2000 Legislative Session: 4th Session, 36th Parliament
SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS
MINUTES AND HANSARD

MINUTES SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS Tuesday, May 9, 2000 8:30 a.m. Douglas Fir Committee Room Parliament Buildings, Victoria

Present:   R. Thorpe, MLA (Chair); E. Gillespie, MLA (Deputy Chair); P. Calendino, MLA; E. Walsh, MLA; R. Kasper, MLA; S. Orcherton, MLA; D. Zirnhelt, MLA; G. Farrell-Collins, MLA; M. Coell, MLA; Dr. J. Weisbeck, MLA; J. Weisgerber, MLA

1. The Chair called the Committee to order at 8:35 a.m.

2. The Clerk of Committees read a memo previously circulated to all members regarding premature disclosure of reports to the House. The Committee agreed that the Chair, Deputy Chair, and the Clerk of Committees would draft a motion clarifying the Committee�s practice of circulating draft committee reports to ensure clarity and technical accuracy.

3. The Committee heard testimony from Endre Dolhai, Senior Principal, Office of the Auditor General, regarding follow-up of recommendations in 1995/96 Report 2 Performance Audits, British Columbia Ferry Corporation, Fleet and Terminal Maintenance Management Operational Safety. The Committee also heard testimony from Bob Lingwood, President and Chief Executive Officer, British Columbia Ferry Corporation; Rob Clarke, Vice President, Finance and Corporate Services, British Columbia Ferry Corporation; and, Capt. Michael Carter, Executive Vice President, Operations and Customer Services, British Columbia Ferry Corporation on the report.

4. The copies of the draft Committee report titled Training and Development in the British Columbia Public Service were circulated to Committee members.

5. The Committee adjourned to the call of the Chair at 10:00 a.m.

Rick Thorpe, MLA Chair

Craig James Clerk of Committees and Clerk Assistant

TUESDAY, MAY 9, 2000

 

Chair:	* Rick Thorpe (Okanagan-Penticton L)
Deputy Chair:	* Evelyn Gillespie (Comox Valley NDP)
Members:	* Pietro Calendino (Burnaby North NDP) * Rick Kasper (Malahat-Juan de Fuca NDP) * Steve Orcherton (Victoria-Hillside NDP)    Dennis Streifel (Mission-Kent NDP) * Erda Walsh (Kootenay NDP) * David Zirnhelt (Cariboo South NDP) * Murray Coell (Saanich North and the Islands L) * Gary Farrell-Collins (Vancouver-Little Mountain L) * John Weisbeck (Okanagan East L) * Jack Weisgerber (Peace River South Ind)

* denotes member present

 

Other MLAs present:	Doug Symons (Richmond Centre L)
Clerks:	Craig James Kate Ryan-Lloyd
Committee Staff:	Kelly Dunsdon (Committee Researcher)

[ Page 1485 ]

The committee met at 8:35 a.m.

R. Thorpe (Chair): We have a quorum. The first thing I'd like to do this morning is welcome Wayne Strelioff, the new auditor general of British Columbia. Welcome, Wayne.

On behalf of the committee, I'd also like to thank all of the staff in the auditor general's department through this transition. They've been very accommodating -- and a special thanks, Peter, to you for your efforts in working with the committee. Of course we look forward to seeing you here on an ongoing basis.

The first item on the agenda is a discussion on the disclosure of draft committee reports. I'm going to ask Craig to address that issue.

C. James: I believe it was yesterday -- but last week as well -- that members of the Select Standing Committee on Public Accounts received a note arising out of a discussion they'd had about three weeks ago relating to the premature disclosure of committee reports -- in particular, the circulation of draft committee reports prior to the report being presented to the House. Just for the record, maybe I could read this letter which you received into the record. This is one that has just slightly changed from the one that you received yesterday. It's more syntax; there's nothing substantive about any of the changes. It says:

"Re: Select Standing Committee on Public Accounts -- Premature Disclosure of Report to the House.

"At its meeting of April 11, 2000, the matter was raised in the Select Standing Committee on Public Accounts respecting two issues: namely, the practice of deliberating upon the committee's reports to the House in public forum and circulating the committee's reports prior to the House having received them.

"The authorities are clear in regard to the two matters raised above. Erskine May, Beauchesne, House of Commons Procedure and Practice and Parliamentary Practice in British Columbia contain numerous references to the effect that any parliamentary report should be tabled in the House before the report is circulated. As well, there have been many Speaker's decisions regarding the application of this practice, and parliamentary committees have been struck to inquire into the premature disclosure of committee reports.

"However, since 1987 the Select Standing Committee on Public Accounts in British Columbia has adopted an administrative practice of having its reports to the House reviewed by the auditor general and the comptroller general for accuracy and clarity relating to technical issues the committee is addressing. It has been a practice that has worked well in the past primarily because most of the issues the committee was considering at the time were not deemed to be controversial in nature. It is probable that the fourth session of the thirty-sixth parliament will generate certain committee reports to the House containing matters of some controversy. A report prematurely released could give rise to matters of privilege being raised in the committee or the House.

"The practice established by the committee in 1987 and continuing to date seems to have satisfied its members and has not offended the spirit of the rule against premature disclosure of committee reports. Where members of the Select Standing Committee on Public Accounts feel that the issue they are considering is too sensitive to permit the above practice, I would recommend that the committee deliberate upon its report to the House in camera.

"Strictly speaking, my advice to all parliamentary committees is to abide by the principle of considering their reports in camera, in order to avoid compromising the integrity of the inquiry process, giving someone an unfair advantage due to the nature of the recommendations in the report by the premature disclosure of its contents prior to the House being informed, and abiding by the well-established practice enunciated by the parliamentary authorities quoted above. It may be useful for members of the select standing committee to discuss this issue at one of their meetings in order to formalize the practice they wish to accept."

G. Farrell-Collins: I just want to sort of summarize what I've heard. Essentially, you're telling us not to do anything -- just keep doing what we're doing unless we think it's particularly important. In that case, then we should discuss and debate the pending report in camera. We are not, by our practice, offending the principle that committee reports should be tabled in the House first. Is that correct?

[0840]

C. James: That's right. Just to further clarify the point, the issue of circulating reports prior to the House receiving them is one which has meant in the past taking a draft copy of the report and sharing it with the comptroller general and the auditor general. It is up to them to obtain the view of others within their domain to provide that clarity where issues that the Public Accounts Committee have been considering are of an extreme technical nature, where that expertise is required.

It's my view that it has evolved as an administrative practice, and the report is in fact not circulated publicly until it actually has been reported to the House. The report being circulated prior to the Chair presenting it to the House is usually limited to members of the committee and one or two copies to the auditor general and the comptroller general.

