[ Page 4499 ]

CONTENTS

Routine Proceedings

Committee of Supply: Ministry of Economic Development estimates.

(Hon. Mrs. McCarthy)

On vote 19: minister's office –– 4499

Mr. Williams

The House met at 10:06 a.m.

Prayers.

MR. G. HANSON: In the gallery today we have a visitor from Salisbury, England, Mrs. Joan Burton. She is accompanied by Mr. John Watson, who is the husband of Hilary Watson, the secretary of the 1994 Victoria Commonwealth Games bid society. Would you join me in making them welcome.

Orders of the Day

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

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

ESTIMATES: MINISTRY OF
ECONOMIC DEVELOPMENT
(continued)

On vote 19: minister's office, $277,394.

MR. WILLIAMS: You may recall that yesterday I asked the minister if she would provide details of the Coquitlam lands, and she expected that she might have that later in the day, and if not, today. Similarly, we are most interested in the arrangements with respect to the Riverview lands at the old hospital site which have had a development underway over the last year and a half by Andre Molnar and other parties. I wonder if the minister could provide us with that background this morning.

HON. MRS. McCARTHY: I did undertake to get that information. I don't think it will be ready until about an hour and a half from now, and I will be pleased to give that information at that point in time. If it is earlier, I shall initiate it into this debate.

MR. WILLIAMS: I see. That takes care of that chunk of the file.

Maybe we'll just deal with some tidbits while I think about some of the major issues that we should be working on this morning. The minister, who as I somewhat facetiously said yesterday has been responsible for so many leaks over the last few months, was a victim of a minor leak herself in the last month in terms of furniture expenditures for her ministry. Maybe she could advise us what her actual request was, since she did protest quite a bit at the time, and maybe she can bring us up to date on her expenditures over in the glass palace in the conversion of the B.C. Pavilion to her super-mod, stylish offices in Vancouver.

Maybe she could tell us how much office space she's taking up here in the building, since I gather she really has more office space here than most any other minister of the Crown. No? Okay.

The cost of the conversion of the glass palace is especially intriguing. They are pretty grand quarters. In these days when we can't find money for hungry schoolchildren or have to cut back the B.C. Institute of Technology by $4 million, maybe the minister could explain to the House her tastes in decor and furnishings.

HON. MRS. McCARTHY: The hon. member has asked questions about the B.C. Enterprise Centre, which is the one-stop shopping centre for investment and domestic information and all the remarkable information that people can get — in the very first one-stop shopping centre, by the way, that has been placed in Canada. It will be duplicated and has been duplicated in satellite enterprise centres throughout the province, but it is the head office of the Ministry of Economic Development, plus an expansion of the information services that were available by the ministry. In that respect, it has been a very exciting and successful conversion from Robson Square. The net cost to the ministry is less than the Robson Square facility. It has, as I say, been exceptionally successful.

The reason that the ministry in the Victoria area is wishing to and has decided to move is that about a year and a half ago — maybe a little less — the B.C. Buildings Corporation and the ministry decided that it would be more efficient to have the amalgamation of three separate areas that the ministry is working from put into a new area — not brand-new, but certainly new to us — in a different location. In amalgamating those three locations, there would be a net annual saving to the ministry. The work that is being undertaken to renovate the building is very much to do with replacing, or adding if you like, the computerized network, which is new to the ministry and would have had to have been in place to some $300,000 worth if we had stayed in the old location. From a rental point of view, we have a net saving.

The breakdown of the furniture is a question of divisions within the work areas — around $300,000. That is the breakdown of the $993,000 Treasury Board submission. That is really not a cost of furniture. It is put in as a cost of furniture, but it is an integral part of a work station and would be there whether they were modular or not. The modular style gives us more flexibility. The other part of it has to do with the filing system, library expansion, meeting rooms and office furniture. The central services — the filing system, library expansion and meeting rooms — take up about $293,000 of that amount, and the office furniture about $400,000.

We took a look at the office furniture to see if there was a possibility of having it provided by other offices. That is still being looked at, but it is becoming more and more evident that it is probably not a do-able thing.

In addition, I have asked the ministry to look at the leasing and see what the various costs would be in that regard, but at present a decision has not been made between Treasury Board and us. The first go-around of Treasury Board was positive, and then we ran into some discussion over leasing. So the whole project regarding the furniture for the ministry in the Victoria office has been pulled back until the leasing and the used furniture could be studied and a recommendation made back to the ministry; and at this point in time I am waiting for that.

[10:15]

MR. WILLIAMS: We do appreciate the lengthy non-answer, Mr. Chairman. The specifics in terms of the $900,000, however, are helpful. I am pleased that the leaker was accurate. Certainly people from Treasury Board benches should be accurate when they're leaking information about other ministers, and I'm pleased that the Minister of Economic Development confirms that the Minister of Finance

[ Page 4500 ]

(Hon. Mr. Couvelier) is a fairly accurate leaker when he wants to be. That's encouraging.

Madam Minister, I asked you what the cost of the palace was, and you're very reluctant....

Interjection.

MR. WILLIAMS: Oh. Did you give us the number for the glass palace, in terms of rebuilding the glass palace to your specification?

HON. MRS. McCARTHY: We've amortized the capital cost of the installation in the rent, and it always was under the Robson Square scenario as well. Robson Square cost $906,000 per year; and in the enterprise centre at the Pacific Place site, it's $902,000 annually. The cost of the new furniture when we first went into Robson Square was amortized at $34 a square foot, in comparison to what now is amortized at $24 a square foot. Both included the furniture and both are amortized over that $900,000-plus figure; $902,000 compared to $906,000 at Robson Square.

MR. WILLIAMS: If we're going to get into this kind of thing, then was the same capitalization rate used in each case?

HON. MRS. McCARTHY: Yes, it was.

MR. WILLIAMS: But presumably, then, you are amortizing these costs over ten years or 15 years or....

HON. MRS. McCARTHY: Ten years.

MR. WILLIAMS: And the capitalization rate you're using was 10 percent, 11 percent, or...?

Interjection.

MR. WILLIAMS: No, no. There's an interest rate; ten years is the term. But then I don't have all those degrees.

HON. MRS. McCARTHY: I'm given to understand that it's consistent with government policy and the B.C. Buildings Corporation. I believe, but I can't be sure, that it's around 10 percent.

MR. WILLIAMS: Now we're getting to the answer, aren't we, Madam Minister?

Interjection.

MR. WILLIAMS: I do appreciate that. But what it means is that you spent $9 million converting the palace. Is that what it means? No. Well, maybe your staff can help us, because that was the original question I asked. If it's a 10 percent amortization rate and it's $902,000 a year, then it's got to be $9 million, doesn't it?

HON. MRS. McCARTHY: The hon. member is appearing to multiply the annual rent by ten to get that figure, and that would include the rent. In some way or other you again seem to be mixing oranges and apples.

MR. WILLIAMS: I asked a simple question, and I got a lengthy answer, so I'm trying to get a simple answer back.

We're going through this process. The question was: what did you spend on converting the B.C. Pavilion into your fancy centre on the shores of False Creek? The answer I got was: "Well, it's so much cheaper than Robson Square." That's interesting. The answer I got was: "Well, we pay it off in rent and we amortize it that way. It's $902,000 versus the very expensive rent at Robson Square of $906,000, so by converting that palace and creating those wonderful premises, we actually saved the taxpayers $4,000 a year." That's the message from the minister.

