The following electronic version is for informational purposes only.
The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE 
ON PUBLIC ACCOUNTS

TUESDAY, NOVEMBER 7, 2000

                                                  * Denotes member present

 

Clerk:

Craig James

Committee Staff:

Kelly Dunsdon (Committee Researcher)

[ Page 1629 ]

The committee met at 9:12 a.m.

R. Thorpe (Chair): Good morning. I think we should get started. With the permission of the committee and noting that we have some new members on the committee that we would like to welcome, we would also like to thank the members of the committee who had served and are no longer here. Of course, one of those members was the Deputy Chair. This committee has always operated with a Chair and a Deputy Chair, and I think it would be most appropriate for us to elect a new Deputy Chair. With that in mind, does anyone have any nominations?

D. Streifel: I put Dan Miller's name in nomination for Deputy Chair.

R. Thorpe (Chair): Any further nominations? Any further nominations? Any further nominations? Nomination is closed. Mr. Miller, did you accept?

D. Miller: The easiest election I've ever had.

R. Thorpe (Chair): The question to the members: all those in favour? Carried unanimously. It might also be your only unanimous victory too.

Motion approved unanimously.

R. Thorpe (Chair): Welcome, Dan, and we look forward to working with you to continue to move the work of this committee forward.

We have a fairly full agenda today. We're dealing with protecting drinking water sources, and as I understand it, our first witnesses are from the auditor general's department -- Wayne, to you and your staff.

W. Strelioff: Thank you, Chair and members. Good morning. With me today is Ken Lane, who leads our work on the safe drinking water examination. He is going to briefly review our follow-up work that we undertook as a result of the committee's work and as a result of our recommendations.

[0915]

K. Lane: In this follow-up work, we reviewed the representations that the directors' committee had presented to you, and I could summarize the review by saying that nothing came to our attention to cause us to believe that the report does not present fairly the progress made in implementing the recommendations.

If I could just point out, some of the recommendations in our opinion have been completed. Of the 26 recommendations of our report and the two recommendations of the Public Accounts Committee, we concluded that three are fully implemented. We will, with your permission, not follow them further.

We concluded that 22 of our recommendations and both of your recommendations are partially implemented and will require further follow-up. On one recommendation, the recommendation for a lead agency, the directors' committee chose an alternative action. That is also ongoing and will require further follow-up.

W. Strelioff: Mr. Chair, it's back to you.

R. Thorpe (Chair): That's your report?

K. Lane: That was our part of the process, yes.

R. Thorpe (Chair): Okay. Let me ask you. . . . First of all, does anyone have any questions of the auditor general?

With respect to the one recommendation, the lead agency recommendation, if I recall from your original report, that was -- my interpretation -- a priority recommendation of the auditor general's office. Have you changed your position with respect to a lead agency, or is it still a priority of your recommendations? And can you comment on that?

K. Lane: It's one of our major priorities. The recommendations on integrated management are all priority recommendations. I would say it's still our belief that a single agency is the best choice. Representatives of the government have explained to us that their belief is that the split model they have come up with is more practical, and they have a workplan to implement it. Our view is that we will watch and see if they can make it work.

R. Thorpe (Chair): When you were preparing your report, is it fair for me to conclude that you had some discussions with the various government ministries? In fact, I believe that one of the ministry's comments on the report was that perhaps there would be a split responsibility.

Nevertheless, did you have discussions at that time with them on that subject? And did you conclude, in putting forward your recommendations, that a lead agency was the best for the province?

K. Lane: When we carried out the audit work, we reviewed our draft recommendations with representatives of the government to check for factual errors. But the recommendation for the single agency was our own.

R. Thorpe (Chair): And you had no discussions with any of the ministries on that and received support or differing opinions at that time.

K. Lane: There were no concerns about the factual support for it. But as you commented, the government's official response to our report had the dual lead model. But that's their response to the audit, rather than our work.

R. Thorpe (Chair): Okay. Does anyone have any other questions?

[0920]

D. Miller (Deputy Chair): I sincerely apologize. I got this material first thing this morning, and I have not reviewed any of it. So no doubt I may ask questions that have already been canvassed, Mr. Chairman. But with respect to a lead agency, I'm just wondering what your thoughts might be. It's one thing to say, and often people are tempted to say, in the face of

[ Page 1630 ]

these kinds of issues: "Well, we need a lead agency that somehow will assist in resolving the problem." But fundamentally, you've got a variety of ministries that have responsibilities on the land. How would a lead agency work in practical terms with respect to, say, the Ministry of Forests, the Ministry of Energy and Mines, and other ministries that routinely make land use decisions and, I assume, incorporate the standards with respect to drinking water and other factors in those decisions?

K. Lane: I think it was the very fact that those other ministries exist that led us to this recommendation. Our view was that the majority of economic interests in the watershed had, effectively, a lead agency in government. The one particular economic interest we were looking at, which was drinking water provision, didn't have that. And it appeared that having that lead agency was an important part of making government work in practice.

For instance, the grazing branch of the Ministry of Forests acts essentially as a lead agency for the grazing industry. The Ministry of Energy and Mines acts as a lead agency for the mines industry. Agriculture does it for agriculture other than grazing. That gives a focus to government activity.

So our suggestion was not an addition to government activity, but more a refocusing of government activity. In other words, we're not saying to add a new superagency, a water agency, but rather to take the resources that already have an interest in the drinking water provision and put them in one place.

D. Miller (Deputy Chair): I'm still trying to. . . . I wonder, at a practical level. The Ministry of Forests receives applications for decisions, whether they're cutting permits or whatever. There is other agency consultation. What role would the lead agency play in, say, approving cutting permits?

K. Lane: A better example might be to look at their role in LRMPs, in other land use planning. There is very time-consuming activity of government there. A lot of the continuity of that planning activity comes from government representatives. We saw that as a place where the economic interests of drinking water weren't getting that continuity of representation, because there was no single part of government that would act, for instance, as local representative as the Ministry of Forests would for the forestry interests.

D. Miller (Deputy Chair): So you're saying that this is the case with respect to LRMPs.

K. Lane: I guess that would be an example.

D. Miller (Deputy Chair): Well, I don't think it is. My understanding is that government agencies are "neutral" at those tables and can't advocate for a particular sector.

K. Lane: Perhaps advocacy is not a word I'd want to use. Much of the legwork and digging process work of those committees is done by government representatives, in my understanding. That gives a powerful continuity to the process. The LRMP and other land use planning activities that we examined didn't have that support and continuity for the drinking water interests.

D. Miller (Deputy Chair): Fair enough, Mr. Chairman.

R. Thorpe (Chair): Any other questions? We'll call the next scheduled witnesses -- the provincial health officer, Dr. Peck.

S. Peck: Mr. Chairman, I just wonder whether it would be more appropriate if Jim Mattison from Environment went next, because they are the lead ministry of this that's coordinating all the ministry activities. Then I'd be happy to talk about the provincial health officer's planned report.

R. Thorpe (Chair): That would be fine with me. Perhaps by then we'll have the technical difficulties corrected also.

P. Calendino: For the Hansard, they can't hear what he's saying.

R. Thorpe (Chair): It's fine; we're just changing a witness list. We'll have the Ministries of Environment and Health come forward then.

Go ahead whenever you're ready. Just make sure you introduce yourself for Hansard, please.

J. Mattison: My name is Jim Mattison. I'm director of the water management branch, and I chair the directors' committee on drinking water that was formed by the provincial government in response to the auditor general's recommendation. With me today is Bob Smith, who is with the Ministry of Health and is also a member of the directors' committee.

[0925]

The directors' committee, on behalf of government, is pleased to submit this latest report to the Select Standing Committee on Public Accounts. The report that you were given, which we submitted to the auditor general's office, is dated October 27. It summarizes our ongoing and planned actions to address the 26 recommendations in the auditor general's report, "Protecting Drinking Water Sources." As well, it includes a workplan to address the recommendation of this committee regarding gasoline additive MTBE.

This update contains 33 workplans, which provide details on initiatives completed or underway. If you have that update, there are some foldout pages that are labelled "attachment 1." That provides an overview of which activity relates to which recommendation and identifies whether the work has been completed or is underway. They're the only pages, I think, that fold out sideways, the long way. I'll refer to some of these. It's not necessary that you follow along, but it might be easier to see those summary sheets.

The activities being undertaken in response to the auditor general's report include field research, policy reviews, policy revisions, legislative reviews, data management improvements, preparation of technical guidelines, implementation of pollution prevention programs, water quality monitoring, education initiatives and enforcement. As you can see in the summary table, and as was described by Ken Lane of the auditor general's office, we have fully completed three of the initiatives. The remainder are in various stages of implementation.

I'd like to highlight some of the progress we've made over the past six months since we appeared before this committee. We have completed some field research on the impact of recreation in watersheds on Vancouver Island, and we're

[ Page 1631 ]

continuing studies in the Kelowna water supply with respect to the impact of field research. This particularly interesting work involves DNA analysis of the parasites to determine whether their origin is human, cattle or wildlife. This is important information for us when it comes time to manage access to watersheds for recreation, cattle or wildlife.

R. Thorpe (Chair): Excuse me, Jim. We seem to be having some difficulties over here finding the information. Kelly, I wonder if you could give some of the members their materials.

Okay, Jim.

J. Mattison: I was just recounting a few of the highlights of our work in the past six months. We have completed a first draft of a nutrient management plan for dealing with manure in the lower Fraser Valley. We also have a draft report on on-site sewage management. This was completed by a consultant, and it will include options for local government to implement.

To improve groundwater protection, we have released the "Well Protection Toolkit." We have been running groundwater protection workshops throughout British Columbia at various communities, most recently in Prince George. And we are doing ongoing monitoring of aquifers and continuing with our mapping inventory activities in groundwater aquifers. We have also completed a draft report on water legislation with respect to water quality rights and rights of drinking water suppliers, and I'll come back to that later.

In addition to these things that we have completed, there's a number of ongoing projects that are also referred to in that summary sheet and that are detailed in the 33 workplans that you have. The time lines on the workplans indicate that we expect to implement 13 more initiatives during the next six months. So when we reappear in six months' time, I hope we will have 13 more in the completed column.

Some of these include publishing guidelines for community-based watershed management and completing a methodology for mapping water supply areas in the province. The provincial health officer's report on drinking water should be published. We will have completed our consultations with the Union of B.C. Municipalities on the rights of access to resources and management of water with community water supplies. We should have the first set of water quality objectives pursuant to the Forest Practices Code made known under the code, and we'll be using those in management of community watersheds.

We have a highway environmental assessment manual that's in the process of being updated; that should be completed. The Ministry of Transportation and Highways and the Ministry of Environment, Lands and Parks are updating a memorandum of understanding on spill reporting that should give us a better ability to manage highway spills.

We should have the nutrient management plan for the Fraser Valley completed and implemented. We will have completed recommendations for municipalities for both the educational and regulatory approaches to control accumulative impacts of septic field disposal in their municipalities. We're also producing guidelines and a toolkit of information and regulatory actions that local governments can use to manage on-site sewage works. We will have completed a waterworks systems operator's manual, and we will have a waterworks system operator certification in place. We will also have our guidelines for MTBE published and available.

Many of the auditor general's 26 recommendations are very specific and technical, and the workplans to address them are also quite technical. However, recommendations 1 through 5 are very comprehensive and are the overarching recommendations, and how we address them is fundamental to government's overall policy and legislative framework for protecting drinking water sources.

[0930]

I'd like to discuss these first five in some more detail. The auditor's recommendations refer to the need for government to take an integrated approach to water resource management to better protect drinking water sources. They recommended a single lead agency, improved representation for water suppliers in decision-making, better information about watersheds, comprehensive water quality guidelines, annual reporting and, finally, a comprehensive review of the rights of water suppliers in having access to clean sources. We've taken these overall issues, these first five recommendations, very seriously. The key to a practical, long-term approach to protecting water in B.C. depends on how we approach these.

Ten workplans have been submitted to address these five recommendations, and I'd like to explore in a bit of detail the two most critical ones. The first one is the lead agency, and we've already had some discussion here this morning. The second one is the rights and opportunities of water suppliers to have access to clean sources of drinking water.

First, on the lead agency matter, the auditor general's report states that the province should "designate within government a lead agency for drinking water interests to coordinate government policy and action on drinking water issues." Within the scope of the audit, the single lead agency for source-water protection issues is the Ministry of Environment, Lands and Parks. The ministry, through activities such as pollution prevention, water allocation, setting water quality guidelines, monitoring and reporting on water quality, and participating in the land use planning processes has the tools and the mandate to protect drinking water sources.

But ensuring safe drinking water goes beyond source protection. Appropriate and well-maintained drinking water treatment and distribution systems are most critical. Under the safe drinking water regulation of the Health Act, the responsibility of ensuring the safety of drinking water from the intake to the tap is the responsibility of the purveyors and the Ministry of Health, which regulates them.

In addition, the provincial health officer is mandated by the Health Act to report in an independent manner on health issues in British Columbia and the need for legislation, policies and practices respecting these issues. The Minister of Health has requested the provincial health officer to develop a special report on drinking water potability in response to the auditor general's report. Dr. Shaun Peck is taking the lead on this report, and he will be speaking to this committee later this morning.

Although there are many variations across Canada for the sharing of responsibilities for drinking water, there is always some sharing between environmental and health agencies. A single agency addressing all aspects of drinking

[ Page 1632 ]

water, including source protection, regulation of water systems and public health protection, is not considered practical by the ministries at this time.

In B.C. the Ministry of Environment, Lands and Parks leads on source-water issues, and the health officials lead on water system regulation and public health protection. This provides some needed checks and balances. The tragic events in Walkerton may be partly attributed to the relatively weak role played by health authorities in Ontario, although I think we're still waiting for those hearings to complete. This is not a model we want to pursue in B.C.

The Ministry of Environment, Lands and Parks will show leadership on source-water protection through three main activities: firstly, to lead legislative and policy reviews for groundwater- and watershed-based protection measures for sources of drinking water; secondly, to continue to work closely with health officials and the provincial health officer to complement their efforts in regulating water treatment and distribution systems; and thirdly, to continue to lead the directors' committee on drinking water to support and coordinate the efforts of other provincial agencies in implementing the auditor general's recommendations.

The other recommendation which I would like to discuss is the matter of the rights and opportunities of water suppliers to have access to clean sources of drinking water. Local governments supply most British Columbians with drinking water. They have made a strong case that their interests need to be better protected. They have invested considerable public resources in treatment and distribution systems and are accountable for the safety of drinking water, yet have limited opportunity to secure the water source.

[0935]

We have conducted a review of existing provisions to protect water quality which apply to drinking water sources. We have concluded that the present regulatory system is overly complex, and it is understandable that local governments are calling for more local level control. In his address to the Union of B.C. Municipalities on October 27 this year, the Premier said that the government will work with municipalities to build a drinking water action plan that will give them authority -- new authority -- to protect their drinking water.

The Minister of Environment, Lands and Parks has been instructed to proceed with drafting new legislation to provide authority for communities to take action necessary to protect drinking water by addressing groundwater and watershed issues. More details on this new initiative are now being prepared prior to initiating consultations with local government, UBCM, first nations and other stakeholders.

The Ministry of Environment, Lands and Parks has also been instructed to include in this legislation provisions for setting enforceable water quality standards and groundwater regulations, and for designating water protection zones and new regulations to respond to emergencies. I hope that when we report to this committee in six months' time, we'll be able to discuss new legislation and regulations.

I will conclude. Many of the efforts which were initiated in response to the auditor's recommendations will be completed or implemented over the next six months. Most of the remainder will be completed during the following year. These efforts, in addition to the new legislative framework being prepared for the next legislative session, promise to significantly advance B.C. in terms of drinking water protection.

R. Thorpe (Chair): Does anyone have any questions?

M. Coell: Just following up on what Mr. Miller was talking about, the lead agency. Can you tell me how, when there's disagreement between the ministries at the director level, that's dealt with? I guess what I'm looking for is some assurance that if there isn't going to be a lead agency, how you deal with disagreements between ministries. . . .

J. Mattison: Well, there's a number of places where disagreements are dealt with, and it depends really on the nature of the disagreement. The directors' committee is charged with implementing these recommendations, and so far we've been able to do that with lively discussion and not disagreement when we came to making progress. We have fairly specific activities we have to deal with.

But in other areas. . . . Dan Miller raised a question of forest development permits -- or cutting plans, I think he said. In cases like that, where the Forest Practices Code clearly gives joint sign-off to the designated environmental official in the Ministry of Environment, Lands and Parks and to the district forest manager, they must both be satisfied that their particular mandates can be taken care of. Those are in community watersheds only, where there's joint sign-off with Environment officials. The reason for that joint sign-off is to ensure that the designated Environment official is protecting drinking water in approving that cutting plan. So there are legislative pieces that allow for that. There is a dispute resolution mechanism that's set up in that legislation, and there are also appeal mechanisms.

In most of the resource allocation decisions there are appeal mechanisms, but within the directors' committee we have disagreements. We have a number of avenues where we have gone. Since the auditor general's recommendations have been tabled and since we have started, we have moved to have the executives of the Ministry of Environment, Lands and Parks and the Ministry of Health meet. The deputy ministers have met. At our last Ministry of Environment senior management committee, the Deputy Ministers of Health and Forests came and spoke to the senior management committee of Environment and discussed these kind of directions and the importance of this.

And finally, the Premier has made it very clear that drinking water is important and that we are to ensure that drinking water is protected in the decisions we make. I don't know if I've answered your question, but. . . .

[0940]

M. Coell: Just one follow-up: you mentioned that you're the chair, Jim. How was the chair appointed or selected from the directors from the different ministries?

J. Mattison: That's a good question. I inherited it; I don't know how it was appointed. I've been director of water management for about a year. And when I took over the job at the end of September of '98, just over a year ago. . . . Bob, do you know the answer to that?

B. Smith: I was on the committee at that time, and it was felt by all the committee members that Environment had a

[ Page 1633 ]

lead role in source-water. And that was deemed. . . . We were actually co-chairs at one time -- Health and Environment. But I felt that they had a more prominent role in the source-water than we did, and we would support them in that area. Really, it was a committee decision.

J. Weisgerber: I'd like to talk about MTBE, if I could. First of all, I think we've made significant progress insofar as we are now testing in British Columbia for MTBE -- and my compliments to everybody involved in that process. I'm looking at a paper that was put out by the Ministry of Environment in August 2000, "MTBE in Groundwater" fact sheet. I wondered, looking at the third paragraph there, the last sentence. It's a statement to the effect that MTBE has a strong taste and odour, that most people would find water with MTBE unsuitable for drinking. My sense from California is that that wasn't the case -- that it was in fact a serious increase in health problems in the community which alerted people to the fact that they should test.

I guess I'm worried about sort of lulling people to sleep with the notion that, well, if you can't taste it, don't worry about it. My sense of that problem, where it's appeared across North America, is that in fact it's high incidence of cancer and other serious illnesses in a community that most often alerts people to the fact of a health risk. Perhaps before I go on, you could comment on that for me.

J. Mattison: We compiled this from the current literature. So I haven't got any way of saying. . . . I've certainly never tasted or smelled MTBE myself. I can tell you, though, that that's not the only thing we're looking at. We are testing for MTBE, and we will continue to do that. The fact sheet actually says, on the back, something about 65 sites -- sorry; it says: ". . .sampling a total of 70 to 80 wells. . . ." We actually have 73 wells being tested at the current time. We have the results completed on 49 of those wells, and we have not detected MTBE in the 49 that we have completed results for.

We are testing source-water, groundwater, in community supplies -- highly used aquifers. We're not testing in a hole drilled through an abandoned gas station. So we haven't gone specifically to spots where we might find it; we've gone to sources of drinking water for our first round of testing, to see if we had some problems there. The Ministry of Health is also testing tap water for MTBE.

J. Weisgerber: My concern is, I suppose, that if we monitor for MTBE as opposed to test for it -- that is, go back on a regular basis to some sites where there's a high probability or where you might be led to believe there could be MTBE -- at what point would we start to raise the alarms? And I raise that because my sense is that if you've got a spill of a contaminant at ground level, and if you wait a period of years for it to reach the aquifer, and then you have a problem, it seems to me it's almost too late at that point -- that you have these aquifers that would be basically unusable for perhaps 20 years or 50 years or 100 years until such time as the ground were to clean itself, if that ever happens. So I'm wondering: how do we respond to those concerns?

[0945]

B. Smith: I could answer some of that. What we have done is identified areas where we know that transportation links, like across the Yellowhead, where we know that the MTBE goes through to Rupert. . . . And Prince George relies extensively on groundwater. They've had some spills there. We've sampled the wells in Prince George -- your suggestion there -- and we couldn't find any detected levels there either.

To carry that further, Dr. Lorna Medd, who's the medical health officer for that area, has initiated a contract to identify what chemicals -- not only MTBE -- are transported through that link. Once they've identified that, then they're going to work with the city of Prince George to develop some sort of an emergency response plan, some sort of well protection toolkit to help protect that water source.

