Finance and Government Services - Issue No. 2

2001 Legislative Session: 2nd Session, 37th Parliament
SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES
MINUTES AND HANSARD

Present: Blair Lekstrom, MLA (Chair); Tony Bhullar, MLA (Deputy Chair); Ralph Sultan, MLA; Kevin Krueger, MLA; Barry Penner, MLA; Brian Kerr, MLA; Lorne Mayencourt, MLA; Ida Chong, MLA

Unavoidably Absent: Harry Bloy, MLA; Jeff Bray, MLA; Joy MacPhail, MLA

1. The Chair called the Committee to order at 2:02 p.m.

2. The Minister of Finance, Hon. Gary Collins, presented the pre-budget consultation paper to the Committee and answered questions.

3. The Committee reviewed and discussed its draft business plan.

4. Resolved, that the Committee approve the draft business plan as presented. (L. Mayencourt, MLA)

5. The Committee discussed its public consultation schedule.

6. The Committee reviewed draft advertisements and media releases.

7. The Committee observed a moment of silence in respect of the tragic events, which had occurred in the United States earlier this week.

8. The Committee adjourned to the call of the Chair at 3:39 p.m.

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES



CONTENTS

		Page

Presentation of Pre-Budget Consultation Report		9
	Hon. G. Collins

Draft Business Plan		19

Draft Hearing Schedule		20

Advertisement of Hearings		22

Draft Hearing Schedule		24

Chair:	* Blair Lekstrom (Peace River South L)
Deputy Chair:	* Tony Bhullar (Surrey-Newton L)
Members:	Harry Bloy (Burquitlam L) Jeff Bray (Victoria–Beacon Hill L) * Ida Chong (Oak Bay–Gordon Head L) * Brian Kerr (Malahat–Juan de Fuca L) * Kevin Krueger (Kamloops–North Thompson L) * Lorne Mayencourt (Vancouver-Burrard L) * Barry Penner (Chilliwack-Kent L) * Ralph Sultan (West Vancouver–Capilano L) Joy MacPhail (Vancouver-Hastings NDP) * denotes member present

B. Lekstrom (Chair): Good afternoon, everyone. I would like to call our Select Standing Committee on Finance and Government Services meeting to order on Friday, September 14. I'd like, first of all, to thank all the members for readjusting your schedule so that we could accommodate this meeting today. Certainly, it's been an unfortunate week not just for our neighbours to the south but for all of us. I think that's reflected in the feelings that we all share. We will get through that, and we will move on. Again, I want to thank you for adjusting your schedules to help accommodate mine, as the Chair, as well.

We do have quite an agenda today: a number of issues we would like to bring to the forefront and deal with, our business plan, our draft hearings schedule and our communication strategies surrounding our public hearing process.

B. Lekstrom (Chair): First, we are honoured today to have with us Hon. Gary Collins, the Minister of Finance and Corporate Relations, to give us our prebudget consultation report and speak with the committee. Good afternoon, Gary, and welcome.

Hon. G. Collins: Good afternoon, Chairman and members of the committee. I appreciate you allowing me to come and present this to you today. Did you want me to start now, or…?

B. Lekstrom (Chair): I certainly think we could begin that way. I will turn the floor over to you at this time.

Hon. G. Collins: I want to start by thanking the members of the committee for arranging to have this meeting, within the guidelines of the legislation, and enabling us to start the prebudget consultation process on time. I don't think it's a secret to anybody that there is a great deal of confusion and a great deal of remorse across the province and across the world in the last few days given the activities and the tragic events that took place in New York City and Washington, D.C., earlier this week. I know that all members of the Legislature feel that to a great extent. I know members of staff in the Ministry of Finance are feeling it particularly hard, given the longstanding relationships they have with many of the people whom we've yet to hear from, in New York in particular.

It's a challenge to continue on with the jobs that we all need to do to move things forward, and I appreciate the members accommodating the schedule of the Chair in being able to have this meeting today.

My job here today is really to pass on to you a prebudget consultation document, which I hope will form the focal point of the discussions and the consultations that you as members of the Legislature and members of this committee will be having with the people of British Columbia in the next month and a half or two months.

We have seen some fairly significant volatility in the economic markets in the last number of months. On July 30 when we put out our report, our minibudget, there was a sense that while we were in a bit of a decline or slowdown in the U.S. economy, there was some sense that it would be relatively short-lived and not very deep and that in fact we would come back fairly quickly with very robust growth later this year and particularly next year.

That was the forecast of virtually all economists around the globe. We have seen a fairly rapid decline in the economic outlook for the United States in the last six weeks, to the point where almost on a weekly basis — in some cases almost on a daily basis — we were seeing various forecasters downgrading their forecasts for economic growth in the United States. It is by far the largest economy in the world. It affects Canada significantly, given that we are its largest trading partner and it is our largest trading partner.

British Columbia, despite its position on the Pacific Rim, isn't immune from that. Two-thirds of our exports go to the United States. We do have a number of exports that go to other countries, and being on the Pacific Rim has helped to mitigate some of the downturn we've seen elsewhere. This was a downturn, or a slowdown, at this point. We're not in recession yet, although we can wait and see what the final numbers might show.

This was a recession or a downturn that has been led initially by a bit of a wealth bubble which has burst as a result of some of the speculation in the high-tech sector. That seemed to lead this. It has penetrated through into the manufacturing sector, and now we're seeing it perhaps moving into the consumer sector as well, with consumer confidence being somewhat eroded as well.

It has been perhaps a bigger impact than people expected. It is perhaps going to be more prolonged than people had originally projected, and there's a possibility that it may be deeper than people originally projected. We will need to stay tuned on an ongoing basis, and throughout the period of time you are engaged in these consultations, I expect there'll be news every day. You're doing these consultations at a time when there's a great deal of uncertainty internationally and around the globe.

People don't know yet what the fallout will be of the terrorist actions earlier this week. Certainly, it has created a certain amount of lack of confidence in the financial markets, although most corporations, as a result of the previous bombing of the World Trade Center, have moved a lot of their data off-site anyway. They have other facilities as well. Some of them, we're hearing, are setting up in New Jersey, some in Toronto temporarily and others elsewhere. Some have moved their business to London, England, in the intervening period until they're able to rebuild.

So on that front, I think there'll perhaps be less disruption than people had originally suspected, but we don't know that yet. As well, the free movement of goods and services and people is going to have a fairly significant crimp put in it, I think, in the short term. Certainly, if you look at what we've seen at the borders and at the airports not just in Canada and the United States but around the world, that can't help but have a fairly significant impact on the economy. The aviation sector, the airline sector, will no doubt take a significant hit, as will other areas of tourism.

We don't know how all of that will impact British Columbia, whether on the plus side or the negative side. Certainly, the restriction of movement of goods and services back and forth across the border could cause us some problems. The reaction of the United States and NATO and nations around the world will also have an impact on what happens here in British Columbia.

If you recall the time of the Gulf War, as things were ramping up for that, there was a great deal of speculation that we were going to lose our oil supplies. Oil prices seemed to go up, but as a result of the coalition-building that went on and the increase in production of some of the OPEC nations, we were able to moderate those energy prices through that very difficult time. We don't know yet what ability there's going to be of the world to coordinate and build a coalition like that this time. This is a slightly different scenario, and there's a great deal of speculation on how that's going to happen.

In the short- to medium-term, that may well have an impact on energy prices. That may well have an impact, in turn, on our revenues from energy prices. One of the reasons why the revenues have dropped off since July 30 in our forecast for the rest of the year has been a fairly significant reduction in energy prices, both natural gas and electricity. That affects British Columbia's revenues relatively quickly as well. So that's one of the key reasons why we've seen a deterioration in our forecast for revenues for this year and next year.

One of the other areas where we saw some deterioration in the first few months, which is now forecast for the further three quarters of our fiscal year, is at the Insurance Corporation of British Columbia. ICBC has new leadership; we have a new board Chair and a new board. We have asked them to do a thorough review of ICBC.

