[ Page 5329 ]

CONTENTS

Routine Proceedings

Mineral Tenure Amendment Act, 1988 (Bill 58). Hon. Mr. Davis

Introduction and first reading –– 5329

Oral Questions

PCB dump in Victoria inner harbour. Mr. G. Hanson –– 5329

Matsqui dump. Mr. Rose –– 5330

Vancouver Community College funding. Ms. Marzari –– 5330

Long-term-care user fees. Ms. A. Hagen –– 5331

Vancouver Community College funding. Mr. R. Fraser –– 5331

Conflict-of-interest guidelines. Hon. B.R. Smith –– 5331

Mr. Sihota

Tabling Documents –– 5331

Forest Amendment Act, 1988 (Bill 28). Committee stage. (Hon. Mr. Parker) –– 5333

Mr. Miller

Mr. Jacobsen

Mr. Williams

Ms. Edwards

South Moresby Implementation Account Act (Bill 57). Second reading

Hon. Mr. Parker –– 5348

Mr. Miller –– 5348

Mr. Williams –– 5349

Mr. Clark –– 5349

Hon. Mr. Parker –– 5350

Employee Share Ownership Act (Bill 61). Hon. Mrs. McCarthy

Introduction and first reading –– 5350

Income Tax Amendment Act (No. 2), 1988 (Bill 62). Hon. Mr. Couvelier

Introduction and first reading –– 5350

Miscellaneous Statutes Amendment Act (No. 1), 1988 (Bill 36). Second reading. (Hon. B.R. Smith)

Hon. Mr. Strachan –– 5351

Mr. Lovick –– 5351

Hon. Mr. Strachan –– 5351

Health Statutes Amendment Act, 1988 (Bill 53). Second reading

Hon. Mr. Dueck –– 5351

Mrs. Boone –– 5352

Hon. Mr. Couvelier –– 5353

Ms. A. Hagen –– 5354

Mr. Sihota –– 5356

Mr. Clark –– 5358

Hon. Mr. Dueck –– 5359

Nursing Statutes Amendment Act, 1988 (Bill 56). Second reading

Hon. Mr. Dueck –– 5359

Mrs. Boone –– 5360

Hon. Mr. Brummet –– 5361

Mr. Mowat –– 5361

Mr. R. Fraser –– 5361

Ms. A. Hagen –– 5361

Hon. Mr. Dueck –– 5361

Nursing Statutes Amendment Act, 1988 (Bill 56). Committee stage. (Hon. Mr. Dueck) –– 5361

Hydro and Power Authority Privatization Act (Bill 45). Second reading

On the amendment

Mr. Sihota –– 5362

Mr. Barnes –– 5365

Hon. Mr. Davis –– 5368

Mr. Clark –– 5370

Mr. Miller –– 5372

Ms. A. Hagen –– 5375

Mrs. Boone –– 5376

Mr. Lovick –– 5377

Appendix –– 5379

The House met at 2:09 p.m.

HON. MR. VEITCH: Today in the gallery are three good friends of mine from the British Columbia Institute of Technology: the president of the staff society, Mr. Mark Angelo, who is accompanied by Chuck Spong and Andy Ellingsen. I would ask the House to bid them welcome.

MR. SIHOTA: It's always a pleasure to follow the person who is rumoured to be the person I'm supposed to be focusing in on next.

I want to introduce in the gallery today two good friends, people who have worked actively for the New Democratic Party in Esquimalt-Port Renfrew and elsewhere across this country. These two people volunteer a considerable amount of their time to our caucus with respect to a number of our activities and have served, in the past. as volunteers in my office in Esquimalt. Would all members of the House join me in welcoming Bob and Peg Close, who are here with us today. Just to show that all of us on this side of the House have friends from Kelowna, joining Bob and Peg are Bill and Doreen Pryce from Kelowna.

HON. MR. REID: It gives me a great deal of pleasure to introduce in the House today my daughter Sheila and her husband Dirk Faulkner from the constituency of Delta, with the two members, Walter Davidson and John Savage, being her hosts.

HON. MR. PARKER: I'd like to introduce to you today and ask that we make welcome Mrs. Marylynn Davies from Terrace, who is president of our Skeena Social Credit constituency association. Joining us from Cranbrook are Mr. Sye Hosaka, chairman, and Mr. Stuart Lang, president of Crestbrook Forest Industries. Would the House make them welcome please.

MR. JACOBSEN: On behalf of the member for Chilliwack (Mr. Jansen), who is unable to be at the Legislature today, I'd like to ask the House to join me in welcoming Mr. J. Bleker and about ten grade 7 students and their escorts from Chilliwack Christian School. Please make them welcome.

HON. S. HAGEN: I too would like to add my welcome to the three gentlemen from BCIT, to congratulate Chuck Spong on his election as the new president of the BCIT staff society, and to thank Mark Angelo for the service that he has performed as the president last year.

I also want to take this opportunity to welcome to the House Paula Peterson and Waldo Ejtel from Vancouver. Would the House please bid them welcome.

MR. BRUCE: In the Cowichan Valley we have a very active seniors' advisory group. Here in the House today is Mrs. Florence Best, who is a representative and a director of the seniors' advisory group in Duncan, and I'd ask that you make her welcome.

Introduction of Bills

MINERAL TENURE AMENDMENT ACT, 1988

Hon. Mr. Davis presented a message from His Honour the Lieutenant-Governor: a bill intituled Mineral Tenure Amendment Act, 1988.

HON. MR. DAVIS: Mr. Speaker, I move that the bill be introduced and read a first time now. It contains several technical changes to an act passed at the end of the last session. It clarifies certain definitions, expands the provisions for resolving disputes concerning title to minerals, ensures that existing regulations establishing mineral reserves also apply to placer minerals, and clarifies the provisions for bringing mineral substances under the Mineral Tenure Act. These were worked up in consultation with the industry.

Bill 58 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

[2:15]

Oral Questions

PCB DUMP IN VICTORIA INNER HARBOUR

MR. G. HANSON: I have a question for the Minister of Environment and Parks. Yesterday the people of this region were shocked to learn that we have a massive PCB dump in the inner harbour of the city of Victoria. We were doubly shocked to learn that knowledge of that dump has been apparent for at least seven years. Since 1981, people have been well aware of the hazards and the dangers of the PCB.

I'd like to ask the minister why there was a seven-year delay in identifying this hazard.

HON. MR. STRACHAN: I'll be brief, and there's more to the question which I'll provide to the member later if he wishes. It was an area closed off in the 1950s by the old B.C. Electric Co., and they buried equipment down there. Because PCBs were not known in the 1950s — as a matter of fact, they weren't even outlawed until 1979 — it was not known if the area covered over and bunkered in by B.C. Electric did have PCB-laden transformers.

In 1981 B.C. Hydro did do soil tests, because they thought that there was a chance that the cement bunker might have contained equipment containing PCB oils. They did five test holes. They found there was no significant presence of PCBs, so they left it that way. Recently, they've come to be in the position to sell the property. Because B.C. Hydro are of the position that any land they sell must be totally clean and uncontaminated, they began the excavation work. At that point, they found out the day before yesterday at five o'clock in the afternoon that they were dealing with transformers dating from the 1950s and containing some PCB-contaminated oil.

That really is all we can say at this point. B.C. Hydro is, of course, right on top of the clean-up. They probably have more expertise than any other company in British Columbia in terms of handling this type of equipment because they deal with it all the time.

Interjection.

HON. MR. STRACHAN: Not the electric division. Didn't you read the amendment?

We're quite positive — on behalf of the Ministry of Environment — that they're well prepared, well trained and well equipped to clean up this potential contamination problem.

[ Page 5330 ]

MR. G. HANSON: I visited the site this morning, and at the bottom of a relatively shallow hole is a hand shovel. a spade. It doesn't exactly look like a high tech recovery project that's underway.

I'm expressing some annoyance, Mr. Speaker, because this is a very serious problem. I understand that an examination of air photographs — readily available — as a result of the proposed sale identified where the site was and that interviews with previous employees also identified exactly where it was. In two days they were able to find something that had been missing for seven years, just because it's on the auction block. That's not good enough, Mr. Minister of Environment, so I have some specific questions here. Can the minister tell us where these leaking capacitors will now be stored? What guarantee do people have that Hydro won't simply rebury them? If they are to be moved around the province, what guarantee do we have that they can be transported safely?

As the Minister of Environment and Parks, you are responsible for the health and safety of the people of this province. It is not good enough to ask those who own PCB sites to report them voluntarily. My question is: will you now direct your ministry to carry out a complete inventory, not to ask Hydro to look at its own situation?

HON. MR. STRACHAN: First of all, I'd like to comment on the remark of the shovel. The member is right, and he should know the answer, because he studied anthropology. If you put heavy equipment in there, there is a chance of further damaging the transformers. As a matter of fact....

Interjection.

HON. MR. STRACHAN: That's right — well-dressed, well-protected people, trained in handling that. But if you've done anthropology, you know that when you ate in sensitive areas, you don't use backhoes or power equipment; otherwise you will cause more damage. That's why they are in there with hand shovels.

In terms of guarantees, we are quite convinced that Hydro can move these transformers safely. They do it all the time and have been doing it since 1979. As a matter of fact, they did a major move out of Victoria last summer. So we are quite convinced that they have the expertise, transportation equipment, manpower and training to handle this with no problem, in which case they will take the material to a safe-handling storage area where they have all their PCB-laden transformers now and where they will remain in storage until shipped to and treated at our new special waste treatment facility.

MR. G. HANSON: A question to the Minister of Energy in his dual responsibility as energy minister and minister of privatization. I would like to ask him if he, as the Minister of Energy, was aware of that PCB dump in the Inner Harbour?

HON. MR. DAVIS: No, I wasn't aware of it ahead of time, nor was B.C. Hydro, I believe.

MR. G. HANSON: To the same minister. Hydro was not interested in cleaning up this site until now. They left these dangerous and leaking capacitors to rot, which put the health and safety of this community at risk. Will the minister now confirm that the only reason Hydro is now interested in cleaning up this site is that it is being sold and Hydro would be liable for clean-up costs?

HON. MR. DAVIS: I am tempted to argue that privatization made this discovery possible, but I doubt very much whether that is the case. B.C. Hydro would have engaged in the clean-up in any case. I believe it is undertaking the cleanup at its own expense, and we are endeavouring to sell a clean property to five interested parties.

MR. G. HANSON: I am sure all members of this House are hopeful that the liquid at the bottom of the hole that I looked at this morning is not PCB-laden and leaching through the gravel into the Inner Harbour. It's obvious that we have a serious problem with clean-up of PCBs in this province, and it was Hydro's research and development division that developed the technology to remove PCBs from oil. Will the minister now reconsider selling off the R and D division of Hydro, which is the only group in B.C. that has that expertise.

HON. MR. DAVIS: It's true that the R and D division, which is separate from the electric division, did carry out some of the basic research leading to the process for successful disposal, but that knowledge is now in the electric division and they will continue to use it as part of the electric operation.

MATSQUI DUMP

MR. ROSE: This seems to be the day for dumps. I'd like to direct a question to the Minister of Health. It concerns a dump in his own constituency on Ross Road in Matsqui. The Agricultural Land Commission advises that the type of waste debris there is totally offensive — and, incidentally, excessive — to the commission's standards and that the material is affecting neighbouring lands. I'd like to ask the minister what action he has taken to order clean-up of the land in accordance with the Land Commission's recommendation, and if a plan of rehabilitation and clean-up will be formulated before the fall wet season.

HON. MR. DUECK: I understand that there is no more material being dumped in that area at this time. That was the latest that I heard. However, if that is not correct, I will bring back a report.

MR. ROSE: It's still there.

HON. MR. DUECK: The material that has been dumped there is still in existence, but there is no continuation of using that area for a garbage site.

MR. ROSE: I wonder if the minister could clarify whether this stuff is going to be removed according to the Land Commission's recommendations.

HON. MR. DUECK: You seem to have more information on exactly what the current situation is. All I can tell you is that I'll have to bring you back a report.

VANCOUVER COMMUNITY COLLEGE FUNDING

MS. MARZARI: A question to the Minister of Advanced Education. Is the minister aware that Vancouver Community College has turned down its share of the $8.3 million offered

[ Page 5331 ]

to the college a few weeks ago because of the strings attached to that $8.3 million? What alternatives does the minister propose to help colleges meet the crush of student lineups when September comes?

HON. S. HAGEN: No, I'm not aware of that.

LONG-TERM-CARE USER FEES

MS. A. HAGEN: My question is to the Minister of Health. My file on senior couples is getting pretty full, and the stories it tells are quite desperate. A typical story of a couple with income of $1,150 a month, with no eligibility for GAIN — I repeat, no eligibility for GAIN — have outgo of fees for a care home of $1,150 to $1,190 a month. The Minister of Health has repeatedly promised in this House that no senior will have less than $150 in discretionary income, and couples will be protected from a $19.20 fee per day.

On behalf of seniors, Mr. Minister, and particularly of senior couples, would the Minister of Health please advise us what he has done to deliver on these promises? I would ask him to be very specific, Mr. Speaker.

HON. MR. DUECK: Well, Mr. Speaker, she mentioned one particular couple, and to be very specific, I would have to know the exact circumstances. I have said in the House before, and I will repeat, that the residual for any individual is a little better than $150 a month. You give me the particulars. You could have found this out this morning. I could have given you the information or sent someone down to talk to those people. But, Mr. Speaker, again. If all we want to do here is try and find fault with the system and try to put fear into seniors, then, of course, you perhaps win.

Interjections.

HON. MR. DUECK: But I'm telling you, I've met hundreds and hundreds of people in your area — and you know that, Mr. Member — and every case that I ran into.... Perhaps there's misunderstanding; but other than that, I can assure you that the $150 a month is the residual for every individual living in a facility.

MS. A. HAGEN: Mr. Speaker, I have talked to care home operators and I have talked to the families of seniors who are affected by the very circumstances. I am not going to take responsibility, as the opposition critic for seniors, to ensure their rights, except to ask you, Mr. Minister, to give us a date when you will inform care homes and seniors, as you were very prompt to do on March 25 after the budget came down, about how you will deliver on these promises. I tell you, Mr. Minister, that there are couples in the exact circumstances that I have described: they have no information about the promises that you have given, and the care home operators do not know. On what date will you ensure care home operators and senior couples that those persons living in care homes will not have to leave because they cannot pay the $19.20 fee? It is still in place, and they have no information whatsoever that it will be changed. When will you deliver, Mr. Minister, and ensure that the promises you've been making in this House will be manifest in the province? Don't talk to me, Mr. Minister....

HON. MR. DUECK: It is very nice to get up in the House and talk innuendoes and speak of situations and not mention any specifics. Without specifics, it's very difficult to zero in on any situation. How can I give you an answer when you're talking in general terms?

However, I was with you in your constituency talking to seniors. We've sent a letter to every facility. If there's a situation in which one couple lives in a better-than-average facility where there are extra costs for rooms, that may be the case. I've said again and again: if you look after your constituency, it is your responsibility to let me know if someone is not getting his fair share. You are a member of the constituency, and you represent that constituency. It's up to you to tell me if there's someone not getting by and getting less than the $150. I've told you before and I'll say it again: the minimum residual anyone will have from any income is $150 — that's the worst-case scenario.

VANCOUVER COMMUNITY COLLEGE FUNDING

MR. R. FRASER: To the Minister of Advanced Education and Job Training. A minute ago you said you did not know that the guidelines for funding for the $8.3 million prevented Vancouver Community College from applying for the funding. Given your answer, would you commit yourself to reviewing that formula?

[2:30]

HON. S. HAGEN: I'm not aware of any need to review the formula. I've not heard anything from any of the colleges except that they were very thankful to get the extra funding.

MR. ROSE: Point of order. It has to do with House business, and I'd like to direct my question to the government House Leader.

The other day, when I asked when my motions — Motion 70, about urban super mailboxes: and Motion 71, closure of rural post offices — would be called for debate, the minister informed me that they were handled sequentially and therefore, since we only had a few days, it might be a long time. I can appreciate that, but this House can call any resolution at any time by leave: the Provincial Secretary's was called, and it's even further down the list. I wonder, if I traded 70 and 71 for his 60, which is the fiftieth anniversary of Ducks Unlimited, whether we could make a deal, because a lot of people are very concerned about this, both in the urban and rural areas of this province.

HON. MR. STRACHAN:, Don't get in a flap. [Laughter.]

The motion called the other day was a government motion, and they don't have to be called sequentially, because they're under government business. But I think it's something we can discuss with my colleague, and I'm sure we can get to those before the end of the session.

Hon. Mr. Dueck tabled the Ministry of Health annual report.

HON. B.R. SMITH: Mr. Speaker, may I have leave to give a further answer to a question asked of me yesterday?

Leave granted.

CONFLICT-OF-INTEREST GUIDELINES

HON. B.R. SMITH: Yesterday the member for Esquimalt-Port Renfrew (Mr. Sihota) asked a question of the Premier concerning conflict-of-interest guidelines, and

[ Page 5332 ]

question was deferred to me. The question concerned Thernis Program Management and Consulting Ltd., the successful bidder in a contract with the family maintenance enforcement program, and one Brian Pollick. After I was in possession of further information, I thought I should bring a full answer back to this House.

The allegation made by the member for Esquimalt-Port Renfrew in his question was that there was a breach of the ministerial guidelines, in that Mr. Pollick, a senior public office-holder, had, within the preceding six-month period, access to information not available to the general public which he could use for personal gain. I'm happy to advise the House that that interpretation of those guidelines is absolutely erroneous and not supported by the facts.

The facts are, just very briefly, that Mr. Pollick worked in my ministry as director of a maintenance enforcement pilot project during 1985, resigned in July 1986 and then became director of the special projects division of my ministry. During that period he did not have responsibilities for maintenance enforcement. Maintenance enforcement was separate, and a new maintenance enforcement act was put into planning stage in 1987, and was introduced and passed in late 1987.

The process to find out who would do the bid in this contract was in accordance with the exemplary guidelines of the privatization program. I say exemplary because everyone in my ministry was told that if they wished to bid for anything like this, they would have to announce it, take leaves of absence and step down when they prepared their bids.

Pollick, who had nothing to do with and no special knowledge of this program for over a year and a half, followed those guidelines. He went forward and submitted his credentials to the privatization branch, and he made his bid. All proper procedures were followed by him. He took a leave of absence to make his bid in November 1987, the day the request for proposals was issued. He had no special knowledge of the tendering process. He had nothing to do with the drafting of the legislation, and no special considerations were given to him. In fact, every effort was made during the whole thing to avoid the appearance and fact of any conflict of interest.

I state those things not to try and justify my role as a minister under that guideline, because I don't think that guideline applies at all to someone in this position. I stand to simply set the record straight for Mr. Pollick, because I think that when good public servants like Mr. Pollick and Miss Gifford — who had nothing to do with this project, but is a partner in it — come forward with creative bids to try and do things in the private sector that we may sometimes do in government, they should be encouraged and not have slurs thrown at them. They should be encouraged in that process, and we should not be using good public servants like that as sticks to beat the privatization program or for some argument about ministerial guidelines, because it's not applicable. I hope the member — because I know he's fair-minded — will correct the statements he made.

MR. ROSE: I just wondered, since it was full of bombast and argument, whether this was really a ministerial statement or was in answer to a question taken on notice.

MR. SPEAKER: The minister asked leave to answer a question. The minister has also invited the opposition member to make a statement. If he wants to seek leave to answer, is leave granted?

Leave granted.

MR. SIHOTA: I'd like to answer that because there are two elements....

Interjections.

MR. SPEAKER: Order, please.

MR. SIHOTA: Mr. Speaker, I'm not going to speak until they settle down over there. It's indicative of what we come to expect from....

Interjections.

MR. SPEAKER: Order, please.

MR. SIHOTA: Thank you. Now that the members opposite have chosen to behave and settle down, maybe I'll be afforded....

Interjections.

MR. SIHOTA: I guess it's indicative of the kind of style we've come to expect from members opposite.

I want to deal with a couple of the points that were raised by the Attorney-General, because the points really relate to two matters: whether or not the individual was a senior official; and whether or not he was in the position within the six-month period that the rules prescribe.

I just want to put on the record the information that was provided to me yesterday from the ministry itself. The information indicated to me yesterday, when I called the ministry at the policy branch and asked for Mr. Pollick, was that I was told of another number that I could reach him at, which happened to be the project for maintenance. I was told by the ministry personnel that I talked to that he had left that position a matter of weeks ago. If memory serves me correctly, it was three or four weeks.

It was as a consequence of that information that I was led to believe that it fitted within the six-month provision that's called for in the rules. If that's not the case then, of course, there is no conflict, and there is no violation of section 7(b). That's why I went very carefully yesterday to say in this House that there was an apparent matter that ought to be investigated, and we've now had a report back from the government. That's fair enough.

It was on the information that the ministry had provided to us that we were acting. Since I was the one that secured that information, I think I can say on a firsthand basis what was told to me. If it's necessary, I can produce the phone number that I was provided with to contact. The matter of the six months — to deal with that element of it — came from information provided to me by the ministry. If that's correct, and the Attorney-General is correct, fair enough.

On the second matter, as to the capacity.... Those who heckled the other day are now of course looking to gain revenge on another issue, I hear from that side.

On the matter of the seniority of the official, I guess that is a term of art, as to whether or not the individual met the standard of seniority that was within the contemplation of the Premier when he drafted the rules. But who knows what it is? It is in the contemplation of the Premier because these rules, with respect to conflict of interest, seem to slide depending

[ Page 5333 ]

on the situation that we are faced with. I think, in fairness, that it's a matter of argument whether or not this person had achieved the status of the senior official that is contemplated under the rules. I don't know that, but certainly the Premier, as the adjudicator of this, is quite capable of deciding whether or not he does.

I think he does. He was a director of a policy position within the Ministry of the Attorney-General; he was a director of a pilot project with respect to maintenance, and he is now president of the company that is involved. All of those positions were management positions and are senior capacities in the ministry. If the Attorney-General and the Premier want to attach a different definition to the term "senior," that is their prerogative. It is our responsibility to raise these issues when the evidence suggests that they fit within the rules, and when they tend to meet the provisions of the rules. Hence, our initiative yesterday in question period.

Orders of the Day

HON. MR. STRACHAN: Committee on Bill 28.

FOREST AMENDMENT ACT, 1988
(continued)

The House in committee on Bill 28; Mr. Pelton in the chair.

On section 8 as amended.

MR. MILLER: We canvassed the issue of performance and cited some instances where licences had been granted conditional upon certain production facilities being built. I asked the question about how performance was to be ensured, since it's integral in this section that the matter of the zero to 10 percent of the previous licence that is going to be rolled into the tree-farm licences could be recaptured by applicants if they fill one or more of the criteria laid down in section 8. Could the minister advise what specific devices are available to ensure performance under this section?

HON. MR. PARKER: Mr. Chairman, provision will be made in the contract language, the licence document.

MR. MILLER: Would those provisions follow what seems to be the normal provision? I'm not familiar with all of the provisions in licences. Is it a monetary provision? Is it a posting of a bond of a certain amount of money? Could the minister outline specifically or in general terms what provisions he is contemplating?

HON. MR. PARKER: There is performance bonding in all licences, but there can be a further requirement, depending on the magnitude of the obligation that the licensee has undertaken.

MR. MILLER: Would those generally fall under what you would call monetary penalties, as opposed to, say, the forfeiture of the allocated timber or lands? Would they generally be monetary penalties?

HON. MR. PARKER: Mr. Chairman, it could be monetary, a penalty on the annual allowable cut amount, or a combination.

MR. MILLER: With respect to the rollover provision and the policy announcement of the government and their stated desire to achieve 67 percent in TFLs, could the minister advise...? There is a bit of complication in here because, I suppose, unknown in this calculation is how much of the AAC will be taken under the various applications that will be made. Obviously it ranges from zero to 10 percent in each case. So there is a variable in there. But there are currently, I believe, 171 forest licences. I don't have my figures from second reading on what that constitutes in terms of AAC. Could the minister advise what number would have to be rolled over in order to achieve...? Is the minister looking at virtually all of those 171, or 50 percent, or 70 percent? Roughly what are we looking at in terms of the existing forest licences and the amount that would have to be rolled over in order for the minister to achieve that policy objective?

[2:45]

HON. MR. PARKER: Whether a licence is rolled over from a forest licence to a tree-farm licence depends on the public hearing process, among other things, and the numbers could be anybody's guess. To get to two-thirds of the provincial cut, I couldn't say exactly how many forest licences would have to be rolled. I imagine we could get that statistic if it's important to the debate and provide it to the member.

MR. MILLER: I think it's important. There is a level of concern about the basic change in tenure. I will accept the fact that the minister doesn't have the figures. Could the minister advise how many current applications there are awaiting the passage of the legislation'?

HON. MR. PARKER: Prior to this, we had about three dozen. With the amendments to the Forest Act, those will have to be resubmitted.

MR. MILLER: There are about three dozen. One would assume, providing they don't think the zero to 10 is an impediment, that they would.... I know of at least one that is current.

That satisfies me on section 8, Mr. Chairman.

MR. JACOBSEN: To the minister, I would just like clarification on one point that I don't think has really been covered. It's my understanding of Bill 28 that much of the discussion has centered around the 15 percent becoming available to the small business program. I understood that a considerable amount of that wood for the small business program would be achieved on the rollover policy of going from forest licences to tree-farm licences.

I'm particularly interested in the amendments that have come in. It seems to me that there will be very few, if any, forest licence holders who will give up any cut in order to become a tree-farm licence, because there are a number of approaches that can be used to achieve the retention of the cut. You cannot use that 10 percent to achieve two objectives. You can't use it to achieve the objective of enhancing the small business program, and at the same time use that same 10 percent to achieve the objective of better forest utilization, better silviculture or value-added products.

In view of the fact that the option is there that it may be, and likely will be, used to retain the cut, how will you then bring that allowable cut for the small business program up to 15 percent? Where will you get the wood?

[ Page 5334 ]

HON. MR. PARKER: The 15 percent of the provincial allowable cut that is to be set aside for the small business enterprise program will be recovered by the 5 percent recovery of cut from all renewable tenures in the province, from the Forest Service reserves and from the transfer of licences. We recover 5 percent of the allowable cut in each one of those transactions.

We didn't count on the rollover to tree-farm licences to make the 15 percent. Whatever is recovered from rollovers to tree-farm licences will go into the small business program, and may have to go into Forest Service reserve in some areas, and possibly may go into new enterprise opportunities. But the up-to-10-percent recovery from allowable cut in rolling over from forest licence to tree-farm licence was not part of the small business 15 percent.

MR. JACOBSEN: Well, Mr. Minister, it certainly is mentioned in the legislation, as a matter of fact, and it was certainly mentioned in the discussion previous to it, because it talks about this 10 percent going into the small business program. I don't think that's really disputable.

Anyway, there is one other question that I'd like to ask, and I guess it's appropriate to ask it here because we're talking about the rollover of forest licences into tree-farm licences. I have some difficulty understanding how that process works, because as I understand forest licences, it's a right to harvest on a chart area. I know how the company works out a chart area in a given region and says: "This is where we'll apply our cut." Essentially, it's a right to harvest.

When we get to tree-farm licences, we're talking now about a geographic area, as I understand it, as that's what most of the other tree-farm licences that exist are. Of the forest licences that I know of on the coast, and I know of several, I'm not sure that there are any — there may be one or two at the most — that have a timber reserve with them that allows for a continuous operation.

It seems to me that if you roll these forest licences over, you're going to have tree-farm licences that will have a supply of ten years or five years or maybe 20 years of harvestable wood on them, and then there will be a gap of 40 or 50 years when they will have virtually no logging on them. Is that a conceivable type of tree-farm licence for the future?

HON. MR. PARKER: Simply replied to, the answer is no. A tree-farm licence can have several cutting areas or blocks to it, as the member is aware. Whether or not harvesting is continuous in any one or all of those blocks depends on the stocking and on the age of the stock. It's quite possible to have a block that's harvested over a period of time, and then no harvesting takes place for another indefinite period of time until the stock is ready. It depends on the management of the working plan.

The management of the working plan is examined in a public viewing process, but before you get to the rollover process, through a substantial public hearing process that permits everybody to take a look at the proposed chart area for the tree-farm licence, there's substantial opportunity to examine and constructively criticize the presentations for rollover to tree-farm licence.

MR. JACOBSEN: I can appreciate that, and I know that they are difficult questions to ask. My purpose is not to criticize; it's just to clarify it. I am, as you know, interested in this matter. I have people ask me questions about it, and I'd like to be able to provide them with answers.

I can understand what you've said, that tree-farm licences don't need to be in one block. I think the point here is that at the present time we are talking about a rollover that would presumably take effect now or in the near future, and that somebody would apply for it. I don't think that many of the people that hold forest licences, that I know of, know where they will be cutting in ten years or 15 years from now. They know where they will cut for the immediate foreseeable future, but they don't know where they will apply their cut in the future.

What we really would have then is a situation where people would apply for tree-farm licences on the area they were cutting on now, to roll that over into a tree-farm licence, but some time in the not-too-distant future they would have to add to that tree farm because they would have to go someplace else to find a cutting area that they could work in. My personal feeling is that those areas will be hard to find. I don't think there's a surplus of mature wood available, and I don't know how that would work.

I appreciate that that's a difficult question to ask and probably takes a lot of research in order to be able to determine just how that will be done. The final thing that I would like to say on the matter is that as a member of this Legislature I have a great deal of concern about the rollover process of forest licences into tree-farm licences. I have a concern because I see that as a major concentration of the cutting rights in British Columbia and I'm not sure what the problems with that may be in the long term. I'm concerned about future flexibility in forest policy once that has been done. I would like to urge the minister.....

I know that when tree-farm licences were established in the beginning.... In the 1940s they were discussed, and there was the Sloan royal commission that talked about it. Then the first tree-farm licences, I believe, were implemented in the early fifties, and there was another Sloan commission called because there were some problems relating to it.

[Mr. Weisgerber in the chair.]

It may well be that it's the right approach to go; that's not for me to judge that. I think it's a very major decision, and I would certainly urge the minister to take advantage of consultation with the very many good, highly qualified forestry people throughout the private and the public sector that we have in British Columbia, have the advantage of their input into this, along with his knowledge and his staff's knowledge, before proceeding on it, because I think it's potentially a very important move for future generations of British Columbia.

I just leave you with that. I would certainly urge you to take advantage of the opportunity to consult with a broad range of people before a final decision is made on that rollover policy.

HON. MR. PARKER: We will certainly consult before moving on rollovers, and we will consult the constituency that the member for Dewdney has outlined to us, most definitely.

