[ Page 2537 ]

CONTENTS

Routine Proceedings

Presenting Reports –– 2537

Ministerial Statement

Dismissal of Mr. Ron Butlin. Hon. Mr. Reid –– 2537

Ms. Edwards

Committee of Supply: Ministry of Transportation and Highways estimates.

(Hon. Mr. Michael)

On vote 61: minister's office –– 2 537

Mr. Miller

Mr. Sihota

Mr. Vant

Mr. Ree

Mr. R. Fraser

Mr. Lovick

Royal assent to bills –– 2549

Committee of Supply: Ministry of Transportation and Highways estimates.

(Hon. Mr. Michael)

On vote 61: minister's office –– 2549

Mr. Stupich

Mr. D'Arcy

Mr. Gabelmann

Ms. Smallwood

Mr. Serwa

Mr. Long

The House met at 10:05 a.m.

Prayers.

HON. MR. REID: Mr. Speaker, it gives me a great deal of pleasure to introduce the administrator of the district of Coquitlam, a former mayor and honorary Kinsman from the district of Coquitlam, Mr. Jim Tonn.

Hon. S. Hagen presented the thirteenth annual report of the Universities Council of British Columbia.

Ministerial Statement

DISMISSAL OF MR. RON BUTLIN

HON. MR. REID: I wish to make a ministerial statement to clarify and set the record straight on the debate which has taken place in the House relating to Ron Butlin, who served as chairman of the B.C. Games. I first want to say that during these discussions I did not intend to mislead, nor do I believe that I did mislead, the House and its members. Clearly, however, misunderstanding has arisen, and if I contributed unintentionally to that, I apologize. It is in that context, in the interest of clearing up the situation, that I make this statement.

In my comments and responses on the question of Mr. Butlin in the House last Friday and yesterday, I tried to make the point that he had not been fired, because he was in fact still working under contract to my ministry. While Mr. Butlin had received a letter dated May 27 which would have terminated his contract with the government effective May 29, that notice was rendered null and void by a new contract which was mutually agreed to by Mr. Butlin and my ministry.

I believe, therefore, that my comments that he had not been fired were valid in the context of the second contract and the fact that Mr. Butlin was still in our employ. However, I might point out to the House that a condition of the second contract was that neither consenting party would make any public comment about its terms and conditions. Mr. Butlin, for reasons of his own, has now seen fit to violate that agreement. For my part, Mr. Speaker, I will not make any comment on it or discuss its provisions, and I have requested legal advice on the employment status of Mr. Butlin because of what appears to me to be a violation of that agreement.

I hope that this statement ends any misunderstanding that may have arisen. I repeat that my comments were made on the situation as I saw it, without any intent to mislead the House or its members.

In closing, I want to assure the House that our B.C. Games program remains as strong as ever, and the plans and preparations for the Summer Games in Delta, to be staged in the municipality, are on time and on schedule.

MS. EDWARDS: Mr. Speaker, the minister is suggesting that it's fair to say that because a contract employee, as he was, is still on contract, he was not terminated. I believe that that is not a reasonable answer to the question that was put to Mr. Reid in the House. The question that was put to Mr. Reid was....

MR. SPEAKER: Hon. member, would you please refer to the member as the Minister of Tourism.

MS. EDWARDS: I'm sorry. The Minister of Tourism was asked whether Mr. Butlin had been terminated; he was asked whether he had been fired. The minister said that that was not the case. In fact it has now become clear that the whole series of events between the ministry and Mr. Butlin was begun and initiated with a termination notice that came from the ministry. We believe that it's one of the foundations of our system, and it's expected, that when a question is asked in the House, the minister should answer with the whole truth. Therefore I have continued to ask the minister to answer that question fairly. When the evidence came up, we still didn't get a straight answer, and I would suggest that that is still the essence of the issue.

MR. MILLER: I rise on a point of order, Mr. Speaker. This subject has been the focus of considerable debate, and indeed is a serious matter for the House. I think it would only be appropriate that, if the minister is planning to make a ministerial statement regarding a matter of such importance, some notice be given to this side of the House, so that the appropriate people can be here to make an appropriate response. It's obvious that the member has had to dash into the House in order to be here, and I think that's a valid

SOME HON. MEMBERS: Order!

Orders of the Day

HON. MR. STRACHAN: Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF
TRANSPORTATION AND HIGHWAYS
(continued)

On vote 61: minister's office, $235, 299.

MR. MILLER: Mr. Chairman, when we left off last night we were discussing some aspects of vehicle safety. A quick question before I get into the whole question of commercial vehicle safety is with regard to the aggregate used for sanding on our highways. I don't know if this problem is peculiar to the north or not but, when we drive the northern highways in the winter, we find that we're not using sand anymore; we're using gravel. We're using some fair-sized gravel. If you ever get stuck — as I did two years ago — driving Highway 16 in December, it's a pretty horrendous experience. It's like driving through a minefield, particularly when you've got transport trucks going by you or ahead of you. A short jaunt in the north is about 500 miles from Prince Rupert to Prince George.

I see the Minister of Forests (Hon. Mr. Parker) smiling. He understands the problems of the north, and I'm sure the member for South Peace River (Mr. Weisgerber) understands the problems of the north, although they haven't spoken about them too much. But there really is a need, I think, to improve the quality of the aggregate used in sanding. That short trip can cost a motorist his headlights, probably his

[ Page 2538 ]

windshield, and probably a fair amount of paint on the front of the car.

Could the minister just deal with that question before we get into the whole question of commercial vehicles?

HON. MR. MICHAEL: Mr. Chairman, the member is certainly correct about the image — and I would have to say, more than the image, the fact — that this question of sand on highways is certainly a problem in the province of British Columbia. It seems to be more of a problem in the north than it is in other areas of the province, and I suppose it is a result of the ice conditions and snow. We do have a fair number of other sections of the province, but I get a tremendous number of complaints from the northern regions about the size of our so-called sand.

The ministry's standard is to crush the material to a maximum size of five-eighths of an inch. The reason for that particular size is that if you put plain sand on a snowpack or ice, the sand would perhaps not give any traction and would seep into the ice or snow, resulting in very poor traction and thus not doing the job. I question the five-eighths size. I'm now looking at the cost of experimentally reducing that five-eighths to a half or three-eighths.

I can tell you that through ICBC they have also researched the cost of windshield replacement in the last fiscal year. It's an astonishing amount of money. I was thunderstruck when I heard the amount. It's in excess of $20 million a year that we're spending replacing windshields.

MR. D'ARCY: That's just ICBC?

HON. MR. MICHAEL: That's just ICBC. That does not include the deductible. What I am doing now is looking at what it would cost to reduce the size from five-eighths down to, say, three-eighths. If you could do that for $5 million and reduce the $20 million down to $15 million, you've got a break-even situation, and anything below that would be a saving. So there's something there to look at. I can also say that the $20 million does not include the headlights or the paint jobs as a result of this problem. It is truly a problem and is really brought to light when I travel the north country, because it is not unusual to get into a car in the northern part of the province and see the windshield with three, four, five or six very large pit marks. The average person up there tells me they don't even bother replacing a windshield until the season is over, because it's that bad.

Yes, it's a problem, and we're looking at it and will continue to do so.

[10:15]

MR. MILLER: Perhaps, Mr. Minister, you might look into the feasibility of using all those broken windshields by grinding them up and using that as your aggregate.

Returning to the question of commercial vehicle safety, there have been numerous expressions of concern. Spot-checks conducted in British Columbia reveal a fairly high level of defects in those commercial vehicles. The minister has talked about it and has put out releases on the National Safety Code and how that will improve the situation. I wonder if the minister could briefly advise how that work is progressing. When are we going to see the implementation of that code? I realize it involves the federal government and other provinces. Perhaps you could give us a very brief status report in terms of the development and implementation of that code.

HON. MR. MICHAEL: Mr. Chairman, the inspections that we have.... Our program in British Columbia is working. We are finding that it's working positively. The number of unsafe vehicles during our inspections, while still high, is showing signs of improvement. We are working very closely with the private sector, the owners of the fleets. Many of them now have very good facilities to bring their vehicles up to standard; they are regularly inspected. The culprits, perhaps, are the very, very small operators, by and large.

Yes, we are working with the federal government on the National Safety Code. While the date for its implementation is January 1, 1988, I'm not sure whether all of the provinces are going to be able to meet that deadline, but we do have strong support from the federal government, and indeed funding from the federal government to assist us in setting up the program. While we in B.C. have had a fairly high standard, come January 1, 1988, interprovincial trucking between all the provinces in the Dominion of Canada will have to live up to the same standards. But we are not nervous about meeting those standards, because B.C. has always had much more stringent standards than our neighbours both to the east and to the south.

MR. MILLER: Continuing with that, my concern is that we really have developed something on paper that we haven't taken the corresponding steps for, in terms of monitoring and all the other factors. In fact, I note that in March a spokesman for the Canadian Trucking Association, although he welcomed the news that this would be developed, also said that it's very unlikely that it would be in operation by January 1. I'm wondering if we are doing enough.

I note that they also express some concern about the impact of deregulation in terms of the whole question of safety, in that if we look at some of the American experience.... And I don't think that there's an exact parallel to the American experience, but certainly you should look at other jurisdictions and see what the impact of that has been, where we see a number of new people coming into the industry and the potential existing for a lowering of standards as the business gets more cutthroat. There's some feeling on the other side that that's a preferable situation and that that kind of competition is actually good for consumers and the industry. Nonetheless, there are some detrimental side effects, and that's one of them. As people come into the industry who perhaps don't have the experience or who don't have the kind of capital to back themselves up — they're fairly marginal operations — you see the squeeze on in terms of maintenance and of the number of hours that drivers are spending behind the wheel.

I wonder if the minister would agree that it would be preferable to have this code completely worked out. I know we talked yesterday about legislative change in British Columbia, but would the minister agree that it would be preferable to have this code worked out and in place — in other words, an effective code — before we really move into that whole area of deregulation, so the code could cover those possible detrimental side effects?

HON. MR. MICHAEL: Mr. Chairman, we do not have any direct control over what the federal government is doing, and my understanding, if my memory is correct, is that the

[ Page 2539 ]

proposal is to have both the dereg and the National Safety Code click in at the same time, January 1, 1988. As I say, whether they make that date or not remains to be seen, but we in British Columbia at this very moment are putting the machinery in gear to add additional staff and make provisions for a stepped-up program of commercial vehicle inspections, and we will indeed have additional staff at weigh scales and areas such as that to look after the commercial sector of transportation.