That's still not quite answering the question. How many millions of dollars did you spend on converting that glass palace into your premises on the shores of False Creek? Was it only $8 million? Is that what the minister is saying?

HON. MRS. McCARTHY: Maybe I could put it a simpler way for the hon. member. It was a million dollars when we moved into Robson Square under a different minister. A million dollars was allocated for furniture at that time. The payment of the furniture and the rent was amortized over a length of time under that scenario. When we moved from Robson Square, we left the furniture at Robson Square for other uses and we bettered our circumstance by that difference between the $24 per square foot and the $1 million it cost for furnishings, installation and leasehold improvements — the $1 million figure, not a $9 million figure. The $1 million figure is amortized along with the rent over a period of ten years at $24 a square foot, as opposed to $32 a square foot.

MR. WILLIAMS: You know, it's really confirmed now. One million dollars a year — $900,000 a year. Your rent in the glass palace is $902,000 a year. Right?

Interjection.

MR. WILLIAMS: Oh, I've got it wrong. Maybe you can help me.

HON. MRS. McCARTHY: Mr. Chairman, the hon. member must know that it's a blended payment — the capitalization, the furnishings plus the rental.

MR. WILLIAMS: So you want to separate the furniture and separate the rent. It's a blending of the two. Okay, but the combination of furnishings and rent is $902,000, which suggests a capital cost of both of $9 million. What was the capital cost?

HON. MRS. McCARTHY: I can try to get specifics for the member, but roughly speaking what we're looking at here is furniture of $1 million to furnish the three buildings: the square, in terms of at least the one floor in the one building; the information centre in the other building; and some offices in the third building. In terms of that, it's about $1 million, give or take. That has been amortized over 10 years, so about $100,000 a year would be the cost to government— putting it on a lease basis, if you like, over ten years. In addition, there would be the rental charge for the same facility. Whether we're in Robson Square or whether we're in the Enterprise Centre or another part of the community, we still have rent to pay. That rental adds up to approximately $800,000 annually. I can give you the exact figure for that. Over the ten years the $902,000 is $120,000 for amortizing the furniture and the

[ Page 4501 ]

balance is $780,000 annual rental. The blended figure of $902,000 gives us $24 per square foot as opposed to $34 a square foot, which is what we were paying in the other location.

MR. WILLIAMS: That gives us the information; now it's clear that you spent $7.8 million in renovating the building, if you're amortizing over ten years at 10 percent. No? It's worse; maybe you can help me there. What was the capital spending there? That's what I'm trying to find out.

HON. MRS. McCARTHY: Mr. Chairman, I've told the hon. member that the cost of the furnishings is approximately $1 million — renovations and furnishings for the new location. That is the capital cost.

MR. WILLIAMS: Furnishings?

HON. MRS. McCARTHY: Furnishings. The method of paying for that is $120,000 a year, amortized over ten years. The balance of the cost — which gives us the square footage cost and comparison of the two places — is rent. Wherever we are, we're paying rent. We're paying less per square foot at this location than we did at the last. The rent, as we have said, has nothing to do with a total cost of $9 million or $10 million, unless you project it ten years from now. But then you can look back ten years, and we paid, over ten years, ten years times $902,000. This time we are going to be paying $906,000 in Robson Square. This time, in the next ten years we are paying $902,000 — a saving. It doesn't matter where we are....

It's interesting, Mr. Chairman, the sarcastic chuckles that come out of this member for Vancouver East. Does he feel that we're going to have rent somewhere for nothing? Of course not. We're charged back, like any business is, for the rent. He's trying again — in his questioning and his assumptions — to make it look as though there's an expenditure on an annual basis — on a move to the Enterprise Centre — of $10 million as the cost to move. Is he saying that above and beyond that we have to pay rent? Of course. That's the impression he's trying to leave, but the fact is that the move to the Enterprise Centre is a million-dollar investment amortized over ten years. That is the additional cost, if you like, to move to the Enterprise Centre.

I can tell you what the additional benefits are. In spite of it being less per square foot.... The customers served since opening the information centre alone, not to mention all the other services of the ministry.... From 1978, when we were at Robson Square, until May 1987, there were 206,009 telephone inquiries and personal contacts. From when we opened in June 1987 to March 1988 — not even a full year — we have had 111,291 inquiries by person and by telephone. So you have to understand that in a shorter period of time we're doing more business at the new, more accessible location, and obviously doing a better job. I think it has a lot to do with our location, the accessibility.

I am really pleased with the success of the Enterprise Centre and equally pleased with the satellite centres that have been started. The one here in Victoria is doing a tremendous job, and we're really pleased with what it's doing. We also have the one in Prince George. We have others opening in other parts of the province, and they are all connected electronically. It has become a tremendous asset to business people who need information.

The $1 million, again, includes furniture and equipment for the B.C. information centre — for which I've just given you the figures of success — and the Enterprise Centre, which has all of my Vancouver staff for counselling and advice. We have offices in two buildings there. That was the cost, which, as I said. is amortized over a decade.

[10:30]

MR. WILLIAMS: I take it the minister has an office there in False Creek.

HON. MRS. McCARTHY: Absolutely. Why wouldn't I?

MR. WILLIAMS: Of course. Absolutely. Why shouldn't she have? Indeed. I just wonder if the minister is prepared to take the press on a tour of her various facilities.

Interjection.

MR. WILLIAMS: Oh, good.

HON. MRS. McCARTHY: To the question asked, yes, I do have an office in that building. Of course I would have one in Vancouver, where the Enterprise Centre is. It's there because that's where the financial centre, the transportation centre and the international airport are. That's where the investors come. There has always been a ministerial office in Vancouver. We have always had one in Robson Square, and we will continue to have one there. It's where I receive people; it's where people come to get information; and it's an excellent place.

By the way, speaking of the media having been on tours, the media have been in my office many times. They will be in many times again. They've been in the information centre and they've been in the offices of our ministry there as well.

MR. WILLIAMS: It does seem interesting that people on the Treasury Board benches felt it was worthwhile to leak information about your latest proposals for furniture expenditures here in Victoria in your ministry, because that is clearly what happened. It must really be a reflection on the level and style to which you've become accustomed through recent years. I kept hearing rumours over the last couple of years about how much money was spent in fancying up the glass palace on False Creek, and I kept getting numbers that were perilously close to $10 million in terms of spending in that place. Are you saying that's not true?

Interjection.

MR. WILLIAMS: No? You won't give us a number. It's a million a year you're spending, and you keep saying that's a saving because it's a couple of thousand less than Robson Square. That's your argument; stick to it. That's fine, but the reality is you're spending a bundle on that big greenhouse that was built on False Creek with absolutely no design, no plan whatsoever for the facility after Expo. The architects did not design that building for an enterprise centre. They built a big space for display purposes, and they didn't know what they were going to use it for when they designed the building.

You spent a bundle on it, fancying it up for your little empire. You can talk about telecommunications all you like, but it's a fancy expenditure for a very fancy ministry that

[ Page 4502 ]

spends a lot of money on itself. No wonder the Minister of Finance (Hon. Mr. Couvelier) just scooted out of the chamber, since he has not been happy with your spending habits. That's very clear. It's quite right that your spending in Victoria should be in limbo now. That's another million bucks — or $900,000, to be more precise — in terms of fancying up offices here in Victoria. There is a consistency here of high-level spending within a government that pretends that it's careful with the public purse. Again and again — the fancy parties for the convention centre, and you dismiss that by saying: "Oh, we got it from all the various people that are supplying the convention centre."

