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   To the Honourable Walter S. Owen,
Q.C, LL.D.,
Lieutenant-Governor of British
Columbia.
May it please Your Honour:
I beg to submit the Report of the Department of Industrial Development,
Trade, and Commerce for the fiscal year
ended March 31, 1974.
GARY V. LAUK
Minister of Industrial Development,
Trade, and Commerce.
To the Honourable Gary V. Lauk,
Minister of Industrial Development, Trade, and Commerce,
Victoria, British Columbia.
Sir: I have the honour to submit herewith the Report of Industrial Development, Trade,
and Commerce for the fiscal year ended March 31, 1974.
Inasmuch as 1973 was a year of reorganization and transition for the Department, this
R.eport will reflect this transition by recording the activities of the Department from January 1,
1973, to March 31, 1974, in order to bridge the gap between calendar year and fiscal year reporting.   It is intended that all future Annual Reports will be on a fiscal year basis.
This Report highlights the performance of the Provincial economy and examines trends
and events of economic importance. The industrial and economic well-being of the Province
is the record of the Department and the Government's role.
During the year, record gains were made in export trade, with the increase in shipments to
Japan far above that to all other countries. It was also a record year for new jobs and for the
fishing industry. Significant advances were made in the Gross Provincial Product and in capital
investment in the Province. Many projects announced and started during the year in all regions
will produce a rise in over-all business activity in coming years. Despite the weight of the universal
problem of inflation and threatened energy shortages, progress in the Province was high. However, continued world demand for British Columbia's commodity-based items will likely see consistent though moderated increases in future expansion.
Expansion will be guided by the work of the Department's Economic Policies Branch,
formed toward the end of 1973. This Branch will be responsible for drafting detailed policies
which will subsequently be published by the Minister.
Additional information is contained in the body of this Report recording progress for the
fiscal year ending March 31, 4974.
A. L. PEEL
Deputy Minister of Industrial
Development, Trade, and Commerce
 DEPARTMENT OF INDUSTRIAL DEVELOPMENT, TRADE,
AND COMMERCE
Parliament Buildings,
Victoria, B.C. V8V 4R9
Honourable Gary V. Lauk, Minister
A. L. Peel, Deputy Minister
VANCOUVER OFFICE
Box 10111, Pacific Centre, Suite 450, 700 West Georgia Street, Vancouver, B.C. V7Y 1C6
Telephone 604-684-9311
BRITISH COLUMBIA HOUSE
1-3 Regent Street, London S.W. 1 Y, 4 N S, England (telephone 01-930-6857)
Rear-Admiral M. G. Stirling, RCN (Rtd.), Agent-General
 ORGANIZATION OF THE DEPARTMENT OF INDUSTRIAL
DEVELOPMENT, TRADE, AND COMMERCE
B.C. Research
Executive
Assistant
Minister
Department
Economist
Deputy
Minister
Administration
Economic Plans
and Statistics
Economics and
Statistics
Financial
Analysis
Economic
Planning
Economic
Policies
Operations
Business
Development
Trade and
Development
Small
Business
Development
Corporation
Information
Services
Projects
Industrial
Locations
Federal
Government
Liaison
CZT
□   □   □
The Economy  	
Industrial Expansion	
External Trade	
Expo'74	
General Affairs	
Operations	
Economic Plans and Statistics
British Columbia House	
Page
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  MY7
In 1973, British Columbia recorded the most
substantial economic gains in recent history,
well above the average increase attained in the
rest of Canada. Many factors were responsible, particularly strong demand of the United
States, Japan, the European Economic Community, and others for the products of British
Columbia industries.
New jobs were created at a record pace. At
the same time, production losses due to labour-
management disputes were relatively small,
primarily because 1973 was an off-year for contract negotiations.
Excellent gains in output and sales were realized during the year in forest industries, fishing,
agriculture, mining, power generation, manufacturing, and construction. This was reflected
in retail sales, gasoline consumption, foreign
trade, transportation, power consumption, tourist expenditures, personal income, and capital
investments. Capital investment jumped by
10.3 per cent between 1972 and 1973.