MR. MILLER: Mr. Speaker, changing subjects again, I want to get back to something we talked about yesterday which I want to explore in a little more detail, and that's the construction of the Coquihalla Highway thus far.

I asked the minister a question the other day about a contract that was let for some $5.5 million. It came in over budget and the minister talked in his very brief response about the seasonal nature of the work. I'd like to explore that just a little bit more.

The contract in question was let to Kerkhoff Construction Group Ltd. of Chilliwack — project B-2882 — the Great Bear snowshed on the Coquihalla Highway. First of all, can the minister advise when that project was commenced and when it was completed? Would he confirm the value of the original contract that I've cited, and would he also advise the committee what the final cost paid by the ministry was with respect to that contract?

HON. MR. MICHAEL: Mr. Chairman, that's a very good question and a very good issue. The original bid price was $5.5 million. The total payment to the contractor was $10.5 million. Some of the reasoning is the fact that the tender was let with the understanding that the work would commence on a certain date. Unfortunately the contractor involved was not able to get into the area for some two months after the date that he was told he could enter the area.

He had worked and bid on the project on the basis of completion by November 1985, and we all know what the Coquihalla is like in that particular region of the project — a tremendous, heavy snowload factor. As a result of the two-month delay in his getting into the project, of course, he wasn't able to complete the project until a long time after that, having had to work through the very heavy winter months. There was an extremely heavy snowload factor, and it was very expensive to keep the project going.

Along with that — again no blame on the contractor — he had difficulty as a result of our efforts and not having adequate access. He had access to only part of the site, again resulting in delays. Also, the contractor had poor rock, which was not anticipated. Much more money than expected had to be spent to set these anchors in place as a result of the poor rock. Along with that, as in many other major contracts that have been let, there were other extra work items that our staff had laid on the contractor which resulted in this figure. It's perhaps one of the worst overruns I've experienced since being the minister, looking over my shoulder at projects in recent times. That certainly cost the taxpayers a lot of money.

However, I have to say that the projects of Coquihalla I were indeed tendered at a point in time when the economy was extremely soft in the province of British Columbia. There was an awful lot of equipment sitting idle, and the province did get tremendously good bargains by and large, as far as the projects are concerned. But that particular one did have a very heavy overrun.

MR. MILLER: During that discourse, the minister didn't give me any firm dates, which is what I asked for: when the project commenced and when it was completed. Has the minister done any investigation? Has his ministry conducted any investigation with regard to the project and where the overruns occurred specifically? First of all, could the minister advise of the dates: when the project was actually started; when the project was completed; and whether any investigations were done with regard to the project?

HON. MR. MICHAEL: Regarding the dates, Mr. Chairman, he was originally scheduled to start in June; he did not start until August. That's what I said earlier; there was a two-month delay. The original completion was scheduled for November 1985; in fact the project was not complete until February 1986.

On the question of managing and investigating the costs, Mr. Chairman, I can assure the member that every single bill that enters the Ministry of Highways for payment is perused and investigated and examined. If there is any doubt, it goes to a more senior official to make a judgment decision. We certainly had a look at all invoices, as we do throughout the entire system, prior to authorizing payment.

MR. MILLER: Mr. Chairman, my information is that the contract was signed on July 18, so it appears there was maybe a one-month delay. Would the minister advise whether any extraordinary efforts were made by his ministry in terms of this particular contract? For example, was an engineer by the name of Rokeby hired by the Ministry of Highways to sort through the invoices on this particular project?

HON. MR. MICHAEL: The person mentioned by the member was the resident engineer on the job. While it's true the contractor was not able to start construction until July 17, he did not have access to the whole site until August. So that's the explanation for that.

I repeat: the overruns were extensive, but our ministry is satisfied that the invoices submitted were justified, and payment was authorized.

[10:30]

MR. SIHOTA: First of all, let me say that it is my information that the contract was dated July 18; it may well have been executed a day or two before that.

The question is with respect to the role of Mr. Rokeby. I'm not too sure what the usual job of the engineer is on these projects. Can the minister confirm to this House that Mr. Rokeby was given specific instructions to review all of the invoices with a greater level of scrutiny than is usually the case?

HON. MR. MICHAEL: Mr. Chairman, I can say that the answer is no, but in answering no, I can assure the member that the ministry scrutinizes and examines all bills very closely before payment.

MR. MILLER: Mr. Chairman, with regard to the scrutiny and the investigation by the ministry, was any concern expressed at any time about other reasons for cost overruns — for example, double billing?

HON. MR. MICHAEL: Mr. Chairman, I can say that from the ministry's point of view, knowing that there were a

[ Page 2540 ]

lot of problems out there as a result of the things I stated earlier, we have no reason to believe that there are any unusual submissions or any cause for any extra concern over any other project that we were doing at the time.

MR. SIHOTA: A question, then, for the minister. He says that he has no reason for concern. The question is: at the time, did the ministry have any concerns about either false invoices or double billing on the project, and did it scrutinize the invoices that were submitted with a view to determining whether or not there was indeed double billing or false invoices submitted?

HON. MR. MICHAEL: The answer, Mr. Chairman, is no.

MR. SIHOTA: Is the minister saying that his ministry had no concerns at all at any time about double billing or false invoices with respect to this project?

HON. MR. MICHAEL: Well, the answer, as stated earlier, is no. We examine all invoices very closely before payment.

MR. SIHOTA: Again to the minister: were any allegations of double invoicing or false invoicing brought to the attention of ministry officials with respect to this project?

HON. MR. MICHAEL: Mr. Chairman, as to whether there were any allegations brought to us for investigation within this ministry, as far as the ministry is concerned, the answer is no.

MR. SIHOTA: Is the minister then saying that he's aware of allegations brought forward to other ministries?

Interjections.

MR. SIHOTA: Mr. Chairman, a question through you, again to the minister: could the minister then elaborate on the nature of those allegations and perhaps inform the House of which ministry those allegations were directed to?

HON. MR. MICHAEL: Mr. Chairman, I would suggest to the member that I am not prepared to speak on behalf of another minister. If the member has questions he would like to ask of another minister, he should either do that during that minister's estimates or during question period.

MR. MILLER: I wonder, then, Mr. Minister, since you're not prepared to talk about what the allegations were and who they were made to, but you have conceded that you are aware of them.... Going back in terms of your previous responses, if you were aware of allegations, why, in the course of your investigation or checking into a project that really had doubled in size...? It's pretty unusual for a project to.... It's not unusual to go over budget, but it's pretty unusual to double — to go from $5.5 million to $10 million. If you were aware of some allegations of double billing or things that weren't right, why did you not investigate that matter yourself internally within the ministry?

HON. MR. MICHAEL: I did not at any time say that I was aware of allegations regarding double billing. I was aware of allegations. I was not aware of the specifics of the allegations. I repeat, Mr. Chairman, perhaps that question could be taken up in detail with the minister involved.

MR. SIHOTA: Mr. Chairman, the minister says that he wasn't aware of allegations of double billing, but he was aware of allegations. Could he inform the House as to what allegations he was aware of?

HON. MR. MICHAEL: Mr. Chairman, I am not aware of the specifics of the allegations. I am aware that there indeed were allegations, and I have all of the respect in the world for the ministry that is involved in the investigation of those allegations. I have no reason to have had concern in my ministry, because there were never any specific results indicating any negative action, any wrongful action, brought to my attention that would cause me to take action to impose any holdbacks.

MR. SIHOTA: It's very interesting. I take it the minister is confirming that the matter is being investigated by the Attorney-General ministry. If I'm wrong in that, I would ask the minister to correct me.

Once the minister became aware of allegations — so far he hasn't said what those allegations were — why did the minister choose not to investigate it himself? It seems to me somewhat strange. If there are allegations that came to the attention of the ministry with respect to a project that had doubled in cost, it should have been a matter of more than just passing interest to the minister. It seems to me that the minister surely must have investigated. Accordingly, I am wondering what steps he took to investigate once he became aware of these allegations.

HON. MR. MICHAEL: I repeat that the question of the details of the allegation should properly be addressed to the minister who was involved with that particular subject.

As far as my role is concerned, I am completely satisfied with the competence of my staff and with the control provisions that we have within our ministry. I am assured by my staff, and was assured by my staff, that there was no reason for us to get involved in investigating allegations. That is not the role of this ministry. The role of this ministry is one of managing Highways, and in managing the Ministry of Highways we set up planning, we do our organization and we set up control procedures, which are the elements of management. In our control procedures, we have a system of checking and double-checking to make sure that invoices as submitted indeed have proper authorization from competent people who have been appointed to fill that role and authorize payment when justified. I am at this point, and have been since being the minister, satisfied that we have adequate control procedures in place within the ministry.

Anyone having any allegations can take them to the Attorney-General, and he or the RCMP will do the investigations. But it is the not the role of this ministry.

MR. SIHOTA: I want to thank the minister for confirming that the Attorney-General ministry was involved in the investigation of this matter. Can the minister unequivocally say to this House that there was no double invoicing or false invoices submitted to the ministry with respect to this project?

[ Page 2541 ]

HON. MR. MICHAEL: The answer to the question is no. Just to correct the member, I would say on the floor of the House that if someone has allegations, he should take them to the Attorney-General. As to whether or not the Attorney-General was involved in allegations on this issue, I would ask the member to perhaps ask the Attorney-General during question period or his estimates to clarify that aspect, because I am today not aware of whether or not the Attorney-General was directly involved. I do know that there were allegations.

MR. VANT: Seeing that the Cariboo constituency has more public roads than any other constituency in the entire province, I feel entitled to make a few remarks. Indeed, I am standing largely because of some of the remarks made by the hon. member for Prince Rupert (Mr. Miller) just last night. He seemed to imply that our hon. minister's immediate predecessor was somehow unfair, that he paved all the roads in the Cariboo and that the roads in Prince Rupert riding were somehow ignored. I want to assure this House and the minister that there are still over 5,000 kilometres of gravel and dirt road in the Cariboo constituency, whereas in Prince Rupert, by the latest figures I have, there are a measly 39 kilometres of gravel road. Every other public road in the riding of Prince Rupert is paved.

I get the sense that the hon. minister is very fair, as his predecessor was, in looking after the roads throughout the province. My only disappointment this current season is the decision to shelve.... I'm talking about the main Highway 97. Because there is just a handful of socialists, like to Prince George North and Prince Rupert, that like to go up our main Highway 97.... I am a little disappointed that the one project from mile 86 to mile 93 on Highway 97 has been shelved for this season. I am aware, of course, that it is very difficult for the minister, seeing that the budget is down about 12 percent, and he's had to make some very difficult decisions. I am disappointed that the main north-south highway — that little project there — has been shelved. That's my only disappointment.