What we have here is high taste and high living, and a lot of money that might very well have been spent better. There has not really been a careful review of these things. These are not always productive expenditures. These are aggrandizement. These are very fancy offices by any measure, and costly to the public purse. I can see why you're reluctant to finally come up with the actual capital numbers.

However, you have a lease there. Maybe the minister could advise us of the nature of the lease of the Enterprise Centre facilities now that the property has been transferred to Li Ka-shing.

[Mr. Rabbitt in the chair.]

HON. MRS. McCARTHY: Let me respond, first of all, regarding the furniture purchases of my ministry. Our ministry in Victoria has spent less that $3,000 a year for the past three years. Extravagance is not really implied in an expenditure of a very busy office which has been called on to do a tremendous amount in the last three years. Also, let me say that all of the expenditures on furniture have been done within B.C. Buildings Corporation guidelines. They always have been. We all hate to live by that rule.

I'm receiving in the Vancouver office, particularly, a tremendous number of people, and nobody seems to think it's a palace. When you compare it with the kinds of offices where ministries in provinces across the country receive international investors and business people, small and large, mine is not extravagant by any stretch of the imagination. Frankly, I don't buy your argument of extravagance; it just isn't there. The media have been through those offices many times. They don't make comments and have feature stories on extravagance in those offices. They are very efficient and they are doing a very good job, but I don't buy the argument of extravagance at all.

All the lease arrangements on the Pacific Place program are made between B.C. Enterprise Corporation....B. C. Enterprise Corporation has our leases, actually with B.C. Pavilion Corporation. Our lease is still between the B.C. Pavilion.... There's no change except for minor changes. There will be no changes in the agreement. We still will be paying our rent to the Pavilion Corporation. B.C. Buildings Corporation has been apprised of those arrangements. They are the ones with whom we dealt in the first place.

MR. WILLIAMS: The Pavilion Corporation presumably has the new landlord, Li Ka-shing. The question then is: what are the arrangements between the Pavilion Corporation and Li Ka-shing?

HON. MRS. McCARTHY: Those arrangements do not affect us, because our lease is effective for the decade and we still have the same arrangements. It has no effect on the Ministry of Economic Development or our estimates.

MR. WILLIAMS: Very neat, but the point is that the Pavilion Corporation has to negotiate with Li Ka-shing. Is that not so?

HON. MRS. McCARTHY: That would be true, but our arrangements remain whole.

MR. WILLIAMS: But this was not settled as part of the bargaining on the exercise with respect to the sale of the Expo lands. This is still left out there to be dealt with. Is that correct?

HON. MRS. McCARTHY: No, all those arrangements are already settled with the Pavilion Corporation and us.

MR. WILLIAMS: Between the Pavilion Corporation and the minister, yes. I understand that and appreciate the point. But you're a tenant of the Pavilion Corporation, and the Pavilion Corporation is now a tenant of Li Ka-shing's. Is that not so?

HON. MRS. McCARTHY: Mr. Chairman, only insofar as the property within Pacific Place is concerned, of course. Yes — the rentals and the leases within that complex.

MR. WILLIAMS: The question is: are those arrangements settled?

HON. MRS. McCARTHY: Yes.

MR. WILLIAMS: Were they settled as part of the contractual arrangements when you made and completed the deal with Concord Pacific, as the minister responsible for the whole entity?

HON. MRS. McCARTHY: They had to be settled in what would be considered a side agreement with the Pavilion Corporation. The answer is yes.

MR. WILLIAMS: The question, then, is: was the nature of the deal such that it would not increase the cost to the Pavilion Corporation during the term of your lease of these premises?

HON. MRS. McCARTHY: I believe that's correct, Mr. Chairman. We've been kept in the same position, as I understand it.

MR. WILLIAMS: So there's no windfall there for Li Kashing, in terms of some increment.

HON. MRS. McCARTHY: No.

MR. WILLIAMS: I appreciate that.

Maybe just while we're looking at that particular complex, I wonder if the minister could advise the House what arrangements were made after Expo was over, in terms of the transfer of the licences of various premises like 86th Street, the Unicorn and the other premises in that facility.

HON. MRS. McCARTHY: Well, Mr. Chairman, they were the usual landlord-tenant agreements. On those specific

[ Page 4503 ]

premises that you mentioned I can't give you.... I'm sorry, I can't give it to you in detail. If it's important to the member, I can get it for him.

MR. WILLIAMS: I think it is worthwhile, and I appreciate the minister's cooperation.

I can't help but reflect.... This is sort of as somebody who's seen the entertainment business in Vancouver and has had some modest understanding of and involvement in it. I for one have been impressed by the work at the Commodore cabaret, for example. It really has quite a nice history in terms of downtown Vancouver. The owner of that facility has probably spent $2 million in the private sector upgrading that facility, which has maybe the best dance floor in the city, and so on.

It was understood by everybody, when Expo was established, that these things weren't going to hang on: the special licences for places like 86th Street, which is a huge cabaret and restaurant; a nice kind of licence. The question is: what kind of process went on in determining who would get that licence after Expo was over? What kind of full, open bidding process occurred with respect to 86th Street? That was a major increase in the number of drinking establishments in the city of Vancouver. I think it had a devastating effect on the private sector, on places like the Commodore, where they have spent a lot of their own capital to upgrade a significant facility.

What's really happened, as I see it, anyway — and maybe the minister can help me out as she pulls together more information — is that somebody else was able to come into the business, as they did in 86th Street, without any capital cost — no capital cost at all, compared to the Commodore.... Maybe you can help me out on that. If there was a lump capital payment made, I'd be surprised. Clearly, that then changed the competitive nature of the entertainment industry in Vancouver. Somebody could go into business without a big capital cost and compete and do very well, as they have done, but at considerable cost to those who have invested in the private sector.

Maybe the minister could advise us how that bidding process took place and what the process was that clearly changed the nature of the game and moved the goalposts.

[10:45]

HON. MRS. McCARTHY: The hon. member would remember that this was a facility service of Expo 86. At that time it was a popular entity, as were two or three others in that complex. After Expo 86 they made a decision to stay, and have done so. At times I think they were there under difficult times, because there was not a lot of activity in that area until we took it over in terms of the Enterprise Centre. They were tenants of Expo. Their special licence ended in December 1987. They're on a normal rental basis, a normal tenant basis, again with the Pavilion Corporation. I think they understand, and I think that all of the tenants understand, that with new owners and landlords there will probably be a rationalization of that particular area and different uses for it, but we have no jurisdiction over that. The liquor control board doesn't come under my ministry, so I can't answer questions on that. The special licence was ended last year. I'm not sure about competition with other parts of the community. That's a very competitive business all around, and they will forever have competition. It's on a normal basis. I can't give you the terms of their lease; however, I don't think it's a long-term lease. I'm sorry, I don't know the answer to it, but I can get that information.

MR. WILLIAMS: The question was: what was the bidding process? Is that the information the minister has trouble with — what the bidding process was? I understand that it's presumably a normal market rent, and I'm satisfied that's probably the case. But the question that interests me is how the people who are operating those premises now got there.