The matter of the forest licensees and the fact that they are not sure beyond about a five-year horizon where their operations will be is correct. They only know that their operations will be within the timber supply area for which they hold an allocation of allowable cut.

[ Page 5335 ]

As far as determining what blocks may be sought by the licensee in a rollover, those have to be presented before it even gets to the Forest Service. It's the sort of thing that the licensees have to discuss among themselves. They will have conflict, and it will have to be resolved through process, and the process includes not only Forest Service review but also review in the public venue in the hearings process.

Whether or not it comes to pass depends on consideration of a number of factors submitted not only by the licensee but by the public in general and other interested parties who will be affected. It's not a decision made solely in isolation by the minister or the Ministry of Forests and Lands.

[3:00]

MR. MILLER: Just a couple of further questions have occurred to me with regard to the rollover. As the minister indicated in response to the last question, a TFL need not be a single geographic area currently, but in fact can occur in various pockets, if you like, throughout the TSA and, indeed, across the TSA or into other TSAs, and that really centres in on my question. One of the concerns expressed, and I don't know how much this is applicable to the interior because I'm not familiar with the interior tree-farm licences, but certainly on the coast we have the example of TFL 39, which covers a wide are of coastal British Columbia, the Queen Charlotte Islands, parts of the mid-coast and Vancouver Island. In each of the areas, or at least in the area that I'm most familiar with, one of the main concerns at the community level is the question of stability.

In other words, the view of the people in the community is that the block of the TFL located in their region should be managed as a separate TFL, in effect, so that we don't get into.... I believe the minister's words were that in terms of the planning and the question of sustainability, some cutblocks or some of those pocket areas of TFL — if they're not large enough for sustainability — would simply be left for some period of time, and no logging would take place.

That's fine if you're doing that planning on that entire area; but if you're concerned about community stability, then it's not fine. If you happen to have a community located near the block or the portion of the TFL that is not sustainable in itself and has been logged and left, you're going to encounter one of the serious problems: the problem of sustainability or a community stability, because communities do spring up in some of these locations.

In terms of rolling over forest licences, which are volume-based, into an area-based tree-farm licence, particularly on the coast, could we have that situation develop? If, in order to achieve the required volume in a tree-farm licence, you have to break it up in the manner described by the minister, it seems to me that you could be setting up a situation where community stability would be threatened. I assume that there would be no restriction, for example, on licensees, who may have forest licences in more than one TSA, being able to apply to roll them either separately or collectively into a tree farm licence. So it's an important question for some of the smaller communities.

HON. MR. PARKER: Mr. Chairman, until we get the forests of British Columbia out of the wild forestry and into a normalized and managed forest situation, we'll have those variations in the cropping; that's a natural phenomenon. It can be mitigated somewhat, and in some instances — in many instances, I imagine — it can be dealt with. The opportunity arises in the public hearing process to share the concerns of the communities involved — whatever they may be — and to what extent they are involved, and what extent the impacts would be of the proposed initial management and working plan.

The public hearing process is a means for various communities to express their concerns and to have their concerns considered as to whether or not there will be a rollover, and if there is a rollover, what ensues by way of contract language and by way of the first management and working plan.

MR. MILLER: Okay. As far as the last part of the statement.... It really wasn't a question; I didn't put it in the form of a question.

Is it possible for forest licence-holders who have forest licences in adjoining TSAs to apply to have those collectively rolled into a tree-farm licence that would cover areas in both TSAs?

HON. MR. PARKER: Mr. Chairman, yes, it's possible to be looking at a larger area than that of the TSA in which the forest licensee has an allocated cut. That too is examined through process, both in-house and in the public process.

MR. MILLER: I want to be clear on that. Then the holder of a forest licence in a particular TSA, in making an application to have that rolled over to a tree-farm licence, would also be able.... The ministry would consider allocating that tree-farm licence not only in the TSA where the forest licence is currently held, but in adjoining TSAs as well? Am I correct? Is that what the minister said?

HON. MR. PARKER: I'm in an interesting situation here, Mr. Chairman.

I guess in most cases it wouldn't happen. But it is possible to have to pick up.... It might be part of a drainage; it might part of an inlet. It might be a situation where you're overlapping into another TSA. But whether or not that takes place, the ministry has to determine whether that can happen without a substantial negative impact on the adjoining TSA. But I can't say black-and-white that things will never happen. We're managing a natural resource here, and we have to move within the natural order of things.

MR. MILLER: A policy consideration has been arrived at in the ministry to change one form of licence into another — volume-based into area-based.

Interjection.

MR. MILLER: I said policy.

Interjection.

MR. MILLER: I realize that, but the minister has indicated in his press releases and the government in its announcements that this is now policy. As far as I'm aware, there was no major policy thrust in 1983, 1979 or whenever that section was amended. It was not the intent of the government of the day to achieve this particular objective; it's now the intent of this government to achieve it. So I submit that questions are in order regarding the impact of achieving it, if I can put it that way.

To get back to it, you had arrived at this stated policy objective, and I assume there was some understanding of the

[ Page 5336 ]

difficulties that would be encountered in changing from a volume base to an area base. Have any strategic studies been done into the current forest licences, the volumes in them and how they relate to the volumes available and the geography of particular TSAs? If that kind of work has not been done, it would seem to me awfully difficult for the ministry to come up with a policy first and then look at the maps, timber cruising, volumes and all the rest of it to see if the policy is achievable. Were those strategic studies done prior to the policy announcement?

HON. MR. PARKER: The answer is yes. There were several levels addressed. First off, there's the timber supply analysis that's done on a five-year rotating basis. There are 35 or so timber supply areas in the province, and each one has a ten-year plan and a 20-year plan. On top of that, we have the management working plan of each of the licensees plus their short-term development plan. A considerable amount of energy has gone into planning and forecasting. It's done in short term by the licensee, in mid-term by the licensee and the Forest Service, and in long term by the licensee and the Forest Service.

MR. MILLER: Were specific studies undertaken in TSAs? I assume that the minister is aware of the truck loggers' most recent submission on the Strathcona TSA, the information they presented and their view that to allow the forest licences in that TSA to be turned into tree-farm licences would, in effect, have to occupy a considerable percentage of the current TSA — I don't have the actual percentage here. Because of the nature of the TSA, the volumes, terrain and all the rest of it, they claim that an additional 64 percent of the net productive land will be required to shift from the volume base to the area base. An additional 64 percent is really considerable and leaves the non-TFL areas very much in a minority. I realize your answer regarding the timber supply analysis, but have specific studies been done TSA by TSA to see what the actual impact would be of trying to apply the forest licences that might exist in a TSA and converting them into tree-farm licences? And if those studies have been done, have any problems been identified, such as those the truck loggers identified in the Strathcona TSA?

HON. MR. PARKER: No such study can be done without a specific case at hand. We need a specific application that outlines a specific chart area so that we can measure the impact accordingly. If you don't know what land masses you're talking about, then there's nothing achieved by trying to analyze it. The Truck Loggers' Association used the Strathcona TSA as an example, and it's a what-if case — if everything happened the way they think it might. The whole process is very involved. Substantial in-depth analysis is done by the licensees in the area, be they forest licensees, timber sale licensees, small business operators and other tree-farm licensees and the public at large. It's a very involved process. Rollovers are not and will not be done lightly, and probably in many cases there won't be a rollover, where the integrity of the other operators in the area is threatened.

MR. MILLER: I reject the response, in that I don't think it is difficult. Surely, prior to setting down policy objectives, some analysis is done about whether or not there will be difficulties in achieving it. It seems to me that that's fundamental. I hope I'm not wrong in suggesting that it is fundamental to the operation or the administration of government. I don't think it is good enough to say you have to wait and see who applies. "We have to wait and see who is going to apply for a tree-farm licence — which forest licence holders are going to apply — and then we'll look to see if we can fit their application into our policy objective." It's a bit of a backwards way of approaching it.

The truck loggers — I think it was wise of them to do it; they are responsible players in this industry — decided to choose the Strathcona TSA for doing some fundamental analysis. They show that in that TSA the TFL land base is 24 percent and the timber supply area land base is 76 percent. Under the policy....They can only assume that when the government announces a policy with.... I'm not going to say fanfare. In other words, an integral part of their forest policy, the new directions policy, is to shift the volume to the area base. Then it is logical for them to look at what that impact might be. It is entirely logical and entirely responsible for them to look at particular areas. In doing that — in looking at the Strathcona TSA and applying the policy as enunciated by the government — they show that under the new directions, 12 percent of the land base will be TSA lands and 88 percent will be TFL lands. As you can see by the graph on page 10 of their report, it is a radical shift in terms of the tenure on the land base.

[3:15]

I would have thought that the ministry would have run some models through. You don't have to wait for somebody to apply. I would have thought it would have been logical for the ministry to run some models through in particular TSAs and use the computers to plug in the numbers on volume and current volume assigned to forest licences and do a couple of "what if" scenarios to see what you come out at. You may indeed, having done that, come out with.... You might have been able to determine that in some TSAs it was simply not logical to apply the policy. That may indeed be the case. It may be that the truck loggers' information is accurate and it would not be logical or desirable to apply the rollover policy in particular regions or TSAs of the province.

Maybe the minister could advise the House why that kind of simple, basic analysis wasn't undertaken prior to the announcement of the major policy shift.

HON. MR. PARKER: I need not go back over everything that we talked about today, because all the concerns raised by the member have been precisely what we have been discussing since the session got underway this afternoon.

The Forest Service has substantial information on the forest resource of the province. The first inventory was completed, I think, in 1937. Following the Second World War there was a continuous forest inventory, and that continues to be updated. We no longer have a forest inventory division. We have forest inventory officers in each of the districts in the province. We have 45 districts. We have about 35 or 36 timber supply areas. Information is kept up to date.

The planning process, as I outlined before, is on a two-year horizon on a development plan basis; a five-year horizon on the basis of TSA analyses and on the management and working plans of the forest licences. There is a ten-year plan and a 20-year plan for the timber supply area. The analyses are there, but whether or not we run scenarios on "what if" situations in case licensee A decides to apply for a certain

[ Page 5337 ]

geographic area for a tree-farm licence or maybe he is going to change it a little.... There are an infinite number of permutations and combinations.

We will deal with each rollover application on its own merit, and whether or not it proceeds to the public hearing stage depends on whether or not we're going to allow such an application. Once it gets to that stage, then finite analyses will take place. The process is ongoing, it's dynamic, and continues to be so in each of the province's TSAs. I might add, for the information of the House, that tree-farm licences are not part of the timber supply areas; tree-farm licences stand alone from the TSAs.

MR. MILLER: I think that's the point I was trying to make — that tree-farm licences are indeed outside the TSAs. The policy now is to take forest licences, which come out of the TSAs on a volume basis, and turn them into tree-farm licences, which are area-based. Obviously that's going to require taking some of the area. It may be in pockets, or it may be in one area, depending on the capacity of individual TSAs to accommodate that, but that's what's going to happen, as I indicated. The truck loggers' analysis of a what-if scenario — what if the policy were completely applied to a particular TSA — has found that if all of the licences were rolled over, 88 percent of the land base in that TSA as presently defined would end up in tree-farm licences, leaving 12 percent of the TSA land base available for other, normal licence applications issued by the ministry.

I wasn't quite sure whether the minister said they did some studies. He did indicate that in some TSAs it may not be appropriate to allow rollovers. Has the ministry done any studies to indicate that, or is that just the minister's feeling? Has it been looked at? Has there been any attempt to apply volumes to area? Or is it just the minister's view that in some TSAs it may not be applicable?

HON. MR. PARKER: Every one of the timber supply areas in the province has been analyzed, and continues to be analyzed. The analyses come up with a number of options on different harvesting scenarios. No modelling has taken place on what-if situations as to whether or not a bi,. a little or an in-between — or some combination thereof, or whatever might evolve into an application for a rollover TFL.... It won't take place until we receive applications, and unless we decide to proceed to investigate whether or not there should be a rollover in that particular application.

There's a substantial amount of information and analysis, but the studies that the member keeps talking about will only take place on the basis of a specific application. He alludes to the truck loggers' concerns about the Strathcona TSA as an example. If everything were to happen exactly the way the truck loggers present it, then that would probably be the result, providing all their data was correct. If it doesn't happen the way the truck loggers present it, then that isn't the way it will happen.

A rollover from forest licence to tree-farm licence is not something done in a heartbeat. It's a long and involved process. Maybe because it is a long, involved, in-depth process, it escapes some people. I don't know, but it appears to me that it does. It's not something done on the basis of a snap decision. It's a long and involved process, and it involves the public process.

MR. MILLER: It's just like these debates are long and involved processes. Given that it's a long and involved process, does the ministry have any target dates in mind in terms of achieving its policy objective?

HON. MR. PARKER: The answer is no.

MR. MILLER: So it could be five. ten, 15, 20, 25 years. It's quite open-ended then, in terms of the major policy objective that the ministry wants to achieve, and it could take 100 years, presumably. Is that correct, Mr. Minister?

HON. MR. PARKER: There's no time-limit at this time.

MR. MILLER: It strikes me as fairly poor administration. We're talking about allocating the resources of this province. We're talking about the forms of tenure that are for the provisions we see in this act. They may be expanded but are not retrievable by the Crown.

We find, in terms of the responses by the minister, that no strategic studies have been done to determine applicability. In other words, in running some case scenarios just to see whether or not the policy objective is achievable — in particular TSAs — we find that there is no specific timetable set for achieving the policy objective. The minister's responses about some of & implications if rollovers occurred and the implications in certain TSAs.... There are no answers to it.

It's quite puzzling to me how a government can announce a major and significant change in policy without having any answers to any of those questions. I don't know if the minister wants to take the opportunity to respond to that, but certainly there are a number of people in the industry who would like some answers to those questions. He must have spoken to some of them himself; I am sure he has. If he hasn't, that's a bit irresponsible. The truck loggers have presented some very serious concerns. They have obviously done some work on it. Has the minister not talked to them? Has he not attempted to advise them how this policy change won't hurt them?

I am really struck by the fact there don't seem to be any answers, yet this seems to be a cornerstone of the government's policy. How did the ministry arrive at this decision to roll over? Who decided that this would be a good thing? Was it the minister's idea? Was it somebody else's idea? Was it decided that yes, let's do this, and we'll look at the consequences later?

Surely when you come up with these decisions, you do it after some analysis and study. Was it a brainwave somebody had? How did you come to the point where you announced that you wanted to change from a 27 or 29 percent TFL to 67 percent? Was it somebody's idea of something that would be good to do? You said that no work has been done on it, so we're left — and I guess everybody is left — with that conclusion. It's just a brainwave that somebody had.

MR. CHAIRMAN: Hon. members, before I recognize the minister, I am having a little trouble. I think we're getting into what really is second reading debate as opposed to debating section 8 as amended in the bill. If the minister wants to respond, I would certainly recognize him, but I think we have to deal with these section by section.

HON. MR. PARKER: Mr. Chairman, you and I are on the same wave length dealing with the amendment to section 27. Which provides for the recovery of up to 10

[ Page 5338 ]

percent of the allowable cut on the rollover to a tree farm licence, which has been provided for in the Forest Act since the Forest Act was established in 1979.

MR. MILLER: I appreciate your comments, Mr. Chairman. I always try to stick to the rules and the topic; the last thing I would want to do is stray.

This provision has been in the Forest Act for some time — section 27.1: surrender of forest and timber sale harvesting licences. It has been there, but it was never put there, I submit, with the intention of applying and actually encouraging that to the point where 67 percent of the AAC would be under tree-farm licences — never. It's a major policy announcement of this government.

The minister felt so strongly that it was a major policy announcement that he actually put out a news release when he put out Bill 28. Unfortunately it was read by some of the press, instead of doing some investigative work. It was read by people to indicate that Bill 28 was going to achieve that. It is a significant policy objective, and this is the clause where we have an opportunity to canvass that. I submit that my questions are entirely reasonable in terms of asking the minister what studies he has done to indicate whether the thing is even achievable.

If the minister chooses not to answer that, I suppose it's left to others to draw the conclusion that I have: that they really haven't done any studies, and that somebody somewhere thought it was a great idea. Maybe it was the minister; maybe it wasn't. I hear lots of people tell me that the minister is not the originator of policy. That's unfortunate, but maybe it is fortunate. Nonetheless, having valiantly attempted to get substantive answers from the minister on this particular clause and having failed to do so, I have no further questions.

[3:30]

MR. WILLIAMS: I think it's interesting that the minister, when he talked about the timber supply areas, talked about the tree-farm-licence areas as simply terra incognito, not areas that were really part of the whole TSA, and that the whole idea of the TSA was to rationalize and do some strategic thinking about these large basins.

It betrays a pattern all too prevalent in the ministry, and that is that once these land areas become tree-farm licences, you have nothing to do with them; you basically regard them as private property in the hands of the corporation pure and simple. The strategic planning that was done in the past by ministry staff clearly saw the TFLs within the TSA. I think what you're doing is betraying a good corporate view, and that is, once it's in the TFL, nothing to do with you to speak of because you don't have any staff anyway, and that's for the corporation.

Maybe the minister could reflect on that, because these are indeed public lands, regardless of the form of tenure, and they should be seen as public lands; and the planning and broad management goals and all the rest of it should be established by the ministry and they should not be seen as simply the private preserves of the corporate bosses of this province.

HON. MR. PARKER: You see, Mr. Chairman, exactly where the member for Vancouver East is coming from. It's his constant hate for the licensees of the province, how disgusting they are and how they might make a profit and might employ people.

Tree-farm licence is a tenure that's area based. The area that is not in the tree-farm licence is under a timber supply area. The management of the tree-farm licence is the responsibility of the licensee. The management of the timber supply area is the management responsibility of the Forest Service.

What takes place on a tree-farm licence is examined by the Forest Service and by the chief forester, and their five-year working plans are subjected to public viewing. The timber supply areas, the same way, except the Forest Service does it. In the timber supply areas we have tenures including forest licences, timber sale licences minor, timber sale licences major, whole temporary tenures, woodlots, special sales. Those are all under the direction of the Forest Service.

The forest licences are a major licence. The licensees are responsible for a great deal of the planning, and as we know by the policies set by this government and the legislation set forth, they also have the responsibility for forest renewal. The whole thing — any licence, whether it's a tree-farm licence, forest licence or any one of the other licences — is under the purview of the Forest Service. That's established. That's in the legislation, it's in the regulations, it's in the contract language, it's in the timber supply area analysis. It's a matter of public documentation, and the obtuse comment made by the member for Vancouver East and his colleague for Prince Rupert (Mr. Miller) clearly shows that the homework isn't being done.

MR. WILLIAMS: Perhaps the minister can give us a definition of obtuse.

HON. MR. PARKER: The apparent and quite transparent concerns of the members opposite on the matter of section 8 of Bill 28. Basically they don't understand the process, and to criticize effectively on behalf of the people of British Columbia they should really be doing their research.

MR. WILLIAMS: What's extraordinary really is that the minister is basically saying: "We can't do the job." He says no. You are the minister. What you're saying is that you can't do the job. You're washing your hands of it. You're saying,"We're tossing it over to the private sector," and this is the biggest privatization scam in the province today where there is tough competition in scams in privatization.

But buddy, it's winner take all for you, because turning over the public lands of British Columbia on this scale to these corporations, where they will then demand compensation for the public lands when we want any of them back, is indeed the biggest privatization scam in the modem history of British Columbia.

You're basically gutting the Forest Service. You don't have anywhere near the manpower, the people there that you need in the ministry, to even begin to look at giving the stuff away, in terms of analyzing all these lands and understanding the implications of the giveaway. Even in terms of wildlife, of integrated resource management and all the pieces you have to look at, you don't have the talent to analyze what you're giving away. And you're admitting it in a sense. You're saying,"We want it out there," controlled by this relative handful of corporations, to determine the future of those lands in the real sense. You can talk about five-year plans and five-year reviews, but the gate is closed. Once you make those allocations, the gate is closed in terms of genuine public control of those lands. That is the reality.

This is the biggest giveaway in the modern history of the province. It is privatization without any money being paid.

[ Page 5339 ]

At least with some of the goofball schemes like selling off the highway maintenance programs and so on, they're putting some money up front for the equipment and all the rest of it. This is turning over hundreds of thousands of acres of provincial lands for free and then saying: "If we ever want it back, we agree to pay through the nose."

That's what you're doing in the Queen Charlotte Islands right now, where they're demanding $100 million for land that was given away for free. You say: "Oh, but that's necessary, because those are contractual obligations." The more fool you. You know right now that we're getting stung. You know the other minister there, the Minister of Environment (Hon. Mr. Strachan), is trying to offload that $100 million onto the federal government so that taxpayers pay it out of Ottawa. But when we want any of it for British Columbia in the future, we'll have to pay, and we'll have to pay handsomely. A hundred million now; what will it be worth in a decade's time in a land-short and resource-short world where softwoods are becoming more valuable day by day? It will be a king's ransom that you have given away.

HON. MR. STRACHAN: You didn't say that last year.

MR. WILLIAMS: Oh!

HON. MR. STRACHAN: You believed my figures on Moresby last year.

MR. WILLIAMS: Oh, $31 million last year.

You're the ones that are giving it away, Mr. Minister. Does it make any sense to you? Can you talk any sense into your colleague there in terms of the giveaway? You're stuck with negotiating with the feds right now on South Moresby. You know that the $8 million the province is going to contribute to get the lands back is a pittance compared to what they're going to get in the end.

This operator over here, your Minister of Forests, wants 67 percent of all the commercial forest lands of the province put into the same giveaway tenure that locks us up. You've simply got to be out of your head to be entertaining a program like that. How many letters have you got on your desk or on the ministry desks saying: "Dear Mr. Minister, I'm interested in rolling over into a tree-farm licence, because it's the sweetest deal I've seen since I crossed the border. I've never seen such a bunch of rubes in my life. Put me on your giveaway list, Mr. Minister." How many letters have you got, Mr. Minister, saying: "Hey, put me on the list. That's the best corporate welfare I've ever seen in my life, and I want into the tub." How many letters have you got, Mr. Minister, lining up for the giveaway?

HON. MR. PARKER: The tree-farm licence land base is not given away. The title is retained by the Crown, and the timber is not given away. The obligation to renew the forest is entirely at the cost of the licensee. That cost is somewhere between $3 and $6 a cubic metre. And the licensee continues to pay stumpage. And the licensee continues to pay rent. And the licensee continues to put up substantial deposits. As well, the licensee has a conversion plant or plants that must be sustained and continue to add to the economic well-being of the province. The ex-minister, the member for Vancouver East, is misleading everybody once again. There are no giveaways.

Yes, timber has value. He told us that here just a few minutes ago. Timber has value, and if you've allocated it to one purpose and choose to move it to another, then it will probably cost you. That's a fact.

MR. WILLIAMS: The minister is saying that if you allocate for one purpose and you decide later that that purpose is not the purpose that would best serve the public interest at the time, we'll have to pay. Well. the evidence is there now....

Interjection.

MR. WILLIAMS: Pay what? The cost. Indeed. And Western Forest Products right now is arguing that the cost is $100 million for South Moresby National Park. You've already been suckered for S31 million, Mr. Minister, which I find offensive, and it's very clear that we are not going to get off at that level at all. Not at all.

Doesn't it strike you that this, then, is a very serious matter and that the goal of rolling over these licences into this tenure, where you have to pay through the nose for what is ours — our public lands — simply doesn't make any sense; that it burdens all of the citizens of the future because of the mistakes you might well make today? Doesn't that hang on you as a burden in terms of mortgaging future generations of British Columbians that might very well want to see these lands used in somewhat different ways?

HON. MR. PARKER: The management and working plans of forest and tree-farm licences have to be developed on the basis of an integrated resource management approach, and that's the only way they will be approved. The first member for Vancouver East really surprises me in that he does not support an integrated resource management approach and an effective and efficient means of managing the forest resources of the province, where the title to the forest land base — and without the land you can't grow trees — stays with the Crown, but the obligations of forest management go with the licence to the licensee, who undertakes substantial obligations.

But then that shouldn't surprise too many of us, because they tend to like what the Suzukis of the world have to say about preservation of the lands of British Columbia, and things like 75 percent of the lands of British Columbia should be preserved forever, as Dr. Suzuki has told us in public before.

It's amazing that the members opposite would espouse a program that basically takes away from the economic wellbeing of the province, from the jobs, the employment. the opportunities and the place in the commercial world that British Columbia holds. I really have a problem. We have a responsibility to the people of British Columbia to return them the best possible economic rent on their resources, and across the way they are saying: preserve. preserve, preserve.

MR. WILLIAMS: It's more than a little offensive to hear this minister talking about integrated resource management. I'd like to remind the minister that there was indeed an Environment and Land Use secretariat that was in the forefront of Canada, if not the western world, in integrated resource management. It was your administration and the administration before you that dismantled it. Some of the top professionals and civil servants in Canada leading the way in integrated resource management, who are now working at an international level with the United Nations and others, long

[ Page 5340 ]

since left British Columbia because of this impoverishment in terms of the capability of the cabinet of this administration and because of their commitment to giving the stuff away and being so shortsighted.

Mr. Minister, you can dump on David Suzuki all you like. If you want to test the public out there between yourself and Dr. Suzuki, you are going to come out at one and he is going to come out at ten, and that's if you are lucky.

[3:45]

MR. CHAIRMAN: Hon. members, again we seem to be straying somewhat from committee debate on this bill, and I'd ask that we get back to debating section 8 as amended.

MR. MILLER: I'm glad you have reminded us, Mr. Chairman, because I do have some more questions on section 8.

I think we should appreciate the fact that if we occasionally stray from the narrow parameters of the amendments, we are talking about a decision of resource allocation that is momentous. It has been outlined even by the second member for Dewdney (Mr. Jacobsen), who made it quite clear that he was totally opposed to the rollovers into tree-farm licences — quite opposed. I hope the minister doesn't consider the second member for Dewdney obtuse and not capable of understanding the logic of the move initiated by this government.

I have spoken to people in the logging industry who tell me quite openly that they have supported your administration for years and years and they are quite opposed to this change. I hope you don't consider them obtuse, Mr. Minister. This is a major, fundamental change.

The only other changes in terms of tenure, as has been pointed out, were initiated as a result of royal commissions. There was Sloan's recommendation on tree-farm licences to get those major industries up and running, and Pearse's in terms of timber supply areas or public sustained yield units that would be available to the smaller logger, the small entrepreneur.

Presumably, the carrot, if you like, of being able to maintain 100 percent of your cut will lead to an increase in productive capacity in the province. There are other measures in the bill that are intended to achieve that same end I'm not aware — perhaps the minister could advise me — whether both the coast and the interior forest licences currently have production facilities associated with them. Is there a difference between the coast and the interior in that?

MR. CHAIRMAN: Again, I'm reluctant to engage in debate with the members over the scope of our discussion, but the principle of the bill was in fact passed by the House in second reading, and we are debating the section-by-section discussion of the bill.

HON. MR. PARKER: Some forest licences do have some contract language on conversion plants.

MR. MILLER: My question, put more simply — perhaps the minister didn't understand — was: is it normal for the holders of forest licences to also have production plants, processing facilities? With regard to that question, is there a difference between the coast and the interior?

HON. MR. PARKER: Most forest licensees have conversion plants.

MR. MILLER: Just one final question. We don't know what will be achieved, but throughout this — I guess the question is applicable to all sections designed to encourage processing or further processing — has there been any analysis done about capacity as it relates to supply? During the estimates I raised Prof. Reed's feeling that the capacity is about 100 million cubic metres a year. Are we in any danger in any provisions in the bill of increasing the capacity to the point where we would not be able to meet that on a sustained yield basis?

HON. MR. PARKER: Yes, we have substantial analysis on plant conversion capacity and the timber production capacity of the various TSAs and TFLs in the province. The matter of whether or not there's more capacity than there is timber is a decision individual operators have to make. It depends on what they have in mind at the time, what their strategy is. The provincial allowable cut is well known, and the allowable cuts in the timber supply areas and the tree farm licences. As to construction and capacity, that's the decision of the business.

Section 8 as amended approved.

On section 9.

MR. MILLER: I notice the only thing that's added down in the corner there is the occasional "aye." But we can't hurry these things along, because we are talking about forest policy. As we all know, forestry is the cornerstone of the economy of this province. If it takes some time to debate it, then we're going to do that, and I would think all members would appreciate that.

With regard to section 9, again, it's really a take-back provision. The notes in the bill indicate that it provides "that some timber on all new tree-farm licence areas is reserved and is to be available, without compensation, for small business forest enterprises or for woodlot licences." I would assume — and perhaps the minister could confirm this — that also applies to tree-farm licences acquired under the previous section.

HON. MR. PARKER: Section 9 provides for the distribution of the timber recovered on a rollover. It also provides — just let me confirm this — for the distribution of the 5 percent recovered in the general recovery of cut for redistribution in the small business program.

MR. MILLER: The minister may be able to correct me, and maybe it's just my misreading of the section, but as I read it, it does say: "...which provide that some timber on all new tree-farm licence areas...." Presumably new tree farm licences can be granted or applied for — I don't know; we may have exhausted that opportunity or capability — quite apart from the provisions of section 27.1. In that case — and this may be a hypothetical argument, but nonetheless there needs to be an answer — that tree-farm would be subject to a reduction. That's the way I read this section; I believe I've read it fairly thoroughly. Again, if the minister could point out specifically how I'm wrong, then I'll be satisfied with that.

Secondly, a TFL acquired under 27.1 would also be subject to a reduction. Can the minister confirm?

HON. MR. PARKER: There is a 5 percent recovery from existing tree-farm licences, and this section provides for how

[ Page 5341 ]

that timber gets distributed. There is also a provision for any new tree-farm licences for up to 10 percent to be recovered; this covers that also.

MR. MILLER: Would the minister advise me which particular part of section 28 as amended by this bill refers specifically back to the 5 percent? Because I just don't read it in there. I read that "some timber on all new tree-farm licence areas...." I have a further question, but I want to clarify this point at least in my own mind. I could be mistaken in the way I am reading it, but I don't see the reference in section 9 of Bill 28 that relates specifically to the taking of 5 percent. It says: "require that timber on the tree-farm licence area, in an amount directed by the minister...." That means, presumably, that the minister could take whatever he wanted. Where is the specific reference back to the 5 percent?

HON. MR. PARKER: In the case of rollover, that amount can be anywhere from zero to 10 percent. In the matter of recovery of 5 percent, that is provided elsewhere in section 28. The provision for where that wood would be allocated is addressed in this section.