G. Farrell-Collins: I think the issue arose not when the comptroller general and the auditor general were receiving copies of it, but rather when they, in turn, were consulting with people who may have been involved in the issue, in order to obtain clarity -- because they obviously aren't the sole containers of knowledge on the particular subject areas -- and there may have been a risk. They were in an uncomfortable situation in having to go out and do that without any express intent from the committee. I don't know that we've solved any of that, other than to acknowledge that it's an administrative practice that has been ongoing.

Craig, perhaps you can advise us. I know that committees in the past have made motions and passed resolutions to more formalize their procedures. Would it be worthwhile for us to draft some sort of a brief resolution that would more formalize that process, just to give the comptroller and the auditor general some comfort as they go about employing that administrative practice?

C. James: I think that would be of great value. Just to remind members, of course, my advice -- and I think it's the collective advice of the Clerks -- is that consideration of any parliamentary committee report by a committee ought to be in camera. A departure from that is a departure from the rules, practices and precedents of both this place and other parliaments throughout the Commonwealth. The practice since 1987 has been firmly entrenched in terms of the committee sharing their reports for this technical purpose.

[ Page 1486 ]

G. Farrell-Collins: As you well know, procedures, practices and precedents evolve over time. It's pretty clear that the practices of this committee have evolved over time, particularly since 1987. Perhaps there could be some wording that all reports shall be debated in camera unless directed by the Chair or that would allow there to be a step taken by the committee that would permit the reports to be circulated to and then by the auditor general and the comptroller general to whoever is necessary.

C. James: In fact, if it's all right with members of the committee, maybe the Chair and Deputy Chair and I could get together. I'll draft a motion which could be brought forward for somebody to move at the next meeting of the committee -- to resolve the issue.

G. Farrell-Collins: I just think that would clarify it and give some solace to the comptroller general and the auditor general, who are obliged to employ that administrative practice without a lot of backup.

R. Thorpe (Chair): Okay, the Deputy Chair and the Chair will get together with Craig. We are going to schedule ourselves together for 15 minutes after each meeting now, so we'll handle that after this meeting adjourns at 10 o'clock.

Now we're going to move to a follow-up report on the B.C. Ferry Corporation -- "Fleet and Terminal Maintenance Management and Operational Safety." Does the auditor general's department have an update or a status report to report?

[0845]

W. Strelioff: Yes, we do. Thank you and good morning, members and officials. I look forward to the opportunity to work with you over the coming years. Endre Dolhai is here from our office to give a background status report on our work at the B.C. Ferry Corp as it pertains to your agenda item today.

E. Dolhai: My name is Endre Dolhai. I'm a senior principal in the office of the auditor general. I have been involved with the B.C. Ferries audits since the outset.

We felt it would be useful for us to give a historical status report on what has happened on this particular project, because we haven't really done any work on the status that you're discussing this morning. We have, in agreement with the committee, started the new process that was agreed to, and that process hasn't been completed yet. What you are about to hear from B.C. Ferries is something that we haven't really reviewed.

You should all have a copy of this document that we have prepared. I don't know whether all of you have a copy of this. This is the document that we prepared to give you some background information as to what has happened on this particular project to date. Does everybody have a copy? Okay.

R. Thorpe (Chair): It was sent out last Thursday.

E. Dolhai: I brought some extra copies that I'll give to you.

G. Farrell-Collins: If you've got one, Mr. Symons didn't receive one. He's not on the committee normally, so we'll get a copy.

E. Dolhai: Okay. I think Kelly should have some extras.

I will just quickly go through this document and then take it from there. It's titled "Information Provided by the Office of the Auditor General Regarding Follow-up of Recommendations on 1995/96 Report 2 Performance Audits: British Columbia Ferry Corporation Fleet and Terminal Maintenance Management and Operational Safety."

Page 2 of the document starts with fleet and terminal maintenance management and describes the original audit purpose and the overall conclusions. Page 3 provides the events to date. It basically states that we issued our report in February 1996 and that the report contained eight recommendations. The Public Accounts Committee reviewed the report on November 20, 1996, and after completing its review, eight remained outstanding. The Public Accounts Committee reported the results of its review to the Legislative Assembly on May 12, 1997. That report included all of the eight recommendations.

We did two follow-ups on this project. The first follow-up was reported in 1998-99 -- report 1, "Follow-up of 1996 Performance Audits/Studies." The Public Accounts Committee reviewed the follow-up report on December 8, 1998. On completing its review, five recommendations remained outstanding. The Public Accounts Committee reported to the Legislative Assembly on July 6, 1999. The report included three additional recommendations made by the committee.

The second follow-up we reported on in 1999-2000 -- report 1, "1999 Follow-up of Performance Audits/Reviews." The Public Accounts Committee has not yet reviewed this report.

I would also just like to mention that this is what the original report looked like. If you would like to see this report or any of the follow-up reports, we have them on our web site, so you can access this anytime. I have five extra copies of the latest follow-up report. If any of you don't have any copies, please feel free to get one from here.

[0850]

On page 4 we have a summary of the recommendations and their status. We started with eight recommendations that were included in the original report. The recommendations that were not fully implemented at the conclusion of the last Public Accounts Committee review were five. In addition, the committee itself made three additional recommendations in its report, "Follow-up of the 1996 Performance Audit/Studies, Third Session, Thirty-sixth Parliament, British Columbia Legislative Assembly, July 6, 1999," report No. 6.

On page 5 we provide some information on operational safety, the original audit purpose and overall conclusions -- and on page 6, the events to date. Again, we issued the report in February 1996. Both projects were included in the same report. The report contained 13 recommendations. The Public Accounts Committee reviewed the report on November 20, 1996. On completion, the 13 recommendations remained outstanding, and the Public Accounts Committee reported to the Legislative Assembly on May 12, 1997. That report included all 13 recommendations.

We reported in August 1998, in our 1998-99 report 1, "Follow-up of 1996 Performance Audits/Studies." The Public Accounts Committee reviewed the follow-up report on December 8, 1998. On completing the review, two recommen-

[ Page 1487 ]

dations remained outstanding. The Public Accounts Committee reported to the Legislative Assembly on July 6, 1999. The report included three additional recommendations made by the committee.

On page 7 we summarized the recommendations and their status. The number of recommendations in the original report was 13; there were two outstanding recommendations, plus three other recommendations that the committee made after it had deliberated on the recommendations.

This provides a summary of what has happened from the time we did the original audit -- the follow-up reports and the committee's own deliberations and recommendations on the reports.