HON. MRS. McCARTHY: I wasn't there at that time, but I take it that decision was made because of their input into Expo, and because they were there — they were the operators. They asked, no doubt, for the opportunity to stay, and because they were the initiators, I presume that's why the agreement was made. That was an agreement made before my time, so I don't have a recollection of that.

MR. WILLIAMS: That's not my recall. Maybe the minister can check that out in more detail, because I don't recall them being the same operators. I might be mistaken, but that's not how my memory serves me at the moment. I could be wrong, but I don't think so. My understanding is that there was a canvassing and that the present operators came out as a result of the canvass, but I'm not aware of any bidding process.

At the same time, Mr. Toigo has the beneficial interest in the B.C. Club. Maybe you could advise us how that works as well.

HON. MRS. McCARTHY: The corporation that operates the B.C. Club is really the same.... They had input into Expo and decided to carry on after Expo. Again, that was before my responsibility. It is because of the input that the service that was given during Expo 86 and, if you recall, Nat Bailey's on the Plaza which was operated by the White Spot firm.... It was a natural party to take over with the installation on the plaza — and I take it that's why — under the same normal rental conditions and leases as I mentioned with 86th Street and again with the Irish pub.

MR. WILLIAMS: The problem I have with it, Madam Minister, is that these people went in with the goalposts clear: out when Expo was over. That's my understanding, at least in terms of the 86th Street, the Unicorn and so on. The proper thing to do would have been to have had a bidding process at that point in time, so that we could find out what the market would pay for these facilities. It isn't just a rent question; it isn't just paying the current market rent. What we have there is some capital which is a significant asset in terms of these premises, and their commitments were — as I understand it — with the end of Expo. So then — the question was — there should have been a process. Madam Minister, you have been essentially responsible for the disposition of the assets after Expo, after the corporation was folded in, and these are among the assets. Maybe you could give us a general description of the disposition of assets, and who your staff was, and why you hired those people to carry out that disposition.

HON. MRS. McCARTHY: Again, all I can say is that on my recollection, they were actually there when I took on this responsibility. I have to say that I am really grateful to all of

[ Page 4504 ]

those people, because I recall that when I did take on this responsibility and was very much involved in the B.C. Enterprise Corporation amalgamation and looking at that site, it was a site that was being cleared of all the old buildings. You will recall it was a sad-looking site. It's a lot better looking today. It's almost all cleared land now, though there are still a few things left over there.

The Expo site was not a site which I think would attract a lot of competition. I think at that time we were, and are even today, rather pleased that those people took that risk, because it was a risk. It was difficult to get people to the site, but it certainly won't be in the future. It's all very well to talk about it in today's economy, but we're talking of 1986. In 1986 there was a difficulty in the ending of Expo, and decisions were made before Expo was over. Those people were there and in place, and decided at that time to carry on.

That was a great risk because when everything ended and everybody deserted it, it was all done. They did it in an era, if I can say, that was not a very exciting one for them to look forward to because it was the end of Expo, with the devolution of all those assets around them. They were going to be within an actual construction site for a while as buildings came down, trucks and cranes were in there to cart things away, and it was not the best place to set up a business.

B.C. Pavilion Corporation and their forerunners, I think, have made the best deal, a deal that would not be easy to make at that time, in that particular economy. I'm given to understand that the best economic picture — and of course the person who's there does present the best economic picture because they're there; they have an advantage over the others, there's no question.

MR. WILLIAMS: But you know, that's the whole point: they have an advantage. No question, the minister says. Indeed they have an advantage. If I were minister, I'd want to make sure that nobody had an advantage. Isn't that why you were derailing the Premier over Toigo? You wanted to make sure he didn't have an advantage that nobody else had. This, on a smaller scale, is the same kind of question. If you want to find out what that stuff is worth, you go for a bid.

That's what should have happened. Then maybe the owner of the Commodore could have put in a bid, and could have avoided spending $2 million on improving his premises as he has — his cost. Instead, somebody else takes over this outfit and has no capital cost. Any businessman that doesn't have to bear capital cost has got it made. Just to walk in and say yes, I'll pay the rent for a going business — big deal. That's a sweet deal. And that's the problem we have with it. It's not good enough.

I also said I was interested in the question of the disposition of the Expo assets, who was responsible for it, why you put them in place, and what their expertise was. I'd be interested in the answer.

HON. MRS. McCARTHY: Again I say I wasn't involved at the time, but I am given to understand that they were...that the Commodore or whatever was knowledgeable and they did seek out other operators. In the case of the B.C. Club, other operators were requested to bid and there was a competition. I'm sorry, I was not there, so I can't give you that. That was before Expo closed.

Also, again I reiterate — I don't think there's anything magic about this — that the fact is that those who had put their capital in such as the Irish Rovers pub and 86th Street and were cognizant of the operation would probably be in the best position to give a better bid because they knew the business. They were on the ground, and they had been on the ground for over a year. Well, for the six months of Expo 86, true; but the installation came before Expo 86, as you know, and they had worked with it for a longer period of time.

I'm given to understand that there was a real effort made to get a series of people into that operation; and I also can tell you from my own association with that whole plant down there that all of those operators, not just some but all, took a risk to be there over a very difficult time. It's fine to talk about that as being such a lucrative and remarkable place in the light of today's economy, but if you look back to when they made all these arrangements, when Expo was being closed and they knew it would all be torn down, they lived through a very difficult year. There was no activity other than demolition around them and there was no sense that there was anything to go to there.

It wasn't until June last year that the Ministry of Economic Development began the Enterprise Centre and moved the Ministry of Economic Development from Robson Square there. There wasn't anything there until that time. Until there was some activity and recognition at this site, they took a terrific risk. Rather than belittle them or suggest they got some remarkable deal, we should really be very grateful to those people for putting their risk dollars out, for sitting through a tremendously quiet winter with probably three people coming by the place to spend money.

Frankly, I've been in that B.C. Club when that has been so, when maybe one other couple besides my husband and myself were there. So I know that from actual observation. All I can tell you from what I'm advised is that they did go through a number of people and they've got a very good operator in there at the present time. The operator gives excellent service and does a very good job.

[11:00]

MR. WILLIAMS: Do I have to ask the question again, Madam Minister? The disposition of the Expo assets?

HON. MRS. McCARTHY: The disposition of the Expo assets has been undertaken by what was at that time B.C. Place Ltd., which was the other corporation that finally came into B.C. Enterprise Corporation. They had a disposal division set up during Expo 86 in anticipation of disposal, and as of last June they actually sold the substantial part of the assets. They wound up as of June 30, 1987, when Expo Corporation was wound up; with a disposal budget which was undertaken by this division. The budget was, I believe, $33.1 million for the disposal budget, and the actual was $20 million.

MR. WILLIAMS: If we could clarify that, it was anticipated that you would get about $33 million for the assets.

HON. MRS. McCARTHY: We would spend $33 million.

MR. WILLIAMS: Oh, spend $33 million. That's in cleanup and all the rest of it.

HON. MRS. McCARTHY: That's the budget.

MR. WILLIAMS: And you spent $20 million. But what did you get for assets that you sold or disposed of?

[ Page 4505 ]

HON. MRS. McCARTHY: We believe it's around $17 million. That's round figures.

