[ Page 5963 ]

CONTENTS

Routine Proceedings

Oral Questions

Federal tax increases. Mr. Harcourt –– 5963

Doman Industries Ltd. Mr. Williams –– 5964

Housing program advertising costs. Mr. Blencoe –– 5965

Speed limit on highways. Mr. Crandall –– 5965

Presenting Reports –– 5966

Tabling Documents –– 5966

Committee of Supply:
Ministry of Government Management Services estimates. (Hon. Mr. Michael)

On vote 31: minister's office –– 5966

Hon. Mr. Michael

Mr. Rose

Mr. Rogers

Hon. S.D. Smith

Mr. Blencoe

Mr. Lovick

Mr. Cashore

Hon. Mr. Strachan

Tabling Documents –– 5991

MONDAY, APRIL 10, 1989

The House met at 2:07 p.m.

Prayers.

HON. MR. DIRKS: In the precincts this afternoon, from the Creston Valley in the great constituency of Nelson-Creston, are Evelyn and Herb Hurford. With them is Pat O'Brennan, who is Evelyn's sister from Saanich. Would this House please make them welcome.

MR. CLARK: Mr. Speaker, I have the privilege today of introducing a couple of east-enders, although they are not currently in east Vancouver. As the member for Burnaby-Edmonds (Mr. Mercier) knows, we are taking over British Columbia. We have Ray McLennan, a nuclear medicine technologist at Kelowna General Hospital, and Nick Volkow, a Burnaby parks and recreation commissioner and — I might add — a member of the ad hoc dog control committee. Would the House please make them welcome.

MR. MOWAT: Mr. Speaker, on behalf of the first member for Vancouver–Little Mountain (Mrs. McCarthy), I would ask the House to welcome 160 students from Little Flower Academy in the heart of Vancouver-Little Mountain. There are 40 in the House now, and there will be three other groups coming this afternoon. The 40 students are from grades 11 and 12 at Little Flower Academy. Would the House please make them welcome.

MS. SMALLWOOD: Mr. Speaker, I have two families to introduce today, and I would like to ask the House to make welcome two very brave kids: Heather Van Egdom and Ryan Benson. With Heather are Linda and Rudy, her mother and father, and her two sisters Michelle and Lauren Van Egdom. Along with Ryan are Glenda and Doug, his mom and dad, and his brother Dustin. Accompanying them is their friend and lawyer, John Nelson.

HON. MR. DUECK: Mr. Speaker, I too would like to welcome the Van Egdom and Bonson families, and the two brave little children, Heather Van Egdom and Ryan Benson. It is a pleasure to see them here today, although we will be meeting informally in my office a little later.

MR. HARCOURT: Mr. Speaker, I would like the Members of the Legislature to give a very warm welcome to 25 visitors this afternoon from the People's Republic of China. They are taking various levels of ESL and North American orientation programs. They are accompanied by faculty members Katherine Odgers and Cathleen Peters, and the liaison officer between the university college and the CESC agency of the ministry of education in Beijing. Would you give a very warm welcome to our visitors behind the press gallery.

HON. MR. REID: I would like the House to give a special welcome today to the most aggressive, dynamic mayor that Vancouver has ever had: Gordon Campbell is in the precincts. Would the House make him welcome.

MR. PETERSON: Today is family day for me in the House. It gives me a great deal of pleasure to introduce probably the greatest supporter I have ever had since day one: my mother Charlotte Peterson. Accompanying her is my brother Lorne Peterson, visiting us from Ottawa. Also here is my sister Brenda Peterson, who, incidentally, is celebrating her birthday today. I won't tell you which one it is, because she will never forgive me. Please join me in making them very welcome.

MR. RABBITT: Today I am very proud to have in the gallery a longtime Socred and strong supporter of mine, one who is probably the oldest active rodeo rider in Canada. At age 63 he is still competing in the rodeo, the honorary mayor of Gold Bridge. I would like the House to give him a warm welcome — Harold Hartley.

MR. HARCOURT: I too would like to welcome the second most popular mayor in Vancouver's history. The only condolence I would like to offer him is that he didn't have the opportunity as I did in 1984 to give a guided tour of Vancouver to the ex-mayor of Surrey.

Oral Questions

FEDERAL TAX INCREASES

MR. HARCOURT: To the Minister of Finance. It is expected that the Mulroney government will be raising the personal income tax rates in its upcoming budget. As the minister knows, this would also mean an increase in provincial income taxes, since your government taxes British Columbia at 51 percent of the federal rate. Is the minister prepared to make a commitment that if the federal rates are raised, his government will lower its rates from 51 percent to whatever it takes so that British Columbians will not pay any more provincial income taxes?

HON. MR. COUVELIER: I'm very pleased to have the opportunity to speak to the question of taxation levels for British Columbians. This government is very proud that all of our taxation levels in this province are very competitive and comparable to those in the rest of Canada.

As a matter of fact, our personal income tax rates are the second lowest in Canada, as are indeed most of the various taxation and user schedules we impose. To the suggestion that this government has a less than responsive and sensitive need to British Columbians' ability to pay, the reverse is clearly true: we lead the country in terms of our concern for taxation levels in this country.

MR. HARCOURT: Supplementary. Yes or no: those are the two choices you have. Is the minister going to

[ Page 5964 ]

join the Mulroney government in raising income taxes, or is he going to adjust his tax rate to ensure that British Columbians pay not one more cent of provincial income tax? Yes or no?

[2:15]

HON. MR. COUVELIER: This government are members of the Social Credit Party. Unlike other political parties in this country who seem to take direction from some national headquarters, our party exists solely for the purpose of serving British Columbians. The Leader of the Opposition seems, for some strange reason, to be mesmerized by events in the national forum occurring in Ottawa.

Unlike the members of the New Democratic Party, we on this side of the House don't have quite that fascination or fixation. We are not prepared to play a guessing game with what the federal Minister of Finance may or may not do with his budget. That's strictly conjecture, and I suppose it might even be described as future government policy, at least as it relates to the federal government. The Leader of the Opposition, of all people, should know the impropriety of that question.

MR. HARCOURT: I have a new question, Mr. Speaker. It's hard for the Minister of Finance to get his head around the whole issue of tax unfairness. I understand that; he would prefer to grandstand. I would like to ask a question about the minister having publicly stated that with the national sales tax, our provincial sales tax rate would increase from 6 to 7 percent. Can the minister assure this House today that B.C. will not join a national sales tax scheme?

HON. MR. COUVELIER: I'm very pleased to have the opportunity to straighten out a rather confused headline writer who composes these issue-selling blurbs for one of the print media in our province. If the Leader of the Opposition had read the copy that accompanied that rather outrageous headline, I think he would have found the question unnecessary. To the suggestion that B.C.'s sales tax rate would go up, I merely have to point out to the member that, unlike every other province in this country, we've reduced our sales tax since we've assumed office. Clearly tax increases are not something this government is countenancing.

MR. HARCOURT: The minister has trouble giving a very simple, straightforward answer. I want the minister to realize that by equivocating on this issue, by dragging his heels and not taking a firm stand like Alberta and Nova Scotia, he is encouraging the federal government to proceed with its unfair national sales tax. Are you going to take a firm stand and say "no" like Alberta and Nova Scotia? Yes or no?

HON. MR. COUVELIER: Mr. Speaker, I believe it's a customary courtesy in this House that in framing questions the hon. members attempt not to misphrase, misinterpret or misrepresent comments of ministers of the Crown. You, if I understand, sir, prefaced your comment by suggesting that I, together with some others, had been promoting the idea of piggybacking the national sales tax. If I misunderstand you, I'd like you to correct me.

MR. HARCOURT: You misunderstood me. I asked for a yes or a no.

HON. MR. COUVELIER: I think the preamble is a very necessary part of consideration of the question, whether the question itself is proper or not. This government has never said whether we are prepared to piggyback or endorse the national sales tax — never! What I have said personally is that it is my view the federal financial situation is in such desperate straits that I can understand the necessity for the Minister of Finance in Ottawa to attempt to devise some programs to deal with it. I am sympathetic to the plight he has placed himself in — or the government have placed themselves in — and I've said so. But I have never said, sir, that this government would be prepared to piggyback that, nor have I denied it. I've said quite simply that we do not yet have enough information to deal with the question.

I gather that the hon. member gets a lot of his information from the media, and if he does, then why does he not also read the explanatory comments underneath these headlines that he refers to? We finance the opposition to provide them with resource writers and research workers, and it does seem to me appropriate that they might do a more professional job in that respect.

DOMAN INDUSTRIES LTD.

MR. WILLIAMS: To the Minister of Forests. Pursuant to the tabled answers that the House received on Friday last, did you meet with Doman Industries to discuss their cut position?

HON. MR. PARKER: I'll take the question as notice.

MR. WILLIAMS: The question is the most elementary in the world, Mr. Speaker. We're simply asking if the minister met with representatives of Doman Industries.

One of the other answers to the tabled questions was with respect to the pulp mill that we have not yet received in British Columbia, even though it's many years later. In the interim, while Doman had that cut and used it, Doman and others bought a pulp mill. Would the minister not agree that the fact that Doman Industries and others had the funds to buy another pulp mill would be a classic case of non-performance, an example of non-performance that the minister should have pursued diligently when dealing with the Doman company?

HON. MR. PARKER: I'll take the question as notice.

MR. WILLIAMS: In one of the other tabled answers the minister indicated that indeed there had

[ Page 5965 ]

been a penalty with respect to B.C. Forest Products, who had not undercut to anywhere near the degree that Doman Industries have. Would it not have been reasonable and consistent to penalize Doman Industries as well in view of the fact that they undercut far more than BCFP?

HON. MR. PARKER: Mr. Speaker, I'll take the question as notice.

MR. WILLIAMS: The media and the public have been provided with memos from the ministry's files that indicate there was a range of non-performance by Doman. Despite all that, in November of last year this minister was responsible for dramatically changing the contract with respect to the pulp mill requirement to the point where it was a loophole.

Why did you let Doman get away with not having to spend $300 million, Mr. Minister? That's what the contract was all about.

HON. MR. PARKER: I'll take the question as notice.

MR. WILLIAMS: When the earlier minister, Mr. Waterland, brought in the 1977 legislation, he said it was tough legislation that said, "Use it or lose it." Whatever happened to the idea of use it or lose it, which was supposed to be the foundation of the statute?

HON. MR. PARKER: I'll take the question as notice.

MR. WILLIAMS: The minister tabled a letter in the House dated July 28, 1987, where he says: "I trust that by that date" — which is September — "you will also be able to confirm, in a concrete way, compliance with the 'wood residue processing facility' requirement of your Strathcona and mid-coast forest licences." What concrete assurances did you receive from the Doman company that they would proceed?

HON. MR. PARKER: I'll take that question as notice.

MR. WILLIAMS: The previous day you advised the House you couldn't answer any of these questions because of legal proceedings, and then you tabled these matters in the House. Have you reviewed with your staff this inadequate advice provided by your staff?

HON. MR. PARKER: I'll take that question as notice.

MR. WILLIAMS: To the Premier, Mr. Speaker. In the media in the past week we have been seeing a level of confidence in this ministry that is so abysmal it almost boggles the mind. Is he reconsidering the position of the present minister?

HOUSING PROGRAM ADVERTISING COSTS

MR. BLENCOE: I have a question on housing issues. My first question is to the Minister of Finance. The budget contained approximately $12 million only for new housing programs. I wonder if the minister can provide the House with the budget figure to promote the government's housing programs — the PR and media advertising that is currently in place. Can you provide the advertising costs?

HON. MR. COUVELIER: I'm aware of the interpretation put on the provincial housing action plan by the second member for Victoria, so I'm not surprised that he would preface his question with such an outrageous preamble. The fact of the matter is that the housing action plan is intended to benefit and does benefit over 500,000 British Columbians. This government sees the housing action plan as a key part of the budgetary initiative this year. In addition to the fact that it's a balanced budget, we've also very sensitively, I think, directed money to this important and essential current housing crisis. My colleague the Minister of Social Services and Housing (Hon. Mr. Richmond) has developed a very imaginative program to deal with every single facet of that housing crisis, and this government is very proud to see it go ahead so quickly.

MR. BLENCOE: The minister has, in his own words, admitted the basic problem the people of British Columbia have. The ads say: "800,000 households will benefit"; you say: "500,000 households will benefit." Which is it?

Question to the minister: maybe he should ask the Minister of Consumer Services (Hon. L. Hanson) to investigate deceptive advertising and tell the truth to the people of the province about what your housing program is all about.

MR. SPEAKER: Order, please. The question is out of order.

SPEED LIMIT ON HIGHWAYS

MR. CRANDALL: I have a question for the Minister of Transportation and Highways. Last Thursday, the first member for Nanaimo (Mr. Lovick) mentioned that he would like to see highways maintenance put back under the government. I just want to ask the Minister of Transportation and Highways — because I'm so pleased with the work in my constituency in highways maintenance during the past winter, and considering all the highways work that has been done in the last several years since 1974 — if there is any consideration being given to raising the speed limit on most of the interior highways, where we currently have a speed limit of 90 km/h, including the Trans-Canada Highway.

HON. MR. VANT: Mr. Speaker, in the province there are already certain parts of our highway system where the speed limit 110 km/h. As we improve our roads throughout the province, a lot of new roads are

[ Page 5966 ]

designed for exactly that speed. So we'll carefully consider — where we can — raising the speed limit where it is appropriate and safe for the travelling public.

