[ Page 2273 ]

CONTENTS

Routine Proceedings

Freedom of Information Act (Bill M206). Mr. Jones

Introduction and first reading –– 2273

Oral Questions

First Investors Corp. Mr. Sihota –– 2273

Newport Realty Ltd. Mr. Williams –– 2274

Mr. Sihota

Forest fire fighters. Ms. Edwards –– 2275

Mr. Miller

Mr. Williams

Miscellaneous Statutes Amendment Act (No. 2), 1987 (Bill 42), Committee stage.

(Hon. B.R. Smith) –– 2275

Mr. Clark

Hon. Mr. Couvelier

Mr. Williams

Mr. Lovick

Hon. Mr. Savage

Mr. Weisgerber

Mr. Stupich

Mr. Rose

Mr. Guno

Mr. Cashore

Mr. Miller

Hon. Mr. Michael

Ms. Edwards

Hon. Mr. Reid

Mr. Blencoe

Hon. Mrs. Johnston

Hon. Mr. Rogers

Ms. Smallwood

Hon. Mr. Strachan

Hon. Mr. Brummet

Mr. Jones

Hon. Mr. Veitch

Hon. Mr. Parker

The House met at 2:06 p.m.

MR. BLENCOE: Mr. Speaker, we are very privileged to have in the House today a group from James Bay New Horizons — good friends of both members of Victoria. They are on a walking tour of the Legislature and surrounding precincts, and they're accompanied today by Mrs. Snye. Would the House please make our friends welcome.

HON. S. HAGEN: It's with a great deal of pleasure that I introduce to the House today two people who are very important in my life, because they are the parents of my wife Judy. I'd like you to make welcome Mr. and Mrs. Jack Robins from Coquitlam.

MR. CASHORE: I'd like to introduce a very dear friend of our family, Louise Hutchinson, who is sitting in the gallery with my wife Sharon. It's very fitting that Louise is here today, on the day of discussing the Municipal Affairs estimates, because she is a member of the White Rock council. I ask you to join me in welcoming Louise.

HON. MR. PARKER: I'd like to introduce to the House today Frans Caspers, Wim Bouwland, Greg Diemer and Susan Bordeaux. They are students from the Netherlands who are here for a few weeks working with the Ministry of Tourism, Recreation and Culture in conjunction with the University of Nijenrode on a project relating to operations management. Will the House make them welcome, please.

MR. CLARK: I'd like the House to give a warm welcome to my wife, Dale Clark, who is visiting in the gallery today.

MR. JANSEN: There are special guests here this afternoon, and I'd like the House to make them welcome: Mike and Sue Chunys, with their three children — Vanessa, Michael and Sara; and Fred and Anne Lowenberger, all from Agassiz. Anne Lowenberger and Vanessa Chunys are both winners of the essay contest in the community of Agassiz: "What it Means to be a Canadian."

HON. MR. REID: Mr. Speaker, in the precincts today is a very good friend of mine and a hard worker in the Social Credit Party, Mr. Dave O'Malley. Would the House please make him welcome.

MR. HARCOURT: I have some sad news.

Interjections.

MR. HARCOURT: No, it is that in the rubber match today between the Scrum of the Earth and the NDP caucus, the Scrum of the Earth got lucky on a number of baskets and won 21 to 14. I'd like to congratulate the Scrum of the Earth for their fine performance, for once.

Introduction of Bills

FREEDOM OF INFORMATION ACT

Mr. Jones presented a bill intituled Freedom of Information Act.

MR. JONES: We've seen a number of bills introduced lately, and I would like to move that a bill intituled Freedom of Information Act be introduced and now read a first time,

I'm very proud to introduce this bill, which has a long heritage in this House, having been introduced 11 years ago by Scott Wallace, and by such eminent MLAs as Alex Macdonald and Garde Gardom, later by Gordon Gibson, and more recently by my predecessor, Eileen Dailly. They were called "sunshine acts" or "open-door government acts." I understand that even five years ago, the Attorney-General at that time, Allan William, announced that the government was studying access-to-information legislation, and that even our current Premier planned to introduce such legislation to apply at the municipal level when he was Municipal Affairs minister.

Mr. Speaker, in his report to the Legislature, the ombudsman noted that we still lack such legislation, which exists in over half the provinces in Canada and in our federal government. Not a week has gone by in this House when we have not seen the desire for more access to information and concerns about lack of availability of information. The public has a right to know. They have a right to know about information on publicly funded institutions, about the information on which government bases their decisions, and about the information that government possesses on them as individuals.

This province was promised open government. British Columbia needs such freedom of information, and I look forward to the debate on this legislation in the House.

Bill M206 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.

Oral Questions

FIRST INVESTORS CORP.

MR. SIHOTA: I have a question for the Minister of Finance. Over the last year or so there have been several business failures in this province: Teachers' Housing Co-op, Newport.... We have First Investors now, of the Principal Trust group. As a result of this, many seniors and unsuspecting investors have been caught, losing their life savings. Can the minister tell this House what steps he is taking to protect B.C. investors, many of them seniors, from this type of situation?

HON. MR. COUVELIER: Mr. Speaker, the difficulty, of course, is evident to all, and we see it in the kind of tragedies that result from the failure of some of these financial houses; that is to say that the basic rule in making investments is always that the degree of risk is naturally reflected in the rate of return. Invariably, whenever entrepreneurs attempt to maximize their earning potential, they will, in pursuit of that, frequently take greater risks and as a consequence expose their shareholders.

The government of B.C. was actively party to the considerations brought to the Principal Trust problem by the Alberta government, and I think that until the Coopers and Lybrand report comes in on that issue, it would be imprudent to make any specific comments on that matter.

MR. SIHOTA: A supplementary to the Minister of Finance. In the case of First Investors, they're covered by the

[ Page 2274 ]

Investment Contract Act, which is an act that the minister is responsible for. Under that act, companies such as First Investors are not required to provide financial statements, so that investors don't know of the situation of the company. The financial records of Principal were given to the investors, but the financial records of the specific company that they had the investment in are not required under the act to be provided. Has the minister considered bringing in the necessary legislative changes so that investors are aware of the financial status of these companies on an ongoing basis?

[2:15]

HON. MR. COUVELIER: I don't think that that particular remedy would have made this particular issue any easier to resolve. I believe that the difficulty with the Principal failure, and the difficulty the monitoring agencies had in dealing with it, reflects the complicated corporate structure of that organization and the fact that not all those organizations were actively in business in British Columbia. As a consequence, the host province had the primary responsibility to monitor that situation.

MR. SIHOTA: The minister can't talk about assessment of risk on the part of these investors if the act doesn't require the company to give them the information from which they can determine the risk. In many cases the investor does not discover until after the fact that their investments are not covered by the Canada Deposit Insurance provisions. Has the minister considered changes to legislation to allow depositors to withdraw their funds without penalty when they discover that their deposits are not protected?

HON. MR. COUVELIER: If the hon. member would like a copy of the application form used by both of those firms, I would be happy to supply him. That form has, in very bold red print, the fact that these dealings are not insured by the Canada Deposit Insurance Corporation. So I don't think the allegation could be made that investors were unaware of the degree of risk associated with their transaction.

MR. SIHOTA: Perhaps the minister should spend some time talking to some of his constituents who are phoning me up and telling me that. But that wasn't the question. We'll move on to something else.

Principal Trust's storefront office in Vancouver lists their group of companies, including investors, on the window, with a notice at the bottom saying: "Member — Canada Deposit Insurance Corporation." Does the minister not agree that this type of misrepresentation ought to be prevented by his ministry?

HON. MR. COUVELIER: I'm not aware of those specific details. I'm happy to take the question on notice.

MR. SIHOTA: A question then to the Minister of Labour, who is responsible for consumer matters. I'll repeat the question. On the windows of these companies is a representation that says they are a member of the Canada Deposit Insurance Corporation. Does the minister not consider that to be misleading and a misrepresentation in terms of advertising, and will he agree to immediately bring forward changes to remedy that situation?

HON. L. HANSON: The answer to the first part of the question is that I would like to see the circumstances under which it is published on the window, and I will have a member of my ministry look at that. The answer to the second question is no.

NEWPORT REALTY LTD.

MR. WILLIAMS: Again to the minister responsible for consumer affairs. The impact of many of these issues is predictable in terms of a gullible public being taken in by these companies. In the case of Newport and the Newport group of companies, where many seniors were bilked in this province, in the provincial jurisdiction, they were advertising at interest rates far above the market. It was totally predictable that that company would be in trouble. When does your staff begin to investigate these companies in such predictable situations?

HON. L. HANSON: When we start to investigate that is when we first become knowledgeable of a practice that is questionable under the Consumer Protection Act. I would suggest to the member opposite that we do keep a very good investigative process in place, but not always is everything brought to our attention. I do believe that the investigative branch of consumer affairs does an excellent job when a case is presented, or at least when it is brought to our attention.

MR. WILLIAMS: Further to the Minister of Consumer Services. Newport was advertising unrealistic rates for some two years before they got into deep trouble. The deep trouble was totally predictable. Do your people never, ever look at the financial pages, see these unrealistic market rates and then understand that there are going to be problems down the line? Or do they always wait until seniors are bilked and lose their life savings"

Answer the question.

HON. L. HANSON: I don't consider that question to be in order, quite frankly, but certainly I assure the members opposite that the ministry staff in consumer affairs are very aware of their responsibilities and do pay attention to cases where there is a requirement for an investigation under the Consumer Protection Act.

I'm not aware of the Newport situation that you were talking about, but certainly I will have my ministry look at the signing on the door of Principal Trust and see if it is a contravention.

MR. SIHOTA: Dealing with the Newport matter, I know the Attorney-General (Hon. B.R. Smith) and the Minister of Finance are certainly aware of that situation.

A question to the Minister of Finance: with respect to Newport, on March 27 the principals were told that they were being investigated. It wasn't until December, some five months later, that the investors found that out. In the interim, the principals of Newport divested themselves of everything in the company and made their profit, and the investors were left alone. The superintendent of brokers had powers to freeze Newport's assets back in March 1986. Could the minister explain why the superintendent of brokers office took no action on March 27, 1986, when it became aware of the problems with Newport?

[ Page 2275 ]

HON. MR. COUVELIER: I believe that that matter is currently under investigation. As a consequence, it would not be proper for me to get into any detailed discussion of it. I can tell the hon. member that I have examined the circumstances surrounding that case, and I am satisfied that the responsibilities delegated to the government and to the branch were properly followed by staff members. The difficulties associated with that in terms of our ability to respond differently than we did are all associated with legal technicalities, which the hon. member, by virtue of his particular profession, might well understand.

MR. SIHOTA: I wish the minister would understand his responsibilities when we're asking questions — not about the investigation, but his staff.

The point is this, Mr. Speaker: the government knew about Newport six months before it collapsed; it knew about Principal Trust — in particular, First Investors — six months before it collapsed. Is the government's reluctance to act to protect investors a demonstration of their throne speech commitment to get government off the backs of business'?

HON. MR. COUVELIER: The question is absurd. The answer is no.

FOREST FIRE FIGHTERS

MS. EDWARDS: My question is to the Minister of Forests. Yesterday during his ministry's estimates the minister stated that he felt that giving unemployment insurance to forest fire fighters would result in prospective workers going into the forest and deliberately setting fires. Is the minister willing to stand by those comments?

HON. MR. PARKER: The discussion yesterday on whether or not UIC benefits would be extended to emergency firefighters in the province was answered. One of our concerns is the possibility of further incendiary fires emanating from having those kinds of benefits extended. It's a concern that we have, and we shared it yesterday.

Emergency firefighting means exactly that. If you have a forest fire, it is within the law of British Columbia to conscript whomever the forest officer sees fit to get on with it, putting them to work to put out the fire. It isn't to make an industry out of firefighting. Anybody who is receiving UIC benefits at the time they're conscripted has their benefits suspended while they're on the fire line. They receive board and room and coverage by WCB in case of injury, while they deal with the public emergency. Once the emergency is by and their account is settled, then they are free to receive UIC again. But UIC benefits are not extended to emergency firefighters.

MS. EDWARDS: Supplementary to the Minister of Labour. Temporary firefighters are being denied basic workers' rights — access to unemployment insurance is one of them — because this government refuses to consider these workers as government workers. So they can't get unemployment insurance, and they're not brought under the Employment Standards Act. Has the minister decided as policy to bring an order-in-council forward to give them those two privileges?

HON. L. HANSON: Mr. Speaker, in very simple terms, the answer is no. That is future policy, and when cabinet decides what course we may take, it will be announced.

MR. MILLER: Mr. Speaker, a question to the Minister of Forests. Is the Minister of Forests suggesting that the unemployment in this province is so bad and people are so desperate that they're prepared to light forest fires in order to gain employment? What does that say about his government?

HON. MR. PARKER: Certainly not, Mr. Speaker. That sort of question in this House is really alarmist and ridiculous.

The whole purpose of attacking forest fires in the province is an emergency situation; it's a citizen's duty to help extinguish forest fires. keep them under control and put them out. It is not an industry. If we could have things the way we'd like to, there would never be a forest fire in the province of British Columbia, and there would be no such situation.

The people of British Columbia are not out to set fires, but there is an element — and the member opposite knows there is an element existing in every society — that is likely to do just such.... As a matter of fact, we've had a number of incendiary fires in the central interior of the province, and there's no point in trying to encourage that sort of thing.

MR. WILLIAMS: Further to the Minister of Forests and Lands, what evidence does he have and what charges has he made in regard to unemployed people lighting fires in British Columbia, compared to employed people lighting fires? What evidence do you have"

HON. MR. PARKER: I have never stated that unemployed people set fires in the province of British Columbia, but that is the sort of stuff we get from the people opposite. If the member is serious in his question, we would happy to take that on notice and bring back a detailed reply — or maybe flush it down the toilet.

Hon. B.R. Smith tabled an answer to a question asked Monday last.

MR. PELTON: Mr. Speaker, may I have leave to make an introduction, please?

Leave granted.

MR. PELTON: During the course of question period, I noticed two long-standing friends come into the chamber: Nick and Mable Andrews, who used to live in Maple Ridge and now live in Coquitlam. Nick is an active Shriner and a long-standing member of the Lions Club. I would ask all members to make them both very welcome.

Orders of the Day

HON. MR. STRACHAN: I call committee on Bill 42.

MISCELLANEOUS STATUTES
AMENDMENT ACT (No. 2), 1987

The House in committee on Bill 42; Mr. Pelton in the chair.

On section 1.

MR. CLARK: I'd like the Minister of Finance to explain the changes for us, please.

[ Page 2276 ]

[2:30]

HON. MR. COUVELIER: Section 1(a) is an amendment that adds the parcel size to the list of factors which must be considered in valuing private forest land. This factor is being added because there is a significant amount of market evidence that the per-acre value of forest land — and indeed any other land — declines as parcel size increases, and therefore this factor should be considered when determining forest land values. The reason for the relationship between parcel size and value is a well-established appraisal fact that, when properties are broken up into smaller units — all other things remaining equal — they become accessible to a larger group of potential purchasers, thereby increasing the demand for, and subsequently the price of, the property.

The original legislation defined forest land as either "land which has as its highest and best use the growing or harvesting of trees," or "land which is being managed in accordance with" an approved plan. It required all forest land so defined to be assessed on the basis of its topography, accessibility, location, soil quality, and the value of cut timber, and it permitted forest land to be split into managed and unmanaged categories with different tax rates applying to each.

This amendment permits the assessment commissioner to prepare schedules of cut timber value, allowing for consideration of the distance between the parcels of forest land and log markets in their calculation. And it corrects an incorrect cross-reference.

The reasons for these changes are these. First, schedules of timber value are being introduced in order to provide a consistent basis for the valuation of this component of the property value. Provision is being made for differing distances between parcels of forest land and log markets in order to provide some recognition of the cost of getting logs to market. The cross-reference change corrects an error in the previous legislation.

MR. CLARK: I'm just trying to grasp the significance of this. What you're essentially saying is that you want to be able to reduce the value of land based on the size, and currently there's a sort of uniform application, and that this in fact allows.... As trees get logged and they're farther from markets, you can reduce the assessed value to accommodate essentially what is perceived to be a decline in market value of the property?

HON. MR. COUVELIER: Mr. Chairman, I think the reverse is what I intended. As a property gets smaller, its value proportionately increases.

MR. CLARK: Parcel size is one of the factors. I'm interested in this schedule of timber values. Does that mean that the same parcel size in different parts of the province would not clearly result in the same adjudication of market value, but that it can be included in the variety of things that are looked at in terms of determining market value?

HON. MR. COUVELIER: That's correct, Mr. Chairman. In effect, a matrix is built of all these factors for these individual properties, and in the process of building that matrix, the assessment staff officer will then be able to calculate his values.

MR. CLARK: So the purpose, really, is to do the reverse of what I originally suggested, which is that to attempt to increase the.... It enables the Assessment Authority to increase the value of the land more readily on the basis of smaller parcel sizes, rather than a more homogeneous interpretation. In other words, it disaggregates the factors to be looked at when determining market value more thoroughly than in the past. Is that correct?

HON. MR. COUVELIER: Yes, Mr. Chairman, that is correct. I'm troubled by your continuing reference to "increases the value." The object isn't necessarily to increase value. The object is to determine fair value.

MR. WILLIAMS: I see, Mr. Chairman, that you're taking two separate approaches between the coast and the interior, as is the case with respect to the Forests ministry, in terms of their so-called valuation process. Why would that be the case? The evidence is now in, in terms of the Vancouver log market, that it is not supportable as a free market. Why would you use the Vancouver log market as a basis for valuation, when the best economists in the province have declared that it is not a genuine free market and therefore does not reflect the real value of timber?

HON. MR. COUVELIER: Mr. Chairman, I believe the hon. member is aware that the whole issue is presently the subject of review. It is not the purpose of the Assessment Authority to inject themselves into that discussion. They have neither the expertise nor the specific responsibility. Our task is to deal with factors that can be quantified, and quite clearly the existence of a log market in Vancouver is the instrument by which these issues are presently quantified.

As to the accuracy of the quantification, that is a matter, as I said, which is under discussion by the line ministry involved.

MR. WILLIAMS: The pompous responses we get from the Minister of Finance continually amaze me. He has the veneer, the pretense of knowledge. Just a minute ago you said to the other member for Vancouver East that you wanted fair valuation, not high valuation, which the member was suggesting. Well, Mr. Minister, if you want fair valuation, you won't use the Vancouver log market. Pure, simple, straightforward: if you want fair valuation in terms of timber, you don't use a rigged market, and that's what the Vancouver log market is.

HON. MR. COUVELIER: Sit down and let me tell you....

MR. WILLIAMS: No, you're going to have to listen to me for a few minutes. Really, the best brains in this province and the best economists all advise us that the Vancouver log market is a rigged market and that it does not reflect real value. There is a market in Puget Sound right over here, as close to this building as the Vancouver log market, where real values are established and where there is a genuine free market in logs. If you wanted to look at the question of real values for logs, you would find them, and in the interior as well. But the Vancouver log market is clearly a glaring problem that has not been dealt with. If you're looking for fair valuation, you're not going to use that as the base.

[ Page 2277 ]

The whole question in the interior is not clear. You talk about prices in the interior. But what prices are you talking about? There are independent prices, in terms of material coming into a mill, and there are prices that are paid for Crown timber, and those prices differ. What are you talking about in the interior?

HON. MR. COUVELIER: The interior prices are based on the price at the nearest mill, Mr. Chairman.

I found the reference to pompous responses somewhat amusing, made by the forestry expert from the high timber country of Vancouver East. The fact of the matter is that in dealing with the coast log market, we in the Assessment Authority must have some basis that is quantifiable and publicly verifiable on which to make these judgments.

I gather the hon. member might be more comfortable were the Assessment Authority to take it upon itself to create its own pseudo log-market figures or steal from the Americans. Are you suggesting we should be letting the Americans dominate the B.C. assessment practices? I can imagine the outrage we'd get from across the floor were we to follow that example.

In any event, in answer to the last question, the interior market price is determined by the price at the nearest mill.

MR. WILLIAMS: A very scurrilous argument; it really is, and you know better. A market is a market is a market. If there were a genuinely free market in Howe Sound and Vancouver, it would be the same as that market in Puget Sound. The only difference between the two markets would be the modest difference in water transport costs between them, if they were a genuine free market.

In economic terms, that is the reality. You can do your little dance about Americanism versus Canadianism, and it doesn't wash. You really should be able to do better than that in debate. The evidence is that there is a significant difference between the Howe Sound market and the Puget Sound market. If you're after real value, you can find it. There is a whole range of other transactions that you could use as the base.

A further question: it's not clear in terms of this amendment whether you're dealing with the historic taxation tree farms in this section as well.

I guess the minister is getting some advice on this, Mr. Chairman, in terms of the taxation tree-farms that we've had historically. For example, MacMillan Bloedel currently are probably the largest taxation tree-farm owners in British Columbia. MacMillan Bloedel own 300,000 acres fee simple, clear title land.

Much of the Gulf Islands, for example, are taxation tree farm lands. Virtually all of Valdes Island and most of Galiano Island in the Gulf Island group are taxation tree-farms wherein there are special valuations relative to them being managed taxation tree-farms.

HON. MR. COUVELIER: These same amendments will apply to taxation tree-farms.

MR. CLARK: I just wanted to ask a couple of questions. If you recall, the other day in estimates we talked about the industrial assessment appeal problem that we have, and there were some suggestions for a specialized appeal panel. Does this change mean that the methodology used to determine the assessment is not appealable?

HON. MR. COUVELIER: The answer to the question is yes, Mr. Chairman.

MR. CLARK: I wonder if the minister has given any thought to specialized appeal boards to deal with this very difficult question of valuation of timberland in the province, given the complexities that we've talked about and the first member for Vancouver East (Mr. Williams) has touched on. Appeals can be very subjective, especially given the geographic nature of appeal boards. Has the minister given any thought to a specialized appeal board to deal with the valuation of tree-farm land?

HON. MR. COUVELIER: Insofar as the dollar issues at stake here are not significant or major, and insofar as the workload in the respective appealing of forestry values is not large, we have not given serious consideration to a special board specifically for that purpose. We haven't found it necessary.

MR. WILLIAMS: Again. Mr. Chairman, this is a specialized field. It's the industrial forest market, and there is a case for separate appeal boards instead of the usual ones that are dealing with Mom and Pop problems and house valuations and that sort of thing. So I hope the minister considers that possibility.

One might assume you're planning on two levels of taxation here — between managed and unmanaged lands. Is that the intent?

HON. MR. COUVELIER: That is correct, Mr. Chairman.

MR. WILLIAMS: And presumably managed lands would pay less tax?

HON. MR. COUVELIER: That is correct, Mr. Chairman.

[2:45]

MR. WILLIAMS: What kind of method would be used to establish qualities of management, inspection and all of the related activities, goals of management, silvicultural practice and the whole range of forestry issues, in determining whether one would get the lower rate?

HON. MR. COUVELIER: I just want to check. Maybe we could deal with that question when we get to section 2. We're still on section 1.

MR. WILLIAMS: If we're giving concessions to these people who hold private forest land in the form of lower taxes, what happens if they decide to use the land for something else the next year? We've been letting them have a free ride because they employ modest forest practices.

Let's think about MacMillan Bloedel itself. MacMillan Bloedel owns 90 percent of Galiano Island. There are incredible waterfront values on Galiano, absolutely extraordinary. Yet because it's within a taxation tree-farm, they're paying on the basis of tree values. They pay on the basis of tree values year after year, decade after decade, and then one year they decide: well, let's go into the waterfront cottage business instead of forestry. That looks fairly lucrative right now. It might come at a time when more people in British

[ Page 2278 ]

Columbia are better off than they are today and could afford more waterfront cottages on Galiano Island. That day might come. Is there no pay-back? Do they simply have the free ride for decade after decade and then when they decide to go into the waterfront real estate business, we don't get any of the money back'?

HON. MR. COUVELIER: I sense that the hon. member would have the Assessment Authority, by virtue of his question, trying to prejudge future use and taxing present property owners for what we, with the arrogance of power, assume might be the best future use. This government doesn't happen to assume that arrogant position. This government does not happen to believe that people who have some property should be burdened with high taxation because we assume that in the fullness of time that property might be used for some different purpose. That would be entirely contrary to the whole philosophy behind current assessment practice, which is to base value on current values.

The hon. member may have the arrogance to believe that he can predict with accuracy these potential future uses. I don't happen to share that arrogance. I don't happen to think that that's a defensible way to approach the assessment business in this province, and I wouldn't support such an initiative.

MR. CHAIRMAN: Hon. members, just before we proceed, if the hon. first member for Vancouver East would take his seat. The Chair has noticed — and it's happening more and more all the time, particularly during the course of debates on estimates — there seems to be an increasing tendency on the part of both sides of this House to make personal allusions in the course of answering or posing their questions. I would just like to suggest to everyone in the kindest way that personal remarks tend to inflame rather than to illuminate, and I would ask all members to avoid these unnecessary personal references from here on in. Having said that, we'll continue with section 1.

