[ Page 6791 ]

CONTENTS

The Ministry Of Human Resources Amendment Act (Bill M223). Ms. Brown

Introduction and first reading –– 6791

Private Members' Statements

Hospital cutbacks. Mr. Stupich –– 6791

Hon. Mr. McGeer

Levels of health care service. Mr. MacWilliam –– 6793

Mr. Cocke

Mr. Reid

Need for integration of services to children. Mrs. Dailly –– 6794

Hon. Mrs. McCarthy

User-pay. Mr. Davis –– 6796

Mr. Cocke

Mr. Williams

Special Enterprise Zone And Tax Relief Act (Bill 49). Second reading

Mr. Reynolds –– 6798

Hon. Mr. McClelland –– 6799

Division –– 6800

Small Business Venture Capital Act (Bill 19). Committee stage –– 6801

Mr. Williams

Miscellaneous Statutes Amendment Act (No. 3), 1985 (Bill 56). Second reading

Mr. Macdonald –– 6802

Hon. Mr. Gardom –– 6802

Workers Compensation Amendment Act, 1985 (Bill 61). Second reading

Hon. Mr. Segarty –– 6803

Mr. Cocke –– 6803

Mr. Gabelmann –– 6804

Hon. Mr. Segarty –– 6805

Dr. Gordon Shrum. Hon. Mr. Gardom –– 6806

Mr. Cocke

Committee of Supply: Ministry of International Trade and Investment estimates. (Hon.

Mr. Phillips)

On vote 49: minister's office –– 6806

Hon. Mr. Phillips

Mr. Williams

Appendix –– 6809

FRIDAY, JUNE 21, 1985

The House met at 10:04 a.m.

Prayers.

HON. MR. GARDOM: It is fitting, M. le president, that I make this observation. Au revoir, Rene; bonne chance.

MR. R. FRASER: Mr. Speaker and members of the Legislative Assembly, today we have in the galleries 45 grade 7 students from Sir James Douglas Elementary School, which is in the great riding of Vancouver South. Would the House please make them welcome.

Introduction of Bills

THE MINISTRY OF HUMAN
RESOURCES AMENDMENT ACT

Ms. Brown presented a bill intituled The Ministry of Human Resources Amendment Act.

MS. BROWN: Mr. Speaker, in the two minutes allotted to me, I'd like to say that this amendment asks for two things. It asks that the annual report of the ministry be tabled annually and not two or three years late. It also asks that that report have detailed and statistical information.

Yesterday in this House we received an annual report from the ministry for the years 1983-84. We've already completed debating the estimates on the years 1984-85. If this bill is accepted, it means that next year, when we debate the estimates, we will have in our hot little hands the annual report for the year 1985-86.

In addition, Mr. Speaker, I want to refer the House to the auditor-general's report of 1985, which states:

"We have concluded that ministry annual reports do not provide a full and fair explanation in plain language of what ministries have done with the money and powers granted to them. As a result, the annual reports do not give the Legislative Assembly and the public the information necessary to judge whether they are being well served by the ministries."

Yesterday we received a PR pamphlet from the Ministry of Human Resources. Mr. Speaker, I would like to ask the minister, in reading the amendment to the bill, to also read the auditor-general's report for 1985 and to introduce some of the amendments recommended by the auditor-general so that future annual reports not only will be tabled on time but will have some information in them that will help us understand the mess that the Ministry of Human Resources seems to be in continually.

Bill M223, The Ministry of Human Resources Amendment Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the Day

Private Members' Statements

HOSPITAL CUTBACKS

MR. STUPICH: Mr. Speaker, there is a serious situation developing in the province, in some areas in particular, and in this instance I want to talk about the cutbacks for the Nanaimo Regional Hospital. They've been experiencing cutbacks for a number of years now, but the cutback this year is of course on top of those of previous years, which makes the situation all that much more of concern.

In previous years the hospitals — I have a number on my list, but I'm going to deal just with Nanaimo — have been able to maintain a level of service by using up reserves of one kind or another that they had accumulated in previous years. However, in the case of Nanaimo in particular those reserves have been used up, and there just isn't anything to fall back on any further. Nanaimo will be experiencing a cutback of 52 beds for some four months this summer and a further cutback of three weeks over the Christmas period. The waiting list for so-called elective surgery has not been growing; it is kept under control because they have been doing more and more day-care surgery. The speed-up in day-care surgery means that the total number waiting for elective surgery has not been increasing, but the hospital administrator expects to run out of day-care surgery this summer, and from then on the list of people waiting for so-called elective surgery is simply going to grow.

[Mr. Strachan in the chair.]

A headline in the Nanaimo Times: "Hospital Cutbacks Slammed." It quotes the assistant administrator. It quotes Dr. Bruce Johnstone, recently appointed head of a one-man task force to investigate what local doctors are calling a "serious deterioration in the availability of services at the hospital." It quotes the Nurses' Union expressing concern. Dr. Martin Spencer, chairman of the hospital's surgical department.... The waiting time for elective surgery, according to the nurses and the hospital administration, will be doubled from three months to six. "The nurses are further concerned that some non-emergency surgery could indeed become life-threatening because of the long waits."

Mr. Speaker, that's part of the question: when does so-called elective surgery become emergency surgery? How much cheaper is it to deal with it in its early stages than by letting it go to the point where it may still become elective, but at great concern to the patient and the families of the patients? How much more expensive is it going to become if we wait until that so-called elective surgery becomes surgery that must be performed?

A letter to the editor of the Free Press from a Michael Darrell on June 10, 1985, has a heading: "Restore Hospital Funding." In this instance the writer of the letter suffers from a condition known as a vascular necrosis. He requires a total hip replacement. He was driving a semi-trailer for Public Freightways. He had to give up his work. Of course, that's a financial loss to his own family. He's falling back on the medical system provided by his employer. But it means he's no longer a contributing member of society. He's on a waiting-list. He was told he'd have to wait from three to five months because of the 1982 cutback. We're now into the

[ Page 6792 ]

1985 cutback. That 1982 cutback was from 172 to 134 beds. The waiting time, of course, will now increase because of the cutbacks imposed in 1983, 1984 and again in 1985.

Here is a letter from a Dr. Westwood to the Minister of Health, whose absence I note today, Mr. Speaker — regrettable, from my point of view — dated December 6, 1984, with a copy to me. I have no knowledge at this point as to whether or not the minister replied. He did not send me a copy of his reply, and although I've talked to the doctor, I didn't find out whether or not this was replied to. But in this letter this doctor is urging that the minister get out of the hospitals those elderly patients who would be better served by being kept at home, by expanding and extending the home care program. We've made that plea on this side of the House for several years now: that restraint in that area is counterproductive. I costs more to keep these people in the hospital. They're not being as well served, because they could be better looked after and happier if they were at home. It would be cheaper. It would release hospital beds for other purposes. Even if the beds are going to be shut down and left empty, it's still better for the people and still less expensive to look after them at home.

There is a letter from a Catherine Lehmann, who is complaining about the service given to her father and an aunt — the level of service, the level of care. She puts it down to the attitude of the staff — not having the interest. I put it down to the fact that the staff are simply overloaded. Their numbers have been cut back beyond the patient load being cut back. They simply aren't able to keep up, to cope, and people in those conditions do lose interest and do lose heart. And perhaps even the level of care that individuals give deteriorates with the pressure put on them to deliver service.

[10:15]

Here's a letter from a Mr. Merrill, who is suffering from a condition.... I'll read part of this letter. It's one that I'd certainly like the minister to know about. He's had a copy.

"With a plant and staff capable of giving high quality regional referral health care, Nanaimo Regional General Hospital is apparently being forced by the government to decay into a community hospital. This hardly seems responsible stewardship of public assets. It is a waste of capital and of talent. As is usual, the sick are taxed in money, travel and pain....

"For these patients on Vancouver Island north of Duncan the closure of the Nanaimo Regional General Hospital rehabilitation ward had at least these consequences.... "

He lists them, but I won't go into that now because of time.

He talks about another patient, who is a victim of systemic lupus erythematosus, "on a waiting-list for admission to a chronic pain/rehabilitation facility in Victoria for three months," and so on. The list goes on and on. It is a terrible situation that is getting worse day by day.

HON. MR. McGEER: Mr. Speaker, this sounds like the annual "the sky is falling in" report from physicians in various areas. I'm sure that we'll hear that annual report from Vernon. But one has to look at what is taking place overall in British Columbia to put these annual speeches in perspective. It's well known that British Columbia has the richest population of doctors per capita in Canada, and one of the richest in the world. In the last ten years, since this government has been in power, the number of practising physicians in British Columbia has gone from 3,800 to 5,800, truly a remarkable leap. Since I've been in the House, payments to physicians in British Columbia have gone up fifteen-fold in 15 years, leaping ahead faster than any other index in British Columbia — in other words, approximately four times faster than payments to people who are the wage-earners in British Columbia, and four times higher than the rate of inflation.

So I mention these indices to say that something extremely significant and rich in terms of services to people is out there — truly quantum leaps in quantity and in quality. Of course, physicians come to British Columbia because the fee-for-service rate negotiated by the doctors with the government is one-third higher in British Columbia than it is anywhere else in Canada. So if you're going to do an elective surgical operation in Nanaimo, British Columbia, you are going to be paid one-third more than to do the same service at another hospital in Canada, and you're going to be paid the most that you will anywhere in the country. That's why we have more surgeons and more services available to our people than anywhere else in the country.

We pay an enormous price in British Columbia to make that service available, but despite all of this — the ballooning of physicians, the tremendous increase in moneys available and services offered — does that reduce in any way the annual complaints that appear in this Legislature? No, it makes no difference at all. Exactly the same rhetoric comes into this House whether or not this took place.

I can remember being on the other side of the House and making speeches like this when there really was a problem, before all of this enormous expansion and expenditure took place. I would like to say to the people who have laid all of these complaints, and I'm sure we will hear more today: could you please tell us how much is enough? Could you please say when the level of service would reach the point where these annual complaints would be maybe just a little bit less? Then after that's all done, could we tell the people of British Columbia how much more they need to put up in terms of taxes before the people out there will say: "That's enough; we're satisfied"? Because I can find with that tremendous.... For example, for the fifteen-fold increase in payments to physicians that has taken place since medicare came in British Columbia, there has been not one iota of reduction in the complaint. The sky is still falling in; in fact, it is falling in at a more rapid rate now than it was 15 years ago when payments were one-fifteenth of what they are today.

MR. STUPICH: I reject totally the arguments of the first member for Vancouver–Point Grey. There are doctors and there are quacks. The only experience that that particular member ever had as a doctor, to my knowledge, was when he was asked to determine the sex of a whale, and he was 100 percent wrong.

The minister asks how much is enough, Mr. Speaker. He should be reminded that the government increased the income tax rate to bring in another $166 million a year — for health care, ostensibly. But health care is not getting that extra money. The minister should be reminded that the total government revenue is going to go up by 6 percent this year, but the spending on hospitals has gone up by only 3 percent. The minister should be reminded perhaps that total government expenditures have gone up 14 percent, yet health care by only 3 percent. Preventive and community care, which is what we are talking about, preventing illness, has gone up by 1.6 percent.

[ Page 6793 ]

Long-term care. The letter from Dr. Westwood was talking about getting people out of hospital beds, and we were expending on that barely enough to keep up to the increased costs, the 3 percent increase. We expect the economy in B.C. to grow by that amount this year. Home nursing by 6 percent, but on a small base, so that is not helping much either.

