is the competition when

eight major integrated firms in British Columbia have their total

timber resource supply guaranteed to them the day after the new Act is

passed? They didn't have to worry about a continuing timber supply.

They had access to the automatic right to renew their licence.

The

minister says that's not perpetual. Well, if I had an opportunity to

renew my $10 bill every once in a while, I'd think that I had a fairly

perpetual supply of money. I think the minister would too. But he has

some euphemism for this called an "evergreen clause." In effect, in my

view and in the view certainly of the independents in British Columbia,

that is perpetuity control, as someone in this House once observed.

That's the issue.

The minister can't seem to get it through

his head that he's using two standards. He's using the one standard of

guaranteeing absolute supply — in fact, excess to the needs of the

major integrated — while saying to the small independents: "Well, okay,

after a while we're going to come up with a small business set-aside.

You're going to get it. It's difficult. We haven't got it available."

Or "we haven't got a budget to provide it." Or: "we haven't identified

it yet."

Mr. Chairman, how long does he expect people to hang on the brink? By next

June, which is the first opportunity that some of that timber is going to be

available, we are going to lose a lot of the existing small businesses in the

forest industry in British Columbia. Is the minister content with that? The

minister hasn't told them definitively that there's no role for them

here. The other thing the minister won't recognize and tries to glibly turn

aside is the fact that he's not going to transfer timber from one company

just to give it to another. But the minister has

an Act here, and

section 14

of that Act says the chief forester shall evaluate each application including

its potential for: " (

a) creating or maintaining employment opportunities and

other social benefits in the province, (

b) providing for the management and

utilization of Crown timber, (

c) furthering the development objectives of the

Crown, (

d) meeting objectives of the Crown in respect of environmental quality

and the management of water, fisheries and wildlife resources, and (

e) contributing

to Crown revenues."

Now

if that is the test, what has the minister done to compare the

performance records of the independents to that of the large tenure

holders? Has he applied this standard? When that tree-farm licence is

up for renewal that he considers in secrecy without a public hearing,

has he asked if this firm in its management of this tree-farm licence

over the past five years has really met this criterion better than the

small mill in the Okanagan or the small mill in the East Kootenay,

which perhaps is more efficient because it has no secure supply?

The

minister is applying two standards. The standard for the major

multinationals is luck, it's a blank cheque — here it is, boys. There's

no real examination of their inventory, no real examination to make

sure that they are maintaining their annual allowable cut, no proper

scrutiny of their management policy and their cutting plan, and so on,

over the past five years — automatic renewal. But for the little guy,

well, hang on and wait for next year, fellows, we're getting our

small-business program in shape; pretty soon we'll have the

administrative capacity to deliver it to you. But by the time you do

that, it's going to be fall, perhaps October or November. Much of the

supply will be at a high elevation; it's in terrain that can't be

logged in winter. What are these people going to do then for a supply

of timber to sustain them over the winter? They can't wait until next

June or July. How is it that the minister considers it even-handed to

automatically deliver to the big multinationals in excess of their

inventory requirements and keep stringing the independents along,

saying: "Well, we're not going to transfer timber to you from someone

else."? You know, that's a con game. The minister cannot get away with

putting that ruse before the House. These are the kinds of things he

has to answer for.

The other concept that the minister

always relied on heavily and talked about a great deal was the idea of

"use it or lose it." I want to ask the minister if he has taken away

any timber from a tree-farm licence held by a private corporation in

this province. Dr. Peter Pearse in his royal commission report

identified faulty inventory, excess inventory. On the books of the

minister's own ministry now are figures indicating and displaying

excessive inventory. That information is available to the minister and

to me. He knows where it is. He knows where there's timber available,

and he hasn't had the fortitude to take one stick of timber away from

the multinationals.

I ask this question: with that kind of

questionable credibility, what hope is there for the small business

person to have a role in the future? The minister already knows where

there's an excess; he knows there are small businessmen going under for

lack of supply. All of those shrewd businessmen over there must surely

understand that you cannot stay in business without a firm supply of

your raw material. You can't go to the bank with that. You can't enter

into contracts with that. You can't develop markets and compete with

that kind of shaky future.

Who is the minister conning? To

hold out the hope that at some future time down the road there is

somehow going to be some tough action by that minister, and some timber

taken away from the people that he has granted increased monopoly

control to, is in my view a sham and an empty promise. The independents

of British Columbia have listened to that promise for over a year, and

nothing has

[ Page 734 ]

happened.

I want some more serious and firm commitments from the minister with

respect to precisely what he's going to do — the amounts of timber

involved, and some identification of them — before his estimates are

going through this House, Mr. Chairman.

AN HON. MEMBER: Is that a threat?

MR. KING:

No, it's not a threat; it's a promise. I think I have that obligation

to people out there, to the workers who are relying on jobs in the

forest industry to sustain them and their families. It's not a threat

at all; it's just common sense, and every member of this House should

be getting up and supporting that demand.

Mr. Chairman, I

want to proceed along a little bit further, and I want to outline some

of the things that have been reported to me. As I say, this information

has come to me from people in the industry in general. They're not

NDPers; they're not sending this material down to me to try to

embarrass Social Credit. Some of them are Social Crediters themselves.

They're people who say: "Hey, we're not getting through to the

minister; he's not listening; and we're frustrated and intimidated and

afraid that we're going to lose our role in the forest industry. " They

are willing to seek help anywhere they can get it. I've certainly been

listening to them, and I'm trying to make some of their concerns

apparent in the House.