MR. WILLIAMS: Well, now, I couldn't agree more, Mr. Chairman. Let's use the example, Galiano Island. The minister says he doesn't want to make all these assumptions about the future, and all that stuff. Let's use Galiano as the example. You know, most of us see it as we go through Active Pass. Heading to Vancouver, it's on the left or to the north. You see that scattered along the waterfront, around the Pass, and near Gossip Island, and that's about it. That's the bulk of the settlement on Galiano. The rest of that Island, 90 percent of the land, 90 percent of the shoreline, is MacMillan Bloedel.

Now there might be a little homeowner on Galiano who has a lot with, say, 100 feet of water frontage. That's probably valued at at least $100,000. Right next to that lot, valued by your assessment people at $100,000, is the 90 percent or the huge tree area — not with a lot of trees on that island, I assure you — of MacMillan Bloedel. You start counting up the numbers of 100-foot pieces on the 90 percent of that island, and Mr. Average Citizen who happens to own the house or the waterfront cottage next to that tree-farm is paying on the basis of a $100,000 evaluation, and the guy next door, which happens to be MacMillan Bloedel, who can afford to pay taxes, certainly this year, is paying on the basis of probably $10 for the same piece of land and the same kind of water frontage. That's the difference. And that's today. It's nothing to do with the future. Same kind of land, same kind of water frontage, side by side, Mr. Minister. Your straw men fall apart so fast, under any examination whatsoever. This is insupportable. In the name of some tree-farm, you have that kind of difference between Mr. and Mrs. Average Citizen and Mr. MacMillan Bloedel. It's not fair; it's not equitable.

Okay, the rational argument on the other side, if I might try and put it, is that the forest is a longer-term investment, and if they're managing it, and the rate of return is not what we might see next door, then we can accept that in the interest of some forest management. But what's the trade-off when MacMillan Bloedel decides to go out of the tree-farming business? They've had 30 years of cheap taxes on 90 percent of Galiano Island. You're ready to continue that into perpetuity, presumably, from what you've said today: that they should pay virtually no taxes on the same kind of land where the average citizen would probably pay $7,000 or $8,000 a year. There's something wrong there; there's really something wrong in terms of equity. There should be some kind of reasonable trade-off. A certain amount of the difference in taxes between the waterfront land values and the tree-farm values should be paid back to the Crown when they decide to change the use of the land. That's not extraordinary. That's reasonable, that's equitable, and that's fair, relative to the average British Columbian.

We're not asking for anything extraordinary; we're asking for fairness. I think the average citizen in this province and the rest of Canada is tired of the fact that they pay more taxes on any measurable basis than the corporations do. The corporations, through the recent decades, are paying less, less and less, and the average citizen pays more, more and more. You're extending that into this property field as well, and the Galiano Island example is a perfect example, arguing for more equity. So your straw man arguments fall apart immediately, upon any investigation.

It's becoming abundantly clear more and more, Mr. Chairman, that the members of this cabinet don't really get fully briefed when they bring legislation into this House. Again and again, we're getting evidence before us that you are not fully informed on the legislation you bring before this House. It doesn't take much investigation or much debate to show that. This is just one more example of a minister who has too much on his table, is not able to handle it all, is not fully briefed, and is not adequate for the job.

HON. MR. COUVELIER: I realize we'd all like to get this over with, but some of these outrageous remarks are so foolish and absurd that they must be answered, if only for the record. The shallow argument espoused by the hon. first member for Vancouver East (Mr. Williams), if carried equally in a democratic society to all property owners, would have the effect of a farmer who lived next to a shopping centre — under your rationale — being assessed some sort of inflated value merely because he happened to have a location that maybe in 20 or 30 years' time might have a higher use; or, carrying that same argument, the reference is made constantly to MacMillan Bloedel, the one largest forestry firm in this province. What about the small-to-medium-sized logger who has the same kind of waterfront property, who's in the business for his family and his children to grow up and continue to log? What about them? Would you also propose that they should have some sort of other category because the government of the day happened to be paranoid enough to think that they would want to penalize these people in some way?

[ Page 2279 ]

Whatever law is put in place must apply to everybody: the MacMillan Bloedels, the small operators, the small farmer who happens to live next to a shopping centre or a condominium, whomever. This government happens to think that the assessment practices in place must be applied fairly and without fear or favour and be applicable to all entities in the province — corporate, private or otherwise.

MR. WILLIAMS: They should be applied fairly, equitably to all. That's the problem. The minister doesn't seem to understand that what he's bringing forth in this legislation is a concession to these major landowners. The largest one in British Columbia is MacMillan Bloedel. They have 300,000 acres in this category, with tens and tens of miles of water frontage; tremendous waterfront values that M&B never pays taxes on. Every other citizen in this province that owns water frontage pays through the nose in property taxes. So that's the point. No average citizen in British Columbia gets this kind of concession. The point then is, what's the trade-off for the concession, so that the average citizen gets something of a fair shake, somewhere at the end of the road? There's something wrong if M&B can get away with paying a couple of percent of the taxes that the guy next door in the waterfront cottage pays. That's what this allows. That's wrong. That's not equitable. So the question is: whenever will MacMillan Bloedel pay? You're saying "never." And you're saying that's equitable. I'm talking about property tax.

Interjection.

MR. WILLIAMS: You say there is a point in here where they're going to have to pay something extra? I don't see it in this legislation.

HON. MR. COUVELIER: When the use changes, Mr. Chairman, the assessment practice will change.

MR. WILLIAMS: That's the point. So it changes from a value of $10 an acre to $150,000 an acre, and it's not until they decide that anything triggers. Meanwhile, they've had a tax-free holiday for 40 years, while property values have been appreciating. Every other waterfront owner had to pay every year, year after year after year. That's simply not fair. It's inequitable. The trade-off should be some kind of payback in terms of the difference in value, at least for the previous decade, or something like that. That would be a most reasonable trade-off. Is it any wonder that the average citizen gets furious about the taxes that he pays compared to the corporations? And you continue to feed that kind of fury that is legitimate. The average middle-class citizen pays more than he should in the income sector, and you're now setting it up so that he does in the property area as well.

MR. CLARK: Just a couple of questions more on this section. Having read the industrial assessment report, it does seem to me that there are a number of interesting suggestions in terms of valuation of industrial property, which is hard to value. It seems to me that this is a similar area. You've indicated that you don't think there needs to be a specialized assessment appeal board because there aren't that many appeals. But it seems to me that the way in which they determine the value of industrial land has some applicability here. For example, discounted future income streams: I wonder whether that kind of analysis should be incorporated into the valuation of timber harvesting lands in the province.

The other question is market transactions. There is trading in this land, and, of course, that's the normal market test for how much the land is worth. The problem with industrial property is that a pulp mill doesn't change hands very often, so you can't determine the value. Well, neither does timberland trade hands very often, but it has been trading from time to time. There is, for example, a small business enterprise program that clearly gives a far higher value for timberland that the Vancouver log market.

Has the minister decided to include an average of the Vancouver log market price and the price at the mall business enterprise auction? The auction price would be preferable, in my view, but at the least an average. Has he looked at the trading of quota for valuation of timberlands in the province? There is some evidence of tremendous values paid. Or has he looked at the price that the government asked the federal government for Moresby Island or Lyell Island? The provincial government said this timberland is worth hundreds of millions of dollars and negotiated with the federal government to get a high price, because the government said it was worth a lot of money for that land. Yet, if we looked at the taxes paid on that very same timberland by the owners of the timber licences, I suspect they'd be very low, and the assessed value of the land would be far lower than the province asked the federal government to pay.

So it seems to me that there are a number of areas. It wouldn't be too hard to come up with a better market value for this land if we looked at the examples that I've just mentioned, rather than simply looking at what appears to be more of a technical, narrow view of it — not very sophisticated, in my view — and looking at a log market which everybody admits is really undervalued.

[3:00]

MR. PELTON: The Minister of Finance?

HON. MR. COUVELIER: I didn't hear a question.

MR. CLARK: I'm being very reasonable here. I'm not being agitated. I'm arguing that there appears to be a more sophisticated way of valuing land. One is the true market test of how much the land trades for — including how much the land traded for on South Moresby — and there is another test which the report suggested, which is to discount future income streams and try to look at future profitability as one mechanism for evaluating land which doesn't trade very often. Your predecessor's committee recommended we look at that for evaluating industrial property. This might be a more appropriate mechanism for evaluating. So there's a number of other options that seem to me to clearly....

MR. WILLIAMS: Three was quota.

MR. CLARK: The third one was quota-trading, yes. Excuse me. The fourth one was.... I even suggested a modest one, which might be to take an average of the price being bid on the small business enterprise program — the auction price — and the Vancouver log market, which is a more realistic assessment. It is far too generous, I suspect, in terms of evaluating land. So there are three or four other

[ Page 2280 ]

mechanisms that could be incorporated in a more sophisticated approach to evaluating. This very difficult area of evaluation.

Has the minister decided to consider any of those? Any of the above?

HON. MR. COUVELIER: I finally got a question. I found it very interesting to hear the hon. member's opinion. It's valuable and it's on the record; we can consider it at our leisure.

The amendments before us have been arrived at through extensive discussion with the industry itself. I think that the member would dearly love me to get into a discussion that might indicate our preference in dealing with the Gordon report and its recommendations. I certainly can't do that. That matter is under review. It's out in the public marketplace being critiqued. I invite the member, if he has any thoughts on that subject, to make representations to the UBCM, who in the fullness of time are preparing a report. We will pay very close attention to it when it's received.

MR. WILLIAMS: I'd like to thank the minister for finally coming clean and admitting that the real consultation has been with the industry, and that the bill we have before us is indeed what MacMillan Bloedel is very happy with. I'll be glad to let all the other waterfront owners around British Columbia know how you operate.

MR. CLARK: This is my last appeal to the minister to stand this section and the next section pending a more thorough review and analysis of this problem. I'd be happy to meet with any technical people that you put on this problem to give them some other ideas as to how to better evaluate the true market value of timberland in British Columbia.

MR. CHAIRMAN: Shall section 1 pass?

MR. CLARK: I've simply asked the minister a question. He could, for the record, answer it. Will he stand this clause and the next clause of this bill pending further scrutiny?

HON. MR. COUVELIER: No.

Section 1 approved.

On section 2.

MR. WILLIAMS: Mr. Minister, maybe you could advise the House what capabilities your assessment staff have to carry out this review of plans and programs and investigation on-site, and all the rest of these forestry activities that valuation people generally aren't competent to deal with.

HON. MR. COUVELIER: The Assessment Authority works with the forestry staff, but we do have a considerable source of expertise in the ministry. I think that's supportable by the fact that we haven't had that many appeals to the practices of the staff. It just hasn't been an issue with those affected by the decisions.

MR. WILLIAMS: I think that sums it up: there can't be anything wrong; they're not complaining about their taxes. I've already gone through the exercise of explaining why MacMillan Bloedel wouldn't complain about their taxes. They were hardly born yesterday.

Ministry of Forests staff was cut by 35 percent under Bill Bennett's phony restraint program. That applied to every other department, and you're saying that there are plenty of people around to do this work. If you're going to go out and check to see whether forest management is really being undertaken, even on 300,000 acres of MacMillan Bloedel you need some staff to do that job. But it isn’t just MacMillan Bloedel. This can include smaller private holders of managed forest lands, so touring around this province and checking all that out is a big job. The three states on this coast — Washington, Oregon and California — have a significant sophisticated staff that reviews the management practices on these lands. I wonder if you or your staff even looked at the legislation in Washington, Oregon and California prior to proceeding with this. Can you advise the House whether you looked at the statutes of Oregon, Washington and California, which are comparable geographically?

HON. MR. COUVELIER: My advice is that we did.

MR. WILLIAMS: For how long?

HON. MR. COUVELIER: I suppose we can provide the hon. member with names and dates and times. I'm not quite sure what the purpose of the question is, other than delay. Of what importance is that? If the hon. member has some valid suggestions dealing with technical changes, we would appreciate hearing them. But in the absence of that, he asked a question and I gave the reply. It seems to me that should be suitable.

MR. WILLIAMS: Could the minister then deposit with the House, today or tomorrow, all the material they reviewed with respect to Washington, Oregon and California?

HON. MR. COUVELIER: I will take the matter under advisement, Mr. Chairman. I'm not quite sure just what kind of evidence would satisfy the hon. member.

The hon. member seems to be fascinated with the American practice. There is one basic difference between the American practice and our own in terms of forestry taxation, and that is the fact that the American system doesn't include, for example, the cost of road construction. You can't really compare apples and oranges, you have to compare apples and apples. Admittedly, that may be a revolutionary thought for the hon. member, but that has been the business practice for generations.

MR. WILLIAMS: This is the same minister who thinks silver culture is the same as silviculture. He's talking about the cost of construction of roads. He's talking about public sector lands in the United States. He really doesn't know the difference between apples and oranges. This is private sector land, Mr. Minister, and the road question is not a factor in private sector land at all, in any respect, in any way.

This is typical of the bafflegab shuffling-around that we get from this minister. You may be unhappy about these comments, but when we get it, we're going to name it for what it is; and that's what we get from this man. There's this veneer in terms of some of the phraseology that would give the appearance of knowledge, but I'll tell you, it's veneer. As soon as you put your finger on it, it breaks. It is a veneer.

[ Page 2281 ]

I am not satisfied that you or your staff have carried out studies with respect to practice in Washington, Oregon and California, and that's why I'd like to see the data put in this House forthwith — today or tomorrow. Let's see it all. If they've done the work and if you've done the work, we'll see it. So why not do it? Just make the commitment; deliver the goods. Mr. Chairman, I'm serious. I want the minister to deliver the goods. I want to see that he has done the studies he claims to have done to justify this statute, because I'm not satisfied it has been done. I think the burden is on him to show that it has been done. There is no evidence from what he has said in this chamber that he does know, so let's see the written material.

MR. CLARK: Could the minister explain the purpose of these amendments? In other words, what is section 2 remedying that's not currently the case?

HON. MR. COUVELIER: The amendment in section 2 provides for regulations governing the classification of forest land into managed and unmanaged classifications for property tax purposes. The more extended regulatory powers are being sought to permit the classification of forest land on the basis of approved forest management plans.

This route for classification is being pursued after consultation with landowners and foresters regarding the most effective way of identifying forest management.

MR. CLARK: So the minister is essentially saying that there is no real technical expertise in the Assessment Authority. This is not to give more expertise to the Assessment Authority. It's really to say that, where there are forest management plans, they are now filed with the Assessment Authority and become, therefore, regulated forest lands. That's really all this does.

Does the minister agree that's what this section does? It has nothing to do with the technical competence of the Assessment Authority. The Assessment Authority has no technical competence to determine whether a land is managed or not. It simply says that, where there is a forest management plan determined in consultation with the Ministry of Forests, it is filed with the Assessment Authority and then is determined to be regulated forest land for the purposes of taxation. Did you hear that?

HON. MR. COUVELIER: Could you restate the question, please?

MR. CLARK: Okay. The question is simply this: would the minister agree that the Assessment Authority really has no competence to deal with the question of what is managed forest land and what isn't managed forest land?

What this really says is that, where the Ministry of Forests and the holder of the forest land file a forest management plan with the Ministry of Forests, they file a copy now with the Assessment Authority, and therefore that becomes managed forest land for the purposes of the Assessment Authority. It has really nothing to do with technical competence in the Assessment Authority. It has to do with filing those plans now with the Assessment Authority for the purposes of classifying it as managed forest land.

HON. MR. COUVELIER: The Assessment Authority does take advice from the Ministry of Forests in this respect; it isn't something we do unilaterally. But we do react to a management plan, and we receive comment from the Ministry of Forests as to its characteristics and suitability.

MR. CLARK: I'm not trying to be pejorative, but the fact is that you don't have Assessment Authority staff who go in and see how big the trees are, valuate the species and do timber evaluation for the purposes of market evaluation. You get a forest management plan written by the Ministry of Forests in consultation with the owner of the land, it is simply filed with the Assessment Authority, and those values and determinations in the forest management plan now become, for the purposes of assessment, managed forest land.

That's really all that happens, Is that not correct? If it's not correct, please clarify.

HON. MR. COUVELIER: From time to time, the Assessment Authority staff will require expert assistance, and when that's needed they will obtain it. That might come from another ministry, and in this case, generally speaking, it comes from the Ministry of Forests. But it's not at all uncommon, in other instances not dealing with forest-related assessments at all, that we might use outside expertise. That has been a common practice.

[3:15]

MR. CLARK: Can the minister then advise the House that it was experts outside the ministry, outside the Assessment Authority, who did the kind of comparative analysis that the first member for Vancouver East (Mr. Williams) talked about in terms of American experiences in this area? Was it outside consultants hired as expertise, or was it in-house analysis done in terms of comparative analysis with American states?

HON. MR. COUVELIER: No, I think that while we can't say categorically, to the best of our knowledge it would have been a group effort on the part of forestry staff and assessment authority staff, and obviously there would have been input from people in those American states.

MR. CLARK: Okay. So it wasn't outside consultants that did the comparison with the Americans; it was done in-house. Having said that, would the minister now give an undertaking to table in this House the analysis that was done with those American states?

HON. MR. COUVELIER: Mr. Chairman, I'm not sure whether we can quantify it to the satisfaction of the hon. members. I don't know what relevance this has to the amendment. The point of the matter is, what we're trying to do with the amendment is reward people who come forward with a forestry management plan.

To bring forward some extraneous point — have we looked at what the Americans are doing in this area? — I think is irrelevant. The point regarding the Americans was raised on the question of the log market and which log market we should be looking at. That's how we got started on this American hang-up. What relevance it has to section 2 I'm blessed if I can figure out.

MR. CLARK: Me thinks he doth protest too much! Look, I hate to say this, but it doesn't appear from your

[ Page 2282 ]

answers that there has been any analysis done in any comparative way with American states. The minister has stated now a couple of times in this House that there has been an analysis done. I don't want to call him names that are unparliamentary, so I would like him to clarify that again. If there has been an analysis done, a comparison with American states, would he give an undertaking to table in this House any of the data which was accumulated in those analyses?

HON. MR. COUVELIER: I am pleased to state that if I can quantify a suitable response, I will present it to the House. If the hon. members are suggesting that we've sent staff members off on some six-month visit to tour American states to determine, on this head of a pin, which side we should dance on, the answer is categorically no.

The original question when it was put to me — and we'll took at Hansard when it's out — was: did you consider — or words to that effect — the American experience? Now you're putting it in the form of a study. Clearly, I didn't send or hire consultants to prepare studies yea thick on this relatively minute point. It has no relevance in the first place. Why would I?

But in answer to whether we are aware of what's going on in the American states, yes, we are. That awareness can be determined by phone calls, exchange of letters, discussions at different levels by different strata of bureaucrats in the system. If I'm going to have to go through the entire system and ask each staff member which point he discussed in this issue with his Washington state confrere or his Oregon confrere in order to satisfy himself that we know what we're talking about, what a monumental waste of time.

We are here to deal with a basic question: do we want to reward businesses and firms that have a forest management plan by reducing their assessments? That's the issue. That's what section 2 is all about, Mr. Chairman. I just ask, for goodness' sake, that the questions be relevant to the amendment.

MR. CLARK: Let me make it even easier. Would the minister table any evidence, quantifiable or otherwise, any letters or any exchange of information that indicates that there was any discussion of the valuation of our forest lands by looking at the American jurisdiction and how they do it? Any evidence whatsoever — not quantifiable, not numbers, but correspondence or any evidence that there was that kind of even cursory analysis.

HON. MR. COUVELIER: I'm happy to consider the request, Mr. Chairman.

MR. WILLIAMS: It's hard to believe that this minister ever passed English in grade 9. He says "to quantify a suitable answer." That's the actual quote — "to quantify a suitable answer" regarding your activity in terms of getting information on how the Americans deal with this. As the other member for Vancouver East said, we'd be happy simply to see the pages of paper. Bureaucrats are very good at filing pages of paper.

MR. CLARK: Here it is!

MR. WILLIAMS: It's in that one little envelope; it's a telephone bill.

MR. LOVICK: It's quantifiable.

MR. WILLIAMS: Yes. That's what we've been getting out of you over the last half hour, but "quantify a suitable answer...." It tells you something about a mind-set, doesn't it?

I want to see the pieces of paper, the letters, the statutes from Washington, the statutes from Oregon and the statutes from California — the way they administer these activities. I'm saying this and I've asked this, Mr. Minister, because I happen to have made those studies. I happen to have corresponded with all of those American states. I considered it a worthwhile academic exercise at one time in my career. It is clear to me from the material you have provided us and the statute you have put before us that there is little evidence that your staff or you or anyone associated with you went through a similar exercise. I have great difficulty believing that story, since I've gone through that exercise myself. It's a significant exercise; it's a worthwhile learning exercise, because they do the job much better than we.

Private forest lands in the United States of America on the west coast are extremely well managed. They are well regulated. They are reviewed in the field. There is a fully qualified staff to carry out the work. How could anybody who had looked at what these more sophisticated jurisdictions to the south of us do come up with this pittance that's before us today? I suggest to you that they couldn't have, and that's why we think it's incumbent upon you to provide all of that information and evidence that led you to this kind of conclusion.

We're not asking much. The one thing bureaucrats are good at is filing paper, if nothing else, and all they've got to do is go back to their colour-coded files and get the right piece of paper; or if they're really sophisticated, I guess they check the computer. But let's dig it out and let's hear exactly what backup you've got. I think that when we find the backup you've got, we'll find that the bulk of it was your correspondence and dialogue with MacMillan Bloedel and the industry that you seem to think is the same as the general public.

Section 2 approved on division.

On section 3.

MR. CLARK: I'd just like to ask the Attorney-General to explain the purpose of this section.

HON. B.R. SMITH: It encourages self-policing for self-governing professional and occupational groups. For instance, if the chiropractors or the physiotherapists, who have organizations that have a protected name in the legislation, want to enforce that protection, they do it by getting their own injunction. They don't come and ask the consent of the government to do it, which seems unwieldy and paternalistic. It's desirable to have all occupational groups and professions that have the unique right to practise their own occupation and profession protect their own professions, without the government doing it for them.

MR. CLARK: Does this cover, then, the new teachers' college, in terms of their disciplining internally?

HON. B.R. SMITH: The best advice I can get is that it does not, but....

[ Page 2283 ]

Interjection.

HON. B.R. SMITH: Well, I don't think that they.... See, this legislation is designed for those organizations to try to protect the exclusive name, and I don't think that you have an exclusive right to the name "teacher." I could be a teacher and not be a member of the public school system or indeed the private school system. I might just lecture or instruct on the side, and I could call myself "teacher." The college couldn't stop me from using the name "teacher," but they might be able to stop me from instructing. Also, of course, teachers in the public system do not provide fee for service; I suppose that's a differentiating reason. But no. If they were to request this right in some way, of course we'd look at it, but these are all groups that want it.

Sections 3 to 11 inclusive approved.

On section 12.

MR. LOVICK: Perhaps I can start again by asking the Attorney-General if he would share with us the rationale for section 12, specifically 16.1(2), which says: "The Industrial Relations Act, the Public Service Labour Relations Act and the Employment Standards Act do not apply to inmates and young persons in respect of or due to their participation in a work program" under the corrections system.

HON. B.R. SMITH: It simply clarifies that inmates are not a certifiable group within the meaning of those acts. As inmates they're not certifiable; they may be members of any union for some other work purpose, but they're not a union for the purposes of doing correctional work programs while in custody. I don't think it has ever been suggested that they should be. It's clarifying that, really. It probably is the case now.

MR. LOVICK: I appreciate the minister's answer, except that I believe — with all due deference — that it only obtains and applies to the first two of those statutes. The third one, the Employment Standards Act, doesn't have anything to do with unions; it simply governs the management and labour relationship in any workplace. Would he care to clarify in response to that observation?

HON. B.R. SMITH: Never have inmates on these work programs received minimum wage. They receive a stipend. The hope under this new legislation is that they will be able, out of increased productivity from these programs, to provide some financing for expanding the programs for the betterment of people in the programs, even for some maintenance for the families and payments for victims. But they've never been subject to the minimum wage. We're not trying to regulate them as part of the labour market. We're trying to deal with it separately.

[3:30]

MR. LOVICK: I can accept and appreciate that argument. The question, however, is something beyond wages: namely, employment standards and workplace conditions. Would the minister indeed be willing to clarify for us that the only reference intended under this exemption from the Employment Standards Act has to do with wages?

What I'm pretty obviously leading to. Mr. Minister — I shan't be secretive — is to ask whether there are indeed any mechanisms in place to guarantee that the individuals working within those programs are treated as human beings.

HON. B.R. SMITH: I guess you get into the whole area of prisoners' rights. You obviously couldn't have some of the employment standards applied to prisoners. It wouldn't just be minimum wage; that would be the main one. I think, for instance, of the notice provisions, or the right to have two years vacation with pay — hardly applicable to somebody on an inmate program. Yes, they have the right to be treated fairly within the system. I hope we will maybe have some review of that legislation in the future as well. If somebody was summarily taken off one of these programs when they were doing well, they would have a right to grieve within the correctional system.

The Employment Standards Act has never applied to them, nor do I think that members would suggest that it should. It's a whole separate question as to prisoners' rights, which is what I think you're getting at. We could maybe debate that on another occasion or in my estimates next year or whenever you like.

MR. LOVICK: I am. Indeed, getting at precisely that, and I do so for a very good reason, Mr. Chairman. Some years ago I worked for the B.C. Forest Service as a firefighter, and at one time I was a foreman of a suppression crew. I had a number of correction centre young people assigned to my crews.

