1979 Legislative Session: ist Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 21, 1979

Night Sitting

[ Page

305 ]

CONTENTS

Routine proceedings

British Columbia Hydro and Power Authority

(1964) Amendment Act –– 1979 (Bill 11).

Second reading.

Hon. Mr. Hewitt –– 305

Mrs. Wallace –– 307

Hon. Mr. Waterland –– 309

Mr. Nicolson –– 311

Mr. Mussallem –– 312

Mr. Lorimer –– 314

Hon. Mr. Wolfe –– 314

Division on second reading –– 315

British Columbia Hydro and Power Authority

(1964) Amendment Act –– 1979 (Bill 11).

Committee stage.

section 1.

Mr. Levi –– 316

Hon. Mr. Wolfe –– 316

Mr. Barber –– 317

Hon. Mr. Wolfe –– 317

Hon. Mr. Hewitt –– 317

Mr. Howard –– 318

Hon. Mr. Wolfe –– 318

Mr. Levi –– 318

Mr. King –– 319

Mr. Lea –– 319

Hon. Mr. Wolfe –– 319

Report and third reading –– 319

Presenting reports

Addendum, volume 11, report of the Royal Commission on the British Columbia

Railway.

Hon. Mr. Curtis –– 319

THURSDAY, JUNE 21, 1979

The House met at 8:30 p.m.

Orders of the Day

HON. MR. GARDOM: Mr. Speaker, I ask leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Adjourned debate on second reading of Bill 11.

BRITISH COLUMBIA HYDRO AND POWER

AUTHORITY

(1964) AMENDMENT ACT — 1979

(continued)

HON. MR. HEWITT:

Mr. Speaker, there were some comments made before we adjourned for the

dinner hour regarding the Committee on Crown Corporations. I mentioned

that B.C. Hydro's officials made themselves available to that

committee, and I believe it was the member for Shuswap-Revelstoke (Mr.

King) — who is not in the House at the present time — who expressed

some concern about that and, I think, felt that he could prove me wrong.

Well,

I want to tell the House approximately how much time was spent by B.C.

Hydro in attempting to provide detailed information to the Committee on

Crown Corporations. The approximate number of hours spent by B.C. Hydro

in researching, preparing and appearing before the committee was 6,000

man-hours; 6,000 man-hours went into the effort of B.C. Hydro to ensure

that they did their homework, their research, prepared their responses

to the members of the committee, to make sure that all the questions

could be answered reasonably and intelligently.

[Mr. Rogers in the chair.]

I'm

not defending B.C. Hydro, Mr. Speaker, because, let's face it, that

organization probably could use some shaking up now and again, but I'm

just indicating the effort that was made by B.C. Hydro –– 6,000

man-hours. Now that's a lot of hours.

Let me give you the

names of the senior executives who appeared before the committee in

order to tell the story of B.C. Hydro. Mr. Olsen, the president of the

corporation, appeared before it, as did John Sheehan, the

vice-president of administration and finance; Mr. Martin, the

vice-president of engineering; Mr. Nash, the vice-president of

corporate affairs; Mr. Mitchell, vice-president and general counsel;

Mr. Walker, vice-president and chief engineer; Mr. Quirk, project

manager; Mr. Spinney, project manager for Revelstoke; Mr. Foxall,

manager of the construction division, plus other support staff. These

are top-level senior officials who took the time and responded to the

requests of the committee, and attempted to disclose to the committee

what the problems were in dealing with a major project and tried to

answer all the questions that were raised. I think it's an indication

of the cooperation and the communication that the B.C. Hydro officials

attempted to have with the committee.

The member for

Shuswap-Revelstoke (Mr. King), I believe, also talked about the

Revelstoke Dam and the concern about the Downie slide and its effect on

the rest of the river and the engineering, I believe you said that it

was inadequate or incompetent or just the poor pre-construction

engineering that had been carried out. I had the opportunity to

investigate it, and the direct costs of engineering, surveying,

drilling and environmental studies up until the granting of the water

licence in December 1976 — this is before you get the authority to

proceed — were $11 million.

Interjection.

HON. MR. HEWITT:

I’ll get to the $30 million — you're taking that out of context, as I'm

sure you well know. The interest during construction and the overhead

were another $2 million, and the total that was spent was $13 million.

You

talk about the $30 million. It was in the headlines about the

additional costs on the Revelstoke Dam. There was $11 million worth of

work done in engineering to determine the ground structure. I'm not an

engineer, so I can't think of some of the terminology, but to determine

the stability of the soil and the rock, et cetera — including, I

assume, the Downie slide area — outside engineers, not just Hydro

engineers, determined through their test holes that there was a shaft

of marble or granite going down the mountainside.

Drill

holes were taken. It ended up that when they had the opportunity to

investigate further they found it came down on a straight level, but

because of the topography or the shifting of the structure centuries

ago, it also came out under where the dam would be. It wasn't until

they could reduce the flow of the water and did some further

engineering that it was determined it was going to cost more, because

they had to extract that marble and/or granite — I can't remember which

one it was — to have a firm base for the dam. I think that's good,

responsible management. If you are going to try and cover up something

like that, then you might have a problem with the dam giving way and

wiping out all the dams down river.

I would also advise —

and I think the member for Shuswap-Revelstoke (Mr. King) knows — that

in all construction projects, consideration is given to providing for

the unexpected. B.C. Hydro, of course, has funds set aside for those

things that may crop up during the construction. I am not saying that

they will come within budget; I am just saying they have attempted to

ensure that any problem is taken care of. They've attempted to cover

all contingencies in their estimates.

Mr. Speaker, in regard to B.C. Hydro, the organization we often hear is out of control and doesn't get proper investigation....

AN. HON. MEMBER: The monolithic monster.

HON. MR. HEWITT:

Yes, the monolithic monster. We have to look at some of the

cost-control measures which have been brought into place. I think they

would indicate to the opposition that there are efforts being made.

Here are some staff levels, for an example: On March 31, 1978, there

were 12,557 employees working for B.C. Hydro: on March 31, 1979, there

were 12,550. That's not much of a difference, but I'm just saying that

you end up with less

[ Page 306 ]

employees

this year than last — or, with the increased amount of customers, you

are keeping your employees within reasonable levels. On May 31, 1978,

there were 12,858; on May 31, 1979, there were 12,568 — 290 less.

Let

me tell you the other side of the coin: on March 31, 1978, there were

952,000 electrical customers; gas, 278,000. In 1979 there were 984,000

electrical customers; gas, 286,000. The customers are up approximately

40,000 as opposed to staff, which is down — a good indication, I think,

of good control in providing a service.

The

project-financing expenditure controls continue to follow the normal

practices of the utility industry in North America. They're comparing

their operations with other utility companies across North America. One

other indication, I think, of attempting to indicate control, so that

the consumer, members of this House and the public at large have an

indication of whether or not Hydro is becoming out of control or is

within reason in their figures, is the debt per customer. We have

$3,807 debt per customer as of March 31, 1979. As of December 31, 1978,

Ontario Hydro had $3,657 per customer. As of December 31, 1978, Quebec

Hydro had $3,924 per customer — an indication that we certainly are in

the ballpark with those other major utilities.

One other

item deals with what the Leader of the Opposition (Mr. Barrett) said. I

can remember going through the election campaign. I had a great time,

because he was talking about natural gas exports to the United States,

and that we should get the same price the Mexicans got for exporting

their natural gas to the United States. He went through this exercise,

and I said I'd give $100 to the campaign of the Leader of the

Opposition if he could prove that Mexico was getting a higher price for

their natural gas — if, in fact, they sold natural gas to the United

States — than we were. At that time the price was $2.16 per 1,000 cubic

feet, or $2.30 per 1,000 cubic feet, and then went up. Every night I

had a meeting I raised the ante until it was $2,000. I was prepared to

give to the Leader of the Opposition a $2,000 donation to his campaign

fund. And, you know, he never took it up, never collected, never

questioned it.

Interjections.

HON. MR. HEWITT:

It's as I'm going to tell you now, Mr. Minister. Earlier he made the

statement that we spent $1 billion to build dams for the Americans.

That's what he said. I'm going to try to establish where he was wrong.

When the Columbia River Treaty was negotiated, the United States agreed

to purchase, and Canada agreed to sell, its entitlement to one-half the

downstream power benefits for the cost of providing storage in Canada.

In addition to the power benefit entitlement, the United States agreed

to pay Canada for flood control benefits provided by the upstream

control of the Columbia River in Canada. The amounts received were:

payment to Canada of $273.3 million; flood control benefits, $69.3

million. That's what we received. We also received bonuses paid to

Canada for early completion of the storage projects. Early completion

of the Duncan and Arrow Dam earned additional downstream power

benefits, and we received $6.7 million. From the interest on those

advance funds we received $47.7 million. We charged interest to the

storage projects during construction and credited it to the treaty

fund, because money that did not otherwise have to be borrowed amounted

to $82.1 million.

So Canada received $479.1 million with

regard to the storage dams. The generation and transmission costs in

Canada were not part of the Columbia River Treaty. Any such

installations were for Canada's account, as would be any other

generation or transmission facility producing power directly for the

benefit of Canada. The total cost can be set out as follows: the

storage treaty projects, Duncan, Arrow, Mica dams, total expenditures

to complete projects were $603.5 million, less the contribution that

was paid to us in advance by the United States, plus the earnings of

$479.1 million. The estimated total cost of the Columbia River Treaty

storage products to B.C. Hydro was $124.4 million, not $1 billion.