In September 1977 a saw log appraisal

project was done by the Forest Service scalers and graders, which

showed that pulp mills as a group were putting through over 30 percent

of sawlogs for their pulp operations. I don't know whether this is

true; I never checked it out for myself. This is a report I get from

people in the industry. Rayonier was the company involved. They claim

that this information is available in the ministry records. Rayonier

was using 30 percent sawlogs for pulping and over 50 percent sawlogs in

the supply of all its pulp mills — over 50 percent of the pulp supply

was logs appropriate for sawmilling. Pulping, of course, is a lower

use. That represents a tremendous loss in revenue to the Crown. It

represents the transfer of good sawlogs, which should be going through

the mills, to a lower use — waste logs and decadent stuff should be

used for pulping. First-class sawlogs are being underutilized, yet the

minister says that his whole Act is predicated on high utilization,

great efficiency, job intensity and return to the Crown. This

information was available to people in the industry, and they've

identified the firm — Rayonier. What I'm criticizing is less Rayonier

than the minister. He is the man who is responsible for administering

the forests of this province. He is the man who is responsible for

ensuring that the companies — be they large or small — are following

sound management practices, that they are obtaining proper utilization,

and that, yes, they are maintaining their plant in modern condition so

that the utilization and efficiency can remain high.

Those

sawlogs were denied to the small independent sawmills. They were

scratching for logs when these first-class sawlogs were being reamed

through pulp mills in British Columbia. And the minister just sat

there; he never did anything about that. A minister who will allow a

pulp mill to operate 50 percent on choice sawlogs at a great loss of

revenue to the Crown is trying to tell us that he is going to tackle

that same company and free up some of their resource and give it to the

independents. I don't believe that, and the small businessmen of

British Columbia don't believe it either. That is why I am trying to

highlight this deficiency in this particular estimate, Mr. Chairman.

1978 another professional analysis was set up, with data from the files

of the ministry showing that eight companies controlling all tree-farm

licences on the coast have undercut the annual allowable cut allocated

to them by an average of 947,267 cunits. I want members of the House to

listen to this. I am going to read again this allegation that came to

me from people in the industry. The allegation is that in 1978

professional analysis extracted data from the files of the ministry

showing that the eight major controlling licensees on the coast of

British Columbia undercut the allowable cut allocated to them by an

average of 947,267 cunits per year for the six years ending 1977.

While

small entrepreneurs were going out of business because they had no

access to a firm timber supply, here was a major integrated company —

foreign-controlled, which is all right if it's treated fairly and made

to compete like everyone else — receiving preferential treatment from

this minister and his staff, and allowed to undercut its allocation in

those major dimensions. Now that in itself is a scandal. If the

minister doesn't understand that the small independents feel

discriminated against and feel outraged when they have access to this

kind of data, then that minister is bereft of any sense at all.

The

loss represented by that kind of situation is just fantastic. It

represents a loss of production for 9 good-sized sawmills and 15

logging operators, and a loss of employment within the industry,

related sectors and so on of about 12,000 jobs in all. That loss of

production, which the minister has allowed to happen while the small

independents were starved, has created those kinds of losses in Crown

revenue, in social benefits to the work force of the province and so

on. In direct revenue and stumpage up to $38 million was lost annually

because this company was allowed to sit there on excess supply, which

they couldn't use, while other companies were starving for material and

while there were record unemployment levels in the province of British

Columbia.

Surely no one who calls himself a British

Columbian or a businessman can associate himself with this kind of

maladministration. It is a scandal of the first order. It's a scandal

from the point of view of lost revenue to the Crown. The minister who

used to have Human Resources could have used another $38 million to

provide human services, and that guy sits there and tells us that the

whole philosophy of his Act and his administration is "use it or lose

it."

I ask the minister: is this acceptable performance? If

this allegation is wrong — an allegation which, I am told, is directly

from the records of the ministry — then I hope the minister will get up

and challenge it. But I hope above all that the minister will open

those files to the public for scrutiny, because that's what's needed —

a major debate regarding forest policy in the province of British

Columbia. He hasn't done anything about it. He waited and vacillated

for a year when it came to providing anything for independent business.

But the licence-holders who had 100 percent of their supply needs

locked up, and who, as demonstrated by this revelation, had far in

excess of their required annual allowable cut, were guaranteed

automatic renewal of their licences behind closed doors, without a

public hearing.

[ Page 735 ]

That's

another issue that the minister has a lot to answer for — the lack of

public hearings in the rollover of tree-farm licences. The minister

told this House that there was nothing in the Act that prevented a

public hearing on those rollovers. But once the Act was passed and some

citizen wrote to him asking him for a public hearing, he said: "There's

no provision in the Act for a public hearing." I asked the question

before. I don't know whether or not the minister was telling the truth

on that issue, whether there is a provision or there is not. But you

can't have it both ways, Mr. Minister. And that's the public you're

talking to. You're accountable to the public whether or not you're a

minister of the Crown or not, whether you've become a bit lofty in your

position and have started to treat all public business as just a

political interference that inconveniences you — and you will remain

accountable to the public of British Columbia.

People in the

industry tell me that these problems with inventory are just the tip of

the iceberg. They tell me that over the years the TFL holders have been

allowed to determine their own allowable cuts and to raise or lower

their annual allowable cuts to suit their particular needs, to

manipulate them at any time so that they are never faced with having to

justify performance or with the possibility of relinquishing some of

their timber supply. The royal commission report at page 86 showed the

TFLs issued for a particular allowable cut in support of a designated

manufacturing capacity turning out to have mature inventory 400 percent

greater than that intended to be issued by the original calculation for

the licence. That was contained in the Pearse report, and I'm sure the

minister read that.

You know, this is just a major scandal.