MR. CRANDALL: Supplementary, Mr. Speaker. I'll perhaps be more specific. The speed limit that we have had in the past was higher than it is now; it used to be 60 miles per hour. Would you consider raising the speed limit on the highways that are now 90 km/h to 100 km/h?

HON. MR. VANT: That is, in a sense, getting into future policy, so I'd have to take that under advisement. But I do thank the hon. member for Columbia River for that excellent question.

[2:30]

HON. S.D. SMITH: Mr. Speaker, I have the honour to present the 1988 annual report on the invasion of privacy, together with 1983-1987 supplementaries thereto, pursuant to section 195 (5) of the Criminal Code of Canada. These matters are known more commonly as the wiretap sections of the Criminal Code.

HON. MR. REID: Mr. Speaker, I am pleased to present the report of the commissioner inquiry in the Station Square development in Burnaby. I'd like to table this report in the House. I'd also like to table the Oakalla escape royal commission report of September 29.

Mr. Speaker, I take pleasure in tabling the report of the Royal Commission of Inquiry Into the Alleged Injuries Sustained by Michael Albert Jacobsen During His Detention in the Vancouver City Police Jail.

Orders of the Day

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

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

ESTIMATES: MINISTRY OF
GOVERNMENT MANAGEMENT SERVICES

On vote 31: minister's office, $259,265.

HON. MR. MICHAEL: Mr. Chairman, I wish to state that later today I will be tabling the Concord agreement. It has already been delivered — or is in a the course of being delivered — to the press gallery, as well as a full set to the opposition.

MR. ROSE: On a point of order, I wonder if the minister is aware of the parliamentary tradition of having something tabled in the House before it is given to the press. The only exception I can think of is during a budget lockup, and then the opposition critic usually gets a copy. I was about to ask the government House Leader — sotto voce — about this Concord Pacific sales agreement; it was indicated in his note to me that it was coming, but we did not I know when. Perhaps the minister might explain why it has gone there first rather than here.

HON. MR. RICHMOND: Mr. Chairman, it was fully our intention to table the report before the minister got into his estimates. If the House wishes we could come out of Committee of Supply and table it forthwith, or we could wait until the end of the day and table it at that time.

MR. ROSE: The old slogan: "Do it now." Persons are available.

HON. MR. RICHMOND: Because it was our intention to table it immediately and it was just a matter of procedure that it got delayed, I move the committee rise, report progress and ask leave to sit again.

The House resumed; Mr. Speaker in the chair.

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

HON. MR. RICHMOND: Mr. Speaker, I believe the Minister of Government Management Services has a report he wishes to table.

HON. MR. MICHAEL: Mr. Speaker, I apologize to he House for the inconvenience of my tardiness. At his time, Mr. Speaker, I would like to table the Concord agreement, which has five sections. Copies have been sent to the press gallery and to the opposition.

Hon. Mr. Michael tabled answers to questions on he order paper from the first member for Vancouver East (Mr. Williams) and a question from the member or North Island (Mr. Gabelmann) put late last week.

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

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

ESTIMATES: MINISTRY OF
GOVERNMENT MANAGEMENT SERVICES

On vote 31: minister's office, $259,265.

HON. MR. MICHAEL: It is indeed a pleasure to rise in the House on my ministry estimates. We have number of areas of jurisdiction under the ministry, and it gives me a great deal of pleasure to review and highlight the various cost centres within the Ministry of Government Management Services.

Mr. Chairman, I'd like to start by stating that sincere compliments are certainly due to the 27,000-odd government employees. Certainly they have been through somewhat difficult times over the last six years, but I think it's fair to say that they have come through those six years of restraint with flying colours. Indeed, the number of suggestions and the motivation I have witnessed in the last few months as been second to none, and it's good to see that

[ Page 5967 ]

negotiations with the B.C. Government Employees' Union came to an amicable settlement, a three-year contract that I think the government and BCGEU can both hold proud.

The first area I would like to discuss has to do with the B.C. Purchasing Commission. I would like to give my compliments to the Purchasing Commission on their supplier development program. As a result of this initiative from the B.C. Purchasing Commission, we have seen established and brought about literally hundreds of jobs. There has been a tremendous amount of pairing of the demand for goods and services with B.C. firms. I believe the program has been second to none in Canada and certainly has kept a lot of dollars home in British Columbia.

The Market Discovery '88 trade show at the convention centre was attended by some 6,000 buyers and sellers. There was tremendous participation by entrepreneurs within our province, and hundreds of thousands of dollars in economic spinoff resulted from that show. We have some 57 examples of positive things that happened as a result of that trade show and of the pairing of goods and services demanded by our province with those items that were manufactured or produced outside British Columbia and are now being manufactured or produced within the province.

I would also like to say for the record that instructions have been given to the B.C. Purchasing Commission that all Styrofoam cups must not contain any CFCs, chlorofluorocarbons. It is the policy of the B.C. government that anything purchased by the B.C. Purchasing Commission will not contain CFCs.

We are also pleased with some of the initiatives shown by the B.C. Purchasing Commission. Members opposite and my colleagues will see some recommendations brought about by the Purchasing Commission within the next three or four weeks. Recommendations are in the mill to enter into a formalized recycling pilot project which will include some six or seven buildings in the province, probably in Victoria. I am sure we will see very positive results of that initiative brought about by the Purchasing Commission.

We are also going to be examining and reviewing, and perhaps announcing in the next two or three weeks, a paper procurement policy that will see us give preference to unbleached paper, as compared to bleached paper, provided it is cost-competitive.

We are also looking at lubricating oil. We are studying the collection and distribution of re-refined oil, and we are confident that the current studies by the B.C. Purchasing Commission will lead to thousands of dollars in savings in the recycling of used oil by government operations and Crown corporations in this province. We are looking at a tremendous B.C. value-added initiative as a result of this, and I am convinced that members opposite and my colleagues will be pleased with the recommendations currently being developed.

Earlier today we had circulated to all members' desks recycled paper. This again is an example of the things that are being brought about by government employees. All of those pads that you have on your desks are recycled paper, paper that used to be put in the garbage can and is now being utilized by this government for a savings of many thousands of dollars.

Regarding the Queen's Printer, I can report that as a result of the privatization initiatives, about 70 percent of that volume is now being put out to the private sector. I am very proud to say that as a result of those studies it is quite evident that a tremendous amount of reorganization and efficiencies have been built into the Queen's Printer that make them more productive than ever. It was with a lot of personal regret — and I know I am speaking for the Minister of Finance (Hon. Mr. Couvelier) as well — that the budget was not able to be printed at the Queen's Printer this year. But I want to assure everyone in the House that this certainly had nothing to do with our fear of security, It was strictly and solely that the union negotiator representing the Queen's Printer was unable to give us written assurance that there would be no interruption in the flow of the printing of the budget. That budget, as we all know, had to be delivered by a certain time and date.

In talking about the vehicle management branch, I have to say that there has been a tremendous amount of consolidation and streamlining in the management of government vehicles. Suffice to say that the number of government vehicles has been reduced from 7,600 to in the vicinity of 4,800. We have upgraded the fleet. There were 550 new vehicles bought in the last fiscal year, and we expect to see a similar number purchased during this coming year to further upgrade the vehicle management branch fleet. We can tell you that all of the small vehicles in all ministries are now managed by the Ministry of Government Management Services, directed by the vehicle management branch. They are doing a very efficient, effective job in managing government vehicles throughout this province.

Regarding air services, Mr. Chairman, we can report to the House that the fleet has been reduced. There used to be seven planes; we have now cut it down to six. We have upgraded the quality of the planes. We have purchased two new Citations, as well as the Challenger. We are very pleased to report that as a result of purchasing the Challenger, the minister of the day was successful in negotiating an offset agreement of some $14.5 million. I know that we will all be very proud of the previous minister. The offset agreement was more than double the actual purchase price of that plane. I know that the past minister will be proud to know that the $14.5 million target and assurance given us by Canadair looks like it is going to be far exceeded, as contracts already committed in the province of British Columbia equal some $22 million.

[2:45]

We can also report, Mr. Chairman, that the air services fleet transported some 1,055 patients in the last fiscal year, and we are looking at transporting some 1,224 in the current fiscal year. We might also report that without that fleet it would have been very

[ Page 5968 ]

difficult to effectively and efficiently handle the wide-ranging committees that have travelled the province of British Columbia in the last year. I am referring to such committees as justice reform, the forestry tour, the Sullivan report, the cabinet committee on regional development and the social services committee. Indeed, Mr. Chairman, several Crown corporations used the fleet as well.

Also, Mr. Chairman, as a result of the initiative of the previous minister, we followed through by donating the surplus flight simulator to Fraser Valley College. I am pleased to report to the House today, and to the previous minister, that it was very well received by the college, located in Abbotsford.

Turning to the B.C. Systems Corporation, we are extremely proud of the initiative shown by the corporation and its leadership. For the first time in the province of British Columbia we have purchased all of the telephone handsets. This has shown a payback in less than one year and will be saving the taxpayers in the province of British Columbia some $1 million a year as future years unfold.

As a result of the initiative again shown by B.C. Systems Corporation, we will be introducing, on July 1 of this year or before, B.C. on-line service. This will provide electronic access to the land title registry, central registry of liens and companies registry. Major tenants to this electronic access will be banks, credit unions, lawyers, realtors and automotive dealers. It will be a tremendous instant service costing in the vicinity of $5, and a savings and profit to the B.C. Systems Corporation, which will be passed on to the Minister of Finance (Hon. Mr. Couvelier), of some $470,000 in the first year of operation.

I can also report, on behalf of the B.C. Systems Corporation, that the mainframe processing rates have been reduced by some 50 percent since 1986, with further discounts to be given in the current year. Further to report, for any business done by the B.C. Systems Corporation, it must compete head-on with the private sector, although the reverse does not apply.

At this time I would like to divert my attention to the B.C. Buildings Corporation. It's my view that the B.C. Buildings Corporation does an outstanding job in any area, when considering and looking at the environment. They have got a first-class program in place for asbestos management. They have 11 buildings underway which are either complete or in progress of clearing asbestos completely out of those buildings.

It's somewhat disheartening knowing the tremendous job that BCBC does and looking at the very negative headline in last week's Times-Colonist. On Friday, April 7, they made a very negative report on the B.C. Buildings Corporation. It starts off:

"There would be howls of outrage if PCBs were stored near Victoria General Hospital rather than Glendale Lodge for the mentally handicapped, says the CRD environment committee chairman. Frank Leonard made the accusation in response to B.C. Buildings Corporation plans to continue storing PCBs near Glendale. 'This matter really upsets me. There is a social question here. It would be different if it were outside Victoria General Hospital. But (Glendale) patients can't speak for themselves."'

As I say, it's a bit disheartening to read stories like that when we look at the facts of what BCBC is doing. I have a report from my staff this morning that reads:

"Some of the pertinent facts of which the press has been made aware but has chosen to ignore most of in its coverage of this matter are as follows: (1) The container is stored at this location because the corporation has employees on the site throughout the day to provide additional on-site security. (2) " — and this is very important — "PCBs are stored in sealed metal drums. The drums in turn are placed in a large tray. The tray in the container would hold all the PCBs in the unlikely event that all the drums leaked. The tray is inside a heavy-duty metal shipping container which is locked and marked, stating it contains PCBs. (3) An intrusion alarm is fitted to the container and connected to the Saanich police department. The container is not visible from the hospital itself and is situated 500 feet from the hospital. (4) The corporation applied voluntarily to the Ministry of Environment under its Waste Management Act for the storage permit, recognizing that our present security levels exceeded current requirements."

It's interesting in looking at the facts and at the person who makes the remarks, Frank Leonard, a council member. It's interesting that in the municipal works yard of Saanich, PCBs are merely stored in a 45-gallon drum.

Reverting to some of the positive things about the B.C. Buildings Corporation, it's interesting to note the tremendous job it has done in bringing about efficiencies in that Crown corporation. The staff has been reduced since their incorporation in 1987 from 2,000 to 870. In 1988, they were able to bring about further reductions from 870 down to 791 — a reduction of 79 persons. They are projecting in 1989 to reduce that down to 762. I think it speaks well of the efforts of the management, the corporation and the board of directors to bring about savings to that Crown corporation, which are in turn passed on to the residents of British Columbia.

It's also interesting to note the job they are doing in regard to energy conservation. With a capital expenditure of some $15.5 million in the last few years, they have been able to bring about savings of $42 million to the Crown corporation. As a result of those initiatives, they have won several international awards.

Turning to the B.C. Enterprise Corporation, it would appear that sometime in the fall — probably by October — we will be able to report the complete windup of the B.C. Enterprise Corporation. We are hopeful that by then all the major properties will have been sold, and the balance of the unsold lots, which are mainly industrial lots located in the interior, will be transferred to the lands branch for their inventory. We expect to announce, probably by the end of this month, the completion of the sale of Westwood. It would appear that we will soon be into a full marketing swing for the Songhees property, located in Victoria, and the balance of the Whistler lands, located in Whistler, B.C.

[ Page 5969 ]

If you look at the opportunities that will arise in the province as a result of the Concord agreement that has already been tabled, you will see some $2 billion in capital investment over the next few years and, probably, a total economic spinoff to this province of $8 billion. As a result of the construction that will take place on that site, we expect to see some 28,000 person-years of employment — a tremendous economic boost for the lower mainland and, indeed, the entire province. As members will note in volume 3, section 3, tab 59 — I believe — that sales agreement with Concord is backed up by an irrevocable letter of credit from the Canadian Imperial Bank of Commerce.