W. Strelioff: Thank you, Endre.

R. Thorpe (Chair): Maybe we could have the officials from B.C. Ferries come and give us their status on these reports. I was going to say, Endre, just move over, but I guess there are not enough chairs.

Welcome back, Bob. If your other officials are going to speak, maybe they could just make sure they introduce themselves so Hansard can get their names down properly.

B. Lingwood: Good morning. Chair, if I could, I would like to circulate two status reports for the committee. My apologies for not having them to you in advance. The notice that we received of this meeting was a little less than we normally receive, so we were unable to circulate them in advance. I have two status reports, one dealing with the maintenance side of the auditor's investigations and one dealing with the operational safety side. We can circulate those now.

R. Thorpe (Chair): Thank you. While we're circulating, why don't you just. . . ? Do you want to lead us through your. . . ?

B. Lingwood: Well, let me do it at a high level to begin with, Chair. The crux of the recommendations for the auditor and the corporations dealing with those recommendations really evolved around the implementation of two major programs. On the safety side it was the implementation of the international safety management program -- ISM, as it's known. On the maintenance side it was the implementation of a corporate maintenance management system, or CMMS.

[0855]

I guess we have good news, and we have news that is not as good as we would like. First, on the international safety management program, we can report that that has been fully implemented as of the end of our fiscal year '99-2000. That provides a system which addresses the broad and ongoing safety issues within the corporation. Essentially, what the ISM does is establish clear responsibilities for safety throughout the corporation, particularly on board ships but also in terminals. It's not only operational safety but also dealing with issues of an environmental nature or environmental safety issues. It establishes responsibility and then procedures to carry out those responsibilities, and it has a system of auditing to ensure that there is compliance. And the auditing is on two levels: one with internal auditors who would audit each ship and each terminal once a year, and then an external audit which is done by Lloyd's, which would come in and select and sample certain target areas to ensure that there is compliance. So that has been successfully implemented and is well underway, and I think it is a major benefit to the corporation.

On the maintenance management side which, from previous reports of the corporation to this committee, was designed to deal with the efficiency of the maintenance within the corporation -- to be able to monitor it, to provide indices that could measure how efficient maintenance practices were and also to track progress or trends in that area -- that program has been partially implemented. Certainly at Deas dock, our ship refit and modification area, it's implemented. It has been implemented on some ships, but it has not been completed to the extent that we're able to get full benefit out of it and really provide assurance to our board and assurance to the committee and the public that in fact at this time we're able to monitor, track and set targets for the efficiency of our maintenance program.

The review I've had undertaken of that since coming to the corporation, which was led by Rob Clarke, who is here, who is our chief financial officer. . . . The major stumbling block we now have is with the software that was selected, I believe, in 1995. The analysis that we've done appears that the owner of that software will not carry on supporting it in the future, and we're at a point where we have to decide in the next two months whether to continue on with that particular software or change to another system which will have a higher level of support in future years.

R. Thorpe (Chair): I just want to ask a question: what's the name of that software?

B. Lingwood: Immpower, and it's owned, I believe, by Walker.

R. Clarke: It's Rob Clarke, vice-president of finance and corporate services. It was a product developed by a company called Revere. Revere was purchased by Walker several years ago, subsequent to when we had acquired the software. Walker is in some difficulties of its own, has realigned its business and had put up Revere and Immpower for sale. It was recently sold in the last month or so, and we're not sure at this point as to what to expect from the new owners.

R. Thorpe (Chair): Is that the end of your overview -- your high-level overview?

B. Lingwood: That's the overview, Chair -- the high level, if you like. I can move through the individual reports, or I'd be pleased to answer questions -- whatever the committee wishes.

G. Farrell-Collins: This first auditor general's report came out some four years ago. I guess my question is: what's the rationale for. . . ? My understanding from reading all of this is that the Ferry Corporation has accepted the recommendations and the advice. We're now four years into it, and not all the recommendations have been complied with. What's the holdup?

[0900]

B. Lingwood: To comply with the recommendations was not a simple matter. In other words, the implementation of the

[ Page 1488 ]

maintenance management system is a major endeavour, and it's quite complex. I think what we've found in analyzing where we are and how we should best complete this task. . . . I think a series of impacts that have been discussed about fast ferries and other issues within B.C. Ferries have impacted the progress which the corporation has been able to make in this area.

G. Farrell-Collins: Maybe I can just try and clarify what you just said. Correct me if I'm wrong. Are you saying that because of the drawdown of time that's been required by senior people at B.C. Ferries to manage the fast ferry issue, there's been insufficient manpower or time allocated -- or able to be allocated -- for implementing some of these recommendations? Is that what you said?

B. Lingwood: I wouldn't say just the fast ferry issue. Dealing with the fast ferry issue and with financial issues within the corporation has resulted in less focus on this particular issue than was needed to successfully complete it in the time that was previously indicated to the committee.

R. Thorpe (Chair): Any other questions at this point in time?

S. Orcherton: In doing an overview, you haven't gone into the details of either of these issues. I'm interested in focusing a little bit on the operational safety side. I see on page 2 that you have put in place a risk management program that is tracking those kinds of things around incidents that occur. How long has the program been put in place?

B. Lingwood: Perhaps Mr. Clarke or Mr. Carter could. . . .

R. Clarke: The program -- or elements of it -- has been in place, I believe, Mike, for three years. Other elements have been coming on. We are at a point in the last several months where we are substantially complete in this area. We are still looking at ways to improve, but that is in the pursuit of continuing performance improvement as opposed to addressing specific recommendations.

S. Orcherton: So have the incidents of operational safety gone up in terms of being reported? What's the status? Are they going down, are they going up, are they staying constant, or. . . ?

M. Carter: I'm Mike Carter, executive vice-president of operations and customer services. The incidence has gone up slightly, largely because the tracking has improved so much over the last three years. As part of the international safety management structure, we're required to track all incidents, have a good feedback mechanism to the fleet and also look at all those incidents and see trends that are developing. That's a process that has much improved over the last three years. The indication is that the numbers are not yet going down because of our improvement in receiving the information.

S. Orcherton: What about WCB issues? Is that going up or going down? Is that part of the incident tracking system, or is it a separate issue?

M. Carter: It's separate from the auditor general's purview in this case.

S. Orcherton: Are there more workers compensation claims coming out of the Ferry Corporation this year or last year -- or however you do your analysis -- as opposed to previous years?

B. Lingwood: Our claim level has been fairly constant. We've worked with the WCB, and we're targeting a 5 percent reduction in claims over the next year.

