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)

THURSDAY, APRIL 25, 1974

Afternoon Sitting

[ Page 2499 ]

CONTENTS

Routine proceedings

Oral questions

Reduction of gasoline tax. Mr. Bennett — 2499

Extension of imported wine list. Mr. Gardom — 2499

Mechanical problems on ferries. Mr. Wallace — 2500

Postage stamp insurance vote for motorists under

Autoplan. Mr. Phillips— 2500

Sale of defective car to minor. Mr. D.A. Anderson — 2500

Export of refined petroleum products. Mr. McGeer — 2500

Identity of persons conducting courts survey. Mr.

Gardom — 2501

Radio announcement on Unified Family Court Act .

Mrs. Jordan — 2501

Vehicle testing stations for Langley — Surrey area. Mr.

McClelland— 2502

Committee of Supply: Department of Mines and Petroleum

Resources estimates.

On vote 174

Hon. Mr. Nimsick — 2502

Mr. Richter — 2506

Hon. Mr. Nimsick— 2510

Mr. Gibson — 2511

Mr. D.A. Anderson — 2523

Mr. Gibson — 2523

Mr. D.A. Anderson — 2524

Hon. Mr. King — 2524

Mr. Gibson — 2525

Hon. Mr. Gibson — 2527

Mr. Cummings — 2528

Mr. Phillips — 2530

THURSDAY, APRIL 25, 1974

The House met at 2: 00 p.m.

Prayers.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I have the pleasure

of introducing my sister and her husband from England with my

wife and daughter, and I would ask the House to welcome

them.

MR. SPEAKER: I would remind Hon. Members that it's National

Secretaries Week. If you have a secretary, take her out to

lunch.

Oral questions.

REDUCTION OF GASOLINE TAX

MR. W.R. BENNETT (Leader of the Opposition): Mr. Speaker, to

the Attorney-General. Inasmuch as the Attorney-General, in discussing

energy yesterday,

mentioned that gasoline would be going up 8.5 cents a gallon in

the province, and as he's taken control, has he discussed with

the Minister of Finance (Hon. Mr. Barrett) a programme such as

Alberta has brought in, in reducing the gasoline tax by 5 cents

per gallon, and also a proposal to reduce it another 5 cents

per gallon in Alberta? Will he be recommending to the Minister

of Finance, upon his return, that British Columbia be prepared

to make the same concessions to their motorists?

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

the Minister of Finance will announce the future policy of the

government in this field. The 8.5 that the Hon. Member

mentioned is really the calculation of what the additional

increase in the price of crude from $3.70 to $6.50 works out to

in terms of a gallon of gas as we see it. That's what that

is.

MR. BENNETT: Well, a supplemental, Mr. Attorney-General. As

you are concerned about controlling

the motorists and controlling the price on the company level,

and as the Energy Commission seems concerned about the price

increase that would pass along, does not the Attorney-General, as part

of this government and through

his concern as discussed in the paper, make recommendations to

the Finance Minister? And has the Energy Commission given the

Attorney-General any advice as to this being done, that

the savings be passed along to the motorists — the

increase of profit on the petroleum resource in this province — through

reduction in the gasoline tax?

HON. MR. MACDONALD: Mr. Speaker, we have received advice, but

announcements of future policy in that respect will be made by the

Premier.

MR. J.R. CHABOT (Columbia River): A supplemental, Mr.

Speaker. On numerous occasions the Attorney-General has stated that

the absolute control of the petroleum industry, which you presently

have, would generate an additional $100 million of revenue for the

province and that this would in turn be passed on to the people of

British Columbia. I'm wondering if this would be passed on in a form of

a reduction in the gasoline tax.

We find in bordering communities between Alberta and British

Columbia that the price of gasoline is 15 cents more expensive

in B.C. Here's an excellent opportunity. I was wondering if

this is going to be the kind of recommendation you'll make — that the

gasoline tax be reduced so that the benefits

can be accrued....

MR. SPEAKER: Order, please. Would the Hon. Member be seated?

Usually when you draw attention to a point by saying the word

"order," it usually means that the Member who is

speaking stops. I just thought I had better remind you of

that.

MR. CHABOT: Oh, thank you very much.

MR. SPEAKER: Now you know. Obviously, future policy cannot be

asked in question period.

EXTENSION OF IMPORTED WINE LIST

MR. G.B. GARDOM (Vancouver–Point Grey): A question

also to the Attorney-General, Mr. Speaker. In view of the

long overdue but anticipated and now thoroughly public

revelation that B.C. wines are inferior, is the Hon. Attorney-General

prepared to order the Liquor Control

Board to open its list to imported wines and give the B.C.

consumer a break, both as to quality and as to price?

MR. D.M. PHILLIPS (South Peace River): Sour grapes.

(Laughter.)

HON. MR. MACDONALD: Mr. Speaker, tests that have recently

taken place indicate that B.C. wines are distinguishable, but

not necessarily inferior. (Laughter.)

MR. GARDOM: A supplemental, Mr. Speaker, to the

Attorney-General. Who has been responsible in the LCB for

the obvious lack-of-palate policy that's so long

been imposed upon the citizens of this province?

AN HON. MEMBER: Your taste's all in your mouth.

(Laughter.)

[ Page 2500 ]

MR. SPEAKER: I think it's ironical — not in good

taste.

MRS. P.J. JORDAN (North Okanagan): A supplementary, Mr.

Speaker. On behalf of the farmers of British Columbia, I demand

that this Member for Point Grey — both of them — withdraw these insults

to the grape producers of British

Columbia. (Laughter.)

MR. SPEAKER: Order. Is that a question?

MRS. JORDAN: It's easy to speak when you have a silver spoon

in your mouth. (Laughter.)

MECHANICAL PROBLEMS ON FERRIES

MR. WALLACE: I'd like to ask the Minister of Transport and

Communications what the nature is of the recurring mechanical

problems which resulted in the cancellation of ferry service

today between Horseshoe Bay and Nanaimo.

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

The recurring problems are all different, as a matter of fact. A week

or so ago it was that some tugboat had let loose a long wire cable with

a nylon cable attached to it. The nylon got wrapped around a propeller,

and then the iron cable got wrapped around the propeller. We had to

wait two days to get it into dry-dock.

This recent one was a leak around the seal, which meant that

oil was escaping, and again we made inquiries. These sorts of

occurrences happen because the ferries are being used full

blast. They differ, and these are part of normal use.

MR. WALLACE: A supplementary question, Mr. Speaker. Is there

any evidence that in fact the continuing frequent use of the

ferries and the age of the ferry are in any way becoming

factors in the efficient functioning of our ferry ships?

HON. MR. STRACHAN: Of course continuous use is certainly a

factor and they are being used full out, I think, as most of

you know. But the ferries are...the oldest ones, I think, are

now about 12 to 14 years old; there is 10 to 15 years more good

use in them. They go into dry-dock once a year for a complete

refit and checking, so they're well kept up.

POSTAGE STAMP INSURANCE RATE

FOR MOTORISTS UNDER AUTOPLAN

MR. PHILLIPS: Mr. Speaker, I would also like to direct my

question to the Minister of Transport and Communications, in regard to

the Insurance Corporation of British Columbia. Mr. Speaker, in view of

the Premier's statement that he intended to assist the motorists in the

outlying areas of the province to run their automobiles at less cost in

view of the increased cost of gasoline, would the Minister institute a

survey to determine the cost to the insurance corporation of

instituting a postage stamp rate for insurance throughout the province?

MR. SPEAKER: May I point out that to ask the government's

opinion on a matter of policy is really not the purpose of

question period?

MR. PHILLIPS: Well, I didn't ask him, Mr. Speaker, in all

due respect, to change his policy. I asked him to institute a

survey.

MR. SPEAKER: Well, you are still asking for something that

is not proper in question period.

HON. MR. STRACHAN: You asked me to consider a survey. I'll

read the question and then give it serious consideration.

SALE OF DEFECTIVE CAR TO MINOR

MR. D.A. ANDERSON (Victoria): Mr. Speaker, a question to the

Minister of Consumer Services. May I ask the Minister whether

she's received representations from a Mr. Henry Mash of White

Rock regarding the sale of a defective automobile to a

minor?

HON. P.F. YOUNG (Minister of Consumer Services): Yes, our

office has received correspondence on this matter.

MR. D.A. ANDERSON: May I ask whether the Minister has

instructed her departmental officials to investigate this with

a view to ascertaining whether the person in question should

receive compensation for the sale of the vehicle, which

allegedly is a lemon?

HON. MS. YOUNG: The department has been in touch with the

gentleman concerned, and it is my understanding that they have a

great deal of correspondence back and forth. The company, I

believe, has offered to make a settlement, and Mr. Mash refuses

to meet with the company. This is our latest information from

correspondence.

EXPORT OF REFINED

PETROLEUM PRODUCTS

MR. P.L. McGEER (Vancouver–Point Grey): A question for

the Attorney-General, Mr. Speaker, with respect to export

of refined petroleum to the United States. A member of the

Energy Commission has stated that some of the refineries in

British Columbia are exporting refined petroleum products

for

[ Page 2501 ]

automobiles to the United States. Are the

allegations made

by the member of the Energy Commission correct?

HON. MR. MACDONALD: Mr. Speaker, I think they are correct.

There's been quite a considerable export of the refined

products from the refineries of B.C. into the northwest of the

United States. That wouldn't matter to us if we were getting

the products we need. I doubt if that situation will continue

for many more years, because I think we'll begin to need all

the refined products we can get, even on the present basis. So

it's something that has to be watched.

I think the government, in a situation like that, should

have the necessary controls to make sure that the refineries

produce the products that we need for our own economy; then if

there is an exportable surplus, that's another question.

MR. McGEER: Supplementary. Is any of this petroleum being

sold in the United States at a lower price than similar

products are being sold in Canada?

HON. MR. MACDONALD: I have no information on that, Mr.

Speaker.

MR. GARDOM: Another question to the Attorney-General, Mr.

Speaker.

MR. SPEAKER: Order! I wonder if the Hon. Member would allow

the Member for South Peace River a supplemental?

MR. GARDOM: Surely.

MR. PHILLIPS: Supplementary to the Attorney-General.

Will the Attorney-General instruct the Energy Board to

make sure that the proper type gasolines are available

in British Columbia in 1975 to meet the pollution control

standards on the automobiles at that time?

HON. MR. MACDONALD: Well, Mr. Speaker, pollution control is

under another department.

MR. PHILLIPS: The pollution control equipment that's going

to be on the automobiles in 1975: we must have a special type

of gasoline, and it's not available....

HON. MR. MACDONALD: I don't believe that's been under

consideration by the Energy Commission.

IDENTITY OF PERSONS

CONDUCTING COURTS SURVEY

MR. GARDOM: Yesterday I asked the Attorney-General some

questions about the survey of court facilities,

and he was saved by the bell, Mr. Speaker. I'd ask him who has

been conducting this survey of court facilities in B.C.

HON. MR. MACDONALD: Well, it's a function of the Justice

Development Committee.

MR. GARDOM: Well, who's doing it?

HON. MR. MACDONALD: Who are they?

MR. GARDOM: Yes.

HON. MR. MACDONALD: Well, the Justice Development Committee —

and I'm speaking from memory now — would be David

Vickers, Jack Cram, Ed Epp, Hank Matheson, Laurie Brahan, with

advice from other people outside; and I've missed some

names.

MR. GARDOM: Well, a supplemental, Mr. Chairman.

HON. MR. MACDONALD: The chairman is David Vickers.

MR. GARDOM: Is public representation being requested, Mr.

Attorney-General, and will the results be made

public?

HON. MR. MACDONALD: Public representation is being received

whether requested or not. It's a pretty open question. Nothing

is being hidden in respect to anybody who wants to make an

argument about what we should best do with respect to court

facilities in any municipality in B.C.

MR. GARDOM: Well, will the results of these inquiries be

made public, Mr. Attorney-General — yes or no?

HON. MR. MACDONALD: Oh, I can't guarantee that every letter

that comes in is going to be made suddenly public, no.

MR. GARDOM: The results?

HON. MR. MACDONALD: Oh yes, the results will be announced in

due time.

RADIO ANNOUNCEMENT ON

UNIFIED FAMILY COURT ACT

MRS. JORDAN: To the Attorney-General in regard to the

family court situation. In view of the fact that it was announced

publicly today on radio station CJOR by a family advocate that the

Unified

[ Page 2502 ]

Family Court Act would be law within two

weeks in

British Columbia, has the Attorney-General given the

Berger commission information on the actions of the Legislature

that is not available to the legislators themselves? And is

this a firm deadline that the Unified Family Court Act

will, in fact, be law within two weeks?