Turning to the B.C. Pavilion Corporation, we can say that this corporation is certainly embarking on a tremendous promotional advertising campaign — both nationally and internationally — attracting trade shows and conventions to this province which have never been attracted before. We have in excess of 200 days already spoken for at B.C. Place Stadium in the coming year, and if you go right now to book a convention at the trade and convention centre, you would have a very difficult time getting a two- or three-day slot still open in this current fiscal year. They have a tremendous slogan they've adopted for their employees, called the "Yes, We Can" program, and they're doing a very assertive, aggressive job of providing service to the tens of thousands of visitors attending the facilities under the B.C. Pavilion Corporation jurisdiction.

One of the initiatives that the B.C. Pavilion Corporation undertook was the sponsorship of an aquaculture trade show. In the last fiscal year they made a clear profit in excess of $100,000 on this show. They have taken that trade show and sold it to the private sector, and I'm pleased to report to the House that the sale price was some $700,000 — $500,000 in cash with a $200,000 payment at the conclusion of the first show.

For a savings initiative, the Food Pacific trade show has been transferred to the jurisdiction of the B.C. Pavilion Corporation, and we are confident that we will be able to show government a savings of $300,000 to $500,000 as a result of that initiative.

As well, I can tell you that the B.C. Pavilion Corporation management and board of directors are still working on many development opportunities, and we expect to see new announcements forthcoming in a short period of time.

We will be expanding the responsibility of the B.C. Pavilion Corporation somewhat. Effective at the end of this month, we will be transferring the film centre located in Burnaby — commonly referred to as "The Bridge" — from the B.C. Enterprise Corporation to the B.C. Pavilion Corporation.

The year before last, the B.C. Pavilion Corporation had an overall deficit of some $9.3 million. Last year they were able to reduce that deficit down to $6.1 million, and I'm proud and pleased to report that in the current estimates this year, that will be further reduced to some $4.9 million.

The economic spinoffs are enormous. In Vancouver alone, with the facilities at B.C. Place Stadium and the trade and convention centre, the economic spinoffs as a result of tourism brought about because of those shows far exceeds $100 million a year.

Turning to the PNE, I'm pleased to report that revenue was up last year. In the current fiscal year, at the coming 17-day PNE, we're projecting attendance of some 1.3 million. We expect revenue to be in the vicinity of $23,600,000 for the PNE this year, and we expect to see a profit of $1.5 million. Just for information, Mr. Chairman — because I know it's of interest to a lot of people in the House — the PNE is the seventh-largest agricultural show in North America.

Now for a brief overview of privatization in B.C. We will let the Minister of Highways (Hon. Mr. Vant) report on his ministry, but suffice it to say that the later part of the budget document as presented by the hon. Minister of Finance on March 30 clearly sets out savings of some $106 million when taking everything into consideration, including sales tax, licences, gravel and things such as school taxes. If you look at the entire document, you will see savings of some $106 million at the end of the three-year contract period, which I think speaks for itself.

[3:00]

I can give you a short report on some other privatized operations. I had an opportunity, about a month and a half ago, to tour Crown Publications, located right here in Victoria. They were having their first anniversary, and it was a pleasure to cut the cake with the proud owners, who are four employees of that division. They were pleased and proud to report to me and to all people present — and there was a very good crowd — that they have increased their workforce from six to ten people since privatization.

The much-talked-about Langford sign shop, an employee-owned initiative, started with 15 employees, and they are proud to report that their workforce has gone up to 23 people — an additional eight people working in that division as a result of privatization. Interestingly, approximately 50 percent of their work is now being done for the private sector. Indeed, they have gone so far as to open another division in the great constituency of Delta.

The privatization of B.C. Steamships is another great initiative. Tens of thousands of extra tourists are coming to the Victoria region as a result of that privatization initiative, and there are a lot more jobs in the province as a result of Stena's efforts.

Looking at forest nurseries, it's really astounding to see how initiative grows under private ownership. Privatized forest nurseries are getting into such things as vegetables, flowers, ornamental trees, bedding plants, strawberry production, seed potatoes, Christmas trees. They're into these exciting areas, creating all kinds of spinoff benefits and replacing certain import items.

We're not too far away from announcing a positive initiative brought about by inquiries made and expressions of interest asked for by the privatization committee regarding an Inside Passage cruise vessel between Vancouver and Prince Rupert. We're not able

[ Page 5970 ]

to make an official statement today, but I'm confident that within two or three weeks we will see a positive announcement on that initiative, creating some 240 jobs in our province with a payroll spinoff in excess of $10 million a year.

We on this side of the House are very proud of the package that was put together by my ministry and others regarding early retirement and severance benefits for those employees who were affected in any way by privatization. I think you will find it one of the very best packages you could possibly imagine being put together by any employer, private or government. I stand here very proud of that package. Indeed, I have received a tremendous number of complimentary notes from government employees regarding the program put together by the province.

Also, there is the success of the efforts of the western procurement and economic development ministers. The western procurement ministers had a meeting just a few weeks ago and signed a memorandum removing all the trade barriers between purchasing commissions throughout western Canada. This was a follow-through on the initiatives given to us by the western Premiers. I'm pleased to say that the agreement has now been signed, and those trade barriers have been eliminated effective April 1, 1989 — just a few days ago. We will not be stopping there. The western ministers had discussions as early as this morning, and we will be putting together a plan of action for the four procurement ministers to visit Ottawa and have a discussion with the Ottawa politicians and bureaucrats who are responsible for purchasing on behalf of the Dominion of Canada.

I've just been informed that I only have two minutes left, so I will try to snap things up a little bit by saying that the cooperation we have received and the enthusiasm of the four western ministers in looking at more manufacturing opportunities in our province were indeed heart-warming. I think we will see some very positive initiatives, no later than the fall of this year, resulting from those meetings.

In winding up, Mr. Chairman, I will tell you that we have set up a very low-cost centre for executive development. We will be doing a needs assessment, we will be doing performance planning and demographic profiles of management employees and we will be putting on management courses to meet these needs. We will be delivering all these courses, whenever possible, on a regional basis.

I have a little bit more to cover, but perhaps I can do that later in my estimates.

MR. ROSE: On behalf of my party, I would have no objection if the minister needs unanimous consent to carry on. I would like him to say something that I could comment on. I was hoping that he would get to it. How much time do you think he needs?

MR. CHAIRMAN: Does the minister care to continue?

HON. MR. MICHAEL: Mr. Chairman, we want to talk a little about the government personnel services division. I might say that I added this section somewhat late on the weekend as the result of a question asked last week by the member for North Island (Mr. Gabelmann). He talked about the reduction of government employees.

I think it would do us all good to look at the record and just see where this government was regarding the number of government employees on April 1, 1983. I can report to the House that this government had precisely 39,965 employees. This year we will have 27,335 FTEs: a reduction of 12,630 employees, or 31.6 percent. I suppose the opposition could argue that in view of the fact that during that same period the population of British Columbia increased by 7.6 percent.... I suppose, had they been government, they would have increased the government employees by 7.6 percent. So instead of having 27,335 employees as we have now, they would have 43,002 employees. We are proud of the fact that we have been able to decrease to this degree.

MR. LOVICK: What's the point of this argument?

HON. MR. MICHAEL: It's not an argument, Mr. Member; it's simply facts.

I know that the BCGEU is very upset about this decrease. I can understand why they are upset. It's the loss of a lot of trade union members and a lot of members for the BCGEU. Just doing a quick analysis of 12,630 dues-paying members, the BCGEU is losing $6,315,000 in dues a year. I know that's not of much concern to them; they are more concerned about the kind of work that is being done in the private sector now. We think the work in the private sector is being done well. I think the record speaks for itself — examining precisely, one on one, the various divisions of government that have been privatized. Suffice it to say, I'm sure we will be having further discussions on that later.

Lastly, I want to touch on a new division within my ministry. It's something that's just been set up. It's not fully in place yet, but we will be hearing more about it as time goes on. It is the office of information technology and security. I have to report to the House that in British Columbia our government is spending some $174 million a year on information processing. It's been growing for the last couple of years by about 20 percent annually. It's a monstrous amount of money, and we want to be 100 percent sure that we are getting our full value. Thus the establishment of this new office. We are extremely concerned about the security of all the systems of government, and I can assure you that this new office will be examining them to make sure the public interest is protected fully. We will also be looking at cost efficiencies in government to make sure that the services are delivered in a very cost-effective way within all ministries and Crown corporations. We want to be convinced and confident that the service is being effectively managed. It's something we haven't heard too much about up to now, but certainly it will be an office that will be getting around and talking to all ministries, all Crown corporations. I think the members

[ Page 5971 ]

will be pleased with the results of the office, once it's been given a year or two to get into full swing.

With that, I'll take my seat. I thank the member for Coquitlam-Moody (Mr. Rose) for this opportunity to finish my overview. I understand he was my official critic at one time; I know we worked very closely together. We had a meeting and agreed that he would be given the opportunity to tour all of the Crown corporations under my jurisdiction. I understand he took advantage of that, and my reports are that he was given first-class tours and a first-class welcome when he appeared at those Crown corporations. I must say that I regret that he's been removed as my official critic, as I really looked forward to working with him.

MR. ROSE: I'm not quite dead yet, as far as the ministry is concerned. I really compliment the minister on his recycled present, but I'd like to tell him that such bribery won't get him very far when we're discussing his estimates.

Could I just enlighten the minister, so he knows who the players are? I don't know if it matters to him very much. We found that the ministry was such a grab-bag and such a can of worms that we didn't really know where to start. We couldn't even see a rationale for it. Some people suggested that maybe the member for Shuswap-Revelstoke needed a job to keep him busy: "If we put a lot of things together, this would be a nice little job for him" — because he missed being in the cabinet and wanted to come back.

The way it's going to work from now on, as we see it — at least for the short term — is that the member for Nanaimo will be, as he has been and as he distinguished himself, the critic for privatization. He'll be dealing with all those interesting little things.

The minister really didn't give us a glimpse of the other little goodies he might have in mind as far as privatization is concerned, or whether he has done all the damage he intended to. We really don't know. I'm glad the Premier is here. Perhaps he will take part in this debate, because I think privatization has often been a bit of an ideological crutch — nothing was definite.

[3:15]

My friend is going to carry on lauding the privatization moves in his own inimitable way. I used to speak very much like him, but I was deprived of a proper education, so I'm kind of an uneducated Dale Lovick. In any event, the member for Vancouver East.... [Laughter.] They're really slow, Mr. Chairman. You've got to give them about two or three seconds. There's silence, and then they get it.

The member for Vancouver East, as I'm sure the Premier and others and especially the minister will know, will really be in charge of Crown corporations. When it came to issues such as the B.C. Pavilion Corporation — you're privatizing that — late last year, we didn't know whether the issue was Crown corporations, government services or privatization. It didn't split very well as far as critic areas were concerned. The first member for Vancouver East (Mr. Williams) will be speaking on the subject of Crown corporations.

In this grab-bag there are a number of other things: commissions of various kinds and various other functions such as vehicle purchases, the purchasing of air services, the ambulance service and things like that. I'll try and keep an eye on that separately and perhaps concentrate, in view of my age, on pensions, both superannuation — which I think is working quite well provincially....

I recall that in 1966 it wasn't really a requirement for municipalities to take part in that. When I was a councillor, as we called it then, in Coquitlam, I was really responsible for having that municipality and all its workers become part of the B.C. superannuation scheme — to their benefit, I think. I think it's basically a good scheme, and well managed. I'll have some general things to say about pensions later on, both public and private, because I think it's an area that needs a lot of attention. I'm not just speaking about legislators; I'm talking about people throughout Canada who are not covered with any kind of decent pension protection.

We are one of the two provinces that lack any kind of pension benefits standards act. We'll be able to touch on the horror stories surrounding that, if not go into great detail, as we go through this debate on government services — which I don't expect to last more than maybe two weeks, unless we're interrupted for bills or something.

I'd like to make a few comments about what the minister had to say. The Purchasing Commission: I was around there and interviewed the CEO, thanks to the minister, and I paid tribute to his cooperation in the Speech from the Throne debate. It seems to me that we could say pretty fairly and genuinely that if we have a criticism of many of these areas, including privatization and commissions and corporations, it's not with the CEOs. Our criticism will be, I guess, mainly directed towards government policy and how those policies are impacting on people and on sustainable social development and economic and environmental development. That's where we'll have the quarrel. But I don't mind saying this again: I was quite impressed with the people I interviewed, including the minister's friend, the chairman of the PNE, and I was impressed with the openness and enthusiasm with which they dealt with their work. I might impress rather easily; I don't know. But I felt that they were quite capable, open in answering questions and doing a good job.

There are two or three questions that I might touch on and the minister might make a note of as I whip through this. The Queen's Printer: you mentioned the budget. Is farming out the budget going to be a permanent thing or is it going to be returned to the Queen's Printer next year? It seems to me that a budget, of all documents, should have the tightest security surrounding it, and I'm not sure that you always get that in farming it out. You may and you may not.

I'm sorry that there was the little glitch having to do with the quarterly reports, where the minister

[ Page 5972 ]

tabled the document that wasn't completely accurate in terms of its titles. That's sort of an in joke, I suppose, and not very important as far as the general public is concerned, but the principle is an important one — the principle that the minister doesn't table something that he knows is inaccurate. He said he wasn't sure.