The thing that bothers me is that last year, when the Forest Act was

being debated, we devoted a great deal of time to questioning the

minister and to delving into some of our concerns regarding this new

Act. Gordon Gibson, who was then in the House, did an excellent job, in

my view, because he had a background and experience in forestry. The

reaction he got from the minister was to make some rather insulting

remarks about Gordon Gibson's father and his role in the industry 50

years ago. You know, that's not a very statesmanlike posture for the

minister to take.

I criticized the media on that occasion

because they didn't cover that debate. We spoke for hours in this

Legislature on that new Act, which is probably the most significant for

the public life of British Columbia for the next 25 or 30 years, and

there was very little coverage. I know that part of the problem is that

forest policy and forest terms are very difficult, very technical. A

lot of the public feel intimidated by any participation in the debate.

But it's about time that something major was done to change that

approach.

I was referring to the manipulation of annual allowable cut that is allowed

by the firms themselves. The holder has been able to do his own calculations.

The study that I referred to reveals instances in which companies have had trouble

utilizing all their allocations and the annual allowable cut has been dropped

substantially. Conversely, when the licensee wanted to cut, he simply reworked

the technical data and, of course, changed the figures again to manipulate his

own needs — and this is a serious charge. Has the ministry not got the capacity,

or the will, to intervene and to monitor in an effective way the large integrateds

that seem to be writing their own ticket in British Columbia? It's clear

to most of the people in the industry that, to a great extent, the books have

been cooked. And the minister approves of it by accepting anything and everything

presented, and by failing to set standard classification, and so on, in annual

allowable cut — methodology and ways of ensuring that there's some standard

procedure and some accountability in the process.

These

are very serious charges, and when the minister can get up and

demonstrate to me that he is really addressing himself to some reform

in these areas, and do more than just make glib statements that they've

got to manage it, use it, or lose it.... When he can demonstrate to me

that he has actually got tough with somebody, then he'll start to gain

some credibility in British Columbia. Somebody will start to believe

him, and perhaps somebody will feel there is hope that there will be a

major reallocation and some fair competition injected into the industry

once again. It's not happening now.

The same companies I

referred to are accused of deliberately understating their inventory.

There is a chronic undercutting of approved allowable cut and flagrant

understatement of the undercut that has been approved by the ministry.

What's the minister doing about all these things? What's the minister

going to do about them? Has he got a plan? Has he hired new staff? Has

he called these companies to account in any way? What procedure is he

going to use for making the public aware of a procedure to deal with

these kinds of problems? It's not enough to make promises, Mr.

Minister. You'll have to come up with something more than that, and

your pandering to those large multinationals gives me little confidence

in any move by you to come to grips with these major problems and these

major abuses that are taking place.

The same eight companies

undercut their quota in the public sustained yield unit by 22 percent

in the six years ending 1977. That's another piece of advice I've

received from the industry: 22 percent undercut in the public sustained

yield area. How is it that the large multinationals are allowed to have

their TFLs, their various forms of tenure, and still get into that

public sustained yield unit and abuse their rights in the fashion that

are apparently revealed by the minister's own ministry data? How is it

that's allowed, Mr. Minister? I want to tell you that if that kind of

performance were indulged in by a small firm bidding for timber in the

public sector, they'd be drummed out in a hurry. I want to ask the

minister when the last time was that one of the majors was fined for

trespass in the province of British Columbia. Has that ever happened,

Mr. Minister, under your jurisdiction? It's certainly happening to the

small guys. They're being fined for trespass, because they're so

desperate for timber to keep their plant going they are straying beyond

the rigid guidelines set out for them by the ministry.

But

here is complete abuse of annual allowable cut by the majors,

documented by the ministry's own data and there has not been one step

taken — no punitive action, no charges laid, and certainly no trespass

charges. Is it that the minister is afraid of the foreign

multinationals? Or is there some other reason why he heaps such favour

on them over our own British Columbia enterprises? These are the things

the minister has to start to answer. I'm not finished yet, Mr.

Chairman, but I'll let the minister have a crack at it now.

MR. CHAIRMAN: The standing orders on Committee of Supply call for 30 minutes.

[ Page 736 ]

MR COCKE:

The member for Shuswap-Revelstoke requires an intervening speaker, at

which point he has another 30 minutes. The minister thought he might

beat him out, and I'm the intervening speaker. But I'd like to say that

the minister is showing his incompetence in the House just as he does

in the bush.

MR. KING: Mr. Chairman, I'm not going to

be up very much longer anyway at this point. I'm dealing in one

particular area, and the area and the data I'm talking about relate

mainly to the coast area. I've got a bit more to say on this area, and

then I'm going to leave that. I hope the minister will not get up and

give a philosophical response but instead will tell me some specifics

in terms of what he proposes to do.

These, as I say, are

very, very serious allegations. When the charge is levelled that $38

million is being lost to the public treasury because of abuse of the

rules by a company under that minister's administrative responsibility,

it is a major and serious allegation. When the charge is made that we

are losing 12,000 jobs because of the abuse of the standards and rules

which are supposed to be administered and enforced by that minister,

that is a scandal. I think all members should take it very seriously,

and I don't think the minister should answer in an offhand fashion. I

think he has a very strong responsibility to treat this in a serious

fashion, as it is being presented to him.

What is he doing?

Is he reissuing this quota under urgent priority and ignoring the

failure of these people to perform? Why the automatic provision for the

renewal of licences to these very people who are accused of major

violations and major abuses? There is no waiting to set up a small

business program and to corral some timber that may be available to

them. They're automatically renewed. Their tenure is tightened up and

extended. We can avoid the. debate altogether as to whether it's

perpetual or not, but certainly 35 years firm supply is nothing to be

sneezed at.

There's no question that it's at least that much

with the option to renew after 10 or 15 years. You know, if the

minister really believed in his own slogan, "use it or lose it," since

these companies have not used it, they would already have lost it. The

minister's statistics document their underutilization — they've

undercut.