When we were sworn in on June 5, one of the things I did in anticipation of the July 30 update was ask all the Crown corporations to canvass their financial people again and give us a forecast of what their revenues were expected to be for this fiscal year. ICBC runs on a calendar year for its fiscal year. They do not start April 1; they start January 1, so they are now halfway through their year. I expected, when I got the results back in July, that it would be numbers that we would have been able to rely upon, given that a certain chunk of their year had passed. They were certainly in a better position than any of the other Crowns to provide us with more accurate information.

They did show a deterioration in the costs of past claims to the tune of about $40 million. That was reflected in July as a downturn in their forecast of their contributions for this year from $75 million to $35 million. That wasn't unexpected in my mind, because we had been hearing, at the time when there was the debate prior to the election, about the inflation of Hydro revenues. There was talk, as well, that perhaps ICBC had inflated its revenue stream to government. So to see a bit of a downturn wasn't terribly surprising to me.

I must say I was more than a little surprised to find out that the $35 million, which was already down $40 million, was about to drop another $185 million to a negative number of $150 million for this year. ICBC faces some significant challenges. They are grappling with those. I hope to see an improvement in that number before the end of the year.

Government may have to take some actions to ensure that ICBC pays its own way in the months and years ahead. We will be speaking to the board. We have been speaking to the board, to the Chairman, and trying to get a better sense of where the Crown corporation is at so we can make some decisions on how we're going to improve those numbers and how they're going to improve those numbers in the months and years ahead. There are some risks there for us.

What I've put together for you, as a budget consultation paper…. If you look at the document, you'll notice that the first couple of pages are really all we've added to a pre-existing document. The core of this report that I'm giving to you is, in fact, the report of the fiscal review panel which came out in July. It was released to the public at that time. These are a group of independent people that government asked to come in to look at British Columbia's financial state; to do an examination of what our outlook is, going forward a number of years; and to give us some recommendations on what we need to do to get our fiscal house in order. They forecast a structural deficit if we maintained the status quo, looking in out years in the billions of dollars, which is simply unacceptable.

Government has made some changes to our position financially by offering some significant tax reduction to the people of British Columbia in an attempt to make us more competitive, in an attempt to put money back into the economy and position British Columbia as a district and a region where growth and investment are welcomed. Obviously, when we run through the models, that has an impact on revenue streams.

I believe that our tax-reduction policy and our positions that we've taken around deregulation in the intervening period will position British Columbia very well for future growth. I've been asked recently whether or not the tax reductions were wise, given the downturn in our economy and the world economy. I argue that in fact they were even more necessary, given the challenges we face, than they were previously, when we thought things were going to be better. If we

had maintained the status quo on the taxation side, given the downturn in the economy, British Columbia would continue to be the last destination of choice for new investment and for growth.

Now, by making those tax changes, we are positioned to benefit from any investment that does go on in the short term. Certainly, in my communication with business people and investors both here and outside British Columbia, they are all looking at British Columbia with a much, much different sense that this is a government that means business, that wants to get investment, that wants to grow its economy and wants to succeed. I'm hearing that as I travel across the country and to other countries as well. So I think we are well positioned to benefit from future growth as the economy starts to rebound.

In the intervening period, I think the injection of that cash back into people's pockets — the citizens and businesses of British Columbia — will help to mitigate what the pressure will be as we experience such downturn in the global economy. People will now have been receiving their tax reduction personally since June 5, so — June, July, August — essentially for three months. A couple of the bright spots in our economy in British Columbia have been consumer confidence, housing starts, housing sales and retail sales. So the areas of strength that we are seeing here in British Columbia, one could argue, are being helped in some form by an improvement in consumer confidence and the take-home pay of average British Columbians.

As well, starting in September — about two weeks ago — we started to see the phase-out of corporate capital tax. We'll see that eliminated in a little under a year from now. That puts us in a very good position to be taking our sales pitch to other places of the world as a place to invest.

One of the things that has hurt us in investment from Asia has been the corporate capital tax. The previous government introduced that in 1992 in their first budget. It had an immediate impact on investment from Asia. This is before the Asian meltdown. It had an immediate impact and has persisted ever since. It continues to be the number one issue raised by Asian investors when they come to British Columbia to talk to us. They find it baffling that we would want to tax capital before it's had a chance to actually produce any wealth. We felt it was important to take action on that soon; we did that.

The Premier will be leaving for a trade mission to Asia — Japan and Hong Kong — in October, and for the first time in a long time a Premier from British Columbia actually has some good news to take to those potential investors there. We're optimistic about that for a couple reasons. First of all, we have a real link with Asia in our population — both the people who are citizens here in British Columbia and people who've come in the past to move their families and their investments here. As well, one of the only areas of really positive growth right now is China. They're growing at about 7 percent, which is pretty remarkable considering what's happening everywhere else. No one knows whether or not that's going to continue there or whether they'll suffer from the global slowdown as well. But at least it is a bright spot, and being able to go to Hong Kong with a positive message will be very helpful. The Premier will be embarking on that.

The document you have before you is the fiscal review panel's report, which they made available to us and the public in July. It sets a scenario that they felt was appropriate at that time. Obviously, the economy has deteriorated since then. That makes our challenge even more difficult. So as you go out and speak to British Columbians, there are some things that we would ask you to ask them. Some information that would help me as Minister of Finance in putting a budget together for next February is how they believe and how they think we should, as a government, best approach this structural deficit.

I expect you're going to hear from some of them that we should raise taxes again and raise them even more. That's fine. There are people who strongly believe that, and it's important that we hear their comments. There are others who are going to look at the scenario we face and perhaps have suggestions about how we reduce the size of government, make government more efficient, how we do a combination of things in order to make sure that we can balance the budget by 2004-05, which we are now required to do by law.

Ida, you were on the committee with me last year as we travelled around the province. It was, I felt, a fairly political tour, if I can put it that way. We were close to an election. Politicians tend to get more political as you get closer to an election, and the document that was presented to the Finance committee at that time laid out page after page of scenarios — you know: "If we cut these taxes, which programs are we going to have cut? If we do this, what are we going to have to do?" I've tried to leave it open. I've tried not to spin the committee or spin the public on what we have to do. I've tried to lay out for them, through an independent body, what challenges we face and then some questions we have that will help us in forming a budget.

You as a committee really have a great deal of leeway to ask the public questions and to see what they have to say. I know that last time — and I don't know if it will be the same this time — we tended to receive an awful lot of information from business organizations and labour organizations. Perhaps that's because they're both well funded, they're both well organized and they have, in some cases, diametrically opposed views on what a government should do with its budget. They were well organized, and it was very good to hear from them and what they had to say.

We had some presentations — not a great deal, but some — by individual British Columbians who just showed up and had something to say and wanted to offer their opinions. There were some who were on the agenda as individual British Columbians — just Joe Henry from wherever — and when they got there, we realized that in fact they were there representing one of these associations I talked about earlier. That's fine as well.

I would just encourage the committee to try as much as possible to allow time, when you travel to communities, to allow individual British Columbians who perhaps just see your ad or just hear on the radio about your coming, to show up at the last minute and have five minutes to tell you what they think. I think that information is invaluable to get a sense of what real British Columbians are thinking as individuals as well as through their associations.

I would encourage you not to allow the associations to dominate the amount of time that you spend in communities but to reserve some time for individuals to come in and tell you what they think. Some of the best ideas come from somebody who is just sitting at home in front of the television set thinking about it. They often have some interesting ideas.

As well, we heard from individuals who were there representing their profession but not in a professional capacity, not as part of an organization. We heard from individual nurses; we heard from individual doctors. We heard from individual school teachers, parents, construction workers, fishers, forestry people, who just worked in that sector and didn't come as a representative of their trade union or an industry or labour association but just as an individual working in that sector, who gave us some very good advice. It's good to hear from people that way.

I wish you well on your travels. You're luckily getting to have your travels a little earlier than we did last year. It was a little colder when were doing our travels and a little more difficult to get around, but I think you're about to see some wonderful communities in British Columbia and meet an amazing array of people from some really beautiful communities. I hope you take some time along the way to stop and talk to people on the streets and look out the window of the aircraft and gather in what is a great province that we all live in.

You'll meet some wonderful people. I hope you have a chance to talk to them, to meet with them and really learn what the people of this province would like to see as we deal with these challenges that we face in the months and years ahead.

