Hansard -- Friday, May 27, 1988 -- Morning Sitting

MR. BARNES: Mr. Speaker, I wonder if the House would permit me a second or two to make an announcement with respect to the late Harry Jerome, who will be honoured tomorrow at Hallelujah Point in Stanley Park. There's going to be an unveiling of a statue which has just been completed as a result of the Harry Jerome Commemorative Society. I believe, as a matter of fact, the Minister of Transportation (Hon. Mr. Rogers) will be there to speak tomorrow as well as myself.

I just wanted the House to know that this is a very special occasion, and Harry is going to be recognized as the athlete of the century at 11:30 tomorrow morning, May 28. I hope that everyone will join me in saluting Harry and maybe toasting him as well for his great achievements. We've discussed him many times over the years in this House. Tomorrow morning, turn up if you can. It should be a very good day. A lot of friends, dignitaries, etc. will be there.

HON. MR. REID: We also would like to pay special recognition to the day which is being commemorated tomorrow. The Sports Hall of Fame on Wednesday evening paid a special tribute to Harry Jerome as a very strong proponent of the sporting community and well recognized internationally for his achievements. British Columbia is very proud of his accomplishments, and the recognition tomorrow will be endorsed by this government.

Over the past month, the licensing of neighbourhood pubs and marine pubs has become a very important topic of public discussion around the policies relating to those operations and the regulations thereto. In that respect, those discussions fit very strongly into a whole year of discussion about liquor policy and regulation, which now lie in the purview of the Ministry of Labour and Consumer Services, which now has responsibility for all aspects of liquor licensing, liquor distribution and also education, treatment and rehabilitation in respect to liquor.

Today in this statement I want to do a very brief reprise of some of the events and to urge the action which we on this side of the House think it's very important for the minister to undertake in respect to his responsibilities. I want to say first of all that I think the minister is in a very favourable position in this regard because, through his own initiatives and the initiatives of government, he has excellent policy review and processes in place. I want to commend the government for that work, which provides a very solid base for policy development — something we don't see in all ministries, I might add; the Health ministry is one. The minister has good groundwork from which to develop policies and regulations that will provide trust and fairness in that particular marketplace.

There are three issues I want to highlight in my comments. First of all, there is the matter of neighbourhood pub applications and the plebiscite or referendum process. That process is mandatory for the approval of a pub licence, and it requires a 60 percent approval rate from those voting in that plebiscite. In fact, the record for those plebiscites is that almost half of them fail — four in ten don't receive that requisite approval from the neighbourhoods. I quote that statistic because it tells us how important that process is.

The Knight Street pub in Vancouver has very prominently figured in the news recently. because in the public's mind. the referendum process is flawed. That particular perception was brought to the attention of this House early this month, and the minister was urged on a number of occasions to investigate that process, which originally he declined to do. On May 17, Vancouver city council made it clear that it had lost confidence in the government's ability to conduct an independent plebiscite on neighbourhood pubs and asked for action and in fact imposed its own indefinite moratorium on pub licences pending the adoption of new plebiscite guidelines being developed by the UBCM. At this time the council will conduct its own plebiscites for three pending applications under review.

The minister has moved to review, and I understand the report on that review is likely to be tabled perhaps as early as today. With the tabling of that review. the minister has an opportunity to restore the faith of that community in the process. I can't prejudge what the report will reveal, but when the results are made known. I believe the minister will need to ensure that the affected neighbourhood in Vancouver is fairly treated and that. if the report indicates that the process of plebiscite was flawed and that there had been irregularities, redress should include the calling of another plebiscite if those improper procedures are the outcome of his investigation.

I have urged the minister in this House that plebiscites should be conducted at arm's length, that they should be conducted by bona fide firms who are accountable to the ministry — with the costs, however. borne by the applicants — and that the guidelines for those plebiscites should be consistent and published. The minister has, in fact, called together a committee of municipal and ministry people to deal with working relationships between municipalities and his ministry on that licensing, and I would hope that that report would bear out that kind of process where there is arm's length between the applicant and any firm that is performing a plebiscite.

It is also clear to me that the ministry should maintain the final word on these matters. particularly in respect to smaller municipalities. because of the costs in administration involved in them taking over any of the responsibilities for the management of those plebiscites.

I want to move on to another area which is at the moment not so clearly defined in policy but where the minister has given some indication. That's the area of licensed retail stores. The moratorium on those has been lifted, and the minister announced that with the lifting of that moratorium he might be setting up regulations for referenda before any of these stores could be licensed. I would like to hear the minister move quickly on that particular issue.

In fact, the Knight Street area has a beer and wine store that was built with the moratorium in place. The people in that community need to know what process would be available to them to speak their minds on that particular facility.

Speaking of my own community, there is great concern about the proliferation of liquor outlets, and they will want to know what those processes are and how they will be delivered through regulation and clearly defined guidelines.

Finally, Mr. Speaker, I want to refer to a kind of pub that presently sits outside the guidelines — the marine pub, which is not like McBarge out on the water somewhere, but on land, and is exempt from any of the licence rulings. I would encourage the minister to follow the Jansen committee report and include marine pubs with the same licensing procedures as neighbourhood pubs.

HON. L. HANSON: The neighbourhood pub plebiscite system certainly has been in the news recently. First of all, I would like to point out to the member opposite that the plebiscite is, in fact, an opinion poll. It isn't an enabling referendum; it's an opinion poll. The requirement for the vote to be a majority of 60 percent is because it is an opinion poll, as opposed to a very legalistic technical operation.

My ministry recognized some difficulties with the plebiscite system in that a little over a year ago — I believe in late 1986 — the mayors of the various municipalities in British Columbia were drawn together, and it was suggested to them that they might want to take a more active part in this process. We were advised at that time that they had no interest in taking part in the process.

Since then — in March of this year — my ministry first started meetings with the Union of B.C. Municipalities to get a better understanding of how the municipalities may take on part of the responsibility, or what part of the responsibility they would like to take in the referendum process. There's no suggestion in our minds that we might consider the cost of that being anywhere but where it is now. It fairly and correctly lies with the applicant, which is where it should stay. To whatever degree the municipality wishes to take on that responsibility, we would be more than happy to negotiate that with them.

It's interesting that in this particular one that has had so much publicity recently, the poll was held a year ago. There were very few complaints issued at that time. As a matter of fact, I think the local constituency office had one complaint. It was six months before there were any issues raised.

Another matter of interest is that after the poll was completed, the city of Vancouver sent out a letter detailing the proposal at 57th and Knight to some 150 residences around the area, and they had six responses. It is my understanding that five were negative and one was in support of it. There are so many conflicting things in that, but I don't think there is any question that there is some concern with the system. I instructed my people long before this came up that we should better codify the requirements of the plebiscite so that it is a standard procedure with everyone.

Certainly we would invite municipalities to take part in the scrutinizing process. I would have absolutely no opposition to that. It is a thing that we would like to have happen, because it is of some interest to us. By the way, we are also codifying some of the other licence issues that are facing us.

I might just respond to the LRSs. Yes, it is our intention that if in the original plebiscite that was held it wasn't highlighted that there was going to be a cold wine and beer store attached, there would be a requirement for another plebiscite.

I guess the final statement the member made was to do with marine pubs. The marine pubs do require a referendum if, at the discretion of the general manager of licensing, he deems it to be a proper requirement. They don't have to have one as such, but there is the jurisdictional ability of the general manager to order it. Since my term in office, in about 60 percent of the marine licences there had to be a referendum — in those few cases.

MS. A. HAGEN: First of all, I would just like to comment that I hope the minister's comments about the Knight Street pub do not in fact reflect on his independent response when he hears the results of his inquiry. I think it is important for him as minister to keep a totally open mind about the result of that investigation he finally authorized.

I want to just conclude in the moment or two that I have left with some comments about my own community and its concerns around liquor licensing, and to press again the urgency for regulations to move ahead as quickly as possible. In the last week or so New Westminster has developed guidelines around liquor licensing based on their point of view that the city has reached a saturation point in the number of pub and cabaret seats available. I haven't got the final count, but as recently as early this year it was one for every two persons in the city; and something like another 400 seats, as a result of cabaret expansions and so on, are presently either approved or in the works.

The relationship with your ministry, Mr. Minister of Labour and Consumer Services, is an important one. I commend you on the committee that you have struck with the UBCM. The representatives on that committee have been well chosen. It's urgent, I think, in order to prevent the proliferation of facilities, the access to liquor, that the kinds of regulations that are going to be in place be clearly defined soon. You've had a liquor policy review since last June; you've had an ombudsman report, which has indicated that there are needs for tightening up the regulations; you have municipalities who have done a lot of work in this area. If you ever were in a position, as a minister, to show good leadership, it is now, but that position will pass you by if there are long delays with this.

I want to see that there are clear regulations, clear guidelines. in written form, ones that the community is aware of, as well as the liquor interests and councils, so people do know what their democratic rights are, and what those processes are that will enable them to control the kinds of communities in which they live, in respect to access to liquor outlets. I speak very strongly for my own community, that the ad hoc procedures that we have undergone have produced a situation which is now virtually untenable for the community. They want controls, and those controls need to be worked out in cooperation between the ministry and the municipalities involved. I look forward to those results in very short order.

MR. REE: I'm sorry, looking over the quarter of this chamber where the opposition sits, that there is not a schoolteacher among them, although I guess most of them in the opposition have some background to that. I wish, under this

subject, to put out a challenge to those in the opposition. I'm repeating a challenge that the Minister of Education (Hon. Mr. Brummet) put out when he first mentioned the binder — the social studies resource package — on May 11. He put out a challenge for the opposition to condemn this book in part or in whole; his challenge was basically in part. I would suggest it should be in whole, but I don't think any members of the opposition, their leader or in particular their critic. the member for Burnaby North (Mr. Jones), would condemn even part of this pamphlet, because each and every one of them is subject to the direction and control of their powerbrokers: the BCTF, the CLC and the B.C. Federation of Labour.

They are the authors of this particular book. This book — this pamphlet or binder, whatever you call it — gives me a great deal of distress. It is suggested by the opposition that it is a leveller for information that was put out by the B.C. Chamber of Commerce. This book, if it is to balance or level. tips the scales far past levelling. I don't think the B.C. Chamber of Commerce information suggested that a resource person from the Chamber of Commerce should be present for seven days in a classroom while they're studying the Chamber of Commerce information. This binder by the BCTF, the CLC and the B.C. Federation of Labour does encourage a resource person who is not an educator, not necessarily a teacher — a person from the unions — to be present in the classroom when the book is being discussed.

It also suggests that material presented by the students should be turned over to this resource person, who is not a teacher. This suggestion sets up.... The book does indoctrination. Turning the material over to the resource person is identification; the result for the students would be identification. Does that then, Mr. Speaker, lead to intimidation? I suggest that if this material is followed, that's what can happen. I think the parents of the grade 11 students of our province who may be subjected to this should stand up and holler loud and clear, because this material to be placed in the hands of our students is one of the crimes of this century. It's a crime against the education system of this province.

There is a picture in it that shows some supposed students holding a placard. It suggests: "NDP Leeches." Excuse me: I read that wrong. It says: "Socred B.C. Bloodsuckers." Do you think any chamber of commerce, any member of the Ministry of Education or any publicly elected school board official would condone and encourage such material being placed before the students of this province? It's a travesty to do such a thing.