S. Orcherton: What's the level of claims right now?

B. Lingwood: I don't have that specific information with me.

S. Orcherton: Everybody that works on the ferries -- are they trained? This is from page 3, talking about refresher training and improving emergency crowd controls and those kinds of things. Is everybody trained in terms of shipboard safety -- all the way from deckhands to kitchen staff to everyone?

[0905]

M. Carter: Everybody has a basic level of training and shipboard safety. As you go up through the ranks, the depth of that training increases.

S. Orcherton: You don't have the WCB statistics?

B. Lingwood: I don't have them here. I can certainly provide them for the committee.

S. Orcherton: That'd be helpful, I think. Thanks.

R. Thorpe (Chair): Bob, if you could supply that through the Clerk's office, we'll make sure it's distributed.

I'll get to you in a minute, Mr. Kasper, right after Mr. Weisgerber.

Just following up on Steve's point on WCB, is asbestos considered a maintenance issue or a safety issue with respect to B.C. Ferries?

B. Lingwood: A safety issue.

R. Thorpe (Chair): What is the current situation? As I understand, late last year -- September, the fall -- B.C. Ferries was fined $30,000 for recurring incidents with respect to asbestos. First of all, is that correct? Am I informed correctly on that issue?

B. Lingwood: That's correct.

R. Thorpe (Chair): What is the situation with that now? And what kind of program do you have in place to deal with that issue?

B. Lingwood: We have a fairly comprehensive program with respect to asbestos, in terms of dealing with both checking on the health of employees who have been exposed to asbestos over the years and also monitoring where asbestos is within the ships. We have procedures for dealing with asbestos once it's identified.

[ Page 1489 ]

R. Thorpe (Chair): Since that incident last year, have there been any other significant incidents with asbestos either on the vessels or at these docks?

B. Lingwood: There have not.

R. Thorpe (Chair): Thank you.

J. Weisgerber: I have a rather general question, so if people have technical questions, I would be happy to. . . . I'm curious about the corporation's focus on maintenance and safety. In lieu of the fast ferry decision, it seems to me from an outside perspective that the Ferry Corporation now seems to be focusing on those two areas with the idea that basically we never needed fast ferries. We didn't ever need new ferries; our ferries are perfectly fine. They work well; they're safe. If we simply maintain them, they're going to last almost indefinitely.

It seems to me that there's a parallel there with a family decision to buy a new car. Safety is important. Maintenance costs are obviously a part of the decision-making process. But there are a whole bunch of other issues that drive that kind of decision, which I am much more familiar with than I am with decisions to buy new ferries. But it seems to me that the family decides on comfort, speed, the ability of. . .and appearances. I'm thinking from an international tourism perspective. How has that kind of sea change of thinking gone on within the corporation, from a decision to move to build these new ferries at a tremendous expense to now deciding that in fact there never was a need? Has something happened externally, or is this entirely an internal process that's come to this new thinking?

B. Lingwood: Chair, if I could first address the initial questions with respect to the emphasis on safety and maintenance, I think that the corporation has always had an emphasis on safety. The implementation of the ISM program has really not only proved that but also assisted the corporation in maintaining an excellent record, and it will do so into the future.

Maintenance has been an emphasis within the corporation, although in past years, in trying to reduce costs, they have cut back on that -- and, I would say, not successfully. In other words, the budgets were cut back. But the actual expenditures in the end did not match the budgets, and the expenditures were required in order to keep the ships licensed and functional. When we talk about maintenance, what we're trying to do is become much more sophisticated in that area so that we're truly getting the best value for our expenditure and getting the right expenditure to keep the ships not only safe but reliable.

[0910]

With respect to our capital plans and the decision to invest in the existing vessels as opposed to build new vessels, it's a combination of a financial analysis and, dominantly, a financial analysis combined with an assessment. Does the existing asset meet the needs which we have? To a large degree, particularly the major vessels that we have do meet our service needs for some time into the future. The analysis we've done of those vessels indicates that with reasonable investment, they can carry on providing service for a number of years to come. When we compare that to options of buying used ferries or building new ferries, that turns out to be the best financial position for the corporation.

J. Weisgerber: I appreciate that. I understand the challenge that you have, and I appreciate it as well. But the fact of the matter is that the corporation appears, from the outside, to have come to an entirely different conclusion five years ago. I wonder if there is something other than the dynamics of British Columbia and British Columbia politics that has seen that change. Is there something happening in the world of ferry travel? Internationally, has the ferry fleet, on a worldwide basis, moved away from replacements and updates to extended maintenance and extended life for ferries? Or is this a phenomenon here?

B. Lingwood: I think that the practices we're setting up to follow really are designed to best meet the needs of service in British Columbia. If you look around the world, you'll find companies doing both. Some companies are retiring ships at what to us would be a fairly early age -- ten to 15 years. In others -- Washington State Ferries, for instance, where I was visiting recently -- they have a number of ships that are older than ours.

I must say that I was impressed, having gone on a number of their ships. Some that I was on were three years old; some were 33 years old. They were maintained consistently, and a passenger would notice very little difference in age or comfort from one vessel to the other. So it's quite possible with ships of various ages, as long as the ship's characteristics meet your needs, to provide a satisfactory level of customer service.

J. Weisgerber: I don't disagree; I wouldn't presume to argue. But as someone who doesn't understand the business very much, it then begs the question: why the other decision? Why the decision to move, five years ago, to building the five new ferries? That's what I'm having trouble rationalizing -- this rather dramatic change in thinking at the corporation. I appreciate that there are changes in leadership and changes in management. I just wonder whether that's the only reason for this change in direction from the Ferry Corporation.

B. Lingwood: I think that had the Pacificats operated and provided the service that the corporation and B.C. had hoped they would, we would have decided to keep those ships and use them as they were originally intended. If you look at the other plans within B.C. Ferries going back to 1994, there was not a huge array of new ships.

[0915]

What we have added, in the work that has been done over the past year, is a detailed assessment of our existing assets, which really wasn't the focus of the earlier plan. The focus of the plan, which was done in '93 and released in '94, was more to meet the new demand with new capacity. The unfortunate results with the Pacificats may explain the differences. Otherwise, I don't think there are huge differences. I don't think there's a fundamental change here. We're doing normal analyses that any corporation would do in addressing the replacement of its assets.

J. Weisgerber: Last question, Mr. Chairman. Is it then a significant change in anticipated demand that's changed the direction? Is that what I'm hearing?

[ Page 1490 ]

B. Lingwood: With respect to demand, we have had declining demand over the last three years. In fact, our traffic from our peak year has dropped over 5 percent systemwide. Was that predicted in 1994-95? Well, obviously it wasn't. That has changed some aspects of the business, which simply means that when we look out into the future, the capacity that we have within our existing ships will last us for a longer period of time.