I'm glad to take any questions if members have them. I don't know if you have questions about this review panel, the document I presented you with, or if you have questions about the quarterly report or what we're facing. I'd be glad to offer that and update you at this point so you have a better sense of what we're facing as we go forward.

B. Lekstrom (Chair): Thanks very much, Minister. It's certainly always interesting to hear the challenges that we face, but living in the province — as you've indicated, I think, one of the greatest places in the world — we'll overcome any of the challenges, and we'll build a better province than we have today.

I see that we do have members who have some questions. I'm certainly happy that you're willing to take those questions.

I. Chong: I just want to ask a general question, not so much on the report. I have already received some queries on this. As we're out travelling the province — and it is a prebudget consultation document they're receiving…. There are some individuals and groups who are really wondering, in fact, whether their input is actually going to be translated into your final budget preparation. I've assured them that in fact, because we're reporting to the Legislature and then the document will be available to you, you would have all the summary for your use. But there is that question. I'm just wondering if you could perhaps also give us an idea of how you may incorporate this document or our report into your financial budget.

Hon. G. Collins: One of the reasons why this committee is receiving this now instead of in the November-December window, which it was previously, is that we've moved the budget date forward by about a month. Now, instead of March-ish, we have a fixed day, which is the third Tuesday of February, and next year it will be February 9. I felt it was important to move the date ahead for this committee to do its work, as well, so we could get that input in early enough that it would be part of what we look at as we decide and make those determinations as to what the budget should look like for next year — what the spending priorities are.

Yes, rest assured that we will be looking at everything that the public presents to you. As well, we'll be eagerly awaiting the report that the committee makes on what you've heard. It'll be up to the committee to decide whether or not you want to make specific recommendations on what should be in the budget or whether you just want to convey what you heard to myself and the government. That'll be up to the committee to decide.

I'll make an undertaking, as well — because I certainly get input almost on a daily basis from people as to what they think our financial priorities should be — to share what I receive with the committee. I know the committee will offer its thoughts to me as well. So I'll try and share as much of that with you as I can.

You will, without question, hear a wide divergence of opinion on what the priorities of government should be. That's what's great about a democracy: everybody has a view and everybody has the opportunity to say it. Your challenge, as representatives of people, and our challenge is to try and distil that down to something that is doable and that doesn't conflict with itself and actually have a plan. Then people who talk to you out there will hold us to account for the plan, whether they think it was good, bad or otherwise. So yes, all of that input is valued. I appreciate it.

I've been meeting with some of the labour groups and business groups over the last number of months as they give me their input as well. I always try and have the opportunity to do that. It's no surprise that very

often there are wide disagreements in what the priorities of government should be.

I. Chong: Supplemental to that, just for clarification…. I know it's customary for the Minister of Finance to have a consultation with business and labour groups in your prebudget work. So you're saying that whatever information you receive, you will forward that on to us — while we're on the road, even, if that's the case.

Hon. G. Collins: Certainly. I'm glad to send any documentation or reports or suggestions that I get from any British Columbia associations or individuals to the committee, whether you are on the road or not. I'll send it to the Clerk's office, and they can distribute it among the members.

T. Bhullar (Deputy Chair): Minister, with respect to ICBC, I understand that they used to run an aggressive program, and that was hiring private investigators. Within the last year or couple of years, I understand, they've slowed down. It was quite an effective program, speaking from personal experience. It tended to get cases dismissed by….

Hon. G. Collins: Oh, I thought perhaps they were investigating you. [Laughter.]

T. Bhullar (Deputy Chair): Not that close, but they were quite effective in using the private investigators. I don't know why they slowed down. I understand from the Newton office, which I have a relationship with, because I've got constituents coming in…. Speaking to them, they indicated that they've slowed that down. They're only using them in certain circumstances now, but they have used them quite effectively in the past. That might be something to revisit.

Hon. G. Collins: I'll certainly pass that comment on to the Chair of ICBC — that that's what I'm hearing. It'll be up to him to determine what the appropriate policy is for ICBC and then to have the staff implement it, but I'll certainly pass on that information to him.

B. Kerr: I was sickened by the events of this week. Now I'm looking at our economic forecast over the next two years. And with the events this week I feel even more sickened, because this was done prior to the events, which could deteriorate it even more. We're looking at a 30 percent decrease or deterioration of our debt-to-GDP. We're looking at a greater than $12 billion operating deficit over the next three years, where expenses have gone up and revenue hasn't gone up. Notwithstanding the work that we're going to be doing, is the ministry working right now to make the changes that are going to have to be made to react to these events and to react to the deterioration of the financial situation upon us? This figure in any other economic entity wouldn't be acceptable.

Hon. G. Collins: The budget consultation paper that you have in front of you, which is the fiscal review panel's report, lays out for us what we're facing if we do nothing, if we maintain the status quo — implement the tax cuts and then do nothing. That is, the status quo is simply not acceptable. We were not elected to maintain the status quo. In fact, we have an overwhelming mandate to change the status quo and to do things differently. I think if we were to fail to do that, the verdict of the public would be swift and hard on us. We have a duty to go out and change the status quo and change those numbers.

It really is a multifaceted approach that we need to take. Yes, we need to grow our economy. We need to make sure that we are a competitive environment, and all the ministers and members of the government, through the committees they sit on, have been working tirelessly since day one to ensure that we put together an economic climate here in British Columbia that allows for growth, that encourages growth, that ensures that British Columbia is well positioned to compete internationally for investment dollars and for talented people. That's one component of it. I would say that our short-term economic gains have been dealt a blow as a result of some of the things that have happened globally. That doesn't relieve us of the responsibility to grow our economy. We have to do that. We are working tirelessly right now to do that.

On the spending side, which is really where we do have some control, we are taking a great deal of action already. The quarterly report that you have in front of you has the quarterly spending up to date and the forecast for the future. Look at page 53 in the quarterly report. It has a revised forecast for next year, and then it has the variance number. You'll notice there's not a lot of variance there. If you were to look at first quarterly reports from past years with the previous government, you would see all sorts of increases in the budgets for those ministries only a few months into the fiscal year.

What we have said early on — you would have seen it in the open cabinet meetings, and you would have heard me say it in other meetings of caucus and publicly — is that ministers are expected to live within their budgets — no ifs, ands or buts — and that there will be no new money for new programs. Ministers have been working tirelessly to manage their expenditures within the budget that they've received. The history and culture in government has been: "Yeah, that's your budget, but if you've got other nice things you want to do, let's do them." So what we've managed to do in the first quarter in virtually every ministry is grind down those future expenditures and those risks and make allotments and make tough decisions to the point where we are not forecasting significant variance at all at this point.

The only risks we have that I would say are significant risks yet that may go over budget are in the Ministry of Health Services, and government will be taking some fairly strong action in the weeks and months ahead to manage that as well. The Minister of Health Services is still managing pressures of between $300 million and $400 million, if you look at everything. He feels he's got that down to about $181 million, and we're still working at it.

It's a new culture in government. We're changing people's attitudes and the attitudes of the bureaucracy. We're saying to them: "These are your budgets. You will live within these budgets. You will find a way to live within the budget, and then you'll try and find other ways to save money and become more efficient." That is a change of mind-set, and I think we're having some fairly significant success in the early period.

The Minister of Children and Family Development has managed to reduce budget pressures of about $53 million, just through efficiencies and management ability. The Solicitor General and the Attorney General, which historically have been — next to health care — the biggest violators of budget caps, have been working very hard to try and manage their costs and are now both believed to be well within their budgets. There's still a bit of pressure on the Attorney General's side, but he thinks he's going to be able to get there in the next month or so as we move forward.

That took a great deal of work. One of the disciplines I instituted when I became Finance minister was…. I started to ask: why is it that these ministries are always over budget? I asked: why does that happen? They said that they talk to Treasury Board, and they give them directions to go out and change these things and do them. They walk out the door and say, "Yeah, we'll do it," and then they never do it, because they know that ten or 11 months through the fiscal year, they're allowed to put up their hand and say: "Oh, we're out of money tomorrow. Can we please have a special warrant?"

I thought it was important for us to start to manage that problem now and not wait until 11 months through the fiscal year. We instituted bi-weekly meetings with a number of ministries: Forestry, which has historically had pressures; Attorney General; Solicitor General; and the health ministries. Every two weeks the Finance people and senior people in those ministries meet with the senior people on Treasury Board to talk about how they're doing on those things we've sent them out the door to do in order to manage their budget.