Here we have the leaders of the so-called education system, of the teachers — their representatives, the BCTF: it's the BCTF that I'm talking about — placing this material and suggesting this material be placed in schools, not through the normal process.... It was not sent to the Ministry of Education or to any school board to be approved. It was sent directly to the teacher in the classroom. Fortunately our teachers in the classrooms — the great majority of them — would be responsible enough to probably throw this where it belongs: in the trash can.

My point is that we have the opposition here standing up at times, hollering about protecting the students. Will they stand up and do the same thing with respect to this binder?

MR. REE: I know they endorse it, and it's a terrible shame to this community. Mr. Speaker, I don't think any member of the opposition will stand up and condemn in whole or in part any of this binder or the videotape that went with it. I don't think any member of that opposition has any moxie whatsoever. Their leader has stood up at times and suggested that there is no moxie. In the 21 benches of the opposition, I don't think there's a moxie among them.

MR. LOVICK: In the absence of the member for Burnaby North (Mr. Jones), our Education critic, I am standing here to listen to the comments from the member for North Vancouver-Capilano and to offer a brief response. I would like to say that I'm delighted to be standing here to participate in a reasonable, rational, fair debate about the validity of a particular issue. Instead, I feel rather like the characters in the 1950s who were subjected to the slander campaign of the McCarthy era.

Quite frankly, I think the member's comments with their blend of innuendo. half-truths and misleading statements do no -good service to this House. As a former college instructor — I grant you I'm not a schoolteacher — who taught industrial relations courses, I have examined some of that material. I grant quite clearly that the material presents a perspective of society very different from the middle-class comfortable one most of us are used to. I am offended by what I would call the lapses in good taste in the material.

Please, friends opposite, pay attention to the point I'm making. To draw from that that somehow the material has no place in the classroom is lunacy in the extreme. It frankly smacks of a kind of censorship we can certainly do without. The member offers a challenge to teachers, and I would suggest that is precisely the context in which that material must be seen. It represents a perspective entirely different from what most of us take for granted and have been socialized to accept.

My background is as middle class as is anybody else's in this House. However, I've also done sufficient academic work to know that is not the only perspective on society. There is another model of society made respectable by about 150 years of discipline called sociology that posits something called stratification and something called a conflict model of society. It suggests that decisions get made in the naked arena of power fighting power. That's the view that certainly creeps in to those materials presented by the B.C. Fed, the BCTF, the CLC and whoever else may be involved.

The member again asks us to condemn the whole. Frankly, anybody who does that scares me to death. To be sure. there may be parts we have disagreement with. but there are also parts of that document — and I've looked at bits and pieces: I certainly don't claim expertise — that have a very high standing in the intellectual community. For example, there is an essay by Prof. Mel Watkins, who is regarded as one of the half dozen best and most prestigious economists in this country. There is also an essay by Prof. John Langford of public administration at the University of Victoria, with whom I shared a panel discussion some months ago. and who told me and the audience that he was a small "l" liberal. He wrote one of the essays that the member would have us throw out.

I am suggesting then that what we have in the member's comments amounts to a kind of slander. To suggest that the material somehow has been snuck into the schools is quite simply erroneous. That is not the case. Indeed, the fact is that the material from the so-called other side went through a

similar process. For example, the thing called "Project Business", as I understand it, was not subjected to any political approval by school boards prior to its use in school districts. Neither has a wide variety of other material been subjected to that scrutinizing process.

We must not fall into the trap — because our particular sensibilities are offended — of suddenly coming down with the heavy hand of regulation and control which these would-be self-proclaimed small V conservatives are very happy to invoke and make use of when it suits their ideological purposes. That strikes me as hypocrisy in the extreme.

MR. REE: I was pleased to hear the member suggest that this material certainly lacked good taste. The taste in my mouth with respect to this material — and I think anybody else who looks at it — would be sour. It would be bad taste.

Some of this material is recognized to be of value, but intermingled with the bad apples of the barrel, it lacks the common sense, intelligence, wisdom and intent of good direction towards the students of our province for the BCTF to compile, edit and submit this to any educational institution. As I said, it breathes of indoctrination, identification, intimidation.

The member says I send out a challenge to teachers. No, Mr. Speaker, my challenge is to the members of this House and the members of the opposition — not necessarily condemn the whole but condemn any part of it. They have not had the moxie to stand on their feet and make any comments.

MR. REE: That educator, the second member for Nanaimo, has lectured this House many times.

MR. REE: Unfortunately it hasn't, Mr. Speaker. I should say fortunately it hasn't, not unfortunately. He's got the ten syllable words and all that. I'm not that well versed in it, but my father often said that one who uses profanity shows a lack of education and an insufficient vocabulary to properly express themselves. I've heard that from the second member for Nanaimo a number of times, and I appreciated his comment the other day of "chunks of paper."

However, I go back and throw the challenge out, as did the Minister of Education (Hon. Mr. Brummet), to the members of the opposition. I throw the challenge out to the media to report this. You've seen very little; the only parts you've seen on the media have come from those independent editorial writers or independent commentators in the newspapers. You have not seen any articles by the reporters of the newspaper media, who, I also suggest, are affiliated with the CLC and the B.C. Fed.

MR. REE: The challenge is still thrown out. I suggest that the members of the opposition have no moxie.

MR. SIHOTA: It is often said in politics that perception is reality. Over the last couple of weeks and months I've done a fair bit of traveling around this province and also spent a fair bit of time in my riding once I got through on the estimates. I want to communicate to the House today that as I go around and talk to people, we notice a subtle shift in perceptions, a shift that's not necessarily picked up by all those horse-race public opinion polls that we see, but yet it represents a very significant change in British Columbia politics. People around this entire province are beginning to ask themselves just who it is that the Social Credit Party speaks for.

The perception, rightly or wrongly, is that the Social Credit Party that the Bermetts built was a broadly based coalition. Heck, it even got some of the labour vote in this province. That perception was strong enough to allow it to win 11 of 12 elections. There was a feeling, rightly or wrongly, that it listened to the average British Columbian. Now people are saying that the Socreds used to represent ordinary people but that more and more they seem to be tied to big business and the wealthy. People throughout this province are saying that the Socreds are out of touch, they're out of step with ordinary British Columbians; that they don't listen to the views of British Columbians. People are saying that the Socreds are causing confrontation and chaos throughout British Columbia.

In short, people are now saying this is not the party that the Bennett family built. If you look at the situation, there's good reason for them to feel that way. Consider, for example, the government's privatization initiatives — on highways in particular. The government won't listen to the first member for Cariboo (Mr. A. Fraser), the former Minister of Highways, when he tells them that privatization doesn't make sense. The government won't listen to deputy ministers, to loyal and committed civil servants who are saying that the privatization scheme makes no sense. They won't listen to 85 municipalities representing thousands of British Columbians expressing their horror over highway privatization.

Take, for example, the abortion issue. The government chose at one time to deny coverage even to rape and incest victims. Average, ordinary British Columbians, particularly women, who had voted Social Credit, thought of themselves and their daughters and realized how out of touch this government was and the extent to which this party was prepared to impose its own views on people. The feeling, rightly or wrongly, was that the Bennett government was not prepared to impose its own views on the abortion issue.

Take a look at the two budgets we've seen from this government. They eliminated the surtax on the wealthy. Who were the Socreds speaking for when they did that? Of course, the wealthy. They increased taxes to the average family by $1,400. They weren't speaking for families when they increased the tax rate for families by $1,400. They increased the rate of taxation for small business to the point now where it's the second highest rate of taxation for small businesses in Canada. They clearly weren't speaking for small businesses. They didn't increase the taxation rate for large corporations, which gives an indication of who it is that this government and this party is now speaking for.

They assaulted seniors in their budget with fee hikes. They're not speaking for seniors and their families. It's becoming more and more evident that this is a party for the wealthy, for the few. It is a party that is not interested or committed to serving the needs of average British Columbians, but instead to serving the needs of their friends.

In some ways, their words speak louder than their actions. When people lining up for heart surgery were complaining about the long line-ups, they were told that their

operation was trendy. When innocent investors lost money in Principal Trust, they were told that they were greedy gamblers. When mothers complained about welfare rates, they were told to turn to Jesus. When children asked for food, the government told them that they weren't loved.

The people of this province know that this is a radical, right-wing government. It is a party that imposes its radical agenda on the people of British Columbia. It is a party which after being in power for 30 years has all of the trappings of arrogance. People feel that this is a party that is out of touch, and the perception now, as we go around this province, is that this is a party that used to represent people but now more and more seems to be listening to and representing the wealthy and big business. The feeling across this province, rightfully, is that it's time for a change.

HON. MR. STRACHAN: The member comments that we're losing touch after 30 years of Social Credit. Well, I'd like to talk briefly about the 30 years of Social Credit and the record that this party has in the province. It's very easy for the graduate from St. George's who lives down here in Esquimalt to not be aware of what's happened in the great central interior of the province, and not be aware of why this party, in its 30 year history, developed this province. I'll give you a good perspective from a Prince George point of view.

The province of British Columbia, particularly the central interior, grew magnificently during the regime of W.A.C. Bennett, W.R. Bennett — not so much during your term from '72 to '75; things kind of stopped there — and under the current administration. It was W.A.C. Bennett who built the great highway system, who encouraged the pulp mills to establish in the central interior, who established the forest licences, the PGE, the BCR, the transportation system, the Hudson's Hope dam, all that infrastructure — a man of vision and a government of vision, and we've always been that.

Good vision developed this province from just a lower mainland perspective, where nothing really existed past the Pattullo Bridge, to a great province and probably one of the most dynamic economic communities in North America.

The member pointed out that we have had, as a Social Credit Party, support from the labour sector. You're absolutely right. During the mid-fifties the percentage of certified workers in the province was about the mid-fifties. At the height of W.A.C. Bennett's popularity, the fifties and the sixties, 45 to 50 percent of the working people in the province were in organized labour, and they continually returned Social Credit governments, government after government. There's no question that we were and still are the party representing the man in the street, the guy with the lunch bucket, the community. The men and women that you think will vote for you in fact don't; it's clear. You talk about being a party of the people. You were the party that wanted, in a policy when you were government, to give the whole energy package to the federal government. You were opposed to the Coquihalla Highway, a highway that opened up the interior considerably. You were opposed to the billing number legislation that would allow better medical practice in the rural areas. As a matter of fact, it caused one of your members to cross the floor. It was the first one I've seen and probably the last one I'll see in my experience here, but a fellow, a good rural member who represented his riding well and could not stomach NDP centralist philosophy, crossed the floor.

MR. LOVICK: Because he knew he was going to lose his seat. Let's be serious.

HON. MR. STRACHAN: No, I am being serious. He crossed.... That's a pretty glib, inhuman, insensitive statement to say about Al Passarell. You ought to be ashamed of yourself, really. The guy had the courage of his convictions — the most courageous guy I've seen in this House, the gutsiest move I've seen, the courage of his convictions to represent his riding and do the right thing for the people of Atlin.

HON. MR. STRACHAN: Al Passarell is maudlin junk? You ought to be ashamed of yourself. I'm talking about Bill 41 and your party's position on it, which in fact was totally opposed to health care in the rural areas, and you know it; it's on the record.