MR. MILLER: I won't pursue it, Mr. Chairman. I'm still not clear in my mind.... I don't think the minister has pointed to the specific tie-in with section 28. Section 28 in the current Forest Act describes fairly extensively the content of the tree-farm licence, and I don't see the specific reference back to the 5 percent. My concern here is that it would be open-ended, that the minister would be able to be quite discretionary in terms of what is under the new paragraph (g.2), which reads: "require that timber on the tree-farm licence area, in an amount directed by the minister...." That seems to me to be quite discretionary and open-ended, and I don't see the qualification contained in there that it's limited to either the 5 percent currently being removed from current licensees — forest licences and tree-farm licences — or the zero to 10 percent that could possibly be removed from forest licences and other small licences that are rolled over.

HON. MR. PARKER: This section provides for distribution of wood recovered either on existing licences on a 5 percent recovery or on rollover to new licences up to 10 percent, how that wood gets distributed: and it's subject to the provisions of this act.

[4:00]

MR. MILLER: Could there be a double-taking on the rollovers? Could there, for example, be any number between zero and ten, and as well an additional 5 percent? Is it possible that there could actually be a 15 percent take of a tree-farm licence?

HON. MR. PARKER: Existing tree-farm licences will be subject to a 5 percent recovery. New tree-farm licences in rollover, where it's approved, will be subject to up to 10 percent. There won't be double.

Sections 9 to 14 inclusive approved.

On section 15.

MR. MILLER: Under this section a TFL holder will lose 5 percent if the licence is transferred — or there's a provision for a payment. But under the terms of this section, with the TFL losing 5 percent when it's transferred, under the terms of section 8 it's possible for a licence rolled over into a TFL to get up to 100 percent of their cut. Again, it's a question of whether or not this 5 percent would apply to those TFLs and in fact limit their recovery to 95 percent.

HON. MR. PARKER: Mr. Chairman, this section provides for a take-back of allowable annual cut when a licence, whatever licence it may be, is assigned to a new licensee. In the case of a tree-farm licence, that would affect only the schedule B lands, the Crown lands that are within the tree farm licence. In the case of a forest licence, it's the total allowable cut. In the case of a timber licence, it's the cut. In the case of a timber-sale licence, it's a cut. So it provides for 5 percent recovery from the allowable annual cut applicable to Crown lands in the licence that's being transferred. If a new tree-farm licence has just been created and there's been 10 percent recovered, and now this licence has been considered and approved for transfer to a new party, another 5 percent is recovered, yes.

MR. MILLER: And the payment then could be used to eliminate the need to take the 5 percent. In other words, the minister is prepared to accept 5 percent of the higher value of the following amounts: the value that the holder of the licence declared when he applied to transfer; or 5 percent of the higher of an independent current appraisal. In other words, on an application to transfer, the person to whom the licence would be transferred could in fact pay that 5 percent and retain the full cut.

HON. MR. PARKER: The provision for paying in cash value for timber alludes only to the old temporary tenures. These are tenures that were issued at the turn of the century — things like timber leases. timber licences, special timber licences, pulp leases. pulp licences. They're scattered throughout the province. They're on a liquidation basis. Some are incorporated in tree-farm licences. Once they're harvested, they revert to the Crown; those that are in tree farm licences, once they're harvested, revert from schedule A lands, alienated lands, to schedule B or Crown lands. The old temporary tenures just provide for the timber crop that's on there at the time, and once it's liquidated, the land goes back to the Crown. So it's only old temporary tenures. Most of them will be gone by the turn of the century. There are a few that will hang on to about the year 2005. but by then they'll all be retired, and then this section wouldn't apply.

Sections 15 to 19 inclusive approved.

On section 20.

MR. MILLER: This section basically has to do with disqualification of persons in a small business operation. As in many of the sections of the bill, there is a fair amount of discretion. I don't know if the minister has considered that in terms of legislation. Normally it's something one would like to keep to a minimum, but nonetheless this section, along with many others, is fairly discretionary. A person can be disqualified if he "(a) makes a material misrepresentation, omission or misstatement of fact in his application for registration...." I can understand "(b) fails to perform an obligation...." but the first section. 6 1.1(a), is pretty broad

[ Page 5342 ]

in scope, and I think the minister should take the time to elaborate to the House what reason his ministry saw for including it in this amendment to the Forest Act and just generally outline the kinds of situations that gave rise to this change and how the ministry intends to apply or interpret it.

HON. MR. PARKER: This section provides for disqualification of small business operators who are operating in contravention of the regulations arising out of this legislation. We hope that it will help offset things such as the surrogate bidding problem that the member for Prince Rupert (Mr. Miller) and the member for Omineca (Mr. Kempf) allude to from time to time. We also hope that it will ensure that the small business operators pay attention to the regulations and operate according to the regulations under the Forest Act.

Yes, it is discretionary, because sometimes we find that what some people might think is a material misrepresentation, on closer scrutiny by people within the ministry turns out to be an honest mistake, and if we don't have the discretion to deal with it, then the person could be inadvertently disqualified for up to two years before he could bid again. So we have to have some discretion there. If there are misrepresentations, omissions or misstatements or if they're failing to comply with the act or the regulations or fail to perform under the terms of the licence, they're subject to disqualification and, of course, cancellation of their licences.

MR. MILLER: I appreciate the minister's response in terms of the issue of surrogate bidding. I would think it would be fairly difficult to prove one way or another. I don't know if the minister has any views on that or any new views the ministry may have in terms of trying to control it now that they have a section 1n the bill that allows them to control it. I would like to hear the minister outline his ministry's views on actually finding people who are doing that and having them suffer the penalties under the act.

Secondly, as with any section of any piece of any legislation we pass, we have to be mindful of its impact. Normally there is a process of appeal, and even more particularly where a piece of legislation is highly discretionary, because the combination of the two is quite deadly. Where law is laid out in very exact detail.... For example, when you park in front of a no-parking sign, chances are you don't have much of an argument. The penalties are laid out and most people accept that. Occasionally, I suppose, someone might argue that they didn't see the sign or something like that — there was a bush in the way — but generally it's pretty laid out. But where you have a provision that's highly discretionary, it seems even more appropriate that there be an adequate mechanism whereby appeals can be made.

Two questions. What approaches does the ministry intend to make with regard to the surrogate bidding, given the fact that they now have a clause that allows them some measure of control? Second is the question about appealing.

HON. MR. PARKER: Mr. Chairman, the regulations are very clear on registration under the small business program. Where decisions are made under this section of Bill 28, the small business operator has recourse to appeal to the district manager and on up to the regional manager. That's provided for further on in the bill.

Section 20 approved.

On section 2 1.

MR. MILLER: Again, Mr. Chairman, the section 1s quite discriminatory and open and has raised a number of concerns. As we go back over the application of the new stumpage system — the comparative value system — we've seen, for example, that study by the minister that the system was implemented satisfactorily. We see subsequent to that a decision to allow some decreases in stumpage in certain parts of the province, and we understand.... And perhaps the minister might wish to comment on the allegation contained in a story in the Vancouver Sun of Saturday, June 4, in statements made by the northern interior lumber sector in Prince George with regard to this particular section of the bill — and another section further on — that in fact the section allows broad discrimination.

When we compare it to the previous or the existing act, section 84, we see that there are a number of provisions the Crown has to undertake with respect to stumpage. Policies and procedures used in arriving at stumpage rates shall be posted or filed with the regional manager, who shall make them available for inspection by any person. That, I presume, is in there because anybody in a particular region who has some concerns about how their stumpage was arrived at would be able to go in and inspect those policies and procedures and arrive at an understanding and, indeed, if they had a disagreement they could pursue that disagreement through the appropriate channels. Now the amendments to section 84, as I read them, remove that requirement to publish the policies and procedures. They are no longer required to be filed with the regional manager.

Further to that, changes can be made by directive. I want the minister to comment on (1.2),"A directive issued under subsection (1.1) is not a regulation within the meaning of the Regulations Act," and advise the House specifically what that means and why it's there.

[4:15]

Rather than fill it up at this point, I'll stop. I have some other questions with regard to this. But specifically with the filing of the policies and procedures, in my view under this change they no longer will be published.

HON. MR. PARKER: Everybody involved in the business subscribes to the appraisal manuals for the area in which they work, and these appraisal manuals are updated with stumpage policy changes. In this section of Bill 28 these policy changes are defined by the term "directive," and each one of those changes will be registered with the registrar of directives in the head office of the Forest Service, and each subscriber to the appraisal manual will receive a copy of that directive. All appraisal manuals are available in the regional offices and district offices for those people who do not subscribe, and they can view them at any time. So it is public information.

[Mr. Pelton in the chair.]

Just alluding to (1.2) of section 84 as amended,"A directive issued under subsection (1.1) is not a regulation within the meaning of the Regulations Act," it's because we're talking about policy. We're talking about stumpage policy changes, and the directive that goes out saying that this policy is now changed.... We don't use stump height of, whatever, 18 centimetres; we're going to use a height of 14 centimetres. That's a change. It goes out in a directive. It's registered with the registrar of directives, so everybody

[ Page 5343 ]

knows that it indeed took place at such-and-such a time on such-and-such a date and that it's in effect from that point on. All the people who subscribe to the manuals will get copies of that, including our people in the Forest Service and the licensees subscribing to the manual.

MR. MILLER: Is it currently the case that those policies and procedures...? Specifically, the minister mentioned that the diameter of a tree is a regulation now?

HON. MR. PARKER: No. Mr. Chairman, they're policies; they're not regulations under legislation.

MR. MILLER: There is really no substantive difference, then, in terms of the paragraph (1.2). There's nothing different now in filing that information than what previously existed. We're not changing from a position where information that was filed or requirements that were in place were regulations and we're now moving to a different system; we're really being consistent with what existed.

HON. MR. PARKER: The only real change is the fact that we are registering these policy directives now, so that it becomes a matter of record when it goes into force.

MR. MILLER: I want to deal now with the new criteria for determining stumpage and the four criteria listed in the amendment. I want to read it: "A regulation or directive issued under this section may establish different criteria or rates for one or more of the following. Then it lists different persons, different places, different classes of timber and different circumstances. One could appreciate, perhaps, (b) and (c), different places and different classes of timber, in terms of accessibility and terrain and quality and type of timber, but "different circumstances," it seems to me, is completely wide open and discretionary, and "different persons" appears to be quite discriminatory — I don't even know if it's legal. Can you put into legislation that you can discriminate against or in favour of different persons? Even though you may not be talking about individuals, but you may be talking about companies, the act says, nonetheless, that you can discriminate between different persons.

HON. MR. PARKER: Under the Interpretation Act,"persons" means individuals and corporations. We have to recognize the fact that there is a great diversity in circumstances.

Interjection.

HON. MR. PARKER: Well, circumstances other than what we're talking about here in paragraph (1.3).

We have to clearly define the fact that different criteria or rates can apply for one or more of different persons, places, classes of timber and circumstances. Circumstances may be emergent. There may be a flood; there may be a fire; there may be insect problems. "Circumstances" may be severe market problems, as we've seen in the past. There has to be a means for somebody in the future to deal with unusual situations, and that's the purpose of this section.

MR. MILLER: I appreciate the need to respond, and I'm sure that almost every Minister of Forests we've ever had has been faced with those difficulties or challenges and has been able to.... We don't necessarily agree all the time, and sometimes we agree with some of & variations. But the broad phrases that are used,"different persons" and "different circumstances," seem to me.... Does there have to be a justification? It's one thing to write in that you can discriminate on the basis of circumstance or persons, but that gives the minister so much power. And it's maybe not power that you'd want to use; you might want to have that more defined. I don't know what advice you've received from the Attorney-General or whoever writes legislation about the advisability of using those broad discriminatory terms in a section that is so important because it deals with the amount of money owing to the Crown for stumpage.

HON. MR. PARKER: Mr. Chairman, our legal counsel advised us on the syntax here. the definitions and the use of words as this section 1s set up. The diversity of the resource means that to be able to manage it effectively you have to have discretionary opportunity to manage, and that's what that provides for. Different persons, as I said earlier, means, under the Interpretation Act, corporations as well as individuals. So you have to have the opportunities to deal with unusual events and circumstances. This provides for it, and our forest council tells us that this is adequate wording.

Section 21 approved.

On section 22.

MS. EDWARDS: I wanted to ask the minister, in section 22, the revision of 87. 1(3)(b), when this small business forest enterprise account is expended to construct and to maintain logging roads and bridges, will those roads and bridges be subject to similar rules of use and maintenance that apply right now to forestry roads? In other words, who will have access to them? That's the main thing I'm interested in.

HON. MR. PARKER: They come under the purview of the district manager. They're public roads. Access over them is open to the public, providing the public is not endangered, and providing the fire hazards are such that it's prudent to allow the public in at that particular point in time.

MR. MILLER: Mr. Chairman, perhaps you could advise us. We're on 24?

MR. CHAIRMAN: No. 22, hon. member.

MR. MILLER: Then that's the account, and basically allows revenue to be collected. Revenues collected can be put into the account and can be taken out and put into general revenue. I wonder if the minister would elaborate. Will there be an attempt to maintain a minimum balance in the fund? Could the minister advise what amount that might be? What kind of contribution has been calculated to be made to general revenue from the fund? Could you advise the House a little fuller on the kinds of revenue that we're looking at, both in terms of coining in and going out?

HON. MR. PARKER: This is reported in the regular budgeting process, and was dealt with in the estimates. We can look up in the estimates book and advise, but that information is available in the 1988/89 budget. The purpose of the account is to make sure the funding is in place to deal with

[ Page 5344 ]

access protection and forest renewal of the small business operating areas. The projection, for example, for the coming year is revenue of $123 million, and net revenue of $69.9 million, with some $53 million being used in timber cruising. road construction, silviculture, protection and administration of the small business forest enterprise program.

Sections 22 and 23 approved.

On section 24.

MR. MILLER: In dealing with roads, both in this and subsequent sections, I presume as a result of the change made to the Forest Act — in terms of companies not being responsible for roads that used to be paid for, at least partially paid for under section 88 — we now get into a situation about ownership. The real substance of my question is what will happen now in terms of expenditures made by the licensee, and not made by the ministry. Will we get into a situation where roads that used to be made available to the public will now be denied access to those roads?

HON. MR. PARKER: Licensees can only construct under the terms and conditions of the road permit issued against the licence. The language of the road permit provides for the ownership of the road to be retained by the Crown. So it is a public road; the ownership of the road built under that permit remains public. However, the constructor of the road, as the user and therefore the maintainer of the road, is entitled to remuneration from other industrial users for assistance on maintenance costs. If the road permitted is seen to be charging too high a fee, that can be adjudicated by the district manager and, on appeal, by the regional manager.

[4:30]

MR. MILLER: Does this really tie in with taking 5 percent, and that 5 percent in TFLs being made available to small business? The difficulties of taking the 5 percent are manifest. Depending on where you are.... They can be all over. I would assume that there would have to be some system whereby a licensee who may have expended money to construct a road would want to be able to recover moneys from a small business operator, for example, who now has access to timber, either under the 5 percent or some of the other provisions whereby timber would be made available.

HON. MR. PARKER: Yes, the small business program licences that are established on or within tree-farm licences as a result of the amendments to the Forest Act have to be serviced. They are serviced by the road network of the tree farm licence, and the small business operator will be looking at cost-sharing the maintenance of the roads on the tree-farm licence. The capital costs of the roads are the responsibility of the tree-farm licensee up to the small business operating area; it's not the place of the small business licensee to deal with the capital cost of the road on the tree-farm licence. That's the responsibility of the Forest Service.

We are to provide access to the small business program, so any assistance on the capital costs of accessing the small business timber sale area would be between the TFL licensee and the Forest Service. That saves the small business operator from having to deal with that sort of situation. That's in the tree farm licences.

Elsewhere, where the small business sales are set up, we're responsible for providing access to those sales for the small business operators, whether it's going across somebody's private property or under some other joint-use agreement.

MS. EDWARDS: I wonder if the minister could clarify this for me, because there have certainly been a number of problems in access for users who may be recreational users; that may have sometimes been even clearer than those who may be not recreational users. I suppose even if you called berry-picking a recreational use.... I don't know.

I'm curious to know if the minister would like to go into it a little more clearly for me as to who he means by an industrial user. I'm not sure if that term was used; I can't remember. If it's only an industrial user.... If we have a recreational business, for example, that wants access to that road, how does that fit in?

HON. MR. PARKER: A regular user of the road system for commercial purposes would be expected to pay a reasonable share of the maintenance cost of that road.

MS. EDWARDS: If the use is regular, then the owner, who may be.... The owner is still the Crown. The user would be the small business, perhaps, or even a larger licence-holder, and would be able to then collect from that regular user.

You say there is the possibility of an appeal to the district manager or the regional manager. I didn't quite get how that was decided. There is no dispute settlement mechanism. The old district settlement mechanism is gone, and now am I to understand that if the individual parties cannot come to a reasonable agreement, it's an appeal process to the district manager and then to the regional manager? If that doesn't work, is that the end of it?

HON. MR. PARKER: Go to your MLA.

MS. EDWARDS: Well, okay.

Would you like to respond on the business of regular users? There are many regular users who would probably dispute the requirement that they pay for the use of that road.

HON. MR. PARKER: I said "regular users for commercial purposes." Let's use as an example a rafting company that may be using a forest road to access a part of the river in order to place rafts in the river. They're a business; it's fee for-service. They take the rafters up, drop them and pick them up at another location, so their vehicles are moving up and down the road on a regular basis and they're doing that as a business. They would be expected to pay a reasonable amount towards the maintenance of that road.

If you have a rancher who goes out from time to time to check on his herd or some other installation that he may have somewhere along that road —maybe just some drift fencing that he has under contract through his grazing lease — no, he's exempt. But if he was moving cattle back and forth on a regular basis, if he was buying cattle and bringing them out to a rail siding or something like that on a regular basis, regular traffic, he would be considered to be a commercial user.

MS. EDWARDS: There are no particular kinds of regulations that try to define this kind of thing? It's simply a matter of trying to agree and then going to appeal?

HON. MR. PARKER: You only go to appeal when you don't agree with the decision. But once there is a commercial user on the road, he is quickly identified by other commercial

[ Page 5345 ]

users on the road because they're all using it fairly frequently. So it's easy to identify them. The recreational user or occasional user is not interfered with at all.

MS. EDWARDS: I wonder if the minister would give me an answer to something that sort of turns around on this, and it's the whole business of closing off access. It's a matter of considerable concern throughout the province, and I think this is the place to address who decides ultimately that some of these roads are going to be closed and at what point.

HON. MR. PARKER: That's the district manager's decision. Road closures are for things such as public safety, fire danger or damage to the road. On some road systems, particularly in the spring during breakup periods, any traffic can do severe damage to the roads and they may be closed for a period of time until they can withstand the punishment of traffic.

MS. EDWARDS: I'm talking about something a little more drastic than that, and that is permanent closure. As you know, that is an issue of considerable concern to wildlife managers and is of considerable concern to some forest managers, who in fact see a whole lot of potential forest land taken up in road acreage — or hectarage, whatever we say these days. Who makes those decisions, and is there some process or procedure that the minister sees would happen within the ministry?

HON. MR. PARKER: That's interagency, generally between the Ministry of Environment and Parks and the Ministry of Forests and Lands. Some of our forest licences require that certain classes of road be put to bed following operations, in which case they are ripped and returned to growing sites.

Section 24 approved.

On section 25.

MR. MILLER: I just wanted to canvass the minister with respect to the removal of what I guess could be interpreted as a dispute settlement mechanism in the existing section 97, where a person — and this is under industrial or timber use — who wishes to use a road deemed to be owned under section 95 but who is unable to reach agreement, may apply to the regional manager or district manager for a determination.

The new section really doesn't have that in it. It does go through the situations or stipulations where the deemed owner can request a reasonable payment of actual expenses. A deemed owner shall not, in respect of the use of the road by any person, require any payment from that person other than a reasonable payment in respect of the actual maintenance to reimburse the deemed owner for capital costs, etc. Nowhere do we have the opportunity that was permitted under the original section 97 for the person who wished to use the road, but was unable to come to an agreement, to approach the regional or district manager for a determination.

It seems to me there is a loss there. What do the parties or the person who wants to use the road now do? Are they required to go to the courts or some other avenue in order to resolve any differences? It's quite logical or likely that differences could arise. Could the minister advise why that is, and would it not be preferable to maintain in section 97 that referral, or approach if you like. to the regional or district manager?

HON. MR. PARKER: Section 97(l) of the act is repealed by this section; section 97(2) remains. Section 97(1) as repealed and substituted for by section 25 of Bill 28 is still appealable by parties in dispute, so the appeal opportunity still exists.

Section 25 approved.

HON. MR. STRACHAN: On behalf of the Minister of Forests.... I understand the critic has this, but I will read it. This is an amendment to introduce between sections 25 and 26 a section 1n the act which would be numbered section 129.2. It reads, in that section 129.2, by deleting "small business revenue" and substituting "small business forest enterprise revenue." I so move on behalf of the Minister of Forests.

[4:45]

MR. CHAIRMAN: This will involve another section then — 25.1.

Section 25.1 approved.

On section 26.

MR. MILLER: The amendment removes references to lumber. I struggled with this one to try and understand what it meant, and I think I finally do. I believe that the minister can require wood products to be manufactured to a further extent. This would give the minister the power to say, for example, to a processing plant that manufactures, for argument's sake, 2-by-4s: "We think you can do better than that; we want to see some further processing." Am I correct or incorrect in that assumption?

HON. MR. PARKER: I guess that interpretation can be made, all right. The purpose of the exercise was to get away from those people in the industry who, just to get around the log export regulations, were taking very light slabs off of logs — just barely skinning them — and then selling them as cants or sawn timbers. It was to try and put a stop to that. The amended act reads: "...manufactured in the Province into sawn wood products...manufactured to an extent required by the minister...." It's just meant to curtail the abuses of the log export program.

MR. MILLER: In other words, those people who were doing that — who were taking the cants off and shipping the squares — were claiming that their product was lumber under the existing act.

Sections 26 to 28 inclusive approved.

On section 29.

HON. MR. PARKER: Mr. Chairman, I move the amendment standing under my name on the order paper. [See appendix.]

Amendment approved.

[ Page 5346 ]

On section 29 as amended.

MR. MILLER: Concerning appeals on stumpage, what recourse would people have if they believed the ministry had made a mistake in applying the ministry's stumpage rules?

HON. MR. PARKER: Licensees have the right to appeal the application of the appraisal manuals, and that's provided for in the legislation — in the act and in Bill 28, which is the amendments to the act. The licensees have the right to appeal the application or applications of the stumpage appraisals and the directives therein.

Section 29 as amended approved.

Section 30 approved.

On section 31.

HON. MR. PARKER: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment approved.

Section 31 as amended approved.

On section 32.

MR. CHAIRMAN: There are three amendments on section 32. Perhaps if the minister would introduce them, we'll call them all.

HON. MR. PARKER: I move the amendments standing in my name on the order paper. [See appendix.]

Amendments approved.

On section 32 as amended.

MR. MILLER: Again, it's not that I take issue, but I seek clarification. One of the concerns in terms of the take-back is that it could be applied to the benefit of the licence-holder. Under section 32(3), reductions made must apply uniformly over the entire allowable cut, and every holder of a licence referred to shall immediately enter into an agreement with the Crown and a revised management and working plan. Is there some difficulty in applying this reduction in a TFL uniformly over the entire allowable cut? I see that there could be. Perhaps the minister might elaborate to some extent on how he sees those reductions being made.

HON. MR. PARKER: This alludes to the forest profile and the recovery of cut from the licences existing: recover forest profile and similarly market a forest profile, instead of taking back just the best and selling just the best, or taking back the worst and selling just the worst, but to give the small business enterprise program an opportunity at the forest profile.

MR. MILLER: Part 6: "Every holder of a tree farm licence shall, within 6 months after the day this section comes into force, submit to the chief forester a revised management and working plan...." Will that plan be subject to the normal provisions of the act with respect to public viewing and the changes the minister has indicated that he would like to see with longer public viewings?

HON. MR. PARKER: I haven't given that any previous consideration. We can certainly take that under advisement.

MR. MILLER: For people in the small business program who have some concerns about the licensees trying to maintain the best and dispose of the stuff on the mountain tops or the least accessible or the poorest quality, I would think that they should have an opportunity to view the revised plan, particularly the small business operators in the particular TSA where the TFL might exist, so that they — given their local knowledge of the area — could comment on it. I would think that would be.... I would like to hear the minister say that he would make that commitment, as opposed to taking it under consideration.

HON. MR. PARKER: I'll certainly take it under advisement. As I said earlier, I'm quite prepared to do that. But I'm not prepared to make a commitment precisely on every tree farm licence in the province at this time without further review. It's good advice, and it will be considered seriously.

Section 32 as amended approved.

Section 33 approved.

On section 34.

MR. MILLER: I alluded to the northern interior lumber sector in the previous section on stumpage, and it's more appropriate to this one because this section, according to the association, really wipes out the appeals they had initiated with regard to the implementation of the new stumpage system. They say that their understanding of section 34 is that all existing appeals are terminated, all existing appeal board decisions are null and void, and all stumpage rates set by your ministry are deemed to be correct regardless of how gross the errors or inequitable the rates might be. It seems to me that if they're correct, we have a government which by legislation is wiping out its mistakes and the right of this association or various companies to appeal. They claim that they have spent a considerable amount of money launching them. They felt their case was good, and now the legislation retroactively eliminates the opportunity to do that.

I don't think that's a good precedent for any piece of legislation to set, and I would like the minister to respond first of all to the allegation made by the northern interior lumber sector — whether or not they're correct in their interpretation of section 34. If that is the case, why was it felt necessary to bring this section 1n?

HON. MR. PARKER: A good number of the appeals we have received of late attack the philosophy of the comparative value pricing system, not the technical aspects, This provides for focusing all appeals on the technical aspects of the appraisal system, and we have advised all licensees in the province that all pricing appeals currently in process will be reviewed to determine those which are technical in matter. Those which are technical in matter will be dealt with accordingly. So a number of the appeals presently on the schedule will fail because they are not technical in matter; they're philosophical.

[ Page 5347 ]

There is a process. They deal with it through discussion with the Forest Service and the various MLAs and government members. The licensees are not without recourse; it's been provided for. All new appeals will have to be proven on their technical merit, not on a philosophical bent.

MR. MILLER: The minister suggested that somehow MLAs play some part in the process of stumpage determination. I wonder if he could advise what part that is.

HON. MR. PARKER: I was talking about the philosophy of the comparative value pricing system. If licensees want to do something about the philosophies of government, then the best way to deal with that is by talking to the MLAs.

MR. WILLIAMS: I wasn't here for the previous section, which allowed discrimination by the minister. But as I read it, this is a mirror image that allows the same kind of discrimination: "or shall be treated as invalid on the grounds that (a) the policies and procedures...were applied differently for different persons, differently in different places, differently in respect of different classes of timber or differently in different circumstances.... Maybe the minister could elaborate on exactly what the implications of that section are.

HON. MR. PARKER: That's a matter of record in the debate on section 33.

MR. WILLIAMS: Well, if you want to hold up the discussion, that's certainly the way to do it, Mr. Minister. A reasonable question has been asked and a non-answer has been received. Maybe you'll have to look up your notes so we'll know whether you really know what it says. Maybe we could have the benefit of your briefing notes, Mr. Minister.

HON. MR. PARKER: Mr. Chairman, a correction. It wasn't section 33; it was section 21. The discussion of those items was dealt with under that section.

MR. WILLIAMS: The question is: could we have the benefit of your briefing notes for this section?

HON. MR. PARKER: Section 21 has been discussed and passed.

MR. WILLIAMS: We're discussing section 34. I asked for the benefit of your briefing notes on section 34. Is that too much to ask for?

HON. MR. PARKER: Mr. Chairman, I thank the member for the clarification of his question. Section 34 is a transitional section. It ensures that timber-pricing determinations made by the ministry to put into effect new stumpage rates on October 1, 1987, under the new comparative value pricing system, were done so under ministerial authority and, as such, valid.

I have already directed staff to undertake a complete administrative review of all pricing appeals currently in process. I'm sure that those which question some application of the pricing system were given a fair and independent assessment.

[5:00]

MR. WILLIAMS: I can understand the concern of the ministry in terms of proceeding with their existing program.

We can argue about the program and its validity versus alternatives, but that is the program. In trying to deal with that question and avoid philosophical questions in terms of the appeal, it seems to me you have established really draconian powers for yourself. It's one thing to simply try and have an equitable system of some kind; but to say that you really have the authority and the power to discriminate between persons and that there can be no successful appeal on that basis is very, very disturbing. As I say, we don't have any trouble with the business of appealing in terms of the fundamental system, because various administrations might establish some fundamental system. and we have to charge for the timber. But when you put the pieces together. It allows incredibly unreasonable and unfair discrimination. It makes it legal and it makes it unappealable, and that is a problem.

Maybe you have some advice from your staff that can allay our fears, which are genuine and reasonable concerns, given our reading of the statute. To be able to discriminate between persons when we might be dealing with the same tree doesn't make sense to me. Maybe you have further information, Mr. Minister.

HON. MR. PARKER: As I explained, the appeal process is to deal with the application of technical aspects of the stumpage appraisal system. We have a number of appeals that don't deal with the technical aspects, but they were permitted under the old act. We're amending the act so that only technical appeals may be heard. Appeals of a philosophical bent must be dealt with by government, not through the appeal process but through the valuation branch of the Forest Service.

MR. WILLIAMS: It's easy enough to write the statute so that you're dealing with the comparative value pricing system, simply saying that the system per se is not appealable — period.

Interjection.

MR. WILLIAMS: All right, technical aspects. Your problem is the overall system, and you don't want that appealed. But that's easy to spell out in a statute. You simply say that the overall system is not appealable, the comparative value process, but that technical aspects of it are appealable. What you're saying in the statute is that you have the authority to discriminate between persons and that that's not appealable. That's draconian. Don't you understand that?

HON. MR. PARKER: It's appealable, Mr. Chairman.

MR. WILLIAMS: Is the minister now saying it is appealable? Well, your staff are advising you, Mr. Minister, are they, that the different treatment between persons as allowed under the previous section 1s appealable? Is that the advice of your staff regarding this section?

HON. MR. PARKER: As I said, section 84 is amended by section 21 of Bill 28. If we take a look at section 154 of the existing act, it says section 84 is appealable.

Sections 34 and 35 approved.

MR. CHAIRMAN: The minister has an amendment to the schedule. Would he introduce the amendment, please.

[ Page 5348 ]

HON. MR. PARKER: I move the amendment standing in my name on the order paper. [See appendix.]

Amendment to schedule approved.

Schedule as amended approved.

Title approved.

HON. MR. PARKER: Mr. Chairman, I move that the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Ree in the chair.

