[ Page 3365 ]

CONTENTS

Routine Proceedings

Oral Questions

Privatization of highways operations. Mr. Harcourt –– 3365

Mr. Sihota

Supreme Court decision respecting privatization. Mr. Sihota –– 3366

Opinion polls. Mr. Clark –– 3366

Lunch program in schools. Mr. Cashore –– 3367

Tabling Documents –– 3367

Motions

Coquihalla Highway cost overruns

Mr. A. Fraser –– 3367

Mr. Stupich –– 3368

Hon. Mr. Rogers –– 3371

Mr. Harcourt –– 3373

Mr. Mercier –– 3375

Mr. Miller –– 3376

Mr. Rabbitt –– 3379

Mr. Kempf –– 3381

Mr. Serwa –– 3381

Ms. A. Hagen –– 3383

Mr. Chalmers –– 3385

Ms. Marzari –– 3386

Mrs. Boone –– 3388

WEDNESDAY, MARCH 9, 1988

The House met at 2:06 p.m.

Prayers.

HON. MR. REID: Mr. Speaker, it gives me a great deal of pleasure to introduce today seven students from the Kennebecasis Valley high school in New Brunswick, who are here with Mr. Lawrence MacDonald, a teacher in Earl Marriott Secondary in my community of White Rock–South Surrey. Can we make these students from New Brunswick welcome to British Columbia. as they're on their way to visit China following their visit here today.

MR. KEMPF: Mr. Speaker, in the gallery behind me this afternoon is a group of students from Nechako Valley Secondary in Vanderhoof, together with their instructor, Mr. Darrell Cursons. I would ask the House to make them all very welcome.

MR. ROSE: A student from grade 10 of Arbutus Junior High School here in Victoria, Miss Katherine Fast, is here. She's on a work-studies program. She was spending one week trailing the second member for Victoria (Mr. Blencoe). However, he is ill, so I am doing the job.

Interjection.

MR. ROSE: Well, I was going to suggest that there's no causal relationship between the fact that she is trailing Robin Blencoe and his illness. But I wouldn't say that, because it might embarrass somebody.

Anyway, would you please welcome Katherine Fast.

MR. LOENEN: Mr. Speaker, the newspapers in our community make a wonderful contribution to our community. I'd like to introduce two people associated with the community newspapers: Bill Lam, publisher of the Richmond News, and Phil Ballard, publisher of the Richmond Review. Please welcome them to the House.

HON. MR. COUVELIER: I note with pleasure the presence in the gallery today of a very close observer of our proceedings and a strong supporter of the Premier and his initiatives, Mr. Martin Olivier, from my riding.

MR. SPEAKER: Before the Leader of the Opposition starts, I have received a letter from the auditor-general, and I would like to read it to the House and then table it. He says:

"It has been brought to my attention that certain information provided in my special report to the Legislative Assembly dated March 7, 1988, did not precisely describe the sequence of events surrounding the tabling of a document in the assembly. In my report, page 12, I stated: As mentioned previously, the Legislature did provide some indication that it approved of the government's accounting treatment of highway construction costs. During the debate in the Legislature on the government's request for further funding for highway construction, a list of highway projects was tabled in the House. This list was available to all members of the Legislature and is included as appendix D to this report.

"In reviewing Hansard for March 26, 1986, I find that the list referred to was not tabled during debate on Supply Act (No. 1), 1986, but rather, immediately following adjournment of debate on the same day. The contents of this list, showing off-site project costs as being charged to vote 69, did not, to the best of my knowledge, give rise to discussion in the House in the days following.

"The conclusions reached and opinions expressed in my report remain unchanged. I will appreciate you bringing this matter to the immediate attention of all Members of the Legislative Assembly.

Yours very truly,
George L. Morfitt,
FCA,
Auditor-General."

HON. MR. STRACHAN: I can't believe I'm asking this, but the motion before us does take precedence. I presume the members opposite would like to ask leave to go to question period.

Leave granted.

Oral Questions

PRIVATIZATION OF HIGHWAYS OPERATIONS

MR. HARCOURT: My question is to the Premier on the issue of highways privatization. We're aware that the deadline for proposals for privatization of highways operations on Vancouver Island has now passed as a matter of fact, on March 4. Before British Columbians are hit by phases 2, 3 and 4 in next week's throne speech, has the Premier decided to listen to the large and growing number of mayors and councils across British Columbia who have requested the government to halt privatization of highways operations?

HON. MR. VANDER ZALM: Mr. Speaker, we always listen.

[2:15]

MR. HARCOURT: Yes. If that's true. I'm sure the Premier is aware that, so far, as many as 70 municipalities and regional districts have passed resolutions opposing privatization of highways operations. For example, Richmond municipal council passed a resolution on February 8 requesting the Premier to suspend the privatization of highways pending a comprehensive review of the impact of such a proposal vis-a-vis public safety, levels of service and costs, and to consult with all the municipalities affected. Has the Premier agreed to halt highways privatization until a cost-benefit analysis like that requested by Richmond is undertaken?

HON. MR. VANDER ZALM: Everything is being analyzed very closely during the whole of the process.

MR. HARCOURT: That was a request to table the cost benefit as requested by 70 councils. This campaign to bring the Premier to his senses was commenced by the mayor of Quesnel, who has taken it upon himself to gain the support of mayors and councils throughout British Columbia to tell the Premier to stop this mad scheme. The mayors and councils

[ Page 3366 ]

who have told the Premier to stop and listen include: Kamloops, Prince George, Kimberley, Revelstoke, Courtenay, Fort St. John, Richmond, New Westminster, North Vancouver and Saanich, to name a few. How can the Premier suggest he's in touch with British Columbians if he won't even listen to the grassroots elected people in this province?

MR. SIHOTA: I see the Premier is stumped again and has chosen not to answer the question.

HON. MR. VANDER ZALM: On a point of order, there was no question, so I would ask the member for Esquimalt–Port Renfrew to withdraw that statement.

MR. SIHOTA: I would suggest that someone wasn't listening. The question was: how can the Premier suggest he's in touch with British Columbians if he won't listen to the grassroots elected people of this province? That was the question.

HON. MR. VANDER ZALM: I will be meeting with hundreds of people in Prince George. As a matter of fact, we expect one meeting alone will attract at least a thousand people this weekend. I'll similarly be attending with hundreds of people in Dawson Creek. We certainly communicate. I would suspect that most of these people are, as you would term them, "grassroots." They're people from the community. They have their views and they certainly will have an opportunity to express them. We welcome their comments and we welcome their suggestions.

We take every opportunity to assure that people are given that right to give us their views, their thoughts, which is why I had the open-line program, "Tell the Premier," last Sunday, which received more calls than we've ever received on any one of the programs — all extremely supportive, I might add. I am sure that they must have been monitored by the opposition. I will be happy to meet with all of the people in both Prince George and Dawson Creek during the next number of days, and I look forward to that opportunity. Certainly that process will continue.

SUPREME COURT DECISION
RESPECTING PRIVATIZATION

MR. SIHOTA: A question to the Premier. I am sure that the Premier is aware of the Verrin decision as it relates to privatization. It, like the abortion decision, is a decision of the British Columbia Supreme Court. Would the Premier advise this House, in light of that decision, what steps the government has taken to assess the economic implications that the decision has for its privatization plans?

HON. MR. VANDER ZALM: There are two observations I must make before answering. I understand this member asking the question is also a member of the legal profession, and I understand or would expect that he would certainly be informed on the subject. I need to advise him, in case he doesn't know, that it's being appealed; therefore it's before the courts and we really shouldn't talk about it.

MR. SIHOTA: The matter may well be before the Court of Appeal. That doesn't prevent matters from being asked that relate to the decision. I take it, then, from the answer that the government has conducted no economic implication studies.

The next question is far more important. That decision gives workers a choice of remaining within the public sector instead of going on to the private sector in terms of privatization, which of course has economic implications. Will the government, pending the appeal, which can take up to a year, respect the Supreme Court of British Columbia decision and not take any further actions with respect to privatization?

HON. MR. VANDER ZALM: I don't think I can discuss this particular matter, since it's before the courts, but we will certainly be mindful in considering the outcome of that particular appeal.

MR. SIHOTA: The Premier doesn't appear to understand. The question did not relate to the decision; it related to the implications of the decision and what happens between now and when that decision is heard. In that regard, people need to know where they stand.

The question to the Premier is: given the fact that that decision provides people with a choice, will the government be advising people affected by privatization that they have in law, by virtue of that decision, the opportunity to remain in the public sector — that they now have a choice? Will the government be advising public servants of that?

HON. MR. VANDER ZALM: Again, Mr. Speaker, we'll be awaiting the outcome of the decision. But in the meantime, yes, we are making considerable progress. I should mention that in the case of the privatization of highways on Vancouver Island, we still have by far the majority of the employees wanting to proceed with continuing the process, and being involved in that process. We're receiving tremendous support from these employees. These are real grassroots people that have been involved in the process, and they want to be even more involved by taking on the challenge which has been offered them. As long as we have that sort of support among employees and among British Columbians, we're making great progress.

MR. SIHOTA: I'd like to take the opportunity to invite the Premier to come out with me and go through my riding and talk to people in the highways yards.

The law in this province, as it stands right now, provides workers with a choice to remain in the public sector, as opposed to being privatized out. That's the law. Will the Premier respect that law, and will he tell the employees that they have that choice?

HON. MR. VANDER ZALM: We always respect the law, Mr. Speaker.

OPINION POLLS

MR. CLARK: A few weeks ago the Premier indicated that the government was not paying for any public opinion polling. Could the Premier advise the House whether that is still the case?

HON. MR. VANDER ZALM: I'm not aware of any polls commissioned by government.

[ Page 3367 ]

MR. CLARK: Supplementary. Could the Premier advise the House whether any Crown corporations are polling on the government's behalf?

HON. MR. VANDER ZALM: Mr. Speaker, I'm not aware of any such polls.

MR. CLARK: It has been brought to my attention that British Columbians are in fact being polled by Goldfarb Consultants on the question of privatization of B.C. Hydro. It's an $80,000 poll, and one of the questions is: "Would you like to see all of the electricity-related part of B.C. Hydro sold to the private sector?" Isn't the government's intention, Mr. Premier — through you, Mr. Speaker — to sell the electrical division of B.C. Hydro? If not, why is it that anyone would be interested in polling on these questions?

HON. MR. VANDER ZALM: I'm not aware of this poll at all. They've certainly not called me. Nor am I aware of any discussions taking place with respect to privatization of the B.C. Hydro electricity division. I'm not aware of such discussions.

MR. CLARK: A supplementary to the Minister of Energy. Maybe he could inform the House whether, in fact, these matters are under the consideration of the government, because I can go on at great length with dozens of questions regarding the specifics of B.C. Hydro privatization in this poll. Could he inform the House whether he's aware of this poll, and whether B.C. Hydro has commissioned it, and whether or not the specifics in the poll relate to government policy?

HON. MR. DAVIS: B.C. Hydro has commissioned a poll of the customers of B.C. Hydro, essentially asking them about the quality of the service of B.C. Hydro, and the poll is being carried out with a view to improving the services to individual customers on the system.

MR. CLARK: The Minister of Energy has confirmed that an $80,000 poll paid for by public money has been commissioned by this government. Nothing will be left but the wires when this government gets through with it. Could the Minister of Energy advise the House whether or not the generating stations and dams and those kinds of electrical components of B.C. Hydro are being considered for privatization?

HON. MR. DAVIS: The answer is, at this moment, no.

MR. CLARK: That answer's not satisfactory. Could the Minister advise the House why taxpayers' dollars are being used to poll on these questions if it's not the government's intention to follow through on the results?

HON. MR. DAVIS: The money involved is money collected by and administered by B.C. Hydro. They are not taxpayers' dollars.

LUNCH PROGRAM IN SCHOOLS

MR. CASHORE: A question to the Premier. Can the Premier tell us why he is continuing to refuse to feed hungry school children?

HON. MR. VANDER ZALM: This issue has been dealt with very effectively by the Minister of Social Services, who has responded to the problem and the various actions and so-called initiatives that we've seen in Vancouver, and I would defer the question to the Minister of Social Services.

HON. MR. RICHMOND: We in Social Services have the mandate to look after the well-being of children in this province, and we take that mandate very seriously. We feel that our mandate is to look after all the children and make sure that they are well nourished, not just the children in six selected schools in Vancouver.

Therefore we have urged on many occasions that the Vancouver School Board cooperate with us, so that we may get to the root of this very serious problem, so that we can make sure that other children in those families are nourished, not just those in the six selected schools. To that end, we have asked for the cooperation of the school board and have not received it. We are quite willing to put any resources needed into the funding of this program at the front end, but we will not on behalf of the taxpayers fund it at both ends.

MR. HARCOURT: I would like to ask leave to table the documents mentioned in my questions in regard to the municipalities.

Leave granted.

Hon. Mr. Couvelier tabled a statement of Crown proceedings and payments for the fiscal year 1986-87.

HON. MR. STRACHAN: Mr. Speaker, as indicated earlier, the motion with respect to the committee of privilege has precedence, the motion of the member for Esquimalt–Port Renfrew (Mr. Sihota). I adjourned debate yesterday on behalf of the first member for Cariboo (Mr. A. Fraser), and we understand that he is ready to speak. I see him there. We will continue with that debate.

[2:30]

Motions

COQUIHALLA HIGHWAY COST OVERRUNS

(continued)

MR. A. FRASER: Mr. Speaker, I want to thank you for your assistance in making it possible for me to take part in this debate on the motion before this House and ask other hon. members to be patient while I say a few words.

I have a mechanical device that replaces my vocal cords. This device has a battery and I press it against my neck so you will all be able to hear me. If the battery becomes weak, I might have to request the permission of the House to pause while I change batteries to get recharged.

Mr. Speaker, I have never misled this House at any time in the 18 1/2 consecutive years I have been a member. In November 1985 I stated in this House that phase 1 of the Coquihalla Highway project, Hope to Merritt, and phase 2, Merritt to Kamloops, would be built for an estimated $375 million. I emphasize the word "estimated." Some $250 million was estimated for phase 1, and $125 million for phase 2.

Mr. Speaker, when I stated this in the House in November 1985 I believed it to be true at that time, based on the information I had been given. All costs related to the building

[ Page 3368 ]

of the Coquihalla Highway were properly recorded in the public accounts of British Columbia, and I assume were audited by the comptroller-general and the auditor-general of British Columbia.

For this reason, Mr. Speaker, I strongly object to remarks that a coverup took place about the costs of constructing the Coquihalla Highway.

Mr. Speaker, I agree with the acting auditor-general and the newly appointed auditor-general that the MacKay royal commission did not know what they were talking about when they reported: "The Legislature was avoided. The Legislature was misled by the documents presented to it. The true costs were not reported in a forthright way. The project was redefined part-way through and expenses transferred from vote 74 to vote 69."

Mr. Speaker and hon. members, I say to you: what expertise and knowledge has Mr. MacKay about the procedures of the B.C. Legislature? I suggest to you: none whatsoever, and he should not be considered a proper critic of what takes place in this Legislature. On the other hand, the acting auditor-general and the newly appointed auditor-general are officers of this Legislature, have full knowledge of the operations of the Legislature and know what they are talking about — far different from Mr. MacKay.