HON. MR. MACDONALD: No, Mr. Speaker. I would hope that some

of the bills — and I regard that as a kind of an urgent

one, will receive consideration fairly early in the next two or

three weeks. But whether or not they pass and are approved by

the Lieutenant-Governor-in-Council, of

course, is in the hands of the Legislature. Nobody can make an

announcement as to that.

MRS. JORDAN: Supplementary. That's my point, Mr.

Attorney-General. In light of the fact that you consider

this Act urgent, and perhaps many Members do, would it not be

more in accord with your responsibilities to discuss this with

the Legislature, rather than have it announced by a member of

the commission on a radio station in Vancouver? Is this not an

abdication of your responsibility to this Legislature and an

erosion of the rights and responsibilities of the Members of

this Legislature?

HON. MR. MACDONALD: Mr. Speaker, it was not announced on my

instructions, and I think that a certain amount of free speech

out in the community is desirable.

MRS. JORDAN: As long as it's free speech and not

instruction.

MR. SPEAKER: Order, please! It's becoming argumentative.

VEHICLE TESTING STATIONS

FOR LANGLEY-SURREY AREA

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

of Transport and Communications. Could the Minister advise

whether or not a site for a motor vehicle testing station has

been selected in Surrey to serve the North Delta, White Rock,

Surrey, Langley area?

HON. MR. STRACHAN: I'm not sure about Surrey. I think one

has been obtained by agreement with the Richmond City Council.

I'm not sure about Surrey.

MR. McCLELLAND: Would the Minister take that as advisement

and let us know at a later date?

HON. MR. STRACHAN: Yes.

Orders of the day.

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

ESTIMATES: DEPARTMENT OF MINES

AND PETROLEUM RESOURCES

On vote 174: Minister's office, $68,724.

AN HON. MEMBER: Too much.

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

Mr. Chairman, seeing that the opposition weren't going to say anything

and let the vote go through, I thought that I had better get up and say

a few words in regard to my department.

You will notice that I've been very silent during this

session, and I haven't had much to say.

And I haven't got any executive assistant, Hon. Member.

Interjection.

HON. MR. NIMSICK: I haven't got any. I have no executive

assistant, so that settles your question right there.

MR. CHAIRMAN: Order please! Would the Hon. Minister please

address the Chair? Order, please! Would the Hon. Minister

address the Chair, please?

HON. MR. NIMSICK: I think I've got enough knowledge in this

field of handling the department without having an executive

assistant, and so that is why I haven't got one.

Interjections.

HON. MR. NIMSICK: Now, in discussing this department, I am a

little reticent due to the fact that I've got about four bills

on the order paper. There is one thing I wouldn't want to do,

and that is transgress on the privileges of the House...

AN HON. MEMBER: Hear, hear!

HON. MR. NIMSICK: ...nor on the Chairman, something I'm

sure you will agree I have never been guilty of.

First, I'd like to introduce to you my Deputy, Mr. John

McMynn; my Associate Deputy in mining, Dr. Fyles; and my

Associate Deputy in petroleum resources, Mr. Lineham.

MR. A.V. FRASER (Cariboo): Where's the guy who really runs

it?

[ Page 2503 ]

Interjections.

HON. MR. NIMSICK: You would like to believe some things that

probably would satisfy your ego a little bit, but I'm afraid

that's pretty difficult to do because I've been here just

a little too long to fall for that kind of malarkey, maybe we

might call it.

AN HON. MEMBER: You'd never satisfy their ego; it's too

great.

Interjections.

HON. MR. NIMSICK: The department has had a very good year

in 1973. The mineral industry alone has brought in nearly a billion

dollars in values into the Province of British Columbia, and almost

half of this billion dollars comes from the depletion of our copper

resources in the Province of British Columbia.

When I took over the department I found this department did

not get the recognition it should have; it was somewhat of a

poor relation in the operation of government. They set it aside

and let it be run by the mining industry rather than by the

elected representatives of the province. For that reason, in

order to try and update it, I divided the department into two

branches in order that each branch would get the credits

they've got coming. I divided it into petroleum resources and

into the mineral resources.

Due to that fact, I've had to increase staff to some extent.

I've set up two new divisions. The revenue division will be

responsible for collecting revenue to enhance the consolidated

revenue of the Province of British Columbia and, from there, to

fulfil many of the social amenities that are so necessary for

the people of British Columbia.

AN HON. MEMBER: What about the takeover?.

HON. MR. NIMSICK: In order to give a better service to the

department, to the people who are in the field and in the

industry, and to the prospector who, I understand, finds all

minerals in the province, we have to have more inspectors and

more geologists. Through this we have decided the resource must

be managed properly on behalf of the people.

We must not forget that this is a non-replenishable

resource which this department deals with. We must not only

think of today; we must think of tomorrow and the day after and

the day after that. We must think of the coming

generations.

I attended a conference in Ottawa where we had Ministers from all

the provinces sitting down and discussing the mineral resources of

Canada. Some of them came from Conservative provinces, some from

Liberal provinces and some from New Democratic Party provinces. I

didn't find any Social Credit provinces there. (Laughter.)

Interjections.

HON. MR. NIMSICK: They said one of the objectives was that

we must receive the optimum benefit from the depletion of this

non-replenishable resource on behalf of the people of

Canada.

I would just like to give you a quote here:

"Relate mineral development to social needs;

Ensure national self-determination in mineral

development;

Improve mineral conservation and use;

Increase the return to Canadians from exportable

mineral surpluses;

Ensure the mineral supply for national needs."

That's the basis of what we should be aiming at.

I'm sure you're going to have a few questions afterwards, and I

hope to answer some of those questions before you ask them because I

can read some of your minds fairly well.

AN HON. MEMBER: Hear, hear!

Interjections.

HON. MR. NIMSICK: We must not forget that the demand of our

mineral resources by the year 2000 is going to at least triple.

So don't get in a panic about how fast we want to deplete our

resources.

When I took over the department, the top priority I placed

in the department was safety...

MR. D.M. PHILLIPS (South Peace River): To retire.

HON. MR. NIMSICK: ...for the miners. I know you'd like me....

MR. PHILLIPS: You'd like to yourself.

HON. MR. NIMSICK: I'm sure there are some here who would

like me to retire.

Interjections.

HON. MR. NIMSICK: Well, I'm telling you now that you'll miss

me when I'm gone, I'm sure. (Laughter.) I'm sure the industry

will miss me as well.

AN HON. MEMBER: Hear, hear!

HON. MR. NIMSICK: They'll know I was here, I'm sure.

(Laughter.)

Interjections.

[ Page 2504 ]

HON. MR. NIMSICK: A statement was made in regard to safety

in British Columbia, and this statement was printed in the paper

some time ago. It stated: "Working conditions in B.C. mines are

the most deadly in the country." The individual who made that

statement compared 1970 to 1950. I would like to say that

statement is incorrect. The injury experience of the British

Columbia mines compares favourably to the other provinces in

Canada, and they've got the best record of any province in

Canada. I'm not saying this is what we want; we want to get

years when there are no accidents in the mines at all.

In the year of 1950, there were 11 fatalities; injury

frequency was 97.4. In the year 1970, the year taken by that

individual, there were 13 fatalities, two of which were outside

the mining industry. At that time it was 38 per cent. Instead

of saying it was 1.75 per million hours, it breaks down to

.793, which was a better rate than they had in 1950. The year

1950 was the best rate in all the years previous, and that is

probably the reason why they compared it with that time.

Mining is classified by the Workmen's Compensation Board as

Class A hazard. It is interesting to note that the mining

industry was the only industry in British Columbia to receive a

decrease in assessment rate during the past three years; the

assessment rates of all other industries increased or remained

the same. The mining industry is high in record of safety in

the Province of British Columbia.

During the year 1973 there were 129,282 work injuries

reported. Mining and smelting was 4.2; forest products was

25.6; general manufacturing was 19.1. Then we go down to per

million man hours; mining and smelting has a better safety

record than the forest products, general manufacturing and the

construction and allied services.

MRS. P.J. JORDAN (North Okanagan): What was the government

administration at that time?

HON. MR. NIMSICK: This is in 1973 I am talking about now.

Mining and smelting in 1973.

MRS. JORDAN: What was your 1971 figure?

HON. MR. NIMSICK: The British Columbia mining industry has

one of the best safety records in Canada. In order to bring

about this, when I first took office, I changed the regulations

to a great extent.

One of the factors that increased the accident rate in the mining

field was open-pit mining. There were more accidents with trucks than

any other item on the mining field. I was up at the Kaiser Development

when the young lad last year was killed. The truck ran over him. We

immediately instituted the plan of having a dump supervisor so he would

be in charge of the dumps. Since that time, things have been

progressing very well.

We asked for greater co-operation between the

employers, the employees and the inspectors. Under the previous

government, the inspector would go into a mine and he would

take with him a representative of the mine management but not a

representative of the employees' safety group.

I changed that so it would break down the suspicion that was

built up between the employees and the employers. It didn't

matter how you cut the cake; if the inspector went in there and

only took a member of the safety committee then the mine

management would probably be suspicious. So you can't blame the

worker for being suspicious when he only took the mine manager

along.

We have had that co-operation. The inspectors are

doing a very fine job throughout the province; management and

the employees have co-operated to the fullest in this

regard. Look at the fatal accident record: in 1970, there were

13; in 1971, there were 11; in 1972, there were 18; in 1973, it

is down to seven, and two of those are outside exploration.

So the safety record is definitely improving. We have given

the miners some status by instituting the certification of

miners, something I had advocated in this House for many years.

I finally had to get on this side of the House before we were

finally able to institute the certification of miners. Mining

is a very difficult job; it is a hazardous job; but it is

mighty important. In some countries a miner has a higher status

than many other jobs that are easier. I think this is nothing

but right; this is something that is necessary.

The depletion of this natural resource, we must not forget,

is not labour-intensive any more, in spite of the fact that we

mined a half a billion dollars' worth of copper last year and in

spite of the amount of mining we have done. In 1928, there were

8,835 employees in the mining industry; in 1973, there were

9,616; in 1952, 13,730, That year we had values of $148

million. In 1970, we had 15,360 employees and we produced $310

million; in 1972, 14,584 and $372 million; in 1973, it was down

to 14,500 and we just about topped $1 billion. So you can see

it is not labour-intensive.

MR. W.R. BENNETT (Leader of the Opposition): The prices are

going up.

HON. MR. NIMSICK: Even taking that into consideration. Take

that into consideration as well. Each individual has got to

deplete more of that natural resource every year in order to

have a job....

[ Page 2505 ]

MR. BENNETT: What's the tonnage?

HON. MR. NIMSICK: One of our problems is that for every ton

of ore we deplete, we must get out of that as much employment

and as much benefit to the people as we possibly can.

I have been after the industry for quite some time in regard

to processing, especially our copper ores, in the Province of

British Columbia rather than shipping them all to some other

country. The companies have been together from time to time to

discuss a copper smelter, but nothing really has come out of it

in any definite way. For that reason, we have now decided that

we must investigate the possibility of a task force

ourselves.

MR. SMITH: Another task force, another commission.

HON. MR. NIMSICK: We set up a task force in order to....

MRS. JORDAN: He's already having trouble with the task force

— he can't find it!

HON. MR. NIMSICK: We have set up this task force in order

that the government can be prepared to go ahead if the industry

is not willing to go ahead with the processing of ore in the

Province of British Columbia. We have offered to participate,

but the industry seems to be a little loath in this regard. I

am announcing this copper task force today.

I would like to quote some of the reports. This isn't a

report of the task force; this is the appointment of the task

force. It is estimated that out of a total mining sales revenue

of nearly $1 billion in 1973, copper sales accounted for more

than half of that amount. By the end of the current year, the

province will have witnessed a production of ore containing

some 7.5 million pounds of copper since 1858. Approximately 10

per cent of that total, or nearly 750 million pounds of copper,

are now produced each year at current production rates.

In 1938, the year of the highest metal mining employment

prior to 1950, some 10,000 workers derived their livelihood in

metal mining as a whole. In the same year, copper production

amounted to 66 million pounds. In 1974, some 14,600 workers

found employment in metal mining, including approximately 4,200

people engaged in exploration and development. By contrast,

copper production will amount to more than 750 million pounds;

hence, copper production alone increased 10 times since 1938

while provincial metal production employment experienced

virtually no increase.