Bill 28, Forest Amendment Act, 1988, reported complete with amendment to be considered at the next sitting of the House after today.

HON. MR. DUECK: Mr. Speaker, I call second reading of Bill 57.

SOUTH MORESBY

IMPLEMENTATION ACCOUNT ACT

HON. MR. PARKER: I wish to present the second reading of Bill 57, South Moresby Implementation Account Act. This legislation is required in anticipation of the signing of the Canada-British Columbia South Moresby agreement. Further to the memorandum of understanding signed by Canada and British Columbia, the bill will authorize the establishment of an account for silviculture work to enhance forest management in coastal British Columbia and for compensation to the forest companies affected by the agreement.

I move that the bill be now read a second time.

MR. MILLER: The legislation authorizes the setting up of an account, but it goes to the heart of a lot of the issues that we have debated here over the last week or so with regard to changes in forestry legislation. We have mentioned on several occasions, and quite strongly I think, the problem we see with proceeding with the provisions to roll over, to allow these Crown assets to be rolled into tree-farm licences.

[Mr. Pelton in the chair.]

We see, as we debate this bill, the immense amount of money that will be required to reclaim what is ours in the first place. It disturbs me, in terms of the accounts, that.... I talked about the compensation to the employees last year, and as far as I'm aware, the employees who were displaced by the park really did not receive compensation that was in any way unique. As far as I'm aware, it followed the provisions as laid out or arrived at through negotiations with the major unions in the forest industry. There was really no attempt made by the government, as far as I'm aware, to do anything more than they were absolutely required to do — to pay out the one week per year of service or the two weeks per year of service that's standard, which, I might add, was won through some pretty tough bargaining.

Yet on the other side we see the negotiations, or what we can see of the negotiations, where the government, through some kind of study and analysis, arrived at a figure of $31 million as the amount that should be set aside for compensation; and we see the forest company involved talking publicly about an amount, some say in excess of $100 million, for compensation, presumably for their forgone rights.

One has really to compare the two and wonder at the government's position with respect to the two: on the one hand, employees who are out there doing those tough, dirty jobs in the bush being given the bare minimum, the industry standard — and it's only the industry standard because those employees through their union managed to negotiate it; and on the other hand, we see this jumping to the public trough by the licensee, and asking an incredible $100 million from the taxpayers of this country.

We know that those workers who generally receive those small compensations are probably still in B.C. We know that they are probably still in the logging industry, for the most part — and I've talked to some. But what do we know about the company, the corporation, that's demanding this $100 million? Do they have the commitment to this province that those workers have? We're disturbed by that aspect of the compensation issue.

The compensation account presumably will be closed once the parties are paid off. There are other parties waiting as well, in terms of compensation.

The forest replacement account, as the minister indicated in his opening remarks, does not require the application of the funds to the Queen Charlotte Islands. In fact, the minister's words were "to coastal British Columbians," if I'm not mistaken. There again, I'm mindful of the situation that occurred when B.C. Ferries agreed to supply service to the north coast and received a subsidy from the federal government to do that. That subsidy, that agreement, was identified in legislation passed in this House and agreed to by the federal government as well, and it specifically stated that the subsidy was on a per-mileage basis on two routes. One was the northern ferry route and the other was the mileage between Victoria or Vancouver Island and the mainland. Yet a short time later we see that that subsidy was all applied to B.C. Ferries general revenue and that the northern part of the route, which is responsible, if you like, for the major portion of the subsidy, was told: "No, it's not earmarked."

Similarly, when we talk about a forest replacement account, it would seem logical to me that if the volume has been withdrawn from that region, there would be some requirement that the funds available to do more intensive forestry work, more silviculture work, to try and increase those volumes should as well be deposited into that same region, and yet there is no requirement at all. Coastal B.C. stretches from the lower mainland up to the Alaska panhandle. It's a pretty big coast. We have no guarantee that moneys allocated under that fund will be used in the region that has been impacted by the park.

[5:15]

In response to the words of the Minister of Environment either yesterday or the day before with respect to the park.... I may have my dates wrong. Nonetheless, we were assured that the park will be created, that that is going ahead. We have certainly tried to play a strong part in advocating that that do proceed. We are concerned as a party, and I am concerned as the member representing the region, that things are in limbo. They're in suspended animation in terms of the kind of activities we'd like to see taking place. I was there last week for a couple of days, and there were tourists both getting

[ Page 5349 ]

on the plane that arrived in Sandspit and getting off. They're coming, and they're coming in more increasing numbers, and the infrastructure that needs to be there to respond to these people — to treat them in a manner that will make them want to come back and will give them opportunities to spend money in that wonderful region of our province — is simply not there.

The people of the Queen Charlotte Islands are wondering and worrying about why they can't get on. They haven't seen a sign that — and no assistance in terms of support from either government — they can get on with the planning and actually start to do some of the work. Some of it's quite simple: to start to put in place the kind of facilities that are required, the dumping stations for recreational vehicles, and all of those things that are required if people are going to go and appreciate the splendour of the Queen Charlotte Islands. There's a great deal of concern about that.

So although the bill makes it possible.....

HON. MR. STRACHAN: That's all?

MR. MILLER: That's all. We haven't seen any action in terms of the agreement being signed.

I don't yet know, and the government has not shared with the people of this province, its position with respect to compensation. I heard the Minister of Environment (Hon. Mr. Strachan) say earlier across the floor, in response to a question or a comment from one of my colleagues: "I told you it would be more than $31 million." I don't know on what basis he makes that comment. Either he is a good guesser, or somebody somewhere has done some work, or the government has a position with respect to what that compensation should be. This would be an ideal opportunity for some government members in second reading to generally talk about that and outline their views about the question of compensation, because there are many people besides ourselves who would be interested in understanding what's going on and what position the government is taking to that issue, which becomes all the more important.... I keep going back and saying it: it becomes all the more important given the policy direction that we have been debating under Bill 28, to put more and more of our Crown lands into this form of tenure.

I won't have any more in second reading. There will be some other questions in committee on this bill. Some of my colleagues may wish to add their concerns in second reading.

MR. WILLIAMS: Mr. Speaker, there is a reference to the agreement. I presume that is the previous agreement. There is a reference in the statute in terms of amounts appropriated by the province for its contributions in accordance with the agreement. That was an $8 million maximum amount, I hope. Or is there a new agreement?

HON. MR. PARKER: This is not committee.

MR. WILLIAMS: The expert.

Interjection.

MR. WILLIAMS: Yes, he does have that one right.

I think the point that has been made is significant and that we do face the prospect of major tax costs here in dealing with the licensee in that area. It also is intriguing to me, looking at this and looking at the schedule for the government, to see that we are indeed going to be debating Meech Lake. I can't help but put the two together for some strange reason. I just can't help but think that there is a relationship between this and the debate of next week on Meech Lake and that we have a federal government that is very keen to get more provinces on board officially with respect to Meech Lake.

The Prime Minister of Canada is always willing to cut a deal, it's quite clear. and in many ways this administration is of the same breed. I think we have the unseemly spectacle of the constitution of Canada being bargained over bucks for a timber deal in the Queen Charlotte Islands. It's the new Fathers of Confederation: a buck is a buck is a sawbuck. What we have here is a classic deal being cut between the right-wingers of the British Columbia administration and the right-wingers of the Tory administration in Canada. Western Forest Products is asking for $100 million. You know, if you really want the constitution to be approved formally in British Columbia, you swallow $92 million; we only swallow the $8 million that we agreed to. That's what the deal is all about.

The account is interesting; it's an interesting exercise, but as usual, the most interesting play is off-stage. Oh, to be in on those discussions between the wheeler-dealer Mr. Mulroney and the Premier of British Columbia! We're a little more reassured that the Minister of Environment is probably in on the conference call. I do hope it's at the right time.

There it is. One can understand it in the days of John A. Macdonald and these kinds of deals being cut in terms of building in a rough-hewn way a new nation in the wilderness. What we have is this government in the wilderness out here in British Columbia doing the same kind of deal-making. It's not very reassuring and it's not very seemly, but it's the way business is done in British Columbia.

MR. CLARK: Just a few remarks along the lines that the member for Prince Rupert.... He likes to say Prince Rupert and the Islands, including South Moresby.

Recently I was talking to a faller who worked on Lyell Island, and he hadn't worked in two years. He went out and bought a brand new motorcycle because he got a job on Lyell Island. He went up there and, of course, the government decided to make it a park.

AN HON. MEMBER: Did you tell him you supported that?

MR. CLARK: I strongly support the move to a national park.

MR. JACOBSEN: Did you tell the faller that?

MR. CLARK: I told the faller that. As we've said in this House, there needs to be a process in place — and money — for workers who are displaced as a result of political decisions to create or preserve areas for parks. What happens is that rather than concern about the loggers or the fallers or the workers who are displaced....

HON. MR. STRACHAN: Mr. Chairman, I don't want to be argumentative, but I'm going to rise on a point of order and state that the member is really discussing something that is not in this bill. This bill provides for a special account in consolidated revenue for money to he granted under the agreement between the province and Canada in connection

[ Page 5350 ]

with the establishment of a national park in South Moresby. It does not deal with past compensation, which I'll advise the assembly has already been paid. The member, if he really has a friend with a motorcycle on South Moresby, should know that.

But really, this is providing an account; that's all it does.

DEPUTY SPEAKER: I'm sure the member will continue to speak on the principle of this bill we're dealing with.

MR. CLARK: Very clearly, the bill discusses setting up an account to deal with compensation. I know that the compensation for workers is minimal under the union collective agreement; but the kind of compensation the company is asking for is not minimal, and could not be called minimal by any stretch of the imagination.

It's interesting that the government, which seems to want to take the position of the licensee that $100 million is reasonable, has in a previous bill, one which I support, established the principle that Crown land can be taken back — or at least a percentage of it — without compensation because it is in fact Crown land. So here we have the licensee asking for $100 million from the taxpayers for land it doesn't own, and which it never paid anything for in the first place. We have the government bending over backwards, holding up the establishment of this park, because of the licensee's demands. At the same time, the workers who are displaced have been given only modest protection.

[Mr. Weisgerber in the chair.]

I think the government is going to have more and more conflicts, in terms of the resource base, as time goes on and we reach the limits of our resource base. Stein Valley is one, and there are others. No doubt other parks will be created. Therefore we have to deal with the dislocation of the workers involved. I'm in favour of dealing with that dislocation. We need retraining programs, relocation programs, money for those workers. We need jobs for those fallers who are displaced by decisions made by governments. It's not good enough for the government to agree to a park without agreeing to the consequences of that action.

The Minister of Forests has said he doesn't agree with creating all these parks. That's fine for him, but it's his government that's creating them. At the very least he should stand up and say that the people in the forest industry who are involved — not just the forest company, not just the licensees, not just the big companies, but the workers — are being taken care of. That's not being done by this administration. It wasn't done on South Moresby.

HON. MR. STRACHAN: Wrong, wrong, wrong.

MR. CLARK: Only the protection that existed under the union collective agreement has taken place.

If the $100 million that they were asking for was to deal with the kinds of labour adjustment programs we need in this province, we might have a different discussion. But it's not for that at all. The members know as well that there hasn't been money for labour adjustment programs to deal with the dislocation of workers.

DEPUTY SPEAKER: Pursuant to standing orders, the Minister closes debate.

HON. MR. PARKER: I'd like to clarify that the employees of Beban Logging were dealt with very fairly, in excess of the requirements of their labour contract, and that their assistance in relocation was substantial.

This bill provides for the establishment of two accounts, the South Moresby forest replacement account and the South Moresby forest compensation account, which accounts for more than just the licensees.

I move the bill be now read a second time.

Motion approved.

Bill 57, South Moresby Implementation Account Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Introduction of Bills

EMPLOYEE SHARE OWNERSHIP ACT

Hon. Mr. Strachan presented a message from His Honour the Lieutenant-Governor: a bill intituled Employee Share Ownership Act.

HON. MR. STRACHAN: I am doing this on behalf of the Minister of Economic Development (Hon. Mrs. McCarthy). The object of this act is to encourage employees resident in B.C. to share in this growing economy by acquiring a stake in their employer's future through the purchase of equity shares. The employer, who must be substantially engaged in British Columbia, may use the funds for business start-up, business expansion and balance sheet restructuring that results in job creation or preservation.

[5:30]

In Canada, the popularity of plans like this has increased enormously. Over 63 percent of the companies listed on the Toronto Stock Exchange offer some form of share ownership to their employees. However, the majority are open only to directors and senior officers. We believe all employees must have an opportunity to share in the future of the company employing them. Thus employee share ownership programs approved under the proposed British Columbia program must be available to all regular employees.

With that, I move that the bill be introduced and read a first time now.

Bill 61 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

INCOME TAX AMENDMENT ACT (No. 2), 1988

Hon. Mr. Couvelier presented a message from His Honour the Lieutenant-Governor: a bill intituled Income Tax Amendment Act (No. 2), 1988.

HON. MR. COUVELIER: The amendments provided in this bill have been requested by the federal government in accordance with the Canada-B.C. tax collection agreement. The intent of the amendments is to clarify provisions of section 8 of the Income Tax Act as they apply to deductions for Crown royalties.

I move the bill be introduced and read a first time now.

[ Page 5351 ]

Bill 62 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

HON. MR. STRACHAN: Second reading of Bill 36, Mr. Speaker.

MISCELLANEOUS STATUTES

AMENDMENT ACT (No. 1), 1988

HON. MR. STRACHAN: It's printed in the name of the hon. Attorney-General (Hon. B.R. Smith), but inasmuch as it is a Miscellaneous Statutes Amendment Act, on which we have already agreed through the usual channels to have substantial committee debate, there is not much more I can say in second reading debate, except that it has some very interesting provisions, most of which I support. However, there are some concerns, I think, in some cases, and I am sure that the debate in committee stage will be lively.

With that said, I move second reading of Bill 36, and open debate.

MR. LOVICK: Mr. Speaker, I am well aware of the procedure and the tradition that we do not have a debate in second reading of a bill that technically doesn't have a principle. However, I want to take just a moment to register some concerns that my colleagues and I have on this side of the House.

We all know, I am sure, that miscellaneous statutes bills are a bastardized form of legislation. They are something that has been cobbled together for some time. They don't really have any great place in the grand tradition of parliament. Rather, they are a convenience, a mechanism that governments find handy to make use of as the occasion arises. The question then becomes: what kinds of occasions would arise to make a government want to use such a measure?

The obvious answer to that question, it would seem to me, is that if a government introduces a miscellaneous statutes bill at the end of a session, after a considerable amount of time has already been spent by members in the Legislature, clearly the government is in a mad rush to get something through, working on the fact that most people will be too tired to pay attention; or, equally possible, the government is not entirely clear what its agenda is, and hasn't done its homework in advance of that miscellaneous statutes bill coming forward.

It seems to me there is something dreadfully wrong when we have a number of items in this particular miscellaneous statutes bill that are going to be contentious, to put the matter graciously and charitably. There are a number of items in this particular bill that we on this side are, of course, going to want to devote some considerable time and attention to, as the hon. government House Leader acknowledged. When he says there are some very interesting provisions in the bill, he puts the matter — how shall I say — circumspectly.

Again, Mr. Speaker, we are obviously not about to hold up second reading, but I do want to register our concern that the miscellaneous statutes provision, it seems to us, is being perhaps overused, if not abused.

DEPUTY SPEAKER: Pursuant to standing order 42, the minister closes debate.

HON. MR. STRACHAN: The question of the form of miscellaneous statutes I'll address briefly. When you have a number of provisions that really don't fit into one particular area, they normally go under this type of bill. It's a standard drafting arrangement.

MR. LOVICK: It's a sleeper.

HON. MR. STRACHAN: Yes. there is the odd sleeper.

The member questioned the legitimacy of the bill. He used a term that I wouldn't care to use. I must admit, in really discussing the legitimacy of this bill, it does have many mothers and fathers. and I guess that to some degree we don't know who they all are. So maybe the member's right in that sense. In any event, I'm sure we'll be able to discuss this at greater length and in more detail. With that said, I move second reading of Bill 36.

Motion approved.

Bill 36, Miscellaneous Statutes Amendment Act (No. 1), 1988, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. STRACHAN: I call second reading of Bill 53, Mr. Speaker.

HEALTH STATUTES AMENDMENT ACT, 1988

HON. MR. DUECK: This bill amends a number of statutes administered by the Ministry of Health. We're also adding new statutory authority in place of directives currently under the Financial Administration Act. These amendments will help us streamline the administration of our health care system — for example, in the appointment of medical health officers and members of hospital boards of management; hospitals will gain greater flexibility in how they make their capital investments; and there are changes to the Name Act to further our support for the RCMP's witness protection program. I would like to briefly outline the amendments to each act and the reasons behind them.

When the position of medical health officer becomes vacant, it is often difficult to find a qualified full-time replacement on short notice. This amendment will allow a municipal council to appoint an acting medical health officer on a temporary basis, subject to the approval of the Minister of Health. Appointments will be for a term not exceeding six months, with a single six-month renewal. Approval by the Lieutenant-Governor- in-Council will still be required for permanent appointments. Sections 66 to 68 of the act will be amended to make it clear that only one medical health officer is required to perform inspection duties as detailed in these sections of the act. The present wording incorrectly refers to more than one health officer in a district or municipality.

To ensure that no person can avoid the various provisions of the Health Act due to a technicality, we are adding a section that clarifies the acceptable modes of serving notices, orders and other legal documents. This amendment also includes a provision allowing service of documents by duplication in a newspaper in cases where, after taking reasonable steps, the person to be served cannot be located.

Fees for provincial services and property pertaining to hearing aids are presently regulated under a directive of the Financial Administration Act. In the interests of greater efficiency, we are simply transferring that authority to an act administered by the Ministry of Health.

[ Page 5352 ]

The Hospital Act. Our first amendment to the Hospital Act deals with which hospital rules and bylaws require approval of the minister. This amendment makes it clear that medical staff bylaws require approval by the minister. To further reduce the volume of orders- in-council I that cabinet is now asked to process, the Hospital Act will authorize the Minister of Health to appoint government representatives to the board of management of hospitals.

An amendment to section 41 of the act, supported by the Ministry of Finance and Corporate Relations, will give B.C. hospitals greater flexibility to benefit from attractive financial arrangements in connection with purchase of equipment. With the approval of the minister, a hospital will now be able to enter into self-leaseback transactions related to hospital equipment. Using the sale proceeds received from the leasing company, an annuity is purchased to cover the cost of the lease-to-purchase agreement. The cash difference between the sale price and total cost of the annuity would accrue to the hospital. As well, the hospital will eventually regain full ownership of the equipment. This arrangement is attractive to the leasing company because of capital cost provisions in the Income Tax Act that are not available to hospitals. The use of this amendment would be dependent on federal-provincial consultation presently taking place on existing federal tax laws. The province simply wanted to afford B.C. hospitals financial benefits already realized by Ontario legislation.

Following on documents made in 1985, a redundant subsection of the Hospital District Act is being repealed. A requirement that cabinet approve certain borrowing bylaws is being taken out, because all of these bylaws are now approved by the minister. This is simply a consequential change that was overlooked in 1986.

Name Act. In 1987, after consultation with the Royal Canadian Mounted Police, we made amendments to the Name Act to support their witness protection program. Since that time, two further amendments have been proposed by the police. The RCMP have pointed out that a change of name must often be carried out immediately to improve the most effective witness protection. Amendments to the Name Act will give the minister discretion to waive residency requirements and waiting-periods if it is in the public interest to effect such a name change immediately.

The second part of this amendment will allow the director of vital statistics to proceed in exceptional circumstances with a change-of-name application for a child without the consent of another person normally required under the act. The RCMP point out that the witness protection program might not be successful unless all name changes under this program, including those of the witnesses' children, can be handled anonymously.

Wills Act. Our final amendment broadens the power of the Lieutenant-Governor-in-Council to set fees for services provided by the director of vital statistics. New fees for filing or changing a notice of a will were established in the most recent provincial budget and have been charged since the beginning of this fiscal year under a directive of the Financial Administration Act. The temporary arrangement is now being replaced by permanent statutory authority.

Mr. Speaker, I move that the bill be now read a second time.

[5:45]

MRS. BOONE: I want to thank the minister, first of all, for the courtesy of providing me with information about these bills and for allowing his staff to come over and discuss them with me. It was of great help and it's something that I much appreciate.

It's unfortunate, because this is a bill that we could pass quite quickly except for one section. There really is only one section that we are concerned about, the section that deals with the Hospital Act and the leasing back section. We have some grave concerns on this side of the House about that, as, apparently, do the federal government and the Minister of Health in Ontario.

It's clear that there are some financial gains to be made by hospitals, and it's also clear that hospitals are supporting this change to the legislation in order to supplement their budgets. But it's very questionable as to the use of tax dollars. These are tax dollars that are being taken back from the federal government through a federal tax loophole, which I would assume would be closed at some point or other, and it raises the question why hospitals are having to go through this juggling act in order to receive funding. It also raises the question: is the Minister of Finance (Hon. Mr. Couvelier) depending on this money to fund our hospitals? Is this the way we intend to fund our hospitals? If our hospitals were funded appropriately, then they wouldn't be looking for these tax loopholes to try and grab some extra money to fund their hospitals.

I'd like to read into the record some remarks by Bob Nixon, who's the Treasurer of Ontario. They were remarks made on May 5, 1988. He states:

"I have serious reservations about this practice. These transactions result in the creation of a tax write-off through the transfer of assets from a non-taxable entity to a taxable one."

He then goes on to say:

"The sale and leaseback of capital assets is an accepted financing vehicle in the private sector. However, I am concerned about the appropriateness of this type of activity where it involves assets of public institutions the province supports. Although this financing vehicle supplements the budget of the institutions, it does so at a very high cost to the taxpayers and with relatively little benefit to the institutions. Out of every dollar in reduced government revenue, institutions receive as little as ten cents, while intermediaries pocket as much as ninety cents.

"While the sale and leaseback arrangements are permissible under existing tax legislation, they represent an inappropriate use of the tax system at a great expense to the taxpayers. I have directed ministry staff to undertake a full review of the implications of sale and leaseback and similar tax-driven leasing arrangements undertaken by publicly funded organizations. The purpose of the review is to develop an appropriate policy to prohibit these transactions, which in essence distort the intent of existing tax legislation. "

That came from the Ontario Treasurer, and that was after Ontario started to implement this process and actually went through.... They have some hospitals there that have in fact sold some of their equipment off.

It is of great concern to us as well that Ottawa and the provinces — and I assume B.C. Is one of those provinces — have unanimously agreed to impose a moratorium on the sale and lease back of libraries and other assets by universities and hospitals. That is an agreement that we have with the federal

[ Page 5353 ]

government, a unanimous agreement, and yet here we are in this enlightened province bringing forth legislation that would be in opposition to that moratorium.

Surely, if we agreed to the moratorium, if we agree that there's a problem in this section, if we agree that this ought to be revisited with regards to the whole process of the tax breaks given to the institutions, then we shouldn't be putting into effect legislation that enables us to use this tax loophole.

I guess the big question here, one that is an overriding one, is: of what use is it to the taxpayer? We constantly hear the government on the other side talking of the taxpayer as being a taxpayer that pays out of federal money and out of the municipal money and out of provincial money, and that it all comes out of the same pockets.

Surely to goodness, if we are taking advantage of this loophole to take money back from the federal government, which is money that was put there by the taxpayers, and a portion of that money is going back into the hospitals, and then a larger portion is going back into the intermediaries, meaning the leasing companies, there is a moral question as to whether that is a proper use of tax dollars. The taxpayer is eventually going to be paying that. The money that the federal government loses in taxes that is given back to this province through the tax rebate system or through the tax breaks that they receive is money that's going to have to be made up somewhere else. It's the taxpayer all around that is going to have to pay that.

We in this province ought to be funding our hospitals appropriately. We ought to be funding our hospitals so they do not have to go through this sort of loophole, or jumping through wires — whatever it is — in order to receive adequate funding to supply our hospitals with the appropriate equipment. If our hospitals are in fact waiting for this legislation to go through to enable them to have enough money to purchase the equipment that they need, then we are in sad trouble. We have big problems with the current budget that we have.

We don't know what's going to happen; the moratorium could go on forever. If the moratorium goes on forever, then why are we bothering with this amendment? I don't see the sense to this. I think we could have easily passed this legislation — this entire bill — without any problems whatsoever, had we removed this section and brought it back at a time when the moratorium is over.

We don't need legislation that is going to be there, which is dead right now but could be enacted at a later date. This is inappropriate. It is not a sensible way to deal with things — to be putting something into legislation now which may come into law at a later date when a moratorium is raised. The people of this province have a right to expect legislation that will be enacted. They have a right to expect legislation that will be debated fully at a later date, when all the rules are known, when all the regulations are there and when we know what cards we're playing with. Right now we don't know what cards we're playing with, Mr. Speaker, because of the moratorium currently on this. It's important that we not put this section through. It's important that we not have this piece of legislation sitting there waiting to be enacted at a later date.

I don't think I can point out strongly enough just how important it is for the taxpayers, because the hospitals right now are saying: "We require this money in order to supplement our budgets." Yet the taxpayers are going to be paying more, because they will have to pay to supplement the federal budget, which will be depleted because of the decreases in their moneys that are coming about as a result of this. That money is not just going out into the provincial scene or into our hospitals. It is going into the hands of private entrepreneurs and leasing companies who, no doubt, would be very anxious to have this imposed so that they could make that money.

That is not the role of this government. It is not the role of any government to enact legislation that will take money from taxpayers from one government and put it into the pockets of the entrepreneur. That is not the role of this government, Mr. Speaker. I certainly don't think that the federal government will be too pleased when they hear that this government has put into place an act, knowing that they have fully agreed to a moratorium. Surely that moratorium was based on an agreement, on the knowledge that there is a problem and that there should be some recognition, that this practice is getting out of hand and yet we in this province are going out and against all other provinces — there are none that have done this — are going to enact legislation that enables them to do this. I will close the debate at this time on the second reading — not close the debate from our side but close my side of the debate. I will get into more questions in the clause by clause, but there are several members from our side who will wish to get in on this debate.

HON. MR. COUVELIER: It would probably be useful at this time if I be allowed to make a few comments insofar as the issue at hand that is troubling the members of the opposition relates to financial matters which my ministry has some connection with.

First of all, may I tell the House and the hon. member for Prince George North that the government totally agrees with the position she takes on the philosophy on this issue. We believe you are right and we agree with it. We have advised the federal Minister of Finance that we agree with the Treasurer of Ontario, that the practice of allowing tax avoidance measures like this should not be condoned. So I think on this issue we are ad idein on both sides of the House.

The matter of the bill comes before this House now by virtue of the discussions that I have had with the federal Minister of Finance, wherein I said to him on this question that we agreed with the position of the Treasurer of Ontario, but we trusted that the federal Minister of Finance would research the facts and come to the same conclusion that we have. That is to say that the province of Ontario has taken advantage of this — to use the hon. member's phrase — tax loophole. The province has taken advantage of that fact, and once having used it for issues of library financing, hospital financing and a host of other initiatives, now chooses to take the self-righteous position that it should no longer be allowed. I — and I believe other provincial finance ministers — have told the federal minister that we agree with the philosophical position and we support it, but we ask that those initiatives which were in process or on stream be allowed to continue — in effect, be construed as being grandfathered so that when the hospitals of the various provinces other than Ontario became aware of the Ontario practice, they then did some research work and started to develop the machinery to take advantage of the similar objective.

We in this House are then faced with the question of whether we should allow the B.C. hospitals to participate in this federal income tax largesse, and the issue has some financial implications. We calculate that potentially there is a

[ Page 5354 ]

benefit of $14 million that would accrue to B.C. hospitals that might choose and could legitimately claim a grandfather status, hospitals that might choose to pursue this scheme. So if the hon. members find themselves unable to support this initiative, they would in effect be denying the hospitals of this province the opportunity to realize considerable sums of money.

[6:00]

I can tell you that as a consequence of my representations to the federal Minister of Finance and my discussions with my colleagues across the country, I do believe that the grandfathering initiative is understood as having some merit. It is merely an exercise in equity. Ontario has taken full advantage of this loophole. To deny B.C. hospitals the same opportunity would be in effect to deny the citizens of this province the opportunity to get the same benefit that citizens in Ontario have enjoyed.

I do believe that the comments made by the Ontario Treasurer were somewhat self-serving when he introduced this sanctimonious position after having first of all exhausted every opportunity before him to realize the advantage. However, that is not relevant to our debate. The issue you raise is an important one, and I have no difficulty — nor does the government — agreeing with you that philosophically it's wrong. So the issue then is: should we be allowed to receive the same kind of benefit that Ontario residents have received prior to closing the issue down? We think it's only appropriate, in the interests of equity, that B.C. citizens receive the same benefit that Ontario citizens have had.

MR. SIHOTA: So that's your price.

HON. MR. COUVELIER: The hon. member should be aware that we are not suggesting that we take advantage of this to deal with libraries — to sell and lease back libraries. We're not as outrageous as the Ontario government has been in this respect. But it is legitimate, I think, for us to recognize that the Children's Hospital is one of the proposed beneficiaries under this scheme. The cancer control agency is another proposed beneficiary under this scheme. The Vancouver General Hospital is another. The issue is one of about $14 million, by our calculation.

The other matter the House should be aware of is that due to the unique method by which provincial revenues are prorated in terms of income tax collections, the effect of stopping now and not putting this legislation through means that B.C. residents would be paying for the benefits that the Ontario residents have already had. If we fail to take this opportunity, the effect will be that we are giving a benefit to the residents of the province that, up to this moment, has received the most benefit by the exercise of this initiative — Ontario. In other words, Ontario, being the province with the largest income tax revenues attributable to it, is in effect the institution or jurisdiction that failure to support this B.C. Initiative would benefit.

Is that your desire? Are you sanctimonious enough to say that B.C. will give a gift of $14 million to Ontario? Is there some virtue in this position that would deny B.C. citizens the same kind of a tax break that Ontario citizens have had? I have some trouble understanding the logic of this. If we can agree on the philosophy, and if we can agree that aside from those initiatives that are in stream it shall not be allowed anymore, then it does seem to me that we are ad idem and can march down the aisle arm in arm, feeling secure that our chastity is preserved.

It does seem to me, hon. members and ML Speaker, that for $14 million we should....

Interjections.

MR. REE: On a point of order, Mr. Speaker. We're speaking of serious matters — the health and what not of the people of this province — and the member for Esquimalt-Port Renfrew is heckling and laughing in his seat here. I think that is disgusting and terrible. Our party is serious about the health of the people of, this province.