So we're trying to work with the communities where we know there are potential risks, to get them up to find out what goes through their particular aquifers and encourage them to develop some contingency plans, because spills could happen -- you're right. That's the last thing we want to have happen, but if they do happen, we try to control them so they don't impact as much as possible. And we will continue monitoring, now that we have a baseline level. We can monitor if there are any instances and then, like you say, be more proactive than reactive through these plans, hopefully, that will help mitigate any damage that might occur.

J. Weisgerber: Well, let me say that I don't want to be an alarmist. I think we've made an important step in testing, and I'm encouraged by the fact that the ministries have become aware of the possible risk and are looking at it.

I am reminded of the break that Pembina Pipeline Corp. had up on the Pine River. There's no MTBE in that; it's crude oil. But we also have both refined gasoline pipelines that cross the province, and we transport, in my understanding, a lot of MTBE by rail and by truck in a pretty concentrated form. I'm wondering: where do you start thinking about protection at major river crossings? I mean the Fraser, for example. What kinds of safeguards should we be thinking about? Or do we perhaps not need to think about safeguards for pipeline and railway and highway crossings of some of our major water systems?

J. Mattison: We certainly are concerned about pipeline crossings, not just because there's a possibility of MTBE but because of the huge devastation that an oil spill would cause.

To be perfectly honest, the Pine River oil spill was a bit of a wake-up call. We realized that really nowhere in North America are government agencies particularly able to deal with freshwater oil spills. The bulk of our experience has been with marine oil spills. In fact, we had all the available supply of those. . . . I forget what they're called, but they look like J-Cloths -- the white cloth with the absorbent material for wiping up the crude oil. We had all the available supply in Canada. We tried to get some out of Texas, and they were reluctant to let it go because they only had a little. There was really no other in North America.

So we have started a complete. . . . To be perfectly honest, I think we got lucky. I think it was a wake-up call, and we have started a complete review of our response to that oil spill to try to build a better ability on behalf of government to deal with freshwater oil spills. We are taking some steps to deal with pipeline crossings, from the contingency planning point of view, where we know we have more work to do.

The other thing with respect to MTBE. We do know it's going to be phased out -- its use in Canada -- within the next couple of years. We are encouraged by that as well.

[ Page 1634 ]

J. Weisgerber: I too think that both Pembina and the government responded on the Pine spill as quickly and as effectively as anyone could. But that river, as a result, is going to be unsuitable for drinking water for decades. There's not anything anybody could have done about that, with the exception of perhaps the installation of a lot more safety valvating at river crossings such as the Pine. I think that's something we've got to look at. That's another talk. I think perhaps Dan has some thoughts on it as well, because he was obviously involved in it. But it is a wake-up call. Chetwynd was incredibly fortunate in that they've been able to locate groundwater in their community, because it could have been a pretty serious and costly. . . . I don't want to diminish the residual effects that that spill may have. That spill is going to affect that river and the fish and wildlife on it for some considerable time, and indeed it is a wake-up call.

[0950]

D. Miller (Deputy Chair): Just following on Jack's point, which I think is a good one -- and, Jim, yours as well -- I think we often take things for granted and don't worry about them, because there's never an incident that provokes worry. I think the Pembina break. . . . To some degree, I agree with your characterization that it's a bit of a wake-up call.

My own view is that the industry and government, jointly, ought to conduct a broad-based review -- actually Canada-wide. There's no question that the pipeline activity in this province will increase. The oil and gas activity in the northeast is really going quite well; there's a lot of new activity. As a result of that, there will be lots of new pipelines.

Now, I'm convinced that the standards we have in Canada. . . . I might take issue, by the way, with a statement made by the federal Minister of Environment at the time of the Pembina break, where he went on the radio and suggested that the federal standards were superior to the provincial standards and then got even goofier than that. But the fact is that the standards are the same. They're Canada-wide, they're developed by CSA, and they're adopted by regulators both federal and provincial. I think, by and large, they're good standards.

But it might be prudent, and maybe this committee might consider a recommendation. I did raise this at the last federal-provincial Energy ministers' meeting and suggested that both industry and government review the standards and review the procedures so that we can hopefully avoid a repeat of the Pembina situation. I think it's worthwhile getting ahead of the game, particularly, as I say, given what I anticipate will be a significant increase in the activity of both oil and gas drilling and pipeline construction in the province.

J. Weisgerber: Perhaps just to add to that, I think the other fact that we have to recognize is that the pipeline infrastructure is aging. Pipelines are a relatively new phenomenon. I mean, there are very few of them more than 50 years old. But a lot of the pipelines in our province are quite old, and I expect that the valves -- the safety, the number of shutoffs, etc. -- are to a standard that was established then. I don't know if that needs to be upgraded. I think it should be studied.

As I see it, the problem with the Pine River thing was not that the pipe broke. That seems almost inevitable that a pipeline will break, whether it be through a shift in a river bank, a washout or something like that. The question is how much crude oil was able to escape before it was shut off. That really, to me, was the issue with respect to the Pine River spill. To the extent that we have a national standard, I think that standard needs to be reviewed.

D. Miller (Deputy Chair): Jack and I are having a conversation here, Mr. Chairman. I'm not certain I'd accept his conclusion with respect to "they'll all break." It's interesting that the pipeline that broke about two weeks after the Pembina line was a gas line much newer, not nearly as old as the Pembina line. That's in the Coquihalla. It almost killed people when it ruptured, and there was a subsequent explosion. There has been other. . . .

I would say that gas is probably -- from a public safety point of view, based on the number of incidents at least over the last number of years -- a higher risk. Now, that doesn't directly link to drinking water, and perhaps we've strayed off the topic. But I think gas. . . . Nor do I accept on its face value the fact that the pipeline will automatically break. I don't think that is the case.

[0955]

I have just one other question, Mr. Chairman. I was struck by the information note that most people would find water with MTBE unsuitable. I don't know who those people are who wouldn't. There is, I understand, a court case pending. Methanex is, I think, suing the U.S. government or the California government with respect to the imposition of the MTBE standards. I don't know what the outcome of that might be. I gather there maybe is some. . . . I'm not suggesting that we pour it in the drinking water but that maybe some more work is required.

Going back to the land use, there were some questions from Mr. Coell with respect to the potential interagency conflict, etc. Generally, I've been thinking about the drinking water issue a little bit. I think most British Columbians tend to think: Well, we've got pretty good drinking water, and there's really nothing to worry about. And in fact, in most cases I think that is the case.

My sense is that the areas of conflict aren't necessarily with respect to forest development plans. For example, I'll go back and reflect on my own constituency, Queen Charlotte City, which is not an organized municipality. It, quite frankly, grew up without regulation and with a lot of people sticking hoses in the creek. The community built and built and built, and all of a sudden they realized they had no structure, no system. Quite often it was the natural disturbances, not the disturbances induced by forestry or other resource activity, that caused the significant problems -- at least there and in other areas.

I'm wondering if you could comment. In terms of tackling the problem, it seems to me, you've got to be. . . . Well, we've got this report that presumably covers every eventuality, and it's exhaustive in its recommendations. There are practical limits to tackling any particular problem or issue. My view is that you ought to focus on areas where you know you've got a problem. I think the agricultural conflict area is one -- probably the worst one in terms of its significance. I wouldn't mind hearing some characterization from either gentleman with respect to that question. I don't think that resource conflict really can be shown to be the significant issue.

[ Page 1635 ]

There are some areas where I think they'll happily fight till hell freezes over -- the Slocan Valley is one of them -- over whether a particular forest development plan will or will not impact the water quality. Quite frankly, I don't know. I'd hate to be an arbitrator in some of those disputes, because you'll never really get, from a public perspective, complete acceptance regardless of what you do.

J. Mattison: There's no doubt that there are natural disturbances in watersheds. For that reason and a number of other reasons, the Ministry of Health -- and I'm sure Bob will talk about this -- has stated that all surface sources should be disinfected. There should be treatment on surface sources before they're consumed by humans. The auditor general's report looked at -- and I forget the exact number, five -- a number of areas of resource development activity that had potential to impact drinking water sources -- forest development, mining, recreation access, the agriculture industry and, to some extent, urban development. There were others that don't come immediately to mind. But there are workplans to address, to kind of determine just how much impact and what the nature of that impact might be and how we might better manage it.

In the case of forestry, we don't need to single it out; it's just an activity that gets pointed at a lot. Within the community watersheds the Forest Practices Code makes specific requirements of forest practices in community watersheds having to do with equivalent clearcut area -- the rate of cut in a community watershed is more regulated than it is elsewhere -- with respect to riparian zones, leaving uncut trees along the streambanks, with respect to roadbuilding and the identification of the intakes and special protection for the intakes, and also with special requirements around fuelling of vehicles and management of fuels and toxic chemicals or any application of herbicides or pesticides in a community watershed. So there is no suggestion that you can't do forestry; there are just some requirements that are put on the forest activities.

[1000]

Similarly, other activities like mining and agricultural practice, mostly agricultural practices. . . . There are two areas. One is the range, the grazing of cattle in community watersheds. The other typical one is the more intensive farming with the application of fertilizers and the runoff of those agricultural areas of fertilizers and pesticides or other farm chemicals. Those too are regulated, and there are specific requirements around their use. We are looking at, particularly in the Fraser Valley where the issue has been brought to our attention. . . . The ability to produce manure in the Fraser Valley exceeds the ability of the Fraser Valley to accommodate that manure when it's done. The farming industry calls it a nutrient management problem, and indeed it is. The nitrates from that fertilizer. . . . We have detected elevated nitrate levels in some of the groundwater.

We also want to look at the parasite management problem and what role human activity and manure management may have in terms of transmitting parasites that have a potential to affect humans. Really, that's research. We're working with the research agencies to try and look at that. In the meantime, we're dealing with the nutrients.

D. Miller (Deputy Chair): So it's the larger urban areas.

J. Mattison: In general, there are natural events mostly to do with landslides, that sort of activity, that affect turbidity in a river. At elevated turbidity levels, it's much more difficult to do appropriate disinfection. That's really the key concern with natural events. In many cases, turbidity levels can be exacerbated by poor road construction practice. That's regulated. And I think that since the passage of the Forest Practices Code. . . . The Forest Practices Code regulates most roadbuilding activities, including in the mining industry. They're often authorized by special use permits issued through the Ministry of Forests, because the access is generally through a provincial Crown forest. So much of that roadbuilding activity is more closely regulated, particularly in community watersheds.

Mr. Miller, you raised an interesting question with respect to the many other watersheds that are sources of drinking water for two or three people or dozens of people that are not incorporated communities or not recognized under the code as community watersheds. That is a management problem. In many cases it's not illegal to use water for human consumption without a licence. In many cases we're not even aware that people are using that water in their homes, although we do have 22,000 domestic water licences in our system. The Forest Practices Code requires that all sources of human consumption be identified and that particular care be taken around the intakes. I think there's a 100-metre buffer from the intake. One of the difficulties is making the forest companies aware that those exist, particularly for the unlicensed sources. So there is activity that can happen.

But in terms of how those communities -- if we use the small-c, the community in a more general sense than an incorporated municipality -- may be managed, whether there should be special protection in those areas. That, I think, ultimately comes down to an economic issue, and the directors' committee has been struggling with that. In some cases it might be cheaper just to supply those people with bottled water. They could bathe in it, and it would still be cheaper than it would be to constrain forest practice to protect that source. Yet it flies in the face of what people want to believe about the pristine water resources of British Columbia. So there's both a perception issue and a science issue that we need to deal with. And we're struggling with that question; I'll be perfectly honest.

[1005]

B. Smith: Can I just add something to Mr. Miller's comment? I think that it's a good comment and one that we've been wrestling with too.

Since 1980 we've had 20 waterborne outbreak diseases -- identified ones. I'm sure others have gone undetected, which we can demonstrate through our MSP billing. Of those 28, if my memory serves me correctly, only three were human-related, were related to human activity. Some were unidentified. And some were obviously natural animals -- like, Giardia is a beaver; it's not a human.

So those kinds of things do raise an issue here about source-water protection and the value of it. We don't want to negate the importance of proper treatment at the expense of source-water protection, because that's a critical component. And that was a component that was missing in Walkerton. I do have some information there, but it's part of what that federal-provincial committee that I sit on, on drinking water, relayed to us -- which will come out in the inquiry -- which demonstrates that there was a real problem with the operation of that system.

[ Page 1636 ]

D. Miller (Deputy Chair): Just a further observation, Mr. Chairman: it is interesting, because we tend to. . . . I think it's part of perhaps a psyche in British Columbia. We've spent so much of our time fighting over resource development, the sort of classic conflict between those who oppose and those who propose, that we do tend to forget that the real problems, I think, arise in different areas. What's fascinating, of course, is the conflict between the natural environment, beaver fever. . . .

In other words, I think there's a strong feeling in the province that we ought to maintain our wildlife populations, that we ought to bring in appropriate protection and regulation, etc., so that we maintain the integrity of nature. Yet quite often it's nature itself that produces the adverse impact; that's a much more difficult issue, to some degree. I think, that in some people's minds, it's easy: "Well, just stop logging, and our problem is solved." But you put it on the other foot, and what do you do -- move the wildlife population or say: "I'm sorry; they represent a significant hazard to human health, and we've got to get rid of them"? It's a far more challenging debate.

V. Roddick: I would like to just ask a question here re. . . . You've gone through all the agriculture, mining, forestry. The real problem is animals, and we're also animals.

The one thing that has not been mentioned anywhere in here is the vast problem of disposable diapers in dumps; nobody monitors that. And hardly anyone anymore is using cloth diapers. They all go into all the sanitary landfills throughout the entire province. I can take you at any given time to the fields around the Delta dump, and there are disposable diapers everywhere. It's revolting.

I think until we really look into our own back yards and stop blaming agriculture, forestry and mining, it's the human problem that needs to be. . . . I notice that there's a couple of times where the Fraser River basin is mentioned. So I assume you are working hand in glove with that, because if we don't clean up the Fraser River, you know, we're not going to get anywhere. But I really do feel. . . . Could you tell me whether you have monitored, at all, this disposable diaper problem?

J. Mattison: I'm not directly involved in the regulation of solid waste, which is what this would come under. I can look into it further and provide more information to this committee. I know they're struggling with how to regulate the disposal of disposable diapers.

V. Roddick: It's a huge sewage problem.

J. Mattison: It is a problem, and it's a problem that this disposal goes to landfills and not to some kind of a treatment plant, so we're struggling with that. We're trying to work with the manufacturers and saying: "You are creating this problem. We want to know what your plans are to manage it." We'd like to see, as we've done with paint in a kind of cradle-to-grave product stewardship model, working with the manufacturers of disposable diapers. Ideally, there would be a pickup service or a recycling depot or someplace where diapers could be dropped off to be treated properly so that they don't go into landfills. I don't know the current progress of those discussions. I know that it's being researched and that there are discussions with the manufacturers and vendors of those products, but I don't know the current status of that. I can get information and report back if. . . .

V. Roddick: I would just venture to suggest that if we are really seriously interested in our water quality, that should be part of the agenda.

[1010]

R. Thorpe (Chair): Yes, if you could report back through the committee, then we can let the various members have that information.

D. Streifel: I have a few points to make. It seems we began this discussion around the lead agency for water protection and what not. If I haven't missed too much of the conversation, I believe MELP feels it has the tools and the capacity to be the water protectors. Who within government issues the permits to pollute, so to speak -- the permits that allow certain discharges and what not? I understand that's MELP as well. If I get a nod. . .

A Voice: That's right.

D. Streifel: . . .then the question I have is: how is that conflict resolved within the ministry that's there to protect the water and the water sources, being the ministry that permits or polices the permits to pollute or discharge materials into waters, particularly around treatment plants?

The circumstance in my own community, the Fraser Valley, where they seem to be an oddity in this province, is that they treat their water with chloramines, and it has created some difficulties already. The current mayor seems to. . . . His standard public pronouncement is: "What the hell's a few fish? We're trying to get water for people." Now that same, moving into the water treatment side. . . . Maybe if I could get some comments on that, because the water supply in that area is Suicide Creek. . . . I guess they don't call it Suicide Creek anymore; it's Norrish Creek. It seems to have reached its capacity to feed the taps and water glasses of Mission and Abbotsford and area.

A proposal by the regional district out there to tap water from Harrison Lake to distribute not only to the lower Fraser Valley but to northwest Washington as well, if I can get some comment on that, how that fits within the overall view of MELP being the lead agency for protection where it comes to water treatment and water purification as well as the tapping of new sources and the protection that would be required to tap into the Harrison Lake system for that kind of distribution. . . .

J. Mattison: Let me deal with the general question first, about how the regulation of discharges, really, is handled. There's a division of responsibilities between water management and our pollution prevention people.

On the water management side we're responsible for water quality monitoring and for the setting of water quality standards, basically. So we examine all of the. . . . Well, it's a struggle to get to all. We examine a number of elements, I guess, that could be found in water -- the chemical, bacteriological and physical parameters of water. And we set criteria levels -- safe levels of them -- for a number of different activities: protection of aquatic life, use for human consumption, use for recreation, use as industrial process water and so on. When those safe levels for those different

[ Page 1637 ]

uses for different physical, bacteriological and chemical parameters -- zinc, for instance, or manganese. . . . We choose that for each of those different sets of activities.

Then, at the request of our regional pollution prevention people, we set specific objectives for particular water bodies. That would be the case: "This water body is. . . ." Our highest standard is preservation of aquatic life. Actually, many aquatic species are more sensitive than humans. We would choose that as the standard. Then we would, from our monitoring, determine what the background levels are, what the natural levels are. And we would set some objectives to maintain this stream in this place -- no higher value for these parameters than this objective amount.

The regional pollution prevention people then must use those objectives in calculating any discharge loadings that would be permitted for those streams. So they would look at the quality of that effluent -- what the parameters might be, contained within that effluent -- and then determine the dilution that could be accomplished, the assimilative capacity of that stream, how rapidly it would mix, how it might be carried, what's downstream. Based on that they would write conditions into a permit to discharge.

We are constantly raising those bars as we learn more and as technology improves, so that the ability of any, whether it be municipal sewage or some industrial effluent. . . . As the technology improves, we say: "It's no longer acceptable to discharge particular chemicals. They have to be maybe zero or at some high level of treatment before the discharge can be accomplished." So those permits are written to allow that.

[1015]

So in general that's the process. There's a division between the water management branch, which monitors on ambient quality and sets those, and the pollution prevention staff, who write those permits and issue the authorities. Bob, did you want to deal. . . ?

B. Smith: Could I add something to Mr. Streifel's question?

R. Thorpe (Chair): Sure.

B. Smith: I think the key, in my view, is that the health authorities are at the table when land use decisions that could affect drinking water are made. And that, through the directors committee, is one of the initiatives that we've been able to move forward. Secondly, that would also apply under waste management permits. There's a process in place now where they are referred to the local health authority for their review on the health implications of that discharge.

So there are some checks from a drinking water protection source, that Health is at the table and that we're aware of those and that we make comments back if we are concerned with any of those discharges. There is a bit of checks and balances. But it's very important that Health is at the table when those decisions are made.

D. Streifel: So what then, Chair, if I could. . . ?

R. Thorpe (Chair): Yes, continue on.

D. Streifel: So the criteria from Health. . . . The problem with sewage treatment, particularly in the Abbotsford area -- the JAMES treatment plant -- is that it's over capacity, and it's not because the plant's too small. It's because too many people built there. So how did the permits for construction. . . ? As I understand it, the waste management and Health would be involved in areas like that. How would that happen, just the ability to plant more people to discharge their sewage through that plant?

It would help me to know how the discharge permits are allocated. Some years there's more water volume in the Fraser River than others, depending upon the snowpack and what not. Is that discharge permit altered or manipulated to address those increased water volumes? Or is it a mean structure, a mean system of historical water flow through the river system? How do they get a permit to build when there are no facilities to treat the waste or there are not adequate facilities to treat the waste?

J. Mattison: There are at least two questions there. Let me address the one with respect to the permit. Many of the permits have conditions of water flow. For discharges above a certain river flow, the permit can be exercised to its fullest. If the river falls, if the flow in the river is below a certain level, they have to scale back on the amount they can discharge. So the discharge is regulated in accordance with the flow in the river.

Now, that causes problems for some systems. If your effluent is in an industrial plant, they can slow their production. In a sewage plant it's much more difficult to have humans slow their production. So we need to ensure there is sufficient holding capacity to provide for those capabilities. So normally permits are written that way.

Now, that was the first question. You asked another question, and I'm. . . .

D. Streifel: It's really how the plant was built. It had some flexible capacity, and within a couple of years it's over capacity, and it's only because of development in the area. Now, how does that happen at a local level and at a Ministry of Health level -- the permits to construct and develop in that manner -- when there isn't adequate water supply, as we're seeing now out of Norrish Creek, and not adequate treatment capacity, as we're seeing out of the treatment facilities in the area?