You bring in the first member for Cariboo (Mr. A. Fraser). Well, he's made some interesting statements; but look at the record. Under his administration as Minister of Highways from 1976 to about 1986, 30 to 40 percent of the highways system was privatized in terms of maintenance. The record is clear. It's done now. Leave Esquimalt-Port Renfrew. Go to the interior. See the private contractors doing the side roads. It's all over. You'll see it; it's clear. It was done under the administration of that Minister of Highways. So don't kid yourself. He's maybe saying some interesting things now, but that highway system has been privatized for some time, and it was led under his administration.

I see the time is running short, Mr. Speaker, but I have to totally reject out of hand that we've lost touch. We are broadly based. Just look at the number of seats and the way we're represented in this Legislative Assembly. You will see that your NDP party is dominated by the lower mainland. We represent the real part of the province.

MR. SIHOTA: I want to respond by saying, first of all, that it's interesting to note that the member, in his reply, stuck to the record of the past and made no comment with respect to events of the present. There was no defence of the budget. There was no defence of the attack on seniors, of the abortion policy or of privatization. We're talking about the present. We're talking about the way in which this party has changed.

Let's talk about the current record, Mr. Speaker. When Highways workers in this province speak out against the government's privatization initiatives, they're fired. Whatever happened to respect for freedom of speech? People in this province always put a value on freedom of speech, but this government won't tolerate it. When uranium protesters come onto the steps of the Legislature, the government takes immediate actions to evict them. Whatever happened to freedom of expression? Whatever happened to the right of dissent in a free and democratic society? When people are cut back on their welfare rates, they're told to turn to Jesus. Whatever happened to recognizing the multicultural, multi-faith nature of this province'? Whatever happened to freedom of religion? This government doesn't understand the concept. When the government isn't happy with its reporting of its activities, it calls in select members of the press to try to control the message. Whatever happened to freedom of the press?

The problem with this government, Mr. Speaker, is that it is out of touch. It doesn't understand the wishes of the people of this province. It would prefer to shoot the messengers — like the media — than to examine its own failings. It would

choose to speak out in favour of the wealthy and the vested interests in this province. Witness the actions, or inaction, of the Minister of Finance (Hon. Mr. Couvelier) with respect to the stock exchange. That's where this government is coming from.

People are saying that 30 years is enough. The arrogance, confrontation and not listening are intolerable. There has been a breach of faith, a breach of promise, in moving away from the promises of open government to creating the confrontation that we now see in British Columbia. It is a government that won't listen. As people say, it is a government that no longer represents ordinary people but represents the wealthy.

MR. PETERSON: Today I'd like to talk for a little while about part-time farmers and the contributions they make to both a lifestyle and the economy of British Columbia.

Part-time farming offers both a relaxed, comfortable lifestyle and a boost to the local economy. Nowhere is this more evident than in British Columbia, where of the 19,063 farms in the province, over half can be defined as part-time or sometimes as hobby farms.

Hobby farmers hold over 28 percent of the total farmland in the province. Of the almost six million acres of agricultural land in B.C., 1.7 million acres are owned or operated by hobby farmers. That's 1.7 million acres that they utilize, bring under cultivation and use for various agricultural purposes. I think that's an amazing figure.

In addition to the intangible benefits that part-time farmers derive from their endeavours, their efforts provide an important boost to the B.C. economy, estimated at about $84 million in direct expenditures — an amazing number. These direct expenditures ripple through B.C.'s economy to add to our provincial gross domestic product. This economic stimulus supports jobs and industries that service the local farming community. The dollars spent by the part-time farmer support the job of the sales clerk who sells the fertilizer and lime needed for the farmer's crop. These indirect benefits that result from the ripple effect on the provincial economy from the spending of hobby farmers cannot be overlooked. As well, the hobby farmer is an employer of seasonal labour.

I'd like to touch on some other things that part-time farmers do. Quite a few — particularly in my constituency of Langley — are seed stock producers. These are purebred breeders, and whether they be raising poultry, hogs, sheep or cattle, they work very diligently in attempting to improve their respective breeds, and they are a great resource to the larger commercial farmers in our province. The bottom line is to produce a better product for the consumers, and because of their smaller operations, part-time farmers have the mobility to experiment in breeding more efficient seed stock for the commercial operations. They make a very tangible, significant contribution to the total economic agricultural picture in this province.

In addition — it's very hard to put a yardstick on this -part-time farmers are usually family endeavours. Many of the young people from these families, who have discovered the rewards — both in lifestyle and financially — of working in agriculture with their parents, have gone on to pursue fulltime careers related to agriculture.

I can name a few whom I know personally. I know one individual who was a seed stock producer with his parents, was in 4-H and thoroughly enjoyed the agricultural sector. Coming off a small, part-time farm, this individual is now operating and managing one of the larger cattle ranches in British Columbia. We've got well-known showmen who come out of the 4-H Clubs and are being hired by internationally acclaimed shows, such as the Agribition in Regina, the Pacific National Exhibition here and the Royal Agricultural Winter Fair in eastern Ontario.

There are a lot of British Columbia youth who have got their training through part-time farms and have developed this into a full-time career. As I say, it is very difficult to put a tangible yardstick on that, but it has given them a vocation that's actually more than a vocation; it's an avocation. It is something they really enjoy.

I could go on to horse breeding, for instance. Even some of our people who really excel at equestrian activities come from small, part-time farms where they pursued that hobby. Pardon me?

MR. PETERSON: Certainly. I could delve into that right now, but I really wanted to point out that there are very real, hard, economic generators from part-time farms, but there are also intangible benefits: a lifestyle training for our youth, so they can go on and pursue full-time careers in the agricultural sector. It gives them a real opportunity, which in some sectors they don't have. If you decided that you wanted to enter engineering, how do you really tell? But with agriculture, by being part of a part-time job, you've had the ability to ask: "Gee, is this something that I like, something that I enjoy doing?"

I want to point out to this House that part-time farmers play a significant part in the development of our future generation of people who work in the agricultural sector. Whether it be on the farm itself; whether it be future veterinarians; whether it be individuals who go on to attend UBC, the fine agricultural school we've got there, and do research to more efficiently develop our agricultural sector; I think the contribution is major and significant and should never be overlooked.

DEPUTY SPEAKER: Hon. members, with your indulgence, the member for Mackenzie has asked leave to make an introduction.

MR. LONG: Mr. Speaker, today in the House we have two parents and two teachers and 19 students from the Nusatsum elementary school in Hagensborg, a small school in a small town in the Bella Coola valley, which is very beautiful. I would like to have the House make them welcome here today.

MR. STUPICH: I'd like to associate myself with the remarks from the member about part-time farming in British Columbia. I was raised on a small farm on Vancouver Island

that my father operated as a part-time farm. It was that experience, I think, that made me interested in agriculture. not so much as a way of life but as a way of expressing concern for those who are engaged in farming, whether it be full-time or part-time. It was that experience that stood me in good stead when I had an opportunity to serve as Minister of Agriculture in the province of British Columbia for just over three years.

The legislation that the NDP government brought in was intended to maintain the family farm, whether it be part-time or full-time, as a way of life in the province of British Columbia. We worked hard to accomplish that; I'm not saying me individually, but certainly the government worked hard to accomplish that. We brought in legislation. As a matter of fact, the legislative package that we brought in in our three years was more extensive in the number of bills than in the whole preceding 20 years of Social Credit administration. That's just an example of the determination that we exhibited in our attempts to help small-time farmers and fulltime farmers in the province of British Columbia.

Full-time farmers, generally, could get along; there are good years and bad years, but generally they can manage. It's the part-time farmer that has the problems. Our legislation applied to both. The agricultural credit legislation we brought in was available to part-time farmers as well as full-time, and it was of great assistance to both.

I note that one of the first things that the Social Credit administration started doing when it was re-elected in December 1975, and is still doing — one of my colleagues has commented on this — was to start increasing the rate of property tax on rural land, including that owned by part-time farmers. When we left office, it was 10 mills; I think now it's up above 30. I'm not sure of the exact figure, but it's something like triple the rate that it was when we left office. That's not the way to help part-time farmers, or any farmers, survive.

There's the question of the farm income assurance that was available to anyone producing food. It was available to part-time farmers and to full-time farmers. It was important. A lot of the fruit grown in the Okanagan Valley is grown by part-time farmers, generally because they need some other source of income to supplement their farming work. They look on farming as a way of life; that's true in the Okanagan Valley, the Fraser Valley and the Saanich Peninsula. It's a way of life, but one that has to be supported by income from some other source. Even when we were in office, that was the case. Nevertheless, we tried to make it easier to make a living fanning, and not to be so dependent upon outside sources of income.

If I could just mention the Agricultural Land Commission Act itself, and my concern there as to what is happening to the land reserve, it seems to be used as a way of keeping land off the market until some friend of the cabinet wants to get that land out to make a fantastic amount of money for himself or herself, and that's when the land comes out. This is serious for full-time farmers and also for part-time farmers because of the difficulty of operating a small farm when you're surrounded by neighbours who are not farming. The farming activities extend from early morning to late night, particularly when the days are long. The activities that include necessary weed control, disease control and insect control are carried out on small farms and are not accepted by neighbours working an eight-hour shift. They want to sleep in the morning, and they want to get to bed at night.

Destroying the land reserve, which is what the government has been doing for the last ten years or so, means that the ability to carry on small-time farming in British Columbia is being more and more curtailed. If the government is allowed to do this, the best areas.... For example, that's happening in Richmond now, where that kind of land is taken out of the ALR, and there is a lot of small-time farming going on in those areas. The ability to carry on small farms where there is a heavy population.... That's where people do small-time farming particularly — near centres of large population.

MR. STUPICH: I'll admit what we did to Tilbury Island wasn’t my choice, but it happened. But you stack Tilbury Island up against everything that this government has done since it was re-elected in 1975 — one instance against a hundred.

MR. PETERSON: Just before I begin, I would like to acknowledge the first member for Nanaimo's contribution to the agricultural sector in this province when he was Agriculture minister. I think he did a reasonably good job in view of the constraints of the party he belonged to.

However, he talks about the agricultural land reserve. It's interesting to note that — if my memory serves me correctly — when he was the Agriculture minister in this province, he was a member of the first cabinet to ever remove good farming land from the agricultural land reserve. It was referred to as the Campbell Creek estate. I believe it was the Molson hop farm.

Over 400 acres were taken out of the agricultural land reserve by the members opposite when they were government — 400 excellent producing agricultural acres — and they over-ruled their own Agricultural Land Commission because it was big brother government. They wanted it for some Crown corporation enterprise they were doing, so they went against their own particular philosophy. They went against everything they said. I have a lot of respect for the first member for Nanaimo, and it just amazes me that he would even bring this up. It really amazes me.

MR. PETERSON: Actually, I'm not amazed. I should say it doesn't surprise me in the least.

My reason for getting up and speaking about the small farmer, the part-time farmer, the hobby farmer — however you want to classify him — was not to get into an argument with the opposition. I would never want to do that. I wanted to highlight the importance of that sector in British Columbia's economy and also to speak about that lifestyle, because it is a bit of a snapshot back in time in the current fast-paced world and the dramatic changes we go through very consistently; it’s a nice feeling. It's a lifestyle that's enjoyed by many, yet it's productive; it's family oriented, and it provides us in British Columbia a means of activating the agricultural potential of many small pieces of property that probably would go to waste.

DEPUTY SPEAKER: The second member for Richmond would like to make an introduction. Shall leave be granted?