You can see the graph over the years: the amount of

employment that has been given has hardly changed since

AN HON. MEMBER: Where did you get these figures?

HON. MR. NIMSICK: I will give you one of these afterwards if

you like.

The entire volume of copper production is currently exported

from the province. Taxation revenue from these operations,

though substantial, has been offset by very heavy costs to the

Government of British Columbia in the provision of

infrastructure. The cost of highways, schools, medical

facilities and social services has been enormous and goes

further with the opening of each mine.

The real benefit from this copper production appears to be

reaped in the places where copper concentrate is transformed

into copper and copper products. While depleting this valuable

resource at an increasing rate, British Columbia is effectively

exporting jobs and services, thereby subsidizing the society in

which smelting, refining, fabrication and marketing are carried

out.

In order to ascertain the means and ways of increasing the

direct benefits accruing from copper mining in this province

the government has appointed a task force whose objectives have

been defined as follows:

1. Development of strategy options with respect to provincial copper

and byproducts development including production, smelting refinement,

fabrication and marketing at all levels.

2. Coordination of liaison with other governments, departments,

agencies and individuals.

3. Consolidation of current data and studies, including review of

submissions to date. Identification of further study requirements and

initiation, and supervision of specialized studies concerning the

economic social and environmental impact of any strategy option.

I want to say, though, in making this announcement that this

is a joint study with the Department of Industrial Development.

The Minister of Industrial Development, Trade and Commerce

(Hon. Mr. Lauk) has been discussing this question with me, and

the task force is made up from both departments.

The copper task force is jointly sponsored by the Department

of Industrial Development, Trade and Commerce and by the

Department of Mines and Petroleum Resources. The group is made

up of representatives of government, industry, labour and the

university community.

My deputy, Johnny McMynn, will act as chairman of the task

force, the remaining members being: W.M. Armstrong, Deputy

President of the University of British Columbia and professor

of metallurgy; J. DeWolfe, economist; L.C. Hempsall, Associate

Deputy Minister of Industrial Development, Trade and Commerce;

H. Horn, director of mineral revenue,

[ Page 2506 ]

Department of Mines and Petroleum Resources...

MRS. JORDAN: It's an incestuous team.

HON. MR. NIMSICK: ...H.L. Keenleyside, past Deputy Minister

of Energy, Mines and Resources in Ottawa; C.E. Sawyer,

management consultant; and E.T. Staley, past president of the

B.C. Federation of Labour and general vice-president of

the Canadian Labour Congress.

It is my hope that that task force, when they bring in their

report, will either get the industry moving or else the

province of British Columbia will have to...

MRS. JORDAN: You'll take it over — here comes the

threat.

AN HON. MEMBER: Which way do you want to move?

HON. MR. NIMSICK: ...move towards processing these minerals

within the....

MR. G.B. GARDOM (Vancouver–Point Grey): That's a

takeover; that's a takeover right now.

HON. MR. NIMSICK: There's nothing to take over because there

is no copper smelter at the present time. When you're talking

about a takeover — that's not a takeover, that's doing

something that private enterprise is failing to do. It is my

opinion...

MRS. JORDAN: You're going to build your own Ocean Falls.

HON. MR. NIMSICK: ...that if private enterprise fails to do

the things that are necessary for the benefit of the people of

British Columbia, then the government must move into that

breach and do the job.

MR. FRASER: The people will give you a pick and shovel.

HON. MR. NIMSICK: I've had a pick and shovel before, and

I've used it too. I'm sure there are some people here who

wouldn't know what a pick and shovel was.

MRS. JORDAN: Oh, a vicious attack.

HON. MR. NIMSICK: Now, Mr. Chairman, I'm going to leave it

open for any questions. I'll try and answer everything that you

put before me, but be careful that you don't transgress on the

Chairman because I have not done so, so far.

MR. F.X. RICHTER (Boundary–Similkameen): I appreciate hearing

the Minister here today. It is with a very heavy heart that I rise to

rebut some of his statements. You know, somebody made a remark that I

should put my hat over my heart — when you're lamenting a fact you

usually remove your hat; it's like at a funeral.

I feel very badly in that the Minister of Mines was going to

do such a great job with this department that I left, I

thought, in good hands. Now it's headed up under the Department

of Lands, Forests and Water Resources, so the Minister has

actually become a puppet or subservient to the Minister of

Resources. And if you don't believe that, look at the top of

your estimates — it states quite clearly, Lands, Forests

and Water Resources. So the Minister is really not a Minister

of the department, he is a figurehead or titular head of what

was the Department of Mines and Petroleum Resources.

He has stated quite clearly that he didn't need an executive

assistant, no, because the executive assistant is already

established down on the first floor in the Department of Lands,

Forests and Water Resources. There's a number of executive

assistants there, so he really doesn't need one over across in

the Douglas Building.

MR. BENNETT: He's just collecting the cheques.

MR. RICHTER: The Minister has made a very, very serious

reflection on the departmental advisers — that they gave

such poor advice previously to the former Minister, and that

the policies that were....

HON. MR. NIMSICK: They had a poor Minister, that was

why.

MR. RICHTER: Of course, that's your opinion probably, and I

have an opinion too; I'm not going to mention it right at the

moment.

The advisers of that department are very conscientious

people; they have done a good job, and I still think if you

would take their advice you'd do a much better job than you are

doing at the present time. But you had to import an adviser who

has no background in the mining field whatsoever and, of

course, it hasn't enhanced the operation of your department one

little bit.

The reason we haven't got a copper smelter in the Province

of British Columbia is because there were two on line to come

into production when I was Minister, but the NDP government cut

them off at the pass. They just wouldn't let them operate. One

was in the Minister's own constituency, the other one in the

constituency of Cariboo.

The Minister can't be credited with all the production that has

taken place in 1972-1973 because those mines came on line much before

the present Minister was installed in that position.

[ Page 2507 ]

Further to that, the Minister hasn't opened a new mine since

he's been in the position — some 18-odd months or

more. So because the other mines were established, that doesn't

prove that his administration has created this higher

production.

As far as the revenue is concerned, we have had a vast

increase in price in the metal market of the world;

consequently, it's going to reflect in dollars and cents.

The amount of production, yes, it's come up for the simple

reason that these new mines were just coming on line and hadn't

got into their full productive capacity, but now they are. And

I'm happy they're producing as they are. If they were not able

to produce in the capacity that they are producing today, they

would not be economic because many of them are working on ore

bodies that were passed over in earlier years — when I

say earlier years, I mean back in the early '30s and the '40s — for the

simple reason that technology had not advanced

to the stage where they could process this low-grade ore

and get the benefit of that resource. That technology was not

available because the necessary power, the necessary investment

capital was not available to put them into production.

Consequently, today we are mining ore that was heretofore

undesirable. There are a number of them — Brenda Mines is

a prime example. The ore body is very, very low grade and the

policies of this government could kill that very operation

along with a number of other marginal operators.

But now that the Minister has obtained this promotion to

being subservient to the Minister of resources of the province,

I harken back to the early stages of the Minister's appointment

as Minister of Mines and Petroleum Resources in September of

Now, at that time, Mr. Minister, you made a statement, a

very, very profound statement. The statement was this: "It is a

complete new ball game for the mining industry in this

province."

Mr. Minister, what a ball game. You haven't hit one ball

yet. You've struck out on every occasion you've gone to bat.

You haven't even made a run. When you hit the ball, you

couldn't even get down to first base. Let me tell you, Mr.

Minister, you've been a dismal failure as a ball player. I

could even go further than that, but in deference to you,

because of the years that you have served in the House, the

years you have tried to represent your constituency, I'm going

to spare you that embarrassment.

In the past, Mr. Minister, and presently, you have represented a

constituency whose entire economy has been dependent on the mining

industry — that is, the Kootenays — and more so since the electoral

boundaries were moved, throwing the Fernie area into your constituency.

You haven't made any marks there, not even black ones, because you have

persecuted the mining industry on every corner that you have attempted

to bring in a policy which would encourage a very, very risky business

in this province, based on the very low-grade ore bodies we have to

work with. We have no monopoly in this province as far as supplying

metals for the world is concerned. Even if we took into consideration

our highest producer, copper, it is an extremely small percentage of

the world requirement.

I know the Minister realizes the importance of a healthy

mining industry to the economy of the province because he has

already mentioned today the number of jobs. He says it's not a

job-intensive industry. I tell you, it's a highly

technical requirement that's needed in the industry today to be

able to survive with competition. The spin-off in service

industries that are associated with the mining industry amounts

to a very, very substantial number of positions to the economy

of the province because every community has to have local

services for the industry, and because of the nature of it, they

have to have highly skilled people.

The present metal prices on the world market are very high,

but that hasn't always been so. Only two years ago the return

to the mining industry on the invested dollar was something in

the neighbourhood of 0.04. It was slightly higher the following

year, and last year was a good year. But if you take over the

course of time, I can recall when we were getting 35 cents for

copper at Copper Mountain. They felt that they could operate

quite successfully on 38-cent copper. But surprisingly enough,

they too closed down, and costs of mining at that time were not

anywhere near in the category that they are today. Supplies

were not that expensive. If we continue to follow the policies

of the NDP government and this Minister of Mines, we're going

to find a lot more mines closing down because they will simply

not be able to compete worldwide.

The legislation that you have passed in the last session or

two has had a very detrimental effect on the mining industry.

It's jeopardized development and exploration. Mr. Minister, you

said that we were depleting a non-renewable resource, and

I grant you that. It is a non-renewable resource. But

what are we doing about discovering the potentiality of the

mineral resources of this province? Nothing.

It's slowed down to a slow walk, and it's only got one more

thing to do, and that is stop. It can stop if we get any more

policies such as you have enunciated, such as you have brought

about by way of your legislative programme in the past. The

future could also spell doom. I don't wish to see this industry

killed completely — we need it. It's the

second-highest revenue producer to this province, and

could and would have been the highest revenue producer had the

policies of this government not been pressured onto the

industry as they have been.

[ Page 2508 ]

There has been a decline in revenue to all levels of

government, and there will be, through the policy the Minister

intends to enunciate. There has been a complete uncertainty.

Just because you're coasting now on the impact that the

previous government created, don't think for a minute that

these ore bodies...because the Minister has said they're

depletable, and I know some that will be depleted in 1975, and

they have nothing to go on. Now you're going to lose revenue,

if you're not producing and you're not discovering. Look at the

rate of your mineral staking. It's gone from a good high level

and has dropped in the last two years by better than 60 per

cent, and will be going down further because there is nothing

to encourage anybody to stake mineral claims today.

There's complete chaos in the financial field as far as....

Interjections.

MR. RICHTER: Well, I could say that the Attorney-General

(Hon. Mr. Macdonald) needs to take a few

lessons in mining or needs to come out; I'd like to take him

out prospecting, particularly if he could get a grant to sort

of pay our expenses.

MR. R.H. McCLELLAND (Langley): Give him the $4,000 and send

him out into the field.

MR. RICHTER: Well, we're not supposed to talk about any new

bills, Mr. Attorney-General, because the Minister told us

that he was going to keep away from them, and I'm going to

respect the rules of the House. But let me tell you, I can

tiptoe through the tulips just as well as the Minister can or

anybody else in this House. I don't know how I smell,

though.

The investment funds, as I mentioned, are so frightened with

what is happening with the policies of the Minister or, let me

say, the tsar of resources policies in which the titular head

of the Department of Mines and Petroleum Resources carries out.

They're so frightened as far as the investment dollars are

concerned that the whole prospectus of the industry is in

complete chaos. Interests in all levels of society and the

industry — prospectors, large and small placer miners,

hard rock mining, engineers in all the fields, along with the

supply industry — have shown by way of representation to

the Minister what effect this is having on their industry, what

effect it was having on their jobs. The layoffs are coming

today, not tomorrow. They're here today, because the work is

not there. There have been very extensive cutbacks on

exploration for this year, exploration programmes. This is

going to continue — there's no question about it — as long as we have

the policies that are presently being

enforced on the mineral industry.

I wonder what the Member for Rossland-Trail (Mr.