He's the guy who set up and said: "We've got a

great Act. We've got to manage it. Use it or lose it." From his own

files in his ministry, the small independents of British Columbia are

establishing. But that's just an empty threat. In fact, the company

knows that the major integrated companies have been failing to use it

since 1971, and he's taken no action.

The minister made the

point that the NDP didn't do anything about it when they were in.

That's true. We've been in three years out of the last 25 — out of the

last 100 years, for that matter, in British Columbia. But Bob Williams

did set up the Pearse royal commission to provide the data on which new

legislation would be based. Of course, this government inherited that

report, and this minister brought in legislation based on the Pearse

report. He certainly interpreted the Pearse report differently than we

would have, and he certainly designed legislation based on that report

very differently than our party would have.

It's not good enough for him to say: "Well, you didn't do anything

in three years." Everything he has accomplished has basically been based

on the report of Dr. Peter Pearse. There were additional committees and task

forces put to work, but the bulk of the data and information flowed from the

Peter Pearse report. That's not an adequate excuse, Mr. Minister. And even

if it were that the NDP were guilty of not doing enough, does that in some way

relieve you of your responsibility to do an adequate job on behalf of the public

in British Columbia? I don't think so.

I say, if he believed in his own slogan of "manage it, use it or lose

it," a lot of the big licensees would be a little lighter today in

terms of their supply, and his deputies know that. I think the deputies

in the Ministry of Forests have become a bit embarrassed by hearing the

minister go around to conventions and so on in the province and face

angry people from the industry and say: "I'm going to get tough. You're

going to manage it or you're going to lose it. " And all the time his

staff knows, and it's documented right in his office, that they haven't

been using it for the last six or ten years. He's got the same

information. There's enough underutilized material there to support and

supply 15 additional medium-sized sawmills, and the minister still goes

around echoing empty threats. They must be a bit amused and a bit

disillusioned, I would think, Mr. Chairman.

Before any of

the TFLs and any of the quotas are reissued to anyone, the TFL holders

should be obliged to undergo a full, open examination. There should be

full, open public hearings. There should be a complete appraisal of

their performance, and a report available to the public as to whether

or not they've met the minister's criteria of high utilization, of high

job creation, of a high return to the Crown. Those are your criteria

contained in the Act. How is it that there's automatic renewal on the

one hand for the big boys, without any of those tests of the criteria

and the rationale you've set up, but when it comes to the small

independents, they're treated as second-class citizens? As one of them

puts it, they're treated as aliens in their own country. That's not

good enough; that's a disgrace, Mr. Minister.

I'm going to

let it go at that for the moment. I have many other areas to deal with,

and so do some of my colleagues. We're going to be here a while,

because this is a major issue in British Columbia. This is the very

underpinning of the economy of B.C. Whether we agree or not, we do have

an obligation to debate this in a serious fashion. We do have an

obligation to try and apprise the public of what the issues are and

what our concerns are. I ask the minister to take it very seriously and

to recognize that he is going to have to give some serious accounting

and some very serious answers to the opposition before we're prepared

to dispense with his estimates before this Legislature.

[Mr. Rogers in the chair.]

MR. LORIMER:

I'm somewhat like the minister, in that I know very little about this

subject either. We haven't had too many timber sales in my particular

riding in the last few years, but certainly a number of people who live

there are very interested in the forestry of this province. I want to

say just a few words about the problem of the disappearing breed of

people who were the backbone of this province through its history —

those loggers and mill operators who basically looked after the

development and progress of this province in the years gone by. As has

been mentioned earlier tonight, those groups are disappearing, and they

are

[ Page 737 ]

disappearing because they have been given, or can obtain, a very limited amount of the logging resource.

They

were the major payroll in the small communities throughout the

province, and these people had a basic interest in the area and in the

villages and so on for which their employees worked. This has now gone;

the larger forest giants that are here at the present time do not have

that basic interest in the people of the province or the province

itself. They're interested in the timber, and they're interested in the

profits that can be obtained from the timber. Some may give token

benefits to certain communities, and so on, but basically they are not

the local people that we have seen in the past. We still do have some

small operators, small businessmen in the timber business, but I'm very

much afraid that these people are disappearing, and they could well be

gone within a very few years unless the minister does something to help

them out.

I would suggest that in most cases the efficiency

of the small operator is much greater than that of the large

multinational corporations in their operations. They're even more

efficient when the dice are weighed against them — the fact that the

write-off for roads in the larger forest areas can be written off

against the price to the province, and the fact that the small operator

doesn't have those benefits. I would guess that in some cases the net

amount paid per cunit might well be as low as $2 for some of these

operations, and for the small operator it could be $60 to $100. I would

ask the minister to give us some indication and I'd like to hear him

tell us tonight — that the plight of the small operator is over, that

he's going to open the woods, that he's going to give these people

their right to carry on their livelihood and to have the timber and the

right to use the woods in the areas they have had in the past. There's

certainly enough timber in those areas for this to come about. All it

needs is the signal from the minister. I hope he will rise in his place

and tell me that I can tell my mini-loggers and operators in

Burnaby-Willingdon that this is going to be done and they can now rest

easy.

HON. MR. WATERLAND: I have a few very brief

comments on the most recent presentation from the member for

Shuswap-Revelstoke (Mr. King). He seemed to take offence at the fact

that I mentioned that the former, former.... Well, I guess the former

Minister of Forests had been counselling him; all I mentioned was that

he probably had. I drew no conclusions. If he has, perhaps he should;

there's nothing wrong with that at all.

He referred to me as

the neophyte minister. Yes, I'm a neophyte minister, but I would point

out that I've been the minister longer than the former minister, and

longer than that member was, too, as a matter of fact.