MR. WILLIAMS: I think it's significant. I wonder if the ministry would provide the detailed information to the House in terms of the assets that were sold and the prices that were established for them — not forthwith or anything like that, but when your staff have assembled the information.

I was interested in who the major parties were in that disposal authority, or whatever it was. Was there somebody with experience that you admired through the years that you thought would be very good at that kind of work?

HON. MRS. McCARTHY: When I took on this responsibility, inherited it, B.C. Place Ltd. was in place and had a plan for disposal. They had hired Mr. Henry Wakabayashi, who had done Ocean Falls devolution prior to this and has a tremendous track record. I'm sorry I can't remember the name of his company at the present moment. Also involved was the Purchasing Commission of our government, and it was led with the Purchasing Commission and B.C. Place Ltd., with a contract to Henry Wakabayashi, who should, quite frankly, be given accolades for how well that was put together and how well he served the province in that regard, because he did do a very good job.

MR. WILLIAMS: That's intriguing. I remember looking at Public Accounts, and Mr. Wakabayashi has done very well in Public Accounts in British Columbia. He got the job of setting up our show in Tsukuba, Japan, and had a nice fat contract there. He had the arrangements for demolishing our facilities in Tsukuba, Japan, and had a nice contract there. You tell me Ocean Falls. Maybe he's become an expert while employed for the government of British Columbia. It's intriguing that the same kind of people who are very good at building displays would be the ones who would be so good at disposing of things as well. I appreciate the....

HON. MRS. McCARTHY: Is that a question?

MR. WILLIAMS: No, just a comment.

It would be interesting to know what kind of bidding process we have in establishing these people in their roles in terms of performance standards, track record and so on. There's a lot of money involved. It really should be monitored carefully. If the minister wants to comment on that, well she might.

There were a range of other matters that I was interested in, but we might just deal a little more with the trade questions. The minister yesterday referred to studies by the Canada West Foundation in Calgary to support some of her arguments in terms of the benefits of the trade deal, which struck me as strange, because clearly there should be British Columbia studies that provide sector-by-sector analyses. Can the minister provide us with those studies that look sector by sector at British Columbia, in terms of the impact of the trade deal? Yesterday you talked about a global number of jobs where there might be benefit from the agreement — in which you expect benefit from the agreement. But there are losers and there are vulnerable areas. The province of Ontario and other provinces have delineated the vulnerable areas and some which are unfortunately losers. But that kind of breakdown by sector would be helpful in understanding the government's perception of the deal.

HON. MRS. McCARTHY: Let me pick up and just finish your concern regarding the process in terms of Mr. Wakabayashi. As you should know, he is a very well respected engineer in this province and has undertaken other work for the government, as I acknowledged in my previous remarks. Mr. Wakabayashi's track record for delivering and doing a good job for government is excellent. There was a choice made of Mr. Wakabayashi after interviewing others. Apparently — again, it was before my time — there were others. You asked about the competitive nature of his getting that contract. He did have to go through the competitive process, and apparently he did and won it. We are the beneficiaries, frankly, because he did a really excellent job, and I'm really pleased about that.

In regard to comparisons in the sectors, we have authorized that and are in the midst of doing it, and a report will be released in the next few weeks. We are hopefully going to have that out in a very short time. We have been joined in that exercise by various sector representatives, such as the people in the forestry industry and the agricultural industry, both in an industrial society sense — representative organizations, manufacturing organizations and so on — and also as individuals. As I mentioned yesterday, we're grateful for the very many individuals, and there have been a whole range interviewed by our ministry. So you will have the results of that as quickly as we can get them completed. They will be made public as soon as we can.

MR. CHAIRMAN: The second member for Langley asks leave to make an introduction.

Leave granted.

MR. PETERSON: On behalf of the member for Cowichan-Malahat (Mr. Bruce) I would like to introduce to the House — I believe they were just in the galleries, and they're in the precincts — 27 grade 5 and grade 6 students from Drinkwater Elementary School in Duncan, plus their teacher, Ms. Derry. Would the House please join me in making them all welcome.

MR. WILLIAMS: Madam Minister, that's pretty offensive, you know. In a few weeks, we'll have the studies of the sectoral impact of the trade deal. You people are on board. You and your Premier on the runaway train are on board. You are on board on the deal. Don't tell this Legislature that you'll have a report in three weeks' time on the impact of the deal. Are you saying you have no idea what the impact of the deal is, sector by sector, in this province? If that's the case, it's grossly irresponsible on your part to carry on your responsibilities as a minister. I don't believe for one minute that you don't have numbers right there now.

HON. MRS. McCARTHY: Of course we have.

MR. WILLIAMS: All right, then. Let's hear the numbers.

HON. MRS. McCARTHY: Mr. Chairman, of course we have numbers. Of course we've had the results of the sectoral visits and those people who have been involved in giving us this information. The question you asked was if we were going to make those public, in detail — and there's a lot of detail to make public. The question that I answered for

[ Page 4506 ]

you.... If you find it offensive, I don't care. If you don't want the information, fine. You asked if we will make them public; I said yes. And yes, we are getting them compiled into a readable form for you to have in a public way. We will be getting them out as soon as possible. You said three weeks. It may be less than three weeks; I don't know. I didn't say three weeks. I said as soon as possible, in the next few weeks.

MR. WILLIAMS: No matter how she tries to explain it away, Mr. Chairman, it is offensive. Don't give us this gobbledegook about readable form. I'm happy to take your handwritten notes or your deputy's handwritten notes here and now. I do not need the Madam Glitz routine. I don't need the fancy stuff that you always peddle in your enterprise magazine and all of the other gloss that you dump by the half-ton out of your ministry. I do not want that junk. What I want are facts.

We do not have freedom of information in this province. You have been an active minister of the Crown for yea these decades, and that suits you fine. There is only one occasion annually when you are questioned anywhere near fully, Madam Minister, and that is when your estimates come up.

One of the major exercises of the last year and a half in your ministry has been climbing on board the Mulroney bandwagon to sell out Canada, namely his trade deal. What we're asking you for are the numbers in terms of the negative impact and the positive impact and the non-impact of the trade deal, sector by sector, with respect to the industries of British Columbia. You should, I think, under our British system of parliamentary democracy, feel some obligation, at least on this one annual occasion, to provide the people of British Columbia with the benefit of the work of your department on this important subject.

HON. MRS. McCARTHY: The hon. member, too, has been a member of this House for some decades, as he said. We both entered this House at the same time, so if he puts on me how many decades, he's been here the same amount of time. He also knows the rules of this Legislature, and he knows that if he puts a question on the order paper for detailed information, he can get that detailed information. If that's the kind of information he wants, then why doesn't he put it on the order paper?

Again, I tell him that information will be forthcoming from our ministry as soon as possible. I have asked for that information. We have used that information internally. I agree with you: I would like to see the information as public as possible, because, quite frankly, there's very much good news in it.

[11:15]

We recognize, as I recognized yesterday in the discussion on my estimates, that there are some things in the free trade agreement on which we have asked for adjustments and are working with the federal government in terms of adjustments. We have had meetings with the various sectors that require that kind of adjustment. But there's more good news in there than bad news. There are good initiatives in there. I really want my ministry to get it in a form that can be easily compiled for the public's use, because it's very good, positive information. Again, I have committed to you that it will be made public as soon as I can get it there.