D'Arcy) will have to say to the people who work on the hill and

the shopkeepers in Rossland, Trail and Castlegar, when he goes

home after we find many new programmes and policies brought

into effect as we progressively work toward the end of this

legislative session. When we have prorogation, I'm sure

everybody is going to waltz off to their own constituencies to

report. I just wonder what the Member for Rossland-Trail

is going to have to report. I wonder what the Member for

Kootenay (Hon. Mr. Nimsick) will tell the people in Kimberley

when it turns out that he's killed the goose that lays the

golden egg.

I suppose the mining industry will have a real big day, a

celebration, when the Minister comes in town. All the miners

will come out of the old Sullivan mine, you know, and really

celebrate the fact that they're going to be done out of their

jobs, or they're going to find that they're going to have to

move to other provinces to try and find work.

Mr. Minister, this is a sorry, sorry day for the mining

industry in British Columbia. Surely the present Minister can't

be the author of these policies that are being implemented by

the government. I wonder if the real Minister, if he were here,

would please stand up.

AN HON. MEMBER: He's not here.

MR. RICHTER: I just wonder, because the present Minister of

Mines as I know him is not that type of a man. He has worked in

the past with the largest mining company in Canada. He got his

start there with a pick and shovel or something of this nature,

but he did handle nuts and bolts, I know, in the stores. He's

had a full career in the mining industry. How in the name of

common sense he could promulgate such policies is more than I

can understand, and I think they're more than he can

understand.

MR. PHILLIPS: I think he's got a loose screw.

MR. RICHTER: It's deplorable; it's depressing. What's the

government going to do on their northern policy development in

this vast territory up in the Omineca mining district? What are

they going to do in relation to the programmes that they had so

hopefully worked toward getting underway through new access

roads and so on, when we find that they're going to be

suppressed to the point that they'll wonder whether it's

worthwhile going ahead? There are a lot of little people who

have invested their dollars and cents in shares of developing

mining companies, hoping that the mine will get into production

and they'll get a return or a dividend on their investment.

There's no chance whatsoever for

[ Page 2509 ]

these people. There's no hope as long as we have

the

situation as it is today.

What is the intention of the socialist government in respect

to future mining in the province? When will you fully implement

your philosophy and take over the mineral industry and the

petroleum industry in British Columbia? You know, Mr. Minister,

it's so very, very obvious that the resources of this province

are going to be controlled completely as to production, as to

exploration. Every phase of our resource industry is headed for

state control. The Minister knows that because he's been told

by the tsar of the natural resources of this province — the Minister of

Lands, Forests and Water Resources (Hon. R.A.

Williams).

AN HON. MEMBER: It's a direct statement of government

policy.

MR. RICHTER: What are the 14,500 employees that were on the

payroll in 1972 going to do in that case? Well, it's very

obvious they will be subsidizing the government revenues so

that the government can pass it back to them in wages and say:

"Well, look what a good fellow am I." It reminds me of Tom

Thumb and the plum. What is going to happen with the additional

people in the service industries? Undoubtedly they will be

under another programme that this government has instituted

whereby they have set up the service industries — Icky-Bicky, you

know, Mr. Minister, all about it. That's

what you'll have to do — you'll have to set up the

service industries. But it will be all right. You'll set up the

service industries because you've got lots of political heelers

who you can put into these positions.

That won't help the mining industry one bit because you can't show

me in any case where a resource industry has been nationalized that

they have been able to operate economically. You can't show me one

case — Sweden, South America.... You know what happened to Anaconda.

Your Deputy Minister knows. You know what happened to Imperial Oil, and

what's happening to them down in South America now. Are we going to be

a banana republic like our Premier likes to expound on? Nobody wants a

banana republic in British Columbia. Sure, we're the banana belt, but

don't need a republic. We have resources. With mining resource in

itself we are blessed with a very, very vast fortune there, but as long

as you don't explore, develop and bring into production as you require

these things, sustain the flow of revenue in the interest of society,

then you're going to come to a vacuum, and that vacuum will be the day

when — what have you got now, 29 mines operating? — when you see that

fall. Even if it falls by half you can be assured that your revenue is

going to fall by half unless, of course, you bring in other policies

in which you extract beyond the ability to pay from the mining

companies.

In the end you'll have to put them under state ownership. You'll

have to put them under state ownership. You'll have to

operate them. You'll be back, Mr. Minister, as a mine foreman.

You never did obtain that stage before, but there's no reason

with the years of experience now.... You might make a fairly

good mine foreman — or a straw boss, anyway.

MR. PHILLIPS: He'd probably botch up that job too.

MR. RICHTER: The amount of taxation that the mining

companies pay is a point on which the public are not fully

apprised. Let us be current. In 1973, through the B.C. mining

tax, the property and school taxes, social services tax,

corporation income, portion of the employee income tax, gas,

fuel and oil tax, royalties where they applied, Crown grant

payments, lease rentals et cetera, coal licences and various

other charges such as the Workmen's Compensation Board, this

province took in almost $71 million. The municipalities in that

year took in over $5 million from taxes and these charges. The

was $134.5 million in revenues. Now, the mining companies don't

mind paying taxes. They are corporate citizens, and they want to

pay.

MR. CHAIRMAN: Order please! I would just caution the Hon.

Member that he's almost stepping on a tulip, and I would ask him

to be careful with his remarks. We're dealing with Bill 31.

MR. RICHTER: At this stage of the season the tulips are

pretty well done, and really you should step on them a little

bit just to push the bulbs a little deeper. It's better for

rooting next year. I used to be in agriculture at one time, and

I used to grow tulip bulbs by the thousands. They're an

interesting study. Sometime you should study them. I would

suggest any time now would be a good occasion.

The very fact that mining does, through its various

contributions to the province, contribute a very great deal,

and they were not above contributing more on the ability to

pay. Your own report, Mr. Minister, indicates quite clearly

what the revenues of the province are from the mining industry,

and they're very sizeable.

Some mining companies back in 1972, because they had certain

federal tax concessions, were cut off at the provincial level,

but they did have incentives, and they paid taxes. One

particular one paid taxes of $3.75 million. In 1975 this will

amount to some $14.5 million, and I'm not talking in terms

either of what pending legislation may reflect in that way. But

let me tell you, Mr. Minister, when I talked about killing the

goose that laid the golden egg, the people you will really have

to explain

[ Page 2510 ]

this to will be your own constituents. I mentioned

earlier

the very fact that in 1971 the return to the shareholders was

very low — 0.4 per cent loss. That's not 0.4 per cent on

their investment, but it's a loss....

AN HON. MEMBER: He wouldn't understand that.

MR. RICHTER: In '72 they only receive about 1.7 per cent.

Now, if you're, going to encourage investment capital, whether

it's the pensioner who wants to build up an equity for future

living accommodations, what he wants to do in the future, if he

wants to sustain his standard of living.... Certainly it's not

the mining field that you want to put it in, is it, Mr.

Minister? I'll bet you, Mr. Minister, you don't own one mining

share.

HON. MR. NIMSICK: I hope not.

MR. RICHTER: No, because

section 5 of the mining Act....

HON. MR. NIMSICK: I shouldn't be here if I did.

AN HON. MEMBER: You shouldn't be here anyway.

MR. RICHTER: No, I would agree with you. So, Mr. Minister, I

don't feel envious of you in the position you have put yourself

in and your colleague has put you in, relegating you to your

secondary position. I don't appreciate this because I think the

mining industry needs more than this. I think they're entitled

to more than this. I can't for one minute feel that you are

really encouraging this industry, building it up to what it

should have been by this time, because the incentive for

development, for improving has dissipated to nothing, the mines

that are at the point of no return must go on, and they will go

on because they are committed. I don't look for a happy future

or an encouraging future for the mining industry of British

Columbia.

Interjection.

MR. RICHTER: Yes, that is about the attitude the

Attorney-General (Hon. Mr. Macdonald) would take. The whole story on

Lornex has

not been revealed in that the fact that they did have certain federal

tax concessions has placed them in a relatively good position in this

financial report. Mr. Attorney-General, Lornex isn't all that high

grade. Their next report and the one after that, before you go to the

general election, will be something to open your eyes. Please, Mr.

Attorney-General, don't invest in that company for the simple reason

you have said that they are too well off now. So you can expect to lay

the wood to them because that can be expected from the government on

the other side of the House.

HON. MR. NIMSICK : I'd just like to reply to the lead

speaker of the opposition in regard to the mining industry. He seems to

think that we're in an awful panic to get rid of our resources as

quickly as possible. The day of depleting these non-replenishable

resources for profits and profits alone is over. We're going to deplete

this resource for the needs of the people, not only of this generation

but of the next, and you should have some consideration in that regard.

I have been in this House for a good many years. I was a

speaker on behalf of the Mines department from the opposition

side, and for years I advocated the very things that I have

brought into force today. If a person is doing nothing, as has

been done in the past, you'll get no criticism. But if you're

doing something, that's the only way to get criticism. The day

of the incentive such as the federal government gave — the three-year

tax-free period — is finished this

year. But when you say to an industry that if you can get all

that ore out of there in three years and you don't have to pay

the people anything for it, that is wrong. And the federal

government has realized that. Now they are changing that story,

because according to the statistics that we have got, by the

year 2000 we won't have enough copper and lead and zinc, and

we'll be going hungry at that time with all the reserves that

we've got today, at the present time. So don't try and tell me

that we should be producing millions of tons more at the

present time just so that we can get rid of it as quickly as we

can. The minerals in the ground are really like money in the

bank, not only for this generation but the next generation as

well.

AN HON. MEMBER: You've got to find them first.

HON. MR. NIMSICK: They're never lost; they're always there.

That's one of the ideas that some people have got — that

they must be found.

When you talk about how much the companies have paid in

taxes and that, I'd like you to figure out the percentage of

your income you pay in taxes as well, and then you'll find out

that we all pay taxes. One of the questions, when we talk about

depletion, is our oil and gas situation today. When they tell

us that 15 years down the road we're going to be out of oil and

gas, it's just a little bit scary, I'd say, because it's very

bad to think that we're going to be out of oil and gas in not

too long a time. Don't ever think that it's unlimited, because

once it comes out, it's gone forever.

You talk about finding more copper resources.

[ Page 2511 ]

Right now in British Columbia we've got

two and a half times the reserves of those in

operation, of what we're producing. We've got quite a bit of

reserves. You talk about exploration going down, but in 1972,

it was $31.3 million, and in 1973, with only 79 per cent of the

returns in, it's $24.7 million.

MR. PHILLIPS: Down!

HON. MR. NIMSICK: Yes, but there are only 79 per cent of the

returns in. In 1972 we had 1,030 reports; today, so far, we've

got 908 reports in. So the actual exploration will not be down

in 1973.

When you make high capital investment.... You talked about

a few years ago when there were low returns. The companies at

that time made very high capital investments. When you make

high capital investment, your returns are bound to be down to

the shareholder. When you talk about mining experience, I cut

my teeth on mining in the Province of British Columbia. I was

in a town where they depleted the mines. I was born in a town

where the mines were depleted. We built the City of Spokane on

the revenues from the mines at Rossland. That's what happened

there, and I don't intend to do that in the Province of British

Columbia for the future.

The mining association forecast in 1970 a steady decrease in

capital expenditure up until 1975. At that time they were

making this prediction according to the records that are

available. When he talked about two copper smelters being on

deck when he left office, the copper smelters in Kimberley at

that time you were going to subsidize by $2.5 million. We said

that we didn't see why the taxpayers of British Columbia should

subsidize a mining company that was as rich as Cominco, to the

tune of $2.5 million. We offered to participate in the smelter

in Kimberley at that time. And Brenda and the other mining

companies today — when you look at the papers, don't

worry too much. I wouldn't shed any tears for them because I'm

sure that they're going to do all right.

Copper Mountain, you said, was operating at 38 cents. It made

profit at 11 cents a pound at one time. Copper Mountain at that

time was finally depleted.

You state mining will stop. That is a terrible statement to

make, to my mind, in a province such as British Columbia, that

when the people of B.C. want a fair share of the resources

we're going to deplete them.

But we're going to manage the resource, as I said before, on behalf

of the people of British Columbia and on behalf of the future

generations as well. And those are no mean words at all. I mean that,

and I'm sure the previous Minister should know that this should be the

situation, rather than to come out and try to state that this

department is a secondary department.

This is a top department, but it only became a top

department since the New Democratic Party got into power.

Previously they were only operating from the direction of the

industry. Let me tell you, we have fine men in our department.