The drop in the vehicles: we visited vehicle management services over here on, I think, Superior Street. The vehicles are down, but if you privatize a lot of the highway stuff and you have fewer employees, you're going to need fewer vehicles. It's as simple as that. It's a correlative thing.

As for the patients delivered on the air services we went out and saw the flight simulator and had a demonstration of it. We knew it was shortly going up to the college in Abbotsford, and I think that's a good place for it; I think it would be very useful up there. I couldn't understand why the second member for Dewdney (Mr. Jacobsen) was seen in the Mission paper in the flight simulator, since he doesn't represent the district of Abbotsford at all. But it makes a good photo op. Anyway, he was there. I'm sorry he is not here today. He didn't seem to have any trouble getting into that rather small cockpit.

The Systems Corporation was reputed to be privatized ever since '83. I'd be interested to know what the intentions are for the Systems Corporation, because, again, I was most impressed with that. I'm the kind of person who gets really impressed with that kind of modern technology. I don't pretend to understand it, but I find it very impressive, if a little bit abstract. I'd like to know what's going to happen to that.

Going back to the air services, I'm quite sure that it's useful to have those air services. I just wonder, though, about the use of them — actually, two flights a day. Here's another question: how often do they fly back and forth to Vancouver empty or half-empty? Since the cabinet ministers and their friends are about the only ones able to use them in most cases, it seems to me that, sure, they should be there for the use of cabinet ministers, but not just to go home for dinner. And if they are — if that is the use of them; they're going anyway — then they shouldn't be flying empty. Other people who have a limit of 52 trips should be allowed to use them as well if there's a vacancy. I have no quarrel with the priority and what they're used for, but I think that other people should use them as well.

The Buildings Corporation. I'll get into this later. Some of their savings — and talk about efficiency.... I think I'm going to put this pretty strongly: they're exploiting workers. The reason they're saving is that they're contracting out and exploiting workers; often immigrant workers; often women who have no protection at all. You take the case of Riverview in my riding, right down the hill from where I live. There are actually two systems over there. We've got a privatized system and a public system. The privatized people get $6 an hour, contracted out; and sometimes the women bring their daughters to help them, so that works out to $3 an hour; and then you've got, side by side, people working at $12 an hour or thereabouts. It's not working out very well. It leads to all kinds of jealousies. I suppose the solution would be to get rid of all the government employees. I don't happen to think that's a good one.

I've got a letter here from some of the workers. They're complaining that the contractor is really exploiting them. They get $6 an hour. Medical benefits are deducted from the payroll. They need maternity leave. They need a dental plan. I'll go into this in detail later, because I have a limited amount of time now, but it is not good enough to do these things just to save money at public expense. I don't think it's fair to exploit people who have no organization, who are poor, who are immigrants, just to say you have a cost efficiency saving of 50 percent. These people have to shop. They have to rent houses. They have all the problems. I don't think it makes sense in the community either; what kind of customers can they be if they have no income?

I know that my colleague from North Island is going to talk about this as well — he has already raised it — so I won't go into it in any further detail today. I'll go into it later.

It's interesting to hear that the Enterprise Corporation is going to be wound up by fall. I guess that's the end of enterprise in B.C. It's a euphemistic kind of title, in my view anyway, and it's caused a lot of trouble. People are still picking the knives out of their backs over that one. I won't discuss that any further; my colleague the first member for Vancouver East (Mr. Williams) would just be delighted to wade into this one.

HON. S.D. SMITH: He likes knives in backs.

MR. ROSE: I'm not talking about his knife.

Interjection.

MR. ROSE: I'm sorry to contradict the Attorney General, but these wounds on behalf of Social Credit were largely self-inflicted.

The B.C. Pavilion Corporation: an interesting little organization. I was down to see their CEO, Mr. Mike Horsey, formerly a Deputy Minister of Tourism. I was quite impressed with Mr. Horsey, who was very open. He has a great advertising program featuring a huge box that he sends out all over the world, with one small salmon skin wallet in it. I was very impressed with that, especially the wallet, which I have here. I have no money in it, but I have the wallet.

Also, I think it's important to know that this Pavilion Corporation includes the convention centre as well as Whistler. There's no breakdown in here about where you're spending your contributions — $6 million last year, $4,900,000 this year. How much of it is going to the B.C. Lions? Are you ever going to get your money back? What's the plan for that? How do we recoup that loss? That Lions débâcle must be a nightmare for that CEO. We'll see what happens.

Another interesting thing is, what are you going to do about parking when you get rid of all the land

[ Page 5973 ]

down at B.C. Enterprise Corporation? The parking lot....

Interjection.

MR. ROSE: They haven't even got room in the B.C. Pavilion Corporation building to store some of their extra seats. So that's going to be an interesting thing too.

The PNE. My grandfather was one of its first directors, so I have a proprietary interest in the PNE. I notice the revenues are up; the president was almost down, but the act rose up and protected him. I understand they're looking around for land for the PNE's future move. There's something behind this, and I'd like the minister, in his usual frank, upfront way, to tell us what's going on down there, if he knows. And if he's looking through lands, is it certain lands that might be situated fairly close to me which are now administered by B.C. Buildings Corporation? I won't say any more than that right now.

The forest nurseries are now growing vegetables. That's nice. They're not growing any bulbs, I hope. The early retirement package is another thing we want to look at very closely. There has been a lot of interest in this, especially by 2,700 people who jumped ship and took early retirement at a cost of about $25,000 each.

HON. S.D. SMITH: A generous sum.

MR. ROSE: It was relatively generous.

MR. LOVICK: One hundred million bucks.

MR. ROSE: We don't all agree on the figure, but if you take 1,700 people below the age of 60 and multiply that by $25,000, you come pretty close to $50 million — $40 million to $50 million anyway. The government had to put that in the superannuation fund. You save $60 million at a cost of $45 million, or whatever figure you care to use. But that's only one aspect of it: many departments are stripped of middle-management talent.

[3:30]

Interjection.

MR. ROSE: I'm not naming anybody in particular now, but I don't see how you can get rid of 2,700 people in the civil service between the ages of 55 and 65 and not lose a lot of talent. That's one of the most serious sides of it.

It's not that people weren't glad to get out; many of them were. Besides, it had a double benefit: they were hired back as consultants. We'd like to know how many of those exist too. We know, for instance, that site nurses at Riverview opted for early retirement and have been hired back because of the shortage. I have that documented.

Interjection.

MR. ROSE: The A-G sits there shaking his head and trying to unnerve me here, but I know these things for a fact. He knows how nervous I get when I'm making a speech.

The procurement policies. The minister is very modest about his accomplishments and all these things that have happened during his tenure. The procurement policies for the western provinces are interesting, but I'd like to know the implication of free trade on those policies. I think it could have profound implications, although, to be fair, I think we have to say that under the free trade agreement there was no reciprocal procurement arrangement given between the United States and Canada when that agreement was signed.

Again, the cutting of the government personnel services by 12,000 is bound to have an effect on the talent. I think we've seen some of the glitches resulting from this reorganization and great brain drain that early retirement caused.

Child abuse teams are an example of the cutting — not directly necessarily — of government expenses during restraint. Socially, I think, that had a tremendous impact.

That's about all I'd like to say in the beginning. As I mentioned, the Crown corporations will be dealt with largely by the member for Vancouver East. My colleague is going to do some things on privatization, as will the member for Maillardville-Coquitlam (Mr. Cashore). I turn it over to the member for Nanaimo (Mr. Lovick), unless the minister wishes to intervene and answer some of the questions.

HON. MR. MICHAEL: I first of all want to say that you'll have to ask the Minister of Health (Hon. Mr. Dueck) any questions regarding Riverview. I'm not ducking my responsibility, but I have to say that he's responsible for that. He's the one to whom you will have to direct the questions.

I do want to say that I take a teeny bit of offence — and I know it wasn't meant by the member — at the reference to the utilization of the government air fleet. He used the words "cabinet ministers and friends." I guess it could be said that they're all friends of ours, but I have to also tell the member that with government flights we have a scheduled flight that leaves Victoria and Vancouver every day unless it's not utilized or needed. Indeed, all government employees are friends.

I didn't like the way he sort of worked the words "and friends" in, but they certainly are friends of ours. All government employees in the civil service are free to use that plane providing they, of course, don't go in and bump cabinet ministers; and the reverse applies. We have a number of deputies, senior civil servants and, indeed, employees at all levels entitled to and utilizing that plane. That may not have been known by the member, and I'd like to bring that to his attention.

Regarding the PNE, yes, I understand that at their last board meeting they made the decision. It was not a direction from me — I can assure the member of that. There have been some invitations sent to the

[ Page 5974 ]

PNE, I understand, by some civic politicians who would like the PNE to have a look at land they might or do have available within their area. I understand it was the intention of the PNE — it certainly was on the agenda, but I haven't heard of the final report of the meeting — to have had a discussion about that.

Other than that, I know very little of it other than to say that it's my view — for what it's worth — that any suggestion of taking the PNE away from where it is now is going to have to undergo a tremendous amount of political, community and lower mainland scrutiny. My view is that where it is now is a very ideal location and, indeed, is very popular. As I said earlier, it draws some 1.3 million people, which is getting on to very close to 50 percent of the entire population of our province, to attend that agricultural show.

The member made some reference to provincial government's purchasing, the four western governments and the letter of understanding, and he tied that in with free trade and wondered what effect this would be. I stand to be corrected, but I'm sure in my readings and studying an analysis of the free trade agreement with our friends to the south that there was a specific exclusion for purchasing commissioned government purchases.

I stand to be corrected on that, but my memory tells me that I think I'm correct in that. Indeed, we did find, in doing some comparisons of the policies of the four western provinces, that there was favouritism given by some provinces to manufacturers and suppliers within their boundaries over and above their neighbours in Canada. We felt this was wrong. We've corrected it. I think the benefactors in western Canada are going to be the people, because they're going to get the goods and services delivered to them somewhat more competitively than they were ever delivered before.

He mentioned the Lions, Mr. Chairman. Yes, it's been very difficult and very frustrating, I suppose, for the management of the corporation, the management of B.C. Place Stadium and the board of directors to have to forgo rent — rent forgiveness. We don't think it's right. Nonetheless, if you look at the alternative, the flip side, the benefits of the B.C. Lions to that stadium, and what that does for the hotel and food industry, there are tremendous economic spinoffs, into the millions and millions of dollars. I believe I recollect a figure of there being something like $25 million to $27 million in economic spinoffs as a result of having professional football in that stadium.

From a business approach, I don't think we can criticize too severely the management staff who made those decisions at B.C. Place Stadium. I think it has probably been money fairly well spent.

The member mentioned the pension act. While I have spent some time analyzing that question, I would have to say to the member that he should save it for the Minister of Labour's (Hon. L. Hanson's) estimates, as he has jurisdiction over that particular question.

The other point the member made was the question of whether or not we were going to farm out, away from the Queen's Printer, in the future the preparation and printing of the budget and all its ancillary documents. I can say without any hesitation that the answer to that question is no. We are extremely pleased with the work done over the years by the Queen's Printer employees — extremely happy. It was with a great deal of regret, as I said, that we removed that from their area of responsibility this year. We were left with absolutely no alternative. We could have had one simple line from their representative saying it would be delivered on time and done as it has always been done. We would have been happy with that; indeed, they would have had the printing this year. It's certainly not the intention for future years, and we make that statement very emphatically.

There's a point that I should have mentioned about the personnel division of the ministry: a very positive trend, and one that I certainly want to see continue.... We are not suggesting in any way, when I give you these figures, favouritism or extra attention. It is just a matter of the way things are evolving. Indeed, it is a positive trend. We are extremely pleased to announce to the House that the number of management employees of the female gender has increased from 17.3 percent of the management workforce to 24.5 percent of the management workforce. That is an increase of some 41.6 percent. I think all members should take note of this. It is a positive trend. Without any particular favouritism or picking one person over the other, through straight competition we have had that dramatic increase for management employees. It's one that I and my government are certainly extremely proud of.

I look forward to more questions regarding the estimates of my ministry.

MR. ROSE: I thank the minister for his responses. I can assure him I wasn't using the word "friends" as synonymous with "cronies." If that's the interpretation or the "spin" — that's the buzzword these days — that he put on it, I didn't intend that. What I was clearly referring to was that these planes never seem to be available, even though the seats are available or perhaps open, to opposition MLAs — or, for that matter, as far as I know, to government MLAs. I think they should be, especially for Vancouver and lower mainland MLAs, who have calls on them constantly to appear midweek. If you do that, those 52 trips are used up pretty rapidly. Perhaps that might be a way, if there is seating available. I don't expect to bump a cabinet minister off them at all.

Purchasing and free trade. As I mentioned, there was no reciprocal agreement with the Americans, so I presume what the minister tells me is right about the fact that it's not going to be a problem. I'll try and check that out, though, because we'll be at this a little while. Clearly what this does say is that "Buy B.C." is gone. We had "Buy B.C." loudly proclaimed, and chest-beating by the government over the years about

[ Page 5975 ]

the "Buy B.C." policy. Clearly that's gone, unless the minister cares to contradict me on that one.

We just got the percentages about males versus females. This could occur merely because many males opted for early retirement — some 2,700 of them. I think hiring would be a better guide to whether or not we are increasing the number of females — not by attrition, but by government policy.