MR. WILLIAMS: At the very least, you should be presenting the House with this information now, when your estimates are here. Don't tell me you're sending it off to your public relations man and printer. That is really offensive. It's a pile of garbage to say, "No, no; in three weeks," once you've done the Madam Glitz routine with it all and put maple leaves, setting suns and Union Jacks on every page. That just isn't good enough. It kind of blows you away that you wouldn't provide the Legislature here and now with the data that is in your hands and the hands of your staff. It's been done in most every province in this land, and the information is out there with the public.

What's your analysis, for example, of just a small industry in British Columbia, the graphic and printing industries? What's the impact going to be on the printing industries in British Columbia — just that little sector alone, which tends to be highly unionized? We have some very capable people in the graphic arts industry, publishing and that sort of thing. What's your ministry's view of the impact on that small sector alone?

HON. MRS. McCARTHY: I don't have ready information at hand; we'll try to get that for you. I've asked my acting deputy to see if we can have that brought forward to the House.

Let me just reflect too on what the hon. member has just said about glitzy publications and so on. It's interesting. As you look across the country and see the quality of publication put forward over the years by our competitors — I talk about competitors not only in this country but around the world; we're in a world competition for business — it's interesting that the informational things that we put out have stood us in good stead in this past year or year and a half. Let me just quote from some unsolicited letters and statements made right at the information business centre, where we ask people to take a few moments to write their comments. Let me give you one from March 18, 1988:

" Hi. Five weeks ago I walked into the information business centre, a laid-off chief engineer, and now I'm walking out of here president of my own corporation, starting the development of a unique destination resort for the B.C. west coast. The friendliest and most helpful people and excellent selection of needed material here made it possible. Many thanks from myself and many of those who will find a job with me."

A letter received from the president of a firm in Richmond says:

"I would like to take the opportunity to compliment the minister and those of you responsible for the Export B.C. program. Pacific Electro Publish Ltd. is currently marketing a single product called Golfmaster. We've had some 25 inquiries in the past month from distributors all over Canada as a result of your Export B.C. booklet and related advertising."

A company from Surrey says:

"We have been extremely pleased with the number of companies and individuals that have contacted us regarding distribution, marketing or availability of our product. This is in response to being featured in the Export B.C. magazine published by the Ministry of Economic Development. We are currently corresponding on a serious level with about six companies out of the almost two dozen responses.

A firm in Vancouver says:

"Further to our recent conversation regarding response to publication of our product in your Export

[ Page 4507 ]

B.C. publication, we have received 15 written inquiries from across Canada and one from the U.S.A. All inquiries were responded to, and two inquiries have led to further contact for possible distribution of our product. We are pleased with the level of response. We'd like to take this opportunity to extend our thanks to the Ministry of Economic Development for its continued cooperation in this instance to us. We appreciate the opportunity to promote B.C. products throughout the rest of Canada and look forward to continued growth and expansion into international markets."

And a response from a young lady reads:

"I wish to personally thank you for all the time and effort you've given me" — this is to my ministry staff — "to help me begin my new business venture. With your help on my cash flow budget, the time you saw me on March 22 on your lunch hour to help me research my business location and your expert advice and helpful information, I'm sure my business will be a success. With all the helpful information booklets and reading material supplied free of charge from the B.C. Enterprise Centre, you have all helped me get started in the business world."

You can play around with all of those. They are just a few examples of the on the ground help that my staff has been giving. Rather than be critical of the kinds of publications we put out, I wish you would be supportive of a ministry staff that's working very hard and doing a darn good job, with the help of those information booklets.

MR. WILLIAMS: I asked a question about the impact of the trade deal on jobs in British Columbia, and the answer I got was: "I got these nice letters from people replying to my glitzy magazines that we sent them." Come on! It's great fun, but.... I asked for information about winners and losers out of the trade deal — numbers by sector. You say you've got the numbers. You've got them, but you won't provide them. You get up and give these long dissertations about: "Why, we had 213,219 phone calls last year on this particular subject, and we had 4,962 letters on that subject, and 1,160 thank-you letters, which I'm going to read into the record in the House right now." Come on! Don't load answers up with this garbage.

We would like some real answers to some real questions on real issues. You are dragging your feet and stonewalling here. What you're doing — and let's make the record clear — is refusing to provide information you have, of importance to all British Columbians, on the impact of the Mulroney trade deal. You're unwilling to give any data at all — and you've got the data. You load us down with bundles and bundles of information on minuscule matters involving your ministry, but you will not deal with the real issues.

It was abundantly clear yesterday, Madam Minister, that you don't really understand the full implications of the trade deal. You don't understand what you're giving away. Do you understand the implications just in terms of energy, in this province alone, in terms of us not being able anymore to have an internal price system that is different from what we deal with the Americans on? Not only that, our resources become their resources equally under the energy deal. That is, we can't cut back on delivery of them any more than we cut back on ourselves. Are you aware, Madam Minister, that in the energy field we have had shortfall problems in gas, for example? We were able to deliver gas to British Columbia customers but cut back on American customers. That is autonomy of the province of British Columbia. Under the deal, that autonomy is gone. Do you at least understand that much — that it's selling off Canadian autonomy in the energy sector?

HON. MRS. McCARTHY: Mr. Chairman, the member continues with his concern regarding availability of information. In the spring of 1987 we made public all the results of the industry sectoral meetings — the sectoral advisory committee — and all of that was given to the members of the opposition. It has been freely mailed out from my ministry, for anybody needing information. Also, last fall we produced a brochure, which was distributed and given good circulation.

What surprises me about the member's queries is that our ministry offered to brief the NDP caucus on the free trade issue in a truly and totally businesslike way — non-political — and answer any questions you would like to ask of our staff and of our people who have been at the table, as observers, with the federal administration over the free trade agreement. As I mentioned yesterday, we were invited; we were not negotiators; we were never asked to negotiate, as were none of those from the other provinces. We had very good people representing us in Ottawa and at these talks. And when these talks were completed and any private meetings were held, they shared the information, and it was then carried back to us. We wanted to share all of that information with you. We made that proposal to the NDP caucus, and only one member of the NDP showed up for that briefing. That shows a tremendously keen interest on the NDP side of the House: when we offered to do this, and any of those questions that you wanted in detail could have been answered, you weren't even there. It's interesting that you should bring that point up today.

MR. WILLIAMS: Are you aware that we indeed met, Madam Minister, with several members of our caucus and your staff?

Interjection.

MR. WILLIAMS: No, you're wrong. That's not true. Are you getting misinformation or disinformation, or are you refabricating it? I attended meetings with your staff, Madam Minister. The member from Coquitlam and other members were there. Are you ready to correct your statement?

HON. MRS. McCARTHY: I'm advised of only one member, and that the date and the member's name can be brought to the House. I'll be glad to share it with you later.

MR. WILLIAMS: What staff? Is this Mr. Culbertson you are talking about?

HON. MRS. McCARTHY: Probably Mr. Culbertson, as well as Mr. Horswill, would have been the identifiable ones that were working as a team on this.

MR. WILLIAMS: There was a group meeting with Mr. Culbertson and a woman from your ministry, and several members of our caucus attended. So there you go; so much for that one.

[ Page 4508 ]

What about the fall brochure that you mentioned regarding the trade deal? Do you have it handy? It would be fascinating to see it.

[11:30]

HON. MRS. McCARTHY: Yes, I can bring it to the House.

