1974 Legislative Session: 4th Session, 30th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, MAY 8, 1974

Afternoon Sitting

[ Page

2925 ]

CONTENTS

Routine proceedings

Trade Practices Act (Bill 126). Hon. Ms. Young.

Introduction and first reading — 2925

Oral questions.

Rezoning attempt on Kelowna property for ICBC purposes.

Mr. Bennett — 2925

Modifications and work on ferries and facilities.

Mr. Curtis — 2926

White lines on highways.

Hon. Mr. Lea — 2927

Statements by Highways Minister and tourist industry policy.

Mr. D.A. Anderson — 2927

Loopholes in rent stabilization Act.

Ms. Brown — 2927

Release of Riverview order-in-council patients.

Mr. Gardom — 2927

Supply of steel to BCR boxcar plant.

Mr. Chabot — 2928

Contingency plans for Vancouver police strike.

Mr. Gibson — 2928

Play drugs in Victoria.

Mr. McClelland — 2928

Committee of Supply: Department of Lands, Forests and Water

Resources estimates.

Amendment to vote 137.

Mr. Phillips — 2928

Hon. R.A. Williams — 2940

Mr. McGeer — 2944

Mr. Cummings — 2946

Mr. Wallace — 2946

Mr. Lockstead — 2947

Mr. Schroeder — 2948

Hon. Mr. Cocke — 2952

Mr. McClelland — 2953

Mr. Lewis — 2956

Mr. Fraser — 2957

WEDNESDAY, MAY 8, 1974

The House met at 2 p.m.

Prayers.

HON. D.G. COCKE (Minister of Health): Mr. Speaker, two days

ago this might have had more significance. In any event, no matter what

happens from 3 o'clock our time this afternoon and 6 o'clock Ottawa

time, I'd like to table, so that all the Members of the House can have

a copy of it, "A New Perspective on Health of Canadians" — it's a

working paper — produced by the Department of Health in Ottawa. There

will be a copy available for all Members of the House.

Leave granted.

MR. P.C. ROLSTON (Dewdney): Mr. Speaker, I'd like to

introduce to the House the Reverend and Mrs. Cliff Henning from the

Methodist Church in South Africa, and also their friends, Mr. and Mrs.

Gordon Tomlin, from West Vancouver.

HON. W.L. HARTLEY (Minister of Public Works): Mr. Speaker, I

would like to introduce a group of students from Merritt in the Nicola

Valley. They brought a special gift to the Legislature today and I

imagine that that was the reason the lights were turned out; when the

electricians heard that a group of sunny, bright students from Merritt

were coming, they felt we needed no extra light. But they did bring a

beautiful day here, a whole day full of Nicola Valley sunshine. For

that I would like to thank Mrs. Newhouse and Mr. McBain and I hope you

will all welcome them to the Legislature.

HON. E. HALL (Provincial Secretary): Mr. Speaker, I want to

tell the House that today is a happy day for the Chabot family. The

Member for Columbia River has survived 47 stormy years in a couple of

provinces and it's his birthday today. I think we should all wish him a

happy birthday, in the full knowledge that he'll be on his best

behaviour all day. (Laughter.)

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, I'd

like to introduce to the House a tireless worker on behalf of the

Saanich and the Islands Progressive Conservative Association, Malcolm

Mitchell, who has brought along his two young sons to observe the

political process today. I hope that they enjoy it.

Introduction of bills.

TRADE PRACTICES ACT

Hon. Ms. Young presents a message from His Honour the Lieutenant-Governor:

a bill intituled Trade Practices Act.

Bill 126 introduced, read a first time and ordered to be placed on

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

after today.

Oral questions.

REZONING ATTEMPT ON KELOWNA

PROPERTY FOR ICBC PURPOSES

MR. W.R. BENNETT (Leader of the Opposition): Mr. Speaker, to the Minister of Transport and Communications. In a news

article in The Province

about the City of Kelowna it says that a Kelowna alderman has accused

Transport and Communications Minister Bob Strachan of trying to

blackmail the city into rezoning property owned by the Insurance

Corporation of British Columbia.

Further, it goes on that the mayor...

MR. SPEAKER: Order, please.

MR. BENNETT: I was just going to ask him to comment on it.

MR. SPEAKER: Under Beauchesne 's authority here it says that an oral question must not inquire whether statements made in the newspapers are true.

MR. BENNETT: Well, then, I'd like to ask the Minister if he

could comment on the five-acre site in the City of Kelowna and whether

the, Minister has made an offer that the City of Kelowna couldn't

refuse in an attempt to get the ICBC land rezoned.

MR. SPEAKER: May I also remind the Hon. Leader of the Opposition that Beauchesne says that a question must not contain or imply charges of a personal character?

MR. BENNETT: May I ask the Minister, Mr. Speaker, what

procedure ICBC has.... What procedures has he taken on behalf of ICBC

to obtain zoning for a five-acre site in the City of Kelowna?

MR. SPEAKER: Now that's a good question.

MR. BENNETT: I thought you'd like that.

HON. R.M. STRACHAN (Minister of Transport and Communications): I want to thank the Member for asking me that question, too.

Mr. Speaker, on the last day of April we had a

[ Page 2926 ]

directors' meeting of ICBC. I was informed that we

were being refused permission to use five acres of a nine-acre site for

ICBC purposes in the City of Kelowna. The suggestion was that we

acquire property elsewhere.

By a fortuitous circumstance, that very evening right here in

Victoria I met Alderman Stewart and I asked him about that and he said,

"The corporation has never applied for permission to use it." He said:

"Why don't you ask us, send a telegram? There's a meeting Thursday

night and I don't expect there will be any problem."

So the next day, May 1, I sent the following telegram to His Worship

Mayor W.C. Bennett, City of Kelowna, 1435 Water Street, Kelowna, B.C.

And I said:

URGENTLY REQUEST YOU GRANT THE ICBC PERMISSION TO USE FIVE ACRES

OF THE CORPORATION'S PROPERTY AT RR 2 SPRINGFIELD FOR THE OPERATION OF AN

AUTOMOBILE SALVAGE DEPOT. TOTAL-LOSS VEHICLES WILL BE ACCUMULATED IN THE DEPOT.

HOWEVER SALE OF THESE VEHICLES WILL BE CONDUCTED TWICE WEEKLY. SALVAGE WILL

BE STORED IN AN ORDERLY MANNER AND IT IS NOT EXPECTED THAT THERE WILL BE A BUILD-UP

OF WRECKED VEHICLES. IT WOULD BE THE CORPORATION'S INTENTION TO FENCE AND

LANDSCAPE THE PROPERTY IN SUCH A MANNER SO THAT IT WOULD BE ATTRACTIVE AND MEET

MUNICIPAL REQUIREMENTS.

R.M. STRACHAN, MINISTER OF TRANSPORT AND COMMUNICATIONS.

I had received no reply by last Friday, I think it was, and I phoned

the mayor to find out what had happened at the Thursday meeting and he

said, as I recollect it, that it would take a little longer. But he

gave no indication that there would be any problem attached to it.

MR. BENNETT: A supplemental, Mr. Speaker. Is it not true that

when ICBC entered into an agreement with the city on the property last

year it was specifically stipulated that no wrecked vehicles would be

kept on the site?

HON. MR. STRACHAN: Oh, yes; that's why I said the alderman said that no application had ever been made, and that's why I sent the telegram.

MR. BENNETT: The supplemental is that on your behalf ICBC

entered into an agreement that no vehicles.... Then I would ask the

Minister this: what has happened to the negotiating team which

negotiated that no vehicles would be on this site?

HON. MR. STRACHAN: I think there's a question on the order paper about that. That company is no longer employed by ICBC.

MR. BENNETT: A supplementary.

Interjection.

MR. SPEAKER: Let's try one more anyway. I think the Hon.

Member for Vancouver–Point Grey has another on the same subject. Would

you proceed with one more supplementary?

MR. BENNETT: Would the Minister tell me if ICBC — or he on

behalf of ICBC — discussed with the Land Commission on zoning in the

different cities for ICBC?

HON. MR. STRACHAN: To the best of my recollection, I have

never spoken to the Land Commission about zoning for ICBC. Someone from

ICBC may have, I don't know, but they usually make a point of working

with the municipalities.

MR. P.L. McGEER: (Vancouver–Point Grey): In that telephone

conversation, did the Minister refer to other land that the area of

Kelowna wished to have rezoned by the provincial government for the

purposes of a fire station?

HON. MR. STRACHAN: I have no recollection of having discussed that matter in that telephone conversation with the mayor of Kelowna, at any time.

MODIFICATIONS AND WORK ON

FERRIES AND FACILITIES

MR. CURTIS: To the Minister of Transport and Communication on

another matter, following up on his statement yesterday with respect to

a new vessel which has been purchased for the British Columbia ferry

fleet. I wonder if the Minister could tell the House if a ship-building

or ship-repair yard has been selected to do the modification work which

was indicated in the Minister's statement. Has time, in fact, been

booked? I ask the question in view of several statements which have

been made with respect to the heavy workload in shipyards at the

present time.

HON. MR. STRACHAN: I'd have to check that. I have no

information that any space has been booked for the limited amount of

work that has to be done.

But related to that statement I made yesterday, the Member for Oak

Bay (Mr. Wallace) asked me when we had first got into this discussion,

and I said the first report I had was, I think, April 16. In my office

there was a previous document, a first report,

[ Page 2927 ]

that two ships were available and just giving a rough outline of them. That was dated March 27, so I want to correct that.

MR. CURTIS: Could the Minister inform the House as to the now

likely completion date of expanded facilities and slips at Tsawwassen

terminal?

HON. MR. STRACHAN: No, I haven't got that figure with me; I'll check on it. That's the work they're doing now.

MR. CURTIS: As soon as possible, I hope.

WHITE LINES ON HIGHWAYS

HON. G.R. LEA (Minister of Highways): Mr. Speaker, I believe

it was yesterday or the day before when the Hon. Member for Cariboo

(Mr. Fraser) asked about white lines on highways. I think it is a

concern to most rural Members about the situation in regard to white

lines. I checked into it. We had four machines to put white lines on

when we took over the government. We now have five and there's another

one ordered.

The reason we're having a bit of a problem is that this government

has ordered that more sanding and more de-icing be done in the winter

months. Because that is being done and the roads are better maintained,

the white lines are becoming obscured by the sand and the material used

to de-ice. So we're going to have to possibly live with one situation

or the other.

We'll try and look after the white lines as much as possible, but

more than that we want to make sure the roads are safe during the

winter months.

STATEMENTS BY HIGHWAYS MINISTER

AND TOURIST INDUSTRY POLICY

MR. D.A. ANDERSON (Victoria): I have a question which is

vaguely related to the people who follow white lines, namely the

tourists. May I ask the Provincial Secretary, who is responsible in

this area, whether the statement of the Minister of Highways that jobs

in the tourist industry are primarily "menial and degrading" is a

statement of government policy?

Further, is it his intention, as proposed by the Minister of

Highways, to replace tourist industry jobs with other jobs in secondary

industry?

HON. MR. HALL: I don't think the description of tourist

industry jobs as described by my colleague is a completely accurate

one. I don't think that's government policy and I have no intention of

changing or recommending to cabinet any changes in the policy as

currently operating for the Travel Industry department this year.

MR. D.A. ANDERSON: A supplementary to the Minister of

Industrial Development. May I ask him whether he and his colleague, the

Minister of Highways, were in discussion with a view to having funds

which might otherwise be available through his department for the

travel and tourist industries being sent to other areas of the economy

rather than this sector?

HON. G.V. LAUK (Minister of Industrial Development, Trade and Commerce): The answer is no.

MR. SPEAKER: That is not truly a supplementary as I see it.

LOOPHOLES IN RENT

STABILIZATION ACT

MS. R. BROWN (Vancouver-Burrard): My question is directed to

the Attorney-General. Is the Attorney-General aware that tenants are

still being served eviction notices if they refuse to pay more than the

8 per cent increase on their rent?

Also, is he aware of the new and innovative way in which one

landlord has decided to issue 99-year leases to tenants as a way of

getting around the 8 per cent increases? If so, I wonder if he has

devised any means of dealing with these two loopholes?

HON. A.B. MACDONALD (Attorney-General): Mr. Speaker, in

answer to the first thing, there are some threats of eviction by reason

of somebody not really being willing to live up to the 8 per cent

restraint on rent law. I would hope the tenants in question who are

subjected to any unfair threat of that kind would look to their legal

remedies which I think are there in the legislation at the present time.

In regard to the second matter of the 99-year leases; in substance,

that's really sale of strata condominium — technically a lease. That

may be outside of the present legislation which puts control on that

kind of a conversion situation in the hands of the municipalities and,

as such, it's something the government is looking at very closely at

the present time.