[Mrs. Gran in the chair.]

This is many years ago, I hasten to point out, but unfortunately what I witnessed at that time was treatment afforded and accorded to those young people that ought not to have been. Apparently their charge hands, or whatever else they were called, were given absolute free rein in terms of maintaining discipline and getting what was considered to be the appropriate amount of work out of those people.

My only reason for posing this question is this: if, indeed, we are talking about the corrections work program — if, indeed, that's what this legislation is all about — will the minister advise me where I can find the protections given to those inmates so they are guaranteed some reasonable protection? It seems to me there ought to be some protections somewhere: if not in this particular bill or in these amendments to the Correction Act, where else? I'd like to know that, if I might, Madam Chairman.

HON. B.R. SMITH: They are contained within the correctional centre rules and regulations and in the manuals, but I'd be happy to provide those to the member if he wishes.

Sections 12 to 17 inclusive approved.

On section 18.

MR. CLARK: We have some real concerns about this section, and we simply want to canvass it thoroughly with the minister. This is a section that, if we understand it, allocates $10 million more to the Farm Product Industry Act, which presumably is for the purposes of an ethanol plant in Dawson

[ Page 2284 ]

Creek. Maybe we could first ask if that's the purpose of the increased allocation to the Farm Product Industry Act.

HON. MR. SAVAGE: The Farm Product Industry Act has run down to $200,000. That's its present sitting position. The $10 million we are asking for here is enabling legislation in the event that Agrifuels does go ahead. That we are not sure of at this stage. What it is is a loan to the farmers for the Farmco corporation, not to Agrifuels.

MR. CLARK: First of all, the budget speech states that there shall be no further loans to businesses under the Farm Product Industry Act and that, in fact, that would be wound down. Would the minister advise the House whether the budget was in error and whether there are now programs to be initiated under this act?

HON. MR. SAVAGE: I believe the budget statements were prepared prior to the Agrifuels system being structured. That's why we had to come back through this act.

MR. CLARK: The Agrifuels proposal was rejected seven times by the B.C. Development Corporation and one time at least by the Partners in Enterprise program, and then the Premier decided that the Ministry of Agriculture was to lend some money. Now I have before me all of the outstanding loans and guarantees under the Farm Product Industry Act: $6 million in 1981 — that's all of the loans and outstanding loans and guarantees; 1982, about $5.5 million; 1983, $4 million; 1984, $4 million.

You're saying that this act, which has a history of loaning very small amounts to farm products corporations, is now going to be entrusted with $10 million, which is two and a half times all the loans and loans outstanding for a project that has been rejected by people in the business of lending out money. So the people with expertise in analyzing loans have rejected it, and an operation in the Ministry of Agriculture that has no history of lending money of any amount at all is now being asked to negotiate a loan that is tens of times larger than any loan ever negotiated in the history of the Ministry of Agriculture in this province.

Could the minister advise what new staff he has hired to analyze the financial feasibility of the Agrifuels project?

HON. MR. SAVAGE: I'm glad we got to the question. None.

MR. CLARK: Well, that's reassuring. Now you're asking us on this side of the House to give your ministry $10 million more for a project that has time and time again been rejected by those who understand lending money. Could the minister tell the House what has changed in the Agrifuels proposal? In other words, it was rejected by the B.C. Development Corporation. In order for the Ministry of Agriculture to accept this loan.... Could he inform the House of the details of what has changed between the loan that was rejected by BCDC and this loan?

HON. MR. SAVAGE: The change that has taken place is that the $10 million is being allocated in the farm industry development act. This is to cover the equity position that the farmers wish to take in Agrifuels, so that they have voting power within that company.

MR. CLARK: The members on that side may be prepared to pay a high price per vote, if they get them, but we on this side are not. These are the taxpayers' dollars, and $10 million is not peanuts. It has clearly been demonstrated by those competent in the field that this is a bit of a scam, really.

I wonder how much they're going to lend to the meatpacking plant in Dawson Creek, and how much they're going to pay to import all those cattle from Alberta and elsewhere to be slaughtered here in order to establish an industry in Prince George to maybe attempt to re-elect the other member for Prince George.

Could the minister inform the House that the loans rejected by the B.C. Development Corporation — you're saying now — were loans to Agrifuels, and that this loan represents loans to farmers who are going to own Agrifuels?

Is it not fair to say that the viability of this project, which has been demonstrated by the B.C. Development Corporation to be not a good risk of the taxpayers' dollars for a loan.... ? Now the farmers are going to take the risk with taxpayers' dollars. If it wasn't viable to lend the money to Agrifuels because the project wasn't viable, why is it now viable to lend money to farmers to invest in an unviable project? What has changed in the proposal?

HON. MR. SAVAGE: If the hon. member will read a number of reports from different provinces across this country as well as the United States, there is a strong swing to encouraging the use of grain ethanols to phase 1n while the leaded fuels are phasing out. Both sides of the border are looking at recommending that.

MR. CLARK: The minister still has not answered the question: has anything changed in the proposal that was rejected by BCDC? Is it a smaller proposition now? Is a new market analysis going to show that they can sell the ethanol now, where they couldn't before, and that is why BCDC...? Are there any studies or analyses done to show that this project is now suddenly viable, even though it had been rejected for funding eight times in the past?

HON. MR. SAVAGE: In a number of presentations made to BCDC,, there were no contractual arrangements made or sales sought out relative to the potential for marketing ethanol. Those particular items have changed since a number of those proposals were taken to BCDC.

MR. WILLIAMS: Can the minister advise, then, of those markets? Are they in Alaska?

HON. MR. SAVAGE: No.

MR. WILLIAMS: Can he advise where the markets are?

HON. MR. SAVAGE: Madam Chairman, the markets are in Canada.

MR. WILLIAMS: Insofar as the lending arrangements, then, with respect to the farmers, could the minister advise us what equity that $10 million will give the farmers in this corporation, what percentage of the corporation?

HON. MR. SAVAGE: I believe the equity position is 25 percent.

[ Page 2285 ]

MR. WILLIAMS: Could the minister advise the House what equity is being put up by the principals involved here for the 75 percent?

HON. MR. SAVAGE: The equity, I believe, is $43 million.

[3:45]

MR. WILLIAMS: Could the minister check that out? We're not talking about total capital, or private sector borrowing, or public sector borrowing, but actual equity capital put up by the private sector people involved here.

HON. MR. SAVAGE: I don't have those figures right here, Madam Chairman.

MR. WILLIAMS: But you do have your staff here, Mr. Minister. I'm having a little bit of trouble with this. We do know that for $10 million, which is public money we're lending to the farmers, they will get 25 percent of the company. But we don't know what the other people are putting up for 75 percent of the company. You have your staff here, and you say you still don't know. I have trouble understanding that kind of business deal.

HON. MR. SAVAGE: A number of the major proponent of the project is being sold out as tax equity.

MR. WILLIAMS: You mean there is some tax equity situation here? Oh, tax credits. I see. Well, that even makes it more complicated and interesting too, because that gets the federal taxpayer on the hook. If they're tax credits, we're not really talking about real dollars of equity being put on the barrelhead, I suspect. So then the question is: do you have agreement with the federal government in terms of that arrangement?

MR. WEISGERBER: For the information of members, because the proposed ethanol plant is in my constituency, I have been very closely involved with the Minister of Agriculture, the Minister of Finance, and the Premier's office. The investment by Howe-Baker and the Wedge corporation, the proponents of the project, started out at about $45 million, cash money, that they would invest. Through subsequent negotiations, that's now up to about $60 million, cash money, up front. There is a sale of tax credits that will be applied to any moneys that come from the provincial government. The provincial government is last in and first out.

In response to some of the questions raised by the second member for Vancouver East, the deal as it finally came down is considerably different from anything that was ever offered to BCDC — genuinely different, genuinely better for the province, a better deal for the province.

MR. CLARK: More provincial money.

MR. WEISGERBER: No, less provincial money with better guarantees.

It is a project that is tremendously important to the grain industry in the Peace River country. That consideration probably was not given a great deal of thought by BCDC, with all due respect to them and their business knowledge. From a provincial perspective, the project had to be looked at not only as a pure business venture but also as an alternative solution to the problems in the grain industry. I think most members of this House and certainly the government House Leader recognize the serious financial problems that are faced by the grain industry. Ethanol represents a reasonable and a good solution to that.

This particular plant is well financed. There's a major equity contribution from the proponents, and a reasonably small loan and loan guarantee from the province.

MR. CLARK: We have heard speech after speech by the Minister of Finance and the Premier that there will be no more subsidies to business in this province. And we had the other day $60 million more for the Minister of Economic Development (Hon. Mrs. McCarthy), and today $10 million for the Minister of Agriculture. The member for South Peace River defends this project on the basis that it's a subsidy to farmers. Either there's a market test and this project makes sense, or it doesn't make sense; and BCDC said it didn't make sense.

The Minister of Agriculture, who, with all due respect to the member for South Peace River, is the minister who is asking for the $10 million.... It's his staff who have to negotiate the deal, and it's his staff who are sitting behind him and who should know the details of this deal and who haven't been forthcoming.... The minister has not been forthcoming with this side of the House with the kind of information that the opposition needs in order to support a significant expenditure of taxpayers' dollars for a proposition that has been rejected eight times by other agencies of the provincial government.

I have a press release dated February 6, 1987, that says: "The Minister of Agriculture guarantees a $23 million loan to Agrifuels, plus a $10 million loan or guarantee to farmers in the area. The farmers will be able to take an ownership position by trading some of their grain for shares in Agrifuels" — whatever that means. Is the Minister of Agriculture saying that this deal is different from the press release? By the way, it says it's a $90 million project. If $10 million is the share, then it's hardly 25 percent equity in a $90 million project, and of course a $90 million project, according to the propaganda we've been getting, is only a quarter of the size of the eventual output of the project.

So would the minister ask his advisers behind him if this is a $90 million project or a $40 million project? Is there a $23 million loan guarantee to Agrifuels, as your press release stated, or is that not the case any more? Is there a $10 million loan or loan guarantee to the farmers, or is it a cash grant? Is there tax credit or some arrangement with the federal ministry for sales of tax credits? Can he give us that kind of detailed information, to justify something that has been rejected by people with expertise in the area?

MR. MERCIER: Madam Chairman, I ask leave of the House to make an introduction while we're awaiting the answer to that burning question.

Leave granted.

MR. MERCIER: I'd like the House to welcome Mr. and Mrs. Harry and Begonia Wearing, who are from the Burnaby-Edmonds riding. Their son Peter was my campaign manager. Also, please welcome relatives of theirs, Mr. and Mrs. Frank and Stella Wearing, visitors from Merseyside, in England, the home of the Mother of Parliaments.

[ Page 2286 ]

MR. STUPICH: Madam Chairman, maybe the minister is ready now. I don't know whether he's the right minister to answer this, but he talked about the sale of tax credits. I wonder if he could be a little more explicit as to just exactly what program.... It might be that the Minister of Finance would be better able to.... I don't know.

HON. MR. SAVAGE: Madam Chairman, I would defer that question to the Minister of Finance.

HON. MR. COUVELIER: What, specifically, might I help you with?

MR. STUPICH: All kinds of things. In this particular instance, I thought the Minister of Agriculture had some other questions he was going to answer, but the one I was asking was.... The Minister of Agriculture referred, with respect to this investment in the proposed ethanol plant, to the sale of tax credits. Now I'm just not familiar with precisely what program the Minister of Agriculture is talking about, and I'm not sure that he is.

HON. MR. COUVELIER: Madam Chairman, a tax-assisted package for this particular proposal will require federal approval. As far as I know, that approval has not yet been obtained. The members will remember that when the hon. Minister of Agriculture introduced this section, he mentioned that it was enabling. It really is merely an effort to provide the funds needed to make Agrifuels happen, if the various requirements are met by the principals while we happen to be away from this House. I think that there are a variety of issues which, to the best of my knowledge, will have to be addressed by the principals before this need would arise.

MR. WILLIAMS: Wouldn't a letter of comfort do, rather than legislation?

HON. MR. COUVELIER: Under the Financial Administration Act, it is a requirement that we have the money in the budget before we spend it. To the best of our ability we always try to do that.

MR. STUPICH: We're not sure that we had it in the budget when we agreed to give $60 million to Cominco.

Is the Minister of Finance telling us, then, that this is something like going into the ALR scheme; that we're not sure there is a program, either federally or provincially, that will enable us to sell tax credits in order to build up enough equity in this plant to get it launched? Also, in the event that that part of the package is not available and the federal Minister of Finance says he will not support it, will the project have to start all over again in trying to come up with a financial plan?

HON. MR. SAVAGE: If all the contracts that are required are not met, then there's no obligation by the provincial government to undertake their commitment to the plan.

MR. STUPICH: Then I think I'm right in saying that when the minister talked about sale of tax credits, he was talking about something that is not yet in place, that has not yet had federal approval, and that may not even have been proposed to the federal government to this point. Does the minister know whether the possibility of using the sale of tax credits as part of the financing plan for the proposed ethanol plant has been put to the federal government?

HON. MR. SAVAGE: Yes, it has been put to the federal government.

MR. WILLIAMS: It's worth reflecting on what we're seeing before this House today. We had the spectacle of the Minister of Agriculture huddled with the member from South Peace, two of his senior departmental people and the Minister of Finance, and they still can't pull together a rational answer to reasonable questions. That is extraordinary. As the other member for Vancouver East (Mr. Clark) said, this thing was turned down, time after time after time, by BCDC. Now, let's understand: BCDC is generous. As the member for Vancouver-Little Mountain (Hon. Mrs. McCarthy) — whom I'd like to welcome to the Legislature this one day that she's managed to make it — knows, it's swimming in a sea of red ink that she's trying to bury under B.C. Enterprise, which she hasn't yet created but which she still operates. So this mess was fobbed off on the Minister of Agriculture. There looked like an easy mark in terms of some new industry that BCDC wasn't willing to swallow.

We're not getting any answers here at all. It's very clear that the Minister of Finance can't provide the answers. He has to get into a scrum over there. It's very clear that the member from South Peace has more of the details and more understanding of the deal, and he has to whisper in your ear what the deal is. We went through the same exercise a couple of days ago on Point Roberts; there, the Minister of Environment (Hon. Mr. Strachan) had to rely on you whispering in his ear. It's fascinating that you should be an expert on the Point Roberts water supply and the member from South Peace should be an expert on the Agrifuels deal. It's fascinating, but it's also simply irresponsible.

You are a minister of the Crown, responsible for handling significant expenditures. What is being put before you now, and what you're putting before the House, is some corporate deal beyond the capability of your ministry, on a scale that your ministry has never dealt with before. It's a deal that BCDC wouldn't touch with a ten-foot pole, and you come in here and say you've hired nobody else, no expertise, to deal with the project. You have the gall to do this. You have the gall to pull your scrum together and try to fabricate the story as you go along, or to piece it together as best you can. Really! We have not got the answers. We do not have the answers. It's not clear to me. You said $10 million to the farmers in terms of their equity. If they can't pay the loan, do we go after their farm? I want an answer.

[4:00]

HON. MR. SAVAGE: Would we go after their farm? If we take the position of a first mortgage, we could go after their farm.

MR. WILLIAMS: I'm not interested in the world of ifs. This is hard cash we're talking about here, $10 million. What's the security backing it? Is it going to be the farmer's farm?

HON. MR. SAVAGE: I would not think so at this stage. I repeat to you that it is enabling legislation. The very statement that the hon. member made not too long ago about how

[ Page 2287 ]

you would tax particular use under the proposal that the Finance minister brought forward is a very good logistic argument to come forward and argue: sell your land outside the land reserve, to heck with agriculture.

MR. WILLIAMS: Okay. So we do not have security in the form of the farm, but we're asking for the signatures of the farmers. How many farmers are involved?

HON. MR. SAVAGE: The number of farmers presently, as I understand it, involved in the negotiating of the deal with the B.C. grain producers and the National Farmers' Union amounts to nearly 600.

MR. ROSE: You see, the difficulty with this is not that we don't want to help the farmers. Or it's not that they're not in trouble in the Peace River; they are. They needed eight million bucks here a little while ago, and they had a big struggle to get that, because they're down the tube and they're facing competition from subsidized agriculture all over the world. So we grant that.

But you see, what you ask us to do, if you'll pardon the agricultural reference, is to buy a pig in a poke. We don't know what we're granting the $10 million for. And if I can be excused another awful pun, it goes against the grain. We have no perspective. We don't know what you're going to do with the $10 million. We don't know how many farmers are involved. We don't know what the share of the equity is. We don't know what's the measure of payment. We don't know whether they're going to be paid off at the EEC price, which is $3.13 a bushel, or the American price of $2.65, or the Canadian subsidy of 85 cents currently. We don't know any of this stuff.

It's another Point Roberts. It's another forestry thing where you squander the time of the House putting forward, in the dog days of July, pieces of legislation that you hope will slide through while nobody's looking, and we don't have the answers. There has to be a minister here who is able, with all due respect for the minister's expertise in agriculture and his commitment to it.

That is not on the table here. On the table is: what do you want to do with the ten million bucks? Let's see the plan. Why do we have to grant it in advance? You trot in here with a decent kind of plan and a prospectus, tell us how many farmers are involved, what their indebtedness would be, what loan guarantees you expect, and we can buy this sort of stuff. Ethanol is very, very trendy. We know that conventional oil supplies are ultimately going to run out. We know that Hibernia and the North Sea and all these other areas are up to $20 to $30 a barrel. This would have come on stream much sooner had oil prices been higher.

We know all those things. We know that Brazil uses ethanol entirely and imports very little crude oil comparatively, because they've got lots of sugar cane and all that stuff. We know all that. That's not the argument. The argument is that the opposition, whose job it is — and I've got to do this business about the separation of the state and the Legislature, and control of the purse strings — is asked to buy something about which there is very little defensible information. That's the problem with it. The bill is not being defended properly, and neither was the Point Roberts thing — not when the minister was here but when it came first a week ago Tuesday. That is the problem. The Minister of Finance (Hon. Mr. Couvelier) doesn't know about the tax credit arrangements. It may be another ALR.

In attempting to sum up, we find it important that there be something done to help agriculture in the Peace River, in view of the competition, because the farmers just cannot compete with their subsidized competitors. Something has to be done. But we also know that ethanol plants have not been remarkably successful in this country. There was one in Manitoba, and I think it was run by Pay 'n Save or something like that.

AN HON. MEMBER: Mohawk,

MR. ROSE: That has not been an outstanding success, and Mohawk has been able to sink a hell of a lot of money into it.

I think this is a political project on about the same level as Westfleisch, north of Vanderhoof and Prince George. You know, it's a figment of somebody's imagination. You back it up with ten million bucks, and if we get enough we'll run with it. That's the part that bothers us just a little bit.

Interjection.

MR. ROSE: The brilliant comment from the Minister of Culture (Hon. Mr. Reid) over there.... He couldn't even be minister of horticulture, but he is our Minister of Culture. The refined minister of tourism and culture and library fees, and museum fleas, and all these other things, is sitting over there making the usual kind of comment on something from his seat, buried deeply in the back benches. I wish he'd get up and speak and take part in the debate instead of waving bye-bye at me, because I'm not going any place, but you might be.

HON. MR. REID: You're gone.

MR. ROSE: No, I'm here. No, all the farmers up there are going to be real pleased with me because I saved their farms, because the only people that are going to compete for their farms now besides the Ministry of Agriculture when they get into the glue is the Royal Bank, and it's got many of them now.

MR. CLARK: The minister never answered a serious question I asked earlier. In a February 6 press release under your name, it says: "Twenty-three million dollar loan guaranteed to Agrifuels." Is that still the case?

HON. MR. SAVAGE: Yes.

MR. CLARK: Well, well. This is getting hairier and hairier — $33 million for 54 jobs. We're getting almost to the northeast coal level, but we're not quite there yet. Is it your ministry that is involved in the $23 million loan guarantee? Is it your little ministry, with no more staff, that has never approved any loan more than a couple of million dollars, that is guaranteeing a $23 million loan to Agrifuels? Is it your ministry?

If it's not your ministry, could you please tell the House under which authority there is a $23 million loan guarantee to Agrifuels? This is something else.

HON. MR. SAVAGE: The $23 million is guaranteed out of our ministry, yes.

[ Page 2288 ]

MR. CLARK: You just said it wasn't. We're not talking a couple of dollars here. With all due respect, you should know the details of this plan, and it's clear that you don't. We're now talking $33 million in loan guarantees from a ministry that has never in the history of British Columbia approved more than a total of $6 million.

All of the loans and loan guarantees outstanding in the history of British Columbia, and we've now got one project, and the minister hasn't hired any new staff, and he hasn't been able to give any information to this House on the details of that kind of proposal. You're asking us to approve $10 million today in this House for a project that has been rejected eight times by other organizations, that has $33 million.

If I work it out — 600 farmers, $10 million — you're going to give them, essentially, cash money, $17,000 each. That's the equivalent, if you're not going to ask for their farms back. The total number of dollars per job is getting to close to a million dollars. That's not good enough, Mr. Minister. It's simply not good enough for you to ask us to give you that kind of blank cheque without any kind of assurance.

It says here that the ethanol plant is given a July target date because of the permafrost and the problems of construction in that area. Could the minister tell us when they're going to stil digging the hole for the ethanol plant in Dawson Creek?

HON. MR. SAVAGE: My last date of expected sod-turning was August 14.

MR. CLARK: The minister started out saying this is enabling legislation. We don't have the details yet, but they're going to start constructing the plant August 14, a month from now. They've got a month to work out all the details for complex negotiations with real money — our money, taxpayers' dollars, and you're going to start digging August 14.

MR. WILLIAMS: And you still haven't heard from the feds.

MR. CLARK: That's right, and it's contingent upon some kind of tax scam with the federal government. This is getting worse and worse. You could give those farmers a lot of money to stay home and just take some leisure time. They could go south every winter.

We need to know. Maybe the minister could give us some assurance. We had in this House the Premier of the province saying in question period that this was money for the farmers, and he said that twice. Now we have the minister confirming in the House that there is also a $23 million loan guarantee, not to the farmers but to the company involved.

That has the appearance of misleading the House. Maybe the minister could explain why it is that he stated time and time again at the beginning of this debate that it was $10 million for the farmers and no other money would be involved, and why the Premier has twice in this House indicated that the assistance would be to the farmers, when there is now also a $23 million loan guarantee to the company involved.

HON. MR. SAVAGE: The money guaranteed is still to the farming community for the construction of the Agrifuels plant.

MR. CLARK: Are you trying to say that giving money to a Texas-based company that happens to be buying grain is giving aid to the farming community?

We haven't even got into this. There is also in the budget a 2 cents-a-litre subsidy for ethanol to be produced by this plant. So now we're getting closer to the northeast coal average, because we're now up to $33 million in cash money for the project for 54 jobs. Can the minister tell the House what the expected volume of sale is? How many litres of ethanol a year in British Columbia are we going to sell out of this plant? We can then determine the annual subsidy, which will go on and on and on after the $33 million, if the plant of course ever makes a go of it,

Could he tell us now, so that we can get some handle on it on this side of the House, what the total level of subsidy is for this project in Dawson Creek, which, by the way, was announced by the previous member for South Peace River, who is acting as a consultant for Dawson Creek and who helped negotiate this deal — which of course becomes clearer and clearer all the time?

HON. MR. SAVAGE: Number one, it is not a subsidy; that was the inference that was made. Number two, the question about how much will be used in B.C.... Those figures can't be finalized to the exact litre. The production capability of the plant is up to 45 million litres a year — if that's the number you're looking for.

MR. CLARK: The company also announced that all of the first phase of their production has been presold to Alaska. But the budget states that there will be a 2 cents-a-litre subsidy to ethanol upon completion of the plant. So if we complete the plant but all of that is sold to Alaska, will we not then be subsidizing ethanol produced somewhere else — namely, in Manitoba — or is the 2 cents-a-litre subsidy only for ethanol that's coming out of that plant and being sold in British Columbia?

HON. MR. SAVAGE: The subsidy is only for that which is produced in B.C. Secondly, on the question that you asked, sir, about how much would go to Alaska, I might tell you that the subject is in bilateral discussions, on the duties related to ethanol sales to Alaska.

MR. WILLIAMS: Could the minister advise us whether there is a maximum number relative to that 2 cents a litre, in terms of payment per annum?

HON. MR. SAVAGE: No, it's all for the consumption of ethanol in B.C.

MR. WILLIAMS: The minister advised us that this will be producing 45 million litres a year. If my number work is correct, at 2 cents a litre it comes to $900,000 a year — if it's all consumed in B.C. That's a million dollars a year in addition to the $33 million. How long might this go on? Is there a time limit on the annual amount per litre?

[4:15]

HON. MR. SAVAGE: I'm sure the Ministry of Finance will make the decision on how long that carries on, but we are asking that that be carried on to support the agricultural community. We must encourage the use of ethanol to phase out the leaded fuels.

[ Page 2289 ]

MR. WILLIAMS: But then I would ask myself the question: what's the volume of leaded fuel sold in British Columbia? It would be huge. Are we willing to put in 2 cents a litre no matter what the number is?