J. Weisgerber: I'm tempted to probe that notion of reduced demand. Have you done an analysis of that? Is it fewer outside visits? Is it less travel within British Columbia? Is there a connection between fare increases? Are you pricing yourselves into a situation where demand will go into a downward spiral? It seems to me that would be reasonably easy to do. One could very easily deal with demand by increasing prices. Am I outside of the parameters of where we're going here?

R. Thorpe (Chair): Just a little bit, Jack. Maybe you could just sneak back inside the fence here.

J. Weisgerber: Okay.

B. Lingwood: The decline in demand, I think, coincided with two events. One was the change in fares in 1997. Also, about that time there was a reduction in the health of the economy. The degree to which the decline in our traffic was related to fare change and the degree to which it was related to overall economic conditions, we really don't know. Certainly we believe that the decline -- a modest decline in three successive years -- wasn't an impact of the fares. It was more of a reflection of overall economic conditions.

R. Kasper: I'm surprised that Mr. Lingwood didn't draw from his transit background and his successful bus rebuilding program, because that would probably demonstrate a change in philosophy. I'm not trying to put words in his mouth, but you can probably do a heck of a lot with what you've got as opposed to going out and building brand-new all the time.

J. Weisgerber: You must have missed that.

R. Kasper: Seeing that Mr. Weisgerber opened the discussion up, I'll probably be totally out of order. Can you tell me about the operation certificate for the little Mill Bay ferry? In '95-96 it said that its operation certificate was going to be expired by the year 2000. I just want to know: what is the status of that? I sort of put that question in and around operational safety and fleet and terminal maintenance management.

My second question deals with the same run, and that's the status of the safety issues that were identified at the Mill Bay and Brentwood docks in 1995 and '96, where the Ferry Corporation had outlined that they'd probably have to spend $10 million to "re and re" that entire operation. Does the change in direction or philosophy or approach that the Ferry Corporation appears to have adopted. . . ? Would that apply to the Mill Bay-Brentwood run?

[0920]

B. Lingwood: With respect to Mill Bay and with respect to ships in general, they have to go through a cycle of refits and maintenance in order to maintain their licence for use. That applies to the ferry on the Mill Bay run, as well as all of our ships.

With respect to that particular ferry, I think it's the oldest ship in the fleet. I believe it was constructed in 1956, and I'm told it's the only one that we have which has a riveted hull. There's no question that it does require capital investment in order for it to maintain its licence, as do the docks. I can't speak at this time -- perhaps Captain Carter can -- with respect to any specific safety issues around those docks. My understanding is that they certainly will require investment in the not-too-distant future but that they comply with safety requirements at this time.

M. Carter: With regard to the docks, the docks themselves -- the ramp structures -- will need substantial work in the next few years. The main concern we have with the trestle at Brentwood. . . . We did elaborate tests on that, weighting it out, and it proved to be in much better condition than we first understood. With regard to the ship's operating certificate, all the ships have a safety inspection certificate from Transport Canada which is not time-dated -- certain aspects of it are time-dated; the engines must be inspected every year and this sort of thing -- so it's an ongoing certificate. It does not expire.

R. Kasper: What about the dolphins? Is that what you call them?

A Voice: Yep.

M. Carter: The dolphins at present are, as I say, in acceptable condition, but all of those structures are of substantial age and will eventually need some major input. . . .

R. Kasper: I noticed, by the report that was released yesterday by the corporation. . . . There was a brief mention in one of the paragraphs that there was public consultation and that there was analysis -- or would be analysis -- of the public input that took place two years ago. What's the status of that? I think, from some of your previous remarks, Mr. Lingwood. . . . You actually talked about level of service and the public's needs and requirements very much having an impact on the decisions that the corporation will make around service areas. Could you give me some insight as to the status of the process that took place two years ago in regard to the Mill Bay ferry operation?

B. Lingwood: There was a public consultation process in 1998 with respect to the future of the Mill Bay service. That was curtailed in late 1998. We are on the verge of finishing that now. When I looked at the discussion that had gone on and particularly at the information that the corporation had presented, I felt that the financial part of that information was incomplete and that it had not properly considered the capital investment -- both for the ship and terminals -- needed to keep the service operational.

The situation with the Mill Bay ferry which makes it unique from all other routes that we operate is that it really is the only route we have which truly does have a sound highway option to it. That's one of the reasons for the analysis. Whereas with most services we operate, we are really looking at the level of service and the cost of service, in this situation we also have to look whether there should be a service.

[ Page 1491 ]

R. Kasper: Well, I'm not going to get into a debate, but during those discussions the public had an opportunity. . . . Yes, there was recognition that there's a highway system, but that highway system does not have an absolute guarantee that it's open on all occasions -- 24 hours a day, 365 days a year -- and there are other rationales as to why a route is there.

[0925]

B. Lingwood: Sure. Clearly there has been no recommendation made on this and no decision made on this. It's a discussion that we have to entertain. It's clear to all the committee members that B.C. Ferries has been in financial difficulty, and we're trying to manage the finances responsibly and bring forward questions and issues on which decisions should be taken. That's not to say what decisions should be taken, but I think the issues should be debated and a decision taken and then that decision lived up to over a longer term. That's really what we're trying to do here.

R. Kasper: Could I just conclude by perhaps reiterating what Mr. Carter had said? The docks are safe, the ferry has a certificate of licence for operation, and there doesn't appear to be any problems. Would that be correct?

B. Lingwood: That's correct. It's operational and it's safe.

G. Farrell-Collins: The issue I'm trying to grapple with is one that Mr. Weisgerber raised. I must say that what I've heard over the last number of years gives me some concern. First of all, there was an urgent need for new ferries to service some of our high-volume or high-traffic routes, partially because of capacity, but also, we were told at the time, because of the age of the vessels and the need to replace them over time.

I have an aviation background, so I'm a big fan of ripping things down and rebuilding them until you just can't do it anymore. That's certainly what happens with aircraft, but I don't know the shipping industry anywhere near as well. I'm concerned because we were told in the early 1990s that, due to capacity, the age of the vessels and demands that were being put on them, they were reaching the end of their life cycle, and that we needed new vessels.