The

member continually refers to the automatic renewal, and in excess of

100 percent, of the timber supply needs of large companies. I don't

really know where he gets his information. Tree-farm licences are

rolled over, area for area and on a continuing basis, after which the

cut performance of the licensee is assessed; if there is more wood than

they need, it will be removed. All I can do is tell that to the member.

He doesn't seem willing to believe me, but I will tell him again. As I

mentioned before, with TFLs and the forest licences there are no

automatic guarantees at all.

The member referred to

section

11(4) of the Forest Act and related that somehow to the rollovers of

the various forms of licence. That provision is for the issuance of new

forest licences, but the general principles apply to existing licences

as well. There must be a demonstration of these various criteria to

benefit the province of British Columbia where licences won't be kept

intact.

The member was using various numbers and percentages

and cut figures to demonstrate that there had been a terrible lack of

performance by tree-farm licence holders. He mentioned, I believe, some

900,000 units of wood undercut per year over a six-year period. That

isn't really too far off. Ten percent is the allowable cut for these

tree-farm licences. The licences in the past, and all types of

licences, have required that the cut be within 10 percent over a

five-year period. Admittedly this is a little over 10 percent. We have

begun to take action. Can-Cel was the first licence we reduced; I can't

recall the number of units we removed from their cut, but it's quite

substantial and could very well bring this into line.

think the member will recognize the fact that there has to be some

flexibility in allowable cut year by year and over a period of time to

adjust to market conditions. A per-year average of 900,000 units is too

much. I think the allowable cut for tree-farm licences on the coast is

about seven million units — something on that order. This is over ten

percent of that. As I say, we have taken action. We are addressing

other obvious cases of undercutting.

The fact that a

tree-farm licence is rolled over — and that requires that you roll over

area for area — does not remove our right to remove cut if it's not

being used; the Act is very specific about that. All I can say to the

member is that is our intention and our policy and that we will do it.

the requirement for hearings on TFL rollovers, TFL rollovers are very

specifically explained in the legislation: they shall be rolled over

area for area, after which time a five-year working plan must be

developed. It is during this very significant time in planning for the

five-year plan that we invite public input. As a matter of fact,

various organizations say that we should have hearings that roll over.

The hearings really wouldn't mean very much, because the rollover

requirement is very specific.

For example, there was even

controversy over the IWA TFL 24 on Moresby Island. The IWA said they

would rather not see hearings on that particular TFL rollover, as have

many people who actually live on the island; but that's a difference of

opinion. The most important time for input is during the development of

working plans.

The member mentioned a 20 percent undercut in

public sustained yield units. I don't know where that figure came from.

Perhaps there are units over a one-year period which could be undercut

by that much. Again, our licence documents generally provide as much as

50 percent undercut or overcut in a one-year period as long as it is

brought into balance within 10 percent over the five-year cut control

period.

It requires some flexibility on behalf of the

government so that the industry can react to market conditions. We

can't remove all that flexibility. Perhaps it can be tightened up

somewhat. Twenty percent over a five-year period would be unreasonable

and wouldn't be permitted. Over a one-year period, if markets happen to

be that, it is permissible. Last year, for example, I am sure there was

overcutting, if anything, and this overcutting last year would make up

for perhaps some of the previous undercutting.

[ Page 738 ]

The

member mentioned trespassers. Well, all trespassers are treated in a

similar manner, regardless of whether they are a small or large

company, and I can't be specific as to which large company we have

charged. It only goes to court in the very extreme cases. Normally what

happens is that if a company is trespassing, if they're cutting out of

the limits of their cut blocks that have been delineated by the Forest

Service, then we have to determine whether it is an innocent trespass —

and this can happen. If they accidentally go outside of the line, or

the line was not properly placed, we charge them either single or

double stumpage and then that cut block is adjusted elsewhere. There

are cases, though, of deliberate trespass, and it really amounts to

theft of Crown timber. Because a person happens to be desperate for

timber is no excuse to break the law. We have charged people

occasionally, but it is not a charge; it is an appeal to the courts

over the charging for stumpage, which we have done. We must enforce the

cut control, the cut block sizes and the way harvesting is done. At

times, if the law is broken, we must enforce the law.

thank the member for New Westminster (Mr. Cocke) for his delightful

speech — it was very short. The member for Burnaby-Willingdon (Mr.

Lorimer), who isn't in the House now, was lamenting the small operators

in his constituency. He mentioned that they are a dying breed. Well,

small operators in the last number of years have decreased in number.

For example, when the Okanagan public sustained yield unit was first

set up there were 82 licensees, all of which were fairly small. At the

present time there are only two of those original licensees left. There

are still a number of small licensees but only two of the originals are

left. The others sold out to other operators — some to larger and some

to smaller companies — over the intervening years.

When a

person spends the better part of his lifetime operating a small plant

in the logging business and there comes a time when he wishes to

retire, I find it very difficult to deny him the right to sell his

operation as a going concern to the highest bidder. I've had many cases

of this happening. Someone who perhaps is now in his 70s has a small

timber allocation and has been harvesting it and running a small

sawmill, and now he wants to get out of business and doesn't have any

family to pass it on to. He really hasn't accumulated much in the way

of savings but he has a growing concern and he wishes to sell it. I've

tried very hard at times to say: "No, you can't." But then I think of

the individual. I go out and meet him and see his operation and try to

talk him out of it, and he says: "Look, I want to retire now. I have no

other assets. Please let me sell to this guy so I can have something to

show for my years of work." All these sales by the small operators,

including that example of the Okanagan public sustained yield unit,

have been voluntary sales. The people who have sold have taken the

proceeds of the sale and either retired or, in some cases, gone into

another business.