Then

you add the generation and transmission facilities in Canada that

weren't part of the treaty, but because of the storage facilities we

could provide electricity by using that water to generate power for

Canada, for British Columbia residents, and for exports if we had the

water storage available. The cost of the Mica generation for units 1 to

4, and the transmission, came to $687.9 million, plus with the storage

cost of $120-some-odd million, it came to $812.3 million, but only $124

million related to the Columbia River Treaty and the storage

facilities. Transmission and generation facilities were for Canadian

consumption, for British Columbia's use. If it wasn't for those

facilities, of course, we couldn't generate the power.

That,

I think, should set the record straight. The statements that the Leader

of the Opposition made regarding natural gas are proven wrong because

he never took up my offer to assist him. In this particular case, he's

wrong again — 1,000 percent wrong.

I'd like to respond to

the member for New Westminster (Mr. Cocke), He makes a statement in the

House — and the press, if they are listening, may take it up — about

the terrible thing that was done in regard to B.C. Hydro and the level

of water. I think he said that in order that we could sell electricity

to the United States B.C. Hydro allowed the water to get to a critical

level, which would imply that disaster was right around the corner. At

every board meeting, the directors receive schedules or tables

indicating just where those water levels are, how much we have in

excess storage capacity to ensure that we always can meet the domestic

consumers' demand. What we don't need we can export, and when we run

out of that surplus water, we, of course, can stop the interruptible

power.

Last year we made $30 million in export sales. The

member for Nanaimo (Mr. Stupich) laughs. He's probably going to get up

and make some comments, First of all, if they can indicate to me the

"critical situation," which the member for New Westminster keeps

alluding to, if he can get up and prove that wrong, I'd be glad to hear

it. I suggest to you that you can't.

This is a bill that

indicates that B.C. Hydro as a utility company has a responsibility in

this province to supply power for industry, for residential dwellings,

and make sure it is there at the peak demand. You can't average out.

You've got to meet the peak demand. If we can't supply that peak

demand, then we do have a problem and a possible disaster. They've got

to provide power for the longest night and the coldest night of the

year. They've got to make sure the wheels of industry turn. Yes, we can

be critical. I'm not defending them, but let's state the facts as they

are. We can be critical. We can have Crown corporations. We can have

the bearded member for Victoria

[ Page

307 ]

make his remarks, but let him give us some constructive criticism.

MR. LEA: Have you looked in the mirror lately? You've got a beard.

HON. MR. HEWITT: Yes, but mine's got a little salt and pepper in it.

all seriousness, we can be critical of Hydro, but remember what Hydro's

responsibilities are. It is a utility company that is responsible, I

believe, for providing power to 90 percent of the population in this

province. If it doesn't meet that responsibility, it isn't just that

your lights don't go on; the economy can slow down and come to a

shuddering halt. We must remember that. We must ensure that that power

is there when it's needed, and that's what this bill is all about.

That's why I support it.

MRS. WALLACE: I don't want

to spend too much time discussing the remarks that the previous speaker

made, but I do want to make one or two comments. As for the Columbia

River Treaty, it happens that I was an employee of B.C. Hydro at the

time that Columbia project was under construction. I recall very well,

Mr. Minister of Economic Development, that there were a lot of problems

surrounding the Columbia River project. There were so many problems, in

fact, that they had a special coloured stationery for very confidential

matters.

Requests were made in this very quiet and secretive

manner to all departments, and I was working for the production

department. We had requests as to whether we had any particular

accounts that were going to be under expended for that year. If so,

they wanted to know by how much and what the account numbers were so

some of Columbia River costs could be charged to those accounts. Those

were the kinds of things that went on in Hydro with that Columbia River

project.

For that minister to stand up and say that

everything was perfectly all right just rankles me a little bit because

I happen to know that that was not the case. He spoke about the farmers

in the Peace River and he said: "In the Peace River, the only land that

was bought by Hydro was that which was offered by the owners." Now. Mr.

Speaker, I am convinced that that minister really knows exactly what

went on there. What he has said is only part of the truth.

HON. MR. PHILLIPS: Have you ever been up there?

MRS. WALLACE:

I certainly have, Mr. Minister. Those farmers were approached by Hydro,

and they were told that if they would sell before they applied for a

water licence, Hydro would purchase their entire farm at a very good

price. However, if they didn't accept, and if they applied for a water

licence and got the approval, Hydro would take only that portion of the

farm which was absolutely required and would take it for much less

money.

HON. MR. PHILLIPS: That's called blackmail.

MRS. WALLACE: That's right. That's called blackmail. That's

really what it was. Not only would Hydro buy the whole farm ahead of time, but

they would rent it back at a very reasonable rate to the farmer, so he could

continue to produce right until the water licence was granted.

That

was what that offer was, Mr. Speaker. The minister talked about the

debt, and he said that in B.C. we have $3,870 debt per customer. In

Ontario it's $3,675, and in Quebec it's $3,942.

I would like

to read into the record some remarks by Emory Lovins. Emory Lovins

first became popularly known when he wrote an essay entitled "Energy

Strategy: The Road Not Taken" published in Foreign Affairs ,

an American quarterly. That particular essay startled people in

government and industry because here was a man who obviously knew what

he was talking about. This man was a typical child genius. He was born

in Washington, D.C. He won seven first-place awards with the national

science fairs for research in measure theory and solid state physics.

As a teenager he received awards and citations from General Electric,

Westinghouse, the Atomic Energy Commission and the American Nuclear

Society. He studied law, linguistics, chemical physics and even

medicine at Harvard. Later he went to Oxford. England, where he took a

research post as the youngest don in the university's history. Now I

think that a man with that kind of a background is a fairly responsible

authority.

He was speaking about Ontario Hydro. He was talking about their financial position. He said:

"Utilities

finance their construction by selling debt and equity from their own

funds. In most cases there is a legal limit on the permissible ratio of

indebtedness to revenue. Many of the wealthy utilities in North America

are at or near their limit. Some are borrowing money just to pay the

dividends. They're borrowing short-term paper. The problem is that the

electrical utility business requires extraordinary amounts of capital,

and it takes a very long time to build facilities and to get them

working so that they produce a revenue. While you're building them, you

have to keep raising the price of electricity in order to finance the

construction and so the people will buy your bonds. When you raise the

price people can't buy as much electricity as you thought they could,

and they can't afford it any more. It's a terribly simple effect."

He goes on to talk about Hydro Quebec, and he says:

had a curious experience when I briefed the Hydro Quebec people two

years ago. One of them was emphasizing how it was a public corporation,

and how the whole process is open. So I asked for his 10-year

projections of the cash flow, showing financing and the rates they

would charge in order to bear those financial burdens. And he said:

'No. we couldn't possibly show you those.' And Amory Lovins said:

'What, you haven't done them?'

"'No, we've

done them, but we've gone to great pains over the years to build up a

relationship of mutual confidence with the investment community in New

York.'

"'You mean they wouldn't have so much confidence if they saw your projections?' And the answer was yes."

What

Amory Lovins is pointing out is that Ontario Hydro and Hydro Quebec —

and B.C. Hydro along with them because the debt ratio is very similar —

are borrowing themselves into complete bankruptcy. And here we are

discussing a bill to increase that borrowing power.

[ Page 308 ]

The

economics of following the recognized power supply are just

impractical. In the United States 21 cents of every dollar that's spent

on energy installations goes into generation; the remaining 79 cents is

allocated to transmission. And here in B.C., I'm sure, it's even worse.

We can't afford large, centralized electrical plants. The whole

economics of it is just not feasible. We have to look at other

alternatives because, if we try to assume that the energy of the future

is simply a larger reproduction of the energy of the past, it's not

economically feasible.

If you're talking about using oil for

mass production of electricity, the laws of physics certainly indicate

that that's a very uneconomic use, because for every one unit of

electricity you're getting two units of heat that is normally wasted.

There

are alternatives; we have to diversify — and, again, this is according

to Amory Lovins, who certainly is a recognized authority. I'm not

quoting anyone who is simply not knowledgeable; this man is recognized

around the world as an authority on energy. He says that we have to

diversify; we have to go into relatively small components. We have to

look at renewable sources; we have to look at some of the soft

technologies — and it's not the sort of bleeding-heart approach that he

takes; it's a cold, hard economic approach. That's why I'm concerned

when we come here and are asked to approve another $275 million for

Hydro. We have no knowledge of how that is being spent.

The Minister of Energy, Mines and Petroleum Resources (Hon. Mr. Hewitt) talked a lot about this Power Perspectives 1979 , and he assumed we hadn't read it. He talked about this particular little booklet setting out the alternatives.

Well,

it's got 30 pages in it, and it is not until you get to page 24 that

you come to anything in the way of alternatives. It talks about

alternatives: it talks about hog fuel, and certainly hog fuel is

something we should be using for energy. You can give lip service to

this, Madam Member, but if you don't set your rate structures to

industry at such a level that it encourages them to use that hog fuel

for their own generation, and to feed it back into the hydro system,

which can well be done at peaking periods, then it's not going to

happen.

MRS. JORDAN: Are you going to subsidize it?