The Gross Provincial Product climbed to an
estimated $13.8 billion, an increase of 1.9
billion or 16 per cent over the 1972 level. Inflation accounted for a significant part of the
increase (the GNP implicit price index rose
about 7 per cent in 1973), but the real gain was
still the largest, in both absolute and relative
terms, realized in the past decade.
Inflationary pressures in the Province increased during 1973 with the consumer price
index rising by 6.8 per cent and the general
wholesale price index by 21.2 per cent. However, these increases compared reasonably well
with those registered in most industrial nations.
The Provincial population increased 3 per
cent in 1973 with residents of other provinces
attracted to the many new job opportunities
arising from rapid economic expansion. In
comparison, the total Canadian population rose
only 1.2 per cent.
A sharp rise in average income, combined
with an increasing work force and higher prices,
led to a record level of retail sales.
Unemployment remained a serious domestic
problem during the year, largely because British
Columbia tends to draw so many people from
other parts of the nation. However, 58,000
new jobs were created during the year, while
the labour force grew by an average of 52,000
people. As a result, the average annual unemployment rate declined from 7.6 per cent
in 1972 to 6.5 per cent of the labour force.
Exports through British Columbia customs
ports climbed to a record $4.65 billion, 43 per
cent more than in 1972. Price increases accounted for part of the gain, but the volume of
shipments rose substantially as well, particularly wood products, pulp, metal ores and concentrates, fish and fish products, grains, natural
gas, and coal. While gains were widespread
and affected virtually every foreign market, exports to Japan rose at a phenomenal rate.
Imports also reached a new high of $2.0 billion. The United States accounted for most
of the increase, while purchases from Japan,
Australia, the United Kingdom, and the balance
of the European Common Market declined
slightly from previous highs.
The value of shipments of manufactured
goods from British Columbia plants jumped to
$6.0 billion for the year, an increase of 26 per
cent over 1972. Although increases occured
in all manufacturing sectors, almost two-thirds
of the gain was attributable to the forest industries.
Mineral production was well above last year
as a number of large properties completed their
first full calendar year of operations. Prices
were up sharply as well for most minerals, resulting in the value of mineral production nearing $1 billion for the first time. Copper concentrates and coal accounted for the major part
of the increase.
The fishing industry also experienced its most
successful year ever in 1973, with the wholesale
marketed value of fish and fish products exceeding $200 million.
Output in the agriculture sector was only
moderately higher in most product groups;
however, greatly increased prices for live stock,
dairy products, field crops, and various fruit
and vegetables boosted farm cash receipts to the
$323 million mark.
The outlook for 1974 is clouded by the current world-wide energy crisis and continued
inflationary pressures and shortages of key
materials. A more moderate rate of expansion
was anticipated for 1974 as the rapid growth
of the past 12 to 18 months likely could not be
sustained. However, it remains to be seen how
much impact a fuel shortage will have on industrial production and ultimately on the demand
for British Columbia products.
 8
»U
mm
During 1973 the level of private and public
investment in British Columbia reached nearly
$4.4 billion compared with $3.75 billion in
1971 and 1972. On a per capita basis, investment spending averaged $1,887 per person,
compared with a Canadian ratio of $1,511 per
person.
Utilities grew the most with expenditures of
$1,040 million. Manufacturing ranked next
at $595 million. Investment in other business
sectors were primary industries and construction, $585 million; trade, finance, and commercial services, $470 million.
Large-scale investments in the electric power,
telephones, marine transport, and pipe-line
transport industries accounted for the substantial level of spending in the utilities sector.
B.C. Hydro and Power Authority awarded
powerhouse construction contracts for the new
Kootenay Canal and Mica Creek Generating
Stations and B.C. Telephone Company recorded a capital expansion programme totalling
over $165 million.
Among significant transportation projects,
major terminal facilities were started at the
ports of New Westminster, Prince Rupert, and
Vancouver.
Investments in the wood industries totalled
over $220 million and led capital spending by
British Columbia manufacturers. Expenditures
in the paper and allied industries at approximately $155 million followed.
Projects completed in other manufacturing
industries resulted in net additional factory
space of some 1.8 million square feet. Investment activity in primary industries and
construction was led by a $12.5 million environmental control addition to the Fort Nelson gas-
processing plant of Westcoast Transmission.
New office towers and hotels in the Greater
Vancouver area accounted for a substantial rise
in spending by trade, finance, and commercial
services.