Every month the ministers meet. The Premier has attended a number of those meetings to make sure there is a sense that it is the whole government that's behind this new way of operating. It's been very successful in focusing ministries on managing those risks, managing those pressures, early in the year before they get out of hand. As a result, we're able to contain those budgets.

That's only part of it. The other part of doing all of this isn't just managing our spending; it's also making government more efficient. That's what we're doing at core review. That's what we'll be doing and asking ministers to do in the months ahead as they build their budgets, moving forward. We're about to give them some targets for spending by 2004-05. Those ministers are then going to have to develop their service plans. They'll be coming to the government caucus committees and Treasury Board to put forward their plans at the same time as they're doing their core review process. Those two, the budget process and the core review process, are really that part of changing the status quo that I talked about earlier.

Those are challenging things. The way I like to phrase it is that it's sort of like the budget process and the core review process are walking down paths side by side with a picket fence in between them. We can see each other, and we have to keep checking with each other as we go forward to make sure that we're moving together.

The core review is a fairly large rethink of how government should work. What are the things we should do? What are the things we shouldn't do? How can we do them better? The budgetary process applies numbers and disciplines and targets to that to try and move those two along at the same time.

That's where the hard work is. We can do what we need to do to position the government to grow the economy, and we'll do that. We can contain our spending growth if we work really hard at it. The real challenge comes with changing the status quo, changing the sense of entitlement in British Columbia to one of responsibility, changing the type of programs that we deliver to try and make sure that they're achieving some measurable results, as opposed to just being the program we've been running for years that just keeps running.

That's where the real challenge that we face is, and that's going to be the toughest thing we have to do. That's why I think this committee, in speaking with the public, should really, in my opinion anyway, be asking those questions: "How do we change government so that we do it better? How do we change government so that we can do it in a more cost-effective way?" Try and get the public and the debate off of, "How much is enough? How do we get more money? Can we get more money? How do we raise more money through taxes? How do we do those sorts of things?" and more on, "What is it government should do? How can it do it? How can we do it better?" and what the public's suggestions are for that.

B. Penner: Thank you, Minister. I'd like to just touch on a couple of things that you've alluded to already, but to follow up in some more detail. First of all, I'd like to express my concern about cost-drivers affecting the provincial government that are, to a certain extent, almost beyond our control. It's a source of tremendous frustration for me and, I suspect, for other members of this committee and of this Legislature.

I am referring to various collective agreements that the previous government signed that contain, in my

view, very restrictive language preventing managers from effectively managing or severely limiting their options. We learned today that the B.C. Teachers Federation is seeking a wage increase of perhaps 34 percent over the next couple of years, which tells me that they have not been reading the newspapers very closely of late and that the general message has not yet reached all British Columbians that we have serious financial challenges on our hands.

I suspect that's going to be a major challenge of this committee and, I suppose, of the government generally: to educate British Columbians on the true nature of the challenge that is facing us. I'd like to encourage you at this point to look in all possible ways at future collective agreements in terms of giving managers more flexibility in actually managing. A percentage wage increase is one thing, but when you restrict a manager's ability to allocate those resources, you drive up costs even more. That is not always readily apparent on the face of a collective agreement.

I'd like to ask you specifically about ICBC. I am curious about the dramatic deterioration that has apparently taken place in terms of their fiscal position. What was the cost to ICBC of the rebate that was implemented earlier this year, during ICBC's current fiscal year? And does Tech B.C. and that whole project have any role in their deterioration in terms of their fiscal performance?

My last question I'll leave with you for response: what is the time line for the core review process, and when can we expect not just a reporting-out of that process but perhaps implementation of some of the recommendations?

Hon. G. Collins: Thank you, Barry. You make, I think, a fairly astute observation about the collective agreements. This is something that I think is important for members of the trade union movement and public sector unions to understand as well. It's in their best interests to have an efficient collective agreement. It's in their best interests to work on a job site that provides for the ability of management to manage the system efficiently, because that's the only way they're able to sustain long-term high wages and able to benefit from that.

Otherwise, you're always going have these ups and downs. You're going to have governments needing to grapple with this, and you create a certain amount of uncertainty at the workplace as well. We have found over the last number of months…. We certainly were aware of it in opposition, watching it, to some extent.

Certainly, in government we are now aware that while the costs of the salary increases are something you can measure fairly easily and see, there's this hidden cost of inefficiencies that can be built in within collective agreements around the ability to manage, to move people from site to site, to bring people in, to have people on call. All of those sorts of things in collective agreements that restrict the ability of management to adapt to new challenges are huge cost-drivers. Well, they're not more than the collective agreement dollar figures, but they certainly contribute to it in a significant way, and that creates some inefficiencies in our ability to deliver those services at the best value for the public.

The Premier has been clear that he wants us, as government, to get back the ability to manage government, to manage the system. That's something he has made clear to me as the minister responsible for the Public Sector Employers Council. I've conveyed that to the Employers Council, which is made up of ministers as well as representatives of the various employer groups — health care, education, etc. — throughout government, and I have told them that we need to put some energy and focus in our collective agreement planning and negotiations around getting back the ability to manage. So we are looking at that. We are working at that, but that could take some time to get to.

ICBC. We are doing a pretty thorough review there right now. The new Chair has embarked upon a pretty good examination of the corporation. He is looking at the $200 million rebate right before the election. Everybody forecast that ICBC was going to make all this money, and you're right: it was in this fiscal year. They started the year with this huge forecast of all this cash, and they were flush. Right before the election they issued the cheques to everybody. I don't think it helped much politically.

Hon. G. Collins: It was $200 million. But now all of a sudden, halfway through the fiscal year, they're short $185 million. Those are the frustrations that I've been experiencing as Minister of Finance. I feel as though every day somebody else walks into my office with a little ticking time bomb and puts it on my desk. Every day I have to grapple with it. Sometimes it's $100,000; sometimes it's $1 million; sometimes it's $50 million; in this case, it's a $185 million problem. That's sort of the news that we're getting on an ongoing basis. It's been a little overwhelming at times, I must say.

Tech B.C., I think, has been put in a very difficult spot by the agreement signed with the previous government on their behalf, signed with ICBC and Bob Williams, his investment arm. The lease that they have for this building in Surrey is a very significantly overpriced lease. It's very expensive for Tech B.C.; that's unfortunate for them. The new Chair…. ICBC's operating side is supposed to move in and take part of this space as well. They're finding that their lease is way out of the market as well. So here you've got an investment arm of ICBC that owns the building, that's building the building and holds the leases. Then you've got the operating arm of ICBC which is supposed to move into the building and pay the lease. It doesn't make any sense. They're grappling with that; we're grappling with it as Tech B.C.

I know the new Minister of Advanced Education is looking at how we deliver on our commitment to double the number of high-tech graduates in the period of time that we've allotted. It's a huge challenge for us, both on the capital and on the operating sides. We're go

ing to do it, but we have to make sure that we're doing it in an efficient way. That's the challenge that's presented to Tech B.C. with this building. We're trying to find ways we can deliver that service in a more cost-effective way. That's what we're up against. I know the minister has been devoting an awful lot of time to doing that. She and I have been spending some time together on that.

Your last question of four was the time line for core review. It really is an ongoing process. The government and the Premier have told ministers: "When you see an opportunity to make a change, don't wait. Make it now." There's some risk in doing that. As we make these small changes one by one, the media is focusing on all of them and saying: "Why aren't you telling us about everything you're doing?" Well, we're racing to grab hold of this thing and turn it around.

For example, in my ministry, within days of coming into government I was briefed on our B.C. bonds program, which is sort of Canada savings bonds, but they're B.C. bonds. Every year we've spent a million or more dollars on advertising the B.C. bonds. Then we'd spend more money on administration of the B.C. bonds program. Then we'd spend more money on commissions for the B.C. bonds program. Then we'd have to offer investors a premium in order to get them to buy the B.C. bonds. What we've found is that since 1993, when the program was put in place, up to today, it had cost British Columbians about $144 million more to borrow that money than it would have if we had just borrowed it on the open market. We didn't wait for the quarterly review; we terminated the program. We saved a million dollars in advertising this year. We saved all the administration costs, and we saved the investment costs.