MR. SIHOTA: I take issue with what the member said. Sure, I'm laughing; I'm laughing at this convoluted, circular, nonsensical explanation that the minister is offering. What he's saying doesn't make any sense.

DEPUTY SPEAKER: Hon. member, if you're on a point of order, please address the Chair.

MR. SIHOTA: I just want to explain to the member opposite why I'm laughing. I think there's some merit in why I'm laughing. He should be laughing too.

DEPUTY SPEAKER: Hon. members, we are in second reading. You will each have an opportunity to speak your piece.

HON. MR. COUVELIER: I don't know that I can say much more to elaborate. It does seem that the members got exercised by my attempt to explain the. truths about how the provinces share federal income tax deductions. I would be happy to get into that in more detail if you find my comments incorrect in any way. But I tell you, my friends, that the beneficiary of our failing to pass this bill will be primarily the residents of Ontario. I say that categorically; that is a fact. If you wish me to bring forward further documentation to prove it, I would be happy to do so.

So the matter in summary, as I see it, is that the citizens of Ontario have enjoyed these — to use the phrase of the hon. member — tax loopholes. Having exhausted those opportunities, they are now saying: "Right, it should be stopped." We agree now that it should be stopped; we agreed before that it should be stopped; but surely.... I have some trouble believing seriously that anybody in this House would be opposed to our at least obtaining the same kind of benefit that the citizens of the most economically sound and stable province in Canada have been receiving. What is our obligation, after all? Is it to our own citizens, or is it to the citizens of Ontario? I happen to believe that I was elected to this House and appointed as a minister of the Crown to represent the interests of the citizens of British Columbia. While I am cognizant of Ontario's importance in Confederation, I'd like to think that my first responsibility is to the management of our own provincial affairs. Therefore I suggest to the House that section 41 that the member is talking to does deserve support and passage.

MS. A. HAGEN: In the late hours of this session of the House, it's a most interesting discussion that we have just entered upon. I found myself thinking as I listened to the minister talk about the philosophy that he holds in accord with that outlined by my colleague the member for Prince George North (Mrs. Boone), that he agrees that this issue is unethical and should not exist in the tax law of this country.

[ Page 5355 ]

We've all agreed on that. Then he proceeds with an argument that was so irrational, equivocal and unethical, for a government that prides itself on its ethics and morals, that I find it hard to imagine I have been listening to the Minister of Finance of this province.

I want to deal first of all with this so-called philosophy and the ethics of the situation, and then deal with some of the practical aspects of this clause in this miscellaneous statute.

The minister doth protest that he is very pure in looking after the interests of the taxpayers of the province, although I have heard the other side of the House say over and over again: "A dollar is a dollar, and it doesn't matter where it comes from. If we take unethically and inappropriately from taxpayers, then we shouldn't be doing that." However, the Minister of Finance tonight has given us his argument about why we should be doing that.

Recently the Minister of Advanced Education (Hon. S. Hagen) had to backtrack on this very issue, when the universities were hoping to get in on this philosophically inappropriate and unethical procedure. To his credit, when he was challenged on leasebacks of university and college libraries, he said: "Nix. No, we're not going to do that. That is not something this province believes should happen." Immediately he moved to scuttle any of those initiatives.

But the Minister of Finance has provided us with an incredible argument about how he has found a means of continuing with an unethical loophole that he doesn't approve of, and all in the name of $14 million, because this government is underfunding hospitals and doesn't have the dollars needed to run its operations. It is looking for any means to get an additional dollar.

Let me just carry this one point further in terms of my own community and the hospitals there, where dozens of people, not only in New Westminster but throughout the lower mainland and the province, are contributing to hospital equipment with a tax benefit. This is a charity; this is where we are putting our dollars to good works. Now the minister is saying that all the people who contributed to these hospital equipment setups where they were matching funds should now have another tax loophole, because for some reason or other, Ontario managed to use it.

He has tried to persuade us that Ontario used it to the ultimate end and that they are now going to be the benefactors. As my colleague from Prince George North has noted, we do not have any proof at all of even the question of the benefit of this. We're into some kind of trading game with the province of Ontario, which says that we can act unethically, do something that we don't approve of, that really is not part of any good and reasonable tax law, because somebody else did it. We should get onto the gravy train and do something that's wrong because somebody else did it. They happened to take advantage of it, and you happen to believe it's wrong. We're going to do it because it's wrong, and we don't want to be one-upped by another province. That, from a minister of the Crown, is pretty hard stuff to swallow.

Let me just move on to some of the practicalities of this. I don't pretend to be nearly the expert in financial wizardry that the Minister of Finance is. He can wave his hands and make us believe that he knows all about how treasury boards work. I don't want it to go to his head, but I thought I might pay him the compliment that he at least has a superior knowledge to mine. 1 will pay him that compliment because he might indeed, by virtue of the fact that he is working with those figures. I'll thank my colleagues for not even giving him that credit. However, I am prepared to acknowledge that he may, in fact, have more knowledge of financial wizardry than I do.

But in practical terms, I have not heard the minister give us one iota of information that suggests this is a good deal for hospitals. In fact, the Treasurer of Ontario noted that it was a rip-off for hospitals in relation to the firms doing that kind of a leaseback.

HON. MR. COUVELIER: After having ripped it to shreds, it's a rip-off.

MS. A. HAGEN: Well, that's your version, Mr. Minister. Unfortunately, Mr. Speaker, the minister doth protest too much. To balance this business of being philosophically pure and agreeing, and then at the same time getting down into — and I'll watch my language — the lower echelons to find a rationale for this particular practice, it boggles my mind at this dinner hour in a late week of this session.

[6:15]

The minister has not provided us with one iota of information to suggest that this will be of benefit to hospitals. He has only said it will somehow let us one-up Ontario and will give to all of those businesses some kind of a tax loophole. Whether that tax loophole is of any use to hospitals, I haven't heard a shred of evidence in the comments. I heard a plea from the Minister of Finance that we should join him in this nefarious activity and this business of abandoning our ethics and our morals, because somehow we should one-up Ontario. Well, Mr. Minister. it's not good enough. It's not a reason that any good and principled Legislature could buy; I, for one, don't buy it for a moment.

Let's take a look at this particular piece of legislation. This particular clause simply should not be there; it should be out of this amendment. It's one where grandfathers should be respected and not put into the position you're putting them in that somehow they can be used for such purposes as this, when you yourself say that the purpose is ill-formed and ill-advised. It shouldn't be on the books; it shouldn't be allowed. Let's for once hold our heads up and do something that is ethical and proper and get on with the business of ruling the province.

At this particular point I can't resist going back to a theme that I often go back to. The figure here is similar to the figure the minister has proposed to charge seniors in their homes in order to get an extra buck: $12.9 million for homemakers, because somehow we need to get some extra dollars, whether it's principled or whether it is something we can deal with philosophically as the right thing for us to do as legislators.

The best thing we can do with this particular clause is to see the minister agree with us that it is philosophically not an action that we should take and to go along with the Minister of Advanced Education and Job Training who, when confronted with the same situation said,"No, I won't proceed with this" and to see this simply not go ahead.

That's the kind of action we would hope the minister — a reasonable man with reasoned debate — would respond to. I hope that the minister would come back to his initial statement that philosophically we agree, and philosophically this clause should not go forward. That would be the honourable thing to do, and we would be delighted to join with the members on the other side of the House in achieving that action,

With that, Mr. Speaker, I look forward to some further debate in committee, and I hope that at that time we might see

[ Page 5356 ]

an amendment from the hon. minister, in whose name this legislation stands, and who has had this particular clause foisted on his amendment act by the Minister of Finance with a purpose and an intent that none of us — including himself — feels very good about.

MR. SIHOTA: Mr. Speaker, I see the Minister of Health has left the room. He wasn't here for that rather persuasive argument put forward by the member for New Westminster (Ms. A. Hagen) with respect to the illogical provision that confronts us in this piece of legislation — namely, the provision that arises out of section 7 dealing with the Hospital Act.

I see that the Minister of Finance (Hon. Mr. Couvelier) is not in his seat. Maybe he will return at some point to have his words drilled back at him. It was just astounding to listen to the rather circular argument put forward by the Minister of Finance in support of the provision being debated here.

It may well be true that Ontario took advantage of the loophole. Does that, in and by itself, justify British Columbia running, cap in hand, to the federal authorities and saying: "Gosh, we didn't catch on to this loophole. Because we didn't catch on, and you are now in the process of shutting it up, we would like to have the benefit of that loophole on a retroactive basis" — or on a grandfather basis, if you want to put it that way. That's effectively the argument put forward by the Minister of Finance when he talks about the provision that is the really contentious piece in this act.

It is a little bit like Imperial Oil....

Interjection.

MR. SIHOTA: I know the Minister of Education (Hon. Mr. Brummet) is listening to this and following this very carefully. He comes from a riding where they know a little bit about oil and gas.

HON. MR. BRUMMET: Talk about circular arguments.

MR. SIHOTA: You listen to me, Mr. Minister. It's like Imperial Oil taking advantage of a tax loophole and running it to its utmost, and the federal government catching on to it and saying: "Gosh, we shouldn't really allow that, because it is really a nice tax avoidance scheme." It allows that to be closed so it's no longer tax avoidance, and Shell Oil comes running up to the federal government and says: "We weren't able to take advantage of it, but Imperial Oil did. We don't think it's fair or equitable" — to use the Minister of Finance's language — "that Imperial Oil got away with it, and we, poor old Shell Oil, can't take advantage of the same loophole.

HON. MR. BRUMMET: Declare your shares.

MR. SIHOTA: I don't have any shares in either company, the minister would like to know; nor do I have any shares — period — in any of those types of companies.

The point remains: what would be the federal government's reaction to that type of scenario? The federal government would say: "Thank God, Shell Oil didn't catch onto it, so we didn't lose that much more revenue. The tax avoidance didn't cost the federal treasury as much as it could have." Sure, one oil company took advantage of it, but luckily another one didn't. Surely they wouldn't say to the other one: "For reasons of equity, we'll shut it off for Imperial Oil, but we will now allow it for Shell." They wouldn't say that. They would say: "Look, this is a tax loophole. We have chosen to close it, and we are not going to allow you to use it."

Interjections.

MR. SIHOTA: Are the members opposite confused about the argument? It's a very simple argument about tax loopholes and tax avoidance schemes, and whether or not parties should be allowed to take advantage of those tax avoidance schemes on a grandfather basis purely because another institution, company or entity took advantage of that tax loophole. Should it be grandfathered on that basis? Surely not.

It has already cost Canadian taxpayers, whether they be from British Columbia, Ontario or Alberta, $14 million.

HON. MR. BRUMMET: Do you take the same attitude to school taxes?

MR. SIHOTA: We've talked about school taxes. But if you want to draw the analogy, feel free to enter into the cut and thrust of this debate, and I'll be happy to hear what you've got to say.

MR. CLARK: We're going to sell schools and lease them back.

MR. SIHOTA: Is the Minister of Education suggesting that we sell schools and then lease them back and take advantage of this scheme because other jurisdictions have done that?

That's what the Minister of Finance is saying: "We didn't catch on to it; we didn't figure it out. But Ontario did." At whose expense? At the expense of taxpayers across the country. Do we now allow B.C. to grandfather that provision and take the benefit of it at the expense of the Canadian taxpayer?

Interjection.

MR. SIHOTA: Oh, I see. Now the second member for Vancouver-Little Mountain (Mr. Mowat) turns it into saying: "This is east versus west." That's even more contorted. If you think about it that way, it's like saying it's an east-west issue because B.C. didn't figure it out and Ontario did, and somehow that deals with tax fairness.

If you want to talk about tax fairness.... If you want to raise this $14 million the Minister of Health so desperately needs for his ministry, I'll tell you how to do it: reimpose....

Interjection.

MR. SIHOTA: I'm just telling you how to do it. The government should just reintroduce....

DEPUTY SPEAKER: Hon. member, if you addressed your comments to the Chair, I think that might slow the rest of the members down a little bit.

MR. SIHOTA: Mr. Speaker, I was addressing my comments to you. I may not have been looking at you, but I can assure you I was addressing my comments to you.

I was going to say....

[ Page 5357 ]

Interjections.

MR. SIHOTA: This isn't a filibuster. This is all started.... I wasn't even going to enter this debate, Mr. Speaker, until the Minister of Finance got up and gave his illogical position on this.

Someone — I think it was the Minister of Health — was saying: "How?" What this government should do, if they want that $14 million, is reintroduce the 10 percent surtax on the wealthy. They lost $34 million of revenue by eliminating the 10 percent surtax on the wealthy.

MR. MERCIER: It's called cash management.

MR. SIHOTA: The learned member for Burnaby Edmonds says it's cash management. It's not cash management. It's structuring a tax system to benefit the wealthy. It's structuring a tax system that says to the wealthy in British Columbia we're not going to impose a minimum 10 percent surtax. When the Minister of Health says,"Look, I need $14 million," I can tell him where he can get $34 million: just by reintroducing the 10 percent surtax on the wealthy. Then you don't have to play these silly games, saying: "Ontario took advantage of this loophole. Golly, gosh, gee, we didn't figure it out then, so we want in on a grandfather basis."

MR. REE: On a point of order, I believe we are in second reading on this bill, and on the principle of the bill, and after second reading we have the opportunity of committee debate section by section. I know that wide latitude has been extended by the Chair in second reading up till now, and the opposition has exercised a great majority of that time of debate. Mr. Speaker, could we please debate the principle of the bill and not the committee stage at this time?

DEPUTY SPEAKER: Your point is well taken, Mr. Member.

MR. SIHOTA: Mr. Speaker, let me say on that point that it's interesting that the member for North Vancouver-Capilano now objects to our talking about one section, which really is the pivotal section 1n this bill. Why didn't he stand up and object when the Minister of Finance was giving his explanation of this section? All I'm doing is dealing....

HON. MR. VEITCH: Copycat.

MR. SIHOTA: Well, that's right. I took it that the government acquiesced in a discussion with respect to the principles behind this section by allowing the Minister of Finance to get into his discussion of this section.

MR. REE: Two wrongs don't make a right.

MR. SIHOTA: Well, perhaps the member would like to stand up on a point of order and tell the whole House that he thought the Minister of Finance was totally out of order when he was engaged in this debate.

[6:30]

AN HON. MEMBER: Don't lecture the House.

MR. SIHOTA: I'm not lecturing the House. I'm just responding to what the member said.

HON. MR. BRUMMET: We'll never forgive him for provoking this.

Interjections.

MR. SIHOTA: Am I being told the Minister of Finance's history? So he won't be allowed to provoke me to enter into the debate? Well, he's history for that. And I'm glad all the members opposite will now be going to the current Minister of Finance and telling him not to provoke me. Whether he's the Minister of Finance or the minister of whatever after this, I'm sure the argument will prevail.

Anyhow, if the members opposite are concerned about the realization of $14 million, which is what we're talking about here, then they should not sell out their philosophy for the price of $14 million, which is what the Minister of Finance has said. They can take progressive, rational, constructive tax measures — such as reimposing the 10 percent surtax on the wealthy — to pick up that $14 million twice over, and a bit more after that. I'm saying it's an indication — to take what the Minister of Finance had to say — of where this government's philosophy is. They'll sell out, and ask for a grandfathering of a provision for $14 million, but they won't take tax action against the wealthy by imposing a surtax.

HON. MR. VEITCH: On a point of order, Mr. Speaker, there is a rule against tedious and repetitious debate in the House. Once an issue has been canvassed by any member, regardless of which side of the House he may be on, I'm sure you will agree it should not be canvassed again by another member. I realize that this is an omnibus bill, but the hon. member is taking one section and just beating the bejeebers out of it. I think we've had almost enough at this point in time. Surely there is one more section in this bill he'd like to speak on. I think we've had sufficient debate in this area. He's offending the rules of the House.

DEPUTY SPEAKER: Hon. members, this is an omnibus miscellaneous amendment type of bill. It's difficult to establish a core principle of the bill. We have a lot of latitude in the debate, so the minister's points are well taken. Hon. member, would you continue please.

MR. SIHOTA: I will get to other sections of this bill. I have no difficulty talking about other sections in this bill.

HON. MR. BRUMMET: Would you get to your conclusion!

MR. SIHOTA: My conclusion, with respect to the point I was making.... I was ready to leave it until the Provincial Secretary stood up; I was going to talk about something else.

The point is this that the Minister of Finance's logic in supporting this provision is flawed. It doesn't make tax sense to take advantage of a loophole. There's a larger philosophical question here. Should provinces, as corporate entities or hospital boards, be taking advantage of tax avoidance schemes? Because the net effect of this type of provision, quite seriously — and I know the Minister of Health (Hon. Mr. Dueck) would agree with me on this — is that government at all levels is responsible to make sure that the tax revenue is collected. I don't think it's government's role to take advantage of tax avoidance schemes. I don't think this province should play that role or provide that example.

[ Page 5358 ]

Sure, if Ontario did do that, I'd say shame on them. If Ontario took advantage of tax loopholes to the expense of taxpayers right across the country, including their taxpayers as well as ours, then I say they were wrong. Someone else said earlier on that two wrongs don't make a right, and it doesn't make sense for B.C. to say: "Well, they did it and it was wrong, and we agree philosophically with what the member for Prince George North had to say, and yet despite that, we'll take advantage of it because there's $14 million at stake." I don't think that's the example I would want any government to set in terms of taking advantage of the tax loopholes. The position British Columbia ought to be taking is to say....

HON. MR. VEITCH: Mr. Speaker, sometimes things get a little unhandy in this House, and I do draw your attention to standing order 43, if you'd allow me I'll read it to you. It states:

"Mr. Speaker or the Chairman of the Committee of the Whole, after having called the attention of the House or of the committee to the conduct of a member who persists in irrelevance or tedious repetition, either of that member's own arguments or of the arguments used by other members in debate, may direct that member to discontinue speaking and, if the member still continues to speak...."

I would draw your attention to standing order 43. This member is persisting in tedious and repetitious debate.

DEPUTY SPEAKER: We have allowed a great deal of latitude in this debate, and I think we're closing in on issues that really should be dealt with in Committee of the Whole Hon. member, would you continue with second reading.

MR. SIHOTA: Okay, the point has been made in terms of tax avoidance; I trust it has been understood by the government and the government sees that there are alternatives. I trust, therefore, that the government will withdraw this section, and recognize — they already have recognized it — that it's philosophically wrong, and practically wrong as well. Or else we'll be here until August. Maybe not that long, but....

Interjections.

MR. SIHOTA: I caught you all off guard, though, by saying that.

HON. MR. BRUMMET: You could take us till August, but could we take you till August?

MR. SIHOTA: I don't know. The member says, could they take me until August. I don't know, but being from the Victoria area, we have no problem with all of your income being spent in the greater Victoria area helping out our local economy.

Interjection.

MR. SIHOTA: That portion of the debate will be mailed out.

I want to thank the members for their attentiveness. Our debate leader on this has indicated and clarified our position on the other sections of this Health Statutes Amendment Act, 1988. But I do say that there is a principle here, and I'm glad the Minister of Finance recognizes it. We trust that the government recognizes it in more than words — in action — and will agree to withdraw this provision and introduce a tax regime which is far more fair and sensible under the circumstances.

DEPUTY SPEAKER: The Minister of Health requests leave to make an introduction.

Leave granted.

HON. MR. DUECK: I would like to introduce an executive officer and public relations person of the Registered Nurses' Association of B.C., Mr. John Cox, who is in the gallery today. Would the House please make him welcome.

DEPUTY SPEAKER: Second member for Vancouver East.

MR. REE: In order.

MR. CLARK: In order. Well, in order to be in order on this bill, I may have to talk at length about the Wills Act, the Name Act, the Hospital District Act, the Hearing Aid Act, the Hospital Act and the Health Act, but I don't really want to do that. I will just speak for a few minutes about section 7 of the act and in general about the principle of the bill. I would say that the principle of this bill is embodied in section 7.

The government should know by now that we feel strongly about this section, and that when it comes up in committee stage, we simply will not allow it to pass without a great deal of debate — and I mean a great deal of debate — and discussion. I would like to make just a few remarks about the bill today.

The Minister of Finance (Hon. Mr. Couvelier) did a better job of exposing the weakness of this section and of this bill than I could do. His remarks were of course that he was philosophically opposed to what the government is doing — philosophically opposed to this section — but that for $14 million, what the heck. That's what it boiled down to. That's rather strange, particularly given that the $14 million really.... The minister used interesting logic. He said that Ontario is going to get this write-off of $14 million and that's going to cost us money, because that comes off federal income tax and we get a share of that tax. If that's the case, then if we use the tax loophole, as Ontario has done, and we make $14 on that, but that comes off federal income tax, then we too will pay back some of that $14 million through the federal government. If his logic were correct, which it sometimes isn't.... His logic is rather circular, and this is exactly one of those cases where he has gone full circle. The logic of his argument now compels us to vote against this section, because he is arguing that the Ontario experience cost us money, but his logic would say that this will also cost us money.

The question really is whether or not we should be allowing a tax scam to take place — or supporting it — so that a private company can make a deal to write down their federal income tax because of the provincial government's actions. I just don't think that makes any sense. It's philosophically wrong, as the Minister of Finance has said, and it shouldn't be done. I think the real question is: why are hospitals so desperate to do this? Quite clearly, they are desperate to do

[ Page 5359 ]

this because they are underfunded. Exactly the same logic would be for the Minister of Education (Hon. Mr. Brummet) to come in here and say that we should sell schools and lease them back. Maybe that's under consideration. I don't know. I look for guidance from the Minister of Education. It wouldn't surprise me, given what's going on today. This building here is a nice building, you know. We could put a little tollbooth outside here and people could pay $2 to come and visit the parliament buildings. We could lease it to some private....

MR. R. FRASER: Not enough.

MR. CLARK: Given the debate and the excitement in the chamber, we could charge maybe $2.50, maybe 50 cents, depending on.... We could have a variable rate depending on who is speaking that day. We could provide a list and people could bid to get in. That might even be better: a little competitiveness. They could bid for seats up there. We could sell seats and lease them back. It's the same logic.

MR. R. FRASER: When you're speaking, you will pay them to come.

MR. CLARK: I'll pay to have them come and hear me. It wouldn't be the first time. I won't say that. The first member for Vancouver South notices that there are at least three people here, two of whom are waiting for the next bill, but that's another story.

Very clearly, this doesn't make any sense in terms of the philosophy that the Minister of Finance has said that he's in agreement with. I think it's strange that a minister would say that he doesn't agree with the philosophy of it, but he's prepared to sell out for some money. I don't think that's in keeping with the minister's remarks previously.

I think this section should be pulled. There's a moratorium on it elsewhere in Canada. The federal government has agreed it doesn't make sense. They don't like the idea of tax scams underwriting federal income tax. They don't agree with it. We've never done it here. We shouldn't begin now. We shouldn't begin what other provinces have also found to be somewhat unethical, so they're not pursuing it.

We want to make very clear to the members of the House that when this comes up for committee stage debate, if this section 1s still there and has not been stood, then we'll be in for quite a lengthy debate. I'd prefer that the debate has already taken place and that the government has the message that we're not in agreement with this and recognize that they're not really in agreement either and that they should pull it. If they want to do it later on when the amendment is lifted, they can bring in such legislation at that time.

[6:45]

DEPUTY SPEAKER: Pursuant to standing order 42, the minister closes debate.

HON. MR. DUECK: I move that the bill now be read a second time.

[Mr. Speaker in the chair.]

Motion approved on the following division:

YEAS — 26

NAYS — 10

Bill 53, Health Statutes Amendment Act, 1988, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. STRACHAN: Mr. Speaker, I call second reading of Bill 56.

NURSING STATUTES AMENDMENT ACT, 1988

HON. MR. DUECK: This bill will make an number of important changes to each of the three statutes that govern the nursing professions in British Columbia. The principal change would be to reserve the exclusive use of the title "nurse" to persons registered with one of the three licensing bodies. That is, a person who wishes to call herself or himself a nurse would need to be a member of the Registered Nurses' Association of British Columbia, or the Registered Psychiatric Nurses' Association of British Columbia, or be licensed by the Council of Licensed Practical Nurses of British Columbia.

[Mr. Pelton in the chair.]

Exceptions would be made for students enrolled in nursing education programs and for nurses from other jurisdictions who are temporarily employed in British Columbia. By reserving the title "nurse" to these persons, the public would be assured that persons holding themselves out to be nurses are in fact being regulated by a body that requires that certain minimum standards of conduct and competency be maintained.

At present, of course, there are hundreds of persons employed as nurses who are not presently members of any of these regulatory bodies. This bill provides a way to bring these persons within the regulatory framework, contingent upon their meeting certain basic requirements. These requirements would be established in such a way that persons who are presently employed as nurses and who do not have evidence of incompetence or misconduct on their record would be permitted to carry on in their present capacity.

Persons who may be performing functions equivalent to nursing in another capacity — for example, through home care nurse service agencies or in some capacity other than a nurse — would not be precluded from continuing with their present occupation. This act does not confer exclusive scope

[ Page 5360 ]

of practice on nurses, nor does it define the practice of nursing. It simply provides that to hold oneself out to the public as a nurse, a person must be registered with one of these three regulatory bodies.

Other changes in the bill make a wide range of amendments to the Nurses (Registered) Act, mainly in the area of regulatory control. The Registered Nurses' Association of British Columbia is intent on maintaining the high standards of professionalism exhibited by its members, and as a result have sought these changes in an effort to have better control over competency and conduct.

The proposed basic registration provisions for registered nurses are more explicit, and in particular spell out the requirement that a person from another jurisdiction must not have a record of incompetence, incapacity or misconduct. A registration committee previously established in the bylaws of the association would be given statutory recognition in view of its responsibilities under these amendments. In addition to making recommendations to the board of directors with respect to applicants for registration, this committee would be responsible for assessing the requests for renewal of registration and imposing terms and conditions on renewal where required.

Related to registration is the matter of licensing the new category of licensed graduate nurse. That is established with these amendments. These nurses are not presently registered with the RNABC. To become licensed, a nurse in this classification must have worked in a capacity substantially equivalent to a registered nurse in British Columbia at any time during the two years prior to this bill coming into force. As well, the opportunity to apply for licensing under this arrangement would only extend for two years following the coming into force of these provisions. The specific requirements for becoming licensed and for maintenance of licensure thereafter is spelled out in rules that would require the approval of the Lieutenant-Governor-in-Council.

A number of other significant changes are proposed in this bill. A new section would permit the chairman of the professional conduct committee, previously called the discipline committee, to order assessment of the capacity of a person to practise nursing where there were reasonable grounds to believe that the person's ability was impaired for any reason. The report of the person making the assessment could be used in evidence in the event that an inquiry was subsequently ordered to be held.

In the case of preliminary investigations, which are already permitted by the act, a new provision is proposed that would protect a person who discloses information or records in good faith in connection with such an investigation. Provisions for delay of proceedings in the case where a person's mental health might be harmed are amended to require that a medical practitioner must certify that harm would result to the member. There would also be a formal obligation on the board of directors to notify a committee or the nearest known relative of the member.

With respect to inquiries held by the professional conduct committee, the act has been amended to permit the committee to dismiss a citation and exonerate a member without the necessity of holding a hearing. Under the current legislation, it is necessary to proceed with a hearing even where new evidence has been obtained showing that an inquiry is not necessary. Also in connection with the disposition of the matter, the committee would be able at any time to cancel or reduce the severity of a term or condition imposed on the membership of a person following an inquiry.

A new provision with respect to inquiries would permit the complainant in a disciplinary matter to appeal the decision of the professional conduct committee to the board of directors. Now such an appeal is open only to the nurse who is the subject of the hearing.

Also in connection with appeals, an amendment to section 29 of the act would clarify that appeals to the Supreme Court from a decision of the board of directors will be limited to disciplinary matters and cannot involve an issue related to registration. This would correct a previous inconsistency in the act, whereby some aspects related to registration can now be appealed to the courts but others cannot. The present protection extended to persons acting in good faith in carrying out duties under this act would be amended to clarify that protection extends also to omissions to act. In addition, a new provision would require that persons carrying out duties under this act must not disclose information or records other than for the purposes of the act or where required by law.

[7:00]

The rule-making power conferred on the association has also been clarified and expanded. Specific rule-making authority would be conferred on the association in connection with a variety of matters related to other amendments made by this bill. For example, rules would be made in connection with initial registration, renewal and reinstatement of membership. As mentioned above, there is also a provision for considerable rule-making authority with respect to licensed graduate nurses.

A number of other changes to the act are also contained in this bill that are of a technical or housekeeping nature. These are made either as a consequence of the changes discussed above or simply to improve the wording and thus increase the clarity of the act.

Mr. Speaker, I should emphasize that the amendments to the Nurses (Registered) Act are the result of considerable hard work by the RNABC in preparing suggested changes and providing the necessary background information that has enabled the government to proceed with this bill.

Miss Sue Rothwell, president of the RNABC, has stated that the association is very pleased with the proposed legislation and hopes that it will receive speedy passage by this Legislature. I would like to echo that sentiment and add that my staff in the Ministry of Health found the RNABC an enormous help in drafting this legislation and enjoyed working with them to develop these improved statutes.

In addition to the support of the Registered Nurses' Association, I am pleased to report that we have the support of the Council of Licensed Practical Nurses and the Registered Psychiatric Nurses' Association for the changes to their respective acts.

Mr. Speaker, I now move second reading.

MRS. BOONE: It's with great pleasure that I see this bill come forward at this time. I can certainly attest to the hard work put in by the RNABC, as they started to work even prior to my election. During my election I met with RNABC representatives in my community, and they expressed their concern about the lack of control over the standards of nurses and their wish to have registered nurse status. Then later on, once I was here in Victoria, they met with me several times, expressing their concern, and I brought this up to the minister last year during the estimates. So it's been a long haul for the RNABC, and I'm sure that they will be very grateful to see this legislation put through.

[ Page 5361 ]

At one point I was concerned about what would happen to the status of licensed practical nurses and psychiatric nurses, if the title "nurse" was protected, and would they be able to call themselves nurses. This legislation protects them and allows them to be called licensed practical nurses and licensed psychiatric nurses, providing they are in fact licensed and have gone through the licence procedure, which is also in the public's best interest.

Mr. Speaker, this side of the House fully supports this legislation, and this bill will be passed speedily — not like the last one.

HON. MR. BRUMMET: I would not like this opportunity to go by without making at least a few comments. I know that that member has been involved in this discussion for a short time, since the 1986 election; believe me, I've been involved in it for a considerably longer time, and in a supportive way, I might add.