RELEASE OF RIVERVIEW

ORDER-IN-COUNCIL PATIENTS

MR. G.B. GARDOM (Vancouver–Point Grey): To the

Attorney-General, Mr. Speaker. In view of the recent decision by Mr.

Justice Munroe concerning the lack of validity of an order-in-council

confining a patient in Riverview, could you inform us, please, what

steps have been taken by yourself to insure that those people whose

sickness requires such confinement are going to continue to be legally

[ Page 2928 ]

confined in Riverview?

HON. MR. MACDONALD: I've just seen a newspaper report of the

reasons of Mr. Justice Craig Munroe, I think it was, who gave that

decision. As I've said all along, I welcome clarification and even

criticism in this field where so many interests are involved — from the

security of the community, to the rights of the accused, to the right

to be different, to the treatment of mentally-ill people — a very vital

area that needs reform. We intend to get the reasons so we can look at

the matter in terms of something to be done at once, even before the

forensic service Act can become operative.

MR. GARDOM: Are we to take it from that, Mr.

Attorney-General, that you'll not be ordering the release of the

remainder of the order-in-council patients.

HON. MR. MACDONALD: I'll look at the reasons for judgment.

SUPPLY OF STEEL

TO BCR BOXCAR PLANT

MR. J.R. CHABOT (Columbia River): A question to the Minister

of Labour as director of B.C. Rail. In view of Stelco's refusal to

supply steel to the BCR carplant, what alternative plans does the

government have to secure the necessary sheet metal and castings to

construct boxcars in the much delayed Squamish plant.

HON. W.S. KING (Minister of Labour): I'll take it as notice, Mr. Speaker. I'm not aware of the situation.

CONTINGENCY PLANS

FOR VANCOUVER POLICE STRIKE

MR. G.F. GIBSON (North Vancouver–Capilano): A question to the

Attorney-General, Mr. Speaker, as the final defender of the

administration of justice in British Columbia. In view of the service

of a strike notice by the police in the City of Vancouver, has the

Attorney-General any contingency plans or is he cooperating in the

development of contingency plans for the continuation of emergency

police services should this strike take place?

HON. MR. MACDONALD: I'll take the question as notice.

PLAY DRUGS IN VICTORIA

MR. R.H. McCLELLAND (Langley): Mr. Speaker, my question is to

the Minister of Human Resources. I wonder if the Minister is aware of a

problem which has been raised in the City of Victoria with regard to

so-called play drugs being sold in downtown Victoria, particularly

something called snort-sniffing powder, which comes in all kinds of

fancy flavours so the children can play at sniffing cocaine or play

cocaine. I'd like to ask the Minister if he's aware and whether or not

the alcohol and drug commission has any plans to do anything about this.

HON. N. LEVI (Minister of Human Resources): I'll take that question as notice.

Interjection.

HON. MR. LAUK: May I have some order, Mr. Speaker. I have a

statement that will just occupy the balance of question period. The

statement is in reply to the question by the Hon. Member for Columbia

River (Mr. Chabot) to the Minister of Labour (Hon. Mr. King).

Interjections.

MR. SPEAKER: Order, please. Is this an answer to an oral question?

HON. MR. LAUK: It's an answer to an oral question if the Member wishes me to give it.

Interjections.

HON. MR. LAUK: That's fine with me, Mr. Speaker; it's in

direct reply to the question by the Member for Columbia to the Minister

of Labour. But I'll give the answer in the corridor if the Liberal

leader wishes it.

Interjections.

Orders of the day.

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

ESTIMATES: DEPARTMENT OF

LANDS, FORESTS AND WATER RESOURCES

(continued)

Vote 137: Minister's office $105,352.

On the amendment to vote 137.

MR. D.M. PHILLIPS (South Peace River): Mr. Chairman, I just

would like to add a few more comments to the reasons why I feel this

amendment should pass in this Legislature — I realize that the Minister

is anxiously waiting to get up. But before I do, I feel there are

certain other facts that should be read into the record.

I would like to just briefly go into some of the background as to why this situation has occurred and

[ Page 2929 ]

how the Minister has allowed himself to get into

the position where his yearning for power — the lust for power — to

build up his empire is really overriding the best interests of the

people of the Province of British Columbia.

As you know, Mr. Chairman; "a government investigation into the

trading of the shares of Col-Cel prior to Victoria's takeover of the

forest company has turned the spotlight on a long sequence of events

which involves the Minister and involves this government and involves

everybody in the province. "The deal actually was announced in this

Legislature last April 2 by the Resources Minister, Robert Williams,

who has been one of the key figures in the take-over."

I would like to quote some of the history behind this take-over from a well documented

article in the Province

of Wednesday, March 20, 1974, because it is very important to the case

we have before us that all Members of this Legislature know the

sequence of events leading up to the present operation where

multi-national financiers are involved, and where the Minister has left

himself wide open to be taken by the world financial community.

I would like to quote from this article, if I might, Mr. Chairman.

"An investigation of trading by a team of experts from

the RCMP and British Columbia Securities Commission was ordered

suddenly last Friday by Attorney-General Alex Macdonald after he had

previously resisted demands by opposition MLAs for an examination.

"The opposition maintained that there were unusual

trading patterns in common and preferred shares of Columbia Cellulose

(Col-Cel) in the three months prior to the takeover. Claims were made

that sloppy handling by the government allowed people to make a fortune.

"The opposition said that in 1972...shares traded each

month was between 30,000 and 35,000 but that rose to 295,000 shares in

January, 1973, one million in February and 675,000 in March. Share

prices rose dramatically.

"The investigation team is now at work. The intention

in this story is only to review the chronology. Much of it comes from

newspaper clippings...and a little that has been learned since."

Mr. Chairman, in order to understand the background of this, we must realize

again — a quote from the

article — that:

"Col-Cel was owned 91 per cent by the Celanese

Corporation of New York, and, despite its three pulp mills and

extensive forest holdings in British Columbia, had been a financial

disaster for years. Losses in operations and write-offs by the end of

1972 had reached about $95 million."

In other words, Mr. Chairman, since this organization was formed,

Columbia Cellulose has lost $95 million in its operations in British

Columbia.

I will quote further from the article:

"When James Wohl was appointed Col-Cel president in

early 1972, he said in an interview that Celanese had decided in 1968

it wanted to sell its B.C. operations, had reappraised the decision in

1969 and hesitated but before the difficulties of 1970, had reconfirmed

that it wanted out.

"The problems were well known to the former Social Credit administration before its defeat by the NDP in August of 1972.

"In mid-August of 1972, Weyerhaeuser Canada Ltd.

announced that it signed a deal with Col-Cel to buy the money-making

Castlegar operation for what was later learned to be $48 million. The

Socred administration had made tentative plans to approve the sale

then, if necessary, to place Col-Cel's northern operations under public

trusteeship.

"After the NDP election sweep, Williams" — and that is

referring to the Hon. Robert Williams, Minister of Lands, Forests and

Water Resources — "phoned Williston and asked that the Socreds in the

interim period between governments not take any action to approve the

sale to Weyerhaeuser.

"In November and December of 1972, Celanese corporate

officials from New York approached Williams who had then been appointed

resources Minister directly without going through its board of

directors which include Vancouver men, Charles C. Locke and James

Sinclair."

The

article further states that:

"The Minister delayed approval of the transfer of

timber in the Castlegar operation and thus blocked the Weyerhaeuser

deal. In October he ordered an assessment of the Castlegar operation

and this was completed in November by F.L.C. Reed and Associates, Hugh

Hodgins Ltd., Clarkson and Gordon and Co. and H.A. Simons Ltd.

"In the interim, Col-Cel's northern operations were

examined by Japanese interests, by Price Co. Ltd. of Quebec. Price is

understood to have made an offer to Col-Cel amounting to $15 million

for the northern plants, payable out of their cash flow.

"Scott Paper Ltd. of U.S. became interested in

Castlegar and is said to have made a bid of $50 million for these

operations. G.W. Pepper, now retired, as one of the firm's top

executives,

[ Page 2930 ]

was here to talk about the offer.

"Williams has said in interviews after the deal that

he began in December, 1972 to consider whether the government should

step in and buy out Col-Cel."

This is in December of 1972.

"In January of 1973, Celanese made a proposal that the government buy it out and was asked to put the offer in writing.

"On February 9, Williams announced that he had vetoed

the sale of the Castlegar operations to Weyerhaeuser, claiming that it

would weaken the Col-Cel northern operations and the tax credits

involved would mean Weyerhaeuser would be tax free in B.C. for up to 10

years. Weyerhaeuser executives denied this.

"At this point a team was formed to conduct formal

negotiations, including lawyers and chartered accountants. Merrill

Lynch Royal Securities Ltd. was retained to do a plan on how the

government could divest itself of all or part of Col-Cel if it did buy

it. The report has not been made public."

This, Mr. Chairman, is just another example of government documents,

government investigations that are being salted away somewhere and the

Members of this Legislature not having access to them.

The

article continues:

"On March 7, The Province

carried a news story reporting the government was discussing with

Celanese the purchase of the U.S. firm's holdings in Col-Cel. The next

day the Company said there was no deal with anybody. On March 17, the

government announced the purchase of Ocean Falls from Crown Zellerbach

Canada Ltd. and reports then said that further developments were

awaited on the Col-Cel purchase.

"On March 30 trading in Col-Cel shares was suspended."

(This is a good four months after the original announcement was made.)

"On March 30 trading in Col-Cel shares was suspended by the Toronto and

Vancouver Stock Exchanges because of negotiations to sell the company's

assets.

"On April 2 Williams announced the deal. The

government would take over 79 per cent for guaranteeing the long-term

debt. Common shareholders would get 7 per cent and preferred

shareholders 14 per cent. In a complicated legal transaction Canadian

Cellulose Company Limited, a Col-Cel subsidiary, became the new owning

firm. There were a series of other financial commitments by Celanese."

HON. A.B. MACDONALD (Attorney-General): That's a good article.

MR. PHILLIPS: Yes, and it relays the history and also points out, as I will continue from the article:

"In a complicated legal transaction Canadian Cellulose

Company Limited, a Col-Cel subsidiary became the new owning firm. There

were a series of other financial commitments by Celanese. During all of

this the shares of Col-Cel were rising. Early in December, 1972, the

common shares traded at 60 cents in Toronto and preferred shares at

$1.25" — That's in early December.

"By February 8 they had moved to $2.60 for common and

$6.50 for preferred. And on March 29, just prior to the suspension of

trade, the common was selling for $3.30 and the preferred shares for

$7.75. In 1973 Canadian Cellulose shares traded as high as $10.50.

"On Tuesday they sold for $7 in Toronto. On February

22, 1973, Col-Cel did report a fourth-quarter, 1972, profit of

$600,000, the first net earnings in three years."

This, Mr. Chairman, is some of the background of the Col-Cel

take-over. It's well documented and I think it's important to the House.

Now that the company is owned 79 per cent by the British Columbia

government it is very interesting to discuss some of the background of

the directors who have been appointed by the government...

HON. MR. MACDONALD: The Midas touch.

MR. PHILLIPS: ...in order to fully understand the

implications of who is really running this company and who stands, in

the international money markets, to make huge rip-off profits — not

only because of the shares that they own but because of the

possibilities through their international tradings in Brussels and New

York, the possibility to receive kickbacks and the possibility, Mr.

Chairman, of receiving favours under the table.

AN HON. MEMBER: What a bunch of rot!

MR. CHAIRMAN: Order, please. I would just draw the attention

of the Hon. Member...while the subject matter which he is discussing is

not strictly out of order, there is a ruling that was made by Mr. T.J.

Irwin, the Speaker of the Legislative Assembly, on January 24, 1956. I

just want to refer to a couple of his comments.

"The Hon. Member for Mackenzie has mentioned the

subject of forestry and in view of the fact that this natural resource

is under consideration of the commission at the present time, I would

suggest that you deal with the subject as little as possible."

And further he says:

"In regard to matters before commissions it

[ Page 2931 ]

is a custom to refrain from discussion of subject matter before

a commission. In fact, in Great Britain the matter is strictly avoided in all

respects."

Now it's a matter of courtesy to the present inquiry commission that

is looking into this matter that was referred to by the Hon. Leader of

the Opposition. I point out again that while it is not strictly out of

order it is, I think, proper to deal with the subject judiciously.

MR. W.R. BENNETT (Leader of the Opposition): Mr. Chairman, I know of no royal commission as you are referring to that was in operation at that time.

MR. CHAIRMAN: Order, please. I'm referring to the inquiry

commission that was requested by the Hon. Leader of the Opposition and

ordered by the Hon. Attorney-General to deal with the matter of the

acquisition of Col-Cel.

MR. BENNETT: There was no inquiry commission, Mr. Chairman.

Mr. Chairman, on a point of order again, I dispute that because it's

not a royal commission that that ruling referred to. This is an

internal inquiry inside the department.