J. Mattison: I'm not going to have the details that you need to answer that question. Part of the coping with the growth, that's partly a job that Municipal Affairs deals with. I know that the directors' committee has a member from the Ministry of Municipal Affairs who's not here today. But we need to. . . . It goes to the kind of growth strategies that we need to look at for areas that are rapidly growing, like the lower mainland. And building -- it's difficult when the tax base isn't there to build the capacity for future areas. So there is a difficulty for local governments to finance projects when the tax base isn't in place. Some municipalities are better at that than others.

[1020]

Largely, from my ministry's point of view, we would respond to the application and review it. It's the same with the Ministry of Health, I think. We would probably look at capacity and look at the designs, the capacity for growth. But we're

[ Page 1638 ]

not any better than anyone else at projecting growth rates. I'd have to get more information if you want details on a specific site.

D. Streifel: No, I was looking for more general information, Chair, than specifics. I was using this example because it's becoming controversial in the water quality and the water volume and where people want to tap and who wants to tap into that water source as well.

B. Smith: I guess my comment might be, Mr. Streifel, that I wonder who is responsible for planning and who is responsible for the operation of that treatment plant. In most cases I would expect that it would be local government that plans and expands the municipal boundaries and is also the manager or the operator of that waste treatment plant, where Environment is only the monitoring and permitting agency.

So maybe there is some area there that could be looked at, too, that might be more proactive in dealing with those sorts of things. I know that's an ongoing situation, where health comes into some concerns, where the plant could be overloaded. Therefore it's probably not meeting the requirements of the permit, and then Environment will take action against that. But it's sometimes delayed action. I think there's the will there; it's just a matter of how it's going to be managed.

D. Streifel: It's always on the worst polluters list in the valley. It's kind of a nasty circumstance. It is a concern, because it directly relates to water quality and the protection of the quality of water and the focus that's on the Fraser River, the circumstances around the river with the studies that other ministries are doing on the resident fish populations and what not in there that are declining. All fingers seem to point to difficulties within the water source itself.

Could I get some input as we're talking about the protection of water? I scanned through these documents. I didn't see very much on the treatment of water and the preferred methods of treatment and what direction we're moving. If any of that was included in the report, I'll go back and read it. If not, if it's not appropriate for discussion at this time, Chair, then I'll just drop the question. But I am curious about the conflict between chloramines and chlorine and the dangers of it. As we move into more concentrated development and more restricted water supplies, will we be changing our methods of treating our drinking water? Are there preferred methods, both through Health and through the Ministry of Environment, Lands and Parks?

J. Mattison: The auditor general's report focused on protection of the drinking water sources. And the workplans we've tabled here really are all about protection of source-water. They don't deal with treatment. However, Dr. Shaun Peck, who is going to speak next, has just indicated he will be touching on that, so perhaps you can direct your questions to him.

D. Streifel: That's fine.

R. Thorpe (Chair): Does anyone have any other questions? I have a couple of questions, Jim and Bob. I remain concerned about the fact that we're moving away from what I believe to be one of the key recommendations: the lead agency. But Jim, you said in your comments that the committee -- and I believe I got this down, because I wrote it down when you said it -- is not practical at this time. What time will it be practical, then?

J. Mattison: Well, I'm not sure. I was thinking in the present circumstances. If circumstances change, we could review it. But I wouldn't. . . . From our discussions in the directors' committee, we think having the division between Health and Environment on this issue not only is a practical way of managing these issues but also may provide some of the checks and balances that you'd want in an overall provision of drinking water.

When we looked at all of our activities, we realized that the Ministry of Environment really is the lead agency with respect to source protection. You look at those 26 workplans; the Ministry of Environment leads on 15 of them. But there is a role for the health officers in source protection, and we do consult with them. But for the bulk of the resource management decisions that are made and that were particularly the ones raised by the auditor general, such as forestry, mining, agriculture or the recreational decisions, the player at the table -- the ministry which tends to provide the information with respect to water, in many cases both from protection of habitat as well as from protection of drinking water -- is the Ministry of Environment. So when we looked at that, we thought that it's logical and natural that the Ministry of Environment be that lead agency on the source side. On the intake-to-tap side it's clearly the Ministry of Health that regulates purveyors.

[1025]

So while in the past 18 months since the report was tabled we have been working towards clarifying those roles and ensuring that everyone understands what those roles are. . . . And we think it's workable. None of us, being career civil servants, wants the kind of wholesale reorganization that creating a single agency and moving out of other agencies would cost; it tends, at least in the short term, not to make things any better. And we felt we could put a higher priority on drinking water -- we clearly need to do that and have done that -- without having the organizational pressures that creating a single agency would cost. So that's kind of the practical answer and the philosophical answer, if you will.

B. Smith: Can I, Mr. Thorpe, add something to that?

R. Thorpe (Chair): Yes.

B. Smith: Having Health and Environment here together, I think, really demonstrates that a lot has happened since the report's come out, that there's a considerable amount of cooperation and complementary work being done between the two ministries, and I think that is very progressive in B.C. I think we've probably got as good a system in B.C. as you're going to have anywhere and a heck of a lot better than the one they have in Ontario, where they have one agency basically from source to tap, and it isn't Health. That doesn't complement the health significance of disease outbreaks, microbiological in particular, which are your highest potential health outcome; I think that's important.

I think we're very fortunate that we have this kind of approach and that we have this complementary management scheme. And I don't believe, from what I heard from the auditor's office, that their lead agency did envision. . . . I think

[ Page 1639 ]

Mr. Lane mentioned that it wasn't a global one-agency kind of thing. I think it's looking. . . . At least, I believe I heard this from Mr. Lane, that it had more to do with somebody to take control and responsibility over the source-water and manage the source-water for drinking, that it doesn't have representation. I hope that's what I heard. But if not, we're still feeling very comfortable in that way.

R. Thorpe (Chair): With respect to the various time lines that you have in your workplans here -- the time lines you've had to date, but more importantly now the time lines you have going into the future -- have you had in your experience to date any difficulty achieving your time lines? And do you anticipate at this point in time -- either Jim or Bob -- problems in achieving your time lines that you've laid out here?

J. Mattison: We're a little behind our original time lines on some of those workplans, I'll admit that, particularly the ones that involve research, more the science questions. The ones that involved either organizational response or some of the practical, on-the-ground fieldwork, the monitoring -- we were able to respond to them fairly quickly.

So I don't expect problems. We reviewed our time lines carefully with the auditor general's office prior to submitting this. We were questioned on a number of them, and we changed a few. I think the package you have represents reasonable time lines. We think we can deliver that. We're well along now on many of these. They're not completed, so they don't show up in the "implemented" column, but I think you'll see a lot more in the "fully implemented" column in six months' time as these projects start to complete.

R. Thorpe (Chair): In a number of places throughout the report you talk about consultation, stakeholder consultation, etc. We don't need to do it right now, obviously. But where those consultation and stakeholder consultation points are noted, would it be possible just to supply the committee with who you anticipate consulting with or where your consultations are going to -- not the place, but the groups that you're going to consult with? One of the things that I'm sure we're going to hear a little bit later today is that perhaps consultation could be a little bit better. So I just wondered if we could get a sense of the consultative process.

On page 3 you mention the addition of five new sites for aquifers. Where are those additional five sites? Do you have that information readily available?

[1030]

J. Mattison: Can you refer me to what you're looking at?

R. Thorpe (Chair): Page 3 of the spreadsheet, item 23.

J. Mattison: I expect it'll be in the detailed workplans. Let me just have a look. I don't have details of where all those new sites are. I do know that we've put in some new monitoring in Prince George and Cache Creek; there are two I can give you. I don't have all five, but I can certainly get the names.

R. Thorpe (Chair): That's fine, Jim. Thanks. On page 14 we talk about the Provincial Health Office's public report No. 1, January-February 2000. Have we had the first report on that?

A Voice: No, we haven't.

J. Mattison: No. That should be 2001. I'm sorry; that's a mistake.

R. Thorpe (Chair): Okay, that's fine.

J. Mattison: That's Dr. Shaun Peck's report, and I'm sure he'll be talking about it. That is a mistake; I apologize.

R. Thorpe (Chair): With respect to page 28, we talk about Transportation and Highways giving priority in planning transportation routes and infrastructure. Where would the Okanagan corridor transportation study. . . ? Would it fit in with this project?

J. Mattison: Certainly there was an environmental assessment. There will be more environmental assessment on that. This project is with respect to the process for doing those environmental assessments, so it fits within the scope of this project.

R. Thorpe (Chair): With respect to pages 33 and 34, you talk about recommendation 20, giving approving officers the authority to take into account the cumulative impact of septic tank systems when examining subdivision proposals. Then on the next page it says: "Key deliverables: a first draft of a report is now being circulated internally for comment." Is that also going to go externally for comment? If so, where is it going to go externally for comment?

J. Mattison: Bob, do you know?

B. Smith: Yeah. This is being done on the directors' committee by the representative for the Ministry of Municipal Affairs. But it's my understanding that internally we are reviewing it, and then it will go externally to the UBCM and agencies like that. We could give you a list on that like you have requested previously too, if you like.

R. Thorpe (Chair): Yeah. I think it may be useful. UBCM is a great organization to ensure that we have a cross-section of communities involved throughout the entire province of British Columbia, to ensure that we hear the views of all the different sizes and regions of British Columbia.

B. Smith: Fair enough. We usually send it to their senior policy person. We could ask them if they could make sure to get a wide selection, and I'm sure they do. But we can follow up on that too.

R. Thorpe (Chair): Does anyone else have any questions of Jim or Bob at this point in time?

D. Miller (Deputy Chair): I just don't know. Again, I apologize if I display ignorance with respect to how the committee functions and works. Just on the first point that you raised, I don't know whether you might advise me whether the committee takes a side, if you like.

I can tell you that my view is -- with all due respect to the auditor general -- that simply because they produce a report doesn't mean they're always right. I think the ministries have looked at the report. They've looked at using their own expe-

[ Page 1640 ]

rience in the field, the broad issue, and have determined that a lead agency would not be as effective and in fact have pointed out that at least in one other province where there is a lead agency, we've got a major inquiry going on now because people died. I just wanted to get some clarification of that. I don't know, as I say, whether the committee wants to land on one side or the other. I can tell you where I've landed. Perhaps you might advise me on that point, Mr. Chairman.

[1035]

R. Thorpe (Chair): First of all, I appreciate your comments. Our responsibility is to review all of the reports and to hear from a variety of witnesses. The subject has had some debate. If I recall, the last time we had officials from the committee here, we really didn't get a position one way or the other. I was looking more for clarification, so we can have a better understanding as we go through this very complex issue. As you may note, Dan, this is an issue that the committee has felt so strongly about that we've asked for updates on a regular six-month basis, so that this committee can be kept informed. I know at least you and I agree on one thing, and that's that we all want safe drinking water in British Columbia. That's the goal we're trying to work towards here. So we'll hear from other witnesses, and we'll see how the progress goes.

D. Streifel: I want to jump in with one more question. Again, as I'm scanning the recommendations and scanning the report, does the report deal with private water wells? I have a well; all my neighbours have wells. Frankly, most of my neighbours drink their water out of a mud puddle. It's a shallow well six- to ten-feet deep, and it's filled with rainwater. It only fills with a trickle in from surface water. Whose jurisdiction is it to write recommendations or develop regulations around that water safety? Most of this report focuses on industrial intrusion like forestry and other things like that. Perhaps this report and the recommendations are overbalanced in appearance against those kinds of activities in their impact on water.

But now someone like my neighbour goes regularly to the community well, fills up a thousand-gallon tank in his pickup, dumps it into a hole in the ground and goes in the house and turns the tap on and drinks it. Where does the jurisdiction for that lie? Should I be back at the local government level? Or should we step out boldly like Moe Sihota did a few years ago and suggest that we should have some form of regulation around well drilling and just the domestic consumption of water from a private well? I throw the questions out: where does it lie, and is it included in this report? Again, I couldn't find it.

J. Mattison: Firstly, the auditor general made three recommendations with respect to groundwater; they're Nos. 23, 24 and 25, so you'll find them at the back of the package. We are doing some work. Mostly the auditor general's recommendations covered asking for -- I'm working backwards -- a comprehensive and coordinated aquifer mapping and inventory program, ensuring that monitoring of groundwater quality occurs regularly in all developed aquifers and ensuring regular monitoring of groundwater usage and levels in developed aquifers.

None of that really goes to your question. Recently -- and I mentioned it in my opening remarks -- at the UBCM fall convention on October 27, the Premier indicated that he has instructed the Minister of Environment to prepare legislation for groundwater. Staff are now looking into that. The kinds of things that you suggest -- provincial standards for wells -- are certainly under review in terms of what the groundwater regulatory scheme might look like.

Currently there is no jurisdiction to manage groundwater. If someone wants to drill a hole in the ground on their property and drink it, they are free to do so. I don't see a groundwater regulatory regime changing their ability to do that. What I do see, though, is some standards for construction. We would certainly be investigating those, and also abandonment. We have in our records a number of poorly abandoned wells that are just sources of contamination for an aquifer. We need to have some regulatory ability to enforce proper abandonment of wells.

So there may be some, and again, it's legislative. There's not much I can discuss at this point. The Premier has publicly announced that he has directed the Ministry of Environment to investigate and to prepare groundwater legislation.

B. Smith: I expect that we'll probably be working very closely with MELP on that, because in the current situation, as Jim mentioned, there really is no regulatory scheme. But what we do provide is the analysis for the individual and interpretation of the analysis. One of the things we hope to do with the "Well Protection Toolkit". . . . I don't know if you had an opportunity to look at it; it is a very good document. It has received wide acceptance across Canada. We'd like to take that document, which really focuses on the larger community water systems, and scale it down so that individuals have some understanding of their well and management of it, along with the construction and the abandonment. We hope to bring in some more useful tools for the individuals.

[1040]

D. Streifel: So at this time there are no regulatory bodies that could shut down a domestic water source if it's on private land. The classic was just down the next street from us -- a nice shallow well, 12 feet deep, nicely landscaped with a foot and a half of cedar bark mulch all around it. You know what happened. But the individual just scraped the bark mulch away and put a filter on the tap, and they continue to use the well. Now, I don't know if we should be intruding so far as to protect people from themselves, but I think the bulk of the flu outbreak around my area is always the water source.

So if there are no regulations, then maybe it's something I'm going to keep my eye open and see what I can. . . . I'll follow this path, and I'll actually acquire the "Well Protection Toolkit," because I worry about my own well, even though it's a couple of hundred feet deep. It's not likely that the dog peeing on the well stack is going to affect it.

R. Thorpe (Chair): No other questions? Jim and Bob, thank you very much. We appreciate it.

Dr. Peck.

S. Peck: I'd like to thank you very much for allowing me to come and give you a preliminary report on the provincial health officer's special report on drinking water quality.

First of all, I wanted a little advertisement for who the provincial health officer is, in case you didn't know. I'm the

[ Page 1641 ]

deputy provincial health officer, and Dr. Perry Kendall is the provincial health officer, and we have a small research office and two support staff. We do rely on the Ministry of Health for assistance when we are developing reports. The mandate of the provincial health officer is to advise the minister and senior members of the ministry in an independent manner on health issues in British Columbia and on the needed legislation policies and practices respecting these issues.

It's interesting to contrast our responsibility with the auditor general, who has the privilege of coming to report to you on issues. We don't actually have a provincial health council or anything like that. This was actually recommended in 1991 when they had the royal commission, but the Legislature did not take action on it. We actually report to the Minister of Health, but we do have a certain independence of the way we're meant to conduct ourselves. Our job is to monitor the health of the population to make a report in the manner that the provincial health officer considers most appropriate. And we also provide an annual report on the health of the people of British Columbia. In about three weeks' time Dr. Kendall will be releasing the 1999 annual report on the health of British Columbians.

We were asked by the Minister of Health to do a special report on drinking water quality, in response to the auditor general's report on drinking water sources. What the report will do is describe, in as much detail as we can get, the current drinking water situation in British Columbia. It will consider issues from the source to the tap. The big difference is that the auditor general's report was on the source; ours will be on the treatment and distribution system and also what results happen at the consumers' tap. It will not duplicate the auditor general's report, which has got lots of very useful and interesting information on the public health issues, I may say.

It will provide an overview of water quality and related health statistics and trends and a better understanding of a number of interrelated issues related to the provision of potable drinking water. It will also be providing recommendations to continue to improve the quality of drinking water in the province.

[1045]

I'd just like to mention that we have had 28 documented outbreaks of waterborne illness since 1980. These names are long-winded, but I just wanted to mention that six were campylobacter, 13 Giardia, two Salmonella, four cryptosporidiosis, one toxo and three unidentified. What I wanted to mention is that most of these are just enteric illness. I mean, they cause you to have diarrhea, and they don't really cause you to get sick.

The exception in this list is toxoplasmosis, which was a serious waterborne outbreak in the capital regional district about five years ago. We were able to demonstrate that about 100 women were infected and about 15 infants were infected as a result of this parasite. It was only the second time in the world that this parasite had ever been described, and it was a very interesting investigation. That's the most serious thing from the point of view of actual health effects.

These other organisms, particularly the cryptosporidiosis and the giardiasis, are ones that have really changed the way we think about drinking water quality over the last ten years or so. I'll speak more about that in a moment.

D. Miller (Deputy Chair): Dr. Peck, are those 28 outbreaks across the province?

S. Peck: Yeah, they're throughout the whole province. We'll report on them in detail in our report when the draft is ready in December.

I just want to talk about two case histories, because I've been consulting extensively around the province. The first one I want to talk about is the Comox watershed. Ken Lane and I were up there visiting recently. The reason I want to tell you this case history is because it's relevant to what you're talking about here in terms of how water sources may be managed. First of all, there's a water supply there that serves 32,000 residents of Comox. They take their water out of B.C. Hydro's big pipe, they chlorinate it, and they show that there is residual chlorine at the very ends of the system. From all the monitoring reports, it's safe drinking water and a well-maintained chlorination system.

However, the source is Comox Lake, and Comox Lake is multi-use. It's got private land; it's got campgrounds; it's even got a shooting range there -- worries about lead getting in water and things like that. But from all the evidence of their monitoring, they haven't found anything that is actually affecting the actual drinking water. In fact, their biggest concern when we went up was that. . . . There was a bridge across the bottom of the lake, and a whole lot of teenagers have parties there in the summer. The biggest concern of the purveyor of the water was that there might be a spill of gasoline or something like that over the bridge. But from all the assessment they've done, they haven't demonstrated any effects.

Now, the thing that's going on there, which I really think is one of the answers to the issues that you're dealing with, is that the medical health officer has brought together all the people who have any responsibility in that watershed, whether they've come from government agencies or whether they're private land owners like the forest companies or whether they're people who operate the campgrounds or the shooting range -- even the military there, because they fly helicopters into the forest and have exercises and were using some types of chemical fire retardant, which I think they've stopped doing now.

The point I wanted to make is that what I see happening there is a collaborative effort to do a risk assessment at the water source and to develop a risk management plan. Who is really responsible for doing it? That is the big issue, I think, that you're dealing with. What's happened here is that the medical officer has taken the leadership to bring everybody together and has very much involved the purveyor. I think the purveyor has to take some responsibility to do a risk assessment and to develop a risk management plan for their watershed, even though they legally don't sort of have control over it.

The reason I mention this is because I did read a report out of the U.S. EPA, in which they present a whole lot of case histories where people have done very similar things. In a collaborative kind of way, people get together and do a management plan for that water source. I know the thinking has been that you've got to have a lead agency that's going to take control over this. But the reality is, because you've got multiple usage and multiple ministries involved, it. . . . I like this sort of collaborative approach.

[1050]

When it comes to enforcement, there are potential problems. For instance, one of the forest companies was at the table

[ Page 1642 ]

at the meeting that Ken Lane and I went to. I actually suggested that it could be put on the permit for the operator that they come up with a plan, and then the forest company said: "Well, do you think you're going to be able to enforce that?" And I said: "Well, no." But there is a private land forest code which actually requires you to do certain things, and we could actually persuade the people who enforce that to, so to speak, lean on the forest company if they were not being responsible. In point of fact, we heard from this forest company, and they were being very responsible, I thought, in the way they were addressing protecting the water that was going into that lake.

My second case history is Revelstoke. I happened to visit that a couple of weeks ago, and what was interesting in Revelstoke was that you had a community of 7,500 people who for years refused to do any disinfection of their water supply. From 1975 onward, public health was trying to persuade them that they should disinfect their water supply. Eventually they got an outbreak of a waterborne illness, and they realized that something had to be done. In fact, the public health officials required them to have chlorination. The chlorine levels that were needed were so high that they said: "Well, this isn't good enough." They actually then got a lot of engineers to consult, and they ended up with making the decision to go to microfiltration.