All ministers are making those kinds of decisions going forward. The core review process should be completed later this fall, but ministers are trying to implement that stuff as time goes by.

K. Krueger: In the last week I've had some really positive input about this government's changes. I was at Sun Peaks on Tuesday. They're having a $50 million construction season at the resort. The mining industry in my constituency is saying that mining got everything it asked for, from the point of view of getting investment to return to British Columbia with the investment credit situation and the relief on taxation on production equipment and machinery.

Residential construction in our area, in Kamloops, hit a 40-year low and is starting to really move again. So on behalf of my constituents, with the input I'm getting, I want to congratulate you, Mr. Minister, on staying the course and not blinking at all on the tax cuts. I don't think anyone realistically expected the oil tanker to stop and turn around on a dime, but it is turning. We're seeing things, as I said, in retail and in construction and house prices, and so on, that are really positive.

I wanted to put in my two bits' worth on ICBC as well. Glen Clark's phony premium freeze in 1996 has hurt that organization really badly. It had finally reached the point where it was starting to rate premiums according to the loss experience of the region where the vehicle was being used. That was an incentive in congested areas, such as the one we're sitting in, for people to use rapid transit and so on. If your loss frequency is high and the claims are very expensive and the premiums are expensive, people are encouraged not to crowd the roads. It's a more environmentally friendly practice, and it just makes a lot of sense.

In a lot of regions of the province, including the one where I live and virtually the whole of Vancouver Island and out through the interior, people's premiums were dropping, because their loss experience didn't justify the premiums they were paying. Mr. Clark froze all that, and ever since then the busy urban centres have been subsidized by the rural areas. That's something that needs to stop, I think. If it hadn't been in place, the $75 vehicle levy wouldn't have really looked like a big deal to people in the lower mainland.

Second, I wanted to add something on the productivity issue. Like you, I don't think the remuneration packages are necessarily the high cost factor for public sector collective agreements, but productivity is a big issue. Public sector managers have begun to embrace creative approaches like job shares. The unions responded by extracting benefits such as: if you have two people sharing a job and between them they go over the 35-hour workweek, or whatever the agreement is, you've got to pay overtime even though neither of them has actually worked anything close to overtime. We saw that with the designated days off of the nurses and so on. Those sorts of things are unaffordable.

Then there were the so-called pay equity upgrades. At ICBC, for a long time they had no difficulty at all in hiring clerical staff, because they were very well paid for what they did compared to the private sector. Along came the NDP, who said: "My goodness, there are so many females in certain job categories; it must be a pink ghetto. It must be that people have been underpaid because they're female." They ratcheted up those pay groups to the point where they're preposterously better paid than the private sector for what they do and gave them huge retroactive payments. Half the time people were coming in with $9,000 take-home paycheques, wondering how they were going to spend them. They'd never had any complaint with the salaries they'd had at that time, but they got retro for a couple of years.

So there is much to fix in that area of making sure collective agreements don't hamper the productivity of public sector workers. I guess I don't really have a question. I want to congratulate you for staying the course, and I think we've done exactly the right thing. It's certainly what the government said it was going to do when it ran for election. I think it's already bearing fruit and will bear more.

L. Mayencourt: I have one comment to make. The first was that I got Mr. Barefoot's and the review panel's summary last week. It was very, very great to read it. I thought it was something that a lot more peo

ple in British Columbia should try and get a copy of. I guess it's probably available on the Web.

L. Mayencourt: If anyone reads Hansard, they might want to check that out. The important thing I found about it was that it, in lay terms, tells people like myself how a budget is created and why something is in a certain fund and why we call this an asset and this whatever. So I found that very, very useful.

The thing that struck me from the report was that it was the status quo. If we left everything the way it was, we'd be $3.8 billion in the hole, and with our tax cut we were going to be a little bit deeper — about $5.3 billion. It didn't really deal with…. The only thing we could really affect on there was our expenses. So when I looked at the expenses and went, "Okay, who's dropped the amount of money from their budget?" I looked at Mike de Jong, Forests minister: "There. He got the message; he's going to cut…." It turns out that it's really because the forest fires weren't as bad as they could have been. When I'm looking at this, while I think it's really great — staying the course and staying on budget — it looks to me like we're relying on a lack of an act of God to stay the course.

I think we need to start talking with people in British Columbia about what we are going to cut and when we are going to start doing that. I know that's really uncomfortable for me to go and talk to my constituents about: "Well, what do we cut, tax or whatever?" But I think it's time that we were more frank about that with people. This, I guess, is a comment to the minister.

My question to the Chair is: when we go out and when we send out this ad to the local newspaper and say, "Please come and present," what do we give to people that tells them what they need to know before they come to us? I read last year's report, and without exception there are wonderful ideas: "We should really put more resources to this. We should definitely shore up that. We should make sure that we focus our energy and our dollars and our resources on X." I didn't see anybody say: "Boy, we could sure cut out a lot of that."

I think we need to give people credit for the fact that they…. You know, I manage my home finances, and every member here does as well. I think it's time we talked to British Columbians on a level that this is kind of like your home budget. How are you going to manage? What are you going to cut out? You might not go to a movie or you might not…. How does that translate into this? What are we going to give to people as we go to see them that tells them what they need to know before they say: "You've got to save our hospital," or "You've got to save our whatever"?

B. Lekstrom (Chair): That's an excellent question, Lorne, and I note that we will be dealing with it later in the agenda today.

Hon. G. Collins: Maybe I can offer something too. The budget consultation paper is designed to be given to the public. This is the basis of the debate. When they walk in…. I'm assuming Kate will have them at the front door, and people can take them in anticipation of coming. You may want to put something in your ad. If people are going to come and present, they may want to look at this document. If they want a copy of it, we can send them one before they come — if you want to do that.

I'm glad you read it. I know not everybody in the province has read the report of the fiscal review panel. It is interesting; it is a good way to present what government faces, how you build a budget and what the challenges are. I think it would be good for people across British Columbia to read this. They'd get a sense of what government faces and that there are tough tradeoffs.

It would be wonderful if GDP were at 20 percent, revenues were at 20 percent, and we could just continue to fund things that we wish we could fund. That's not going to work. It's not an efficient thing to do. People need to understand — as we all do, as members too — the challenges that leaders face in making those tough decisions. That's what budgets are about. They're about choices. Which things are you going to do? Which things aren't you going to do? Where are you going to find the money to do what you are?

This document is really the debate, and I would encourage you, when you're meeting with people and they're speaking to an issue…. When you get an opportunity to ask them questions, refer to things in the book and draw them into it so that they actually do read it and think about it. There are questions in here that people need to think about.

L. Mayencourt: If I could make a suggestion to the Chair. Last year this committee went out and had submissions from approximately 400…. There were a lot of people that came out. We have their names and addresses, and they're likely to show up again. Shouldn't we be proactive and say: "Look. You might be coming. Would you like this? Please read this before you show up"?

B. Lekstrom (Chair): There are a number of things that we are going to discuss. I think that certainly, when we do put out the call, people will put their names forward to make submissions to the committee. I believe that at that time, we'll forward that. With item 4 on our agenda, I think we can cover the issues that we're discussing here right now — very good points.

R. Sultan: Minister, I hesitate to add another item to your list to discuss with the new Chairman of ICBC, but I must relate a personal experience on receiving a nice little cheque in the mail in the run-up to the election. The only problem was that it was made out to my wife, who had been dead for almost two years. You might ask ICBC whether they're planning any cross-checks against the tombstones of the province.

Hon. G. Collins: Okay, I will raise that issue with them. I guess I can't apologize. I wasn't there, but I do apologize now for the Crown doing that. It's not very sensitive.

R. Sultan: I just think it's an example of the profligate tendencies of this Crown corporation.

T. Bhullar (Deputy Chair): Minister, what steps will you be taking to prepare the public for the bad news that's coming? Are you going to be touring the province or going on television or…? How are we going to soften them up for the blow?

Hon. G. Collins: As a policy, I've tried to communicate the information to the public, as soon as I can, in a reasonable way. I've done it through open cabinet meetings. Two or three times I've made presentations to open cabinet on the economy, on our fiscal situation. I did it yesterday with the release of the quarterly report.