The people who are in my department are very fine men. Sure,

we're on a different philosophy than that which you have been

on. And they're operating under that philosophy, not your

philosophy.

MR. G.F. GIBSON (North Vancouver — Capilano): I have a

few differences with the Minister. I agree with him that this

is one of the most important departments in government because

it deals with the second most important industry in British

Columbia, unquestionably.

Yet at the same time, Mr. Minister, I wish that your

department seemed more important in financial terms. The

forestry service alone, which is perhaps our most important

industry — perhaps three times as large as the mining

industry — manages to spend 15 times as much in the

service of that industry as your department does.

So I don't blame you for that; I blame the Treasury Board,

the people who are parceling out the money. I'll support you

any time in saying: "Let's have more money for the Department

of Mines to help the mining industry." I just wanted to put

that little plug in for you first of all.

Now after that I want to react a little bit to your

announcement about a copper task force. Mr. Minister, it's

disgraceful that we don't have a copper smelter, a building in

British Columbia right now, when your government has been in

power for 18 months. I thought you were a government that got

things done. But what you've done has been to scare off the

industry that was very interested in building a copper smelter

in this province.

HON. G.R. LEA (Minister of Highways): As long as the people

paid for it.

MR. GIBSON: Letters to this government by the industry

asking for co-operation and discussions on building a

copper smelter in the Highland Valley and elsewhere in this

province went unanswered, and still are unanswered. What kind

of co-operation between the government and the industry

is that?

Where are the pollution control regulations for a copper

smelter, Mr. Minister? How can you properly design a copper

smelter without the pollution control regulations that would

relate to it? Why doesn't your government produce that? Maybe

that had better be one of the first things that your copper

task force looks into.

The fact of the matter is that your government has been

standing in the way of getting a copper smelter

[ Page 2512 ]

put together in this province — and the jobs that

would create. And it has been in no little consequence the

application of New Democratic Party dogma that has led to this.

It's the same old game of making a vacuum and then saying:

"Well, private enterprise hasn't produced, so we have to rush

in and fill this vacuum."

Mr. Minister, is there going to be a representative of the

mining industry on your copper task force? Or are they going to

be working with the mining industry? Are they going to hold

public hearings? I hope they are going to hold public hearings.

There are a lot of people who have views on this. Not just the

industry, not just the people who work in it, but many people

around the province have views about how and where a copper

smelter should be, what the pollution control factor should be,

and so on.

Mr. Minister, I hope you'll tell us later on that this

copper task force will hold public hearings and that they'll

get off the mark pretty quickly, because we're sending too much

copper out of this province untreated. As I say, it's just a

disgrace that plans aren't further along at this point. To have

to announce a task force is about the ultimate in political

bankruptcy at this stage.

Now the Minister spoke a good deal about safety, and safety

is very important. But what he didn't talk about very much is

the preservation of all of the jobs in the industry. He said

1973 was a wonderful year. Mr. Chairman, there was a remarkable

achievement by the Minister in 1973. I hope it never happens

again. It was a miracle that the Minister produced in 1973.

In the midst of the highest prices and the highest profits

that the mining industry has ever seen — which happened in

1973 — in the midst of those buoyant and bountiful

conditions, he's managed to strike gloom and despair into those

who would do something about building the future of the mining

industry in British Columbia. I'm going to give him some

indicators about that in a few minutes.

First of all, let's talk about profits because, you know,

Mr. Chairman, there are those on the other side of the House

who think that profits are indecent — a bad thing. I'm

glad to see the Minister shaking his head, Mr. Chairman. I'm

glad the Minister of Mines doesn't believe that, but a lot of

his colleagues do.

You remember the NDP newsletter that had the big headline

about how many hundreds of millions of dollars of profits there

were in 1973; there was something wrong with that. Profits

aren't a bad thing. The Minister agrees with that; that's

wonderful.

So let's not hear any more snipes from the Attorney-General about

the profits of various mining companies. Let's instead look at it

sensibly. Let's say: how do we best get a share of those profits for

the citizens of British Columbia? Surely that has to be the question,

rather than sniping at profits. I want to quote what Mr. J.L.

McPherson, president of the Canadian Institute of Chartered

Accountants, said last week. He said:

"Profits is not a dirty word. It's a word that spells

activity, jobs, opportunity, social systems to care

for the handicapped, the sick and the underprivileged.

Governments must join business to explain the situation instead

of criticizing business and threatening the stability of the

country.

"A profit, however large, is not satisfactory and

never will be if it is less than the return that

business could have got in a risk-free investment such as

government bonds. A company making a percentage rate of return

that is less than the risk-free rate of return is in fact

making a loss and not a profit at all."

So let's examine profits in that light. What has been the

overall profit of this industry over the years? The Investment

Dealers Association of Canada made an excellent submission to

the government of a bill — which I don't propose to talk

about, because we can't under the rules at this time. But they

did, in that submission, give figures for the rate of return of

the British Columbia mining industry for the last six years,

1973 not then being available, and the figures were as

follows:

Rate of return in 1967 — 17.8 per cent; 1968 — 11.8 per cent; 1969 —

16.2 per cent; 1970 — 8.5 per cent; 1971 — minus 1.1 per cent; 1972 —

1.7

per cent. They have 1973 down as not available.

I'm going to guess, Mr. Minister — in 1973 — I'm

going to guess that the rate of return on equity in 1973 was an

all-time record, something between 20 and 25 per cent;

that's just a guess. That would make the seven-year

average rate of return of the mining industry around 11 per

cent. Canada Savings Bonds are now yielding about 7.5 per

cent.

I want to ask the Minister and ask this House and ask the

people of British Columbia if that extra premium of 3.5 per

cent is an adequate return for the investor in the mining

industry for the risk he takes. Because there are a lot of

risks, as the Minister knows full well — a great many

risks.

Mining is a difficult business because it starts out with

the fundamental difficulty that you can't see underground.

That's the basic problem of mining. A lot of people think there

are just diamonds lying around waiting to be picked up. That's

what they think when they say the mining companies are ripping

off the people. But there are not diamonds lying around to be

picked up. It's all down there somewhere under the ground, and

you don't know where it is.

You start off with rock, and then people go out and look at

that rock, and 99 per cent of the time they're wrong; maybe

99.9 per cent of the time they're wrong. Perhaps 999 out of

1,000 of those

[ Page 2513 ]

risks don't work out, don't find a mine. The

Minister knows

that. That's a big risk. That's the risk of the little man.

That's the risk of the prospector. That's a big, big risk.

The second risk comes at the stage of the developer, and the

third risk comes at the stage of the producer. I'll go into

that later on. But the fundamental point I'm trying to make is

that it's an industry of high risk, and that risk has to be

rewarded.

Otherwise, the people who would take that risk would take

their activity elsewhere. The prospector can take his activity

elsewhere and work for a secure living. The investor can take

his money elsewhere and put it in Canada Savings Bonds or in

second mortgages yielding a good deal more than the average

rate of return in the mining industry by a long shot — and

a lot safer.

How do we find the evidence that this industry that looks on the

surface so healthy, so prosperous — perhaps $250 million

worth of profits in 1973 (and I am guessing; the figures aren't

out yet. but they are educated guesses) — can in fact be in

such ghastly shape? How can we tell that?

We can tell it in several ways. We can look at what is

happening in claim-staking. In 1973, claim-staking

was down roughly 60 per cent — a 60 per cent decline in

claim-staking. That was just in 1973; that was before the

infamous Bill 31 was introduced. That was just under the terror

of the Mineral Land Tax Act which I will get to in a

little bit. That was just beginning nervousness, not nearly the

nervousness in 1974. I have some figures on that too.

Another way we can tell it, Mr. Minister, is the decline in

claims in good standing. The usual figure of claims in B.C. in

good standing throughout the early part of the '70s, I am told — and I

would much appreciate the Minister's advice on

this because I find it very hard to get hard figures on this — has been

around 250,000. I am told the number of claims

in good standing as of the end of March 1974 was on the order

of 135,000.

There is a drop in claims in good standing of — I will

do the arithmetic quickly in my head — something like 40

per cent. In other words, people don't even think it is

worthwhile hanging on to those claims anymore. What is going on

here, Mr. Minister? That is an indication of serious ill

health.

We have a statement of the B.C. and Yukon Chamber of Mines,

which is certainly one of the more representative bodies of the

British Columbia mining people. It doesn't represent the big

companies; the Mining Association of British Columbia

represents them. It doesn't represent the unions in particular,

though many unionists are members of it. It represents more the

prospectors, the supply companies and so on. I think the

Minister would agree with that.

Here is what the British Columbia and Yukon Chamber of Mines

said about exploration:

"A recent survey of exploration budgets for British

Columbia

conducted by the chamber in 1974 indicates that, since the

Mineral Royalties Act was introduced, intended

exploration expenditures have been reduced to $14.5 million

from $29 million.

"It is important to observe that only $26.5 million

was

expended on exploration in the province in 1973 after Bill 44

when provisions for the discretionary granting of production

leases was introduced. When this matter was satisfactorily

resolved by amendment of the Mineral Act in the fall

session and the government announced the postponement of

royalty legislation, the industry felt it could place greater

trust in the government."

What a mistake they made, Mr. Chairman.

"The industry actually intended to spend $2.5 million

more

in 1974 than it had in 1973."

The accompanying chart goes down, straight down. They go on

to say:

"Forecast exploration expenditures in 1974 are the

lowest in

a decade. 1975 will witness a further decline unless confidence

is restored and as 1974 expenditures largely represent

continuation and completion of earlier commitments for property

work."

In other words, it is not new work being done now; it is

just the unavoidable follow — on for certain special

situations.

"No new mine construction prospects have commenced

since

1971. Several companies have been forced to postpone mine

development and production plans as a result of previous

statements by the government until such time as promised tax

legislation was introduced."

Mr. Chairman, that is a sad commentary on the health of the

industry. Those 1973 profits are not going to continue. The

Minister knows why those 1973 profits were there: it was the

price of copper. To some extent the price of silver was very

helpful; the price of gold has been helpful. But copper is the

big one. Copper is more than half of our mineral production in

British Columbia: over $500 million worth and

750 million pounds. The price of copper in the world

in 1973 was at an all-time record high. It is

still up there in the clouds, but we can be reasonably certain

it is going to come down.

I have here a chart showing the price of copper; the London

Metal Exchange wire bar price, the settlement basis from

1948 through the beginning of 1974. It looks

like the mountains of the moon; it is up and down. That is what

the price of copper is like. That is why it has been the hope

of mining companies in the past that, in good years, they could

recover

[ Page 2514 ]

their investment and make a bit of a profit. In bad

years,

they would hang on. I can quote exact figures of these prices

over the years, but I don't know that it would be helpful; the

principle is there. The principle is that 1973 was a very rare

year, and it would be very unwise to predicate treatment of the

industry on the basis of 1973 conditions continuing on into the

future. Very unwise indeed, because we are just not going to be

that lucky.

So I hope I have made the point to this stage. Profits have

a place. We should seek to get more out of those profits for

the public well-being, particularly in exceptional years

such as 1973. We should leave the investor enough for a fair

rate of return. Finally, the mining industry is tremendously

sick right now, in spite of its apparent robust complexion.

MR. R.T. CUMMINGS (Vancouver–Little Mountain): The

whole world has rejected them.

MR. GIBSON: The Member for Vancouver–Little Mountain

says the whole world has rejected them. By them, he means the

copper companies, I presume.

MR. PHILLIPS: He's the big man from Little Mountain.

MR. GIBSON: I am going to tell the Hon. Member, Mr.

Chairman, a little about copper conditions in the rest of the

world, and of other metals too. I can assure him right now that

they haven't rejected this business in the rest of the world.

British Columbia is pretty unique in this circumstance.

Many of the Members, I think, on the government side have a

feeling that it is almost wrong to take minerals out of the

ground and do something with them. It is better to leave them

in the ground.

AN HON. MEMBER: It is better to leave them in the ground

than to give them away!

MR. GIBSON: "It is better to leave them in the ground than

to give them away," says a Member. Of course; but who is

giving them away? Nobody is giving them away. We are getting

top dollar. We are getting well over a dollar for our copper

now, Mr. Member. The Member doesn't understand very well.

There are a lot of people who honestly believe we are

consuming the resources of the earth too quickly — and

that includes minerals. When you have that point of view, it is

not difficult to come to the conclusion that anything that

slows down the extraction of minerals is necessarily a good

thing. There are people who feel that way.