HON. MR. MICHAEL: We in British Columbia are confident that we will be the winners on the letter of understanding we have signed with other western Canadian ministers. We are extremely well positioned in British Columbia. We have tremendous advantages with our workforce, our skills, our index of natural resources and our access to seaborne shipments; we have a great number of ports on the west coast of British Columbia. We certainly are in a very strong position to compete with the other western provinces. I think we're all going to benefit, but I certainly believe that British Columbia is going to benefit most. The more we can exchange and trade with one another in western Canada, the stronger we're going to be.

Mr. Member, we're not just stopping there; we're not just happy with that. That is a small ingredient in the overall economic development of our province and our western nation. There's more to it than that, and as I said earlier, we will be lobbying Ottawa with a united force to get a better share. I don't want to be up at the microphone continually knocking our dear friends in Ottawa.

Perhaps the member could do a little better job or encourage the federal MPs of his party to do a little better job of pointing out the discrepancies and unfairness with the federal purchasing division in what they're giving us in western Canada. I'm sure he knows the figures and is aware that although we in western Canada represent 30 percent of the population of this great nation, we get only 12 percent of federal procurement. We all know in this House that that is unfair.

[3:45]

[Mr. Rabbitt in the chair.]

Suffice it to say, we're doing our share; we're giving it our best shot, and we're going to make our voice heard and known in Ottawa. As well, we in the western Canada procurement will be sending joint letters — throughout the entire continent — to major manufacturers in four key areas: pharmaceuticals, medical devices, vehicle manufacturing and computer manufacturing. When we examine those four areas, we are finding that we're not getting our fair share of new manufacturing facilities anywhere in western Canada. In fact, if you look at those four particular areas, the percentage is very close to zero in manufacturing and processing.

So we in western Canada intend to go out and actively solicit meetings with all the major suppliers in these four areas and invite them to our western provinces to sit down and talk to us as to the location and possible setting-up and establishment of plants and processing facilities. Perhaps I am a bit of an optimist, but I'm confident that by the late fall of this year, we'll be able to report some interesting contacts and proposals from the major manufacturers on this continent to have a serious look at.... Whether it's in Alberta, Manitoba, Saskatchewan or British Columbia, I'd like to see some overtures and some interest shown by these major manufacturers, because we are very determined to see some manufacturing components set up in those four key areas.

I repeat that if you look at vehicles, pharmaceuticals, medical devices and computers, there's very little in western Canada. We've got a wheel manufacturing plant out in Richmond. There's the odd little thing here and there spread across western Canada, but that's certainly nowhere near in relationship to the dollars we spend.

If you look at the purchasing divisions of the western Canadian procurement divisions and add all the Crown corporations to that, it's into the many billions of dollars. Not only have we in the purchasing divisions done this job, but we've informed the Crown corporations as to what we have done. I'm happy, pleased and proud to report that at least one Crown corporation in B.C. is already taking the early initiative to contact their counterparts in western Canada to sit down and negotiate an agreement along the lines of what the procurement ministers of government have negotiated.

I think we're going to see some more spinoffs of this and indeed, the winners in these arrangements are clearly the people. If you can have good competition, open tendering and lowest bidder with adequate quality protection, the taxpayers are the winners because the product is delivered more econometrically.

MR. ROGERS: I want to talk to the minister responsible for the government air service about the role and the mission of the government air service, and what I believe is an error made in that role.

I think the role of government air service is to provide air services within British Columbia and in the reasonable confines of British Columbia. I think they made a rather drastic error when the government involved itself in a used aircraft from the Bombardier company that has transoceanic capabilities, to say the least. I think government air services would be very well served if the Challenger 600 — a Lycoming-powered monster — were disposed of to the very affluent business market out there that might want it. A more appropriate aircraft, which would suit the needs of not only the government air service but the mission that it has, could be purchased as its replacement. In fact, I would suggest, having checked the market as recently as last week, that for about the same amount of money that they could get for the Challenger, they could buy three used Citation 2s, which would give them fleet compatibility, avoid unnecessary training costs, and go along with parts compatibility.

For the life of me, Mr. Minister, I don't understand the justification for having an aircraft of the Challenger type. A one-only fleet is not economic under

[ Page 5976 ]

any circumstances. I don't believe that we want to take this aircraft to Europe or Japan, although it has the capability to go from here to Narita with only one stop, and I believe that one stop is all that's required if you want to go to Heathrow to see Gardom, for example.

I don't think that's the most efficient way to go. The per-seat cost per mile is cheaper if anybody has to go to London or to Japan, for that matter, to buy them a first-class confirmed seat on a regularly scheduled airline. I hazard to guess that is it cheaper to buy them a first-class seat to send them to Ottawa. When I was a minister, we used to go economy, and I don't think that's changed. It doesn't seem to me to make any sense to go on a government airplane that would cost more than on a scheduled carrier.

I think it is vitally important in British Columbia that we have a very first-class government air service to get us to those places where air service doesn't exist. There is often the case that somebody is in Nelson and has to go to a place like Terrace, and doesn't have the time or doesn't want to go through Vancouver. They may be in Port Hardy and have to go to Fort St. John. That's exactly what government air service should be. It should not be used to parallel the routes operated by commercial airlines, when there are a number of commercial airlines operating on those routes.

Lord knows why anyone wants to go to Ottawa, and I can understand why almost everyone would want to come back. But I can understand that occasionally people have to go there and, from that point of view, perhaps it is worthwhile having an aircraft with that capability. It just doesn't seem that there is any justification for it. It is an embarrassment to have an airplane that large unless you fill it up, and we don't have the opportunities to fill it up on some of the sparse routes that we operate on.

I am sure the pilots like to fly it — every pilot likes to fly a bigger airplane — and I'm sure the mechanics like it, because it is something new and very technical. The people who run air services like it. But I think it is a mistake. I don't think it's a mistake to have the aircraft in the fleet; I think we should have more of them. But I believe we should get rid of it before the market devalues it. It was a used airplane. I understand we got a good deal on it. I just think perhaps the salesman was a little slicker than the purchaser, and perhaps that's what happened.

I would like the minister to focus on the role of government air. I like the opposition House Leader's suggestion that all MLAs.... Go ahead, take the credit, but you have too much hair for the job; remember that. But if you are going to use this facility, if you are going to make it available.... I recall, quite frankly, the member sitting just beside you had to go one time to Port Hardy and I had to get permission to get permission for him and his wife to be with me. I couldn't get permission because it was late at night when you called. It's preposterous! If all the government employees can travel on it, those of us who are members of this Legislature and are not members of the government but are nonetheless paid by the taxpayers should be able to ride on these aircraft when the space is available.

I don't think there should necessarily be a shuttle service, nor do I think we should have the right as members here to be able to commandeer an aircraft or say we want to go here or there, but there are times where you have a minister going into a place that is awkward and inconvenient to get to and the aircraft is going with empty seats. It's a highly perishable commodity, but I don't think any of the backbenchers would want to be seen riding in the Challenger, which brings me back to my point.

If you like the feel of leather seats, and you like to know how much it costs, I really think you'd be better off and your ministry would be better off. We'd be able to get the airplane in the hangar and go out there to see if we couldn't sell it, and get a least three new aircraft, which you could get for the same price. Or possibly someone in air services could be convinced to be progressive and go the route of the regular aviation industry and go to high-speed turbo-props, which have infinitely cheaper operating costs, can go higher than the Citations, are more efficient and can go into shorter and unpaved airstrips. That would be something even more progressive, and I think there's a lot of machinery around that's available.

I'd be delighted to send you another memo like the memo I sent to somebody on the Challenger, if you want my opinion on these matters. I did want to have it on the record because I genuinely think that it's time to get rid of it before the thing becomes a bigger embarrassment.

HON. MR. MICHAEL: There are a few things I'd like to say regarding the Challenger. Firstly, at an extremely low cost — not much more than $1,000 — we have found a way to put the Challenger in the hangar.

AN HON. MEMBER: Almost.

HON. MR. MICHAEL: Yes, I guess the word is "almost" in the hangar; we simply cut a hole in the door for the tail to stick out of. I have to say that that is not an unusual sight. You see this in many airports throughout Canada and many airports throughout the world. It's very low cost, and it's working well. We have that particular area covered if that was one of the things the member was concerned about.

We also want to say what a great deal we got on that plane. You don't see this being advertised or talked about much, but we got an extremely good deal on this plane. The previous minister was able to negotiate a purchase price of some $7.2 million — I believe that was the figure — and the latest information that I have is that we could sell that plane tomorrow if we wanted to for in excess of $10 million. We got a tremendous deal on it, and I congratulate the former minister for the bargaining that was conducted on behalf of the government.

I want to talk about the question of lobbying Ottawa and the importance of government members — cabinet ministers, deputies, senior people in government — getting back to Ottawa as often as they can. I

[ Page 5977 ]

think that it's penny wise and pound foolish to be tight on spending dollars sending representatives and delegations back to our capital city. I think it's important to not only maintain what's happening now but also to do more. It's my view that for every dollar that we spend sending people to Ottawa, we get that back many times over in regards to getting federal dollars spent in British Columbia. Indeed, I think it would be correct to perhaps criticize past governments for having not spent more money in lobbying Ottawa.

Whether members are aware or not, we are running scheduled flights now for the Challenger. It goes back to Ottawa every second Sunday, leaving Victoria at, I believe, 11:00 a.m. In the morning on Sundays and returning Tuesday afternoons. We're attempting to fill that plane up with our people, representatives, senior civil servants and our cabinet ministers, to get them out to spend more time in Ottawa — not less.

I want to emphasize that lobbying is important, but it's also important for members to realize that while riding on the Challenger they are at complete liberty, without any hesitation or question, to conduct work, to have meetings, to have conversations about cost-effective delivery of services, perhaps have confidential meetings in the wide open with the freedom inside the plane, without having to worry about someone seeing what they are writing or reading or overhear what they are discussing. I think that's important, and the other thing that's important to know is that the plane does go nonstop.

Firstly, it travels faster than the Citation. Secondly, it goes nonstop, which saves quite a bit of time. It's hard, perhaps, to convince members opposite or members in the House of the value of a Premier's or a cabinet minister's time. What is the value of a Premier's time? What is the value of a cabinet minister's time? What's the value of a deputy minister's time? It's hard to put dollar figures beside that. It could well be that as a result of having a plane in Ottawa freestanding and at the call of the Premier or the ministers or senior government employees, that plane has flexibility. It can leave early if the people are ready to leave; it leaves a little late if the people still have meetings on the go. It's not unusual to be sitting down in Ottawa and talking about grants and programs in the range of tens of millions of dollars to hundreds of millions of dollars.

I think it's important to have that little bit of flexibility built in there. So I want to reiterate that it was a very good deal. We can sell it for probably 30 percent more than what we paid for it — maybe even more than that. It's a bit of a wash, if you look at the cost of a first-class Air Canada trip as compared to having the Challenger full with nine people, as far as the bare-bones costs are concerned.

I want to re-emphasize the importance of lobbying our federal counterparts. The one thing that I emphasized earlier in my address, Mr. Chairman, was the question of the offsets. The House should be aware that not only did we negotiate an excellent price, but we had an assurance from Canadair that we would receive approximately $14.5 million worth of offsets in B.C. purchases that would not have come otherwise. Indeed, they've more than honoured that commitment, and we're now looking at....

Specifically, my staff advises me that they're expecting that by the end of 1998 — we've already got a tremendous portion of this — we will have received in British Columbia additional procurements to the tune of $22,384,115.

[4:00]

HON. S.D. SMITH: I'll be very brief, Mr. Chairman. I want to speak only to the matter of the Purchasing Commission and to commend to the minister that, to the extent he can, that area of his ministry should have its resources buttressed and augmented.

I want to very briefly relate what I think we might give some consideration to in that area. The Purchasing Commission — particularly through its SupplyNet agency — has been a tremendous assistance to the small business sector, especially outside the major metropolitan areas of British Columbia. We have seen some very innovative initiatives, which I would like to commend to you and have that Purchasing Commission follow up on even more. Those are dealing particularly in their recycling initiatives — where they are in fact leaders in this country in a very progressive way — and in the development of software. The Purchasing Commission, using the buying power in a non-preferential way in the province, has done some very innovative things with universities, the colleges and the business community to assist in developing British Columbia products that have been available and have in fact been exported outside of the boundaries of this jurisdiction.

Particularly in the area of Kamloops, we are pleased that the Purchasing Commission has developed its policy to look at the component breakdown of purchases and purchase orders, rather than buying systems. For instance, in terms of office furniture, they are prepared to look at the credenza and the chair separate from the whole office. That has given a tremendous advantage to the small business community.

In the case of the Thompson-Nicola Manufacturers' Association in the area of Kamloops, Merritt, the whole Nicola valley and east of Kamloops as well, which now is the second-largest area of secondary manufacture outside the lower mainland, anywhere in this province.... They have worked very closely over the last two and a half years with that Purchasing Commission — with Steve Hutchings particularly — and their assistance has been very important to diversify the economic base of those areas.

We have seen a sizeable number of small businesses take advantage of small and medium-sized orders through the change of policy of the Purchasing Commission, in order to access the British Columbia public sector purchases, which are sizeable.