Last week I was briefed after hearing the Fed in the U.S. downgrade their forecast. The federal government here downgraded its forecast on the Friday. We had the long weekend of Labour Day, and on the Tuesday afternoon I received a briefing from our economic people. I called in one of the reporters, because I had about five minutes before my next meeting, and tried to debrief him on what was happening and that we were no longer expecting the same sort of GDP forecast we had previously.

So my policy has been to try and give the public as much information as we can, as soon as I get it. Yesterday my presentation on the quarterly report was not a pleasant one. It wasn't an enjoyable task as Minister of Finance, but I think the public has a right to know what the situation is as soon as we know what the situation is.

I think that if you're up front and straight with people about the challenges, they understand that, and they'll accept that. We may disagree, and you're certainly going to hear disagreement on what action government should take in response to it, but I try and put that information out as much as possible.

Yesterday I spoke about the need now, given the situation we're in, to downsize government fairly significantly. We campaigned that we would protect the funding for health care and the funding for education. We didn't say we would keep health and education the same. We said we'd protect the money that was going into them, but for the other parts of government we need to do a full review. We're going to do that. That may mean significant reductions in the size of government in those areas, but we want to do it in a thoughtful way. That's what the whole core process is partly about, as well, as we build our budgets and put numbers to it.

This is the committee that is there to engage the public in that very debate, and I think you should be really frank with the public and talk about the challenges we face. You know, it'll be nice to hear all the things people want to spend money on, but there is no new money. If they want to spend money, they have to understand that that means government is going to stop doing something else. It really is about priorities and balances.

Bill Barisoff, Minister of Provincial Revenue, and Kevin Falcon, Minister of State for Deregulation, and I are going to be doing some speaking around the province in the next couple of months. We'll be out there, and we may cross paths with you at times. We're out there to try and talk about the challenges we face but also about some of the positioning we've done to make sure we're in good shape to weather this and come out the other end in a really competitive way.

I think Kevin made some comments about what you hear on the streets. People are worried about the economy. They're worried about what's going on in the world. They're a little shaken by what happened last week, but there's a lot of optimism in British Columbia about where we're facing.

They've had this huge burden on their backs for a decade, and now, almost overnight, they see big changes in the taxation regime. They see big changes in the attitude of the government toward trying to foster investment and success and risk-taking, and they're excited about that. That's what British Columbia is about. That's why I moved here from the Prairies when I finished high school, because this is the place where things happen.

This was an exciting place to live. People took risks; there were opportunities. It was a great place. It was where young people came if they wanted to build a future. That's what our history has been about, and so people are anxious and eager to get back into that, to take those risks, make those investments, hire those extra people. While they're a little nervous about our short-term economic outlook this year and part of next year and shaken by the events of the last week, they're gung-ho and ready to go.

I think you'll find that when you're out there too. When you talk to people, they're excited about things. They're positive about what we're doing as a government. They understand there are tough times ahead, but they're willing to weather them.

B. Lekstrom (Chair): I believe that concludes the questions from the committee, Minister. I would like to thank you for taking the time and going over the review with us. One of your comments earlier about the organizations that will be making presentations and the individuals…. I can assure you that this committee will go out and consult with the public of British Columbia. We will set aside time at our public hearings to make sure that the people you've mentioned, who are sitting there and have come up with an idea but possi-

bly haven't put their name forward, will have an opportunity to speak to us. We will do our best to present a very good and comprehensive report back to you and do the best job we can — that is, to represent the views of British Columbians.

Hon. G. Collins: Thank you for letting me come and present. I'd like to just offer the services of the ministry as well. If there are specific issues that you need further examination of and that you think would help in the debate as you're discussing things with people, I'd be pleased to try and provide that information or analysis to all members of the committee. If we can be of help in any way as you do this, let us know.

B. Lekstrom (Chair): At this point, that does conclude item 1 on our agenda. We will move on. I know that a number of you have tight schedules to meet today, and we will try and conclude our business as efficiently and effectively as we possibly can.

B. Lekstrom (Chair): Item 2 on our agenda is a review of our business plan for the Select Standing Committee on Finance and Government Services. I believe you've had a chance to review this, and I would open it up at this time for any comments on the draft that sits before you today.

Following through on that, I've had the opportunity to go through this. I think it's a very good draft. I think it lays the issues out as to what our duties are. The time lines that we're looking at on page 3, I think, are quite achievable. We knew going into this that we had some tight time frames, but we will do what's necessary to meet those time frames.

R. Sultan: We are to prepare a report. Who is actually going to write the report?

B. Lekstrom (Chair): The Clerk's office will be doing the drafting of the report through the tours. That's my understanding.

My name is Kate Ryan-Lloyd. I'm here today to assist as a Clerk to this committee, although Craig James, I believe, has been assigned this committee on an ongoing basis.

Yes, it will be the role of our office to provide research support to the committee. As the committee begins to receive written submissions, research analysts in our office will begin to synthesize those and prepare a sort of summary, which will in fact become a draft report. The presentations and evidence received during the public hearing process will also be incorporated into that research.

We hope to finalize the results of that process by early November, as quickly as we can. We'll have summaries prepared for the members as you begin your deliberations on the draft report, and we'll also help you draft that report.

B. Lekstrom (Chair): I apologize for not introducing you. I made the assumption that everybody knew Kate. I apologize for that.

Are there any other topics for discussion? I'll note that when you look at this, there's also a draft budget that has been put together by the Clerk's office — again, subject to change by the committee. It is based on the history of this committee touring the province.

I. Chong: Can you advise us, Kate? The budget that was set out last year. I know we had done some changes to it. Did we keep within that budget? Did we actually find savings, or did we go over that? As a comparison….

K. Ryan-Lloyd: That's an interesting question, actually. This budget, as the Chair mentioned, is based on the same schedule of 14 public hearings that we undertook last year. It is precisely the same, plus $1,000, as the budget that was set for the previous committee. I believe that figure was $197,000. I can assure this committee that the previous committee, in fact, came in well under that, mostly through savings on eating facilities.

As you might remember as a former member of that committee, we made every effort to meet in community centres and schools wherever possible. We achieved a considerable cost savings through that line item, as well as general expenses, on the public hearing trail. I think the final figure for last year was about $125,000.

I. Chong: Supplemental to that, the advertising costs. I know that was a bit of a concern last year. This $85,000 — was that sufficient, or did you find that there were complaints from the public afterwards? How did that relate? I think the advertising budget presented last year was substantially larger; we've reduced it. I'm just wondering about the effect that has had.

K. Ryan-Lloyd: I think this figure is a fairly conservative one for advertising for this time around. Certainly, one of the larger items of expenditure for any committee's work is the advertising communications expenses. I think the current preliminary budget here includes provision for a one-time advertisement to invite written submissions to be placed in community newspapers around the province, including the major daily newspapers of the province. In addition to that, I

understand that this line item also allows for the committee to do up to two placements for each public hearing location. That would be a selection of regional community newspapers, as required, in those particular targeted areas.

The committee last year also experimented with radio advertising, which we heard was very successful in reaching a new population of people who may not be so tied in to the print advertising. That was very affordable, actually, compared to the traditional print advertising that we'd undertaken. I don't have the exact figure of what the advertising was for the previous committee, but I think this is a good target to keep in mind. Obviously, when members have a chance today to decide to finalize the public hearing locations and the number of hearings that are planned, we'll have a better handle on where that figure will come in for the current committee's work.

B. Lekstrom (Chair): Any other questions surrounding our business plan? If not, I will take by consensus that the business plan will be adopted by this committee, and we will move forward to item 3.

B. Lekstrom (Chair): Moved by Lorne; seconded by Ida. All in favour of the motion? Opposed? It is carried unanimously.

B. Lekstrom (Chair): Item 3 on our agenda today is a review of the draft hearing schedule. It is very preliminary. We had a couple of people put forward ideas on locations. I have taken the opportunity to review it. The option A that you see in front of you…. I have certainly put some significant changes into that. We had missed the northwest completely under this. There are a couple of areas. What I would like to do is possibly just review what I've looked at by looking at a map and locations relating to what took place last year with the tour and trying to accommodate some new locations in there. I know that sometimes in the regions, we seem to visit the same ones. There are times when we have to visit certain centres, but in other areas of the province we can sometimes move those meetings around to be more inclusive to the public.