What the RNABC was asking in this legislation was to give them control over those people who might affect the reputation of the nursing profession in the province but were out of their control. The RNABC can certainly look with considerable pride to the way they have enforced standards in and policed the profession. I suppose there is also considerable frustration that despite all of their fine efforts, people who were not qualified or licensed could call themselves nurses and be detrimental to the reputation of the profession. This bill, of course, closes that loophole. It allows the profession to set standards. It allows the profession to require upgrading after absence under the reinstatement clauses, and it certainly gives them the power to evaluate qualifications from elsewhere. As the Minister of Health said, people cannot come in from other places without having their qualifications or their status from that other jurisdiction checked before they can practise in British Columbia and affect the reputation of nurses.

I want to say that I very much support the bill. I'm glad it has finally come forward; I know it's been a long time. I do know that in the process it has brought in fairness and other elements, so it's probably a better bill. It protects the rights of the other organizations. It was never the intent, as I understand it, to prohibit other licensed nurses from calling themselves nurses. I think we have a better and fairer bill. It's long overdue.

Unlike the member for Esquimalt-Port Renfrew (Mr. Sihota), I will not miss eight or ten good opportunities to conclude.

MR. MOWAT: I too wish to rise in the House this evening and support the amendments the Health minister has brought forward through the registered nurses' act. I think the ministry and the RNABC are to be congratulated and complimented on how they have worked together to bring forward an act that meets all of the needs of the RNABC. As the Minister of Education said, it has been a long time coming. Many members on this side of the House have worked for the amendments before us this evening. I particularly think the professional conduct committee is to be congratulated on the protection of health and the fact that they police their profession in such a great way. The disciplinary action they've taken in the past is something that I think other professions should look at as to how they conduct their own hearings.

Again, I congratulate the minister and the RNABC for bringing forward Bill 56.

MR. R. FRASER: I want to add my congratulations to the nurses' association, past president Gloria Parker and others who made long and thoughtful presentations to the government. I see this act as a perfect reflection of the philosophy of the government: it places responsibility on the people of the province — not unlike Bill 20, which came through the House with such a struggle: it created the College of Teachers and was opposed by the opposition, of course. Again, it puts into the hands of the professionals the self regulation of properties that are so important to the way this province was built and the way this province will go.

To the nurses, my congratulations for their efforts. To the minister, my congratulations for his work today. To the House, a wish for a speedy passage.

MS. A. HAGEN: Mr. Speaker, I will be very brief. I want to add my words of congratulations to this process, which has been lengthy. I just want to note that in this legislation we have had a number of health constituencies which have needed to work together in its development, and that's not always easy in a complex field of endeavour. I'd like to note that we have had that kind of cooperative effort, which has dealt with some very difficult problems around the needs of the various constituent groups. It's to the credit of them all that they have been able to arrive at a recommendation to the minister for legislation that he can bring forward. I know we'll have the unanimous support of the House.

DEPUTY SPEAKER: Pursuant to standing order 42, you are advised, hon. members. that the minister closes debate on second reading.

HON. MR. DUECK: Mr. Speaker, I appreciate the cooperation we have had from the RNABC and the members opposite. Certainly it's been a long-standing effort, and I think it takes a lot of cooperation to come up with something to which we can all agree without great debate. I move second reading.

Motion approved.

HON. MR. STRACHAN: Mr. Speaker, we seem to have some agreement here, so I move that the bill be referred to a Committee of the Whole House to be considered now.

Leave granted.

Bill 56, Nursing Statutes Amendment Act, 1988, read a second time and referred to a Committee of the Whole House for consideration forthwith.

NURSING STATUTES AMENDMENT ACT, 1988

The House in committee on Bill 56; Mr. R. Fraser in the chair.

Sections I to 41 inclusive approved.

Title approved.

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

Motion approved.

[ Page 5362 ]

The House resumed; Mr. Pelton in the chair.

Bill 56, Nursing Statutes Amendment Act, 1988. reported complete without amendment, read a third time and passed.

HON. MR. STRACHAN: I call adjourned debate on second reading of Bill 45, printed in the name of the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. Davis). The member for North Island (Mr. Gabelmann) adjourned debate and loses his place if the next member wishes to speak.

HYDRO AND POWER AUTHORITY
PRIVATIZATION ACT
(continued)

On the amendment.

MR. SIHOTA: I will commence speaking on this matter at this time. I wasn't here earlier on to see where we were, so hopefully I haven't cut off the member for North Island unduly. Hopefully he would have made the full breadth of his comments. If he hasn't, I guess we'll have a chat later on in terms of his presence.

[7:15]

AN HON. MEMBER: You'll be fine.

MR. SIHOTA: I'll be fine. The member is quite correct.

This is the first time I've had a chance to rise and speak on this bill and enter into the debate, because I did not get a chance to talk on it prior to the introduction of the motion by the Leader of the Opposition. During the course of the debate that has gone on for the last couple of days on this matter I've had a chance to read the press clippings and go over the Hansard accounts of what has transpired on this bill. So I would like to put on record some of my thoughts and opinions as they relate to this piece of legislation.

I see the second member for Okanagan South (Mr. Chalmers) smiling, and I hope I've got everything in order here and that there's no reason that I'm doing anything wrong here.

The legislation before this House is really, I think, indicative of a number of things. It's indicative of the way in which this government has been behaving on the matter of privatization to date. It is indicative of the process that the government has embarked on with respect to this critical issue of privatization. It is also indicative of the style that the government wants to bring forward with its privatization initiatives.

Quite frankly, it's our submission that the way in which this legislation has come before the House is wrong. There were alternatives available to the government in terms of the way it should and could have dealt with these issues. They have chosen not to deal with them in the fashion that I think is far more appropriate. It's also clear that the legislation, in the form in which it has been presented in the Legislature, is broad. It's a very broad-brush approach to the sale of Hydro assets. It's illogical in the manner of the language that's used and the approach that was taken; it's illogical with respect to consistencies between what the government has indicated its intentions were originally and what its intentions are now; and it's radical. It's a radical philosophical departure from where we have come from as a society, and it raises a lot of questions in terms of where we ought to be going with respect to the utilization of our public utilities and whether indeed those utilities, which are such a strategic component of the economy, ought to be vested in private as opposed to public hands.

I appreciate that the Minister of Energy has indicated quite often during the course of debate that it was never the government's intention to take the broad approach of privatizing the entirety of Hydro, particularly the electric division. I'm not totally familiar with the history of this, but I think we all....

Interjection.

MR. SIHOTA: With respect to the public ownership of B.C. Hydro, I've never written a thesis on the history of this utility. But there was a time in this province when we used to have private enterprise engaged in a lot of these types of activities. For prudent reasons the government thought it was best — in the public interest — that these types of utilities, these types of programs and services, be kept within the public sector. That reasoning prevailed, of course, during the early days of the Social Credit Party, and at the time W.A. C. Bennett took the initiative to take this radical experiment in socialism, as it was described at the time, to allow for the ownership of this type of utility to be placed in public hands. One ought not to depart lightly from that public policy decision; hence the reason we are moving this motion to hoist debate for six months. Hopefully we will by then have completed all of the other bills before us.

We can come back later on, after the government has had a sober second look at this matter. That sober second look is really overdue and much needed, when you look at the history of this matter. In '61 — or around the early sixties — we had the government moving into public ownership of these types of utilities. Then in 1986 we had the election of a Premier bent on and driven by the concept of privatization, without really and truly thinking about the implications and the details of privatization. The implications and details of privatization as they relate to this type of utility are enormous. Hence again the reason to say to the government that it would be prudent for this government to consider hoisting this legislation and not dealing with it for some six months, to take a look at its effects.

We on this side of the House would like to know just where the evidence is. Where is the evidence that would suggest that it is now in the public interest that components of — or, if one read the legislation prior to the amendment, the entirety of — the utility be placed in private hands? Where is the evidence that would suggest that it would be cheaper for the taxpayer if this utility, or portions of it, were placed in private hands? That's a legitimate question, because taxpayers deserve not only quality of service.... Of course, that's another question: where is the evidence that the quality of service that people have now would be maintained? More importantly from the perspective of the consumer of the service, what about the cost? What assurance is there that the cost would go down?

I think the salience of that point really comes home when you take a look at the problem that's going to occur with the sale of the gas division in the city of Victoria. It's not a moneymaker; its operations are otherwise subsidized. As a consequence of that subsidization, the costs are kept within a

[ Page 5363 ]

reasonable range for the consumers of that service, and that's fair and right. However, with the sale of the gas division in Victoria, which will affect about 4,000 gas subscribers in the Victoria area — many of the users are businesses — user fees to cover a lot of the items that are now free will of course be passed on to those users: things such as adjusting gas appliances, adjusting burners, analyzing the flue, greasing stiff taps and whatever else is needed to keep the appliance in tip-top and, I must emphasize, safe condition.

If I recollect the debate, I'm sure others have said these charges will be comparable to the charges by B.C. Tel — somewhere in the neighbourhood of $50 an hour to provide servicing which is now free. If the privatization proceeds, that's going to be a cost to the users in Victoria. There are going to be other costs; I've probably picked the smallest of these in terms of servicing.

AN HON. MEMBER: What are the costs now?

MR. SIHOTA: They're quite reasonable, exceptionally reasonable. It makes it an alternative for people on this Island. But when you recognize that the system loses money, and you know that somebody is going to have to finance an acquisition.... There are carrying charges, the interest and the mortgage payment on it. On top of that, they're not going to buy it to run at a loss; they're going to buy it to run at some type of a profit. It means that the costs are going to go up. Just on a straight mathematical basis — and others have indicated this during the course of debate — the cost implications to the people who reside in greater Victoria are going to be about $1,000 per customer. That's just the starting point.

When we talk about privatization, we ask this government: where is the evidence that would counter what we are saying about the Victoria situation? Where is the evidence that would suggest it is going to be cheaper to the people of Victoria? The costs will ultimately rise.

[Mr. Weisgerber in the chair.]

All of this really is contingent, I guess, upon the gas pipeline. From the perspective of the government, the position here really is that we'll sell that gas division, and we'll ask the private purchaser of that gas division to gamble, to speculate on whether or not the gas pipeline is going to be awarded to Vancouver Island. If the gas pipeline is awarded to Vancouver Island, then there are benefits that would accrue in terms of servicing available to other customers, so to take on the debt factor now and deal with it later on when the pipeline is constructed....

I've lived on this Island for some time. I was born and went to school on this Island. I graduated from the University of Victoria.

MR. REE: What private school did you go to?

MR. SIHOTA: I went to St. George's. If the member wants to know what other schools I went to — if he wants the full history — I'd be happy to tell him. I went to Stanley Gordon Intermediate....

AN HON. MEMBER: You may as well; you're not telling us anything else.

MR. SIHOTA: I'm telling the member this: where's the evidence that this is going to be cheaper to the consumers of the service in Victoria? I'm sure my good friend the second member for Saanich and the Islands (Mr. Huberts) shares the same concerns. I'm sure he's concerned about the cost implications to users in the Victoria area, and I'm sure he has asked the Minister of Energy where the cost saving is to the people of Victoria. I'm sure the answer has come back the same as we have calculated it: that there will be a net increase in cost to the people of Victoria with respect to the gas division. That's why this should be hoisted; that's one of the reasons why this legislation should be put aside.

I want to join, I am sure. with the second member for Saanich and the Islands and share with him the same concerns that I'm sure he has and will articulate during the course of debate on this matter. He will stress his concern about all those restaurant owners and operators — and I am just speaking of one user group: I'm not picking on anybody — who rely on this service. He knows what that will do to our tourism industry in Victoria as the cost of meals increases at all those nice restaurants along the Inner Harbour that utilize this service.

Interjection.

MR. SIHOTA: The member says "thin." Any time we make an argument.... If the member says thin, produce the study; produce the evidence that says it will in some way result in a saving to the people of Victoria. That's why it should be hoisted. We want to see this government and its members table some type of information, some type of study that demonstrates it would be cheaper to the people of Victoria. It's not going to be cheaper.

Interjection.

MR. SIHOTA: The second member for Langley (Mr. Peterson) says I'm running out of gas. Do you want to move on to something else? I've got lots to talk about. I'm worried that we're running out of time, but there's a lot here to talk about.

Let's take a look at this piece of legislation and another reason why it should be hoisted. Like I said, it's a radical departure from what we've had philosophically. It's going to cost people more. It's indicative of the style of operation in which this government has proceeded on the matter of privatization.

We have a piece of legislation which, when interpreted properly.... I want to say that the second member for Vancouver East (Mr. Clark) has done an outstanding job, and even the Minister of Energy, Mines and Petroleum Resources has recognized that the youngest member of the House, the second member for Vancouver East, has done a remarkable job of looking at this legislation and recognizing how broad the implication was. The Minister of Energy, Mines and Petroleum Resources, to his credit, has recognized that this legislation would allow for a full and total privatization of this electrical utility.

[7:30]

Interjection.

MR. SIHOTA: The second member for Langley.... Or was it the first member?

MRS. GRAN: We've got two first.

MR. SIHOTA: Okay, two first-class members from Langley — one of them, the male version thereof.... I

[ Page 5364 ]

always have nice things to say about the female version thereof because she lives in my riding during the session, and if the other member moved to my riding, I would say just as many nice things about him. In any event, I see he's pinned something on to the bulging chest of my good friend....

MR. PETERSON: His hero badge.

MR. SIHOTA: His hero badge.

But you know, I have to give him a lot of credit. He caught the provision in the legislation which demonstrated that this government really hadn't thought about what it was doing. It introduced a broad, sweeping piece of legislation which would have allowed for the total and absolute....

MR. MICHAEL: That's a sexist remark: broad.

MR. SIHOTA: I don't quite understand, but if the member for Shuswap-Revelstoke would care to explain, then maybe we'd all understand.

MR. MICHAEL: Only if I draw you a picture.

MR. SIHOTA: I'm not running out of gas; I'm trying to get to my point. But Mr. Speaker, if the members keep on heckling me, I can't get to my point. The point simply is this: the second member for Vancouver East caught the problem with this legislation whereby it allowed for a total annihilation of the utility and stripping it right down to its wires. The Minister of Energy, Mines and Petroleum Resources totally agreed with that provision. And what do we get? We get an amendment.

This amendment, in my submission, again demonstrates why we should hoist the legislation. The amendment, like the legislation, was rushed in as an afterthought, without much consideration of the implications of the amendment. The amendment says that nothing in this legislation authorizes the sale of the electrical division. On the face of it, that seems to be fairly encompassing, until you start to think about the implications of that. Nothing in this legislation authorizes the sale of the electrical division. What about the sale of part of the electrical division?

I don't have access to what legal counsel said for the Ministry of Energy, Mines and Petroleum Resources. But what about a sale of part of the electrical division? Is that prevented by the wording of the legislation? Surely if the government says that its intention is not to sell the entirety of the electrical division, and if it introduces this amendment, the amendment ought to capture the essence of the government's intention.

All it says is: "Nothing in this Act authorizes the sale of the authority's electrical division." You can sell a part of it and not violate that section. You could sell several parts of it and not violate that section. You could strip it down piece by piece, until someone would have to walk in front of a court and say: "They are selling the electrical division." By that time, the pith and substance of the electrical division may well have gone. There may be nothing left there.

MR. R. FRASER: It will be sold and moved to Manitoba.

MR. SIHOTA: I didn't hear that, and perhaps I'm happy I didn't hear that.

We're talking about a part of the electrical division. I would say that one of the reasons why this provision ought to be hoisted is that it should have said: "Nothing in this legislation authorizes the sale of all or part of the electrical division." If those words had been injected into the amendment, then I would find more comfort in it.

The reason we raise this is that when the second member for Vancouver East (Mr. Clark) raised the matter, we were told: "Trust the Premier. Trust us. We won't dismantle or sell off the electrical division of Hydro."

MR. R. FRASER: We're not talking about the electrical division in this bill.

MR. SIHOTA: Well, the amendment deals with the electrical division of B.C. Hydro.

We trusted the Premier when he talked about the Insurance Corporation of British Columbia. And now we're told that maybe it is for sale — we don't know. It's clear that people in this province do not trust the government, do not trust the Premier; and as a consequence of that, the amendment was brought in. It was a matter, I guess, in some ways, of political face-saving.

But the point remains, to get back to the amendment that's been introduced, that it's not well thought out. It allows for the sale of a portion of the electrical division; and for that reason alone, so that we can get a better-thought-out amendment, all members of this House should be supporting a hoist motion, in order to ensure that this legislation and the amendment that comes with it are properly thought out.

Interjection.

MR. SIHOTA: The member says I want some help. No, I don't need any help; I just want the member to support me by coming forward and supporting our hoist motion.

Then it says "the electrical division." Well, as I read Bill 45, Mr. Speaker — and I stand to be corrected — the electrical division is not defined. So what is the government not authorizing the sale of? I can see the following scenario. I can see the government entering into a deal to sell off something which is arguably part of the electrical division, and there then being....

MR. R. FRASER: On a point of order, I think we've listened quite a while to the presentation of the member for Esquimalt-Port Renfrew. The thrust of the bill is named in the first paragraph: Victoria Gas, the rail division, research and development.... I think it would be reasonable to ask the member to stay with the philosophy of the bill at this point, Mr. Speaker.

MR. CLARK: On the point of order, Mr. Speaker, the first member for Vancouver South is, of course, completely incorrect. We're debating here a hoist motion — not the principle of the bill, but in fact the principle of the hoist motion. If the member had been listening to the member for Esquimalt-Port Renfrew, he would have known that we're really dealing with whether or not this bill should be hoisted for six months, and not the principles of the bill itself.

DEPUTY SPEAKER: I think your point is very well taken, Mr. Member. Could we speak to the hoist motion.

MR. SIHOTA: I'm really disappointed, Mr. Speaker, to see that the member for Vancouver South was wrong on the matter.

[ Page 5365 ]

MR. R. FRASER: I'm not sure I was.

MR. SIHOTA: Gee, I hope you didn't hear that comment, Mr. Speaker.

I'm saying why this bill should be sent back and hoisted for six months, and the reason for that is in part that the amendment before us doesn't capture, I would submit, the intent of the government. They've rushed into this piece of legislation without adequately thinking about it, to the point, as I was saying, of not even defining what the electrical division is. They're saying that nothing in this act prevents the sale of something that's not even defined. How do you know when something is sold if you don't know whether or not it was intended by this legislation?

MRS. GRAN: You have to trust us.

MR. SIHOTA: The member says: "Trust us." The reason this government brought in the amendment was that no one was prepared to trust the government, and as a consequence, the government brought in the amendment. Right? It may assist one of my brothers or sisters in the legal profession, but I can see an argument arising, and somebody going forward and saying: "Well, this entity that hasn't been defined now has to be defined by the courts."

MRS. GRAN: Picky-picky.

MR. SIHOTA: I'm not being picky-picky here, as the good member from Langley says. I'm just saying that you don't want a poorly drafted amendment — and that's why we've got to hoist this thing — which is going to result in oodles of evidence coming in front of the courts as to what.... I can just see a volume of evidence coming in front of the courts as to what does and doesn't constitute the electrical division of B.C. Hydro.

MRS. GRAN: That's one lawyer's opinion.

MR. SIHOTA: And a good one at that.

I'm saying that the government ought to have defined in this legislation what they meant by the electrical division, because if they had, we would have a better idea as to what is protected. We got this rushed-in bill followed by a rushed-in amendment which really doesn't tell us exactly what is being put on the auction block and what isn't.

MR. R. FRASER: On a point of order, with respect, the motion is the hoist motion, in the words of the hon. member. Now he is talking about the electrical division, which is not even included in the original bill. I think that you should direct him to speak to the hoist and why the hoist should be accepted or defeated. That's what we are talking about, and that's what that member should be addressing.

DEPUTY SPEAKER: Yes, hon. member. Indeed, the motion is to hoist the bill for six months.

[7:45]

MR. SIHOTA: Yes, Mr. Speaker, I am explaining why it should be hoisted. If the first member for Vancouver South hasn't heard this while he is signing his autograph to all those pieces of paper there.... One of the reasons this has to be hoisted is that the amendment the government introduced doesn't really define what the government is trying to protect. We're saying that you had better go back to the drawing board and figure out what this legislation actually says so that we all understand.

There is another way of doing it. The reason it is so broad is that the government really doesn't know what it's going to sell and what it's not going to sell. That's the essence of the matter. They don't know what they are going to sell, so what they have done is come in with broad legislation which will allow them to sell some. all, none, part of and a little here and there of this utility. We're saying that maybe it makes more sense for the government, once it has put things on the auction block, received tenders, come down to some type of analysis and seen what is in the best interests of the taxpayers, to come back and submit a narrower bill which deals with that sale, so we would approve through this Legislature sale by sale as opposed to approving through this Legislature a broad stroke of legislation that gives all sorts of prerogative powers to the government without any real definition of what you are trying to sell. If you end up with a price — let's say for the Victoria gas division, as I was talking about before — then there should be a bill that can come before this House so that we can deal with the specifics of that sale. But what this allows is that the government be given a blank cheque, carte blanche, to do what it wants to do with Hydro. As the offers come forward, they will then proceed.

DEPUTY SPEAKER: Hon. member, I regret to inform you that your time has expired.

MR. SIHOTA: I'm sorry to hear that. I had a lot of comments I wanted to make. Those are the reasons I support the hoist motion.

MR. BARNES: I want to point out that the minister had an announcement to make — perhaps he was overtaken by the comments of the member for Esquimalt-Port Renfrew, who has really come to the nub of the issue — and was trying to got on his feet so that he could say: "Let's save some time. I get the message. It's loud and clear, We aren't going to get caught with our hands in the cookie jar again, and I'm going to withdraw that amendment and try again." I thought that was what he was trying to get on his feet for, but maybe I was wrong.

The member who just spoke has really revealed something just as profound about the faults in this whole initiative by the government as was what the second member for Vancouver East (Mr. Clark) pointed out to us in his eloquent response to the introduction of this bill last Friday, when he said that the government had managed to bring this bill in at the last moment just before adjournment of the House with as little fanfare as possible, when in fact it was the key to opening the floodgates in this province, allowing those people who had the resources to purchase the heart of the province, its natural resources.

I'm standing here very disappointed in the government, because it has been talking about trust. It has been saying: "We will consult with the public on any matters that concern them." Of course, there's ample evidence to support this statement, if we were to check the archives and the various media outlets in the province. We've got lots of footage of the Premier going around the province talking about no more confrontation and things of that nature with respect to initiatives by the government.

[ Page 5366 ]

If the government wants the people to trust it, as it has said, why hasn't the government trusted the people? Why hasn't there been consultation on the whole concept of privatization? Privatization is a fairly new concept. It's ideological, but it's more than just that; it's actually a word loaded with something almost diabolical in its effect on people. Privatization is saying, in effect, that the public should not have the authority or the power to manage its own affairs, that it can be done better in the private sector, no matter what it is.

Fortunately this bill has been caught by the detective work of some of our new members: the second member for Vancouver East, who first became aware of some of the dangers of this bill, the member for Esquimalt-Port Renfrew and others. They have begun to look at the agenda of the government. The Leader of the Opposition touched on it the other day when he indicated that we have reduced the public service from some 60,000 employees to about half that many today, and the numbers are still going down. We will probably be looking at 20,000 or fewer in a very few years, perhaps by the next election. There is a move on the part of government to reduce the province's ability for self-reliance and its ability to benefit from many non-renewable resources or have control over those which require good husbandry and management in order to ensure that we have longevity and security for our generations to come.

I don't think we should undermine or diminish the revelations made by the member for Esquimalt-Port Renfrew. That amendment, in fact, is not appropriate: nothing in this bill authorizes the sale of the electrical division. It is not an appropriate amendment to allay the fears raised by the second member for Vancouver East last week, when he suggested that potentially everything — all assets of the B.C. Hydro and Power Authority — could be disposed of under Bill 45, one way or another.

The minister, without even blinking an eye, straight-faced as you could possibly imagine, said: "Yes, the member is quite right. In fact, that could happen." There could be nothing left but the wires, and probably in due course even those would be gone. I added that bit. There was no shock on the part of the minister. He said: "Yes, but we're not going to do those things. You just have to trust us."

Is it really appropriate for the government to expect the public to trust it any more than it trusts the public? That's a valid question. If the government wants the public to trust it, why doesn't it trust the public? This is clearly a hidden agenda. This bill represents a move by the government that it was not prepared to risk an election on, that it was not prepared to allow the public to participate in. No one in his wildest imagination expected the Bill Vander Zalm crowd that were running around the province in October 1986 to reduce this province in the way it has, to being vulnerable and having its resources at risk, by bringing in a privatization bill such as this.

I think it's unfortunate, because we now have a situation where cynicism is setting in. People are beginning to wonder what's next with this government. We in the opposition — although we're usually suspect as to trying to find criticism of the government and believing that we would go to any extreme in order to obstruct — are at risk ourselves, not only as politicians but as citizens. We're at risk, and we're watching what's happening here and thinking: what is it going to do to our future generations? What's it going to do to our families, even to the government's families, even to your own young people and your families?

How can you seriously believe that it is a good deal to take a lump-sum payment for resources that you need for your daily bread that you have control over? How many of us in this Legislature, for instance, would sell the air we breathe and then make a deal with the purchaser to sell it back to us as we require it at the risk of him tightening up the air lines and making it awkward to get the amount of fresh air we required to stay alive? That is not a far-fetched analogy. I think that over the years — five, ten, 15 and 20 years, as we go down the pike and begin to see the effects of what this bill could do, it will make that three-year freeze on the gas rates in the mainland branch a very minor fact. What happens after the three years? What happens when the demand changes? What happens as the British Columbia population begins to change and as more industry comes in and more demands are placed on our natural resources as the population shifts?

[Mr. Pelton in the chair.]

The problem is that we won't have any more control right now than we did prior to the nationalization of B.C. Electric, which was touched upon by some members. You can recall that we celebrated the nationalization of B.C. Electric because it meant the public would finally have control over a resource that we all relied upon and that would be there for us to benefit from and to share equally. But how long will it be before we'll be buying back the gas division? There's no guarantee; it doesn't say it's sold for ever. It's sold now. What if it doesn't work? Are we going to buy it back later? Who knows? It's just that the government is not consistent.

We heard some people say that W.A.C. Bennett would roll over in his grave if he saw what was happening now. The thing is, the government, in selling the resource the way it has, hasn't really indicated to the public what guarantees we have with respect to our future ability to have those resources at equitable prices.

How long ago was it that B.C. Hydro was encouraging people to convert from electric and oil heating to gas? We can remember those campaigns because at that time B.C. Hydro was saying that natural gas was clean and efficient and was going to be there forever, and that people should convert. There was a major campaign going on. What's going to happen to that campaign? People have converted. What protection are they going to have? Are they going to find that it's now too expensive to use gas and go back to electricity, not knowing whether the electric division is going to be sold? These are the things we're concerned about. There hasn't been consultation. There hasn't been the planning that should have taken place. It's as though the government has abdicated all responsibility for management of the resource.

You can't get away from the fact that the government was doing something that was clearly either a mistake or diabolical. In any event, it shows that it is in a very big hurry to do a lot of very risky things with a valuable resource.

[8:00]

Not being a lawyer, I'm not sure how you would write an amendment so that it defines the problem in such a way that B.C. Hydro electric was protected and could never be sold, as the member for Esquimalt-Port Renfrew was pointing out. I don't believe that there is any question, if the amendment is passed as the government has presented it, and it is not changed, and there is no definition any more than what we have right now before us, that any aspect of the electric division would be at risk and could be negotiated away.

[ Page 5367 ]

As we know, there is no reference to the Legislature in the future with this bill — by order-in-council and by regulation. We could find ourselves in very serious difficulty as the buyers start to come. Where are they going to come from? Who are they going to be? What are their commitments going to be? What will be their motives? Are they going to be concerned about providing the very cheapest and most effective resource and service to the public, or are they going to be concerned about maximizing their profits?

It's not a good day for us. It's strange too, Mr. Speaker, that we didn't hear a whole lot of drum-beating on the part of the government when they introduced this bill. It was very quiet. There wasn't a whole lot of ballyhoo. The government hasn't been running around telling the people: "Hey, look, another good deal like BCRIC. We're going to give you something that you could never have had with the government having the responsibility for managing this resource. We're going to turn it over to the private sector, and we guarantee you that things are going to be great. There's going to be good times ahead." We haven't seen that kind of ballyhoo. We haven't seen the Premier running around the province like Bill Bennett did talking about the BCRIC shares that were going to be given to the people and the opportunity for them to buy thousands more.

We remember that story; it's a sad story. We remember those resources as well. What happened to them? The promise was that this is going to be something for the people of British Columbia. Only British Columbia citizens are going to be able to control it. Not even the guys back east are going to be able to get their hands on it. You're going to have a chance to experience what it's like to be involved in free enterprise, and we're starting you off with six free shares.

What happened to BCRIC? BCRIC should not be forgotten, because there was a promise made there. People believed in something, and a lot of people were hurt. People lost their life savings over that. The promise was that things were going to be better. What's the promise in this deal? What are you promising, Mr. Minister? What's your government promising? What's so good about what you are doing?

It baffles the mind that you would be taking this action. You have a successful operation; the demand will go up — not down. It's the kind of resource....

MRS. GRAN: How do you know it's successful?

MR. BARNES: Well, don't you think it is?

MRS. GRAN: How do you know it is?

MR. BARNES: Well, isn't it? Are you saying it's not? Are you saying it's no good, and we should get rid of it? Is that your motive?

MRS. GRAN: No, maybe it could be better run.

MR. BARNES: Better run? Do you really believe that? It's obvious that the government is willing to play games with people's resources. The first member for Langley is asking me how I know the resource wouldn't be handled and managed better by the private sector. That's a question that the minister should be answering. That's the question we've been asking the minister. Where are your studies? Where is your research? Who have you consulted with? What guarantees do we have that this is a good deal, and what protection will the consumer have, with respect to access to this resource over the months and years to come?

Clearly, in a very few years, people are going to find themselves at the mercy of shareholders who are going to want to maximize profit. You're not going to find it an easy situation to contend with.

I want to say one thing. The member for Esquimalt-Port Renfrew (Mr. Sihota) suggested that the government had perhaps made a mistake or that the amendment was poorly drafted, I believe, when he was talking about nothing in the bill authorizing the sale of the electrical division. He's a lawyer, and perhaps he knows a mistake when he sees it. But I would suggest that there is no mistake; I don't believe that's a mistake. I think that with all of the pressure the government has found itself in as a result of introducing this bill in the first place, this amendment is not a mistake; it's another attempt to try to do an end run. The member for Esquimalt-Port Renfrew, the second member for Vancouver East (Mr. Clark) and, I'm sure, some of our other people have picked it up, just as we picked up the fact that you were initially selling everything but the wires and you're still trying to pull a fast one.