But the figure that I want to bring in, Mr. Speaker, apart from the $166 million by that special tax, is the amount of money that Ottawa is sending to British Columbia under the established programs financing, which the Minister of Education (Hon. Mr. Heinrich) says is not his; he can't use it. I didn't hear what the Minister of Health (Hon. Mr. Nielsen) had to say about it. Mr. Speaker, that has gone up 27 percent in the estimates for this year as opposed to last year. Last year we expected to get $871 million from Ottawa. In the budget that we dealt with this year, we expect that figure to go up by 27 percent, to $1,104,000,000. That's another $223 million on top of the $166 million. That's $389 million.

There is money that is being collected by this government that is supposed to be spent on Health, and the government is using it for other purposes. They would rather build a highway, in the hope that that would help them get re-elected in certain constituencies, than provide necessary surgery for people in this province. There are many other programs they have cut back on. But what I was asking for this morning was something for Nanaimo hospital. The doctor who was called upon to do this study said that the reason Nanaimo is suffering so much is that it has run such a tight ship in the past and anything it is getting now is based on the good work they've done in the past. They were congratulated. Now they're paying the price for having cooperated with this government. And they know it.

LEVELS OF HEALTH CARE SERVICE

MR. MacWILLIAM: Mr. Speaker, I'm saddened in the fact that there are two important statements on health care today and the minister is absent from the House. I don't even believe his parliamentary secretary is here. It's a shame, because I do feel it's important. I know that the session is trying to wrap up, but there is still business to be done here. It reminds me of when I taught high school and the kids started to slough off at the end of the year. A good kick in the slats every once in a while kept them going a little bit longer. I think it's the same thing here.

The British Columbia Health Association president, Herman Crewson, recently stated that 60 of British Columbia's 130 hospitals are suffering from the latest round of budget cuts. He went on to say that many of the hospitals are in double jeopardy. Those hospitals that have had difficulty in living with the level of funding last year have rolled over that difficulty onto this year, compounding the effects of further cutbacks that have taken place.

I want to make specific reference to two hospitals: one in Kelowna, just south of Vernon; and one in Vernon. Colin Elliott, the administrator for the Kelowna General Hospital said in a recent statement that in facing the latest round of budget cuts, the hospital will have to use cheaper medication, fewer operating room facilities and supplies and cuts in maintenance and renovations in order to hold the line on the budget. The 29-bed ward for the chronically ill will close for August. Where are the patients going to go? They're going to go home, or they'll be moved to the more expensive acute-care facilities. As well, during the summer one operating room, ten surgical beds and one long-term care unit will close. Over Christmas 59 of the 313 acute-care beds will close. Four out of five operating rooms will be shut down for ten days. Discussions with the administrator just yesterday confirmed that a significant increase on stress is occurring on staff working in that hospital. Mr. Speaker, that translates into only one thing: an inevitable erosion in the quality of service in the hospital, and the quality of service to the patient — and, I might add, the increased opportunity for serious mistakes to occur. That's the situation at Kelowna General Hospital.

At Vernon Jubilee Hospital the latest figures, in discussing this with one of the board members just the other day, show that the hospital still faces a projected deficit of $750,000 to $900,000. As a result of the shortfall, Vernon Jubilee must close a further 25 beds in the surgical ward. This will effectively shut down all elective surgery for July and August. The closure of these beds is expected to reduce the deficit by about $300,000. However, the present waiting-list of four to five months is going to be extended, as a result of those closures, to approximately seven months. There will be a seven-month waiting-list at that hospital. That's certainly not the worst situation in the province. There will be a further reduction in staff through layoffs and attrition. Hopefully they're going to be able to trim another $300,000. But that still leaves them short of the mark. Despite these reductions in service and staff, the hospital remains unable to cover the deficit. The board has requested the ministry review team to consider the provision of additional funding because of the inability of the board to find any other room or area to cut back.

As the gentleman who I was talking with had stated, all the fat has been trimmed off and they're now carving into the bone. I'm sure that's been stated a number of times before. But on behalf of the people of both the north Okanagan and the south Okanagan who use the Kelowna General Hospital and the Vernon Jubilee Hospital, I've been asked to appeal to the minister to reassess the situation in those acute-care facilities. Don't force these hospitals to compromise their high quality of patient care through inadequate funds and over-worked staff. Don't compromise the quality of delivery of health care in these hospitals as well as throughout the rest of the province of B.C.

[10:30]

MR. COCKE: Mr. Speaker, the Minister of Health isn't here, so that gives us an opportunity to extend the debate around this most important question.

I was shocked when I listened to the Minister of Universities, Science and Communications (Hon. Mr. McGeer)....

MRS. DAILLY: Who's gone.

MR. COCKE: ...who's gone from the chamber, reply to my colleague, the member for Nanaimo, on the same subject. He totally distorted the entire question that my colleagues are both talking about. They're talking about provision of hospital care — nothing to do with medicare, nothing to do with doctors. Doctors don't make people sick. They don't break their legs; they don't make sure that they require a hip replacement; and so on and so forth. The fact is, those facilities are needed.

[ Page 6794 ]

The minister complains about the cost. There have been ways in which the costs could have been cut and hospitals not overcrowded, as they are now. Home care is naturally the way to go in our society; it's the least alienating and the best system of delivering health care for those who are in need of that level of care. But we're not providing that level of care, nor are we providing adequate intermediate care. Therefore all our major hospitals, such as Vancouver General, Royal Columbian, Vernon Jubilee, Nanaimo, Kelowna and so on, are suffering by virtue of the fact that we don't have the proper and adequate backup service. That backup service is less expensive than hospital care. A day in the hospital costs the public about $300 — and more — and a day in home care costs something in the order of $35 to $40.

Any mathematician with a pencil that isn't broken certainly can figure out the benefit of home care. Under those circumstances you have hospitals doing what they're supposed to do in the first place: providing the level of care for those who need it. Our beds are crowded by people who are being inappropriately served by the general hospitals in our land. That's the problem. I would agree that a tremendous amount of money is being spent on health care, but there has been nothing done at the less expensive levels of care to reinforce the lowering of those budgets — that is, the high budget in hospital care. Instead of that, Mr. Speaker, we have a government that lacks any kind of planning, any kind of thought in terms of how best to serve their constituency; and their constituency is all the people of British Columbia.

It's very easy for us to stand here in this House, as that Minister of Universities, Science and Communications did, without an ache or a pain in our body, and say: "We're spending too much, the doctors are costing us too much." But put him in a position where he requires elective surgery, where he's racked with pain; then he would change the speech that he just made.

Mr. Speaker, I believe sincerely that we're not being well served in this particular area. We're not being served by virtue of the fact that there's no planning being done at all. We are totally running from crisis to crisis. How do you cut budgets? Just by cutting off hospital beds served. That means you're placing people in jeopardy and increasing the longterm care. You know, the earliest intervention in an illness is the cheapest intervention. The longer you leave a medical intervention, the more costly it's going to be in the long run. Just as plain and simple as that.

So I ask the government to do one thing: smarten up. Smarten up in the delivery of health care. Do a better job and do some planning for a change.

MR. REID: Mr. Speaker, rising to the comments made by the member for Okanagan North (Mr. MacWilliam) in relation to students in the province sloughing off....

DEPUTY SPEAKER: I regret to tell you, hon. member....

MR. REID: I take exception to that, Mr. Speaker, because we have in the audience today Mrs. Hall and 45 of her grade 6 students from Surrey visiting, and to have those comments come from an ex-teacher, one who will never be a teacher in this province again, I take exception to that.

DEPUTY SPEAKER: Time has expired. Order, please.

MR. MacWILLIAM: I'm not even going to qualify that response with an answer. The fact that the minister and the minister's parliamentary secretary do not even have the will to come and listen to these important statements.... Just look at the number of government members on that side compared with the number of members present on this side.

Interjections.

MR. MacWILLIAM: I think that states a very significant point. The session is not over yet, Mr. Speaker, and we're dealing with people's business here, and we should get down to it, and they should be here to listen to these comments.

Interjections.

DEPUTY SPEAKER: Order, the committee will come to order — the member for Burnaby-Edmonds (Ms. Brown) and the member for Omineca (Mr. Kempf).

MR. MacWILLIAM: Mr. Speaker, the people in British Columbia find it very strange that health care must be sacrificed when this government continues to spend more and more money in other areas. The people in this province find that this government's priorities are all screwed up when they can blow $500,000 on champagne and caviar extravaganzas, yet they can't afford the basics of health care, Mr. Speaker.

The people in the north Okanagan are concerned. I've got proof that they're concerned. Here are 314 individual letters of concern that have come to my office concerning the cutbacks at the Vernon Jubilee Hospital. There are another 50 letters sitting on my desk that I'll be bringing down following this weekend. Those are letters of concern, and I'm going to give them to the minister, despite his absence. I'll forward them to his office.

The other member says it's all hogwash. You tell those 314 elderly people, Mr. Member, that that's hogwash, because those are letters of concern. I'm going to read into the record one of the letters. It says:

"We the residents of the north Okanagan face the temporary closure of 25 surgical beds at the Vernon Jubilee Hospital. Such a reduction in service in an area where we already have a four- to five-month waiting period for elective surgery is occasioned by our hospital board's attempt to reduce a projected $700,000 to $800,000 deficit.

"Surely you will agree that few things in our society are as important as readily available quality health care. Please make every effort to provide the Vernon Jubilee Hospital with the necessary funding to allow all surgical beds to remain open."

This is signed, individually, by a number of concerned citizens — elderly citizens, I might add, Mr. Speaker — of the north Okanagan. With the Chair's permission, I'll now make these available to the minister.

NEED FOR INTEGRATION OF
SERVICES TO CHILDREN

MRS. DAILLY: Mr. Speaker, my statement today deals with children. The topic of my statement is: the need for integration of services to children. Never before has this been more necessary and more needed. I think that we're all aware

[ Page 6795 ]

that government has seen fit to cut back on many services to children in all areas — health, education and human services — at this particular time. Never before have we needed to have a properly integrated and coordinated service set up at the ministerial level to assist in the proper and efficient delivery of these services.

I regret to say that from all the studying that I have done on what has happened since the Social Credit resumed power in 1975, we find that the integration of services to children has deteriorated from the time the NDP were in government and first conceived the idea of establishing an interministerial committee for children's services to be delivered.

For some reason or other, Mr. Speaker, the whole coordination of these services is apparently going nowhere. I hope that in reply.... I notice the Minister of Human Resources is in her seat, which I'll give her credit for, because the other ministers are not here to reply. We would like to know what has happened. To start with, why is it not functioning at the ministerial level in the way it should?

To give some specific examples to you, Mr. Speaker, of what is happening out there today and why we need this so desperately, I just want to point out some areas which I'm sure you yourself are aware of. Because of the economic crisis we face today, particularly in British Columbia, more adolescents are unable to obtain work, and they are not eligible for any form of financial assistance. They are therefore unable to become independent when such a move would be desirable. In other words, we have young people at home now who are probably at an age where it would be better for them to leave home in some cases and be independent. Because of the inability to find work due to the employment situation in this province, we have some very undesirable situations erupting on the home scene.