Mr. Speaker, as the Minister of Transportation and Highways during the construction of the Coquihalla Highway phase 1, from Hope to Merritt, and part of the construction of phase 2, from Merritt to Kamloops, I am proud of my part in this great project.

Mr. Speaker, the original Coquihalla estimates were made public prior to detailed quantity survey. Those estimates did not properly factor in inflation. Consequently, the actual cost is higher than the original estimated cost. That, in turn, is the main cause of all this finger pointing. I accept my responsibility, as minister, for those facts. However, I can tell this House that it always received from me full disclosure of all the facts needed to do its work.

I am sorry that the actual cost was above the estimates, but many projects do go above the estimates because of the difficult terrain and changing weather conditions we have in British Columbia. Almost all construction work on the Coquihalla project was awarded to British Columbian contractors who were low bidders on the various sections of that project.

When speaking about estimates, I would remind this House that when the original estimate was made for building SkyTrain, it was estimated to cost $289 million. SkyTrain was constructed, and the final cost was — and get this — $1 billion. As hon. members know, SkyTrain was built from Vancouver to New Westminster on fairly level ground and under moderate weather conditions, compared to the Coquihalla Highway which was built over mountain ranges in all types of weather.

The staff of the Ministry of Transportation and Highways, as well as all engineers, contractors and their workers that took part in this great project are to be congratulated for a job well done and should feel proud of the part they played in the transportation history of our province, which created a third road access to the Pacific coast from the interior of British Columbia.

Mr. Speaker and hon. members of this House and all people of British Columbia, the Coquihalla Highway cost more than the estimates, but the citizens of British Columbia who paid for this safe and efficient highway got full value for dollars spent.

In closing, I have been an hon. member of this Legislature for 18 1/2 consecutive years. I would never deliberately, intentionally or any other way try to deceive or mislead this great institution of democracy. I have the highest respect for this institution and its members.

Mr. Speaker, for the reasons I have given, I cannot support the motion before us and I will be voting against it. Thank you for your patience.

[2:45]

MR. STUPICH: Mr. Speaker, this is not a moment that anyone on the opposition side would choose, and it certainly isn't deliberate. It was my intention to speak yesterday, but things didn't work out that way.

For a start I intend to comment briefly on some of the remarks from the first member for Cariboo. Perhaps it's just as well that I'm the one who's doing so. I think I'm the only one, with perhaps one other exception, who has served in this Legislature longer than has the first member for Cariboo — not continuous, but I'm in my twenty-second year now — and if we didn't have some feeling for this place and what it means, neither one of us would have been here as long as we have.

It was never our intention to single out the first member for Cariboo; nor was it the intention of the MacKay commission or of the results of the deliberations of Mr. MacKay. The first member for Cariboo said it was a job well done. There have been some minor arguments about that, but none serious. It was a job well done. It's a good highway. I've driven over it.

The first member for Cariboo talked about another job on which there was a very large overrun. SkyTrain, which was to cost $289 million, cost a billion. The point at issue here is not whether or not there have been overruns in the past, or whether there will be in the future. The only question at issue is whether the Legislature was misled — "lied to" are the words used in the MacKay commission report, or at least in comments on it. As I heard it, the first member for Cariboo made only reference to that when he said in the first place that he never intentionally misled the Legislature. The MacKay commission indeed suggested that maybe it wasn't the Ministry of Highways that was doing the misleading, that the minister himself may have been misled. That's one of the possibilities that arise.

Secondly, the first member for Cariboo said that the MacKay commission didn't know what it was talking about. If there's any case to be made for a special committee to be established, it is indeed to find out whether the MacKay commission did know what it was talking about. The first member for Cariboo was one of the witnesses who was heard at some length by Commissioner MacKay and his staff, and the questions still remain: did the MacKay commission know what it was talking about? was the Legislature misled? We have the motion asking that a committee be appointed to consider the facts surrounding the prima facie evidence that the first member for Cariboo deliberately misled the Legislature. As the first member for Cariboo suggests, perhaps he wasn't the one who did the misleading. He didn't say that, but with the MacKay commission inquiry report before us, we have to consider that possibility.

There are many parts that one could read from the MacKay commission, but in part it.... The Journals for

[ Page 3369 ]

1987 show that on March 19 the first member for Saanich and the Islands (Hon. Mr. Couvelier), in his capacity as the Minister of Finance, tabled the Public Accounts for the fiscal year ended March 31, 1986. In view of the evidence that was presented to the MacKay commission, the first member for Saanich and the Islands must have been a knave or a fool to have presented those accounts in the way they were, and I leave it to him to say which he was. For him to be as ignorant of what was there as he would have to be to present them, I wouldn't believe. So I say, either a knave or a fool. The Public Accounts claim that vote 74 was spent on the construction of the Coquihalla Highway and related projects.

If we look at the report presented by the auditor-general, we see that Coquihalla and related projects narrows down to a strip of highway with one end not even part of the Coquihalla and related projects. One end was defined as part of the Coquihalla and related projects and the other end was in vote 69. Such an arbitrary distinction obviously was not what was intended in the first place. There's no question about that.

The first member for Saanich and the Islands in his speech yesterday talked about a specious allegation. Well, if it were just specious we wouldn't be discussing this resolution today. Mr. Speaker in his wisdom decided that it had some substance to it. The first member for Saanich excused it on the basis that unemployment was high at that time and it was important for the government to do something, and it provided direct and indirect employment. That's admitted. It reduced travel time, we admit that. It saves fuel: well, of course it does. A valuable contribution to the economy: yes, indeed. Nobody benefited illegally: well, that's never been questioned, to my knowledge — benefited, yes, but not illegally.

The first member from Saanich went on to say that no further inquiry is necessary, and the government House Leader said nothing more than that political voyeurism leads the opposition into this attack. The first member from Saanich said the commission did a complete job. The government House Leader said the commission did a good job.

The first member from Saanich went on to say that there are only two reasons for pursuing this motion; one of them to attach blame, the other to make sure it doesn't happen again. Blame has already been directed. It's been directed at a number of people, members of the House now and members who are no longer in the House, including the former Premier, Bill Bennett; the member for Shuswap-Revelstoke (Mr. Michael), who was a past Minister of Highways; and, of course, the first member for Cariboo (Mr. A. Fraser).

Also, all of the members of the Bill Bennett cabinet at the time of the election must have been in on all of the discussions about the rearranging of dollars that was reported so well in the MacKay commission report. They all knew about it. They attended cabinet meetings. It's just inconceivable to believe that the first member for Cariboo could have singly, solely, all by himself, without anyone else's knowledge or collusion, lost half a billion dollars and nobody else knew about it.

HON. MR. COUVELIER: Then why proceed with this inquiry?

MR. STUPICH: I'm coming to that. The first member from Saanich wants to know why I'm proceeding. Well, I'm coming to that.

All of those people knew about it, and all the members of the current cabinet must have known about it. Then he went on to say the second reason is to make sure it doesn't happen again. What is the "it"? The it could be the overrun. Well, we've been told by the Minister of Finance that steps have been taken to make sure that such overruns don't occur again. But the it could be something else indeed. It could be the deception. Have they taken steps to make sure the deception of the Legislature talked about in the MacKay commission does not occur again? That's the question.

The first member for Cariboo said that the commission doesn't know what it was talking about. Well, the commission was well chosen. We didn't choose them, and they were well supported by what I believe to be competent staff. They're listed on page v of the Acknowledgments: Mr. C.F. Murphy, QC; Mr. G. Macintosh of the firm of Farris Vaughan Wills and Murphy; Mr. D. Hooper, CA; Clarkson Gordon. Some members, not very many, will remember the Clarkson Gordon report of 1976, so we're still using Clarkson Gordon — a good firm — and Mr. Pankratz of the same firm.

The MacKay commission was a well-organized commission. To simply dismiss them by saying they didn't know what they were talking about is not good enough, in my opinion. Page 69 of the report....

Well, I listened carefully to the Minister of Finance and I'd ask him to have a little patience. I don't have that much time left. I'll try not to bore him too much.

"The commission cannot find that this transfer from vote 74 to 69 was acceptable when it had the sole effect of making the project on-budget..."

The auditor-general says he doesn't know why it was done, and because he doesn't know why it was done it must be okay. The commission didn't take that stand. The commission did inquire into why it was done and came to the conclusion that it was not acceptable, because it was done for the sole purpose of making the project on budget.

"...by shielding prior decisions on significant additions to scope, and by altering the basis for reporting the project's total cost.

"When all of the foregoing is added to the findings of chapter 3, including the misleading news releases issued about the project, the commission finds the financial reporting of the Coquihalla Highway project to be tainted with an atmosphere of deceit and prevarication by both politicians and public servants."

That's the finding of the commission.

The acting auditor-general: his name has been brought into this and there are a couple of letters. I'd like to just read briefly from the first of them dated November 9 and addressed to the first member for Vancouver East (Mr. Williams): "Our reports on this work contained warnings that if heeded could have prevented many of the problems of the Coquihalla Highway and perhaps eliminated the need for a commission of inquiry." So the acting auditor-general admitted in that first letter that indeed there were problems — reporting problems, financial problems. "In 1985 we reported the results of our audit of ministry annual reports, which concluded that legislators and the public were not getting the information they needed to judge the performance of ministries." The Legislature wasn't getting the information, according to the auditor-general. "In large measure, it was the disclosure of the costs of the Coquihalla Highway which led to the commission of inquiry. These costs would have been clearly evident to everyone if the recommendations of our report had been adopted." So indeed, Mr.

[ Page 3370 ]

Speaker, the acting auditor-general was saying that the government was hiding things from the Legislature.

Again in a second letter, dated January 22, to the same first member for Vancouver East: "...if our warnings had been heeded, proper disclosure of the costs of the Coquihalla Highway would have resulted. Legislators would also have had factual information" — which means to say we did not have factual information — "against which to evaluate statements made by the government about the costs of the highway."

The auditor-general on page 5: "We cannot attribute any motive to the transfer, as we cannot know the intentions of those who made the reclassification or directed that it be made." Well, as I said earlier, the commission did inquire into the reasons and came to its conclusions. The auditor-general made no inquiry, and since he made no inquiry, he had no reason to think that anything other than what was there was correct. He didn't look for reasons, so he didn't find them.

Mr. Speaker, to make sure it doesn't happen again.... There's a perception in the community that several ministers participated in an attempt to deceive the legislators, the Legislature. That's in the commission's report. While that perception is in the minds of the community, I think it's important that we deal with it. It's not good enough to leave that out there and to leave the perception that some or all of the half-dozen people whose names have been linked with this — quite apart from all their fellow members of two cabinets — lied. I've been here 22 years, but never in the history of the province have I heard of more than one person accused of lying to the Legislature.

Now we're told that there's evidence. The commissioner, in talking about the evidence, described it as "testimony and documents" leading the commission to the conclusion that the Legislature was deliberately deceived by cabinet ministers. That's a question that should be answered. It should be answered by a committee that can call witnesses and put to them the kinds of questions that could not be put to them by the commissioner because that was beyond his terms of reference.

The terms of reference are included here, as to what he could do and what he couldn't do — what he was hired to do, if you like. They are:

"...to compare the estimates and costs of the Coquihalla Highway; to find the reasons and justification for differences between estimates and costs; to examine other recent highway projects where costs may have differed from estimates; to investigate the procedures for costing, administering and reporting highway projects; to make recommendations."

Mr. Speaker, nowhere in there did the commissioner feel that he had the authority to ask people the kinds of questions that arose from his gathering of evidence, his listening to evidence, his perusal of documents — the people who he had working with him. Nowhere in there did he have the authority to go in the direction that he felt his findings would lead someone to go to find the truth of the matter.

"From all of the evidence — testimony and documents — on matters of authorization and reporting of the Coquihalla Highway, the commission finds" — these are distinct, deliberate findings — "the Legislature was avoided; the Legislature was misled by the documents presented to it; the true cost were not reported in a forthright way; the project was redefined part way through, and expenses transferred from vote 74 to vote 69."

Skipping along:

"The political decisions were implemented by senior administrators who could not have been unaware of their purpose. The financial statements, the ministry brief and the auditor-general's report did not reveal the transfer of costs from vote 74 to 69."

The Province, Thursday, February 25: "Taxpayers Taken for a Rough Ride." Just one sentence out of this: "The people of British Columbia have been lied to and deceived for political purposes."

A story from the Times-Colonist, March 3, and just quoting briefly: "The people of this province" — and skipping a few words — "know they were lied to and deceived.

[3:00]

From the Vancouver Sun, February 25: "The deception by the government of Bill Bennett was outlined in the report of special commissioner Douglas L. MacKay.... He concluded: the Legislature was avoided; the Legislature was misled; true costs were not reported in a forthright way; the highway project was redefined part way through, and expenses transferred from the appropriation authorized by the Legislature to another vote."

"...advance reports suggest that the present government, which was not accused of anything by Mr. MacKay, will try to block it" — the inquiry. "This would be a mistake for the sake of the government's own reputation, as well as that of the Legislature."

That was from the Province — I'm not sure what I said.

This one is from the Times-Colonist: "The commission found, among other things, that 'the Legislature was avoided...was misled by the documents presented to it...true costs were not represented in a forthright way...these deliberate and planned actions were politically motivated and were designed to give the impression of good overall budgeting and...that the Coquihalla Highway was on budget."'

The first member for Cariboo may have contributed to that process, but he certainly was not the only cabinet minister to do so. In our parliamentary system of government, responsibility for policy decisions rests with all members of cabinet. Is the first member for Cariboo's head the only one on the block because he had the temerity to denounce the privatization of highway maintenance? I quoted the reference.

Mr. Speaker, my point in reading this material is to try to emphasize that the public has been reading this about the report. Not many of them have had an opportunity to read the report, but they have read from the report. The editorial writers and the column writers are all telling them that the Legislature was misled — in some cases they say, "lied to." That has never happened before in the history of the province. There have been charges that one member may have done this, and usually they've had to be withdrawn. Never before have so many people been accused of working together in collusion to mislead the Legislature.

To cover up a half-a-billion-dollar overrun, there had to be collusion; there had to have been quite a number of people involved in this. The commission did find that they were politically inspired decisions rather than financial ones, and indeed, in some instances, relinks the Finance ministry very closely to the decisions and the actions.

[ Page 3371 ]

While people in British Columbia are reading this and are aware that the Legislature — of all places — has been lied to.... Now that isn't supposed to happen here. Very seldom is anyone even accused of lying in the House, and as we all know, it's withdrawn unless you can prove it. In this instance, the commission has gone a long way towards proving it, and they've certainly proven it to their own satisfaction. For the sake of those who have been charged and for the sake of those who still believe in our system of government.... I do. I wouldn't have been here for 22 years. The first member for Cariboo would not have spent 18 1/2 years here, and others who have been here for a long time.... We must have some feeling for the place; we must have some positive feelings for it. For a member of the opposition, and perhaps even more so for a member of the back bench, it must be awfully frustrating at times, not being able to do the things that one can do in cabinet. That's frustrating, but it doesn't make one cynical. It takes something like this to make one cynical about the process.

If a government, supreme in the knowledge that it can do whatever it wants and get away with it, is prepared with cabinet members in such numbers to work together to mislead the House, then what future is there for democracy in British Columbia? What's the point of it all? Why elect governments, if this is the kind of treatment we're going to get from them?

