1975 Legislative Session: 5th Session, 30th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 12, 1975

Afternoon Sitting

[ Page

3421 ]

CONTENTS

Speaker's ruling

Motion to adjourn the House on a matter of public importance.

Mr. Speaker — 3422

Routine proceedings

An Act to Amend the Municipal Act (Bill 139). Mr. Wallace.

Introduction and

first reading — 3423

Oral questions

Date of closing of Haney Correctional Institute. Mr. McClelland

— 3423

Vancouver Island Coach Lines in violation of Companies Act. Mr. D.A. Anderson

— 3424

Fire prevention inspection and education programmes. Mr. Wallace —

ICBC strike delaying school construction starts. Mr. Schroeder —

Withdrawal of Bill 61, Emergency Programme Act. Mr. Morrison —

Payment of taxes by ICBC. Mr. Gardom — 3425

Shortage of canning lids. Mrs. Jordan — 3425

Grant to Disability Rights Association. Mr. D.A. Anderson — 3426

Asbestos air pollution. Mr. Wallace — 3426

British Columbia Railway Company Construction Loan Amendment Act, 1975 (Bill

27). Second reading.

Mr. Gardom — 3426

Appendix — 3456

THURSDAY, JUNE 12, 1975

The House met at 2 p.m.

MR. R.E. SKELLY (Alberni): At 3 o'clock this afternoon we'll

be visited by a group of students from Wickaninish Elementary

School in Tofino on the west coast of Vancouver Island, and I

hope the Members will welcome them warmly at that time.

MS. K. SANFORD (Comox): Mr. Speaker, seated in the gallery

today is a young student who has come down from Comox Junior

Secondary School as part of a careers day programme which has

been instituted by the school. She's here today to find out

what the job of an MLA is all about, so I hope the Members will

work hard this afternoon and show themselves actively

participating in the job of representing constituents. Thank

you very much.

MR. F.X. RICHTER (Boundary-Similkameen): Mr. Speaker, I would

ask the House to join with me today in welcoming a group of

elementary students from Cawstin, B.C. along with their

teachers, Mrs. Lind and Mrs. Dupuis. Now Cawstin, B.C. Is the

original Hudson Bay post in the Similkameen Valley which was

called Similkameen at the time, and that is where my father

settled in 1864. This is a growing community and this is the

first group of students we have had here in the House from that

area. I ask the House to join with me in welcoming them at this

time.

As the junior Member of the three Members who are still in

the House that were here in 1953 — the Member for Kootenay

(Hon. Mr. Nimsick), the Member for Cowichan-Malahat (Hon. Mr.

Strachan) and myself — I want to extend to the Member for

Cowichan-Malahat the warmest greetings on his 23rd anniversary

in this House since his wife got him elected. (Laughter.)

HON. D. BARRETT (Premier): Mr. Speaker, it comes as a shock

to me that it's the 23rd anniversary of the Member for

Cowichan-Malahat. I can't believe that he's been here for 23

years. He's only 35 years old; that's what he told me.

Mr. Speaker, on behalf of our group, and perhaps others in

the group wish to say something...I've worked with Bob

Strachan since 1960, when I first met him. I liked Bob Strachan

from the first time he made a public statement about me saying

what a fine candidate I would be for the CCF — even before he'd

met me. (Laughter.) Mr. Speaker, he hasn't been wrong since. I

want to say that he was a great leader to work with, a great

colleague in this House and also, in the same category as the

things we said about Frank Richter, a friend of all the Members

of this House regardless of party.

MR. D.A. ANDERSON (Victoria): Mr. Speaker, briefly I'd like

to join with other Members in congratulating the Member for

Cowichan-Malahat. In 1953 I started to come down to the gallery

of the House, and I remember him well when he was a freshman

here. I was even fresher and in the gallery, and I'm glad that

I'm here with him now.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I would like to add

my personal congratulations to the Member for Cowichan-Malahat.

I first came to the House when he was the strong, aggressive

Member who was the leader of the official opposition. Of

course, I've been on both sides of the House and I well

remember some of the contributions that he made to debate and

the strong, forceful position he always took as leader. He

happens to have had a big advantage in life in being born in

the right place to start with. (Laughter.) I just say very

sincerely that I think he's made a tremendous contribution to

the political life in this province, and we appreciate it.

MR. SPEAKER: The hon. leader of the independent party.

(Laughter).

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): I don't have

any competition today, Mr. Speaker.

I would like to join with the other Members in

congratulating the Member for Cowichan. We've had differences

of opinion but I say, Mr. Speaker, that I don't think that

anyone could come to this House and go wrong by emulating the

style with which that Member has discharged his

responsibilities here.

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

I was here when the Member for Cowichan-Malahat arrived in the House. I had

met him when I first came. He had run at that time as a federal candidate and

he impressed me very much. With the little bit of education that I gave him

and talk (laughter), I think I was one of the helping hands to get him elected.

Bob has made a great contribution and I want to say that I've been with him

since that time and I hope that he has plenty of time in the future.

HON. R.M. STRACHAN (Minister of Transport and

Communications): Yes, it's been a great 23 years I can assure

you, Mr. Speaker. I'll never forget the morning after the June

12th election in 1952. I was walking down the main street of

Duncan and a woman stopped me and said: "What are you going to

do about that road of mine." Right off the bat the problems

started to come in.

MR. WALLACE: It's been that way ever since.

[ Page 3422 ]

HON. MR. STRACHAN: Well, it took me 18 years to get the Lake

Cowichan Road fixed, and get the Duncan court house.

I've participated in some of the great debates of this

House. I expect to participate in a few more. It has been a

great experience. There were times when the former Premier and

I stood toe to toe across the floor of the House and had some

classic debates. I'm sorry there was no Hansard in those days;

I'd like to go back and read some of the speeches that were

made at the time.

But, Mr. Speaker, probably the thing I'm most proud of is

that in 23 years in this House I have never once been thrown

out. (Laughter.)

MR. SPEAKER: It can always be arranged. (Laughter.)

HON. MR. STRACHAN: Over the years there have been many

things said and many friendships made. After the recent

election I had the experience of getting phone calls from some

of the former Ministers congratulating me and wishing me well

in our new job as government. It has been a great life

experience. I don't regret a minute of it. If I had to do it

over again I would do exactly the same thing. I've never

forgotten the job I was sent here to do; I've tried to do it to

the best of my ability, as all of us do. Thank you very

much.

MR. SPEAKER: I had promised the Hon. Leader of the

Opposition (Mr. Bennett), in respect to his application this

morning, to deal with the question after serious concerned

study of it. I find the following.

With respect to the application by the Hon. Leader of the

Opposition to move adjournment under standing order 35 for the

purpose of discussing a definite matter of urgent public

importance, I should first comment that the standing order

requires that it must be asked after the ordinary daily routine

of business (under standing order 25) has been concluded and

before notices of motion or orders of the day are entered upon.

That is set out in standing order 35. Morning meetings are

ordered especially for estimates, and such an adjournment would

not fit into the requirements of standing 35 that leave be

asked after the ordinary daily routine set out in standing

order 25.

It is desirable that according to accepted practice the Member asks the opinion

of the Speaker before raising the matter in the House, as the Speaker should

be apprised of the proposed proceedings. Further, pursuant to standing order

35(3), the Member seeking leave must, after stating but not debating the matter,

hand the statement in writing to the Speaker. In the present case which I have

been asked to consider these prerequisites were not followed. However, notwithstanding

the incorrect procedure adopted by the Member the Chair felt that the merits

of the application deserved an opinion.

May , 16th or 17th editions, deal with the urgency rule as we

have it in our standing orders. They've changed the British

rules since.

It was employed between questions and commencement of public

business: see May , 16th edition, page 366 and following. At

page 369 in that edition it says:

"In accepting or rejecting such a motion, the Speaker is, as

in the case of a motion alleging a breach of privilege, doing

no more than deciding whether there is, in his view, a prima

facie case of urgency."

Here the matter raised referred to a prospectus filed on

behalf of B.C. Hydro before the Securities Exchange Commission

in the United States, and to the June 3 report of Peat,

Marwick, Mitchell relating to the B.C. Railway, which report

casts reflection on previous audited reports of the railway

used in the prospectus dated last May 22.

The matter must, according to our practice, be definite,

urgent and of public importance.

"Urgent means of recent occurrence, raised without delay and

requiring urgency of debate" — May , 16th edition, page 370 —

"and if the facts alleged have only been recently revealed,

that does not make the occurrence recent" — see at page 37. "If

it is not raised at the earliest opportunity, it fails in

urgency" — see page 370.

"The motion has been refused when an ordinary parliamentary

opportunity will occur shortly or in time, such as in debate in

a bill, in a supplementary estimate or in public accounts" —

see page 371. "Such a motion is denied when a matter also

anticipates a matter already on the order paper" — in this case

Bill 27 — "in which both second reading and committee stages

may normally be contemplated."

We are presently engaged in second reading debate on this

bill, and the motion deals with financial matters presently in

debate.

"Further, the matter must not be offered when the facts are

in dispute or before they are available" — May , 16th edition,

page 370.

The facts surrounding the true financial standing of the

B.C. Railway have been the subject of debate in the House in

recent days, and are obviously in dispute at the present time.

On those grounds I cannot but decide that, in my opinion, we

should not proceed in this matter, but go in the normal manner

as shown on the order paper.

MR. W.R. BENNETT (Leader of the Opposition): In response,

Mr. Speaker, one of the difficulties is

[ Page 3423 ]

that without an order of business between the Whips we had

no idea what the order of business would be this afternoon.

MR. SPEAKER: I believe that was mentioned last night.

MR. BENNETT: We were not aware. I felt that the debate that

needed to take place, Mr. Speaker, couldn't take place in

normal second reading because it would restrict some Members

who had already taken their place in that debate. I felt, since

this matter was of such urgency and importance, as it reflected

upon the Province of British Columbia, our credit rating and

our intentions, that I felt it should be a full debate. I only

say this in response to your ruling.

MR. SPEAKER: Well, I'm willing to predict that the

opportunity will evolve for many of the Members to debate this

issue in second reading. If the bill progresses to another

stage, which I can't predict, if it does go to committee stage,

no doubt you will have ample opportunity for the Hon. Leader to

debate and everyone else who may have spoken to date. But I

can't predict that. All I can say is that I must follow the

rules, and I think that I have stated it as fairly as I

can.

MR. D.E. SMITH (North Peace River): I don't want to prolong

the discussion, but I would hope that the debate in second

reading would be given some latitude in view of the remarks and

the comments raised by the Hon. Leader of the Opposition (Mr.

Bennett).

MR. SPEAKER: No doubt the same rule would apply as occurred

earlier when all these financial reports were discussed.

MR. BENNETT: On a further point, then, I ask unanimous

consent of the House to move a motion under standing order 49,

the motion to read:

"That this House urge that a judicial inquiry be established

forthwith to determine the circumstances surrounding the filing

in New York on May 22, 1975, a prospectus with the United

States Securities Exchange Commission purporting to be a true

and accurate statement of the financial position of the British

Columbia Railway, and the subsequent filing in this Legislature

of a financial statement dated December 31, 1974, purporting to

be a true and accurate statement with respect to the financial

position of the British Columbia Railway, and to report to this

Legislature a judgment with respect to the reasons for the

discrepancy between the two documents."

Leave not granted.

MR. BENNETT: Did the Premier say no?

MR. SPEAKER: A number of people did.

Introduction of bills.

AN ACT TO AMEND THE MUNICIPAL ACT

On a motion by Mr. Wallace, Bill 139,

An Act To Amend The

Municipal Act, introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next

sitting of the House after today.

Oral questions.