Conversely, we have other adolescents who are forced out and are leaving very difficult family homes. The problem is that when they leave, they can't find adequate income or an an adequate place to live, with the result, Mr. Speaker, that there are many seriously disturbed children today in this province, who through no fault of their own — because of policies which exist in this province — are being faced with some tragic situations. These situations are not being alleviated, because there is a lack of coordinated services to these children.

We are finding an increase in the abuse of alcohol and drugs and attempted suicides by teenagers. Bad enough that we have to have this situation today. But the whole point of my argument and statement today is: what is the government doing about it? In many cases — not all — we have to hold the government responsible because of their economic policies; they have created this scene. At the same time, with more and more children at risk, troubled and needing assistance, we find that the government has cut down on many services in Health, Education and Human Resources. In my opinion, the situation is reaching crisis level in British Columbia. There are many children out there who are desperately in need of services which they are not receiving.

One example of what I consider a very callous government policy was the closing for the summer of the VGH centre for adolescent children. We are told that those children can go to the adult ward. This is the whole point of my statement today, Mr. Speaker: the children of this province are not being given priority. Taking children at an early stage and giving them the best in services is one of the most important functions of government. This government is not doing that. The children of this province who are not being given the services they need today are in time going to become the problems of the future. I cannot understand why this government is so short-sighted on this particular issue.

I understand that the ministerial committee — I don't remember exactly what it is called — is not functioning with any real purpose: it's in chaos; it's disorganized. I think that the public of B.C. deserves to hear from the government why this is not functioning.

In thinking about this whole matter and being concerned, as many others are, about what is going to happen to the children of B.C. without proper services, I've come to the conclusion — and I'm saying this as an individual member — that the only answer is to develop a ministry for children in this province; and perhaps, somehow or other, the priority of children's needs will get more attention.

[10:45]

HON. MRS. McCARTHY: First, may I say that I am pleased to respond, and I thank the member for Burnaby North for bringing the subject to the floor. I am pleased because I think I am going to be able to share with her some facts which she obviously does not have. When we are talking about children in the province of British Columbia, I think it's important that we do not in any way — any member in this House — do our jobs in ignorance of what is actually going on. So it is my great pleasure to respond to what the member says about lack of coordination.

I want you to know, Mr. Speaker, that there is very great coordination in services for children. First of all, there is the Cabinet Committee on Social Services, on which every social services minister sits. It meets every single week, and that provides policy direction. Secondly, there's a deputy ministers' committee on social services — I'm going from, if you like, the top down into services in the field. This committee sets expectations at the senior deputy minister level that social services ministers will ensure integration and coordination of policy development and service delivery. We have an interministerial committee, for example, just on wilderness standards, which ensures that when young people in care of the province are in wilderness and high-risk situations, all disciplines, even the Forests ministry, are brought into that particular area of concern. We have the Provincial Child Care Facilities Licensing Board, an interministry committee which sets standards, grants licences and monitors child care facilities. We have interagency committees in most communities throughout the province. Representatives from the social service agencies in the community meet regularly to review their mandate and their role, to discuss joint planning and specific care situations, and to review current problem areas. They do a case-by-case review and jointly make decisions — not in isolation, the Ministry of Human Resources from the Ministry of Health, or the Ministry of Health in isolation from the Ministry of Education, but professionals working together and all looking to the best interests.... Gone are the days when all those departments worked in isolation, one not knowing what the other was doing. That is not happening today, Mr. Speaker; there is total integration.

The interministerial child abuse handbook, which was introduced by this government in 1979, is updated every so often by those same social services ministries I have mentioned. It includes new sections on child sexual abuse.

[ Page 6796 ]

MR. WILLIAMS: What does the judge say?

HON. MRS. McCARTHY: Mr. Speaker, the second member for Vancouver East, who wishes to interrupt the statement I am making, may well want to make comments about the judiciary, and may want to inspire comments from me in this House about the judiciary. I don't intend to respond to that. I will not be baited into making comments about judges, inside the House or outside the House.

[Mr. Ree in the chair.]

The sexual abuse part of the handbook has been added, which has been needed. As we discover new concerns and have new procedures, the child abuse manual is being updated. It is looked on as not only a first but one of the best that have been produced since ours was produced five years ago. It is to promote, assist and integrate a coordinated response to the serious problem of child abuse, and it is issued under the auspices of more than one ministry — not the Ministry of Human Resources, but the Ministry of Health, the Ministry of Education, the Ministry of Human Resources and the Ministry of Attorney-General. It includes sections on the mandate and functions of the four ministries, interviewing guidelines, indicators of abuse, and suggested guidelines for development of a coordinated interagency community protocol.

This protocol is to provide the structures to facilitate the coordination of the response of all those who are, or may become, involved in child abuse situations. It further improves the communications, so if there are any gaps in service, they will be avoided; any duplications will be avoided.

I noted that the member made a comment regarding adolescents which are in this province....

DEPUTY MINISTER: Time, Madam Minister.

HON. MRS. McCARTHY: Well, Mr. Speaker, there is so much on the integration and the delivery of child services that I am going to have the notes that I have made and the examples in all the regions in the province sent to the member who has asked the question. I wouldn't want any member in this House to be that ignorant of what we are really doing, and I would like everybody to be truly appreciative of what is happening in the province.

MRS. DAILLY: Mr. Speaker, I do not happen to be the debate leader or the particular critic of human services, but I am debate leader in health and have been involved in education. So I feel that I have that background and that I also happen to have done a fair amount of studying, in preparation for this statement, of remarks and comments made by social workers who have to deal right in the field with the children.

Combined with that, I think that the statement I made was not based on ignorance, and that's the first thing that I want to point out to the minister. The social workers of the province, as I said, who deal with this every day, are the ones who have expressed grave concern that the integration of services of this province simply is not working. I think that even if we didn't have the statements of the people who are out there working, in contrast to the minister's statements, all we have to do is look at the increase in problems faced today by the children of British Columbia. We just have to look, as was pointed out in an aside, at some of the cases that have been coming forward before the courts, in which we find judicial people stating that they themselves see the results of inadequate care and coordination. This is not a political partisan statement. This is from the judiciary.

The minister cannot sweep it away with the fact that all the rest of us are ignorant. There are many people out there who are concerned. I am not saying that minister doesn't have a concern. What I am saying to her is that her policies are wrong. Her policies are not working.

Mr. Speaker, I think that the minister must face up to the fact that one of her policies which is going to cause more deterioration is this tendency to privatize and to turn things over to unregulated agencies. Now the minister may say they are regulated, but her whole philosophy that says let's turn things over, let charity do it, let us have other volunteer groups take over things, is not going to be in the best interests of the children of this province.

That government under that minister has one basic concern. They're here to deal in the best way possible, to serve the children of this province. It is the children of this province who need priority; that government is not giving to them.

USER-PAY

MR. DAVIS: I am for user-pay. I believe in individual choice. I am convinced that the user should decide whatever he or she uses as much as possible whenever possible. Given sufficient income, this should be their God-given right. Toll highways do not offend me, for that reason. Someone has to pay. The generalist, the socialist, the welfare statist, believes that "they" should pay. Someone else should pay, the body politic should pay, the government should pay — not the final user, the immediate beneficiary of the service, whatever it is.

I do not agree, especially in the area of transportation, where other routes exist.... Other ways can be used to get from here to there. New highways built ahead of time, built in a recession in order to put people to work, are logical candidates in my mind for user-pay. Use them and benefit. Pay for that benefit; don't use them and don't pay. The choice is yours. You assess the benefits and weigh the costs. If the net benefit is in your favour, buy it. You're better off as a result.

I cannot therefore understand the hangup which the NDP members have in this regard. Public funds are being used to build the Coquihalla Highway, for instance. Anyone choosing to use this new route from the interior will benefit — an hour saved, $10 or $20 worth of fuel saved, wear and tear reduced. The user clearly benefits. Why shouldn't the user pay part of the cost at least?

The numbers are interesting. The estimated cost of the new Coquihalla Highway from Hope to Kamloops is $375 million. The annual carrying cost of this investment is therefore of the order of $40 million. Initially, the car and truck tolls will generate $20 million a year. As the traffic builds, project receipts will grow to $30 million a year, $40 million a year, $50 million a year. Between 1986 and the year 2000, payments all told will be enough to pay off the initial debt. Then we'll have another highway all paid for, financed by users, each and every one of them having a choice. They could use the old Trans-Canada Highway down the Fraser Canyon instead, or drive from the interior to the coast via the Hope-Princeton route. Individually, they concluded that the net benefit to them was worth taking the shorter, faster Coquihalla route. They gained time and saved money —

[ Page 6797 ]

more than they paid in tolls. They benefited from a public investment; they benefited from government foresight, from the building of a new highway earlier than would otherwise have been the case.

Much of the same reasoning, I contend, should apply to other transportation routes which offer a special benefit to a segment of the public for a period of time. I would pay for a new, much shorter ferry crossing over the Strait of Georgia in this way. I would ensure that benefits exceeded costs, or it shouldn't be built in the first place. But having made this assessment, I would set fares at a level which covered all of the crossing's expenses over its useful lifetime — capital costs, maintenance, operating costs, salaries and wages included. Fortunately, that would be the same or less than present day fares on Routes 1 and 2, Tsawwassen to Swartz Bay and Horseshoe Bay to downtown Nanaimo, for example. The user, incidentally, now pays roughly 100 percent of costs on those two main routes, so they are effectively user-pay highways currently. I'd build more toll highways, establish more full-fare ferry routes, a new highway up the Island from south of Nanaimo, to Courtenay and Campbell River — it might be toll part-way or all the way. A new highway running north from Whistler and Pemberton through the Chilcotin and aimed at Prince George could be financed in part or in whole in a similar manner.

There are other routes to Vancouver. There are other ways of getting from the central interior to the lower mainland, from the lower mainland to Vancouver Island. But new toll facilities, built in advance of what otherwise would be the case, generating savings to the user in time terms, in energy terms, in terms of less maintenance of vehicles, are a benefit and a benefit which can be captured in this way.

Tolls, in the form of toll gates, may seem old-fashioned to some, but we charge everyone a kind of toll now. We levy a tax on motor fuel, on gasoline, on diesel oil. It's 20 percent of the price at the pump provincially and 10 percent federally; and remember, Ottawa collects numerous other taxes downstream in the oil and gas industry. Roughly speaking, two thirds of the price everyone pays at the pump for motor fuel is tax, and if that tax were to be used exclusively for the construction and maintenance of roads, streets and highways in this province, we'd have many hundreds of millions of dollars to spare. The user, in other words, pays much more in taxes, federal and provincial, than the user gets benefits from our road system in the province.

[11:00]

As a supporter of the user-pay concept, I want to register a special beef here. Ottawa takes but doesn't contribute currently to the nation's highway system. It taxes motor fuels but invests little or nothing in roads, highways and streets. The old Trans-Canada formula disappeared in the late 1960s. The level railway crossing formula vanished in the 1970s. In other words, the federal government no longer contributes money for physical works, roads, highways, etc., anywhere in Canada. Certainly it doesn't contribute materially in British Columbia, and getting on to half of the taxes collected from the use of surface vehicles, cars and trucks, goes to Ottawa currently. As the member for Cariboo, the hon. Minister of Transportation and Highways (Hon. A. Fraser), has made this point repeatedly, I won't dwell on it further other than to repeat, as he's often said, that B.C. seems to be a goblet to be drained insofar as federal highway transportation taxes are concerned.