The people in British Columbia have a right to know and to have it definitely established by a committee — a committee, I would hope, that would be chaired by a member of the opposition and that would have the authority to call before it any witness that anyone on that committee wanted to hear. Only then can we really find out who is telling the truth and who isn't. There's not a great deal that can be done to any of the people. I don't suppose there are any charges that can be made afterwards, but at least we'd be getting at the truth.

If indeed there are people who have participated in a campaign to mislead the Legislature, then that truth should come out. We should know it. The people of British Columbia have a right to know that these people had their day in court and their opportunity to answer all questions put to them and to make their submissions and argue to try to convince everyone — as the first member for Cariboo did — that he never intentionally misled the House. He had that opportunity in the House today; others have their opportunity here, but there isn't the opportunity to cross-examine them. Only a committee of inquiry can remove this cloud that currently hangs over the Legislature of British Columbia.

I believe there is only one reason for not going the committee route on the part of the government, and I'm sorry to have heard the government House Leader say yesterday that he would be voting against this resolution. Obviously, that means that the government would be turning it down.

But I would submit, Mr. Speaker, if I can't talk to the members on the government bench, perhaps I can talk to some of the back-benchers. This has been a great place, and I have spent just about 22 years here. But I believe there is a real cloud hanging over it right now. Nothing like this has ever happened in the province before and, to the best of my knowledge, anywhere in Canada — nothing as big as this.

It is important that we get at the real truth. The commissioner said he couldn't, but he recommended that it be done: "The commission finds that its terms of reference do not permit it to make any further inquiry." The implication is that he would like to make a further inquiry, but his terms of reference didn't provide for it.

Mr. Speaker, I don't know what I can do other than appeal to the House Leader to change his mind about this resolution. That is the only way, in my opinion, to remove the cloud that hangs over this place. I've been here a long time, and I rather like it. I expect to be leaving it; it has to come to an end sometime. But I don't like to leave it with this kind of cloud hanging over everyone. There has been the suggestion that all of us should have known better, that we should have caught it sooner, but the real criticism is against the government, many of the members of which — if one can follow the track of the commission report — participated in this attempt, as one of the newspaper articles said, to lie to the Legislature. Many of them, Mr. Speaker, not just one. Not just the one referred to in this resolution, but other members as well. All I can do is appeal to the government to change its position. Let's have it out. Let's get at the truth, because then it's gone.

I can remember a former minister of the Social Credit government quite some time ago, who lost his position because he did lie to the press and to the Legislature actually. Each time he lied, the truth was found out, and he had to tell another lie to cover up. After the fourth or fifth lie, he lost his position in cabinet and got another one later on.

If you can agree to a committee of inquiry, it will get the truth out of this matter. Once the truth comes out, as I say, that's the end of it. But at least people will know that the system works, that you can't get away with lying in the Legislature, that the members of the Legislature have an opportunity to bring you to task if you are accused by someone with the ability, if you like, of the MacKay commission. That's a pretty strong document, Mr. Speaker, and there have been strong comments about it.

There's only one way to get at the truth, to absolve the people who are indeed innocent. For all we know, the first member for Cariboo (Mr. A. Fraser) may be innocent. There's only one way to get at the truth, and that is through a committee that has the power, the authority and the freedom to dig until it gets the truth, to absolve from blame any who are blameless, to clear the cloud away from the Legislature and to find guilty those who are guilty. That will be the end of it. As I say, there's really no punishment after that, but at least the truth will be out, and the people of the province will know that there is always that way of the Legislature getting the truth.

If the government, in its determination to defeat this motion — which it can, 46 to 22.... It can do it, sure. Mr. Speaker, that doesn't give us the truth. All that will do is convince people more than ever that the government has something to hide. I wouldn't think that the government itself would want that to be the answer coming out of this debate. Is that really what they want to tell the people of British Columbia: "We have something to hide; we don't want to go any further with this. We think it will cost a bit money, and it's not worth it to clear up the questions"? Mr. Speaker, I can't accept any of those arguments, and that's about all I've heard. It's a serious matter. I ask the government members to consider it seriously before they vote.

HON. MR. ROGERS: As the member for Nanaimo said, for those of us who have been here some time — I haven't been here as long as he has, but I have been here 12 years and then some — this is a very different kind of debate than the kind we are normally engaged in. But during almost all of the

[ Page 3372 ]

12 years that I've been here, the first member for Cariboo — in fact for many years the only member for Cariboo — was the Minister of Transportation or the Minister of Highways, anyway. The portfolio changed a little with definition over the years. In an amusing way, he was always highly revered by everybody, because almost everybody had some project in their riding that needed highways work, except for those of us, I think, from the metropolitan area, which isn't covered by the ministry. In all that time there has been a great sense of dignity that went with this gentleman. For his performance today in the House and for the difficult work he had to do in order to come and speak, I would like to send him my personal congratulations for having the courage to come from what is obviously a sickbed to defend his honour and his position in this House.

But the question really before us is: has the House been misled? I can recall when Mr. MacKay was originally commissioned to do this report that there were cries that it would be a coverup and that it would be a hollow report, and I don't believe anybody's calling it a coverup today. I think it's probably one of the most thorough investigations of a highways project done by anyone. I also have known Mr. MacKay for some years, and his integrity I think goes without question. Those who may have questioned his integrity before certainly should not be questioning it now after his having put in this report.

I want to focus for a little bit on the magnitude of this project and the condition that the Ministry of Transportation and Highways was in when it was given the challenge to build the Coquihalla, phase 1 and phase 2. It is worth noting that the ministry had not actually done a major highway construction project in many years. While there had been some bridges built and major highway rebuilding, there had not been a major greenfield construction project in this Ministry of Highways in the last 20 years. Certainly none of the senior people who were in the ministry at the time would have had the experience or the possibility of working on a project this big. It's my information that the Coquihalla phases 1 and 2 was probably the largest highway construction project done anywhere in North America in this last decade.

Having said that, I wonder — and others have wondered — whether the whole magnitude of the ministry, from the deputy minister right down to the very bottom, had the ability, within the time-frame they were given, to do this project without running into the kinds of problems they ran into. Remember that they were put under the time-gun of Expo 86. They were also told to speed this project up, to at all costs.... Not at all costs: it's not the right word to use.

Interjection.

HON. MR. ROGERS: It isn't, though, because I was there and those are not the instructions they were given. But they were given the instructions to go ahead and build the highway, and there was even at that point some reluctance by the ministry to say: "This is a major project, a very big project, and it's going to cause some problems." They were told: "No, you can get on and do it."

I can't emphasize enough to the members of this House the strain that was put on the employees of this ministry. Everybody who was involved, from the deputy minister down, worked on this project like they had never worked on a government project before. The same thing can be said for the contractors, the subcontractors, the suppliers, the people who supplied the suppliers and, of course, the workers — the contractors' employees and the ministry's employees. With a dedication that we have not seen before, and with a target that was looming up on them in terms of construction date, the ministry staff went about the task of completing this incredible project. Somewhere along the line not absolutely every single, systematic, regular reporting system fell into place as it had usually done. Many errors were made in estimating quantities of work, and errors are still made in the estimation of quantities of work.

In that process the question is: were we deliberately misled, or did the system strain so much that it was unable to come up with the data in time for the members of this House? I've had this ministry for a few months now, and I've not detected anybody who has any malice whatsoever. In fact there is a pride in this ministry that is not always there in other ministries. The ministry perhaps should have said: "We'll open it the year after Expo." But they would accept the challenge. They have dignity and pride, and when they're challenged to do something, when they're given a challenge that's a once-in-a-lifetime challenge in some cases for a project this big, they took it on.

[3:15]

Perhaps they were delinquent in not focusing as much on the accounting side of it as they did on the construction side of it. I would suggest that those people who have travelled the highway since and those people who used it to gain access to Expo would not question that too much. They would say they did a very fine job on concentrating on the construction. There even are some errors in the construction which I'm sure we'll hear about from time to time. This ministry will now be under a looking-glass, and it's my prediction that when the next problem comes in one of the ministries of government, it probably won't happen in the Ministry of Transportation and Highways, because everyone will be watching us with such incredible scrutiny.

Mr. MacKay, when he examined the ministry, also identified some procedures that were quite out of date in terms of reporting — procedures that had served the ministry very well. He made a number of recommendations, and as a matter of course these recommendations have largely been implemented by my staff and myself in terms of where the ministry goes. I cannot believe that anybody in the ministry with any malice or any lack of foresight decided that the ministry was above and beyond the Legislature and that they were able to go ahead and spend money without the authorization of the Legislature. I think if some of them had the chance to do it over again, they perhaps would build the project the same way but would hire more staff on the accounting and reporting end of it.

The magnitude of this project strained the resources, at construction and accounting levels, of absolutely everybody involved — from construction companies to the ministry and the ministry staff. The members of this House and, I believe, the members of the executive council.... But I was not a member of the executive council for the particular period of time that the great balloon took place.... I don't believe the members of this House were misled intentionally. I believe that if we had to do it again, we would have started the project two years sooner, and if we had the luxury to start it two years sooner, we would probably have built it for the same cost, but would not have run into this embarrassment of having the issue before the House for debate today.

[ Page 3373 ]

On behalf of myself as a member of this House, I find it awkward to speak during a debate on this particular subject. But as the minister responsible for what's left of the ministry — those people who remain and who have dignity and pride and have served this province well and intend to continue serving this province well — I would suggest to you, Mr. Speaker, and other members of this House that, given the challenge to do it again, either we would be pragmatic and say: "Postpone the project, or give us advance warning next time." Or we would say: "We will do the challenge if that is the direction of the government of the day, but we will have some difficulties." The difficulties will be exactly the same difficulties that Mr. MacKay reported.

Mr. Speaker, when my estimates are discussed in this House, I'm sure this thing will go into much further detail. But I don't believe my colleague, the first member for Cariboo — a man with great pride and great dignity — personally ever misled this House. I will be voting against the motion.

MR. HARCOURT: I rise to support the motion that was put forward by the able member for Esquimalt–Port Renfrew (Mr. Sihota) in regard to setting up a committee of this Legislature. I listened very carefully to the Minister of Transportation and Highways, and I wanted to respond to him, but I see that he has taken off. So it's very difficult for me to address these words through you to him.

The Minister of Transportation and Highways said that the issue is whether the House is being misled; that's not the issue before us at all, Mr. Speaker. The issue isn't whether the House is being misled; the issue is whether this Legislature should set up a committee of the Legislature to investigate the matters raised by the government's own commission — the MacKay commission. That is what is before this Legislature.

What is before this Legislature is not just the conclusions of the MacKay commission, but the events surrounding the MacKay commission and many other pieces of material. It is not just whether the first member for Cariboo has misled this Legislature, but it is the very real fact that the events that took place over the last few years were not known just by the first member for Cariboo (Mr. A. Fraser). To say otherwise is just not believable by the people of British Columbia. To say that a $500 million cost overrun was covered up for over two years, and that it was done solely by the first member for Cariboo in his previous capacity as the Minister of Highways is just not believable by the people of British Columbia. That is why we are here. The prima facie case that has been put before the House to see if this Legislature will establish a committee of the Legislature: that is what is before us. That is what I intend to address.

I think it's important, when we consider the issue of a $500 million cost overrun that was covered up — a half a billion dollars, the most massive cost overrun that we've had in this province.... That is the conclusion of the MacKay commission that was established by this government. I would like to refer to page 71, which would be very useful for members of this Legislature if they haven't read the MacKay commission. If they're going to read only one page in the MacKay commission, I recommend that they read page 71 of the report. The conclusions are, and I quote from page 71 of the MacKay commission report that was tabled with the Lieutenant-Governor-in-Council on December 21, 1987:

"From all the evidence — testimony and documents — on matters of authorization and reporting of the Coquihalla Highway, the commission finds: the Legislature was avoided, the Legislature was misled by the documents presented to it, the true costs were not reported in a forthright way, the project was redefined part way through and expenses transferred from vote 74 to vote 69.

"These deliberate and planned actions were politically motivated...."

I think most importantly — and I listened very carefully to the presentations earlier from the first member for Cariboo and the first member for Nanaimo (Mr. Stupich), who indeed have been in this Legislature for many years — the commission says:

"The commission's terms of reference directed inquiry into the ministry's practice and procedures in the administering and reporting of projects. This it has done and is satisfied that the reporting irregularities documented here did not originate within the Ministry of Transportation and Highways."

The commission goes on to say, Mr. Speaker: "The commission finds that its terms of reference do not permit it to make any further inquiry" — basically that there is a need for the Legislature, through a committee, to make that further inquiry. That is the conclusion from the MacKay commission: if the Legislature was avoided, the Legislature was misled, the true costs were not reported in a forthright manner, these actions were deliberate, planned and politically motivated, then it's the Legislature which should be setting up a committee to deal with these matters. That is why we are here.

I found it unfortunate yesterday that the Finance minister (Hon. Mr. Couvelier), the member for Saanich and the Islands, who also is not here, could only engage in a fierce personal attack on the member for Esquimalt–Port Renfrew, working on the theory that the best defence is an offence. He failed in that theory; he simply succeeded in being offensive. He was basically attacking the member as inexperienced, that the member was personally going after one of the longest serving, best known and most successful elected members in this Legislature. I found that offensive indeed, because that is not what we are doing here today nor has the New Democratic Party ever intended that.

When we asked questions in this Legislature in 1984, 1985 and 1986, when we started to ask the Minister of Highways at that time, the member for Shuswap-Revelstoke (Mr. Michael), in July, it was not to deal with one member, because it is beyond comprehension that the first member for Cariboo would be the only one involved in the $500 million cost overrun and the fact that the Legislature was avoided and misled and that these were deliberate and planned actions. The commission indeed said that it did not originate with the first member for Cariboo, the then Minister of Highways, and that there is a need for a legislative committee to look at that. We then heard from the member for Prince George South (Hon. Mr. Strachan), the House Leader and Minister of Environment, who said we've already had an inquiry. Well, it's true, we had an inquiry, and I've just read you the conclusions of that inquiry, which are absolutely startling. We have never seen anything like that in the history of this Legislature. For a man of the stature of Commissioner Doug MacKay to say that the House was misled and avoided, that these were deliberate and planned actions that were politically motivated and that these irregularities did not originate within the Ministry of Transportation and Highways but at the

[ Page 3374 ]

top leadership of the Social Credit government  — we say past and present  — is an astounding finding indeed.

We have also seen an attack on Commissioner MacKay, that he is inexperienced in the rules and regulations of the House. That's when you've got a weak argument. You always fall back on technicalities. If you can't win on substance, you fall back on technicalities.

I want to let you know about Commissioner MacKay. I had the honour of serving with Commissioner MacKay, as did the present Premier, for many years when he led the regional district in Vancouver with a population of 1.3 million. With the multimillion dollar construction contracts and proposals that he was in charge of as the commissioner of the regional district and as the engineer in charge of the water and sewage and all the public works in the regional district of Vancouver, to say that that man is inexperienced in government procedures and in multimillion dollar construction contracts is to miss the whole reason that the government chose Commissioner MacKay in the first place.