As this gradual redistribution has taken

place in the private sector over time there are those who come back

later and say: "I want back in now." Unfortunately, if there's a total

commitment to the unit there is no room to get back in. They would have

to buy back in, just as they sold out. So it's an ongoing problem of

trying to be fair to individuals and yet trying to slow down and halt

this concentration into fewer and fewer hands. It is a difficult

problem and something we have to continue to deal with.

The

member for Burnaby-Willingdon mentioned the difference in allowance for

road costs under the forest licences and the timber sale licences of

the small business program. Under the small business program the Forest

Service will either be doing the major road development itself or else

the sales will be set up on existing developed areas, so there is no

need there to have them have a credit under

section 88 for road

building, because we will provide the roads for them. The small spur

roads they build will be allowed for in the appraisal, just as has been

the case in the past.

Forest licences, on the other hand,

are responsible for building their own main access roads. The cost of

doing that in the past has been allowed in the stumpage appraisal; in

future it will be allowed as a credit against stumpage, and that is the

reason for the difference there.

MR. MITCHELL: I am

not going to be long, Mr. Minister, but there are a few things that I

feel are important to keep repeating to this House. One is the

guarantee that I know that you, as the Minister of Forests, can give to

the companies that are established in areas where the economic base is

based on the mills that are in operation now. There are areas where

homes, schools, industry and commerce are established, and the whole

economy is based on that mill. As you all know, as I've said before in

this House, Sooke Forest Products is an efficient mill in my riding. It

has one of the top records of production for its size. You as the

minister can guarantee success if you give the leadership that is

needed from your ministry to the forest industry and to the people who

control the timber resources of this province. I feel it is vitally

important, not only for my area but for the whole province. It's not

that I'm trying to give your government ways of getting re-elected. But

as I said before, when I spoke out for the need for timber for mills

established in this province — and I'm just one little candidate in the

western end of this province — I received phone calls from all over

this province from people who are running mills. They are being denied

timber when all around them there are large corporations who have

control of the resources of this province.

I know it's easy

for people to throw out condemnation of large multinational

corporations. I am not intending to do that, Mr. Minister. One of the

things I really feel is important — and the member for

Shuswap-Revelstoke (Mr. King) said this too — is that we must properly

utilize the timber resources that we have.

In my area — and

when I say "my area," I mean Vancouver Island — we have the IWA, which

is a responsible trade union and has members working in all sections of

this island. When members of that same union tell me of the large

merchantable sawed timber that is being used in Crofton to make pulp,

when mills in my area have to import small skinny hemlock logs from

Washington, I say it's a disgrace on the minister and on the forestry

industry that is utilizing our timber wasting it. To allow merchantable

timber to be ground up at the lower rate when other industries, other

businesses, other economies and other districts are in fear that they

may lose the base that keeps that town going is a disgrace. It is a

disgrace to all of us.

I don't think this is something new

to Canada, when you study the economy of the Maritime provinces. They

used their resources, their timber, to go into pulp. It was wasted in

pulp; it was not harvested. The forestry methods of those

[ Page

739 ]

provinces were not planned; they are not producing

timber today. They were wasted. I feel that we in this province, with

your leadership, can guarantee a far greater return of our resources

than we are receiving to date.

It is important that when we

study the various other provinces, we should use a little bit of the

industrial democracy that we talk about. We have many people within the

forest industry. We have many people within the IWA and the trade

unions, people who work in the industry. I feel that there should be

some consultation between these groups and the industry. The leadership

should come from the province, and it should come from the ministry so

that we are going to properly and more fully utilize our timber. When

we go out to the province, to areas that are depending on mills, the

minister can say that he's going to guarantee that needed economy and

the needed logs.

I say, Mr. Minister, in all sincerity, the

leadership has to come from your ministry, and it has to come now. We

can't keep putting it off.

MR. NICOLSON: Mr.

Chairman, I have a fairly simple request of this minister, and I'm sure

he'll disagree with me. I know there has been an overcommitment in the

Nelson timber supply area, particularly in the region that was formerly

the Creston PSYU. I've been listening to both sides of this question

since about 1972, or maybe going back to 1969. That simple request of

mine is that the minister simply make timber available to the few

small, independent operators who are active in that former Creston PSYU

area. These are people with whom the minister has met, people with whom

the deputy minister has met, and people to whom certain promises have

been made.

Mr. Chairman, it's a desperate situation. It's

fine to worry about the larger mills, but they're not all giants — some

of them are just moderate-sized independents who have quota in the

area. Something is certainly wrong when in 1977 there were 12 salvage

sales in that area, in 1978 it was reduced to something like 8 to 10

sales, and in 1979 there were 2 sales that I know of. I'd like to talk

a little bit about the nature of these sales.

One of the

reasons the minister and his deputy have met with the small

independents in the Creston area was as a result of something which is

an absolute disgrace and a scandal — the mishandling of the tree

cutting in a Hydro right-of-way which involved some 700 acres. It was

an area which the independents estimated would have provided sufficient

supply to keep six small business operations going for about seven

years.

I think the deputy has inspected at first hand

the timber which was not harvested. I have here some rather conflicting

evidence — letters from B.C. Hydro and the ministry as to what they

felt was done and what they felt was a good job of pre-logging before

the clearing operation went ahead. Anyone who has seen pictures.... Of

course, CBC did, I think, give time to it on about six different

occasions. They came into the area and took photographs of this. I

certainly don't have any answers for these people in terms of how a

government can justify refusing to give them the small amount of timber

that they need to continue, when it is obvious that the big- and

middle-sized quota holders in the area were able to allow such

tremendous waste of a very precious natural resource.