Back to my main theme. Why this hangup on tolls as such? If a new route, a new highway, a new ferry crossing means a saving to the users, why shouldn't those users contribute some of their savings to the public purse in compensation to the government, to the ministry, whose foresight saw that new facility built in the first place? In summary, I'm in favour of tolls selectively placed and used to build new transportation arteries ahead of time. They make sense, especially in a recession. I'm all for them and, given the reasons, I'm sure most British Columbians are too.

MR. COCKE: Mr. Speaker, I was hoping that the member for Omineca (Mr. Kempf) would have been on his feet to answer that member from North Vancouver–Seymour. We heard from the member for North Vancouver–Seymour a speech that Herbert Hoover could have made. As a matter of fact, if you took a look at the United States....

AN HON. MEMBER: Who was he?

MR. COCKE: He was a guy in the late 1800s in the United States.

MR. WILLIAMS: A man for his time.

MR. COCKE: And a man for his time. That's exactly what he would have talked about in terms of access. Yes, the people. The people who are driving cars are paying their way now. They're more than paying their way. But that wouldn't be taken away. We would have just another price on top. The people in the north, the people who provide the south — the manufacturing and commercial area — with so much of our good fortune in this province, would be the ones to pay. It would be the people in the outlying areas seeking access to the cities who would be the ones to pay. People in the cities would be encouraged by this kind of drastic step to go straight across the border, instead of moving around our province and enjoying it, because the bulk of the population lives within a few miles of the 49th parallel. This would just take people in our province and make the province less accessible to them. They would resent it. User-pay indeed! What we need is a fair taxation proposition that will give people access to their good fortune.

One other thing is that any time you have a user-pay system, you are depriving the less fortunate in our community of the access to this province that they would otherwise have. So I say that I would totally oppose this concept. I think that any right-thinking person in the 1980s would as well.

MR. WILLIAMS: Well, it's a kind of an engineering approach to a problem. I don't want to knock engineers completely. It's a pretty narrow economic approach. What it ignores is the other benefits. The assumption by the hon. member is that only the people who are riding on the route benefit. That isn't so. Have you ever thought, say, of driving along Kingsway and all the benefit along that route? Where do you think it really lies? It lies on the land on either side of the road, as a matter of fact. That's where the bulk of the benefit lies. It's going to happen with ALRT and other systems. There will be tremendous increases in land values. So there is a potential revenue there that you people have never tapped in terms of the great values that are created as a result of public works. So you've missed that one completely.

[ Page 6798 ]

That's very often what engineers tend to do: concentrate on the public works and not see what happens on either side of it.

I guess what really sums it up is the member for Omineca. Imagine! The member for Omineca. My God! A man who says: "You betcha! User-pay, and if you can't pay, you stay home." Well, that's what I'd expect from the man from the boonies. The people in his riding would never make it out to Prince George. They'd never get to Prince Rupert. If they were stuck with a user-pay system, they'd be stuck with just seeing you at the corner store for the rest of their lives. That's what they'd be stuck with. I can't wait to get to the Omineca riding and tell the people of Bums Lake and the people of Vanderhoof what he said in this House today. He wants them to stay home. He doesn't want them to get educated in the rest of the world and turf him out of office.

It makes you think about user-pay. Imagine the people in Bella Coola paying for the route from the Cariboo through to Bella Coola. It just wouldn't happen. I would suggest to the member for North Vancouver: look near your own riding. The SeaBus. User-pay? There wouldn't be anybody on the SeaBus if it was a user-pay system.

MR. DAVIS: Thank you, Mr. Speaker. There were two interjections from the NDP side. The first: the hon. member for New Westminster says to never use the user-pay approach. Well, if you don't use the user-pay approach, basically you say don't use the marketplace. Don't let the individual choose. Don't let the user — the beneficiary — make a choice. Make the choice for these beneficiaries, whoever they are. And who makes the choice? The government.

In other words, his answer is that the government is all wise, the government will make the choice for you, the government knows what is best for you. The government will build whatever it feels like building, and the user will use it, on the face of it, free of immediate cost to the user. But of course the user will pay in the long run; the user always does. So essentially that view is: don't use the marketplace at all. Government is all wise; government will make the decisions for you.

Now the hon. member for Vancouver East really gives another reason for the user to pay. He says there are other beneficiaries: the people who own property fortuitously located along the route. They should pay something too. In concept I agree with him. On the ALRT project, we gave serious consideration to trying to tax back and recover some of the cost of ALRT through, for example, buying properties close to stations, and then selling them back. This interfered too much, really, with municipal jurisdiction. That opportunity certainly was open to the city of Vancouver, Burnaby and New Westminster. They too really haven't taken advantage of that opportunity.

I agree that there are benefits there, and I agree that those users, if you can call them users — the landowners along new, beneficial routes — should also contribute in a meaningful way. But that's an argument for user-pay; it's not an argument against user-pay. I let my case rest there.

MRS. JOHNSTON: Mr. Speaker, may I have leave to make an introduction, please?

Leave granted.

MRS. JOHNSTON: Mr. Speaker, in our gallery this morning are some very special people visiting us from Surrey. They are certainly adding to the economy of the city of Victoria because fortunately for them they have had chaperones, parents and teachers who have made arrangements for them to spend two days in Victoria. I would like the House to now welcome the students from J.T. Brown Elementary School who are visiting us from Surrey today.

HON. MR. NIELSEN: Second reading of Bill 49, Mr. Speaker.

SPECIAL ENTERPRISE ZONE
AND TAX RELIEF ACT

(continued)

MR. REYNOLDS: I will just take a few minutes today to close off where I started yesterday, which was talking about the new secondary industry plan for Squamish in British Columbia, the Makin pulp and paper mill. I would like to, for the benefit especially of the second member for Vancouver East (Mr. Williams), give some quotes that were released on this major project for British Columbia, and to answer the Leader of the Opposition, who made statements in the House yesterday as to why industry is not locating in British Columbia. Well, Mr. Speaker, as we all know, industry is locating in British Columbia, and they are coming here because of the positive steps this government has taken over the past two years in the province of British Columbia.

"Richard L. Ireland, Makin's manager of business development, in making the announcement, said the research and development project will involve the derivation of a range of high-grade pulps and papers, using a high percentage of aspen pulp that has been produced by a chemically assisted high-yielding pulping process. To date, these qualities of papers have not been produced from an aspen-based furnish using this integrated type of process."

Again, there's a new program, a new process for British Columbia, because an outside company has confidence in what we are doing in the province of British Columbia.

"This project will also conduct research into the use of calcium carbonate, available from deposits on Texada Island and in the Creston-Osoyoos area of southern British Columbia, as coating and filler material. The coating clays available in North America at present come from Georgia, U.S.A."

So there's another use of a product in British Columbia that we are presently having to buy from the United States, something else new for British Columbia in this project.

"The total world-scale project, when completed, will involve investment of approximately $235 million and will create 350 direct jobs in the processing operations. The initial research phase will employ 150 to 200 people in processing and an additional 50 people in forestry, harvesting and transportation.

"This project has been involved in research and development for more than five years, having first been considered for a location in Alberta, which was an attractive site because of its large aspen forest resource.

"British Columbia also has a considerable aspen forest resource, has ample supplies of electricity, is close to major suppliers and to the market that the

[ Page 6799 ]

project will serve in western Canada and the western United States."

Mr. Speaker, here's an important quote from Mr. Ireland. He said:

"The decision to consider a location in British Columbia came after some recent developments which added to those attractions. These include the B.C. government's introduction of property tax changes, electricity discounts, special enterprise zones and other incentives for industrial growth."

Mr. Speaker, here is a firm that is headquartered in Alberta, was looking in Alberta to build their facility, and is now coming to British Columbia because of the positive steps this government took in its latest budget. I will repeat it. He said that they are coming because of "the B.C. government's introduction of property tax changes, electricity discounts, special enterprise zones and other incentives for industrial growth." That's what is attracting industry from around the world to come to British Columbia at this time.

The second member for Vancouver East — who has the gall to talk about giveaways — gave away a railway plant in Squamish that didn't have a hope in heck and wasted the taxpayers' money in British Columbia on a project that was bound to fail. And we could list them time after time after time. They don't like to remember the things they did when they were in government.

[11:15]

"The economic factors of these incentives and a long-term supply of aspen fibre and softwood fibre were essential to enable the implementation of the Makin project in British Columbia.

"The B.C. attractions also include the decision by FMC of Canada Ltd. to construct a plant at nearby Squamish to produce hydrogen peroxide, which the Makin complex will use as its bleaching agent."

Mr. Speaker, FMC is another major firm, which is already in Squamish but is expanding, that had an opportunity to do it in Quebec in their plant, an opportunity to do it in the United States, but they chose to expand their plant in Squamish and to employ more people in that area because of the confidence in what this government has done over the past couple of years to build a positive business climate for people to come here and start secondary manufacturing.

"These processing facilities, upon completion of the research and development phase of this project, will consume 200,000 tonnes a year of wood chips, divided between aspen harvested in the region between Kamloops and Prince George and some softwood chips purchased from B.C. suppliers." This is a very important sentence for the second member from Vancouver East, who yesterday was concerned about the Howe Sound and what it was going to do to pollution: "The proposed process will have no air emissions, except steam vapours, and no offensive odours." That's because of the new high technology that will be used in this plant. I think that's a very positive step, and the people in that area were very happy to hear that. "The most modem proven technology available will be employed in effluent control and treatment." Project management for construction of the facilities will be by the Vancouver engineering firm of Nystrom Lee Kobayashi and Associates.

That's just one example — actually two in the Squamish area — an area that was hard hit by the recession and has been hard hit because of mistakes that were made as long ago as 1975 by a former government. But that area is coming back, like other areas of British Columbia, because of the positive steps of this government. Look at the fertilizer plant in Delta and what's happening in Ocelot.

Mr. Speaker, I heard the second member for Vancouver East say yesterday: "What about jobs in Vancouver?" Has he forgotten about ALRT? Has he forgotten about Expo and all the things that are employing tens of thousands of people in the lower mainland of British Columbia and all the exciting things that are happening? It's very frustrating to be a member of this government and representing the lower mainland when I have to listen to other members from that lower mainland area continually knock the city of Vancouver, knock the province of British Columbia, when there are so many positive things happening. It just doesn't seem to be in their make-up.

It's like listening to the member from Vernon in his speech a little earlier talking about how nobody was interested. Look who's interested in the NDP right now. Three members sitting there. Where's the Leader of the Opposition? He disappears most days. It's going to be quite interesting to look at his declaration form to see where he was over this past session.

MR. REID: Even the leader of the United Party is here paying attention.

DEPUTY SPEAKER: Order, please. The member for West Vancouver–Howe Sound on Bill 49.

MR. REYNOLDS: Mr. Speaker, as members of this House know, there were 47,000 more British Columbians working in May 1985 than there were in May 1984. That leads all the other western provinces combined. These people in the NDP like to talk about Manitoba. How are they doing in employment figures? It's disastrous. Why is British Columbia gaining 15,000 people in this province every year? Because of the excitement that's being created by the policies of the Social Credit government. Why are the NDP in Manitoba...? Manitoba lost 3,000 people a year over the last four and five years. Why is that happening? Because of the poor policies of a New Democratic government in Manitoba, which is going to be defeated in the next election to eliminate New Democratic governments right across Canada — of course, with the exception of the short marriage that's taking place in Ontario right now.

I certainly support Bill 49. I know the people of British Columbia support Bill 49. It's positive; it means jobs for British Columbia. I'm happy to support it.