MR. CHAIRMAN: Order, please. I'm not saying that it's out of

order; I'm merely reminding the Hon. Member that this area is before an

inquiry commission and, therefore, should be dealt with judiciously.

MR. BENNETT: Well, I'd just further point out, Mr. Chairman,

that I have confidence in the staff of the Attorney-General that they

won't have their commission compromised by anything that's said in this

House. It isn't like a public inquiry where the public is making

submissions.

HON. MR. MACDONALD: Just for clarification, I think the

investigation is one under — if I remember the number correctly — 23(2)

of the Securities Act.

MR. PHILLIPS: But the reason I'm discussing the directors of

this company is because, after all, the people of, British Columbia do

own 79 per cent of this company. It's been the stated policy of the

government — as I mentioned last evening or at least during the

estimates of the Minister of Housing (Hon. Mr. Nicolson) — that no

individual should be allowed to make a gain by holding shares in a

company in which the government holds the majority of the shares.

I think it's very interesting, when we get into this web of intrigue

surrounding this Can-Cel deal, that the Legislature be advised of the

background of these directors — particularly the fact that four of the

directors, and indeed the president-director, were alien to British

Columbia until just a short time ago and are involved in world-wide

paper and newsprint operations.

I think it's very important that we understand who is actually

running this company for the government and for what reason. Now the

president-director, Can-Cel is Mr. Ronald M. Gross. In 1973 Mr. Gross

stated that he was 39 years of age, born in Cleveland, Ohio....

Interjection.

MR. PHILLIPS: Well, he has a BA degree in biology science at the Ohio State University.

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources): I think he went to Harvard too.

MR. PHILLIPS: But he also has an MBA degree from the Harvard Graduate School of Business Administration.

After Harvard he joined the Champion International organization as

associate to the chief of operations research corporate staff in

Hamilton, Ohio, and in six years rose to vice-president of finance and

treasurer of the corporation's international division in New York.

So we know now that Mr. Gross certainly has a connection and, in all

probability, several close friends in Champion International, which is

a very large multi-national corporation, one of the corporations that

the Minister says....

AN HON. MEMBER: Bring that bat boy back.

MR. PHILLIPS: He's referred to them in the House as being

rip-off artists and big, giant multi-national corporations from the

States. I'll tell you just how large Champion International is in a few

moments, if you'll just bear with me. But I did want to relate to the

Legislature the connection between the president and the director,

Ronald Gross, and his relation to Champion International.

Interjection.

MR. PHILLIPS: Well, that's a kind of a stupid question from

the Minister of.... The Minister's always talking about big, giant

multi-national rip-off corporations and here he's in bed with one of

the biggest; and so are the directors of this company.

AN HON. MEMBER: Laugh that off.

MR. PHILLIPS: Now in 1968 Mr. Gross joined the Columbia Cellulose Company Limited as its secretary

[ Page 2932 ]

and from 1970 until the takeover by the government

in June of 1973 was executive vice-president of the company. In 1962 to

1968 he was with the Champion International Company — associate to the

chief of operations research corporate staff in Hamilton, Ohio; and, as

I said before, he rose to vice-president. That is the president-general

manager.

We have another director of Col-Cel. This gentleman has never to my

knowledge, by the research I have done, lived in British Columbia. He

is a man by the name of Max Litvine who lives in Brussels, Belgium.

This man doesn't hold any shares in Col-Cel but he is the managing

director, according to the Vancouver Province report of June 30, 1973, of La Compagnie Lambert, a holding firm for Banque Lambert.

AN HON. MEMBER: Oh, a banker.

MR. PHILLIPS: Yes, an international banker at that. He was

the former secretary-general of Sabena Airlines, Belgium, a

government-owned airline.

HON. R.A. WILLIAMS: The state airline?

MR. PHILLIPS: At the end of 1972, Litvine was a director of

S.A. Intermills (Champion International) but resigned as a director

during 1973. We're unable to find from our research why Mr. Litvine

resigned from being a director of Champion International. According to

a local Brussels trade journalist, Litvine now probably devotes all of

his time to Haseldonckx company.

HON. R.A. WILLIAMS: The one we got for free.

MR. PHILLIPS: Yes, which is 50 per cent owned by Can-Cel. So

he devotes 50 per cent of his time to Haseldonckx. He's a director of

Col-Cel, and Haseldonckx is 50 per cent owned by Can-Cel.

I would like to know from the Minister, when he answers in the

Legislature, if Mr. Litvine is the money man behind Can-Cel, or,

indeed, maybe the money man for the provincial government itself?

Interjection.

MR. PHILLIPS: Well, it's all very well and good. You might think this is very funny but we'll see what the answers are, Mr. Chairman.

HON. MR. LAUK: No wonder they told me all that stuff about you in Dawson Creek.

MR. PHILLIPS: We have another director of Col-Cel, a man by

the name of Ira David Wallach, lawyer and business executive, born in

New York City. He married Miriam Gottesman, and now

Gottesman & Co. are selling the newsprint from Ocean Falls Corporation.

Mr. Wallach has been involved in several multi-national

corporations. In 1952 he was executive vice-president of Gottesman

& Co; in 1956 he was president.... Oh, pardon me, in 1947 he was a

director; in 1956 he became president and has been involved with them

ever since. He has also been involved with the Central National

Corporation of New York City and became president in 1956. He has also

been involved with Southwest Forest Industries of Phoenix.

We'll have to explore the amount of connections that Gottesman and

Company have with the newsprint and pulpwood paper industry in the

world in order to understand what his connections could be through

Col-Cel. We must also realize that Ira D. Wallach is also a holder of

several thousand shares in Col-Cel.

AN HON. MEMBER: That's part of that 21 per cent.

Interjections.

MR. PHILLIPS: Gottesman-Central National Organization deals

extensively in many places in the world. They have associations with

operations in Portugal. They also have associations with Crestbrook

Forest Industries. Crestbrook Forest Industries, I would predict, is on

the Minister's lineup for takeover very shortly.

HON. MR. LAUK: It doesn't make enough money, Don.

MR. PHILLIPS: Well, maybe Gottesman sells and deals in

newsprint and pulpwood throughout the world. They have consulting

services, and they're a large multi-nation corporation.

Now, we have some of the background of Col-Cel and we have some of

the international implications. I wonder if the Minister really

realizes just who he is dealing with. In this web of companies we have,

we find that Champion International, which controls Intermills, and

Intermills controls 57 per cent of Gastouche. But Haseldonckx, which is

also owned 50 per cent by Can-Cel, has a 43 per cent interest in Les

Papeteriesde Gastouche. I'd like to know who owns the other 50 per cent

of Haseldonckx. Who is involved, and in what way, in the other 50 per

cent? The Minister talks about multi-national corporations. When we

look at the chart, you can plainly see that Champion International

really has a large say in Les Papeteries de Gastouche.

Interjection.

[ Page 2933 ]

MR. PHILLIPS: I will. The Minister is always talking about

large international corporations. How large is Champion International?

The Minister has a great distaste for international corporations and

yet he's dealing with them. Champion International in 1971 was the 73rd

largest world corporation and rose in 1972 to the 62nd largest world

corporation with sales of $1,871,735,000.

Let's just compare that with some of the other giants the Minister

has such a distaste for. Let's compare that for instance with Crown

Zellerbach. Crown Zellerbach in 1972 was the 127th largest company in

the world with sales of $1,112,928,000 — quite a fair amount smaller

corporation than Champion International that he's in bed with.

He also seems to have a distaste for MacMillan Bloedel. MacMillan

Bloedel is the 112th largest corporation in the world, but they are

basically a Canadian Company. Their sales were only $973,253,000 in

The purpose of this is to point out that there certainly was here in

British Columbia companies which had the knowledge, companies which had

the expertise, knowledgeable people in the pulp and paper business,

knowledgeable people in the forest industry not connected with as large

a multi-national corporation as the Minister has chosen to deal with.

When this expertise was available in the province, why was not the

Minister able to find directors for the Can-Cel Corporation?

Why did he have to go to directors out of the province? And I admit that there are four directors who are Canadian citizens....

HON. R.A. WILLIAMS: Just name them.

MR. PHILLIPS: Well, all right. If you want me to name them for the record, I'll be most happy to name them for you.

The unfortunate thing is that of the other directors none of them

seem to have that much say or that much knowledge actually in the

forest industry.

HON. R.A. WILLIAMS: Just businessmen.

MR. PHILLIPS: Well, they're businessmen, yes, but as

directors of a corporation you certainly want expertise What I'm trying

to point out, Mr. Chairman, is that the people who are actually going

to run and have the say in running Can-Cel are going to be the

directors who have not been living in Canada that long, and directors

who have dealings with these multi-national corporations.

We have as a director Donald Watson, who is the president of Pacific

Western Airlines, formerly vice-president of management of Technical

Services of Pacific Western Airlines; John A. Spicer, vice-president of

the Mountain Region of Canadian National Railways, formerly assistant

vice-president of Canadian National Railways. But Mr. Spicer doesn't

own any shares and Mr. Watson only owns 100 shares.

We have Harry L. Purdy, management consultant, formerly lecturer at

the University of British Columbia, and Charles L. Locke, who was the

only previous director of the Col-Cel operation.

What I am pointing out, Mr. Chairman, is that the people who are really going to run this operation....

HON. R.A. WILLIAMS: You missed one.

MR. PHILLIPS: Allan S. Gordon, consultant to Merrill Lynch Royal Securities Limited.

None of the — I will term them — Canadian directors have had any

expertise in the forest industry. So the people who are really going to

run this corporation, which is owned 79 per cent by the people of

British Columbia, are going to be the people who have not had that much

experience in the previous operation of a forest industry.

Somehow, Mr. Chairman, I missed one director here.

This is such a web of international intrigue that it is very difficult to....

Interjection.

MR. PHILLIPS: Yes, you'd need a Scotland Yard. You'd need a Scotland Yard all right to get it all straightened out.

However, the point is, Mr. Chairman, that these gentlemen are

connected with the international financiers, and I would like to know

just what connections and how much opportunity there will be for these

directors — who will be dealing in Brussels and who will be dealing

with the products of this British Columbia corporation — to receive

payoffs in Brussels....

AN HON. MEMBER: Oh, come on now!

MR. PHILLIPS: Well, come on. These people are connected

through the interlocking companies. We don't know. We can't receive in

this Legislature any of the documents. The Minister wants to be

secretive. He won't file any of the documents. How are we to know? We

asked him for the document, the sales agreement, with Gottesman and

Company for the sale of Ocean Falls, and what did we receive? Nothing.

AN HON. MEMBER: That's right.

MR. PHILLIPS: Because that newsprint is being sold not

directly to a consumer, but it is being sold directly to Gottesman for

a price far below the market price.

[ Page 2934 ]

HON. R.A. WILLIAMS: Oh, really?

MR. PHILLIPS: Yes, far below the market price. However, the

Minister smelled a rat. He knows he's in trouble. He won't file the

documents. So he comes out in the paper yesterday and he says, "I'm

going to renegotiate it."

HON. R.A. WILLIAMS: It's already been....

MR. PHILLIPS: And knowing that Minister, if he feels it

desirable to do so, he'll break the contract. Why can't we receive the

survey that was done on Ocean Falls?

HON. MR. MACDONALD: I thought you were talking about Col-Cel.

MR. PHILLIPS: No, no. You're confused. Well, you should be

confused, and I don't suppose, Mr. Attorney-General, that you really

know what the Minister himself is doing. But the Minister is in bed

with a group of international financiers.

HON. R.A. WILLIAMS: I'm not even on the board.

MR. PHILLIPS: Oh, you're not even on the board. I'll tell you, Mr. Chairman, that they are using this Minister like a puppet on a string.

AN HON. MEMBER: Yes, and that's happened frequently.

MR. PHILLIPS: Yes, it's happened.

Interjections.

MR. PHILLIPS: And it will be the people of British Columbia who will lose millions on their forestry operations.

A good example of what can happen is the Ocean Falls deal, and the same thing can happen to Col-Cel.

HON. R.A. WILLIAMS: Oh, oh!

MR. PHILLIPS: The Minister moans. I'll tell you that I moan too when I get into finding out exactly what a web we have here.

HON. R.A. WILLIAMS: Especially when you count the money for the people.

MR. PHILLIPS: Well, the Minister talks about money for the people. You know we had an episode not very long ago in Manitoba...

MR. R.T. CUMMINGS (Vancouver–Little Mountain): Tell us about the used

car sales.

MR. PHILLIPS: ...where the experts came in and advised the

Manitoba government, and in their haste to make what was going to be a

quick profit for the people of Manitoba the New Democratic government

there proceeded and got ripped off by the international corporations

because they had bad advice.

Here we have this Minister moving ahead in his desire to build up

for himself a quick empire. He has gone outside the province to get

directors for the company. He has got people who have many more

interests elsewhere in the newsprint business and in the financial

world, whose interest will be.... It will be in their own interests to

see that this corporation takes over literally all of the forest

industry in British Columbia, and it will all be under the umbrella of

Can-Cel.