Mr. Chairman, as a result of one of these meetings an encouraging letter was

sent out to one of the spokesmen of the small, independent sawmill operators.

It was to Mr. Eugene Schmidt from Mr. Apsey, the deputy minister. He said:

"Further

to the meeting in my office on February 9, I would like to report that

I've taken the following action to date: I've instructed the Forest

Service staff to proceed with the processing of one or more timber

sales in your area. I'm informed by the Nelson regional office that

preparation of a number of sales is proceeding.

also met with B.C. Hydro officials regarding policies on clearing

rights-of-way and to discuss the comments put forward at the meeting

and began planning of a field trip to your area so that I may review

your concerns on the ground. An official from B.C. Hydro will accompany

me together with members of my staff."

Mr. Chairman, on

point number three the deputy minister kept his word. He did come into

the area and he did get an opportunity to look at it first hand. I

trust that he reported to the minister. And I would certainly like to

see if the report given to the minister coincides with the reports I

have had from people who have viewed it first hand.

I am

sure the minister has viewed the photographs of the area which I have

had the opportunity to look at. There was a meeting with B.C. Hydro

officials, and I don't see how one can agree with the comments from

B.C. Hydro that they were pleased with the manner in which the

pre-logging was carried on, or, indeed, with comments from the regional

manager's office that they also were satisfied that no appreciable

volume of economically accessible merchantable timber had been burned

or buried in the clearing of the right-of-way, as was contained in the

letter of September 20, 1978, which I'm sure the minister and his

deputy have also had an opportunity to look at.

[Mr. Strachan in the chair.]

had the destruction of a good portion of 700 acres. Some of it, indeed,

was harvested and decked and will be taken out. But at an estimate of

the carrying capacity of that land, it is estimated there could be

14,000 units, which would be a considerable percentage of the 1977

annual allowable cut. As I say, it would have been enough to produce,

also by estimate, a log value of about $1.4 million, and, in terms of a

finished product, a lumber value of about $5.4 million. So that's a

tremendous loss.

When we start talking about losing

appreciable amounts of that timber, we're talking about losing millions

of dollars and a tremendous number of jobs. But what we're really

talking about is what has been going on between the Forest Service and

the major quota holders, when they had years of warning about going

ahead with the clearing of this. In a B.C. Hydro and Power Authority

letter to Mr. Elvin Mossouk of the public advisory committee, the

organizational meeting of which I attended with the minister at the

invitation of the minister, the letter said:

review of their records showed that on August 19, 1976, Hydro formally

advised the B.C. Forest Service of their desire to have all

merchantable wood removed from the right-of-way, and the scheduled

clearing to commence April 1, 1977. Considerable pre-logging was

initiated during the fall of 1976, notably in the Boundary Creek area.

[ Page 740 ]

"On February 10, 1977, Hydro advised the B.C. Forest Service

that clearing would not commence before April 1, 1978, with surveying completed

in the fall of 1977.

"On

March 8, 1977, B.C. Forest Service, with the advice of local logging

operators in the Creston area, informed us that this was not enough

time. They suggested that we have priority lines flagged by early June

1977 or delay the issuance of clearing contracts until September 1978.

As far as we are aware, we have operated within these lines.

"The above briefly outlines the development of pre-logging arrangements which are administered by the B.C. Forest Service.

"Incidentally,

you will recall that our Mr. Barker reviewed the project with your

committee in Creston on June 7, 1977, and at that time project

scheduling as an essential need to maintain schedules was discussed."

HON. MR. PHILLIPS: Aye.

MR. NICOLSON:

The Minister of Economic Development takes these comments as being

facetious. Well, I'd like that minister to know that you can produce

one hell of a lot more jobs through small, independent sawmill

operations than you can through the highly integrated multinationals.

That's something that minister should know. He's been minister in this

area and he hasn't produced a single job in this province. All he

produces in this province are jobs for travel agents getting him

tickets to travel all over the world.

MR. CHAIRMAN: Order, please. Could we carry on with vote 117?

MR. NICOLSON:

Well, Mr. Chairman, I just think it's shocking that, when someone is

trying to come up with something positive in terms of employment and

getting some kind of utilization out of wood that is being

bulldozed.... I'm sure the member sitting next to him doesn't think

that this is funny, because some of this timber is in that member's

riding.

Mr. Chairman, we're talking about waste which

amounts to over $5 million in terms of what that raw material could

have been turned into in finished product. What is more, if it were

turned over as raw material to some of these small, independent

foresters, they could produce two or three times as many jobs from that

material as are being presently produced by the large integrated

companies. If we don't recognize this thing, if we don't do something

about it and if there isn't some action taken immediately to help the

small, independent forest operators in this area, they are going to go

out of business. If we don't bring this up in this House, it will be

tantamount to being involved in a coverup of major proportions. We're

talking about undertakings that were given by the deputy minister. As I

said in part number three, he did go ahead and visit the site. I would

like the minister to report his impressions of the extent of the waste

there. Was there waste or was there not waste in the area?

the number two part, I'm sure the deputy minister did discuss this with

officials of B.C. Hydro. But on the first part, he instructed Forest

Service staff to proceed with the processing of one or more timber

sales in the area. Well, he did go ahead. There were two timber sales

announced in the area. I'd like to talk about those.

Number

one was a timber sale for timber that was cut four years ago. There

were mixed species of spruce and hemlock. It was on an old trespass,

and the person who had cut it didn't take it out. It was dead and down

for four years. It was pushed aside by a Cat from the Crestbrook Forest

Industries road-building operation. It was broken up during the

construction of a road, and it was advertised at current stumpage

prices which would be suitable for green timber. In fact, there were

only about six cedars and three white pine in that total sale that were

of any commercial value. The balance was broken and destroyed, and they

were asking for $1,300 up front, plus a bonus.