MRS. WALLACE:

It is not a case of subsidizing: it is a case of setting your rates so

it is feasible for industry to sell that power to you. And Hydro has

historically charged more for the power they sell to industry than they

are prepared to pay to industry for the power they need for peaking

periods. You would get a lot more generation and a lot more use of hog

fuel by industry if you had an equitable arrangement on your rate

schedule. They talk about hog fuel, but their practical approach to it

is not encouraging industry to get involved in using it. They talk

about nuclear power, and the minister said we had so many plentiful

reserves that we didn't need to use this. But I want to read just a

little bit further down in this same booklet, Mr. Speaker, and it says:

"However, B.C. Hydro cannot ignore the existence of such a possible

major source of energy, and is continuing to gather technical and

capital cost data on nuclear generation to determine its practicality

for British Columbia in the future." Now that doesn't sound as if we're

not really going to have any nuclear energy in British Columbia. It

goes on to say: "Nuclear energy is not among the alternative sources of

power available to Hydro in the 1980s." Why? Because the least time for

any possible construction of a nuclear plant would be in the range of

13 to 15 years. So they are not discounting the use of nuclear power.

Then they go on to a very interesting paragraph, Mr. Speaker:

"Studies

on operating data from various parts of the world, including Ontario,

indicate that the thermal effects resulting from the discharge of

cooling water are not expected to present serious problems, that the

probability of major nuclear plant accidents is extremely low, and that

radiation levels in the vicinity of operating nuclear plants are lower

than those existing naturally in many areas."

Now

that, to me, sounds like a case for nuclear power. To suggest there is

not any consideration of nuclear power by B.C. Hydro, and to quote this

book as a source for that, certainly indicates to me the minister is

not being entirely candid.

The very last of this book does

talk about alternatives. It says: "B.C. Hydro is also keeping close

watch on developments around the world in so-called alternative energy

of the sun, wind and sea — research ranging from the depths of the

ocean to outer space."

The minister talked about the solar

plant in Burnaby, but he didn't say anything about this picture. This

book is just a little misleading, because it gives you the solar panels

installed on the Burnaby building, and then on the next page, without

any definition of where it is or anything else, it says: "Experiments

underway to directly harness the sun's energy and produce electrical

power include this solar dome concept of 10 megawatts solar power

plant." It doesn't say where that is, and though the indication is it

could well be in B.C., that is not so, Mr. Speaker. I think it is

misleading to put that kind of picture on the full page to indicate we

have that kind of approach toward solar energy in Hydro when, in

actuality, it is only the installation in Burnaby. It is very

misleading to put that in there with that kind of a caption and not to

have a location; that definitely isn't in British Columbia.

had an interesting experience, Mr. Speaker. The Nitinat Indian reserve

is miles away from a Hydro supply. They had two diesel motors supplying

power for their village. It was costing them some $50 per family per

month, and they had built up a terrific deficit because it wasn't even

covering escalating fuel costs. They came to me, concerned about what

could be done. "Could we get a rural extension in from Hydro, and how

could this be done, and what would the cost be?" When we started

looking at it I began to think about alternatives, and I talked to some

of the people in the Federal Alternate Energy Bureau. They said they

had been looking at that area and found it was a very high wind area,

very steady, and they felt that it would be a good place for a trial of

a wind generator to supply for the Nitinat Indian village. They were

quite prepared to do the experiment and got the thing on the road,

except they didn't have an anemometer to measure the wind velocity to

see just what they need.

You know, Mr. Speaker, I tried for

two months through various areas and departments of Hydro to get an

anemometer to measure the wind velocity. They apparently had two — one

was broken down, the other one they couldn't find — and there was no

way that we could get an anemometer in there to measure the wind

velocity. Now

[ Page 309 ]

that's

the kind of experimental programs and research into alternates that

Hydro is involved in, because that's an actual example of trying to get

some experimental work done to provide an alternate energy supply.

There was absolutely no way that I could get any cooperation from Hydro

to get that thing off the ground. The whole thing just died and those

people are still paying untold amounts of money for their diesel

generation.

There has been quite some mention of Vancouver

Island and its shortage of power supply. But there are certainly ways

in which we can improve our supply on Vancouver Island without getting

into excessive amounts of extra generation. We're short. Sure we're

short, particularly in peaking periods. We must remember that nearly

half of the load on Vancouver Island is what Hydro calls "bulk sale

customers" — the industrial load, the pulp mills, the mines, those

large loads. Nearly half of the demand goes into those areas.

I mentioned before, if Hydro was serious about having the hog fuel

generation.... It's a top priority with those companies — energy is a

very grave concern — and if Hydro was serious about looking at

equitable kinds of rates, I'm sure that we could work out with those

companies.... They will be quite happy to install further generation

and use up some of their waste wood products in that generation, and

feed back power into the system on Vancouver Island at peak periods in

return for more power at off-peak periods from the Hydro grid. But as

long as Hydro has the rate structure that they presently have, that's

not going to be encouraged.

That would be one way that it

could be done. It could presently be done just with the facilities that

are there in the amount of approximately 100 megawatts by simply

getting the mills to do their heavy loading at off-peak periods and to

reduce load at peak periods. It's quite possible. It has been done. I

know it has been done because I've been involved in it when it was

being done, when we had troubles in Hydro on the Island a good few

years ago. It can be done; it works very well. I understand that could

reduce the peak demand on the Island system by something like 100

megawatts.

There is another way that it can be done. Our

equipment is all geared to something like a range of about 25 percent

in the voltage level required, the equipment that we use in our

households. There is no reason that we couldn't drop our voltage in

peak periods — just a little lower voltage. It doesn't need to be very

much. For every 1 percent voltage you drop, you drop your kilowatt

demand by 1 percent, and that's a very easy way to reduce your demand.

Interjection.

MRS. WALLACE:

You've got a 25 percent factor to work in there; it certainly can be

done, and that will help relieve your peak load. So what I'm suggesting

is that there are ways that you can reduce your demand, and we don't

always have to think about adding that extra capacity.

Hydro has already embarked on this program. If the average outage on Vancouver Island is between 4 and 12 minutes....

Interjection.

MRS. WALLACE: Your average outage, Mr. Minister of Forests (Hon. Mr.

Waterland), is between 4 and 12 minutes, and if your water heater is off for

4 to 12 minutes you're not even going to know it. Hydro is already trying

to embark on this program, and that's a good program: I give them credit

for that. But I think there are more programs like that that can be undertaken.

There

is no indication in this power prospectus where Hydro is spending

money. They're certainly not spending it on research for wind

generation. I found that out. Solar generation — maybe some. They do

have solar panels on one of their buildings. But I believe that the

major thrust for alternative energy is being directed at nuclear power.

As long as Hydro is going in that direction, as long as it is looking

only at the conventional methods of supply with economically

self-destructive high costs, then there is no way that I am going to

support a motion to increase their borrowing power. We have to do

something to bring this Crown corporation to its senses, because we’re

heading for nothing but bankruptcy if we continue in the direction

we're going. It's going to happen in Ontario. It's going to happen in

Quebec, and it will happen here. We have to re-evaluate the methods by

which we're going to provide power for our use. It is possible it can

be done, but we have to concentrate on that aspect of it. This report

and the Hydro board of directors are not interested in those

alternatives. Until such time as I see a more forward-looking attitude

on the part of Hydro, I am not prepared to support any further

borrowing.

HON. MR. WATERLAND: I wasn't planning on

entering this debate, but after hearing some of the comments made by

the members opposite, I felt that I should say a few things.

I'm

very interested in the simplistic approach to power and power options

presented to us by the hon. member for Cowichan-Malahat (Mrs. Wallace).

She began by referring to the days when she was in the financial

section or the production department, or whatever it was, at B.C.

Hydro. She was privy to all the innermost financial undertakings and

plannings of that corporation. I really don't know what her position

was, Mr. Speaker, but to hear her speak, she was setting the most basic

policies of that corporation.

She carried on from there to

talk about how terrible British Columbia Hydro Authority was in

offering to buy farms from people who perhaps could have been subject

to flooding or displacement because of Hydro's developments. I guess

that member would have preferred that B.C. Hydro had waited until such

time as the properties that these people had were depreciated because

of power development, speculation, and then come in and bought the

properties at distress rates. I think B.C. Hydro, when they plan ahead

and anticipate the problems which are being presented to people and try

to save them from financial loss by planning, should receive credit.

You

criticize Hydro for failure to plan ahead: you criticize them also when

they plan ahead and try to overcome hardship by perhaps bailing them

out ahead of time before their properties are depreciated.

was very amused at some of that member's discussion about alternate

power sources. I don't know what that member's background is, but she's

talking about various alternate energy supplies. I'm sure there are

other energy sources, and there will be additional energy sources

coming in. She speaks about solar power, tidal power, wind power,

thermal power, geothermal power and many other sources

[ Page

310 ]

of power. Perhaps, at some point, they will be

available to us. But she fails to recognize that there is an economic

factor involved with power.

She spoke about the Nitinat

Indian band attempting to determine whether they could have wind power

to replace their diesel generating plants. They couldn't acquire an

anemometer to record wind velocities, because Hydro didn't have one.

Well, you know, an anemometer is a very readily available instrument.

It can be acquired from almost anywhere and the cost is very minimal —

perhaps $150 to $200 will buy a very good anemometer. Perhaps the

reason Hydro wasn't interested in providing an anemometer was because

they know that wind power, on the basis of today's technology, is

completely unrealistic. There is no way that wind power can possibly

replace any other source of power in an economic or reliable basis.

Wind

power is something, my friend, that perhaps you can use if you have no

other source of power available to you. In British Columbia, there are

many, many options which are more reliable and less expensive than wind

power. Wind power, at some point in time, perhaps, will become

economic; at this time it is not. Hydro, I suppose, was trying to

humour that member, to tell her: "Please go away. Go back to your books

and understand what you are saying before you start talking about wind

power."