HON. MR. McCLELLAND: Mr. Speaker, I'll be very brief. I just want to perhaps answer a couple of questions that were raised and correct a misconception.

I think the problem with the opposition in the understanding of this bill is that they still think that we've introduced a bill dealing with duty-free zones. That was never the intention. It is not in the bill at the present time and it will not be a duty-free zone. These are special economic zones which will allow for special economic benefits for new businesses which decide to come into British Columbia and create a new industrial base — an absolutely new industrial base, which will spin off into all kinds of other developments with existing industries which are already here in British Columbia. So disabuse yourselves of the idea of duty-free zones, because that's not what we're talking about in this bill.

[ Page 6800 ]

There are opportunities for duty and trade or customs remissions already in legislation which exists within the federal government. The problem has been, in the past at least, that these remissions are hard to come by from people who are offshore. With the new legislation proposed by the federal government, we believe that those impediments to people getting duty-free remissions for certain kinds of businesses which provide for things to be done in British Columbia for export will be removed with the new legislation which was announced in the budget. So from that point of view, we feel that our special enterprise zones will entirely complement the federal legislation.

You know, the biggest impediment to progress in terms of new business and new business development in our country, I believe, has been that one phrase — forgone revenues. We have turned off so many people, who could have come with a little innovation and a little extra tax benefit or a little extra innovative taxation measures, by saying: "Well, gee, we'll lose all those.... We'll have those forgone revenues gone." We've had a lot of crazy legislation in this country because of so-called forgone revenues. They really are not forgone revenues at all, Mr. Speaker; they're fictitious taxes, because they are taxes that won't be here unless we do something to bring the businesses into our country and into British Columbia.

Somebody mentioned some enterprise zone in Britain, where only 12 percent of the business set up was new to that zone. I can tell you that 100 percent of any business that comes to a special enterprise zone in British Columbia will be new business to Canada. No one that isn't an entirely new enterprise for this province will qualify for the special enterprise zone, and will not be allowed to be in competition with any business that is already here in British Columbia.

As I must say again, this is designed to create a new industrial base for the province; to diversify our industrial base in order to provide new opportunities and new jobs for the people of British Columbia. I think it was the member for Vancouver East who said that a couple of years ago somebody said that we're looking to a number of areas for industrial diversification. He mentioned pharmaceuticals, auto parts and electronics, and said they were some kind of myth. I wish that member would start visiting around British Columbia and see what kind of a myth it is. Go out to Glenayre Electronics' new plant. Go out to MDI's new plant in Richmond. Electronics is a booming industry in British Columbia today. That new plant in Richmond had seven people working for it seven years ago. Today it has something like 250 people — in a short seven-year span.

Interjection.

HON. MR. McCLELLAND: Well, it's all your fault, Mr. Member. You're the only one that's still here.

The same is true of MacDonald Dettwiler — a small company that started in a basement about ten years ago with one person; now a couple of hundred or three hundred employees working for that company. Electronics is a truly booming industry in British Columbia.

The auto wheel plant in Delta: the member for Vancouver East said that that plant was just assembling things. They're not assembling things; they're making wheels in British Columbia to send back to Japan to put on Toyota cars. Hopefully that plant will be expanding soon to be making wheels for other markets around the world as well — perhaps North America too. So they're not assembling things; they're making things; and they're employing British Columbians to make those things.

I don't think I need comment on much more, except from the point of view.... Well, I did want to talk about one thing that the member for Nelson-Creston (Mr. Nicolson) — I wish he was here — said yesterday. He made a very eloquent plea for British Columbians — and Canadians, I think — to be prouder in what they do, yet at the same time he put down everything we're doing. There's a great conflict there of one kind or another. He talked about discovery parks. He said there's one tenant at SFU and the discovery park. Well, that's true. But he didn't say very much about how many tenants there are in the discovery park at BCIT. There are 48, and every one of them an exciting, young success. I'd invite every member of the opposition to go and visit that place, because you'll come back proud of British Columbia. That'll give you the chance to go out and tell everybody how proud you are of what young entrepreneurs are doing in this province. It's very, very exciting.

One other comment. The member for Victoria — I don't know whether he's the first or the second member; it doesn't really matter — talked about the downfall of the municipalities as a result of this legislation. I won't comment on it, except to read an excerpt from a couple of letters. One is to me from the assistant executive director of the Union of B.C. Municipalities:

"UBCM president Mel Couvelier has asked that I convey to you the willingness of the UBCM to assist you and your ministry in communicating details of the special enterprise zone legislation to local government officials. Mayor Couvelier has told me of one prominent interior mayor that he met yesterday who, when advised of the SEZ legislation, immediately asked UBCM to send him more details. I think this is an indication of the interest that the legislation will raise among our membership."

Then a letter from Mayor Couvelier himself, the president of UBCM:

"We have reviewed with great interest your Bill 49, Special Enterprise Zone and Tax Relief Act. We recognize this bill as another key element in the government's economic strategy. Bill 49, like the Provincial-Municipal Partnership Act and the venture capital corporation legislation, has the potential to be an element that will assist local communities in their recovery plans."

That doesn't sound like the downfall of municipalities to me. This is an exciting piece of legislation. I'm proud to support it; I'm proud to put it forward on behalf of the government, and it will open up tremendous new industrial opportunities for all British Columbians.

I move second reading.

[11:30]

[Mr. Speaker in the chair.]

Motion approved on the following division:

YEAS — 22

[ Page 6801 ]

NAYS — 12

Bill 49, Special Enterprise Zone and Tax Relief Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: Committee on Bill 19, Mr. Speaker.

SMALL BUSINESS VENTURE CAPITAL ACT

The House in committee on Bill 19; Mr. Strachan in the chair.

On section 1.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 1 as amended approved.

Section 2 approved.

On section 3.

HON. MR. McCLELLAND: Mr. Chairman, I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 3 as amended approved.

Sections 4 and 5 approved.

On section 6.

HON. MR. McCLELLAND: Mr. Chairman, I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 6 as amended approved.

On section 7.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 7 as amended approved.

On section 8.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 8 as amended approved.

On section 9.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 9 as amended approved.

On section 10.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 10 as amended approved.

Section I I approved.

On section 12.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 12 as amended approved.

On section 13.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 13 as amended approved.

On section 14.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

On the amendment.

MR. WILLIAMS: I thought that when we endorsed this statute and the section, they'd have to hire at least one lawyer to get going into this venture capital program and tax credit program, but I think you're providing a great deal more employment for lawyers than I ever anticipated as a result of this statute. We have a lot of underemployed lawyers in British Columbia, and I think this is a spinoff benefit that the minister never, ever contemplated.

Amendment approved.

Section 14 as amended approved.

[ Page 6802 ]

Sections 15 to 18 inclusive approved.

On section 19.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 19 as amended approved.

Section 20 approved.

On section 21.

HON. MR. McCLELLAND: Mr. Chairman, I'd just like to advise the member for Vancouver East that we got a lot of free advice as well. I move the amendment standing under my name on the order paper. [See appendix.]

Amendment approved.

Section 21 as amended approved.

Sections 22 to 25 inclusive approved.

On section 26.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 26 as amended approved.

On section 27.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 27 as amended approved.

Sections 28 to 33 inclusive approved.

On section 34.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. (See appendix.]

Amendment approved.

Section 34 as amended approved.

Section 35 approved.

On section 36.

HON. MR. McCLELLAND: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 36 as amended approved.

Sections 37 to 39 inclusive approved.

Title approved.

HON. MR. McCLELLAND: Mr. Chairman, I move the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 19, Small Business Venture Capital Act, reported complete with amendments to be considered at the next sitting of the House after today.

HON. MR. GARDOM: Mr. Speaker, on behalf of my colleague the attorney, I would call second reading of Bill 56, which is, as usual, best addressed during the committee stage.

MISCELLANEOUS STATUTES
AMENDMENT ACT (No. 3), 1985

MR. MACDONALD: Mr. Speaker, I've been assigned as junior counsel on this particular piece of legislation. It is a blockbuster of a piece of legislation. You've got the Minister of Health there, with his medical diagnostic clinics, where vast sums of public money sink without a trace. He doesn't make them public, and they're just being tidied up. He doesn't really care — or the government — about whether we should pay some people a little less and employ more and give other people a chance to live and breathe in this province of British Columbia.

You've got a section in there where the consular officials can drive their cars through the streets, even if they're half-blind; they don't have to take a test any more. I know we can trust those people.

But because of the immense significance of the different sections of this bill, I think they should be discussed thoroughly in Committee of the Whole House.

HON. MR. GARDOM: Moving the bill be read a second time, I just respond to the one observation of junior counsel from Vancouver East. There is a requirement for the consular people to pass a sight test.

I move second reading.

Motion approved.

Bill 56, Miscellaneous Statutes Amendment Act (No. 3), 1985, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

[11:45]

HON. MR. GARDOM: It is with great pleasure that I call second reading of Bill 61, Mr. Speaker.

[ Page 6803 ]

WORKERS COMPENSATION
AMENDMENT ACT, 1985

HON. MR. GARDOM: We are awaiting the Minister of Labour (Hon. Mr. Segarty). I am sure he will be here in just half a second or two, Mr. Speaker. I do know that he is within the premises; the Clerk has assured me of that, and when the Clerk gives me assurance, I am certainly assured,

This is the first day of summer....

Interjection.

HON. MR. GARDOM: He's coming down the hall, Mr. Member; I can assure you of that.

MR. SPEAKER: On a point of order....

MR. COCKE: He's not discussing Bill 61 at all.

MR. SPEAKER: Nobody is, hon. member.

HON. MR. SEGARTY: It's a pleasure for me to get up in second reading in support of the bill. The bill basically provides for the restructuring of the boards of review, with somewhat the same structure as the Labour Relations Board, which would consist of a chairman and one or more vice chairmen and representatives to be appointed in equal numbers from employer and employee backgrounds. It's my hope that this bill will be able to solve the serious problem out in the community of British Columbia today, where individuals have to wait two years to get an appeal before the board of review. It's my hope too that once the appeal process is in place, and the appropriate personnel found, we will be able to get the backlog caught up in about a year and a half, and eventually then be able to have a turnaround point of approximately two months, where an individual can receive a fair, impartial and speedy hearing before the boards of review.

Mr. Speaker, I move second reading of the bill.

MR. COCKE: Mr. Speaker, I'm surprised, with such overwhelming changes the minister has made in the whole review process of the Workers' Compensation Board, that he didn't have a lot more to say about it. It's certainly been given a good deal of publicity of late.

It might come as a surprise to the minister, but we are going to support the bill — not as enthusiastically as I'd like to. I'll outline some of the reasons that we have some problems with this bill, The main problem, as far as I'm concerned, is the lack of choice around the one-person panel. Our understanding at the outset was that the one-person panel was only if the worker had opted for fast-tracking his or her appeal. Let me say that we will be opposing that in committee, and get on with some other thoughts.

My first thought is that the Workers' Compensation Board, in and of itself, is largely responsible for that 4,600-person list of appeals. The minister stood up and said that there is a two-year waiting-list. In other words, a person can be absolutely broke, flat, off compensation — because, after all, they have adjudicated that person not to be eligible — wind up on welfare, and sit on welfare, through no fault of his own, for two years while waiting for an appeal process to take place. That's very unfair. I say this, and I'll say it again: the reason for it is largely the tough adjudication at the Workers' Compensation Board itself. That's why there are so many waiting.