Now, Mr.

Chairman, asking a bonus on this very questionable sale which would

take about a day to haul the stuff away — it would take more time to

get some equipment in there than it would to get it out — is just an

absolute slap in the face to the small operators.

In the

second case, I have the details all here. Again, it was dead and down.

It amounted to 594 cubic metres mixed, and the upset price was

$1,071.88. Mr. Chairman, again this thing amounted to almost nothing

and was of no real consequence in terms of fulfilling the requests. One

would think, when one read the letter from the deputy minister — which,

of course, was forthcoming with a lot of talk about an election in the

wind; in fact it was dated March 19, 1979 — that he had instructed

forest staff to proceed with the processing of one or more timber sales

in the area. One would have expected a little bit more than this kind

of a slap in the face. To the credit of the minister and the deputy,

they have spent some time on this, but we have evidence in our area of

some major waste, and there are many other examples.

The

minister and the deputy minister could have been taken up into the

Coffee Creek area and shown the waste that went on up there at the

hands of what was then a company owned by Eddy Match — Kootenay Forest

Products at that time. This type of thing has been going on for years

and years.

I want the minister to consider what it is we are

trying to get out of our land-based resource. I submit that we should

be trying to get revenues for the Crown; we should be trying to produce

jobs. You can produce more jobs by allowing small independent operators

to take out timber — and don't worry if they only turn it into ties.

They are also producing more revenue to the Crown. What else do we want

from the resource'?

If we allow this very last remaining

almost token free enterprise to remain in the forest industry, we will

at least have some kind of a benchmark for competitive bidding. In that

old Creston PSYU part of the Nelson timber supply area, the total quota

was 49 or, let's say, 50 cunits out the annual allowable cut of about

103,000 cunits, leaving the balance of more than half as TSHLs. In the

last couple of years the minister has turned over some of the old

reserve to one of the intermediate companies, already a quota holder.

Sometime

before the minister's estimates are concluded I would like to have a

commitment that timber will be made available to these people

forthwith, so that they can continue to provide employment in a very

high unemployment area. I think that this is the best way to go, and I

am convinced that we will get better utilization.

[ Page 741 ]

have met with the Council of Forest Industries, and I have even heard

people within that organization have enough nerve to get up and say

much the same things that are being said here today. It is not a myth

that the large integrated companies go in and deliberately break up

material because they just don't want the competition. They don't want

those competitive little outfits to get in there and go after their

specialized timber supply. I hope that before your estimates are over,

other members will get up here and speak out in favour of retaining

some real free enterprise in the forest industry in this province.

HON. MR. WATERLAND:

I have some response to the previous two speakers. The member for

Esquimalt–Port Renfrew (Mr. Mitchell) spoke of the timber supply

problems at Sooke Forest Products and suggested that I guarantee a

timber supply to Sooke Forest Products. I don't know quite how to go

about making such a guarantee. I hope that member is not suggesting

that I make a special issue of timber to that company outside the terms

of the Forest Act, or, indeed, outside the terms of the former Forest

Act. Sooke Forest Products has been free for many years to bid on quite

a number of timber sales which have come up. They have chosen, rather

than doing that, to purchase timber on the log market and to acquire

private timber sales. If I were to say to you that I would guarantee

Sooke Forest Products' timber supply I would be breaking the law. I

think if we look at Sooke Forest Products, we will recognize the fact

that they are owned 49 percent by Pacific Logging, which, of course, is

100 percent owned by CPR. Pacific Logging has a great deal of private

wood and I am sure that Sooke Forest Products should be able to deal

with Pacific Logging. I am not going to tell them there is a special

timber allocation for you, because I can't be selective like that; I

would be breaking the law. I am sure that if I did that the hon. member

for Shuswap-Revelstoke (Mr. King) would be hammering me in this House

and publicly as well, because you can't make direct timber allocations

like that.

The member mentioned the time during the election

when there was a flap about a shortage of wood for Sooke. I wasn't in

the area, but I asked my deputy minister if he would go and look at the

problem. He went to their mill and their log yard was quite adequately

stocked. There was a lot of wood in their water storage areas, and the

management there said: ''No, we don't have an immediate timber supply

problem. We're concerned about the future." As I say, they've always

had the opportunity, as they will in the future, to bid for any Crown

forest sales which come up.

The member for Nelson-Creston

(Mr. Nicolson) says: "I'll disagree with everything he says.'' Of

course, I won't disagree with him, not at all. As a matter of fact, he

mentioned Mr. Schmidt, as did the member for Shuswap Revelstoke. As you

mentioned, my deputy met with Mr. Schmidt, reviewed the sites with him;

Mr. Schmidt was in my office. And we did attempt, in order to have a

stop-gap timber supply for them before we could make these small

business sales available without competition from the larger companies

or even the large logging companies, to try to find them some, even

though inadequate, timber supply to tide them over. We were scrambling

around doing our best. The wood that we could make available to them

without a lot of competition from big operators was not the best wood,

admittedly.

I will agree with the member that there has

been, and quite recently, a waste of good wood on Hydro rights-of-way

and other places. We try to monitor this to the best of our ability.

Since my deputy came back from his trip with Mr. Schmidt, I have had

discussion with my colleague, the Minister of Energy, Mines, and

Petroleum Resources and Agriculture (Hon. Mr. Hewitt), on ways of

trying to do a bit better pre-planning with Hydro.

Mr.

Chairman, I think that covers most of the items mentioned. I will say

and reconfirm once again that we will be making timber available for

small operators.

The House resumed. Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Presenting Reports

Hon. Mr. Wolfe presented the annual report of the B.C. Systems Corporation for the year ending March 31, 1979.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 10:59 p.m.

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