Mr. Speaker, other members over there had various

things to say, and the member for Shuswap-Revelstoke (Mr. King) tried

to mix up dams and natural disasters, speaking, I guess, of the Downie

slide at the 1880 dam. If that member was not at the hearings held in

Revelstoke in 1976, in which there was a full engineering discussion

about the possibility and the effect of a Downie slide, then he should

be ashamed. If he was there, then he's deliberately misleading this

House, because it has been....

MR. NICOLSON: A point of order.

DEPUTY SPEAKER: Please state your point of order.

MR. NICOLSON:

The minister — and I would be surprised, Mr. Speaker, that you wouldn't

have jumped on him, that it should have to be brought to your attention

— said that the member for Shuswap-Revelstoke was deliberately

misleading this House. He was certainly at those hearings, and I ask

that member to withdraw.

DEPUTY SPEAKER: The Chair has no knowledge of where members are when they are not present in the chamber.

MR. NICOLSON: On the point of order, Mr. Speaker.

DEPUTY SPEAKER:

Order, please. Before I recognize the member for Nelson-Creston, the

Minister of Forests has been asked to withdraw an unparliamentary

remark, and I would ask that he withdraw it.

I would also ask that the member for Nelson-Creston extend to the Chair the courtesy of at least finishing their statements.

Please withdraw.

HON. MR. WATERLAND:

Mr. Speaker, if the member for Shuswap-Revelstoke was at the hearings,

then he is fully aware of the very detailed studies and presentations

made there, which very clearly indicated that there is no problem....

DEPUTY SPEAKER: Hon. member, it's simply a matter of asking for your withdrawal, and I must ask you to withdraw.

HON. MR. WATERLAND:

In order to continue, Mr. Speaker, I will withdraw any comment that may

have been offensive to the member for Shuswap-Revelstoke, who doesn't

happen to be in the House now, but who is championed by the other

member.

Mr. Speaker, it was very adequately demonstrated at

those hearings, with engineering studies, models and any other form of

demonstration which Hydro could bring to those hearings, that even if

the Downie slide did take place, any wave action as a result of that

slide would be fully dissipated before it ever reached the dam. He

attempted to mix that up with the recent problems of instability with

the strata underlying the site of the dam itself.

By trying

to bring newly found problems and relate those to problems which were

recognized and accounted for many years ago, the member is trying to

bring forth the possibility of an imminent disaster because of the

breaking of dams through the Downie slide and other terrible things. I

think he is being very unkind to people who live downstream from these

dams, because of all the hydro dams anywhere in the world, none of them

is engineered with as much detail and foresight and thought as are the

dams in British Columbia. The dams that we have in this province are,

as far as can be humanly determined, absolutely safe. There is no

hazard as a result of these dams. Any time dam construction proceeds,

as is the case with the 1880 Dam, and the strata is unstable beneath

the dam, the engineering construction is modified in order to look

after those problems. Anybody who tries to raise the spectre of a

number of dams being washed away by mixing up of two different

problems, I think, is being very unfair to the people in this province.

The

member for New Westminster (Mr. Cocke) made comments about B.C. Hydro

and the province of British Columbia lumbering along in their same old

ways. Let me tell you, Mr. Speaker, that if we don't have power in

British Columbia, we won't be lumbering along at all. We won't be

lumbering along, we won't be saw milling along, we won't be pulp

milling along, we won't be mining along, we won't be anything along,

because we won't have any power for these tremendous industries in

British Columbia.

British Columbia, Mr. Speaker, is blessed

with many, many fantastic resources. We have one-half of the forest

resources in this country right here in this province. We have a forest

industry which is very prominent at this time and can become much more

prominent in years ahead. We have mineral resources which have not

really been touched yet. We have a location on the Pacific Rim of North

America which gives us an opportunity to enter into the new Pacific

trading patterns of the world. But if we take all of these resources,

and this location that we have, and the number of people we have in

this province who are willing to go out there and work and produce,

nothing will happen unless we add the other ingredient, which is power.

That

is what this bill is all about: to try to make sure that British

Columbia has the power it needs to put together with the tremendous

natural and people resources we have, so

[ Page 311 ]

that

we can enhance our way of life in this province. B.C. Hydro has a

tremendous responsibility in predicting power requirements. As the

minister responsible for B.C. Hydro pointed out, they have a very

difficult job. They must provide power for the industry they predict

will happen here and for the longest and coldest night of the year.

There are no shortfalls allowed B.C. Hydro. Quite frankly, I think B.C.

Hydro is being very conservative in their projections of power

requirements for the future. Their projections are based upon recent

history in British Columbia, and in the early 1970s their projections

of power requirements went down tremendously because they couldn't see

anything happening in B.C. The investing world thought B.C. was a bad

place to invest in, and therefore they thought we would probably not

need power. We do need power now. British Columbia is on the move. The

power requirements of industry in this province in the next few years —

just through the commitments that we know of now, not even considering

those we know are coming — are going to tax the ability of B.C. Hydro

to provide power to the limit.

This afternoon a member

mentioned Crown Zellerbach's recent announcement of needing power to

Vancouver Island before they can go ahead with their Campbell River

paper plant — a $170 million investment dependent upon power. That is

only one small power requirement coming to B.C. Hydro in the next few

years. We know of the announcement made by B.C. Forest Products. They

will require power in order to carry out their developments, in order

to create jobs and opportunities for the people of B.C. We know of West

Fraser's announcement made today about a thermal-mechanical pulp mill

for Quesnel, which will require power in order to provide jobs and

opportunities for the people of B.C. We know of the hundreds of

millions of dollars committed by MacMillan Bloedel in order to provide

jobs for the people of British Columbia. They will require power for

their developments. We know of Rayonier; we know of Doman Industries,

Weyerhauser, Can-Cel, Northwood, and many, many other companies in the

forest sector which have expansion and new development coming along,

all of which require power. none of which can go ahead without power.

That is what we are talking about tonight: power to generate and fuel

the industry of this province, to provide jobs for the people.

The

members opposite constantly say: "What is the government of British

Columbia doing about jobs?" As soon as commitments are made and we try

to provide power for the industry which will create jobs, they say:

"No, no, no. You can't do that."

The forest industry is but

a part of our economy. Highmont Mines recently announced production

plans which will require a lot of power. Equity Mining will require

power. B.C. Moly will require power. Carolin Mines will require power.

Valley Copper will require power. All of our industry in British

Columbia requires power in order to utilize the resources we have to

create jobs for the people of B.C., opportunities for the people of

B.C., revenue for the government of B.C. If we don't have power, we

might as well shut down the province. Yet those members opposite say:

"No, B.C. Hydro doesn't need money. You can go to some of these perhaps

futuristic types of energy sources" — which today are not practical.

Today

hydroelectric power is the cleanest, safest, most economical source of

power we have. If we don't allow B.C. Hydro to go ahead with their

plans, then I would ask the last member of the opposition who leaves

this province to please turn out the lights, because nothing will be

happening here. I fully support this bill.

[Mr. Davidson in the chair.]

MR. NICOLSON:

I don't know if one should debate with the member who just spoke. As a

result of the member for Shuswap-Revelstoke (Mr. King) appearing before

the Revelstoke hearings, Hydro changed their design and increased the

freeboard on the dam to compensate for the possibility of a Downie

slide. If that means that the slide is an absolute impossibility and

that no one down the Columbia River should worry about it.... I'm not

too willing to be reassured by a person who told us there was going to

be a certain disaster in the forest industry if we didn't go out and

spray the spruce budworm.

On this side of the House we said:

"Leave them alone. It'll collapse and we won't get into the mess

they're in in New Brunswick." We were proven right. That minister was

proven wrong and he still has his big stash of spray hidden away at the

cost of thousands and thousands of dollars to the people of this

province. As a matter of fact, the member for Shuswap-Revelstoke (Mr.

King) in cross-examination could not get the outside engineering

consultants to give any guarantees in terms of the stability of the

Downie slide.

Mr. Speaker, what I am most interested in this

evening is the fact that we have the minister responsible to this House

for B.C. Hydro, the Minister of Energy, get up in this House and make a

speech and not mention one of the biggest conspiracies presently

underway in B.C. Hydro, and that is for the export of firm power by

B.C. Hydro. There is an application presently before the National

Energy Board. Neither he nor the Minister of Finance made one mention

of this conspiracy to build, not for the needs of British Columbians,

as was just said from the other side of the House, but to build for

export.

We're talking about exporting three billion kilowatt

hours compared to the total domestic consumption in 1978 of 24 billion

kilowatt hours. That is 12.5 percent. That is what B.C. Hydro, this

government and this policy is all about. They are also going before the

National Energy Board and asking to export up to ten billion kilowatt

hours of interruptible power, which is 41.5 percent, making a total of

54 percent.

This indicates that they are expecting to have

massive surplus and they are applying to do this. The reason they are

applying to do this is to beef up their energy demands.

Mr.

Speaker, I say that this is a scandal and a conspiracy which I first

brought to the attention of this House over a year ago. I urged that an

enquiry take place and that there could be the possibility of a

ten-year pause in new Hydro dams. With the capability of adding

generating facilities to existing dams, we could do this. I said that

Hydro's projections were way above and beyond the actual needs of this

province.

Mr. Speaker, one year later the technical report

of the British Columbia energy supply and requirements forecast came up

with the projection that the average rate of growth for B.C. Hydro was

3.5 percent, almost one-half of that projected by B.C. Hydro.

want to know why that Minister of Energy did not get up and inform this

House that B.C. Hydro is presently appearing before the National Energy

Board and asking for

[ Page 312 ]

permits to export firm power in the amount of three billion kilowatt hours per annum.

AN HON. MEMBER: To whom?

MR. NICOLSON: You don't even know. You don't even know.