DATE OF CLOSING OF HANEY

CORRECTIONAL INSTITUTE

MR. R.H. McCLELLAND (Langley): I'd like to ask a question of

the Attorney-General. With regard to the closure of Haney

Correctional Institute, the Attorney-General announced some

time ago, through his Deputy, Mr. Epp, that the institute would

be closed at the end of July, I believe. Is that timetable

being kept? In fact, will the institute be closed at that

time?

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

correctional facility, I expect it would be closed about July

1, not the end of July.

MR. McCLELLAND: Mr. Speaker, on a supplementary, could I ask

the Minister what guarantees are being given to the 200-or-more

staff at the institute that their jobs will be secured, that

they will be placed in other institutions or, at least, within

the correctional institute?

HON. MR. MACDONALD: All of the jobs will be protected in the

public service — mostly in the correctional area, possibly some

in other departments.

MR. McCLELLAND: Supplementary. Those people who are

employed, and have been employed less than two years, will they

also be guaranteed employment within the public service

somewhere? Will they be given any choices, or will they be told

in which area of the public service they must go?

HON. MR. MACDONALD: Mr. Speaker, I don't want to be

incorrect about job security under the collective agreement

between the government and its public employees, but I would

think somebody who had been there for up to two years would

have that

[ Page 3424 ]

job protection. But whatever protection was available to

them before, in terms of job security, is available to them

now.

VANCOUVER ISLAND COACH LINES

IN VIOLATION OF COMPANIES ACT

MR. D.A. ANDERSON: To the Attorney-General: could he inform

the House whether or not he intends to take action against

Vancouver Island Coach Lines Ltd. for possible violations of

sections 355 and 356 of the Companies Act, inasmuch as this

Crown-owned corporation has not, since the takeover in July,

1973, put forward an annual report with the registrar of

companies?

HON. MR. MACDONALD: Mr. Speaker, I will have to take that as

notice. I will check into the matter.

MR. D.A. ANDERSON: A further supplementary. Could I ask

whether or not the Attorney-General, when he looks into this

matter, will check with his colleague and director of the

company, the Minister of Municipal Affairs, who is resting his

eyes, I believe, at the moment...

HON. J.G. LORIMER (Minister of Municipal Affairs): Yes,

you're one year out.

MR. D.A. ANDERSON: ...and ask him whether or not the

government intends to appoint more directors so the bylaws of

the company are fulfilled?

HON. MR. MACDONALD: I will take the Minister under

advisement. (Laughter.)

FIRE PREVENTION INSPECTION

AND EDUCATION PROGRAMMES

MR. WALLACE: Mr. Speaker, I would like to ask the

Attorney-General: in the light of the report on B.C.'s shameful

fire protection and prevention record, and in light of the

urgent need for public education, particularly in regard to the

number of residential fires started by cigarette butts, and

since we have just had a fire in a senior citizens' residence

with the loss of one life in this community the other day, has

the Minister taken any immediate steps to improve the frequency

of inspections or promote educational programmes relating to

fire prevention, particularly in senior citizens' homes?

HON. MR. MACDONALD: Mr. Speaker, obviously that part of the report,

and all of the report, is a matter of concern, but to say that we had taken

immediate action since the report was received and tabled would be incorrect.

We are now studying these recommendations which arise after a period of years

and decades of neglect of fire services in the Province of

British Columbia. We will be moving, as the government approves

the recommendations, in a phased manner to implement those

recommendations.

MR. WALLACE: Supplementary, Mr. Speaker. The fact is that we

are having ...

HON. MR. MACDONALD: I know.

MR. WALLACE: ...very frequent fires, and people dying. I am

wondering if the Minister has given any consideration to

providing incentives to encourage landlords in apartment

buildings to give rental discounts to non-smokers because of

the decreased risk of fire.

Interjections.

MR. WALLACE: Well, has this been given any consideration

before?

HON. MR. MACDONALD: No, that one has not. That is not in the

report, but I am glad to have that and any other

suggestions.

ICBC STRIKE DELAYING

SCHOOL CONSTRUCTION STARTS

MR. H.W. SCHROEDER (Chilliwack): The question is to the

Minister of Education. In view of the fact that ICBC approval

is required for the design of school buildings, with reference

to fire protection, is the present strike effecting these

approvals and delaying construction starts?

HON. E.E. DAILLY (Minister of Education): I have had no word

at this time that it has specifically, but I can take it as

notice if you wish further information.

WITHDRAWAL OF BILL 61,

EMERGENCY PROGRAMME ACT

MR. N.R. MORRISON (Victoria): My question is addressed to

the Provincial Secretary. Can the Provincial Secretary confirm

to this House that the Government will withdraw Bill 61,

intituled The Emergency Programme Act, which was read a first

time on May 8?

HON. E. HALL (Provincial Secretary): I think that I can say

to the House that we are considering withdrawing the bill.

MR. McCLELLAND: A supplementary. Does the Minister confirm

that certain instructions have been

[ Page 3425 ]

sent out to people who were involved in the provincial

emergency programme of his department regarding what

constitutes an emergency, or any other instructions regarding

new application of their duties with regard to either this bill

or some other regulation?

HON. MR. HALL: That is the whole point of the exercise we

have just gone through; there wasn't any need to change the

instructions.

MR. McCLELLAND: But have instructions been sent out to the

provincial emergency programme's people? That is the question I

asked.

HON. MR. HALL: I'll look into the matter but, as I say, the

whole point of the exercise is that Bill 61 sought to rewrite

the old bill, and it has received some hysterical

criticism.

PAYMENT OF TAXES BY ICBC

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

Minister of Transport and Communications, Mr. Speaker. Is ICBC

paying premium tax called for under the Insurance Premiums Tax

Act and under the Fire Marshal Act that all other insurers in

the province have to pay?

HON. MR. STRACHAN: I'm quite sure that an item in the annual

report, which I tabled some time ago, indicates that we

are.

MR. GARDOM: Does the Hon. Minister know the amount that's

being paid?

HON. MR. STRACHAN: It's in the annual report.

MR. SPEAKER: If it's in the annual report, it shouldn't be

subject to question.

SHORTAGE OF CANNING LIDS

MRS. P.J. JORDAN (North Okanagan): My question is to the

Hon. Minister of Consumer Services. Is the Minister aware that

Consumer Services' activities so far to provide a supply of

canning lids, particularly screw tops and the lids themselves,

is, if you'll pardon the expression, almost a complete bust?

Nowhere in the Province of British Columbia today are there

screw tops and canning lids and we are now well into the

canning period in many parts of the province. People are

wanting to can asparagus, rhubarb and this sort of thing. Is

the Minister aware of this and what is she doing?

HON. P.F. YOUNG (Minister of Consumer Services): Mr. Speaker, I am very

much aware of it. I have had three studies made of the problem. We have contacted

suppliers all over the continent. Bernardin, the company in Ontario, was able

to put on a double shift in November, principally to supply the British Columbia

market. The latest analysis indicates that suppliers are getting about 200 to

300 per cent of what they received last year. They are attempting to distribute

them evenly throughout the province.

There's a great indication that there's a great deal of

hoarding going on. To give you an example, 288,000 lids were

sent to the City of Trail, which has a population of 12,000

people. They were sold out in one day. Now that means 24 lids

for every man, woman and child in Trail and that's pretty far

out. There has been some talk to complainants, and we have

discovered that the people in fact have enough lids for this

year and were attempting to stock up for next year. If people

would simply cool it a little bit (laughter) there would be

sufficient lids to go around. There are in Victoria stores at

this moment ample stocks of lids, and there are in other stores

throughout the province, but it's a case of people hoarding

them when they see them, and this is a situation that will not

be totally corrected until about next year, because there's a

two-year lead time in gearing up for the volume.

Interjections.

MR. SPEAKER: Order, please! The question is important to

half the population, at least.

MRS. JORDAN: Well, I suggest the other half eats, Mr.

Speaker, and that really is the point of my supplementary

question. The Minister has made the very serious charge against

citizens in this province that they're hoarding. I would

suggest that from her statements she's basing this accusation

on last year's canning figures. This isn't substantial enough

to accuse people of hoarding. Is she not aware that the cost of

living has increased fantastically and that such groups as B.C.

Tree Fruits have put on a concentrated programme to encourage

people to can? I would ask the Minister, if she is so sure

there is hoarding: is she contemplating bringing in rationing?

Also, in talking to the suppliers, has she talked directly to

the factories? Have you phoned yourself to the Kerr Co. to see

if we can meet the needs of the people of British Columbia?

HON. MS. YOUNG: Mr. Speaker, we have been in direct contact

with about five firms that make canning supplies. For instance,

the Kerr Co. last year serviced only its own area — Oklahoma,

Missouri, Arkansas and that area. Washington, Oregon, British

Columbia, northern California and Utah did not receive any

lids. I'm perfectly aware, for instance, that seed sales were

up 40 per cent this spring, and

[ Page 3426 ]

that definitely more people are canning because of the

economic situation. I am also told, and if you contact any of

the canning companies they will tell you, that it takes them

two years to gear up for the tremendous expansion that has gone

on the past year.

We have done everything. We have contacted suppliers and the

supermarket chains. The people at Woodward's particularly have

been most cooperative and most helpful, as have the canning

lid companies.

GRANT TO

DISABILITY RIGHTS ASSOCIATION

MR. D.A. ANDERSON: Mr. Speaker, may I ask the Minister of

Human Resources whether he has received the request of the B.C.

Disability Rights Association asking him to review his decision

on a grant for the coming year and, if so, whether he's made

any decision on it?

HON. N. LEVI (Minister of Human Resources): Yes, Mr.

Speaker, we did. I met with them as well as the Minister of

Labour (Hon. Mr. King), and we've told them that we will make a

decision about it in the near future. We're also asking for

further information based on some documents that they left with

us.

MR. D.A. ANDERSON: Could I ask the Minister, in light of the

success of this organization in acting as an ombudsman for

those who have trouble with the WCB, and the fact that in one

recent case they were successful in the case of a man who was

injured some 30 or 40 years ago, if he will please make a

decision on this just as soon as possible so the continuing

work of this organization can go on?

HON. MR. LEVI: We have not discontinued grants. We're paying

them at the same rate that we paid them during the last fiscal

year. The other thing is that I would remind the Member that

they come at us with a fairly substantial budget, well beyond

what we were doing last year. I've discussed the matter with my

colleague, the Minister of Labour; I've specifically asked if

there was overlap in terms of the function of the Workers'

Compensation Board. They left a great deal of material with us,

and he is following it through his department, and then we will

make a decision about it.

In respect to the case you referred to, it's my

understanding that this long-standing case was, in any case,

under review by the Workers' Compensation Board at that time

anyway.

ASBESTOS AIR POLLUTION

MR. G.S. WALLACE (Oak Bay): To the Minister of Mines. Because of the

continuing revelations about asbestos levels and the increasing incidence of

cancer caused by asbestos fibres even in the new mines, according to the latest

evidence from Quebec, I wonder, with regard to the Cassiar Asbestos Corp. mine,

when the most recent reassessment was carried out in regard to asbestos fibres

in the air, and how much improvement has been achieved since the Minister last

reported to this House about the serious menace in that mine.

HON. MR. NIMSICK: Just talking to our dustman a week ago, at

one of the mine-rescue competitions, he tells me that he's

checking continually, monthly, in regard to....

MR. WALLACE: Yes, but how much improvement has there been?

It was dangerous a month ago.

HON. MR. NIMSICK: I can't give you exact figures right now,

but he said that he's keeping right on top of the subject to

see that they put the new filters in to correct the situation.

A couple of years ago there was the same situation. I don't

know whether they've got a different type of mine here to what

they have down east, but at that time the Health department

checked the employees and they didn't find any problems with

asbestos fibres. I will check it with him again and I'll give

you a full report as to how much improvement is done.