This is no mistake. It's quite clever, because a novice without the legal experience that you would expect from people who are trained to detect these things would say it says nothing. "Nothing" means not a thing in this bill. Why do you have to sell the division? Perhaps if you were to say,"We are going to sell the division," it would be 100 percent of everything connected with the electrical division. But if you were selling any aspect of it, what's going to stop you?

I'm not a lawyer, but I'm beginning to pick up on the fact that that's something that a lay person can relate to. You look at it and think: what does it mean? That's a good question. I think the minister should stand up and tell the House that those high-paid lawyers have not made a mistake; that it was deliberate; that you just got caught again. I don't believe that those guys are that incapable of drafting a piece of legislation, as the member for Esquimalt-Port Renfrew pointed out, that will address the concern you have and remedy the problem you're trying to solve.

After what you've just been through, surely you want to have something absolutely ironclad in terms of stopping guys like that second member for Vancouver East from going around and saying that you are going to sell everything. You want to put a stop to it. You want the reporters to believe you when you say there are only four aspects of the operation that you're selling: the railway, the two gas outlets, and research and development. That's it.

But that's not it. It's not consistent with your way of operation. It's not consistent with your style and your ulterior motives. But it's very consistent with the bafflegab we get with you: doing one thing with one hand and something else with the other. And you've just been caught.

AN HON. MEMBER: Again.

MR. BARNES: You've been caught again and again and again. You will keep getting caught.

I have a little note here that says: "The cat is out of the bag." It says: "The intent is clear. The ultimate objective is wholesaling the whole works." I don't know what I meant by that, but maybe you could explain, Mr. Minister, what I mean by "wholesaling the whole works." It sounds like you're extending this free trade deal beyond the 49th parallel. You are going to open everything up and let everything go.

[ Page 5368 ]

It makes sense, considering your view of the public having anything to do with management of its own resources. The more I think about this thing, the more I start shaking my head. I think the public is far from ready to begin absorbing what's going on. If you really want them to get on side, if you thought that this was going to help you electorally, you should be out there beating the drum, you should be on the hotlines, you should be on the TV stations, you should be talking to people and running ads like you do with the government news. There are all kinds of things you could be doing. Why aren't you?

Why did you bring this thing in five minutes before it closed? Why is it that the second member for Vancouver East had to scramble to try and get some facts on what was going on because you dropped a bill on him at the last minute? It doesn't seem like you're too proud of this thing. Nonetheless, you carry on; you push on.

I think if there was ever a time to go to the public, this is it. Let the people participate. Give them a chance to tell you whether they think you've gone too far with your privatization ideas. I think the ordinary person — perhaps it's not always appropriate to call people ordinary.... I don't believe that they have the opportunity to get enough of the facts about major issues in order to make a judgment or a comment on what's going on.

I doubt if any British Columbian who has the facts, who understands the implications of what you're doing, would agree that you should be selling our natural gas, or that you should be putting at risk our main means of power, as we've pointed out, with the possibility of selling the water, dams and generation equipment that is used for making electricity. I think the people who should be debating this are the people who pay the taxes and consume the electricity, and I think they have the right to know what's going on.

Instead of asking the people of this province to trust him, the Premier should be saying: "I trust the people. We are right in what we are doing. We believe that what we are doing is good for British Columbia, and we are going to go to the people with this. We're not going to force it down their throats. We're not going to tell them to adjust to something that they don't understand. That's undemocratic; it's unfair. It wasn't part of our mandate. We don't feel we are authorized to make radical departures from established ways of running this province." Why don't we have that kind of response from the government?

I think that I could summarize by saying I think people in this province have had a shell game played on them. I don't think they know what's going on; in fact, I am certain of it. When you talk about privatizing, I don't think the public understands fully what you are talking about. What about informing the public, Mr. Minister, when you are closing the debate? When you are speaking, why don't you say you know you're right? You're a very straightforward person; you don't believe in shirking from the facts as they are. You are a very learned individual and you've served in many cabinets, and you know that after all these years you're going to rest much easier if you feel that you've done the right thing by the people who put you in office.

[8:15]

I am convinced that nobody in this day and age who knows how the world is changing and the way the material mentality is in terms of fairness would give up our natural resources this way. That's my concern, and I will simply say to you that British Columbia is not for sale. That's what we've always heard. But clearly this government is behaving as though everything is for sale. Everything is at risk. The Premier has said that on many occasions, even to the point of the Legislature. When someone said,"Would you sell the Legislature?" I think I recall him scratching his head and chin and thinking about it for a second or two, and saying: "Well, you know, I guess we'd have to take a look at it."

That's his attitude. I haven't heard him say unequivocally that there are some things that are not for sale.

HON. MR. DAVIS: I think I should perhaps thank the Leader of the Opposition for this opportunity to say a few words about a worthy bill, and one which merits the support of all members of the House.

The topic now is the six month hoist, and I know it's a formality in this House. Usually six months is referred to. I wonder, though, why the Leader of the Opposition didn't talk about a one-year or ten-year hoist or a hoist forever, because that really seemed to be what he meant.

The B.C. Hydro and Power Authority is by far the biggest corporate entity, not only in this province but in western Canada. Its mortgage is more than half the mortgage of the whole province. Its mortgage is of the order of $10 billion. It's a massive enterprise. A few years ago it employed more than 12,000 people. When construction of the last major dams and transmission lines was complete, that payroll began to fall, and currently it employs around 6,000 people. It built massive projects.

It began its life in 1962. I looked up the 1962 legislation, indeed the vote; and on Thursday, March 22, 1962, the party opposite — which has a kind of love-hate relationship with B.C. Hydro — voted to a man against establishing the B.C. Hydro and Power Authority. The NDP was against the creation of Hydro. It voted every year, religiously, against any expansion in the capitalization of B.C. Hydro. It voted against the moneys for the Bennett Dam through the early and mid-1960s; against the moneys for the Columbia River projects; against the money for the Kootenay Canal project; against an expansion of the Burrard Thermal plant through the late 1960s and into the 1970s; against any expansion of its transmission line facilities across the province; against money for the Peace Canyon Dam; against money for the Revelstoke Dam in the late 1970s; against the money for the new large transmission line to Vancouver Island; and against any money for Site C, on which hearings were held up to a year or two ago.

The NDP, through its vote, was always against the creation and expansion of the B.C. Hydro and Power Authority. The moment we bring a motion to privatize a tiny part, or several tiny parts, of this massive authority, they vote against it. So clearly, the only thing consistent throughout the period is voting against — not for or against the electric or gas division or whatever, but simply against. If the government takes an initiative, they're against it, whatever that initiative is.

Now the bill. The bill you have before you, hon. members, is an attempt to unscramble what really is an omelette. It's easy to nationalize, it's easy to provincialize. You can pass a one-line bill, and you can take over. But when it comes to unwinding an authority as complex as the B.C. Hydro and Power Authority, there are many facets and aspects. Just think of the rights-of-way in Vancouver alone. The B.C. Hydro rights-of-way are not simply power lines; there are gas lines and rail lines, and there may be water lines and telephone lines.

[ Page 5369 ]

So the bill itself attempts to deal with a wide range of matters, a wide range of possibilities. This is the principal reason why the word "may" is used often and, indeed, why some passages are quite vague. However, those who looked closely at the bill saw that the only matters specifically defined were gas and rail and research. There was no mention of the electric side. I think the bill can stand further clarification. Admission of this is, of course, a clause, now introduced as an amendment, which says nothing in this bill deals with the electric division.

There are advantages in privatization, and they haven't really been fully expressed. B.C. Hydro Gas is a well-run distribution authority. It doesn't produce a resource; it doesn't produce gas in the Peace River area; it doesn't bring gas down across the province through mainline transmission; but it does wholesale and retail gas in the lower mainland — and similarly, after a fashion, propane air in Victoria. It's really a retailer. It owns hardware, and it performs a function. That function isn't necessarily one that's carried out by a government-owned company. It's more generally carried out by privately owned companies across Canada and in the United States, and around the world generally. So what we are doing in spinning that off to the private sector is not unprecedented or unheard of. It's the rule across Canada. Indeed, the only substantial gas distribution system in Canada is that in the lower mainland. So if we privatize it, we're like the other provinces, we're like the rest of the country, we're like the systems in the United States and western Europe.

But we need further proof of whether this is a sensible thing to do. B.C. Hydro's service is good; it's good-quality. B.C. Hydro's rates are among the highest in Canada, not the lowest. B.C. Hydro's rates are far higher than the gas distribution rates through private monopolies. All of them are monopolies; it is a monopoly in Alberta. They are higher than in Saskatchewan; higher than in the private gas distribution utility in Winnipeg, which the NDP government looked at taking over, and backed away because it was too efficient. Most rates charged by Consumers' Gas and Union Gas in far-off Ontario are lower than B.C. Hydro's rates. Are we running a risk by going private? I doubt if there's any proof that we're running a risk, because rates are lower elsewhere and indeed at much greater distances from the gas fields where private utilities, private transmission companies, private gas producers are involved from beginning to end of the business. What we're attempting is not unprecedented, and indeed if one judges from the point of rates it's reassuring.

One of the members opposite really said that the only good monopoly is a public monopoly; private monopolies are suspect. I think all monopolies are suspect, and for that reason private monopolies generally are overseen and regulated by regulatory commissions like the B.C. Utilities Commission. What the commission has to be doubly aware of in regulating a private utility, in regulating B.C. Hydro as a public utility, is the cost of the pipe that's being put in the ground, the capital cost of additions, of extensions and so on. Hydro has tended to gold-plate its operations. Hydro has tended to be expensive. Hydro up until a couple of years ago wasn't under regulation. No one looked over Hydro's shoulder. Hydro did everything very well — beautifully engineered. It's a beautiful system, but in economic terms it's overbuilt. Regulatory authorities endeavour to limit excessive capital expenditures, and that's really where regulation is effective: ensuring that what's put in the ground as pipe or storage or other facilities is at reasonable cost, not excessive cost. This is where Hydro has tended to fall down.

When the NDP were in power, they didn't regulate Hydro. Hydro is very difficult to regulate. Hydro is a big, competent — certainly technically competent — organization. But if you can do something Cadillac-style, you do it that way, because you'll always be able to recover the costs in the rates. With the private utility, not only do you have closer scrutiny from the Utilities Commission — private utilities can easily be pulled onto the mat; Hydro is very difficult to get onto the mat — but they're also interested in making a bit of a profit on their investment. Hydro never makes a profit; Hydro merely breaks even. It passes on its costs, whatever they are, to the user. So there's no internal, self-regulating mechanism in Hydro to ensure that the consumer is well protected from a cost and price point of view.

Competition. There's usually not much competition in monopoly situations. In the case of B.C. Hydro electric and B.C. Hydro gas, one group of people — in fact a few people — in top management in the Hydro tower on Burrard Street in Vancouver decided what was good for you, Mr. Speaker, and what was good for me. Those few people decided what the rates would be on the electric side and what the rates would be on the gas side. That wasn't competition, that was simply an administrative decision. By separating the two, even if they were both publicly owned there'd be some measure of competition. There is competition between electricity for space-heating and gas for space-heating. There is some competition between gas and oil, but oil tends to be roughly twice the price nowadays in the lower mainland. There is some competition with propane, etc. But there will at least be some competition by separating out the gas division, by having it privately owned and operated, where there's some incentive to expand the number of customers, to expand the volume of sales. Indeed, there's a real incentive to find storage, either locally in the lower mainland or immediately south in the United States, because that alone could cut prices by as much as 10 percent. If they can do that, the operation would be more profitable for the shareholder and certainly much better for the user of gas.

Some references have been made to a problem here in Victoria. If natural gas becomes available, of course, the people here will be much better served. A number of the bids for the mainland gas division include the proviso that if the company gets mainland gas, they will also take over the Victoria franchise and they will strike the same rate in Victoria, regardless of whether they use propane air or gas, as in the lower mainland. That has to be weighed in the final evaluation. But there's a possibility that some cross-subsidy might work, might mean good news to people in Victoria. I hope — I think indeed it is more likely — that we will have gas on the Island; then it will be a natural gas service, and the rates will be comparable to those in the lower mainland. Those events can't all be foreseen. Certainly we would be unwise to sell the Victoria gas division until we knew for sure that gas was or was not becoming available on the Island, because the sale price of the monopoly — the franchise — here has to be considerably more if natural gas is going to be available than otherwise.

[8:30]

Taxes. Income taxes paid by private utilities since the early sixties — indeed, since the takeover of the old B.C. Electric — as a reaction really to the takeover of the B.C. Electric, part of the rationale of which was that British

[ Page 5370 ]

Columbians shouldn't be paying corporate taxes to everybody in Canada simply because you have a privately owned utility.... Since the early sixties the totality of the corporate tax has been returned to the province, and I would think the province would have to look carefully at doing what Alberta does: namely, returning the corporate tax to the consumers. That's one of the concerns. Private utilities have certain write-off opportunities — leasing, etc. — that government-owned ones do not, but I think one has to admit that financing costs tend to be somewhat lower with government-owned operations simply because the government lends its credit rating to the utility. That has a cost. It tends to raise the cost of borrowing on all other matters for the province.

One or two other matters. Frequent references were made to the fact that all of Hydro is for sale. The electric side is not for sale. That constitutes 94 percent of the total investment of B.C. Hydro, the gas side only about 5 percent, and the rail and research divisions the remaining I percent. So we are currently involved in offers for sale of several small parts. They are large in their own right, but small relative to the total of B.C. Hydro at the present time. We are not selling resources. We are not selling activities that relate to river flows or the production of oil or gas. We are simply selling some rights to run on railways, the right to retail natural gas in Vancouver and Victoria, and the research and development side — if in fact interesting proposals come forward.

We are not selling resources; we are selling private enterprise-type activities that are common elsewhere in the country and which do not involve the dedication of any particular natural resource that belongs to the people of the province. Premier Barrett, in a moment of enthusiasm when he was contending with the rising world price of oil, with a move by Canada to insulate itself from the world oil price shock in the early seventies, offered to turn over all of the energy resources of British Columbia to the nation. We are not talking about any of those resources. We are certainly not about to turn them over to anyone. We are not about to turn them over to Ottawa or to any foreign corporation. We are simply engaged in trying to take several elements of Hydro which are not commonly owned by governments and allow them to be more efficient and serve the people of the province better than they do currently.

I have to vote against the hoist motion mostly because the argument we hear from the opposite side doesn't relate to the genuine intent of the bill; that is, to take those elements of B.C. Hydro which are not common to other electric utilities across the country and sell them to the private sector, the usual manner in which those services are provided elsewhere in Canada, generally in the United States and certainly in Europe. I am therefore going to vote against the motion.

[Mr. Weisgerber in the chair.]

MR. CLARK: I wasn't planning to speak on the hoist — not at this point anyway — but the minister provoked me with what is clearly a very good speech and the most articulate defence to date. Nevertheless, I still have several quarrels with the minister, but clearly there are some areas where we can agree.

For example, we can agree that B.C. Hydro has overbuilt and is gold-plated. I can't think of a better indictment of 30 years of Social Credit management ability than what has happened with B.C. Hydro. The minister has admitted that they have real problems dealing with that.

One of the ways that our side of the House has always suggested dealing with that, and one of the ways that I support, is to break off the gas division from the electrical division for precisely the kind of competition the minister suggested. However, the prerequisite for that is not private ownership. In fact, we could have the benefits of both competition and public ownership through a Crown corporation dealing with gas distribution.

The minister did admit that several points that I've made on the rate structure of B.C. Hydro gas, the fact that Crown corporations can borrow more cheaply and the fact that federal corporate income taxes are paid by private companies, which impacts on the rate base unless it's rebated to the utility.... I'm happy that he has suggested that they will consider rebating that income tax to the private company to pass on to consumers. But once again, that's not in the bill; it's only a vague suggestion.

He has dealt with those and said that he agrees with me that they may have an impact on rates, but says that private utilities do it elsewhere. The reality in Manitoba, as the minister may know, is that ICG was found very recently by the Public Utilities Board to be overcharging to the tune of at least 10 percent, and with respect to the gas prices they were paid, probably in excess of 30 percent. After the Utilities Board and after the threat of nationalization, rates there have dropped by 30 percent.

I might say that while perhaps it's not appropriate, I hope the minister takes that track record of Manitoba into consideration — given that ICG is one of the short-listed companies — and does not hand over our public utility to that company, which does not have a good track record in Manitoba, in my estimation. If he does, I'll certainly dig in to provide for the minister more details of ICG's track record in Manitoba, and if it's the successful bidder, you'll hear a lot more about it from my side. Other bidders have other problems, and I won't go into them at this stage.

I want to mention a couple of other things that the minister said. He said rights-of-way are not to be sold. Once again, I hope that's the case. The minister's nodding, and that is a very good step. I do have some concerns, however, that once again that is not in the bill. I know the minister said the bill is not completely clear, but there is specific reference to rights-of-way in the bill. We can cover this in committee stage, and I'm sure we will; but if it's the minister's intention to not sell the rail right-of-way, for example, and only to sell rolling stock on that, then I would hope that there could be some rental....

Interjection.

MR. CLARK: The right to run transit. Then perhaps any economic rent could still go to the Crown in terms of extracting from that, depending on.... If they're federally regulated, they become switching track, as I understand it, which impacts seriously on the economics of the sale. I hope that it's still not a federally regulated switching track but keeps the profit-oriented structure that we have now, and that the Crown, therefore, can extract that same profit through private ownership.

Given what I've just said, it seems more appropriate to leave it in public hands. That is certainly my contention, given that it's going to be much more difficult and convoluted to try and structure a sale and still retain the Crown's share in the rights-of-way. I don't see why the government would

[ Page 5371 ]

press ahead with this privatization of a small component of B.C. Hydro that's very profitable if they're not going to sell the rights-of-way which retain some of the profitable feature for the Crown. It doesn't make a lot of sense. It points out that politics is intruding its ugly head on a rational decision of the government, and the rational way would be to leave that in the public sector.

The minister didn't deal very much with the research and development division. I suspect that it's because he knows it doesn't make any sense either. I know that the second member for Kamloops (Mr. S.D. Smith) made an argument that the research and development division should not be sold. I know that Thorne Ernst and Whinney suggested that it does not make sense to sell it; I know that the Stone and Webster report said that it didn't make sense to sell it.

I know, and I can imagine, that the minister, in trying to come up with a bill that allows him to privatize these disparate elements, has come up with a bill that allows him to privatize anything. In my estimation, the only way to correctly phrase this bill would have been to define the assets ahead of time, to lay them out very clearly as a stand-alone proposition, and in some form of appendix or annex to the bill, list in great detail which assets were for sale. That would have dealt with any of the problems.

For what it's worth, I understand that that is what Mrs. Thatcher did in Britain with British Telecom. That enabling legislation was mammoth, because it was unravelling a similar monopoly situation. But what they did was what I'm suggesting. The homework's done ahead of time, assets for sale are decided ahead of time, they're listed very clearly and everybody knows what's for sale. That would have been the more prudent way to go. Then we could have had a clear debate on it.

I don't know how you're going to take the assets of the R and D division and extract them from the assets of the electrical division, or B.C. Hydro in general, given that it's sitting there in Surrey, surrounded by what is, in effect, Hydro property. You're going to have to somehow legally subdivide, or something, that property and lay it out for sale. If you're going to do that and that's your only intention with the bill, then I think you should have done that ahead of time, and it could have been done ahead of time. Perhaps there's some pressure for time — I must say, probably for political purposes. I think it would have been more appropriate to do that, and we wouldn't have had this kind of problem.

I still have great fear about this bill. We've heard that from our members on this side, and you'll hear that in committee stage. Although with all good faith the minister has said we're only going to sell these four divisions, the four divisions aren't defined, and the bill still enables wide, sweeping privatization of all kinds of other initiatives. I'm not saying the government's going to do that. Given the current political climate, they perhaps won't, and I hope they won't. But the bill enables them to do that without any further public scrutiny, and I had problems with that and I still have problems with that, although the amendment goes a measure in that direction. I may be proposing other amendments that further narrow the definitions with respect to the sale of the four assets in order to restrict it to what the minister said he wants to.

Given that, I think this is a very good argument for a hoist. I submit that a more appropriate course of action would have been to more narrowly and strictly define the four divisions that are for sale. If the minister's not going to sell the rights away, that should be in the bill. If the minister is going to put restrictions on the sale of the Victoria gas division in order to protect consumers over here, that would be more appropriate, I submit, in the bill.

The minister could have waited until negotiations are decided and a bidder is decided upon and the exact.... Obviously, when an individual bidder has bid on something, before it can bid and before the successful bid and negotiations are concluded, all those questions would have to be resolved. It's apparent to me from this legislation that none of those questions are resolved — or at least, all of them aren't resolved. If they'd been resolved, the bill could have been designed to meet what is in effect the end product, the four sales.

The bill is all-encompassing and all-discretionary in terms of cabinet. I know that if we were government and we put forward legislation like this, the members opposite would quite correctly criticize us. I must say that there is a disturbing pattern with respect to discretion of cabinet ministers. We saw that, I think, with the Forest Act. There was amazing discretion on the part of the minister to even take — and if I were a Conservative, I might even say "confiscate" — land from private tenure-holders without compensation. I think that's a good principle, but I have some problems with not narrowing it down and not providing appeals, and making it completely discretionary on the minister. I would think that the members opposite would do otherwise. I do know that if we brought such legislation in, there would be a great deal of debate and discussion in this House from members on the other side.

This bill is still sloppily written. I understand why, because of unscrambling the omelette, as the minister said. I understand completely that that's the problem. Rather than bringing in enabling legislation that enables you to sell everything or anything or whatever you want, it would have been more prudent and far more appropriate to strictly and narrowly define the four divisions that are for sale so that not just the public can see what you're selling but the bidders, of course, can see as well. We didn't see that. I think the amendment we're going to debate later in committee stage goes partway toward that. I appreciate that, but I still think it's open to interpretation. As the member for Esquimalt-Port Renfrew (Mr. Sihota) has pointed out and I will point out again, we could see the sale of certain divisions.

[8:45]

The minister knows that the Thorne Ernst and Whinney report talked about selling Canal Flats to West Kootenay Power and Light. I recall that the numbers were a book value of $130 million and a replacement value of $1 billion — very enticing, I would think, for the members opposite, given their ideological disposition. So Thorne Ernst and Whinney said that maybe we could sell this Canal Flats to West Kootenay Power and Light and we could get $1 billion. Given that that was discussed by Thorne Ernst and Whinney, given that this legislation essentially enables that and given that 46 deals with the wielding of private power, it seems to me that one can hardly escape the conclusion that that is being contemplated. Even if it isn't, of course, the option is available down the road. So if it's not being contemplated, I would like to see that very tightly defined in the act, so that if the government does contemplate it — and they're certainly within their rights to do that — they have to come back to this Legislature for debate on something as fundamental as that. The Thorne Ernst and Whinney report says that that's the

[ Page 5372 ]

sixth-largest generating facility and at another point says it's the seventh. So I don't know what it is, but it's one of the largest generating facilities in British Columbia.

We see legislation that really doesn't accommodate what the minister says.... Certainly it does accommodate it — excuse me — but it accommodates much more than that. I have some real problems with that. Therefore we think a hoist is prudent at this time and that we can deal in greater debate at committee stage with how we could best narrow the definitions, at least to the four divisions. As I said at the outset, those four divisions should not be sold. I remain convinced they should not be sold. Nothing the minister has said has convinced me of that, but I appreciate his thorough remarks tonight.

MR. MILLER: I think there's ample reason to support the motion to hoist. As the minister said, it's a traditional device, in this case, in this parliament. I'm not familiar with other parliaments, but in this parliament it is a hoist for six months. Indeed, it's not particularly relevant, in terms of the intent of the motion, whether that period is for six months or for a longer period of time. The intention is clear that the opposition is expressing through that traditional motion their disagreement with the thrust of the legislation.

That's important because I don't think you can dissociate our opposition to the thrust of this particular piece of legislation from our opposition to the general thrust of the government's direction, in terms of their movement to privatize. It's really at the heart of the debate that's taking place, and in this particular instance it's taking place over this bill.

I too appreciate the minister's clear remarks in terms of the bill he's bringing into the House. As much as I appreciate that, I'm still not dissuaded from the wisdom of hoisting the bill at this particular time. One gets the feeling that the minister is swimming in waters with some shoals in them, and certainly when I listen to some of his colleagues on the issue of privatization, it becomes much clearer to me.

AN HON. MEMBER: Careful, careful.

MR. MILLER: The members who always sit on their seats and never enter these debates are now trying to enter the debate from their chairs. I don't have any particular objection to that; I just ask them to speak clearly so I can respond to whatever they might have to say from their seats. Even though they say it from their chairs, we still think that it might be worthwhile in terms of the contribution to this debate. We're quite prepared to listen and respond to it and even to identify the members who are taking the time this evening to speak from their chairs on this very important bill. We're happy to say who they are and what they have to say so that the record is established.

I haven't named that member so far. He's going to have to do a little better job than he's done thus far before I'm going to advise Hansard just who is heckling.

HON. MR. BRUMMET: You can't think of their constituency.

MR. MILLER: No. Actually I looked in my drawer. I think it's out there in Langley somewhere, if I'm not mistaken. Well, I'm pressed; the Minister of Education is pressing me. He says that I can't think of the constituency, and he's right. My mind was around another bill today, and I've been quite active speaking in a couple of anti-free-trade rallies. Occasionally I forget that it's the second member for Langley (Mr. Peterson) who is speaking from his chair. I don't even know if it's his chair.

AN HON. MEMBER: It is.

MR. MILLER: It is, okay.

Nonetheless, I was saying that the minister has offered one of the clearer defences of legislation so far brought into this House around the issue of privatization. In his remarks he talked about what had happened in the past, going back to 1962 and the legislation that was brought in at that time to do the opposite of what this bill is doing. The legislation in that particular year.... I'm not sure which year legislation to deal with B.C. Ferries was brought in, but clearly at that point in time the administration of the day, which was a Social Credit administration, thought it was in the interests of the people of this province to, in effect, nationalize in several key areas.

HON. MR. BRUMMET: Did you support that?

MR. MILLER: I'm going to get to the question of whether we supported it or not in a moment, Mr. Minister of Education. I don't know what your position was at the time. Perhaps you might care to take the time to stand and advise the House whether or not....

Interjection.

MR. MILLER: And I will get to that in a moment, too.

When a previous administration of this province back in 1962 decided it was in the interests of the citizens of this province to nationalize B.C. Electric, I assume they had some good reason for that; but so far none of the members with that kind of history have stood and explained why it was appropriate to do it at that time.

It also strikes me, as I remarked in previous debate concerning another piece of legislation — if I'm not mistaken, it was the BCRIC bill I was talking about just recently — that it's true that legislation really is more than just the bill. It's more than just a dry bill that we get on our order papers and in our books. Really, the life of legislation is the debate that goes into it. I know, from my brief involvement with some labour negotiations, that quite often you produce a contract and you should always be mindful that that contract, hopefully, will stand the test of time. Quite often the people who are most useful in terms of resolving particular issues are people who are actually involved in the debate or the negotiation process.

Interjections.

MR. MILLER: Mr. Speaker, I'm being assailed, and I'm talking about issues that were raised by the minister in his speech. I didn't hear these members assailing the minister when he brought them up. So why are they picking on me?

All I was going to say before I was so rudely interrupted was that what history doesn't show is the debate that took place on those bills that were brought in to nationalize B.C. Electric. The bills that were brought in to nationalize the ferries don't reflect that debate, and that's truly unfortunate. I suppose it's fortunate — and I would hope that the members

[ Page 5373 ]

opposite would give credit where credit is due — but it wasn't until the mid-1970s, I believe it was, that we got a Hansard in British Columbia.

HON. MR. BRUMMET: And the speeches got longer.

MR. MILLER: No, I don't think the speeches got longer.

Interjection.

MR. MILLER: Well, you'll never know. I could never accuse the Minister of Education of giving a boring speech. In fact, I can't even remember the last one he gave.

Nonetheless, I simply wanted to respond to those challenges thrown out by the minister in his defence of the bill, remarking on a position taken by this caucus back in 1962. It is indeed unfortunate that that Hansard is not here. I certainly found it most useful when I was debating the other privatization initiative brought forward by this government, in the 1970s. I found it most useful to be able to go back to Hansard and quote the former Premier on the opportunities that would be available under BCRIC. I know, from the applause I got when I read those excerpts, that the members opposite appreciated it as well.

My point is that a simple recitation of the position ultimately taken on a vote is not necessarily a reflection of the position of the day or why a particular vote was taken. Of course, since the New Democratic Party administration brought in Hansard, we are better able to look at those issues in the past and see why certain positions were taken.

I said at the outset that despite the quality of the defence offered by the minister, we would continue our opposition, and it's based on the philosophical approach being taken by this administration with respect to privatization generally. I have never heard any other minister rise and talk about privatization initiatives and offer the kind of defence of a particular bill that has been offered today. Certainly I haven't heard it when it comes to highway maintenance, despite the considerable opposition in this province to that measure. I have not heard rational arguments put forward by a minister in defence of that. I haven't heard the rational arguments put forward in defence of privatization of government services, nurseries, labs — you name it. I have not heard a rational defence, yet I have heard consistently a philosophical defence. Therefore it's appropriate, I think, that we examine that philosophy, because in many instances there's a failure of logic inherent in the simple borrowing of a philosophy that happens to be current in western democracies, some far more than others.

[9:00]

1 happen to have been involved in an incident.... We had some questions today with regard to PCBs. It's far easier, of course, to debate here about it, but far more difficult to actually be involved in an incident, as I was in Prince Rupert at the pulp mill, where a transformer had leaked and there were considerable PCBs in the area. It was so bad that all of us who were engaged in the maintenance operation there had to remove our clothing and put it in plastic containers, and all of our boots and all the rest of it. At the time it was one of the PCB hot spots in British Columbia. Now research and development, as has been outlined, has developed a method of separating the PCB out of the oil. I just want to use that one example as a starting-point in talking about public versus private.

I don't subscribe to the notion that because something is in the private market it's necessarily competitive or efficient. In fact, I have seen all kinds of endeavours in the private sphere that were exactly the opposite. To some extent, there is an argument that the marketplace creates that efficiency, and under certain circumstances I'm prepared to subscribe to that notion; I don't rule it out entirely. But I don't go so far as to think that being in the private market alone will necessarily induce efficiency. I think that's really behind the thrust, as I've heard members on the other side talk about privatization — this notion that....

Interjection.

MR. MILLER: I'm getting to it, Mr. Member from Langley.