I believe that in the last few years the Workers' Compensation Board has grown to be a defensive organization, to the extent of saying: "Don't pay any claims unless you absolutely have to, and particularly a back claim." Anybody with a back injury is suspect, just by virtue of that injury itself. Mr. Speaker, you have a number of back and limb injuries that are going...and placing people in just terrible economic conditions. There are aspects to this bill that can't address that whole question of the Workers' Compensation Board where it's going and where it's coming from.

Let me outline one or two of the things that I feel quite friendly toward in this bill. I feel very friendly toward the fact that the principle of the accident benefit picking up the tab for workers' advisers is finally recognized. I feel very friendly to that indeed. I believe it's part of the process to instruct people who feel they have a claim to make. So they should be very much a part of the process. What this bill does is place that in law, and it continues the funding of the review process from the accident fund — which I also agree with. I think that all compensation questions should be addressed in this way.

I am also very glad that the minister is keeping those two organizations quite separate. They must be responsible to the Minister of Labour and not the Workers' Compensation Board. I want to reiterate what I said some time ago. If the workers' advisers are to be moved back into the building, even to be seen as part of the Workers' Compensation Board, it defeats part of the purpose of workers' advisers. Workers' advisers should be seen as totally separate under the Minister of Labour. It was a very good move — and it was a move that that government made in 1977, as I recall — to move them out of the building. Before that they were in the building, and of course, the worker felt almost as though he were in hostile territory when having trouble with the adjudicators — the adviser was seen as part of the adjudicating process, as opposed to providing the friendly help they should. I'll commend the minister and the government for this. The minister hasn't given us an outright promise that the workers' advisers won't be going back there, but he's put it on hold, and I believe that by putting it on hold he'll find another facility for them. There's lots of empty space, Mr. Minister. Let's see to it that they're out there.

[Mr. Strachan in the chair.]

I have some other concerns. I have a concern that when you repeal section 90 of the original act and replace it with this new section 90, you're weakening section 90. I think what you're saying now is that when an appeal is won, the board may then review it. They're not really being instructed to review it, as they were before. I think it's loosening it. I believe that the Workers' Compensation Board — well, the law says they have to have the final say — is given too much latitude in this process. I believe that the section 90 that was in the original act was a lot stronger than the new section 90 that the minister has put forward. I recognize that section 96 has been amended, and the bill indicates that the amendment of 96 brings back 90 to the standard that it was before. Well, I'm a bit lost on that. Let the minister tell me about that in his summarizing this particular debate.

Let's go back to the part of it that I feel is very remiss. It's full of holes. I'm really disappointed in the fact that the cabinet now decides whether there will be a one-person panel

[ Page 6804 ]

or a three-person panel. My understanding was that the appellant would have the discretion to decide whether to have a one-person or a three-person panel. A person who wanted to fast-track his or her appeal could go the route of the one person panel. I don't see that in this bill. The minister may give us some reassurances and indicate: "Oh, well, yes, but it's implicit. We'll be good. Trust us" — and all those other words that we've heard from time to time. But I'd like to see it in language. It's not in language. It's not here. It doesn't say so. So there's no question that when we get to that aspect of the bill in committee, unless there's something I've overlooked, we will be opposing it. The problem is, of course, when you get a good and bad bill, what do you do in second reading? Because there is a move forward here, we will naturally support it in second reading.

Interjection.

MR. COCKE: We will. Are you in a hurry to get home, Mr. Member from Surrey?

Interjection.

MR. COCKE: I think he's in a hurry to get home.

In any event, we do have that problem with that aspect of the bill. As a matter of fact, my colleague from North Island, who has dealt with these matters a lot longer than I have, will also, I think, instruct the House as to how he feels about it, because he and I have had discussions on it.

I'll get back to where we came from. The major reason we are in this quandary today is that we have a very rough, tough Workers' Compensation Board. The board was set up for one purpose and one purpose only, and that was that we would not have court cases out of every accident. It was set up years ago, almost at the turn of the century. But you know, you're a real loser if you get hurt on the job now; and you can't take your employer to court, because of the workers' compensation law; and if the Workers' Compensation Board is too tough, you're an absolute loser. You've lost that and you've lost the ability to take your employer to court.

I think that the employers should be a lot less strident with the government. I've heard them on this whole question of workers' compensation. They are lucky we have workers' compensation boards. They are lucky we have an appeal process. They are lucky this is the way we're going. The only people who aren't lucky in this whole question are the losers to the Workers' Compensation Board — and the lawyers who would otherwise be made rich by court cases. But now the lawyers are out of work in this area, and that's good, providing you have a fair system to deal with the folks.

The minister has gone a step forward, but he has not gone far enough. With that, Mr. Speaker, I suggest that we will be supporting it in second reading, but we will be looking very hard at one or two sections of this bill that I don't feel we can support in committee stage.

MR. GABELMANN: When the minister had his breakfast press conference on Monday, I think it was, there was quite a bit of delight and pleasure on the part of a lot of people who deal with this whole issue about the directions indicated by the minister. When I read the press reports and the press release, I too thought we were going to get a very good bill that would deal with this problem in a very appropriate way. The bill does not entirely reflect Monday's discussions, Mr. Speaker. There are a number of areas in which the expectations have not been met. I want to deal with a couple of them in a moment, and in committee stage I think we want to pursue them in some detail when we get to that — hopefully on Monday.

[12:00]

The minister indicated that the concept of three-member panels in the review or appeal process was an appropriate — and I'm using my words to describe how I heard what was being said — mechanism, but that because of the 4,600-person backlog, or whatever the number is now, he felt that there could be a speeded-up process accomplished by giving workers an option to choose, if they so wished, a single-person board. While I have some problems with that, because I'm not sure there's much free choice involved when a worker is told: "You can choose between waiting two years for a three member board, or you can have it done in a couple of months by a single-member board...." There isn't a heck of a lot of choice in terms of real free choice with that. But because of the serious problem of the backlog and because it appeared to be an option that workers could choose freely despite that limitation of obvious time problems, I, for one at least, was prepared to go along, however reluctantly, with the idea of the optional single-member board.

But that's not what the legislation does. The legislation essentially establishes a review board along the LRB model and then authorizes cabinet to draw up regulations and rules establishing how those boards will be structured and how many persons will sit on an appeal, and all the rules governing how the boards operate are to be determined by cabinet — except the bill says that oral hearings are not required. So on one hand the promises of the minister are left out of the bill and are left for cabinet, and something that most of us don't like — the lack of an oral hearing, where the parties may wish an oral hearing — is put into the bill. That signals to me that we've got some problems.

If the government were to be consistent — if it wanted all of the power about how the hearings were conducted, and by whom, to be determined by cabinet — it would have done that. But it didn't. It took away from cabinet the flexibility in respect of oral hearings, but gave to cabinet all of the other authority.

There is no guarantee or assurance, other than comments by the minister, that in fact we won't get into a permanent single-member board system under the.... The minister shakes his head. I suspect, Mr. Speaker, that the minister is serious and that he's shaking his head in an honest belief that what I'm worried about won't come to pass. But he may not be Minister of Labour after the next cabinet shuffle. He certainly won't be after the next election, but he may not be after the next cabinet shuffle. And then what? The bill is wide open. It allows for hearings to be conducted in whichever manner the cabinet chooses, except for this strange...what I think is an anomaly, that the bill is specific about the question of oral hearings.

Another section of the bill, without getting into too much detail, talks about temporary vice-chairpersons and members of boards, and imposes a 12-month limit on this 12-month appointment, but only a 12-month limit for the appointment of persons — not a 12-month limit for the process of temporary persons, as I read it. I wonder why that is.

I think I've made the point about the fear about losing triple-member panels. I made the point about the lack of oral hearings. That decision came by order-in-council, I guess,

[ Page 6805 ]

six or eight months ago now, and we have the situation where oral hearings are not required. We now have that put into a legislative imperative, which I think is wrong. If people want to waive an oral hearing, give them that choice; fair enough. But if an oral hearing is desired by any of the parties to one of these questions, then one should occur, and that now is not necessarily the way it will be.

I'm also puzzled, as was and as is the member for New Westminster (Mr. Cocke), about the changes that flow from the elimination of section 90 and the replacement of parts of that by 96(2). We'll get into this in more discussion during the committee stage, but I really do wonder what the intent of this particular change is, because it leads to a concern that in fact these boards of review are nothing more than just another process in the continuing process of finalizing a claim. What happens in a case under the bill is that the adjudicator does all the inquiries and makes a decision. The commissioners can at that stage under this bill, as I read it, intervene immediately and tell the adjudicator to make a different decision. That seems to be one of the implications of it.

The adjudicator and the review board are put in parallel terms in the legislation under 96(2). The adjudicator looks at a case and makes a judgment. He may go against the worker, let's say, so the worker appeals; or it may go against the employer and the employer appeals. The review board makes a judgment which goes against the adjudicator's decision. It then goes to the commissioners. That was there before in old 90(3), where the board of review does not confirm the original decision. That decision will be reconsidered by the board. This wording appears to broaden that. There appears to be more discretion. It's not at all clear from the wording what the intent is.

I welcome some comments from the minister in second reading so that we can consider what he says and what other people say is the meaning of this particular section, and then we can deal with it in an appropriate way in committee stage. I've had arguments with people about what this means, and there are a lot of different views. I guess my central concern is that it appears to diminish the authority of the review process, or, at least, enhances the authority of the commissioners to come up with whatever decision they want to come up with irrespective of the review board process.

In conclusion, let me say, as the member for New Westminster indicated, that we'll be supporting the bill in principle, primarily because the backlog is so bad that something had to be done. I might also say that I support it for a negative reason, and that is that some of us were quite convinced that we'd seen the end of review boards. I guess we are so relieved to see them maintained that we're going to support the government just for that reason. But that's a trap for us, I guess; I admit, quite frankly, that we've probably fallen into it.

It does not do what we had hoped. A simple amendment to the legislation could have solved all the problems just by authorizing the minister to establish temporary boards and authorizing — he didn't even need that, really; he could have just appointed additional boards — single-member panels when chosen by the worker. He could have just put that simple amendment in and been done with it all, because that's all we really needed to accomplish the main goal.

Nevertheless, having said all of that, we're going to support the bill. I personally don't have very much problem with the new structure. I kind of like it, actually — the LRB model structure. I think it gives more flexibility and all of that, as long as we retain — and this is the essential issue — the three-person boards so that workers do have that advocate for them who sits on the review board.

In this House we tend to think only of those people who are represented. Most people who end up with compensation cases are not represented, either by union business agents, by lawyers or by MLAs. The overwhelming number of claimants are not represented. So because they aren't, they need that representation on the review board by that person who has some knowledge from their perspective about the particular problems.

In conclusion, the lack of mandatory three-member panels, the ability not to have oral hearings, the concern about what appears to be the enhanced authority on the part of the commissioners in reconsidering decisions made by the review board are all things that we worry about. I hope we can be reassured by the minister, if not now then certainly in committee stage. Thank you.

HON. MR. SEGARTY: Both the members for New Westminster and North Island brought up some valid questions during the course of debate on second reading, and I'll try to answer their concerns a little more fully in committee stage.

In meeting with the parties of interest over the course of the past three months, there were a number of other things that I thought we might have an opportunity to put forward to provide for a fuller, in-depth opportunity for the parties of interest to be able to participate both in the administration and the policy direction of the Workers' Compensation Board, which, of course, would alleviate a lot of the concerns that were brought up by both members this morning.