MR. WILLIAMS: A brochure — does that mean a couple of pages, three or four pages, something like that?

Interjection.

MR. WILLIAMS: I guess it was impressive, all right — loaded with facts and information. One gets confused when you keep seeing the British Columbia flag on everything, with a lack of a lot of hard data.

[Mr. Pelton in the chair.]

I wonder if your ministry has reviewed the work of the Bank of Nova Scotia with respect to the impact of the trade deal.

HON. MRS. McCARTHY: We review everything that comes along in terms of the free trade agreement. My staff would probably have had that information.

MR. WILLIAMS: Well, they've looked at winners and losers, Madam Minister, and they come to some conclusions. It's interesting that in the update of their fuller study of the summer of last year on the overall deal, they say: "From the U.S. perspective the deal is very good and the benefits are mostly delivered up front." This is economists at the Bank of Nova Scotia, not the rabid socialists that concern you when you get in debating trouble. That's the Bank of Nova Scotia, department of economics, research section.

Then they say this about energy. Just a few minutes ago you chose not to respond to my question about energy in terms of our sovereignty. They say: "The energy concession is of great political and strategic importance." That's the Bank of Nova Scotia talking.

There has been a major concession to the United States in the area of financial services, Madam Minister, in terms of their invasion of Canadian turf in the financial services sector which bulked so large in the political process, they say.

Then they say the following: "From a Canadian perspective the economic benefits of a successful deal are somewhat different." But they say the political risks are delivered up front. So what they're saying is that what's delivered up front for the Americans is immediate benefit; what's delivered up front for Canada is political risk. I would say that's got something to do with the nature of Canada, which I talked of yesterday, and it has something to do with sovereignty, which I talked of yesterday. One of the elements of sovereignty that is impacted by this deal is in the energy sector. A few minutes ago I mentioned that when there have been gas shortages in British Columbia in the past we have been able to serve British Columbians and cut back in terms of supplying the United States. It is a prerogative of the Crown in British Columbia to see that our energies and our resources are used for our people first, if government so determines. Under this deal with the Americans, that opportunity will no longer be there. We will not have the right to do so. If there are shortages, we will have to ration on a pro rata basis — on the basis of how the supply is currently distributed. That is an invasion of sovereignty. Was there no expression of concern on the part of the government of British Columbia in this area?

HON. MRS. McCARTHY: In terms of our national energy policy being threatened by the free trade agreement, the member knows that since 1974 Canada has had obligations to share energy supplies under the International Energy Agency. It is true that a commitment to share energy supplies in times of shortages is contained in this agreement, but we've had that commitment. It's nothing new; we're not changing history by this. Critics on the other side of the House forget the 1974 agreement. We now have affirmed these commitments bilaterally.

Our national energy policies are not threatened. Free and open trade in energy is an important component of the agreement, since it enhances the energy security — which is what we all want — and the industrial competitiveness of both countries. Canada is not obligated to supply energy to the U.S. However, should either party impose restrictive measures on energy products which impact on exports, the other party must continue to have proportional access to the product being restricted. That's a fair trade component.

There will be no more national energy programs or federal tax grabs under this agreement because governments will not be able to impose higher prices on energy products. However, the agreement does not prevent private entities from negotiating the price for energy exports, such as B.C., Hydro. In terms of national energy policies, the agreement does not prevent Canada from achieving its objective of 51 percent Canadian ownership of the energy industry. The agreement does not preclude that.

We will have a secure market access for Canadian energy exports to the U.S.A., and all in all, it's a positive deal for western energy-producing provinces such as ours. We are an energy-producing province. It's a good deal for us. It's on that basis that we in British Columbia support that agreement. I appreciate that the member is going to try to raise as many fears as he can, because that's been the modus operandi of the opposition in this regard. We on this side of the House do not believe that it's any threat whatsoever to our energy resources.

MR. WILLIAMS: This did by treaty bind us up — that's the whole point. The full range of options for provincial administrations is curtailed. While there were some modifications in '74, this expanded them and tightened the bind on the province even more. That is clear.

Prior to you right-wingers running amok federally and in the western provinces, we at least had a policy in Canada that argued we should have a 25-year energy supply for ourselves before those surpluses went to the south. It made a lot of sense to ensure lower-cost energy supplies for Canadians. By this process you're ensuring that we will have high-cost energy supplies in the future on the frontier for Canadians; the low-cost supplies will be provided to the Americans. That's really the policy currently in place.

I read again from the Bank of Nova Scotia. They say: "The benefits to Canada out of this trade deal tend to be down the line." They're not up front. They are not immediate benefits. The people in the Okanagan sure know that. "But the adjustments" — that's the term you like; that means the

[ Page 4509 ]

losers under the trade deal — "and political risks are delivered up front." That is not a negative socialist speaking, Madam Minister. That's the department of economic research at the Bank of Nova Scotia.

Why would the Bank of Nova Scotia carry out these kinds of studies? The Bank of Nova Scotia carries out these studies because they're in the business of making loans. They came to the conclusion that there are some sectors they shouldn't lend to in the future. They came to the same conclusions as a credit union in Kelowna: that they shouldn't make new loans to people in the grape industry or the soft-fruit industry in the Okanagan Valley.

The response of the Premier was: "Why, they're being political." He said that the credit union in Kelowna was being political. I guess he would say that of the research department at the Bank of Nova Scotia back in Toronto — that they, too, were being political. But that doesn't wash. This is a hard-nosed lending institution saying: "There are troubled areas, and we don't want to lend to these troubled areas in the future." They're saying that these problem areas are delivered up front in the trade deal, and the benefits are further down the line in terms of the trade deal. So the risks and the political problems are delivered up front, and the adjustments are delivered up front, and the benefits are going to be further down the road — if they're to be there.

Where are we now? If you're an orchardist in the Okanagan, and you want to borrow against your orchard from the Bank of Nova Scotia or the other major lending institutions, and you can't do so, in terms of carrying on with your work, what programs have you got in place to help those people who are impacted?

HON. MRS. McCARTHY: In talking about the energy situation, the U.S.A. is dependent upon energy supply from our province and this nation, but we're dependent upon their markets. This ensures our good supply and ensures us being good suppliers, because we can now establish long-term agreements, which we have not been able to do heretofore. The idea behind the free trade agreement in terms of energy is that if we do have a shortfall on either side of the border, that shortfall will be shared proportionately. That gives longevity to the contracts with which we can deal with the energy purchasers in the United States. I don't have the same fear.

You talked about the banking institution not having immediate faith in this particular agreement because they are concerned about the next six months or the next year in their institution. We have always said this is not an overnight thing, that this is going to be phased in. But so will the risks be phased in in terms of adjusting for those risks. That is what is good about the agreement, inasmuch as it has got that phased-in time-frame which will allow us the kind of adjustment that we can have.

In every economic impact assessment that's been made, there have been net jobs generated. We talked about the jobs again yesterday, and you made some comments and you asked the question. We told you what we believed were the net jobs created, and we had that yesterday. But studies that were made by the federal Department of Finance are talking about 120,000 by 1993; the Economic Council of Canada are talking about 251,000 jobs by 1998; Wharton Econometrics is talking about 190,000 by 1999.

[11:45]

This agreement is a continuation of a process that really began after the war, and that is that we've had adjustments.