MR. LOENEN: It gives me a great deal of pleasure to introduce four students from the Duncan Christian School who are accompanied by their teacher Mrs. Spyksma, who has been a personal friend of mine for many years. I am just delighted that they are here, and I ask the House to give them a hearty welcome.

MR. CLARK: Many of the clauses we won't have any problem with, but we could have some discussion on the first clause and we can cover most of my concerns. I guess the first clause deals with a number of things. First of all, it seems to me — maybe the minister can clarify this — that it allows the ministry to allow royalty holidays for specific wells as opposed to.... As I understand it, now wildcat wells have a royalty holiday. A subsequent section eliminates that, I think, as a category, but this section allows specific designation for specific wells. If the minister will confirm that that's the case, I'll support that, because I think that's a good move that allows for some flexibility for government to deal with it. I might argue that it is, however, potentially open to abuse, because it's done by regulation, so it allows the minister or the ministry to provide royalty holidays without purview of the House in terms of debate or discussion. Nevertheless, I think it eliminates across-the-board royalty holidays, essentially, but allows the minister to designate by L-G-in-Council specific categories for such holidays. Is that correct?

HON. MR. DAVIS: Yes, that is correct. By regulation, the minister can do a variety of things. The current practice, however, is to allow a three-year royalty holiday only for new wells in new development areas. It's not general. But the regulations could be amended to do other things. In fact, that's not our intention. We merely want to limit the royalty holiday to new wells in new areas to encourage new development, but not to benefit financially in any way established wells or new wells in established areas.

MR. CLARK: Thank you. I agree. I think that's a positive move, but I do understand that a subsequent section, which we can get to, essentially eliminates that automatic holiday for new wells in new areas, at least by statute - that's how I read it. So this allows you to do it via regulation, but eliminates the statute which does it across the board. Is that correct?

HON. MR. DAVIS: Yes, and the royalty holidays that are presently available have a sunset clause on them, so a new well in a new area three years from now doesn't necessarily receive a three-year exemption.

MR. CLARK: This clause, as I understand it, does a number of other things. it says that the government won't refund for overpayment in order to simplify things. I understand that it adds that you credit future payments. So instead of actually refunding a cheque and then collecting more later on, you give the company a credit against future royalty payments. I don't have any problem with that. I wonder if there's any provision, however, for what happens if a well becomes defunct. Maybe I'm ignorant on this point, but maybe the minister could help me with this, because it seems to me that if you're crediting against future payments and there are no future payments, then I don't know if there's a provision in the act to provide for such a refund down the road if that's possible. Is that a possible scenario, or is that so unlikely that it's not worth worrying about?

HON. MR. DAVIS: Joan Hesketh, who's energy policy adviser, tells me that the bill allows the minister to make refunds, but there's a time limit as to how late in the game the minister can make the refund. That time limit, I believe, is six years. So refunds are possible. Refunds might not only come through future liabilities, but can be made from time to time as the occasion demands.

MR. CLARK: That sounds reasonable. I don't see it in the bill. Is it in the bill? He mentioned that it was in the bill; maybe it's in a regulation. Perhaps the minister could just clarify that point for me.

HON. MR. DAVIS: I am advised that this bill gives flexibility, but it does set a time limit as to the time during which the rebate can be made. The timing is in the regulation.

MR. CLARK: It's not in the bill; it's in the regulations. That's what I was trying to get at.

One of the points that the and auditor- general's report made.... As the minister and others know, it was a rather scathing indictment of the attempt to change. I can sympathize to some extent with the ministry, because there is essentially a revolution happening in the regulatory field in natural gas, so it may be difficult. Nevertheless, I don't think that's an excuse.

The auditor-general pointed out a number of concerns, one of which was the failure to pay the appropriate amount. This addresses some of the concerns. One of the concerns they raised, and I think it's a valid one, is the potential problem with a tempting combination of self-auditing or self regulation, the notion that the company has to determine what the royalty is to be paid and has to remit that appropriate payment. As I recall, the auditor-general said that the ministry did not have the audit capacity to deal with this problem and that relying on the companies themselves to remit the appropriate amount, on top of all of the confusion with respect to the regulations, caused concern for the auditor-general.

You've clarified the regulations for the companies, and I agree with that and that's a good part of the bill. But I don't think you've dealt with the problem. Maybe the minister could tell me, under this section, whether or not the ministry now has the capacity to effectively audit what is still, under this bill, a self-regulatory or self-paying kind of regime. I have some concerns with it, and clearly the auditor-general pointed out some concerns.

HON. MR. DAVIS: First, with restraint, the numbers of staff people capable and available to follow up on a complicated

system.... Their abilities were limited in part by their numbers. The job was rendered difficult because they not only had to know with certainty what the revenue was to the producer -well by well, but they also had to know with certainty what the costs were. This new scheme eliminates the need to know all about costs. I think the member is asking: is this still in some measure a self-regulatory regime? It is in some measure, but we now certainly have the follow-up capability to monitor, to check out the figures on sales. We're introducing a sales-tax regime as distinct from a much more involved — certainly from a follow-up point of view — profits-tax regime. Yes, some revenue was missed, but the ministry, the government, is in the process of recovering the missed revenues.

The auditor-general's staff had the advantage of coming in and talking to staff who were in the midst of preparing a new regime, and were able to pick up the criticisms of the old and report them and, I think, report them accurately. But we moved to a much simpler regime and a relatively small staff that has a much better chance of doing a good job — certainly a monitoring job — than it had previously.

MR. CLARK: I appreciate that the minister is basically saying that it was the complication in the old formula that led to not necessarily abuse but inappropriate collection by the government, because it was so complicated for the companies themselves that they didn't know what the appropriate amount was. This clarifies that for the companies involved; therefore it will be an easier process.

It still doesn't deal with the rather tempting combination of having them determine how much they have to pay, but I guess I understand your point that because it's much simpler the staff of the ministry will be able to keep on top of the payments and audit them. I hope that's correct, and I suspect it certainly is in some measure. I'm not yet convinced, and it will remain to be seen whether you really do accomplish all you've set out to with this regime.

I want to ask a couple of questions. I have some information and I want the minister to tell me whether it is, in fact, correct. As I understand it, the auditor-general audited regulations in 1987 which had in fact already been amended in House, and his report did not capture the full impact of double-dipping by companies — double-dipping meaning those who deducted costs of service both when calculating the royalty rate and when calculating the royalty payable. which, as I understand it, was one of the focuses of concern Of the auditor-general. Therefore the auditor-general's findings dramatically underestimate the amount of revenue lost to the Crown for that period. In fact, between July 1985 and May 1987 the auditor-general reported that the loss to the Crown was $1.5 million, when in fact the figure is closer to $7 million. Would the minister confirm that?

HON. MR. DAVIS: There's some truth in what the member is saying. The tax missed has subsequently been picked up. Yes, there was a brand-new system brought in in 1985, a brand-new system which was also very complicated. There were loopholes in it, if I can put it that way. They were subsequently plugged by changes in regulation, and the ministry is still in the process of recovering moneys which lawfully were owed to it.

The problems of that short-profits tax regime are being overcome, but it's irrelevant for the future because we have an entirely new, much simpler regime to administer.

MR. CLARK: I understand that this bill rectifies that problem. Will the minister agree that the number is not $1.5 million but in fact $7 million?

HON. MR. DAVIS: Certainly I can check and find out what the number was, but I simply would be taking a number Given to the House by a member opposite. I have no knowledge of what the higher number is or might be.

MR. CLARK: I certainly won't belabour the point, because we basically agree that restraint caused a lack of monitoring capability and that because you are bringing in a complicated regime, there were all kinds of loopholes and double-dipping and complications and confusion in the industry. Millions of dollars were lost to the Crown, which you are now rectifying. I'm not saying.... Nevertheless, it is hopeful that you have caught it, or the auditor-general has caught it with your staff, and that you are now moving to rectify it.

I think it is an indictment, however, of moving in this way if you are going to move to a complicated, new and radically different system as you were or the previous government was. It's simply not very good public administration to allow that kind of thing to happen. It's encouraging. I give him some credit for catching it now and rectifying it. I still think — and I don't want to labour the point — that the revenue generated by the Crown is not adequate for the resource, but that's another debate.

One last point on this section. It appears that Section 1(h) makes a regulation which allows for the privatization of B.C. Petroleum Corporation. Is that correct?

HON. MR. DAVIS: No. that's not true. In fact, the Petroleum Corporation for some years has not been the exclusive purchaser of gas in British Columbia, since the royalty regime was introduced in '84-85. Today the Petroleum Corporation is buying something of the order of 80 percent of all the gas produced in the Peace River area. For many years it was the exclusive buyer. It bought 100 percent. The revenue to the Crown essentially was generated by the Petroleum Corporation buying at one price — it was the sole buyer — and selling to the B.C. utilities and at the border at higher prices. the difference being the dividend or yield or product going to the Crown.

In 1984, the government of the day switched over to a royalty regime which is common elsewhere on the continent and endeavoured to collect the moneys by taxing production of the well-head as opposed to being the exclusive buyer and marketer of B.C. gas. Of course. in the intervening years, the selling price has dropped dramatically, largely because the world oil prices went down and competitive prices everywhere have been much more onerous as far as the producer is concerned.

However the royalty regime, as designed in '64, was intended to recover the same order of magnitude of revenue to the Crown as the previous regime did. In theory, it was a good tax system. It was a profits tax, it captured the economic rent to the province. But being a profits tax is much more complicated from an administrative point of view, and the complication. the fact that it was a brand-new tax, led to some administrative problems, some revenue missed which is now being picked up. Now we've switched back really to a much simpler regime of the type which used to be in place generally across the continent. It is in place in most jurisdictions in North America.

MR. CLARK: I realize it's more complicated to collect the profits-based tax, and it's also easier for a company to distort the tax that would be paid, which is why we moved in many respects, not just in British Columbia but in other jurisdictions, for the Crown to more effectively capture that economic rent through other mechanisms because of the.... Now we're moving back. I think that's regrettable, but so be it.

If the purpose of section 1(h) is not for the privatization of BCPC, could the minister explain what the purpose of it is?

HON. MR. DAVIS: In the earlier years of the B.C. Petroleum Corporation, some producers, because of existing contracts, sold gas other than to the B.C. Petroleum Corporation, and a device was developed to capture the royalty equivalent. This clause really relates to history and has nothing much to do with the future, but it covers off a wrinkle that existed because not every company sold through the BCPC.

MR. CLARK: What you're saying is that it's now 80 percent and this regulates the 20 percent, essentially.

HON. MR. DAVIS: Today, all gas pays the new type royalty. This clause, I'm told, is merely to cover off an historic situation and make the treatment of all producers uniform. All producers, whether they sell to the Petroleum Corporation directly — and they are obliged to do this because of historic contracts — or to someone else, such as Prince George Paper or whoever, pay the royalty.

MR. CLARK: I don't want to belabour the point, but I'm not quite there. Maybe the minister could explain why.... Are you saying that those companies that did not sell to BCPC since '85, or the new regime, or that were selling to...that some companies didn't pay a royalty because they sold directly to the industrial consumer?

HON. MR. DAVIS: It has to do with implicit and explicit payment of royalties. I'm not clear as to what this does, but essentially it clears off this history and puts everyone on the same basis for the future. Whether or not they sold directly to the Petroleum Corporation after 1984 is irrelevant for the future. Everyone pays the new royalty. It's eliminating one of a large number of anomalies and details in administration which made it difficult to collect the true tax.