Certainly if you look at the motive of any given business, it's to secure profits.

Interjection.

MR. MILLER: I hear the Provincial Secretary (Hon. Mr. Veitch) say that it doesn't seem like a bad idea. I don't disagree with the Provincial Secretary; it doesn't seem like a bad idea. In fact, if I were running a business it would seem like an excellent idea; and, I'd suggest, I'd be rather foolish if I had any other imperative. But the next leap of logic that you're asking me to take is that if a business makes a profit, therefore it must be good. Well, it doesn't always cover the situations that need to be covered and really are the responsibility of....

HON. MR. VEITCH: Are you talking about Panco Poultry?

MR. MILLER: No, I don't want to talk about Panco Poultry. I wouldn't mind talking about it at another time, but I don't want to be sidetracked from my remarks today. I wouldn't mind talking about Panco Poultry; I wouldn't mind talking about Westar and BCRIC either, but when I started talking about it I was heckled from the other side. Mr. Speaker.

[Mr. Pelton in the chair.]

All I'm trying to point out is the fallacy of the argument that because a particular enterprise is subject to market forces, somehow that will answer all our problems or our questions. Certainly when it comes to research and development, unless a firm knows that research they are likely to do will ultimately result in the firm's being able to make a profit, it seems unlikely that they would undertake it. I don't hear the other members responding to that. but it seems logical to me that a business enterprise is not likely to engage in activities that will not ultimately result in a profit for the owners or shareholders. That makes sense for that particular business, but it might not make sense for the citizens of any particular province or any particular country.

This is really where the role of government comes in. Unlike some other western democracies, I submit that we have a long tradition of the government playing a role along with private industry, generally, we hope, for the betterment of all of the citizens, who are able through the participation of government or the state to consider issues that would not

[ Page 5374 ]

ordinarily be considered by a private company, because they don't produce a profit.

Look at the items that are to be disposed of. I suppose we can be forgiven — given the vagueness of the act, as outlined by my colleague the second member for Vancouver East (Mr. Clark) — for retaining our suspicion about the ultimate intent of the bill. Simply to dispose of assets for the sake of disposing of them doesn't make a lot of sense.

If B.C. Hydro Rail makes money, why not keep it? Where's the incentive or what's the reason for disposing of it to the private sector? Victoria Gas is now subsidized. Again, even if it ultimately results, because of the construction of a gas pipeline, in its being able to turn around into a company that makes money, why would we, simply for the sake of philosophy, want to dispose of it?

If we had adopted that attitude in terms of the development of this country, both nationally and provincially.... It would seem logical to look, for example, at the medicare system and compare it to our neighbours to the south. They do not have the kind of history that we have in terms of governments being involved to protect those citizens in our society who are least able to protect themselves. Therefore they did not develop a system of universal medicare such as we enjoy in this country today. I suspect the reason is that they were more committed to the philosophy of letting the private market do it. If the private market doesn't fill a particular vacuum or void in terms of services, it's nobody else's responsibility.

I don't understand that philosophy, particularly if in participating with private enterprise you can produce a system that is both efficient and provides a service to the people that you are elected to serve. We're seeing this move or this trend more and more. I suspect it's because we feel we have to follow the lead of countries other than ourselves.

I know that the Minister of Transportation and Highways (Hon. Mr. Rogers) had to go to Great Britain to study privatization to see what they were doing in Great Britain. He basically came back here and said: "It's working in Great Britain so we should do it here." It may not ultimately work in Great Britain. Not even to pursue that angle, I don't see why we have to go there. I don't see why, if what we have here is working, we should necessarily change it, unless we're trying to make it better. Simply saying that we're going to dispose of it to the private sector, in my opinion, doesn't necessarily make it better.

Interjection.

MR. MILLER: The member for Shuswap-Revelstoke (Mr. Michael) hasn't yelled "Manitoba" at me, and he has really disappointed me because I could probably stretch this speech out a little longer if he'd do that.

I think if we look at the thrust of privatization from the philosophical point of view — and certainly that's a legitimate debate in terms of the motion that we're presenting to hoist the privatization efforts — the benefits that are so embraced or extolled by the other side aren't necessarily there. I have yet to hear in a general sense anybody really deal with that argument, except to use a fair amount of rhetoric: well, if we give it over to the private sector, it's got to work; it will become more efficient.

I don't know how we protect the interests of the citizens at large when the interests of a particular company, large or small, that is providing a service do not coincide with the interests of the citizens of British Columbia. Whether you are talking about the maintenance or the ploughing of snow on a particular highway in wintertime or the testing of materials in a laboratory, the company's prime goal is to make a profit; and as I said, that's not necessarily compatible with the interests of the citizens of this province.

HON. MR. SERWA: All it does is encourage efficiency.

MR. MILLER: I don't know why necessarily it ensures efficiency. I haven't heard any arguments why it ensures efficiency. Does it always ensure efficiency? Is it a rule of economic law that it always ensures efficiency, Mr. Member? Can you cite that? Do you subscribe to that role? Have you never seen inefficient private corporations? Certainly, inefficiency can rear its head in both public and private corporations. People can be motivated to be efficient and operate a good service whether they are in the private sector or the public sector.

If you don't believe that, Mr. Member, you don't have too much faith in people generally. Perhaps you subscribe to the old notion that was expressed by a previous Minister of Transportation in this House: what really makes the world go round is greed, and if you do away with that, we're all lost. That's really another way of expressing the notion that you have to give things over to the private sector in order for them to be efficient, and that's not necessarily the case.

Interjection.

MR. MILLER: The member opposite is asking why so many jurisdictions are moving in this direction, and it is a legitimate question. If you want to talk about that in terms of western democracies, there are a variety of reasons. This jurisdiction, as compared to a nation like Great Britain, is quite different. There, many of the enterprises that could legitimately be in the hands of the private sector were taken over the by state. Some of the basic processing was taken over by the state. Even given that, some of the experiments in privatization there have been less than good for the people in the country. I have only seen a brief documentary on three aspects of it: the airline, the telephones and the Jaguar car company. In each case it could be argued that without the subsidy provided by the state, the enterprises would not have been successful.

In Jaguar's case, certainly, without the massive subsidies provided by the state, that company would have folded. When it was healthy it was then turned over to the private sector. They say, from things I have seen, that the telephone service is actually deteriorating under private ownership. Finally, the airline was given a monopoly, and if you can't make it when you've got a monopoly, Mr. Member.... If that's the case and you require a monopoly, then where is the argument? If you want to be logical, if you require a monopoly, then where is the argument that that monopoly has to be in the private sector? If you take away the fact that a company can make money, which is the case in one of the situations that I'm arguing, then where is your argument that it should be in the private sector? Why not retain it in the public sector? The incentive that you so dearly love to talk about — the ability to make a profit — is not there.

[9:15]

Maybe you might want to respond to that. All I'm suggesting is that simply turning things over to the private

[ Page 5375 ]

sector is not necessarily in and of itself a logical or a good move, and it won't necessarily in and of itself provide a better quality of service to the citizens of British Columbia. Our responsibility as legislators and as government is to do that.

In this particular case, many years ago we acquired the interests in the production of electricity and other interests under B.C. Hydro. That was done for a definite reason, and a strong reason. The father of the former Premier obviously felt strongly, and there were fierce battles with the private sector and with the industrialists who control those private companies. Yet the Social Credit administration of the day felt quite strongly and proceeded. They did so on the basis that it was better to have it under government control; it was better to have a government monopoly.

I don't think the reasons for that have changed. I've heard no evidence presented that the reasons have changed. All I've heard, really, is a government — spokesman after spokesman — rising and defending privatization on a philosophical basis. It's really on a very simplistic philosophical basis. It's almost the kind of rote that you learn somewhere at somebody's knee that private enterprise is better. You've carried that forward with blinkers to the present time, and I assume, given your age, that you won't lose it. It's a very narrow view of what is really possible.

As I said, we have developed this country through a marriage of.... Excuse me, Mr. Speaker, I have to drink some of this undrinkable water. I hate to bore the members opposite, but I'm quite prepared to give them the opportunity to do the same to me, which I know they won't accept. However, I think I've tried to deal on a philosophical and a fairly logical basis. Instead, all I get from the members opposite is the occasional heckle. I must say I'm disappointed tonight that the quality of the heckling is unusually low. It must be a reflection of the fact that those members over there are tired of doing nothing, and they want to go home.

HON. MR. COUVELIER: Mr. Speaker, I wondered if I might have leave of the House to make an introduction.

Leave granted.

HON. MR. COUVELIER: The previous speaker has the dubious pleasure of having vacated the gallery, with the exception of two stalwarts. I wanted to introduce to the House one of them, a longtime friend and a close observer of the political scene not only in British Columbia but nationally and internationally: Dr. Neil Swainson, from the faculty of the University of Victoria, a man who served on the Oak Bay council for many years and a good friend of politicians everywhere.

MR. WILLIAMS: 1 wanted to make the same introduction on behalf of the opposition and welcome Dr. Swainson and commend him for the good work he's doing with the interns who help us every year. It's very worthwhile work.

MS. A. HAGEN: I had noted too that until a moment ago Dr. Swainson was the only observer in the gallery. I had the pleasure of meeting him earlier this evening, so I was intrigued to see him maintaining his lone vigil as the hour waxes toward adjournment time this evening.

I will be brief, but I have a few things to say that I feel very strongly about. I will try to make my points as quickly and cogently as I can.

When I spoke on second reading of this bill, I noted, as many of us have, that it was an incredibly sweeping piece of legislation in the powers it gave toward the selling off — as the minister has noted — of the largest public utility in western Canada. Indeed, it is interesting that the minister's and the governmen's response to some of that concern is an amendment filed on the order paper which purports to place some limits on the intent of this legislation.

However, in my view, that amendment simply deals with a part of the here and now; it does not alter the essential nature of this legislation, which is to provide a massive framework for the selling off of public utilities that have — with the support, I would say, of both sides of the House, in spite of the minister's comments — remained in that public domain as a matter of public policy supported by people of many political persuasions.

Therefore this particular legislation doesn't serve the immediate goal of privatization, which the minister has spoken to on the two occasions when he has addressed the legislation: first, in introducing second reading; and again this evening, when he spoke to the hoist. He spoke very specifically in both of those presentations to the House to the fact that he was dealing with the selling off of the natural gas division. If we are to debate that agenda, we are debating it without the context of legislation, because the legislation is simply a framework and fails to deal with the specifics of the sale of the mainland natural gas, Victoria gas distribution, B.C. Hydro Rail and the R and D division.

The minister has in fact had to provide us with the intent of his privatization initiatives outside the specifics of this bill. He has said over and over again that the bill has massive discretion. My concern is that discretion. My concern is that with this particular legislation there is no reason for government to give any accounting of what it expects to get from the sale, where the profits from that sale will go, how the services will be delivered, and what will be sold. We are dealing with a piece of legislation that doesn't enable us to debate the whys and wherefores and the merits of the privatization of the particular 6 percent of B.C. Hydro and Power Authority which the minister says is what he intends to provide for in this legislation.

For that reason, Mr. Speaker, it seems to me that we should put this bill to one side, whether for six months or until the House sits again, if that is to be, later in the fall or next spring, or till the minister can bring forward the specifics of the privatization proposal that he has for B.C. Natural Gas and Hydro and R and D. Then we could look at those specifics, debate their merits, and have the public response to a very specific proposal.

You'll note, Mr. Speaker, that I'm not at this time debating, as some of the speakers have tonight, the merits of privatization, yea or nay. That's a debate that has merit too, but I wanted in these few moments to say very specifically that this legislation that has been proposed doesn't serve the purpose that the minister himself has announced he intends it to serve. It serves a much broader purpose, which I think is so broad that at this point it has not had — and will not have — sufficient time to be received by the public, to be understood by the public, to be debated by the public. That is the reason we should be pulling the bill at this time .

It is, regardless of any amendments that occur, a vehicle that allows for a massive change in the most significant public utility not only in British Columbia but in the western provinces of Canada. I won't reiterate the specific concerns I

[ Page 5376 ]

have about the privatization of the specific areas. I dealt with that, and I don't want to revisit my second reading comments. But for us to proceed with this piece of legislation as the vehicle for, as the minister notes, a relatively modest privatization, and to be denied by this vehicle information about the specifics of that privatization, is in itself sufficient reason for us to hoist the bill.

I think there is a meritorious debate to be had around the separation of the hydro division and the natural gas division, another separate public utility. I think there is a reasoned debate to be had about some competition between those two sources of energy. I think we would relish an opportunity to engage in that debate.

Certainly there is a good deal of debate to be had around the specifics of what would happen with the sale of this ever so modest in percentage terms 6 percent, but ever so significant in dollar terms well over half a billion dollars in assets — the very specifics of those sales.

This is the first bill we have had before the House that enables us to look at the substance of sweeping privatization initiatives by this government. It's the first bill where we could in fact look at the details, the purpose, the goals, what will happen with the services that will be sold, what will happen with the proceeds, and how we can determine whether services are to be maintained. Instead of having those specifics, we have this broad, sweeping bill, and we have none of those details before us. That leaves me very uncomfortable. It leaves me uncomfortable after the experience of BCEC; it leaves me uncomfortable after the business of highways and bridge maintenance privatization initiatives, which have happened totally outside the purview of discussion in this House.

I want to have an opportunity to look at the nuts and bolts of a privatization initiative, to examine it in very specific terms. If the minister has, as he clearly does, a number of potential buyers, then I would presume we have a number of potential scenarios about what those various buyers would offer and how they would propose to offer service to the people of Vancouver, Victoria and the province, through the R and D division.

[9:30]

In his comments tonight the minister also made a number of references to some very specific uncertainties. What is going to be sold through B.C. Hydro Rail? Are the rights-of-way going to be sold? Are we just going to deal with the rolling stock? Those issues very much affect the whole process of privatization. We come back again to the R and D division, which is integrated with the whole of Hydro and which has a role to play, as members on both sides of the House have noted, with the academic community, the public utility and government's goals.

[Mr. Weisgerber in the chair.]

There are a range of issues that we can't genuinely debate with this piece of legislation. Therefore it would seem to me that we would be well advised to support the hoist in order to provide time for a significant examination of this document. It could become something of the nature of a White Paper, and we could ask the minister to come back with a very specific piece of legislation that deals with the sell-off of natural gas, hydro, and R and D that he wants to accomplish. Let us look at those in very specific terms, examine them on their merits and have that debate at some future time.

With those words, I add my voice to those supporting the hoist motion this evening.

MRS. BOONE: You may be surprised to hear that I am rising to support this motion. This is a motion that is....

MR. PETERSON: What a shocking statement!

MRS. BOONE: It's a shocking bill. This is the flagship of privatization. It's one of the few bills that we have actually seen come forth that deals with privatization, and it's indicative that this government is proceeding with this even though they have a clear message from the people of British Columbia, through the Boundary-Similkameen riding, telling them that privatization is one of the things that they don't want to happen. This bill ought to be delayed for six months so the people have a chance to let this government understand just how they feel about this.

When I hear the minister speaking — and he spoke very well and made a lot of really good statements — he is constantly talking about the things I hear them talking about all the time. They talk about the ideology that they come forth with, constantly referring to the fact that the private sector can do it better: the private sector can do it more efficiently; the private sector can save us money. They don't have one single, solitary proof that this is true. They seem to think that the more often they say it, eventually the people of British Columbia are going to believe that. If they continue to say that the private sector can do it more efficiently, then eventually people in Boundary-Similkameen will believe that that's what will happen. That isn't the truth.

We don't know for one ounce of fat that there is anything there at all. We want this bill to be hoisted for six months to give the people a chance to tell the government exactly how they feel about the selling off of our natural gas division.

This is a wide, sweeping bill. It's as radical as the other "Bill" that's on the other side there, and we know how radical he is at times. This is a sweeping bill. originally it came forth, as the member for Vancouver East said, containing the electrical side. We were totally appalled at that. Then we found out that, yes, in fact it did contain the electrical side. An amendment came forth that deals with that to some extent, but it still leaves those four divisions that they originally said, and it's still doesn't address many of the issues that are of concern. You've heard the member for Vancouver East state that it doesn't cover everything. In fact, the minister himself has admitted that it doesn't cover everything. The rights-of-way are not mentioned in this bill, and this government wants to say: "Trust us, we are not going to do anything that is not in the public's best interests." I don't think this side of the House or the rest of the people in this province are going to be trusting this government too far when it comes to bills.

One has to wonder about the competency of the drafting of this bill. It was written in such a way that if allowed for the sell-off of all aspects of Hydro, and it would have been possible to sell off the Bennett Dam, had the bill proceeded in its original draft. It wouldn't even have been mentioned, had it not been for the second member for Vancouver East (Mr. Clark), who brought it to our attention. Then it was taken back, and amendments were brought forth.

One has to question what else is in this bill. What else is in there that should be studied a little more and improved? There are a lot of improvements required. What kind of studies have

[ Page 5377 ]

been done to indicate that this is going to be in the best interests of British Columbia?

When you get down to the actual divisions that are going to be sold, there is no doubt in my mind that rates will go up. The gas division in the Victoria area is subsidized by the whole system. Rates are definitely going to have to go up here, if that's the case. The profitability of the gas division has been well canvassed here, and that profitability has gone on to offset the high cost of hydro. With that section being sold off, there is no doubt in my mind at all that our hydro costs will have to go up.

We have touched a little bit on the Hydro rail division and the fact that it has a monopoly on the line that goes out to Roberts Bank. What kind of impact is that going to have when that is sold off? What kind of impact is that going to have on coal prices? How are they going to regulate the cost of shipping the coal out there? Again, that is a monopoly; we are putting that into the hands of a monopoly. What about the Hydro research and development division, which has done a lot of good work for this province and is shown to be a very worthwhile part of the section? Why are we selling this off?

This doesn't seem to make any sense. The government just keeps responding that we are selling this off because the private sector can do it better; the private sector can do it more efficiently. Well, I'm not willing to just take this on blind faith and listen to what you say about that. Give us some proof that the private sector can do these things better. We have not seen any proof whatsoever, Mr. Speaker, that this is true. In fact, the auditor-general's report, talking in terms of the Attorney-General, stated that the contracting-out, the privatization that was done in that area, was not proven to be more efficient; it was not proven to be cost-effective. It didn't prove any of those things.

What proof do we have that this is going to be in the best interests of the people of British Columbia? That is what this government and this opposition and all of the people who sit in this chamber should be concerned about. What is in the best interests of the people of British Columbia? We are not willing to just sit back and assume that an ideology called privatization is in the best interests of everybody without having any proof whatsoever, without having any studies to indicate that this is true.

My colleagues, Mr. Speaker, have canvassed this quite effectively. I am going to close my remarks at this point with a few remarks about the situation that's happened in Britain. In Britain, as the members from the other side so often try to point out — Britain has done this and Britain has done that.... Well, Britain is now at the point of thinking about purchasing back some of the things they have sold because it's not working out, because it is not in the best interests of the people of that country. I don't think that is what we want to do: sell off, at the very start, our assets, which your and my fathers worked for, and my mother worked for, and then at some point down the line have to buy them back at a much greater cost. That is not the purpose of government.

I want this government to take six months. I want them to rethink this, to come back with some proof and some studies, so that we the people of British Columbia know that we are not being sold off down the tube.

MR. LOVICK: Mr. Speaker, I have some good news for members opposite to begin my opening comments, and I'm sure they have all been waiting for this announcement. I have the honour to be — should the need arise — the designated speaker. [Applause.] I sincerely hope that Hansard will duly record that there was a tremendous outpouring of enthusiasm and support for that announcement.

I shall have occasion to refer to hoist motions and the fact of my experience with hoist motions. I'm sure that members opposite will be paying very scrupulous attention to whatever I have to say on that subject, so I give you that cautionary note.

We have had a very long session, albeit not necessarily a very productive one, at least until the very recent past when suddenly we have had this veritable deluge of legislation coming before us. Some of us, of course, wondered why it should be that only at the almost eleventh hour of the session do we get all this legislation. The answer to that question is clearly that the government wasn't ready with any legislation before this past week. That, of course, is an admission of failure.

The other question, perhaps more germane to this debate, is why, given the fact that we have had such a long session, given the fact that we are all tired.... Indeed, some of us are even getting a little bit testy in debate, I have noticed. Perish the thought, but it seems to be the case. Why, you may ask, would anybody choose to move a hoist motion? We know that a hoist motion has as its purpose to stall, to delay. That's it purpose; we have no illusions about that.

It's interesting to note that that great parliamentary authority, our bible for these proceedings, Sir Erskine May, acknowledges very clearly that a hoist motion is "a traditional way of opposing the second reading of a bill."

Interjections.

MR. LOVICK: I had no idea that Sir Erskine was so much beloved of my colleagues. In any event, what's important is that Sir Erskine May says it's "a traditional way of opposing second reading." It is precisely that point that I want to begin with in defending this hoist motion.

We are talking about a very important tradition, in more than one sense of that term: first, in the parliamentary sense of the term; and second, in terms of the nature of our society and our economy and the way we do things north of the 49th parallel — the Canadian way. I shall have occasion to deal with precisely those dimensions.

Let's deal with the direct question: why are we asking for a hoist motion? There are two answers. You ask us why we ask for a six-month hoist motion, and what we say, quite simply, directly, and indeed emphatically is: because we want to draw attention to this issue. We think this issue matters. We think it's sufficiently important that we are here at 2143 hours debating this hoist measure. Clearly there are other things all of us could be doing at this hour, but we realize that this issue is sufficiently important that we want to make others aware of it.

[9:45]

MRS. GRAN: Who?

MR. LOVICK: As you sound like the wise old owl, Madam Member, I can tell you that that's the closest you've been to wisdom in most of your utterances.

We want the people, those we represent, to know about this issue, and we fear that despite the valiant efforts of my colleagues — most specifically the second member for Vancouver East (Mr. Clark) — and the efforts of some of the

[ Page 5378 ]

scribes from the gallery, it has not yet exactly become the big event of the session. We believe it ought to be. Thus we play our parts. Thus we do our little dance in the parliamentary forum, in the form of a hoist motion.

Interjection.

MR. LOVICK: It is curious, is it not, that those who are most critical of the ability to articulate intelligibly are those who have the least amount of skill in that area. But who am I to say? Certainly I wouldn't point the finger at anybody in making that observation. I detect that the troops are becoming a little restless, so I shall try to be a little lower-key in my delivery.

[Mr. Speaker in the chair.]

The other question is that if in fact you aren't going to be able to persuade the government to delay a measure for some six months, if you aren't going to be able to persuade the government to drop the particular measure, why go through the motions? The answer to that question is simply to be found in the nature of parliament itself. I would like to point out, at the risk of lecturing members opposite, that we who are called upon to serve in this hallowed chamber sometimes forget what a parliament in fact is. Literally translated, the parliament is a speaking place.

Interjections.

MR. LOVICK: It's wonderful to note how appreciative my colleagues opposite are of that little gesture towards wisdom. I acknowledge and am thankful for their effort.

What parliament was once called, in an absolutely derogatory fashion by a guy who had no respect whatsoever for parliamentary democracy, was a talk shop. As I recall, I think it was Vladimir Lenin who said that. The point is, what Lenin said is absolutely correct, because that's all it is. It is all we can do here. It is the only weapon we on this side have. I have no illusions that my remarks, however brilliant they may be, however lucid and logical the case presented may be, will sway those members opposite.

MR. WILLIAMS: Give them time.

MR. LOVICK: I do not believe they will support this hoist motion. It hurts me to say it, but I'm afraid that is the case. Nevertheless, I hope, because of the simple fact that we on this side are standing here persisting in a hoist motion, they will recognize that what we do has purpose behind it. The purpose behind it....

Interjections.

MR. LOVICK: Somebody suggested that a particular member opposite was jealous, and I want to inform the person who said that that it was an unkind cut.

I began by saying that I have, perhaps regrettably, had some experience now with hoist motions. Indeed, I would go so far so to say that I think I even have some expertise on the subject. With all modesty and with all due deference, I would like to quote myself. Mr. Speaker, I am sure you will be happy to know that I am not quoting myself on the subject of diffidence or modesty; rather...

MR. SPEAKER: Order, please. If the member could just advise the Chair which bill he's speaking to, it would help.

MR. LOVICK: I thank Mr. Speaker for reminding me that it is indeed necessary to inform members opposite what it is we are discussing, even though they have been sitting here now for some 45 minutes. I am prepared to say that yes, indeed, the bill we are now discussing — the advisability of hoisting the particular bill — is Bill 45, entitled Hydro and Power Authority Privatization Act.

HON. MR. BRUMMET: He's got it!

MR. LOVICK: Note also that he got it in only one try.

As I said, I wanted to quote myself talking about the nature of hoist motions. I am referring now to Hansard, page 3139, January 25, 1988. I say at that point:

"A hoist motion, almost of necessity, will have arguments on either side that tend to be substantially the same, whatever the subject might be. In short...."

AN HON. MEMBER: Author!

MR. LOVICK: This was original, I assure the member opposite.

"In short," — this learned authority goes on —"there are only so many arguments in favour of holding up a measure, and so many against, whatever the measure might be....

"Traditionally and conventionally, it is safe to say that the arguments adduced for hoist motions are usually predictable, pro forma and sadly pedestrian. Similarly, on the other side, the arguments against hoist motions — to show that we too can take blame unto ourselves — are traditionally seldom prescient or penetrating or, for that matter, surprising."

HON. MR. VEITCH: On a point of order. Mr. Speaker, I am in a bit of a quandary here relative to standing order 43. I know that that standing order states that when a member quotes another member he is both tedious and repetitious, but this guy is quoting himself. I'd simply like a ruling on that.

MR. SPEAKER: I thank the member for his input.

MR. LOVICK: It's nice to see that the Provincial Secretary is batting a thousand. Last time I spoke on a hoist motion, he tried to suggest that it was not in order, and I'm happy to see that his interruption this time has been treated with quite the same cavalier disregard and dismissal. It's nice to know that some things are indeed consistent and right in this universe.

What I want to do, looking at the clock and realizing that I certainly can't give all of the arguments I intended to sketch out, is to suggest that the fundamental question we need to pose regarding the advisability of hoisting this motion is: why the urgency? I would just offer, in the little time I have remaining here, one significant argument. It is interesting, is it not, that in a relatively short space of debate on Bill 45 in second reading, the minister responsible for the measure, who apparently had a considerable amount of time to prepare the legislation and who also apparently had a considerable number of resources at his disposal and considerable expertise

[ Page 5379 ]

to draw upon, nevertheless brought forward a bill that, we are to judge from the most recent evidence, was inherently flawed. The most recent evidence I am suggesting is the fact that in a very short period of time we had a substantive, significant amendment.

The moral of that particular story, it seems clear to me, Mr. Speaker, is that if, in a matter of one and a half or two days, we can come up with an amendment that calls into question the advisability of the whole bill, what might happen if we had six months to examine the measure? It seems very clear to me that if we can yield that kind of result in two days, think what might happen in six months. Perhaps the minister would indeed be converted and would recognize that the overall measure was not advisable after all. Certainly that is the contention that my colleagues and I are arguing. Certainly that is the case that we will continue to debate in the time allotted to us. Certainly that is the case we are going to examine in the course of the committee stage of this debate.

Given the number of people I now see sitting in the House, and recognizing that they are all here because they are anticipating adjournment of this debate, I am prepared to make that motion, if that is acceptable to....

Interjection.

MR. LOVICK: About an hour and 25 minutes, I suspect. Would you like me to carry on?

HON. MR. STRACHAN: Five more minutes.

MR. LOVICK: I see that we are indeed going to go right to 10 o'clock, Mr. Speaker. That suits me fine.

Let's start, then, by posing a question about this critter, this thing called privatization; let's start with a definition of terms. You remember that last time during second reading debate I focused my remarks on the proposition that what we had in this measure and what we had by way of defence of the measure from the minister amounted in effect and in fact to begging the question. I want to suggest that that is precisely the case and the problem with this measure and indeed with all measures emanating from the other side which are ostensibly to do with privatization.

All of the publications from the ministry and all of the debate we have heard thus far have focused on the technique — the means of implementing a particular privatization measure. The fundamental questions about why we do this, about in whose interest this is occurring, about whose benefit this will serve.... Those fundamental questions have not been presented and debated. If for no other reason than that, it seems to me we ought to hoist this particular bill so we might begin to have that kind of debate. I think that's a reasonable proposition. I don't think it is radical or extreme, by any stretch of the imagination.

I think we need to have that debate, Mr. Speaker, because thus far I am not persuaded. from listening to comments opposite, that members opposite are entirely aware of what this phenomenon called privatization is and amounts to. I therefore take it upon myself now to begin by offering a little definition for purposes of clarification, so we understand what we are talking about and what the implications of what we are talking about happen to be.

My conclusion to that is that if we understand what it is and we understand those implications, clearly we will be moved to reject the proposition. That's my case, in terms of why I want to spend some time on definition. Shall I carry on? Mr. Speaker, I see the clock marching on. I am quite prepared to carry on.

HON. MR. VEITCH: More, more, more.

MR. LOVICK: Mr. Speaker, I might decide to take up that member opposite, who suggested keeping us to the last moment, and do so. Let me begin.

Interjections.

HON. MR. STRACHAN: On a point of order, we have really extended standing order 3, and the member can continue as long as he wants. Please carry on.

MR. LOVlCK: I thank the hon. House Leader opposite for that invitation. My understanding is that we are going to adjourn at 10, and I am therefore prepared to stand....

Interjections.

MR. LOVICK: Mr. Speaker, I am not sure what the correct words are. but I want to move adjournment of this debate until the next sitting of the House.

Motion approved.

Hon. Mr. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 10:02 p.m.

Appendix

AMENDMENTS TO BILLS

28 The Hon. D. Parker to move, in Committee of the Whole on Bill (No. 28) intituled Forest Amendment Act, 1988 to amend as follows:

SECTION 29, by deleting section 29 (f) and substituting the following:

( f ) in subsection (2) (c) by striking out "55 (2) (a) (ii),55 (5)," and substituting "55.4," and by adding "; and" at the end of the paragraph.

SECTION 31, in the proposed section 31 (6) (d) by deleting "section 33" and substituting "section 32".

[ Page 5380 ]

SECTION 32, in the proposed section 32 (2) (c) by adding "replaceable" after "timber sale licence".

SECTION 32, in the proposed section 32 (2) (d) by deleting "form" and substituting "from".

SECTION 32, in the proposed section 32 (2) (d) by deleting "the Crown portion of the tree farm licence," and substituting "the Crown land referred to in section 28 (1) (b) (i),".

SCHEDULE, by deleting the proposed Schedule and substituting the attached Schedule.

SCHEDULE
(Section 31)

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