HON. MR. MICHAEL: Mr. Member, I appreciate receiving suggestions during estimates from members such as yourself. Speaking for the record, that member has been working very hard with me since his election in fighting for additional improvements to that great constituency in the Cariboo. He has repeatedly pointed out to me that on a percentage basis — in kilometres — it has more unpaved roads than any other constituency in the province. I have a lot of sympathy for him because the constituency of Shuswap-Revelstoke is very close behind him.

MR. MILLER: I didn't follow all the remarks by the second member for Cariboo (Mr. Vant), but I did hear the name of the previous Minister of Highways mentioned. I would like to assure that member and his partner in that great constituency which has received the benefit of so much highways work, that I have every respect and regard for that member.

Returning to the subject at hand, the minister said that he can't confirm that there were no false invoices filed with respect to this project. Would the minister then confirm that there were false invoices filed?

HON. MR. MICHAEL: Mr. Chairman, I have no knowledge of that.

MR. MILLER: The minister denies any responsibility. Surely when his ministry is paying out double the amount originally agreed to, it must be a matter of some concern within the ministry — if not the minister himself. Could the minister advise if there are current investigations going on and who would be conducting those investigations?

HON. MR. MICHAEL: There are no current investigations going on to my knowledge. I can also say that on this particular project in our control procedures, which involved the control division and our resident engineers, there were a number of claims reduced or disallowed. Again, that is not unusual in major projects of this size. There is continually an evolution of areas of dispute between contractors and staff; that's why we have a very tight control procedure on payment of invoices. We review them, analyze them and make judgment calls.

Yes, there were a number of claims reduced and disallowed on this project. But I repeat: this is not at all unusual. There is a continual dialogue and argument taking place between staff involved in the payment of invoices and the major contractors. I can tell the member that with the system we have in place, these disputes are settled and resolved. It's very rarely that it is ever brought to my attention by a contractor that there is bitterness or anger over a submitted claim. We do have the odd one, but by and large, I think the system is working quite well within the ministry.

[10:45]

MR. MILLER: I've been involved in one project of some significant size; in fact, the value is about $5 million. As the chairman of the organization building that project, I was concerned every step of the way about cost overruns. Could the minister give us some idea of the kinds of invoices he has briefly described that were disallowed?

HON. MR. MICHAEL: To do something like that would require a great deal of time and notice. Had the member given me that notice, I would certainly have attempted to have that with me today. But to get into that type of detail on precise examples or samples, I'm not prepared to draw on those on short notice.

I can tell you that it's a continuing process within the ministry of what is fair and equitable, and what is right or wrong. We have experienced staff in place — highly qualified engineers and accountants — to make those decisions. I'm sure that we're no different than any other ministry or Crown corporation or private sector corporation in that process. We analyze and decide based on evidence and invoices and advice of our on-site engineers and control personnel.

MR. SIHOTA: Is it not true that this matter was under investigation by both the RCMP and the Attorney-General's department?

HON. MR. MICHAEL: Mr. Chairman, my only knowledge is that it was under investigation by the RCMP. There were allegations taken to the RCMP; that's my only knowledge. To my knowledge, the Attorney-General was not involved. It's unfortunate the Attorney-General (Hon. B.R. Smith) is not here today to answer the question himself I repeat that it would be better put to him during question period or estimates. My knowledge is limited to the RCMP.

[ Page 2542 ]

I'd have to leave the question of the Attorney-General to be answered by the Attorney-General.

MR. MILLER: With regard to that investigation then, would the minister advise whether he or his departmental officials were contacted and supplied information to the RCMP with respect to that contract?

HON. MR. MICHAEL: The answer is no.

MR. SIHOTA: That's amazing, Mr. Chairman, incredibly amazing. A question to the minister: is it not true, Mr. Minister, that when the contract exceeded $10 million, ministry officials asked the contractor Kerkhoff to stop submitting any further invoices?

HON. MR. MICHAEL: Yes, Mr. Chairman, that is true.

MR. SIHOTA: Will the minister confirm that the reason for that was that the ministry had concerns about overbilling, false invoices and double invoicing?

HON. MR. MICHAEL: My information is that we had no reason to suspect any double billing or wrongdoing. It was just a matter of the total cost of the project.

MR. SIHOTA: A question to the minister again. Could the minister then explain to the House why at that point the ministry officials asked Mr. Kerkhoff's firm to stop submitting invoices?

HON. MR. MICHAEL: Well, Mr. Chairman, we do that on any project where there are major overruns.

MR. SIHOTA: Again to the minister. Was the project complete at that time?

MR. CHAIRMAN: Would you repeat the question, please, hon. member.

MR. SIHCfrA: Was the project complete at that time?

HON. MR. MICHAEL: Yes.

MR. SIHOTA: But I'm sure the minister would also agree with me — and he can correct me if I'm wrong — that the invoices that were coming in after that point had been surpassed were still in relation to work that had been performed on the project. Is that not true?

HON. MR. MICHAEL: The answer is yes.

MR. SIHOTA: It seems to me somewhat peculiar that the ministry would not accept as policy invoices after a certain quantum of money has been expended on the project, unless of course it wants to involve itself in litigation. Indeed, if the invoices are legitimate, then they must be accepted and be paid for under the contractual obligations between the ministry and the contractor. If they are not legitimate, then of course the ministry has every right to say that they won't accept them. I can only assume that that third branch that I just laid out right now is the one that applied. Am I correct in that: that the ministry chose, after the figures surpassed $10 million or $10.5 million, not to accept any further invoices because it was concerned about the legitimacy of invoices?

HON. MR. MICHAEL: Basically, Mr. Chairman, the answer to the question is no, but the reason for rejecting invoices at the point in time where they were rejected was, plainly and simply, that more information was required.

MR. SIHOTA: Would the minister tell the House, then, whether or not further information was supplied by the parties from whom it was requested?

HON. MR. MICHAEL: The answer is yes. Upon full analysis of the ministry by the staff and close analysis of the invoices submitted, those approved by the ministry were paid, and those that weren't were not paid.

MR. SIHOTA: With respect to the invoices that were not paid, would the minister agree that one of the reasons they were not paid was with respect to a concern the ministry had about the legitimacy of those invoices? Is that one reason, Mr. Minister?

HON. MR. MICHAEL: Mr. Chairman, it's very difficult to interpret the word "legitimacy." There may be some connotation that there is a wrongful or illegal action by someone, and certainly we never felt that way. We analyze bills as we do in every contract. We analyze the invoices, the reports of the project engineers, the resident engineers, people within the ministry who are involved in control procedures and make judgment calls every day of every year when bills are paid. If our staff feel that an invoice does not represent actual services rendered, then we question the invoice. If follow-up documentation that satisfies the ministry staff is not received, we have a procedure whereby the contractor can talk to someone at a very high level within the ministry to argue his or her case.

To give exact specifics of what was and wasn't paid is very difficult, but we in our ministry are satisfied at this time that in the total project, while very high, there was sufficient reasoning and full knowledge that his contract was indeed extended into the very heavy winter months. I'm not sure whether or not the minister for Esquimalt-Port Renfrew is aware of the type of snowfall in the Coquihalla, but I'm told it's not unusual to have 30 or 35 feet of snow on that mountain — working under very extreme conditions. As I say, the contract was not finished until February, with heavy winter snow months in December, January and February in that region. There were very expensive overruns — very unfortunate.

But we got the project open by the target date set down by the government. It was certainly of great benefit to the people of the province of British Columbia to have that project open for Expo. My information is, Mr. Chairman, that without the Coquihalla having been open for Expo year, the Fraser Canyon would have been in an intolerable condition due to tremendously heavy traffic, very frustrated drivers, and the very high likelihood of serious accidents.

I'm not sure whether the members opposite are aware of the tremendous benefits of the Coquihalla Highway and its relationship to safety — accident prevention, the number of lives saved by traveling that highway, particularly during the very busy Expo year. Up until the last two or three weeks, there had been only one fatality on that highway since it

[ Page 2543 ]

opened. I understand there was a recent one in which an individual hit an animal on the road. He wasn't wearing his seatbelt, and we've had our second fatality.

But there has been an extremely good safety record on the highway. It is well engineered, recognized by people throughout the length and breadth of British Columbia and, indeed, the Dominion of Canada. We're even getting letters from residents in the United States, writing the minister complimenting him on what a tremendous highway the Coquihalla is. I'm sure all members opposite would join the members on this side of the House in looking forward with great anticipation to the opening of Coquihalla 2 on September 4. We invite all the members to come to that great opening in Merritt and Kamloops to see the opening of the Coquihalla all the way from Hope to the great city of Kamloops. We're also looking forward to the further extension of the Coquihalla 3 into the Peachland area — hopefully by the fall of 1990.

MR. SIHOTA: I want to thank the minister for that commercial break, but I think we should get back to the point. I also want to thank him for referring to me as "minister." That will only be two or three years from now, at the next election, I hope, if the Leader of the Opposition has faith in my abilities.

I want to get back to the issue at hand. It seems to me, Mr. Chairman, if I may think out loud a bit here, that there were several projects on the Coquihalla Highway, because we know the government wanted to fast-track them for Expo. I'm sure many of them met with seasonal difficulties and heavy snowfall. I think we're all well aware of the problems in that area with respect to snowfall. But all of the contracts that took place during that time period were affected by the same seasonal factors, yet this contract sticks out as being one that doubled in cost to the taxpayers of this province. I'm not too sure, because I haven't checked, but I don't think that there are too many others over that same time period that doubled. Accordingly, I would venture to say that it's unlikely that the sole explanation for the doubling can simply be seasonal factors.

[11:00]

I also would say, as I think out loud here, Mr. Chairman, that it is difficult to reconcile, on the one hand, the minister's assurances that everything is above-board with, on the other hand, the capping at $10 million or $10.5 million combined with the RCMP investigation. I think it may lend more credence to the argument that indeed there were concerns with respect to overbilling and false invoicing.

With respect to those invoices., there were indeed, as the minister indicated in his opening comments when quizzed by my good friend the member for Prince Rupert (Mr. Miller).... When quizzed, the minister made a comment about extras, and I'm sure that some of that overrun is predicated on extras. I ask the minister this question: was the minister, during the course of his ministry's review of this whole issue, ever made aware of the existence of any agreements whereby Kerkhoff would submit invoices for extras under an understanding that if those extras were paid by the ministry, 40 percent of the payment would go to Kerkhoff Construction and 60 percent would go to the contractor submitting the invoice? Was the minister ever aware of any agreements to that effect?