Well, there are some difficulties with that philosophy, and I am

going to speak that philosophy because I do think it is fundamental to

some of the people on the government side.

The first difficulty is that minerals play a very direct

role in our standard of living. If you want to try an

interesting exercise, think of your daily activity. Think of

what minerals have to do with it: reading a book that was

printed on a press, watching a television set that is full of

metals; travelling, whether in public transit or in your own

automobile; eating the food that has been cultivated and

transported by metallic goods; putting on your clothes; closing

your door at night. Think of the chain of metal products and

metal inputs that have led to all of that.

Some people say we don't need all of these things. Let's

rule out some of them. Maybe let's rule out private

transportation in a car; that's bad, that uses a lot of metal.

Hon. Members, let's say we were willing to rule out so much of

the use of metal in our lives that we would cut it by 50 per

cent. I tell you, most people wouldn't agree with that; they'd

think they were suffering pretty badly. But suppose we tried

that.

What you would find is that still wouldn't help us because

maybe a very large percentage of the metal now used in the

world is used in North America only. We have to consider

bringing the rest of the world up to the North American

standard of living, and that's going to take a tremendous

amount of metal. So any way you look at it there's a very good

reason for taking it out of the ground.

British Columbia has a contribution to make to the world in

terms of our metal. Coming back to that Member who said "Don't

give it away," certainly, don't give it away. Get a good

price for it, but also do the right thing, because that metal

can't do any good to anybody in this world as long as it's

underground. You have to take it out.

Let me tell the Members another interesting thing that many

don't realize. They seem to have the idea that because it's a

non-renewable resource it's a disappearing resource. It's

not a disappearing resource. It's used over and over; 40 per

cent of the copper that is ever taken out of the ground is

reused at least once and 60 per cent of the lead is reused at

least once.

There are even ways being sought of reusing the lead in

gasoline through capturing it from the so-called

catalytic converters. And that metal can't do any good until

it's out of the ground.

Now, Mr. Minister, through you, Mr. Chairman, the

contribution of the mining industry to this province is so

tremendous that I wish you had made more of a point of it in

your remarks. The revenues are only part of the picture, but in

1973 the revenues were either $935 million, depending on

whether you go with the mining association figures, or $899

million, if you go with your departmental figures. I'm

excluding fuels here from the production, which total

[ Page 2515 ]

around $105 million; but it does include coal.

This was up from $420 million in 1971 and $530 million in

1972, and represented an increase of about five times in the

last decade. That's a superb growth industry and one that we

should be very proud of here in British Columbia.

What were the wages and employment? The latest figures I've

been able to get refer back to 1972. We do have an employment

figure for 1973 of roughly 15,000 in direct employment. But as

for the actual wages and so on, in 1972 they were around $190

million, or around 35 per cent of revenue. And that's just

direct employment. Direct employment, as I said was around

15,000, around 2 per cent of the labour force; but, Mr.

Minister, it was paying 3 per cent of the wages. It's a

well-paid industry. It's going to be better and better

paid if it follows along in the wake of the 40 per cent

Craigmount settlement. It's a very well-paid

industry.

But in that same year of 1972 the industry paid out $365

million for goods and services, mostly within this province. In

addition to that, as referred to by the former speaker, taxes

were paid at all levels, federal and provincial, taxes

benefiting this province directly by some $93 million.

HON. MR. NIMSICK: You're using a lot of your ammunition for

Bill 31.

AN HON. MEMBER: He'll use it again, recycled.

MR. GIBSON: These things, like minerals, can be recycled, Mr.

Minister. The transportation expenditures of the industry — and this

is important because the Minister said it's

not labour-intensive....

AN HON. MEMBER: Don't worry about that.

MR. GIBSON: The transportation expenditures of the industry

in 1972 were $64 million. That pays wages on the trains and on

the trucks that haul these minerals.

In addition to that direct employment there were at least

two jobs, a little over two jobs, for every person directly

employed. The Price Waterhouse study that's generally done by

the industry each year calculated that 34,000 additional

persons were indirectly related to mines.

I personally think it's a lot more that that. A lot more

people than that pretty directly depend for their livelihood on

mines, Mr. Minister, because it's a basic industry. If you take

that away, everybody who cuts hair, draws legal documents and

all of these other things won't be supported by that basic

industry.

The industry has benefits of other kinds. The Minister is very

concerned about northern development. I know his whole party is. His

reliance, I would suspect, for the development of the northwestern

corner of British Columbia depends on mines, particularly on the

Stikine mine and on the Silver Standard mine, with a possible addition

of the Groundhog coal deposit as an energy source, and with the BCR

tying it all together in a transportation sense.

That's just an example of the kind of regional development

that mines have brought to this province. The mining industry

in this province provides us our balance of payments, because

everything that we bring into British Columbia from abroad,

whether elsewhere in Canada or overseas or the United States,

has to be paid for by something that we ship out of this

province. The mining industry provides, I would say, about 25

per cent of our balance of payments.

Mr. Minister, one thing I'm glad to see, and I hope you'll

take measures to further it along, is that Canadian control in

the mining industry has been improving over the years. It is

now some 68 per cent in 1972, which was up substantially from

58.5 per cent in 1971. Again I don't have the 1973 figures

yet, but the trend has been good.

It has been gratifying to see the trend of head offices

coming to British Columbia like Cominco and Teck. Things had

seemed to be going pretty well.

We have here a tremendously important industry that is

unwell in this province, and we have to wonder what to do about

it. We have to wonder in particular because of this critical

aspect of exploration.

I want to quote something that Mr. Charles Elliot of the

Mining Association of Canada had to say about exploration. In a

speech in Vancouver he said:

"Clearly we have failed to communicate the absolute,

the

essential, role of exploration function in our industry.

Exploration is mining's future. No government should permit

itself to be lulled into believing that because mines continue

to operate — yes, with today's prices, even thrive — that the industry

is not seriously affected by

progressively heavier tax burdens. Exploration is based on

incentive, and when you remove or diminish substantially this

element in the mining equation, stagnation sets in.

"Mines already in operation will continue so long as

any

recovery of invested capital is possible, thus creating an

illusion of continuing production prosperity. But there will be

a day of reckoning. If taxes and regulations under which the

mining industry must operate, either in this province or

anywhere else for that matter, become too onerous and

burdensome, exploration activity will dry up and the industry

will die with the inevitable exhaustion of known ore

bodies."

[ Page 2516 ]

Talking about the exhaustion of known ore bodies, talking

about leaving it in the ground, I want to tell the Members of

this House something about the availability of minerals in this

world. I'm just going to take one example, and that's

copper.

We produce in British Columbia around 5 per cent of the

world's copper at the moment. The world consumes 8 million tons

of copper a year. Now we have no monopoly of copper in this

world. British Columbia doesn't have all of the copper in

Canada, and Canada as a whole has only about 8 per cent of the

world's copper — known reserves.

If you look around the Pacific Ocean around the

so-called "ring of fire" extending up through

Alaska and down through Japan and New Guinea, the Philippines,

across the ocean again to Chile and up the other side, you find

all through that area examples of the tremendous porphyry

copper deposits that we are fortunate enough to have here in

British Columbia.

The difference is that our ore here in British Columbia is a

lower grade than any of the rest of it. It's a lower grade than

any of the rest of it. And it has come to be exploited only by

the putting together of a most remarkable group of

technologists, people who have been able to supply capital,

people who have been able to design the right kind of equipment —

geological consultants, the mining engineers, who have

found ways to treat that low-grade ore well.

Let's suppose now that we say: "Oh, no! We think that you

should leave a lot of that ore in the ground." What's going to

happen? The people who have to find copper are going to go to

other parts of the world — around the Pacific, down to the

Philippines where deposits currently being exploited are 4 per

cent instead of 0.4 per cent, and into New Guinea. Chile may be

unstable, but they'll move up to another country. They're going

to find that copper. In the longer run, Mr. Chairman, let me

tell you something else. On the floor of the Pacific Ocean are

these strange things called nodules.

AN HON. MEMBER: They're not strange. They've been there a

long time.

MR. GIBSON: They're strange to me, Mr. Minister. I find it

hard to visualize these enormous lumps lying down there. But in

any event, these nodules have a copper grade, interestingly

enough, of 0.53 per cent.

AN HON. MEMBER: Those are old anchors.

MR. GIBSON: No, the old anchors are particularly valuable.

They're hard to find way out in the middle.

The technology's being developed now to mine those nodules. As I

say, their copper grade is higher than the grade of copper that's being

mined in much of British Columbia today. Mr. Chairman, at current rates

of world consumption, just in those nodules lying on the floor of the

Pacific Ocean, there's a 1,000-year supply of copper of a higher

grade than we have here in British Columbia, that will be mineable more

cheaply once the technology is developed.

HON. MR. NIMSICK: A thousand years? Whose statement is that?

Where did you get that?

MR. GIBSON: Where did I get what, Mr. Minister?

HON. MR. NIMSICK: This thing.

MR. GIBSON: I got that from Professor Evans.

HON. MR. NIMSICK: Oh, no wonder. (Laughter.)

MR. GIBSON: I'll give you another statement.

HON. D.G. COCKE (Minister of Health): How can you make a

statement like "once the technology has been developed"? It's

not developed.

MR. GIBSON: Mr. Minister, I didn't know you'd be interested,

through you, Mr. Chairman. I didn't know you'd be interested in

that because I have some data along here about the development

of that technology. There's some $300 million being spent in

the United States this year to develop it by groups such as

Lougheed, groups such as the Hughes Tool Company, other groups

which are developing this technology on a very current basis. I

would suggest that it will be here in five years. I hope your

government can look that far down the road. Maybe it sees

something sliding across the road two years hence. I don't

know. But five years from now they'll be doing underwater

mining. We have to consider this as competition.

HON. MR. NIMSICK: We can't get people to mine on top of the

ground, let alone getting them to go down under the water.

MR. GIBSON: Exploration, of course, is so completely the

lifeblood of the industry. The average cost of finding metals

in British Columbia has been going up constantly. If those

expenditures stop, it means that we very, very quickly begin to

slide back.

I want to shift my remarks to another stage now. I hope I

made the point that British Columbia has to compete in this

world to sell our minerals, and that we shouldn't be talking

about leaving them in the ground unless, of course, we can't

get a fair price for them. But as long as we can get a fair

price for them, we're doing something good for the world by

digging them out.

[ Page 2517 ]

Now, this is something of absolute amazement to me to find,

but within the last month — I think without the knowledge

of this Legislature, but pursuant to actions taken by this

Legislature — this government has imposed a tax on half

of the mining industry, which is certainly immoral and stupid,

and it's possibly illegal too. I refer to order-in-council 1086. Hon.

Members will recall the

Mineral Land Tax Act passed last year, covering

Crown-granted lands. This order-in-council

was passed pursuant to the Mineral Land Tax Act .

Crown-granted lands cover the following producing mines

in British Columbia: Britannia Mine, Bethlehem Mines, Bulkley

Valley Mines, Cassiar, the HB Mine of Cominco, Pinchi Lake

Mine, Sullivan Mine, Giant Mascot Mines, Phoenix Mine, Granduc

Mines, Granisle, Jordan River, Kaiser Resources,

Kam-Kotia and Burkam Joint Venture, Annex Mine,

Ingerbelle Mines, Highland Bell Mine, Texada Mine, Tasu Mine,

Windermere Mine, Lynx Mine. Many Members will know those names

from their own constituencies around the province. This covers

about half the mineral production from the Province of British

Columbia. It's an order-in-council of enormous

import when you consider what it says.

I'd like to refer, for a moment, to the Mineral Land Tax Act ,

which one would be forgiven for assuming would be

considered a tax on property, a tax on land. Indeed,

section

5(1)(

b) mentions a tax "at such rate not exceeding 25 mills on

each dollar of the assessment of his designated mineral land

situated within the production area as the

Lieutenant-Governor-in-Council may by order

prescribe." Assessment on land.

Order-in-council 1086, aside from being a

vicious and deficient order-in-council in terms of

discretion, also purports not to be a tax on land but a tax on

the value of production. I'll come to the legality of that in a

minute, but first of all let me cover the morality of it and

outline some of the provisions of this order-in-council to this House.