MR. CLARK: Would the minister agree that it also covers the possible eventuality of a privatized B.C. Petroleum Corporation?

HON. MR. DAVIS: I'm told this is not a new clause. It's one of several sub-items in this section which are taken directly from earlier legislation, but it does deal with some anomalies that we don't want to carry over into the future.

MR. CLARK: So you're telling me this is really an innocuous clause and there's no hidden messages here or anything else, and if there is one I can beat you up later on it.

HON. MR. DAVIS: If you leave it much later, I'll understand what it is, and then you won't be able to beat me up.

MR. CLARK: I guess the last question is: how did you arrive at the 15 percent royalty figure?

HON. MR. DAVIS: Simply put, I asked our staff what flat rate would yield the same return to the Crown as the complicated system we had previously. The 15 percent, as I understand it, can be altered to some other figure by regulation, but the 15 percent does yield the same revenue to the treasury. The principal debate in Treasury Board was whether it yielded enough, or at least would yield as much. I argued that we would attract more activity with a system that is not only simpler than Alberta's but a little more tolerant, and that we would get more revenue.

MR. CLARK: So you argued a supply-side argument. I imagine it was very difficult to come up with a revenue neutral number given the complexity of the previous regime that you're moving for. I hope you erred a little on the higher side than on the lower. I'm sure Treasury Board made you justify those remarks.

Is it true that this bill, in this section and its number, was arrived at in consultation with the industry? Although I don't get all the correspondence from your ministry, I have seen correspondence with the independent petroleum producers and others regarding this review. This was a result of consultation with the industry, and a similar situation is happening in Alberta with respect to.... Is that true?

HON. MR. DAVIS: Yes, Mr. Chairman, there have been extensive consultations with the industry. In a general sense, the industry welcomes this new royalty regime because it's simpler and easier to understand. However, moving from a profits tax scheme to a simple sales tax does, in the eyes of producers who have a very small profit margin and have cost problems.... They see themselves as faced with paying a higher tax. So there are some producers who at least in the short term would regard this as onerous because they're going to have to pay more tax.

MR. CLARK: So this is a royalty; it's not a profits-based tax. In second reading the minister did use the terms interchangeably, which I had some objection to at the time, if you recall. Is it a 15 percent sales tax on gross sales?

HON. MR. DAVIS: It's a royalty; that's the terminology in the industry. But in simplistic terms it's akin to a sales tax, which is a simple percentage figure applied to the gross value of sales at a certain point — in this case, at the wellhead. So it is a sales tax, yes.

HON. MR. DAVIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Bill 30, Petroleum and Natural Gas Amendment Act, 1988, reported complete without amendment, read a third time and passed.

MR. LOVICK: Mr. Chairman, when we left off last time in the debate, I had posed one question that the minister took on notice. I thought perhaps it would be wise to clean up what we'll call unfinished business before we go any further. So perhaps the minister would like to respond to that.

HON. MR. ROGERS: Yes. Last year, actually, the office of the minister was somewhat underfunded, and there were some efforts made to address that. There was an underfunding of about $7,000. In addition to that, the 10 percent executive benefits plan had previously been paid by the Provincial Secretary ministry, and it's now more correctly and accurately reflected in the expenditures for the minister's office — plus, there has been a general increase in the salary of all ministers. I think if you peruse the spending estimates of ministers' offices, there has been an increase in a number of ministries. That's why this was done last year. Last year we had underfunded one whole position in the ministry, and the person working in the office was in fact being paid by the ministry. It perhaps more correctly reflects the genuine cost of operating the minister's office, which is actuarially correct, and one of the things I asked the staff to do when we came there.

Secondly, yesterday you talked briefly about Coquihalla 3, and I know you will want to mention it some more. When the spending limits were imposed by Treasury Board on this particular highway project, the cost was put at a ceiling of $225 million in 1987 dollars for project completion — depending on some conditions — in 1991.

There are 84 kilometres of road between Peachland and Aspen Grove, 54 kilometres of which will be four-laned. All of the adverse gradients will be four-laned so that we don't run into the difficulty of having to cut and fill above or below the existing gradient. There will be 21 kilometres of two-lane, and 11 kilometres of three-lane which has been recently upgraded from two-lane. Any place where the highway is in relatively level condition, it will be a two-lane road, and where there is traffic congestion caused by slower vehicles, of course we move into a three-lane thing.

The entire highway will be built to high-speed traffic standards and posted at a 100-kilometre speed limit which, even at the most optimistic of estimates, will adequately handle our traffic flow requirements for the next 15 years. It also completes the tourism route for people who choose to go up the Hope-Princeton Highway and come back through the Okanagan or, for that matter, to go up around Salmon Arm and come back down the Trans-Canada Highway. The one we would see being more widely used is the Hope-Princeton and the Coquihalla 3.

We looked at where the savings would be. having constructed certain areas of sub grade. Essentially we came to the conclusion that where 80 percent of the work had been done, it should be completed, and where less than that had been done. we could go to a two-lane configuration which would accommodate our requirements from Treasury Board to stay within $225 million. To build a four-lane sub grade at this time would cost about $8 million additional dollars. To justify making that expenditure 15 years in advance of the time when you require that as a minimum is just not actuarially sound. We don't believe that we have left any engineering problems, so that when you run into an engineering problem.... We are not going to be running into it; we are just postponing some expenditures.

Mr. Chairman, I believe those are the two items that I discussed with the member yesterday and perhaps we could get into other items as well.

MR. LOVICK: I want to thank the minister very much for that detailed answer. I appreciate an answer to both of those questions.

On Coquihalla 3, precisely because it is a detailed question and answer. I am going to reserve comment to later in the estimates when I will come prepared with some opinions and arguments suggesting that another approach is required. I nevertheless do want to emphasize that I appreciate that answer and thank the minister for it.

When I left off yesterday, I was providing simply an overview of the kinds of questions I wanted to pose under the heading of Highways estimates. I had not gotten too far with that. I am not going to touch on all of the things I intend to cover. I don't think the House would be served by that. I want to pick up on a couple of points though. because they are very much current and alive. They are matters I have raised earlier in the House. and therefore it seems appropriate to touch on those briefly now. Even though I didn't give the minister any advance warning, I'm sure he will appreciate this as a legitimate approach.

The first thing I want to touch on briefly is the Redman case. As we have all now heard, Mr. Redman has been reinstated retroactively, despite the fact that when I posed the question in the House some weeks ago on May 11, the Premier informed the House that Mr. Redman was indeed terminated "justifiably."

The questions that still remain concern the reasons for that firing. I recognize that there are personnel matters that don't belong in this public forum, but given the problems that we have heard about in terms of morale and given what has been refer-red to as the shake-up in the ministry, I think it's fair for us to ask a couple of questions and to ask for some assurances. I would therefore ask the minister if he would care to comment in response to a couple of questions.

For instance, is the minister prepared to assure us that Mr. Redman's dismissal had nothing whatsoever to do with his voicing of concerns and apprehensions about the privatization of highways maintenance? That is certainly the perception in Kelowna and of highways workers everywhere. and I think for the benefit of morale — if nothing else — the minister might want to give us that assurance. Perhaps I'll ask that direct question first.

HON. MR. ROGERS: I'll back up a little bit and tell you a little wise word about the Coquihalla 3. Needless to say, all of the contractors who have done work on this project and want to continue to do work on the project have very wonderful arguments as to why the thing should proceed in

the way that it has done in the past. They would even like us to have the same kinds of disciplines that we've had in the past, and that's just not in the cards at present.

As I told you, or told.... I don't believe you addressed the question to me in the House, so I will just back up a bit; I told reporters who had asked me the question that the administration of personnel within the ministry is an administrative function dealt with by the deputy minister. The decision on Mr. Redman's case, and on any case, is one that I have no knowledge of. I was not consulted, I was not asked, and I don't expect to be asked. Not only do I not expect to be asked as to who should be hired, I don't expect to be asked as to who should be terminated and under what circumstances. There are fairly rigid guidelines put out by the division of government that looks after the hiring and dismissal of employees.

I believe the matter has been dealt with. I have spoken to the deputy minister who deals with personnel matters where this reinstatement in fact took place, but neither instruction came from me. If you ask me to make a statement about what people can and can't say, again, that's not an administrative function of this ministry; that's an administrative function looked after by the minister responsible for the government employees bureau.

Needless to say, I have given no instruction that employees who are critical of the minister or of the minister's action should be dismissed. If I had given such instructions in the past, there might have been a long trail of people dismissed from government, because not everybody in all the ministries I have had were totally thrilled with all the decisions we made. But we get elected by the public to make those decisions.

I can't give you assurances of what basis.... I wasn't privy to knowing under what basis the gentleman was dismissed or on what basis the gentleman was rehired. I believe in retrospect, and after examination by staff people — not by political people, but by staff people — that the matter was not handled in an appropriate manner. Nonetheless, no instructions were given by me to dismiss him.

I think that managers have a certain role and responsibility that requires them to handle and conduct themselves in a manner which is pretty clearly laid out for them. I don't set that policy and I don't enforce that policy; that's an administrative function in the ministry.

I've never met the gentleman in question. I didn't suggest that he be dismissed, I didn't suggest that he be rehired, nor do I give direction or criticism as to where he should go. I think that answers the question you put to me.

MR. LOVICK: That perhaps answers the question to your satisfaction, Mr. Minister, but I must confess not entirely to mine; the reason, I think, is fair and certainly worthy of airing.

You can indeed, Mr. Minister, disclaim responsibility for personnel matters and say, "I did not have a specific involvement in this; managers should be left to manage," and all those others things we all learn in MBA courses. Fine. There's a considerably good case to be made about that; I accept the premise. The problem, however, with this case is that it's gone rather beyond that textbook stage, that theoretical stage. We're talking about somebody who, we recall, went public. The papers picked it up; television picked it up. A whole bunch of people in the ministry are now saying: "Is it the case that if I go and privately talk to my superiors about an initiative of government that, in my professional judgment, based on my experience, I conclude is wrong, my job will be in jeopardy?" Of course, it's complicated further by the fact that, as we know — and I'm delighted to see one of the members for Okanagan South here — that same individual had a conference with his elected representatives.

The question also arises inevitably and, I think, quite fairly as to whether it is the case that, because of taking either of those approaches — either talking to his superiors in camera about reservations or to his elected representatives -that activity, that occurrence, had anything to do with his dismissal, albeit a temporary one. The problem, of course.... What that does is that those questions raise the whole issue of free speech. They raise the whole issue of whether in fact we are indeed imposing some kind of gag order; whether the ministry's power is being used, albeit not by the minister, in some kind of coercive way to extract and guarantee silence from employees about what is, after all, a very sensitive issue throughout this province — namely, privatization of Highways maintenance operations-

I think, then, with all due respect, that the minister does have a necessary obligation to at least provide assurances that as long as he is the minister, that kind of policy will not be tolerated, and any deputy who tries to do that kind of thing.... I recognize this is all merely allegation; we don't know. But as I say, I think the minister has an obligation to provide us with assurances that that kind of behaviour and treatment of Highways employees will not be tolerated. Would the minister care to respond?

HON. MR. ROGERS: I've never had the privilege of attending an MBA course, so I'm not sure that it's not just....

