Mr. Speaker, it gives me great pleasure to speak in support of Bill C-107 today.
In 1990 Price Waterhouse estimated, as the hon. member who just spoke indicated, that about $1 billion of expenditures involving up to 1,500 jobs in the mining and forestry sector were likely to be affected if claims were not resolved. When we hear these numbers we must keep in mind that these are only two industry sectors and this study was over five years ago. In that report Price Waterhouse indicated that comprehensive land claims generate uncertainty for companies operating in British Columbia. I will get back to the factor of uncertainty.
Factors creating uncertainty include right of access to land and resources, possibility of production or shipment disruptions affecting reliability as suppliers, and possibility of unsatisfactory compensation if a company is affected by a land claim settlement.
Forestry and mining companies reported that they required a premium to invest in British Columbia rather than elsewhere because of the uncertainties related to comprehensive claims. Currently the premium is generally less than 1 per cent but it is expected to rise in the future. As indicated, the economic impact on the province of British Columbia is substantial.
The report goes on to indicate that uncertainty surrounding settlement of the land claims issue will ultimately have an impact on the provincial economy. It is estimated that almost $1 billion of currently proposed mining and forestry industry investments could be affected by the non-settlement of comprehensive land claims, although land claims are generally not the only issue to be resolved before development can proceed.
The economic impacts of such delays or cancellations could be summarized as follows: $50 million of capital expenditures could be lost each year; $75 million of capital expenditures could be delayed resulting in both lost opportunities and continued operation of less than efficient plants; and some 100 jobs stand not to be created each year because of the economic uncertainty. Such loss of growth of primary industry jobs means that the service sector will also be impacted and grow more slowly. Using generally accepted employment multipliers this is equivalent to a further 200 jobs not created throughout the province each year which might otherwise materialize.
The report indicates based on the projects identified in the survey that ultimately some 1,500 permanent jobs could be impacted, together with related indirect and induced employment.
It is important to refer to particular parts of the report because of the details contained therein. It is important to look at different aspects. There is reference made to the mining industry. The situation is a bit different at the mining development stage. A number of the participants indicated that they expected difficulties from unsettled land claims. Together the projects the participants indicated they had problems with represent about $680 million in capital expenditures.
Extrapolating the results and analysing expected impacts, Price Waterhouse estimated that the mining investment of about $100 million a year was likely to be affected by uncertainties related to comprehensive land claims in British Columbia. This represents about 12 per cent of annual private and public capital investment in the British Columbia mining industry. Based on the survey results about half the projects affected were expected to experience delays of about three years. The other half were expected to be cancelled.
Along with these losses one has to look at another ancillary loss, legal costs. Comprehensive land claims in British Columbia result in legal costs to governments, companies and native organizations estimated by Price Waterhouse at about $5 million a year.
In 1987, it is important to note, forestry, logging and wood products, manufacturing and pulp and paper manufacturing accounted for about 30 per cent of the GDP of the goods producing industries of the province of British Columbia and about 10 per cent of the province's GDP. In 1988 the industry was responsible for 87,000 direct permanent jobs representing about 6 per cent of total employment in British Columbia. The multiplier effect creates at least two more jobs for each direct job. Thus 261,000 jobs in British Columbia can be attributed to the forestry industry, 17 per cent of the total provincial workforce.
Mining, oil, gas and related manufacturing account for about 15 per cent of goods producing GDP and about 5 per cent of the provincial GDP. This is half the size of the forest industry in terms of GDP contribution.
We must note the Price Waterhouse study was completed over five years ago in March 1990. A lot has happened in the resource industry and on the land claims front since that time. However the one thing that has remained consistent is the need to establish certainty in the province of British Columbia through the negotiation and settlement of land claims.
The study conducted by Price Waterhouse involved leaders in the mining and forestry industries including senior executives, presidents and vice-presidents of companies, as well as general managers, chief foresters and managers of exploration and woodland operations. This is a critical point to understand the real impact of the lack of certainty on the land claims front to resource development and the impact the study has had in the industry. It signals the very broad recognition by industry from the boardrooms out to the field. The issue cannot be more emphatic. The settlement of land claims is long overdue.
Price Waterhouse reported that unresolved, comprehensive land claims generate uncertainty to companies operating in British Columbia, as I have already mentioned. I will mention it again to emphasize it for third party members and get through to them that it is an important factor.
Factors creating this uncertainty include the right of access to land and resources. For these companies the most important factors affecting the premium include future uncertainties regarding the outcome of injunctions related to land ownership or access, the possibility of production disruption, and future considerations regarding royalties and taxes.
The respondents to the Price Waterhouse survey generally agree that companies, employees and governments all pay the cost of uncertainty related to comprehensive land claims. The survey respondents also agreed that generally the higher cost could not be passed on to consumers because the resource sectors in British Columbia sell on world markets and are price takers. None of the respondents reported having considered compensation for comprehensive claims when applying for federal-provincial government funding. Very few respondents actually reported having applied for government incentive programs in the past.
These are very real concerns in resource based sectors in the province of British Columbia that consequently the economic stability not only of that province but the rest of the country as well.
There has been considerable action on the claims front since the study was done. The province of British Columbia has entered into the negotiation process and over 47 nation groups in the province of British Columbia have submitted statements of intent to negotiate.
The federal government is committed to resolving the uncertainty issues caused by the lack of treaties in B.C. The tabling of legislation for the creation of the B.C. Treaty Commission is one step toward the resolution of uncertainty.
There is no doubt in anyone's mind that the Price Waterhouse numbers demonstrate a clear and resounding indication of the impacts and the costs associated with not resolving land claims in the province of British Columbia.
We know we are losing over $1 billion in investment and over 1,500 jobs in mining and forestry. The door is open to resolve the land claims issue, to achieve certainty and to move forward. We must act. The opportunity is here today with the B.C. Treaty Commission legislation.