The argument, or one of the issues, that you raised in response to Mr. Weisgerber's question was that the recent marginal decline in traffic is more likely a result of economic factors as opposed to pricing factors. Then one can say that we hope that at some point the economy is going to turn around in British Columbia. The government thinks it's already happened, so perhaps it's not that far in the future when the economy may turn around and those capacity pressures may resume being placed upon B.C. Ferries. At that point what challenge is going to be facing B.C. Ferries? Are we going to be facing capacity problems? It now appears, with the capital plan that was introduced yesterday, that there is no real need, or no urgent need, on behalf of B.C. Ferries to increase capacity, but merely to continue to extend the life of our already-aging vessels.

So what do we face down the road? We were told one thing in the mid-nineties, and now we're being told something else at the dawn of this century. I'm not convinced that either one is necessarily accurate. Can you give me some confidence, some examples of why we believe that the lives of these ferries can be extended? Are there some real concrete examples of what the Ferry Corporation is doing to extend the lives of these vessels? Also, how does the Ferry Corporation intend to grapple with what may well be a significant upturn in demand if the economy should turn around?

B. Lingwood: First off, I'll address the demand issue. As I said previously, the volume of traffic from the peak in '95-96 has decreased by a little over 5 percent. In 1995-96 the corporation was able to deal with the capacity essentially with the vessels and the fleet that it has now. I think one new vessel has come in since that period of time. When we forecast out over the next five years -- and the plan we looked at had a five-year horizon -- it's certainly our indication from our forecast that we will be able to deal with the demand over that period of time with the ships that we have. Will our forecast be right? It probably will not be absolutely correct. Will they be close? Yes, they probably will be close.

[0930]

The other factor is that we always focus on an Easter weekend or some other event where there are long lineups. The truth with respect to our capacity is that it's very peaked in a very small number of days in the year -- long weekends, around Christmas. August is decidedly busier than July. So it's a matter of fully utilizing the capacity that we have at those periods of time. We've talked about reservations. We're looking at public information improvements and things of that nature which will help us fully utilize the capacity that we have during those peaks. And we do have capacity, even during August on the major routes; we only utilize 80 percent of our capacity on a daily basis. So the investment and measures to properly utilize the capacity, as B.C. Ferries looks at our situation, look like very sound investments as opposed to going out and, as a first step, building or acquiring new ships.

In terms of the specifics as to what we're doing or what confidence we can give you in terms of investing in the ships and getting additional life out of them, our oldest ships have been surveyed. We know their condition. Essentially what you have in these vessels is a hull that is sound. You have a variety of mechanical systems and also customer areas, whether it be carpeting or seats, that need to be repaired or replaced on certain cycles. The mechanical equipment needs to be maintained and, at certain junctures, replaced.

Our decision points for retiring a ship or doing major reinvesting in it usually centres around the points at which the ship has to be re-engined. So when we come up to. . . . Assuming the hull is in good condition and assuming the characteristics of the ship meet our service needs, we approach the decisions to replace or repair at points of major investment.

G. Farrell-Collins: Was a survey not done of these ships in preparation for the capital plan that was done in the mid-nineties or early nineties?

B. Lingwood: I'm not aware of the detail that was done in the mid-nineties, but I know that not as much detail was done as we did over the past year in preparing the current plan.

G. Farrell-Collins: Well, I'd like to make a comment which I don't expect you to respond to, but then I do have a

[ Page 1492 ]

question. First of all, it seems to me that the driving force behind the capital plan in the mid-nineties was a political one. It appears to me that the political masters have changed, and now we have another capital plan. What I'm trying to determine is whether or not this one is as politically driven as the one in the mid-1990s was.

The concern for that is this: there are thousands of people who rely upon the ferry service; our tourism industry relies upon it. There is a need to be as realistic and as accurate as possible about the life of these vessels, as well as being as accurate as possible in forecasting future demand as a result of both pricing, to a small effect, and more importantly, in your opinion, the current state of the economy at any particular point in time.

[0935]

That's my comment, but what I'm looking for is some reassurance from the corporation that this is the real thing, that this capital plan and this maintenance plan and these forecasts upon which it's based are based in reality, as opposed to what must have not been the case, according to the recent plan, in previous incarnations. I'm looking at this, and I'm not convinced yet that there isn't a fairly significant looming liability out there for capital projects and maintenance projects for B.C. Ferries -- if not in the next five years, then certainly in the next decade. It would also seem to me, given the length of time it takes to properly envision, approve and construct a ferry of any type, that the five-year time line is pretty short for a capital plan.

B. Lingwood: First, just going back to 14 months ago when I joined B.C. Ferries, as I talked to people within and outside the corporation -- some committee members -- about the issues, what I consistently heard was: "Our old ships are need-to-replace ships." I saw capital plans that had replacement for ships. When I looked for more detail about those, I found it a little wanting and therefore set out on a very detailed exercise to develop, first, a five-year capital plan. That capital plan, over the course of this fiscal year, will be extended to 15 years.

Myself and the corporation were really motivated by finding out what our needs were. We focused very much on our existing asset base, because as we looked ahead over the five years, looking at the decline of traffic that was occurring and what the projection might be, we certainly felt that. . . . At the time, we didn't know that we would not be asking for additional capacity, but we felt that the additional capacity would not be an issue. The issue would be how we dealt with the replacement of our existing assets. As the committee may be aware, in round numbers the replacement value of our ships and terminals is about $3.5 billion. So it's a substantial asset base.

We set out to look at the asset base that we have. We surveyed 24 of the oldest ships. We surveyed all of our terminals and all of our marine structures. The plan that we developed really is a result of that work. We didn't set out to develop a plan that reinvested or that kept the ships longer. That was a result of, I think, intelligent and professional analysis around the options that we did have.

I should also comment on where we're going, because Mr. Farrell-Collins's comment about five years being a short time is quite correct. We have looked generally at our asset replacement, out certainly to ten years, and this year we want to extend it to 15. We know that in the segment past the five years we will start to get into the replacement of major vessels, which are expensive to replace. If you went out to build a new Spirit-class vessel, it's probably in the order of $180 million. The other large ships we have -- to replace them with similar ships would be $135 million to $150 million. So these are very major decisions.

Our information is that the first major ship that will have to be replaced is in 2006. Over the course of this year, we'll be defining that more exactly and also defining the replacement cycle for other ships as we go on and likewise forecasting at what point we might need additional vessels to deal with demand.

[0940]

G. Farrell-Collins: I just have two quick questions in follow-up. What sort of a market is there out there for vessels of this age? Are there vessels out there that are somewhat newer that are available -- that are on the market -- or is there really nothing out there? I mean, do we have to buy new? Do we have to build, or is there something out there that we can pick up that still maybe has ten years on it? You said some ferry corporations around the world replace their vehicles at ten and 15 years.

A Voice: Vessels.