HON. MR. ROGERS: I never had the time to go. I was busy carrying people back and forth.

In terms of this particular issue and the dismissal and rehiring of this employee, I would like you to consider that the standard has to be the same for all government employees, not just those of the Ministry of Transportation and Highways. So the standards that are set down by the ministry responsible for the government employees' relations is the one that has to make those standards. I'm not going to impose a specific set of rules for employees of my ministry as to what they can or can't say. Those are a standard set of rules for all government employees.

I can tell you that about eight months ago my television set broke down, and I've had the wisdom not to have it repaired, so I haven't seen any of these great stories that you have. I would recommend that to all members. Your life is much happier. A whole day without watching the news is a pleasant day, and sometimes if you stretch it into a week you'll feel better, sleep longer and be more productive in the work you do. Nothing will really have changed very much over the weekend, and you can get back and do the chores you have to.

I believe that all ministry employees of all the ministries should be treated with the same set of guidelines. I don't

believe we should impose a special restriction or special loosening of the rules for employees of this ministry.

You asked me to give you assurances; I think those assurances should be asked for of the minister responsible for all government employees. We have no special circumstances in this ministry. I have not asked for them; it's the farthest thing from my mind. It's not a matter of consideration. The rules that are there are consistent, because the issue of privatization will inevitably affect most if not all of the ministries of government. Therefore most if not all of the ministries of government will have employees that will want to speak out on this issue, and therefore we should have standard rules for everybody. I think that — not to your satisfaction, but at least to my satisfaction — answers the question.

MR. LOVICK: I'm glad to see that the minister has psychic powers, because he knows clearly that that is not answered to my satisfaction.

The minister can say that the way to solve your problem is not to watch television or some such thing, We all know that line; it's called ignorance is bliss and enjoy while one can. However, it begs the question, and with all due deference, I think the rest of the answer also begs the question. To say that we have to have specific standards and those must be universal and fairly applied across all ministries is fine; nobody disputes that. I don't think that that has a heck of a lot to do with the case I'm making.

The case we are making is that it has been alleged in a number of different forms by a number of different people that what has happened here is that an individual's right to free speech.... Privately expressed opinions — not having gone public with those opinions — and opinions that are in opposition or at least expressing reservation about government policy constitute grounds for dismissal — that's the allegation. It seems to me that that is a damning allegation and that any cabinet minister ought to want to make sure that that kind of behaviour does not go on. If I should conclude from the minister's answer that really what I should do if I'm concerned is ask somebody else — namely, the Premier as somebody who is apparently responsible for all ministries — fine, I will accept it. But I think the minister also has an obligation to say that he wants to get assurances from his own deputy that it was not a privately expressed disagreement with policy — privately expressed, I emphasize — that was the grounds for dismissal of that employee. Surely that is not asking too much of the minister. Will he not ask his deputy for that assurance?

HON. MR. ROGERS: You pose a little different question when you bring in the issue of the deputy minister and what relation he has had with this particular employee. I could ask him for that assurance; that I can certainly do. But there are also other matters surrounding this particular case which are currently being discussed in another forum, which I don't particularly find myself wanting to get involved in one way or the other. I think it should go through its due process, and there is due process that's there. If there is a personality issue or another issue involved, there is a proper forum for that to follow its full course. There may be disciplinary issues. There may be legal issues that come before us in this case. There may be a numbe

Well, it's moot now, anyways. They've just announced a Finance meeting for tomorrow, so I'll be at work. The problem for me is that this stretch of working just about every day at Hansard comes with only a half-hour lunch.

What do you think about next Tuesday, instead? I'm off that day, and I could come and meet you downtown for lunch, someplace close to where you work? You name the time and place, and I'll be there.

r of issues. But I'll certainly get an answer to your question on that issue when I see the deputy. He is not here today; I'm joined by Mr. Hogg and Mr. Collins from the ministry, in case there are technical questions they can assist me with.

MR. LOVICK: I thank the minister for that. I think it's an important step forward, and I think it's absolutely necessary that we separate those other personnel matters and possible reasons for dismissal or reprimand or expression of dissatisfaction with an employee's performance from the one I'm referring to, which is a mere expression of disagreement with the policy.

Embedded in my question is an assumption, and I acknowledge the assumption: that as long as those opinions or disagreements are expressed privately, they should indeed be allowed; moreover, they should be encouraged. The usual rule of thumb for civil servants to work within a given ministry is that you can disagree in private. The issue is: will you have difficulty carrying out the ministry's policies? If a civil servant has no difficulty carrying out those policies, then she or he ought to be able to carry that private disagreement without any difficulty whatsoever. I'm sure the minister would agree with that. I think that's the civilized approach to public service that's been around for a very long time in this country, and one I hope would obtain and continue.

Unless the minister feels an absolute need to leap up, let me turn to another matter that has also very recently come to light. I'm referring specifically to the news release issued by the Minister of Transportation and Highways dated May 26, headlined "Privatization Progress."

What I really want to do is to pose a couple of questions about this. The lead for this press release and the thrust of the story seems to be that privatization is proceeding swimmingly and the minister is especially delighted by the fact that employee groups have leapt into the fray and are playing out their allotted parts so happily. I'm obviously overstating the case. but I think it's fair to say that the thrust of the release is that yes indeed, all these employee groups are on side, and there are some — what? — 12 in total that are now in the process of making application.

I don't object to the minister's saying anything like that. Obviously it's a right to give the press release that kind of thrust. The problem I have with this — I'm happy to see my colleague the member for Esquimalt-Port Renfrew (Mr. Sihota) here too, because I'm sure he has a similar problem — is that this particular approach to the press release does not seem to be entirely consistent with recent history concerning employee groups' applications to take over the operation of a particular region of highway maintenance operations. Of course, I'm referring specifically now to region 1, southern Island.

The perception of southern Island employees with whom I've had some contact, from whom I've received a certain amount of correspondence, is that they did what they were called upon to do; they were rejected; they made an appeal for further explanation concerning what they had to do to satisfy all the requirements; they were again rejected, as they tell me, without satisfactory or adequate explanation. They therefore conclude, Mr. Minister, that — to borrow a phrase — they have been led down the proverbial garden path, and that the whole process of an employee group making application was merely a sham; it had no chance whatsoever of success. That is the sense that these employees have given to me and to others. They are saying: "As far as we can make out, we did what we should have; we spent the time and the

money; we got the appropriate expertise; we answered the questions; we dealt with the objections presented to us by the privatization group staff; we did everything we should have; but we still came a cropper. We didn't get accepted." They are indignant, angry and certainly disillusioned, and they feel they have been betrayed.

Rather than my belabouring that point any further for the moment, perhaps the minister would like to respond to just what I've said thus far.

MR. R. FRASER: With the permission of the committee, I would like to add a little phrase or a paragraph to that question from my hon. colleague opposite. My part of the question is that apart from the fact that employees have been disappointed from time to time, I understand there is a suggestion by Mr. Shields that union groups have been pressured into making bids, and I would like the minister to tell the House whether or not any pressure whatsoever has been applied to union groups, as expressed by Mr. Shields.

HON. MR. ROGERS: A very detailed submission was sent to employees of the ministry affected by this initiative. Some of those employees felt the issue would go away and that the government was not serious about its concern. Others chose not to be involved with it. Others chose to go through a prequalification process; some were successful and some were not. They were put through a standard set of tests, and many of them failed to meet the basic criteria set down to prequalify for these particular operations. I had a look at some of them. In some cases the employee groups were acting as a front for a construction consortium, or acting in concert with a construction consortium who would have taken advantage of the employee discount that's available, but which the employees themselves had not prepared for. Looking at it from my point of view, there is a remarkable difference between the submissions of prequalified employee groups in the different areas of the province. An extended effort was made to go back to them, to point out what the shortfalls were and where they had failed to meet those requirements. I forwarded to your office some time ago the rather detailed prequalification package so that you were aware of it and had the opportunity to look at it.

The difficulty is that in many of these cases the employees got together and had a meeting and, I think, left it to somebody else to follow through with it. I'm not sure. I've talked to a number of employees who asked me to come and speak to them privately just to give them some basic assurances as to why the program is going ahead and how we think it will work, and I've left the matter at that. There are areas of the province, quite frankly, where the employees aren't the slightest bit interested. Whether or not that is as a result of coercion or pressure, or maybe just a personal choice, they have to make a commitment if they wish to be their own employers in this particular case, and some of them choose not to do that.

I think the prequalification process has been done well and fairly. I think some felt that the whole issue...that if they just leave well enough alone, it'll go away. I don't think some of them were convinced of our depth of conviction on this process. I haven't had any correspondence from employee groups who felt they had prequalified and been unjustly treated; but as in any process when there's more than one bidder on a particular project, there will be someone who spent time preparing a bid and has not been successful in winning the contract.

We think we have gone an extra mile in trying to qualify and assist these people. In many cases staff gave quite a bit of extra time to employee groups to make sure they had the documentation in order to prequalify. While some may be disappointed, I don't think there has been any suggestion — at least none that's come to my office — that there has been a difference in the way people have been treated in this issue.

MR. LOVICK: I want to emphasize the point that for the present I am referring only to contract area one. Perhaps a little later in the game, when I can do some investigation of other areas, we can have a look to find out what employee groups are saying there, and I can respond then. For the moment, though, my focus is on contract area one.

I'm pleased to hear the minister say the privatization task force and other officials have given lots of their time to help these groups; and I have had, as he said, an opportunity to refer to the materials provided. That's all to the ministry's credit on the face of it. The point, though, is that some kind of training program was given — seven weeks, I believe — and the employee group had an opportunity to review those manuals in terms of how to put their specifications together. They did all that. They were rejected, and when they wrote for an explanation in writing, including specific reasons why they were disqualified, they got, unfortunately, a very simple statement that their proposal was found to be deficient in the areas of financing and management capability; whereupon they attempted to provide answers to those questions and, I gather, felt — again based on their testimony — they did not get any further sufficient detailed explanation of why their bid failed. It's precisely that chain of events that calls into question the entire process.

If in fact the ministry is selling this privatization program on the basis of opportunities for workers to become owners and they have indeed set aside a considerable amount of ministry staff and money to help these employees, isn't it then fair to ask why specifically this particular bid did not get accepted? The employees still do not feel they have had an adequate answer to that question.

HON. MR. ROGERS: The privatization working group works out of another ministry, and I had not brought the staff people along to get the details of the number of meetings. If we'd like to go on to other questions, I could have them here for Monday. Given the time now, I don't think it would be possible to get somebody here.

I do know that their representatives were given a long and detailed explanation, and several meetings took place between people from the privatization working group and representatives of the employees. It may have been that the employees were not prepared to accept the reasons given to them, as opposed to the fact that the reasons were not given to them.

We have lots of other issues to discuss in the estimates, and I had not anticipated that this would be coming along and would be a particular question. If you'd like to go on to another issue now while I have staff here, I can assure you that if we can agree on 2:30 Monday, when I believe we'll be doing these estimates again, I can have someone here from the group who can specifically answer those questions. If you want to spend a little time on them and if you give me some warning, I can get the staff.... As I say, these people don't work out of my ministry; they are actually the responsibility of the Minister of Energy, Mines and Petroleum Resources,

So we're answering questions that affect my ministry but are dealt with by someone else.