In addition to that, the chamber of commerce has worked with the Purchasing Commission and has enjoyed its assistance through something that I am pleased to say was initiated through my office a year

[ Page 5978 ]

ago: namely, taking a trade mission of business people from Kamloops to the city of Vancouver to look at the services available through the Ministry of International Business and Immigration, the Purchasing Commission of this ministry, as well as the relationship they have with the government of Canada. It was so successful a year and a half ago that indeed another one is going to be undertaken this weekend. The member for Yale-Lillooet (Mr. Rabbitt) has been involved in the organization and participation of this. It has been well-received by that small business community and indeed has been very useful to them. Frequently in government we devise good programs and good policies, good equipment and good people, but we don't tell anybody about them. Taking people on this day-and-a-half-long trade mission has worked out very well.

I want to also say, Mr. Chairman....

MR. CLARK: Who pays?

HON. S.D. SMITH: They pay. That's a good point that the second member for Vancouver East raises as to who pays. The participants pay.

I want to say that the staff of the Purchasing Commission come on their Saturday and have done that of their own free will and volition. They have done an outstanding job and have been most gracious, informative and helpful down at the Enterprise Centre. It has, all in all, been an outstanding success, and quite frankly has been picked up by other MLAs in the interior of British Columbia. I would commend it to anyone — members in the Fraser Valley. I'm not sure of anyone yet from Vancouver Island. I would commend it particularly to the member for North Island (Mr. Gabelmann) quite seriously. It's a very good program. It works out very well. The MLA rides in the bus with them, as I did, and as the member from Langley and others did. It's a very good community device. Frankly, it is helpful to the small business community in our own areas.

As much as we are doing, we can do more, and we should. We should be buttressing the resources in that particular area of this ministry. It is trite but true that 12 percent of the population resides in British Columbia and 3.5 percent of federal spending takes place in British Columbia. I know that those figures sometimes are a little misleading because of certain factors; nevertheless, we ought to be getting more.

I must tell you that the Hon. Mary Collins has been named as the associate defence minister particularly responsible for defence spending. I have no doubt that all of the ancillary that takes place there is going to be of great benefit to this province in terms of the fairness with which this province will be treated in that process. I was pleased to have been able to meet with her at the opening of Parliament in Ottawa last week to discuss these very issues.

In closing, I want to say to the minister that in my view we ought to be putting more teeth into our own policies and programs, particularly where we fund other agencies, such as hospitals, regional districts, school boards, municipalities and colleges. I do not think they are doing enough or as much as they ought to. I do not think that they are giving the kind of cooperation that Steve Hutchings's group deserves in terms of drawing in the vast purchasing potential that takes place in those areas. That is one place where all of us as individual MLAs — not to put it on the minister, or onto the Purchasing Commission — ought to be doing more to be encouraging our own municipal governments, schools, and so on to be taking advantage of the assistance that now is available, the systems that have been developed by that Purchasing Commission and the great data base they have through their SupplyNet program to be able to do more on behalf of British Columbians, to do more purchasing of goods and services in this province, and to do it in a way that does not offend at all the notion that we have to compete with our neighbour provinces across this country. That's what they are doing. They are doing a good job. I think that all of us in this chamber can help ourselves and our province by encouraging our local governments to be more proactive with the Purchasing Commission to do even more than is being done now.

MR. ROSE: Perhaps with the minister's blessing, I'll shoot my wad and he can respond to both of us, the A-G as well as me.

The word proactive came to my mind when I interviewed the chairman of the Purchasing Commission, and I will say in a complimentary way that I had no idea that they were doing those kinds of initiatives until I went there. The idea of a fair in which various manufacturers can see the nature of purchases by governments — and I use the plural advisedly — certainly gives our people a chance for import substitution and genuine competition and employment and a lot of other things. It can be used creatively. The Purchasing Commission started out a few years ago with a very bad name because it was the pork-barrel of governments. I haven't been looking that closely, but I haven't seen any particular evidence of pork from that particular commission, and I wanted to say that in the House.

Interjection.

MR. ROSE: I haven't found anything, I said.

As far as the defence spending, with Mary Collins, MP.... The former minister of defence, Mr. Submarine, is now the minister of health; it seems to me that that is a signal that there is going to be some kind of review, a revisitation of the sort of defence commitments we saw earlier. To completely destroy a simile, the submarines didn't fly. They weren't talked about very much. They moved....

Interjections.

MR. ROSE: Oh, I'm not denying that there is spinoff to defence spending, but there are probably a lot more spinoffs to other kinds of spending and probably to social betterment as well.

I'd like to get back, though, to the minister, directly, on this business about how British Columbians

[ Page 5979 ]

or for that matter western Canadians, can get a bigger chunk of federal procurement. One of the difficulties is that federally and provincially we have free trade, and they buy where they like. They usually buy in central.... We don't have free trade between provinces? We do, except in agricultural commodities. In beer, yes. Beyond that, it's pretty well free trade, and the manufacturers are basically centred in central Canada. That's one of the problems. I am glad that the minister recognizes the fact that until you get manufacturers settled here in western Canada, it is unlikely that many government procurements can take place from this source.

I sound like I am making excuses for your friends. They are not my friends. It is the Conservative government, and I don't think they're behaving much different than the Liberals behaved before them. As far as the MPs from British Columbia go, I don't have any special linkage with them except that I know some of them, but no better than lots of other people. Maybe we could do more in that regard. Maybe it would be wise for the minister to go down and ask to meet with the caucus of British Columbia, either here or down in Ottawa, when he gets off his Challenger jet. Go down there and talk to those people. Say: "Look, this is the problem. Can you help us?" I don't see why this has to be a partisan issue at all.

If the minister is taking a delegation of civil servants, he could also take perhaps the result of a joint resolution of this House. I think the House would be very interested in passing something like that for the betterment of British Columbia, its businesses and manufacturers, to urge more purchasing from western Canada. There are a number of initiatives that could be made besides just lobbying the B.C. MPs; that's my view of the whole thing.

Destroying my own unity somewhat, but getting back to the Purchasing Commission, I'm not sure that the various communities know very much about this.

Interjection.

MR. ROSE: We as MLAs can tell them, but also I think there should be.... Since we are spending considerable money on advertising and communications in this ministry — look in the blue book and you'll see it — maybe there could be something prepared and sponsored by the Purchasing Commission to go around to the various communities, community councils and business organizations. That sort of attractive brochure might include such things as what have we got available, how do we do it, when can it be done, here's your application, and let's have this trade fair, which is import substitution on a local level. Yes, all MLAs should be participating in it.

[4:15]

HON. MR. MICHAEL: Yes, Mr. Chairman, regarding the question of being proactive and getting out in the communities, I can assure the member that our people are already doing that. We need to do more of what the second member for Kamloops (Hon. S.D. Smith) suggested: we must have excellent encouragement. I have assured him that we have discussed this up to this time and will be following through. I think the member's point is very well taken, of what we could do if all levels of government — municipalities, regional districts, water improvement boards, hospitals, the provincial government — were all working together as a team. Certainly there are tremendous opportunities out there in the area of purchasing and development.

Indeed, we have embarked on one program that I am aware of and are looking at others regarding working with the federal government. I don't think very many people in the House are aware that the B.C. Purchasing Commission is already working with the federal government in maintaining and looking after all their computers. For any federal division in British Columbia that has a problem with a computer, the trouble call comes into the B.C. Purchasing Commission division. It is looked after, there is a chargeback arrangement and we make a slight markup in profit from looking after that for the feds.

I think we can expand that a great deal. We can get into our vehicle management areas. We are now looking at perhaps expanding the responsibility of vehicle management in this province rather than just managing the vehicles of the ministries, which, as I said earlier, is a component of about 4,800 vehicles. We are now thinking that perhaps the vehicle management division should manage the vehicles of the B.C. Buildings Corporation, B.C. Systems Corporation and some of the other smaller Crowns, and deliver this service more cost-effectively to government. I think we could talk to the feds — the suggestion has already been made — about getting into that service for them as well, under the same umbrella. We can not only provide as good or better service, which our standards call for in any restructuring or privatization move, but can do it more cost-effectively.

The other thing I wanted to re-emphasize was that we certainly are looking forward to paper recycling. That is likely to have tremendous job creation opportunities in our province. We are looking at the spinoff effect here that will grow and grow, and spread into the Crown corporations, the hospitals, the Regional districts, the municipalities. I predict that a year from now we are going to have very positive, outstanding results in the area of recycling paper products. I can tell the member, Mr. Chairman, that our Purchasing Commission isn't just stopping there. We're looking at many areas of opportunity other than just paper or lubricating oil. There are many other things out there that we're examining.

The thing I wanted to say to the second member for Kamloops (Hon. S.D. Smith).... He made the point, and I want to make it to all members of the House: if anyone would like to take advantage of a tour — putting together a program for a busload of constituents from anywhere in the province — please contact my office. We would be more than pleased to set up arrangements and work with you.

Just in the last few weeks, I took a busload of people from my constituency. They came from far and wide. They came from the north shore, Shuswap, Enderby, Armstrong, Revelstoke, Salmon Arm and all

[ Page 5980 ]

over the constituency. We even had a person there from Falkland who went down on the bus. I believe there were 47 in total. They had a great two days and really enjoyed themselves. It was a real eye-opener to see the tremendous areas of opportunity for people in the outlying areas, where they can plug in and get information from the Enterprise Centre and the B.C. Purchasing Commission.

I want to say, just as an aside, that if any MLA ever has any ideas of things they think we could do better in my ministry, be it in the Purchasing Commission, the Buildings Corporation, the Systems Corporation or any other, please don't hesitate to give me your positive input. I've received some already.

I received some just the other day. One of the MLAs came up to me and complained that we were putting out to tender a certain kind of tile for a particular government building, the standards of which could not be met by manufacturers in our province. I had a look at it, analyzed the problem and I'm pleased to say that we've solved it. I think we're going to see a contract awarded to a B.C. firm shortly which is going to result in several tens of thousands of dollars staying in this province rather than going across the line into the States.

One of the things that certainly come to light in my experience with the Purchasing Commission.... We're talking about opportunities, and the ministry of defence spending money in British Columbia. I had no appreciation before Market Discovery '88 for the tremendous garment industry we have in this province. It is a huge industry, employing lots of people and putting out a tremendous product. It's unfortunate that more members opposite didn't take advantage of attending Market Discovery '88.

I want to say for the record now — and I know the member will write it down — that Market Discovery '89 will be held at the trade and convention centre on October 12 and 13. I look forward to seeing many of you there, learning about the great things going on in this province and the great strengths and opportunities we have.

Just to give the members opposite a bit of a feel for some of the reports that have evolved from Market Discovery '88, let me read you a few. I have 57 here altogether, but I don't intend to read them all. Just to give you a bit of a feel for the kind of things that are going on in this great province.... These are reports from exhibitors at Market Discovery '88.

Here's the report from Pro-Tech Industries, a division of JTM Industries of Grand Forks, which added two new distributors to their client list. Automarine Electric ordered 100 headlamp-guard sets per month as a result of Market Discovery '88. They identified over 50 new contracts. They have a good potential for sales to Kenworth and an Ontario parts supplier.

Another one: Bay Glass Ltd., a Delta manufacturer of specialty glass items, added 16 new distributors for its products by attending Market Discovery '88. JWD Marketing, a local producer of canned juices and water, has four new distributors from Taiwan, Japan, Saskatchewan and B.C. An order has already been placed by the Saskatchewan distributor.

I think it's just incredible, if you look at these success stories. AMS Industries made 300 contacts at Market Discovery '88. This is a quote from the AMS representative: "I was so busy talking to potential customers I didn't have time to see the show." Those are very positive remarks from participants of Market Discovery '88.

I do expect to see — and I know, that I will — a large number of members opposite attending the Market Discovery show in 1989, which will be held on October 12 and 13.

Another one: Astrographic Industries of Surrey, a manufacturer of licence plates, signs and decals, feels this is the best type of show for them. Approximately $40,000 in business already with CP Rail.... Doors opened to a large number of buying institutions, including St. Paul's Hospital, just because he took the time to attend Market Discovery '88.

Vancouver Gear Works Ltd., another exhibitor, manufactures gear sprockets: contacts made that have the potential of millions of dollars. To date, orders have totalled approximately $225,000 from B.C. Rail, CN Rail and CP Rail as a result of Market Discovery '88.

Those are just a few examples. They are the kind of things that can be done by good planning, cooperation and good promotion.

[Mr. Pelton in the chair.]

MR. BLENCOE: I just have a couple of questions. I'll go back a little bit in time. Some months ago, last year, an issue arose of concern to this community, and the minister was involved in the issue. The minister and I have talked about it, but we didn't resolve our differences. I am pleased to see the Solicitor-General (Hon. Mr. Ree) is here as well. The Solicitor-General and I see eye to eye on this particular issue.

The minister, as the minister responsible for government buildings, in his wisdom decided to lease a government building — the Windermere Building, a beautiful building in downtown Victoria very close to the convention centre — to a casino operation; I believe the Great Canadian Casino company is the correct title. It is a company that is well known and has connections with this government. I believe a former vice-president of the Social Credit Party is actively involved with that company.

The minister, unbeknown to local council, local authorities or the local MLAs, with no consultation with anybody in this community, in his wisdom decided to lease that beautiful building to a casino. It was a great surprise, needless to say — and I'm understating the case — that not only would he deem to officially endorse casinos by leasing to a casino one of most beautiful government buildings we have in our community, expanding casino operations in this community when this community has clearly articulated that it doesn't want to see any more of these operations....