I visited this plant, and it was very interesting. I mean, it's high-tech, new technologies. You were asking about new technologies. But the interesting thing to me was that this high-tech filtration system. . . . I asked them: "What's the water rate for the users of this water system?" You know, you worry that new technology is going to cost much too much. Well, actually I was told that the water use rate per householder was only $225 a year, which in the scheme of things is not very much. Admittedly, they were 50-cent dollars coming out of. . . . You know, 50 percent came from Municipal Affairs, and 50 percent came from the local taxpayers, but $225 a year for a state-of-the-art filtration system with a small amount of disinfection, the chlorination afterwards, didn't seem to be a big deal.

I think the point of this story is that public health has been working for years to try and persuade communities to adequately disinfect and treat their systems, and it's a very uphill battle, particularly with the smaller ones.

I'd just like to talk about Walkerton, because while Pine River was certainly a more recent event in B.C. from a public health point of view, we've certainly paid a lot of attention to Walkerton and its implications. The outbreak due to E. coli occurred this summer in Ontario, and it appears that contamination of the source-water well provided to the city's 4,800 residents resulted in about 2,000 people getting sick and at least six people dying -- I read seven the other day -- as a direct result of the contamination.

The Walkerton outbreak has raised the profile of the safety and cleanliness of drinking water in British Columbia and the need to make sure safeguards are in place to protect the public from waterborne disease. While there have been improvements made over the years, more actions need to be taken by the purveyors of water supplies and government regulatory agencies. We have over 3,500 water systems in the province. In addition, there are 250 first nations small water systems. It's actually of interest that there are now 25 filtration plants on these first nations water systems.

There are currently about 220 boil-water advisories in B.C. as a result of water not meeting minimum standards for treatment and/or the presence of fecal or total coliform bacteria. Most of the boil-water advisories are on water systems serving between 15 and 5,000 people. In other words, it's the small water systems. As you know, the greater Vancouver water system serves about two million people, which is about half the province. But it's these small systems -- between 15 and 5,000 -- where we've got the real problems.

B.C. implemented the safe drinking water regulation in 1992. The authority for this regulation comes from the Health Act, and the health officials responsible for its implementation are the medial health officers, the public health engineers and the environmental health officers who are employed by the regional health authorities in the province. It's worth noting that prior to the introduction of this regulation, there was limited authority for public health officials to require a purveyor to deliver potable water.

[1055]

I can recall in the eighties, when I was the medical officer in Prince George, how difficult it was to persuade McBride, B.C., to do anything about their drinking water supply. We couldn't, at the time, get the minister to give an order, which was about the only thing you could do. But the safe drinking water regulation has really transformed the ability of public health to actually persuade water purveyors to improve the potability of the drinking water. The regulation requires a purveyor of water supplies to provide safe drinking water which meets certain standards, which include the absence of indicated bacteria. Coliform bacteria are the indicated organisms used to determine the likely presence of E. coli 0157:H7.

As you may know, the Walkerton E. coli 0157 is a special type of E. coli which causes toxic effects. And E. coli itself is a bacteria that's present very commonly in the environment. I should also say that the regular indicators we use are not good indicators for the presence of the emerging pathogens, which are the cryptosporidiosis and the giardiasis -- the protozoa.

Quite independently of the Walkerton event, for several years in B.C. there has been a continuous review of what measures are needed to control these parasites. These are the emerging pathogens that have changed our thinking about what is necessary to ensure water potability. We've studied the experience in other jurisdictions -- Europe, U.S. and Australia -- on the needed controls to prevent outbreaks of illness as a result of the presence of these parasites in drinking water.

We need a multiple barrier approach to achieve this. The term used to describe this may be referred to as HACCP. It's the acronym for hazard analysis and critical control points, a system of process control originally developed by NASA, the National Aeronautics and Space Administration, in food preparation for space flight. A critical control point is any point in the process where the loss of control could result in unacceptable safety risks.

So if you understand the thinking, you've got to look at the system from the source to the tap and identify where you've got threats and, in your plan, try and figure out where you need to do better. This thinking is very applicable to a water system from source to consumer's tap.

Tap water can be made as safe as possible through this multibarrier approach involving protection of the water source and water treatment, including the filtration, disinfection, distribution system maintenance and water quality monitoring. These measures are requirements placed on the

[ Page 1643 ]

water purveyor through the safe drinking water regulation. The Ministries of Health, of Environment, Lands and Parks, and of Forests are working with other ministries to improve the quality of the source-water used for drinking, whether it comes from a stream, lake or well. And they're responding to the auditor general's report.

The safeguards we have in B.C. do go a long way to reduce the likelihood that a Walkerton event could happen here. You'll remember the Walkerton event. There were problems with the samples and who got to see them. Well, all samples in B.C. are tested at laboratories approved by the provincial health officer -- that's us -- and the results are forwarded directly to the public health inspector and medical health officer. The medical officer can then make immediate decisions about requiring the water utility to provide public notification of water quality when there is a concern.

In B.C. public health inspectors and public health engineers work with the medical health officers. They have the necessary expertise to evaluate the public health implications of the variety of tested parameters and the effectiveness of treatment measures. One result of Walkerton is a greatly enhanced awareness of the potential hazard and greater propensity to act swiftly to take preventive action. And we certainly saw an increase in the number of advisories that were put on in B.C. after the Walkerton event.

Unfortunately, we cannot say that the waterborne outbreak due to E. coli 0157 similar to Walkerton could not occur in B.C. However, the present safeguards in our management system are designed to ensure swift action and prompt notification of the public to boil their water if a risk is detected. The regulation in B.C. also requires that the water purveyor undertake remedial action in the event of contaminated water samples or a water system failure, to mitigate the impacts and address the cause of the source of illness.

[1100]

We also do not have concentration of intensive animal husbandry that is present in other provinces, from Alberta, Saskatchewan and Ontario. I was actually told by somebody from Agriculture that in Alberta they have as many animals on a feedlot as we have in the whole of B.C. -- I mean cattle -- which I thought was an interesting comment. We don't have those sort of very intensive feedlot activities that they have, for instance, in southern Alberta.

We did have one outbreak of cryptosporidiosis in Cranbrook that was clearly associated with a herd of cattle, with young calves present in a stream adjacent to the intake of the community water supply. I'm glad to say that remedial action has been taken there. They've put a barrier fence about two kilometres all around. The municipality has purchased the land, and so they now have a means of preventing this concentration of cattle.

One of the points that I think one needs to get across in understanding what actually causes waterborne outbreaks: it's not humans or animals or agricultural animals per se. It's the concentration of the manure that they produce; that's the real issue, I think, in producing the risk. So, you know, I hear people perhaps thinking that you're going to ban all sorts of activities.

But I would like to suggest to you that the thing you have to think about is: are you going to get concentrations of animal -- whether it be agricultural, whether it be wild or human -- manure that actually can contaminate a water supply? You're never going to ban all the birds and the animals out of the water supply. But you can at least mitigate a herd -- whether it be wild animals or a herd of agricultural animals -- from getting close to the source. Those are the kinds of plans that I think need to be done in every watershed.

There are many ways to limit health risks to waterborne disease and to reduce the potential of a waterborne disease outbreak. However, there's no way to ensure zero risk. The wake-up call from Walkerton is that constant vigilance is needed to protect the safety of drinking water. This should involve adequately protecting the quality of the sources by being aware of possible contaminants from multiple usage -- for example, forestry, mining, agriculture, wildlife and human recreation.

A few of our water sources in B.C. are highly protected, such as the greater Vancouver water district; many others are not. And I would like to comment. You may have picked up yesterday's news that in fact, even with this huge watershed in Vancouver, they have now demonstrated that there seems to be a relationship between the turbidity events and the presence of enteric illness in the population. Dr. Blatherwick was in the media extensively yesterday talking about that. It's a very comprehensive study, which we all reviewed carefully to make sure that the conclusion they were drawing from it was sound. But it makes you realize that even when you've got a very protected watershed with razor wire around it, you can still get, it appears, enteric illness related to turbidity. So that totally protected watershed isn't necessarily the answer.

We need to raise awareness of the importance of maintenance of reservoirs, of adequate water treatment, including disinfection, including the best information on disinfection products. The maintenance of the water treatment plants by sufficiently qualified personnel -- that was a big, very important issue in Walkerton. The Ministry of Health has actually provided grants to the B.C. Water and Waste Association in order to put on training programs for the operators, and that's a very important and positive step that has been happening. We also need to ensure that the distribution system water pipes are adequately maintained.

While increasing attention has been paid in recent years by many people, including the B.C. Water and Waste Association, to improving the safety of drinking water, there are still opportunities for more action to be taken by the purveyors, by government ministries that are the regulators, by individuals and by elected officials to ensure the safety of our drinking water supplies. It's important that all those who can affect the safety of drinking water work together to ensure that we continue to make these improvements.

There are some science issues which I'd like to just touch on. Monitoring for cryptosporidiosis is a very uncertain area from a scientific point of view. Do you actually measure for cysts or not? If you find them, what does it mean? If you actually look in water supplies, you actually find these cysts, but there's no agreement in the world literature about the benefits of monitoring for this.

The treatment for Crypto and Giardia or parasites. . . . There's a lot of interest now in two technologies: microfiltration, which I mentioned, and another one is ultraviolet light. While people have been going with a relatively expensive disinfection, ozone, as an alternative to chlorine, they're now looking at ultraviolet light. I understand that the capital region

[ Page 1644 ]

here is currently doing a feasibility study. A benefit of ultraviolet light is that it actually costs an awful lot less than ozone does.

[1105]

The role of turbidity is something that is emerging from a public health point of view. We are increasingly reading and hearing, like in the greater Vancouver study, that with more turbidity there are increased risks of gastroenteritic illness. So I think we're going to be seeing a greater emphasis on reducing turbidity in drinking water supplies.

Some of you may be aware of the Kamloops situation, where they have very high levels of turbidity -- at times like 500 NTU. There's now an automatic boil-water advisory after a certain level, because the medical officer was able to demonstrate a relationship between the turbidity and enteric illness. The way they found that was because they looked into the data in the Medical Services Plan and found that more people went to see physicians for enteric diseases when the turbidity went high.

Disinfection byproducts and trihalomethanes. The effects of chlorine on organic matter is a big area of scientific debate. It is yet to be seen whether Canada will lower the acceptable level. What it does mean from a water treatment point of view is that you want to try and make sure that there is less organic matter in the water, because you are less liable to form these organic compounds. I mentioned the new technologies that I'm aware of.

I want to talk a little about this report development. The approach that I'm taking with it is extensive consultation. I've spoken at seminars; I've been to national conferences; I've talked to the public health officials; I've talked with the auditors general. This will be the sort of report where hopefully the things that we're talking about will be implemented even before the report is finished. I believe that if you involve the people who can actually make a difference, you end up with people doing things. The more you do that, the better your report becomes. I've met, as I mentioned, with small system operators, public health officials, the directors' committee and the auditor general's office, and the draft report will be circulated for comment.

In the present draft recommendations, I've got four recommendations: firstly, a higher priority on the safety of drinking water in all legislation affecting drinking water sources. Public health officials have an ongoing concern with the Forest Practices Code and how these land use plans are put in place, because they get treated like anybody else. They just say: "Well, we'll listen to your point of view, and then we'll decide what we're going to do." We would like to see a little more acknowledgment of the importance of trying to ensure, when the land being logged is actually the drinking water source, that there is something acknowledged that this is a priority in how it is managed.

I'm not saying that you can't do logging. I understand the B.C. Medical Association has come out against logging in watersheds, and I said to them: "That's totally unrealistic." I mean, look at the economy of this country. But you can at least. . . .

D. Miller (Deputy Chair): They wanted a raise too, didn't they?

S. Peck: Yeah, that's right. But the thing is that I've listened to the logging companies talk about how they can manage. It's quite feasible to do your logging practices carefully so that you do not increase the turbidity in your water and therefore don't increase the risk of illness.

I think that purveyors need to be aware of activities in and affecting water sources. There's a certain amount that a lead agency in government can do, but on the other hand, I think we have to keep saying to the purveyors: "Look, you have to take some responsibility and be involved in what's happening in your watershed and make yourself aware of the government officials. Government officials change all the time, and there are multiple agencies. The approach, as I mentioned, that was taken by Dr. Emerson in the Comox area is highly commendable.

I think the purveyors should be responsible for informing the public. This is increasingly patterned on the quality of the drinking water, and hopefully in the long run we can get it available on the Internet. This is already happening, for instance, in greater Vancouver and the capital region. You can go to the Internet and look at all the results of the monitoring of the water supply. I think that's a trend that is very healthy, because it gives some accountability to the public about what the quality of your water is.

[1110]

My fourth recommendation is that public health officials develop a water quality improvement plan in each of the health regions. This is not an easy task. In places like the Kootenays, where one health region may have 200 water supplies, there's a lot of anti-chlorination in some areas. But I really believe that if we can get our medical health officers and public health engineers and environmental health officers to develop a plan to publish it to the boards that they report to -- to the municipal councils and to the government agencies -- that will help this continued improvement of drinking water in British Columbia. The thinking that I have around this is that you can't achieve all of this overnight. There is a tremendous amount of progress happening in improved water quality in the province, but there's a long way to go.

Other recommendations will cover quality assurance, education and public information and funding issues. I hope that those of you who are involved in approving capital funding through Municipal Affairs will pay attention to the importance of grants to municipalities and others for drinking water improvement. There will be recommendations on monitoring in future reports.

This is my last slide and last word. From a public health perspective, we must recognize that there are limitations to the improvement in source-water from the point of view of potability. There is a certain amount that you can do, but you're not going to get such pristine water out of a source that you don't have to have disinfection, and in many cases you're still going to need filtration. The current activities are really commendable. It's a real pleasure to be able to go to a directors' committee and talk to all the ministries at once and talk to them about the public health perspective on drinking water. I really would like to commend this committee and the auditor general for bringing this issue forward.

But I think from a public health point of view, it's not the whole answer to producing safe drinking water in B.C. We must continue to ensure that there's adequate disinfection, and Public Health still has difficulty persuading communities to disinfect their water. You're probably well aware of the

[ Page 1645 ]

Erickson improvement district situation, which has been in the news a lot. I predict we will see increasing use of filtration for British Columbia's water systems over time.

Mr. Chairman, that's a rather speedy summary of some of the thinking around the development of this report. I would be very pleased to have an opportunity to bring it if you are meeting in six months' time, when we certainly. . . . If it's not final, it will certainly be in a form that I could talk about more details.

R. Thorpe (Chair): Thank you very much, doctor. I would hope that when you're circulating a draft of your report, you would perhaps want to consider sharing it with this committee. I think this is a subject that a lot of committee members would be very interested in.

R. Kasper: Dr. Peck, you mentioned that there were over 200-plus boil alerts. How many orders to correct were issued by the chief medical health officer or his or her designate throughout the health regions?

S. Peck: I can't give you any exact numbers, Rick. But under the safe drinking water regulation, what is happening is that on the operating permit that is required under the regulation, increasingly the medical health officer is putting terms on it which end up being orders. A lot of these boil-water advisories are on the small systems, as I mentioned, where there is often not sufficient disinfection -- or none at all. Or they're because something has been identified in what's going on in the distribution system.

R. Kasper: Could you get back to me on how many orders to correct have been issued? I think that's the next step. My understanding is that once a problem has been identified either by somebody getting sick or with routine monitoring of the water supply within a system as required by the purveyor, and if the tests are consistent, then a boil alert is issued. But it's my understanding that the next step would be the issuance of orders to correct. So I wouldn't mind knowing what that information is.

[1115]

You also said in your presentation that enforcement is a problem. I'd like to be corrected, but nowhere in your presentation did you actually get into any detail on what in fact is going to be done about enforcement in regards to matters that arise that can affect safe drinking water. So is there anything that's going to come from your report or any other agency that you're working with that is going to deal with enforcement issues?

S. Peck: Yes. The safe drinking water regulation provides the enforcement capacity. The medical health officer, the environmental health officer and the public health engineer are all mentioned in that, and orders can be given under that.

When the purveyor doesn't comply, that is when we get into difficulties. Over the years all I can tell you is that on many of these small systems, the public health officials have been working very hard to persuade -- and using whatever means they can to persuade -- people to improve the water quality. But you know, I think there is a fine in the regulation, and in the high-profile ones it even ends up in court and legal challenges and things like that. So all I can tell you is that they're doing their best. But it's not an easy issue, particularly with these small water supplies, when you've got communities who are maybe dead against any disinfection at all.

R. Kasper: Well, that's true. But if they're a purveyor of water, and they're statutorily required to meet the Canadian drinking water standards, it's my understanding that before they would even get a licence to become a purveyor of water -- depending on where their source of water comes from -- they are there to meet all those requirements.

Now, whether it's a public utility that is a purveyor of water or a private utility that is a purveyor of water or a de facto private utility that is now under the auspices of the Ministry of Environment, because the utility went bankrupt or broke, I understand there are a large number of those that are administered by the Ministry of Environment through the water rights branch or the water division of the ministry. Why, then, is enforcement a problem if you have a wide range of utilities that have been designated purveyors of water, when you said yourself that the safe drinking water regulations built in there allow for the chief medical health officer to issue an order to correct?

I thought the whole exercise of the auditor general and everybody responding to the issue of safe drinking water was to give comfort to those who are consuming the water, whether they're from a public system, a private system or one that comes under the auspices of the Ministry of Environment on a monitoring, day-to-day operation basis. Enforcement is a problem. You know, I assume that if one wants to assure people that, as you said in your presentation, from source to when you open the tap, the water that comes out is in fact safe. . . .

You mentioned the Canadian standards that we all subscribe to. Then is it a case of it being too much of a potential hot potato for the Ministry of Health to actually invoke the powers that they actually have the authority to do? Is that what you're saying -- and that it's a monetary issue? I also understand that the Ministry of Municipal Affairs has, within their budget, a provision that when the chief medical health officer issues an order to correct, there is a source of funding that can actually offset the financial impact on those systems.

[1120]

So I'm just basically encouraging your good offices to perhaps put more emphasis on enforcement issues. If you're going to go through an exercise, and if you said yourself that enforcement is a problem. . . . All this stuff is all great stuff. But if you're not using the tools that you have at your disposal to get the problem cleaned up, then what's the point in doing all this wonderful stuff? People have been talking about this for years, and we still have historical communities' problems, purveyors of water that have ongoing problems on a regular basis. It's very rare -- I'd like you to prove me wrong -- that orders to correct outstrip the boil alerts. That's why I need the numbers. I apologize for sounding off, but I think enforcement, as you say, is a problem. I'm suggesting that enforcement should be tantamount -- as to how to get these problems solved or these drinking water issues addressed.

S. Peck: I agree with a lot of what you say, but I can tell you that the reality in persuading communities to do certain things to their water when they don't really believe in it is a very difficult job. That is what we tend to get in a lot of small

[ Page 1646 ]

communities. I mean, even when I worked for the CRD, we knew of small systems where the fellow who was meant to be operating it might turn on the chlorination when the inspector came around but seemed to turn it off at other times, because he didn't believe in chlorination and neither did the community. And we couldn't actually prove that they'd had an outbreak.

When we get outbreaks, usually people wake up and agree to do something. To that extent we welcome all the publicity around Walkerton, because I'm sure there are many purveyors who have actually taken more action as a result of the awareness that has been raised.

R. Kasper: Great. Thank you.

E. Walsh: Your reference to Cranbrook and their problem with Cryptosporidium a couple of years ago. . . . You made mention, too, that they had taken some measures to mitigate some of the problems that arose due to this outbreak. But the Cryptosporidium parasite, as I understand it, can lay dormant for a long time in any supply, if I'm not mistaken. Then times of turbidity or times of movement of the water in the river or creek or wherever it is can actually bring the Cryptosporidium to life -- from its dormant period, I guess you'd call it.

Now, what is there in Cranbrook's case that has allowed. . . . Other than the fencing off of their watershed area, what is there in place to actually address the fact that the Cryptosporidium parasite is still in the water supply system in the creek? It's a surface-fed reservoir; it's groundwater. What is in place to ensure that the Cryptosporidium that may be laying dormant in that supply isn't going to enter the water system again, thereby causing a few more of the problems like gastroenteritis and that sort of thing? What is there in place to ensure that it doesn't? You said that the microfiltration and the UV treatment are rather new, and I know that it's really costly. So what is there in place, if chlorination doesn't kill the Cryptosporidium? What, other than the fencing off, is taking place?

S. Peck: Well, what you've raised is some of the scientific uncertainty around Cryptosporidium. I agree with you that once you've had it in the system, there will be cysts around. But what we don't really know is whether they are still viable, even though they may be identifiable. What we do know is that when you get a whole lot of cattle with calves close to a watershed, calves are known to excrete high quantities of Crypto which are viable and alive in their first few months of life. They all get the squitters, and they excrete a lot of it, and there was a clear association in that outbreak.

[1125]

I don't know all the details of Cranbrook, but I know they've put this fence around it. They've continued their chlorination, they're monitoring for bacteria and things, and they certainly haven't had any more outbreaks in the population. So the steps that they've taken seem to have stopped it from happening. There may be still some uncertainty around whether there are some old cysts around and whether they're viable or not. There's a lot of scientific uncertainty around that, when I talk to the experts. We don't really know what it means, because you can find small numbers of these cysts in many water supplies, but we don't necessarily think they're going to cause outbreaks of waterborne illness. It's the live ones that are sort of fresh, coming straight out of these calves, that we're pretty sure will cause outbreaks.