These directors who have the shares in Can-Cel will certainly stand

to gain, and they will be able to control the markets while they have

their fingers in other pies. And you talk about multi-national

corporations?

Now, Mr. Chairman, we have as one of the directors of Can-Cel a man

by the name of Ira Wallach, who is also the president of Gottesman

Company in New York, who are world-wide sellers of pulp, linerboard and

newsprint. Mr. Wallach, as we have said here before, has an ongoing

sales arrangement for all newsprint produced at Ocean Falls.

I would like to know, and I'm going to ask the Minister again, why

he is allowed to buy it at the California price, which is $2.13 per

ton, less $18 freight...

HON. R.A. WILLIAMS: That's $213 minus $18, yes.

MR. PHILLIPS: ...which nets Ocean Falls $195 per ton; and yet

this man is free to resell it anywhere in the world and retain the

markup. And today's current price is $640 on the black market.

Now, Mr. Chairman, I ask you: who's being ripped-off? We asked for a

copy of this sales agreement and the Minister flatly refuses. Well, I

ask the Minister: if there is nothing to hide, and if our facts and

figures are not right, why doesn't he table the document?

MR. A.V. FRASER (Cariboo): Public business.

MR. PHILLIPS: It's the public's business. Why don't you let

the light shine in a little bit? I'll tell you why, Mr. Chairman.

Because he doesn't want to reveal to this Legislature that Gottesman

and Company and Ira D. Wallach probably ripped off last

[ Page 2935 ]

year about $8 million. That's why he doesn't want to table the document.

This man could make probably upwards of anywhere from $8 to $15

million by selling on the black market newsprint from Ocean Falls,

while that corporation shows a loss of $850,000 on its operations.

Interjection.

MR. PHILLIPS: The Minister of Lands, Forests and Water

Resources says "garbage." I defy the Minister to file that document in

this House. Let us have a look at it. Until he does, I charge him with

allowing Gottesman and Company to rip off Ocean Falls anywhere — I

don't know what the exact production is — from $8 million to $15

million of money that should belong to the people of British Columbia.

I ask the Minister: why is he renegotiating? Why doesn't he sell

direct? Why did he cancel the sales agreement he had with Crown

Zellerbach? Why was it given to Gottesman and Company? Why was it given

to Ira D. Wallach, who was also a director of Can-Cel? This man, who

stood to net $8 million last year, sits on the board of a government

company — Can-Cel — from its date of takeover.

MR. D.E. SMITH (North Peace River): He laughs all the way to the bank.

MR. PHILLIPS: This is the very thing this opposition pointed

out would happen when the Ministers of the Crown and indeed the cabinet

get into business such as they are in, taking over from the private

sector.

Tell us, Mr. Chairman — why was the contract with Crown Zellerbach

cancelled? Why was Gottesman and Company put in as a buyer instead of

an agent? Crown Zellerbach was acting as an agent to sell the newsprint

from Ocean Falls, and if they sold it for a good price, Ocean Falls

received the profits. It wasn't a firm price, but now we're selling the

newsprint to a company that buys it at a fixed price and has the right

to resell it wherever and to whomever they desire. Where is it going?

It's going to countries in this world of the third generation who are

trying to bring themselves up to our standard of living.

HON. R.A. WILLIAMS: The third world, you mean?

MR. PHILLIPS: Third world. You know what I'm talking about — you know where the black market is.

AN HON. MEMBER: Oh, it's incredible.

MR. PHILLIPS: And also this Gottesman and Company have sales affiliation with Crestbrook Timber.

Crestbrook Timber, as you well know, have been damaged by the takeover

of Kootenay Forest Products — all part of the web, all part of the

takeover. It's all very well and good for the Minister to laugh.

HON. R.A. WILLIAMS: It's such a tortuous route.

MR. PHILLIPS: It's also interesting to note, Mr. Chairman,

that when Gross was made a director of Can-Cel, he said that Can-Cel

would be a large...and I don't want to quote this wrong: "The company

would seek additional timber in the Kootenays." This was long before it

was announced in this Legislature by this Minister that the government

would be taking over Kootenay Forest Products.

MR. SMITH: How did he know that? Inside information?

MR. PHILLIPS: Who knows all this information? Do the other

directors know? How did Mr. Berkley, your other directors, know that

Can-Cel was going to be a large timber operator in British Columbia?

I'd like to quote from an

article in The Vancouver Sun on August 11: "Berkley said he believed that Can-Cel will be developed into a major forest company in a matter of years."

Mr. Chairman, this statement was made on August 11, 1973,

approximately four months after the takeover of Col-Cel by the British

Columbia government. How did this man Berkley know this?

HON. R.A. WILLIAMS: I guess I used WAC's stuff. He was the financial genius around here for so long. We might talk about that a little later.

MR. CHAIRMAN: Order, please. I would ask the Hon. Minister not to speak from his seat.

AN HON. MEMBER: I'm worried about that guy.

HON. R.A. WILLIAMS: We need a genius like W.A.C. Bennett. That's what we need.

AN HON. MEMBER: I have an Eaton's catalogue — would that be of any help to you?

MR. PHILLIPS: Well, I'll tell you, the research that's been done on this could almost fill an Eaton's catalogue. But who is Mr. E.B. Berkley?

HON. R.A. WILLIAMS: He's the president of Tension Envelopes.

MR. PHILLIPS: Yes, that's right. Where does he hail from?

[ Page 2936 ]

HON. R.A. WILLIAMS: Oh, he's an American.

MR. PHILLIPS: He's an American.

HON. R.A. WILLIAMS: And a Republican.

MR. PHILLIPS: He's also a graduate of Harvard business administration. He's a Republican from Kansas City, Missouri.

HON. R.A. WILLIAMS: Trained at Harvard.

MR. PHILLIPS: Trained at Harvard. What I'd like to know is

how this Mr. Berkley knew that Can-Cel was going to be developed into a

major forest industry. How did he know that back in August, 1973?

HON. R.A. WILLIAMS: I guess he looked at the nine million acres and thought there was a potential there.

MR. PHILLIPS: Is he a friend of the Premier's?

HON. R.A. WILLIAMS: A Republican from Kansas City?

MR. PHILLIPS: Could be. Stranger things have been known to happen.

This Mr. Berkley is a third generation family from Kansas City.

HON. R.A. WILLIAMS: Good heavens — maybe the Mayflower, too.

MR. PHILLIPS: He's president and director of the Tension

Envelope Corporation of Texas, Tension Envelope Corporation of

Minneapolis, the Tension Envelope Corporation of Iowa and Tension

Envelope Corporation of Missouri. He's president and director of all

these corporations.

HON. R.A. WILLIAMS: It's a web again.

MR. PHILLIPS: It's a web.

HON. R.A. WILLIAMS: Right.

MR. PHILLIPS: I want to know how this man knew what was going

to happen to a British Columbia corporation. I ask you again, Mr.

Chairman — is this man a friend of the Premier? Is his family on first

name speaking basis with the Premier?

HON. R.A. WILLIAMS: I'm sure they've never met.

MR. PHILLIPS: It's something for you to think about and I'd like to have the answer.

HON. D.G. COCKE (Minister of Health): The answer is no.

MR. PHILLIPS: Mr. Wallach also has an office in Phoenix,

Arizona, where George Scrimshaw, former chairman of Columbia Cellulose

now has a home office operating International Marketing and Development

Company.

HON. R.A. WILLIAMS: We've left Berkley, have we?

MR. PHILLIPS: Well, I might come back to him. It's a business

similar and possibly related to Wallach-Gottesman International. Mr.

Chairman, we're talking about Berkley and the Minister of Lands,

Forests and Water Resources seems to take it as such a joke. Where did

Mr. Berkley come from?

HON. R.A. WILLIAMS: From Kansas — three generations ago.

MR. PHILLIPS: How did he happen to become a director of

Can-Cel? I'd like you to answer that question. Are you going into the

envelope manufacturing business?

HON. R.A. WILLIAMS: You never know.

MR. PHILLIPS: You never know. What connection has Mr. Berkley

with Col-Cel? He didn't have any. How come he became a director of

Can-Cel? Is he a friend of Ira Wallach's?

Interjections.

MR. PHILLIPS: You know, Mr. Chairman, it's all very well and

good for the Minister of Lands, Forests and Water Resources to make

jokes, but had he come clean with this Legislature we wouldn't have to

be here today asking these questions, trying to find out what is going

on in a company where four directors outside of this province, alien to

the province, stand to make huge rip-off profits.

All you have to do is answer the questions. You had three

opportunities last night to stand up and file documents or answer

questions. But no, you are the strong, silent type....

MR. CUMMINGS: Sit down and he'll tell you.

MR. PHILLIPS: No one can dare question the Minister of Lands, Forests and Water Resources. He keeps his business dealings to himself.

Interjection.

[ Page 2937 ]

MR. PHILLIPS: We are going to have an election in Ottawa, I

would just Eke to announce to those in the Legislature who haven't

heard, that the Trudeau government has been defeated.

The citizens of British Columbia also want an election. We want an

election so we can find out what is going on behind the intrigue of the

power magnate in the cabinet, the self-appointed empire-builder.

HON. R.A. WILLIAMS: Tell me about Wenner Gren.

MR. PHILLIPS: You know, Mr. Chairman, the Minister wants to live in the past. I want you to know that today is 1974 in British Columbia...

HON. R.A. WILLIAMS: Very good, very good.

MR. PHILLIPS: ...and we are accountable for what we do today.

The Minister of Lands, Forests and Water Resources has got to be

accountable for what he is doing today.

Mr. Chairman, Mr. Scrimshaw was at one time the President of

Col-Cel. He left and Mr. Gross came in and took over. Mr. Scrimshaw and

Mr. Gross, the president of Can-Cel today, are business associates of

long standing, Gross formerly worked in areas directly connected with

Wallach, and is considered in New York circles to be a protege of

Wallach.

But there still seems to be a big question around Mr. Berkley — how

he was appointed. Maybe the Minister would care to explain to the

Legislature on what basis these directors were chosen.

I think we will have to draw our own conclusions since the Minister

won't tell us. I have reason to conclude that Wallach, Scrimshaw and

Gross have connections and mutual interests which could be in conflict

of interest with the publicly owned Can-Cel.

Maybe they are connected with Max Litvine, who is connected with the

world's syndicate of money-makers. And he had something to do with

Churchill Forest Products which is under question in Manitoba. He is

the director of a Belgian holding company which controls Banque

Lambert, a large institution financing in international trade. Why was

this gentleman chosen, Mr. Chairman, as a director of the publicly

owned — by 79 per cent — Can-Cel?

Mr. Wallach also maintains an office in Belgium, and Scrimshaw was

formerly a director of Intermills, the Belgian firm that merchandises

pulp and paper. The company was partly acquired by Champion

International from which was spun out Haseldonckx, formerly a

subsidiary of Columbia Cellulose, and now a Belgian firm owned by the

B.C. government company.

Maybe the Minister would like to stand up and make some comments at this time. Oh, he's going out.

HON. R.A. WILLIAMS: I'll be back.

MR. PHILLIPS: Mr. Chairman, unfortunately, there seems to be

a mysterious and clouded reason why Scrimshaw got Columbia Cellulose

into, Belgium, the nature of the dealings in Belgium of Intermills, the

Gastouche and Haseldonckx.

It is very interesting, Mr. Chairman. I certainly hope the Minister

will let the light shine in. You know, when we came into the

Legislature today, I thought there was a cloud over the Legislature. I

thought that cloud might be the cloud surrounding the questions

directly concerned with the Minister of Lands, Forests and Water

Resources.

Mr. Litvine, who is a director of Col-Cel, through the British

Columbia government, retains this obscure Belgian company. It is even

more curious why Litvine was appointed a director. I would still like

to know why, Mr. Chairman.

The mystery also surrounds Champion International's role in Belgium,

and its. former relationship with what is now a Can-Cel subsidiary.

Knowledge of this relationship could explain why Weldwood-Champion, the

B.C. wing of Champion International, and Can-Cel seek a joint venture

in the British Columbia sawmill at Burns Lake.

I think the whole of British Columbia is going to be Champion-ized.

Even more curious is the activity of Arthur D. Little of New York.

This firm was involved in the Manitoba situation respecting Churchill

Forest Products. Mr. Little was adviser to the Manitoba government, as

well as representative of the financial group from Switzerland and

Belgium which allegedly defrauded the people of Manitoba. Are these the

type of people we are dealing with, Mr. Chairman? Are the people of

British Columbia going to be defrauded in the long run because of this

Minister's dealings with a group of international financiers that will

eventually treat him like a puppet on a string?