HON. MR. MICHAEL: Mr. Chairman, the answer from our ministry is clearly no. I would say that if that member wishes to make allegations such as that and make statements along the lines of whether everything was above-board or not, he should probably make them outside the House.

MR. SIHOTA: Was the minister ever made aware of an agreement, then, with a firm called Specialized Coatings and Sealants with respect to this 60-40 agreement?

HON. MR. MICHAEL: The answer, Mr. Chairman, is no, I've never heard of the firm in question.

MR. SIHOTA: Would the minister please tell the House whether or not that type of an arrangement would be acceptable to the ministry?

HON. MR. MICHAEL: Mr. Chairman, I don't think I have to answer that question.

MR. SIHOTA: Under the terms of the agreement between the ministry and the main contractor — one of the Kerkhoff companies — could the minister tell the House what the agreement was with respect to wages to be paid to employees? Was there a fair wage provision? Were any wage rates stipulated in any of the contracts? Or were there any agreements that touched upon the rates payable to employees working on the project? Was that covered at all in the contract?

HON. MR. MICHAEL: Mr. Chairman, I think the member is well aware that we in the Ministry of Highways, and indeed in other ministries in the province, do not get involved in setting rates other than the rates as set out by legislation — as set out in minimum wages and requirements such as that; WCB requirements, CPP requirements and UIC requirements, which are both federal. But as far as instructing contractors on what wages they pay, the answer is clearly no.

MR. SIHOTA: The minister earlier on in the course of our discussion on this issue indicated that he was aware of some allegations that were made with respect to work performed on this project. Were there any allegations that came to the attention of the minister along the line that although invoices were submitted stating that workers were paid — for example, $25 an hour — that indeed they were actually paid a sum close to half of that?

HON. MR. MICHAEL: Mr. Chairman, my information was limited to a former deputy of mine informing me that there had been allegations made to the RCMP. My information now is that they were not sufficient enough to warrant further action by the RCMP. I never asked for specific detailed information on those allegations. I knew it was being handled by the RCMP, and I have all the faith in the world in their investigations and their inspectors and their procedures. The rest, Mr. Chairman, I would have to say is hearsay, from my perspective. I've heard quite a few rumblings of what has happened and what hasn't happened, not only on this particular contractor, but I've heard stories in the corridors and on the street on some of the things that allegedly go on.

We have a procedure in the province of British Columbia called due process. If there are allegations and charges to be

[ Page 2544 ]

made, they should go through the proper channels. As Minister of Highways, I am satisfied that the control procedures with the system we have in place are adequate and sufficient. The other ministries will do their job, and I'm sure they will inform me of any wrongdoings and things that I should involve myself in. To this point in time I have not had that advice from other ministries.

MR. SIHOTA: Mr. Chairman, once again returning to the point, during the course of rumblings — if the minister wants to put it that way, or allegations — was this issue of wages billed versus wages paid brought to the attention of the minister?

HON. MR. MICHAEL: Mr. Chairman, not officially. I would welcome a signed document, an affidavit, from some one who would like to lay it on the table and put it to the Minister of Transportation and Highways. I would welcome such information. To this point in time I have not received anything other than what I would have to refer to as either rumblings or hearsay, and I'm sorry, Mr. Member, but the Minister of Transportation and Highways cannot take action on such hearsay and rumblings. Put something on the table, let me have a look at a document that's got some meat in it, and we'll have a look at it. I

MR. SIHOTA: It strikes me, Mr. Minister, that there are several issues here, one of which is the whole issue of whether this ministry will move on these types of allegations to determine whether or not they are indeed true, instead of simply relying and hoping that other branches of government will do just that.

With respect to these allegations of wages billed versus wages paid, is the minister aware of any investigations on that issue by the employment standards branch?

HON. MR. MICHAEL: Mr. Chairman, the answer is no. Surely if the problem is as severe as the member opposite states, that someone somewhere, whether it be a subcontractor or an employee, would have come to the minister.... And my door is always open; I have never refused an appointment.... Certainly to my knowledge I have not refused an appointment as long as I've been the minister. My door is always open, and I've talked to people from all walks of life — individual citizens who have concerns. I've answered my mail and my telephone calls to a T, and if someone has a claim or a grievance or cause for concern, please, Mr. Member, have that individual come forward and talk to me. I may not be able to directly involve myself as the Minister of Transportation and Highways in resolving that person's dispute or allegation, but I can certainly see that proper action is taken if he has a cause for claim.

MR. MILLER: Mr. Minister, I don't know exactly when the ministry became aware and presumably the contractor became aware that there were difficulties with the contract, that it wouldn't be able to be done according to the tendered price or the bid price, and I don't know what point that is, but.... Perhaps the minister would advise: was it $6 million, was it $7 million, was it $8 million? When did you start to have those discussions in terms of that contract going over the bid price? Secondly, what arrangements were made with respect to those moneys over and above the bid price? You mentioned originally that there were extras that were required — there were more anchors, poor rock, the access was a question, the snow was a question. There seemed to be a variety of factors involved in going over. What was the nature of the agreement between the ministry and the contractor once you'd had those discussions regarding this contract?

HON. MR. MICHAEL: As far as the question as to what level the light comes on, I have to leave that to my senior staff, my deputy and assistant deputies and people working in the control division. I wasn't the minister at the time, but I certainly was as fully aware, as every member in this House in government was fully aware, that the government had set down a target date for the opening of Coquihalla 1. That target date had to be met and it had to be met by early May in order to satisfy the tremendous flow that was predicted as a result of Expo. Everything was in high gear.

I am sure that the minister of the day and the senior staff, as well as the Premier of the day, were well aware that there would be problems when you set target dates that are difficult to meet. Our engineers and staff were convinced that the target date could be met, but we knew that it was a difficult highway, that there would be problems, that there would be overruns. I'm not sure whether the member opposite is aware, Mr. Chairman, but every single major contract that we have in the province has a degree of overrun. It happens in every case. There is always the unexpected. There are predictions set out by the engineers as to the volumes of rock, the volumes of dirt, the volumes of blasting, and a lot of plans are made and things are anticipated. When you get into big projects and big road-building projects, invariably there is the unforeseen. So we do have overruns.

In the case of this particular contractor, yes, it was very heavy and, from the ministry's point of view, certainly does not reflect well when you look at a near double. But in rationalizing the reasons and going over the background and looking at the extremely heavy snowfall that the contractor was faced with, and all of the other factors that were built in....

As far as the extra work items, I can't rattle off what all the extras were. But I can tell you that there are extras in every major contract throughout the province of British Columbia. If you would like me to supply you with some examples of the extras, please make your request and I will see that you'll get sufficient documentation from our staff.

MR. MILLER: I'm taking that comment to mean that all documents relating to this particular issue are available for members of this House and in fact should be public documents.

I asked specifically what the nature of the arrangement was between the ministry and the contractor with respect to overruns at the time. At some time somebody must have triggered an alarm bell within the ministry. I mean, it's highly unusual for a contract to double in cost. At what point — whether it was at $6 million, $7 million, $8 million, $9 million — did somebody say: "We've got a problem here"? Or did we just shovel the money out?

I asked you about the relationship, but you must have sat down and said: "Look, we've got a serious problem; how are we going to handle it from here on in?" At what point was that, and what was the arrangement? Was it a cost-plus arrangement? Did the ministry simply agree to pay the invoices of the contractor with a blank cheque? "Finish the project and we'll pay the bills." Was that the arrangement?

[ Page 2545 ]

HON. MR. MICHAEL: The member remarked earlier that this was the only one to his knowledge where there was a heavy overrun, and I can tell the member that this is not the only one. There were a couple of others that were pretty heavy as well, and it's a simple matter. We had anticipated a startup at a certain date. That date was not able to be delivered to the contractor, and once the project got started — and it was a late start — the minister was well aware that there was a problem, and that problem was defined in one word, and that was "weather." It was within the complete knowledge of the minister that we were going to have a problem as a result of the extremely heavy snow in the area.

We're not happy with the cost. We knew it had to be done. The orders were to go, we went, and we delivered. I don't think we have any regrets. The project was open on time. It did the job for the people in the province of British Columbia, and it is certainly resulting in a lot of economic activity and people enjoying that short route from the mainland to the interior of the province of British Columbia.

I might say that it's not just British Columbians who are enjoying the Coquihalla Highway and improving the economic well-being of the province; it's other western Canadian provinces as well — the truckers and the passengers and the attractions that the Coquihalla is bringing in commercial activity and in tourism.

[11:15]

MR. MILLER: I'm trying to get through these estimates with a fair bit of speed, with some fairly short and rapid questions, and I keep getting these election-style speeches from the minister in response to very specific questions. That's really unfortunate. I don't want to take the time of the House, because I know there are other members here who want to ask questions. The member who just piped up from his seat wants to ask about what the government's going to do about Highway 3. But I want to find out about a contract that doubled in cost. It's an important issue, and this is the forum to determine those things.

The minister just said that somebody was giving him orders to go. Was it to go at any cost? Is that the way we build highways? Is that the way we spend the taxpayers' money wisely — go at any cost? Who was giving the orders? Would the minister simply answer yes or no. Was the relationship, in terms of the completion of this project — whenever the ministry finally woke up and decided that there was a problem at hand — a cost-plus arrangement?

HON. MR. MICHAEL: It was a cost-plus arrangement on the extras.

MR. MILLER: Which is standard policy, and quite frankly, in my experience, not a very good policy, because it allows the contractor pretty well free rein. There's where you can lose a lot of money. If the member for Yale-Lillooet (Mr. Rabbitt) thinks tossing $5 million of the public's money away is a trifling matter, then he can explain that to the public and his constituents.

To wrap up this particular issue, I don't think we've really got the full story, but given the time, some of the other questions that are obvious.... The minister finally conceded that this wasn't the only project that had a considerable cost overrun. I'll be interested in pursuing that with the minister to find out just where the money went, what the problems were, why we were experiencing these overruns and why there wasn't a little better control.

Getting back to the tendering of the original project, when I look at some of the other projects that were tendered in relation to the construction of that and other highways, and knowing that the ministry itself does a cost analysis.... In other words, the ministry, when they put that tender out, have a fair idea in their own mind what a realistic price for the contract should be. I have two questions.

Number one, what was that ministry estimate, in terms of this project? Secondly, looking at the various tenders that came in on the project, I find that there's a considerable range. The lowest tender is the $5 million from Kerkhoff, and we go all the way up to almost $9 million from the highest bidder, Tonto Construction. In that group of about eight contractors who bid on the project, we do have a considerable range. Contractors with a fair amount of experience — for example, Peter Kiewit — were saying it would cost $8 million.