Orders of the day.

HON. E.E. DAILLY (Minister of Education): Mr. Speaker, I ask

leave of the House to proceed to public bills and orders.

Leave granted.

HON. MRS. DAILLY: Adjourned debate on second reading of Bill

BRITISH COLUMBIA RAILWAY COMPANY

(continued)

MR. G.B. GARDOM (Vancouver–Point Grey): As early as this

morning the Premier was loudly proclaiming that Members of the

House were not addressing themselves to the principles and

concepts of proposed legislation, and in taking a look at this

bill it would seem to me we would have to concern ourselves

with the reasons for the B.C. Railway accountability and also

the need for this specific borrowing that has been requested. I

do think the Member for West Vancouver–Howe Sound (Mr. L.A.

Williams) most ably stated the case and I would very much like

to associate my comments with the ones that he earlier

made.

The Premier also took the position that Members were

concerning themselves with a range of postures — sort of in

fear and hysteria, hate and vendettas, political politics and

all of those sort of things — but I do note that in setting the

scene Friday last, the Hon. Premier, podium and all, utilized

pretty well all of the procedures he so roundly rejects in the

airways. A lot of the talks, unfortunately, since then have

followed the same line: establish a premise without opportunity

for full and free independent inquiry, tack a label onto it,

and plead perpetual and continuing guilt for all associated —

past, present and future. Now that may well be politics, but

it's certainly not politics of the best sort, and such

procedures are not effectively curing untoward situations or

preventing them from reoccurring in this province, In Hansard of November 22, 1974, there was an exchange

between myself and the Minister Without Portfolio (Hon. Mr.

Nunweiler), and I asked him a question in his capacity as

director of B.C. Railway, and drew to his attention that one

contractor had left the Dease Lake job alleging fraud and

conspiracy on the part of the railway, that the estimated

contract was $5.2 million and was now reaching $11.3 million,

with another estimated $8.5 million to finish — in other words,

an increase from $5 million to $20 million. I asked the

Minister if he was prepared to inform the House if any other

contractors were leaving the job, requesting revision of their

contracts, or bringing similar actions against the railway.

That response has never yet come to the floor in an effective

manner. The Minister replied with words to the effect that

he'd like to point out that management was very carefully

reviewing the situation, litigation was going on, and he was

not in the position to make any further comments in that regard

at that time.

Well, that was back in November of last year. I asked the

Minister a supplemental question: in view of the fact that the

Minty report was scathing of the accounting procedures and

audit procedures, and in view of the fact that the auditors and

the comptrollers pulled out, and in view of the fact of those

lawsuits, was the Minister prepared to order a judicial inquiry

into the accounting, estimating and bidding procedures of that

railway? That was in November of last year.

The Minister replied that the matter was being considered, that he was concerned

about the comments made in the Minty report, which was published, as he said,

some time ago, and concerned about its comments dealing with the practices of

the B.C. Railway. He said that the matter was being reviewed. I say this to

you, Mr. Speaker: what could have been better at that time than an independent

judicial inquiry to get to the bottom of something like this and come up with

concrete suggestions and recommendations for improvement? It could have been

quick; it could have been precise and it could have been completely out of the

political arena. For that is exactly what this province is lacking: checks and

balances that are independent of the political arm, and independent of the civil

service. We need to have some free, uncluttered mechanism that can inquire,

investigate and report — a service that can tell the public, independent of

the politician and independent of the civil service, if they are receiving value,

and if not, why not.

In his remarks, the Premier re-revealed and rearticulated

unorthodox accounting procedures, pretty well all of which were

laid down in the Minty report which was filed in this House

months and months and months ago. But there seems to be some

other side to the coin — a different attitude to depreciation

and so forth and so on. I would certainly like to hear the

expression and comments of the government on that point.

The Premier drew to the attention of the House the

engineering procedures which the railway now appears to

consider to be inadequate. But didn't they have engineers then,

Mr. Speaker? Didn't they have engineers at that time? How come

this reversal of opinion on the part of the railroad as to its

engineering techniques?

The Premier mentioned only one side of a lawsuit, and oddly

enough paid great respect to the one that was opposite to the

official position that is taken by his government in its

pleaded defence.

Most of all that is sad, Mr. Speaker, is that the processes

so righteously complained of by the Premier don't appear to be

cleared up by this government. Indeed, one can well question if

they're not being multiplied and perpetuated because

accountability in this province has been and still is

woeful.

Way back in 1871, when British Columbia first entered

Confederation, the total revenues amounted to $292,823.

Parliamentarians then had an opportunity to scrutinize each

expenditure and determine that government and its bureaucracy

was utilizing public money efficiently. Now, 104 years later,

this Premier is spending $3.2 billion, but the point is this:

essentially the machinery for scrutinizing these massive

expenditures has not changed over that period of time. The

legislative power of check and balance, of being able to

scrutinize and able to consider cost projections, income

projections and so forth and so on, is slipping absolutely

backwards, This Legislature is losing its ability to watchdog

the public money, Witness the debate in public estimates this year which was

curtailed. Witness also, Mr. Speaker, that millions have been

issued in this province by executive authority, by cabinet

warrant, and beyond

[ Page 3428 ]

legislative scrutiny — no means of approval or disapproval

of the project or the programme until long after the money is

spent. We also find millions of dollars have even been borrowed

without revealing to the general public the name of the lender.

Millions are being delegated holus-bolus unto Ministers and

Crown corporations for expenditure, again without the power of

legislative inspection. This is ultra-delegation without even

the sources, in the main, coming within the ground rules for

normal and accepted methods of account and report.

To wit: some 25 corporations, boards, programmes and plans

not within the Public Bodies Financial Information Act. Just

take a look at some of them: Farm Income Assurance Act,

Department of Housing Act, Development Corp. of British

Columbia, Energy Act, Ocean Falls, British Columbia Cellulose,

Medical Centre, Plateau Mills, Pacific Poultry, Panco Poultry.

Are we going to have accountability or are we not going to have

accountability in the province? Unfortunately, the continuing

answer seems to be in the negative.

The public accounts committee, best described, I think, as a

smokescreen committee — for all practical purpose, it's without

support services, it's without staff. It should be sitting not

just periodically, but throughout the year, and there certainly

shouldn't be restrictions on time for questioning.

MR. P.C. ROLSTON (Dewdney): The chairman never called any

meetings.

MR. GARDOM: Well, I hope the Hon. Member has the view that

if the chairman of the public accounts committee would see fit

to call meetings and sit constantly throughout the year, he

would support that premise — which he would not, as we well

know.

No information can be brought in front of the public

accounts committee concerning lead planning, cost expense and

income projections. As I've said, Mr. Speaker, this committee

should be sitting year-round, particularly in view of this

government's ultra-expansion into the private sector. At the

present time the public accounts committee is nothing more than

window dressing. I'd say a bad window and a pretty bad kind of

dressing at that.

Mr. Speaker, what I've advocated in this House year after year after year is

to have a mechanism where public finance and public expenditure can be independently

watch dogged as I have said, to ensure that the public can receive value for

their tax dollars, somebody who has the responsibility totally unfettered by

governmental pressure or political pressure or bureaucratic pressure to independently

inquire, search, assess and publicly report. Why? — says the Premier. We've got

a Deputy Minister of Finance. And he always purrs that we've got a comptroller-general.

But, Mr. Speaker, those positions lack the degree of independence that is properly

required, and they lack the responsibility to investigate and inquire into that

which requires investigation.

The very proof of that position is this. I note that Mr.

G.S. Bryson is listed under the names of the board of directors

as secretary of the company. I have no quarrel with Mr. Bryson,

but having the Deputy Minister of Finance as the secretary of

B.C. Rail did not seem to prevent the allegedly fallacious

accounting practices that were followed by that company. Having

Mr. Minty as the comptroller-general of this province — and I

have no quarrel either with Mr. Minty — didn't seem to prevent

the allegedly fallacious accounting procedures from being

followed in B.C. Rail.

I certainly do have a quarrel with the Minister of Finance

of this province when he points out these kinds of rosy

pictures, and postures that these kinds of services and these

kinds of mechanisms we now have are not only adequate but

superior and doing a fine job. Mr. Speaker, they are just not

doing that. Make no mistake of that fact.

How come, indeed, this prospectus, about which there has

been some discussion today? I have a copy and I would assume it

is the correct date. It says April, 1975, on the back and March

13, 1975, on the front.

MR. SPEAKER: Excuse me, what was the date?

MR. GARDOM: I beg your pardon?

MR. SPEAKER: What was the date, please?

MR. GARDOM: On the cover it is April, 1975, and on the

front, March 13, 1975 — Prospectus, $125 million, British

Columbia Hydro and Power Authority, dealing with series DY, due

year 2005 bonds.

MR. SPEAKER: Thank you. I must have made an error on the

date I showed in my reasons. I just wanted to correct that, I'm

not sure.

MR. GARDOM: It is certified by Mr. Minty on March 10. What

date did you use?

MR. SPEAKER: I used May 22 for my own information.

MR. GARDOM: This is the copy I have that is dated this way.

We'll check notes a little later on, Mr. Speaker.

MR. SPEAKER: Thank you, I'm sorry to interrupt the Hon.

Member.

[ Page 3429 ]

MR. GARDOM: I know you always like to be absolutely and

totally correct.

Mr. Speaker, how come this prospectus appears to reflect

inaccurate data without explanatory notes? The report of the

comptroller-general to this House dealing with the British

Columbia Railway was April 5, 1973, according to this letter —

two years ago. It clearly recorded criticisms of accounting

procedures and of internal and external audit procedures and of

budgetary procedures of B.C. Railway. Two years have passed,

Mr. Speaker — April, 1973, to March, 1975.

Surely in April, 1973, it was apparent that there were

problems in internal audit, external audit and budgetary

procedures. This is referred to in the lengthy report of Mr.

Minty. So the government was alerted. It had other auditors go

in. They have done a job and this government surely has had

more than enough time to furnish correct information in a

prospectus that is required to be filed under the United States

Security Exchange Commission and is required to be correct.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): There is no

change in auditors until December, 1974.

MR. GARDOM: My friend from West Vancouver–Howe Sound

mentions there is not any change in auditors until December,

1974. But I would like to say this: I am referring to page 43

of the certificate of the comptroller-general, and it says in

this prospectus that is supposed to be correct — it says this

in this prospectus which is under the hand of this government,

it having had knowledge of the Minty report two years back:

"These financial statements present fairly the financial position of the Province of British Columbia

as of March 31, 1974, and the results of its operations for the

five years then ended, and the statement of direct debt and

guaranteed debt presents fairly the indebtedness of the

Province of British Columbia as of March 31, 1974, and December

31, 1974, all in conformity with generally accepted accounting

principles applied on a consistent basis."

How come? How come? Is that a correct statement? Did this

government not acquire knowledge two years ago of difficulties?

Was there not a responsibility, an onus upon this government to

furnish explanatory notes to this prospectus?

Now remember well, Mr. Speaker, the NDP when they were in

opposition — no major arguments or quarrels by them at any time

about the structures that we have for effective accountability

in this province. They never seem to have any problems in

voting enormous sums to B.C. Rail, B.C. Hydro, B.C. Ferries or what-have-you, and always without receiving cost

estimates, without receiving cost projections, without

receiving income estimates, without receiving income

projections. They didn't have any problems with that at all. No

way. They backed all of that blindly, without question or

without effective debate — a sort of a blank cheque to

motherhood. And they still seem to do that.

Yet with the programmes that they have control of and have

brought into this province, we find transit losing $2,000 an

hour, ICBC losing $10,000 an hour, Ferries losing $4,000 an

hour, B.C. Rail losing $1,000 an hour — a total of $17,000 an

hour, and that's probably a very conservative estimate.