I think it was unfortunate that Commissioner MacKay was diminished by those attacks on him by the Minister of Finance and the Minister of Highways just a few minutes ago. I want one thing to be very clear. Even if this present Social Credit government do as the government House Leader has said they're going to do, which is to not vote for this motion for a legislative committee, the people of British Columbia still know that there was a half a billion dollar cost overrun and coverup. That is still there staining the affairs of this province.

[3:30]

This matter of the coverup of the half-billion-dollar cost overrun, as we've said from the beginning, does not rest solely with the first member for Cariboo, and it doesn't just rest with the past government; it rests with the present government. I would like to spend a few minutes talking about the relationship between the first member for Cariboo and the present Premier, and I'd like to lay out some history to set the context for that relationship.

As we're aware, in August the hon. Premier was elected leader of his party and sworn in as both Premier and Minister of Finance on August 14, 1986. As we know, as Minister of Finance the hon. Premier became the chairman of the Treasury Board. Hugh Curtis, the former Finance minister, was appointed the co-chair, at that time, of the Treasury Board, an appointment not provided for in the statute and one which is believed to be unprecedented in British Columbia.

Next in the sequence was that the first member for Cariboo was sworn into the first cabinet of the new Premier. The first member for Cariboo knew that with his old colleague, Hugh Curtis, co-chairing the Treasury Board with the hon. Premier, support for the Coquihalla was every bit as strong as it had been in the previous Premier's day. We have a pretty good idea about what the member for Cariboo knew and when he knew it.

What we want to ask now is: what did the Premier know and when did he know it? He knew, or ought to have known, first, from the briefing that he received from Mr. Curtis as they worked together to run the Treasury Board, that this massive project had great difficulties. It's beyond credibility to say that it would not be one of the first matters that would be considered by either the Minister of Finance or the Premier, and if they didn't, it's absolutely astonishing to believe that they didn't. They had to have had regard to this critical project in a critical stage; it is just beyond the bounds of any reasonable person's thoughts that the Premier or the Minister of Finance would not have known about this project, its cost overruns and the coverup that had occurred to date.

I think it's also clear that the member for Cariboo knew that the public accounts would show the redefined scope of the Coquihalla Highway. He would be unconcerned about the cost overruns because he knew the hon. Premier presided over the preparation of the accounts in the Premier's capacity as Minister of Finance and chair of the Treasury Board. The Premier, the first member for Cariboo would think, would support him and, indeed, that the coverup that had occurred would be maintained. And so it turned out to be for a time.

The next important sequence and date in the review of this period of history of the Coquihalla is September 7, 1986, when the hon. Premier and Minister of Finance released the forty-sixth edition of the Financial and Economic Review. The review presents, in the words of the hon. Premier in his preface, "comprehensive and up-to-date information on the recent activities and finances of the provincial government and the Crown corporations...." The Premier took pride in the review as "a document of record on the economy and finances of the province of British Columbia." The review includes the preliminary financial statement for the fiscal year ended March 31, 1986. These statements show that for vote 69, Highways operations, $478.8 million was estimated, and an additional $118.8 million was added as a result of a special warrant, for a total of $597.6 million. The actual expenditure is given as $585.9 million, for a net under expenditure of $11.6 million. However, no mention is made of the Coquihalla allocation to vote 69. Mr. Speaker, the statements were designed to conceal the coverup of the Coquihalla.

The pious level of political leadership's expectations that the coverup would be maintained was fulfilled with the forty-sixth Financial and Economic Review. For the first time, the misleading allocation of vote 69 and vote 74 appears in a document of record, made available to the public and circulated to members by the Premier.

One of the conclusions of Commissioner MacKay perhaps the most important one, as I said previously . was that the Legislature was misled by the documents presented to it, and that the true costs were not reported in a forthright way. He found that the project was redefined part way through, and expenses transferred from vote 74 to vote 69.

1 repeat  — because it's important for this Legislature, as it considers the necessity of a committee, to understand the scope  — that this was not the intention and the actions of the lone member from Cariboo, the first member for Cariboo; that these were deliberate and planned actions which were politically motivated and designed to give the impression of good overall budgeting, specifically that the Coquihalla Highway was on budget. I repeat, Commissioner MacKay also found that none of the reporting irregularities originated with the Ministry of Transportation and Highways or its minister, the first member for Cariboo.

[Mr. Pelton in the chair.]

There was no effort to reveal the truth about the Coquihalla. It is difficult, as a matter of fact next to impossible, to believe that the Premier and Minister of Finance knew nothing of the largest cost overrun in the history of this province.

The Premier retained Hugh Curtis's Deputy Minister of Finance, Mr. Philip Halkett, in a senior capacity in the

[ Page 3375 ]

Finance ministry. Mr. Halkett was acting deputy minister from July 1, 1986, to September 1, 1987, when he became secretary of the Treasury Board. It is inconceivable that Mr. Curtis or Mr. Halkett would not have advised the Premier about the major items facing the ministry, including the Coquihalla Highway costs.

I find this whole episode very disconcerting and discouraging. I'm appalled at the way the financial affairs of this province are run. I come here with a background in the private sector and as the mayor of the third-largest city in this country  — as you do, Mr. Speaker; you come with a municipal background  — where we have to balance the budget, where there is full disclosure of our finances, where people have got to see the budget every year. Our capital financing in Vancouver is done through the vote of the people of Vancouver, up front. I as the mayor was able to persuade the people of Vancouver in a vote, where 75 percent of the people in our city voted for a new Cambie bridge to be ready for Expo — and it was ready, 25 percent under budget, seven months ahead of time, and all with union labour. There was a one-year process of public consultation and participation and, during construction, monthly printouts that were publicly available on construction progress and the financing of that project. That's accountability, and that's the way the books of this province should be run, not in this disgraceful way that the Coquihalla was built, and covered up.

A half a billion dollars, Mr. Speaker. I'm angered by that. And I'm angered on behalf of the people of this province, the taxpayers who were run through and lied to for a half a billion dollars.

What we need out of this episode is a committee of this House to inquire into the highest level of the past and present administrations of the Social Credit government, into the half billion dollar overrun and into the coverup of that, on a continuing basis. We need to clean up the fiscal affairs of this Social Credit government, which has had six deficit budgets in a row and has seen our credit rating diminished to a double A and getting shakier. What we need is the truth to be told to a legislative committee about a cost overrun of a half a billion dollars, $500 million, the largest overrun in B.C. history. The truth will not be covered up by Social Credit past or present.

MR. MERCIER: The political rhetoric is great, but I think what the public is interested in are facts, and the facts are that there is no coverup. Never has there been such an extensive examination of a project in the history of this province. The facts don't warrant or support the motion to further belabour the issue at hand. The truth is already known.

The opposition is being vindictive, and for what purpose? What can they hope to achieve? What do they think they'll find out that they don't already know? I'm concerned that they are effectively attacking the acting auditor-general and the office of the auditor-general.

I think that it's a very serious step they've taken through their member for Esquimalt–Port Renfrew (Mr. Sihota), who actually has spent a lot of time in the past year proving that he's expert in many affairs. He's expert on the Vancouver Stock Exchange and all securities matters, and now he's an expert in highways construction, accounting and auditing and the operation of the auditor-general's office. Actually, things that are heavier than air don't fly for very long, so I expect he'll come down to earth in the next year.

They're trying to elevate the substance of the event. The substance of the event is already known. The auditor-general reports: "...the government was within its authority to account for the highway costs as it did, and the costs charged to the votes were permitted within the vote descriptions." The reason: "Because the government rather than the Legislature made the original allocation, it was the government's prerogative to change it, as long as the resulting allocation did not conflict with the meaning of the vote description." Throughout his report, the auditor-general reports support for the substance of the transactions that took place. I won't go into detail, but on pages 4, 5, 10, 13 and 14 he basically repeats the same tenets, the same accounting and auditing principles, that support the project in total.

Now the MacKay report: it was good as far as it went. I don't think the MacKay report did a very good job of describing how the allocation from vote to vote took place, and there were cases in the report that I think went beyond their mandate.

The report followed some quotes in a letter from the member for Vancouver East to the auditor- general. who had said: "...there were flagrant violations, false reporting and false billing...." I would like that member to one day apologize for making those accusations and pointing them in the direction of the auditor-general in his letter of November 1987, because the MacKay report clearly establishes that the ministry's records were corroborated in all important respects, there was no evidence of excess payments made to contractors, and the prices bid and the profits made by the contractors were not excessive. It's not very often that the member for Vancouver East would eat his words, but I would say that this would be a good time for him to start.

[3:45]

Now for the procedures that were adequately documented in the MacKay report. What I think the public is aware of and what I would say in response to the opposition who say there was a coverup, and the truth must be known, and why they want to have a committee.... The public is aware that the highway was constructed, and that although the costs exceeded the estimates, there is no proof other than that we had value for the money expended. Nowhere in this whole issue has the opposition recognized the fact that the people who benefit from the highway got value for their money and therefore the people of this province got value for their money.

I think it was wrong for the MacKay report to speculate:

"...one wonders whether funding would have been provided for its completion on the schedule and to the standards that it was built."

That is pure speculation. The people saw the highway being built; the opposition saw the highway being built: they knew that there were people employed and equipment employed and millions of dollars being spent. If they were so certain there was something wrong, they could have started making their inquiries a lot sooner, and they would have had the answers then, and they wouldn't be wasting our time now.

The report does condemn certain management practices. As the current Highways minister stated, those practices were in effect for decades including the period of 1972 to 1975. Our government has taken all the necessary steps to prevent a similar event in the future.

What I think the member for Esquimalt–Port Renfrew is attempting to do is elevate the cost overrun beyond the criticism set forth in the MacKay report, and again I ask: for

[ Page 3376 ]

what purpose? What does he hope to achieve? He's overstepped the bounds of parliamentary privilege and his own area of expertise to question the opinion of the acting auditor-general in this matter, and more latterly, he goes to the press and criticizes, indirectly and partly directly, the words of the current auditor-general. I think he's overstepping his bounds. Throughout the information that has been provided, it is clear that no one is going to be hung; no one is going to be jailed; and no one is going to be fined. So what exactly is it that the opposition is taking our time for at this point?

Notwithstanding the overrun was large compared to original estimates, it is clear the MacKay report findings were not material with respect to the total provincial operating results for the year. And for those who are not familiar with the process, the province received an unqualified report from the acting auditor-general. The reason the report was not qualified is because they found no reason to qualify the report. So again I repeat: the member for Esquimalt–Port Renfrew has far overstepped the bounds that the public expects and is wasting the time of this Legislature.

If the lawyer for Esquimalt–Port Renfrew will allow me, I suggest he is taking on an accounting matter— a cost overrun — and attempting to turn it into something more substantial. In the process he's sacrificing the procedures of this House and the reputation of some of the members, I think for his own glorification.

The MacKay report was sufficient. The public is aware of the events and the results. The government of the day did nothing different than the 1972-1975 NDP government did, which spent $100 million more in a ministry than they had planned, and the minister of the day responded: "What's a hundred million?"

I look forward to the improved accounting and management procedures promised by the Minister of Highways. The member for Esquimalt–Port Renfrew continues on a path where his research and presentation are inadequate to the task, and he will usually fail, like the current motion should fail. As the first member for Cariboo stated, the statements he made in the House were the truth, based on the information available to the minister at the time. He refutes the conclusions in the MacKay report with respect to misleading the Legislature. In highway estimates, the quantity surveys and other measurements are a very complicated matter, and I believe that our practices now and in the future will give greater accountability to those factors. The project on its own was significant. The issue of disclosure must be related to the provincial budget in total, and that is what the auditor-general has done. It was a management decision to direct the funds, which was in the purview of their management responsibilities, and therefore there is absolutely no reason to support the motion.

MR. MILLER: Mr. Speaker, the last speaker, the member for Burnaby-Edmonds, says it all. He said it all when he said the MacKay report was good as far as it went but it didn't go far enough. There's more to this story. I think it was a bit unfortunate in some sense that the first member for Cariboo has to stand in this House in defence of what took place during that period of time. I know the first member for Cariboo — not well, but I think he's a scrapper; I think he's a fighter and can take care of himself. I would rather have seen, perhaps not in this chamber, the former Premier and the former Minister of Finance offering some defence of this affair. Why have they been so silent when it comes to discussions on the Coquihalla Highway? I think that's truly unfortunate. But I guess the former Premier's doing okay by the highway — he's doing all right. The former Minister of Finance seems to be doing all right as well, in terms of his position with First City Trust and the business they do with the province of British Columbia. I guess they figure they're doing all right. They're not going to open their mouth and put themselves on the line. They're not going to stand up and defend the member for Cariboo, the former Minister of Transportation and Highways. They're not going to tell what they know about this issue, and I think that's extremely unfortunate.

I was involved right from the beginning in this issue, being the critic for Transportation and Highways at the time the issue really first came to light. As a new member, I recall going through some real wrangles with myself in terms of coming to the conclusions that I was coming to as I unearthed the information. I don't think it's an easy matter when we make these kinds of statements or allegations. These are very serious allegations, and they're central. I would think that all members, no matter which side of the House they happen to be on, would be equally concerned about the importance of this kind of issue in this House. In my opinion, it really does go to the heart of our system, and that is that we trust that all members are honourable members.

I think that the evidence has been presented in such a way that it can't be simply deflected or ignored or sloughed off in some kind of counteroffensive from the other side. I would remind you that a prima facie case was made by the member who raised the matter; it was made and accepted by the Speaker, who ruled that a case was made. That therefore became something that this House had to deal with. As a logical consequence of that ruling by the Speaker that a case had been made, we again returned to this House with a motion that the matter be sent to a committee of privilege.

As I started to dig into this stuff last summer and before, in terms of my responsibility as critic for Transportation and Highways, I was a bit taken up with the chase. I was a rookie MLA, and I was digging into these budgets and estimates and Public Accounts and Hansard, and trying to chase through a very tortuous path, trying to find information that would assist me in asking questions about the Coquihalla Highway — a highway, let us not forget, that had been a major political issue in this province. The government had raised that highway as a major political and economic initiative. Later on, I'll get to what I think was their real undoing, the introduction of the Coquihalla Highway Construction Acceleration Act. I think that was really what did them in, and it was a piece of political arrogance that probably hasn't been matched, and I hope nobody ever tries to do it again.

As I was going through this paper chase, trying to find the information that I required — that really wasn't available — I remember that at one point I had really formed in my own mind the opinion that the House had been misled. When all of the facts came together in my mind, that was the opinion I formed, that the House had been misled.

I recall working on a weekend here, and I happened to run into a person who's been around these precincts for a long time. I won't say who it is or whether he's government or press or whatever, but it was a person who'd been here a long time and who had a lot of respect for the traditions and the trappings of a parliamentary democracy. I said: "Look, I'm

[ Page 3377 ]

really kind of troubled here. I think I've come to the conclusion that the House has been misled." I was quite dismayed and saddened by that revelation. I said: "What do you suggest? What should I do?"

I suppose any member has the option of simply throwing things back in the drawer and forgetting it or pretending he didn't see it. But I also had a job to do as an elected representative in this province, and as opposition critic in terms of that Coquihalla Highway. The advice I got was: "Well, if you've got the evidence, if you think the facts substantiate your conclusion, then you have to go with it. You really don't have an option." And so I did.