Normal amortization of most major loans would, I guess be 20 years — just like the average house — so is it reasonable to assume that this would apply for 20 years? That's depending, as you say, on the Minister of Finance and what the contract finally is — that's not clear yet. But then we could be talking about a subsidy of a million dollars a year in terms of the 2 cents a litre, plus the $10 million, plus the $23 million. So what we're talking about is $53 million here, over 20 years.

Interjection.

MR. WILLIAMS: Well, that's $1 million a year in terms of the litrage.

It's still not clear to me about the actual cash that the company is putting up. We've had all this tax credit stuff. That's something else. But the firm cash that's being put up — could you cover that again, if you would, Mr. Minister?

HON. MR. SAVAGE: On the question of the number of litres or gallons, or whatever you want to call it, and the use of leaded fuels, the 2 cents a litre is paid on the gasohol — the blend of ethanol and gasoline. The benefit of it is to the consumer.

MR. WILLIAMS: I don't want to get into that, Mr. Minister. It's fair for you to make that comment, certainly, but I'm trying to establish just what cash amount the company is putting up. That's still not clear to me.

HON. MR. SAVAGE: In the capital cost of the project? Is that the question? It's very close to $60 million.

MR. WILLIAMS: So that's it then. And the total is $93 million for the total capital cost of the project?

HON. MR. SAVAGE: In that range.

MR. WILLIAMS: So for $33 million and maybe $1 million a year from the province, the equity that the farmers are going to end up with is 25 percent.

HON. MR. SAVAGE: That gives them shares in the company, and they may acquire more shares.

MR. WILLIAMS: It's still not clear to me, though, what's backing up the loan to the farmers if this thing falls apart. I think the chances are good, I'm sorry to say — or bad; whatever you will — because this is looking more and more like a northeast coal project to me. It really is. That was $1 million a job, northeast coal. It's on the edge of monumental failure right now; the banks are still wrestling with the mess. And here we are now, talking about a capital project that, in terms of jobs, is in the same range.

If this thing goes under, what recourse do we have in terms of getting our money back?

HON. MR. SAVAGE: Madam Chairman, the government has first right to the equity that is left or to the value of the company if it goes under. We're the last ones in, first ones out.

MR. CLARK: I've just been looking at this, and I think our numbers are a little low. Would the minister confirm that it's a 2-cents-a-litre subsidy for gasoline mixed with ethanol? Ethanol is only a little percentage of gasohol. Therefore it's something more like a 10-cents-a-litre subsidy for a litre of ethanol. Can the minister confirm that is in fact the case?

HON. MR. SAVAGE: Madam Chairman, no, because the blend is the percentage.

MR. CLARK: Maybe you should check with your staff on this, but it's a 2-cents-a-litre subsidy for gasohol. Therefore if the plant produces so many million litres of ethanol, then the subsidy per litre of ethanol is more like 10 cents a litre if we assume that it's a 20-80 blend. But if it's only 10 percent, then the subsidy is even higher.

HON. MR. SAVAGE: That's correct.

MR. CLARK: Okay. So we've got to readjust our numbers here. I'm sorry. It's not S900,000 a year, but it's five times that. We don't want to exaggerate: it's a subsidy of $4.5 million per year. We're getting up there. It's almost northeast coal.

Interjections.

MR. CLARK: Per job? We're getting close; we're surpassing. First of all, would the minister inform the House what percentage of gasohol is ethanol, so that we can refine our calculations? This is wild.

HON. MR. SAVAGE: I believe the blend that is being considered was about 10 percent.

MR. CLARK: Madam Chairman, just give us a second, and we'll work these numbers out. It's $9 million a year. I'm sorry, it's ten times — $33 million. We'd have to get the Minister of Forests to do a discounted future income stream on what $9 million a year is worth in net present value. But we're certainly in excess now of a million dollars per job created, and 600 farmers.

Now that we're getting to the bottom of this, I wonder if the minister would consider standing this section of this bill today and coming back to the House at some later date with more details of this rather suspicious project. It's going to cost the taxpayers of British Columbia a lot of money, and maybe we'd be better off paying in perpetuity a healthy standard of living for those 600 farmers rather than involving the government in this kind of very expensive venture using the taxpayers' dollars.

HON. MR. SAVAGE: No.

MR. WILLIAMS: It really is mind-boggling, and I'm sure that's shared by all members of the House, not just the opposition side. I suspect it's mind-boggling for serious civil servants, who have to be careful with the taxpayers' money in other departments, to hear all this unravel. We're talking about $10 million loaned to the farmers — a $23 million loan guarantee. Some federal tax scam, which we still don't know

[ Page 2290 ]

the dimension of, will take more money out of the taxpayers' pockets. Is this fellow from Texas? I mean, it sounds like a pretty tall story from Texas to me.

Then $9 million a year in terms of the stuff coming out at the end of the pipe.... You know, if I was a Texas wheeler-dealer and I came into town and I saw an operation like this, I'd think I should take these rubes for all I could get. And it sure looks to me like that's what he's doing. "Let's go borrow from the Department of Agriculture," says Mr. Man from Texas. "It looks better than a bank robbery to me." Honestly, I don't really like to ridicule this, but what can one say?

I happen to be the chairman of a seed capital program at Vancouver City Savings. I'm chairman of the finance committee, and I monitor all major loans and small loans to people who don't have money but have a good idea. We met just this last week, and we approved several loans. We put aside $1 million in profits at Vancouver City Savings to create jobs. I've put that to the former Minister of Economic Development, and we've written to the current Minister of Economic Development (Hon. Mrs. McCarthy), but she's so busy with all those other things. That kind of cheap job-creating is really not what she's interested in. So be it.

I'd like you to know, Mr. Minister, what it costs us at Vancouver City Savings to create a job, in terms of capital costs, in terms of the seed capital program, the first in Canada. I just want you to know the difference between prudent money management and foolish, profligate money-wasting. I want you to understand the difference. It costs, in terms of our last years of operation, something like $14,000 or $15,000 a job in capital costs. That happens to be less cost than the ideal established by Dr. E Schumacher, looking at Third World companies, in terms of how you can create jobs in the poorer regions of the world. He came to the conclusion that one should only create jobs that didn't cost more than the average wage of a working person in that society. I think that was a profound idea, a profound concept. He had to reduce his thinking to something very pure and clean, in terms of how one creates jobs for the poor in poor countries. I think he came up with a really solid answer and a really solid guideline.

We at VanCity are trying to work within that principle. We're a richer country; we could probably talk in terms of double the average person's wage as a reasonable capital cost, and employ all our people readily. But, as I say, we are finding we can do it currently at under the average person's annual wage. It's not big, but it's starting. We're learning, and we're not losing money either.

Interjection.

MR. WILLIAMS: You're going to knock those service sector jobs? No, it's a range of jobs: some are manufacturing, some are service. It's a mix. You people still are not contributing to that program. If you wanted to create jobs in British Columbia quickly, you'd be looking at similar small seed capital programs across this province, where you're dealing with individual ingenuity and with people that know the value of money. But what you're talking about here is this.... We're dealing with this extraordinary, tall story that some Texan — or wherever he's from — has sold you at more than a million dollars a job, with an almost endless subsidy, as the stuff comes out of the pipe; $9 million a year for the material coming out of the pipe.

That's a lot of money, Mr. Minister. I would have expected that a person with your kind of background would appreciate that that's a lot of money and would want all the advice in the world before one proceeded with it. No farmer out there goes thinking in terms of this kind of borrowing and these kinds of schemes. They just don't think in those terms; and they're right not to think in those terms, because they couldn't afford it. As they can't afford it, so the people of British Columbia cannot afford it. We can't afford this kind of nonsense.

[4:30]

Your Premier got elected on a program of no more subsidies. He said it all over this province — no more subsidies. "I don't think it's healthy for the industries," he said, "and I don't think it's healthy for the provincial economy." And he was right. But he's forgotten and you've forgotten. No dirt fanner would consider this kind of thing, and no reasonable, thinking person would either. Twenty-three million dollars, plus $10 million, plus $9 million a year, and you don't have the staff to analyze it. You don't have the staff to monitor it. You don't have a word from the federal government. We don't know the dimensions of the tax scam that is envisioned, and you don't have a good record there. Your Minister of Finance (Hon. Mr. Couvelier) tried that tax scam with the SkyTrain, and he didn't get away with it. He blew 700,000 bucks.

You guys! It makes me think of old W.A.C. Bennett. He said: "The trouble with you people over there is that you're Saturday-night rich and Sunday-morning poor." And I think that's what we've got here: a gang of folks that are Saturday-night rich, playing with the public treasury, and the people of British Columbia are going to be Sunday-morning poor. That's the problem. You're not dealing with your money.

I don't know if you know, Mr. Minister, what a mess BCDC is. Your Minister of Finance should, and his deputy should. The previous deputies were ringing the alarm bells years ago about the sea of red ink at the B.C. Development Corporation. And that member from Shaughnessy Heights has still not reported to this House on that mess that she's still trying to cover up. They learned some very expensive lessons; that is, they made a lot of bad loans. They've made more bad loans than Northland Bank. They've made more bad loans than Canada Commercial Bank that went belly-up in Alberta, but they decided this one they wouldn't touch. So they decided: let's find a hayseed that will buy this one. And they found one. We cannot buy this nonsense. We will not buy this nonsense.

We were told that the legislation coming before this House this week and next week was going to be modest stuff that would be non-controversial, easy to deal with and fast.

Interjection.

MR. WILLIAMS: Yes, indeed. We don't have that here, and there is a lot more legislation around that is in the same category. This kind of stuff is inexcusable. This would be laughed out of the chamber in Newfoundland, where they have tolerated some of the biggest scams in the history of this nation.

MR. CLARK: Bricklin was in Nova Scotia.

MR. WILLIAMS: There's Bricklin in Nova Scotia; there's Javelin in Newfoundland. This is of that dimension and of that order.

[ Page 2291 ]

But I reflect back on what I said to you about Dr. Schumacher and the whole idea of limited capital per job. How many unemployed do we have in British Columbia — 200,000? Two hundred thousand people are unemployed. If we wanted to create jobs for them all, because we should be fair, we should be equitable.... If we're going to subsidize and create jobs, let's do it for everybody. Two hundred thousand times a million — I don't know what that amounts to. I guess it would break the bank in Canada.

So don't you see what you're doing for a handful of jobs in the Peace River district? You're talking about a cost per job that is gargantuan. It's like northeast coal. We end up, if this thing goes belly-up, stuck with the debt — that's another $33 million — and whatever we spent on what came out of the pipe, and we've got.... You say: "Well, we're first there." We own an Agrifuels plant that can't make money. I wonder what that's worth. I don't think it's worth anything. It might be worth the land value, if you put it back into crops, if you remove the debris on top of the land.

So, you know, you're asking us to throw $33 million on the table...

MR. CLARK: Nine million a year.

MR. WILLIAMS: ...and $9 million a year, and you don't have the details. You have to pull in your rookie member for South Peace River (Mr. Weisgerber) to tell you what the deal appears to be. Your Minister of Finance can't give you the details, your staff can't give you the details, and you say the sod is going to be turned August 14 — and you nod your head.

We're looking for more explanations, Mr. Minister. If you can give them, we'd be more than pleased to listen.

MADAM CHAIRMAN: Could the second member for Richmond please have leave to make an introduction?

Leave granted.

MR. LOENEN: Madam Chairman, it's a great honour for me to introduce Shirley Romas, who is the executive director of the Canadian Mental Health Association, Richmond. She's a most energetic person, very innovative, and has made a great contribution to our community. Please join me in welcoming her to this House.

HON. MR. COUVELIER: Madam Chairman, it's all been interesting, and maybe I can try to summarize what I've heard here in responses from this side of the House. It's like we're talking to a wall. They seem to be more interested in creating artificial arguments than getting the facts straight. What the questioners have been told this afternoon is that the province will have a short-term involvement of about $33 million — key word, "short-term." There will be $23 million in loan guarantees and $10 million in direct loans. Only $5 million of the $10 million loan will be carried by the province beyond an 18-month construction period. In other words, once the plant is built, the provincial exposure in terms of the loan to the farmers will be brought down.... The $10 million will be brought down to $5 million.

Now the fact of the matter is, Madam Chairman, that if you calculate even the sales tax to be paid on the construction materials, that $5 million is covered by the tax that's going to be paid.

Interjection.

HON. MR. COUVELIER: You've been told that. It's like talking, as I said, to the wall. You don't seem to be interested in hearing about it.

Dealing with the question of the tax credits, many major capital projects take advantage of existing federal tax legislation. There's nothing objectionable about it, and it shouldn't be the cause of derision or criticism. Ws a standard practice. I don't applaud the fact, but it is a fact. I wouldn't be at all surprised, were we to get into it, that some hon. members across the floor themselves might have taken advantage of some of these programs.

The program that we're talking about here is the investment tax credit program, which is applicable to geographic sectors, and the federal government decided the Peace River was one of those. The proponents, knowing that, decided to roll that into their financing package. There is nothing wrong with that. It's being done by hundreds of Canadians every business day of the year.

MR. WILLIAMS: What are the numbers in terms of tax credits?

HON. MR. COUVELIER: Dealing with the question of the farmers, because that's an issue that has been brought out here, we will advance the farmers $10 million. But when Agrifuels turns over ownership of the plant to the operator, $5 million of that farmer's investment will subsequently be paid back to us.

It's important to remember that the construction of the plant will result in the farmers having a negotiated film contract price for their production, something they've been missing for years and something which we believe will stabilize the economy. It is a very necessary requirement if the hon. opposition House Leader's ambitions regarding farm stability are to be met.

The government suggests that this package as put together will have.... When the plant is built, the provincial government maximum financial exposure will be $5 million, and that will be a loan to the farmers. All the rest of our bridge financing will be recovered from the owner when he takes over ownership of that plant.

Obviously, Madam Chairman, we are not going to make any investment whatsoever of taxpayers' dollars until we are satisfied that all the requirements have been met and that the necessary investment dollars are in place by the principals. In the absence of that, we will not forward one red cent.

It's a matter of contractual agreement. The provincial interests are well protected. The only question at issue here is whether the principals will be able to complete the deal they are negotiating, but that is not the provincial government negotiating the deal. The deal is to be negotiated between the principals and the federal government and other investors that the principals will bring in. If they don't meet all those conditions, the deal will not proceed. All we're talking about with this amendment is placing enough money in the budget so that if the principals are able to put the deal together, we will be able to complete the bridge financing to make it possible.

If they do succeed, the Peace River winds up with a $90 million plant in place with a provincial investment of $5 million, which will be retired over the subsequent seven years, from which we will have received $5 million in sales

[ Page 2292 ]

taxes from construction materials alone, and from which the farmers will receive a stabilized grain price for their product which they have missed for years. The initiative is a community economic initiative which, when built, will have minimal provincial involvement.

MR. STUPICH: I appreciate the information that we're getting now. It's a little more solid information than we've been able to get most of the afternoon. The $5 million is to be paid back when the plant opens. What is the source of funding that will pay back the provincial government $5 million on the day the plant opens? Who is putting up the $5 million at that point?

The price of grain is going to be negotiated between the management of the plant and the farmers. This is not going to be done until after the plant has been built. We're probably talking about next year's grain crop. Who is going to do the bargaining on that — the farmers on one side and the owners of the plant on the other? What bargaining power will the farmers have in that situation?

HON. MR. SAVAGE: Madam Chairman, if I may, the answer to the hon. member's question is that the farmers are entering into a contract that guarantees a minimum of 5 percent over Canadian Wheat Board prices. It could be as high as 10 percent, and that's net of freight.

MR. STUPICH: The other question was: who is putting up the $5 million to pay off half of the loan the day the plant opens? Which minister? Or should I look at Madam Chairman for the answer to the question?

HON. MR. COUVELIER: As a matter of fact, it isn't inappropriate to look at Madam Chairman. It's unfortunate she's in the chair, because she could join us in this discussion about ethanol by virtue of some personal experiences in the business. My understanding is that reference was made earlier to a firm that has some special knowledge in the area. Madam Chairperson happens to know the individual involved. However, a little digression.

HON. B.R. SMITH: It's on the menu at the press gallery dinner.

HON. MR. COUVELIER: Yes. The answer regarding the $5 million: it's important to recognize that nothing happens unless and until the plant gets built. When it gets built and Agrifuels takes over ownership of the plant, then the investor, who is part of the financial packaging, is required to pay $5 million to the farmers and the farmers will be required to further the $5 million back to us. The net position is that the provincial government has a residue $5 million advance to the farmers, which is planned to be retired over the next seven years beyond that. When that seven years have expired, the provincial government has virtually no exposure.

The reference to the gasohol 2 cents a litre rebate. The members of the opposition were leaping to the assumption that that rebate inured to the benefit of the operators of the plant. Of course, it doesn't; it's a rebate to the consumers of B.C. In the interest of promoting more fuel-efficient use of energy. It seems to me that's something that even the members of the opposition would support, something that's environmentally desirable, that passes a benefit and reduces the cost of living to our average citizens. I know you're great favourites of the average citizens, as expressed by your great numbers across there. So I think it's pretty clear that it should be a unanimously endorsed resolution. I don't see what there is to argue about. The point is, it is not a gift to Agrifuels; it's a gift to the citizens of British Columbia in the interests of the environment.

MR. STUPICH: I'm trying to make my questions very explicit. If the answers were as explicit, we could move along a lot faster.

As I understand what the Minister of Finance said, the government is going to lend $10 million to some 600 farmers, who in turn are going to invest it in the plant, and the day the plant opens the people who are behind the investment — not the farmers but whoever is organizing this thing in the first place — are going to give the farmers $5 million, which the farmers in turn will give to the provincial government as repayment of half of the loan.

What is the nature of that payment from the company to the farmers? Is it a gift? Is it an advance for grain that they're going to deliver over the next 10 years? What is the nature of the $10 million return to the farmers which, in turn, comes back to the government?

[4:45]

HON. MR. COUVELIER: I'm not quite sure I know what you mean by "the nature of the return", but in any event it is a complicated package and difficult to assimilate quickly.

What we're talking about here, basically, is bridge financing. The role of the province in this deal is to be the bridge financer. But as I say, that financing would not be made unless the plant is going to be built and unless there are sufficient guarantees in place to ensure it is. Then the minute it is, the investors, who will have been motivated by the investment tax credit deal, will come on and take out the provincial exposure except for the last $5 million, which will take seven years for the farmers to retire, and who will do it, I understand, by a deduction from their grain deliveries over that seven-year period. I think that was part of the package.

MR. STUPICH: When I asked about the nature of the payment from the company to the farmers, what I was wondering was, is it revenue or return of capital or just a gift? That's what I meant by nature.

HON. MR. COUVELIER: It's cash. As I understand it, it comes out of the sale of the investment tax credits. That's what makes it all possible.

MR. STUPICH: I'll try once more. How will the farmers report that when they're filing their income tax returns? Will they report that they have received back half of their capital investment, or will they report that they have received an advance on income over the next seven-odd years?

HON. MR. COUVELIER: I'm not sure we can answer this. I suspect it depends upon the farmers' personal income tax status and how they might choose to deal with the financing arrangements. I can't predict that. We don't have that information here and I'm not sure we could. It does seem to me that it would be subject to individual farmers' tax situations, as to how they might treat it.

If there's any further information we can provide by the experts' consideration of the question in more depth, then I'm

[ Page 2293 ]

happy to provide that. But I'm not sure it's of great significance; at least, I can't see it.

MR. STUPICH: I accept what the minister says, that he just doesn't know the answer to this question right now. But I will not accept the idea that each fanner would determine individually how he or she would report it. The company is going to pay out $5 million in cash. The income tax department is going to want to know the nature of that payment, and depending upon the nature of that payment from the company to the farmers, the farmers will have no choice as to how they report it — whether they report it as return of capital or income.

I accept what the minister said, and on the basis of previous experience I know he will tell me when he has the specific information.

MR. CLARK: I've been thinking we may have been too hard on the Minister of Agriculture. I wonder if the minister would confirm that it was the Premier who negotiated the terms of this loan and then directed the Ministry of Agriculture to provide the funds.

HON. MR. SAVAGE: No.

MR. CLARK: The Premier said in this House, in answer to questions, that he met with the principal involved and directed the Ministry of Agriculture to assume this loan guarantee after all of the other normal avenues had failed. That's what the Premier said in this House. Is the Minister of Agriculture saying that's not the case?

HON. MR. SAVAGE: I don't believe the Premier directed me. He suggested: is there something in the acts that exist in the portfolio that would cover the $10 million loan?

MR. CLARK: Confirm this, please. In response to that direction from the Premier, you said that the only mechanism we have for lending money is this program that in the budget we announced was being discontinued. But we do have this mechanism that has lent money out in the past. We do have an officer assigned to that program. So we have a mechanism, and on that basis it was agreed that you go ahead. I guess you said to the Premier: "We have this program that has only a couple of hundred thousand dollars left; we could do it under this program, but we need a lot more money."

HON. MR. SAVAGE: That is correct.

MR. CLARK: Originally you said there was no loan guarantee to the company; it was only the farmers. But we've clarified that. You've said there's a $23 million loan guarantee to the company.

I have this operation here, guarantees and loans, and $10 million is actually a loan — cash money — to the fanners. But the loan guarantee is a guarantee. Maybe the minister or his staff has this information: that the largest loan guarantee ever given to a company in British Columbia that I can find is $2.5 million to Scott Poultry Cooperative Association, but the largest actual loan ever given in the history of this program that I can see is $110,000. Could the minister advise the House — or could his staff advise the minister, who could advise the House — what the largest loan guarantee ever issued under this program has been, and what the largest actual loan has been under this program?

HON. MR. SAVAGE: I believe the Panco Poultry purchase was the largest loan.

MR. STUPICH: Madam Chairman, the minister is wrong. That was not a loan; that was the purchase of an operation that was going to be split up into pieces and the agricultural land sold off for other purposes. It was also an investment that the government bought for some $4.1 million and then sold for something in excess of $14 million some three years later. If this government could make deals like that, we'd be a lot better off in British Columbia.

MR. CLARK: Maybe the minister or his staff could then clarify. I am just trying to get a handle on the largest loan ever given under this program by the staff, and the largest loan guarantee.

HON. MR. SAVAGE: We don't have those figures with us right now, but it's certainly larger than the $110,000 that I think I heard you refer to as one loan.

MR. CLARK: I noticed in the press release — we're trying to get a handle on exactly what the level is here — that the government will carry or pay the accrued interest of the project during the construction phase. Maybe he could clarify that, and exactly how much that is going to cost. Is the government carrying the accrued interest for the $90 million plant for the 18 months, or is it for the $23 million, the $10 million or the $33 million? What's the magnitude of that level of subsidy, just so that we can get all the information on the table.

HON. MR. SAVAGE: The loan interest guarantee is until the company comes in, and then it's all paid back to the government.

MR. CLARK: Did the minister say that the carrying costs are paid by the government for the $23 million loan guarantee, but that that has to be returned at some later date?

HON. MR. SAVAGE: The loan of $10 million will have the carrying costs, and they will be repaid when the company comes in.

MR. CLARK: I don't know what "the company comes in...." Maybe we can explore that a little bit.

The Minister of Finance said that upon completion of the plant, the $10 million loan becomes a $5 million loan, and the company will pay the government — through the farmers, I guess — $5 million. Is there a change in ownership associated with that $5 million, or is it still...? In other words, do the farmers retain the $10 million equity, or does the farmers' equity in the project drop to $5 million?

HON. MR. SAVAGE: The $10 million loan is from Farmco, which is the farmers' company. The $5 million is paid back to them.

MR. CLARK: I'm sorry, I may not be getting this. There s a $10 million loan to Farmco, which is a new corporation representing the farmers. On completion of the plant, Farmco

[ Page 2294 ]

has to pay back $5 million to the government. Where will they get that $5 million from?

[5:00]

HON. MR. SAVAGE: If you heard the answer that the Finance minister gave, once it starts operations it has to pay back the $5 million. That's the contractual arrangement.

MR. CLARK: Maybe the Minister of Finance can help me. I may be wrong, but is the $5 million.... Do the farmers have to come up with five million bucks cash — private sector, borrow from the bank — or does Agrifuels have to pay Farmco $5 million to give to the government? Maybe the Minister of Finance can respond.

HON. MR. COUVELIER: The point at issue here, I think, is that first of all we're talking about bridge financing — interim, short-term — and the sums required to pay back the loans will come from the sale of the investment tax credits by the participants in that exercise. Those participants, as I understand it, have yet to be identified, so we can't give you any certainty about how the federal government will deal with their application.

As was said earlier, there are so many trigger points here at which the deal may collapse that all of this is almost pure conjecture. What the government has done is write a contract in a way to ensure that even if the plant is built and a $90 million investment made in the area by the private sector, the maximum provincial exposure will be $5 million, and that will last only for seven years.

MR. WILLIAMS: What about the $23 million?

HON. MR. COUVELIER: That is retired out of the bridge financing, out of the sale of the investment tax credits. The purpose of the $23 million is bridge financing. The purpose of the $10 million for the farmers is to get them into an equity position in this venture and also to assist in the bridge financing. Once the investment tax credits are sold, then the revenue from that sale will be given back by the principals. As was stated repeatedly, the province is the last in and the first out. We are bridge financiers, that's all.