I have put together a breakdown for the province of Dawson Creek, Prince George, Kamloops, Williams Lake. I'm saying these in order, as well, with a combination of groups of two — trying to consolidate two meetings into one day. Otherwise, I don't believe that we would be able to get around the province to hear from all corners.

When I began, Dawson Creek and Prince George would be my recommendation for one, Kamloops and Williams Lake for another, Vernon and Revelstoke for another, Cranbrook and Trail, Chilliwack and Surrey, Port McNeill and Nanaimo, Terrace and Prince Rupert. The two larger centres I have broken down. Vancouver, I believe, will take a full day. That's what I have put there rather than try and join two in, possibly. Then I have Victoria as a stand-alone at this point.

Also leaving options so that if submissions are coming in, or requests to meet, we do have some flexibility in the schedule. I would throw that out for discussion. I have not put dates to this. It is certainly our intent to travel in October, but I thought that we would have a full discussion on what I've put forward here. I note that under option A, when you look at the first one that was put forward, there were a considerable number of meetings held in the lower mainland. I've tried to accommodate that, but certainly missing the northwest throws something in there that we have to address. Also, we had to look at Kamloops, which I think is a very vital link within the interior, and allow people to get to it.

Having looked at last year's schedules, I've revised it. I've put forward, for discussion purposes, what I've just put on the floor for the members today.

B. Lekstrom (Chair): If I could throw one other thing out, and then I'll go to Ralph. It would be my intent that we don't put dates — Monday, Tuesday or the actual date. I would do some work on that and forward it to you as quickly as I could at the beginning of next week for your comments.

I know that a number of members have a lot of work on their plates, whether it be other committee work or GCCs. I began looking at that to see if it could be accommodated. It's a virtual impossibility to do that, with the numbers and the work schedule that we have. We will try and do the best we can.

R. Sultan: I'd repeat the comment that I made at our last meeting. I think that if the amended option B schedule, if I can refer to it as you've just enunciated it, were to be adopted, it does seriously underrepresent key population areas in the southern portion of the province. I would view this consultation as having the first objective of consulting our citizens and only secondly the objective of consulting our regions.

Furthermore, while some of my best friends live in Williams Lake and I love that community, we were there last year. And Kitimat…. Well, I helped build it, but the northwest corner of our province is hardly one of our population centres, and we did spend a considerable amount of time there last year. And to go back to Terrace and Prince Rupert would strike me as being a little bit of overkill, in terms of geographic representation. My own vote would be to increase the representation of the major urban areas, whether it be Surrey, Burnaby, Richmond, etc.

B. Lekstrom (Chair): Thank you for those comments. I noted that Williams Lake was visited last year as well. Looking at the map, when you take a map of British Columbia, I certainly did try and accommodate both the areas of population and the regions as well. Although sometimes the north is not a populated area, it's a very resource-rich part of our province. It helps drive this economy. I tried to put the balance in, with population as well as regions. But your issues and concerns are certainly taken and noted.

R. Sultan: If I could add a PS, if we did focus a little bit more on the southern areas, we would probably have some modest but positive impact on our travel costs and the availabilities.

B. Lekstrom (Chair): Thank you, Ralph. I do have two other speakers at this point. I have Barry and then Ida.

B. Penner: I trust that by now you've received the letter that I wrote immediately following our last meeting. In that letter I suggested a methodology of determining meeting locations. I think the committee is bound to meet every year in certain central geographical hubs in the province: namely, Prince George, quite possibly Cranbrook and certainly Vancouver and Victoria. Beyond that, I think there are other areas where we need to alternate or not attend every single year.

To address Mr. Sultan's comments about the northwest, I think it is important that the committee make its presence known there every year but perhaps, instead of having two meetings this time in the northwest, consolidate that into one meeting. I see that last year the committee met in Prince Rupert and Kitimat. If the committee were to meet in Terrace this year, that is a community that's almost directly between the centres of Prince Rupert and Kitimat. So meeting in Terrace might effect a compromise that would keep people in the northwest feeling like they're being included in the government process.

B. Lekstrom (Chair): Okay, that's certainly duly noted, and I can do some work on that. Actually, in discussions, Terrace and Prince Rupert, looking at our travel patterns, I was trying to keep…. If we were trying to accommodate two per day, and that would certainly be our hope that we could do this, I was going to try and keep something geographically relatively close. I can take the comments that we will hear today and certainly revise this draft. I will take those comments under consideration and see if we can accommodate something there.

I. Chong: I think those are good points raised by both Mr. Penner and Mr. Sultan about the fact that this is an ongoing committee and that we will reach all regions at some point. But I do take to heart what was expressed by Mr. Sultan about the large population areas. What was very clear last year when we were travelling was the fact that reaching the smaller destinations, people were very encouraged by the fact that an all-party committee would reach out to those communities for which travel was much more onerous in terms of financial costs.

I think that is in large part the reason why we got to these small areas. However, if the schedule is to be revised and we are looking at large urban centres, the one area that I encourage you to look at, Mr. Chair, is perhaps the Richmond area. I mean, you've got Vancouver and Surrey, which makes sense. But perhaps Richmond could accommodate the other large urban area, because there is quite a lot of activity there.

What I do note, and maybe you can correct me — my geography isn't perhaps as good as others' — is that I think we are missing the Okanagan region. I see Vernon there, but I'm not sure if that's going to be classified as sort of an Okanagan area or whether we have considered there…. I think Revelstoke is considered further, sort of Kootenays, and then Vernon is a smaller area. Whether you wanted to look at another area in the Okanagan, not necessarily Penticton and Kelowna, that is a possibility. I just leave that for your consideration.

K. Krueger: Responding respectfully to my lower mainlander colleagues, being other than yourself, Mr. Chair, the only person on this committee who isn't a lower mainlander or a south Islander, these areas of the province are far away. It's a huge province, and although the population is small, the perspectives are very unique.

People who live in these areas do not have the opportunity and seldom have the resources to come down and make their voices heard in Victoria or Vancouver, where the head offices of ministries and Crown corporations, and so on, are located. People have far less opportunity to have personal input to government if they live away from the lower mainland or the south Island than if they lived there.

I hope we never degenerate to the point of arranging meetings as rep-by-pop, because eventually there would just be a tiny geographic portion of the province that we were taking representation from, other than by e-mail. Even there the services, although we pledged to deliver better services, aren't available electronically in the same way they are in the cities.

So I strongly support the agenda as drafted. And as long as we're going as far away as Terrace, I think it would be kind of silly not to try and have two meetings, especially when we're having two meetings on every other trip around the province. I do support the agenda as you've drafted it.

T. Bhullar (Deputy Chair): Perhaps the interior could be covered before winter sets in. In the colder winter, a personal experience from Terrace frightened me with airplanes. We couldn't land; we tried three landings. It was a frightening experience, and we finally went to Prince Rupert.

T. Bhullar (Deputy Chair): I wasn't worrying about a snowmobile. I was just trying to land.

B. Lekstrom (Chair): That is an excellent point you brought up. It would be my intent in coordinating this, Tony, to try and begin in the north, if we could. You know, fall is setting in up there, and we feel that in the mornings in particular. Although the sky is blue and it's beautiful up there right now, it's not that far off before the snow will hit us.

T. Bhullar (Deputy Chair): At Terrace I looked out the window of the airplane and thought I saw the runway; then I realized it was a snowstorm.

B. Lekstrom (Chair): What I have heard, to look at this, is that the review and the option that I've put forward is meeting most people's expectations. I have heard that we could possibly look at the Okanagan — I will have some discussion, Kevin, with you, if that's acceptable to the committee, to make sure we cover that area — as well as possibly look at further representation in the lower mainland. Richmond has been brought forward. I will try and accommodate that and put together our first draft schedule, with some dates and time lines, and have it to you, hopefully, by Monday or Tuesday of next week. I think it's very important that we move as quickly as we can so that the members can coordinate their schedules on this. I would look to see if that's a good summation of the discussion that's taken place. Okay?