I'm also aware, Mr. Speaker, that at the time we started to unearth these facts about this highway project in June or July of last year, phase I had been completed already. We were two months away from the entire phase I and phase 2 complex being opened. Only two months away, for a project that had gone on for a considerable amount of time. Two to three years after that, the truth had not come about what the true costs were. I wonder if the members have asked themselves that question, particularly those with municipal experience who constantly talk about the wise use of the taxpayers' dollar, and their responsibility to the taxpayers. I wonder if they have really asked themselves that question: why it took so long.

But we finally did get to the issue. We finally started to uncover the issue, and I'm reminded by the kind of paper chase that we had to go through of the saying that if the people don't know what you're doing, they don't know what you're doing wrong. In hindsight, I can see why this government did not want those figures to come out. The project was a cornerstone in their political platform. Let's put this issue in context. We're not talking about some minor mistake: "Oh, well, we forgot to put the figures down. No, we didn't estimate properly. It was all a little mistake." How easily they can sweep aside these facts that have been brought out by the MacKay commission. How easily they can dismiss these facts, Mr. Speaker. I'm disheartened.

In any event, we did unearth this. We did unearth these facts, and as we started to bring them forth in this Legislature, we found a great deal of reluctance on the part of the government to admit to anything. I recall when I asked the Premier to set up an inquiry in this House.... During question period, I said right to the Premier: "The facts are revealed. We're talking about $600 million for phases 1 and 2. Would you set up an inquiry? How have we done this?" I recall the response from the opposition side; it was laughter, Mr. Speaker. "Oh, well, it's only millions." I heard the member for Burnaby-Edmonds (Mr. Mercier) go back 15 or 16 years to find a reference to a member on this side who used to be a cabinet minister to apparently justify his position and the position of his government. That appalls me, that they so easily dismiss the millions and millions of taxpayers' dollars involved in this issue.

[4:00]

1 return to the former Minister of Transportation and Highways, the current member for Shuswap-Revelstoke (Mr. Michael), and some of his remarks on this issue. I really am dismayed at that member, because he hasn't displayed any contriteness about what's been discovered. There's no contriteness; there's no admission that it was a severe wrongdoing. He reminds me of a kid you catch with his hand in the cookie jar, who doesn't say: "I'm sorry." He's mad at you because you caught him. It's the only thing that upsets the member for Shuswap-Revelstoke; he's mad because he was caught. I guess he's mad because he's no longer in the cabinet. Well, don't get mad at us because you're not in the cabinet, Mr. Member for Shuswap-Revelstoke. Get mad at the Premier who took you out.

MR. SERWA: "Angry" is more appropriate.

MR. MILLER: Thank you, Mr. Member. I would not like to accuse any of the members on the opposite side of being mentally deficient.

So as my leader said, he decided that the best defence is an offence, and all he succeeded in doing was being offensive. He made what is probably the most illogical leap of logic that I can think of in defending what happened in this issue. He wanted to attack the opposition because they weren't efficient enough, they weren't good enough, to dig these facts out. "It's your fault." he says to the opposition. "You weren't smart enough to find out." Well, that's a very strange attitude for a person who used to be a cabinet minister. "It's not that we have an obligation to reveal, to let the public know, to let the opposition know in the Legislature. We don't have that obligation. You have an obligation whether you're the public or the opposition — to ferret the facts out. If you can't find those facts that we've hidden in all of these obscure little comers, then you're not doing your job right, and don't talk to me.

Interjection.

MR. MILLER: That's a very strange attitude, Mr. Member, and I wouldn't mind debating the issue with you in your constituency — particularly that attitude. We'll see if the voters in your constituency support that attitude, Mr. Member for Shuswap-Revelstoke. He even had the temerity to attack the labour movement. You know, these sensitivities keep popping out when this member gets up to speak — these little sensitivities about the labour movement and others. Do you think the labour movement is after you, Mr. Member?

MR. MICHAEL: Mr. Kerkhoff is the only thing you're interested in.

MR. MILLER: Kerkhoff is the only thing I'm interested in; there we have it again. This member is single-minded when it comes to the issue of one particular contractor in this province.

I'll tell you, Mr. Member, why and how this issue first came to light. You spoke of it yourself. It was because this opposition could not find the facts that you had hidden about this issue. We couldn't find them because you didn't want us to find them. You didn't publish them; you didn't explain them: you didn't volunteer them. You hid them.

Acting on information on one project, we took the lid off of that whole Coquihalla scandal, and believe me, it stunk. We took it off with one project that happened to double in cost. The member is, as I said. extremely upset that we found out that information. I'm appalled, Mr. Member.

He's upset that we actually did what he accused us of not doing — that is, our job. Would you not have done that, Mr. Member? If you as an opposition member had received information that a project had doubled in size, would you not have stood up in the House and asked questions about it? Or would you have sat in your seat, Mr. Member? Maybe you're

[ Page 3378 ]

not fit on either side. If that's unparliamentary, I'll withdraw that, Mr. Speaker.

So the member for Shuswap-Revelstoke wants to castigate the opposition for not being smart enough to find their way through this maze that had been created in terms of the true costs of the Coquihalla Highway. I ask the member for Shuswap-Revelstoke: did he know about the cost overruns?

He knew about the cost overruns. When did he know about the cost overruns? The member is silent when you ask pertinent questions. He likes to attack the labour movement, but when you ask him a direct question about when he knew, he is silent.

If you knew about it, why didn't you tell anybody about it? You were part of a new administration, I recall. I was in that election, Mr. Member. I recall the Premier: "This new open government...." This honest government; the clean broom; you were part of that administration, Mr. Member. You knew about the Coquihalla cost overruns; you just said so.

MR. MICHAEL: I didn't say so.

DEPUTY SPEAKER: Order, please.

MR. MICHAEL: I'd like the member to withdraw that remark. I made no such statement.

MR. CLARK: I think a quick review of the Blues would confirm that, in fact, the member did say that he knew of cost overruns on the Coquihalla Highway.

DEPUTY SPEAKER: I think the debate should proceed, and members should remember that what we're discussing here — as I pointed out yesterday — is whether or not a special committee is required to deal with this matter.

MR. MILLER: I guess the matter of whether he knew or not is something that we may find out.

In any event, we had this commitment to a new and open and honest administration that was going to be a breath of fresh air in this province, in terms of the public attitude that had grown up around the previous administration. Yet at every step of the way, when it came to trying to find out information about what really happened, there was resistance. There was resistance from the Premier initially about setting up an inquiry. There was resistance from the member for Shuswap-Revelstoke when he was the Minister of Transportation and Highways, in terms of revealing the true costs of this project.

Despite a lot of huffery and puffery in terms of trying to defend what has taken place in the past, the members on the government's side — as far as I can ascertain from the way they're handling themselves — really don't like the fact that these kinds of things have come to light. They don't like the fact that there's been a MacKay inquiry. They don't like the fact that we're now dealing with this issue again in terms of trying to set up a committee to really get at what happened.

As I said at the outset, it's not something that anybody should be happy about, and if the members opposite think that we're somehow pleased at this turn of events, they're completely mistaken. I would much rather deal with the issues of substance in this province, and I think there are many. This is one that I think cannot be ignored.

Turning to the kind of response that we've seen.... I think it's important in terms of the motion we've made, because we continue to insist that facts should be brought to light, and all we get on the other side is not any kind of defence except: "You guys somehow want to blacken people's names." Again the member for Shuswap-Revelstoke used that analogy. Again I have some difficulty interpreting the argument.

On the one hand we have the member saying in his speech yesterday that his name has been blackened in the press: "My name has been blackened by the press in this issue." I would have thought you would want to have a further look, a further intensive scrutiny of this issue, and maybe your name wouldn't be so black. In the very next breath he says: "We wouldn't have had an inquiry at all if it hadn't been for the courageous Vaughn Palmer of the Vancouver Sun."

There would have been no inquiry if it hadn't been for Vaughn Palmer, he says. Well, get it straight; do you want the press to report on these issues or don't you? Did you want the MacKay commission inquiry or didn't you? Mr. Palmer said on July 21, and I quote: "Michael is reluctant to release details." Maybe you should have a chat with Mr. Palmer, to the member for Shuswap. The only reason we have the MacKay inquiry is because of one column by one newspaper columnist.

I think in terms of the substantive issue here, which is whether or not there should be a committee of privilege, we have to look at the information that has been brought to light to date, and there is considerable. I think it's pretty solid, substantive information and it's worth repeating some of it.

I want to deal, first of all, with just a couple of statements of the MacKay inquiry. My colleagues have read others that I think are pertinent, but I just want to deal with one in terms of the process because there have been members on the other side who have tried even to discredit Mr. MacKay. Again I repeat: you've got to really examine your own position and your own conscience.

I see all too often in this province in dealing with this government, when there is a heavy body of opinion that says you're doing something wrong, and you continue to cling to the notion that there's nothing wrong with me, it's all you guys who are wrong.... You've got to think about that. I am sure there is a name for it. Maybe if you can scurry to your dictionary you might find it, but you know what I'm talking about.

Just reading the summary in the MacKay inquiry report, to substantiate what I've just said:

"The inquiry has been conducted with the com mission's agenda being set by the need to discover the facts in a methodical way." Further on, the same introduction says:

"The Ministry of Transportation and Highways, contracting companies, industry associations, trade unions and private individuals have all contributed. Experts in accounting, engineering, law and project management have acted as advisers to the commission."

In the face, Mr. Speaker, of this kind of methodical, serious approach to try and unearth the facts in this case, we are still faced with members on the opposite side — some of those members with accounting experience — who can blithely stand up and say, "The MacKay commission, that was no good; they went too far; they were no good, " when the evidence is in front of them. It's not a bad attempt at a

[ Page 3379 ]

defence, but ultimately I would expect some realism to creep in — that indeed there was a misdeed in this province.

[Mr. Weisgerber in the chair.]

AN HON. MEMBER: Ask about Queens Beach.

MR. MILLER: We could talk about the auditor-general too, but I don't want to use everybody else's material. I've been ordered off it.

I want to turn now to Hansard, which I find to be a valuable document when it comes to examining the past. It is a very valuable document because, unlike minutes of meetings or facts and figures, when we talk in Hansard, these are the actual words spoken in this House about particular issues. One of the things that struck me as I was going through Hansard last year in terms of researching this issue was the constant and detailed questioning by members of my party, acting as responsible opposition members, as to the true cost of this highway. They were almost relentless in terms of trying to get the facts. I haven't counted up how many times, but on numerous occasions they asked: "Come on! Why don't you tell us the real cost?" Despite all of that, they got the same consistent answer back: "The cost is $375 million." Despite all of the pressure, the first member for Cariboo. who was then Minister of Transportation and Highways, refused to admit, even a little bit, that it would be a nickel over $375 million.

[4:15]

My colleague for North Island asked a number of detailed questions in terms of interactions with the Treasury Board, and again we got the same kind of response: "No." I particularly remember one response that really got my goat, if you like. Having been around politics in British Columbia for a long time, I've heard all kinds of references to people's ability to manage. In response to one detailed question about the true cost of the Coquihalla, the first member for Cariboo said: "You guys are so negative. You've always being negative. Why don't you listen to us? Why don't you trust us? We're honest." That's the response we got: "You guys are always being negative." It seems we can't do anything to please the members on the government side. If we ask enough questions and get the right information, they're mad at us for that; and if we ask tough questions, they're mad at us for that.

Well, we pursued, and so did Mr. MacKay. Mr. MacKay really substantially lays out the case. But we go on. I was at a constituency meeting a couple of weeks ago speaking to the good people in Esquimalt–Port Renfrew, and a young fellow came up to me, quite upset about this whole Coquihalla affair. What really upset him — and I have a lot of respect for what he had to say — was the throne speech of 1986. I have to read this because it is so germane to the point we are trying to make. These were words spoken by the Lieutenant-Governor of British Columbia. The Queen's representative said this in this House. He didn't write it. I don't think he wrote it; I think the government wrote it.

"I am informed that in the past year we have witnessed some major achievements in the continuing development of our province's transportation systems. Work is close to completion on the Coquihalla Highway and the new Annacis bridge across the Fraser River.... My government's pride in these three major feats of engineering is matched only by our pride in British Columbia and the British Columbia workers who brought them in on time and on budget."

Who put those words in the mouth of the Lieutenant-Governor of the province of British Columbia in March of 1986 when it is well documented that the government was aware that the costs had gone over budget? All we get from the members opposite is their offensive offence in terms of this issue.

Again, on March 26 in the Legislature of British Columbia, dealing with a very salient point in the history of this project and the history of transfers of votes and special warrants, sometimes brought in a week after this Legislature adjourned or a week before it started — what kind of way is that to do business? — an exchange between the former member for Mackenzie and the Minister of Transportation and Highways: "My first question in this regard would be: how much of this " — special warrant — " is going toward the cost overruns on the Coquihalla and the Annacis bridge? Where is this money going and how is it being spent, and why the large amount?" A valid question for the opposition. The answer from the then Minister of Transportation and Highways in Hansard, page 7568, March 26, 1986: "None of it applies to the Annacis or the Coquihalla. I have a list of the projects. three or four pages long, and with permission of the House, I'll read them all out. It will take me about an hour and a half." At that point it ended.

I can see that the member for Columbia River (Mr. Crandall) thinks it's funny. Well, he can laugh all the way up to Columbia River and explain to his constituents how the government managed to spend that kind of money and keep it hidden for so long. Don't they trust the judgment of the people of this province? Do you have to bury facts from the people of this province, Mr. Member from Columbia River?

Mr. Speaker, let's really examine the politics of the Coquihalla and why we need this further examination. The question is: why was an act brought in — the Coquihalla Highway Construction Acceleration Act? I would ask those members: have they not done any research on this? Are they just reading the stuff that they're given? It was brought in as a political device and ended up being the petard on which they hoist themselves. It was a cheap political device. It's clear from reading the debates that an act wasn't required. During debate on the act the minister said they had already spent $260 million, and simply didn't answer questions about the need for an act.

I'll tell you why the act was brought in: because they were hoping they could embarrass the opposition in this province into voting against it, and then they could trumpet that around the province. If the opposition asks serious questions about costs, these guys over here are going to misinterpret it for the public of British Columbia and say: "See, you're against the Coquihalla. You're against progress." Well, quite frankly, those kinds of cheap political devices have got them in the hot water they're in today.

MR. RABBITT: Mr. Speaker, I stand today opposed to the establishment of a special committee of privilege, and I stand proudly in favour of the first member for Cariboo, whom I quote: "Mr. Speaker, I have never misled this House at any time in the 18 1/2 consecutive years I've been a member." I will stand here and defend that member's honour and integrity, because I believe he is correct.

[ Page 3380 ]

I've reviewed the work and the expenditure that has occurred in the riding, and let me tell you something about the history of that highway.

MR. LOVICK: In the riding?

MR. RABBITT: Yes, my friend, a good chunk of that highway is built in my riding, and that's why I feel that I have to stand here and contribute today. So if you will listen, you might learn a little of the history of when a colleague of the member for Nanaimo was also a member of the opposition and a member for my riding, and that member rode on caravan after caravan promoting the Coquihalla Highway and saying: "We will build it." But let me tell you what happened after 1972 when the NDP became the government. They put their head in the sand and we never saw anything happen. That's what we saw out of that hon. member.