G. Farrell-Collins: Sorry, vessels. Are there vessels out there that are available used that still have some life in them? Are there ways to reduce capital costs in that way?

My last question -- I'll ask them both now, because I see the Chair is all over me -- is: repeatedly throughout this submission, there's talk about difficulty in cost-effective, ship-to-shore communications as an implementation factor of your maintenance plan. Can you perhaps explain what that problem is?

B. Lingwood: First, with respect to used vessels, there are used ferries on the market, and I'm sure any one of us can go to certain web sites and find out about them. Really, what we would do at the time we're replacing an asset is look at what we need to replace that asset. Looking for used vessels is one of the things we would do. To find something that fits well is difficult. In all cases, you're judging a vessel that was built for a somewhat different purpose and what it costs to put it in shape for the purposes that you have. There may well be different issues in terms of registration and licensing in Canada versus the country that the vessel is operating in.

In the past, B.C. Ferries has bought used ships, sometimes successfully -- you think of the Queen of the North as an example of that -- and sometimes not so successfully. But it is an option that's there for us and one that we would look at as we come up to replacements.

One of the problems that inevitably comes up when you buy a used vessel is the issue of standardization when it comes to maintenance. One of the objectives we have, as we move forward with our fleet, is to make it more standard. That doesn't mean that every ship would be the same or that you would have just three varieties of ships but that there is commonality in systems -- whether it be propulsion systems, navigation systems and so on. When we buy used ships, we proliferate that information and increase our maintenance

[ Page 1493 ]

costs and our training and familiarization costs. So there's a balance to be struck. It becomes a fairly complex analysis when you go out to buy a used ship, in terms of looking at the true life cycle costs.

With respect to the ship-to-shore, perhaps Mr. Clarke can respond to that.

R. Clarke: The issue with the ship-to-shore communications relates to the Immpower system. The Immpower system is a real-time system. It requires a consistent and reliable communication link. One of the problems we've had is in trying to arrive at that linkage. We've achieved probably 95 percent reliability, which is inadequate when you think in terms of what's going on aboard a vessel. An engineer, for example, who wishes to strike a work order, is half way through his work order when there's a three- or four-second drop in the communication issue. His work is gone, and he has to go back and restart. So there's a bit of a mismatch between the sensitivity of the technology on the systems side versus the reliability of the communications.

The solution that has been available to address that has basically been satellite-based communications technology, which is prohibitively expensive. What we've done in the short term is address this with. . . . It's a short-term strategy, because we're still looking at ways of fixing this communication link. We are at a leading edge -- about halfway. It's catching up with us. But in the short term, we're looking at shore-based input of this issue. This is less efficient than the original concept. It means that somebody writes his information out and it's transmitted to shore, where it's lifted up to a system. But at least it has a reliability that's allowing us to go forward while we address the other issues.

[0945]

E. Walsh: Incident reports are filled in and filed by the travelling public and by staff. What happens to the incident reports once you receive them? Actually, it's a three-part question. What happens to them? How long does it take to address those incidents that have been reported to you by the staff? How are they acted on? Do you notify. . . ? How are the travellers and staff told exactly what the outcome of their incidents reports are?

A Voice: Mike, can you address that?

M. Carter: We receive reports on almost everything imaginable from the travelling public, from conduct of employees to the condition of the ship, or whatever it happens to be. If they are serious incident reports that merit a full investigation because there is some safety issue behind them, we conduct a full investigation and the person is usually kept completely in the loop with that. The other ones. . . . We respond to every single letter and report we get from customers. There's a presidential letter that goes back, telling them what we've done. That usually takes less than a month.

B. Lingwood: If the incident -- whether it's from a member of the public or from an employee -- relates to a safety issue, it is investigated and it's dealt with. There are safety issues of a very minor nature, and there are issues that could be very significant which may prompt an inquiry and a formal report, which would come to myself and the executive and be sent to the board of directors, as well -- not only the report, but the remedial action or the steps that were needed to be taken and followed up on the implementation of those particular actions.

E. Walsh: So the incident reports, then, that you receive -- do you compile them? Are they followed through to ensure that they are in fact addressed?

B. Lingwood: Yes.

E. Walsh: So they are -- okay.

E. Gillespie (Deputy Chair): The first thing I want to say is that I'm pleased to see the full implementation of the international safety management program. I think that's a great step for the corporation.

One of the things I noticed here in your report is that policy and procedure manuals have been consolidated and amalgamated. I know that was an outstanding issue, where manuals perhaps weren't appropriate to ships or weren't available when they should be. So I'm pleased with that part of it.

Looking at the fleet and terminal maintenance management status update, it would appear to me that the work undertaken by the corporation over the last year and a half or so has much to do with the financial crunch -- crisis, if you will -- of the corporation. There has, since that time, been a commitment to ongoing support from government to the corporation. You commented earlier about budgeting one amount for maintenance and finding at the end of the year that that budget would have been overspent because maintenance is required in order to keep the ferries moving.

With the support that the Ferry Corporation has now -- with that financial footing -- is there an adequate budget, in your view, for ongoing fleet and terminal maintenance -- that is, a budget that's going to be adequate to the requirement?

B. Lingwood: The area that we have really made progress in over the last year is our budgeting, particularly with respect to ships and terminals. As you can appreciate, a budget for a large ship is a fairly. . . . Just the maintenance budget alone is a fairly complex document. Under Mr. Clarke's leadership, we went back and did zero-based budgeting -- ship by ship, terminal by terminal. We wanted to ensure that nothing was left out and nothing was put in that did not need to be put in. The comfort level. . . . Not only did we do that, but we ensured that there were key budget managers with responsibility for those budgets and that there was not any ambiguity around who was responsible. In the past it seemed as though there was some ambiguity. So that has been done, and we have a good level of confidence in the budgets that have been set on a ship-by-ship basis.

[0950]

E. Gillespie (Deputy Chair): In my experience, especially when it comes to terminal maintenance, surprises would be uncovered, and the actual cost of that maintenance would far overrun the budgeted figure. What is the requirement for reporting back to the board on such matters?

B. Lingwood: Rob, do you want to talk. . . ?

R. Clarke: First of all, we report quarterly on the operations -- financial results of the operations, generally. With

[ Page 1494 ]

respect to capital projects -- and I'll come back to this; it's all part of the same issue -- we've significantly enhanced the reporting to the board, which is now being done on a quarterly basis.

Effective April 1, 2000, with the foundation of the zero-based budget for each of the major project issues, all projects that are budgeted over $200,000 will be reported on an individual basis, quarterly, to the board of directors. We have a basis to do that against now that there's a benchmark established by the budget process.