R. Thorpe (Chair): Dr. Peck, we heard earlier from Jim and Bob that they're working through the 26 recommendations. You've talked about working through a list of priority items. We've talked or heard about Walkerton. It was my understanding on Walkerton -- and correct me if I'm wrong here -- that there were a number of problems, but there was also a problem of breakdown in the testing and taking action on the results of those tests.

As we work through the variety of things that other presenters have talked to us about and that you've highlighted are going to be in your report, could you give this committee your views on our system of taking tests, getting results, identifying where there are problems and having a monitoring situation in place that allows for action to take place? Could you share with us your views on that and your comfort level on how it works?

S. Peck: Frankly, I'm very reassured that in B.C. we haven't had the problems of lack of provision to the medical officer of the ongoing monitoring data. Our environmental health officer or medical officer gets copies of all the lab reports on any given drinking water system. So that is not an issue in B.C. as far as I'm concerned. The only time I've heard of it being an issue is if somebody produces a result on a Saturday; then it might not get there till Monday. I think that needs to be thought about.

But I should also mention that bacteriological monitoring is only one. . . . If we're actually getting positive results, you may actually have had an unsafe water supply for several days. If you can imagine: you take the sample, you send it off to the lab, it gets there 24 hours later, and you get the result 48 hours later. So we need to have other means like the adequate maintenance of disinfection to safeguard against these kinds of things happening. If we know that we were carrying chlorine residual to the ends of every system, there would be less need for the bacteriological monitoring.

But in answer to your question, I'm very reassured that we're a lot better here in B.C. than they were in Ontario, where the communications had broken down.

R. Thorpe (Chair): Does anyone else have any questions?

D. Streifel: You mentioned Walkerton a few times in your presentation, doctor. And I'm wondering if. . . . There's ongoing report in here, involved at the table with the provinces in Canada. . . . No, I think it was one of the health or environmental folks. The media reports around Walkerton have focused on the reasons for the communications breakdown. Could you shed some light on that -- whether or not it was a breakdown in the system through underfunding or whether it was just strictly a breakdown in communications between the branches of a water-testing, reporting and health system?

I find it kind of interesting. And maybe the reference to the Friday-night-to-Monday-morning circumstance and the 48 hours. . . . A lot of that's a funding issue, in fact, I would think. Was that one of the major problems in Walkerton, in your opinion? Or do you have the knowledge to speak to that?

[1130]

S. Peck: My knowledge is based mostly on newspapers, but I've talked to Bob Smith, who's had other accounts from

[ Page 1647 ]

the national drinking water committee. From what I heard, the operator was well aware of these positive accounts for some time and suppressed them. They did not provide them to the medical health officer. When the medical health officer found out about them, he seemed to get denial about what they knew. Eventually he sort of said: "This is enough. I'm going to tell the public about this, because there seems to be enough evidence that it is a waterborne illness." So there was a real breakdown in the communications and perhaps a lack of knowledge on behalf of the operator.

I think this is being addressed in B.C. because of the small system operator training program that the Ministry of Health is funding. They will certainly raise awareness of the importance of talking to public health officials when there's any concern and the sort of thing that the public health officials would like to know about. I would imagine that in the hearing in Ontario, we will hear a lot about the adequacy of the training and knowledge of the operators as a result of what I've heard from the Walkerton event.

P. Calendino: Dr. Peck, Rick raised a question of the 200 boil-water advisories that you have issued recently. I'm sure a number of those were caused by forces of nature that you don't have much control over or perhaps by animal excrements that you also don't have much control over. Do you have a breakdown of how many of those boil-water advisories might have been caused by human activity that perhaps could have been prevented if there was enough monitoring being done?

S. Peck: No, at this moment I don't have the data. If Bob Smith can get the staff time, we might be able to do the research to answer Rick's and your question. I would like to include it in our report if we could, but it would involve quite a lot of research time to contact all the health authorities and get them to go through their records and tell us how many orders to correct there are and what the reasons are for these advisories.

R. Thorpe (Chair): Seeing no other questions, thank you very much, Doctor. I appreciate your presentation today. Good luck with your report, and we look forward to seeing a draft too.

Our next presenter is from the North Okanagan water authority: Mike Stamhuis.

M. Stamhuis: Thank you, Mr. Chairman and members of the committee. I'm here to give a perspective from the water purveyors. There are a great number of water purveyors that are looking very closely at the work of this committee in the hopes that it'll have a very positive impact on their ability to do their jobs.

With that, I should give you a bit of background on my own personal history, just so you can understand a little bit of where I'm coming from. My first experience with municipal water systems was up in Prince Rupert. Prince Rupert is one of the eight case studies that were presented and represents probably the ideal setup in terms of water source protection. They're a closed reservoir in a high-quality water system.

Also, while I was up in Prince Rupert. . . . I should mention -- as Dan Miller discussed -- the Queen Charlotte City water project. I did have a major role in coming up with a water and sewer system for the Queen Charlotte City area. From there I went to Campbell River -- again, a very good water quality source. It was a large system of lakes. It's the Campbell Lake-Buttle Lake system. There was a mine at the very top end. However, the lake immediately upstream from our intake was essentially closed off. Logging was very restricted and essentially closed to the public -- a very high quality water source.

Two and a half years ago I moved from Campbell River to Vernon and became the manager of the North Okanagan water authority. On my second day on the job I had a tour of our watershed. After coming from the two jurisdictions where I was municipal engineer, it was like going from day into night. The watershed there is managed by the Ministry of Forests, and there are logging activities, grazing activities and recreational activities, all of which are promoted and encouraged.

[1135]

Now, I've prepared a submission for you that I hope to follow along. Hopefully, it will be useful in outlining where we're coming from and why we see this committee's work as so important.

In April of 1999, when the auditor general released the report on source protection, many of our fellow water purveyors stood up and cheered. We were very, very excited about the fact that this report actually went to the heart of the many problems we face as water purveyors. So we do hope that this committee will work very hard to make sure that the government does everything it can to implement as many of the recommendations as possible and, hopefully, on a timely basis.

I'll give you a little background on the NOWA system. NOWA stands for North Okanagan water authority, which was formerly the Vernon irrigation district. The Vernon irrigation district was started early in the last century. In the late sixties it evolved into a water system that not only served the needs of the irrigation users but also became a domestic water supply. It now serves about 14,000 people -- just under 6,000 households. As such, it is fairly typical of quite a number of the water systems in the interior, ranging from very small improvement districts to many of the larger irrigation districts. The Vernon irrigation district -- now the North Okanagan water authority -- is probably the largest of the irrigation districts and probably one of the half-dozen largest water suppliers in the province in terms of volume of water that we deal with.

The nature of the watershed is such that we have all kinds of water quality problems. Typically, we deal with high turbidities, colour, taste and odour, and trihalomethane generation, and we're vulnerable to bacterial and protozoan contamination. We effectively chlorinate to deal with the bacteria; however, there is no effective treatment in place to deal with any of the other water quality problems.

Now, it would be nice for us to build a filtration plant that would deal with those problems. However, we would have to deal with our irrigation flows, which in the summertime are typically 40 to 50 million gallons per day. A number of years ago an estimate to build a filtration plant to handle those flows was in the order of $65 million to $70 million. We could not justify that with fewer than 6,000 households. As a result, we are very, very dependent on water source protection to try and minimize the remaining problems.

[ Page 1648 ]

[1140]

I'll just quickly go through what a lot of those problems are. With the logging, we have a number of logging roads, and we have harvesting and activities in the riparian areas. Additional sediments will affect turbidity. Now, what we believe is that that turbidity will also affect our chlorine demand. It makes it more difficult for us to maintain residuals at the end of our distribution system, and indirectly we believe that it affects the algae blooms, the taste and odours, and the overall organic loading, which then affects trihalomethane generation.

The grazing activities -- essentially there are two problems. One is that we get large numbers of cattle congregating en masse in the riparian areas, and they do churn up sediments. They turn areas that were originally not sources of sedimentation into sources of sedimentation. The cattle instinctively gravitate to the riparian area, because it's a fairly dry area, for their own drinking needs, and inevitably that's where they drop their feces as well.

There's supposedly an effective cattle management plan for our watershed. This fall, when I did the dam inspections that I do twice a year. . . . We have seven dams, and all of the dam areas for our lakes are supposed to have effective cattle management to keep cows out of there. They were littered with cattle feces throughout each and every one.

Recreation activities may increase the risk of disease transmission through the use of undesignated campsites. And the area's very popular. Recreation in our watershed is promoted by the Ministry of Forests. We have a lot of vandalism, which is probably the most serious problem, in that it creates turbidity problems. It stirs up the sediments, which could be linked to algae blooms. We also have the campsites where we do have the facilities. They're not necessarily secure, so we do have potential for contamination migrating into the lakes.

In the back of the presentation there's a number of photographs. I could perhaps just refer very quickly to those -- give you a bit of perspective. Go to the appendix on page 1. You see a campsite. Essentially campsites are in fairly high demand in the summer. A number of them are unregulated campsites, so there are no facilities, and we have no control over the activities of people right in the watershed. Again, they're always adjacent to the lakes. The outhouses are not sealed, so they are a potential for contamination. One of the dilemmas we have is: do we put an outhouse there and encourage people to use the area, or do we not -- discourage people from using it? But at the same time, people will still use it without proper facilities. So it's a dilemma that we face.

We do get a lot of people going into areas and mud-bogging. They stir up sediments. They also tend to break down fences and open up areas for cattle to migrate into, areas where we don't want them. There are a number of pictures just showing evidence of that on pages 2 and 3.

The other thing is that these lakes are quite small lakes, so we don't have the large volume of water that would help mitigate these impacts. So essentially, if there is an impact, we're going to notice it in our water system.

On page 4 you see some pictures of vehicles actually right in the creeks. The picture on the bottom of page 4 was taken a short while ago. The fencing was put up in the spring, and it's already been damaged and is partly down only a few months later. We suspect that that fencing won't be there by the end of next summer.

[1145]

We have a lot of cattle. Unfortunately, I don't have pictures that are as good as I'd like to see. Again, we had to chase a number of cattle out from our dam at Aberdeen this year when we were up there. You see some pictures of the cattle droppings on King Edward Lake. Again, all of our dams were covered with these droppings that will all be under water when the lake levels go back up next spring.

The last picture on page 6 shows that the Ministry of Forests does make efforts to control the cattle movements. We don't want to appear totally unbiased here, and we do want to show that while there are efforts, we still don't believe that they're as effective as they should be.

Page 7 shows a couple of pictures of the main lakes on the Duteau watershed, and you see the forestry clearcuts that go right up to the edge of the lake. While we are making efforts to remove the forest activity from the lake, we haven't been anywhere near as successful as we'd like.

Page 8 just shows some of the types of sediment generation you see from forestry activities.

Hopefully, you see a little bit of some of the problems that we as a fairly typical water purveyor, in the sense that our watershed is not at all unique in our area. . . . Land use decisions are essentially made by the Ministry of Forests, and while we are invited to the table as they review the cutting plans, our requests are sometimes listened to but are very often ignored.

The Ministry of Environment does sit at the table. However, they are plagued with all kinds of staffing problems. I think, in the words of our chair, Ted Osborne, the staff in the Ministry of Environment in our area has just been eviscerated. So we're dealing with new people who don't know the watershed, and they have a great number of priorities and very few resources and little time to really effectively do their jobs. They also have a bias in favour of habitat rather than drinking water per se, and although the two are related, they are sometimes different. So they often rely on us to provide them with information.

We are somewhat unique in that we have a full-time water quality technician who does sit and work in this area. Many of the smaller water purveyors do not have that position or that role.

We've had a lot of difficulties in the area of grazing, grazing management. We've had our requests in terms of activities to be taken frequently ignored. For example, cutblocks are sometimes created in the middle of cattle management areas. We've had a few examples where we've had a cow catcher in the middle, so the cutblock has now opened a path for the cow around it. We've said: "Well, leave some trees to prevent the cattle." The problem that occurs is that they say: "No, we can't do that. The trees are too valuable. We'll build a fence." But invariably the fence ends up being a maintenance problem, and the cattle get around and through the fencing over time.

We've approached the ministry and asked: "Where you have a grazing tenure that the rancher does not renew, would you please consider taking it out of the system, perhaps for a period of five years, so that we can see if that's going to improve our problem with the generation of fecal coliforms in that area?" We do have a significant fecal coliform problem.

[ Page 1649 ]

The response from the ministry has been: "No, there are other ranchers who want to fill that tenure." Where we're trying to make reasonable requests that we don't believe are putting undue hardship on a significant user, we find even those are not being followed through.

[1150]

We believe that domestic water quality is not a priority of the Ministry of Forests, and they do control our watershed. An example of that is. . . . This document is part of the Forest Practices Code of British Columbia. What it is: it's a "Lake Classification and Lakeshore Management Guidebook -- Kamloops Forest Region." In here, the criteria for deciding what the attributes of a lake are, are recreation, visual landscape. Then there are a series of eight criteria for fisheries and then wildlife biodiversity values. There's nothing about water quality protection.

We after considerable effort managed to get a number of our lakes changed from a C classification to a B classification. We've asked for an A classification, where we would have a 200-metre lakeshore management zone around our lakes. But our requests have fallen on deaf ears.

So you see it's with a great deal of frustration and a great deal of excitement that we finally see this report from the auditor general saying that we need to be doing a better job of our water source protection. What I'd like to do is just comment on the various recommendations of the auditor general and where we see what's happened to date in the reports that have been generated.

The first one is to ensure the integrated management process, where the suppliers are meaningfully represented, and decisions are based on sufficient, reliable information and handed off to officials with authority to act on them. We think that's an excellent recommendation, although the suppliers will not be meaningfully represented unless they have some clout.

That's why the second recommendation that the auditor general has provided -- to have a lead agency that does represent our interests -- is of such importance. This committee received a drinking water action plan from the interagency directors' committee. We believe that the action plan does not speak specifically to the recommendations -- or as specifically as we'd like -- in terms of giving water purveyors a meaningful say.

Drinking water regulations, we think, are a great idea. We already have drinking water regulations and guidelines, and we think the Ministry of Health does a very good job in managing them. In our area they're excellent to work with. They use a risk-based approach, which is very reasonable. However, we're talking about from the intake point downstream to the tap. We're not talking about the source. So it really has nothing to do with source protection.

Management of non-point-source pollution again is great. But we really don't know what those details are. Is management of non-point-source pollution going to deal with issues like logging, grazing and recreation use? And is it reasonable to expect some real results from that?

Groundwater inventory and protection. Absolutely, the inventory is a great idea, but it is only a first step. We will need some regulations, because we believe that in terms of regulations with groundwater it's basically a free-for-all in terms of access to our aquifers.

Pollution prevention programs are great, but there need to be specifics.

Coordination of watershed stewardship and planning has been done at the local level for years.

Water education and public awareness -- all levels of the provincial government, through the Ministry of Environment and Ministry of Health, and the Water and Waste Association and local water purveyors have been very active in this for decades. It's nothing new. So we don't see that much in the action plan that's really going to change the picture for us.

[1155]

We also note that the ministry reps have indicated that the LRMP process will have a positive impact on how our watersheds are managed. Our perspective is that while the LRMP process has a lot of values, I think its value in terms of watershed protection and changes is greatly overestimated. I've listed the reasons why we believe that.

The process has been very, very long and time-consuming. It has demanded a lot of energy on the parts of a whole number of stakeholders and sectors. Special interest groups have had the time and energy, whereas a lot of the industry groups -- the water purveyors, the logging companies, the mining interests -- don't have the ability necessarily to provide the staff, to release them for the amount of time that this whole process had demanded, and it's been very hard on them. The North Okanagan water authority has had a staff member sitting in as the Water Supply Association representative at the LRMP meetings. It's been very, very frustrating with the amount of staff and the amount of time it takes, because there are so many groups involved that all want to have a say. And in many areas the process has been dominated by those groups.

The language in the plans that have been generated has generally been so very, very ambiguous and watered down in so many areas that it's really not very meaningful in terms of what kind of changes it will represent. That tends to be a necessary part of the process, if you want to achieve consensus from all these groups with differing objectives. There hasn't really been a sensitivity review to determine whether the recommendations that have come out are practical and implementable. Then for the ones that may be practical, there is not now any mechanism in place to actually see that they get implemented. That maybe still needs to be done, but it's still not there, from what we can tell.

And the final thing in our area: the Ministry of Health did not take part in the process, and they're being seen as a key player in this whole program.

The second recommendation, designate a lead agency -- this, we believe, is probably the most important of all of the recommendations. Of the 26 recommendations, if only one is adopted and it's this one, we will see a significant improvement in our ability to do our jobs, because a great number of the other recommendations will likely follow from that lead agency. The information that you've heard today from the Ministry of Environment and the directors' committee leaves me with just two words, and those are "utter dismay." This we see as by far the most important recommendation in the whole report.

The recommendation on accountability reporting -- we believe it's valuable. But we hope that the provincial health

[ Page 1650 ]

officer will concentrate very much on source protection, because that's one area where the Ministry of Health is not well involved. We believe that the Ministry of Health does an excellent job in helping us make sure our water supply is risk-free from our intake to the tap, but they are not involved in helping us in any way in keeping our source-water protected.

[1200]

The drinking water guidelines -- I think I've talked about those before.

Rights of the drinking water suppliers. It would be interesting to know if we have any other rights than to just take water. Our understanding of the Water Act is that we have a right to store water and to use it and to take it. We have no rights in terms of its quality or its protection. So if there is research being done that tells us different, we are very anxious to see it and to hear it.

Forest Practices Code. We believe that in our area a fair bit of good work is being done in terms of terrain assessments and risk assessments in the areas. However, they need to be followed up. There needs to be enough expertise on the Forests ministry staff to challenge what the consultants for the forest companies are doing. There is a total reliance on the forest company to provide that expertise, and there are no checks or balances. And believe me, the water purveyors really do not have that expertise.

The recommendations regarding on-site inspection, I think, are very, very important. One of the key areas is that there really aren't the resources on the part of the Ministry of Environment, Ministry of Forests and the water purveyors to do the kind of inspection to follow up, so that the cutting plans or the grazing plans that the practices talked about are actually carried out or to identify the problems on a timely basis. It's just not happening. And I think perhaps a lead agency would help in that area.

As far as livestock grazing goes, you've been advised that the range management framework of the Forest Practices Code is sufficient to prevent or minimize the introduction of parasites by cattle and to deal with problems as they arise. We don't believe that that's the case, because we don't believe that they are being effectively followed up through inspection. And we don't believe that the water purveyors' voices are being heard in managing the cattle in our area, in our watersheds. So we agree with the separation of enforcement provisions that the auditor general has recommended, and we suspect that the lead agency would assist us in doing that.

Recreation. We recommend that the Forests ministry discourage rather than encourage recreational use of watershed lakes. That doesn't mean we are saying by any means that the lake should be closed. But we'd like to see a change in attitude in terms of passively discouraging rather than actively encouraging the activities. One of the problems is that the recreational users often render the grazing controls ineffective. We might have fairly good controls for grazing if that was the only activity in the area, but when you couple it with other activities, they don't work anymore.

Agriculture does not really affect the NOWA system per se, as we just have grazing activities in our source. However, it will affect the Kalamalka Lake source, which is a source for the city of Vernon and ultimately, with the restructuring of NOWA, will be part of NOWA's responsibility. So we concur with the recommendations in the auditor general's report. And we believe that there need to be adequate resources given to the ministries to ensure compliance with the regulations.

We've talked about groundwater already, briefly. One of our concerns is with the lack of regulations for groundwater. There are areas where there's a limited amount of groundwater available. Who has access to it? Is it the first people who drill holes? Well, right now anybody who wants it can go in and drill as much as they want. If they reduce the supply to someone else, well, that's tough, even if those other parties have built a significant infrastructure, based on a reliable supply.

[1205]

Who controls activities that affect the quality of the groundwater? NOWA has a couple of wells, one of which we've had to start chlorinating this year, because we're getting coliform counts. We have no control over the land use around the wells. Now again, part of that is also a local government responsibility. Local government does have a lot of say in land use in built-up areas. So part of that is the responsibility of local government.

But there really are no regulations anywhere. It's not reasonable for the province to start to enact regulations now. They're suggesting that we need to do an inventory, we need to do the mapping. And we're saying: "Yes, that's right, but we think that is a first step to then providing some effective regulations."

Small water systems -- I think many of them are really voices in the wilderness. A lot of water systems are managed by volunteers. There may be 20 or 30 households, and one of the residents is now tasked with looking after the water system. That might change every six months or every couple of years. The program of trying to educate the small system operators, I think, is a good one. However, with many of these small water systems, they don't have the ability financially to attend these, and in many cases they don't have the inclination. They're saying: "Well, that's well beyond our level of expertise. So why should we go?" There's really nothing there that would protect the small water system operators, and so they have to be considered. Water source protection, in many areas, is their only protection.