Let us remember what that government, from 1972 to 1975, gave us. For a Minister of Highways they gave us Pothole Lea. He wouldn't build a highway. He never even patched the potholes in the whole country.

I've sat here for two days and listened to cheap shots. I've read the papers for weeks and listened to the cheap shots taken at a member who wasn't even here to defend himself. You must feel very proud of yourselves, gentlemen.

I ask myself: what is the NDP agenda? Why this vicious attack on the first member for Cariboo? I've known this hon. member for many years, and he would not deliberately mislead this House for any reason. His nickname in his home riding is King of the Cariboo, and let me tell you, in my riding he's King of the Interior. I think this vicious attack is only out there to score political points, and I predict that in the interior it will backfire on you, members.

So again I ask: what is the real agenda? I suggest it's a strategic plan worked out to discredit the Social Credit Party, the Social Credit government both past and present.

The member for Esquimalt–Port Renfrew (Mr. Sihota) originally brought a motion forward that I think offended individual members of this House. It offended the auditor-general, it offended the Speaker, and it certainly offended me. I think it's unacceptable.

The member was not successful. Let's look at the reason why. Possibly he had an incompetent lawyer put the package together for him. Possibly, if he'd gone to a good lawyer, the Speaker might have ruled differently. Rather than attack the Speaker and the auditor-general, why hasn't that member put forth a substantive motion on this matter? Tell me why.

Let's look at the real agenda of the NDP. Let's look at the position of the NDP leader, the inept Leader of the Opposition, the one who's seldom in the House, who was making remarks during his speech, because the hon. first member for Cariboo was outside the chamber for a few moments. What was one of his utterings? May I quote from a local paper in my riding, Similkameen Spotlight, Wednesday, March 2, 1988, an article entitled "The Opposing View, by Mike Harcourt. Let me quote the second paragraph: "The first item on the agenda for the New Democratic MLAs is our call for a special committee to probe more deeply into Coquihalla corruption." Now we know the real agenda: muck-stirring. Corruption — where is it? You have no proof of any corruption.

AN HON. MEMBER: Who wrote this?

MR. RABBITT: I did, my friend. Live with it.

He also refers to the MacKay commission report. He says it's the first step. Let us look. Let's go on this corruption. What does the MacKay commission inquiry say about that particular word "corruption"? Not one word, hon. members. Not one penny was spent corruptly. It is smoke and mirrors. Now we see what the real agenda is: smoke and mirrors, just to discredit the government and gain some more headlines.

What did the MacKay commission say? Let's look. I've heard some quotes from the critic of the opposition, who has snuck out the back door: "Overall, the difference between estimates and costs is due to the inadequate estimates." We have been informed by the present Minister of Highways that that has been remedied, has been corrected — and it should have been.

Let's look at what they said about financial investigations. Let's see what the MacKay commission says about that.

"His detailed review compared the ministry's fi nancial records with those of the contracting companies. This revealed: the ministry's records were corroborated in all important respects; there was no evidence of excess payments made to contractors; the prices bid and the profits made by the contractors were not excessive."

Not one penny of corruption.

[4:30]

Let's look at another quote. There was one subject raised by the member for Prince Rupert (Mr. Miller). He did ask the then Minister of Highways about the Great Bear snowshed. Let's see what they say about that: "...the commission is satisfied that all invoices were properly scrutinized and payments were made only for work actually done on the project." I suggest there was no corruption; I'll insist there was no corruption. So what is the leader of the NDP doing? Is he telling the whole truth? I suggest not. Again we see what the real agenda is across the floor there. It's a vicious attack on the first member for Cariboo. Why the character assassination? I certainly will not support this motion.

Mr. Speaker, our House Leader spoke yesterday. He told us very clearly what the proposal that the opposition is putting forward would do — and that was nothing. I believe him. Our Finance minister spoke at length on this. He pointed out some very positive benefits of that highway and I certainly agree with that.

Let us look at this for a minute. Where did the money go? Tell me. I'll tell you where it went. Every single dime of it got spent right here in British Columbia. Is there something wrong with that? A good chunk of it got spent in my own constituency, and what did it create? Jobs, jobs and more jobs, and what is wrong with that? For you members over there who may have been away from a real job for awhile, let me tell you what they are. There are scraper operators, 'dozer operators, truck drivers, crane operators, rock drillers, labourers, carpenters, back-hoe operators, electricians, engineers, draftsmen, surveyors, loggers, painters, and many others.

We had people from every corner of the province who worked on this project and who benefited from the Coquihalla Highway, and the people of this province will benefit for years and years to come. I want the NDP to tell the people of the Nicola Valley that the Coquihalla is bad. I want them to tell the people of the Upper Thompson that the Coquihalla is

[ Page 3381 ]

bad. Tell the people of the Okanagan that the Coquihalla is bad. Come on.

The member for Shuswap-Revelstoke (Mr. Michael) yesterday made some valid points. He pointed out the opportunities that the opposition had to challenge his ministry. He specifically pointed out four ways that the opposition could have challenged the estimates. They failed on all four.

I contend that there was no corruption. I contend that the taxpayer of British Columbia got value for the dollar. I contend that the first member for Cariboo is an honourable man and should never be subjected to this type of vicious attack. And I contend that the NDP have a hidden agenda and the voters will tell them that, come next election. I urge the House to defeat this motion.

MR. KEMPF: I am going to be very brief. I don't think one needs to speak for very long on this subject, a subject which shouldn't even be before this Legislature. I intend to vote against this motion.

I would like to congratulate the first member for Cariboo for having the courage — for, hon. members, it took courage — to do what that member did today. I believe that the courage shown by that member today exemplifies the feeling that this member has for this institution, and not only for this institution but for the people of British Columbia. He is not only an honourable member; he is an honourable man. He is an honourable man who understands, unlike some who would by their actions, by calling such a motion in the first place, show contempt for the democratic process. I personally know that this member would never mislead this chamber, would not knowingly mislead anyone. He's an honest man. He's honest and he's concerned for the people of this province, because he's spent the better part of his life in their service.

I've been here 12-plus years and have watched this member, and if there has ever been a member who has warmed a seat in this place and has had as much concern for the way in which taxpayers' money is spent, I've yet to see it. I have never seen such concern. I experienced that concern first-hand, because I spent a year as parliamentary secretary to that Minister of Highways. I'd like to relate a little story to this Legislature with respect to that job, which I feel was probably one of the best years I've ever spent in politics.

As parliamentary secretary to the then Minister of Highways, the now first member for Cariboo, every move I made, every cent I spent, was monitored. In fact, I would think that the reports I was asked to submit on a regular basis to that minister when I served as his parliamentary secretary are probably the most in-depth reports written by any member who ever served in this Legislature since its inception. Everything was accounted for: my time, who I met, what I spent of the taxpayers' money in doing so. I was made quite aware very early on in becoming that minister's parliamentary secretary that every cent of the taxpayers' money had to be accounted for, and it was. So I know perfectly well that all of this hullabaloo over that member having misled this chamber, particularly with respect to taxpayers' money, is absolutely and totally false.

I say again that I'll vote against this motion, as I'll not take any further part in this kind of witch-hunt. It's a witch-hunt. You know, somebody said just recently.... They talked about cheap political devices. That is what this is. Mr. Speaker. It's a cheap political device. What good do you expect to do by further hanging someone out to dry on this issue? Are you going to bring the dollars back? Is that what the opposition intends to do? I would say that's rather impossible.

So there was an overrun — if there was. So what? One of the most impossible feats ever taken on was the building of the Coquihalla. You know, it was a real Social Credit administration that by building roads really built this province. I remember it pre-1951, because I was around. I was born and raised in this province.

You're not going to do the taxpayers of this province one bit of good by continuing with this kind of witch-hunt. It's already been very well canvassed. There's absolutely no purpose or advantage in further wasting either time or money, particularly of this chamber, on this issue. I'm sure, I'm positively sure, that the opposition benches can find enough wrong with this administration that they don't have to flog a dead horse. There are sufficient issues that can be debated and will be debated in this chamber with respect to what this administration is up to. They don't have to flog a dead horse. Purely partisan political reasons are motivating this particular motion and, Mr. Speaker, I have to speak and vote against it. Thank you.

MR. SERWA: Mr. Speaker, it's a real honour and a pleasure to speak today. I rise to speak in opposition to the motion put forward by the member for Esquimalt–Port Renfrew.

The MacKay report was far-reaching, comprehensive and conclusive. Can anything further be gained by a special committee of privilege? I think not. An overrun — $500 million the opposition shouts. On what basis? Nothing but the failure to upgrade estimates for a number of reasons: inflation, upgrading of standards, extra work, a greater scope to the project.

I thank those members of the opposition who have taken liberty to exercise considerable latitude in this debate, especially the first member for Vancouver East (Mr. Williams) and the second member for Vancouver East (Mr. Clark), and I thank them for their pioneering work because I'm going to utilize all of the latitude that they've taken.

I'm addressing this debate from the perspective of an interior MLA. I note with considerable interest that the members adjacent are smooth-talking city slickers. They have absolutely no comprehension of the importance of highways and transportation systems to the vast interior of the province of British Columbia. Absolutely no comprehension.

[4:45]

They have among their assets and their opportunities a recent capital investment made by the people of this great province: SkyTrain. I don't hear the members talking long and loud about SkyTrain, an outstanding project for the lower mainland. We keep hearing about large cost overruns. The first member for Cariboo indicated the estimate for SkyTrain was $289 million. It's now over $1 billion, growing and expanding. Figure that out.

MRS. BOONE: It's your government.

MR. SERWA: I don't think I hear much about that issue because it's pretty close to home, pretty close to the home of the city slickers.

MRS. BOONE: Not my home.

[ Page 3382 ]

MR. SERWA: No, that's right. That's right. The member for Prince George North will probably join me in speaking in opposition to this motion.

Suddenly, where there was always wilderness, a freeway came into place, and a vast province shrank. That's good stuff. Think about it.

The Coquihalla country is rugged and it's an unwelcoming land. What did the building of the Coquihalla mean? I think we might as well look back a period in time to the earlier days of British Columbia. When I first came to British Columbia in 1941, I remember the Big Bend highway. I remember all of the gravel roads in this province. I remember the Fraser Canyon. I remember the Okanagan highway system. I remember Kelowna in 1946 when we moved there. No substantial change: narrow roads, the occasional one that was paved, the pavement was 12 feet wide. Most of our transportation was by ferry and barge. Agricultural and lumber products were about the sole economic opportunity for the people in the Okanagan. Very limited tourism because of the difficulty of access.

In 1952 the economic opportunity for this province of British Columbia was pretty well relegated to the lower mainland and especially to the Vancouver area. Even the lower Fraser Valley, Chilliwack, didn't have the type of access that they required to encourage economic growth and industry.

In 1952, for the first time in the history of this province, we had a Social Credit Premier, W.A.C. Bennett, who had a vision for this province and who made a commitment to this province. Social Credit governments, through their commitment to highways and transportation, built and developed this province and created the strong economy that we enjoy today. The Premier had the assistance of one of our first great highway builders, a Minister of Highways who was famous throughout this land, Phil Gaglardi. As a matter of fact, he was so committed to highways he used personally to go and test the curves at high speed.

The government of the day opened up this province: the north country, via the Cariboo highway system; the Peace River country became attached to the province of British Columbia through the John Hart system and the increasing upgrading of it. The East and West Kootenays for the first time really became part of British Columbia with the construction of highways such as the Rogers Pass and the southern transprovincial.

Capital investment and expansion was made in this province in a variety of other ways. B.C. Rail opened up the heartland of this province and gave economic opportunities and jobs to the north country. B.C. Hydro undertook vast construction projects — dams, generating stations, transmission lines.

W.A.C. Bennett's government changed something that was very important, something that we thrive on today. He changed what was traditionally a north-south transportation route, a north-south supply route because of our north-south orientation of the valleys, into an east-west opportunity, an all-Canadian Trans-Canada, the opportunity to travel across British Columbia on the southern transprovincial or from Prince Rupert across to Alberta on our northern highways systems. There are opportunities and jobs for all areas of British Columbia. Who benefited? You bet — the north, the Peace River, the central interior, the East and West Kootenays. The biggest beneficiary of all, hon. members adjacent, was the lower mainland and most especially Vancouver — a rich, vibrant province held together for the first time by a modern system of highways that has enabled and enhanced opportunities for economic expansion in all areas of our province.

As the demand increased on our highways system, it became readily apparent that we had to have some other system of moving vehicles from the interior through to the coast. We had difficulties, cost limitations, difficult terrain in the Fraser Canyon. We have climatic, elevation, terrain, topography restrictions on the Hope-Princeton.

In 1965 I was a member of the original car caravan that went from Kelowna through to Merritt. We overnighted there and then drove the next day from Merritt right through to Hope. My background is in the construction business, and I was very impressed with the formidable task, the formidable challenge, that a road through that area would entail. I looked at the railway, the trestles, the avalanche paths, the snowsheds, the difficulties with rock and water, the terrain, soils, mud, silt, the elevation and the climate. Formidable challenges only could be met with iron men who were courageous and determined and iron machines.

British Columbia, under the then Premier, Bill Bennett, had another great highways builder, the first member for Cariboo (Mr. A. Fraser). He carried on the government's commitment to the people of the entire province. In 1978 the estimate for the Coquihalla was $250 million. That was in 1978; $250 million in 1978 dollars. If you took those same dollars, factored in inflation and purchasing power, it would come to approximately $450 million by 1984.

Eight years expired from that estimate to the time of completion. What else happened? The route was changed several times. The standard of the highways system was upgraded. New impact on the estimates, eh? Well, substantial impact on the costs. The Boston Bar Creek hill had to be utilized to bypass the Coquihalla canyon; required to avoid numerous avalanche passes and difficult rock terrain, but it required the construction of some snowsheds.

Another accommodation that was made and was very expensive on that system was the commitment by the former Minister of Highways to stay out of the valley bottom of the Coldwater River. Why was that commitment made? It was because there were seven reserves in that particular area occupied by our first peoples. We could have saved a great deal of money. We would have interrupted and interfered with their lives and opportunities. Is that a waste of money?

The expansion of the project added to the costs: the Hope bypass, overpasses on the Trans-Canada west of Hope, side service roads, costs involved on Highway 3 to Princeton and Highway 8 from Spences Bridge to Merritt.

The bid process is something that's also very interesting. Perhaps many of the hon. members are not really aware of what transpires when a highways contract is put out for tender.

The only thing that's available is normally a cut centre line, and that centre line is staked. From that base centre line and topographic maps, estimates are made of materials, quantities and type of material. When these are all put together, the idea is that you will get competitive bids based on unit volumes. Those bids that come in are expanded by the number of units. They do not in any way reflect the ultimate cost of the road.

To try to change this art form — perhaps — into a science would he a very expensive proposition. I have difficulty believing that we will ever refine any process to reduce the

[ Page 3383 ]

differential between the estimated cost and the final cost. The entire right-of-way would have to be cleared; the cross sectioning would have to be done; we would have to do extensive geotechnical survey work — and I still think there would be a lot of questions between that and the final result.

Another thing that is not normally taken into account is the additional expense of the cost of side roads — adjacent connectors. The cost to accurately ascertain quantities and types of material would probably amount to 30 percent of project costs. Material had to be moved on the highway system. Costs had to be incurred. Whether the exact quantities of materials were known or not, they were moved and they were paid for.