Mr.

Speaker, this little item might have escaped notice in the province of

British Columbia. It came to the attention through a press agency

called, I understand, the Dow Jones Wire Service. It was printed as a

very small item in the Toronto Globe and Mail , where they

announced that on May 30, 1979, the British Columbia Hydro and Power

Authority of Vancouver "has applied to the National Energy Board for

permission to export electricity to the United States for five years

beginning October 1, 1979. The exports include up to three billion

kilowatt hours a year of firm power and ten billion kilowatt hours a

year of interruptible power. The licence would replace an existing

five-year permit expiring September 30." This is to go to the

Bonneville Power Authority.

The Minister of Energy seems not

to be aware of this. But, Mr. Speaker, I want to point out to that

minister, who seems to want to interrupt, that we're talking about 54

percent of our domestic consumption for the year 1978 in terms of

magnitude. So what are we being asked to authorize the borrowing for?

Another three-quarters of a billion dollars increase again this year in

order that we can generate surplus electricity, in order that we can

sell it to the United States.

I think that what we've got to

do is bring in some kinds of assurances that this money will be

borrowed at interest rates which are not going to lead to costs that

are going to show some kind of a return on the dollar. The minister

responsible for B.C. Hydro comes into this House and doesn't even

mention such a thing, and this is the whole fundamental argument and

this is what people have been saying for some time. I must say I was

surprised. one year later, to see the B.C. Energy Commission come out

with the very same forecast I had made back in January of 1978.

When

a layman can come as close to the true situation, and it is not a

position of the New Democratic Party — it is my personal feeling in

this matter — it indicates there is need for thorough study and through

investigation of the supply and demand forecasts of B.C. Hydro. I know

the committee has looked into certain things: they've found out the

waste, as we heard presented to the House today, in terms of what

people are allowed, just to furnish their offices in Hydro. The

fundamental question is: should B.C. Hydro be allowed to continue? It

is not simply cost of financing this debt. It is the cost of the

flooded valleys; it is the cost of dislocated people; it is the cost of

the destruction of our environment and our way of life here in British

Columbia. It is pretty doggone convenient for some of these Vancouver

MLAs to get up in this House and talk about flooding another valley, as

if people didn't live in those valleys; as if the very things that

attracted people here to British Columbia, in terms of its wildlife

resources, in terms of its mountains, its streams and its free-running

rivers, were not what brought us here in the first place.

Mr. Speaker, there is a cost bigger than even the debt financing here, and

that is why I'm going to vote against this authorization of another three-quarters

of a billion dollars, another pig-in-a-poke without any up-front admission as

to what the real things that this government is funding for. This government

is funding for the "Bonnerville Power Authority." This government

is in bed with the "Bonnerville Power Authority." This government

is in bed with a continental energy policy. This government, through Robert

Bonner, are part and parcel of an international group of people called the Trilateral

Commission. They are after the water resources of British Columbia, and they

are not serving the people of British Columbia. To vote for this bill will not

serve the people of British Columbia.

MR. MUSSALLEM:

Mr. Speaker, I could not possibly remain in my seat any longer after I

heard the stirring address from the member who has just taken his seat.

He probably forgets the good things the B.C. Hydro has done. Let me

refer him to his own area of Trail. There are no more floods in Trail.

Why not? Because they dammed the Columbia River. There are no more

lives lost in Trail because of the same Columbia Dam. There is no more

great loss of business in the Trail area, because they dammed the

Columbia River.

MR. LEA: What about the Arrow Lakes?

MR. MUSSALLEM:

And he would sit here — never mind the Arrow Lakes — and talk about the

Columbia. He just can't sit still through this. He talks about the

losses, he talks about what Hydro has done — destroyed everybody. Let

me tell you about my constituency of Dewdney. Let me tell you about

that. Well, Hydro built a dam on the Alouette Lake, and that valley now

has 1,000 homes — 1,000 people live in it. And you say Hydro is all

bad? I tell you, they're good, intelligent, upright and honest people.

Another

thing they do. Whether it be Vancouver, Kerrisdale or Dease Lake the

price for power is the same. Would he like to live in Manitoba where,

they say, the price of power is low? It's cheap in Manitoba if you live

in Winnipeg. But go 500 miles out of Winnipeg and you can't afford

electricity. That's the situation. But our friends don't listen.

They've got a block; they hate Hydro. I don't know why — it's a

socialist operation. I don't want to say that very loud. It's a thing

you've got to say quietly. I don't understand that. It's a terrible

thing to say, but you know, stop and think. It's a socialist operation;

it's owned by the people; and yet they knock it. It's the truth.

The

reason that it's owned by the people is because Hydro has done a great

job. An organization of this size that makes money, as it is with

moneys everywhere, gets extravagant. By getting extravagant, they know

very little cause for how money is spent. I was on the Crown

corporations reporting committee, and my hon. friend from New

Westminster (Mr. Cocke) was there. I looked Mr. Bonner straight in the

face and said: "Mr. Bonner, the trouble with your corporation is you're

too extravagant, and I think that's got to stop." He gave us a little

lecture, and he told us it was bothering his officials because they all

had to stay there just to watch.

I told him we were the eyes

and the ears and the mouth of the people, and it took our government to

establish the Crown Corporations committee that put a check on Hydro.

They need a check and they are the ones that admit it. Mind you, it

annoys them, but they admit it. But we investigate all Crown

corporations, not only Hydro, and I want to say that Hydro has done a

great job for British Columbia. I see

[ Page 313 ]

nothing wrong with selling power across the line; I see nothing wrong in asking for a permit to sell power.

have a product that is more valuable than oil. They talk about thermal

power, wind power, solar power. The member for Cowichan-Malahat (Mrs.

Wallace) spoke about solar power, and showed us a picture. Well, tell

me, what in the world is hydroelectric power but solar power? But

you’ve got to have magnifying glasses in the sky; they call that solar

power. Solar power, hon. friend, is hydroelectric power, the best kind

of power there is. And why shouldn't we sell hydroelectric power? It is

far more valuable than oil. The oil in Alberta will run out, but the

sun will always shine in British Columbia. As long as the sun shines

and the rain falls we'll have hydroelectric power. I say let us build

more dams — yes, dams — because if we build more dams we'll never have

to face the nuclear age in British Columbia. Let us have thermal power,

and we'll never face the nuclear age in British Columbia. And that is

the policy of our government.

The hon. member for North

Vancouver–Seymour (Mr. Davis), a man who is qualified to make a

statement of this nature, said that the $750 million being borrowed

will produce power at $1,000 per kilowatt. Well, that is very low-cost

power. Power developed by thermal energy at this present rate takes

$1,100.

Interjection.

MR. MUSSALLEM: My

hon. friend helps me; he says that in Latin "hydro" means water. We

know what it means. Hydro may mean water but it is still solar power.

MR. BARBER: No, George.

MR. MUSSALLEM:

It is. Hydro power is solar power because the sun shines and the clouds

go up and the rain comes down — that's solar power, solar energy. The

sun shines, it evaporates the water, the water goes up and the clouds

come down — what more solar energy is there than that?

Interjection.

MR. MUSSALLEM: Listen, I could out talk you in Latin anytime. Ipso facto!

Interjections.

MR. MUSSALLEM:

They talk further: they knock the Columbia, the Mica Dam project. They

have the audacity to knock it. Do you know that the Mica Dam is on line

now at $261 per kilowatt? That's the lowest-priced power in British

Columbia. In 1956, '57 and '58, that party there fought the two-river

policy of this government tooth and nail. I wish I'd got the

newspapers: "The government has given away British Columbia. We'll be

in debt. We don't need the power." Never need that power! Why, if we

didn't have that two-river policy now, my friends, there would be no

interior British Columbia, there would be no pulp mills, there would be

no power on this island. It was the two-river policy that made the

province of British Columbia, and you knocked it. Yet when we're

talking now about borrowing $750 million to create more power at $1,000

per kilowatt — far less than any other power you can produce — they

knock it. My hon. socialist friends get excited with big numbers. But

let them understand this: British Columbia is big and the numbers are

small by comparison.

Here's what they would do. Say I

suggest to them that if we want to remove this debt totally from the

people of British Columbia, all we need do is put Hydro up for sale.

You would have them flocking here from every direction to buy Hydro,

and they'd pay double the price of the debt. But then watch your Hydro

rates go up; then watch the Interior close down.

MR. BARBER: Why don't you throw it in with BCRIC?

MR. MUSSALLEM:

My friend, don't talk about BCRIC! That's the greatest thing that ever

happened to this country. It will go down in history as a milestone.

this debate the hon. member for Shuswap-Revelstoke (Mr. King) said what

an awful thing Hydro had been doing. He said they were in such a big

rush to get the bids on the Revelstoke Dam that they called the bids

and then they put it on a cost-plus system. He said: "What a terrible

thing. They just threw money away." He read the report. But you know

who did that? Do you know? Let me tell you. They said "Fire Bonner."

What a disgraceful statement to make. He's a Great businessman, a

leader in our province. Fire Bonner? Why fire Bonner? He's doing a good

job — he's an honourable man, and he should have our respect, and you

should be ashamed to make a statement like that.

MR. LEA: They're going to fire him.

MR. MUSSALLEM: They're not going to fire him.

MR. LEA: Don't put your paycheque up for a bet.

MR. MUSSALLEM: I'll tell you, I don't know what they're doing. [Laughter.]

MR. LEA: Don't feel bad, neither do they.

MR. MUSSALLEM:

We don't know what they do when they close the doors. Listen, just hold

it. New Westminster, keep quiet. We do not know what they do when they

close the doors.