They must have regular, ongoing cost projections; they must

have regular, ongoing expense projections, they must have

regular, ongoing income projections in all of the Crown

corporations and in all of these programmes, which should

properly be listed under the Public Bodies Financial

Information Act, which they are not. These things are never

publicly revealed. So who gets it in the neck? The taxpayer.

Old expendable.

Civil servants carry on and politicians carry on with their

condemnations of the past and their condemnations of the

present. But I would say that really heavier, Mr. Speaker, is

the responsibility of the present than the past, and heavier

still is the responsibility of the present for the future.

We've got to have a complete, new attitude to accountability

in this province. It cannot be used as a political mechanism.

It's got to be considered that which it is — the public

requirements. Let's see that we establish fair checks and fair

balances. Make it a duty and a responsibility of office that

government and Ministers will furnish cost and expense

projections of government programmes to the Legislature and to

the people. Let the government provide mechanisms for

independent reporting and accounting — as I've said, an

individual or a service whose function and whose mandate would

be to independently reveal and enquire and report. That should

be his perpetual and continuing interest where lack of value

has been determined, and let him report that.

Let the government also put together a public accounts

committee that's more than a figurehead, where one can

regularly and properly sit and question public expenditures and

determine as to whether or not the public has received

value.

When presenting bills such as this one for $210 million, let

the government provide valid reasons and enunciate and furnish

proper evidence and support of the measure that is proposed,

and of the need for the dollars. Let us have cost projections,

income projections, expense projections. What are the social

benefits, what are the economic benefits, what are the

environmental benefits? To what extent are they

[ Page 3430 ]

going to be restricted by the policies of this government or

by the policies of perhaps any future government? But where are

those briefs, Mr. Speaker? Where are those briefs and where are

those budgets?

Any endeavour that should stand any chance of success

whatsoever should have that material available and those

figures filed. That information, I would say, must be

available. If it's not, that's an absolute public disgrace. I'm

going to assume that it is available, but if it is available

why has it not been produced to this Legislature?

Once again we're going to be asked to vote $210 million in

the dark and make a judgment decision without providing

material facts. That I cannot do, Mr. Speaker. I will be

opposing this bill. I'm not opposing the railroad, but I'm

opposing one thing: I'm opposing the lack of proper

accountability in this province.

MRS. P.J. JORDAN (North Okanagan): Mr. Speaker, in some ways

this is one of the most important bills we have to debate in

this session of the Legislature because it does deal with one

of the fundamental lifelines of this province. One could call

it an artery in relation to the human body because without

sound arteries the body doesn't function, and without this

railway it's quite obvious that British Columbia cannot

function as it should. As is clearly evident from statements in

this House and evidence as to what is happening in the railway,

its functioning is in jeopardy.

Because of its vitalness to this province we must all stand

in support of this railway. Otherwise those programmes and

services that we all wish to perform and provide for people

cannot be provided unless we do follow the tendency being

carried on by this government of financing those services to

people, not from the resources of our province but out of the

pockets of the working people of our province.

The bill asks for a loan increase by striking out $440

million and substituting $650 million. I would feel that this

is the matter to which we should address ourselves in this

debate, the amount of money involved and the reasons for its

need as it relates to the viability and the economic soundness

of our province.

Also the matter of accountability must be considered. But I

think, in light of what has been said in this debate, led off

by the Premier, there are also some other questions that should

be asked, and there are also some other points which should be

made.

My thoughts are prompted by the statements of the Premier of this province

when he introduced this subject Friday last and that are recorded in Hansard .

It leaves one in a quandary when they read his statements as to really what

his intention is, and whether in fact his professions of accountability, his

professions for open government and his professions for the

love of this province and the need to develop this province on

a sound, economic basis for people, and the need to do away

with political interference and the need to do away with

politics per se when we are discussing serious subjects, are

not just a little bit plastic.

In his introduction of this subject, Mr. Speaker, there is

very little, when one reads through Hansard , in the statements

of this Premier and president of this railway that would in

fact explain factually to the people of this province why this

railway must continue and why this railway must be dealt with

on a sound basis and why it is essential that this railway must

function on an economically sound basis, If I were a citizen reading this without knowing all the

details — and we don't know all the details of the railway — I

would draw the conclusion, in spite of the Premier's

protestations, that this was very much a political speech and

that this Premier was very much intending to bring the B.C.

Railway into the public sphere, not for a matter of serious

discussion but for political reasons and, heaven forbid,

possibly political gain.

It is this Premier and this president of the railway that

uses such terms as " political chicanery...scandalous

behaviour." It is the Premier and his statements that refer so

consistently to "cheap politics." One can find very little that

this Premier has said in discussing this subject in this bill

as well as looking at his statements in relation to other basic

projects in British Columbia that would make one prompted to

deal with the facts and to set politics aside.

I wonder why this Premier talks about accountability. He

rode to office on the premise that he would bring a new era

into British Columbia, let the sun shine in, accountability on

the part of government and Ministers, open books, do away with

the political shenanigans that he felt were here before.

We see no evidence of this. If the Premier felt that this

was a matter of concern in British Columbia, why, when now he

is the Premier of this province and he is the president of the

British Columbia Railway and he is the architect of ICBC and he

is the architect of the actions of his government, so he says,

don't we see an example of the change he says was needed?

He claims that government could conduct its business under

the light of the public, that there was no need in negotiations

for there to be private meetings or even secret meetings. But

do we see the Gottesman contract? We're advised, in spite of

his words, that there is a need for secrecy.

It is this Premier and Minister of Finance and president of

this railway that told the public of British Columbia and told

this Legislature that there was indeed a need for open

discussion on the

[ Page 3431 ]

borrowing of this province, if it had to borrow. It was this

Premier who criticized the financial practices of the former

administration, and yet we see that it is this Minister of

Finance and the president of this railway who is borrowing

secretly, who is borrowing under prospectuses that may well

come into serious question.

I wonder why, and the public wonder why, if he felt these

things were wrong, he is carrying them on now. On

accountability — and I don't want to be repetitive — the former

speaker from Vancouver–Point Grey (Mr. Gardom) went into great

detail on the debts that are mounting not monthly, not weekly,

not daily, but hourly by Crown corporations and government

businesses that have been started since this government took

office and that previously showed a responsible fiscal

attitude. I won't repeat those figures, but one must ask again,

in a broad term, where is the accountability? What is the real

amount of the ICBC subsidy? If we're going to vote money to the

B.C. Railway, which is running at a surprising loss at this

time, we must know what is the true profit picture of

Can-Cel.

MR. SPEAKER: Order. I would ask the Hon. Member not to stray

into other Crown corporations. Really, it's starting to debate

a totally different issue. The issue really is the

accountability or otherwise of this institution in the

bill.

MRS. JORDAN: I appreciate your comments, Mr. Speaker, but

the former Member who just spoke went into a good deal more

detail for comparative purposes on these subjects than I am. I

don't wish to be repetitive, as I mentioned — that's why I'm

not mentioning them now — but I think it's essential, begging

your acceptance of this argument, that if we are to vote $650

million borrowing power to the B.C. Railway, we must be sure

that there is going to be accountability. To date, Mr. Speaker,

it's essential that we examine this Minister of Finance and

president of the B.C. Railway's accountability in other

areas.

I won't transgress on your good nature, but I hope that the Speaker himself

will reflect the need and the concern of the public to know why this Premier

who talks one way acts another way. There's such an example this afternoon,

Mr. Speaker, when the Leader of the Opposition (Mr. Bennett) made a motion.

I recognize it was the Speaker's decision, but the Leader of the Opposition

asked for leave of the House to have a judicial inquiry to examine areas of

extreme concern regarding a prospectus issued by this government which does

not appear to be compatible in its statements outside British Columbia with

the statements that are made inside British Columbia. Who denied this Legislature

the right to set up this inquiry? Why, it was the Premier himself, the Minister

of Finance, the man who is asking for this extensive

borrowing power as president of the British Columbia

Railway.

HON. D.G. COCKE (Minister of Health): On a point of order,

the Leader of the Opposition put forward a motion and it was to

have instant debate on the motion — that was what was denied.

That motion can be put on the order paper, Mr. Speaker, and

rest in that fashion. There's nothing denied about that motion,

other than his way of implementing his desires and making some

press kudos.

MRS. JORDAN: What is your point of order?

MR. SPEAKER: I think the Hon. Member was saying that what

was denied was suspension of the rules to deal with and debate

a matter of his motion at this time. When he asked for leave of

the House to debate a motion that he then read out, he was in

effect asking for a suspension of the rules, and suspension of

the rules was denied by the Members of the House.

MRS. JORDAN: Yes. Thank you, Mr. Speaker. That's understood

and your ruling was accepted. I didn't read the motion and I

don't intend to introduce it at this time, but the point that

must be made is that this was a matter of urgent public concern

in terms of public concern. The Speaker was gracious enough to

put it to the House for their decision, and it was the very man

that calls for open government, who rode to power on the fact

that the was going to bring accountability to British Columbia,

who has cast so many innuendos and aspersions and smears

against the former administration, that denied the right of

this House to examine this question today. With due respect, I

appreciate the Minister of Health's advice that it could be put

on the order paper, but the Minister of Health knows as well as

I do that that motion would not be called because it is only

called at the pleasure of the government.

One has to ask why this Premier and Minister of Finance is

trying to build his political base and his political image and

his political power while in office, when he has the

opportunity to be positive, when he has the opportunity to

perform, and he has the opportunity to be accountable, why he

is trying to build his reputation and his image and his power

by tearing down, often not in the true factual sense, the

former administration and the former leader of this

province.

The B.C. Rail is a classic example, When the Premier made

his presentation, Mr. Speaker, he didn't talk with pride of

this great railway. He introduced his subject by saying: "Today

is another day of reckoning for the people of British Columbia

and the

[ Page 3432 ]

Members of the official opposition. The facts I reveal today

will surely lay at rest forever the myth of financial wizardry

attributed to the former government."

MR. D.M. PHILLIPS (South Peace River): He laid himself to

rest.

MRS. JORDAN: Why is this Premier so intent on destroying 20

years of what would appear to be apparent satisfaction by the

people of this province? They re-elected that government over

and over again. Why does the Premier go back and use that as a

means to build himself? Why does he not build himself on a

positive basis?

HON. MR. BARRETT: And hide the facts?

MRS. JORDAN: This railway, Mr. Speaker....

AN HON. MEMBER: You hid them in here.

MRS. JORDAN: I think the Premier's expression "hide the

facts" has got to be most touching. No one has hidden more from

the public since taking this office than that Premier and

Minister of Finance and that government.

HON. MR. BARRETT: Ohhhhhh!

MRS. JORDAN: He hides nearly every action behind those green

doors. This government and these Ministers consistently resent

questions that are being asked by the opposition, to the point

where their arrogance is becoming legendary. Talk about

hiding!

This railway is a part of the history of British Columbia. I

don't agree with the Member for Vancouver–Point Grey (Mr.

McGeer) that it's been racked with scandals, as he mentioned

last night. I believe it's had its problems; I believe it will

have its problems in the future. The railway is there and the

history is reasonably well-known. For years the railway

essentially stagnated in British Columbia. Rail lines sat

there, cars shuttled back and forth, but it was going from

nowhere to nowhere, serving no major, useful purpose and unable

to meet its destiny as committed to British Columbia because

there was not the opportunity for it to expand, nor was there

initiative for it to expand and commence its contribution.

It was the former administration that did have the courage and did have the

foresight, frequently contrary to the thinkings of the then opposition, which

is the now government, the NDP — and the CCF before that — to push this railway

ahead, to take the chance that had to be taken. I'm sure it wasn't easy, but

the recognition was there that if ever this province was to expand beyond the

Patullo Bridge and the slight expansion in the Fraser Valley, there had to be

essential ingredients.