I refer to the special report of the auditor-general for the information of the hon. members. From the contents of this special report, it is obvious that many of the financial reporting problems of the Coquihalla project stem from the lack of a clear definition of that project.

In the MacKay report on page 10: "Estimates can only be made if project scope is known. As a project is refined from concept through to completion, so should the scope and the estimates be refined."

In the MacKay report, he addressed a number of projects: the Coquihalla, the Coquihalla ancillary, Trans-Canada Highway upgrade, Bullmoose-Tumbler Ridge, Fraser River crossing, Revelstoke-Mica Dam, Lougheed Highway, Garibaldi highway and the Vancouver highway. An assessment of the contracts found this: the total paid to contractors was $180,949,000. The original contracts totalled $89,730,000, or 49.6 percent of the total paid.

When you look at percentages, and recognize the difficulties that face the unknowns and uncertainties, the Coquihalla is well within the scope — in spite of the time of the estimate and the inflation factor — of traditional Highways practice.

The fast-tracking of the project is deemed to have been very expensive. It's estimated to have cost $40 million.

MR. S.D. SMITH: What about the toll?

MR. SERWA: Ah, the tolls. The tollbooths were placed on the highway specifically to retire the cost of acceleration.

MR. S.D. SMITH: Say that again slowly.

MR. SERWA: The toll booths were placed on the highways system specifically to retire the acceleration costs. They were not put in place to pay for the highway system.

[5:00]

What does the Coquihalla Highway system mean to the interior of the province? My friends the hon. members in the opposition have to recognize the fact that a substantial number of voters in the interior depend on our highways and transportation systems. When these smooth-talking city slickers sit snugly and think that this province can stand a dual economy, they're sadly mistaken.

MR. MILLER: I'm from Prince Rupert.

MR. SERWA: I apologize to the member for Prince Rupert. I regret very much putting him in the same group as the smooth-talking city slickers.

What does the Coquihalla mean to the people of the interior of the province? Every resident of the interior, whether a businessman, an orchardist, a trucker, a rancher, a professional, a senior citizen or a student — chambers of commerce, mayors and councils, regional districts — all of us stood united and looked forward with great anticipation to the completion of the Coquihalla system.

That standard of highway must be continued if we're going to continue to expand and develop this province. We need to upgrade the Vancouver Island system for the people of Vancouver Island. We're going to have to continue to upgrade standards in this province, so that we don't have a dual economy in this province — a strong economy in the lower mainland and the rest with only the resource industries.

Economic democracy, my friends, is the goal of this government — equal opportunities for all in British Columbia. Citizens of the interior, whatever their political persuasion, are concerned with opportunity for themselves and their children. Resource-based industries, manufacturing, tourism, agriculture — all depend upon an effective and efficient highway system. The strong provincial economy this highway helps to create funds health, education, social services and housing. Every man, woman and child in British Columbia continues to benefit from this capital investment. This capital investment in the Coquihalla system is an indicator of the faith, trust and confidence of this government in the people of British Columbia.

I salute and commend another one of British Columbia's great highway builders, the hon. first member for Cariboo. I, like that member, salute and commend each member of the staff of the Ministry of Transportation and Highways, as well as the engineers, contractors and workers who worked on that great project.

Estimates were not updated for inflation. Upgrading the standards — upgrading the Trans-Canada Highway, upgrading the Hope-Princeton, upgrading the Spences Bridge-Merritt highway system — was not included in the updated estimates. Some big deal! Every dollar, all of the money, went into the highway system.

I can find no reason to support the motion put forward by the member, and I again pay homage and honour to a great citizen, a great politician and a great road-builder, the first member for Cariboo.

DEPUTY SPEAKER: Perhaps before I recognize the next speaker, I'd just take an opportunity to remind members on both sides that we are speaking to the motion to establish a special committee of privilege, and I urge members to direct their comments toward the motion.

MS. A. HAGEN: Coming as I do from a small town and being a small-town woman at heart, it's probably fitting that I should be following.... I'm never sure whether it's the first or the second member for Okanagan, since I really regard them as quite equal people in representing their constituency.

I want to begin my remarks today by picking up on the admonition or advice that you've just given me as the speaker coming to the podium immediately after that comment. My intent this afternoon is to return our discussion to some reasoned debate. I want to say that particularly in respect to some of the comments from the member for Yale-Lillooet (Mr. Rabbitt), who spent a goodly part of his address talking about cheap shots and vicious attacks and strategic plans and so on.

[ Page 3384 ]

I want to pick up on a theme that ran through the comments of the member for Okanagan South, who noted that this whole discussion has come about from nothing but a failure to upgrade the estimates.

[Mrs. Gran in the chair.]

The failures to upgrade the estimates we are more than well aware of. They have been quoted in any number of accountings of the Coquihalla system, the statement of estimates, to the tune of $500 million for phases 1, 2 and 3, and the statement of costs — I'm quoting from Commissioner MacKay — of $998.4 million, double that amount.

I want to note some of the comments that are associated with that statement of costs in some footnotes that the commissioner makes available. One of them has to do with phase 3, which is quoted as having an estimated cost of $268.7 million, up from the $125 million at which it was estimated on June 5, 1985. That was a relatively current estimate, I would note, in relation to the time that this statement of costs was presented to the commission; that statement dates from September 1987. The footnote states that this estimate of phase 3 comes from the ministry brief: "It is the commission's opinion that the publicly estimated costs for Merritt to Peachland would have remained at $125 million but for the need to update them for the inquiry." So the issue is indeed the failure to upgrade the estimates and to inform this House — and the operative part of our discussion is the failure to inform this House.

In debating this motion of privilege, we are indeed looking at what the Leader of the Opposition has stated: that we have got to step one. I note that the member for Yale-Lillooet seemed to feel that that was where we could indeed stop; it was sufficient to our needs.

However, Madam Speaker, there have been, in the very careful accounting of this inquiry, signals that suggest to us that that is indeed not adequate, and that is the substance of our discussion over the last two days in this House.

I was moved, as a new member of this House, to listen to the debate early this afternoon in which the first member for Cariboo (Mr. A. Fraser) and the first member for Nanaimo (Mr. Stupich) spoke one after the other. I noted that both of those members are long-time members of this House and very familiar with its traditions. I can't quote exactly, but the spirit of the comments of the first member for Nanaimo was that there is a cloud over this House because of the failure of two governments and two administrations to be honest and open with this House in reporting the truth about the Coquihalla project.

The thoroughness of the MacKay report is in fact the means by which we have any accounting of that project, and the conclusion that Commissioner MacKay comes to, after he has looked at one of the aspects of his mandate — the project authorization and reporting — is to state very clearly and unequivocally that the true costs were not reported in a forthright way, that the Legislature was avoided and that the Legislature was misled by the documents presented to it.

Much has been made by various speakers on the government benches of the manner in which we have discussed that report, and also the report of the auditor-general to us regarding this whole process of dealing with the estimates. I think it is important, in looking at the work of the commissioner and of the auditor-general, to recognize that both of them have presented us with caveats about the limits of the review that they have been able to undertake.

For example, we have heard today from the auditor-general a further submission regarding his reading of the shifting of costs of the Coquihalla from vote 74 to vote 69. He has noted that some of the premises on which he based his report he has on further review found to be faulty, to be incorrect. He has also, in his special report to the Legislature of March 7, presented in this House on March 8, noted the whole process of estimates as one that is laden with faulty characteristics. "However, in this particular case" — he notes on page 10 — "...we would have difficulty providing the assembly with assurance that all expenditures had been correctly allocated between the two votes. We knew from our audit work where these expenditures were being charged, but not whether it was the correct allocation...."

Many signals throughout these reports.... There are further signals in the very extensive work of the forensic accountant, Mr. Hooper of Clarkson Gordon, where he queries the Ministry of Transportation report to the commission in September and quotes that the ministry officials in fact admit the inaccuracy of the list, describing it as out of context with reality. He notes specifically.... I won't go into the detail now, Madam Speaker, of some accounts that were moved and some that were not. We have had a very thorough review by competent servants of this House, the auditor-general and a commission appointed by the government, and each of them has told us in language that is unequivocal, straightforward, reasoned and factually documented that there have been inadequacies and inaccuracies, misleading statements around this very extensive project.

Madam Speaker, we are here as representatives of the public, and we are here to facilitate the public's right to know; not just our right to know, but the public's right to know. In this particular project that has been before us over a number of months, we have been looking at a colossal spending without clear, adequate and factual reporting to this House.

[5:15]

I want to note also that when we look at the comprehensive communication that has been charted not only by the commissioner, who has taken us through the labyrinth of the ministry's work, the Treasury Board's work, the detailed project analysis, the press releases of the government, the reports of Hansard.... Various members on this side of the House have reviewed these matters in their comments. Over and over again we have a consistent deception of the House as to the cost of this project. The issue before us is the covering up of a project that has run 100 percent to this date....

Interjection.

MS. A. HAGEN: I would note, Madam Speaker, that there is a member who is not in his seat; he knows the rules of the House, as we all do. I'm sure that he will be happy to carry that on from a sitting position.

When we look at the deceit that covers every communication that we have had before us, we want to get at who is responsible. There is no question in my mind, in reading these reports, as I have a couple of times, and following this through in a schema, that this particular coverup encompassed members of two administrations: the former Premier, the present Premier, the Ministers of Finance, and the principal secretary, now the second member for Kamloops (Mr.

[ Page 3385 ]

S.D. Smith). All of these people were aware of the extent of the cost overrun, in a political strategy that is documented, not speculated on, and that was designed to mislead this House or members of this House and to mislead the public.

One of the areas that various people have assured this House would be improved as a result of all of this unveiling of the coverup is the estimates process. I want to go back historically a little bit to that estimates process, perhaps to suggest that, as another avenue for us to consider in a committee of privilege, the estimates process is part of the design that has enabled that coverup to occur.

When the New Democratic Party formed the government between 1972 and 1975, we had a Department of Highways. At that stage it wasn't a combination ministry encompassing all of Transportation, as it presently is. In that particular time, the estimates that came before this House were much more detailed, and because the Ministry of Highways was a full ministry there were more subsections to provide for some detailed accounting of the work of that ministry.

That process or method of dealing with the estimates was changed quite recently — as recently, in fact, as 1982-83 — under the direction of the previous Minister of Finance, Mr. Curtis. At that particular time, it might very well be contended — and it would be worth examining this in a committee — that the administrative means were put in place for concealing the Coquihalla costs by virtue of much more global votes and much looser definitions of those estimates.

In that regard, we have seen the kind of problems that we have around votes 74 and 69. We have seen the hanky-panky that has gone on in shifting the scope of the project related to the ribbon that is the Coquihalla Highway and its related projects, and eventually in separating all of the ancillary parts of that highway into another vote, very conveniently matching exactly the kinds of discrepancies we were seeing in what was being accounted for at that time. If we had had the system that had been in place, perhaps the government would have had more difficulty in carrying out its deliberate policy of not having this House informed about what the previous speaker has so euphemistically called nothing but a failure to upgrade the estimates.

The report of the auditor-general, which I referred to earlier in my remarks, has been very extensively used as a basis for excusing the kind of coverup that we have been dealing with in our discussions over the last few days. I want to just stress again — I know that this is probably repeating an earlier remark — that his report notes that at the moment there is no remedy that would prevent this from happening again; the potential for weak and inaccurate reporting has been clearly identified as one that still exists very strongly.

Madam Speaker, to review: we have had two highly comprehensive, professional, technical and interpretive reviews of the Coquihalla issue. We haven't even looked at the Annacis Island issue, which I'm interested in because that bridge comes into my riding and it, too, is a specific link with related projects. But if we were to look at that we would find further evidence of the coverup in reporting the actual costs of the project. Fortunately that is part of the commissioner's inquiry and his conclusions as well.

We have had the auditor-general advise us of the technical accountings that have taken place, but he notes very emphatically the weaknesses in the system and the fact that this House could not and probably would not — in what he had been able to review — signal what its knowledge and its intentions might have been on this matter. We've had his further report today, which notes that in March, when we were dealing with a special warrant, the House — at the time it was debating the issue — did not have before it the specific projects being transferred that were a part of that warrant.

We have gone halfway in this particular study. I am convinced and I would submit that the public right across the province is eager to know. The issue here is not the project, its benefits or its completions; the issue is accountability in this House and by this House. We have a responsibility to conduct our business with integrity, and the question of establishing a committee of privilege as a means of clearing our own House and our own record is one that this House should, in fealty to its basic role in this province, adopt.

DEPUTY SPEAKER: Hon. members, the first member for Cariboo would like leave to make an introduction.

Leave granted.

MR. A. FRASER: I would like the House to join me in welcoming my good wife Gertrude and my oldest daughter Louise, who are in the galleries today.

MR. CHALMERS: I certainly can't say that it is with pleasure that I rise today to speak against this motion, because quite frankly it saddens and disappoints me that any of us have had to be here today and yesterday to talk about a motion that should never have been brought before this House. I intend to speak against it and when the time comes to stand up and vote against it, as I would urge everybody on both sides of this House to do.

I sat here yesterday and listened to the vicious attack against the first member for Cariboo and in particular the vicious personal attack by the member for Vancouver East against Premier Bennett. They have the audacity and unmitigated gall to stand up and suggest that the Coquihalla Highway was built to benefit Premier Bill Bennett because he owned land in Kelowna. I would suggest that that indicates exactly what that party feels about the building of highways in this province, and it indicates their complete and utter lack of understanding about the needs and the importance of the transportation system in the interior of this great province.

The previous member for Okanagan South understood the need for highways to be built in this province, and that's exactly why he had the first member for Cariboo in charge of the most important portfolio of the day, with the building of the Coquihalla Highway.

For the member for Esquimalt–Port Renfrew to try to better his political career by attacking one who is halfway through his career is, I would suggest to you, not only wrong but scandalous. If they feel that they have to steal the headlines of the Vancouver Sun and the other newspapers on the backs of these people, I've got three words: shame on you!

MR. MILLER: Madam Speaker, on a point of order, the second member for Okanagan made the statement that the issue was raised by the member for Esquimalt–Port Renfrew to further his own career. That is a despicable statement, and I demand it be withdrawn.

HON. MR. STRACHAN: It's not a point of order and does not require withdrawal.

[ Page 3386 ]

DEPUTY SPEAKER: Would the member for Okanagan South please continue.

MR. CHALMERS: The member for Esquimalt–Port Renfrew stood up yesterday and suggested that there was a change....

MR. SIHOTA: A point of order with respect to the comment made by my good friend over there. I want to bring to the attention of the Speaker that first of all, there's no truth to that statement; and secondly, I find it objectionable, and I would ask that he withdraw it.

DEPUTY SPEAKER: Hon. members, the statement is very close to being unparliamentary, and I think in the best interests of this debate it might be best withdrawn.

[5:30]

MR. CHALMERS: I find that the whole item was offensive, and if the hon. member feels that the shoe fits, I'll be happy to withdraw that statement.