MR. LEA: Nor does anybody.

MR. MUSSALLEM:

Nobody knows. That's the system we work under. But I want to tell you

this. If I had a say and if the hon. members here had a say, Bonner

would be respected and not derided. You ought to be ashamed of yourself.

was telling you who was the culprit that made this disastrous deal with

Atkinson and various people. Who was it? Their man, Mr. Cass-Beggs, who

over three years.... It was in the report, but I'm going to tell you

now. I would never had said a word about it, but you brought the thing

up and I'm telling you what they did. They said: "Oh, no, we can't pass

that report if you leave Cass-Beggs' name in there."

We took

Cass-Beggs' name out, but that was the guy who did all the damage. That

was the fellow that messed up the bids. I'm not going to knock somebody

for the disaster

[ Page 314 ]

created there. Disaster after disaster, mess after mess, but we're not

knocking it. We're merely saying they do not understand government and

they never will. Excellent opposition.

We have some of the

greatest chairmen. Hydro had great chairmen: Hugh Keenleyside, Gordon

Shrum, all these great men. Why are we knocking them? We will pass it

because it should be passed. My friend opposite said we were developing

power for $1,000 per kilowatt hour. That's a good deal. It's not a

debt. We could sell the whole company and make money, but why sell it?

British Columbia needs Hydro, and why should this company knock a

socialist enterprise? That I will never understand.

SOME HON. MEMBERS: More! More!

MR. LORIMER: I thought they were applauding me, but I guess it was the former speaker. I was ready to sit down when I was ahead.

We're

discussing a very simple bill. It's three lines and spends

three-quarters of a billion dollars. That comes out to a quarter of a

billion a line. That's pretty heavy stuff.

The increased

debt that this allows amounts to over $2,000 for every man, woman and

child in this province. That is a terrific debt for any province to

carry on one Crown corporation. I am not in argument with the member

for Dewdney (Mr. Mussallem) in that Hydro is a good company. The

company is fine. It's the directors that we have to question. It is the

leadership of this company that has caused the need to bring forth a

bill to borrow another three-quarters of a billion dollars.

The

bill doesn't tell us for what the money is wanted. There have been a

number of our members on the other side who have said that it was to

prevent blackouts or brownouts. Certainly there is nothing here to

indicate that that's the purpose of the borrowing requests in this

bill. What it is is a blank cheque to Hydro to spend as they see fit.

The

issue really isn't in the borrowing. The issue is that we're expected

to pass a bill of this kind without any indication or suggestion of

what the funds are required for. What are they going to use it for? At

the present time — from their report for 1978-79 — 31.7 percent is set

out for interest payments. That's well in excess of the amount of the

money paid by Hydro for wages for their staff. Only 23 percent for

wages and salaries, and 31 percent on debt payments. Now that's a lot

of money: a third of a dollar, basically, goes into debt reduction in

this Hydro performance. It's strictly financial irresponsibility by the

directors in allowing this company to go farther and farther into debt,

and not stopping the waste and the other matters that have created this

debt over the last two or three years.

I might point

out that one of the problems, it appears to me, is the fact that we

have four directors on this Hydro board. One is the Minister of Energy,

Mines and Petroleum Resources and Minister of Agriculture (Hon. Mr.

Hewitt), who has been on the board for some six months; another is the

Minister of Education, Science and Technology (Hon. Mr. McGeer), who's

been on about the same length of time. For that length of time, they

basically know nothing about Hydro and very likely have only learned

where the executive dining room is. Hydro is a complicated company, and

certainly you don't gain knowledge about Hydro in a matter of six or

seven months. The other director is Charles Brazier, who is a lawyer

and again a part-time director. So we have three part-time directors

and Bonner, who is the only permanent director at Hydro.

[Mr. Speaker in the chair.]

Certainly

it was regrettable to learn of the death of Mr. Steed, who had served

Hydro very, very well as a permanent full-time director for many years.

But now we have a case where there are three part-time directors and

one full-time director controlling the affairs of Hydro.

Decisions

are not being made by the directors, but are being forced to be made by

the staff and the general manager. There's certainly no leadership in

Hydro at the top. As a result, there is no financial responsibility, no

accountability, and it's a financial disaster.

We don't know

what they will be doing with this money. They've been selling some of

their assets in the past year or two. They've sold a number of buses,

and yet they have to borrow more money for their capital expenditures.

If the money was used to increase the transit system, it might be

worthwhile considering, but we have no knowledge of what this money is

earmarked for. It might be earmarked for Bonner's atomic plant, for

atomic energy, the start of development of power through atomic energy.

The

waste at Hydro is another thing. Here we have an action in court which

was settled out of court last year with a payment of $34 million to

contractors on a contract which was completed somewhere around 1969.

The people who were being paid were Morrison Knudsen Co., Northern

Construction Co., J.W. Stewart, Perini Pacific Ltd., and so on. These

people were given a settlement of $34 million without awaiting the

decision of a court.

Now this is part of the waste that goes

on in Hydro. One of the problems is the fact that it's a company of

engineers, and there are probably too many engineers in Hydro. The

directors have now hired an outside consultant to determine if there

are now too many engineers on staff in Hydro. Of course, the answer is

pretty obvious that that is the case. But they're going to spend

thousands and thousands of dollars on this outside study of a problem

that is reasonably obvious. There is waste, I suggest, throughout

Hydro, because of the lack of leadership and lack of guidance by the

directors of this company. Until we have an idea of what is required,

for what purposes these moneys are required, I don't see how it is

possible for any person in this House to vote three-quarters of a

billion dollars as a blank cheque to B.C. Hydro.

MR. SPEAKER: The hon. minister closes the debate.

HON. MR. WOLFE:

Mr. Speaker, as per usual on this borrowing bill, we had a wide-ranging

debate on engineering aspects and various problems associated with

British Columbia Hydro, but the simple fact is that this bill proposes

to increase their borrowing authority to be used, if necessary, and

based on current projects underway. As all members know, I circulated a

detailed list of the reasons for this new borrowing authority, and I'm

therefore rather surprised to hear the last speaker refer to the fact

that no information has been given to him in terms of what this

information was used for.

But generally speaking, Mr. Speaker, we've talked about the lack of accountability of Hydro; the fact that this

[ Page 315 ]

rubber-stamping, a blank cheque; concern was expressed over the size

and the cost of their debt by the Leader of the Opposition; a question

or two was raised about where we're going to get all this money;

concern was expressed about waste and extravagance in Hydro; and, of

course, the fact that we just don't need this power — the suggestion

that we can just shut it all down for ten years. That's really one for

the books.

Just to talk about accountability. Mr. Speaker,

we now have through B.C. Hydro a fantastic annual report that's been

circulated to all members and now, through the introduction of this

government, quarterly reports on British Columbia every three months —

full disclosure every quarter. And, of course, we have them appearing

before the Crown corporation committee on several occasions, and now we

have the ultimate in disclosure and accountability, Malcolm Turnbull

and Alex Young. So this just shows you the extent that we've gone to in

terms of accountability.

Now in terms of the suggestion that

this bill for such a huge authorization is rubber-stamping, Mr.

Speaker, I would point out that it would be quite easy for the

government to change the Hydro Act to allow for no accountability, to

allow for full borrowing power without any limit, and this is the case

in certain other provinces in Canada. I think we should be aware of the

fact that it is this government's policy to place the bill before the

Legislature every time we want to increase this authority and allow for

this full and broad debate on this issue. There are other provinces in

Canada which have no latitude or control over this same aspect of Hydro

borrowing. And I might say that our predecessors, the former

government, in 1974 — as an example — increased the borrowing authority

of Hydro by $500 million. Where did they do it? Not in a special bill

in the Legislature. Where did they do it, Mr. Speaker? In the Statute

Law Amendment Act, buried with a whole series of other amendments — an

increase of $500 million. That's the importance they gave public debate

of an increase of this kind in the size of their debt. And we're asking

here for no inflationary increase in the requirement for borrowing.

This

is the same level of increase, when you look back over the last seven

or eight years — and this bill has been before us for every one of

those years, practically — that you found over those years: in the year

1975 there was an increased request by the former government of $750

million, and here we have the same amount being requested this year. So

it does follow that same pattern: there has been no inflation in this

amount. And I might say, Mr. Speaker, in terms of the concern over

borrowing. that in the last two years there has been no new external

borrowing, no outside borrowing since June 1977. That was the last

public borrowing by British Columbia Hydro on behalf of their increased

borrowing requirements. Every borrowing since then has been with the

use of internal funds.

It was indicated by the member for

Coquitlam-Moody (Mr. Leggatt) that there was no indication of where

we're going to get this $750 million, and I would simply refer him to

the full detail on this matter in pages 35 and 36 of the budget speech.

There was a full statement of the funds and where they were provided

from for last year's and for the coming year's requirements of all

Crown corporations. So, Mr. Speaker, the member should refer once again

to the budget speech for that kind of information.

Now as to the size and the cost of the debt. the Minster of Energy, Mines and

Petroleum Resources (Hon. Mr. Hewitt) has already explained that the present

size of debt per customer is very comparable to other Hydros in Canada. I only

want to add to that that although we are concerned with the amount of interest

which is a burden on the ratepayer of B.C. Hydro, you'll find if you look

back over a number of years as related to their total operation, as related

to their total revenue, that it varies from about 30 cents to 31 cents to 32

cents on the dollar of revenue, Notwithstanding the increased use of outside

borrowing, this has been the pattern. If you look back over a number of years

you'll find that the same relationship to the sales revenue of Hydro exists.