B. Lekstrom (Chair): We will move to item 4 on our agenda, which is a review of the communications relating to hearings and something that Lorne had discussed earlier. We have an opportunity now. I will begin with our immediate release — the draft news release, for instance. This is for discussion by members of this committee, if they have had an opportunity to read through it, if they see any concerns regarding the public hearings on upcoming provincial budget in progress.

B. Lekstrom (Chair): These ones will be dealt with when you read them and released to the media, and of course, I'm assuming that these would be dealt with on a provincewide basis based on the areas of visitation by the committee.

K. Ryan-Lloyd: That's right. We anticipate that we would do a provincewide release during the first week of hearings, and then at the direction of the committee we'd also be prepared to reissue releases just prior to the committee visiting a local region. So we would do customized versions of this, also, to remind people that the committee is about to head into their town.

B. Lekstrom (Chair): The drafts, I believe, are done very well, having gone through them. Certainly, any member of the committee that sees something….

B. Lekstrom (Chair): Yes. The date that's in there — we can correct that. That will be noted.

R. Sultan: Perhaps those who have participated in this committee in the past could indicate whether the number of people wishing to be heard is overwhelming and, if there is a long lineup of potential speakers, how one decides who to hear from.

B. Lekstrom (Chair): I will defer to Kate, and then I can certainly comment on that as well.

K. Ryan-Lloyd: I think that last year there was a significant level of interest in the committee's process partly, perhaps, because it was a new process. It was being undertaken for the first time. I think many groups and associations wished to participate in that. Once the call for submissions begins to be placed and appears in newspapers around the province as well as notices of public hearings, our office will immediately, no doubt, be receiving calls from people requesting to reserve a spot at a public hearing. If this committee agrees, the usual procedure is that each caller would be allotted a 15-minute time slot to make a presentation to the committee. That would include a ten-minute presentation by the individual followed by five minutes of questions and answers from the committee. With a typical hearing schedule, that might allow for anywhere between 20 to 35 individuals appearing before the committee at a given location, give or take a few and depending if some people go over or some people fail to show up.

Of course, the written submissions are also a useful tool for the committee to focus on. Certainly, in no way would the committee's efforts to encourage written submissions diminish in the face of the oral presentation. The written submission is just as fully considered a part of the process and part of the committee's draft report as would a presentation being made face to face to the committee at a public hearing.

The last committee process, I believe, had 268 oral presentations to the committee and about 228 written submissions received by our office. I think that in certain regions the requests to appear before the committee were overwhelming. The committee could not ac-

commodate all of the requests to have a face-to-face appearance with the committee, particularly in the Vancouver area. I believe a second hearing date had to be scheduled to accommodate overflow of people who couldn't have a speaking slot arranged at the first meeting date. I believe there was a very high demand in Victoria, as well, though last year time didn't permit a second hearing date to be scheduled in that region.

K. Ryan-Lloyd: Certainly, yes. I'm sure the committee would want to encourage people, as well, at the meetings wherever possible, wherever the schedule permits, when people are there in person to try and make every effort to hear from as many people as possible while the committee is in that community.

B. Lekstrom (Chair): To follow up on that, it certainly would be my intent. When I look around this table and the members here, I've never seen anyone that's scared of work. If we have to extend, in some cases, our ability once we start getting the information in on presenters, I think the committee can make that call then. For instance, last year Vancouver was one meeting. We are trying to spread that out and allow people to attend different ones in the lower mainland. It would be my intent, as Chair, to make sure that we are as open and accessible as any committee this province has seen, and that will be my endeavour.

The first news release, as it's written, will begin. I will move on to "Legislative Assembly of British Columbia: Pre-budget Consultation in British Columbia — Public Meeting" at the top of the page, and see if there are any comments on that. It's the second in the package of communication.

L. Mayencourt: Is this the kind of document that we would share with people who have called or written to our constituency offices? Is this something that we would utilize within our ridings?

B. Lekstrom (Chair): I believe that it would definitely be a document that we could utilize that way very appropriately. Our job as a committee is not only to hear from the people of British Columbia in this prebudget consultation but to make every effort we can to make them aware of the times and the places — really, what Gary had touched on earlier: what the expectations of British Columbians are. We are facing some realities here that I think, for the most part, British Columbians understand. But we do have a job to do, as elected MLAs, to make sure they know the situation we're in.

K. Ryan-Lloyd: Further to that, the document headed "Public Meeting" is actually a draft print advertisement to be placed in the community newspapers where the public locations will be set. The format of it can also be used as a flyer to be distributed through your constituency offices as well, or as a fax, but the text is designed to be in a newspaper ad.

I. Chong: The only thing missing on that — because I recognize there's a part to go in a community paper — is that I think on every communiqué we do, we should include the e-mail or the website so people can refer to that. I don't see this.

K. Ryan-Lloyd: It might be that that's what it means. I presume it would be included in that, but I will ensure that that's done. The committee will have a website. Well, it already does have a website up and operating now, which will contain copies of the prebudget consultation paper and also an electronic link to enable submitters to put their written thoughts on there to the committee through e-mail.

I. Chong: I just wanted it ensured that it was provided for in every ad that we take out.

Moving along, the sample radio advertisement that we have before us, I think, is quite straightforward. Any comments on that or alterations that any members of this committee would see?

B. Penner: I'd just note that the radio ad does contain a reference to the website address for the committee.

The call for submissions is the next one in our prebudget package that is to go out. Again, it's very important, because not only the oral presentations that we receive but the written submissions will receive equal presence from this committee in our evaluation and development of our report. So for the people that can't travel to the locations…. Although it would be nice to get to every single location in British Columbia, that's an impossibility. We're going to make every effort so that every British Columbian has an opportunity to put forward their views, if they wish to do so. I see that as being appropriate.

The other one that Lorne had touched on…. I'll just touch briefly on that. In my discussions briefly with Kate, it would be my understanding that upon our call for submissions or for public hearing involvement, when the names are put forward and dates and times booked, we would forward copies of our prebudget consultation paper to the individuals so that they would have an opportunity to prepare for that submission.

L. Mayencourt: No. Actually, I just wanted to say that if we're going to be sending anybody anything, that would be one thing that would be very useful, a good primer.

I think that concludes item 4 on our agenda this afternoon. We do have item 5, which is any other business. I would move it open to the floor at this time for any members to bring forward any business that would need to be dealt with by this committee at this time.

R. Sultan: In terms of scheduling, is there some attempt to work around other committee assignments, of which there seems to be a growing abundance? Or do we just sort of cut right through them and say: "You work it out on your own"?

B. Lekstrom (Chair): You know, I began thinking that I could work around schedules. I began looking at them, and to get to the point, I'm going to have to say: "Work it out on your own." That's the point we've reached. I know myself, my schedule…. This is my first priority. I'm also then going to try to get to the others. The Premier has certainly put a very progressive agenda and time lines before us, and it's our job. As the Chair, I am committed to meeting those time lines. We'll do the best we can. There may be times when every member of this committee is not sitting at the table, but I know that each and every one of you will do your best and try and accommodate your schedules to meet the best interests of British Columbians.

R. Sultan: I appreciate that the schedule really suggests that the public consultation will sort of begin and end in October.

K. Krueger: If I could just add to that, there aren't any other committees, except the Aboriginal Affairs committee, with as tight a time line as we have. I think it's pretty much understood that as far as a lot of our other committee work, this is probably going to have to take precedence.

R. Sultan: I think that as this evolves, we'll seek the guidance of the Whip. [Laughter.]

B. Lekstrom (Chair): Well, members, I would like to thank you for coming this afternoon and again realigning your schedules. With the events of this past week, I would like at this time, on behalf of our committee, to take a moment's silence before we end this meeting, on behalf of the victims and families of the people who were so devastated in the tragedy that hit the United States, our neighbours to the south. These imaginary borders are certainly eliminated at times like this, because it affects each and every one of us. I'd ask that you join me in one minute's silence for those families.

Thank you, members. I appreciate it. Please have a safe journey home. I will be in contact early next week with a draft that we can hopefully agree to and begin the process.


Witnesses:	Hon. Gary Collins (Minister of Finance)

REPORT OF PROCEEDINGS (Hansard)

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
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