It's not as if this were a well-known order-in-council. The

department, for perhaps

understandable reasons, didn't go out on March 28 and hand a

copy around to everybody on the street. As a matter of fact,

three or four weeks later we find mining men who should know

what's going on, mining on Crown-granted lands, who are

saying they didn't know what to do with their mines because

they didn't know what the tax burden was going to be, and yet

here it is. It's 1086. The department didn't send it to me,

whichever Minister asked that. I was able to obtain a copy.

It starts off with a bunch of regulations. Half a dozen of

them, anyway, are

definitions which relate to the discretion of

the Minister. It refers to costs approved in writing by the

Minister — "approved transportation allowance,"

approved in writing by the Minister.

" 'designated mineral' means designated by the

Lieutenant-Governor-in-Council;

" 'production tract' means any area in the province

designated as a production tract."

HON. MR. NIMSICK: You're going to get all balled up in

that.

MR. GIBSON: It's a very complicated document, I assure

you.

" 'Standard value' means the standard value prescribed

the Lieutenant-Governor-in-Council."

Here's a good one:

" 'Gross production revenue' means money or rights or

things

expressed in terms of money, or the value in terms of money of

the right or thing paid or credited to an owner as

consideration for the purchase or other acquisition from him of

the total standard measures of a designated mineral produced in

his production tract and sold by him during the calendar year

immediately preceding the taxation year or the value in terms

of money of a benefit to an owner as a result of the use by him

of standard measures of a designated mineral produced by him in

his production tract during the calendar year immediately

preceding the taxation year."

I read out gross production revenue, Mr. Chairman, because

what's called GPR (Gross Production Revenue) figures in the

formulas we're coming to now, and they're very interesting

formulas. We have these

definitions set out in

section 1.

Then we have

section 2 of the order-in-council,

which notes that there shall be a mill rate of 12.5 mills

applied to the assessed value of a production tract. Mr.

Chairman, when you hear that something is a mill rate, once

again you're led to believe there's a tax on property going on

here — a tax on land or on some fixed property. But now

we hear, under

section 3, that the assessed value of a

production tract shall be the sum of the products of the gross

production revenue from each designated mineral in respect of

the production tract, and the valuation factor for each

designated mineral determined under

section 4. This is where

the complexity starts, Mr. Chairman, because under

section 4 we

have the formula. There's formula A and B and C and D. I won't

worry the committee with any formula beyond formula A, because

that's certainly sufficient to demonstrate the point.

[Mr. Dent in the chair.]

Formula A, for those who haven't seen it, says:

F =

42GPR – 2(S + T) – 48(SPV)

GPR

[ Page 2518 ]

AN HON. MEMBER: That's pretty straightforward.

MR. GIBSON: When I saw that I said to myself, this doesn't

look like a usual property tax to me, so I put some numbers in.

Mr. Chairman, you know what comes out if you put in $1 copper

and a 55-cent standard value that the Minister had cited for

copper? You know what comes out? What comes out is exactly the

same royalty per pound of copper as under Bill 31 — that's all I'm

going to mention.

SOME HON. MEMBERS: Oh, oh!

AN HON. MEMBER: Legislation by order-in-council,

eh?

MR. GIBSON: When I saw that, Mr. Chairman, I said to myself,

there is something very strange going on here. Could it be just

at the $1 value that this happens? I'll send the Minister a

copy of the arithmetic if he likes, but it turns out....

HON. MR. NIMSICK: I've gone all through it.

MR. GARDOM: Alphabet soup, that's all it means to you.

HON. MR. NIMSICK: I drew it up.

AN HON. MEMBER: It sounds like it!

MR. GIBSON: If you do your arithmetic, you'll find that the

tax on a pound of copper comes to this: .525(GVP – 1.2SVP) – .025(S +

T) – .03SVP.

HON. MR. NIMSICK: Hansard' s going to have a lot of

trouble.

MR. GIBSON: Almost exactly the same as that other bill, Mr.

Speaker, all up and down the line. So what do we have here?

What we have is already imposed on half of the producing mines

of British Columbia, the exact same royalty

schedule — I

call it a royalty schedule, I can't call that a property tax,

Mr. Minister — that has not as yet been passed by this

House.

MR. D.A. ANDERSON: Shame!

MR. GIBSON: That may be legal, Mr. Minister, but I don't

think it's moral.

AN HON. MEMBER: It's ultra vires.

HON. MR. NIMSICK: Didn't you vote for that bill, or weren't

you here?

MR. CHAIRMAN: Order, please! I would point out to the Hon.

Member that I think that the point you've arrived at in your

comments would appear to be such that it would be more

appropriate to continue the discussion under Bill 31.

MR. GIBSON: Mr. Chairman, I'll be very glad to table

order-in-council 1086 if you wish me to do so.

MR. CHAIRMAN: Order, please! The proper place to table a

document would be when we are sitting in the House.

MR. GIBSON: That's fine. I just wanted you to be able to

have a look at it to assist you deliberations, but I can assure

you that this is an existing order-in-council

passed on March 28, 1974, pursuant to the provisions of the

Mineral Land Tax Act . It is that order-in-council which I will

discussing. That order-in-council, as I mentioned earlier on, covers

the taxation of roughly half of the producing mines of British

Columbia, and that order-in-council sets out

nothing more nor less than a graduated royalty charge and in

particular a surcharge on the value of minerals more than 20

per cent above what is called a standard value.

MR. CHAIRMAN: Order, please! I would ask the Hon. Member if

he considers the most recent remarks that he's made to be in

some way relevant to the principle of Bill 31.

MR. GIBSON: Mr. Chairman, I'm relating my remarks to the Mineral

Land Tax Act and to order-in-council

MR. CHAIRMAN: Order, please! I'm asking the Hon. Member if

he would consider his remarks as relevant to the principle of

Bill 31.

MR. GIBSON: Mr. Chairman, I'm not talking about Bill 31. I'm

talking about this order-in-council.

MR. CHAIRMAN: Order, please! I'm asking the Hon. Member if

he considers his remarks as relevant to the principle of Bill

MR. GIBSON: Well, Mr. Chairman, I suppose that everything

that one says is relevant to the budget of the Minister of

Finance, but that surely doesn't mean....

MR. CHAIRMAN: Hon. Member, I'm sure that all the Members of

this committee would agree that the remarks that you're making now you

have related to the principle of this bill, and therefore I would

consider it out of order.

[ Page 2519 ]

MR. GIBSON: Mr. Chairman, what I said was that in passing

this order-in-council what the government did was

to implement something that may be legal but has not been

debated by this House.

HON. MR. NIMSICK : You're all mixed up.

MR. GIBSON: The Minister says I'm all mixed up. He can

straighten me out when he stands up. As I say, this is a

royalty on mineral production, so I went and sought a little

bit of advice because this is on Crown-granted lands. It's not

on Crown lands, but on Crown-granted lands. That

incidentally, Mr. Chairman, is the difference between the Mineral

Land Tax Act and the other Act: these are

Crown-granted lands.

There have been instances where provinces have attempted to

levy a royalty on production for mineral lands, where the lease

or permit did not contain a provision for the levy of a

royalty. In such cases the provinces have been forced to

abandon the royalties. A court case relating to this type of

situation is that of the Colliery Coal in Alberta. The Province

of Alberta undertook to levy a percentage of the selling price

per ton of coal from the mine as a royalty. The company

contested the right of the province to levy such a royalty and

won the case on the ground that the royalty was an indirect

tax. The Province of Ontario, in recent years, was forced to

abandon a tax of one half cent per 1,000 cubic feet on natural

gas from lands held under freehold title for the same

reason.

The right of a province to levy a royalty on mineral

production appears to depend, therefore ,on whether a provision

for the collection of the royalty was included in the terms of

the lease or freehold title (the Crown grants) when granted

originally. Is it the case then, Mr. Chairman, that there's

actually some legal question about whether this order-in-council passed

under the Mineral Land Tax Act is ultra vires of the powers of

the province? The

Minister shakes his head. I hope his lawyers have checked

it.

HON. MR. NIMSICK: They took it to a court in

Saskatchewan.

MR. GIBSON: I hope his lawyers have checked it. In any

event, I'm giving him that information to go on in the hopes it

might be helpful to him.

AN HON. MEMBER: Check the court record. It's all there. It

went to privy council, as a matter of fact.

MR. GIBSON: So we have a situation here where we have a tax

that has been imposed under the authority of a statute given by this

House to tax property, which in fact taxes the gross value of

production. It's a tax which may or may not be open to legal challenge.

This tax is in effect and operating today, Mr. Chairman, insofar as the

notices are sent out. There's tremendous discretion here. Mr. Chairman,

I want to suggest that it's the wrong kind of tax. What this is is a

royalty-type tax, and it should be....

MR. CHAIRMAN: Order, please! I would ask the Hon. Member if

he in some way is equating the order-in-council

with the principle of this bill.

MR. GIBSON: Mr. Chairman, I'm talking about this tax which

is imposed under order-in-council 1086. I went to

some pains....

HON. MR. NIMSICK: You're criticizing previous legislation,

which is not right.

MR. GIBSON: Mr. Minister, I'm not criticizing legislation.

I'm stating what the regulation you passed does.

MR. GARDOM: He can criticize existing legislation as much as

he wishes to!

MR. CHAIRMAN: Order, please! Speaking in regard to a point

of order, it's permissible for the Hon. Member to pursue the

line that he's following, providing that he's dealing with the....

Interjections.

MR. CHAIRMAN: Order, please! But I'm really cautioning the

Hon. Member and requesting that he not in effect get into a

debate on Bill 31 by dealing with something that he's equating

with the same principle as Bill 31. Would the Hon. Member

continue, please?

MR. GIBSON: I can assure you I'm dealing purely with an

existing royalty structure imposed under the Mineral Land Tax Act .

The order-in-council is pursuant to

the tax.

Now, we have in this province, Mr. Chairman, some great

expertise, some of it appointed by this government, which has

been giving good economic advice on the subject of royalties.

It applies exactly as well to the mining industry as it does to

the timber industry. In the report of the commissioner, Dr.

Peter Pearse, appointed to investigate the use of

royalties in the timber industry....

HON. MR. NIMSICK: You're discussing royalties, and that's

Bill 31.

MR. CHAIRMAN: Order, please!

[ Page 2520 ]

MR. GIBSON: Mr. Minister, I am discussing the royalties

imposed under your order-in-council.

HON. MR. NIMSICK: Read your Act.

MR. GIBSON: Mr. Minister, anything that slides up and down

with the value of production and levies a fixed fee as it does

in paragraphs B, C and D — a straight percentage royalty,

nothing else.

HON. MR. NIMSICK: Read your Act.

MR. GIBSON: Read your formulas, Mr. Minister. I don't know

if you wrote....

MR. CHAIRMAN: Order, please! I would ask the Hon. Member for

North Vancouver–Capilano again if he is equating the

subject matter of the order-in-council — equating it with the

contents of Bill 31, the principle of

Bill 31.

MR. GIBSON: No, no! I am not, Mr. Chairman. All I am doing

is saying it is a royalty. Now, let me clarify something for

you. Bill 31 applies to lands other than the lands I am talking

about. The lands I am talking about are Crown-granted

lands, which are covered by the provisions of the Mineral Land Tax

Act . These Crown-granted lands.... I

read out a list of them a few minutes ago. I am sure you

wouldn't want me to read them out again, but it is a

long list of producing mines that are on these

Crown-granted lands.

It is those lands and the taxation pattern on those lands

which I say is a royalty-type taxation, which I am

discussing. Bill 31, as I say, does not apply to those lands,

nor does the Mineral Land Tax Act apply to the lands

covered by Bill 31. There are two distinct compartmentalized

parts of the province. I am talking only about that part of the

province which is covered by existing mineral taxation

legislation of this kind which I say, relating only to these

lands, is a royalty.

MR. CHAIRMAN: I have not ruled the Hon. Member out of order,

so don't look so guilty yet.

AN HON. MEMBER: The Minister doesn't know what a royalty is.

He doesn't know what you're talking about.

MR. GIBSON: Now, royalties....

HON. MR. NIMSICK: You don't know what you are talking about

either — don't kid me.

MR. GIBSON: Royalties, Mr. Chairman, are a very...

HON. MR. NIMSICK: I drew it up!

MR. GIBSON: ...pernicious type of taxation. Let me quote

from an excellent

article written by the Business Editor of the

Vancouver Sun . He said:

"To the uninitiated and for the sake of this saga, a

royalty

is something you pay regardless of how much profit you may or

may not make..."

HON. MR. NIMSICK: That's not a royalty — don't confuse

the issue.