MR. LOVICK: I thank the minister for that answer and appreciate the fact that this matter is being raised without much in the way of warning. I don't intend to violate the rules that we set up in the beginning in terms of working from common ground. We will leave it then, Mr. Minister. I would prefer not to defer it specifically to Monday. Instead, I'll deal with it as part of a larger package and will certainly keep you advised about that.

My colleague from Esquimalt-Port Renfrew wants to make a very brief reference to that area, given that it's within his constituency. The reason I'm standing up now is that I was given a note and asked if I would make an introduction. If the House would give me leave, I'd like to make an introduction.

MR. LOVICK: My colleague our House Leader, the member for Coquitlam-Moody (Mr. Rose), is not here and has asked me to extend his greetings to a class of students — about 60 grades 10 and 11 students from the College de Levis en Quebec. Bienvenue aux etudiants. Nous sommes heureux a faire votre connaissance ici aujourd'hui. I didn't realize they were from Quebec until I read this. In any event, I would ask the House to please join me in welcoming those students.

MR. SIHOTA: I can hardly wait till we get some students from the Punjab here so I can speak in Punjabi. I wonder how Hansard would handle that.

I want to deal with the matter of privatization just in a general sense. I have some specific questions on the privatization of that area but will wait until a later opportunity.

Suffice it to say to the minister that I've been down to that work yard on Jacklin Road on several occasions and in Sooke as well. I'll tell you, there are a lot of guys down there who don't know what's going to happen to them in the future. Quite often in the politics of privatization, we tend to overlook the fact that there are people whose livelihoods depend on these decisions. There are a lot of people down there who are hung in suspension; they don't know what's going to happen tomorrow. They don't know if they're going to have any work tomorrow. They don't know if they should go out and acquire things for their families. They're working under a tremendous amount of stress because of the indecision around privatization. That stress is showing in what's happening both on the worksite and with their individual families.

In particular, 17 employees who work at the fabrication shop have been told over the last few months that they're going to be gone, then that they're going to stay, then that they're going to be gone. One time they were told they were going to be gone in March, and here we are in May and they're still here. Then they were told that they might not be gone, and they breathed a collective sigh of relief. Now they're told that they're going to be gone.

I'm telling the minister that there are lives involved here. I've got a couple of people down there who have flipped out, who have taken time off since October in stress leave, and other people who have opted for the retirement package as a way of getting around the intolerable situation down on Jacklin Road. I can't speak enough for the human dimension to this privatization problem, which I can say often gets overlooked in the confines of this chamber. I've spent a fair bit of time down there, and it's not a healthy situation at all. It's not particularly healthy for those people who work at the fabrication shop — there are 17 people there.

I want to know from the minister what the government's intentions are with respect to that fabrication shop.

HON. MR. ROGERS: The employees of the fabrication shop know the status — at least, they have been advised. Eventually they will be laid off, because we will see an end to the requirement for the product that they produce.

You talk about the anxiety of the employees. We've done a pretty good job of communicating with them as to what the program is — I think an excellent job, quite frankly. They have had some contradictory stuff sent to them by other people. But in view of the fact that we wanted to have the employee groups themselves considered, we had to allow a much longer time-frame for the privatization group than if we had made the decision that the employees wouldn't have an option on this thing and we'd just go right out to tender with it. They would now be working for an independent contractor with the same terms and conditions that they have working for government. But we wanted to allow them to have that option themselves. In some cases they have chosen not to take that option; in some cases they have chosen to try it and have failed; in other cases they have been successful in finding the funds and the wherewithal to go ahead and do it.

So there has been a longer period of time in this privatization process than would have taken place under normal commercial circumstances because we wanted to go out of our way to do the correct thing for the employees. In some cases misleading information is being given to them by a number of different people. I think the information we have sent them has been quite specific and detailed. I expect that the majority of the employees who are currently working for us in highway maintenance will be working for a private contractor where a private contractor takes over that particular area, or will be working for themselves where they take over that area.

In terms of the fabrication shop, there are some products that have been produced by the fabrication shop on and off basis, some of which we will be phasing out. Some of the products produced in the fabrication shop are somewhat unique, and perhaps the employees may go with the particular fabrication if that is to go ahead. I will get you further detail on that.

MR. SIHOTA: I take issue with the minister when he says that the communication has been excellent. I don't think that's the case. In fact, the only official we've ever had down there is myself. I've gone there and talked to them, and they are always asking me what's going on. Believe you me, I'm not trying to pass on — and I don't think you were saying this.... It's not me who's trying to pass on any misleading information. It is a very, very tense situation and they are getting mixed signals. The communication is less than excellent, and they are desirous of meeting with anybody from the minister's political party who will explain to them what the government's agenda is. Since it's not that far away, I would encourage the minister to come with me sometime to that fabrication shop or that work yard and have a chat with the chaps down there. I think he would quickly find out that what people are telling him is happening with respect to communication is not the case.

I want to go back to the fabrication shop. The minister talks about additional information in this regard. People down there tell me about the economics of that fabrication shop: how it makes sense to have one centralized unit in the province doing all of that type of work; how it makes sense to maintain at one site the collective experiences built up over the years at that shop; how it doesn't make sense to contract out individual components of that work. I'd like the minister, if he's going to provide some information to this House — whether today or later on in these estimates — to tell me whether or not he has in his possession any cost-benefit analysis to demonstrate that it would be in the best interests of the taxpayer to break up the specialized fabrication shop unit that we have now at Langford. Does that kind of information exist? I hear the minister saying he will get it for me, and I'd like to see that tabled in the House.

HON. MR. ROGERS: On a cost-benefit analysis basis, we could change a whole host of things in government, I could give you lots of cost-benefit analysis to show you that certain things we do in ministries in government have no cost benefit at all. But when it comes to metal fabrication and fabrication of specialty products for the highway maintenance operation, I have some difficulty following the argument, which I'm sure is put forward very eloquently by the employees, that they have some pool of expertise so specialized that it couldn't be done elsewhere. But I will get that information for you.

MR. SIHOTA: Thank you. I would like to receive any background information that the minister has in this regard. Certainly, to be very honest about it, I'll share it with the employees. It's not just a simple metal fabrication shop. It's a highly specialized function which few, if any, people are involved in.

I want to ask the minister this question; if it has been asked before, I apologize, because I wasn't here. With respect to region one, first of all, and secondly in general terms, how is the ministry handling the issue of liability with respect to its privatization initiatives? Has that been asked?

HON. MR. ROGERS: No, but your colleague has a complete set of that detailed information which we gave to the employee and contractor groups. If you want me to duplicate the work I've given to the critic, I can do that. It seems to me that this ministry is relatively complex and the issues are complex, and where there is background information that I can provide to your caucus, I would only provide it to the one member it might be most pertinent to.

MR. SIHOTA: There's another issue that I want to canvass with the minister in terms of region one, again specifically with respect to the people at the Jacklin Road site. I found it astounding to learn when I talked to them most recently that a number of what I would call somewhat strange things are happening. First of all, there have been days when there has been little or no work for them to do, on the pretext that things have to be delayed in light of the privatization initiative. I can tell the minister that for two days all the workers down there were told simply to wash vehicles; that was all they had to do, because there was no requirement that they do anything else, and they wanted all the vehicles to be clean for the people that were coming for the viewing on privatization. On another occasion, all the staff was told that its job for the day was to go out and pick up garbage at the side of the road, again because of the indecision over privatization. On another occasion they were told that the usual process of securing purchase orders to buy equipment was now replaced and that they could not go out and buy more than $500 worth of material. I believe they could not buy any hot-sealing equipment to do patchwork on roads. There were limitations on the amount of material they could buy and what they could buy, to the point that a lot of routine maintenance work could not be performed.

We have people who are washing trucks all day long, who are told not to do anything but pick up garbage for a day, and who are told that their ability to buy supplies and goods is severely limited to the point that they can't perform regular maintenance work. That's what the employees tell me is happening on the site. I have no reason to doubt them. I am wondering if the minister can comment on what I say in that regard.

HON. MR. ROGERS: I used to work for a very large federal Crown corporation. At the level I worked — which is very close to the level, I guess, of what you're talking about — we used to hear all sorts of wonderful things. I eventually got to meet the president of the company and check out some of these wonderful stories that I heard and found completely different answers for the reasons that those decisions had been made. I can't give you an explanation as to why a particular foreman or district has decided to do a particular type of work. It certainly isn't something that has come out of a privatization policy.

I will tell you that we've tightened up very severely on regional purchases in that we have reduced the amount of money they can spend without getting permission from someone higher up. It's had some remarkable effect. We would find that near the end of the fiscal year there would be quite substantial expenditures on a whole host of things just to make sure we spent all the money that was in our budget. Every expenditure that came to Victoria for approval was approved; however, many of the regional managers decided not to submit things to headquarters for approval just because they gave it the second thought that it needed.

I don't believe we've ever been in the situation where they haven't been able to get the equipment that they needed to do the job. I also know we've been in a position where they haven't been able to spend money that they have traditionally spent near the end of the fiscal year just so we would spend all the money allocated by this Legislature. We just wanted to see that that kind of efficiency takes place. That's a normal kind of efficiency, and in the post-Coquihalla period this ministry cried out for it.

MR. LOVICK: The privatization issue is, of course, large and complex. As I said to the minister the other day, we're going to save that issue for a much fuller canvass. Interestingly enough, in the minister's comments when he introduced his estimates, the comments on privatization were the most terse of all, because he obviously knew that there would be lots of opportunity for that discussion and felt he didn't need to.

I want to turn to the whole matter of B.C. Ferries as, by arrangement.... I assume that the minister recalls that it is what I said we were going to turn to next. If I might, Mr. Chairman, I will just begin by again offering a very brief outline of the things I intend to do.

I want to start by focusing on the overall policy governing the operation of B.C. Ferries. I want to touch a little more specifically on the matter of subsidy and just what the real arguments for and against subsidy happen to be. Then I want to move to a series of very specific questions about B.C. Ferries — not specific ferry routes and schedules, but specific system wide questions. Then I want to end by posing a number of specific questions on specific routes. I don't expect, Mr. Minister, that we'll get very far on all of this today. That's an overview, if you like.

Let me begin by offering a couple of comments about the whole large area of ferry operation. It seems to me that if I had to describe the approach by government to the operation and management of the B.C. Ferry Corporation, the word that I would come up with would probably be "erratic." It seems to be an on-again, off-again approach to things; less delicately put, some might say flip-flop.

By way of illustration, let me offer just a couple of things. Early in 1988, there was an announcement suggesting there would probably be no expansion of the fleet's capacity. Six weeks later, however, we had an announcement suggesting that a fairly major building program would be undertaken, namely a new vessel a year, and on and on. I know that's overstated, and the minister qualified that somewhat earlier. The point is, the erratic quality nevertheless was there. What happened was that we had one policy at one point; six weeks later we apparently had another. These are policies to govern the total operation of the thing.

Another example, of course, in more recent time was the business about selling liquor on the ferries. That was all t rage for a little while, perhaps before your time, Mr. Minister. But then that also seemed to have disappeared. On wonders if perhaps the policy governing might be the mod I perfected by the Premier, which is to test the winds and see which way they're blowing; in other words, to make announcements on a kind of "adhocratic" basis, as the spirit moves one: find out what the public opinion polls say, find out what's happening, then react and respond accordingly. I hope that's not the case, but one can be forgiven, I am sure, for suggesting that is perhaps the case.