MR. WILLIAMS: But the numbers in terms of the equity of the company are still the question. You're talking about selling tax credits in this thing. I want to know what cash they've got now. What cash are they putting up right now? All the numbers we've heard so far today, I suggest, are the numbers that are going to come out after the federal exercise in terms of tax credits, and you've been calling that their equity. I can understand the Minister of Agriculture (Hon. Mr. Savage) not quite handling the question satisfactorily, and I think he was looking at the question down the road, once that tax credit situation was resolved. We would like to know what cash these people are putting up front right now. Will you deposit all of the contractual information that you have at your hands, Mr. Minister?

HON. MR. COUVELIER: Madam Chairman, I don't have the pro formas here with me at the moment, but I can get them, and I'd be happy to do that. If you wish, we can maybe go on to the next section, and come back to this one after the break, at which time we should have that information for you.

MR. WILLIAMS: I think we'd appreciate that, Madam Chairman.

MADAM CHAIRMAN: Section 18 is postponed.

On section 19.

MR. STUPICH: Madam Chairman, I don't want to get into a long debate on this, but I think it's just giving the minister the authority to set the limits as opposed to having it in legislation. I don't suppose we have any indication as to what limits might be on the figures?

HON. MR. COUVELIER: Yes, it is the intention to have a threshold of $5,000 as the trigger figure, so that sums less than $5,000 would not have to be individually listed. They would be bulked, and reported in total, but sums greater than $5,000 would be listed.

MR. STUPICH: Madam Chairman, with respect to employees' earnings then, does that mean that you would name employees who were earning less than $5,000, or would there be different threshold there? That's in 19(l)(e)(i).

HON. MR. COUVELIER: No, that figure hasn't been determined yet, Madam Chairman.

Section 19 approved.

On section 20.

MR. WILLIAMS: I'd just like to make the point, Madam Chairman, that the current statute requires that financial information regarding all individuals be published. That's reasonable. This changes that, so that you decide which individuals, and I don't think that's reasonable. Why is that so important to bring before this Legislature? I think it was thought out before, and we should have that information in terms of these various Crown agencies and corporations, and yet you're saying only certain people — presumably for certain incomes — to be designated by cabinet. You're cutting back on the disclosure, and that's not reasonable. It's not reasonable at all. Why are you embarrassed at what you pay people? It would suggest that you are embarrassed by the funds that you pay some people, and I think it's reasonable that we're again using public funds, and the information should be public.

HON. MR. COUVELIER: Madam Chairman, just so there's no misunderstanding, this is an effort in publicly declaring information that previously wasn't public. We proclaimed the act just in the spring, and that information wasn't provided before. What we're saying is that we proclaimed the act, and the information will be provided. To avoid a bureaucratic nightmare, sums less than $5,000 can be bulked. It's reasonable. It's in the public interest to have that information available. This should be unanimously endorsed, it strikes me.

Sections 20 to 24 inclusive approved.

On section 25.

[ Page 2295 ]

MR. GUNO: Madam Chairperson, this is really a question of clarification on this definition of aquaculture. I'm a little concerned that it has become so general, and I want to get some clarification from the minister in terms of the definition, which states that aquaculture "means the growing and cultivation of aquatic plants, as defined in section 12, or" — and this is the important one — "fish, for commercial purposes, in any water environment...."

I know this may infringe on federal jurisdiction, but I just wanted to canvass the minister's viewpoint on the definition and just how expansive it is; whether or not it contemplates, within the ambit of that definition, things like ocean ranching, for instance, which we have a lot of concern about because of its possible impact on the wild stock. So I'm just wondering if the minister has any views on whether or not this definition would include that kind of operation.

[Mr. Pelton in the chair.]

HON. MR. SAVAGE: No, it wouldn't. It would not include ranching. It's only for farming.

Sections 25 to 32 inclusive approved.

On section 33.

MR. CASHORE: Mr. Chairman, I wonder if the government House Leader would indicate to me to whom I should be addressing my questions. My understanding is that when the Minister of Social Services and Housing (Hon. Mr. Richmond) is not here, the Minister of Health (Hon. Mr. Dueck) is next in line, and then the Minister of Advanced Education and Job Training (Hon. S. Hagen). Given that, I think this is a very significant....

HON. MR. STRACHAN: I thank the member for his question, and I recognize his concern in the case of a bill like this. The Attorney-General, who has the bill, will be able to address your concerns, Mr. Member.

MR. CASHORE: Mr. Chairman, I would like to give a brief overview with regard to what I understand to be the effect of this change. Then I would ask the Attorney-General to give me his interpretation, to see if that is correct. It seem to me that what we have here in this section is the repealing of two sections of the GAIN Act, and those two sections have not been proclaimed into law. In other words, they have been passed by the previous action of this Legislature, but have not been proclaimed, and the action of section 33 would be to remove those unproclaimed sections from the statute. Is that correct?

HON. B.R. SMITH: That's exactly right with both parts of section 33. They were, as I understand it, put in there for cost-sharing purposes in 1976 at the request of the federal government. Shortly after the passage of the GAIN Act, the federal government decided not to take that route. Therefore, this government never proclaimed the sections, and they've been on the statute books unproclaimed and not used. So they're being cleaned up.

MR. CASHORE: For the record and also for members of the House who may not have the GAIN Act in front of them, I would like to read the sections that are being repealed.

Perhaps I can preface that by saying that what is being repealed are those sections of the appeal process — and this is an appeal process that involves people representative of the ministry, people representative of the appellant, and a chairperson mutually selected by those two appointees. Under the present circumstances, with these two sections not being proclaimed, tribunals are able to deal with issues dealing with income assistance and with income assistance only. We have on the books two sections that are very socially responsible sections, in that if proclaimed into law, they would give the appellant the right to appeal with regard to social service matters. So the two subsections that would be repealed are:

"(3) Where an individual is dissatisfied with a decision made under this Act or the regulations respecting the refusal, discontinuance or reduction of social services to him or to his dependants, he may appeal the decision to a tribunal, to be established and conducted in accordance with the regulations.

"(4) The tribunal's decision respecting social services may be reviewed by the minister on application to him by the individual affected, or where he considers it advisable to do so, and he may vary or cancel the decision where, in his opinion, the tribunal did not have sufficient regard for (a) the purpose and intent of the social service; or (b) the regulations and administrative procedures established for the administration of the social service."

Then in section 5 the words are repealed, so that it brings it into sync with that.

Mr. Chairman, what we have before us.... I really do regret that the Minister of Social Services and Housing (Hon. Mr. Richmond) is not at present in the House.

[5:15]

HON. B.R. SMITH: I'd suggest that we postpone section 33, if the member agrees — the one that he's just debating.

MR. CHAIRMAN: Is it agreed that under standing orders we postpone section 33?

HON. B.R. SMITH: Yes, and maybe see if the minister is available later.

MR. CASHORE: I would certainly agree to that. And I would like to ask that we also include 34 and 35 in that same process.

MR. CHAIRMAN: Is that agreeable to the Attorney-General?

HON. B.R. SMITH: Yes.

MR. CHAIRMAN: All right. If it's agreeable to both parties, we'll postpone sections 33, 34 and 35.

HON. B.R. SMITH: Just before you do that, perhaps I can just tell you the rationale for 34. This amendment is being made to section 26 to remove ambiguity with respect to the authority for the Ministry of Social Services and Housing to take assignments from GAIN recipients. These assignments are taken for the purposes of recovering income assistance made to persons pending resolution of their claims for retroactive workers' compensation, old age security, guaranteed

[ Page 2296 ]

income supplement, disabled veterans' allowance, or benefits of that kind. The clarification would minimize interpretation problems which have resulted in challenges by lawyers and by appeal tribunals where assignments have been taken by ministry staff.

That's the purpose of it. If you still want to postpone the debate on it, that's perfectly agreeable, in the hopes that the minister may be here before the bill's completed.

MR. CASHORE: Thank you. Yes, I would like to postpone it until the minister is here.

MR. CHAIRMAN: Then sections 33, 34 and 35 stand postponed under standing orders.

On section 36.

MR. MILLER: Very briefly, Mr. Chairman, the change allows the minister, instead of the Lieutenant-Governor-in-Council, to dispose of land. Perhaps the Minister of Transportation, who is in the House, could explain what the current practice is with regard to disposal of land, in not only his own ministry but any other ministry that may be involved. Does all land currently go under one authority in terms of its disposition? If that's the case, why is this change being brought in to allow the minister to make those determinations?

HON. MR. MICHAEL: In response to the question, the change affects closed roads, roads being closed out. Mostly the ones that I have checked out have to do with developers going into an area which may encompass an old road, a current road, oftentimes not up to current highway standards. The developer as a result of his subdivision application is required to put in roads which meet Highways specifications, and as a result of the overall development a road closure application is required to be submitted by the developer. In most instances, it's a developer.

My experience in politics has shown these applications to be very, very time-consuming; they go on for 8, 10, 12.... I've actually found in my constituency where they've taken as long as 14 and 16 months to get approved. One of the things that I've addressed as the minister is to try to cut down on red tape and shorten the approval process. Without this amendment, we've already cut the approval process at least in half. It's my understanding from my staff that if we are able to clear these through the minister, rather than going to order-in-council — to cabinet — we will be able to significantly reduce the red tape and improve the time-lag as far as the approving process is concerned.

Most of them do not involve any money at all. Often it's just a simple application to close out a road, but the OIC has to be passed before the subdivision can proceed and the developer can get on with the job he's trying to do.

It's going to reduce the red tape in my ministry by a great deal, because there is not a cabinet meeting that goes by that I don't have a wad of these road closures to take before committee and then on to cabinet. So it's going to shorten the process and reduce red tape.

MR. MILLER: I certainly can't disagree with cutting red tape, and I'm a bit surprised to learn that the approval process can take up to 14 months. I don't know if that's a question of red tape or simply bureaucracy, but we can't disagree with that being cut.

The other section that's been deleted, as I understand it, is the requirement or the statement that under the authority of the Lieutenant-Governor-in-Council any of these lands be leased or transferred to the government of Canada. Again I would simply ask: why the need to delete that particular section?

HON. MR. MICHAEL: Could I have the question again, Mr. Chairman?

MR. MILLER: The change under 36 is that section 9(2) of the Highway Act is repealed, and under 9(2) we have four parts: (a), (b), (c), (d). The replacement section has two parts, (a) and (b). My question is: why are you deleting the other two references under the current section; one dealing with the transfer of land to the federal government, and the other....

Yes, that's basically the question. The new wording takes in the first three parts of section 9, but does not make any reference to the original section 9(2)(d).

HON. MR. MICHAEL: My only response to that is that as long as I've been a minister, I've never had any occasion in any of my experiences to date where we have ever contemplated transferring any part of a closed road to a federal government.

MR. WILLIAMS: In some parts of the province we have a pattern of old roads along water frontage. If those roads were cancelled, the contiguous lands behind would suddenly become valuable waterfront lands. I can think of cases where that has actually happened, which have involved prominent politicians in this province.

Would this then allow the minister simply to handle that kind of situation where some old waterfront road was cancelled and the owner of the land behind it suddenly became a waterfront landowner?

HON. MR. MICHAEL: Mr. Chairman, if the member is making inferences about any members of the House regarding closing out roads and gaining from it, I wish he would name names.

MR. WILLIAMS: It is just a simple question, Mr. Chairman. It has happened in the past. The question is: does this give the minister authority to handle situations like that?

HON. MR. MICHAEL: I know there are fast-buck artists in the province, there's no question about it, whether they be condominium or land developers or whatever kind of developers they might be. But if a legitimate claim to close out a road comes before the minister, the answer to the question is yes, the minister will have the authority to authorize the road closure.

MR. WILLIAMS: Here we go again. Just think about it. Say you had a half-mile area, and it was acreage land in back of a small rural provincial road that meandered along a lakeshore.... There are a lot of spots like that in this province, particularly in the central interior. These are historic roads, on which Highways, over the years, has paid for maintenance. But if there is some nice spot where you could

[ Page 2297 ]

wow that road a little and turn the acreage into waterfront acreage....

MR. BLENCOE: Without a public process.

MR. WILLIAMS: Without a public process. That is the problem, Mr. Member for Victoria. That's the question: what is the public process involved in terms of the Minister of Highways entertaining such a proposal?

HON. MR. MICHAEL: Any person wishing to get involved in a development of land, and closing out roads and things along those lines certainly has to go before the planning process of some level of government, depending on where that piece of property might be located. There are many ministries that get involved in that approval process. I don't know what else to say. If it's a legitimate application, the staff of the ministry will involve themselves in whether or not it's fair and equitable and whether it should be tendered or auctioned, and a decision will be made and recommended by the staff to the minister.

MR. WILLIAMS: But, Mr. Chairman, that's the staff of the minister who has to make the decision; that's not a satisfactory open process. In these kinds of circumstances we could be talking about tremendous differences in value. Am I correct, Mr. Minister, in that the Minister of Highways is the minister responsible for subdivision approval in rural areas?

HON. MR. MICHAEL: The requirement to gazette the closed roads remains in practice. It will still be a requirement of the Minister of Highways, once the road is closed, to report that to the province of British Columbia.

MR. WILLIAMS: I'm sorry, Mr. Chairman, it's still not clear to me what that reporting process is. And on the previous question, the reporting process regarding closure, are you saying that that's through the provincial Gazette?

HON. MR. MICHAEL: Yes. If a road is to be closed, under the amendment, the requirement will remain that roads to be closed be listed in The British Columbia Gazette.

MR. WILLIAMS: The other question was: is the Minister of Highways the provincial official in charge of subdivision approval in rural areas?

HON. MR. MICHAEL: Yes.

MR. WILLIAMS: So that is the situation — that the minister is also the minister responsible — so that when you talked about other agencies, you were really talking about your own.

HON. MR. MICHAEL: That's one.

MR. WILLIAMS: It would seem to me that, in the case of an example that I mentioned, if you were going to shift this road back of the water frontage, all you'd be talking about then is a process involving the Ministry of Highways — no other agency, necessarily, in a rural district. And most of these sites I can think of would be in rural districts. So you are the one person involved in that process.

HON. MR. MICHAEL: Unless there was a subdivision application which would affect the boundaries and the creation of lots at that time — there are about six other ministries that get involved, including Environment, Lands, Fisheries, Forests and numerous other ministries.

In my experience, Mr. Chairman, in every instance that I've investigated the Crown comes out much better on these closed roads. In most instances they are in poor shape, poorly maintained, shoddy; and the developer, as part of the development process, is required by the ministry or ministries or various levels of government to come up with much better class roads, and the Crown by far wins on these closed roads. The result is improved roads for the benefit of the people of the province of British Columbia.

[5:30]

MR. WILLIAMS: The biggest trouble I would have, though, is in the examples I'm suggesting, and that is where we would confer new waterfront land values on some acreage owner. They were talking about incredible increases in value. I have some trouble with having this kind of process go on where that would automatically happen, that these values would be transferred and a public shoreline would be lost. Where these highways follow along the shoreline.... There are parts in, say, the Okanagan Valley where that's the case right now. You can think of sites along Highway 97 and other provincial highways where all that waterfront is open, public waterfront. I have a lot of trouble with shifting that back and then having the contiguous owner become the new waterfront owner. Would the minister give some assurance that there would be some public hearing process beyond just Gazette notices in instances like that?

HON. MR. MICHAEL: I can only give assurances, Mr. Chairman, in the areas under my jurisdiction. As for the regular process that is in place throughout the province under various ministries, the laws of the day will be the rule.

MR. WILLIAMS: It's true, Mr. Chairman, and is the minister giving us that assurance now9

HON. MR. MICHAEL: Mr. Chairman, it would depend on the nature of the problem. If it was a major problem, something of major significance to the province of British Columbia, or access to or egress from lake frontage, certainly I would give that assurance. If it was a minor road closure, as I get on my desk every week — dozens throughout the brief seven months I've been in office — then the answer would be no. If it's minor, the answer would be no; if it's major, the answer would be yes.

Sections 36 to 52 inclusive approved.

On section 53.

MS. EDWARDS: As I understand this amendment, it allows the minister to appoint a non-librarian to be a director in charge of supervising the operation of the act promoting library services, apportioning money and overseeing staff. I'm wondering why the minister would choose to do that with the Library Act,

HON. MR. REID: It has been made quite apparent that the director of the Library Act need not be a librarian to be a qualified director.

[ Page 2298 ]

MS. EDWARDS: Have you consulted with the librarians' association about this? Presumably there may be some objections from the people who administer the libraries in the province. Has there been any consultation? Perhaps you would expand on the reason for someone who is going to administer this rather complex and sophisticated act not needing to know the complexities and the sophistication of the libraries themselves.

HON. MR. REID: You asked whether we had consulted with the professional librarians. There is no question about that. We consult with them daily. We have a library board that sits within the ministry and it advises us on questions about libraries and library funding and the requirements around the province. It has come by way of those professionals that it's not necessarily required to have a librarian in charge of librarians.

MS. EDWARDS: Then I clarify this very specific issue of the director not having to be a librarian. Did you say it came from the librarians? Or have you specifically consulted with them?

HON. MR. REID: The answer is yes. The advice for the change has come from my consultants, who are the library board.

Sections 53 and 54 approved.

On section 55.

MR. MILLER: I think this change needs flagging, because it's the beginning of the introduction of short-term licences, which will eventually be for a range of vehicles. As I understand it, the introduction of technology and computers and the rest of it will now allow this to take place over time.

Perhaps the minister could briefly outline what his plans are with respect to the future changes beyond the ones we are now seeing. I don't want to get into future legislation, but this is the opening of the door in terms of those short terms. Perhaps a brief explanation from the minister would suffice.

The other section I want to deal with, because they are quite dissimilar, deals with fines that can be issued under the Motor Vehicle Act.

HON. MR. MICHAEL: The ones that we've had the most requests for are gravel trucks, farm vehicles, farm trucks and motor homes — RVs. These are the types of things we will be addressing initially. The new act and regulations will give the minister authority to sell these on a six-month basis, perhaps on a three-month basis in the future.

Naturally, with the cost of handling the paper, it'll be more expensive to buy two six-month licences or plates, as compared to buying one for 12 months. There will be a flat surcharge of $10 or $15. We have had a lot of requests for this, particularly for the ones I named.

Sections 55 and 56 approved.

On section 57.

MR. MILLER: Sections 57 and 58 essentially deal with the establishment of a minimum fine for certain offences: namely, driving at speeds greater than 40 kilometres per hour in excess of the posted speed limit; and a $100 fine for undue care and attention.

I have no serious objection to the increase as it applies to trying to improve traffic safety and hopefully cut down on the number of accidents we have in British Columbia; but I am concerned about the arbitrariness.

I note further on in another section, which is going to be cancelled under this bill, that the original section as it was written — I can't recall the year — called for a fine after excessive speed of 30 kilometres per hour. In terms of section 58 — since we are really dealing with both of these — under 152.1(2), there is a bit of double jeopardy where a person may be hit with a fine of $100, or at least charged with that offence. Then if that offence can't be proven, they go on to trying the person on a lesser offence. Is that standard procedure when it comes to hauling people up in front of a judge? We've cleared you of the major one, but now we're going to try to nail you on a slightly lesser but related offence.

HON. B.R. SMITH: No, I think that's a reference to the fact that if you.... A lesser offence would be speeding less than 40 kilometres per hour over the speed limit. In the event that they were convicted of the lesser offence, you would normally impose that speeding conviction by a traffic violation report normally. But if it went to court.... If you charged somebody with speeding in excess of 40 kilometres per hour over the speed limit, it would be open to the court to find that they'd been speeding but not 40 kilometres per hour more, and they would then be found not guilty of the offence here that gives a $100 fine, but they would still be liable for the three points for ordinary speeding. So I think that's what the reference means. It doesn't mean that you'd be hit for two fines.

I should also point out that with excessive speeding and careless driving, which both have fines imposed, you're still going to get points, so you're going to still have that double whammy. That's not double jeopardy, that's just two.... You're penalized with a fine, but you're also penalized with a bad driving record. So for careless driving you'll get six points, and for excessive speeding you'll get three points plus your fine of $100.

For excessive speeding causing bodily harm or death or something else, you might be dealt with in court. We're not going to do that regularly with excessive speeding; we're going to do that by violation notice. But with careless driving, we're going to bring all of them into court. That's not because we want to make work for the courts or the lawyers; it's because with those particularly serious categories of provincial driving offences, it's felt that some court sanction and process is better than just the kind of detached, aseptic ticket that is handed out. You get it and if you don't do something within ten days, and something happens that you don't know about or care about....

I went to court about a year ago on a case involving a gentleman — I did it for the Crown because it involved suspensions of a number of licences — who had accumulated, in the course of about three or four years, some 88 points. He argued that his licence couldn't be suspended because he'd never had a formal hearing; he had been suspended by the pen of the superintendent. What he neglected to tell anyone was that time and time again he was handed billets-doux. Notices were served on him by registered mail which said, "If you want to appear before me...." Please appear before me, the superintendent was really saying to

[ Page 2299 ]

him. But he never answered any of these things. He ignored them all. So he accumulated 88 points, and he was still driving. He claimed that under the Charter of Rights his rights had been disposed of, because he hadn't had a formal hearing. That case went against him, and we were able to uphold the suspension process, which requires that you activate the hearing. Everybody isn't dealt with by a hearing. Otherwise, you would have 10,000 hearings.

I'm going through all this simply to try to explain that for some people the ticket notice and the suspensions and all the stuff that goes with them doesn't get through their skull. They don't pay any attention and just keep driving. "Haven't got a licence and could care less. Never had a licence. I didn't know that my right to obtain a licence had been suspended; I don't read any of those things that come from the superintendent, whoever he may be." We recognize that we have this minor category of people, and the only thing you can do is drag them into court every now and then. That's what we're doing.

MR. MILLER: They sound to me like pretty smart dumb people.

Getting back to the fines, according to current practice, if you're stopped by the RCMP or city police for speeding, let's say, and you decide to accept the judgment of the officer, you simply take the ticket that he hands you and wait for those three points to be piled on your licence, and hope you don't get another one before you've dropped three points off. Now that same officer can say to you: "You were speeding in excess of 40 kilometres per hour, and you have to pay a $100 fine." Presumably you can say, "Okay, I accept that," and pay your $100, the same as you can now. Are there any additional points for that charge over and above the three that would normally apply? After all, if we consider it serious enough to levy that kind of automatic fine....

[5:45]

I notice that the $100 is a minimum, by the way. Perhaps the Attorney-General could advise whether or not there would be a maximum. I note that the section that's to be cancelled in a subsequent amendment under Bill 42.... The old section, which was never proclaimed, talked about a maximum $2,000 fine. So is there a maximum that can be levied by the courts?

I'll just finish all my questions, if you don't mind. What about additional points, and the same with respect to careless driving? Presumably if you're nailed for careless driving, it would be an automatic $100 fine. You could simply agree, "I'll pay that fine," and not have to go to court. Or would you have to go to court in terms of that careless driving?

HON. B.R. SMITH: First of all, for both of those offences — the new excessive speeding one that's proposed and the careless driving offence — you are liable to a minimum fine of $100; but all the other limits under the Offence Act apply. That is, the fine could be as high as $2,000. Instead of setting out all those amounts, we're going to start in the act just incorporating the provisions of the Offence Act, so that if we ever come to change those limits we can do it in one act instead of doing it in about five or six or seven or eight. So that's where we're heading there.

Yes, you could be liable for a fine greater than $100, as much as $2,000 or imprisonment. The $100 is just a minimum. For the excessive speeder, you're correct that he is going to have the same three points as the non-excessive speeder. His additional punishment is his fine. If that doesn't help things, we sure would look at some additional points for him as well.

The careless driver still gets his six points that he got before, which puts his licence in jeopardy immediately with those six points. He is going to have to pay a minimum fine of $100, but he is also going to have to appear in court. The careless driver is going to go to court. The excessive speeder probably won't go to court.

When I say "not go to court," anybody, as you know, can go to court if he wants to. But we're not going to drag the excessive speeder into court unless it's one of those cases I mentioned where a death has ensued or really serious bodily harm. That will be up to the prosecutor, who probably will issue a summons and bring that excessive speeder into court.

The normal excessive speeder will get a ticket. If he doesn't contest it, then he is deemed to be guilty and he owes the Crown $100 right then and there. If he goes to the court, of course, he could end up owing more. The careless driver could owe considerably more because the court might not impose a $100 fine; it might impose a $500 fine.

MR. MILLER: I can only conclude that if the legislation had been brought in when Mr. Gaglardi was Minister of Highways, the revenues of the province would have been fattened considerably.

Sections 57 to 59 inclusive approved.

Section 60 approved.

On section 61.

MR. BLENCOE: Maybe the minister could just give us a quick background.

HON. MRS. JOHNSTON: Mr. Chairman, this is actually validating what the municipality of Kitimat thought already was in place. What happened is that Pacific Northern Gas Ltd.... Just a minute now. Sales to Ocelot are made through a subsidiary of the British Columbia Gas Corp. The argument by Pacific Northern.... They've taken legal action. Is legal action pending, or have they taken it?

Interjection.

HON. MRS. JOHNSTON: It's over. Okay. You'd better come and get me out of this one.

AN HON. MEMBER: Your mike is on.

HON. MRS. JOHNSTON: I know my microphone is on. I never did say that I used a pencil without an eraser. I still can make mistakes.