In 1974, utilities are again expected to absorb the major share of investment funds. B.C.
Hydro and Power Authority is anticipated to
switch its ninth generating unit into service, a
facility of 275,000-kilowatt capacity, at the
Peace River hydro-electric project, and a
150,000-kilowatt unit at the Burrard Thermal
Generating Station. B.C. Telephone forecasts
capital improvements totalling over $190 million in 1974.
Westcoast Transmission is submitting a proposal to the National Energy Board for pipeline extensions valued at $15.4 million. In
other transportation industries, a $24 million
expansion is being planned at the Vancouver
International Airport.
The most substantial investment proposal
announced in the manufacturing industries is
a $50 million expansion to the refinery of Chevron Canada Ltd. at Burnaby, which would include environmental control installations.
At year-end, redevelopment activity was reported for the reopening of various metal mines
previously closed because of unfavourable price
and market conditions.
 mm
Price gains and strong domestic and foreign
demand combined to produce a substantial
advance in the value of trade through British
Columbia customs ports in 1973. Export shipments reached $4.65 billion (62 per cent of
British Columbia origin), compared,with $3.3
billion in 1972, while imports are estimated at
$2 billion, a gain of 14.9 per cent over 1972.
Significant advances in exports included fish
products, lumber and related wood products,
pulp, copper and other metals in ores and concentrates, coal, wheat and other grains and oilseeds. Import classes of major importance
were food, iron and steel, machinery, and fabricated metal products and industrial equipment.
Export advances were registered in practically every foreign market in 1973. The most
important value gains were made in shipments
to Japan, the United States, Britain, other
Western Europe, and China.
The demand for most Western Canadian exports to the United States accelerated to a total
of $1,685 million (1972, $1,383 million).
Lumber led the way, followed by natural gas
and petroleum; pulp, paper, and allied products; and metals in ores and concentrates
(mainly copper, lead, and zinc).
Exports to Japan increased at a phenomenal
rate from $789.9 million in 1972 to $1,508.0
million in 1973. These gains were spread over
the full range of products, but the big value exports were copper concentrates, barley, wheat,
coal, lumber, rapeseed, and flaxseed. Britain's
entry into the Common Market has not apparently hampered exports through British Columbia customs ports and a gain of $113 million to a total of $301.6 million was registered.
The value of imports through British Columbia ports, at over $2 billion, exceeded 1972 by
an estimated $260 million. This gain resulted
from increased demand and general increase in
the price (average 6.8 per cent) of imported
goods.
The United States dominated the advance in
imports ($1,126.4 million), while imports from
other major suppliers (such as Japan, United
Kingdom, West Germany) declined slightly in
value compared with 1972. Prospects for trade
in 1974 suggest continued growth, but at a
slower pace than in 1973.
Cutbacks in deliveries of Middle East oil to
the United States, Japan, and Western Europe
could hamper economic expansion and therefore affect exports to these markets in 1974.
Worldwide inflation and continued problems
with the international monetary system also
continue as problems. Despite this, British
Columbia's exports are expected to increase in
1974, because of worldwide demand for such
commodities as fish products, pulp, lumber,
newsprint, coal, natural gas, copper, lead, zinc,
aluminum, and molybdenum.
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74
British Columbia's participation in Expo '74
at Spokane, Wash., was announced toward the
end of 1973 by the Honourable Gary V. Lauk,
Minister of Industrial Development, Trade, and
Commerce. The British Columbia Pavilion is
on a unique island setting. In design and surroundings it will "symbolize British Columbia's
place in the world. In the midst of a vast complex of industrial and commercial exhibits, it
will be a place where nature still has precedence
over man. It will be a quiet place, a place to
stop, relax, and renew one's acquaintanceship
with the natural world."
The building itself consists of three interlocked hexagons. The main part of the exhibit
is a series of audio/visual presentations. Entering the pavilion, the visitor is first presented
with a kaleidoscope view; a tunnel of mirrors
which reflects images from various parts of the
display.
Continuing, the visitor passes through five
separate viewing areas, which combine double
and single slide projection, real and mirrored
views of the natural setting of the island, table-
top and floor-level views from overhead film
and slide projectors, and, finally, a theatre with
a seven-image screen.