Number one, what was the ministry's estimate? Number two, bearing in mind that nobody who is tendering is obliged to accept the lowest bid.... In fact, they're obligated to look at that bid, in terms of the project, to make a determination of whether it's realistic or whether they're simply letting a tender to the lowest bidder and leaving themselves open for that whole ball of wax that we've now gotten into, where we've allowed that contract to double in size. Would it have been wiser, in hindsight, to consider some of the other tenders submitted by experienced contractors in this province and say that it was realistic to let the contract at that particular price to that particular contractor?

HON. MR. MICHAEL: I suppose the only way I can answer that is to reflect on a statement I once heard that the only thing you get looking over your shoulder is a kink in your neck. Perhaps something could have been better by a different decision being made back in the summer of 1985, but I'm not in a position to comment or to make any judgment calls on whether or not it in fact would have happened any differently. Regardless of what contractor was awarded the tender, the conditions would have been the same. He would have been faced with the exact same delay in getting started, the inability to have access to the whole site as set out in the tendering document, and he would have incurred the extra costs.

As far as the other matters are concerned, I think I covered them in answers to questions asked previously by the member. Yes, I suppose you could say the orders came from headquarters. The plan was set out. The government made a decision: Coquihalla. I was going to open by mid-May of 1986. Yes, while certain jobs in certain parts of that project had significant overruns, the fact is that the project was built during times when a lot of major equipment and major contractors were sitting idle in the province. We got what we considered extremely good bidding on these projects to build that highway for the people of British Columbia, and as I stated earlier, it's being enjoyed by people both nationally and internationally.

MR. MILLER: I'm amazed. Mr. Chairman, that the minister can give such fine-sounding statements in regard to such a matter. In terms of the operation of the ministry, it must be an all-time low. The minister perhaps — and maybe his predecessor — simply didn't have any power in this regard,

[ Page 2546 ]

because the minister's own statement is that he was taking orders from somewhere. You can't convince me, and I don't think you can convince anybody who has any understanding of contractors, that when the word was put out that anything goes at any cost — and it's obvious that was the word — the contractors must have been rubbing their hands in glee. "The word is out. Let's start throwing the bills into this ministry." Because they dealt with this issue of highway construction in a political way as opposed to a sound, business-practice way, in terms of building a highway and getting the best costs.

Given the constraints of time and other people's desire to canvass issues, I won't proceed any farther at this point with respect to this and other possible overruns on that section of the Coquihalla. My colleague from Esquimalt-Port Renfrew may have a couple of questions in terms of finalizing the issue, and then I want to deal very briefly with one other issue before other MLAs have an opportunity.

MR. REE: As the minister indicated yesterday, ferry traffic from Horseshoe Bay to Departure Bay in Nanaimo is up about 12 percent. Might I suggest that there's a limiting factor for the increased growth? I'm not talking about Horseshoe Bay, but the access to the North Shore. As you're well aware, we have some difficulties with backups in the Cassiar corridor and on the Second Narrows Bridge. We have difficulties with the Lions Gate Bridge. Not only should the centre span be widened — and I know there have been plans in the past to do so, but we've never proceeded because, I guess, Expo held that off — but there's also very great restriction on the Stanley Park causeway, which is down to bedrock. As you are well aware, ditches have been lowered on the sides to take the drainage, and something should be done fairly imminently with respect to the causeway.

Mr. Minister, could you advise what the plans of your ministry are with respect to the Cassiar corridor, the Lions Gate Bridge and the Stanley Park causeway? Because they are in imminent need of attention.

HON. MR. MICHAEL: The Cassiar connector and the Lions Gate Bridge are certainly being strained to the limit, and I can also say they are big-ticket items. We're looking at a lot of dollars on both those projects — I mean really big dollars.

Regarding the Cassiar, I have had conversations with the mayor and aldermen in charge of transportation for the city of Vancouver, and I would expect that, if the House has adjourned by early next week, I will be making a trip to Vancouver to meet with the mayor, aldermen and senior staff, along with my senior staff, to review the problems over there and to analyze alternatives and plans set out by planners, engineers and staff, to see what the alternatives are and to have a look at the bottom line — the cost — and to see when and if a target date cannot be agreed upon.

Regarding Lions Gate, I'm pleased to report one thing to you. We do have assurance and a plan that the Lions Gate Bridge can be four-laned. That information was brought to me very recently. It's something that has been worked on for some time, but we do now have a plan in place to four-lane the Lions Gate Bridge. But once again, it's dollars. It can be done without too much inconvenience to the traveling public, but it's a big-dollar item. I believe the figure is $90 million.

It can be done, and in conjunction with that, naturally, there would have to be something done to the Stanley Park causeway. There would have to be some widening, and I'm sure we're going to have some problems with people in widening that area. I've been through it. I've had a close look at it personally, in taking trips over to the North Shore. While not being a major, costly project, it would certainly cause some environmental concerns. Whether they are slight or major depends how you would interpret that.

These are very good points — areas on the drawing boards of the ministry. I think I made reference last night to the tremendous number of demands for capital throughout the province of British Columbia. These are just two further examples of major capital requirements of Highways, ferries and B.C. Rail.

You mentioned Horseshoe Bay. I can tell you, Mr. Member, that if the growth carries on as it has for the last three years in the Horseshoe Bay area, we are going to be into extreme difficulties for B.C. Ferries to facilitate and handle the large volumes using that dock facility. There are going to have to be some alternatives sought to relieve the congestion, because we're running into difficulties there already, and it's going to be that much greater as the next two or three years unfold.

As I said, total capital requirements.... Without any effort, without any searching, we got together in just the last two or three weeks with our senior staff, and we came out with $4.7 billion worth of needs that we can see on the short-term horizon throughout the length and breadth of British Columbia.

MR. REE: I'll just make one point if I may, Mr. Chairman. Both of those corridors, the Stanley Park causeway and the Cassiar, are probably the most heavily traveled in the province. In other words, more people are impacted by those corridors than anywhere else in British Columbia — the traffic patterns. I would trust that that would be a certain consideration in arriving at a conclusion as to where those dollars that are spent each year are going to be spent.

[11:30]

MR. MILLER: As I stated, I think there are a number of issues that need to be canvassed. Just briefly running through some of them, and concluding with one that I hope to get an answer from the minister on, I congratulate the minister on his efforts to reach an agreement with the federal government for more of the capital dollars for the cost-sharing on Highway 16. I do have a concern, however, in terms of the kinds of delays that are being experienced before those contracts are let. We are now seeing that the first contract in the Tyee-Khyex section probably won't be started until some time in August, and clearly we could have been away ahead in terms of that contract and possibly others. I wonder what kinds of delays are taking place in the ministry with respect to the letting of contracts and the issuing of contracts.

Secondly, on the Vancouver Island Highway, there was a commitment from the Premier prior to the election for $450 million over an eight-year period. Certainly that's a major commitment, and we'll be watching with interest to see that the work is progressing on that.

I note that in B.C. Rail, which falls under this ministry, they have some concerns about the impact of deregulation and competition between CNR and CPR. We'd hoped that there would be no downgrading of revenues on B.C. Rail as a result of that kind of federal legislative change, which this government is supporting.

[ Page 2547 ]

With regard to the ferries, certainly the feeling in the north country has been that the federal subsidy of $14 million, $15 million or $16 million that this government receives, which is based on a highway mileage equivalent, has really not gone into the northern operation as we would like to see it. Certainly I'll be continuing to press for the winter operation of a Prince Rupert-Tsawwassen run, which I think is quite feasible, in terms of linking in with the Alaska system.

Finally, with respect to Highway 97 and the Hope-Princeton, there is considerable concern in the lower Okanagan about the impact of the completion of the Coquihalla — phase 3, or the connector, as it's called — in terms of possible negative impacts in that section of British Columbia. There's been a pretty high response in terms of the need to upgrade Highway 3 and Highway 97. Perhaps the member for Yale Lillooet (Mr. Rabbitt) will want to talk about that himself.

I note that there have been a fair number of accidents on Highway 3, and that sections of Highway 97 are identified as so-called "hot spots" in terms of accidents. The member for Yale-Lillooet feels that three sections of the highway should be tackled, that they are unsafe. There are a number of expressions of concern from regional districts and municipalities in the area.

Dealing particularly with Highway 3, I wonder if the minister could outline what plans his ministry has to deal with this really quite old, very winding highway, which is obviously dangerous in terms of the kinds of accidents we're getting and obviously very essential if we don't want to cut sections of this province off from good access, good highway corridors that can be used not only for the transportation of goods but for the movement of people, particularly to those communities which rely on tourism for their economic benefit.

So I'll conclude on that note, listen to the minister's response, and then my colleague from Nanaimo, who has responsibility for B.C. Ferries, may wish to raise some issues with regard to that section of the minister's portfolio.

MR. R. FRASER: A couple of remarks about the suggestions made by the opposition on the Coquihalla. I wonder whether they would have raised so much fuss if one of my unionized contractors had gotten the job, but that remains to be seen. And there was a sort of sly suggestion that a 60-40 split is unrealistic: it's not unrealistic if the subcontractor and the general contractor agree. The science of engineering is not a science exactly as one might expect. It is not like a bean counter, where you put the beans on the table and count them one by one, and they're all there. When you do engineering work and heavy construction, you're doing a little bit of estimating, a little bit of guessing; you don't really know for sure where all that rock is or how much rock is there. The simple fact that overruns exist from time to time is not unusual.

I would suggest to the opposition that if there are any pieces of information that the minister should have, they should give them to him. I would expect that the minister, receiving anything like that, would investigate fully, as you would expect any minister of the Crown to do.

I didn't really intend to talk about this. I want to talk a little bit about safety and ask the minister if he has any statistics on what percentage of accidents is caused by faulty equipment. If he has that information, I'd like to hear it, because I've got more.

HON. MR. MICHAEL: Regarding faulty equipment as the cause of accidents, a report given to me recently by my motor vehicles branch clearly indicates that in 1986.... I've got statistics covering 1982, '83, '84, '85, and '86, and there's not much variance in those five years. In 1986, as an example, human action was involved in 66 percent of accidents, and human condition in 15 percent. If you add those two together, 81 percent of accidents in the province had the human factor — driving without due care and attention, alcohol, drugs, careless driving, excessive speed. Environmental conditions put in 16 percent, adding up to some 97 percent involving human action, environmental condition or human condition. Only 3 percent of accidents can be directly related to vehicle condition. So the thrust of the traffic safety committee's attention in the future must be in those areas: stiffer penalties and perhaps dollar fines, as we're now getting into for such things as driving without due care and attention, excessive speed, careless driving, alcohol impairment; things along those lines.