Little was also employed by Scrimshaw and Columbia Cellulose in

Prince Rupert, engaged in preparing a prospectus to sell the,

operation. The web gets thicker and thicker.

Now, I would like to return for just a moment to Mr. Berkley. I

would ask the question again to the Minister: will he advise how and

why Mr. Berkley became a director of Can-Cel? He is the President of a

Kansas City, Missouri, envelope manufacturing and distributing company.

I would like to ask the Minister if Mr. Berkley or any of his family

have any connections with the Premier of this province.

HON. R.A. WILLIAMS: None that I am aware of.

MR. PHILLIPS: None that you are aware of. Then tell me how Mr. Berkley knew in August of 1973 that

[ Page 2938 ]

Can-Cel was going to take over many more operations in British Columbia.

Interjection.

MR. PHILLIPS: He says it is going to be.... I'll say it again — it will be developed into a major forest company in a matter of years.

HON. R.A. WILLIAMS: By using the trees they already have — by using the 9 million acres well.

MR. PHILLIPS: This is a company that previously had lost $95

million. I would suggest that Mr. Berkley had conferences with the

Premier and the Minister of Lands, Forests and Water Resources. I would

also suggest that this is all....

HON. R.A. WILLIAMS: I never met him before.

MR. PHILLIPS: You've never met the director. Well now, that

is an interesting twist. Here is a director of a company which is

overseen by the Minister of Lands, Forests and Water Resources, and the

Minister says he has never met one of the directors.

HON. R.A. WILLIAMS: Well, I have met him.

MR. PHILLIPS: Oh! you have met him? Oh! now we have met him. Oh! I see, now we have met him — well.

So I will continue my previous conversation. I am suggesting, Mr.

Chairman, that there is a plan developed by the Minister, developed by

the Premier, to eventually take over all the forest industries in the

Province of British Columbia.

HON. R.A. WILLIAMS: Table it, table it.

MR. PHILLIPS: I am suggesting that there is such a plan. I am

suggesting that some of the architects of the plan, besides the

Minister and the Premier, are Mr. Berkley, Mr. Litvine, Mr. Gross, and

Mr. Wallach.

I would suggest that they are the architects of this master scheme,

and that we have just seen a very, very little bit of it. I would

suggest that these directors, these foreign directors on this company —

Col-Cel will certainly be the vehicle through which all the

acquisitions are made — will move from place to place in the province.

We will go in and first of all do a survey, Mr. Chairman. We will do

a market study because we want to make sure it's economically feasible.

Then we will say to the recreation people that this timber should not

be cut. We should take it away from forest industries that presently

hold the rights.

Then, when these forest industries can't survive because of lack of

timber, when they start to go broke, when they're on the brink of

suffering financial disaster because of lack of timber which this

king-maker controls, then Col-Cel will move in and say that to preserve

the jobs of the people working for these companies we will have to take

it over.

That's all part of a master plan and I want to say that the Minister

has been playing his game of takeover very well. He does it very

effectively.

While the Premier and the Minister of Industrial Development, Trade

and Commerce (Hon. Mr. Lauk) are in Japan seeking Japanese help to

build a steel mill, the Minister is out playing his game with other

Japanese investments in the province — namely Crestbrook — taking away

their timber, putting on the squeeze.

How long does the Minister think before the investments that are in

this province from other countries...how long do you think before those

people who have those investments are going to wake up to your grand

scheme? I certainly hope, if Mr. Litvine has access to the bank in

Brussels, that he's got lots of money, because you're going to need it.

Mr. Chairman, how much longer does the Minister think he can play

with foreign investments — play with it like a cat plays with a mouse —

and expect it to come into the Province of British Columbia in what

used to be a safe investment?

I think- that the Minister is being very, very short-sighted indeed.

If this province is to grow and prosper, unless he plans on taking over

the entire forest industry — which I'm sure is his plan — we are going

to need outside capital.

But maybe the Minister has sources of outside capital. Maybe these

directors who are in this corporation, and who stand to make fantastic

gains, are going to supply the money. Because there are many billions

of dollars invested in the forest industry in British Columbia — many

billions of dollars.

Are we creating in this province another Mr. Fines? Are we going to

have the defeat of the NDP government in B.C. In 1976 and have several

millionaires walk off the scene?

Interjection.

MR. PHILLIPS: 1975? Oh! the election is going to be in 1975?

AN HON. MEMBER: No, he said, "You're sick."

Interjections.

MR. PHILLIPS: Well, it's all very well and good for you to

toss those terms around, but when this Legislature can't be provided

with the facts, what else are we to think? What is so suspect, Mr.

Chairman,

[ Page 2939 ]

about these documents that they can't be tabled in the Legislature?

People who were sent here by the electorate to keep this government

honest are having a very difficult job indeed, particularly with that

Minister. The problem is that he's not only indicting himself but he's

doing it to the rest of the cabinet and indeed to every backbencher on

the NDP side of the House.

Why is the Minister absent from this Legislature today? He doesn't

receive his doctorate until Saturday. I'll tell you why, Mr. Chairman.

He didn't want to be here while this Minister's estimates were going

through the Legislature. But they're in it together.

MR. CHAIRMAN: Order, please. I would draw to the attention of

the Hon. Member standing order 61 (2): "Speeches in Committee of the

Whole House must be strictly relevant to the item or clause under

consideration." We are considering vote 137 in the Minister's

estimates. I would ask the Hon. Member to confine his remarks to the

vote.

MR. PHILLIPS: Mr. Minister, that's exactly why we are having

a vote of no confidence in this Minister today — exactly why. This

Minister has set himself up over and above the rest of the cabinet,

trying to build his own empire. He's in cahoots with the Premier. The

Premier knows what's going on but the rest of the cabinet don't.

The Premier chose not to be here while these questions were being

asked, because the Premier knew these questions would be asked. The

Premier knew that this Minister had his government in trouble and

that's why he's not here today. That's why we have this vote of no

confidence in this particular Minister — this super Minister.

HON. R.M. STRACHAN (Minister of Transport and Communications): I can hardly believe it. I didn't believe you'd be so silly as to move a motion of non-confidence in this Minister.

MR. PHILLIPS: Well, the Minister of Transportation and Communications says it's silly.

HON. MR. STRACHAN: Nobody would believe that you'd be that silly.

MR. CHAIRMAN: Order, please.

MR. PHILLIPS: Mr. Chairman, the Minister doesn't know what's

going on behind the scenes. He's not in with the Premier and the

Minister of Lands, Forests and Water Resources on this plan to take

over the entire forest industry in British Columbia.

AN HON. MEMBER: Oh, oh!

AN HON. MEMBER: And next the world!

HON. MR. STRACHAN: Don't talk nonsense. Come on now.

Interjections.

MR. PHILLIPS: I suppose, Mr. Chairman....

HON. MR. STRACHAN: Be reasonable.

MR. PHILLIPS: Don't talk nonsense. I remember when the bill

to take over Col-Cel was going through the Legislature. I remember when

the bill to take over Ocean Falls was going through the Legislature and

we debated them and, oh, it was "to save the jobs of the people."

HON. W.S. KING (Minister of Labour): Do you remember B.C. Electric?

MR. PHILLIPS: It was to save the jobs of the people, but nobody came to the Legislature when we took over Plateau.

Nobody came back to the Legislature. No, the Minister has his

vehicle now. He doesn't have to consult with the rest of the cabinet.

He doesn't have to consult with the back bench because he's got his

company. He's got the nucleus of it.

He didn't have to come to the Legislature to take over Kootenay

Forest Products. He won't go back to the Legislature when you take over

Crestbrook. You won't go back to the Legislature when you take over

Eurocan.

AN HON. MEMBER: You're talking nonsense.

MR. PHILLIPS: Nonsense, my foot! If I had told you last year

when these bills were passing through the House that you were going to

force Plateau to sell, you would have said, "Oh, nonsense." If I had

told you last year that you were going to take over Kootenay Forest

Products you would have said, "Oh, nonsense."

HON. MR. STRACHAN: Yes, and you are talking nonsense still.

MR. PHILLIPS: I'm telling you now. You will take over Crestbrook. You'll take over Eurocan.

HON. MR. STRACHAN: Absolute nonsense. You don't know what you're talking about.

MR. PHILLIPS: I know what I'm talking about, but you don't

know because you're on the outside. You're not in on the scheme. You're

not in on the grand blueprint. You don't know as much about

[ Page 2940 ]

what's going on as these foreigners.

MR. CHAIRMAN: Order, please. Would the Hon. Member address the Chair, please?

Interjection.

MR. CHAIRMAN: Order, please!

MR. PHILLIPS: Yes, Mr. Chairman?

MR. CHAIRMAN: Would the Hon. Minister of Transport not interrupt the Hon. Member?

HON. MR. STRACHAN: I'm not interrupting him. I'm trying to get him on the right track and help him.

MR. PHILLIPS: Had the Minister of Transport and

Communications done some research himself he might know, but I'll tell

you he will never find out in a cabinet meeting, Mr. Chairman. He'll

never find out in a cabinet meeting because he's not in the know. He's

not in with the powerhouse. As a matter of fact, he's probably scared

of the Minister of Lands, Forests and Water Resources like all the

other cabinet Ministers and all the other backbenchers. He's got them

frightened.

We can see it on this side of the House. They come running to him

like chickens to the old hen. They gather under his wing. They want to

be under his protection. We see what's going on, Mr. Chairman. But this

Minister has abused the power of his office. He has abused the rights

of this Legislature. He's making a farce out of the Legislature.

HON. R.A. WILLIAMS: Now that's a bit thick after....

MR. PHILLIPS: He's making an absolute farce out of the Legislature.

HON. MR. STRACHAN: That's what you've been doing for two years.

MR. PHILLIPS: I want to tell you, Mr. Chairman, that if I

were a Minister of the Crown, I would let my dealings stand up to the

light of day. That Minister is afraid; he's scared to let his dealings

stand up to the light of day because these directors he has in Can-Cel

have got him wrapped around their finger.

Interjections.

MR. PHILLIPS: That's right. Sure.

Interjections.

MR. PHILLIPS: Mr. Chairman, I hope all of the Members of the back bench

will stand up and be counted when we vote on this motion of no confidence. I

hope they will realize what a serious problem the Minister has. I hope they

will ask him to see the documents in their speeches in support of this motion.

I want to tell you, Mr. Chairman, this type of wheeling and dealing

is against the very thing that the Minister says he stands for: looking

after the little people against multi-national corporations. Now he's

in bed with them and I'm afraid he's getting skinned. I'm afraid the

people of British Columbia are getting skinned.

Maybe the Minister could tell me when he answers the questions why a

sum of $1,178 was paid out to Berkowitz E, Berkowitz L, and Ellis-Con

ET. Is this a relation to Mr. Berkley, one of the directors of Can-Cel?

There are many questions still to be asked and much to learn from

this Minister, so I'm going to leave it at that for the present time.

But I do hope that the Minister will enlighten the Legislature so that

we don't have to make these accusations and don't have to feel this way.

It is he who has led us to believe that there are wrongdoings in his

department simply by his secrecy. He thinks he is above this

Legislature, that he doesn't have to answer to the Legislature, that

anything he does is okay and it shouldn't be questioned as he continues

his game of takeover by takeover and continues to build an empire for

himself over and above and apart from the Legislature, away from the

cabinet and away from the hands of the back bench. An empire builder —

an egotistical empire builder, I might say, Mr. Chairman.

MR. CHAIRMAN: Order, please! I would ask the Hon. Member to withdraw that remark, please.

MR. PHILLIPS: Yes, I'll withdraw that.

The Minister wants to create for himself a dynasty. He's going to

use short-term, short-sighted policies at present to build up a power

base which in the long run will weaken the forest industry in British

Columbia, weaken an industry that was one of the best-run industries in

the Province of British Columbia or in North America.

This Minister, unless he can answer the questions, unless he can

answer the accusations that have been made against him of wrongdoing,

unless he can come clean to this Legislature, should resign. He should

resign forthwith.

HON. MR. WILLIAMS: Well, it's very difficult to take the kind

of nonsensical, "Alice In Wonderland" diatribe that we've just listened

to since 2:30 this afternoon. An hour and a half of nonsense while the

back bench Socred wandered through a catalogue of

[ Page 2941 ]

boards of directors that confuses him to no end. I'm not surprised that that's the case.

I think the Hon. Leader of the Opposition (Mr. Bennett) can hardly

ignore the kind of statements that have been made by the backbench

Member this afternoon because they're indelibly involved, the two of

them, in these kinds of wide-ranging, nonsense accusations that have

come to be part of the pattern of the small band that used to the the

Government of British Columbia.

You talk about the board of directors established by this government

with respect to Canadian Cellulose. You express concern that they

should be people who know something about the business, concern that

they should know something about marketing, for example. Shocking idea.

[Mr. G.H. Anderson in the chair.]