Apropos of vehicle expansion, I might ask a very specific question. The minister pointed in his opening remarks with some satisfaction to what I think he called "phenomenal growth of demand on the ferry routes" — primarily routes I and 2, of course. He pointed to some figures and percentages which I can, of course, quote.

Concluding, however, from that evidence of phenomenal growth that there was a case for a major expansion of capacity, the question that has been posed by a couple of people who have analyzed the data is whether that trend in growth really represents any observable trend that we can count on for the next ten years, or whether it's part of the five-year cycle that we've had before. Certainly, we have seen this in the plateau that was reached, so the argument goes, between 1980 and 1985 and stopped in '85 effectively.

The talk about adding extra capacity to the fleet seems to be based on the assumption that there will be a long-term trend of increased demand. I'm wondering if the minister can provide us with information to show us that there has been some kind of projection to demonstrate that we will have to make major investments in increasing the capacity. I'll just ask that specific question first.

HON. MR. ROGERS: One Crown corporation that certainly has a lot of details and does a lot of projections and knows precisely what its load capacity is and what we're doing is B.C. Ferries. Yesterday I had the honour to attend a luncheon given for those employees that have 25 years service or more. Statistics were given out to me about what had happened 25 years before when we carried 3 million vehicles, and in the ensuing 25 years where we now carry 14 million vehicles. The growth continues.

There are a number of factors involved. I want to go back to your first thing about options, from an operations point of view. I don't foresee an operational increase in frequency; I just see an increase in capacity. We are referring now to routes 1 and 2, because you should almost divide the Ferry Corporation into routes I and 2, the lesser island ferries and the northern services.

In terms of liquor on the ferries, that's the very same thing. I know we serve alcohol on the Queen of the North, which has a 12-hour run. I believe the Queen of Prince Rupert, which goes to Skidegate, is an 8-hour run and also has bar service on it, although I can't be positive about that. But those are the only two that I have known of, in the time that I've been in this government, for which we ever considered whether or not alcohol should be made available. When the CPR ran a ferry from Nanaimo to Vancouver they had a bit of a pub on the back of it. Perhaps they had the argument they went from downtown to downtown and the walk-ons were entitled to have a drink. I don't see any pressure, and I haven't had any requests for it.

What we want to do is put more children's rooms on these vessels. All the European ferries have a children's playroom on the ferry. They're very much more of a family-type operation. They want more shopping space and they want more video games. That's what the public asked for.

HON. MR. ROGERS: Yes, that's routes 1 and 2, and perhaps on the Queen of the North as well, or any vessel that we may put on to replace that. It's got to be more of a liner type operation. It's a liner-type operation now, but if you're going to compete with the market that's out there.... Right now we don't need to compete, because we're sailing virtually at capacity. In fact, we're loath to advertise that route, because we can't handle the people during the time of the year that they'd like to travel.

On routes 1 and 2, we see continued growth. An interesting phenomenon is the decrease in the amount of warehousing that's done on this Island. Warehousing used to be done on Vancouver Island. Trucks would bring goods to the Island, or in some cases they would come by rail; they'd be warehoused and distributed from the Island. The economics of the size of vehicles and delivery times and handling costs have meant that there has been a decrease in the amount of warehousing done on the Island. Some of the growth that we see in the commercial traffic has really been as a result of a change in the economic structure of the distribution of goods, rather than a choice of how things are moved that way.

In terms of long-term projections, and figuring into '86 what Expo did to us, I'm absolutely convinced that B.C. Ferry Corporation's projections, day by day and month by month.... They have kept very good detailed things. We know where the bottlenecks are. We know where the expected growth is coming. We can also pick where the peaks and valleys are. The problem is not the frequency of service; the problem is the uplift capacity of the vessels during those times when we have regular sailings.

If you want to go back and talk about some historical things, and talk about flip-flops, I guess I could take you back to a time when Mr. Strachan was the minister responsible for the B.C. Ferry Corporation. I'm not referring to the member from....

A decision was made by a previous government to build a class of vessel that was designed to serve what's called a short link. They had the courage to design the vessel, and we have five of them in service now, but they really are not the correct vessel to use on that route. There was a decision to construct the vessels without the decision to make the corresponding capital and infrastructure investment, bridging to Gabriola Island and putting in a terminal which would be terribly controversial wherever it was put on the mainland side. While that might give us a 45-minute crossing and a whole bunch of attendant benefits to the central part of Vancouver Island — Nanaimo likes to consider itself the centre; I think perhaps Campbell River is closer to the centre, but Frank Ney would spank me if he heard me calling the Hub City anything but the centre of the Island — that would very much adversely change how we go.

In terms of routes I and 2, as we begin to see it.... I'm going to see it this afternoon, and you're going to see it for the rest of the summer: weekend traffic, peak traffic. Interestingly enough, we've tried putting on late-night trips. It will work for a rock concert, but that's a different kind of market. Believe it or not, they're very subdued when they come home, because it's too late. We've tried those kinds of things. What we have to do is try and accommodate the people by having that uplift. They can handle the 7 o'clock and 9 o'clock sailings in the morning, and handle the evening sailings, the 5 and 7, and even as much as the 9 o'clock sailings on those main routes.

It's not urgent that we get on with this job. I'd like to stress that. We have the capacity now. We have some vessels laid up; we can cut them into service. That's not a problem. We certainly have the crews, although some of our skippers who are getting close to retirement age are going to be moving on, and we're going to start seeing our own chiefs and skippers that have come up entirely through the B.C. Ferry system. In fact, we have an internal training system.

We're trying to get some more of the gentler sex on the bridge and in the engine room of some of our vessels. We're working towards that end, although there is great difficulty in doing that because of the time-line involved in getting all the various papers for Canada Coast Guard. We certainly want to do that, and that's one of the firm instructions I've given to Captain Partridge and the others involved in the operation of the ferries. That part of it we have to plan for.

The other thing is the design and capability of new vessels. If you have seen some of the new vessels that visit the port of Vancouver, from a nautical perspective they are genuinely ugly. They are truly offensive to the mariner's eye. But they are very efficient. We have tended to design vessels and put cars in them, rather than designing a vessel around the automobile and the truck already designed for us. The Europeans have come up with vessels that I find to be, from the mariner's point of view, rather unattractive, but grossly more efficient than the vessels we have.

We are looking at the time and the loading facilities. We have engineered the Vancouver-class vessels. We've cut them and stretched them and raised them and double-decked them, to the point that I don't think we can do too much more with those vessels, without going to a new one. That's the point I'm at. From the point of view of the shipbuilding industry and B.C. Ferry Corporation, I'd like us to say we're not in a big shipbuilding process, or we're not building ships this year. It would be very healthy if we had a regular retirement program. We're going to be retiring this year the first vessel that we had built for the fleet. I believe it's the Queen of the Islands. Hopefully, it will go off to pasture somewhere else. It may go to the breaker's yard, but it may go to Greece or the Philippines or someplace else where it may give long and useful service.

We're going to have to see some of those vessels replaced, and that's healthy for the economy. It's also healthy for our yards. B.C. Ferries is certainly the largest user of the graving dock and of the Burrard Yarrows dock — or whoever has it this month — in North Vancouver. We maintain perhaps the largest fleet utilization facility at these docks -certainly larger than the defence establishment at Esquimalt and, I can assure you, more efficient. That's really where we're trying to go with the ferries.

In terms of the growth on this Island and the growth of traffic between the islands, every single projection tells us that while we can't accommodate every passenger on every sailing, we can see that growth continue to project upwards as the population continues to increase on the Island. It's our role to meet the requirements of the people.

MR. LOVICK: I quite enjoy the fact that the minister obviously enjoys an opportunity to talk about the B.C. Ferry Corporation. I take a delight in that because I too think there are considerable grounds for praise of the employees and so forth. The corporation is indeed well run. All things considered, I think there's no doubt about that.

The problem with the minister's enthusiasm, however, is that it keeps spilling over into areas I'm not ready to talk about yet. I have to resist the temptation to say, "You want to talk about Gabriola; okay, let's do that, " and bridges and short links and so forth, and we want to talk about the esthetics of ferries. I wonder if you vetted that part of your remarks with the Minister of Tourism, Recreation and Culture (Hon. Mr. Reid), who sits close to you and says that if we want to maintain the Beautiful B.C. image, perhaps we have to go for criteria other than just utility or something. I don't know.

Let me just touch briefly on the point about new vessels, new routes. I'm sure you recall that in 1982 the Crown Corporations Committee concluded that there was apparently no rational process of planning in B.C. Ferries in terms of expansion. I think the minister has anticipated the question I would pose: what has changed since then? Have we really begun that process of planning? To judge from the minister's remarks, I think that's tomorrow country as opposed to what's going on. I think the announcement about one ship a year was really talking more about growth patterns on the Island.

I think we have a number of questions that need to be posed, and I'm sure we shall be doing that in the course of the next little while. What I could do now is simply pose a couple of very direct and specific questions. Is there a plan? Do we now have one, or is that simply in the development stage?

Who prepared it? Is that Ferry Corporation staff, or is that some kind of consultant's operation? What was the consultation process that was or will be involved in terms of that planning process? Does that plan outline what its own assumptions are in terms of growth, the kind of service, the share of market or the focus in terms of targeting particular markets — tourism versus commercial traffic, etc.? Are all those things going to be part in? Is the plan in existence already, or is that part of the five-to-ten-year plan that we've talked about developing? Would the minister like to respond briefly to that?

HON. MR. ROGERS: You slipped in new routes with new vessels. I haven't talked about new routes. I don't mind talking about new vessels, but we haven't talked about new routes, because the short link has been talked about and promoted by thousands of people but it's not being talked about and promoted by B.C. Ferries, particularly. In fact, we believe that there is sufficient capacity at the Horseshoe Bay and Departure Bay terminals for the kind of time-frame that we have to look at for planning to accommodate our requirements; that's ten to 12 years minimum. We believe that we're going to have to make some expansion at the Horseshoe Bay terminal; we're going to have to do a little excavation, and we have a parking problem there. But we genuinely believe that for the foreseeable future — let's get us into the next century, plus a little bit — it is going to accommodate our requirements. On the Tsawwassen side, we would like to have the Highways department do a little expansion of that highway. I'd like to see that three-laned from the Tsawwassen terminal to the connection with the highway that goes down to Tsawwassen — I've forgotten the exact number. It's four-laned all the way until it's two-laned the last little bit of the way.

That's where we are. That's the kind of expansion I see happening, not new routes at this point. We have not envisioned any new routes.

We have envisioned a couple of.... We've had the Gabriola bridge club come to see me. I've had a whole host of people come. There are a number of different alternatives on Gabriola. One is to make a bridge that services the people of Gabriola with the cost in the $15 million to $17 million range — replace the ferry to Gabriola Island and make it a toll bridge for a short period of time. and then take the toll off. That's one of the operations. Of course. when you talk about building a bridge to Gabriola Island, immediately everybody says: "Well, that's the start of the short link." That's a policy decision that has not yet been made. I don't have enough information to take that situation forward. There is a slight political problem with that issue. You may be aware of it, as it happens to be in your riding. B.C. Ferries are not promoters of that at this point.

Mr. Chairman, the Whip has asked me to move that the committee rise, report progress and ask leave to sit again.

HON. MR. STRACHAN: Mr. Speaker, I would like to wish all members a very happy, productive and fun-filled weekend.

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