Regarding the member's remark about overruns and union or non-union, I can assure you that this minister does not ever go looking at or reviewing overruns as to whether or not the contractor is unionized or non-unionized. However, now that the member has mentioned the point, yes, Mr. Kerkhoff, the contractor, is non-union and had an overrun of nearly double; but I can also tell the member that a unionized contractor had a contract that turned out to be more than double. So we don't go around looking at whether it's union or non-union. The opposition chooses to examine one particular contractor, but as I said earlier, there are a couple of others around where the results are out of line. The minister looks at that and we make judgment decisions. In this last example that I pointed out, it was clearly the result of engineering within the ministry not being completed.

Talking about engineering, Mr. Member for Prince Rupert, and the question of the Tyee late call, yes, I would dearly love to be able to put out all the major tenders early in the year — February, March, April — and indeed I'm working toward that objective. I think that's the way you get the best value for the dollar. In respect to the question that you ask about the Tyee project, it's clearly a result of not being able, engineering-wise, to have all the i's dotted and t's crossed to put that project out earlier. It is out now, and yes, we will be starting next month.

Regarding the Island Highway, the report is in the hands of the Premier. Yes, there is a project underway right now; quite a few more will be called prior to year-end. It's interesting that the member mentioned the subsidies received from the federal government for our B.C. Ferries. Yes, the figure is somewhere in the neighbourhood of $60 million. Perhaps the member opposite could do both sides of this House a favour and ask your members back in Ottawa — we don't have any members in the Social Credit Party in Ottawa, but you do have some. Perhaps you could assist us; we could work in a spirit of cooperation. You could be going back to your members in Ottawa and asking them to please correct the inequities in subsidies to ferries.

In eastern Canada they are receiving in the neighbourhood of $130 million a year in subsidies to the eastern ferries. We in British Columbia have as many ships, every bit the size of the fleet of all those in eastern Canada combined, and we are getting a paltry $60 million. Mr. Member, what are the members of your party doing in Ottawa in pressuring

[ Page 2548 ]

the government to give a better break to the people in the province of British Columbia?

Yes, Mr. Member, we are looking at Highway 97; it's the plan. I won't give you an assurance, but it's certainly the ministry's plan to see that Highway 97 north to south in the Okanagan — from Salmon Ann to Penticton at least — is four-laned in time for the opening of Coquihalla. 3 in the fall of 1990.

Highway 3 will be getting attention this year in the area of paving. I am pleased to report that in the current fiscal year we have budgeted $7 million for paving Highway 3. As far as turning Highway 3 into a major artery, I can tell the member that that is another very big-ticket item somewhere out in the future, as far as the long-range plans of the Ministry of Transportation and Highways are concerned .

MR. LOVICK: I am delighted to hear the Minister of Transportation and Highways acknowledge what everybody in this country has: namely, if you want anything done, make sure you get the NDP to lobby for you.

However, I am not here to score points on the Minister of Highways; that's too easy. Instead, what I want to do very briefly is pose some questions about the B.C. Ferry Corporation — one of my critic areas. I know there is a cast of thousands in this House wanting to talk to the Minister of Highways about particular projects. First a few questions about the Ferry Corporation.

To begin, let me offer some praise. The minister points with justification to the operations and activities and efficiencies of the B.C. Ferry Corporation. All things considered, I think the corporation operates very well, and that is to their credit. Take note, you advocates of privatization. The question that remains is whether there is a lot more we could be doing. The first and most pressing question that people have — those of us who depend on the ferry system on a regular basis — is whether the transportation costs will continue to rise. There is nothing mysterious about the question; indeed, it's predictable. The point is that there have been increases for the past eight years, with one exception only: Expo 86.

I grant everybody that the issue of rising costs is of primary concern to the residents of the smaller islands. But it's also of concern for people living on Vancouver Island and going back and forth to the mainland. I want the minister to simply grapple with that question and consider whether he is prepared to give us assurances that that pattern of regularly increasing ferry rates is going to end, or whether there will at least be some kind of rationale provided — a longer-term rationale, rather than every year we have to talk about increasing ferry rates.

[11:45]

The first question is whether the ministry and the corporation acting under the minister's authority will consider developing some kind of coherent policy regarding ferry transportation and pricing policy, a statement of the criteria used to determine and a statement of longer-term plans. At the moment, we seem to be responding to immediate and imminent crises, rather than any kind of longer-term plan.

I hope that we can get some assurances that that will be considered. I know that the residents of the Gulf Islands as well as residents of Vancouver Island would like to see that kind of statement coming from the Ferry Corporation — a statement governing the tariff. That's my first question.

Mr. Minister, in the interests of conserving time I'm going to give you a number of questions, if I can, and you may want to respond to them all briefly now or perhaps give me more elaborate answers later.

The second question, a kind of subquestion to the first, is whether the plan of the B.C. Ferry Corporation is to operate without subsidy, to pay its own way. Or is it the case that what we're going to talk about doing is rationalizing some kind of what we call the highway equivalent formula? The point is made by a number of other people. For example, I see the Victoria Chamber of Commerce has advocated that in correspondence to the minister. In other words, will we get some assurances that the ferry system is going to be recognized as an essential part of the highway and transportation system in the province, rather than something that seems to be subject to a kind of double taxation? That is what we think we have now, quite frankly.

The second question I would pose to the minister is whether there might be some consideration given to putting the operation of the ferry system into a larger economic development strategy for the province; more specifically, a development strategy with a regional base or bases. For example, we hear complaints from Gulf Islands residents saying that the ferry schedule is not compatible with the bus schedule. Understandably, then, they wonder whether there ought to be some consultation between those two authorities, which I realize are independent of one another. The question is whether we can talk about pulling together transportation as just another component of a larger economic development strategy. I'm talking about future policy, I guess, Mr. Minister, but I would recommend that to the corporation.

The third question has to do with what the minister and I both had some experience with recently, in February or March: the great cry for more public involvement. The minister will recall vividly, I am sure, what happened when he went to various islands and the refrain that we heard from the residents: "You're doing this to us, Mr. Minister, and we haven't been consulted." I'm wondering if we might talk about setting up some more elaborate procedure that provides for public involvement and consultation with those residents, especially on the smaller islands, who are directly affected by pricing and schedule changes.

I would anticipate, by the way, that the minister may well say in response to that: "Well, we already have some committees." I know there are some committees in place, but I submit that they tend to be token in their activities. For example, I understand that the members of the committees who are asked to come over to Victoria to meet with officials of the corporation don't even get their costs, their ferry fare over to those meetings, repaid them. That seems to me not exactly conducive to any ongoing consultative process.

The next question I would pose, perhaps more for future reference — and I notice it was alluded to by my colleague from Prince Rupert — is the improvements to northern services. I would simply recommend to the minister's attention the correspondence he received from the community of Prince Rupert concerning the cooperation and doubling-up of ferry routes and ferry authorities with the Alaskan authority. I am wondering if he can tell us now or later whether any further study has been undertaken with regard to that proposal.

The final question I would pose — a larger one and for future reference — has to do with an economic development strategy. The contention has been presented that what we have done effectively in the smaller island routes, specifically northern island routes — I'm referring to places like

[ Page 2549 ]

Denman, Hornby.... The argument presented there from individuals who have done a considerable amount of homework, Mr. Minister — and I'm sure you're familiar with the submissions they have made — is that in fact what the ferry tariff policy has done has been to serve as a disincentive or as a discouragement to development.

Now when I read that brief, I too had some questions about whether the kind of causal connection between price and use was indeed that valid, or whether the demand, if you like, was that price-responsive or price-elastic. The question, though, I want to pose to the minister is whether he has indeed considered those kinds of briefs, specifically the one that came from the Denman Island people, who really did a good job of doing their homework and did a number of interesting projections and analyses of past traffic patterns, and so forth. The question I would pose is whether the ministry and the corporation have indeed done any of their own studies to determine just how responsive to price is traffic, if we can get that kind of information.

I see that the government House Leader is asking us to end this. Those are my questions for ferries, so I'll leave those for the moment if I can. I would move then, if I might, Mr. Chairman, that the committee rise, report progress, and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

HON. MR. STRACHAN: Mr. Speaker, I am advised that His Honour is in the precincts. Perhaps you could ring the bells, sir, to summon members, and then His Honour will be visiting us shortly.

His Honour the Lieutenant-Governor entered the chamber and took his place in the chair.

CLERK-ASSISTANT:

Municipal Amendment Act (No. 2), 1987.

CLERK OF THE HOUSE: In Her Majesty's name, His Honour the Lieutenant-Governor doth thank Her Majesty's loyal subjects, accept their benevolence and assent to this bill.

His Honour the Lieutenant-Governor retired from the chamber.

HON. MR. STRACHAN: Mr. Speaker, Committee of Supply.

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

ESTIMATES: MINISTRY OF
TRANSPORTATION AND HIGHWAYS
(continued)

On vote 61: minister's office: $235, 299.

MR. STUPICH: Mr. Chairman, I have a number of short questions....

Interjections.

MR. CHAIRMAN: Hon. members, Committee of Supply is being called to order. If you want to hold meetings, would you please do so out in the hall.

MR. STUPICH: I've raised most of these items in previous sessions — with a different minister, true — and I've always had generally satisfactory answers, so I'll try again.

I've discussed with ministry staff previously — perhaps never with this minister personally — the intersection of Takla Road with the Island Highway; that's just north of Oyster Bay, north of Ladysmith. It's a very bad situation there. It's almost blind, coming out of Takla Road, and traffic going north on the Island Highway, wanting to turn left on Takla Road, is a hazard. The answer would seem to be a left turn slot for traffic going north along the Island Highway and wanting to turn left onto Takla Road. A year ago the ministry said they would look at this. Some improvements were done by removing some rock, which improves the visibility a bit. A left-turn slot would certainly help there, if the widening of the highway is going to be long delayed.

On previous occasions the Minister of Highways has assured me that there would be some kind of pedestrian crossing of the Island Highway from Transfer Beach to Ladysmith, which is on the other side of the highway. I know an underpass was talked about, and I know that they're not popular But on previous occasions the Minister of Highways has recognized the need for a pedestrian crossing between this very popular beach and the bulk of the population on the westerly side of the highway. I hope that that's still in the plans.