My working paper suggests that Pacific Northern Gas Ltd. will pay the city of Kitimat a tax equal to 1 percent of its sales — the sales of course being to the British Columbia Gas Corp. — for the years 1982-85 inclusive. Taxes will be collected as if they were valid under section 407(2) of the Municipal Act.

Now I've got it. This is right. The reason there is a dispute here is that the sales to Ocelot are made through a subsidiary of the British Columbia Petroleum Corporation — this is through British Columbia Gas — and there is an argument by

[ Page 2300 ]

Pacific Northern that, because they sell gas to the British Columbia Gas Corp., which in turn sells it to Ocelot, the gas is for resale, and it's not being sold direct. That's how they argue that they should be exempt from payment of the tax. We're saying that should not exempt them from payment of the tax. Kitimat should be entitled to the tax, and we ask you to support this section.

MR. CLARK: Yes, this corrects something that should have been corrected some time ago. I wonder if the minister has an indication that this exists anywhere else. I notice that this amendment is site-specific, and it might be useful to have a more generic amendment that would cover any similar situations in the future.

HON. MR. ROGERS: Mr. Chairman, perhaps I can shed some light on it.

The B.C. Gas Corp. Is a one-time-only corporation to facilitate the interaction between Pacific Northern Gas and Ocelot Industries. It was a flange-to-flange company, and that's the reason they got out of it. We don't believe it exists anywhere else. That's knowledge from a previous incarnation.

Section 61 approved.

On section 62.

MR. LOVICK: Mr. Chairman, we see in section 62 and following sections a number of things we think are significant and are probably going to require an extensive debate. I see the Minister of Environment and Parks (Hon. Mr. Strachan) nodding his head in agreement. I'm wondering if, given the lateness of the hour, it might be appropriate to adjourn now, rather than start this and get nowhere.

The House resumed; Mr. Speaker in the chair.

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

The House recessed at 5:54 p.m.

The House resumed at 7:32 p.m.

[Mr. Pelton in the chair.]

HON. MR. STRACHAN: Committee on Bill 42, Mr. Speaker.

MISCELLANEOUS STATUTES
AMENDMENT ACT (No. 2), 1987
(continued)

The House in committee on Bill 42; Mrs. Gran in the chair.

On section 18.

HON. MR. COUVELIER: I believe there was one question left with this section 18, and the members of Her Majesty's Loyal Opposition kindly gave us time to research the answer.

The question was: how much will the Agrifuels' parent have in the project when it is constructed and actually in operation? That's my understanding of the question. The answer to the question is $45 million.

MR. VANT: Madam Chairman, may I have leave to introduce some very special people who have joined us this evening?

Leave granted.

MR. VANT: It gives me a great deal of pleasure to introduce the Campbell family from 108 Mile House in the great constituency of Cariboo. They are Colin and Linda and their two children, Craig and Heather. I know the House will join me in giving them a very warm welcome this evening.

MR. CLARK: First of all, the Minister of Finance indicated that he would table some contracts. It was my understanding that he would table some documents for this House to peruse. It wasn't simply a question of answering or taking a question on notice. Does the minister have any documentation on this proposed deal that he indicated he might table?

HON. MR. COUVELIER: I'm at a loss to understand what might be meant by contracts. The investor, to the best of my knowledge, has not been identified — and that's the responsibility of Agrifuels to identify; insofar as the tax ruling, to the best of my knowledge, it has not been obtained — and that would be the responsibility of the investor to obtain. The extent of the provincial government's involvement was explained during the answer period. I believe I've answered — certainly attempted to answer — the question put to us, Madam Chairman.

MR. CLARK: We'll have to go through this a bit more. The details are becoming clear, but they are not clear yet. Could the minister indicate to the House the name of the company that will be constructing the ethanol plant?

HON. MR. COUVELIER: Madam Chairman, I'm advised the name of the company that is proposed to construct this is Lockerbie and Hole.

MR. CLARK: Could the minister explain who are the principals of Lockerbie and Hole, where their head office is and what their connection is to Agrifuels?

HON. MR. COUVELIER: I'm advised that the office of Lockerbie and Hole is in Edmonton. As to the extent of the involvement with any of the principals, we are not certain, but I suspect the motivation of the question, Madam Chairman, would be to ensure that the costs as reported are actual costs rather than inflated costs. In that respect I am told that there is adequate protection to ensure that the costs reported are verifiable, and they will be audited closely.

MR. CLARK: Is Lockerbie and Hole a subsidiary of Abex Energy Services Ltd., or Agrifuels, or Wedge Petroleum?

HON. MR. COUVELIER: I'm advised that they are not, although insofar as we're now depending on memories, I'm a little bit reluctant to be very categoric about it.

[ Page 2301 ]

MR. CLARK: Is the $23 million loan guarantee to Lockerbie and Hole?

HON. MR. COUVELIER: No, Madam Chairman. The question put to me was "Who is going to build the venture?" and the construction company is evidently Lockerbie and Hole. The $23 million that we've talked about is to Agrifuels, who are the principals in this exercise. They will be one of the major shareholders but not necessarily the major one, depending on the investor that they finally attract to take out the investment tax credits.

MR. CLARK: The information I had at an earlier stage was that Agrifuels Canada is registered in Edmonton, with a records office in Calgary. It's a Houston subsidiary of Abex Energy Services Ltd. Now Abex Energy Services Ltd. was published as an engineering firm which was earlier reported to have the construction contract for the plant. Is the minister advising me that that is no longer the case, and that Abex Energy Services, which in turn is a subsidiary of Process Systems International Inc., of Tyler, Texas, is not involved in the construction of the ethanol plant in Dawson Creek?

HON. MR. COUVELIER: I don't think anybody would have any great comfort standing up and extemporaneously dealing with what are, most commonly, convoluted corporate interrelationships. But the reason for the question, I suspect, would be to ensure that the provincial exposure is protected and that the costs of the construction of any plant built can be audited and verified. I can tell the member that this aspect of the Agrifuels proposal did receive intensive discussion and consideration by the government, and that the government is satisfied that there is in place in the understandings sufficient comfort that we feel very confident and can categorically state that the transactions, totalling an estimated $90 million, which obviously is an estimate until it's built.... I trust you would agree that the figure can't be exact. But, in any event, we are satisfied that there will be sufficient auditing procedures in place to verify that the sums claimed to be spent have been spent.

MR. CLARK: Process Systems International Inc., which is a Texas firm, is in the business of building and erecting processing plants for the petroleum and petrochemical industry, and so when the details originally came out, it seemed abundantly logical that the parent company to Agrifuels, which is in the business of building these types of plants in Texas and which at one stage announced: "We're going to be the construction arm of it...." It seemed logical that that would in fact be the case. Now the minister is advising us that that is no longer the case and that it is a local firm in Edmonton that has the contract to construct the plant and that there is no provincial money going to the company, Lockerbie and Hole, in Edmonton, or loan guarantees or any association with the provincial government with respect to the construction company.

HON. MR. COUVELIER: Madam Chairman, the financial arrangements that the province has made are with Agrifuels Canada Ltd. — I think that's the proper corporate name — exclusively.

MR. CLARK: That's the loan guarantees.

HON. MR. COUVELIER: Yes.

MR. CLARK: Can the minister explain the involvement of Wedge Petroleum in this project?

HON. MR. COUVELIER: As we understand it, Wedge Petroleum is part of the corporate family associated with Agrifuels in the States.

MR. CLARK: The minister indicated, in answer to a number of questions.... I've had a chance to think about this. A couple of times the minister has indicated that when Agrifuels buys the plant, they will pay $5 million to the farmers. Is that correct?

HON. MR. COUVELIER: Yes. Bear in mind, however, that the first player here, the first person to part with the money, is the investor. It then goes to Agrifuels, then to the farmers, and then back to the province.

MR. CLARK: Explain that.

HON. MR. COUVELIER: It is a complicated financial arrangement that is made possible by the federal income tax regulations of Canada. That's a federal responsibility. By virtue of the existence of those understandings, it is possible for entrepreneurs to put together a package that obliges the federal requirements and to capture some benefits. In order to do that, some of these involved corporate relationships have to be created.

[7:45]

I do admit that the subject is one of some difficulty, but the member has had some knowledge of the Agrifuels situation, and I gather from the questions that he has done some homework on the matter. I'm wondering whether a little more homework might have been able to extract the answers in written form or something more easily understood. It's pretty difficult in a setting like this to try to explain these kinds of arrangements, and I'm not privy to them in their minute details.

The issue really is — and I come back to it — a weak economic situation in the Peace River country: farmers who are hurting and finding that the prices paid for their grain by the national grain marketing system don't meet their higher cost of production: the obvious need in the near future for Canada to develop energy-efficient fueling systems' the inclination of the federal government to require abandonment of leaded fuel in the next year or two; the increase in world energy prices that all close observers figure is inevitable.

The mix of all these factors allowed the creation of some solutions to those problems. We have — for no significant provincial exposure — a $90 million plant to be built in the Peace River country, which needs it. The purpose of it will be to utilize and fix contract purchase of grain from Peace River farmers at a premium price over what they might get from the elevator through the Canadian Wheat Board. The purpose would be to produce an energy conserver which would be mixed with gasoline.

We believe it's in the interest of the province at large, if that plant comes on stream, to extend a savings in the purchase price of gasohol. All of this is tied together and becomes possible by virtue of the investment tax credits applicable to the Peace River country alone. In other words, the federal government has identified that country as a place

[ Page 2302 ]

where investment tax credits can be used. It is the perfect marriage of a need and an opportunity, and it obliges everyone's best guess of what the future holds.

MR. CLARK: I might remind the Minister of Finance that this isn't question period, and convoluted, long answers that are repetitive are not going to get out of this question.

We're trying to deal with specifics here. I find it incredible that the Minister of Finance would tell an opposition member to do more homework, when it is quite clear that the obligation is on you, coming before this House to ask for $10 million approval, to have done at least some rudimentary analysis of this project.

It's quite clear from the debate we had earlier this afternoon that the homework hasn't been done on that side of the House. I find it interesting that it is the Minister of Finance has now been delegated to respond to these questions, when it is the Minister of Agriculture (Hon. Mr. Savage) and his department that have been given the responsibility to negotiate and to lend this incredible sum of money when it's clear that they don't have the expertise to do so.

Could the minister inform the House what the Ministry of Finance's involvement is in this project? Could he inform the House who his counsel to his right is, please?

HON. MR. COUVELIER: I don't know whether it is common practice to introduce staff members. I am pleased to do it. But is that proper form?

Interjection.

HON. MR. COUVELIER: Well, I'd like the House to join me in welcoming the treasury branch staff expert who has been privy to and part of the discussions surrounding the Agrifuels proposal. He is a gentleman who has a total grasp on the situation we're discussing today. His name is Neil Muth, and I value him as one of our best public servants.

MR. CLARK: Is the Minister of Finance saying that the negotiations for the Agrifuels project have taken place with Treasury Board staff and not with staff in the Ministry of Agriculture?

HON. MR. COUVELIER: No, I don't say that at all. As the hon. member said, the arrangements have been complicated. The bargaining positions of the participants have changed numerous times, and it has required the combined attention of not only treasury branch staff, but also staff from the Ministry of Agriculture and, I might add, assistance from staff of the Premier's office — not to forget the active participation of the member from the constituency.

So there have been many players involved in this exercise, and I think that is appropriate and as it should be.

MR. CLARK: Could the Minister of Finance indicate to the House the name of the company that is seeking private investors to take advantage of the sale of federal tax credits?

HON. MR. COUVELIER: The company's name is Agrifuels Canada Ltd.

MR. CLARK: Could the minister explain to the House why he stated on numerous occasions, and again a minute ago, the implications of the statement that when Agrifuels buys the plant, $5 million will be given to the farmers in the corporation that has got the $10 million grant or loan from the government?

HON. MR. COUVELIER: In consultation with the member for South Peace River (Mr. Weisgerber), it was agreed that it would be desirable to have some farmer participation in the project. Indeed, at some stage during the discussions the farmers themselves suggested that they would desire this. So some time was spent looking at the question of how that might be accommodated, given the fact, as described by the House Leader of the opposition, that the farmers are in no cash position to take an equity position at the moment, by virtue of the disastrous sequence of years they've gone through.

We spent some time trying to find a way to have fanner participation, and it was decided we could do this by including them in the bridge financing proposal. So the farmers' presence is explained purely and simply by the government's desire, and the member for South Peace River's desire, and the farmers' desire themselves, to be involved in this venture, hopefully in an equity position.

MR. CLARK: Could the minister inform the House what the equity position is of the farm corporation that's getting the $10 million loan during the construction phase, and what the equity position of the farm corporation getting the loan will be after the payout of $5 million?

HON. MR. COUVELIER: No, Madam Chairman, I cannot. That will be a subject of negotiation between the farmers and the final participants, once they've all been identified.

MR. CLARK: The government of British Columbia is giving a $10 million loan to Farmco, which is a corporation, I gather, created for these purposes of 600 Peace River farmers. The cost of the project is $90 million. Are the farmers getting, therefore, more than 10 percent equity in the project? If the total cost is $90 million and they are putting up, through the government of British Columbia, $10 million, are they getting that equivalent amount of equity?

HON. MR. COUVELIER: As I said in my previous answer, the determination of the farmers' equity position, if any at all, will be the subject of negotiation between themselves, the investors and Agrifuels. But by structuring this vehicle in this way, it gets them in the door. In effect, when the dust settles and the plant is built, they will have assumed a $5 million liability to the province which will be paid back over seven years, and the farmers will, in this hiatus period while the deal is getting its final touches, negotiate what the equity situation will be vis-à-vis their $5 million.

MR. CLARK: Is this a $10 million loan to the farmers, or a $5 million loan to the farmers and $5 million to Agrifuels? Let's get this right here. You're giving a $10 million loan to the farmers for bridge financing of the construction phase, and then Agrifuels is paying the government back $5 million of that $10 million. But you're saying the equity position is to be negotiated. So therefore will the farmers end up with $5 million worth of equity in the company after construction or $10 million?

[ Page 2303 ]

HON. MR. COUVELIER: Well, I wish the farmers well. I hope they strike as good a deal as they can. But as I said, that deal has not been struck so I can't give you an answer. That will have to be the subject of negotiation between (a) the investor, (b) Agrifuels, and (c) the farmers. I said it three times.

MR. CLARK: You're asking us in this House today to approve a $10 million loan to the farmers. We had the Premier say twice in question period that any provincial money in this project will go to the farmers. We've now discovered quite clearly that that is not correct: that there is a $23 million loan guarantee to the company; that there is $9 million worth of subsidy in the way of a 2-cents-a-litre deduction in gas. You're now saying that it's not $10 million to the farmers at all — it appears — but a $5 million loan to the farmers. The other $5 million is bridge financing for construction of the project.

HON. MR. COUVELIER: The Premier is correct when he says that the Agrifuels plant is for the farmers' benefit. Do you think anybody in their right mind is going to create a $90 million investment that.... ? It's there to buy grain. Who grows grain? Farmers. Farmers will benefit when they get paid for the grain that's produced by the plant. We are not putting anything more.... If you read Hansard, you'll see it. I said it before, and I'll say it again: the province will have a short-term involvement of $33 million — $23 million in loan guarantees and $10 in direct loans. When the plant is constructed, the province gets paid its $23 million and $5 million of the $10 million that is being funnelled through the farmers.

The consequence of all that is that the province is being used for bridge financing. Now that's a standard practice in any construction project. Someone has to do the bridge financing, and we're doing it.

Lastly, can I say it again: the point at issue is merely whether we're going to top up this particular account so that the government can, if approached by the principals of Agrifuels, follow through with the deal. If Agrifuels cannot package this material in a way that is acceptable and meets our criteria, there will be no deal; ergo, we will not need the topping-up of the fund. But we hope to get out of here one of these days soon, and presumably the need for a decision will occur while the House is away. If we were not to include this topping-up, who would be the first to object that we spent money without providing for it? This is merely a topping-up of an existing account that is there for the purpose of financing deals like this. The beneficiaries are the Peace River farmers.

The final exposure, when $90 million has been spent by the private sector, is an ethanol plant on the Peace River that will be purchasing grain from the farmers at a higher price than they can get from the Canadian Wheat Board. It does seem to me that it is a good deal and that everyone wins, although obviously some members of the opposition will be discomfited by its success.

MR. ROSE: I would like to direct a question to the minister of bombast, and ask him whether or not the farmers may be in fact — simply in fact — being used to launder a kind of subsidy which is going to Agrifuels.

HON. MR. COUVELIER: No.

MR. ROSE: In order to help the farmers, has the Minister of Agriculture thought about increasing the feed freight assistance from Peace River to Vancouver Island? I wonder if he could answer that question.

[8:00]

HON. MR. SAVAGE: I might inform the hon. member that feed freight assistance has been adjusted.

MR. ROSE: Is this also going to apply to the transport subsidies that have to do with Peace River hay into the lower mainland, which is obviously in jeopardy because of the U.S. imports?

HON. MR. SAVAGE: I would think the question is out of order. It doesn't relate to the program we're talking about.

MR. ROSE: The general question before us is whether or not this is sufficient assistance to Peace River farmers. That's the question we're dealing with. This whole thing has been sold on the basis that it's going to save the bacon.... Excuse me, that's a mixed modifier.

MR. LOVICK: Metaphor.

MR. ROSE: A mixed metaphor.

I would like to ask whether or not the minister, in addition to these other things, including this mythical ethanol plant.... A Candu reactor costs $1 million a job. A tar sands plant costs $1 million a job. This thing costs $1 million a job, and we think there are other, more effective ways to spend the people's money. Has the minister considered other ways to assist those farmers? I'd like him to tell us what they are.

HON. MR. SAVAGE: The program that we announced about one month ago — the $15 program for the grain in the Peace River — was to help them out through the '87 crop.

MR. ROSE: I'd like to know whether they included such things as fertilizer rebates, because Alberta has probably double the rebates that we have. If you want to save the farmer, these are other efforts you could indicate. And the tax removal and programs in terms of farm fuel: what's the situation on those things?

HON. MR. ROGERS: On a point of order, Madam Chairman, this is getting so far from Sir Erskine May's guidelines for the discussion of a bill. What we're doing is in the estimates of the Minister of Agriculture, and I think it would be fair if you'd wait until the staff were here for this particular question, and stick to the question of Agrifuels as it specifically relates to the section of the miscellaneous statutes. This is not the opportunity to do estimates. The proper opportunity will come for that. Sir Erskine May is very clear on how this is done.

MR. ROSE: I would really like the hon. member to give us a citation from Sir Erskine, and I'll sit down while he finds it in about 700 pages.

Interjection.

MR. ROSE: Section 81? No. that's not the case.

[ Page 2304 ]

The point is that this is miscellaneous estimates. This is a grab bag of junk you've brought in here in the middle of July. That's what it is. And you expected to sneak it by us all while we weren't looking. There's a lot of nonsense in here that you can't justify.

Where is the prospectus the Minister of Finance promised to bring us tonight? Where is that? We haven't seen that. Bring it in here. All we've had is bafflegab. It's charming from the Minister of Intergovernmental Relations, of course. He's always charming. But it's bafflegab, nevertheless.

HON. MR. ROGERS: It's very clear that when we get onto a discussion of fertilizer subsidies for Peace River farmers, we're dealing with something that should be dealt with during the estimates.

Now, in terms of this particular item in the miscellaneous statutes, there are a number of ministers who can clearly speak to it, the Minister of Finance and the Minister of Agriculture being two of them. But whether or not we're going to get into the detailed examination of what the minister may be doing for farmers in the Peace River seems to me to be somewhat inappropriate on this particular section, because that vote is still before the House.

MADAM CHAIRMAN: Hon. members, before we continue, the standing orders do call for strict relevancy to the sections that we are debating. I would advise the members in a very kindly way that we should get on with debating this particular section.

MR. ROSE: When it comes to fertilizer, I will defer to the Minister of Intergovernmental Relations, because he is an expert on fertilizer, both natural and chemical. But when I asked the Minister of Finance if he brought in, as he promised to do when we stood this clause — grammarians, please take off; "stood the clause" is what we have to say around here.... He promised us answers, and he hasn't provided them. So I'd like to know why the Minister of Finance has not come in here with a detailed plan for what is envisioned for our $10 million or $23 million of public money.

HON. MR. COUVELIER: I'd refer the hon. member to Hansard, and he can read about it in the morning. We have spent the last two hours on it.

MR. CLARK: The Minister of Finance promised documentation after the break, and it hasn't been forthcoming.

I want to ask a question. How much money is the private sector company Agrifuels Canada putting up — how much money cash — for the construction of this plant?

HON. MR. COUVELIER: When I rose after the break, that was the very first statement we made. That's what has got the hon. members from the opposition off on this red herring. The answer given 40 minutes ago, Madam Chairman, was $45 million.

MR. WILLIAMS: The question before the break was: how much cash, here and now, are they putting in? How much is right up front? You're saying that it's $45 million?

HON. MR. COUVELIER: Madam Chairman, when the plant is built, the sum invested by Agrifuels — their own money, hard dollars — is $45 million. The provincial position: nil, directly, but $5 million guaranteed through the farmers, and that will take seven years to retire.

The day the $90 million plant opens — we'll have a ribbon-cutting, and the member for South Peace River (Mr. Weisgerber) will be there — the relative financial position of all the players at that time will consist of: the investor, who will have cash in the neighbourhood of $55 million to $60 million; Agrifuels itself, who will be fixed at $45 million; and farmers, who at that point will still have a position of $5 million.

MR. WILLIAMS: The numbers keep moving; it's like an accordion. I have trouble with that. The numbers you just gave us now were, $55 million to $60 million — the first numbers. That was the investors?

Interjection.

MR. WILLIAMS: That's the other investors. Agrifuels, $45 million; farmers, $5 million. Right? That comes to $105 million to $110 million. We were told that the actual total for the whole thing was $93 million — but it's only $12 million.

HON. MR. COUVELIER: Madam Chairman, I realize we are now getting into a level of detail that members of the opposition are going to have even greater trouble grasping, and I do it very reluctantly. However, the figure of $105 million to $110 million will, at that time, consist of: construction costs of $89 million; accrued interest — because you earn interest when you have this much money floating around — of $6.5 million; startup costs of $4 million; a performance bond — because we require a performance bond — of $5 million; sales tax — which comes to the provincial treasury — of a minimum of $4 million; and working capital of $1.5 million. That adds up to $110 million.

I realize I've just injected another good hour's worth of red herrings, but that's the answer to the question.

MR. WILLIAMS: So the minister is saying, Madam Chairman, that there will be no borrowing, that it's all equity in this operation. After you go through this business of the guarantees and you get rid of that, you're saying it's all solid equity, no borrowing whatsoever.

HON. MR. COUVELIER: The opportunity inherent in the Agrifuels proposal is driven primarily by the investment tax credits available from the federal government. That's what started the whole process. The sale of those tax credits — so the proponents claim — will attract a purchaser, as yet unidentified, who will have in the project hard cash of $55 million to $60 million.

I'm not prepared to stand here now and say that a working capital of $1.5 million is all that will be required to operate this plant. That's something for the operators to determine. Surely the only issues we should be concerned about here are: (1) protecting the provincial investment to make sure it is not put at risk; and (2) if we can, creating a structure in the Peace River which is going to widen the farmer's opportunity to sell his grain. If we happen, in the process, to be able to pick up some environment enhancers, as we do with this project, it seems to me it's a desirable thing for everyone to support.

To come back to the purpose of the amendment, it is to top up a fund so that, if we are approached with a firm deal that

[ Page 2305 ]

meets the criteria we spent the last three hours describing, we will be able to make that contribution.

MR. WILLIAMS: The $45 million is very substantial; there's no argument about that. This company or its parent companies has that kind of assets. We're talking of a company so significant that it has assets of $45 million that can be in place for this project within the time-frame you're envisaging now. What is the name of the company, and its parent companies, that has this kind of capital?

HON. MR. COUVELIER: Madam Chairman, do I have to repeat this? Just because the hon. member was out of the room and the other hon. member asked exactly the same questions 30 minutes ago, do I have to go through it all again?

[8:15]

MADAM CHAIRMAN: The point is well taken, Mr. Minister.

MR. WILLIAMS: This minister also told us clearly, plainly and simply that the prospectus would be delivered here before we continued this debate. He can shuffle around, and he can shake his head. He promised to deliver; be has not delivered.

Interjection.

MR. WILLIAMS: You bet he said "prospectus."

HON. MR. COUVELIER: I did not use the word "perspective" because I would have known better. There cannot be a perspective on a deal that isn't yet put together. We spent goodness knows how long trying to tell you gentlemen and ladies across the floor that the deal has not been made.

All we've done is said: "Look, if you expect the province to be the bridge financier of this Agrifuels project, here are the requirements we demand, and here's how the deal can be structured. Now you go off and go through those hoops, and if you go through them, we will stand here ready to meet our promises." But our promises, as we've spent the last two hours explaining, will have minimal risk to the province, and if the applicants are successful — irrespective of who owns them or where the money comes from — there will be a $90 million physical plant project situated in the Peace River.

MADAM CHAIRMAN: The Minister of Tourism wishes to make an introduction. Shall leave be granted?

Leave granted.