Imagine having a person on the board of directors of Canadian

Cellulose who is familiar with international marketing in pulp and

paper. It's a precedent setter in terms of what the old government

might have done, I admit, but in ordinary circumstances and in circles

of decent citizens I'm sure it makes a great deal of sense.

I see too that the Member is also shocked that we should have

somebody from Kansas — good heavens! — who is the president of the

largest envelope manufacturing organization, in the United States. And

a Republican to boot! Good heavens! Imagine having somebody on your

board of directors who might be able to advise you with respect to

subsequent steps to make more use of labour in the province and to go

into fine paper processing in British Columbia, to make better use of

our resources, to provide more jobs for our people.

Imagine bringing people from around the world! Imagine bringing the

best people and the best minds in the world to British Columbia to work

on our company — one that we own 79 per cent of. Shocking idea!

Imagine, when you own a company that was part of the conglomerate you

acquired that is based in Belgium, that you might actually involve a

Belgian banker. Shocking idea! Imagine having someone informed about

problems in Belgium and the whole process of fine paper production

within the Common Market, in the capital of the Common Market. Imagine,

little British Columbia having access to the Common Market with its 50

per cent owned company or 50 per cent own company in Belgium.

MR. PHILLIPS: Who owns the other 50 per cent?

HON. R.A. WILLIAMS: Who owns the other 50 per cent? A group of individuals in Belgium; no single company.

You wander around through boards of directors.

Maybe we should look at some of the private-sector directors since

you've got on this trip, Mr. Member. Let's look at some of the private

companies in the province since you're so disturbed.

Maybe we should look at B.C. Forest Products. I wonder if they have

anybody on their board of directors from outside British Columbia.

After all, it is named British Columbia Forest Products Ltd. I wonder.

Why, look at the list of names. There's a man by the name of Paul Clay

Baldwin of 1300 South Leopard Road, Irwin, Pennsylvania. Good heavens!

Somebody from New England on the BCFP board of directors. Here's

another one: Charles Denston Dickie, Jr. — two generations — 649 Dorset

Road, Devon — no, not England — Pennsylvania. Imagine!

Here's another one: James Wilmer McSwinney, 2300 Ridgeway Road,

Dayton, Ohio, on the board of directors of British Columbia Forest

Products.

Here's another one: Harry Talbot Mead, 650 West David Road, Dayton, Ohio, also on BCFP.

Here's another one: George Hinkle, 60 Harmon Terrace, Dayton, Ohio —

three gentlemen from Dayton, Ohio, on the board of Directors of British

Columbia Forest Products.

I'm sure that the Member is shocked that BCFP finds it worthwhile

and necessary to go abroad and bring people to British Columbia to help

them in correcting the affairs of this British Columbia company. It's a

shocking idea.

Maybe we should also look at Rayonier. The Hon. Leader of the

Opposition (Mr. Bennett) would seem to champion Rayonier, because they

wanted to expand in the north and we wouldn't let them. Let's look at

Rayonier — the friendly little Rayonier Company, IT&T, the

sovereign state of IT&T and all that. What about Rayonier? What

about their board of directors, super-sleuths over there?

Here we are: Charles Eldon Anderson, 181 Chestnut Hill Road, Wilton, Connecticut. Imagine!

Here's another one. Robert Allan Buddington, 55 Tolmie Avenue, Old Greenwich — not England, but Connecticut.

Here's another one. John Ronald Goode — spelled just like the

Liberal mayor in Delta. Muse on that. Where does he live, in this

Alice-in-Wonderland debate we've been provided by the opposition? Why,

he lives at 16 — get this now — he lives at 16 Cottontail Road,

Greenwich, Connecticut.

Here's another one — Glanton Windship Haskell, 124 Thayer Pond Road, New Canaan, Connecticut.

Imagine! Rayonier finds it worthwhile to have those kinds of people on their board of directors....

MR. PHILLIPS: Are you going to table the documents?

HON. R.A. WILLIAMS: That's the board of directors of Rayonier, Mr. Chairman, the board of

[ Page 2942 ]

directors of British Columbia Forest Products.

There you are — those secret directors in the United States, secret

directors from abroad who seem to shock the opposition. Imagine

bringing talented people to bear on a company that was mismanaged by

absentee owners in New York consistently.

I just have to listen to the kind of debate I've listened to this

afternoon and earlier to convince myself that if we are to preserve

decent management and sound and good management in these companies, we

have to make sure that the good, professional management of these

companies is not subject to your brand of witch-hunting games-playing

that we've seen in the last two days.

Interjections.

MR. CHAIRMAN: Order, please!

HON. R.A. WILLIAMS: We heard some interesting points

yesterday, Mr. Chairman, about the question of the price paid for

newsprint. It was a long harangue about newspaper prices that I'm sure

that somebody in the industry, no doubt, courteously provided for the

Hon. Leader of the Opposition (Mr. Bennett).

There's been speculation, if you'll forgive the term, in the

industry and in the political world. People have been wondering for the

last several days what Robert Bonner was going to do. I think we might

just now have a clue. The speech material provided the Hon. Leader of

the Opposition just might have that kind of imprint. I wonder. Maybe

he's been put to work at last helping the leader of Her Majesty's Loyal

Opposition.

But maybe we should look at the price paid across Canada at mills

for newsprint. What is the f.o.b. price at the big mills in Canada?

What kind of price is paid?

MR. PHILLIPS: Table the documents!

HON. R.A. WILLIAMS: What kind of price is paid at MacMillan

Bloedel? What kind of price is paid Arbitibion the east coast? What

kind of price is paid British Columbia Forest Products?

MR. PHILLIPS: Table the documents! Tell us we're wrong!

HON. R.A. WILLIAMS: What kind of price in U.S. dollars per ton?

Interjections.

MR. CHAIRMAN: Order, please! Let us have some order.

HON. R.A. WILLIAMS: The kind of price that is being paid, Mr.

Chairman, is in the $170 and $175 a ton, range for the major Canadian

producers of newsprint at the mill. That's the kind of price.

MR. PHILLIPS: Table the documents! That's all we ask!

HON. R.A. WILLIAMS: The amount that Ocean Falls originally

received from the Crown Zellerbach Corporation under their initial

contract was $146.02 mill net. At the time of the ending of the

arrangement with Crown Zellerbach the mill net that was paid was

$148.40.

Interjection.

HON. R.A. WILLIAMS: We cancelled it because we didn't think it was as good an agreement as we might have.

We now have an agreement with CNC that has been renegotiated in the

past month, and improved considerably. We also have a contract with the

Crown corporation in Mexico, Pipsa, which is the Crown buying agent for

all paper in Mexico, that is also considerably above market in this

region. We are satisfied that the market price that we are receiving is

certainly, in the Mexican instance, satisfactory. We think that there

can still be some improvements with respect to CNC, and there are some

discussions being pursued subsequent to the latest improvements.

I should make it clear that we do have a secure market so that if

there is a fluctuation in the world pulp market and it declines, we

still will receive a good price above market on the west coast —

considerably above market on the west coast.

The Hon. Leader of the Opposition suggested we were talking in terms

of a fixed price. We are not. The contract is not a fixed price

contract. It floats and relates to markets and it is, in fact, above

market.

MR. PHILLIPS: Table it!

HON. R.A. WILLIAMS: I think that no private company tables the various documents.

SOME HON. MEMBERS: Oh, oh!

HON. R.A. WILLIAMS: These companies that we hold must have

the freedom to move in the international markets of the world like the

private sector companies. There's nothing that that little group over

there — that failing opposition — would like better than to see these

companies fail, and the more they can feed them and thrash around in

the straw, the more they think the chances of failure are.

MR. BENNETT: If the people own that company why don't you tell them how the people's business is

[ Page 2943 ]

done?

HON. R.A. WILLIAMS: That's right. We'll file the annual report shortly.

MR. BENNETT: Will the documents be in it?

HON. R.A. WILLIAMS: The annual report will be filed shortly. It is interesting

to hear the Hon. Leader of the Opposition talk about fixed price contracts.

Now, he should be upset about them. His dad should have learned something about

fixed price deals because he went into more, than one of them.

Now we talked about Wenner-Gren. We had to blow $10 million to buy

us out of that mess; to get back our own river and our own Rocky

Mountain trench. But he was involved in an even grander one, and it is

known as the. Columbia River Treaty. No wonder the Leader of the

Opposition is upset about fixed price deals, because we got the worst

fixed price deal in history under the Columbia River Treaty. The latest

figures indicate that we are short $137 million on the Columbia Treaty.

AN HON. MEMBER: Big daddy!

HON. R.A. WILLIAMS: Big daddy blew that one, I'll tell you. Big daddy blew that one.

What did he say at the time of his election campaign? He said, "Nothing

is freer than free, my friends." That's $137 million short. Even worse than

that.... I guess a guy can make a mistake....

Interjection.

HON. R.A. WILLIAMS: Maybe you should develop that in your speech.

That's $137 million dollars short. Well, you know, I guess a guy can make one

mistake, but he had to make a grander one. He had to sell the energy for 30

years. The downstream benefits on our rivers had to be sold for 30 years; until

the year 2002 we sell the energy of the Columbia on a fixed-price deal. A.

fixed-price deal! And what sort of price? Why, 5 mills. That's 5-mill power

until the next century by the financial wizard, Daddy.

AN HON. MEMBER: Who's ripping who off?

HON. R.A. WILLIAMS: The financial wizard of 20 years! He was

the Wizard of, Oz. He made a fixed-price deal unequalled in this nation

where we've made mistakes in dealing with our neighbours to the south

many times — 5-mill power.

How much is it going to cost us for power in the Columbia area now for ourselves?

We're presently involved in a major project in the Columbia system. It's on

the Kootenay River between Nelson and Castlegar, that marvellous, beautiful,

short stretch of river that has, considerable fall between Nelson and Castlegar.

We're building the Kootenay Canal project, which I think is

something like $160 million in costs, to pick up something out of the,

Columbia River Treaty disaster. And what is the cost going to be for

power on the Kootenay, which in its purest sense used to be one of the

cheapest power sources in North America? The price, or mill price for

power in the Kootenay Canal project, in the Columbia system will be

seven mills — 40 per cent more than that which we sold to the

Americans. The Americans got Duncan in 1967, and the downstream

benefits in 1967; they got the downstream benefits from Arrow in 1968;

and they got the downstream benefits from Mica just last year. And it's

five-mill power.

Our system on the Kootenay Canal won't be ready.... The first

generator will be 1975, the second in 1976. And we, in just a few short

years since the Columbia River Treaty disaster, will be paying 40 per

cent more for power — for British Columbians at source — than the

Americans are getting until the year 2002.

Just think what the cost of producing power in British Columbia will

be in the year 1980; just think, what it might be in 1990; think what

it might be in 2002. That's the kind of simplistic view of the world;

the fixed price dealing that we got at the hands of the former leader

of this government (Hon. Mr. Bennett) for 20 years.

It is just a little thick to listen to the lower rung of the dynasty

talking about fixed price deals when we, as people of this province,

have to live with one of the worst fixed price deals in the history of

Canada. Not only that....

MR. D.M. LEWIS (Shuswap): Don't forget the Skagit.

HON. R.A. WILLIAMS: Not only that, we gave away the flood benefits in

the United States under the deal. Not only that, we got $64.4 million in terms

of flood benefits — $64.4 million. But the Americans were willing to pay

half of what the damages downstream in the United States would have been. In

June of 1972 the damages downstream in the United States would have amounted

to $213 million. In one year alone we could have got more than we got for it

in perpetuity.

You only have to go down to Portland or the tri-city area or any of

the towns along the Columbia and look at the development along the

river and see that we've made this colossal blunder in British

Columbia. While we're helping our neighbours, we did it for nothing —

or virtually nothing.

You only have to look at the development of the bridge as you cross the Columbia River going into

[ Page 2944 ]

Portland. See the huge hotels, the townhouse

developments right on the riverbank. None of it could have happened

without the Columbia River Treaty. That's the kind of fixed price deal

that we got from the senior member of the family over there.

MR. H.W. SCHROEDER (Chilliwack): Pretty weak, Bob.

MR. LEWIS: What about the Skagit?

HON. R.A. WILLIAMS: We lose our sovereignty forever over the

Columbia basin and you're willing to stand up and support it. Well,

help yourself. Well, help yourself. It's just amazing.

What about the Skagit?

Interjection.

HON. R.A. WILLIAMS: Oh, water resources, I think, is part of the department.

What about the Skagit? For $34,000 a year the financial genii over

there were prepared to give it away at $34,000 a year. Peaking power in

Seattle — $34,000 a year...and as recently as 1967.

MR. BENNETT: What kind of power in Seattle?

HON. R.A. WILLIAMS: Peaking power, yes, incredible!

Absolutely incredible! A fixed price deal as they saw it in perpetuity:

that's the kind of fixed price deal that you were prepared to put as a

permanent burden on the people of British Columbia.