The minister was asked by the media and by others: "Why would you not consult council? Why would you have no discussions with the local

[ Page 5981 ]

people?" The convention centre was coming on stream; this casino is close to the convention centre. The problems of policing — no discussions with police authorities. The Victoria Police Board had indicated some months before the announcement its deep concerns with the continuing granting of casino licences.

I'm wondering if the minister in his wisdom has reassessed the process when granting leases of government buildings, particularly leases to sensitive operations like casinos, and all the ancillary problems that arise. Has he reassessed the way of dealing with the community and the local council so that in future there will be full discussion, public hearings, information-sharing with the local council, with the police department and others?

Interjection.

MR. BLENCOE: Not a study — just courtesy when dealing with government buildings and sensitive operations.

Has the minister reassessed the process, and will he ensure that local councils and police departments are fully apprised of decisions to lease government buildings to such operations in future?

[4:30]

HON. MR. MICHAEL: I find the member's comments interesting, to say the least. It's my information that the number of casinos in Victoria, which generate tens of thousands of dollars for charities in the southern part of Vancouver Island.... It's interesting they would come under attack by the member representing Victoria. I find it interesting that the member would expect me as the minister in charge of the B.C. Buildings Corporation to go to the police commission to find out whether or not a casino should be permitted to be located in the Windermere Building, when days before that it was located in a dingy hotel right next door to it. They didn't change neighbourhoods; they just changed from one building — I believe it was from the Strathcona corner up to the Windermere corner. Because of that change I should call for a police inquiry or investigation or police consultation? I find it strange,

I find it strange as well that the member criticizes a casino because it's close to a convention centre. My thought process would be that when convention delegates come to your community, certainly you like to see them spend money. You like to see them get out and have a good time. You like to see them enjoy all the amenities that we have to offer in British Columbia, and in Victoria. I am sure there will be a portion — whatever that portion might be; 5 percent or 50 percent, or somewhere in the middle, I suppose — that might be interested in visiting a very well-set-out, well-run casino facility in the Windermere Building compared with what used to be regarded as, from my understanding, quite a dingy atmosphere that used to be offered at the building next door.

I can only go by memory regarding the rental arrangements. BCBC is the landlord, and I am the minister. As to what the improvements were on those rentals, I can say that it was into the thousands of dollars. The Buildings Corporation is getting thousands of dollars extra per year with the new tenant as compared with the old tenant.

I can further say to the second member for Victoria that the restaurant that was in there was on the verge of receivership, or bankruptcy, or going under. The owners were extremely pleased and supportive of turning the facility over to the casino, which completely removed all the encumbrances, liabilities and lease requirements and obligations that the previous owner had. So the restaurant person was very supportive of that facility being taken over.

My recollection is that all the furniture and facilities inside the building have been sold at a very favourable price to the casino operator. The B.C. Buildings Corporation were extremely pleased with the negotiations that transpired.

I will report to the House what the previous lessee paid in rent and what the new tenant pays, but I can tell you from my memory that it's into the thousands of dollars.

The bottom line is that as I understand it, Mr. Chairman — I don't follow the industry that closely — there are no more and no fewer casinos than there ever were in the city of Victoria.

As the landlord, we had an opening, it was vacant, there was a problem with back rent, we have zoning in the city.... The member used to sit on city council and was part of those zoning regulations; he helped put them all together, and I'm sure he assisted in making many zoning decisions in the city of Victoria. Now he's rising in the House and saying the minister in charge of a vacant building should forgo the extra income that's being received, at a great loss to the taxpayers, and that even though the entrepreneur has qualified and passed the zoning requirements as set out, we should step in and make a moral judgment on whether or not that particular person's business is right or wrong.

Suffice it to say, we made a decision. I don't know if the member is happy with it or not. I take it he's not, but I can tell you that the community, if they know the whole story about what's being brought in in the way of rent and the reduction in tax requirements as a result of that high rent being paid.... We all know that anything BCBC makes at the end of the year in the way of a profit or surplus, call it what you want — the residual of what they take in and what they spend.... Any balance at the end of the year is turned over to general revenue. So when we talk about denying a particular tenant a building, I think we should give second thought as to whether it has an effect on the bottom line to government. Because it's all a question of taxes. As the minister, I certainly want to see the government receive fair market value, for any vacancies that might come about.

I also find interesting the little bit of tone to the member's remarks about gambling. Maybe that party is not in favour of gambling. He has a little bit of a suggestion that we're doing the wrong thing by opening this opportunity up for some person to go in and play bingo, buy a lottery ticket or play some blackjack.

[ Page 5982 ]

I guess it's fair to announce to the House and all who are listening which political party brought in the Lottery Corporation and who set it up. How did legalized gambling come about in the province? I'd like to remind the member — he probably wasn't even in the province; I think he was still back in the Old Country in 1974 — that in the later part of 1972 we in this province, much to the regret of many, elected an NDP government, and they were in power for some three and a half years, I believe, until the month of December 1975 — a snap election call, just before Christmas. But guess when the Lottery Corporation was founded, Mr. Chairman. Guess when the whole thing started. In 1974.

MR. BLENCOE: I wasn't intending to prolong this debate, but the minister talks about lotteries. We're not talking about lotteries. We're talking about this government's distinct policy to go beyond the lottery and to move into the gambling casino concept. They made that decision and have gone that route under the guise of benefiting certain charitable organizations.

Casino operations are very different from the lotteries and various things we've had in this province for a number of years. Our party has gone on record as clearly stating a policy of no more gambling casinos in B.C. The citizens of the province don't want them.

Interjection.

MR. BLENCOE: I'm not talking about lottery grants, about lotteries. Let's not try to confuse the people of B.C. We have clearly articulated a policy of no more gambling casinos in the province. We don't need that kind of event, that kind of institution. We certainly don't need a proliferation in the beautiful capital city of Victoria.

The minister talks about the bottom line and generating dollars. I know it's hard for this government to get a handle on this, but dollars are not always the top priority; it's the kind of community we're creating. This community is of the view that we don't need any more slot machines or roulette wheels, and the government has a policy to expand those kinds of systems. We don't want them in the city of Victoria.

This government still refuses to say that it's prepared to consult the community when it's moving in this direction. I had words with this minister after the fact, the same government that says it wants to include all MLAs in discussions of import in their ridings. Yet this minister made an arbitrary decision to put a gambling casino in one of the most beautiful government buildings in the city of Victoria, sending a clear message not only to the people of Victoria but to the citizens of B.C. that casinos are very much on the agenda of this government. Indeed, they support them so much that they're going to give one of the most beautiful buildings in the city of Victoria to operate a gambling casino. This minister refused to even mention to the mayor of this city, or to the council or police department, that they were moving into that building, not even thinking that maybe the local authorities would like some input into that decision.

I would contend that minister that my understanding of the situation — the minister may wish to refute this — is that the past leaseholder of that restaurant was negotiating and had virtually completed an alternative lease for that building. Within a matter of weeks, even days, the new minister, the member for Shuswap-Revelstoke, negated that process and entertained a lease proposition from the Great Canadian Casino company — a company, I might add, that had been told some months previously that the Windermere Building was not available for a casino. Indeed, I suspect that the Attorney-General of the day, the member for Oak Bay-Gordon Head (Mr. B.R. Smith), had given that message.

I even mentioned to the members for Saanich, the Minister of Finance and Corporate Relations (Hon. Mr. Couvelier) and the now Minister of Parks (Hon. Mr. Huberts), that there was some indication that the minister responsible for government buildings was going to allow a casino into the Windermere Building, and those two members were surprised. They didn't know. The minister hadn't even consulted with his own colleagues about deciding, days after taking over the portfolio, that the Great Canadian Casino company, which had been told over and over again that that building wasn't available to them.... This minister decided virtually overnight to give them the lease. Now, Mr. Chairman, the minister can talk about bottom lines and making money, but there are greater issues sometimes. Casino operations and what they bring to a community are greater issues in terms of the dollars generated.

I want to ask the minister again: is it his intention, when he has such sensitive operations, that when he has government buildings available in the future, to continue the same process he used in this decision, and have no consultation, no discussions with local councils or local authorities — just to decide arbitrarily to move this kind of operation into government buildings? I think this community deserves an answer to that question.

HON. MR. MICHAEL: Indeed, the member will get an answer. The answer from this minister is that I'm in charge of buildings. I'm not in charge of licensing, and I'm not in charge of the moral questions. I'm in charge of the B.C. Buildings Corporation, and if there is a vacancy in a building and there are one or more tenants wishing to fill that vacancy — from this minister's point of view, who is not in charge of licensing — the tenants we can negotiate the best deal with, providing they conform to all of the rules, regulations and zoning, are indeed the tenants to which we will give the award.

I would like to know this — perhaps the second member for Victoria could advise the House: is the NDP advocating that all casinos and bingo halls in the province be shut down? Is that what he is advocating? Is that what he's stating? All these charities.... I'm not saying tens or hundreds or scores,

[ Page 5983 ]

but I would suggest to the member that from bingo games and crown-and-anchor and all the other things that go on in the majority of community halls across this province.... Are you suggesting that they all be shut down? Is that NDP policy? Is that the policy of your party? We would like to hear about that.

[4:45]

I found the member's opening remarks interesting, about no more gambling casinos. I can tell you that that was a decision of this government many months ago; I believe it was a year ago last February. We made a decision in caucus. I believe the caucus was held in Powell River. There were one or two proposals from some isolated communities in the province that we give consideration to destination resorts to replace the flow of tens of millions of dollars down to Nevada. We had a serious look at that. We had a good debate in caucus, and we turned that down. We on this side of the House turned that proposition down.

I don't think we're talking about whether there should be more gambling casinos. The real, bottom line here is that there was one in the Strathcona. They wanted to move into the Windermere. There was a vacancy in the Windermere. I don't know what the member is talking about when he says the current tenant wanted to re-lease the facilities, because I can tell you that I have firsthand information that he was extremely pleased to see Great Canadian step in and pick up all the back rent and all his obligations regarding the buying of the furniture. As a matter of fact, I think that if the record were thoroughly researched, you would find that the casino operator at Windermere House even hired the previous tenant's daughter or son-in-law or something, and they're running the kitchen facilities. I think that all in all it was a very happy story. As a matter of fact, the only negative remarks I've received on this question are from that member.

I have just received some statistical data from my staff. It's interesting to look at the new rents. Perhaps the second member for Victoria could write some figures down on the rents paid by Great Canadian Casino.

Interjection.

HON. MR. MICHAEL: Well, it is an issue from a taxpayer's point of view. It is an issue with the Minister of Finance. It is an issue to all the citizens of the province who care about cost-effective delivery of the rental of government buildings.

I can tell you, Mr. Member, that as of now we are getting $42,000 a year — $3,500 a month — in rent. Prior to the casino going into that building they were getting $1,800 a month, or $21,600 a year — now nearly twice as much as was being paid previously. Along with that, Great Canadian Casino stepped in and picked up all the past rents owing — some $12,433 — and all the encumbrances regarding assets. I believe the figure there was something like $51,600.

If you look at the bottom line and the decisions made by the Buildings Corporation, I think that all fair-minded members would say that the decision of the Crown corporation in this respect was the right one.

MR. BLENCOE: I'm interested in the fact that this minister still refuses to give some assurances to this community. He is the minister in charge and has responsibility for government buildings. I think this community would be very interested in this minister's position.

He is stating today that he administers buildings and is interested in leases and interested in the bottom line. But nowhere in that formula comes the question of ethics or appropriate use or how the community may feel about a particular operation in a government building.

I might add that the minister just reminded us all that the cabinet made a decision that there would be no more casinos opened in the province. Yet, Mr. Chairman, this minister decided to permit a casino operation to go into a government building — a very beautiful government building; a very important part of the inventory of government buildings that we have in this community.

This minister is prepared to say that all he is interested in.... There is no question of appropriate use or no question that the community may feel it's inappropriate. In this case, I can assure you, this community felt it was an inappropriate use for that building. There should have been some consultation with this community.

This minister is putting on the record today that all he is interested in is taking a look at the bottom line. If that is the issue, what other uses would this government consider for government buildings? I think we need a clarification for this community. We have many buildings in this community. We would like to know if there are guidelines for appropriate use and operation that might go into these buildings. There is obviously no process in place to consult with the local authorities about some of the problems that might arise from your use of government buildings. I don't think the answers are appropriate for this community. We would certainly like some answers. Is it always the bottom line, or do you consider other issues before granting leases to our government buildings?

HON. MR. MICHAEL: I certainly don't want to be repetitive. From a B.C. Buildings Corporation point of view, if there is a bona fide business person, an organization, service club, trade union, association, a partnership that are not breaking the law in any way and are reputable, if we have vacancies, yes, we will discuss with them filling those vacancies.

If we have two or more clients, we will sit down with the two and negotiate the best deal that we can on behalf of the corporation and the taxpayers in this province.

Perhaps, Mr. Member, to put the question to bed, I would be prepared to undertake a commitment with the member for Victoria. If he would like to get all the charitable groups that are benefiting from casino-bingo

[ Page 5984 ]

charities in Victoria and organize a meeting — I'll assist the member in putting it together — he and I can attend the meeting together. We'll debate the matter. I would be most pleased to attend and listen to what the rank and file who manage those various charities have to say on this matter.

If you can convince me at that level, I assure you we will come back and have a famous second look at the current policy of this ministry. To put it to bed, Mr. Member, you and I could work together. I'll be pleased to set aside an evening. Let's get out and talk to the people.