I have discussed previously, again with ministry staff and the minister.... I know the Diamond Bridge is one of their priorities, and I'm not sure when they'll get to it. But there is a very serious problem there at the southerly end of the Diamond Bridge, at the intersection of Christie Road and the highway. It's a very bad situation traffic-wise: traffic that's proceeding north along the highway, turning west onto Christie Road, and there's no left-turn slot. There's no room for a left-turn slot — that's the problem, I understand from the ministry — and also the bridge isn't wide enough. So I guess it's all part of the whole picture of replacing the Diamond Bridge. I guess it's just a matter of making sure that when that is done, there is a provision for safe entry to Christie Road from north and south, and also an exit from Christie Road.

The Stewart Avenue four-laning, I believe, is going to be completed this year. I'm hoping that is the case.

Then there is the old question that I have raised.... And if I had the answer, I'd be glad to give it. I don't think anybody has the answer. It's that tremendous, or horrific — whatever we want to call it — intersection of Brechin Road, Estevan Road, Departure Bay Road and Terminal Avenue North, the Island Highway. What can be done about it to make it sensible I don't know. Perhaps one day there'll have to be a vehicle underpass there or something. I just don't know how to solve that. I wonder if the minister has any thoughts on it at this point.

The only one left is the Gabriola bridge, which keeps raising its head from time to time. I just want an assurance that in the event that there's going to be any serious discussion

[ Page 2550 ]

of a Gabriola bridge, there will be public hearings and opportunity for the public in the area to express their points of view.

[12:00]

HON. MR. MICHAEL: Without any question whatsoever, if there's ever to be serious consideration of a Gabriola bridge, I can assure the member, Mr. Chairman, that there will certainly be public input and public hearings and public meetings. As a matter of interest to the member, I've been to Gabriola three times now for a variety of reasons, and have talked to a lot of the citizens over there. There's a tremendous amount of interest in this question, as the member is well aware, both pro and con. I think it's something that certainly has to be vented.

Regarding the number of items the member has brought up, some of them will be actioned this year and some won't. I'm glad he brought them up. I sincerely appreciate — not only from this member, but from all members, whether they are members opposite or members on the government side — personal briefings on the concerns of the members in their respective constituencies, because only by being briefed am I familiar with what their concerns are when I travel to the areas. I have been and will be attempting to travel through all regions of the province to get a clear understanding of the concerns, particularly of the members of the assembly and the members of councils and chambers of commerce and groups throughout the province. There is nothing that replaces a firsthand examination. We'll have a good look at these items you brought up, Mr. Member, and I appreciate your spelling out your concerns.

Further, regarding comments made about the ferries, yes, we went through quite an exercise this past year regarding trying to adjust and rationalize the rates so that they make some semblance of sense. I think we've gone a long way in that rationalization. I won't promise that there will not be increases in the future, any more than members opposite can promise that there will not be any increase in wages or fuel or other areas of expenses. I do think that we have rationalized those fares and that you can look at them now and see some semblance of logic, as far as distance being traveled and things like this.

Yes, I visited a number of the islands, and we had some very interesting and memorable public meetings. They were well organized and well handled, with extremely good input from the people of those islands. I feel that I have much more feeling and understanding of their sincere concerns.

Yes, we will be monitoring very closely those increases and the effect that they've had on volumes and traffic, and the bottom line. We'll be reviewing that late in the fall. There's no use reviewing it now because it needs a good number of months from implementation in order to get a good rationalization. I would say give it six months, and we'll certainly have a look at the volumes on those ferries.

Regarding other matters brought up, they're in the record. Yes, our staff will be having a look at the concerns expressed by the second member for Nanaimo (Mr. Lovick) and review them to see what can be done within the financial limitations of the ministry this year. Also I will be looking at them as to what can be done next year.

As far as the provincial involvement in transportation in the ferry area, the subsidy is really not very much different from B.C. Transit. We have been working — at least this year; what it'll be next year remains to be seen, and what my directions are — in B.C. Ferries in the area of about 25 percent provincial subsidy, and I think if you check the records, B.C. Transit is very similar. So all those things are being looked at.

As far as the committee is concerned, I have to say that I was not aware that meetings were being called by the B.C. Ferries staff, other than on the islands affected. That's news to me. I'm glad the member brought that to my attention. We will have a very serious look — no promises — at perhaps providing transportation for committee members when they're going to a meeting with officials of the B.C. Ferry Corporation to discuss transportation matters. I can also assure the members opposite that we're looking at revising those agendas somewhat to provide for more citizen input and advance copies of the agendas prior to meetings. Those are all in an ongoing process of trying to work with the committees on the islands in a more adequate, forthright, upfront manner.

MR. D'ARCY: I'm not going to go through my earlier request of a week or so ago for a discussion surrounding the West Trail approach, since there was a most encouraging reply by the member from Seymour on behalf of the minister, except to say that, while the reply was encouraging as far as day labour work and municipal service alteration in conjunction with the city of Trail, of course what we really want, hopefully later this year, is a contract.

What I want to talk about briefly today is the pedestrian crossing on the CPR bridge in Castlegar. Your ministry at the regional level and the district level have slated this for closure either later this year or early next spring. This pedestrian crossing is an outrigger on the bridge. It's an absolutely vital link across the river. It's used more today than it has been for the past 27 years since the flood of 1960. It's used particularly by senior citizens, children and parents of young children, especially as there is a very popular park on the northern end of this particular crossing.

I know the wooden aspect of this outrigger is deteriorating rapidly and there are various estimates of cost of replacement or repair. Some say $50,000; others say $90,000 to $100,000. But I would point out that it is the only pedestrian crossing in the area. The Castlegar ferry does run on a 16-hour-a-day basis. However, as it gets more and more aged — and I'm sure you know this, Mr. Minister — its breakdowns become more and more frequent and the repair times take longer and longer. Even though there is a transit service using one of the bridges, this is a most circuitous route to get to and from the downtown area and the Raspberry-Robson area.

I would hope that the minister will not heed the advice of some of his excellent regional staff, and will make sure that funds are provided to maintain this pedestrian crossing and keep it open. As I pointed out, it is used more today than it has been for the past 27 years, and I can attest to that personally. So there certainly is a public and popular demand for this particular service.

The last remark I want to make about this, Mr. Chairman, is that we all know what happens when people want to cross a railway bridge and they don't have a pedestrian walkway. In many cases they simply use the ties in any event. The minister I am sure, as well as Minister of Transportation, knows that this particular bridge is used on the average about eight times a day by CPR trains, and it has blind curves on either end. In some cases it might be very difficult for people to anticipate the approach of a train. So I hope the minister will reconsider the advice he's receiving.

[ Page 2551 ]

HON. MR. MICHAEL: Mr. Chairman, we will certainly have a look at that pedestrian crossing. It seems to me we have some correspondence that has been ongoing on that, and I will review that and indeed review the advice of the excellent staff members that you have referred to.

Yes, I believe the member is aware that there will be a start made on the West Trail approach. That's another example, Mr. Chairman, of the positive advantages of firsthand review, on-site examination. It stands out very clearly in my mind, having been there and had it shown to me by your very good mayor, who pointed out the inequities and the need for a start on that approach. I can assure the member that there will be a start made in this fiscal year.

MR. GABELMANN: Mr. Chairman, I have, by actual count, somewhere over 60 highways-related issues — all separate. I'm not going to raise them all this afternoon. I've selected six of the more pressing concerns to residents of the northern half of Vancouver Island.

The first is the Island Highway itself. I won't make a big speech about that, but as a person who has driven the Island Highway from Campbell River to Victoria just short of 700 times — by count — in the last eight years or so, I find it strange that the Highways ministry priority for construction starts appears to be on the Malahat.

The most serious problem along that highway exists in the Bowser area. Essentially, it exists from the Port Alberni turnoff through to Campbell River, with primary concerns in the region of Qualicum and Parksville through to Bowser. The second most serious part of the highway in terms of needed reconstruction is the bypass of Nanaimo, which all of us on the Island — with the exception, perhaps, of a few downtown merchants in Nanaimo — think is essential.

I would put third the Ladysmith area and fourth the Malahat, in terms of priority for construction on that particular highway. That's my personal view, as I say, having driven it now almost 700 times — I checked my diary just to be sure about that — in the last eight years. I trust that the minister will recognize those concerns about the sheer danger of that road in areas north of Parksville. I hope it's not going to take us ten years.

Secondly, a more local concern. We've now lived with Bailey bridges in the north end of the Island on the Keogh River and Marble River. The Keogh is on Highway 19; the Marble is on the road from Port Alice to Highway 19. Those bridges have been in place and slated for replacement for years and years and, for some reason, even though they appear to be near the top of the list of replacement bridges, they don't ever show up in the budgets. I had really hoped that this year they would show up, and they still haven't. I trust that the minister will have a look to see why it is those replacements haven't been made and, if they can't be done in this year's budget, if they can be slated for certain in next year's.

Thirdly, the minister and I have exchanged correspondence on the problem fairly common in North Island, that of public use of section 88 logging roads. There are several of them. The one I want to talk about is the one we exchanged correspondence about in the last few days: the road from Zeballos to the Island Highway, north of Woss.

That particular road goes through the Canadian Forest Products TFL, then through the CIP TFL into Zeballos. It services Fair Harbour, which means it also services Kyuquot and points on the west coast. It is a fairly heavily used road not only for residential traffic but also for commercial traffic, servicing both Kyuquot and Zeballos. The minister has replied to me with a memo dated June 29 which I received on July 14 — interesting time it takes for the mail to go from downstairs in the building to just across to the east annex — two weeks plus. In any event, the minister is suggesting that the off-load logging truck weights and whatever are a problem on a public road. The minister made no reference at all to the fact that that problem has been solved in other areas. You can have off-limit logging trucks with 14-foot bunks and excessive weight loads and unlicensed on public roads.

[12:15]

You do it already now, and I don't see any reason why you can't extend that policy to additional roads. The place you do it already is between the pulp mill in Gold River and the access road to that area just near the community of Gold River. I forget how many miles that is, but it's six, seven or eight miles of what they call joint-use public road. You have unlicensed 14-foot bunker overweight logging trucks on what is a joint-use public road, and it happens to be a paved joint-use road. We're not proposing that we pave the road from Zeballos to the Island Highway; all we're suggesting is that you change the category from a section 88 road to a joint-use road, so I would ask that the minister have a look at that whole issue. You've already found a way to avoid the rules that apply in terms of unlicensed, overweight and overwidth.