But having said that in my discussion with them the other morning, I did indicate to them...and in fact encouraged them to set up some sort of a committee that would advise me on matters dealing with workers' compensation on an ongoing basis, and offered the opportunity for them to participate in developing the regulations under the changes to the act that we're bringing forward today, changes such as establishing the regulations dealing with one-member or tri-party review panels, and so on.

When the regulations are brought down, they will be the result of a great deal of discussion between me and the parties of interest. I will in that process ensure that when the regulations are brought down, they will be brought down with the individual who's making the appeal in mind, leaving it optional for them, or within their choice, to opt for a one-member panel review. That will be in place in the regulations. The member is right. It is not in the act at the present time but will be part of the regulations, leaving the more complicated legal and medical reviews for tri-party committees which are panels that will be set up throughout the province.

The member for New Westminster (Mr. Cocke) talked about finding neutral space both for the workers' adviser and the boards of review. My ministry has been in contact with the British Columbia Buildings Corporation and has asked them to find suitable space outside Workers' Compensation for the boards of review and workers' advisers, and that is currently being undertaken.

With regard to section 90, the legal people would say that under the current act there can be two reviews going on at the same time: the commissioners can be looking at the boards of review, and looking at an appeal process that would be underway, and basically could interfere at the present time, under the current act, with the decision of the board of review

[ Page 6806 ]

before it's even made, and direct them to make a decision. Under the changes to section 90 the commissioners wouldn't be able to do that until the appeal is completed before the boards of review. It puts them in a position where they may review the decision of the boards of review; they don't have to. I would hope that the boards of review would have as much flexibility as possible in dealing with a particular review that's been brought before the committee, whether it's a one-member panel or tri-party. Give them as much flexibility as possible, and only after the review is heard provide an opportunity for the commissioners to hear that review.

As I said earlier on, the regulations will be the result of consultation between the parties of interest. It's my hope that, as well, the parties of interest will be able to give me some guidance on the appointment of an administrative chairman, along with the chairman and vice-chairman that will be required to set up the additional panels across the province. I hope that they will be able to bring those names forward to me as quickly as possible, and they will be selected as a result of discussions that I've had with the parties of interest.

[12:15]

The reason that there's a 12-month limit on the appointment of the individuals who will be vice-chairmen, or sitting on the panels, is that we may well find that in some regions of British Columbia — in the Kootenay region, for example — there are no appeals to be heard beyond the 12-month period. You may want to disband that particular review panel, or you may find that there will be a reduction in the number of panels required beyond the 12-month period. So what it does is give us some flexibility in whether we should renew the panel or not at that particular time. But we can discuss that under the section as we're debating it.

It's my hope that the bill will go a long way to resolving a lot of the difficulties. More changes are required, and I hope they will be the result of consultation between the parties of interest. So with that, Mr. Speaker, I move that the bill be now read a second time.

Motion approved.

Bill 61, Workers Compensation Amendment Act, 1985, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

DR. GORDON SHRUM

HON. MR. GARDOM: Mr. Speaker, before calling Committee of Supply, I would like to make a statement.

I know that all members of the assembly will be very saddened to learn of the death of Dr. Gordon Shrum, an outstanding British Columbia, and a gentleman, I'd say, of Olympian achievement.

He was a young researcher at the University of Toronto where he earned his PhD in physics. He was credited with the discovery of the auroral green line and the liquefaction of helium. It is very interesting to note that in the mid-twenties at the University of Toronto Dr. Shrum was one of a group of very creative scientists including the co-discoverers of insulin, Banting and Best.

It was British Columbia's very good fortune that he moved to our province, heading west in 1925, and in that year took up his appointment at the University of British Columbia. During his time at UBC he was a very skilled administrator. At one time he was the head of the physics department, the director of extension, director of the B.C. Research Council and dean of graduate studies.

I don't think anyone who attended the university in the years following World War II, and indeed during that period of time, would have forgotten the contribution of Dr. Shrum, both in his capacity with the university training corps and after, at war's end, when under the presidency of Dr. Norman MacKenzie it was Dr. Shrum's responsibility to locate housing for the hundreds of returning veterans. He did that, and he did it exceptionally well.

After 36 years at UBC, as far back as 1961, he retired as a scholar and an administrator, but it was not retirement for him. Mr. Speaker, he became a supermanager, he ran B.C. Hydro, he oversaw the construction of the Peace River dam, he headed Vancouver's Centennial Museum, he managed the construction of the Robson Square courthouse complex, he helped lay the groundwork for the Vancouver trade and convention centre, and of course, as we all know, he was essentially the creator of Simon Fraser University, where he was the first chancellor.

Mr. Speaker, I would say that British Columbia extends the sincerest of condolences to Dr. Shrum's family and his hosts of friends. I would say on behalf of all British Columbians: Dr. Shrum, well done. May many of us follow your exemplary example.

MR. COCKE: Mr. Speaker, on behalf of the opposition, we too are shocked that Dr. Shrum is no longer with us. There is no question that the man was one of the greatest British Columbians who ever lived, in terms of getting things done. He had the confidence of a great majority of the community. Probably the most outstanding thing, in my ken, is not necessarily the building of dams, although that is very important. But Simon Fraser was one of the most exciting projects that I have ever seen put together. He did it as though it was easy, and you know how difficult it is to build a project of that magnitude and magnificence — tremendous imagination. I was pleased to see Simon Fraser University put a Shrum chair together in his honour, and that will live on. But his name will on in this province as long as there is a history written of British Columbia. So we in the opposition are saddened at his death.

DEPUTY SPEAKER: Hon. members, if it is your wish, the appropriate message will be sent.

HON. MR. GARDOM: Mr. Speaker, I call Committee of Supply.

The House in Committee of Supply; Mr. Ree in the chair.

ESTIMATES: MINISTRY OF
INTERNATIONAL TRADE AND INVESTMENT

On vote 49: minister's office, $143,191.

HON. MR. PHILLIPS: Mr. Chairman, I am certainly very pleased and honoured to be the minister putting through the first estimates of this very important ministry, one which in years to come will serve this province well in what is now

[ Page 6807 ]

certainly a more competitive international market than indeed we have ever faced.

As I have said before in this House, Canada is a trading nation and her standard of living depends to a great extent on the international marketplace. British Columbia is probably more dependent on the international marketplace than are any of the other provinces in Canada. Certainly, being Canada's gateway, Canada's window, to the Pacific we have an especial role to play in ensuring that we do present to this growing Pacific Rim an opportunity for Canadian and British Columbia businesses to take advantage of. We know that the United States is and always has been, and will continue to be for a number of years, our greatest trading partner; but if you see what has happened with the growth of trade between Canada and the Pacific Rim — last year exceeding trade with Europe, which historically has been a great customer — we are coming into an era where Canada is recognizing that she is a Pacific Rim country as well as an Atlantic country.

Historically, most of the prosperous nations of the world have been great traders. Trade has been going on in the world since the days of the Phoenicians. They probably started out by selling cedar and glass to the rest of the world. We're in the same position. But this ministry is probably more important today than it has ever been before. We have received some criticism from our business community, and probably from labour unions, because we haven't been doing enough in the international marketplace. As you know, other provinces in Canada have offices abroad and spend a great deal more money than we do in supporting those offices and the personnel. I believe Ontario has some 26 offices abroad. I was in their office in Los Angeles not too long ago, where they have a staff of 13 people, and Quebec has a staff of some 26 people in the Los Angeles office. They also have offices, of course, in Japan, in Hong Kong and in a number of other countries. Ontario just recently opened an office in Singapore.

One of the first jobs that we have to do in this ministry is not to open British Columbia offices abroad, because I don't really believe in that, and it hasn't been the policy of the government. We feel that we have been getting tremendous support from our consuls, from our high commissions and from our embassies abroad. As a matter of fact, we couldn't ask for better service than we have been getting from the embassy in Tokyo. But indeed, we do feel that there is a need for a British Columbia presence in some key areas.

We are looking at establishing.... And I have been working with the federal government, and I'm waiting almost on a daily basis for their reply that they will give us either co-location or condominium location in the offices of Hong Kong, Peking, Seoul and Tokyo. We're looking to establish a presence in the San Francisco and Los Angeles area and probably one other place in Europe other than our traditional House in London.

We are working with the federal government. They are, I think, taking a realistic look at requests from some of the other provinces, particularly the maritime provinces, and I think that they're saying that the maritime provinces really have a right, logistically, to have some presence maybe in the Boston and Minneapolis area and that maybe they should have presence in some of the European countries. They recognize that, naturally, British Columbia would want a presence in some of the Pacific Rim countries. So I think that they're taking a very realistic look.

I think that there are a number of other provinces that have already established offices and that are saying: "No, we don't want the provinces with a presence in some of the established offices." I've had to say that, look, we're not spies. We're going in there to work for the interests of the British Columbia business community and for the interest of the exporting community, and we really are Canadians. We're not some foreign country that's trying to get into the inner workings of our embassies and high commissions abroad and relay secrets to some foreign nation or something. We are Canadians working for the good of Canadians, and, indeed, we feel that it is necessary to have a presence there.

I have spent some amount of time talking about various aspects of international trade in the Legislature, and I won't go into that again today, but I certainly do look forward to the very positive suggestions and constructive criticism that I know will come from Her Majesty's Loyal Opposition. And if there are any of those suggestions that we can implement to make it better for British Columbia, we will certainly take them under advisement.

MR. WILLIAMS: In the fullness of time.

HON. MR. PHILLIPS: In the fullness of time, yes — or maybe immediately. It just depends. We'll certainly give them a lot of consideration and check them out to see if they fit into the overall scheme of things.

[12:30]

I say sincerely that it is more necessary now that this ministry take its place in the structure of the British Columbia government. We've come through some very difficult times. The world is certainly more competitive. We have a story to tell with regard to a change in attitude toward foreign investment. I guess I could be critical, but being in a good frame of mind today, I won't be. I know that certain parties have been against foreign investment, but I guess we'd have to look at it in retrospect and say that it was a sign of the times. Certain people thought that everybody was going to continue to beat a path to our door for our resources — you know, how high was high? — not realizing that the world was going to change. There were a lot of people who thought that, and I won't be critical of their attitude toward foreign investment.

But I must say that there is an image out there in the real world that Canada is not interested in foreign investment. One of the responsibilities of this ministry and the people who work for it is to get out there and, not print glossy pamphlets, but sit down with the business community, with those who make the decisions, with other government leaders, and say: "Yes, indeed, Canada is interested in your investment. There are certain rules and regulations under which you can do business in Canada, but we are interested."

We are also interested in promoting entrepreneurial immigration. It seems to me that we've had the attitude that anybody who has money and wants to come to Canada, invest it and employ themselves and other people must be put through the hoop. We make them do more paperwork than anybody who just wants to come to Canada and, if necessary, be a ward of the state. I think there are going to be some changes made in that, but we have been very supportive of the entrepreneurial immigration policy.

We have another job to do now which is very important, because we have a new budget. We have some very good programs now that put British Columbia in a position where we can be competitive with most places in the world. Certainly our industry during the past three years has become aware that they must be more competitive, that they must be a

[ Page 6808 ]

more reliable supplier, and indeed, I think that our more intelligent labour union leaders have the message, and certainly I think the workers recognize that international trade is where it's at.