MR. LEWIS: Social Credit know-how.

HON. R.A. WILLIAMS: And I ask, Mr. Chairman, because it's not

very clear to me: just what does this group really stand for? What kind

of British Columbia do they really want?

They object to the acquisition by the people of the province of

Plateau Sawmills — with the minority shareholding group some 3 per

cent, the Mennonite group in Vanderhoof. Is the Leader of the

Opposition saying that he prefers IT&T, that he prefers the

expansion of IT&T?

Well, the history of the former government was of a rubber stamp

one. You rubber-stamped every proposal of the forest industry. Not one

trade proposal was ever stopped under the former Minister or the former

Premier. The pattern was established firmly: what the multi-nationals

want the multi-nationals get. That was the system under Social Credit.

Are you saying that you want IT&T with their record of intrigue?

Interjection.

HON. R.A. WILLIAMS: The Mennonite people were free to choose

the buyer. The interesting thing is that they're free to make their

choices; they are free to be involved with the government or sell their

3 per cent or whatever they like. But they choose to remain involved.

So we have a partnership with these people and they're involved on the

board of directors.

Now I don't think they have ever had a happier situation in

Vanderhoof or on that board of directors as they presently have. There

was controversy because of the American owners in the past. The Mormon

group that were the owners in Plateau caused considerable frustration

in the community with respect to the Mennonite owners. That problem has

now been resolved, and the minority group in Vanderhoof is obviously

pleased and anxious to have this Minister back in Vanderhoof working

with them.

I look forward to going there and actually working in Vanderhoof for

a short period this summer at the mill in Engen and with the people

there so that I can get a better feeling for the problems of that

community, just as I did with respect to Terrace. I see that as the

obligation of a cabinet Minister in a government such as this.

So I look forward to working even more closely with the people that

are obviously enjoying the new majority owner more than they ever had

with former owners in the past.

Is the Leader of the Opposition saying he would have turned his back

on the return of nine million acres, as we got in Columbia Cellulose?

Is he saying he wouldn't want the 50,000 acres of prime recreation

land, shoreline land, fish-spawning land, magnificent waterfrontage

land in the lovely valley of the Kootenay? What does he stand for?

He stands for an extension of the mistakes of the past. What we're

being offered is a pale carbon copy of the man of the past 20 years — a

pale carbon copy that would extend the kind of multi-national control

and limited control by government that we had for too long. That's what

he's offering.

I challenge the Leader of the Opposition to tell us today what he

stands for in relation to the patterns of the past that the former

leader of the former government brought forth. Clearly we're getting

just a poor imitation, a poor repeat of 20 years that was dismissed by

the electorate only a couple of years ago and I'm sure will be

dismissed again.

AN HON. MEMBER: Billy boy can't stand the heat.

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Chairman, the

Minister of Lands and Forests gave an interesting account of the

mistakes of the past. He knows them well. I know them, and I agree with

what he says. There is little doubt in my view that the Columbia River

treaty will go down as Canada's

[ Page 2945 ]

greatest disaster. I intend to say more in the debate on the Minister's estimates about that Columbia River deal.

We have to move to retrieve it. There are ways. I have suggested

these ways to the Minister of Lands and Forests. He has been developing

background material; there have been discussions with the Prime

Minister. He's still the Prime Minister; perhaps there'll be a new

Prime Minister. If there is a new Prime Minister, then we should enter

into discussions with him.

MR. WALLACE: No doubt about it.

MR. McGEER: Well, perhaps the Member for Oak Bay is going to run federally. If he does, I wish him well.

MR. WALLACE: Not a chance, not a chance.

MR. McGEER: I think he might be able to make a contribution to the House of Commons.

But we're dealing with the here and now. We're dealing with

legitimate problems that the present Leader of the Opposition raised in

what I thought was a well-documented case. It may be that the Minister

of Lands and Forests has adequate answers for the questions that were

asked. But if he does, he did not give them. He merely catalogued the

disgraceful errors of Social Credit in the past. I don't disagree with

him about those errors.

But Mr. Chairman, I do say this: if the Minister has placed the

people of British Columbia, through a contract he has negotiated with

an international broker, through a Crown corporation that now belongs

to the people, of selling newsprint at black market prices, then this

practice must be terminated immediately or that Minister must resign.

We cannot be placed in a position in British Columbia or seem to be

placed in a position where our newsprint for temporary expediency is

being black marketed around the world. We must see that agreement. You

must make it clear to the broker that you deal with that any contract

you negotiate with him is for the people of British Columbia to see,

and not a cozy little deal between you and that man. Never. We're going

to operate these Crown corporations in British Columbia in a completely

ethical and satisfactory manner or we're going to see the Minister out

of office or a government out of office.

It isn't good enough to run a Crown corporation according to the

looser standards by which international brokers operate. If he's clean

and if you're clean, there's no reason why that document cannot be

tabled for everyone to see. You've completely evaded this issue by

suggesting that there was some advantage to holding these negotiations

confidential on a contract. What advantage is there to anyone but to

you yourself? There's no advantage to the people of British Columbia.

No long-term reputation can be built up for yourself, your government

or for that Crown corporation. Anything you do behind the closed door

with an international broker you have to be prepared to lay on the

table before this Legislative Assembly and the people of British

Columbia.

We don't want any more of the phony annual reports we used to get

under Social Credit. What responsible legislator is going to be

satisfied with an answer from a Minister that merely says, "We will

file with you an annual report." That's what we used to get from W.A.C.

Bennett and Einar Gunderson, and it wasn't good enough. That Member

knew when he was in opposition that it wasn't good enough. Not for the

people — but it turns out to be good enough for him when he's a

Minister. That, Mr. Chairman, is a double standard.

What is it that the Minister is trying to hide? What profits have

come to the people of Ocean Falls and the public of British Columbia

versus the profit that has gone to Ira Wallach? Has he got 90 per cent

of the cream out of this and has the public of British Columbia got the

10 per cent skim milk? Wasn't that what happened on the Columbia?

Wasn't that what happened on the Skagit? And didn't it all start for

the same reason? The government wanted to keep its deals with others

under the table. That was the basic fault under Social Credit, but that

basic fault hasn't changed one tiny little bit under the New Democratic

Party — not one bit.

You're very good at seeing the errors in others. Let us face it, Mr.

Chairman: anyone who is in power and must make judgments will make

errors. Sure, the Minister of Lands and Forests will make mistakes; the

Premier will make mistakes.

AN HON. MEMBER: No, no.

MR. McGEER: No, no. Even the Minister of Labour may make

mistakes. But the public will forgive that. What they will not forgive

is coverup. And rightly so.

We do not excuse Social Credit for its past errors. We certainly

would not want to apologize for the former Premier and his mistakes and

his methods. Yes, the former Liberals too, says the Leader of the

Opposition (Mr. Bennett). I agree with that; they made plenty of them.

I certainly agree with the analysis that the Minister of Lands and

Forests made about those deals. If he were to say the same things about

the Liberals — and he had occasion — I'd agree with that too.

But to use that as an excuse for doing the very same thing — perhaps

worse; we don't know yet.... We know the Minister is not prepared to

lay the cards on the table; he is not prepared to face public

[ Page 2946 ]

scrutiny on the actions he has taken. Let's keep it down to one single issue, the Ocean Falls deal.

We want to talk about other things: what he's done on Can-Cel; what

he hasn't done on the Columbia; what he hasn't done on the Skagit; what

he hasn't done on the Ponderay; what he intends to do on the University

Endowment Lands. But these are matters of judgment, and compared with

the central issue on which this non-confidence motion is based, it

shrinks in significance because it appears as though the Minister has

been caught out in signing a secret contract with an international

broker whose methods must be .questioned.

He refuses to give details to this House about what he has done on

that contract, and refuses for unsatisfactory reasons to table that,

document in the. House. Unless the Minister is prepared to table the

contract and make a clean breast of what he has done, we intend to

support the amendment.

MR. CUMMINGS: They told me that you should answer fluff with

fluff, a crock of.... What was it? The vanilla ice cream with the crock

of something else.... But the worst bang I've ever heard came from the

First Member for Vancouver–Point Grey (Mr. McGeer). A real big bang.

According to him, he feels that our corporation in Ocean Falls

should reveal all their contracts and all their business dealings. How

come in the Income Tax Act all dealings of the international companies

who compete with our little tiny corporations aren't revealed? It's

because it would give any competitor one terrific advantage on this

poor little company.

MR. BENNETT: Nonsense!

MR. CUMMINGS: Stick to hardware. After all, your daddy gave you a hardware store and now he wants to give you a province.

MR. BENNETT: Nonsense! You don't even understand the newsprint market.

MR; CUMMINGS: Tell me how you made your first dollar. Tell me, did Daddy

give it to you? Come on, now — Daddy will give you everything you want.

Interjections.

MR. CUMMINGS: With my luck I might make it. Hey, they have all deserted him — oh no, here comes one.

MR. CHAIRMAN: Would the Hon. Member relate his remarks to the motion? .

MR. CUMMINGS: Let's get back to the facts. The facts are that

what they are asking of Ocean Falls is ridiculous. As the First Member

for Vancouver–Point Grey. often does, he is asking our company to

expose itself for what it is.

AN HON. MEMBER: That's right. Gyp artists.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, at this point in the debate

I plan to stick to the issue which was put forward by the opposition. as the

reason, for a motion to reduce the Minister's salary by I would like to quote

at he outset from Hansard in the question period on October 15, 1973. I am not

quoting from the Blues, Mr. Chairman. This is a question that I asked in the

question period on October 15, 1973.

MR. WALLACE: I noticed that the newsprint sales contract between Ocean

Falls and Crown Zellerbach has been, terminated and. that the company which

is taking over the contract as of January 1, Gottesman-Central National Organization,

has a president by the name of Mr. Wallach, who is a director of Can-Cel. I

wonder if the Premier would make any comment as to whether, this director will

be resigning in the light of the business contract now set.

If I might interject, Mr. Chairman, I was asking the Premier because the Hon.

Minister of Lands, Forests and Water Resources was out of the House on that

occasion. The Hon. Mr. Barrett is quoted as replying:

HON. MR. BARRETT: It is correct that it is the same man, but

there is. no conflict of interest. The sale of newsprint, of course, is something

separate from Can-Gel's products.

The reason for the change in the Wallach contract is that the

price is much higher right now. I'm sure that with this move we will be returning

even greater funds to the corporation on behalf of the people of British Columbia.

I then asked a supplemental question. I continue to quote:

MR. WALLACE: Just a supplemental question, Mr. Speaker. The Minister

concerned declined. to outline the terms of the new agreement. Since this is

now public business with the taxpayers' money being involved in Can-Cel, would

the Premier care to table the terms of the new agreement with the House?

HON. MR. BARRETT: I will certainly take the question as notice.

I would like to speak to the minister.

Mr. Chairman, that really sums up my, position and the position of

our party in this House on this issue, We hear a great deal from this

government based on their clear philosophy and ideology, which differs

from ours, that the economy and the welfare of this, province is better

in the hands of the government through a variety of Crown Corporations

and other vehicles whereby the state will operate and control

[ Page 2947 ]

parts of the forest industry at the present time, and other industries as

well which we all know have been mentioned in this House recently — whether

it is alfalfa cubing or poultry processing or various other government involvements

in the business of the province. In this case we are talking specifically about

a company which the Minister reminds us is 79 per cent owned by the people

of this province and which is the pulp business.

I think this is the nub of this particular business — namely, the government's

claim that the citizens of British Columbia will receive better management of

their resources if they are managed and controlled by government than if they

are managed and controlled by private companies.

My very clear conviction is this: if that is the answer and if the Minister

believes in taking more and more public control over the resources, then it

is an axiom that the public should know what this Minister and what this government

are doing with their money. It is just that simple.

When the Premier answered my question on October 15 that the reason for terminating

the deal with Crown Zellerbach and making the deal with the American companies,

in his words, was that the price is much higher now, the clear implication

is that the deal was changed because the price had improved. But how much

had it improved, and to what degree has it improved still further?

I listened this afternoon and made notes here where the Minister said that

the price is even better now and that it is above market value for this area

of the country. It is not a fixed price. Certainly in the days of inflation

and soaring costs any government or businessman these days who made any kind

of deal with a fixed price for any length of time has to have his head examined,

I would think, I don't even think we have to. go into the merits and demerits

of negotiating, in this economic era on a fixed price for any period of time.

So I don't think that is the debate.

The issue that I and the party I represent in the House feel is so

important is that in an industry of this importance to the province,

which brings in so much income and the differing philosophies I

mentioned a moment ago that the state can do better than: private

enterprise.... We needn't argue that because we, could argue that for

the next 20 years probably and that side of the House and this side of

the House would agree to disagree.