These areas present the nature of British Columbia in several ways, from microscopic views
of plants and insects to aerial views of the landscape.
Leaving the theatre, the visitor will again
move outdoors and may then proceed to an
enclosed exhibition area where British Columbia artists, including native carvers, weavers,
and dancers, will be featured in displays and
demonstrations.
The display has been designed so that, with
minor alterations, it can be removed and later
travel throughout British Columbia for use in
schools and for display to the general public.
 MF\FMB
While still maintaining a full range of services
to existing and prospective industry in the Province during 1973, the Department of Industrial
Development, Trade, and Commerce commenced a major reorganization programme.
The updated objectives of the Department
are to stimulate spatially ordered economic development in the Province; to broaden the
economic base, particularly in the area of creating jobs through added value in processing; to
develop dynamic and flexible economic strategies which relate to British Columbia's strategic
position in Pacific and world trade as well as
trade within the region of Western Canada.
Reorganization resulted in formation of two
main divisions within the Department—Economic Plans and Statistics, and Operations.
These two bodies report to the Deputy Minister.
The Deputy Minister, the Minister's Executive
Assistant, the B.C. Research Council, and the
Crown British Columbia Development Corporation all reports to the Minister.
The Economic Plans and Statistics Division
compiles and analyses all statistical data; acts
as liaison with Statistics Canada; initiates and
conducts market studies, and provides statistical services to all other components within the
Department.
It is envisioned that this group will provide
the principal source of all statistical information
on past and present activities.
Also under Economic Plans and Statistics are
the Economic Planning, Financial Analysis and
Economic Policies branches.
Economic Planning processes statistics and
general information into specialized technical
data and economic strategies for guidance in
project planning and development of likely key
areas such as base metals and processing, forest
products, and manufacturing.
Financial Analysis provides profiles of successful business projects for the business community of the Province. It is responsible for
producing regular reports of activities of financial institutions and providing advice and assistance to business projects.
Economic Policies is responsible for drafting
detailed policies to be published by the Minis
ter. When fully staffed, the group will carry
out analysis of the policies of other governments
to determine their possible impact on the British
Columbia economy.
The Department's second main division,
Operations, has one group responsible for business development and includes a new group
responsible for small businesses. It works
closely with the Development Corporation of
British Columbia. A second group, for Projects and Industrial locations, is also included
in the Operations Division.
In the promotion of its services to businessmen, the Business Development group organizes trade missions; plans and sponsors visits
by groups of British Columbia manufacturers
to prime export markets, trade fairs, and shows;
provides assistance to individual companies who
wish to participate; arranges and sponsors visits
of officials whose companies may be potential
buyers; provides technical assistance and marketing assistance to companies expanding or
diversifying; counselling assistance by experienced members of the Department; and introduces new programmes designed to encourage
the expansion and growth of secondary manufacturing in the Province.
Information Services was formed in 1973.
It is responsible for handling questions that
arise from calls, letters, and visits to the Department; arranges speakers for meetings, display
units for trade fairs and newsletters and departmental publications; co-ordinates advertising
and publicity and press conferences.
 12
The year 1973 was one of reorganization,
planning, and implementation of specific activities. With the changing of the division's name
from Trade and Industry to "Operations," the
development of a much more aggressive role
started to take shape.
The objectives of the Operations Division are
described as follows:
(1) To develop plans and programmes
and carry out their implementation,
which will assist the growth of existing industrial establishments within
the Province:
(2) To develop plans and programmes
and carry out their implementation to
encourage the establishment of new
industries within the Province:
(3) To work closely with the communities of the Province and to assist them
in their planned industrial development:
(4) To provide an open line of communication between industry and the Department by way of personal contact
between Department officers and industrial establishments:
(5) To obtain, through personal visits by
Department officers, an intimate
knowledge of the productive capacity
of the industrial establishments located in the Province:
(6) To develop programmes designed to
encourage the establishment of small
businesses and assist in their growth
within the Province:
(7) To provide the leadership and action
in carrying out the recommendations
connected with programmes jointly
sponsored by the Provincial and Federal Governments, with specific attention directed to those programmes
associated with the Department of
Regional Economic Expansion.