Beyond that, the terminal maintenance program involves certain non-destructive testing procedures that are designed to catch problems before they become major problems, so that the maintenance procedures can be done in a fairly predictable way. That's not to say there won't be surprises, but, hopefully, the surprises are contained. We'll be in a position to react to those surprises by looking for resources in other areas of the corporation, so that we may not need to spend. We can move those resources to cover those issues.

E. Gillespie (Deputy Chair): Okay. The last time B.C. Ferries reported to this committee, we had quite a walk-through of this communications system that you were just describing earlier. I still have some confusion around that. That's part of the indication of why the CMMS implementation is behind schedule. My understanding from today is that you may be looking at a new system, a different system, depending on decisions made by the owner of the software in the next couple of months. Is that. . . ?

R. Clarke: There are two issues around the system. One is that we are at a point in its implementation which is not as far along as we would like. That has been exacerbated by the communications issue, and we are moving to address that. Sort of concurrent with that arose the issue of the concern about the level of ongoing support for the underlying software. One of the things we're looking at right now. . . . The whole point of this is that if we're going to enhance the implementation process. . . . If there are problems with the system -- which there are; we have to go back and restart certain elements of it -- and if concurrently we're facing a potential, in the next year or two, of having to change to a different platform, one of the assessments we're making right now is: would it not make more sense to make that change now rather than continue to invest in this system? That's still an open question, but that's what we were prepared to do.

R. Thorpe (Chair): Just one question that I have: how much has been spent to date on this Immpower system and this communications system?

R. Clarke: Approximately $5.5 million.

R. Thorpe (Chair): So $5.5 million has been spent to date. How much more is going to be spent on it before you get to a decision point -- whether it's a go or a scrap?

[0955]

R. Clarke: In terms of reaching that decision, the amount of money we'll spend will be fairly minor. It will be, I would say, a maximum of tens of thousands. In reaching that conclusion, one of the determining factors in terms of whether we'll continue with this software or move to a different platform will be cost. Now, the one thing that we're committed to as a corporation is having a decent, functional maintenance management system, so there's no question in our minds that we're going down that road. It's just which vehicle we'll go down it with.

R. Thorpe (Chair): Mr. Symons, do you have a couple of very tight, quick questions or one question?

D. Symons: I have a lot of questions -- questions raised earlier about past information about the fleet and the terminals. It seems to me that in the past, then, from answers given, things seem to be different today than then. Really, the maintenance and safety issues in the past have been compromised. It seems that there was not a proper survey of the facilities done so that people would know the condition of it as far as maintenance or safety goes.

We heard a few minutes ago that the terminal at Brentwood Bay is in better shape than we thought. Well, were proper safety procedures and surveys of those facilities done earlier? It seems not, but you say that now you've done this. I would gather that in the doing of the surveys, you've done a cost-benefit analysis of the vessels in relation to whether they should be replaced or whether we can indeed do some repairs on them.

On page 33 of the auditor general's report. . . . There are a lot of deferred capital replacement figures in there. Halfway along, in a box you have on that page: ". . .there's a limited amount of maintenance work that has been deferred." It lists, primarily, a lot to do with thickness of the steel plate on the car decks.

R. Thorpe (Chair): Mr. Symons, could I ask you to get to the question, please? Thank you.

D. Symons: I'm wondering whether this work has now been done. This report is five years old, and some of these things were getting close to needing to be done back then. Secondly, the report that you've put together to make the decision or the determination that we don't have to replace the vessels as quickly as was thought back in 1995. . . . Could that particular document be made available to us?

B. Lingwood: First, with respect to compromising safety, I think that in looking back, one would clearly reach the conclusion that safety was not compromised. Was the best maintenance practice followed, vessel by vessel? Probably not. With respect to the reports and the background information, you're welcome to have each ship's survey if you'd like. Certainly the five-year plan document could be made available to you, but if Mr. Symons or any member of the committee would like to see any particular analysis and the options that were considered, we'd be pleased to send that information or have someone go over it with the committee member.

R. Thorpe (Chair): Thank you very much, Mr. Lingwood.

I know I have a number of questions. In the interests of time, what I would propose. . . . I think we have two options, and I'll tell you what my preferred option is. We can invite

[ Page 1495 ]

you back -- and I know you're always so excited to come -- or you could do what we've done in the past, and that would be to write letters. Your office has been very prompt at replying to those letters. My wish would be -- unless other committee members feel differently -- that if there are any outstanding questions, we gather those together and dispatch a letter off to B.C. Ferries with respect to these. . . .

Interjection.

R. Thorpe (Chair): Yep, obviously through the Clerk's office.

Would that be acceptable to all committee members? If anyone has any questions. . . . I have a number, but in the interests of time. . . . Is that acceptable to the Ferry Corporation -- the usual fast turnaround?

B. Lingwood: Indeed, Chair, it is.

R. Thorpe (Chair): Okay. Thank you very much for taking the time to come, Mr. Lingwood, Mr. Clarke and Mr. Carter. We have one agenda item left to do as the committee. Kelly, if you could do that really quickly.

K. Dunsdon: Yes. I'm just going to hand out this morning a copy of another committee draft report on training and development in the public service. I'm not going to go through it, obviously, right now. I'll just pass it out and look forward to comments back from members on it.

R. Thorpe (Chair): Our intention is to deal with this report at the next committee meeting, which is next Tuesday. Remember that the schedule has been changed. It's 6:30 in the evening to 8 o'clock in the evening.

[1000]

Interjection.

R. Thorpe (Chair): Why? To facilitate your caucus, at the request of the Deputy Chair. Comptroller general, any comments today?

A. van Iersel: No, thank you, Chair.

R. Thorpe (Chair): Auditor general?

W. Strelioff: Yes. Members and Chair, your expectations on our office in terms of following up the outstanding recommendations. . . . I assume that we will just carry out what we had agreed to in previous meetings -- that we'll follow up the recommendations that are outstanding and continue from there and report back. Is that the expectation?

R. Thorpe (Chair): That is correct. There have been a number of discussions with the senior people from your office with respect to follow-up, etc. This committee always reserves the right, though, even though we've adopted a new follow-up procedure, to ask people to come and appear before the committee -- as we've done today with B.C. Ferries and as I think we're doing next week with emergency preparedness.

So yes, that's the way it is. The Deputy Chair and I will meet in the Clerk's office for 15 minutes after each one of these meetings. Then instructions will come from the Clerk's office with respect to the comptroller general's office and the auditor general's office with respect to meetings in the future and who's required etc.

The committee adjourned at 10:02 a.m.

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