Power. There is no way you can develop a jurisdiction for

people without power. There is no way you can develop a

jurisdiction for people without Transportation — a means for

moving the basis to build that power from A to B. That is what

the railway was designed for.

MR. PHILLIPS: Just like the CPR built Canada.

MRS. JORDAN: Indeed, Mr. Member — like the CPR.

MR. PHILLIPS: And the CN.

MRS. JORDAN: The cost at the time of the CPR.... When we

look back in retrospect and in light of today's values, it's

very easy to be critical. But how would we have voted if we had

sat in the federal parliament at that time? How would we have

voted if we had been the people? We would have voted as they

did. We would have voted as the people of British Columbia did

when it came to the development of this province and the

BCR.

MR. PHILLIPS: With his lack of leadership and lack of

courage, he would have been against it.

MRS. JORDAN: Indeed. But I can't speak for the Premier of

Finance. It was the NDP that didn't want power development

until 1984 — George Orwellian days — in this province. But the

government of the day, with whatever problems they may have had

did have the courage. They recognized the resources were there

in the northern part of this province. They recognized that

those resources had to form an economic base for this province

in order to attract people to the north, and from which we

could provide the services to the people that were needed and

desired in this province, and from which we, the people of this

province, could build a lifestyle that we were capable of doing

and which we desired.

It's very appropriate that this discussion is taking place,

for that railway was designed to be one day in concert with the

Yukon Territories. We hope to this day that it will be.

But we had a benefit that was recognized then, and which the

Yukon doesn't have today. Their legislators who are visiting

with us today have made very clear that one of the major

problems they face, apart from the constitutional questions, is

that they have a non-renewable resource from which to build

their economy. That's a great problem for them.

We were blessed in British Columbia. We had an

administration with the sight to see that we couldn't build for

British Columbia the life we want solely on a non-renewable

basis, that we not only had to look

[ Page 3433 ]

at the mineral development and its benefit, we also had to

look at the forestry development, a renewable resource. This

province led.

Even the Minister of Lands, Forests and Water Resources

(Hon. R.A. Williams), who has been so critical of the past,

when he is not in British Columbia will say that British

Columbia developed one of the most advanced and conservatively

conscious forestry cultivation programmes in the world today.

We will eventually farm our forests agriculturally and

responsibly so that we do have a renewable base from which we

can provide the services. And we hope that someway we can help

the Yukon in their problem that way.

So the government then recognized that there had to be a

companion approach to developing the north and our economy —

power, transportation, expertise and people. They recognize

that for the province to grow, we had to have a stable base all

over the province, not just concentrated on the lower mainland,

and that if we are to attract people to the north, we had to

generate an economy there that would provide for people that

which they needed in the terms of services, hospitals, schools,

recreational facilities, and a life style that was compatible

with those in other parts of the province. It wasn't a one-shot

deal; it was a planned development and a planned

recognition.

The criticism is that the railway was developed as a

resource railway, not a passenger railway. The Premier simply

doesn't seem to be able to understand this concept of reality

when you're developing a province. To bring it down to a simple

measure, I would just point out to him that when he first

married, he rented an apartment or a house. It's common

knowledge that some few years ago he had to borrow some money

to make a down payment on a small house. It wasn't until he had

advanced to the Premiership of this province that he could

afford a house that cost in the neighbourhood of $60,000 or

$70,000.

MR. SPEAKER: Order. Order, please.

MRS. JORDAN: He didn't get a Cadillac before he learned to

ride a bicycle.

MR. SPEAKER: Order, please. I think the Hon. Member is

transgressing on a very important....

MRS. JORDAN: I don't mean this in any way an insult to the

Premier. It's a very important point. But I'll liken it to

ferries, Mr. Speaker, if you wish.

MR. SPEAKER: Personal allegations or statements are not in

order.

MRS. JORDAN: I never intended this to be an allegation; I'm trying to

help him understand.

The Hon. Member for South Peace River (Mr. Phillips) used

roads as an example. If you're developing a road into Pouce

Coupe, as it's a little community, you don't put in a four-lane

highway. You put in a road to serve the needs of the people and

the economy at that time, with room for expansion.

The ferry system. This government.... Very proudly the

Minister of Transportation and Communications (Hon. Mr.

Strachan) announced the stretching of another ferry, and that's

a good thing. You don't devise a ferry system and then put on

streamlined Cadillac ferries that would carry 50, or 500 or 100

more cars than you're going to carry in the beginning. You

start small, and you start responsibly, and you expand. That's

what was done with the B.C. Railway.

MR. PHILLIPS: Like upgrading the Fraser Canyon.

MRS. JORDAN: Excellent example. Jackass Mountain — when you

talk about overruns and problems, that probably had some of the

finest engineering and road development in the world. But it

will always require it because British Columbia is a province

with unique geography and unique geographical structures.

The British Columbia Railway has been a major part of the

development of the resources and the services in this province

in the past, and it will be. The forest industry developed in

the north as a consequence of the B.C. Railway. The mining

industry developed in the north as a consequence of the B.C.

Railway. The validity and creation of markets for Peace River

grain and other agricultural products developed, is developing

and must develop more, as a consequence of the B.C. Railway.

Tyler petroleum by-products, butane and propane, go to the

market today as a consequence of the B.C. Railway.

Interjection.

MRS. JORDAN: Yes, industrial activity flourished throughout

the years as a consequence of the BCR, and it must again.

That's the vital reason for the B.C. Railway and the need to

support this bill.

The validity of developing the pulp mills in the interior of

this province to expand the economy of the province, to balance

the economy of the province, to balance, hopefully, the

dispersion of the people who are moving so rapidly to this

province, was made possible because of the abilities of the

B.C. Railway.

Loos at Prince George — a small and very nice community a

number of years ago, but one of its

[ Page 3434 ]

major problems was population turnover. Lack of jobs, lack

of amenities. Today it's a vital thriving city. In the future

it will be a crown jewel of northern cities. And one day we

hope it will have a university. We hope that it will continue

to be an attractive area for people to live.

Fort St. John. None of these communities would be what they

are today; none of them would be able to provide the jobs and

the amenities for the people living there today, if it wasn't

for the British Columbia Railway.

But what does the Premier do when he gets into a position to

build and expand this railway? What an opportunity of a

lifetime for a leader. Does he build it up? Does he speak

proudly of it? If there's criticism to be made of it, does he

make it factually? No, he wraps it up in political — as he

calls it — chicanery.

If you look at the figures for the B.C. Railway since 1972,

it proves that the only thing that has increased since the NDP

came to power in relation to the British Columbia Railway is

the cost. Revenue in 1972 was $44 million, Expenses in 1972,

$32 million. Revenue in 1973 was $48 million. Expenses in 1973,

$48 million. Expenses in 1974, $62 million. You count out that

in 1973 and 1974 the figures are restated, whatever accounting

procedure you use. They would be worse if they were using the

new accounting procedure.

Mr. Speaker, whether an accountant's theory of depreciation

is used, or another accountant's theory of depreciation is

used, either system, when you examine these figures, reveals no

significant increase has occurred in the revenues of this

railway, in the cash flow of this railway, while the costs have

sky-rocketed.

But what has happened to the resource development in British

Columbia which should be assisting this railway, which is one

of the fundamental reasons why this railway exists? The

resource revenues should be providing the services to the

people of this province. But in fact, under this government

those services are now being provided, to a large extent, out

of the pockets of people rather than out of the pockets of

resources.

Mr. Speaker, how can the Premier deny and not understand

that resource development in the north fits hand-in-glove with

the development of the B.C. Railway? In January, 1973, there

was still optimism in this province that this resource

development would occur. People were willing to account for the

Premier's newness in office, perhaps a little naivety, and the

fact that he really knew nothing of resource management,

finance or business. But that excuse can't last forever and it

hasn't lasted forever.

Now the truth of this government's attitude toward resource development and

the strangulation that its resource policies have put on this province are coming

home with their devastating and potentially devastating effects for the people

of this province. No matter how new he was, the Premier can't claim that he

didn't know.

Let me read from the Touche Ross report of January, 1973. I

don't think you have to be a wizard to understand this. I am

just a simple country girl, but this seems to make sense to me.

They say "provincial." They are talking about economic and

social considerations for the development of the railway

provincially:

"The Leo Creek–Dease Lake extension will have economic and

social implications for the province well beyond the immediate effects on the

financial performance of the British Columbia Railway. The time available for

the review of the project has not permitted an extensive examination of these

implications. Also, the uncertainty of some of the resource projects and the

definite timing make any benefit cost evaluation extremely imprecise."

That came out in January, 1973, at a time when this Minister

was formulating his resource policy, at a time when Bill 31 —

which, for the interest of those from the Yukon, we class as

the Yukon development bill — was to become a reality in this

province. Yet in their own report they are being cautioned,

very simply, that the uncertainty of the resource projects

makes cost benefit evaluation extremely imprecise. In other

words, we have got to support this railway with sound resource

policies and development of the north.

Among the other principle economic considerations for the

province are the following, the report goes on to say: "Mining

royalties from the expansion of existing mines and the

establishment of new ones will contribute to the benefit and

the security of this railway."

They suggest forestry taxes from expanded sawmills, new

sawmills, new pulp mills and other forest products

operations.

They suggest to the president of the railway that corporate

income taxes from the increased business profits attributable

to the extension of the railway through the development of

primary industry, secondary industries and commercial

businesses will all contribute to the stability of the railway

and help with its development. Personal income taxes from

payrolls arising from expanded new businesses, provincial and

local taxes, taxes from liquor, gasoline, property and other

revenues....

AN HON. MEMBER: What are you quoting from?

MRS. JORDAN: This is from the Touche Ross report as to the

policies that this government should adopt in order to help

establish more firmly the British Columbia Railway.

When one examines the record of this government

[ Page 3435 ]

and the recommendations of this report, the only

recommendation the Premier, Minister of Finance and president

of the railway seemed to adopt was the increase of liquor,

gasoline and other tax revenues — personal income taxes. His

policies, Mr. Speaker, have not increased the revenues from the

natural resources of this province. I won't go into the

figures, but we all know that exploration is down, if not dead.

We all know that mining revenues are down. We all know that

forestry revenues are down. That can't all be blamed on the

world economic situation. The Premier must accept the

responsibility that his policies and his policies alone have

been among the most devastating attacks on the viability of the

British Columbia Railway.

In these areas, royalty and taxation have increased, and

many increases have been dramatic. This has been to the

detriment of those industries. It has been to the detriment of

exploration; it has been to the detriment of investment in this

province and the development of this province. Even the

Minister of Lands and Forests (Hon. R.A. Williams) was

optimistic when he took office, though it repeated attitudes as

much as any others — it is his repeated policies as much as any

other policies — which are proving a detriment to this province

and this railway. One must ask why these Ministers don't take

the advice of the reports they receive and why the Minister of

Lands and Forests doesn't read his own press releases. In a

press release from his department dated July 23, 1973, the

Minister and a team of professionals support the Dease Lake

extension. The Minister's release outlines the forest and

mineral potential of the area. I'd like to quote for the record

parts of this press release, Mr. Speaker. He says:

"The new rail system will open up an area of some 27 million

acres of forest land within the northwestern

section of the

province west to the Alaska Panhandle, north to the Iskut and

Stikine drainage systems and east to the headwaters of the

Skeena. The individual lines will pass through virtually the

whole of tree farm licence 1, awarded to Canadian Cellulose Co.

Ltd., the Skeena Bell-Irving public sustained yield units and a

number of proposed PSYUs to the north up to the Yukon border,

which will be developed as a transportation network is

installed."