HON. MR. REID: It gives me a great deal of pleasure to introduce to the House the alderperson from White Rock, home of the world-famous sand-castle contest, Louise Hutchinson. Accompanying her is my lovely wife, Marion. Would the House please make them welcome.

MR. CLARK: I have a couple more questions. Maybe the minister — because he hasn't answered my original question — could explain why he stated repeatedly that when Agrifuels buys the plant.... I'm having some difficulty with that. If Agrifuels is the person raising the money in the private sector, putting their own money up to build it, could he explain to the House what he means by "when Agrifuels buys the plant"?

MR. WILLIAMS: Another minor question, and that is around the whole question of fabrication in the construction of the plant and the materials. Will the fabrication all take place in British Columbia?

HON. MR. COUVELIER: To the last question: to the best of our ability to ensure that that's the case, it will be a requirement, I understand. I also understand that because of the specialized nature of the process, we don't expect that the plant and equipment will be 100 percent fabricated in B.C.

MR. WILLIAMS: Are those other capabilities in Texas?

HON. MR. COUVELIER: They may be in Russia, for all I know. The purpose is to get a plant built in B.C. without any provincial money. That's what this proposal does. Does it matter, really, where the equipment will come from that will create these jobs?

MR. CLARK: The minister didn't answer my earlier question prior to the one from the first member for Vancouver East.

The question was: why has he stated repeatedly that when Agrifuels buys the plant, they will be paying $5 million for the farmers' share of the $10 million loan? If Agrifuels is the primary mover putting the money up and building the plant, why is he saying "when Agrifuels buys the plant" after it's built?

HON. MR. COUVELIER: Madam Chairman, I think what I said was that Agrifuels will be building the plant. I suppose the purchase of the plant will come from the purchasers — or the investors, yet to be identified, who will be purchasing the investment tax credits sold by Agrifuels. So if you're talking about the actual construction of the plant, then it would be Agrifuels who will be constructing it, and they would hire a construction firm: and we understand it will be the construction firm I mentioned earlier.

MR. CLARK: Okay. So the $5 million payback to the government, as half of the loan to the farmers, will be paid back upon completion of the plant by Agrifuels. Is that correct?

HON. MR. COUVELIER: That is the proposal, Madam Chairman.

MR. CLARK: So we know that it's not a $10 million loan to the farmers — that's just a sham. It's a $5 million loan to the farmers. Because if it's being paid back by Agrifuels upon completion, it's effectively a $5 million loan to Agrifuels for the construction phase of the project, and it's not to the farmers at all. Is that correct?

HON. MR. COUVELIER: I didn't use those terms. The member is changing my wording a little bit. What I said was: $5 million of the farmers' $10 million will be used for bridge financing; and $5 million of the farmers' $10 million will be in place, owed by the farmers to the provincial government, to be repaid over a seven-year term.

[ Page 2306 ]

MR. CLARK: You've just confirmed what I said.

I'll just wrap up, if I could. I want to read you a statement from a recent report by the United States Department of Agriculture. The report is entitled — the minister might want to get it — "Fuel Ethanol and Agriculture: An Economic Assessment." It says: "'Subsidized ethanol production is a very inefficient way to raise farm income,' says USDA economist Gerald Grinnell, one of the researchers. 'It would be much more economical to burn straight gasoline in our automobiles and pay farmers a direct subsidy equal to the amount they would receive as a result of ethanol production."' That's the economics of a normal subsidy, not $9 million a year, every year, as a result of a tremendous subsidy to ethanol that amounts to 20 cents a litre of the plant produced in the minister's budget; $9 million a year for the first phase only of a plant in construction, plus a $5 million loan to farmers, and $5 million more to Agrifuels, plus a $23 million loan guarantee.

This government has not been consistently straightforward in the facts in this matter. We've had the Premier consistently mislead the House when he said that it's a $10 million loan to farmers, without mentioning the hundreds of thousands of dollars worth of subsidy in all other manners. We are not getting the details for 54 jobs. A million dollars a job, approximately, is the potential subsidy for this plant, and we have not had any analysis as to whether this is the most appropriate mechanism for dealing with grain problems in the Peace River.

Don Phillips, the consultant for Dawson Creek.... It is fitting that he announced it, given his track record in this House in previous years for massive giveaways of taxpayers' dollars for very small numbers of jobs in his former riding.

We are not prepared on this side of the House to give a blank cheque of $10 million to a minister who doesn't even understand it and can't even stand up and defend his request of this House for $10 million. We rely on another minister and other bureaucrats to defend it — and not very well at that. We have a minister who has not been straightforward, who has promised documents and not come forward with documents. We have had other ministers of this House give us misleading information repeatedly. That is why, Madam Chairman, we have been hours on this. Instead of coming clean and saying that there is a massive subsidy of taxpayers' dollars to this plant — even though the Premier has stated dozens of times that the end of subsidies is near; even though the budget speech that the minister read said the financing for farmers is supposed to be phased out, there are no more subsidies....

The first member for Nanaimo (Mr. Stupich) stated in the budget debate that there is a significant increase in subsidies to business across the board with this government, and we're now seeing the first monumental one. I suspect that if this plant is built, it will be the taxpayers who are paying millions of dollars — again, for some individuals, for private gain.

Again we see a scam with respect to federal tax money to put it together. So it's federal money here. It's provincial money here for farmers. It's loan guarantees here. Where's free enterprise with this kind of project? Why don't you just stand up here and come clean, and tell this side of the House the kind of massive subsidies that you're having with this plant for Dawson Creek? Then we can deal with it, at least on a rational basis. We can quantify it and say whether or not this is the best way to subsidize grain production. It's quite clear from American economists, it's quite clear from anybody with any economic background, that this is not an efficient way. In fact, it skews; it is absolutely inefficient in terms of trying to deal with the problem of grain farming in the Peace River, and it is a dumb economics in terms of creating a very few jobs. It is exactly opposite to the kind of job creation strategy we should be seeing followed by this government.

So this side of the House will not be supporting this blank cheque for a phony scam of a project.

MR. WILLIAMS: Mr. Minister, Barnum put it very clearly: there is one born every minute.

Section 18 as amended approved on the following division:

YEAS — 36

NAYS — 14

[8:30]

On section 33.

HON. B.R. SMITH: Section 33, with 35 consequential on it.... In the absence of the minister, and after discussion, we call the question.

Section 33 negatived.

On section 34.

HON. B.R. SMITH: The purpose of section 34 is to legitimize the payment of benefits to people who have claims which they have not yet materialized, but the status of their claims being such as would disentitle them to social assistance. What the ministry does is give them that assistance pending their claims, and take an assignment for the amount of the assistance. It does this with authority that has been challenged in the courts, but without this authority they really can't give those benefits in those cases.

So that's the purpose of it. I have instructed my colleagues on the other side of the result of the briefing that I had.

MR. CASHORE: With your indulgence, Madam Chairman, I would like to say that I very much appreciate the consideration of the government with regard to defeating 33

[ Page 2307 ]

and 35. I feel that's a consideration that speaks very well for cooperation.

With regard to section 34, I understand, having heard the explanation, that the Attorney-General sees in this wording something which in his view would help to facilitate extending benefits to those who would otherwise not be able to receive those benefits. I certainly cannot argue with that kind of a possibility. However, I would think if that were the intent of this section, it would not have been worded the way it is. So it is with the wording that I take exception and have a great deal of difficulty, because in looking at it carefully, it seems to me that the wording indicates the possibility that it would give the minister the right, with regard to any income assistance recipients — not just those who are not presently eligible, but any recipients — to affix their assets.

It seems to me, Madam Chairman, that this section would have the result of causing a greater threat to those disadvantaged people who are already having a difficult time. Therefore, given the wording that we find here, which is very clumsy wording if it is wording that is intended to fulfil what the minister has said, I would want to ask first of all if it were not possible to go back to the drawing-board and word this section 1n some different way that would say very clearly what the minister just said, rather than implying this threat to the assets and to the very minimal properties that disadvantaged, low-income people may have. Very specifically, I would say that the words, "taking of assignments to secure them," are words that could apply to other than the situations that the minister referred to.

HON. B.R. SMITH: Well, I suppose I would agree with the commentary as to the social aridity of the draftsmanship of some of this legislation, or political aridity if you like, but it is put together by worthy professionals who try to express in language the legal policy. From a marketing standpoint I guess it could be expressed positively, perhaps, if we redid it; but I don't think the member has to worry about the wording, "the taking of assignments to secure them," because the only thing that's being secured there is the grant or advance. You see, without the section the ministry wouldn't be entitled to pay the person who has the potential benefit.

That's as a result of some legal dispute in the past where they've been trying to pay these benefits, but they've had that challenged. This puts it beyond doubt that they can pay those benefits to people who will be receiving a repayment, or receiving some sort of a windfall, which otherwise would disentitle them to their social service benefit. That's the reason for the section. I quite agree with you that reading it from the standpoint of political or social policy it doesn't took too promising, but that is what is sought to be achieved by the draftsmen. I had the director of GAIN here and was briefed by him, and I must accept that briefing; and I also accept the briefing of my legislative counsel.

MR. CASHORE: Madam Chairman, again I do have this problem with the wording, because if we were thinking here of a possibility that someone might be receiving a windfall — for instance, winning $200,000 in a lottery — I would certainly not oppose a repayment of a small grant, and most such grants are very small. But it would seem to me that in dealing with the feelings of those people who are disadvantaged in our society — low-income people — if there is seen to be an implied threat here, it is quite unnecessary in terms of the wording to do so.

So if we're thinking of such things as a windfall benefit, then why not state that, rather than leave the possibility here that it could be interpreted by people working for the ministry at the local level in such a way that a person might feel that in fact their asset — their home, something that they had set aside that was within the legal requirements — might somehow be jeopardized? I really feel that it would be worthwhile to draw back from this and go back to the drawing-board.

MR. ROSE: I think the Attorney-General is one of the rare members — rare birds in this House as a minister — who seem to be quite able to sort of amend and readjust legislation on the floor. He seems to be always ready to listen to reasonable arguments from the other side if there happens to be a particular problem in the legislation. He's shown this on this particular thirties section already.

So would it be possible to suggest that for ten or 15 or 20 minutes he consider what the hon. member for Maillardville-Coquitlam (Mr. Cashore) had to say and perhaps come up with a more reasonable wording to take care of the concerns and threats that he alleges? I think that is a very reasonable position for the minister to take. I'm quite sure that even Shakespeare and T.S. Eliot were not really content with their final wordings.

HON. B. R. SMITH: In this instance, I prefer Sir Francis Bacon.

The governing words of the section as amended still will read: "Where a person is not eligible to receive income assistance due to income or assets in excess of those permitted...." That is the person we are dealing with, you see. That is the person we seek to give a benefit to, so that he can realize income or assets not having been received.

It is really an advance against that. You want to give that person the benefit. The language of the thing isn't going to catch a social service headline in a positive way; I agree with that. I really don't know how to do it much more artfully. It is to extend benefits and to put that beyond doubt. The taking of the assignment is simply to secure the return of that amount advanced to someone who was never entitled — under the statute or the regulations — to receive that assistance.

So what we're doing is reaching out to somebody who has no entitlement to social services. We're saying: "Look, you are in a bind right now because you are going to get your hands on some money, so we're going to support you while you do that and advance that money to you by way of payments, and then you give it back to us. This is how we're going to secure it." I don't know how to put it more strongly.

[8:45]

Section 34 approved.

Section 35 negatived.

On section 62.

MS. SMALLWOOD: My first question is to the minister. I'd like him to explain the purpose of the legislation, if he would.

HON. MR. STRACHAN: It's an explanatory act. It's a recommendation of the Wilderness Advisory Committee. You'll find it on the other side of the page.

[ Page 2308 ]

MS. SMALLWOOD: I'm looking for further explanation for some of the boundary changes; particularly in regard to the recreation areas and perhaps some background as to the ministry's policy on changes to park boundaries.

I thank the minister for the reference to the Wilderness Advisory Committee. I have that document. I've read it and I'm familiar with it.

HON. MR. STRACHAN: We'll begin with section 62, which covers Manning and Kwadacha. There was a great amount of public interest, and a draft proposal for the area was prepared. There was an interagency study completed, and in 1983 ELUC directed that the Ministry of Forests would manage the lands and resources. Further public concern led to re-examination of that decision in 1985. A joint Ministry of Forests and Lands, Parks and Housing study proposed an addition to the park and a compensatory withdrawal of land from the Copper Creek drainage. The land was then proposed for addition to the park. It included the essential core of the original Cascades park proposal.

When the WAC saw it, it recommended the proposed withdrawal, the one that had come from the joint ministry of the old Ministry of Lands, Parks and Housing and Forests. It made the recommendation that the Cascades area adjacent to the Manning Park, as recommended by the WAC and shown on the attached map, be designated as recreation area to permit studies of mineral potentials and of the terms of agreement on management of minerals within provincial recreation areas; to designate and protect as heritage trails the Dewdney, Whatcom, Hudson's Bay Brigade and Blackeyes Trails within the original 41,000-hectare Cascade wilderness proposal; and to withdraw from park status the Copper Creek drainage of Manning Park. The reason that was done is that it wasn't seen to be of remarkable park value. That's Cascades.

Now the other one was Kwadacha. Those amendments reclassify some class A park to recreation area and include some withdrawals. The member has the map, Madam Chairman, so she's familiar with what I'm talking about. The WAC recommended that the southwest portion of the park may benefit the province more through uses other than recreation and conservation, and that no significant loss to park value would result from a boundary revision in this area.

It was also recognized that the upper Tuchodi River area was of limited value to the park. A review following the report of the Wilderness Advisory Committee in the park master plan determined that the Tuchodi River area is an isolated area cut off from the rest of the park, the deletion of which would have no adverse impact on park values.

However, the southwest portion of the park contains significant conservation values — wildlife as well as significant mineralization — and would best be managed as a recreation area, rather than removed from the park system.

That, I think, explains why the Wilderness Advisory Committee took that position, and that's the reason we're bringing in this legislation.

[Mr. Gabelmann in the chair.]

MS. SMALLWOOD: Can the minister advise the House as to the number of actual mining claims in the recreational areas in these three parks?

HON. MR. STRACHAN: No, I can't. But they are there, as the member knows from previous estimates. We are moving to either quit-claim or make people prove up, and I think we're going to see this area come from recreation area to full park area as we quitclaim or proceed with those mining claims.

MS. SMALLWOOD: Mr. Minister, I understood, and I'll make two points.

First of all, when we talked about your policy for parks development in this province — I believe this was during estimates — you emphatically stated that, once a section of a park was designated, there was no degrading of that designation, that there was only the possibility of upgrading it. What we see here is an area of a park that is moving from class A to recreation. Perhaps the minister would explain if it's anything other than that.

HON. MR. STRACHAN: Mr. Chairman, these are class B areas at this point, moving in many cases to class A or recreation areas. So there's no moving down.

MS. SMALLWOOD: I refer specifically to the Kwadacha amendment and the downgrading from class A to recreation status. I believe that reference is in the minister's own press announcement. Is that not correct?

HON. MR. STRACHAN: Yes, Kwadacha is, and it's because, as I indicated earlier, there was no significant loss to park value, but there were considerable benefits that could come through uses other than recreation and conservation. I guess you can complain about this all you want, but it was the recommendation of the Wilderness Advisory Committee that these revisions be made, and I don't think it's appropriate for us to go against the recommendations of that committee.

MS. SMALLWOOD: So the minister has just in these last few minutes contradicted himself. He said that no, there was no downgrading of any of the parks in this province. Now he's acknowledging in his own press release that yes, indeed, one of the parks' boundary changes before us is just that — a downgrading.

I want to further investigate the issue of mining claims in this province, because these boundaries and boundary changes are not in isolation. They are a package. They are part of the changes announced several months ago dealing with the Strathcona Park changes, and there were several other park boundaries changed in this province. The argument at that time, if I can refresh the minister's mind, was that the ministry was bringing the park boundaries in line with the Tener case, with the case dealing with mining claims in parks.

For the minister to come to this House with legislation that again changes boundaries, and to be unable to tell us about the mining claims in these recreational areas.... The minister is now allowing mining in the parks and recreational areas. If the minister cannot explain to us which mining claims are there and which have precipitated the changes to these park boundaries, then I don't feel we have all the information before us.

I see the minister wants to comment on that. If you'd like to, we'll continue this discussion about mining in the parks.

[ Page 2309 ]

HON. MR. STRACHAN: First of all, we don't mine in parks. We mine in recreation areas. Do you understand the distinction? This defines boundaries where we have a class A park where there is no mining, or we have a recreation area where there is mining. Where there are mining areas, they're termed to be recreation, and where there are mining claims we have designated recreation areas, This legislation before us indicates how those boundaries should be drawn as a recommendation of the Wilderness Advisory Committee.

In terms of the amount of claims and where they are, you'd have to address that question to the Minister of Energy, Mines and Petroleum Resources. Parks gets that information from them. It says there are mines there, and we designate that area as a recreation area and then we move quickly to try to quitclaim or have them prove up their geology.

MS. SMALLWOOD: I'm afraid it's not acceptable for the minister to say that he's purely fulfilling the recommendations of an advisory commission and that he doesn't have the information about the specific mining claims and we'll have to ask the Ministry of Mines to advise us. He is proposing changes, the downgrading of parks that are part of the provincial heritage of the people, and we, by a leap of faith, must understand and agree with him that because there are mining claims in these recreational areas.... and therefore pass this legislation and trust him that those claims will be resolved and then we will upgrade the parks. That is not good enough.

I would like to suggest to the minister that when we're dealing with this particular park, that when we're dealing with the change to the Kwadacha wilderness area, to the once class A park in this province, perhaps through investigation the minister may find there are no claims in that park and that what we are seeing is again a lobby from the mining industry.

I would like to suggest to you that a speech given by Tex Enemark, when he was the president of the Mining Association of B.C., outlines their specific concerns with this park. In his speech he says that in the case of the Kwadacha wilderness park, for example, no mineral resource surveys were carried out before the park was established, and thus a significant lead barite deposit was overlooked.

What that tells me is that if there was no analysis of the value and the mining industry has discovered that they might make some bucks off our parks....

Interjections.

MS. SMALLWOOD: To the members who find that to be such an interesting prospect, I will remind them that we are talking about the property of the people of this province. We are talking about the heritage of our children. To the members who are so amused at the prospect of a private company making some bucks off the back of that heritage, that just reinforces the basic philosophy that this government brings to the management of that heritage and the wilderness resources in our province.

What this government is doing, by changing the boundaries of parks in this province under the facade of the Tener case — and that was a discussion during the first go-round — is facilitating a mining lobby, because it isn't even relevant to these changes. This minister, responsible for parks in this province, is dismantling the parks system for a quick buck. The minister has not been particularly enthusiastic about this debate from the start. He has not been very forthcoming with information. Basically the line is: "Trust me." To quote the minister, a few minutes ago when I raised the objection, he said "tough" to the people who have concerns about the people who are looking after the park heritage in this province. Well, there are many people who have fought long and hard not only for the preservation of those parks but who understand the importance of preserving land for the future generation and the importance that those parks provide to sustain the habitat of many of the species that are left in this province.

I don't know if the minister has any further information about the mining in these recreational areas, or whether he's prepared at this time to make a comment, but I'd like him to....

HON. MR. STRACHAN: First of all, on the question of stewardship over the park — I've said this during the estimates four or five times, and the member can look it up — in the last year we have added almost a million hectares to the park and wilderness system in the province. So I will not accept any argument from you or anyone else that we're not good stewards of the wilderness, nor are we not concerned about parks, because the record shows that comment to be not correct.

In the case of Kwadacha, it was a park that was established by your government in 1973, and without detailed assessment of natural recreation or resource values. It did put park status on an area that had extensive mineralization. Tex Enemark may or may not be correct on that. I have a tendency to discount what tox says from time to time, but I guess in speaking for that association he knew what he was doing.

We have realized that we have to tighten up and redefine the boundaries for the best park value and also for the best other uses for the province of British Columbia. The remainder of the park is going to remain as wilderness with a class A designation. However, you have the map there, and the areas where we are excluding our areas, Madam Member, we have far better uses for than for park, There's no outstanding park value there, and I make no apology for what we're doing to those boundaries.

[9:00]

MS. SMALLWOOD: As the Minister of Parks, can he advise this House as to whether there is extensive study being done about other mineral values in other park areas in this province?

HON. MR. STRACHAN: Yes. As I said in my estimates, but I'll repeat, in every case we are doing mining claims site by site, having the owners identify what geology they have. We had a quitclaim, as a matter of fact, to Strathcona last week, and we are — and I used the word — "ratcheting" the recreation areas towards full park value. That's being done on a site-by-site basis. It's begun in Strathcona now. As soon as this legislation is passed, we'll carry on with the other three areas.

By the way, for the information of the committee, Mr. Chairman, we need legislation for these three parks identified in the bill this evening, because they were parks that were put in by statute. The rest of the parks were done by order-in-council many years earlier. I don't know why some were done by OIC and some were done by legislation; but in any event the three parks before us this evening were statute parks in the Park Act, and that's why we've had to bring them to this committee. The other changes that were made by the ministry

[ Page 2310 ]

with respect to park boundaries were done by order-in-council because those were order-in-council parks.

HON. MR. BRUMMET: I did want to make a comment and support the minister on these park boundary changes.

One of the difficulties in establishing and doing anything with park boundaries in this province is that sometimes the boundaries are drawn on a map rather hurriedly. Then someone like the Wilderness Advisory Committee looks at it — let's use the Kwadacha example — and takes the considered opinion of the parks experts, who say that there is a certain area that has little or no recreational preservation value but it may have some mining value. So if it has no recreational or conservation value, why should it be left there just because politically in this House somebody doesn't want to change a line?

So you've taken the considered opinion of these experts, considered their evaluation of that, and then in this House, somehow or other, can you ignore all that and say: "Well, there was a line drawn there once, so this line must never be changed. It may make sense, but for political reasons it mustn't be changed, no matter what the experts and the evaluators say about it."

That is what makes it so difficult to delete a section that isn't of park value and add a section that is, because there are other areas that can be added. So there is sense sometimes in taking a look at the initial drawing of boundaries. We both gain from it. We say: "It's the heritage of our children. It's the property of the people." It is. Why not put it to its best use, according to the considered opinion of people who have studied it? That is also a heritage value. Surely once in a while we have to make some adjustments in our society and in our life and to our parks.

As far as the mining claims are concerned, the Tener case was a case which brought something to light very strongly — that as long as the mineral claim existed any value that anybody wanted to put on it could be put on there, whether or not there was any mineral there. Any value could be attached to it. The only way that the value could be established is by having either the mining company prove up on the claim or having the government go in there and drill to prove that it didn't exist. Either way you're touching the park. And to try to preserve the policy of not mining in parks instead of just saying that any value that anybody wants to place on that for its potential has to be acceptable and the people of the province should pay the bill.... By declaring it a recreation area, it then can be determined, in time, whether or not there is mining there. And because it's in a recreation area, if the mineralization is there and it can be proven up and it can be mined, it has to be mined with recreational factors seriously considered.

It can be restored. There are places in this province that were mined and are now parks, and they have taken their value because they were once mined — because that's where they gained their fame, if you like. So it doesn't preclude them forever. But it does say: "Either prove you've got a claim there or drop it; or if you have a claim there, then get at it, and we'll consider the recreational value." And then at some time in the future, if it has recreational value, it can be re-established as a class A park, in which there is no mining.

But to just hang on to a line that was drawn on a map for some sacred political reason, for benefit to someone in this House, makes so little sense when you can solve problems. It's so easy to be a critic. It's so easy to attack all of these solutions that people try to find to problems that have been created by their predecessors. I would suggest that members sometimes think about that. It isn't just the minister and it isn't just the ministers before him who have said something should be done. It's because problems developed and they needed solutions, not just burying your head in the sand and saying that once a line is drawn on the map then it must never be changed. I would hope that our park system is a dynamic system, that we can add to it, and that we can delete.

For instance, as minister I was in on the initial negotiations on Strathcona Park, and by changing some of the boundaries there, accommodating some of those areas, what we saw was a great addition in many other places to our provincial park system to make it much better. But, if some members are going to say, "Never mind what can be improved; don't touch it," that to me makes very little sense.

So I would like to strongly support the member on this, because it is not a whim that's being acted on here. It is proposals that have come up and solutions to problems that have been proposed, carefully studied by the Wilderness Advisory Committee, and strongly recommended as in the best interests of the parks system in this province.

MS. SMALLWOOD: I would like to continue to address my comments to the minister, because while I respect the sentiments that were expressed by the Minister of Education, some of the points he made were not accurate, and I don't think for a moment....

Interjection.

MR. CHAIRMAN: I recognized the member for Surrey Guildford-Whalley.

Interjections.

MS. SMALLWOOD: Until such time as the Minister of Education rises on a point of order, I will continue my comments to the Minister of Environment. The minister earlier said that he didn't understand why certain park boundaries were established by statute and others by order-in-council. Well, the reason these parks were established by statute was so they would come before this House, so that there would be a public review of the changes to those boundaries.

HON. MR. STRACHAN: No.

MS. SMALLWOOD: Well, quite frankly, the minister says no, but I have it on good advice from the minister who was involved in actually founding these particular parks, by developing and placing those boundaries by statute, and he advises me that this was the reason — that they would come before the House to change those boundaries.