And I might say that most of their debts — in fact all of them — have sinking-fund

arrangements associated with them. When compared to many of the debts of Hydros

across Canada, I think we are in better shape for the provision of repayment

through sinking funds.

talk about waste and extravagance. Members should have a closer look at

this annual report, where you'll find that salaries and wages have

increased only about 5.2 percent in their expenditures for the past

year. The only expenditures which have increased more than that in the

past year have been in two items: property taxes for school purposes,

which went up 15 percent, a considerable burden on this operation, but

to the benefit of school districts in this province; second, the only

other area that increased above that was in the price of natural gas,

which has escalated substantially and is a burden on the cost of

providing natural gas to the customers of Hydro.

We've

talked a lot about the demand for power and the need to provide these

projects for the future benefit of this province. I don't think a case

can be made that there is excessive Hydro development going on in this

province.

In the newspaper this week, we see that Crown

Zellerbach expansion plans at Elk Falls include a $171 million

newsprint machine. The obvious concern expressed in this undertaking as

to whether they are going to have the power availability in Vancouver

Island is the new transmission line going to Vancouver Island not being

available until 1983. It's going to be imperative that we move forward

very rapidly with such projects so that there is not going to be a

shortfall in these kinds of demands for power because of fantastic

expansion and economic development going on in this province.

This

bill means jobs: it means economic development; it means industrial

reputation and expansion of investment in this province. I'm going to

vote for it. The interesting thing is that our opposition, when they

were in power, voted for it; when they're not in power, they don't vote

for it. That's just something I want to leave you to think about.

I'm happy to move second reading.

Motion approved on the following division:

YEAS — 28

Waterland

Nielsen

Chabot

Williams

Hewitt

Mair

Vander Zalm

Heinrich

Ritchie

Strachan

Brummet

Ree

Segarty

Curtis

McCarthy

Phillips

Gardom

Wolfe

McGeer

Fraser

Jordan

Kempf

Davis

Davidson

Smith

Rogers

Mussallem

Hyndman

[ Page 316 ]

NAYS — 21

Howard

Lorimer

Hall

Nicolson

Lea

Cocke

Dailly

Stupich

Barrett

Levi

Sanford

Skelly

Lockstead

Brown

Barber

Wallace

Gabelmann

Hanson

Mitchell

Passarell

King

Division ordered to be recorded in the Journals of the House.

HON. MR. WOLFE: By leave, I move that the bill be referred to a Committee of the Whole House to be considered forthwith.

Leave granted.

Bill

11, British Columbia Hydro and Power Authority

(1964) Amendment Act,

1979, read a second time and referred to a Committee of the Whole House

for consideration forthwith.

BRITISH COLUMBIA HYDRO AND POWER

AUTHORITY

(1964) AMENDMENT ACT, 1979

The House in committee on Bill 11; Mr. Rogers in the chair.

section 1.

MR. LEVI:

I missed my chance before, but in the committee stage I just want to

deal with a very complicated

section in this bill — the only

section in

the bill — which increases the amount from $4.9 billion to $5.6

billion. First of all I'll quote something, and then I'll ask the

minister to comment on it.

In May 1978 the minister said the

following when we were debating a similar bill: "The Authority did

request a larger increase, but after study the government is only

prepared to recommend an increase of $750 million."

Now we

have the minister saying this afternoon and I quote: "Mr. Speaker, all

these capital projects total $797 million. In the borrowing picture of

B.C. Hydro, $274 million of the present borrowing authority still

remains." Are we to presume that something like $500 million or $600

million of the amount that was approved was spent?

We don't

really know how much Hydro asked for last year — presumably something

in the order of $1 billion. They got $750 million; they spent,

apparently, about $500 million of that. Now does that really represent

a cut of 50 percent in the request that they made? We're at this end of

the fiscal year now. If this is the case, what projects did the

government cut out last year? The minister did say that "the Authority

did request a larger increase but, after study, the government only

approved $750 million." Can the minister tell us what he cut out? What

was cut back, or what was put on the back burner?

Somebody

made reference before to the brownout people. Exactly what was it that

you retarded, in terms of development, that might result in the very

problem that some of the people out there suggested? Can you tell us

that, in respect to the kind of funding? That's why I raise the issue.

would like to make reference to the whole question of accountability

which was dealt with by the Minister of Energy, Mines and Petroleum

Resources when he suggested that there is accountability. He made

reference to the auditor-general as being one of the people who

presumably takes a look at what Hydro does. If the minister was

familiar with what the auditor-general does, he would know that the

auditor-general has no concern at all with B.C. Hydro. That was the

kind of thing we were looking at on the committee.

I served

on the committee, and I found that the work that we did was worthwhile,

but what we became familiar with was simply scratching the surface. We

were constantly trying to understand the very large amounts of money

that were being approved. We were trying to look at the kind of

overruns that they had, and even at this stage of the game — and the

report was one that I endorsed — we were still a long way from

understanding exactly what was going on in that operation.

However,

we do have some clue now — not, as the Premier is fond of saying, that

Crown corporations are at arm's length and somehow the government

doesn't have any involvement. We know very well that the government

makes major financial decisions. What we were concerned about this

afternoon, and have been for some time, is just who makes the policy

decisions about where power is going in terms of its development or in

terms of money. In terms of accountability, that is still a very

serious problem, a problem that, frankly, I am not satisfied that

either the minister responsible for Energy or the Minister of Finance

understands exactly how you can do that kind of monitoring.

would just like to refer the minister to the questions that I asked:

last year, $750 million $270 million left over. What was cut out? What

was put on the back burner?

HON. MR. WOLFE: Mr.

Chairman, if I understand the member's question, he is referring to

last year's estimates of Hydro's expenditures, which I commented upon

at that time. Last year's increase request was for $750 million. What I

think I was referring to at that time was that their original request

was for some $900 million or $1 billion. In analysing the detail of

that request, it was reduced to $750 million, which was the amount they

would have to live with.

I don't recall your other question

except you referred to the auditor-general in passing, and I believe

she does have authority to comment on B.C. Hydro.

MR. LEVI: No, she doesn't.

HON. MR. WOLFE: I said Crown corporations.

MR. LEVI:

You said this afternoon, and I will read it again slowly and then you

can hear it: "Mr. Speaker, all of these capital projects totalled $797

million. The borrowing picture will be $274 million of the present

borrowing." That relates to that $750 million that we approved.

HON. MR. WOLFE: But there was some left over at the beginning of the year from the previous year.

MR. LEVI:

We can debate this in the hall, Evan. They came in with $950 million

apparently as the request. The minister indicated $950 million to $1

billion, something of

[ Page 317 ]

that

order. It was cut to $750 million. Now what is it that you cut back?

Presumably you don't just slash off $250 million. You have to look at

projects. What were they planning to do that they didn't do? There are

some unspent funds in here. Now did this result in the retarding of the

development of various projects? That's what I want to know.

HON. MR. WOLFE:

Mr. Chairman, on a technical matter, in 1976 the B.C. Hydro Act was

revised to make the auditor-general's Act apply to it. Once again, the

increased authority of $750 million last year was developed after

analysing the detail of their revenue of $900 million, and arriving at

the understanding that they could live with $750 million. I can't tell

you what the individual items were in the $900 million and I don't

think you want to know.

MR. LEVI: That's not true

that I don't want to know. What do you think I asked the question for?

The trouble is that the three of you over there can't sort out the

information. You make quite a thing of saying that you did not spend

$274 million of the appropriation and that last year you cut it down by

an equal amount, pretty close to $250 million. That's almost a half a

billion dollars, half of, presumably, the original appropriation

requested, that is a very significant cutback or retardation in the

programming.

With all of the accountability that the

government claims, the Minister of Finance can't tell us, and the new

Minister of Energy, Mines and Petroleum Resources can't tell us. Maybe

we should ask the old Minister of Energy: he's probably very informed

about this. We might even ask the chairman of the committee, but he

doesn't know any more than I do, because we couldn't get that

information.

The minister said that the auditor-general's

Act was amended to take in B.C. Hydro. In the report of the

auditor-general B.C. Hydro appears in the column which she is not

concerned with and not in the 23 Crown corporations that she is

concerned with. Maybe I'I have a chance to talk to the Minister of

Energy about that. Don't look so surprised; that's what it is.

MR. BARBER:

Does the amount which the Legislature is being asked to approve as an

increase to Hydro's indebtedness include money for the construction of

a natural gas pipeline to Vancouver Island?

It's a very

important question. It's a legitimate concern of the residents of

Vancouver Island and considerable concern about, about the future

ability of residents and business on this island to provide for their

own maintenance.

HON. MR. WOLFE: Under gas service it

provides for the recurring cost of improving and expanding the gas

distribution system and other facilities and additions needed to

provide gas service to customers. I haven't got the answer to that

question. I can get it for you later. As we all know, it obviously

wouldn't provide in those amounts for the construction of a new

pipeline to Vancouver Island. But there may be certain planning or

engineering associated with this that I am not aware of.

MR. BARBER:

From my own inquiries, Hydro isn't aware of it either. To the best of

my knowledge — I certainly stand to be corrected — this amount doesn't

include a nickel for the planning, the engineering or the construction

of a natural gas pipeline to Vancouver Island. As the minister just

said, the amount includes simple maintenance of the current system. I'd

like to point out to the committee that Hydro has adopted a policy — I

guess it was four or four and a half years ago — of in fact reducing

its customer service on Vancouver Island in the field of natural gas.