He suggested that changes had to be made and that there had to be checks and balances. Many of the members in this House, and certainly the first member for Cariboo, remember well the period between 1972 and 1975, and I would suggest to everybody in this House that the NDP in that time gave a new meaning to checks and balances. When they got elected in 1972 they started writing cheques and the books were out of balance until the Social Credit government took over in 1975. And they imply that there were no overruns during the period between 1972 and 1975. I would suggest that you do your homework, because there certainly were many overruns, and there wasn't much left over at the end besides those overruns to show for it. There were maybe some overruns in the building or some underestimates for the building of the Coquihalla Highway, but we've got something that will be a lasting legacy in this province for many, many years. As a member who represents an interior riding, I fully understand and appreciate the need for a transportation system in this province.

MR. LOVICK: The problem with you guys is you can only count what's concrete.

MR. CHALMERS: That may be true, my friend.

The Social Credit Party and its members have always understood the need for a transportation system in this province. To give you an idea of what the socialists think about the need for highways to be built in this province, the Leader of the Opposition not only talked about the policy they had between 1972 and 1975, but he also clearly demonstrated during an open-line program in Kamloops last year exactly what the present opposition party's position is on the building of highways. He demonstrated that by saying that if he were the Premier today, he would shut down the building of phase 3 of the Coquihalla Highway. Well, that says an awful lot about not only what they think of the need for highways, but also what they really think about people in the interior of this province. If you think you're going to better your political career by attacking the first member for Cariboo and the building of highways, I've got news for you. The people of the interior know this man, love this man, and know and fully understand that he would lie to no one, let alone anybody in this House.

I would suggest to the member for Esquimalt–Port Renfrew that he's safe over there in the opposition rows. He'll be there for a long time. I will do all that I can, as will everybody on this side, as will thousands and thousands of people in the province of British Columbia, to ensure that he stays in opposition for many years, until he learns to even do that right.

With that, Madam Speaker, I would urge everyone to defeat this motion.

DEPUTY SPEAKER: Hon. members, before the next speaker, could we just have some decorum — just a little.

The second member for Nanaimo on a point of order?

MR. LOVICK: Madam Speaker, I hope it's a point of order, and I'll take guidance from you, of course, if I am in error. If we're going to talk about decorum, surely the means of measuring decorum is to start by finding out what kinds of spurious allegations are emanating from the other side. Clearly we're going to erupt. Clearly we might offend the rules of decorum simply because of the inanity of comments coming from the other side.

DEPUTY SPEAKER: Hon. member, the Chair appreciates your comments.

MS. MARZARI: Madam Speaker, I don't stand to hurl invective across the floor or to engage in the late-afternoon bantering that very often goes on in this House. I rise to present my arguments in favour of taking this particular motion and the questions that arise around it to a committee of privilege of this House. I am going to try to spell out the reasons why this issue should be transferred to a committee of privilege of this House, and I will not be engaging in my own speculations or my own questioning of the evidence that has come before us. I will refrain from doing that for very specific reasons, one being the fact that the mood of the House is deteriorating, the other being the fact that the committee of privilege is an appropriate and proper place for the discussion of items of this nature.

A committee of privilege, I gather, has not been used in the history of this House to any great extent. My colleagues remember a case in the late seventies of the Minister of Health — it was Mr. Nielsen — taking an issue with the RCMP to a committee of privilege. I don't know if in this House allegations of this nature — of representatives of the people misleading the House — were ever taken to a committee of privilege, so it would be something of a precedent.

1, like the member for Nanaimo, would like to say that I respect the traditions of this House and that there is reason, therefore, to take a look at this particular issue; not use the House to try to resolve it but rather take it to the appropriate mechanism.

[Mr. Pelton in the chair.]

What does a committee of privilege look like, then, I would ask. A committee of privilege, I would suspect, would be preferable to this House for the following reasons. The painstaking examination which must go on around this issue that is before us cannot property go on in the House. Legislative assemblies are large; they're discursive. They are set up on an adversarial system; the architecture of this House reflects that. And we, hurling invective across the floor at

[ Page 3387 ]

each other, are not getting any further into the substance and the evidence at hand.

Not much reference has been made to the initial allegations, I may note, as I have listened to the discourse in this House. There has been, rather, a pulling up of history and a lot of allegations. There has not been a systematic looking at the evidence. Some members have pulled out the MacKay commission and others have pulled out the Speaker's judgment; others have pulled out the auditor-general's report. If I may suggest, the place that these reports, commissions, statements and judgments must be taken is to a committee of this House capable of sitting in a committee room, capable of calling witnesses, capable of calling on more than elected representatives and former elected representatives: a committee capable of calling people who are closest to the expenditures of funds in our system, the civil servants and people who are in receipt of those funds during the course of these contracts, most notably the contractors themselves and those who were in receipt of public expenditures.

The nature of partisan debate that we have in this House does not necessarily lend itself well to the investigation that should be done. As my colleague from New Westminster pointed out, we have gone halfway. The MacKay commission has put forward serious questions and we have gone halfway with that commission. The commission was called; it did its job honourably and well. It put forward questions which need to be answered by a committee of privilege.

For those reasons I would suggest that a committee of privilege be struck. The Chair of that committee could be an opposition member or a government member, but the important thing is that the Chair should run a good committee, and the committee should be properly financed and properly structured to be able to hear evidence properly and to be able to carry on in a quasi-judicial capacity to put forward the questions, to hear the evidence, to have it all laid out and to do this in the public eye, obviously, but to do it with the structure and the budget that it requires. I would suggest that such a committee would require legal consultants to protect the interests of the people being interrogated, the public purse and the House itself.

The committee would also require, I would think, clerical staff to be able to give proper notice to subpoena witnesses to come to speak to the committee. The committee would probably need the capacity to meet outside the sittings of the House, and it would need to be properly financed and structured.

Why is it so important, then? Next question. The reason that this issue is so important is that serious allegations have been made, having to do with public expenditure. They have to do with misleading of the House. These allegations have not been made lightly, and they have not been made just by the opposition side of the House.

If I may suggest, the MacKay commission has firmly put in writing its dismay and has used very strong language — for a commission — in expressing its sentiment and the results of its deliberations, that this House was misled. We have not only the MacKay commission, we have a Speaker of this House who, in ruminating upon the evidence before him when this matter was first brought to the House, did not absolve the parties in the allegation of guilt. The Speaker's judgment, at the bottom of page 5, did not say that the people involved were innocent. He simply said that, in his judgment, there didn't seem to be enough evidence to prove that the House was misled.

My reading of the Speaker's judgment was that there were further questions to be asked. My reading of the Speaker's judgment, as it pulled in a letter to a member of this House from the auditor-general, went further. The Speaker went further and suggested that, having read the auditor-general's letter to the first member for Vancouver East (Mr. Williams), there were serious problems inside our estimates process and our accounting processes.

The Speaker is not satisfied — I don't think, from reading his judgment again and again — that things are looking good. In fact, the Speaker, in my interpretation, was asking for further questions to be asked. The Speaker was not saying that everything is fine.

Furthermore, we have a commission and a Speaker saying this. We have an auditor-general who has produced a report, and the report is basically suggesting that different interpretations were made by the MacKay commission and by the auditor-general as to whether or not certain roads and interchanges and ancillary buildings and constructions were within the terms of reference.

We have an auditor-general who is saying basically and I quote from the top of page 5 of his report on Monday to this House:

"The fact that these costs were reclassified may have two interpretations: either the costs were being concealed, or the original classification was faulty and the cost allocation was being made more appropriate." And: "We cannot attribute any motive to the transfer as we cannot know the intentions of those who made the reclassification or directed that it be made. We are of the opinion.... . that the government acted within its authority when making the reclassification."

You will notice that the auditor-general is saying that he couldn't attribute any motive to the transfer as he did not know the intentions of those who made the reclassification. The auditor-general goes on to say, on the same page 5: "A list of projects that were charged to vote 69, including most of those that were reclassified and are now the subject of controversy, it was tabled in the House during the debate on the government's request for a special warrant." So the auditor-general is referring to the list that was presented to the House for a special warrant. "Because this allocation was not contested at that time, the indication to us was that it was accepted by the Legislature."

[5:45]

Now, here's the question I put to you. I don't expect this question to be answered here in the House today. I don't have an answer for this question either, but let me put the question on the floor for the record. Here we have an auditor-general who has admitted in a previous letter to a member of this House that the estimates process doesn't jibe with the expenditures process, and the expenditures process doesn't jibe very well with the public accounts process; and although he's the auditor-general, things are not what they should be and he's been trying to tell us that for some time. Here we have the auditor-general trying to guess what the motives of the House were, and what this auditor-general has done is to go to the Hansard of the day the lists came forward for that warrant and tried to guess, from what was said in the Hansard, in the House, what the intent of the House was.

The question is this: if the auditor-general is using a Hansard, what kind of auditing was done before Hansard

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came along in 1972? That's an extraneous question, but the more important question is this.

HON. MR. VEITCH: We didn't have an auditor-general.

MS. MARZARI: We didn't have an auditor-general either? I see. Well then, there's no problem. The Provincial Secretary says that not only was there not a Hansard, there wasn't an auditor-general, so that solves that problem.

AN HON. MEMBER: Social Credit brought in the auditor-general.

MS. MARZARI: And I believe the NDP brought in the Hansard. Okay; one for one.

The question that I'd like to put on the floor is this. We have an auditor-general saying that he was reading the Hansard to find the intent of the House for the purposes of writing his report. Today I was late coming to the House, but as I was in my office collecting my papers to come to the House, the Speaker read a letter from the auditor-general which basically said that it had come to his attention that this list was not put on the floor of the House, was not brought to the House, the day that he had thought; that in fact his reading of the Hansard on that day might not have reflected any discussion about the transfer from vote 74 to 69.

The auditor-general, in his note of today, I gather also stated that it didn't change his mind or his judgment. But is it not worth asking the auditor-general in a committee setting: if you were using the Hansard on that day, to look at the transfer of this money to see what the House might have intended, and if the House expressed no dismay, no question, no problem, and if we now know that the list was not before the House on that given day, so that the Hansard couldn't reflect what might or might not have been said, is there not an inconsistency between what we've been told here and what we've heard in the letter today?

Interjection.

MS. MARZARI: All right. I'm glad you asked that question. I'm glad the question has come forward. I put this question forward just as an example of the kinds of questions that might be asked in a committee. I put this question forward along with many other questions — of civil servants, of contractors, of members of this House — about what did happen in those years that the highway was being planned and built and whether or not this simple transfer of funds is not the only thing to be asked questions about.

[Mr. Speaker in the chair.]

The final item that I want to address is: why should we not send all of this to Public Accounts? I'm speaking to you as the Chair of Public Accounts. I think it's an important question to ask. Public Accounts has the mandate in this province, as it does in every province, to take a careful look and give an accurate and detailed report of the government's financial affairs, so that government can be properly accountable. It's our job in Public Accounts to take a look at taxes and revenues and make sure that they are properly accounted for. We have to ask whether money voted by the Legislature was spent for the purposes approved, and whether the expenditures exceed the amounts that were authorized. These are all legitimate questions for Public Accounts.

You're going to ask me why am I not saying — as I chair the Public Accounts Committee — to send the whole thing to the Public Accounts Committee and let Public Accounts deal with it. I have presented a cogent case, I believe, for sending it out of this House to a committee, but I have not presented a case for not sending it to the Public Accounts Committee.

The Public Accounts Committee, at this point, Mr. Speaker, is not a judicial committee. It is not a committee of this House that can make serious decisions about the lives of its members. It is not a judiciary; it is not a courtroom for peers to judge each other on their performance. In fact, I have looked across the country, and within the last few years the Ontario Public Accounts Committee put itself in the rather sad position of expanding its mandate and trying to become a committee that judged its peers when an individual in the cabinet was pulled before the committee, investigated and interrogated.

The Public Accounts Committee was not properly established for the purpose. It has the capacity only to look at the accounts for the fiscal year that it has been told to look at. Our Public Accounts Committee, at least, has not been vested with the kind of budget, support staff or judiciary mandate that the committee of privilege would have in this matter.

I think that there are many items here which could easily be sent to the Public Accounts Committee. In fact, I would see that the committee might want to look at various expenditures and the process on the Coquihalla if only to establish a better system in the future, such as doing our accounting by project rather than by fiscal year, so that when you are looking at a highway, you take it from inception to completion and audit the project itself from 1981 to 1987.

1 don't see any reason why we couldn't use some twentieth-century management techniques in doing our auditing and perhaps expand the scope of our audits. But the Public Accounts Committee is not the logical place to deal with the allegations made in this House, because they are serious. They are extremely important; they have repercussions all the way down the line for many people in this House; and they must be dealt with appropriately and in an appropriate judicial setting.

For all those reasons, Mr. Speaker, I put it to you that the evidence is there. We have gone halfway, as my colleague for New Westminster has suggested. The commission has made its statement; the Speaker has made his statement; the auditor-general has made a statement; and they are not complimentary statements, none of them. They do not lift the cloak of secrecy; they do not suggest that innocence is here. They suggest thus far that guilt has not been fully ascertained.

A committee of privilege is what I will be voting for, and a committee of privilege is what this House might want to have to clear its own integrity, to clear the name of this House.

MRS. BOONE: I'm not a city slicker either, and I certainly don't intend to be one.

Interjection.

MRS. BOONE: That's right, I come from the boons.

The members on the other side went on at great length about the need for the Coquihalla and how important the

[ Page 3389 ]

Coquihalla was and how important highways are to the interior. Of course. That's not the issue. We don't question that, and it's not the issue whether or not the Coquihalla should have been built or should be built or whether we should have any highways done. That is totally out of line with anything that this House is dealing with right now.

The situation we are talking about is: what happened? Why was this province misled? Why were we not told about $500 million that was spent — taxpayers' money? Yet the member for Okanagan South says: "Why should you be concerned about that? Because SkyTrain is over budget." That kind of logic really seems very strange. Don't worry about being over budget on this area, because this area is even more over budget. Surely, if that is the attitude of this government, we should be taking a look at everything in this province and not just the Coquihalla, and I would have no objection to that whatsoever.

The member talks about fast-tracking and how the Coquihalla went over budget because of fast-tracking. The people want to know. They have a right to understand why the government was fast-tracking this, why they went about doing things that were going to cost us all money, why they were dipping their hands into each and every one of our pockets. And they dipped their hands into the people's pockets in Prince George North and Prince George South.

Despite what the member for Prince George South (Hon. Mr. Strachan) says, I can tell you that the people in Prince George see no relevancy at all of the Coquihalla to my area. They certainly are concerned about the overruns. They are very concerned, not just about the overruns on the Coquihalla but about the overruns that exist throughout a lot of the highways in this area. It is not acceptable to say that because there was fast-tracking, because SkyTrain is over budget, because they can't tell what these things are, it is acceptable to be over budget. It is not acceptable to be over budget. It is not acceptable to hide $500 million. Those are things the people have a right to understand.

Interjection.

MRS. BOONE: Move adjournment, you say? No, I'm just getting on a roll here.

When we talk about the fast-tracking, and when you talk about the impossibility to be in line, to be within estimates, this is bringing into question a whole slew of things that the public wants to know. For example, what about the companies that are making these estimates and getting their contracts? What about the people who came in over the amount and didn't get the bid? What about the companies that never got those bids because the other people were under them?

What we are talking about here, Mr. Speaker, is defending the public interest. This interest has got to be defended.

Mrs. Boone moved adjournment of the debate.

Motion approved.

Hon. Mr. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 5:59 p.m.