In summary, we believe that the report has provided a very accurate assessment of the problems that water purveyors face in protecting their water sources and their customers' health. The recommendations are clear, I think they're very specific, and we believe they are very appropriate.

They call for some changes in the mandates of the ministries. I believe that the Ministry of Environment, Lands and Parks has a lot of expertise, but I believe that they do not have the resources to take this on and do it effectively. That may be why they are not recommending a lead agency. I believe there need to be more resources to do this.

So we hope that your committee has a bit of a better perspective on where the water purveyors -- or some water purveyors -- are coming from and why we believe that you will be doing a great service in ensuring that these recommendations are looked at very hard and are implemented as soon as possible.

R. Thorpe (Chair): Thanks, Mike. Just a couple of questions, and then I'll let the committee members ask some ques-

[ Page 1651 ]

tions. You talk about water purveyors. Have you consulted with other water organizations in preparing your presentation to us? If so, how many, because you referred several times to. . . ?

M. Stamhuis: Good question. I'm speaking in addition on behalf of NOWA and also as a member of the Water Supply Association, which represents about 40 or 50 water purveyors, mostly in the interior of B.C.

R. Thorpe (Chair): Have you or that organization had very much involvement to date with the directors' committee?

M. Stamhuis: No, we haven't.

R. Thorpe (Chair): Do you think that would be useful?

M. Stamhuis: Probably. We would be quite happy to make our submissions to the committee.

J. Weisgerber: My question was along a similar line. Is there a provincial organization of water purveyors of which you might be a member?

M. Stamhuis: There are a couple of organizations. There is a B.C. Water and Waste Association, and then there's the Water Supply Association. There is a similar association of improvement districts, I believe, on Vancouver Island that's somewhat similar to the Water Supply Association.

J. Weisgerber: Okay. I raise it because obviously your opinions are valuable, and it's always interesting to know how large a constituency you are able to represent and how large a constituency you're able to speak for. I recognize the limitations that you might have.

M. Stamhuis: I think that's quite correct. I can't say I speak for all water purveyors in the province or all municipalities. But we do speak for a significant number in the interior.

[1210]

J. Weisgerber: Just to finish up, do you think that there's perhaps a need for some broader provincial organization to provide a source of response, a way of communicating not necessarily with this committee but with provincial agencies on these issues?

M. Stamhuis: That's a very difficult question. The B.C. Water and Waste Association is a fairly effective voice on a number of issues. The issue of water source protection perhaps varies significantly in importance, depending on what your own water system status is. There are systems that have very effective treatment; they already have a multi-barrier approach. So this report will not have a huge impact on them. However, there are other systems where it will have a huge impact. So it varies. B.C. Water and Waste speaks for all water purveyors, so it's very difficult for them to say: "You must do this." We believe that they have made some representation already, however, in support in general of the auditor general's report. We're a member of the B.C. Water and Waste Association.

In terms of those water purveyors where this report hits the nail on the head, you would find that sentiment unanimous in the Water Supply Association.

D. Miller (Deputy Chair): Maybe you could just give me a bit of history here. I seem to recall that I dealt with this a little bit in 1992. I get the sense, reading your report or listening to you, that we're dealing with, I'll call it, a historical problem. I'm kind of curious. How long has this general situation existed? It's almost ten that I know of. And perhaps the origins of the Vernon irrigation district. . . . It sounds to me or at least has connotations that it was established with an agricultural focus. Am I correct? Maybe you could just give me a little bit of history here.

M. Stamhuis: I think that's quite right: it is a historical problem. The Vernon irrigation district started almost a hundred years ago, before 1920. The difficulty that we are faced with is that in the early part of the last century all kinds of activities developed in the watersheds throughout the Okanagan, and in the late sixties and early seventies a number of them, especially with ARDA grants, converted to domestic water systems because there were problems with other sources. So here were these large sources of water that were turned into potable systems. So the problems we have are to a large degree inherited problems, and they are historical.

Perhaps I should comment that one of the frustrations in dealing with the Ministry of Forests is the refusal to change past practices, because historically these parties have had access. They don't want to change that access, even though it's quite clear that it's got an impact on our ability to protect our watershed.

D. Miller (Deputy Chair): Has there ever been an attempt, from an interagency point of view, to develop a fairly comprehensive watershed management plan? It seems to me, given the competing interests here and the historical issues, that that might not necessarily be an easy task, but one that I think might be the way to go.

[1215]

M. Stamhuis: Well, I think that the LRMP process was a partial attempt at that, although the LRMP process was much broader than just community watershed protection. One of the problems with the LRMP process, as I said, is that there are so many interests that all of the conclusions were very much watered down. I think perhaps the process would be valuable. The question is: who's at the table? And how much clout does each party have? That's an interesting. . . . I think you have to look at the different levels of clout that the various parties carry to see whether there's going to be any change.

D. Miller (Deputy Chair): Finally, you're fairly critical of some agencies -- Ministry of Forests, for example. And I think you say that they don't have expertise in hydrology, soils, etc. And I just note that that's not the case. I'm not trying to sort of take their place in this discussion. But it would be fair to say that if we asked representatives of those agencies to attend the committee, they might have a different perspective, Mike. I mean, you'll appreciate. . . .

M. Stamhuis: Okay, I think that's a fair comment. Basically they don't typically have the expertise at the regional or district level in terms of the number of people with those various levels of expertise that deal with the plans. I believe that within the ministry, quite likely, there is that expertise. But generally there's a reliance on outside consultants for that expertise.

[ Page 1652 ]

D. Miller (Deputy Chair): So, really, I think you're. . . . If I can sum it up, not putting words in your mouth, there is clearly a level of frustration in this area that goes back a long, long time. You're looking for some way to break through this. And I think you're suggesting the lead agency, although I do note that you suggest that the Ministry of Health. . . . Or it seems to recognize in your report that the separation with respect to the Ministry of Health's monitoring function is an important one and ought to be maintained. You're really looking for some leadership in terms of land use planning or planning for this watershed, to try to resolve the competing interests that have existed there and still exist.

M. Stamhuis: I think that is absolutely right. In terms of from the intake to the tap, the Ministry of Health does a good job. I don't believe that they have the expertise or the resources to take on water source protection. That's my own personal opinion.

D. Miller (Deputy Chair): But you acknowledge their vital role in terms of the presentation that we've just received.

M. Stamhuis: Absolutely.

D. Miller (Deputy Chair): I just make that observation, Mr. Chairman. Clearly I think. . . . Again, you may have more knowledge than me of this particular circumstance. You come from that region, I think. It's a long and complicated one. And the committee can dig deeper, I suspect. We could ask people from other ministries and agencies to come forward and give us their perspective. But it seems clear to me that there's an overall plan required here, and while it might not be easy, I think that's a solution.

R. Thorpe (Chair): Did the auditor general's office or staff have any comments or questions here?

K. Lane: Perhaps I could comment. One of the land use plan mechanisms we looked at in our report was a mechanism called an IWMP, an integrated watershed management plan. These were developed originally, I believe, in the 1970s, and I think about 20 have got to some degree of completion. That was a tool that -- I believe the Ministry of Forests was the lead participant on that -- addressed this scale of land use planning. The ones we looked at that had got some reasonable way along seemed quite effective.

But they were the cause of one of our subrecommendations, which was the problem of handing off the recommendations of this committee -- this plan -- to someone who had the authority to act upon it. But there have been at least 20 years of attempts by both Environment and Forests to develop this kind of integrated management plan for watersheds of the scale we're talking about here.

B. Smith: If I just may add one point to what Mike had said -- not add to it but maybe respond to it. . . . Not the source-water issue -- I think Jim would have liked to have been here to respond to that, but as you appreciate, he's out. The small waterworks operators, I think -- as you've mentioned, Mike -- are critical. I know that Dr. Peck indicated that we put $50,000 into a program, and I'd like to expand on that a little bit, because the BCWWA are the key components in that.

[1220]

What we have contracted with the BCWWA is to develop a small waterworks course for those systems, like 15 to 300 connections, and to take that course to the regions. As Mike indicated, they don't have the financial resources to travel to Vancouver to take that course. They're prepared to put on that course for as little as seven people, and we would subsidize the small waterworks operators in attending that course. We would fund; part of that $50,000 would go towards paying for their cost of registration at that course. I've talked to the first nations people, and we want to extend that offer to them also. We think that would also be of benefit. We hope that would help cover some of Mike's concerns relative to the small waterworks operators. We think it's important.

R. Thorpe (Chair): When would you see that starting, Bob?

B. Smith: Well, Kevin Ramsay, who's the president of the BCWWA, will be in Victoria tomorrow. He's presenting a talk to the chief environmental health officers, and then he's meeting with the water issues committee. I will be talking to Kevin in the evening in a location of his choice. The schedule looks like. . . .

We're hoping to put it on a pilot project -- one in the Kootenays, which we think is a prime area, and one in the lower mainland, probably in Mr. Streifel's area. It's a pilot project to get feedback from the small waterworks to make sure that we are really focusing on them. We're not going to focus on Vancouver, who have the staff. We're talking about the laypeople who are trying to manage these systems.

We also have, as part of our business plan. . . . As you've noticed, we have developed this CD-ROM, so that access to computers is quite ready. They will be able to take that; we will be giving them a copy of that at the same time. We're looking at piloting it, hopefully, early or late winter -- maybe December-January, depending. They're really working diligently at developing this course. We've set up a steering committee, which I decided I'd chair, since the ministry is putting the money in. We will bring in a small waterworks operator and a utilities. . .from the Ministry of Environment and a public health engineer and those kinds of people to make sure that we have the material they really need.

R. Thorpe (Chair): So when we meet in April, you'll be able to tell us how many of those you've conducted. That'll be fantastic.

B. Smith: BCWWA hopes to put on 20 to 50 of these next year.

R. Thorpe (Chair): Good. There's just one point I'd like all committee members to know. As a result of Mike's report here, which certainly raised some eyebrows and no doubt will get some attention as we move forward here, I did receive a note from Jim. Unfortunately, he had a previous commitment. He would like to study your report, Mike, and make comment to the committee, which we would ask him to do as quickly as he possibly could. In addition, he writes that the directors' committee would like to meet with you to discuss your concerns and see how you can work together. I believe that is a positive step here today.

Does anyone else have any other comments at this point in time?

[ Page 1653 ]

On behalf of the committee, then, I'd like to thank everyone for attending today. It was very, very informative. It's good to have a discussion on these issues. As I said earlier to Dan, everyone does share a common goal here, and that's making sure that we have safe drinking water in British Columbia for all British Columbians. So thank you, everyone, for attending. The committee will reconvene at 1:15 p.m. Is that fine?

D. Miller (Deputy Chair): Mr. Chairman, I just want to tell Mike that I'll be in Prince Rupert Thursday morning, and I'll have a drink of water.

J. Weisgerber: Mr. Chairman, if it were appropriate, there is one motion that I would like to make with respect to water quality, which we can do at 12:15 or 1:15 p.m. It's at your pleasure. I just didn't want to adjourn this section without it.

R. Thorpe (Chair): We can do it now, if you'd like.

J. Weisgerber: Yeah. In light of the Pine River pipeline break, I move that we ask the Ministry of Energy and Mines to initiate a comprehensive review of pipeline safety, with particular emphasis on watershed crossings.

R. Thorpe (Chair): We cannot instruct the ministries; we can only make recommendations as a committee, Jack.

J. Weisgerber: Yes, okay; I'm easy.

D. Miller (Deputy Chair): Mr. Chairman, I raised this issue earlier, in terms of a broader scope. I think there's some merit to the committee making a recommendation. I think this motion is a little bit limited. I don't disagree with the intent of the mover, but maybe over lunch we could think about it. If there's a way we can add or modify a little bit. . . . I don't think it's inconsistent with some of the remarks I made earlier.

R. Thorpe (Chair): Yes, we'll just adjourn the motion, but we won't close this section off, and we'll resume after lunch. Adjourn debate. Thanks.

The committee recessed from 12:25 p.m. to 1:40 p.m.

[R. Thorpe in the chair.]

R. Thorpe (Chair): So we'll resume. Dan, I don't know if you and Jack had the opportunity to discuss the motion on the recommendation that you talked about.

D. Miller (Deputy Chair): We have, Mr. Chairman, and I haven't thought of any specific wording. Perhaps, Jack, you may want to just repeat the. . . .

J. Weisgerber: What I suggested was that in light of the Pine River break, we encourage the Ministry of Energy and Mines to initiate a comprehensive review of pipeline safety with particular emphasis on watershed crossings.

D. Miller (Deputy Chair): As I said, Mr. Chairman, my view is that it is a pan-Canadian issue and one that all regulators and the industry, I think, ought to be concerned about. And perhaps just a small amendment, that the Ministry of Energy and Mines and the industry -- I'll use the term "industry" to denote the pipeline industry or the oil and gas sector generally -- consider what is required to undertake a review of pipeline safety, something along those lines. . . .

R. Thorpe (Chair): Who can advise this committee?

D. Miller (Deputy Chair): Maybe that might be a first cut. In other words, that kind of motion, and have the ministry come back to the committee.

J. Weisgerber: I just want to get. . . .

D. Miller (Deputy Chair): Yeah, just to get the ball rolling. And the ministry may come back with more specifics. We could ask them to do that. Do you think you could fashion a motion out of that? I apologize. I've been on the telephone for the last half-hour.

R. Thorpe (Chair): That was an amendment to the motion that was on the floor -- correct?

D. Miller (Deputy Chair): Yeah, friendly -- if it's acceptable to the mover.

[1345]

J. Weisgerber: Sure. Mr. Chairman, we have an amended motion or a new motion, however you'd. . . .

R. Thorpe (Chair): An amended motion.

J. Weisgerber: It's an amended motion that the Minister of Energy and Mines, in conjunction with the oil and gas industry, investigate the feasibility of conducting a comprehensive review of pipeline safety and that we invite the ministry to appear before this committee for further discussions.

Motion approved unanimously.

R. Thorpe (Chair): Okay, now we'll move on to the consideration of the 1999-2000 annual report of the auditor general of British Columbia, "Auditing in the Public Interest."

W. Strelioff: Thank you very much, Chair and members. I think all of you have a copy of the report. It's this colour.

J. Weisgerber: They're all that colour.

W. Strelioff: Do we all have a copy?

J. Weisgerber: I said they're all that colour.

W. Strelioff: They're all that colour for each year. [Laughter.]

Well, certainly I am pleased to have the opportunity to discuss the work of our office with you today. As you no doubt appreciate, the work that we carried out in '99-2000 reflects the work, thinking and priorities of my predecessor, Mr. George Morfitt. I certainly acknowledge his significant contribution and accomplishments during his 12 years as the auditor general for the province of British Columbia. Deliver-

[ Page 1654 ]

ing this report is one of the first official acts that I had as the new auditor general, but it really does reflect the work of Mr. Morfitt.

I'm certainly not able to speak to the contents of the report in the same detail that George would be able to, but certainly we'll be here to answer your questions. I have with me Susan Jennings and Fred Heard. Susan leads our business planning and performance reporting initiatives in our office, and Fred Heard manages our corporate services group. Fred and Susan are certainly here to answer more specific questions, as they helped prepare the annual report.

I would like to draw to your attention pages 4 and 5. On those pages we do describe three significant strategic issues facing the office. The first issue relates to providing sufficient audit coverage for the Legislative Assembly. That's on pages 4 and 5; there's a summary of those issues.

The first issue relates to providing sufficient audit coverage for you. For a number of years, in our corporate plans and our annual reports we have reported that we are less able, increasingly, to provide adequate audit coverage. Overall, the level of resources has meant that many sectors and key systems of government have not received much attention from our office. In general, it was one of the surprises that I've had as the new auditor general, given my past experience: the sort of lack of audit coverage that our office is able to provide you in looking at key systems and also more presence in the key sectors of government where programs are actually delivered -- the education sector and the health sector and. . . . Those sectors are so important that they do require, in my view, more scrutiny.

[1350]

A second key issue facing the office is managing our own human resources. If you remember, about a year ago my predecessor delivered a report entitled "Maintaining Human Capital in the British Columbia Public Service." In that report he noted that the capacity of government organizations to renew themselves so there's succession planning and to maintain services at a level the public expects had come increasingly under pressure. He also noted that the B.C. public service will need to manage more effectively than ever the most valuable asset it has, which is the accumulated skills, knowledge, experience and relationships built up by its workers -- its human capital. My office faces the same challenges as the rest of the B.C. public service.

The third issue relates to updating the Auditor General Act. The current act was enacted in 1976, and except for some minor amendments in '97 and earlier this year, it remains in substantially the same form today as it was in 1976. Much has happened in the world of public sector accounting and auditing during the last 24 years, and the developments reflect a need to do an updating of the Auditor General Act.

In the first few months of my tenure -- I've now been here just over six months, actually -- I have taken the opportunity to look at each of these three strategic issues: the extent of our coverage and the importance of managing our own human resources, as well as updating the act. I do support the general intent of each of those issues.

In addition, you as legislators have passed the Budget Transparency and Accountability Act. That act is a very important step in terms of the future management and accountability practices of the government of the day, a very important step forward. It sets out explicit requirements for an overall government strategic plan as well as individual ministry and government organizational performance plans and reports -- very important steps forward. I look forward to seeing the government overall strategic plan, as it should set out the overall government priorities and identify specific objectives and expected results. The ministry and government organizations' plans drill down a little bit deeper and do the same.

The act also requires government ministries and government organizations to report annually comparing what they said they were going to do to what actually happened. There are also important disclosure requirements for major capital projects, setting out specific project objectives, costs and benefits, and the risks associated with those costs and benefits -- all very important steps forward, all with new deadlines. Of course, all the deadlines are tighter than before, putting lots of pressure on my colleague's office, Mr. van Iersel, as well as our office to make sure that we can support the intentions that you've put in place in legislation.

It's going to be an interesting challenge for the future. You've put a lot of good work on the table, and now it's up to a lot of us to make sure that it is carried forward. It does represent a tremendous advance in providing public accountability information, and it's certainly one that I welcome.

Over time I intend to provide the assembly with independent assurances on the reliability and completeness of the performance information that is moving forward, just like we do with financial statements. That's going to take time to move forward, because it is a complex issue -- but a needed initiative.

So, faced with many issues and challenges, I have begun to take several actions within my office, actions that I think will help serve you better. I am beginning to restructure our office along a sectoral line approach. This will permit the office to focus more directly on some key significant areas of government such as health, education, natural resources and finance.

[1355]

Moving to a sectoral organization structure will also support recommendations made some time ago by the Public Accounts Committee and reiterated by the Enns committee, and that is to establish and use sectoral standing committees to review the performance plans and reports of various sectors of government. We're organizing ourselves so that we support that type of initiative and provide a different focus or a more specific focus to some of our work. We are combining the resources of what's called our financial unit, our performance unit and our conduct of business audit groups within each of the key sectors of government. The implementation of this new organizational structure has begun. It will be substantially in place, certainly, by the end of the year.

In that context we are currently finalizing a new direction for the office, a strategic plan that, in some cases, reaffirms our existing approaches and, in other cases, will set out a slightly changed direction for the office in terms of its goals and objectives and strategies for achieving our goals and objectives, as well as the specific actions that we're going to put in place to support our strategies. We are also bringing to life that strategic plan with the preparation of a new business plan for the office, which of course addresses some of the strategic issues that our office faces, as well as how we intend to address those issues.

[ Page 1655 ]

It is my intention to provide this new business plan to your committee early in the next year, and I ask that you discuss the proposals and provide us advice and also lend your support to our proposals. The strategic and business planning processes that we have put in place will, I think, help us serve you as legislators. We are evaluating the mix of products that we deliver. As I said, we are going to focus some of our attention on the key sectors of government: health, education, finance, natural resources.

Over the past year we have also been examining, as I think many of you know, our role with respect to environmental audits and examining the degree to which our system of government embraces sustainability concepts. The safe drinking water examination and review that we had this morning is an example of work that we've done in the past. If an environmental auditor is to be created, we have recommended that the federal model for an environmental commissioner would be a good model, and we continue to support that approach.

The extent to which we examine, in the future, risks facing all facets of government will be a key issue. As you know, most of what government does isn't done in ministries. It's done in community-based organizations, school districts, health institutions and a wide array of public bodies. Our approach to examining the practices, the management and the accountability practices of these many organizations will be a key challenge for the future.

In addition, we will be assessing or reassessing how the office can leverage its work or capacity through the use of public accounting firms and other professionals. We do come in contact with many public accounting firms, and we do work with them and through them to carry out our work for you.

We're also developing a comprehensive human resource management plan that will allow us to make sure we manage our recruitment, our professional development and individual career planning, as well as succession planning, more effectively -- making sure that we walk the talk; that our values are adhered to; that we implement in our own office what we recommend for others; that we continually monitor the state of our own working environment -- our corporate culture surveys, working engagement surveys -- to make sure that we have a healthy organization; and that where we need to address issues, we actually address those issues.