It goes on to explain that tremendous factual development

that can take place in that area. On copper, under mining

development, his own press release says:

"Two very large copper royalties lying in the Stikine River

basin will benefit from the extension. These are the Stikine Copper on Galore

Creek and Liard Copper on Shaft Creek. Each of these has ore reserves exceeding

100 million tons. When developed they will be major contributors to freight

on the new extension of the British Columbia Railway. Other promising copper

properties in the area have reserves in the order of 30 million to 100 million

tons."

He goes on to describe a new discovery — asbestos. "A new

line will provide an alternate route for the shipping of

asbestos from Cassiar property, currently 100,000 tons of baled

asbestos annually, which is now trucked by the Alaska Highway

and the Port of Skagway. Additionally, it may now prove

feasible to market the short-fibre asbestos presently

stockpiled in the mines."

A vital need for this extension — coal. This has been touched on, but I will

say out of his press release: "The Dease Lake extension will pass right through

the Groundhog coal field Copper smelter.

"It is quite conceivable that as the tonnage of copper

concentrates in the area expands a copper smelter could be

established on the coast, possibly at Kitimat."

Unfortunately the Minister is wrong when he suggests that

automatically the movement of the railway into these areas will

by itself cause resource development. The presence of the

railway is an important factor, as I pointed out. So is

taxation, so is resource policy, government intervention,

attitudes and many other factors. What has happened is that the

government's relationship with industry in encouraging economic

developing has changed. The third-party role of government is

now gone in British Columbia. There exists now a virtual

adversary relationship between government and the industry.

That, Mr. Speaker, is what the Minister of Finance and

president of this railway should be accountable for. The truth

of this statement is reflected in the absence of growth in

revenues and in the absence of any significant development of

the new customers for the British Columbia Railway.

Mr. Speaker, if this Minister of Finance and the president

of this railway believes in this railway, why doesn't he deal

with these facts? Why doesn't he tell us his positive approach

to the future? Why doesn't he tell us how he is going to

balance the books, how he is going to change his resource

policies and the attitude of government and the relationship of

government to bring confidence back to British Columbia so that

we can continue to expand and develop this railway to meet the

needs of people?

This Premier is known to secretly admire the former premier;

we know he emulates the former premier in many ways. But I

would like to point out a vast difference, Mr. Speaker.

The former Premier had a great capacity to make us proud to

be British Columbians. He had a great capacity to unite us as a

people so that we could

[ Page 3436 ]

recognize our own talents and our own potential, so that we

weren't afraid to step forward and take a chance, so that we

weren't afraid to tackle our province and bring it out of the

wilderness of debt and nowhere and make it one of the most rich

and satisfying living areas of this country. Through his

influence, we as a people built this province.

This Premier, in contrast, builds his power on trying to

foster disunity. Under the former administration we were proud

of the B.C. Railway, we were proud of the Bank of British

Columbia, we were proud of our province, and we were proud of

our accomplishments. That's how we will build this province —

and that's why we're going to support this bill. We know, Mr.

Speaker, that in a very short time there will be a Premier in

that chair who is competent, who is capable, who speaks in

terms of unity of people and who will help us as a people build

this province into the province that it can be and will be and

to build a life here for people, oriented to people, with an

economy that will serve those people.

The British Columbia Railway will be part of that, and it

will be managed openly and it will be managed responsibly. It

will continue to develop the northern part of this province for

people. It will continue to see that the power potential is

utilized. It will continue to see that it plays a vital role in

expanding the economic base of this province so that we never

become a one-interest province, and that interest in those

services served not from the resources and not from the riches

of the people and the resources of the province but out of the

pockets of the workers. That's why we'll support this bill.

MR. H.S. SCHROEDER (Chilliwack): Mr. Speaker, I'd like to

speak just briefly in support of Bill 27, which expands the

borrowing power of the British Columbia Railway. I think that

the British Columbia Railway is something that all of us would

like to see go. By "go" I mean operate, and operate at as close

to a profitable level as possible. I think that the Premier

himself does not wish by any statement or any attitude that he

may communicate to try to disrupt the operation of the

railroad or curtail the operation of the railroad to make it

look worse than it really is. I'm sure that that is not his

intention.

I think that any railway, Mr. Speaker, that can boast, as this one does in

the report of the vice-president, that it has something like 100 diesel units,

that it has total operating units of some 7,412 units that are able to transport

the raw materials from the interior to the coast where they can be either utilized

or distributed to the export market upon which we depend.... Any railroad that

can boast as it does on page 10 that we had something like a million and a half

total train miles, that we had a net ton-miles total of 1.9 billion and that

we had a gross ton miles of something like 3.8 billion is a railway that all

of us would like to see flourish.

[Mr. Dent in the chair.]

I'm wondering if in the opening statement that the Premier

made in introducing the bill he was actually asking the people

to support him in a bid to increase or enlarge the railway, or

was he asking the people of British Columbia to join him in a

verbal barrage that would further undermine the confidence

that's in the railway, the people who are working in it and the

management of it and the ownership of the railway?

We, the people of British Columbia, own the railway. We

trust its management to, first of all, those who we have

elected and secondly to those whom they appoint. And it seems,

Mr. Speaker, that each time we change ownership — at least

directorship — we have major either birth pangs or growing

pains, and I haven't quite determined which of the two it

is.

Nonetheless, in introducing the bill I'm sure that the

Premier had in mind the 3,000 to 3,500 people who belong to the

direct labour force of the railway. I'm sure that when he

sought, by his opening statement, to undermine the confidence

of the railway, he kept these 3,500 people clearly in mind.

Whenever you change management you many times change

policies. It doesn't come as any surprise to the people of

British Columbia that some of the policies of this railway have

changed. It doesn't come as any surprise, certainly, to the

elected Members that policy could — maybe even should — change.

But to make those changes in such a way that it would seek to

cast aspersions not only upon the previous management but upon

those who have to carry the load of managing that railway now,

I think is despicable. I don't think that the opening statement

of the Premier could be or should be acceptable — not in this

House or beyond these sacred walls.

MR. G.S. WALLACE (Oak Bay): Which walls?

MR. SCHROEDER: These walls, Mr. Member for Oak Bay, are

considered by many to be sacred. Perhaps you don't hold to that

theory.

MR. WALLACE: Huh!

MR. SCHROEDER: Nonetheless, there are two basic changes that

took place. In bringing in the changes, the Premier sought by

any means, even by the use of devious language, to cast

aspersion upon the previous administration.

Let me say, for instance, that on page 2 of the

vice-president's report it talks about financial reports under

"corrected procedures." Clearly, Mr. Speaker, the words were

not "corrected procedures" but "adjusted procedures" —

financial reports under adjusted procedures.

[ Page 3437 ]

As we look at the restatement page in the financial report,

on page 3, the major area of adjustment came in the area of

depreciation. I would like to just address myself to the

concept of depreciation for just a few minutes. Depreciation

starts out with the cold, hard asset figures. You are going to

depreciate X number of dollars over a period of time. This

administration chooses to use straight-line or accelerated

depreciation. No one in this room and no one in the accounting

industry (if you can call it an industry) is in a position to

say it is right or wrong or it is better or worse just to say

it is a statement of policy that this administration believes

in a straight-line depreciation policy. Well, that's great.

That's great. Go to it. Have with it, if that is the policy

they wish to follow.

Then there is the other policy, which is one perhaps more

closely adhered to by the previous administration, and that is

one of deferred depreciation. However, the number of

depreciation dollars is established at the time of

capitalization. Those dollars are constant. If you want to

depreciate them on an accelerated basis, it just means that you

have to charge those dollars in the early years of the

amortization period. If you want to defer depreciation, it

means that you charge the bulk of those dollars a little

later.

This was the major policy change. With this change in mind,

there has been an increase of depreciation charged in the early

years, making the loss position of the railroad look worse at

the beginning. But I remind this administration that it will

make it look better at the end because the depreciation value

is constant.

Now there is a very serious question that I must pose. The

question is simply this: in an escalating economy or when there

is an inflationary spiral, Mr. Speaker, it is left to the

economists to decide: is it better to have an accelerated

depreciation programme or is it better to have a deferred type

of depreciation programme? I would have to suggest to you that

although this administration wants a straight-line policy and

wants to have an accelerated form of depreciation, I simply

have to ask this: is it better or is it worse? I don't know

that the administration has stopped to think whether or not

depreciation has an advantage in an escalating economy.

For instance, since load values — dollar values attached to

load-tons — are going to be increasing in an escalating

economy, wouldn't it be better to establish the assets to be

depreciated at a fixed level today and defer the depreciation

until such a time as the dollar value has decreased? You have

an inflation. Let's say you had $100 that you wanted to

depreciate, Mr. Speaker. Are you with me? Let's say you were

going to depreciate it on a straight-line basis of 10 per cent

per year so that over a 10-year period, you completely

amortized.

Now if you had $100 worth of revenue per year and operating expenses against

which you wanted to charge this depreciation, the $100 is your revenue today,

the same day that you establish your depreciation value, your asset level.

On an inflation or escalating basis, perhaps five years from

now your income would be $200. Let's just build the model in

that way. It's not too high when you consider that the

percentage increase in one year is 31 per cent in expenses in

this railway in this past year. I think the model is a

reasonable model, Mr. Second Member for Victoria (Mr. D.A.

Anderson).

However, coming back to the model. After a five-year period,

perhaps your revenue would be $200, against which you would

charge your depreciation. Having been established at the $100

level on a straight-line basis, you would be charging $10

depreciation against the $200 revenue,

whereas if you had had

an accelerated plan whereby you had to charge those dollars

against depreciation in the first year, you would have been

charging $10 against $100. Do you see the advantage?

I'm not sure that the government has taken the right policy

in choosing the accelerated depreciation plan. Nonetheless,

whichever way, they have the decision to make. It is a

political decision, it is clear. However, I do not believe that

the Premier in making that decision has the right, or I even

wonder if he had the intention, of trying to create a false

loss picture at this time so that he could lend some

credibility to the actual loss where actual losses have

occurred.

Mr. Member for Vancouver–Little Mountain (Mr. Cummings), you

understand that the real losses occur when you compare revenue

in a given year with actual expenditures in a given year.

Strange as it may seem, the vice-president's report spells it

out rather clearly. It gives us both numbers so that it is

simple. Just by subtraction you can find out what the actual

cash-flow loss was for the year 1974. His report says on page

3: "The net loss of the railway in 1974 amounted to $32.2

million compared with a restated loss of $13 million in 1973.

This $32.2 million loss included $13.9 million arising from the

above changes." You notice it doesn't say "from the above

errors," or "from the above bungling." It doesn't say

that these $13.9 million arose from hidden costs, or, as the

Premier in his opening statement suggested, that the end result

of this was to bury in the books a loss of $52.5 million. It

doesn't say here that these losses occurred because of a

burying process. It says that the above additional losses were

book values because of "the above changes in accounting

policies and depreciation rates."

Okay. If you subtract the additional amount that was caused

by the restatement, by the new policy, by the new depreciation

rates, if you subtract it from the stated amount of loss, $32.2

million, you have a net "under the old system" loss of $18.3

million.

[ Page 3438 ]

My question is: did the Premier find the $18.3 million a bit

hard to swallow when he looked at the year-to-year comparison

of losses and profits from the years 1957 through 1973?

Accumulated losses from 1957 through 1969 were like $4.369

million. By 1970 there was a break-even point under the old

policy. In 1971 there was approximately break-even — there was

$989,000 on the black side of the ledger, but approximately

break-even in 1971 under the adjusted policy. In 1972 it was

approximately break-even, under the unadjusted policy. Then in

1973, the first year of the new administration, we have a $3.3

million loss in one year under the old, unadjusted, understated

system, When the figures came in, when the administration became

aware of it in 1974, the losses were to be like $18.3 million.