HON. MR. STRACHAN: No, that's not right.

MS. SMALLWOOD: I would suggest that the Minister of Environment could have that discussion with the previous Minister of Forests and Lands. I'm not sure we will resolve that at this time.

The minister did not answer my question about the kind of work that Parks has undertaken, perhaps with the Ministry of Mines, to identify other mineral resources in the parks. This

[ Page 2311 ]

particular change is not like other changes that have taken place, as supported by your argument, to facilitate the Tener case. I would argue that it was not necessary even then. The ministry did not have to change the park's boundaries to facilitate the Tener case because there were cases — in Strathcona, for instance — that went to the Supreme Court since the Tener case and were turned around. They had the exact opposite conclusion, and the ministry certainly could have chosen to use that as its precedent.

Are you doing an analysis of mineral resources in parks? I don't believe there are mining claims in this particular park boundary; I believe you are facilitating the change of this boundary for the mining industry so that they can come in and claim mineral rights and mine.

Interjection.

MS. SMALLWOOD: The minister says that he agrees that he did not have to change this boundary, that they have recognized that there are minerals of value there, and that because the minerals exist they are changing the boundaries to facilitate a private company, a mine, to come into the park and extract those resources.

Was this part of the minister's strategy from day one? How extensive is this strategy? Next week are we going to see more changes? I don't believe the full extent of the mineral values of most of these wilderness parks is known. Next week, if we find some more rich deposits of this or that mineral, will we be changing the boundaries again? Will other parks, because they were not formed by statute, be done by cabinet? Will they never come before the people's eye? What sort of a situation are we in in this province when the person who is responsible for the preservation of wilderness and for the stewardship of this heritage is systematically dismantling it for the interests of the mining companies?

Whom do you serve, Mr. Minister? And how far will you go? Perhaps the minister can explain to us the extent of the studies underway identifying minerals for the mining corporations in this province.

[9:15]

HON. MR. STRACHAN: In the case of Kwadacha, I said it was done in 1973 by your government without any detailed assessment of any natural recreation and resource values. The Wilderness Advisory Committee concluded that the southwest portion of the park may benefit the province more through uses other than recreation. In other words, the park value is not there, and there are better uses. It could be mining; it could be forestry. In any event, it's not remarkable park value. The reason the Minister of Education (Hon. Mr. Brummet) entered this debate is that Kwadacha is in his riding. He's quite familiar with the appearance of it and with the current boundaries that don't seem to make any sense. They were simply lines drawn on a map by your government, Madam Member, when you were government.

So what we've done is clean up the boundaries of Kwadacha to recognize the high park values where they exist and to recognize that there is better economic benefit for the people of British Columbia in other areas. You may disagree with that. That's your position. That's fine, but we have the economy of the province to serve. We want to establish a good park system — the best park system — and because we redraw a few lines it may upset you. I still maintain that it's an exceptional park system. The class A areas are clearly class A, and are going to be of benefit to people who enjoy that type of wilderness. The areas that can be better utilized for economic development will be utilized for economic development.

MS. SMALLWOOD: The minister doesn't seem to be either interested in or capable of giving me information about identifying other mineral resources.

The minister has said that we have to worry about the economics of the province. This minister is the Minister of Environment and Parks, he is not the Mines minister. It is your responsibility, Mr. Minister, to preserve the wilderness and parks value in this province, not to identify resources for the mining industry. Any reference I have seen, including the speech to the Mining Association, had nothing to do with the recreational value of that park; it had to do with the resource value.

HON. MR. STRACHAN: You're cute when you're mad.

MS. SMALLWOOD: The minister hasn't seen mad yet.

The minister has told us.... As in the estimates, the minister has made references to his responsibility to the industry in this province. I suggest to you, Mr. Minister, that you're in the wrong job. That is not your responsibility. The responsibility that you have is the preservation of the environment in this province.

This is probably the truest picture we have seen as to the real park strategy in this province. The minister, within a very short period of time, has changed the goalposts. The minister told this House not less than a week ago that the park strategy for this province is a strategy of upgrading the quality of parks, and that in no way. once the parks had achieved a specific status, would there be a downgrading. And the minister brings legislation before this House that downgrades the value of a park.

Interjection.

MS. SMALLWOOD: Yes, Mr. Minister, we are opposed to your park strategy, and you are not true to your responsibilities.

HON. MR. STRACHAN: I'll comment briefly to the member. These are recommendations, as I indicated earlier, from the Wilderness Advisory Committee, which examined all aspects of the park system. Really, it is an upgrading in terms of park value. You may see it in terms of a downgrading in terms of actual hectares for park, but when you create a higher quality with — in some of these cases — less hectares, I make no apology for that. I'll repeat that we've added almost a million hectares to our park and wilderness system over this past year.

MS. SMALLWOOD: One quick comment. The minister refers to the Wilderness Advisory Committee. That committee took three months to assess the value of all wilderness in this province. That is not doing credit to the job that is necessary for land use conflict in this province. For the minister to hang his hat on it, with the kind of record that this government has, is totally and completely absurd. We have seen reports that this government has done, which the government does not agree with, disappear into the woodwork, never to be seen again. The minister hangs his hat on a

[ Page 2312 ]

Wilderness Advisory Committee that spent three months deciding on all of the wilderness designation in this province. It is laughable.

Sections 62 to 68 inclusive.

On section 69.

MR. JONES: I would first of all like to ask my friend the Provincial Secretary to explain the motivation behind these amendments to the Pension (Teachers) Act.

HON. MR. VEITCH: The membership of the Teachers' Pension Board will reflect the changes provided by the Teaching Profession Act to ensure appropriate representation from various employee and employer groups.

MR. JONES: I'd like to question the minister's interpretation of what appropriate representation really means. It seems to me that if we have a group we want represented, then we ask that group what kind of representative they would have, rather than having somebody outside that group — in this case the Provincial Secretary — appoint those people.

That wasn't there in the previous legislation. I suppose whoever is appointed to this board will do a good job, but I think there is some important symbolism here. Maybe the minister would want to comment.

HON. MR. VEITCH: Mr. Chairman, there are several definitions and several things changed as a result of the Teaching Profession Act. You'll note that the principals, vice-principals, administrators and so forth are no longer referred to as "teachers" under the act. They're not covered as teachers. You may want to cover some of those people on this board, some of those individual groups.

You'll note that there will be representatives from teachers and from school boards and other persons who have a direct interest in this pension.

MR. JONES: Is the Provincial Secretary saying that he is going to ask these groups to submit names to him, and he will choose from those names? Or is he going to choose those people himself?

HON. MR. VEITCH: No, no. Certainly they will be chosen, but with advice from other groups. What we don't want to do, Mr. Chairman, is restrict it entirely to the groups that exist at the present time, because when bargaining units and other things change, there may be other groups representative of those individuals involved with teachers' pensions.

MR. JONES: I think at best this legislation is premature, because in essence it has eliminated the former opportunity for those groups to choose their own representatives.

In the past, the representative of the employees was appointed by the executive of the B.C. Teachers' Federation. That organization is still there. It still represents — at this point in time, when this legislation is being introduced to this House — all the teachers of this province, all the principals and all the vice-principals. We anticipate changes in the legislation, but we don't know exactly what kind of structures are going to exist after January 1. I think this legislation anticipates certain kinds of changes and not others. They're not the kind of changes the majority of people in the teaching profession are particularly supportive of.

I am sorry the Minister of Education (Hon. Mr. Brummet) is not here, but it seems to me this is a further attack on that organization. The minister has mentioned several times in this House that his nose is out of joint because they did not invite him to their annual general meeting. It seems to me that that organization is being systematically written out of existence. It is being written out of existence in this legislation. If you take a clause that says "a representative of the employees, to be appointed by the executive of the British Columbia Teachers' Federation" and replace it with a clause that says "who shall be appointed by the Provincial Secretary and Minister of Government Services," I mean, what other interpretation can you put on it?

HON. MR. VEITCH: I'm sure it is of interest to the member for Burnaby North that this is a proclamation section. If and when the situation changes as a result of the new Teaching Profession Act, then this can be proclaimed. If it's not necessary, then it would not be proclaimed. 

MR. JONES: Okay, I'll accept that answer. Let's assume that structures carry on in a similar manner and there is an opportunity for the employees to choose their representatives. I suppose they will then submit names to the hon. Provincial Secretary, and he will appoint those people who are proposed by the employee organization. The minister is nodding his head yes.

Interjection.

MR. JONES: You just nodded your head yes, so that's on the record. The Provincial Secretary does not disagree that that is the case.

MR. ROSE: Can you put a nod in Hansard?

MR. JONES: Well, I know the minister would get up and object at this point if I wasn't accurately reflecting his nod.

We've had this pension board for a number of years — many, many years — and what we had was a certain composition. That composition was a commissioner that served as the chairperson, a representative from BCTF, a staff person from the Ministry of Education. Now we have a commissioner appointed by the Provincial Secretary. We have, in theory — and I take the minister's word that they will be — representatives of teachers, appointed by teachers' organizations in this province, and now we've added school boards; and I suppose there's some rationale for that, and the minister will explain that to me.

But we've considerably changed the makeup of this board in subsection (c). In subsection (c) it says: "such other persons as the Provincial Secretary and Minister of Government Services may appoint." Could I ask the hon. Provincial Secretary why it was necessary, after this board has been functioning with a particular kind of representation for many, many years in this province, without, I'm sure, any complaint.... Why does he feel it's necessary to stack the deck in such a way — the minister will correct me if I'm wrong — that it really becomes not a representative board, not a board that's representing those organizations and groups that are serviced by these pensions, but a board of the Provincial Secretary? Could the Provincial Secretary explain to me why

[ Page 2313 ]

he feels it necessary to stack the deck in this way and why he feels it necessary to change the historical composition of this board?

[9:30]

HON. MR. VEITCH: It could very well be that the hon. member for Burnaby North is correct, and that the B.C. Teachers' Federation will represent all of the teachers in the province of British Columbia and there will be no changes. But in the event that the hon. member is not correct — and I think that at least once in his life he has been incorrect; he may have forgotten when that was — there may no longer be just one representative body for employees. What this does is enable those changes to be made if that is the case. This is a proclamation section which may or may not need to be proclaimed, hon. member. In the event that there are other players in the game, you wouldn't want to have them not represented on this board, I am sure. And that's the reason for this particular enabling section, nothing more.

There's no stacking of the deck; it's just ensuring that everyone has equity, that everyone who is represented by whomsoever they may be represented by has an equity. There's a different role for principals under the Teaching Profession Act; there's a different role for certain administrators and vice-principals. They may very well want some representation or require some representation on this board, and I think it would be fair and just to ensure that that in fact occurs.

MR. JONES: I recall, when I was briefed on Bill 20 by the Deputy Minister of Education, that there was some kind of betting as to what would evolve after January 1. The deputy minister at that time predicted that 70 of the 75 local associations would go along with the union model — and I assumed they would be affiliated with the B.C. Teachers' Federation — and that there would be five that would not. I don't know how large the Provincial Secretary wants to make this board, but if 90 or 95 percent of the teachers in this province are represented by a particular organization, does the minister necessarily have to go against the wishes of that organization and appoint such other persons as he deems necessary?

Let me take the minister's position and look at it from the other side. If it is the desire of this government — and it's believed in many quarters that it is — to see the demise of the B.C. Teachers' Federation, then it's quite logical that we would put in legislation what would not make them the representative organization of the teachers in this province and undermine their credibility and the spokesman role that they've had for many years in this province by putting in this kind of legislation.

I'm making certain allegations here; I'm the alligator in this case. I guess it's going to be a matter of time before we see the composition of this board, but I do think it's very important that we flag these things. I don't think this legislation was necessary at this time. We do know that after January 1 there's going to be a B.C. Teachers' Federation. There is no necessity of writing them out of this legislation. Until it's very clear that they're not representative of the teachers of this province, I think it's a very premature and an unwise move on the part of the government.

Sections 69 to 78 inclusive approved.

On section 79.

MR. LOVICK: I think four different things got by there that we otherwise would have discussed, Mr. Chairman, but I won't belabour that. Again, let me pose a very simple question. Why have we suddenly extended the number of QCs that are made available in any given year? That's all.

HON. B.R. SMITH: The act hasn't been changed as to numbers since the 1940s, and it allows ten during a calendar year to be appointed. But it allows accumulation of a backlog. We accumulated a backlog because there were no appointments for ten years. Since they were reinstated about five years ago, we've been appointing between 25 and 40 a year, and the backlog is just about gone.

Let me just give you some figures. There are roughly 204 QCs in British Columbia out of a practising bar of 5,900, which is 3.5 percent, In Ontario, there are 19,442 lawyers and 3,000 QCs. In Ontario they were given out somewhat lavishly; here they've been given out sparingly. One of the reason for that is that there's a process under the act that they have to go through a committee comprised of two Chief Justices and two representatives of the Law Society. The present percentage just happens to be 3.5 percent. The proposal is to increase that to 7 percent, which would allow 200 more QCs to be appointed. Our plan is to continue to appoint around 30 or 35 — maybe 40 at the most — a year, and if that is used up, then come back to the House again. We tried to think of ways of doing it on an annual allotment. We knew ten wasn't any good, and we just wouldn't be able to appoint the many good counsels that are out there unless we increased it.

MR. LOVICK: I assure you, Mr. Chairman, I'm not going to be jumping up with too great a regularity for too long. Just a very quick question. Is it not the case that the province of Ontario has discussed the practice, or considered at least, the obsolescence of the practice of appointing QCs and has taken into consideration whether or not it be continued?

HON. B.R. SMITH: Yes, it is correct. They announced they weren't going to appoint any more, and they were also going to abolish the offices of those who had been subsequently appointed. They were actually going to go to the tombstones of Oliver Mowat and Arthur Meighen and erase the honour from the tombstones. But I think they have backed off that course, and I don't think they've taken any away. There was one apocryphal story of a lawyer in Ontario who feared so much for losing his QC that he applied for a change of name to name himself "George Brown QC," so he could still write the same thing on his office door, and he was denied a change of name.

MR. LOVICK: I love to hear somebody dip into the Apocrypha. I think that's marvellous.

One other quick question. Can the Attorney-General advise us whether in fact this particular amendment is in response to a specific and direct request from the Law Society?

HON. B.R. SMITH: No, it's just to allow the appointment of more than ten a year, that's all.

MR. ROSE: Since we're not going anywhere tonight anyway, I wonder if the minister could outline for us the

[ Page 2314 ]

purpose of the honour of QC. Is this prestige which is accorded a lawyer? We all know that judges are frequently lawyers who have gone into politics; that's why they're judges.

I have privilege in here. Close your mouth, Minister of Culture (Hon. Mr. Reid). If you're going to be the Minister of Culture, you can't stay there with your mouth open.

Other than doubling the size of one's bill, is there any particular reason why somebody should be accorded these illustrious, prestigious initials of QC — quick cash?

HON. B.R. SMITH: Well, it's an ancient honour that was accorded to barristers and goes back to the seventeenth century. The criteria used for the appointment of Queen's Counsel are as follows: professional integrity and good character, along with outstanding excellence in the practice of the legal profession as evidenced by one or more of the following: (1) being generally acknowledged as a leading counsel; (2) recognition by other members of the profession as an exceptionally gifted practitioner; (3) the demonstration of exceptional qualities of leadership in the profession, including the conduct of the affairs of the Law Society, the Canadian bar, and other lawyers' organizations; and (4) outstanding work in the field of legal education or legal scholarship.

MR. LOVICK: Enfin, Mr. Chairman; this is positively my last observation about this section. Given that the minister shared with us the apocryphal tale about George Brown, I would just like to end this discussion of QC, from this side at least, by reminding him of the definition of a lawyer provided by Jonathan Swift in the eighteenth century. He said that lawyers are a society of men brought up from their youth to believe that black is white and white is black, and to prove so according as they are paid.

Section 79 approved.

On section 80.

MS. EDWARDS: Mr. Chairman, it is hard to follow an act like that, but I have a question for the Minister of Forests. I wonder if he would explain to me why he thinks it is reasonable to remove the requirement to publish or advertise all applications for licences and permits regarding range.

HON. MR. PARKER: Mr. Chairman, I was lost in some correspondence. Would the member mind asking me that question one more time?

MS. EDWARDS: My question is in relation to section 80. It's an amendment of the Range Act. The short explanation — as we are calling it — on the other page says that it removes the requirement "to publish or advertise all applications for licences and permits or renewal of them." I want to know why the minister would think that is no longer necessary.

HON. MR. PARKER: Getting my mind around the Range Act here, it's a housekeeping matter. In most cases range renewals are to the same people again. If the range right has been retired by government, or relinquished, or has been cancelled, and it becomes a surplus range right that can be offered, then it's advertised; but for a renewal it's not advertised. You're just dealing with the licensee.

MS. EDWARDS: I imagine the minister is aware that a lot of the range is managed, particularly in the East Kootenay area, which was a pilot for this method in the province through coordinated range management plans. These plans mean there's any number of users involved in doing the planning for range use. As you may know, in the East Kootenay in particular there is a great deal of, shall I say potential for conflict, over the use of range. If in fact the minister has given to his particular range manager more power than he had before and is not going to involve the other people who are normally at these coordinated range management planning meetings and so on, could he explain why he has decided to do so?

HON. MR. PARKER: Range rights are tied to commensurability of the licensee's home ranch. Commensurability means the capability of the home ranch to carry stock through the winter months. The grazing rights attached to the home ranch are tied to the commensurability figure. When you're in beef production you like to have some continuity on your range, and when your term comes up as far as your range rights are concerned, you have the opportunity to renew them. They're not put out to competition unless you're in default or if for some other reason you've lost that range right.

MS. EDWARDS: The question is, why would you allow this kind of change, perhaps, or application or continuation of the permit or licence for the range to go, when in fact there is a great deal of conflict about who wants to use the range? It isn't just beef growers who want to use the range. Often the range is given for other uses. Certainly the people who are interested in the use of that range want to know who has the current licensed or permitted use, they want to know who has applied for it, and they want to be able to be ready to make licence and permit applications themselves.

[9:45]

HON. MR. PARKER: For continuity in the livestock industry, whether it's beef, horses, sheep, whatever, the incumbent licensee is entitled to renew his range fees. What we're saying in this amendment is that we may or may not advertise it.

MS. EDWARDS: What about other users of range, such as municipalities who have some uses designated in the coordinated range management plan; for example, for watershed use? What about Fish and Wildlife, which often has designated use within the coordinated range management plan for range for wildlife? All of these things are there. There are other uses as well. There are recreational uses.

It seems to me that, when we've gone to as much trouble as this province went to to establish the coordinated range management planning as a method for the year-to-year management of the range, all of a sudden to say that we don't need to keep this an open process, and there are two people who can decide whether in fact that needs to be open and public.... Perhaps there will be more conflict.

HON. MR. PARKER: The coordinated range management plan is an integrated land use plan; it's not a single-use plan. All the players that were together at the time the plan was put together continue to be the same, unless for some

[ Page 2315 ]

reason the grazing-rights holder loses his rights, and then there may be a new player.

So everybody is in it. Everybody understands what the situation is. It's an integrated land use; it's not a single-use. I don't understand why the member should raise such a question if she understands the process.

MS. EDWARDS: The question was: why not? I just feel I haven't got an answer from the minister.

HON. MR. PARKER: It's optional.

Sections 80 and 81 approved.

HON. B.R. SMITH: I would ask to postpone sections 82 to 98 inclusive.

SOME HON. MEMBERS: Agreed.

MR. CHAIRMAN: Sections 82 to 98 inclusive are stood down.

Sections 99 to 104 inclusive approved.

On section 105.

MS. SMALLWOOD: I'd like to deal with all of the sections dealing with the Water Act. That would be sections 105 to 111, but I'd like the Minister of Environment (Hon. Mr. Strachan) to be here to do that.

MR. CHAIRMAN: Before the member proceeds, to make this simpler I think we could simply consider all those sections in one fell swoop: sections 105 through 111, unless there's any major disagreement. If not, that's what we'll do.

MS. SMALLWOOD: I'd like to start off by having the minister explain to the House what appears to be a centralization of licensing for water, which excludes the consultation from other ministries. In particular, this excludes the involvement of the A-G, Lands, Housing and Agriculture.

HON. MR. STRACHAN: At the outset, I'll begin with section 105, fluming purposes, water licences.... We haven't had fluming: that's where you put logs down a flume. As a matter of fact, I checked with the Minister of Forests (Hon. Mr. Parker) and also the Minister of Transportation (Hon. Mr. Michael), who spent some time in the logging industry. I think the last one was in Chase in the thirties; so we deleted that act.

The subsequent sections with respect to removing the power for certain ministries to formally object is reorganization of government. We now have a deputies' committee of ELUC who meet regularly and do all this type of thing, That's been in place for some time. Of course, ELUC would discuss these issues if it were serious, so there's another mechanism in place. I recognize the member's concern that it appears to be putting everything in the hands of the minister and taking away comment from other ministries. But that process of clearing things is covered under another procedure.

MS. SMALLWOOD: Perhaps the minister could further explain how the public would have access to that sort of discussion and that information, if other ministries are not empowered to comment on major changes. I can think of several different developments in the province that have major impact on other ministries and the whole licensing and application process. It is of utmost importance to the public that they hear where those conflicts arise and that they hear comment from other ministries and understand the interest that those ministries are representing.

HON. MR. STRACHAN: Water licences are.... Where one is issued under the Ministry of Environment, under the Environment Management Act, it would be open to appeal — if there was one — to the Environmental Appeal Board. It's a utility as well, so there's adequate procedure for public hearing, public process. We're simply streamlining a government process that has not been used for some time now.

MS. SMALLWOOD: What the minister is saying, if I understand him correctly. Is that the public has ample opportunity to have some input in the appeals process. In other words, if the people of this province don't like what the minister is doing with the waterways in this province, then they can appeal it. Quite frankly, that's not particularly conducive to good planning, nor is it particularly conducive to developing some consensus on major developments. I think, in particular, of the development that the government has talked about in regard to Site C.

HON. MR. STRACHAN: This deals with fluming, and it deals with the Water Act and water licences. Site C and that type of process would come under the Utilities Commission as an energy project, and it's quite clear in that legislation — of the appeal process that can be put in place.

MS. SMALLWOOD: Mr. Minister, I am not talking about the appeals process: I am talking about the planning. I'm talking about the involvement of different ministries in that planning process. I'm talking about what appears to be a closing or a centralizing of that process, a process that at the very best has not served to be as open as perhaps some community groups and effective individuals may have liked it in the past. Indeed, what should be happening when we're dealing with water management in the province is quite the opposite of what's going on here. Rather that saying that particular ministries have no say in the granting of licences and permitting, we should instead be undertaking a process of accessing information, of making this process open, and of making the planning and decision-making of the use of our water resources a more public one. Instead, what the minister is doing is suggesting that he will have the ultimate say.

HON. MR. STRACHAN: No. We don't take the ultimate say. It may read that way, but I can assure the member that the deputy ministers' committee ensures that all the references to other ministries are followed. This is dealing with water licences and certainly no major water or energy projects.

With the greatest respect, Madam Member, it's not as onerous as you might see it as being, particularly when we consider the right of ELUC, which is in place by statute, and the right of anyone to object to a Ministry of Environment decision by virtue of the environmental appeal board.

MS. SMALLWOOD: On section 40, what that says is that the Deputy Ministers of Agriculture. Attorney-General

[ Page 2316 ]

and Lands, Parks and Housing cannot appeal a granting of an application. So not only are these ministries not going to be involved in the actual licensing process, but they don't have the power to appeal either.

HON. MR. STRACHAN: Well, it's a consequential amendment. All I can do is restate to the member, Mr. Chairman, that given the way that the deputy ministers' committee works now within ELUC and within the deputy ministers' committee, adequate and fair hearing is given to all ministries with respect to water licences. The process is in place now and has been in place for some time, and we're presenting these amendments to eliminate an old process that has not been used for some time.

MS. SMALLWOOD: The repeal of section 8(2) — and this is 106 — removes the requirement that the controller or regional water manager notify the deputy ministers of Agriculture, Parks and Housing, before issuing a licence. They don't have to notify them, even with that provision repealed. The areas that have specific concern and specific knowledge and specific interest don't have the ability to appeal. They are not involved in the planning, they are not notified of the licence, and they can't have anything to say about it. If they should find that there is information relevant to the process, they have no opportunity to appeal either.

I'm afraid that again we're in a situation where the minister is saying: "Trust us." The amendments to this legislation — the information that is before us — tell us it is a complete centralization, and it's completely opposed to any understanding of comprehensive coordination with other ministries and other interests.

HON. MR. STRACHAN: Mr. Chairman, all ministers, all deputies, are involved in the case of a water licence. There is a deputy ministers' committee of ELUC, which includes all the ministries that were in the other act, and more, as a matter of fact: it includes Tourism, Lands, Parks and Housing, Forests, this ministry and Agriculture, and the process for other ministries to have input into the Water Act and water licences is expanded.

Sections 105 to 112 inclusive approved.

The House resumed; Mr. Speaker in the chair.

HON. MR. STRACHAN: Mr. Speaker, pursuant to the adjournment motion made at 6 o'clock this evening, I move the House do now adjourn.

Motion approved.

The House adjourned at 10 p.m.