In the future we will be asking the assembly -- and we have in the past -- to review the mandate of our office. We believe that new revisions to the Auditor General Act are needed to do things like reaffirm that the auditor general is responsible to the Legislative Assembly as a whole and not to the government of the day, to make sure that there is clear direction for the auditor general about the scope of our work that the assembly wishes to be carried out, to confirm the range of government organizations that the assembly intends to be subject to audits by the auditor general, to ensure that our office has the appropriate degree of independence from the government of the day in the particular areas of personnel and financial management, and also to make sure that what is asked of other organizations is required of our office -- that we are accountable for our performance and the financial management of our office in the same way we advocate for other organizations that are publicly funded.

[1400]

I do ask the committee to review our proposed legislative changes in the near future. We have provided you copies of our proposals. And I ask that you discuss those changes with your colleagues. Certainly from my perspective -- and I think I share that perspective with you -- a strong, independent office accountable directly to the assembly is an important ingredient to public confidence in our system of government. I think several key changes and a general modernization of the Auditor General Act are required to ensure that our system of government is well positioned for the future.

So in summary, we do face significant challenges in terms of our ability to serve you. I ask that you support the work of our office, and I look forward to future discussions on our next year's business plan and our proposed legislative revisions. This concludes my opening comments, and I'm certainly here to answer your questions.

J. Weisgerber: I continue to be interested in movement toward auditing funded agencies of government. And I think at the head of that list have to be the various health care providers around the province. Public confidence in our health care system is at a low point. Enormous amounts of public money are spent on our health care system, some 40 percent of the budget. And it seems to me that there is a clear lack of standards of accountability and perhaps questions about the effectiveness of the way that money is spent. It's been my hope that the auditor general would move in the direction, rather quickly, of auditing these agencies to make sure that British Columbians are getting value for money -- the best possible value for money -- through their health care spending.

W. Strelioff: I agree. It's one of the reasons that I've moved to reorganizing the office to a sectoral approach. One of the key sectors that I want in place is the health sector. I've asked one of my assistant auditor generals, who's with us today -- Peter Gregory -- to lead this initiative. We will take a look at how best to organize our efforts to focus not only what the Ministry of Health does but what's being done in terms of the delivery of health care services in B.C. That's certainly a significant part of my own personal priorities as the auditor general. I think you'll see that come to life in a more visible way in our business plan that will be provided to you in January or February of this year.

J. Weisgerber: Just as a follow-up, can you tell me what, if any, legislative constraints there are to your ability to audit agencies that are either partially or fully funded by provincial taxpayers?

[1405]

W. Strelioff: The current Auditor General Act does give us sufficient general provisions to examine some of these funded agencies directly. But in our proposed revisions we're asking for a more explicit statement that that's what you want us to do.

When we do go out there and introduce ourselves to officials of health care institutions, they will ask us: "Well, what are you doing here?" And there will be a more explicit recognition and support that is recent or live from the Legislature. In terms of proposals to revise our authorities, our legislation, we want to ask you to confirm in a very explicit way that that's what you want us to do, so that when we do go out to visit health authorities and discuss issues, we don't have to

[ Page 1656 ]

argue for a few days or weeks as to exactly why we're there and have negotiations and discussions before we can get our work done.

J. Weisgerber: Would the need for legislation extend itself to colleges and universities, for example, on the education side? Are there any constraints in that area?

W. Strelioff: It's the same issue. On the other hand, we do examine some universities now, although the history of examining educational institutions. . . . When you start pushing the envelope from "Are your financial statements okay?" to "Where are your performance plans? And how do you explain publicly what you're going to do?" and when you begin to push that envelope, there's usually a push back, saying: "Why are you addressing those kind of issues?" So it's really important to get strong legislative support.

D. Miller (Deputy Chair): A number of questions again, just glancing through the report -- I guess this is somewhat personal. But is it safe to conclude that, given that you note the difficulty of attracting and maintaining highly qualified staff due to the differential in salaries and benefits between government and the private sector, there is some qualified support for the increase to the deputy ministers that I authorized earlier this year?

R. Thorpe (Chair): I'm sure Mr. Kasper will want to comment on that.

D. Miller (Deputy Chair): No. 2: you appear to be advocating that your budget be obtained not through the normal channels that everybody else has to go through -- in other words, Treasury Board -- but that it be a different process. Is there somewhat of a contradiction in that request, given that most of your reports -- we're dealing with fast ferries tomorrow -- are generally critical of the lack of governance of those kinds of things? It just struck me as just somewhat -- perhaps I'm mistaken -- contradictory.

Secondly, the broader question. . . . Jack, just following on your question about CHCs, this goes to, perhaps -- and I don't want to get too philosophical -- your question of approach, I suppose. People generally look, in my view, at the role of the auditor general as being independent of government, not being afraid to criticize, and I think they've fulfilled that very well. But there is also an inference there that they generally conclude that the auditors sort of come up with a plan to fix things.

On the other side, there are those who would argue that an auditing approach -- even a comprehensive auditing approach -- is somewhat narrow in its perspective, in that it fails to ignore the realities of how much money is available. Would the auditor want to comment, for example, on what would be a fair salary for doctors or nurses or health care workers? Would the auditor be prepared to get into the issue of what level or degree of health services ought to be available to every citizen in the country? Ought there to be limits to what's available? Are there limits in terms of financial ability? There are all those kinds of questions.

It seems to me you're wading into some territory here where, in fact, you may not be in much of a position to contribute to solutions. It strikes me that in this country of ours the problems are relatively the same, regardless of provincial jurisdiction. And do you think that the office of the auditor general could somehow, in examining these questions, contribute to the broad overall solution to these issues that bedevil all governments of all political stripes across this land? I think some thought is required about that, because quite frankly it's possible that you could do a disservice to what is, in my view, one of the most important debates in the country.

W. Strelioff: Your first comment related to where our office goes to obtain support for our funding.

D. Miller (Deputy Chair): My first comment was kind of a crack.

W. Strelioff: The first one was something else.

R. Thorpe (Chair): Your first question.

[1410]

W. Strelioff: The first question. Okay.

As you know, in the past our office went to Treasury Board to discuss our financing proposals. So one day we're publicly challenging what the government is doing or reporting, and the next day we go to a key cabinet committee to ask for support for continuing to do that. That's a difficult relationship.

Who we work for is the Legislative Assembly, and so it does make sense that we go to a committee of the Legislative Assembly for advice and direction on our workplan, on the degree to which we're going to be funded and how, and on a sense of future priorities. I think the trend everywhere is to ask legislative committees, all-party committees, to deal more directly with the workplans and funding proposals of their legislative officers.

We're suggesting that this committee, the Public Accounts Committee, be the one that hears our proposals and then recommends to the government of the day what funding levels should be provided to the auditor general's office. That kind of change clearly makes sure that there's no confusion as to who the office of the auditor general works for. We work for the Legislative Assembly. Right now, the idea of going to Treasury Board for support for our workplan and financing does tend to confuse the issue of who the auditor general works for. The auditor general works for the assembly. So an important role of this standing committee could be to hear our proposals and decide whether to support them.

The second question had to do with to what extent an office of the auditor general does get into policy issues. Now, our role is to try to help ensure that government provides you with information about their performance, so that you can decide what best to do with the resources and responsibilities that are provided to government. We're not here to say, "Here's how much a person should get paid," or whether you increase taxes or decrease taxes or allocate more resources to health care or less resources to education; that's your role. Our role is to try to do what we can to make sure that you have the best information available to you to make those kinds of decisions.

This forum, where we do provide information to you about such items as safe drinking water and then be able to question officials responsible for that, helps you decide what

[ Page 1657 ]

changes should be made in the future; that's your role. Our role is just trying to strengthen the management and accountability information that comes to you. We don't have a role in deciding things like salaries for people or to what extent you raise taxes or increase or reduce spending. That's the clear role of legislators.

D. Miller (Deputy Chair): Notwithstanding the. . . . What you describe, I guess, is a conflict. In other words, I suppose what you're saying is that because you're critical of government -- what you appear to be saying, at least, is that you may be critical of government -- government will starve you at Treasury Board -- right?

W. Strelioff: I said that there is an independence issue there in terms of who we work for. When one day you're coming in with a report that perhaps is not a report that government wants to be issued, and the next day you're going in to Treasury Board asking for a resource to do more of the same, it's a tough sell.

D. Miller (Deputy Chair): On the other hand, you note and report that 90 percent of your recommendations to government managers have been accepted. And probably the most dramatic acceptance of an auditor general's report has to do with the way we present the public accounts in this province -- a significant, I think is the term, step towards more meaningful public reporting. So it appears to me, on the evidence, that government has by and large accepted significant recommendations out of your office and implemented them.

[1415]

Nothing would seem to suggest that there's any difficulty at all in terms of appearing before Treasury Board and having your budget given the kind of consideration that everybody else has to go through. I've been there many times myself, and it's not an easy process. It's designed to be rigorous, although it has its occasional failings, I suppose. Anyway, I just don't like the idea that somehow we're going to take the auditor general away from the normal kind of practice and rigour that everyone else has to go through in order to obtain their budgets.

There are limited resources; there are huge demands, as you know, on the public purse. It's always a question of judgment between ministries or between those who are asking for money about how much you can give to each one. In fact, it quite often results, because it's not a perfect world, in offices and ministries receiving far less than they consider adequate for the job, but nonetheless living with what they've received.

I've been in the position of minister where I've had to downsize. It's not easy -- very, very difficult -- telling people they're losing their jobs because we've made some tough decisions that more funds are required, for example, in health care than in another ministry. So I just have some difficulty sort of pulling you out of the stream with respect to that kind of rigour.

W. Strelioff: But just think: I don't work for the government. I don't work for the committee or Treasury Board. I work for the Legislative Assembly.

D. Miller (Deputy Chair): You work for the public. We all do.

W. Strelioff: But in terms of who I take direction from, my direction comes from the assembly. So it seems that if I'm going to be held accountable for carrying out the expectations of the assembly, I should be coming to a committee of the assembly for discussions of the workplan and whatever funding they think is reasonable. Treasury Board handles the resource allocation decisions of the ministries that are accountable to cabinet. My accountabilities are to the Legislative Assembly. So to make sure that there are clearer lines of accountability and responsibility, it seems to make sense to me that my workplans, my business plans and my funding proposals, as well as my annual reports, be reviewed by a committee of the assembly.

D. Miller (Deputy Chair): But surely all expenditures are subject to scrutiny by the assembly -- meaning, yours included.

W. Strelioff: That's correct. But in terms of asking for the business plan of our office to be reviewed by this committee, what I'm asking is for this committee to make a recommendation to the government of the day as to what the assembly thinks should be the resources and directions provided to one of their officers.

D. Miller (Deputy Chair): It's tough to have it both ways.

J. Weisgerber: I guess the conundrum for legislators is that we're quite happy to have vote 1, which is completely removed from Treasury Board, as it should be. I'm not sure that if we as legislators had our Speaker's office and the institutions surrounding our own independence as members, as something that's important to us. . . . We would put a different measure to the auditor general's office, who are in fact an extension of our work, not an extension of the government's work.

D. Miller (Deputy Chair): Well, we could have a debate about that. But governments create the role of auditor general. Governments create the office.

W. Strelioff: The Legislative Assembly does, through the provision of the Auditor General Act.

D. Miller (Deputy Chair): Yeah, but Legislative Assemblies in and of themselves don't; it takes a government initiative to produce a result in the Legislative Assembly. It's saying that it's divorced from government; it's not. It's a part of our system of government, where all parties under our democracy can debate issues, and those that have the majority generally prevail. Some people argue that that's undemocratic, but I don't want to introduce that topic here.

So I just recognize some basic facts about the way our system operates. I think the office has done a remarkable job, quite frankly, over the years. It appears to me that on balance government has treated the results of your work quite seriously. In some cases we're in the forefront in Canada in terms of our public accounting and those kinds of things. So it seems to me that things are working fairly well. I can't see a reason to change it.

S. Orcherton: I'm not going to belabour the point. First, let me thank you for the report. I always find this report

[ Page 1658 ]

particularly interesting. I think I've been on this committee for three years, and it seems to me that at this particular moment in time every year this question is raised to the committee. It was raised by your predecessor, and I see that you're raising it now, around where the auditor general should be placed in terms of making the case for funding for resources that the auditor general's office believes are required to fulfill the mandate.

[1420]

I've said it before, and I'll repeat my comment again: I believe that the process we have in place is one that works and works quite well. You argue, I think, that as an officer of the assembly you're accountable to the assembly; that is true -- as are all members, at the end of the day, and all other officers.

But no one goes through a different process to make the argument for the resources that they need. I wouldn't support the initiative that you're putting forward in that regard. I haven't in the past, and I won't now. I think it's appropriate to go and make the arguments to Treasury Board as others do. And I think that, by and large, the office of the auditor general has been successful in the past in making those arguments, never having all the resources that the office needs, but making the argument to deliver a number -- an extraordinarily large number, actually -- of in-depth and very good reports. Some of those reports have actually prompted governments to bring in legislative changes around budgetary practices, and those kinds of initiatives are continuing to be ongoing.

So I think that while there may be a feeling of friction when these cases are made at Treasury Board, I think the results of the process in the past prove themselves out as positive ones. And I think it's appropriate to carry on with the program and the process that's been in place for some time. I think it does bear fruit at the end of the day. It is tough to make those arguments -- I can appreciate that -- in light of sometimes being critical of some of the ministers and ministries who are on Treasury Board. But the proof really is that the office of the auditor general has indeed achieved positive changes and has resources to be able to do that. And I note that you actually have an excess of revenue over expenses for 2000 on these forms.

In this kind of work there's never enough money to do all of the things that you want to do, whether you're the Minister of Health or the auditor general or the information and privacy commissioner or who you are in government. I think the process is to make the argument as best you can to Treasury Board, and I think that, frankly, the auditor general's office has been markedly successful in that endeavour over the years. I think the process that's in place is one of checks and balances, and I think it works well in the interests of the assembly and in the interests of the people of British Columbia.

W. Strelioff: I'd just like to point out that our office is one of those few offices that actually work directly for the assembly. We're directly working for you, and we're accountable to you. And therefore it seems to make sense to me that our workplans and funding proposals and actual results be reviewed by you.

My previous experience. . . . I went through the gamut. Some of you might know that I was the provincial auditor or auditor general of Saskatchewan for about ten years. Initially it went to Treasury Board, and that was said to be the right place. And then after a lot of discussions we went to what was called the Board of Internal Economy, which was equivalent to the Legislative Assembly Management Committee here. It was an all-party committee. Initially it met in private or in camera. And then they moved that committee's hearings to public meetings to consider the reports and funding proposals of all legislative officers. Now, more recently, that jurisdiction is thinking about moving the more specific performance planning and reporting relationships to the Public Accounts Committee, again moving to ensure that the group the office works for has a direct impact on the work priorities and funding of the office. So I'm continuing to advocate that.

[1425]

R. Thorpe (Chair): It appears you are. Yes, Mr. Calendino?

P. Calendino: I guess if you keep talking, eventually you might persuade me to agree with you, but this time I'm not totally convinced yet. Here is the reason why. We have probably a dozen legislative officers who are all, as you said for yourself, employed by the Legislative Assembly, they are all responsible and accountable to the Legislative Assembly rather than a ministry or this committee. You have a special relationship with this committee, and this is Public Accounts. And most of your work has to do with public accounts. But if we have to do one-off with just your office, how do we deal with all the other legislative officers who also make the same demands that you make or your office makes?

W. Strelioff: Well, one approach could be to charge the Legislative Assembly Management Committee with responsibility for the performance reviews of all legislative officers. Because our office has such a close working relationship with the standing committee, it seems to make sense that if you're going to hold us accountable for performance, you have a stronger link in deciding what we should be doing and the funding that is provided to us. Those are pretty important principles of holding a person accountable for performance -- that you have the authority to influence that performance in terms of funding.

P. Calendino: I guess my difficulty here, and I think Mr. Miller alluded to it, is that you may have a close relationship with this committee, but you don't work for the committee. You work for the Legislative Assembly. So it is difficult to justify a committee making budgetary decisions on your behalf; that's my problem.

W. Strelioff: But the alternative is one. . . . I mean, I'm working for the Legislative Assembly. But a committee of cabinet is now making decisions as to how best I should serve the Legislative Assembly, which doesn't seem to be the right reporting and accountability relationship.

P. Calendino: But they do that for all the other legislative officers as well.

W. Strelioff: That's correct.

P. Calendino: So it's standard practice to do that with all legislative officers.

[ Page 1659 ]

W. Strelioff: Or a more pervasive problem or a more pervasive issue -- that perhaps you should consider a similar kind of approach to other legislative officers that work for the Legislative Assembly.

P. Calendino: So isn't that jumping into policy?

W. Strelioff: In terms of the accountabilities of our office -- I mean, you charge me with that responsibility -- I am advising you or recommending to you to make sure that the accountability relationships that I have to you should be strengthened by me reporting more directly to you in terms of our performance plans and reports.

R. Thorpe (Chair): I have a sense we're not going to reach a consensus here today on this issue. Just to put it into some kind of perspective, though, on the assumption based on your comments earlier, Wayne, about not being able to do some of the things you feel you should be doing, if my assumption is correct, what would you estimate your underfunding to be for the current fiscal year?

W. Strelioff: Right now we're in a strategic planning mode and are beginning to develop a more specific business plan. Until that happens, I'd rather use that document as a way of explaining the future and the challenges that we face, rather than putting a particular number on financing.

R. Thorpe (Chair): Based on the current strategic plan you have now, do you, or does your office, have an estimate of what you believe that you're underfunded?

W. Strelioff: I think in my predecessor's report he indicated that a budget increase of approximately $1 million is needed to bring the office back to an audit coverage level that existed ten, 15 years ago.

[1430]

R. Thorpe (Chair): With respect to updating the Auditor General Act, on page 4, I believe it is, the closing sentence is: "The office is pursuing this issue further." Could you expand on that?

W. Strelioff: Yes. Changes to the Auditor General Act have been under discussion in our office and with various groups within the system of government for pretty well ten years. It's been a long grind to capture attention. More recently we've asked an external advisory group to lend their thinking as to what changes or challenges our office faces and whether a different legislative mandate is required. That advisory group, in its work ending near the end of June of this year, has said it supports the proposals that we have provided to you.

Then in our report to you on the implementation of the Enns committee recommendations, which we provided to you at the end of September, we said that one of the key issues facing government and our office in terms of bring to life the legislative expectations set out in the Budget Transparency and Accountability Act is building the capacity of government officials to actually deliver on performance plans and reports -- to manage in a results sense. There are lots of capacity development issues facing our system of government.

We have also said in that report that similar capacity-building issues exist within our office and mandate issues. We said in the report to you on the implementation of the Enns committee's recommendations that we are developing or recommending changes to our act, so that we can better serve the expectations set out in the Budget Transparency and Accountability Act.

Following the release of that report to you, we then did provide each of you a copy of the proposed legislative changes that we are advocating recommending, then coming into this meeting again, suggesting to you that at some time in the future -- hopefully the near future -- you'll choose to review the report on the Enns committee recommendations as well as our proposals for legislative changes. In terms of the number of initiatives that have been taking place to further move this along, those are some of the items that we're pushing forward -- remembering that changes to the Auditor General Act were first discussed within our office and with others almost ten years ago. Given my opening comments that no significant large-scale change has been made to modernize the Auditor General Act since 1976, really there needs to be a relook at it.

R. Thorpe (Chair): With respect to your comments on the new organization, would it be possible not necessarily to have all the names, but for you to provide, through the Clerk's office, just directionally where you're going? So if committee members are interested -- which I am -- I can just see what the organization is going to look like. You don't have to put names on it, because I realize some of those decisions will be made at the appropriate times. Would it be possible to supply that in the near future?

W. Strelioff: Yes, I will be. This is an important week in our office in terms of locking in that change. I hope, if I can get through this week still sort of intact, that next week I should be able to do something like that.

R. Thorpe (Chair): Do you have some doubt that you're going to get through this week?

W. Strelioff: There are a lot of issues on the table when you go through organizational shifts.

S. Orcherton: I wanted to follow up on what we were talking about earlier, because as I said, it's been brought forward at least three times in my participation on this committee. It's one that I still need some clarification on. Maybe the Clerk can help me with a question here, if you like.

My understanding of how our system works is that this committee has no authority at this moment to make any decisions around funding for the auditor general or to make any decisions around the recommendation of funding for any particular arm of government. Is that right?

[1435]

R. Thorpe (Chair): That's correct. But this report was tabled in the House and referred by the House to this committee.

S. Orcherton: But I'm asking the Clerk: does this committee. . . ?

R. Thorpe (Chair): No. On funding. . . .

[ Page 1660 ]

S. Orcherton: We have no authority for funding.

R. Thorpe (Chair): That's correct. That is correct.

S. Orcherton: As I understand it, auditor general, what you're proposing is to put in place a mechanism where you would indeed come to this committee to seek that kind of authority from the committee around your funding. Is that correct?