They had to come up with a plan whereby they could rationalize

and justify that kind of a loss to make it look not quite so

bad. You see, $32.2 million of loss doesn't look so bad when

you say: "Hey, we've had losses all the time." So that is why

the new policy was adopted — one of accelerating

depreciation.

We're talking about the major segment of the restated

numbers — $27,197 million in what we're talking about,

restated.

There was another area.... By the way, before I go to the

other area, the vice-president's report itself gives us some

insight as to why the changes were made. Did you notice them,

Mr. Member? On page 4 of the vice-president's report it cites

four reasons for the retroactivity of the new policy.

First it says: "Because the financial statements as of

December, 1973, were not prepared in accordance with generally

accepted accounting principles...."

First of all, we have to discount that reason completely. It

is false, it is misleading to say that the financial reports

before 1973 were not issued in accordance with generally

accepted accounting principles because you first have to answer

the question: who establishes those accounting principles? They

would have us believe that it was the Canadian Transport

Commission. However, the Canadian Transport Commission not only

is not responsible for the accounting procedures of the B.C.

Railway, but also the standard of comparison prescribed by the

Canadian Transport Commission is not even available to the

BCR.

So in what kind of a frame of reference do we take this

statement "in accordance with generally accepted accounting

principles"? Here again, those principles have to be

established by the policy of the administration itself. That

same prerogative that this administration has accepted for

itself and has taken by implanting new policy procedures — that

same right belonged to the previous administration. As a

result, you can't say that these were not prepared in

accordance with generally accepted accounting principles.

AN HON. MEMBER: Jiggery-pokery.

MR. SCHROEDER: Right on! Jiggery-pokery.

Let's go to the second reason. The second reason says — and

I've already alluded to it: "Because certain past policies did

not conform with the accounting regulations prescribed by the

Canadian Transport Commission." Need I repeat? It didn't have

to be. Not only didn't it have to be, it couldn't be. So that's

a whole lot of breath in a windstorm.

The real reason, I suggest, is in No. 3. I've already

alluded to it in my earlier remarks. The real reasons given

in the words of the vice-president. Why were these new policies

made retroactive? Listen to it: "To establish a basis for the

preparation and comparison of 1974 and future financial

statements." There's the real reason. They wanted to establish

a more favourable comparison level so that the $32.2 million

loss of this year wouldn't look so bad — that's the real

reason.

No. 4 just further cements the position I have just

suggested. It says that the fourth reason was because of the

significant effect of such changes on previously reported

amounts. Why would they make that statement when they left the

key word out of the statement? I'll fill it in now and you can

understand very readily why these policies were made

retroactive. "Because of the significant" — can I put it in

parentheses? — (political) "effect of such changes on

previously reported amounts."

The Premier in his opening statement clearly tried to make

it look as though error had been committed — clearly made it

look as though there was a devious plot to hide something. As a

matter of fact, he says it right in his statement in the

Blues:

The end result of all this, Mr. Speaker, was to bury in the books a

loss of $52.7 million between 1967 and 1972. For the benefit of the

Leader of the Opposition (Mr. Bennett) I would note that in the year

1972 there was a loss of $8.1 million, not a profit of $993, which he

would like the public to believe.

He clearly says that there was a plot to deceive. I don't

believe that that serves the present railway in good stead at

all. I don't believe that he has thought through to the end of

that kind of a charge because, surely, he must understand that

the people of British Columbia are sophisticated enough to see

through the fact that even the $52.7 million restated loss over

15 years amounts to only $3.5 million of restated loss, which

is almost the equivalent of the actual understated loss of the

operation of that railway in the last year, 1973.

I think the Premier should apologize, not to the House so

much because we understand him here, but I think that the

Premier should apologize to the people for trying to make them

believe that the

[ Page 3439 ]

railway is in bad shape.

The other area — and I was all ready to start on this

paragraph about 10 minutes ago — of major change in accounting

policy was in the area of capitalization. Depreciation was one

area; capitalization was the other. I can just hear the scoffs

as the track-laying labour issue was discussed. It is the other

major area in the restatement — $27 million is depreciation and

$10 million is the track-laying labour. The Premier said: "How

can you take track-laying labour and charge it to capital

assets? It's labour."

Let me ask a simple question: what are all capital costs

made out of? Materials only? When they finish the construction

of the new railcar plant which is supposed to cost a total of

$9 million, does that $9 million include materials only? Of

course not, Mr. Speaker, labour is involved. Labour expense is

capitalized. That $9 million for the railcar plant represents

the cost of construction and is subject to depreciation. It is

capital investment. Labour is part of that capital investment.

Why doesn't the Premier understand then that track-laying

labour also can be charged — not only can be (that's to be

decided by the policy) but I say should be charged — to the

depreciation of the account, track-laying labour of some $10

million. But no, this administration chooses rather to have a

deflated capital assets figure and an accelerated depreciation

policy to make the railroad look bad right now.

But I've got faith in this railway, Mr. Speaker, because you

can't cheat on numbers. If you take them away now, you don't

have them left later. If you leave them here now, they are

there when you come back to them a little later if they have an

accelerated depreciation plan right now. God bless them,

because in the years to come that depreciation will not be

charged to operating accounts. And although the railway may

look bad today, it will look better tomorrow because of the

policy — which I don't believe this administration understands — they have adopted today.

I say let's on with the railway. I say if we need to borrow

the extra $210 million to make it go, let's first consider

whether or not the railway can recover from such extended

borrowings; then go ahead and borrow it. It increases the

capital base. Let's make the railway not only pay for itself,

but let's let it be the backbone that it is for the development

of the interior of British Columbia so that it can show its

strength in the timber industry, in the forest industry, and so

that it can open up those vast areas of richness which still

exist in the interior and which are awaiting the end of this

debate for the borrowing so that we can get on with the

job.

I support the bill, Mr. Speaker.

MR. F.X. RICHTER (Boundary-Similkameen): Mr. Speaker, the debate that

has taken place in the course of second reading of Bill 27 has clearly given

me some concern. I am sure that the House can understand my concern in the light

of the facts and the statements that the Minister of Finance made in his remarks

on moving second reading, and the cloud that it places me under personally in

light of my administrative responsibilities as the previous Minister of Commercial

Transport who was in charge of railway certification, engineering certificates

and also plans. I have been markedly concerned in relation to this matter because

I recall back in the very early years of my youth the discussions that took

place in my own home regarding the very same railway, then known as the PGE.

There was always a considerable amount of political hay

being made with that particular railway. I am sure that it was

started with the best of intentions. I still think that it

should be continued with the best of intentions, although it

has been a political football that has been kicked around from

pillar to post over the past few years and from one political

atmosphere to another.

Certainly this is not what we should be thinking. We should

be thinking in terms of proper administration, proper

management and the extending of this railway into the areas for

resource development. Truly, it is a resource railway, and I'll

have a little more to say on this a little later.

When I was Minister of Commercial Transport, my chief

engineer was R.E. Swanson, highly regarded for his engineering

judgment. He had been there in that department for a number of

years. At no time did I ever have any occasion to question his

decisions. Certainly, we frequently had long discussions not

only in relation to the railway's established plant, but also

in relation to the extensions — Fort St. John, Fort Nelson,

also the extension from Fort St. James to Dease Lake, and the

area between Summit and Fort St. James. These were all new

branches for resource development based on a long-term

programme, a rather extensive programme covering a very large

area.

There have been statements made in relation to centre-line

surveys, and various other remarks which, I assume, were made

to detract from the good management or the engineering that

took place in relation to the railway. You know, there has

probably been more miles of railway built in North America on

centre-line surveys — and I'll give you an example of some: Jim

Hill, the Canadian Pacific, the Canadian National, formerly the

Grand Trunk. In prairie areas, where most of our mileage is,

it's not necessary to go into very detailed surveys. The main

thing is your grades, and in most of those areas there was very

little grade work to be done other than to build up your

roadbed above the level of the prairie soil.

The mountains are a little different. We run into

[ Page 3440 ]

some rather difficult engineering, and it has to be done in

great detail, particularly if it's being built on a contractual

basis.

Of course, in the building of the railway between Fort St.

James and Dease Lake, it runs pretty parallel with the Rocky

Mountain trench, and the topography there is not nearly as

difficult as it is closer to the coast or further east in the

Rocky Mountain chain.

In the reports that have been made — the Swan Wooster report — they make definite statements. They say that the engineering

practices employed by the British Columbia Railway on the Fort

St. James–Dease Lake extension have been taken as typical of

the railway's current practice. Now this had to be so,

otherwise I wouldn't have received the reports that I did from

my chief engineer.

As I said previously, I had no reason to ever question any

of his judgments or any of the decisions he made in relation to

making his recommendations to me regarding certificates and

also as far as the signing of plans which had to be signed

first by the engineer before I, as Minister, could give the

final signature for the construction to go ahead.

Further, it has been stated by Swan Wooster that engineering

practices follow what can be considered normal North American

practices. I have just mentioned practices that were utilized

by such great railway builders as Jim Hill and his Great

Northern, and the other railways that we know of today, some of

which have gone out of existence because of technological

development, highway transportation and various other modes of

transportation — air and water.

I find it rather difficult to follow some of the statements

that have been made by the Minister of Finance as president of

this railway.

Swan Wooster further states that the limited degree of

preconstructural engineering performed by the British Columbia

Railway directly contributed to the unrealistic, low initial

estimate of earthwork quantities and cost at the time of

awarding construction contracts. I wouldn't think that this is

very detrimental because when any contractor goes in to do a

contract, he is going to look for himself.

In most cases, as far as this province is concerned, they

have not run into problems other than the escalation by way of

our inflationary trends. They have been able to keep pretty

much on course, but where you have a railway that you can

estimate the original cost and find that this goes on for

several years, there is no question that there is no escalation

clause put in the estimate, but certainly an engineer would put

his own escalation cost in there, knowing full well that at the

rate that we are going today, we're bound to have higher

costs.

Swan Wooster say they believe the engineering division of

the railway is understaffed for the volume of new construction

currently underway. The level of

[ Page 3441 ]

individual effort put out by members of the division is

highly commendable. Now if they were understaffed, there is

only one jurisdiction which could change that under the present

system of management, and that would be the board of

management, who would then through recommendations from the

field increase that. Now why hasn't it increased if it was so

badly in need?

These questions give me a great deal of concern, and I have

pondered them over the period of time that we have been

discussing this bill. Supervision of construction contracts by

railway field staff is of a high calibre, Swan Wooster say. If

it's a high calibre it is like my former chief engineer. He was

considered in the field of engineering to have a very high

calibre of decision-making ability. As I say, I had no reason

to question him on any count in that particular field.

Methods of measurement of work performed and methods of

payment are standard practice in the industry and entirely

satisfactory. Well, we're running into this every day with any

area. We know that in construction we pay by quantity today and

we find that there are variations in quantity and sometimes

there is variation in the geology, the materials and there are

sometimes some problems. Probably one of the problems of some

magnitude is the fact that in many of the areas you run into

problems with boggy areas or you have to do some construction

during very cold weather to be able to move your dirt, but it

seems to me that they have been able to overcome this by newer

technology.

The completion

schedule and probable ultimate cost of the

Fort St. James to Dease Lake extension has been estimated as

follows, based on current progress. Probable completion: 1976.

Originally, it was for 1974. Probable ultimate construction

cost: $140 million, in 1973 dollars. This presently represents

a probable final cost of $340,000 per mile, including ballast

and track. Taking terrain and railway design standards into

account, this figure compares favourably with other recent

North American experiences.