In order to achieve these objectives, the
Operations Division has been divided as follows:
(1) Business Development, which includes trade and industry development and small business assistance:
(2) Projects, which includes major long-
range industrial development activities:
(3) Industrial Sites, which includes the
selection of suitable properties, design of facilities, and development of
specifications for industrial sites
throughout the Province:
(4) Federal Government Liaison, which
includes the planning, organizing, coordinating, and the development
activities which are identified and
financed through joint co-operation
between Provincial and Federal
Governments.
In response to the reorganization programme,
the role of the Vancouver Office has been
upgraded. Its initial objectives have been concentrated on improving the communication between the Department and the industrial community and obtaining first-hand knowledge of
the productive capabilities of the Province's industry and of the problems of development
which face both industry and communities.
During the year, Department personnel operating out of the Vancouver office made 1,400
visits to industries in the Province and responded to an additional 1,200 inquiries
through interviews held in the Vancouver office.
In the same period, Department personnel made
300 visits to the communities of the Province,
contacting elected and appointed officials in
every corner of British Columbia.
As the first step in assisting existing industries to expand, company representatives were
sent to foreign market areas and foreign buyers
were brought into the Province. Although the
initial efforts were limited by staff shortages,
representatives of the oyster industry were able
to assess the oyster-seed market in France, and
10 foreign buyers from New Zealand, the
Philippines, Guyana, Brazil, Sweden, and other
countries were brought to British Columbia to
attend the Pacific Sawmill Equipment Exhibition and discuss equipment purchases with the
manufacturing companies. It is estimated that
equipment orders valued at $1 million were
received, partially as a result of the Department's effort, and valuable contacts were developed.
An on-the-site study was prepared to identify
the market opportunities for logging, sawmill,
and plywood equipment in Malaysia. Following the completion of this study, a seven-com-
 13
pany mission was organized and departed in
January 1974.
Planning is under way for 1974 for a 10-man
mission to attend the Hanover and Milan Trade
Fairs in search of joint venture and licensing
agreement opportunities.
A five-company mission visited Australia in
March 1974, to determine the opportunities for
sale of prefabricated kitchen cabinets in that
country.
A 10-company mission is planned for June
1974 to Japan to identify opportunities for prefabricated housing and components.
With the increased activity generated by the
home offices of the Department, more attention
is being paid to the California, Washington, and
Oregon markets, and regular visits are made
into these areas by Department personnel.
 14
The Economic Plans and Statistics Division
performs a wide variety of duties related to
economic and industrial development in British
Columbia. Along with its other activities, the
Branch is responsible, through agreement with
Statistics Canada, for meeting the needs of users
of 1971 census data in the Province, and functions as the Provincial Census Data Dissemination Centre.
Within the Division are four branches stemming from reorganization—Economics and
Statistics, Economic Policies, Economic Planning, and Financial Analysis. The latter two
did not become operative in 1973.
During 1973, there was considerable activity
for the Economics and Statistics Branch. Staff
members carried out a number of research projects for the Department which included a study
of sawmill and logging equipment producers,
estimates of British Columbia product exports,
a survey of hearing impairment to aid the Board
of Hearing-aid Dealers and Consultants in establishing policies and regulations, background
data related to G.A.T.T. negotiations, steel industry studies, Peace River-Liard task force
report, Kootenay task force report, report on
Japanese trading companies in British Columbia, petroleum sales survey, negotiations with
Department of Regional Economic Expansion
(DREE) pertaining to new progress of Federal-
Provincial co-operation.
In co-operating with the other Government
departments and organizations, the Branch
produces studies such as related to Government
purchasing policies, Government automobile insurance, papers for the Western Economic Opportunities Conference, and research on a B.C.
Merchant Marine.
The Economic Policies Branch did not become operative until late in 1973 when a director was appointed to draft policy statements
for approval and publication by the Minister.
When fully staffed, the group will carry out
analysis of the economic policies of other
governments to determine their possible impact on the British Columbia economy and
their relationship to policy considerations in this
Province.
The Economic Policies Branch will also
prepare policy drafts for study within the Department and will submit position papers on
various policy questions for Ministerial consideration.
Further involvement for this group will be
with policy-related projects that have important
implications for the socio-economic development of the Province. Initially, activity in this
area has been largely concerned with liaison
and research relating to the economic rights of
women in British Columbia.