W. Strelioff: I will be seeking your support for legislative changes and your support for our business plan, which we plan to table some time in the early new year.

S. Orcherton: Does that include a recommendation not to pursue your funding authorizations through Treasury Board but rather through a committee -- this committee -- structure?

W. Strelioff: The recommendation that I would be putting to ink would be to ask this committee to recommend to either Treasury Board or the Minister of Finance, as responsible for the estimates, a funding proposal -- recommend to Treasury Board or to the chair of Treasury Board or to the Minister of Finance a proposed funding. So the final decision obviously rests with the government of the day, in terms of what they would put into the budget.

S. Orcherton: So what you're really putting in place here is some kind of a buffer between your office and Treasury Board.

W. Strelioff: The phrase "buffer," what I'm trying to. . . .

S. Orcherton: You want this committee to act as an agent for the auditor general's office at Treasury Board.

W. Strelioff: I would like this committee, since I work with you and work for the Legislative Assembly, to have an active involvement in our proposed workplan and funding proposals. I have a hard time using the phrase "buffer." I would actually ask you to take an active role in recommending to the government of the day the funding that you think is appropriate for one of your officers.

S. Orcherton: It seems to me that we're really convoluting what, as I argued earlier, I think is a process that works very well. I'm concerned that you believe that this is necessary. My sense is that you're operating largely on a perception of Treasury Board, not moving to where you should be. All I wanted to do at this juncture was just get clear on what your notion was of how this would work, and I've done that.

I have another question here. Page 4 of your strategic issues, around updating the Auditor General Act, said that during the year an independent committee, formed at the request of the auditor general, reviewed the current act. What independent committee would that be?

W. Strelioff: The previous auditor general established an independent advisory group to an independent committee that he asked to consider what changes to the Auditor General Act are necessary and to provide him or the office advice on what those changes should be. The members of the committee are. . . . I think it was a four-person group. One was the then president of the Institute of Chartered Accountants of B.C., one was the chair of the B.C. Securities Commission, one is a professor at the University of Victoria, and a fourth person has vast experience in the B.C. public sector and provided advice to my predecessor as well as to me in May and June of this year as to what changes are required to the Auditor General Act to make sure that the office is well positioned to serve the assembly and the public in the future.

[1440]

S. Orcherton: You'll be able to supply the names of those individuals, I guess, when you bring your business plan forward early in the new year.

R. Thorpe (Chair): Wayne, just include the names in your business.

W. Strelioff: Mr. Woody Hayes, who used to be the president of the Institute of Chartered Accountants; John Langford, professor at the University of Victoria; Dale Parker; and Doug Hyndman -- a group of people who have a lot of experience and respect in the system of the public sector as well as B.C.

S. Orcherton: So we'll be hearing more of this initiative in the new year.

W. Strelioff: Absolutely. As I said, I am asking this group, particularly in the context of our report on the Enns committee's recommendations, to also consider our proposed revisions to the Auditor General Act.

E. Walsh: I know I've asked this question before. In fact, I've asked it a few times. Who, then, audits the auditor general's office? Who audits the auditor general's business plan? How often do they audit it, if it's audited by an outside agency? And when was the last time it was audited?

W. Strelioff: There's an appendix beginning on page 35 of the report. Then around page 39 -- it's not numbered -- there's a firm of chartered accountants that audits our financial statements, and that firm is appointed by Treasury Board. That firm of accountants that audits us is appointed by cabinet.

E. Walsh: So the audits are done yearly.

W. Strelioff: Yes.

E. Walsh: What kind of audits are they? Are they performance audits? What kind of audits are they?

W. Strelioff: This audit is an audit of our financial results.

E. Walsh: And have there been any performance audits done?

W. Strelioff: We do have an annual quality -- I don't know what it's called -- practices inspection that is carried out by the Institute of Chartered Accountants of British Columbia.

[ Page 1661 ]

One of the changes in our proposed revised legislation is to make sure that by law we are asked to provide the same kind of performance accountability information as is being asked to be provided by all government agencies through the Budget Transparency and Accountability Act. One of the key features of our proposed revisions is to make sure that we're asked to, and required to, provide the same kind of accountability reports to the assembly as are asked of government organizations through the Budget Transparency and Accountability Act.

We still should have more scrutiny on our performance -- absolutely. That's one of the reasons that I think that coming to a standing committee of the assembly that knows what we do and the type of work we do and can ask tough questions about our performance is a good step forward.

D. Streifel: Interesting discussion. When we started off, frankly, I didn't care one way or the other. I had a certain amount of sympathy for you, having been eviscerated at Treasury Board in at least two ministries and having barely escaped with my shoes intact in two others.

As we go along, I want to ask you a few questions about why you want your budget set by a committee like this as opposed to Treasury Board. You say that that happened in your tenure in Saskatchewan, so I'm guessing that your experience was that you received a more friendly reception from a committee as opposed to Treasury Board and that you received in some way or another budgetary increases over what you would receive at Treasury Board. And what did you spend the money on? There can't be any other reason to want to change your reporting mechanism.

[1445]

In this document, in here we see about a 4 percent increase in the last couple of budgets. I'm just curious as to why it's of that much interest to you to change your source of funding. Now, that might be a base question, but that's the only one I can come up with, having had my interest piqued through this discussion.

W. Strelioff: Where I'm coming from is that my job is to help you hold the government of the day accountable for how it manages the public's resources. I'm accountable to you for carrying out that job. So my position is that you as legislators should have a direct oversight responsibility for deciding, determining, the extent to which we're able to carry out our job for you -- rather than having that relationship with the organization that we're supposed to examine on your behalf.

D. Streifel: Okay. Thank you.

J. Weisgerber: I think we can move on, Mr. Chairman. I think we've heard all the sides of this argument.

D. Miller (Deputy Chair): I think we can. I think these are difficult questions, and I just want to reiterate: the question with respect to expenditures is always very, very difficult -- unless you live in Alberta. The system we have allows government to make some very, very difficult choices. I'm certain you appreciate the difficulty that is inherent in trying to look, on the one hand, at the list of demands for government spending -- and in areas that can, quite frankly, break your heart -- and to look at the available resources, to look at reports produced by your office and others, and to look at criticisms, generally, from the public with respect to the whole issue of expenditures and keeping books in balance and issues of debt. And we're going to deal with some of those. I really, really get concerned.

We have a couple of areas of statutory expenditure -- forest fires and things of that nature -- where clearly you don't go through that kind of process. If the province is burning, you try to put it out. And if there's a cataclysmic economic event, then you have to deal with people, and that's something that is sort of beyond that rigorous process. But fundamental to the whole system, I think, is that governments make decisions about spending. Where can they afford, after their reasonable discussion. . . ? The Minister of Finance reports to cabinet, cabinet discusses it, and eventually that winds up in the Legislative Assembly and is debated by all members. So trying to jump out of the queue -- and even respecting your arguments, it seems to me -- does present some problems.

There are other organizations who report directly to the Legislative Assembly. It may be that in other provinces they've adopted a slightly different model. It may be, at the end of the day, that the money you've been given is a rational decision and curtails the level of activity that you can undertake, but that's because the money-maker required is more useful in other places. That's the system and the problems we have with respect to making these very tough decisions. It's not, at least on my part, a reflection of the role of the office but really the difficulty in making these kinds of decisions. I think you must appreciate that challenge that governments are faced with.

W. Strelioff: Absolutely. I very much respect the tough decisions that the government of the day has to make in determining how best to allocate resources and how best to raise revenues -- a very difficult job.

R. Thorpe (Chair): Seeing no other speakers, thank you very much for this report. We wish you well and look forward to being updated on the changes that you're making at your office, so please keep us informed.

Now we're going to move to the draft committee report on social housing. Some of you will recall that it was originally discussed in late September, I believe. Kelly, would you lead us through this discussion, please?

[1450]

K. Dundson: First of all, I'd like to make sure that everybody here got a copy of the draft report. It was sent out in a package last week. Also in that package was a copy of some correspondence coming from the Ministry of Social Development and Economic Security just providing us with some comments on the draft report.

This draft report was first brought to the committee at its meeting of October 4. Prior to that meeting the draft report had been distributed to all members and to the auditor general's office and comptroller general's office. However, by the time of the meeting we had not received comments from B.C. Housing on the draft report, so the committee decided to take the report away to allow B.C. Housing time to review it and provide comments. Those are the comments that you have in front of you today.

[ Page 1662 ]

The report that you have in front of you today is actually a revised report that reflects some of the comments made by B.C. Housing. What I've done is taken any comments they had that really were directed at the accuracy of the report, and I've made the changes that they've requested there. I'll just go through those with you now. Also, they're underlined in the report just so that you can see where they're located.

First of all, on page 7 of the report at paragraph 2, there was just a minor wording change in the reference to the housing advisory council. Next, on page 13 there's a clarification in the first paragraph clarifying the fact that the ministry's '99-2000 annual report was actually presented to the minister within 120 days of the fiscal year end. Page 13 of the report, the second paragraph, clarifies that it was past B.C. Housing annual reports that didn't include adequate performance information but that in fact the 1999-2000 report does include information comparing actual performance to plans and targets.

The next correction I've made is on page 16 of the report in the second paragraph, which changes the reference to state that it's B.C. Housing's financial review processes that were found to need improvement, rather than review processes in general.

On page 17 the first full paragraph discusses cost comparisons. The report notes now that collection of that information is to be part of the ministry's corporate services branch workplan, rather than B.C. Housing's 2000-01 corporate plan. A similar correction was made in the last paragraph on page 17 regarding mortgage negotiations and collection of information, which are to be part of the financial services branch workplan rather than the corporate plan as well.

Finally, on page 18 in the last full paragraph, in reference to B.C. Housing's replacement reserves, there's a discussion of a staff committee that has been created. It has been clarified that part of that committee's work is to review investment policy.

I should also just draw your attention to page 5 of the draft report. I just want to point out that the second full paragraph of that page discussing the Budget Transparency and Accountability Act is actually located in the wrong position on that page. It will be moved to the bottom to reflect the more recent developments that have occurred since the committee met on this topic, which I believe was in March.

Also, in the materials that we. . . .

[1455]

R. Thorpe (Chair): Just so I understand, those last two paragraphs on page 5 just flip over.

K. Dunsdon: Exactly.

Also in the package of materials we distributed, as I mentioned, there is a copy of correspondence from the ministry and B.C. Housing. Those were provided through the comptroller general. Comments that were contained in there that were strictly corrections to the report have been made, as I just discussed. However, you'll also see that there were some other comments in the form of either updates or developments since the committee met in March or disagreements with certain statements in the report.

At the October 4 meeting, there was some disagreement over whether this report should represent a description of the state of things as they were in March or whether it should represent a description of the state of things as they are now, including any sort of follow-up information that has come in. So I've just provided their comments there for your review, and perhaps you could provide me with some input as to what you would like to see included from those comments. I should also note that since October, the committee has received the auditor general's follow-up review of the social housing audit, and that was distributed in your package as well.

I don't know if Mr. Timms or Mr. van Iersel wish to speak to the comments made by B.C. Housing.

R. Thorpe (Chair): I think I would ask Arn, first, to review the document dated November 1. Arn, if you could, and then we'll go to Tony after that.

A. van Iersel: Thank you, Chair and members. Just to remind everyone, when a version or a draft version of the report from yourselves to the Legislative Assembly is prepared by Kelly and is ready for distribution, I electronically send that as soon as possible to the various ministries or other representatives that have attended at this meeting to get their comments. I do advise them that our intention here is that they focus on major errors or omissions as opposed to providing detailed comments.

I think one area we're still wrestling with is that there's a natural desire, as Kelly has pointed out, for people to update us since the initial discussion of the auditor general's report. And while that might be valuable, I guess it always leads to a continuous update and in some ways, I would say, has ended up delaying some of the reports because we're always trying to catch up with the most recent version.

I did speak to Jim O'Dea, the deputy minister responsible, and gave him those instructions. We ended up with response as you see here. I agree with Kelly in the sense that my recommendation would be that we accept those areas of the report where there are errors or omissions that contribute to the report and that in terms of update we leave those things out unless there is something that a member here feels is necessary in terms of clarifying the intent of the report when it goes to the Legislature.

So I did read this when I received it but immediately forwarded it to Kelly to have a look at it. I haven't had the opportunity to compare this draft in terms of. . . . I go with what Kelly has said basically -- that she's captured the essence of anything that is necessary. I would leave it at that.

R. Thorpe (Chair): Has the auditor general's office also received this document?

W. Strelioff: With me today is Tony Timms. Tony leads our work on this audit.

T. Timms: We received a package from the Clerk's office of the most recent draft of the report of the committee, as well as the letter dated November 1 and the attachments in terms of the response from B.C. Housing to the draft report and their detailed status report of their response to the recommendations. In the last week or so we've provided to the Clerk's office our report on the follow-up work that we have done in connection with our original report, and the work that we did was focused on the representations made in the detailed status report, which was included in this package.

[ Page 1663 ]

In essence, our conclusion paragraph was based on our review. Nothing has come to our attention to cause us to believe that the B.C. Housing Management Commission's progress report does not present fairly in all significant respects the progress made in implementing the recommendations contained in our 1999-2000 report.

[1500]

R. Thorpe (Chair): Arn, you're saying that it's nice that we got all this detail but that we should try to kind of stay to where we are, just making sure that there are no glaring errors there.

A. van Iersel: That would be my recommendation to you, Chair, and to the members. As I say, it's always difficult, because of the delay in some of these reports, to be totally current. So I think I would suggest that this should reflect the discussion as it happened back then and rely on future updates to capture things that have changed.

R. Thorpe (Chair): Would that be the view of the auditor general's office too?

T. Timms: Yes, it would be. I noted, looking through the response from B.C. Housing, that they themselves have mentioned that some of the issues they've raised have been minor matters of clarification. Probably we would support only making adjustments for, as you've said, major omissions or misstatements.

R. Thorpe (Chair): Do any members of the committee have any questions, observations? I realize some members. . . . This material is quite new to them.

D. Miller (Deputy Chair): I'm one of them, Mr. Chairman. That's why I'm remaining silent.

J. Weisgerber: It's never stopped you before.

P. Calendino: I noted that one of the. . . .

M. Coell: You're just reloading; that's all.

P. Calendino: I was about to say that I noted that one of the difficulties that the auditor general found in looking at B.C. Housing was the governance practices problem. I know that there have been some changes to improve governance at the board level there. I wonder if anybody is aware of how that is functioning at this time.

T. Timms: Yes. In the update report that they provided us with, they have described the response to each of the recommendations with regard to the governance. I think generally most of the governance recommendations that we made have probably been completely addressed by now. There have been changes surrounding the governance structure regarding PRHC, which, you will recollect, was a problem. And as well, a lot of the issues surrounding the lack of clarity with regard to the roles of the ministries, the chair, the CEO of B.C. Housing, have been resolved in the intervening time through, first of all, ministry reorganizations which took place after the date of our report, as well as work done by the board of B.C. Housing and the executive to obtain greater clarity in a lot of those issues.

So I think the concerns are substantially far less than they were at the time of our audit, and B.C. Housing seems to be making very good progress towards dealing with these.

R. Thorpe (Chair): Well, if there are no other. . . .

One of the areas of the report that we have to deal with is our recommendations -- on page 22. Historically, we've put in the recommendations of the auditors general with amendments and additions that members feel. . . . I don't recall any deletions, but perhaps there have been. In the auditor general's report, to the best of my recollection there were 15 recommendations on the housing part and 12 on the social housing section. So if members have any other recommendations, then they could put them on now. We also need to put those other recommendations into the report.

So do we want to put in the 27 recommendations -- 15 and 12? I guess we need a motion to do that.

P. Calendino: Isn't the practice to accept or receive the report of the auditor general with its recommendation and recommend such report to the Legislative Assembly?

R. Thorpe (Chair): But on this report we have in front of us, this draft -- there are no recommendations on it.

P. Calendino: Right. But if we recommend the auditor general's report with its recommendations, because we haven't made any of our own. . . .

R. Thorpe (Chair): I thought that's what I was asking. Maybe I didn't say it the correct way. So are you moving that we. . . ?

[1505]

P. Calendino: Yes.

R. Thorpe (Chair): Okay.

Motion approved.

R. Thorpe (Chair): We need a motion to adopt the report.

Motion approved.

R. Thorpe (Chair): No other business today? Oh, we have one more.

K. Dunsdon: The second draft committee report today is the committee's report on the office of the auditor general's 1998-99 annual report. Actually, this is work that was done by the committee in January of this year in the context of the auditor general presenting his office's corporate plan for 1999-2002 and his business plan for 2000-01. This was the first time that the auditor general has tabled these plans with the committee.

This is a very brief draft report. Page 1 discusses the role and functions of the office, as well as funding and resources, which the auditor general had at the time advised the committee were not sufficient to allow for an adequate level of audit coverage. Page 2 provides a summary of the auditor general's submission to the committee with respect to your proposed new Auditor General Act.

[ Page 1664 ]

I should just point out that the committee's previous report, on the auditor general's previous annual report from 1997-98, had contained three recommendations, the first being that the committee expressed an intention to review and discuss with the auditor general, for information purposes, the revised Auditor General Act being proposed by his office.

The second recommendation from that previous report had been a recommendation that the government review current levels of funding for the office to ensure that it has an adequate level of human and financial resources.

And the last recommendation that had been made at the time was a recommendation regarding performance audit of the office and public reporting of the results of that performance auditing. These are from the committee's previous report on the same issue.

R. Thorpe (Chair): Are those in this report here?

K. Dunsdon: No. I'm just pointing out that those were the recommendations that were made in the previous report, in the '97-98 annual report.

R. Thorpe (Chair): Is there a motion to adopt the report tabled before us? Erda, thank you.

Motion approved.

R. Thorpe (Chair): A motion, please, for the Chair to present the various reports to the House, pursuant to the committee's terms of reference. Thank you, Jack.

Motion approved.

R. Thorpe (Chair): Any other business?

A. van Iersel: I just wanted to draw to members' attention that further to the meetings that were held in early October, a number of questions were asked, and there is a response coming back to you through the Chair and the Clerk. You haven't got the information just yet, but the package has now been made available. It deals with a number of issues that we were talking about. You'll remember that the main conversation point at that time was government debt.

It provides you with the provincial treasury business plan and some of their performance measures. There was a question raised about interest rate exposure. There's also a document included in this. Mr. Kasper raised a question on the capital multiplier, and we have provided a document on that and also an overview of capital spending and some PSAB performance measures. There's going to be a separate document coming, I believe. We've collaborated with the office of the auditor general, and that'll be coming separate to this document. Finally, there are some excerpts from the recent budget consultation and from Budget '99 documents regarding the debt framework that exists.

I don't wish to ask the committee to take its time to look at these again. But I would offer that in the event that any member wants to discuss it, I'd be available to do that or, if necessary, to bring in the various parties that made these available to me for you, to answer anything in detail.

[1510]

J. Weisgerber: Is it possible to just get them circulated?

R. Thorpe (Chair): They will be.

J. Weisgerber: They will be?

R. Thorpe (Chair): Yes. The Chair and Deputy Chair have theirs, and copies are being made for other committee members.

D. Miller (Deputy Chair): I assume, Mr. Chairman, that that was just an issue raised by the committee; there was some curiosity about some question.

R. Thorpe (Chair): Yeah, a variety of members asked questions, and we asked for follow-up. The comptroller general's office has followed up in providing the committee with information.

D. Miller (Deputy Chair): So is the committee pretty wide open in terms of those kinds of questions?

R. Thorpe (Chair): It depends on what your next question is.

D. Miller (Deputy Chair): Well, I'm kind of curious. There's been some discussion about the return or payback, if you like, with respect to tax cuts. It's an intriguing question. I don't know if it's appropriate for the committee or not.

R. Thorpe (Chair): If that comes up in one of the reports that the House recommends to us for review, I'm sure we could study that. And if we need to do some research in that area, we could do that.

D. Miller (Deputy Chair): It's a very important topic -- one that may be tested in the months to come.

R. Thorpe (Chair): Well, I guess if it's really, really important, the House will refer it to us.

Just one thing, though, looking at the agenda for tomorrow: I personally have a commitment at 1:30 p.m., and I would ask the indulgence of the committee if we could work right through lunch. Hopefully, the two items that we have to deal with tomorrow -- we'll be through those by 1 o'clock or 1:30 p.m. So instead of breaking for lunch, is that fine with the committee?

A Voice: As long as you give us a coffee break.

R. Thorpe (Chair): You'd like a coffee break.

J. Weisgerber: Yeah, Mr. Chairman. I'd suggest that if we actually got started at 9 a.m., we could probably be done by 12 o'clock.

R. Thorpe (Chair): I'm sure all members will try to be here at 9 o'clock tomorrow.

The committee adjourned at 3:12 p.m.

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