We've had four million Canadians change jobs every year in this country. That's an adjustment we've had to make. That was a whole different societal change than we had prior to the war. Since 1945, tariffs have fallen from 50 percent to 9 percent. In that same time-frame, jobs in Canada increased by 400 percent.

So in every case it would appear that the overall and overwhelming body of information is that every credible study shows a positive outcome. It may not be overly enormous in many cases, and it may not be even enormous in some cases, but it's generally positive. That is why we're supporting the free trade agreement. There is time for adjustment.

I have an apology to make to the hon. member, because the information that was given to me earlier vis-à-vis a meeting by the NDP caucus, showed that some four members showed, three of whom left within the 30 minutes. I believe you were the one remaining member who very kindly stayed with my staff to get the briefing on the free trade agreement. My apologies for having said there was only one that stayed, or one that showed up. There were actually four that showed.

MR. WILLIAMS: Yes, I put up with ideological dialogue for a couple of hours; that's right.

HON. MRS. McCARTHY: We both did.

MR. WILLIAMS: But you swallow it and I don't.

The Scotiabank economics department said this about.... The minister puts forth a positive line. In their analysis, the Bank of Nova Scotia came out with winners and losers. They look at it from a range of zero, i.e. no impact from the deal, to minus 4 and plus 4, in terms of the impact of the deal on sectors. For the people of the Okanagan this is really significant. The Bank of Nova Scotia says that for fruit and vegetable farmers the risk level is minus 4, the highest on their chart. They say this: "The industry faces a slow but steady decline in its market over the next ten to 20 years due to the elimination of tariffs." That's clear and simple. This is still the Bank of Nova Scotia speaking; they say fruit and vegetable farmers remain in the highest risk category at minus 4, in their range of plus 4 to minus 4.

They say in the service industries, the financial services sector.... We have a significant financial services sector in this province, and we have our own credit union system, which we should be fostering as an indigenous institution controlled by local people. They say this about financial services: risk index, minus 2; significant risk. And they say: "As feared from the outset, the financial services section of the agreement is quite lopsided." Economists with the Bank of Nova Scotia speaking. They say: "Canada has made a large concession up front by conceding national treatment. So benefits to Canada are smaller, less certain and further down the line." That's clear.

What policies do you have in place to deal with these problems of adjustment in the fruit and vegetable industry and even in the financial services industry in British Columbia?

HON. MRS. McCARTHY: Could I say that as schedule B banks locate here in the financial sector, British Columbia should benefit greatly; those are some of the opportunities that we have because of the agreement. We have always said that in some agricultural sectors there are going to be tremendous

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adjustments to be made. I know that has not gone unnoticed by those who grow fruit and vegetables, but in fruit, vegetables and horticultural products, they are protected for a 20-year period with seasonal tariffs. That's already built in and agreed to under the agreement, so in that particular area, instead of the ten-year phase-in, there is a 20 year period — two decades of adjustment.

I'm of the mind — and I really do have faith in the entrepreneurs in the agricultural industry as well as in every other industry — given the time-frame being given here, that the development of new markets and the improvement of their own products in order to market them internationally are going to be raised considerably in that 20-year period. I have that faith, and I don't think it's founded on wishful thinking whatsoever. I believe that's been proven in our nation when we have been placed in the position of being competitive. We do rise to that challenge in the competitive world.

I'm not as, shall I say, pessimistic as the hon. member in that regard; but again, we are not in any way saying that everything is going to be changed overnight. We've been appreciative of the time-frame because we know there is a period of adjustment — in the case of fruit and vegetables 20 years, and in other cases ten years. We will have, we believe, that opportunity to adjust.

Talking about the financial industry, the insurance industry in Canada was the earliest and the most vigorous supporter of the free trade agreement. There could be a very like comparison to the institutions that you mentioned in the financial field. They seem to be able to see the opportunities.

I'm sympathetic to you zeroing in on those negatives, because you should, as a responsible member of the Legislature. We too have zeroed in on them in a way that we believe can be helpful to the process. The length of the process gives us the time for that, but overwhelming those negatives is such a positive opportunity for our people that we believe we can do that and have here the creation of new opportunities and new choices for the entrepreneurs in this province.

MR. WILLIAMS: I didn't hear of any programs that were beneficial in the financial services sector in terms of our indigenous financial services sector — credit unions incorporated in British Columbia and the community-based, member-owned financial institutions in British Columbia. The Bank of Nova Scotia says that they're a risk level of minus 2. That's all financial institutions. That's the big banks of Canada — the big five — and all the rest of them and our local institutions as well. That's a high risk level.

Credit unions don't have a capital base like the banking institutions; they don't have money-bag shareholders. They have people who put in $20 or $30 as their equity contribution to the credit union. That makes them more vulnerable than other financial institutions because they don't have the capital base. The capital base is essentially the profits from over the years that they retain and don't put out in dividends. That means that our home-grown financial institutions will be threatened to a significant degree under the trade deal. The Bank of Nova Scotia says minus 2 in its risk level in a range of risks from plus 4 to minus 4. That's pretty high. But I didn't hear anything from the minister to indicate that there will be provincial adjustment programs that will be beneficial to our home-grown financial institutions.

HON. MRS. McCARTHY: In various discussions I've had with our ministry I'm given to understand that the locally based financial institutions will benefit more than the big five, as you have termed them. Credit unions have expanded and historically in our province expand as the economy expands, and more jobs are gained than lost in that situation. They don't compete with the American banks and institutions. Their position under a free trade agreement will be enhanced as more jobs are created and the economy is more effective. There's no question that that will accrue to British Columbia under the free trade agreement.

MR. WILLIAMS: Does the minister understand that under this trade deal credit unions are going to have to compete with the big American banks? From her comments I got the impression that she thinks that under this deal we still have the closed society where Canadian banks are protected from the great Yankee invasion. Does she think there will be no competition from American banks within British Columbia as a result of the trade deal?

HON. MRS. McCARTHY: Mr. Chairman, we're in an absolutely competitive world. British Columbia cannot survive unless it becomes totally competitive with the world and comes up to the world standard. There's no question that this province has to create that kind of activity and productivity and cannot be afraid of competition, because we're not isolated from the world. The minute we try to be isolated from the rest of the world, we're not only going to lose jobs, we're just not going to be able to create any more jobs.

Your aggressiveness to assist the big banks of Canada and the big banks of the United States of America is really touching this morning. This is the first time I've seen the socialist party, the NDP, on the other side of the House come to the rescue of the big banks of this country. The best adjustment for the credit union movement of British Columbia and all the locally financial institutions is an expanding economy. That's the best thing for them. That's what comes with a free trade agreement.

As a result of a free trade agreement, it's not.... I tell you, I know the people in the credit union movement, and I don't think they're afraid of competition. I don't think they'd be afraid if Chase Manhattan Bank.... It's quite unlikely to go into Castlegar; they're quite concerned about a branch of Chase Manhattan going into Castlegar. If they do come into the province of British Columbia, you know that they're going to be competing with the financial institutions in the Vancouver market and not in Castlegar, Prince Rupert, and so on.

I say again that it must really touch the hearts of those who are viewing in this House, and those on the enterprise side of the House, to know that the socialists — and of all members, the member for Vancouver East — are flying the flag for all the big institutions. I'm sure you'll hear from them all within a very short time.

Mr. Chairman, I move the committee rise and report progress.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 12 noon.