Now Swan Wooster's report. I've had something to do with

Swan Wooster because when I was chairman of the British

Columbia Harbour Board we were in the throes of developing

Roberts Bank, where the operating railway that managed that

branch was the operating management for all railways that used

the branch to Roberts Bank — the CPR, the Burlington Northern,

CNR, B.C. Hydro and also as far as the B.C. Rail is concerned.

They were the dispatchers who took care of the operation of the

trains, the mileages, the wheelage in which the amount of

moneys were collected. They did the maintenance of that

road.

So I see no reason why such criticism should have been

heaped on by the Premier in his early remarks in this

debate.

Really, when the railway was discussed — by the Hon. Don

Jamieson on behalf of the federal government and by the

provincial government — it was necessary to accumulate an

inventory of what that railway was going to haul, what was

going to be the source of revenue, how you could justify this

construction.

A very detailed survey was made under the Department of

Industrial Development, Trade and Commerce of that time by a

Mr. Glover in regard to the resources, along with the

cooperation of the Department of Mines and Petroleum

Resources, of which I was the Minister at that time.

Now based on the known mineral resources, based on the known

coal resources, timber resources, and resources that were on

site, namely at Cassiar — the short-fibre asbestos. I visited

the area. I saw a pile of approximately 12 million tons waiting

for the B.C. Rail to reach Dease Lake so it would be

economically feasible for them to move that product to market

for processing. To haul it the 380-odd miles to Whitehorse and

put it on the Yukon–White Pass Railway was not feasible. So

they were only hauling their long-fibre, which eventually was

shipped from seaports at Skagway to North Vancouver.

Now that material has not yet moved. It is still there, and

it must be moved, and the only way they can economically move

it is by way of rail. Now that was already there. The minute

the rails got there the cars could start to be loaded.

Since that time, many, many mines have been developed. The

Stewart-Cassiar road which was to complement the rail, the

Omineca mining road, which was under my jurisdiction, was

pushed through and was to reach Dease Lake on a comparative

date basis, which was going to open up between the rail east of

the rail to the Rocky Mountain trench for resource development,

and the Stewart-Cassiar was going to give you an access between

the coast and Cassiar, which would follow feeder roads to work

out from the resource location to the point of transportation

and to rail.

Now this was the basis on which the discussions took place

with the Hon. Don Jamieson here in Victoria, which I attended

as the Minister responsible for the railway development, and

also as the Minister responsible for Mines and Petroleum

Resources, which were going to be utilizing this rail line.

Now there was more to it than that. There was really more to

it than that — and Mr. Speaker, this was affecting your area,

too — because it was agreed at that time that the federal

government would run a line off the CN to Bear Lake to join the

B.C. Rail, and arrangements would be made for wheelage between

the two railways. In other words, in the use of the comparable

rail, whether it was federal or whether it was ours, an

exchange of running rights would be granted.

Along with that there were other concessions that were to

take place, and that was to the effect that in this general

agreement that was reached there would be joint participation

to work out details in regard to interconnections, running

rights, harbour development at Prince Rupert and assistance in

financing, with the ultimate destination of the railway — when

I say the ultimate destination of the railway, I mean the BCR —

being Yukon territory. Of course, that being under federal

jurisdiction, the Hon. Don Jamieson was fully apprised of the

fact that this became a federal responsibility at that

point.

But this is why it was necessary to have an interchange of

running rights. By that fact alone, the interchange of running

rights, we were going to see a greater degree of movement of

produce down through Terrace, out to the sea coast because, you

know, Mr. Minister, there is a more favourable saving in time

in shipping between Japan and Prince Rupert than there is

between Vancouver and Japan. There is a time-saving factor. One

would not think this, but that is a fact. This is clearly

demonstrated by the various Japanese companies which were

interested in using this line. Not only were they interested in

using it for mineral concentrates, they were also interested in

the possibility of the Sukunka coal developments being moved to

Prince George and out over the CN to have that time-saving

factor.

Of course, we know what's happened today as far as the

resource policies of the government are concerned. Our mining

industry is virtually dead. It's merely just going along on a

shoestring at the present time with existing operations.

There's nothing more being developed. And when I say there's

nothing more being developed, this also includes the whole

Atlin and Omineca mining districts because they have not had

that resource transportation available to them to make it

possible for them to open up their mining properties which have

already been proven as far as the tonnages being delineated and

the fact that we know the mineral is there.

Now our timber industry in that area may not be the greatest

in the world, but it is of a reasonable consequence. It must,

in due course, be considered as part of our total timber

inventory of the province. We're going to have to harvest —

there's no question about that. It's the only wise management

thing to do — harvest the timber before it becomes decadent and

is a total loss.

There are going to be developments in that area as soon as

the railway is completed. There's no question but that there

are going to be other developments. And there is area for other

developments: it can be in certain agricultural endeavours; it

can be recreational as far as the tourist industry is

concerned. In your own constituency there are many areas in

which you have very commendable recreational areas such as the

hot springs and various mineral springs which are

[ Page 3442 ]

there — and the benefits are great.

What should really happen as far as the future of the

railway is concerned? I am 100 per cent behind the railway

being completed with its extensions into the Yukon. It's not

going to cost what we originally estimated because of the

inflation factor. But certainly I don't think you can expect

any resource railway, as such, to be a paying proposition.

Where the rewards and benefits come from is the fact that you

can develop those resources within these areas. When you can

develop the resources within these areas, this is being done

not for the benefit of a board of management of the railway;

it's being done for the people of British Columbia. Certainly

while we may have to pay more for this — I'm going to pay more

for my meat and my bread tomorrow than what I'm paying, today.

This is an ongoing situation. We realize this.

I don't think there is anything that has been brought up by

the Minister of Finance in his castigation of the former

government in its management of this rail line that would

really stand scrutiny if a proper, full investigation and a

report with recommendations for proper management in the future.... I think it should be completely divorced from any

government. I don't think that is the area in which government

should operate.

I think that a full board of management, similar to what

other railways have on the national basis.... These types of

management boards then can be responsible to the people of the

province, and not at the whim of any particular political party

or any particular government. There would be no interference,

They would operate under company law and not be excluded from

any of the impact of following that law. I think political

interference, probably from the very beginning back in 1912

when I was very small, has been one of the greatest millstones

on the neck of this railway. It is my fondest hope and wish

that this will be removed at the earliest possible time for the

benefit of those of future generations who are following

us.

MR. J.R. CHABOT (Columbia River): It is a very important

bill we are debating, the bill of the Minister of Finance, who

just left the chamber. It is one which deals with the increase

of the British Columbia Railway Co. construction loan from $440

million to $650 million, in which the government is seeking the

sum of $210 million for furtherance of the expansion of the

B.C. Railway into northern British Columbia for a purpose of

extracting that great bread basket of resources that is up

there north of Prince George that is known as the top half of

this province.

Prior to granting approval to this additional $210-million requirement, it

is now necessary to discuss some of the financial affairs that are taking place

and some of the statements made by the government and its representatives as

well as some of the material that is being tabled in this House or has been

made available to this House. I want to speak first of all about the prospectus

that was filed in New York on May 22, 1975. On the front of this prospectus,

which is for a $125-million borrowing, it says:

"These securities have not been approved or disapproved by

the Securities and Exchange Commission; nor has the commission

passed upon the accuracy or adequacy of this prospectus. Any

representation to the contrary is a criminal offence."

I suggest to you, Mr. Speaker, that when I read this

prospectus, I find it to be erroneous, inaccurate, and not

telling the full story. I look at the discussion of the British

Columbia Railway Co. I look at the operating revenues from 1969

as a normal progression from $28 million of revenue onwards up

in an annual progression of growth and revenue up to the year

1973 of $46 million, which is a normal progression for a

railway such as this, a resource railway. I look at the

operating expenses that have virtually doubled since that time

although revenues have not virtually doubled. I look at the net

profit of the railway as stated in this document that was filed

in New York on May 22, 1975, and I find that in 1969 the

railway made $764,000; in 1970 it made $897,000; in 1971 it

made $990,000; in 1972 it made $992,000; and then lo and

behold, we come to the error of the socialists — in 1973, a

loss of $3,302,000, a loss all based on a uniform rate of

depreciation.

We see what has happened to the railway since that socialist

government has moved in and interfered with the management of

that railroad, Mr. Speaker. We see what has happened — never

mind the jiggery-pokery and the playing around with

depreciation figures as was done by the Premier when he made

his address here last Friday.

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

MR. CHABOT: The Member for Vancouver–Little Mountain says:

"Shame!"

MR. CUMMINGS: It is a half-built railway.

MR. CHABOT: I am saying that here we are. On the same

depreciation figures as the former government, we see it is

running this railroad into the ground.

Speaking about some of the other statements that are made in

the prospectus relative to the British Columbia Railway Co., it

says:

"Results of operations of the railway were adversely

affected during 1973 by strikes on the two national railways,

two strikes of 12

[ Page 3443 ]

days' duration on the railway itself, wage settlements which

were retroactive to the beginning of the year, and an extreme shortage of railway

cars which limited operation of the railway.

"Also contributing to the net loss for the year were

continuing increases in depreciation and interest on debt.

"Because of a decline in lumber shipments and further

increase in wages, depreciation, interest on debt, higher field

costs, strikes during the period November 5 to November 12,

1974, and November 21, 1974 to January 6, 1975, the railway is

projecting a substantial increase in the net loss for the

period ended December 31, 1974. Prior to the foregoing strikes,

this loss had been estimated at $10 million."

A tripling of the loss from 1973 to the year 1974 up to $10

million. You'd almost think they picked that figure right out

of thin air — that's the figure that the Member for Cariboo

(Mr. Fraser) has been projecting for some considerable period

of time without the knowledge of being a director of that

railway.

Certainly, when they filed this prospectus in New York on

May 22, 1975, the government knew full well that the loss was

to be substantially greater than that which was declared. In

fact, the loss was $26 million, 360 per cent greater than they

led those people who are going to be loaning money to the B.C.

Railway to believe. Yet on the front of the prospectus it says:

"Any representation to the contrary (other than the truth) is a

criminal offence." There is no doubt in my mind that there is

something drastically wrong with the information that has been

conveyed to those people who will be loaning us $125 million.

There's no doubt in my mind that we need a judicial inquiry to

examine the details surrounding the filing of this false

prospectus in New York.

Prior to its filing in New York on May 22, 1975, the

government was in the process of attempting to establish some

form of scandal surrounding the B.C. Railway and its operation

because we had that little Minister of Economic Development

(Hon. Mr. Lauk) — that little no-growth, no-job Minister of

Economic Development — who told us on April 9 of the great

scandal that would be revealed in due course. He said: "I could

give you the details" — he more or less implied that. "I could

give you the details but I'll leave that for another day

because I wouldn't want to take away from the glory of the

Premier in revealing a magnitude of this calibre" — even though

he still is unfortunately a director of B.C. Rail. He knew on

April 9 that the government was preparing an attempt to mislead

the people with the operation of the B.C. Railway. Yet he was

unwilling to do so and we find a falsely erroneous prospectus filed in New York some

considerable time after the Minister of Economic Development

made his statements.

DEPUTY SPEAKER: Order, please. Before the Hon. Member

proceeds, I would ask the Hon. Member to withdraw the

imputation that there was an attempt by the government to

mislead the people. This would include Members. I think that it

could be phrased in another way.

MR. PHILLIPS: It's all right for Gary Lauk to do that but....

DEPUTY SPEAKER: Order, please. I just ask the Hon. Member to

withdraw any imputation that there was any attempt by any

Member of this House to mislead.

MR. CHABOT: No, I didn't suggest that the Premier....

DEPUTY SPEAKER: The important thing is to state the facts

without making charges.

MR. CHABOT: Well, I have to make charges when I see that a

prospectus doesn't tell the true facts as were known at the

time it was fil