I understand the position of the opposition when they say that we've got to make it happen at home. Yes, there are a lot of things we can do at home, and there are a lot of things we are doing at home. We've built up the infrastructure at home so that we and the rest of Canada will be in a position to take advantage of the growing trade.

But you cannot deal in isolation. We are part of the international trading pattern. We must remain competitive. We must get out there and sell. We must sell in a very competitive market, certainly one of the most competitive markets I think there has been since the history of trading began. We can survive, we can increase our trade, we can ensure that our standard of living based on international trade continues.

Having said that, I will take my place, and, as I said, listen to the very positive constructive suggestions which I know will come from the opposition. I'll certainly be looking forward to discussing them.

MR. REID: I ask leave to make an introduction.

Leave granted.

MR. REID: Mr. Chairman, I would like the House to welcome today to the precincts Mr. Hammond and 30 grade 7 students from the Holly Elementary School in Surrey. I would ask the House to make them welcome.

While I am on my feet, I'd like leave to make one further introduction. In the precincts today is my lovely wife Marion, and it is our anniversary today. I expect to stay as long as the discussion continues in the House, but I'd like it to convene pretty shortly so I can go and spend the rest of my anniversary with my wife.

MR. CHAIRMAN: The Chair is sympathetic to the member, having experienced a similar anniversary yesterday.

MR. WILLIAMS: I'd certainly be willing to concede to the member for Surrey, Mr. Chairman, and move adjournment of this debate until the next sitting.

Interjection.

MR. WILLIAMS: Ten minutes? All right.

I notice that the minister has a very thick file that will provide all the depth and background necessary in terms of dealing with all the homilies we've just received. You go through it all, and it sure would be nice to grab something there. But what do we hear? The US is the greatest, but there is the Pacific Rim, and things are more competitive than probably since the Phoenicians were trading in cedar and glass. Is it all true? And you're still waiting for that phone call from Ottawa. I remember the Premier....

Interjection.

MR. WILLIAMS: What's that? You've put in a call?

HON. MR. PHILLIPS: No, I've had the call.

MR. WILLIAMS: Oh, you mean they've assured you that you will actually be able to place a desk in Tokyo, Japan, in Seoul, Korea and in Taipei? You have all that assurance.

HON. MR. PHILLIPS: Mr. Chairman, I have had a call — as a matter of fact, it was over a month ago — and he told me we were going to be accommodated in Tokyo, and that as soon as they moved the Hong Kong high commission into new premises, we would be accommodated there. The same thing in Peking. With regard to Seoul, I have been supporting the embassy to build a new chancery and office combined. I'd like to see it built out of timber so that it could be an example of what type of structure we can build of timber. People would be coming there and have an opportunity to look. They have a team. As a matter of fact, a team was arriving in Seoul shortly after I left to look for property. As soon as that is accommodated, which could be a year and a half or two years, we will be accommodated in the Seoul office. But I must say, we have a very efficient young ambassador, His Excellency Don Campbell, who is doing a really tremendous job for us in Seoul; and a good commercial staff. We may have to go there on a more frequent basis, but we're getting good representation.

MR. WILLIAMS: Encouraging. Is there a limit on the size of the desk, I wonder?

AN HON. MEMBER: As big as the one you had.

MR. WILLIAMS: Or that the speaker has, I'm sure.

I would have thought that we would have heard a little.... It's certainly interesting to hear about this, but we haven't heard about your trip, which just occurred. We did hear some words from the Premier in that regard in terms of the new breakthrough on value-added wood products, like 2-by-4s, in the eastern markets. Maybe the minister could elaborate on that area; we haven't heard about that. Certainly one of the most critical issues facing us right now involves trade with the Americans with respect to our lumber industry. I would have thought that we might have had some comment on that as well, since it is very critical. I know the Premier will be going to Washington to meet with legislators there, and that's most important. It is one of the most serious challenges we've faced, and it does involve some technical questions. I would have thought the minister might have some thoughts about that as well at this point.

HON. MR. PHILLIPS: I'd be happy to respond to that. The purpose of our trip to Korea was twofold. Number one was to ensure that the business we have there was contacted to ensure them that we continue to be interested in their business, and that we want more of it. As you know, we're selling Korea a lot of coal. They are developing a new steel mill, and we are trying to get our percentage of their total coal purchases increased. In meeting with the government people in Korea, of course, we've said to them: "Look, you know, we've been pretty good to Korea." We've been good for them with their Pony car. The experience they've gained in Canada will be projected into the United States market. They certainly owe us more than they're giving us in terms of their purchases of both steaming and coking coal; and as you know, we're working on breaking into the anthracite market there.

[ Page 6809 ]

You must also realize that we are trying to change their method of home construction. We've had some very positive results, but it's going to need a lot of administrative guidance from the government of Korea, because they're used to building their homes out of cement block. A lot of people there have the idea that if they build a house out of wood it's going to fall down or burn down — that it just won't stand up. The experiment that we put in place with Hyundai Corp. has been successful. But there is a high tariff on dimensional timber going into Korea. We have pointed out to them that you can build a timber frame house in Korea about 20 percent cheaper, and it's about 30 percent more economical to heat. That's very important to the Korean market because of the fact that they have to import most of their energy. A number of our business people with us of course call on individual business people there, and we are asking the corporations for further investment in Canada. We met with the Hyundai Corp. and pointed out to them the advantages of coming into British Columbia and establishing and using this as a jumping off point to the total North American market, not just the Canadian market, because in numbers we have a very small local population in terms of world population.

With regard to the United States, I met with a number of the lumber wholesalers in the Boston area and in the Minneapolis area about a month and a half ago. That information that I received from them as been relayed back to cabinet where we've had discussions on this. The Premier will be going to Washington next week, I believe, to have high-level discussions. He will also be attending the governors' convention in Boise, Idaho, I believe, in the first part of August, so we can have firsthand talks with a number of the governors from the states that are creating the biggest problem sponsoring legislation in Washington with regard to lumber.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:43 p.m.

Appendix

AMENDMENTS TO BILLS

19 The Hon. R. H. McClelland to move, in Committee of the Whole on Bill (No. 19) intituled Small Business Venture Capital Act to amend as follows:

SECTION 1,

(a) in the definition of "associate" by adding the following paragraph:

(b.1) a participant in a joint venture with the person,

(b) by adding the following definition:

"employee" includes a person engaged by a small business for a prescribed period calculated in the prescribed manner;, and

(c) in the definition of "equity share" by adding at the end ", but does not include a share having prescribed rights and restrictions".

SECTION 3, in subsection (1) (e) by deleting "equity capital" and substituting "capital".

SECTION 6, in subsections (3) and (4) by deleting "authorized".

SECTION 7, in subsection (3) (b) by deleting "equity".

SECTION 8, in subsections (2) and (3) by deleting "issuance" and substituting "issue".

SECTION 9, in subsection (1) by adding at the end "subject to any conditions that he may determine, including a condition that the shares shall only be issued, as he specifies, to investing entities or to persons, as defined in section 20 (1), and fixing the maximum consideration for which these shares may be issued to those investing entities or persons".

SECTION 10, in paragraph (a) (i) and (ii) by deleting "annual".

SECTION 12, in subsection (1)

(a) by deleting paragraph (e) and substituting the following:

(e) purchasing goods or services from a director, officer or shareholder of the venture capital corporation or from an associate or affiliate of that director, officer or shareholder, other than services referred to in section 6 (1) (b) provided by a venture capital corporation,, and

(b) by adding the following paragraph:

[ Page 6810 ]

(e.1) payment of all or part of a debt obligation, unless the administrator considers that the payment is necessary for the viability of the small business, or.

SECTION 13, in subsection (1) by adding "or corporations" after "other venture capital corporation".

SECTION 14,

(a) in subsection (1) by deleting "that is a subsidiary," and substituting "that is, or was, before the investment is made and after March 14, 1985, a subsidiary, ", and

(b) in subsection (2) (a) by deleting "are held by" and substituting "are, or were, before the investment is made and after March 14, 1985, held by".

SECTION 19, by adding the following subsection:

(5) Where a venture capital corporation fails to comply with section 8 (2) or (3), the corporation is liable to pay the Crown all interest on the investment protection account earned between the time the account was opened and the time at which the 18 or 30 month period referred to in section 8 (2) or (3) expires.

SECTION 21, by deleting section 21 and substituting the following:

Annual maximum venture
capital incentives

21. (1) The Lieutenant Governor in Council may, in respect of any year, prescribe amounts to be known as the annual maximum venture capital grant and the annual maximum venture capital tax credit.

(2) Where, in any year, the minister considers that, in respect of the issue of equity capital that was approved under section 3 (4) or 9 (1) in that year, the amounts will be paid out under section 20 (5) will exceed the annual maximum venture capital grant, the administrator shall not, for the remainder of that year, approve of any issue of equity capital under section 9 (1) in respect of equity shares that are proposed to be issued to investing entities, as defined in section 20 (1).

(3) Where, in any year, the minister considers that, in respect of the issue of equity capital that was approved under section 3 (4) or 9 (1) in that year, the amounts will be payable or paid under section 8.3 (3) or (5) of the Income Tax Act or deductible or deducted under section 8.3 of the Income Tax Act, will exceed the annual maximum venture capital tax credit, the administrator shall not, for the remainder of that year, approve of any issue of equity capital under section 9 (1) in respect of equity shares that are proposed to be issued to persons, as defined in section 20 (1).

(4) Where, in any year, the minister considers that, in respect of the issue of equity capital that was approved under section 3 (4) or 9 (1) in that year, the amounts will be

(a) paid out under section 20 (5) of this Act,

(b) payable or paid under section 8.3 (3) or (5) of the Income Tax Act, and

(c) deductible or deducted under section 8.3 of the Income Tax Act, will exceed the aggregate of the annual maximum venture capital grant and the annual maximum venture capital tax credit,

(d) the minister may suspend further registrations of venture capital corporations under this Act for that year, and

(e) the administrator shall not, for the remainder of that year, approve of any additional issue of equity capital under section 9 (1).

SECTION 26, by adding the following subsection:

(3) Where,

(a) on the basis of information supplied by a director, officer or shareholder of a venture capital corporation, a tax credit certificate has been issued or a grant has been authorized under section 20, and

[ Page 6811 ]

(b) that information is false or misleading and the director, officer or share holder knew, or ought to have known, that it was false or misleading

the director, officer or shareholder who supplied it is liable to pay the Crown the amount of the tax credit or grant, as the case may be.

SECTION 27, in subsection (1) by deleting "he may make an incentive forgiveness order." and substituting "he may, in respect of that issue or additional issue, make an incentive forgiveness order at any time after the expiry of the 10 year period referred to in paragraph (a) or (b), as the case may be."

SECTION 34, by deleting the "and" after paragraph (a) and by adding the following paragraphs:

(c) defining any word or expression used, but not defined in this Act,

(d) establishing a period of time over which the number of employees will be determined for the purposes of the definition of "small business" and section 17 (1), and

(e) for the purposes of the determination referred to in section 10, establishing the period

(i) over which the 75% of wages and salaries must have been paid, and

(ii) during which the small business must have been substantially engaged.

SECTION 36, in the proposed section 8.3 of the Income Tax Act,

(a) in subsection (2) by deleting "in a taxation year," and substituting "in respect of a taxation year,", and

(b) in subsection (8) by deleting "in a taxation year," and substituting "in respect of a taxation year,".