Fourthly, I just want to make a brief plea again that the ministry not lose sight of the fact that there will need to be, at some point, a road between Tahsis and Woss to link that area. The ministry has rejected it consistently. I still think that if combined with redesigned logging plans of both Canfor and CIP, there could be a considerable amount of that road built for logging purposes, and ministry responsibility would be lessened as a result. Again, we're not talking about the kind of expenses that your engineers tell me we're talking about, because they think in terms of highway standards, and we're thinking in terms of logging road standards. They're considerably different. In that territory you can build logging road standards for $80,000 per kilometre or less, and we really need to look at that kind of solution.

Fifthly, the minister and I had a brief conversation about this the other day — Fir Street in Alert Bay. That is the main street in that town — it's an arterial highway and I trust that moneys will be found to upgrade that particular highway, although it is essentially a main street.

Sixthly, and finally, the ferry situation from Port McNeill servicing Malcolm Island or Sointula, and Alert Bay. It's really not very satisfactory at the present time, and requires significant changes by B.C. Ferries. I understand they are discussing changes, that they are in consultation with the committee that's been established there. The problem, of course, with the committee is that there are four people from Alert Bay and four people from Malcolm Island, and they have very different needs and requirements, but I trust that in trying to reach an agreeable solution consideration will be made to a new docking facility opposite Alert Bay to reduce the length of the run from Alert Bay to Port McNeill.

There is an initial heavy capital cost to build a new docking facility and if you do it in one location you won't need any additional road links, so it can be fairly limited in terms of capital. But in the long term, in terms of the shortened run, I think you will end up saving considerable money and making the service more effective for the residents. As part of that whole redesign of those services, it's really

[ Page 2552 ]

essential that an early ferry run be instituted between Alert Bay and Sointula and Port McNeill. People who work in industry can't get to work on time. Teachers and bank tellers can get to work on time, but loggers cannot, because the ferry just doesn't leave early enough. Normally it's fine that they take their private pleasure boats across. In ten months out of the year it's safe; the other two or three months it is really not very safe at all.

The additional benefit of putting in the early run is that people can get to Vancouver during the day much more effectively than they can now. Secondly, you'll take the pressure off the second run, which is the run that contains all the school kids, which is a problem creating the overcrowding that we have on those ferries because so many of the kids go to school in Port McNeill. So if you have an earlier run, you reduce the pressure on that second run — as they call it, the school run.

So I really ask for serious consideration of that early run, some rescheduling and perhaps an eventual fourth terminal with two small craft servicing those four points.

HON. MR. MICHAEL: I once again thank that particular member for his excellent input. I can say that I am familiar with some of the areas he's pointed out and not so familiar with others. It's all on the record, and I can assure the member that we'll have a serious look at what can be done this year and what can logically be put on the agenda for next year.

I listened very closely to the suggestion for a road between Tahsis and Woss, and I can tell the member that I have had at least 15 submissions that I could rattle off, with a little bit of time, of similar requests throughout the province. I guess one of the things that we can be thankful for, looking at the Ministry of Forests and the various companies throughout the province, is that there is a lot of the infrastructure that we can put on them — a lot of the responsibility and cost — and then perhaps we can go in behind and work with the Ministry of Forests, in combination with the Ministry of Highways, in maintaining, or certainly putting money in the kitty toward maintaining, these types of roads.

The minister and I are working closely. We've had a lot of communication and dialogue on these types of projects. Hopefully in the future we can work even closer together in maintaining and exploring the possibilities of opening up new avenues for development and tourism. We are all aware that tourism is a tremendously growing industry in the Province of British Columbia, and certainly a lot of people are adventure seekers and would like to get out into the areas where they can explore and look around. They're looking for loop roads or circle tours where they don't have to come back on the same road from whence they went up on.

HON. MR. STRACHAN: From whence they came.

HON. MR. MICHAEL: From whence they came; thank you, Mr. House Leader. Having been a grade 11 dropout, I never excelled in the English language in school. I must apologize sometimes for my grammar.

The one thing — in getting close to closing, Mr. Chairman and fellow members — is that, in looking at highways, yes, we've had a reduction in our budget this year of 11 or 12 percent, and it's been pretty tough. I can say that there are some positive aspects. A lot of things are going on in the province in the various comers. We haven't been able to satisfy all the requests, and I suppose we never will.

Just in passing, I would like to make a remark about one simple fact that hasn't been mentioned; perhaps it's not in my field to mention it. If we do not bring the health care costs in this province and in this country under control quickly, we're not going to have any major projects or all the roads, highways, bridges, ferry services and other transportation things we need.

I look back and examine the money being spent by Health; we know it's needed and it's an excellent case. Unless we bring that budget under control, we're going to have less rather than more highways, because it's truly eating up more and more of the budget. Just as a matter of interest, I went back 25 or 30 years to all the budgets in British Columbia and did a five-year overview every year. Back 25 or 30 years, the Ministry of Highways used to get 22 percent of the provincial budget. Today we're getting somewhere around 9 percent.

In that same time-frame, Social Services and Health and Education combined used to take about 28 percent. You look at those three ministries now, and they're eating up two-thirds of the provincial budget. So those trend lines are going to have to be brought into some type of balance and check, because the requests, as witnessed since yesterday afternoon, are very long. I would love to satisfy all the requests and needs, but we have to work within the budget as set down by the government.

Mr. Chairman, it's been a pleasure listening to the various concerns of the members. Apparently there is still one more to go. Taking note of all the concerns and requests, we'll be working with the members. I'll repeat in all sincerity: my door is always open. Several members have been into my office outlining their individual concerns to me, and I welcome similar visits in the future.

MS. SMALLWOOD: I know there are a lot of people very concerned about the issue that I'm going to bring up, and I was concerned that we weren't going to get the time. I'd like to remind the minister of a few questions that I put to him during question period several months ago and some of the subsequent news articles that followed from that. On April 7, the big headline in the Vancouver Sun was: "Minister Aids Socred Pal's Non-Union Truck Firm." That article was about some of the questions we raised regarding the New Westminster highways contracts in Richmond — the Fraser River bridge connection. It has been four and a half months since any work was done on that site. During question period I asked the minister if he would assure the House that that work would continue; that the contracts would be taken away from Ike Unger and Maxim and Sonny, and let to a firm that had employees and could finish that work.

I have a couple of concerns beyond the fact that there hasn't been any work at that site for about four and a half months. I understand that the holders of those contracts are looking for other contractors to bid on the work there; they would have the bonding companies turn over the contracts to another company to complete the work. There are audits going on at this time, and those audits are looking to see whether the employees' benefits — their CPP and the other items that they have to pay — are taken care of. Can the minister assure us (1) that work will continue; and (2) that those companies will not get out from under that labour bond that is held, and that those labour bonds will be used to pay for the employees' contributions to their pension plan, to

[ Page 2553 ]

unemployment insurance and so on? Can the minister advise us what is happening at that site right now and why there hasn't been any action, and assure this House that there isn't political intervention at this time?

HON. MR. MICHAEL: I thank the member for raising this matter. At this very moment it's under active review by our senior staff, and we're looking at the entire matter. There have been some problems. One of the principals had a serious heart attack, I think the third or fourth one, and is not in very good health. We have been very tolerant in attempting to see a resolution brought about, and I don't think the member is going to have to wait much longer to see some action in that area.

As far as the bonding is concerned, we will certainly ensure that any holdbacks, or any employee wages that haven't been paid, will be paid. That's part of the process, as I understand it from my staff. As far as reviews by the Minister of Labour or the labour board regarding UIC and WCB contributions, that's a matter for another ministry; hopefully that will be worked out by the proper authorities. I'm not aware whether this problem exists, but if it does exist, it will certainly be worked out. The laws of the land are very simple: employers must make contributions for employees' UIC and WCB.

MR. SERWA: There are a few things I would like to address briefly to the minister. In Transportation and Highways, I would like to suggest that a dual budget be developed; that basically there be two levels. We have a situation that exists currently where we have local highways districts, and when we undertake major capital projects, such perhaps as the Coquihalla or the Island Highway system, we impact heavily on planned local projects.

What I would like to see is that a budget be set up so that the approved local projects go through and the accommodation for those projects isn't impacted by the demands of the higher-profile provincial-type projects. I think I would like to impress on the minister that his ministry probably impacts the greater area of British Columbia most heavily. It really fuels the economy. Transportation is the ingredient, the catalyst that we all require, and it fuels the economy of this province.

It is my opinion that a great deal more capital has to go into Transportation and Highways. The last major injection of funds into our highway system throughout the province of British Columbia occurred in the sixties when we expanded the standard of our highways. A lot of these highways are deteriorating and a great deal more capital expansion has to go into them.

For a stable source of funding for Transportation and Highways, it is my belief also that this ministry is so important that we have to be able to plan five years and ten years ahead with a stable source of budget. The minister has indicated that the budget has been impacted very heavily by social aspects of the provincial budget. I feel that either we have to come up with an alternative source of funding for our capital projects in our highways system, or else we have to be able to reserve and preserve the priority of highways, as its position in the province is so prominent and so important for our future. It is the only source from which we can get the economic viability in our province to fuel the funding of all the other services, such as Social Services and Housing, Education or even Health.

[12:30]

MR. LONG: I'd like to bring to the House's attention that in my riding we've been neglected in highways for approximately 15 years that I know of. I think the last time there was any amount of work done was 25 years ago.

MR. MILLER: You say there's politics in highway development?

MR. LONG: I've got to thank the minister for the three bridges that are going in the Bella Coola Valley that are very much needed. They were one-way bridges. They've taken away a hazard that the people up there were having to live with on an ongoing basis. I'd also like to thank him for some of the things that are happening there, including some pavement that would be with it.

There's one area, though, that I'd like to ask the minister about, and that's the Sunshine Coast highway, 101 through to Powell River and through the Sechelt and Gibsons area, which is in drastic need of repair. Is anything planned for this particular highway in the future? I'd like to have him answer me.

HON. MR. MICHAEL: I sincerely thank that member for his input and questions. I know that he's related a number of problems in his constituency to me since being elected. I can assure him, regarding the particular points that he's made now, that our staff are making note of them; they're in the record. We'll be reviewing to see what can be done in this fiscal year. If something can be, we will give you a report; and if it can't be, we will also give you a report and let you know what the chances are for getting that done in the near future. I thank the member for his question.

Vote 61 approved.

Vote 62: administration and support services, $14,759,725 — approved.

Vote 63: highway operations department, $726,974,820 — approved.

Vote 64: motor vehicle department, $33,961,110 — approved.

Vote 65: transportation policy department, $86,909,512 — approved.

HON. MR. STRACHAN: I move the committee rise, report resolution and ask leave to sit again.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 12:35 p.m.