MR. CHAIRMAN: Order, please! The Hon. Member for North

Vancouver–Capilano has the floor.

MR. GIBSON: Thank you, Mr. Chairman.

"...and a tax is a levy against profit.

"I hope that Peter Pearse and his colleagues" (and I

quoting Mr. Hammond) "will forgive me when I suggest that as

you read the following selected passages from the Task Force

Report on Crown Timber Disposal, that...."

and he goes on to say you might find some

relationship with

it.

Then he quotes Mr. Pearse's report.

"Royalties on private and Crown timber in British

Columbia

are, with only minor exceptions, specified dollar assessments

per unit of volume of wood harvested. Royalties fixed in

dollars per unit of wood are easy to administer because they

require only a scale of the timber harvested."

That is one of the great attractions of royalties: they are

easy and simple to administer. And that was from an earlier day

when we didn't have the administrative tools that there are

now. The quote goes on:

"No information is needed about the forest from which

it is

taken nor the cost of the logging and transport. The

disadvantages of such a system were that it implied that all

timber was of equal value, which of course encouraged loggers

to take only the best timber" (and that is what bothers me in

the mining industry, Mr. Chairman) "and it failed to recognize

that timber in different locations varied in value because of

differences in logging and transportation costs.

"Natural forests ranged from worthless to very

precious, and

so a fixed levy per unit of wood harvested from different

tracts will inevitably extract an inconsistent fraction of net

value timber.

"Even if royalty rates were fixed at levels that would

extract the full net value of harvested timber, in a given

category on the average, all the timber of above-average

value would be underpriced and operators would

[ Page 2521 ]

incur loss on the other half and hence

have no financial

incentive to remove it. Apart from its obvious implications for

efficient forest utilization, the system creates inequities

among operators on forest stands of different qualities."

HON. MR. NIMSICK: We are not on the Forestry department

now.

MR. GIBSON: No, we are not on the Forestry department now,

Mr. Minister, but many people, I find, find it easier to

visualize the mining problem in the context of something that

they can see. So that is why I had hoped that reading this

little extract from the Pearse Report would be helpful to you

in that regard.

The opinion is pretty well unanimous on this, you know. Here

is a quote from a gentleman who is called a

world-renowned mining authority, especially on copper.

His name is Ronald Prain — he's the past chairman of the

RST Group of companies.

Interjection.

MR. GIBSON: I don't believe so, Mr. Member, I think it is

Rhodesian Selection Trust, and I am not exactly sure what the

RST stands for. But he was speaking of this form of taxation.

He said he noted that the proposed form of taxation "has no

regard to profits, creates artificial inequalities between

mines, increases the cutoff grades, thus reducing reserves, and

has many other bad features which can be avoided by taxation

based on one criterion only — namely, profits."

HON. MR. NIMSICK: You are talking about Bill 31 now.

MR. GIBSON: We are not talking about Bill 31, Mr. Minister

...

HON. MR. NIMSICK: Ah, don't give me that....

MR. GIBSON: You keep mentioning that word. You shouldn't do

that. Out of bounds, in this debate.

MR. CHAIRMAN: Order, please. I would point out that the Hon.

Member for North Vancouver–Capilano is walking through

the tulips on a tightrope, but he is still on it, so I would

ask the Hon. Member to continue.

MR. GIBSON: Now, the other day, Mr. Chairman, the Association

of Professional Engineers had some things to say about the same sort of

thing — a most unusual statement. They said it raises the cutoff grade.

If anyone in the industry did that, he would be accused rightfully of

high-grading. But modern mines don't do that. They extract all the ore

that is economic — if the government thinks it should have more taxes

it should take them from the profits.

Now, Mr. Chairman, let me give an example of how this would

work. It is an example I worked out myself, so the Minister is

very welcome to check my arithmetic, which I hope he will. It's

again an example related to trees, because they are easier for

me to see.

You have a forest of 1,000 trees. And let's say, just to

keep the numbers simple....

HON. MR. NIMSICK: I wish your Dad was telling us about the

trees!

MR. GIBSON: He knows a lot about trees — he knows more

about trees than I do, but I am using this example. Just to

keep these numbers simple, we are going to say that to log each

tree costs $1. And these trees are of a varying value. There

are 100 of them worth $1.10, 100 worth $1.20 and so on — up to $2. So

the average value of a stand is $1.55 per tree.

And let's say that there is an operator on this timber, and

each year he is giving the government half of his profit in

taxes and keeping half.

Interjection.

MR. GIBSON: Well, I am relying on the fact it has been

written down.

HON. MR. NIMSICK: Anyone who reads Hansard is going

to have a tough job following him!

MR. GIBSON: It can be studied the next day.

Interjection.

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

the Chair, and speak a little more loudly than his critics,

please?

MR. GIBSON: Thank you, Mr. Chairman. Now, if you go through

the long and short of it, with a 50 per cent tax rate, that

operator logs all those trees. He pays $1,000 costs for wages,

supplies of one kind of another. He splits the $550 profit with

the government — $275 goes to each of them.

Now, let's say that one day the government came along and

said, "We are not getting enough out of that natural resource.

People deserve more out of those trees, and it is

unconscionable that the operator should be making that

profit."

MR. CHAIRMAN: Order, please, I would ask the Hon. Member

whether he is debating the desirability of imposing a royalty

per se — that is, the principle of imposing a royalty as

opposed to other means of

[ Page 2522 ]

raising revenue. My understanding was that the Hon.

Member

was discussing the administration of the Land Tax Act ...

MR. GIBSON: Yes, sir. I am.

MR. CHAIRMAN: ...and I would ask him to confine his remarks

to that particular legislation that is being presently

administered.

MR. GIBSON: Crown-granted lands — order-in-council 1086,

and I am even willing

to specify that this stand of timber is above one of these

mines. (Laughter.)

MR. CHAIRMAN: I think that the Hon. Member would agree, that

if he is going into a full discussion — or we are going

to enter into a full debate on whether or not royalties should

be imposed in mining, that I think the most appropriate place

for this discussion would be under Bill 31, which is the main

point of the bill — one of the main points of this bill.

Will the Hon. Member continue?

MR. GIBSON: Thank you, Mr. Chairman. I have to report again

to you that Bill 31 does not apply to Crown-granted lands,

and it is Crown-granted lands that I am talking

about.

MR. CHAIRMAN: I think the Hon. Member would agree that if he

read Bill 31, the main point of the bill is to impose a

royalty on units — therefore, if he is going to discuss

the desirability of royalties, the most appropriate time to

discuss this would be under the bill. Would the Hon. Member

continue?

MR. GIBSON: My understanding had been that Bill 31 was to....

Well, I shouldn't discuss it, but it is certainly not to

tax Crown-granted mineral land. It's to tax other mineral

lands that....

MR. CHAIRMAN: Order, please. The Hon. Member has not

understood the point I'm trying to make. Under estimates the

main thing is to discuss the administrative aspects of the

Minister of Mines under this particular vote. We can consider

those particular Acts that he's responsible for administering.

However, the concern should be in the way these Acts are being

administered, rather than in discussing some of the principles,

such as whether we should have a royalty or not have a royalty,

which are more appropriately dealt with under Bill 31.

MR. GIBSON: Well, perhaps I can reassure you in that regard,

Mr. Chairman. This is exactly the administration of the Mineral

Land

Tax Act and the regulations — which are certainly administrative —

which were passed under that Act less than a month ago and are only

now....

MR. CHAIRMAN: Well, would the Hon. Member then move along

and get to his point regarding the administrative

responsibility of the Minister in regard to what he's

saying?

MR. GIBSON: Well, I'll get back underground in just a

second, Mr. Chairman; but if I could just finish with my trees,

which will take me about one minute.... (Laughter.)

HON. MR. NIMSICK: I've got nothing to do with trees.

MR. GIBSON: No, but this will illustrate something to you,

Mr. Minister. If the government decided to say, "In addition,

you fellows have to pay 25 cents a tree to take those off there....

HON. MR. NIMSICK: This is sort of a parable, is it?

MR. GIBSON: A parable. Then the operator doesn't take off

the $1.10 trees and he doesn't take off the $1.20 trees,

because his costs are now $1.25; so he high-grades.

That's mining talk: he high-grades. And as a result of

his high-grading he makes less money; he makes $190

instead of $275. The government makes more; they make $360

instead of $275. But the province as a whole only has revenues

of $1,320.

In other words, it's down $230 because of this silly

decision to impose that type of tax. And the men aren't paid

for taking off those 200 trees that had to be left there when

they were really economic according to cost, but according to

royalty weren't. So that's that example.

HON. MR. NIMSICK: I know somebody who could have done better

on parables than that.

MR. GIBSON: You have to practise.

Interjection.

MR. GIBSON: Is that like seagulling?

So exactly the same thing applies to the mineral side with

the incalculable wealth lost to British Columbia if this form

of taxation specified under 1086 is continued. It will just be

absolutely immense.

I mentioned earlier on that Crown-granted lands

comprise approximately 50 per cent of the producing mines of

the province. I am going to estimate, and I think it will be

pretty close, that they also comprise 50 per cent of the good

potential prospects. Now the president of the B.C. and Yukon

Chamber of Mines has estimated the combination of those two

kinds of

[ Page 2523 ]

things, the Crown-granted land and the other land,

containing a combination of six billion tons of ore, both

operating and proven sufficient to operate. So let's say there

are three billion tons on the Crown-granted side.

Then the president estimated as well that the application of

this sort of a charge would cut those reserves by about

one-half. Well, that means we'd cut them about 1.5

billion tons. A ton of ore just has to be worth $5, Mr.

Chairman. It can't be worth any less, Mr. Minister; that's

right, isn't it? A ton of economic ore can't be worth less than

$5. That's a minimum figure.

So that's what? It's $7.5 billion worth of mineral resources

put in the category of those low-grade trees, just like

that, by this form of taxation, by this order-in-council 1086 — cut out

of the

economic category. What does the Minister have to say about

that? How does the Minister fulfil his mandate by making it

impossible to mine?

One of these Crown-granted mines is at Granduc. The

Member for Atlin (Mr. Calder) is here. I think he was in London

at the time this particular newspaper

article came out, but

he'd be interested in it. It says, "Atlin Miners Pour Out

Complaints."

HON. MR. NIMSICK: That's about Bill 31.

MR. GIBSON: It can't be about Bill 31 because that doesn't

apply to Granduc, Mr. Minister.

AN HON. MEMBER: No, but it said there that they were talking

about Bill 31.

MR. GIBSON: They must have been talking about something else

because they're in the town of Granduc.

These calculations that you have to make about the effect of

this kind of tax legislation on the province are necessarily

rough. That $7.5 billion figure might be low.

MR. CHAIRMAN: Order, please. I would ask the Hon. Member

that when he says "this kind of taxation...."

MR. GIBSON: Order-in-council 1086, I beg your

pardon.

MR. CHAIRMAN: The Hon. Member has indicated to the committee

that the formula contained in this particular order-in-council is

to be equated with the formula used in Bill 31. I was under the

impression that the Hon. Member was going to be talking only about the

order-in-council in question. But it appears that the Hon. Member

is talking about the formula or the principle which, in effect, is

impinging upon Bill 31. Therefore, I would ask him to discontinue his

remarks on that particular line, inasmuch as he is in effect discussing

identically the same formula contained in Bill 31. And this is clearly

out of order under standing orders.

MR. D.A. ANDERSON (Victoria): It is very interesting, but

the fact of the matter is that because a principle may be

contained in an order-in-council already passed and

because it may also be contained in later legislation, it does

not mean that the government, by introducing such legislation

in a totally different field that we've talked about — Crown-granted

lands and Crown lands — can

somehow stifle debate on the taxation that's coming up under

this particular order-in-council 1086, and thus we

cannot question the Minister on this particular area of his

responsibility which comes under the Mineral Land Tax

Act , already passed by this Legislature and comes up under

an order-in-council passed by the cabinet a short

time ago.

Now if they put on a bill on a totally different area of

land, namely Crown land as opposed to Crown-granted land,

and get away with any discussion, and you accept that argument

of theirs — indeed you don't even accept it; you develop

it on your own without any suggestion from the government

benches — it is a ludicrous way to run debates on

estimates.

MR. CHAIRMAN: Order, please. As Chairman, I'm ruling that

any continued debate on the principle of Bill 31 is out of

order. I'm ruling that the principle contained in Bill 31 is,

in effect, part of the principle whic