I think regardless of that different attitude to our philosophy and

to the management of the resources of this province, we can differ in

that respect, but I don't think we should fail to acknowledge the

obligation of government. If it's doing public business and if it's

spending and investing taxpayers' money, I can't understand why there

should be any hesitation at all for the government and this Minister to

just give us the simple facts and figures.

I just add what has been added to many debates in this House: this government,

in seeking the confidence of the voters and in putting forward its policy and

its ideology, promised the voters open government. The NDP not only said that

it could give better government and in particular a more judicious use of our

natural resources, but it promised open government.

So, here we have one of the first major moves by this, government into, the

area of resource management in competition with the private sector and using

taxpayers' money to acquire 79 per cent of a company. There is some doubt on

two scores now as to whether or not the government made an adequate deal in

the first place, and secondly whether we have suffered internationally by possibly

having gained a reputation of dealing with a company which is reselling the

pulp at exorbitant prices because of the international shortage.

I'm sure that that would never be the Minister's intention or this

government's, intention, because whether we're socialists or

conservatives, we're all Canadians. I'm quite sure that it wouldn't be

the wish of any single person in this chamber to end up in that

situation whereby we're selling pulp at deflated prices which is then

resold to countries who are desperate to, get the pulp at any price.

But, it may be that that has happened, certainly unintentionally, but

by poor administration and poor management through this Minister's

department and through his failure in the negotiations which took place

in this regard.

So, Mr. Chairman, while there are many other, areas of this

Minister's administration which we should discuss, to save the time of

the House at this point; I feel that it is a very legitimate criticism

of the Minister for the reasons I've outlined, that he should table in

the House the details of the original agreement. I'm talking about the

details of the original agreement with Crown Zellerbach, the subsequent

agreement with Gottesman-Central and the details which he's just talked

about generally this afternoon which were re-negotiated. So there's

really three sets of simple information and figures.

In the light of the reasons I've given — the open government, the

claim that the government can do better than private enterprise — for

these fundamental reasons, I support the amendment.

MR. D.F. LOCKSTEAD (Mackenzie): Mr. Chairman, I just wish to

go on record as not supporting the present motion before the House.

This Minister, in my view, is the best Minister of Lands and Forests

this province ever had — no question about that.

While the former government was prepared to let whole communities

disintegrate, let thousands of jobs go down the drain and let our

resources be sold out

[ Page 2948 ]

of this province completely, this present Minister has reversed that trend and that policy.

Also, for the first time in the history of this province, to my

knowledge, this present Minister is listening to environmental groups

and other departments of government on environmental matters. All these

departments are plugged in. This is a motion of non-confidence, Mr.

Member. As I said, in no possible way can I, or I think the people of

this province, support such a motion.

I want to talk about one other matter very briefly, Mr. Chairman,

and that is the matter of Ocean Falls. A lot has been said in this

House in the last day or two on this matter, and I expect to be

speaking on this in more detail later under this estimate. I think the

Minister made it quite clear earlier that the Members of the opposition

do not want that Crown corporation to work, for no other reason than

that they believe that if these Crown corporations don't work it will

be sort of a black eye for us. I'd like to tell you and this House now,

Mr. Chairman, that while we may have some interim problems at Ocean

Falls — we admit that and we have said so — they are in the process of

being solved. In the long view, I am fully convinced that Ocean Falls

will probably be one of the brightest communities on this coast.

MR. H.W. SCHROEDER (Chilliwack): I'd like to speak just

briefly on the amendment and support it. The reason why I have to

support this is not only because it was sponsored by this party on this

side of the House, but because as we study the remarks of the Minister

and the pattern established by this Minister over the past 18 months,

we see a complete reversal of stated policy when he went to the people

for a mandate.

I remember in the fall of 1972, the members of the NDP coming to the

people for support. They didn't believe they had sufficient support to

form a government, so they could be a little reckless in their

statements.

In their statements they came out long and hard and strong, I might

add, against multi-national corporations. They cited the oil companies.

They cited the forest industries and made statements which would have

the people believe that our resources — whether they be energy

resources, whether they be forest resources or whether they be water

resources — were going out of the province and leaving nothing behind,

using the words "royalties" and saying that the former government was

giving the natural resources of this province away.

They cited the chief demon in this regard as in the multi-national corporations,

saying that they wouldn't want to have anything to do with them, saying that

they should be banned from the scene, saying that they resembled too closely

monopolies (which word should never be spoken in British Columbia), saying that

they were part of big business which was robbing the little guy out on the street

and not giving a fair distribution of buying power to all of the residents of

British Columbia.

They made snarky remarks about people belonging to a Vancouver Club,

saying that the destiny of our resources was determined perhaps over a

martini and that the real control was not out there where the rubber

meets the road, but in here somewhere a few people, usually

representing multi-national corporations, get together and determine

what's going to be happening to the resources which we all admit belong

to the people of British Columbia.

What has happened in a few short months since this Minister has

taken his portfolio? All of a sudden the weight of responsibility has

weighed heavy and it has bent him over — as a matter of fact, bent him

so far that he has done a complete flip-flop as regards his position

regarding multi-national corporations. All of a sudden not only is he

not against multi-national corporations, but he wants to become a part

of them. Not only does he create a part of them in his own portfolio,

but he strongly supports the creation of monopolies within the province.

Now, it sounds to me like this is a double standard. I think I've

heard it charitably reported among some of the other Members of the

opposition that it could be called a double standard. I think those

less charitable would call it hypocrisy. I think that perhaps those of

us who would put charity aside and just call it like it is would call

it misleading, but I think that the people who are out in the province

call it what it really is, and that is dishonesty.

I don't see how this Minister can become involved in something to

which he was diametrically opposed just as short a time as 18 months

ago. Now if he is knowingly involved in this thing, the whole act

becomes villainous or preposterous and if he is unknowingly involved,

then the man is dangerous.

In either instance, I believe that his salary needs to be questioned

here today and not only do I agree that his salary should be reduced by

$1, but Mr. Chairman, if we were going to tell it like it really is,

this man should not receive salary at all because he has changed

completely his position.

He's been called the super Minister, the super Minister, and I think

when you talk of him in the circles of the backbench of the NDP Party,

he might be the super Minister. I think even on the treasury benches

they regard him highly, because he helps to shape the financial

destiny, undoubtedly has a great deal of influence upon the Premier of

this province, gives the Premier of this province some decisions which

the Premier himself cannot refuse. He's called the super Minister.

The people out in the constituencies have a regard for him. But

regard there is spelled f-e-a-r. They have a fear of him, because he

has a tendency to be closed

[ Page 2949 ]

mouthed, closed minded and the opposite to what we believe would be open government.

He answers no questions in this House, he files few documents in

this House, he acts as the secret super Minister and as a result is the

instigator of fear in the province. Fear to the extent that people who

are dependent upon the Ministry of Forests for their livelihood and who

must come to him for timber leases, tree farm licences, permits to

operate, they refuse to say what they really think because they are

instilled with fear, believing that the man perhaps could turn on them

and cut away from them their very livelihood.

He's called a super Minister. But Mr. Chairman, I have to tell you that in

the eyes of the financial world, in the eyes of the business community of the

world which goes beyond the Province of British Columbia, this man is no super

Minister. He's a super pawn. He's a super pawn because when somebody else moves

him to the King's square in the fourth row he moves without question. He has

to, because he himself has not the power nor the financial backing and he goes

where the players move him. He is the super pawn and I have to remind him that

he's playing in a league to which he was not born to play.

AN HON. MEMBER: Oh, oh!

MR. SCHROEDER: He's playing in a league....

AN HON. MEMBER: You don't even know what you're saying.

MR. SCHROEDER: Yep, sure do. He pretends to be a part of the

great international business community. But I want you to know, Mr.

Minister through you Mr. Chairman, you were born under the wrong star.

You were born under the wrong star to play in that league.

When they're all finished with you, after they've moved you as far

as the opposing Queen's row, they'll kick you aside like they do a

fingernail that's too long. They'll kick you aside and they'll say to

you, "sorry fella, you belong to the wrong sect. You belong to the

wrong community." Because in the international business community, you

have to have a name like Wallach, you have to have a name like

Berkowitz, you have to have a name like Litvine.

HON. R.A. WILLIAMS: You are sick, you are sick.

MR. SCHROEDER: You have to have a name like Gross. These are the boys who are the pawn movers — the pawnbrokers...

AN HON. MEMBER: You're sick, you're sick.

HON. R.A. WILLIAMS: You know what you're saying? You know what you're saying?

MR. SCHROEDER: ...and as a result, as a result you won't stay my friend, you won't stay. Mark it down.

HON. R.A. WILLIAMS: Anti-seminist speech. Never heard the like of it!

Never heard the like of it!

MR. SCHROEDER: I want the Minister to withdraw those remarks. Absolutely.

He called me an anti-Semitism and I'll have him remove those remarks.

AN HON. MEMBER: He was on your side.

MR. SCHROEDER: I never said anything of the sort. Never said anything of the sort. Mr. Chairman, will you have him withdraw?

MR. KELLY: You inferred that, you sure did.

MR. SCHROEDER: Never said anything like it.

HON. R.A. WILLIAMS: It's evil stuff no matter how you slice it.

MR. CHAIRMAN: On the advice of my learned friend I would ask the Minister to please withdraw that remark of anti-Semite.

HON. R.A. WILLIAMS: Well, I think the record is clear and will be there in Hansard for all to see and on that basis I withdraw, Mr. Chairman. I think the record is abundantly clear Mr. Member.

MR. CHAIRMAN: Would the Hon. Member please continue?

MR. SCHROEDER: Thank you, thank you.

MR. CHABOT: On a point of order. Would you have that Minister withdraw that statement without the qualifications he attached to it?

AN HON. MEMBER: There's no qualifications. He said it.

AN HON. MEMBER: Do you want to stop Hansard ?

MR. CHAIRMAN: I have to rule that the...

AN HON. MEMBER: Take the meringue out of your ears!

MR. CHAIRMAN: ...remark the Minister made was withdrawn to the Chair's satisfaction. Will the Hon. Member please continue?

MR. CHABOT: The Chair's satisfaction? Well, the

[ Page 2950 ]

Chair's being unfair, Mr. Chairman. I'll tell you

that right now. It's about time if you're going to sit in that position

that you be fair or at least display fairness.

MR. CHAIRMAN: Will the Hon. Member please continue?

MR. CHABOT: We have a political chairman in the chair.

MR. CHAIRMAN: I would have to ask the Hon. Member to withdraw that remark.

The Hon. Member for Columbia River. That we have a political chairman in the

chair.

MR. CHABOT: Well, Mr. Chairman, if it offends you that I have suggested

that you're a political chairman, even though you'll never convince me in

my mind that you're not, I'll withdraw.

MR. CHAIRMAN: Thank you very much. Will the Member for Chilliwack please continue?

MR. SCHROEDER: I want to thank the Minister for his unqualified withdrawal because certainly there's not intent in this regard.

I was amazed to find that the Minister's only defence in the charges

that have been laid to his department in the short time that his

estimates and this amendment have been under discussion, his only

defence was one of pointing the finger at some other object, reminding

me very, very much of the child still in his mother's arms but already

old enough to be aware. When you speak to the child and try to address

him, he points quickly to some other object in the room. It seemed to

me to be a very, very, very, weak defence.

I'm not saying, that the object to which he pointed was not one

worthy of having been cited, nor would I say that I would defend the

position taken by the former government as regards the incident that he

cited. But nonetheless it seemed to me that to take up 25 minutes of a

retort in which he was given full opportunity to defend his position in

his department and point only at some misgiving or some failure of some

government in bygone days, is only a smoke screen and only indicates

the same juvenile attitude that is suggested by the child I mentioned

in the illustration.

It seems to me that to have no answer and to have no defence or to

change horses in the middle of the stream is certainly not satisfactory

and as a result it just helps to cement my attitude to the fact that

this Minister's salary must be reduced by $1.

He gave a very interesting little speech on constant price contracts. Fixed

pricing he called it. But I want you to know that in the operation of Can-Cel,

in order for people who are operating private forest industry concerns, in order

for them to gain a timber lease, a condition of that timber lease is that they

will supply pulp chips to Can-Cel for a fixed price, a fixed price. The price

is $35 a cunit regardless of what the price may be on the market and regardless

of whether that individual could be transporting those chips in the opposite

direction and gain immediately $3 a cunit extra.

Nonetheless, this Minister who says he does not believe in fixed. Pricing,

conducts fixed pricing in his own department. Then he talks about a $12 million

profit that that Can-Cel operation is supposed to have gained in its first report.

Was there a $12, million profit? Or is this another time when the Minister

has flip-flopped? Is this another time when he has changed his direction? Is

the $12 million, a real profit, or is the $12 million an imaginary profit?

Is this $12 million a profit as a return to the people in addition to what

it would ordinarily have been? Or is this a $12 million profit after the deletion

of certain charges that Can-Cel does not have to pay