Economics and Statistics personnel attended
or participated in a number of meetings during
the year.   Among the most significant were:
Federal-Provincial Review of the Pulp and
Paper Industry, Ottawa, August 2,
1973.
Labour Force Survey Assessment and Review Project (Statistics Canada), Ottawa, October 16 to 19, 1973.
Foreign Trade Seminar—Pacific Rim markets for food products—Vancouver,
March 12-13, 1973.   (Sponsored by
Department of Industry, Trade and
Commerce, Ottawa).
Statistics Canada—Provincial Committee
on  Provincial  Economic  Accounts,
Ottawa, November 7 and 8, 1973.
Committee on International and Interpro-
vincial Trade Statistics, Ottawa, November 9, 1973.
Construction and Investment Statistics
Workshop, Ottawa, November 9,
1973.
Western Economic Opportunities Conference, July 24 to 26, 1973, Calgary.
Eighth Federal-Provincial Conference on
Economic Statistics, Montebello,
P.Q., May 22 to 26, 1973.
 Following is a list of publications issued by the Department in 1973, with brief descriptions:
Bulletin of Business Activity—A monthly summary and review of current economic and
business activities with statistical data showing comparisons to the previous month and the same
month of the preceding year. Also contains special articles of current interest and lists new
publications as they are released by the Department.
Summary of Economic Activity—Annual summary and review of the economic pattern of
the current year and a statistical supplement covering the past 10 years. Issued at the end of the
current year.
British Columbia Business Outlook—A study of the prospects for business for the coming
year.   Issued at the end of the current year.
External Trade Through British Columbia Customs Ports—Annual report providing both
detailed and summary tables showing exports and imports through British Columbia customs
ports.   Includes data by commodity and country and graphs.
British Columbia Preliminary Regional Salary and Wage Rate Survey—Annual study of wage
rates for selected occupations and industries in British Columbia. The information is useful for
inter-industry salary and wage-rate comparisons.
Industrial Expansion in British Columbia—Quarterly publication listing, and describing
projects completed, commenced, and proposed for each quarter on a regional basis. There is also
an annual report of the year's activities under the same categories.
Skeena-Queen Charlotte Regional Economic Study—Examines the past and present economic base of this region and suggests the direction of future growth.
The Washington Oregon Market—A study for British Columbia businessmen. An in-depth
study of the economic structure of these two states and suggests opportunities for sale of British
Columbia products.
Employment and Investment in British Columbia Government Approved Tourist Accommodation—A survey and analysis of the industry. Co-operation of the Travel Department contributed significantly to this study.
 Lru
■j
British Columbia again had an official office
at the Hanover International Trade Fair,
manned by the Commercial Officer from B.C.
House in London. This is the largest industrial
fair of its kind in Europe, attracting about
500,000 visitors. Assistance was given to
businessmen and industrialists thinking of Western Canada as a base for future expansion and
investment; useful contacts were established
with representatives of Canadian banks and
government departments in Germany. A great
deal of trade literature was distributed. During
the year, requests were dealt with from British
Columbia manufacturers interested in the markets of Great Britain and the new EEC, looking
for sources of supply, sales prospects, etc. A
number of British Columbia businessmen also
called at B.C. House, London, seeking advice
on contacts and itineraries.
Similarly, inquiries were received from British and European firms wishing to expand their
Canadian sales or enter into manufacturing
arrangements or joint ventures with British Columbia companies. Unfortunately, the restrictions imposed by the U.K. Government on the
transfer of sterling to the dollar area still in
force are a restraining influence on the establishment of new businesses or branch plants in
the Province by U.K. industrialists.
Facilities are now available at B.C. House,
London, for British Columbia manufacturers to
exhibit their merchandise for viewing by importers, buyers, and distributers in the U.K. It
is hoped that many manufacturers will take advantage of these facilities to expand their business and to make successful contacts in the
trade.
Throughout the year, British and European
firms and trade associations, chambers of commerce, banks, and government departments
were regularly circulated with trade literature,
particularly the monthly Business Activity Bulletin.
In September 1972 the Trade Commissioner
in London was posted back to Vancouver and
since that time the Commercial Officer has been
filling in. As a result, usual visits to other areas
of Britain and Western Europe were not undertaken.