No natural gas customers on the Island have been permitted to increase

their natural gas usage. On the contrary, when applying for changes

within the current amount used by them on an annual basis as customers

of natural gas, natural gas customers on Vancouver Island have been

told they may not do that.

For instance, a perfectly simple

illustration was brought to my attention by a businessman in town. He

told me that he had a fish-and-chip shop which used to operate on two

levels, downstairs and upstairs. The pipe bringing the gas into his

facility — which is required in that particular business — used to go

to some extent downstairs and to some extent upstairs — about a third

of his total gas supply went upstairs. He had a fire, and after the

fire he said: "I want to bring the third downstairs. Can I put in a new

outlet?" No, Hydro said, you may not. Hydro, after many appeals from me

and others, said you may not. Why, the Attorney-General asks" Because

it has been their policy that they will not permit any expansion

whatever of natural gas service on the Island. And when they can take

the opportunity to do so, they will reduce service. He wanted what

Hydro determined to be new service on the ground floor — that was the

way Hydro interpreted it. We appealed it, up and up the management — it

finally went to Norman Olsen — and we got nowhere. That has been

Hydro's policy for some time.

During the recent campaign the

Premier made a promise to the people of Vancouver Island that his

government, should it be returned, would deliver natural gas in

abundance to the people of Vancouver Island. The first case I make is

that it's clear natural gas is not abundantly available. The second

case I make is that, in fact, natural gas service has been reduced

deliberately, purposely and consecutively over the last several years

by B.C. Hydro. The third case I make is: if you're going to keep that

promise, when will we see the financial commitment required in order

that it be kept? I don't see it in this bill. If it's not to be found

in this bill, in what bill, during this session or some other, will we

begin to see a commitment to the requirement for planning and

engineering, and finally the capital costs of construction of a natural

gas pipeline to Vancouver Island?

HON. MR. HEWITT: In

regard to the natural gas pipeline to Vancouver Island, some of the

preliminary engineering and reports of the feasibility of that have

been made by Hydro. Until such time as they determine the total costs

involved. It's not, of course, in the capital fixed asset borrowing.

When the feasibility, the environmental impact and everything else have

been identified, then we shall do the proper budgeting. I think the

member is aware of that.

MR. BARBER: I wonder if

either minister — and I appreciate your answer — would be prepared

tonight to indicate in a rough time framework when you expect that

engineering and developmental material will be available.

[ Page 318 ]

and

when you expect the board of Hydro might be able to name the cost of

keeping the promise that the Premier made in the last election.

HON. MR. WILLIAMS:

He explained it yesterday in the debate. He said: "It's not there." You

want to ask a question when it's not there. He said it wasn't there,

and you want to ask questions as if it were.

MR. BARBER: I think it's a reasonable question, and if the Minister of Labour wouldn't mind keeping quiet for a moment....

HON. MR. WILLIAMS: Why should we keep quiet?

MR. BARBER: If the minister is willing to answer, why don't you let him answer?

HON. MR. WILLIAMS: It's not in his estimates.

MR. BARBER: He's willing to answer. Would you let him answer?

HON. MR. WILLIAMS: No. [Laughter.]

MR. BARBER: No wonder labour management relations are so bad. Look at cabinet relations.

the Minister of Labour would keep quiet for a moment, I too would be

happy to.... It's an important question; it's fair to raise it now.

It's fair thereby to be better able, during the minister's estimates,

to ask more questions about further problems associated with natural

gas transmission on Vancouver Island.

HON. MR. HEWITT:

Just a quick comment. I do have a task force dealing with the reports

regarding natural gas pipelines. That's where it is at the present

time. I will be making comments on that as soon as that report is

complete, but B.C. Hydro — dealing with this bill as the Minister of

Labour has pointed out to you — does not include the natural gas

pipeline in the fixed asset expenditures for this year out of this bill.

MR. HOWARD:

Much was made earlier of the statement in the annual report to the

effect that Hydro had earned $34 million from the sale of energy to the

United States. This was purported to be a very good venture and a good

thing because it brought funds into the country and into B.C. Hydro's

position.

I think that on the other side of the ledger — and

this was ignored by those who were putting forth that sale of so-called

surplus electricity as a good thing, and the earning of $34 million as

a good thing — is the fact that Hydro pays out at least $100 million

annually in interest on debt owed in the United States. There's a net

loss position there of the difference between $34 million and at least

$100 million — it's closer to $110 million or $112 million in interest

paid out on money borrowed in the U.S.

Can the minister tell

the committee: where does Hydro intend to borrow this $750 million that

it is seeking permission to borrow?

Interjection.

MR. HOWARD: Has it borrowed any of it?

HON. MR. WOLFE:

Mr. Chairman, the Crown corporation's estimated requirements for this

fiscal year are listed on page 36 of my budget speech. I stated at that

time that we expect to meet these financial requirements from the

Canada Pension Plan and from pension sinking funds administered by the

province.

MR. HOWARD: Apart from that, you know,

we're still running a net shortage of $65 million to $70 million on the

difference between this paying out of interest in U.S. funds and the

money that comes in from the sale of energy across the line.

also seems that what we are doing here is giving Hydro the authority to

borrow money to pay interest on the debt that it already owes. That's a

rather sad state of affairs, because paying interest to the extent of

some $300 million a year means you're going to give Hydro the authority

now to borrow another $750 million and $300 million of that will go to

pay the interest on the debt that we already have, leaving a net of

perhaps $450 million for projects, which is a rather silly way to do

business. I think anybody who looks at borrowings and that sort of

thing will see that when you go to the process of starting to borrow

money to pay interest on the debt that you already owe, you are in some

serious trouble. That appears to be the case in what's happening here.

HON. MR. WOLFE:

Mr. Chairman, I won't debate this matter, but the member stated that

the interest is being paid out of the debt we're creating. I refer him

to the operating statement on page 34, where it's indicated clearly

that interest charges appear as an offset against the revenues

developed each year. It's a part of our operating expense.

MR. HOWARD:

It also shows in the statement of changes in financial position as a

source of funds in the year ending March 31, 1979, something called

bonds to the extent of $473 million. That wasn't created out of thin

air, I don't think.

MR. LEVI: I would like to have

the House welcome the new member of the front benches over there. He's

not waiting for the Premier to make any decisions; he's already made up

his own mind. Well, you got my vote, son.

I just want to

clear up one small matter with the two ministers. I would like the

Minister of Finance to tell me whether the auditor-general actually has

the power to look into the books of B.C. Hydro. Check with your mate

behind you, and then let me know.

Let me just save the

minister. I'll save you a lot of trouble. If you take the trouble to

read the auditor-general's report, it says: "Public bodies of which the

auditor-general was not appointed auditor" — page 55. Among a number of

the Crown corporations appears British Columbia Hydro and Power

Authority. She does not have the power to look at B.C. Hydro, and this

was one of the issues that was a continuing problem in terms of the

committee. What's being raised in here today is the question of

accountability. It's all very well for the Minister of Energy, Mines

and Petroleum Resources to make a smart remark about Arab control and

no control. They do not exist — the kinds of controls that that

minister thinks exist, That's one of the very serious problems that

obviously has to be considered by the new Crown corporations committee

again: what exactly happens about accountability.

[ Page 319 ]

MR. KING:

I just wanted to say that looking at the cabinet benches and the new

members over there it appears that we've got a cross between the

amateur magician that formerly hailed from Kootenay and the magic

mushroom. He's popping up all over the place.

Mr. Chairman,

I just want to ask the minister two things. Does he have any estimate

at all of the overrun related to the Revelstoke Dam and the Highway 23

reconstruction? I understand there is a similar rock problem with

respect to the replacement of that highway. Initially there was a $30

million overrun indicated on the dam. I understand that may be much

larger now, and I want to know what the overall estimate is at this

point regarding the dam site and the highway. The other question I

would like to ask is whether or not there is any of the money allocated

in this increased borrowing power for any further development work

incident to the proposed Kootenay diversion.

HON. MR. WOLFE:

Mr. Chairman, I think the question first asked about the Revelstoke Dam

should be addressed to the Minister of Energy, Mines and Petroleum

Resources (Hon. Mr. Hewitt) under his estimates. The answer to the

second question is no.

MR. LEA: Mr. Chairman — just

so the member for North Peace River (Mr. Brummet) has some idea of what

he is voting for here — when the minister was talking about internal

financing instead of going to the open market, and he mentioned the

Canada Pension Plan and other pension funds, what sort of interest rate

are B.C. Hydro going to pay for this money? Could the pension funds be

invested in the open market for a better return and therefore help the

member for North Peace and his pension plan when he gets back to being

a school teacher? Does the member for North Peace really want this

money from his pension fund to be invested below the market value in

point of return? I'd like to ask the minister: will the pension fund be

paid the same kind of interest that Hydro would have to pay if they

went to the open market?

HON. MR. WOLFE: Mr.

Chairman, the rate determined for internal issues is always based on

current market. Therefore they become a considerable economy to both

sides because there are no placement charges associated with them or

brokerage, et cetera. The rate determined is the market rate from time

to time — whatever it is at that time.

MR. LEA: Which market?

HON. MR. WOLFE: The market rate.

MR. LEA: The prime rate?

HON. MR. WOLFE: The bond rate, the open market rate.

Section 1 approved.

Title approved.

HON. MR. WOLFE: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed: Mr. Speaker in the chair.

Bill

11, British Columbia Hydro and Power Authority Act

(1964) Amendment

Act, 1979, reported complete without amendment, read a third time and

passed.

Hon. Mr. Curtis filed the addendum, volume 11, report of the Royal Commission on the British Columbia Railway.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 10:54 p.m.

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