I also have to say — and I think it goes without saying — that I believe the figure was something like $7.5 million from the lotteries fund that was turned over to that member's constituency to build the famous convention centre in the city of Victoria. Without any doubt, it would not be there. It's an example of lottery funds being spent to spin off and make things happen: the generation of millions of dollars in capital; tens of thousands of man-days of employment in the construction of that facility — that certainly stimulated the economy in the greater Victoria area and indeed will lead to millions of dollars in economic spinoff in the way of tourism, visitors and convention activity.

I might just add to that member that one of my other Crown corporations, the B.C. Pavilion Corporation, at the opening of the convention centre was good enough to bring over a mailing list with information for that convention centre. It was a list in excess of 1,000 names — to assist the second member for Victoria (Mr. Blencoe) and the first member for Victoria (Mr. G. Hanson). Seeing more economic activity, seeing more tourism and more convention delegates.... We went to the trouble to make that information available.

I think it's good once in a while to reflect on the work done by the Lottery Corporation, and the way they can fund something and make something happen that creates tens of millions of dollars in economic activity. But still, Mr. Chairman, that member continues to attack, while knowing full well that it was his party — back in 1974 — that started the whole cycle. To stand up now and take the righteous stance of being against gambling....

Mr. Member, let's get together some evening. Let's meet with all the organizations and the benefactors, and let's see what they have to say. If you can convince me, perhaps we could have a second look at government policy.

MR. BLENCOE: Mr. Chairman, I'm going to wrap it up here.

Interjection.

MR. BLENCOE: The member for Oak Bay-Gordon Head (Mr. B.R. Smith) is here; he's heard this speech before. Actually I know that he will agree — quietly — that this community doesn't want any more casinos. I think he agrees with that viewpoint.

Mr. Chairman, I want to again make it clear that we're not talking about.... The minister tried to deflect the issue. We're not talking about lotteries; we're talking about casinos. We're talking about this minister's decision to put a casino into a government building — the Windermere Building. That's the issue. Some months prior to that decision, I had some discussions with Mrs. Jacee Schaefer, who I believe is a former officer of the Social Credit Party and an officer of Great Canadian Casino Supply Co.

I said to her: "I understand you're interested in the Windermere Building." "Oh, Mr. Blencoe, the government has told me that there's no way we can have the Windermere Building."

Suddenly, Mr. Chairman, within days or weeks of this member taking over that ministry, there was a major shift in policy, and Great Canadian Casino Supply Co. — with deep-rooted connections to this government and the party — got a very valuable lease. By her own admission some months before, she had said: "Oh, the government won't deal with me at all and won't give me the Windermere Building."

Mr. Chairman, I'm wondering what changed. It was quite clear that a message was given by I don't know who on the government side — very wisely, whoever they were — to Mrs. Jacee Schaefer, who I believe was a campaign manager for the member for Kamloops at one time, that the policy was: no Windermere Building. Yet this minister agreed to it.

Can the minister tell us what changed? Why was there suddenly a change of direction to give one of the most beautiful government buildings to this company?

[5:00]

HON. MR. MICHAEL: I can certainly give the member a little insight. Again, Mr. Chairman, hating to be repetitious.... Perhaps the member is too busy talking or tossing paper into waste baskets — or whatever he's doing over there — to listen to what has been said.

Certainly one of the things that changed and came about as time unfolded and marched on.... I regret having to talk about past tenants in there; I really do. But the facts are — you asked the questions; I'm answering them and laying it on the table — that the past tenant was getting further and further behind in his rent. Other payments that were expected were not coming in as regularly as the landlord would have liked. All in all, at the time the decision was made, there was some $12,433 — I believe — in past rents due.

There was also a question of other ancillary assets. In taking a fresh look and a fresh approach to a serious problem for the corporation, which is a serious problem for my ministry in looking at this delinquency from the private sector.... How are you going to handle it? Are you going to kick the person out on the street and then turn to the court to enforce every letter in the lease and have the person end up in absolute, complete, 100 percent bankruptcy?

I can tell you, Mr. Member, that is exactly what would have happened to that person and his family.

[ Page 5985 ]

One of the first people he would have visited would have been his local MLA to have a discussion about this cruel Crown corporation, which had an opportunity for someone to step in and take over all the outstanding debts, to pick up all of the assets that were part of the building — and not only do that, not only the back rent and the assets, but also to double the rental income received by the Crown corporation.

Now bear in mind once again, for the record, that we are not adding any more casinos. All we did was move it about 100 metres up the street from the old Strathcona building to the Windermere building, which I have heard is a beautiful structure and certainly one which has a lot of amenities and warmth to it as you walk in. My information is that there are a lot of people employed there and things are going very well. I have a bit of difficulty understanding the deep concern of the member in looking at not just one facet of this leasing arrangement, but in looking at all of the facets and all of the things that I have reported on. I repeat, I look forward to spending an evening with the member and having a personal discussion with the charitable organizations.

MR. LOVICK: Mr. Chairman, I am going to be very brief right now and defer to another of my colleagues. But what I want to do is see if we can create a context for the item in vote 32 named "Privatization and Communications." I'd like to quote for the record just what that says: "This subvote provides for the costs of evaluating restructuring initiatives and for ministry information services."

When I read that, Mr. Minister, I must say that I am absolutely thrilled to think that perhaps at last we are going to get some answers to some questions; that indeed there is a mechanism to evaluate those initiatives to find out whether we are getting value for our money, to find out whether we are getting the kinds of services that all of us in this province are committed to the retention of. My fear, Mr. Minister, is that we are not getting those services. Indeed, I have gone rather beyond just expressing a fear and have challenged a number of your colleagues on a number of different occasions to show us the figures, to show us the contracts, to demonstrate that we are not getting a bad deal.

I would like to begin, — Mr. Minister, by asking you to tell us what the wherewithal is in your department to enable you to carry out the function of providing the evaluation of the restructuring. How do you do that? What's going on over there? How does that happen?

HON. MR. MICHAEL: Mr. Member, I believe that more than anything else, you will probably be looking forward to receiving the auditor-general's report. I know that he has been working very closely with my ministry in looking at several things. He has up to now, and I am confident that he will do so in the future.

Regarding analysis of privatization, which covers many ministries of the government, reviews will be done and reports written. Information will be passed on to me and my colleagues, cabinet in general, to do a continual appraisal and evaluation in review of what we see up to now at least. Perhaps the future will change, but up to now it has been a tremendously successful program right across the piece.

Mr. Chairman, I am repeating these figures — perhaps the member missed it slightly. There is an oversight in the budget review that he would have noticed. Already the privatization fund has some $302 million sitting in it, gathering interest for the benefit of the people of British Columbia. I look to the Minister of Finance (Hon. Mr. Couvelier), who I know will invest that money wisely and add to the benefits and overall debt reduction of the province. I've said it before, during the minister's budget debate; I am not sure whether the first member for Nanaimo was in the assembly. I will say again for the record that the Minister of Finance made a statement in his speech that he is looking forward to the privatization fund growing even bigger. He predicted that by the end of the current fiscal year the figure would grow from $302 million to $322 million; that's growth of $20 million. We'll see what the record shows at the end of the fiscal year, Mr. Member, but I can tell you right now that we are going to exceed that figure. We're not going to just double it; we're not going to just triple it. I can tell you that with the ideas we have on our committee and with the attitude of the civil servants in general right across the piece in Crown corporations and in ministries.... There are lots of ideas out there. There are lots of positive attitudes about a number of little things that can be done.

This is probably the epitome of rank-and-file involvement. Two employees of the Ministry of Transportation and Highways, located in Prince George, came to the Minister of Transportation and Highways (Hon. Mr. Vant) and said: "We want to talk to you about the gravel-crusher. We've been operating this gravel-crusher, and we think we can operate it maybe even better and more productively and more profitably in the private sector. We'd like to sit down and talk to you about maybe buying this machine. We'd like to enter into negotiations with you. Perhaps we can do something a little bit better, change our ways a little bit, enter into competition and get into the private sector." That was done.

That initiative was referred to the privatization committee. The privatization committee assigned an analyst. Negotiations were conducted, a report was brought back, and today I am pleased and proud to talk about that as perhaps the best example. It's small in number and small in dollar value, but there were dollars to the hon. Minister of Finance's privatization fund.

I can tell the member opposite and the assembly that there are scores of those types of initiatives coming from ministries throughout the province: rank-and-filers interested in looking at privatization initiatives and ownership, so they can be part of owning the job to which they report. The little people, the working people of the province, are looking at it. Why? Because they have witnessed firsthand.... They've heard all the horror stories from the members

[ Page 5986 ]

opposite, but a lot of them took the let's-wait-and-see approach: "Let's see how this thing is working." Now that they have witnessed how it's working, we are getting scores of inquiries from rank-and-file working people wanting to talk about privatization initiatives in this province.

I repeat: the Minister of Finance's $20 million projection will look small by the time this year is finished. I think the figure will be closer to $100 million.

MR. LOVICK: I'm sorry to note that the minister apparently didn't understand my question. I apologize to the House for my lack of verbal dexterity, insofar as I didn't explain it clearly. I was reminding the minister of what it says in the description of the vote. I said that what is described there is a provision for evaluating the restructuring initiatives.

Instead, I seem to have got some rehearsed responses that sounded rather like bits and pieces cobbled together from other speeches for diverse occasions, but that didn't answer my question. Sure, the auditor-general's report will give us some information, just as Public Accounts will give us some information. What I want to know, however, under this vote — and I think I'm entirely within my right to ask — is what initiatives are presently being undertaken.

I note that the minister constantly said "will be." He talked about future developments, what we're going to be doing. What I want to know is what you have done. What has happened to determine whether things have been done efficiently and well?

Just in passing, I might add that regular iteration of the matter of the $302 million.... It's not exactly a matter of financial genius or brilliance, in terms of government policy, to sell some assets. That's what the $302 million is from: just selling some assets. In fact, when you put some pressure on the other figures appended to the budget — as I recall, it was appendix H — what you discover, in fact, is that it's not at all clear that the amount of money there is the actual amount. Whether it was a $20 million or a $10 million overrun on highways maintenance is the question that emerges from that particular appendix to the budget.

I'll pose the question again, then, to the minister. Perhaps what I'll do is flag it for his attention, because I do want to give some time to my colleague this afternoon. What we want to focus on now are some specifics. We want to talk about a couple of cases of privatization and give the minister an opportunity to explain to us in some detail how these things have worked out. We have all kinds of allegations to suggest that things have not worked out at all well. We would like to give the minister every opportunity to show us that we're wrong, that things are operating very nicely, thank you very much.

The first illustration we would like to present and the first set of questions we would like to pose have to do with the environmental testing laboratory, and without further comment from me, I'll simply defer to my colleague the member for Maillardville Coquitlam.

[5:15]

MR. CASHORE: On page 106 of the '89-90 estimates book I note, under privatization and communications, the words: "This subvote provides for the costs of evaluating restructuring initiatives...." I would think that in those few sparse words is the explanation that this ministry has some responsibility for the consequences of the privatization of what was a resource belonging to the people of British Columbia, the B.C. Environmental Lab.

To start with, I'd like to ask the minister to give us a little update on the functioning of the lab and the purposes for which it was created — I'm thinking of B.C. Research and Zenon Inc. In view of the fact that I asked on November 9 that this government release full details on the sale of the lab, I would like to ask the minister if those details are going to be released. I would like to hear the minister comment at this time about that part of his responsibility, since privatization has been a major thrust of this government, certainly a hallmark of this government.

Privatization has been one of the initiatives that this government wishes to use to indicate to the people of British Columbia that this is what this government is all about. Somehow this government wants the people to feel confident about this privatization process. I'd like the minister responsible for privatization to tell this House and the people of British Columbia just how the process is working for the benefit of the people of British Columbia at this time.

HON. MR. MICHAEL: Not wishing in any way to deflect or shrug my responsibilities, I have to tell the member the way the system works from this side of the House. That is, I am not prepared, nor have I tried to make myself prepared, nor have I done the homework in going out and talking about the massive number of privatization initiatives touching most of the ministries in this government. It would be literally impossible for me to get into the specifics of Highways, Agriculture, Environment, Crown Publications, B.C. Steamships, Inland Gas, B.C. Hydro, B.C. Gas, the nurseries.... There is a wide range, as the member knows, of privatization initiatives which have taken place in the province in the last year or so. If he wants to talk about an assessment of the workings of the Environmental Laboratory, then I would have to suggest that if he's looking for an assessment he's going to have to wait until the Minister of Environment's (Hon. Mr. Strachan's) estimates are debated in this House.

The NDP, for whatever reason, seem to have a feeling or sensitivity or impression, at least, that the private sector can't do this kind of work as well as the public sector. I can only add from my overview and from my advice that the member is dramatically wrong in thinking that it can't be done under the private sector. I have heard no specific examples — nothing that I can get my teeth into to identify with

[ Page 5987 ]

— to suggest that it's not being done in a professional, public service, cost-effective manner. So I find that somewhat strange.

The member mentioned privatization and restructuring initiatives. Yes, that's one of the things we've been responsible for having made happen, and we will continue to do so, Mr. Member. We have had our terms of reference somewhat expanded, and the privatization committee is now at complete liberty during its privatization studies to also look at cost-saving initiatives, to look at restructuring that might be put in place, and to carry out the basic objectives of the committee.

The basic objectives of the privatization committee are very clear. We want to assure — on every decision made, on every initiative — the citizens of the province that we will either maintain, sustain or improve the quality and the standard as previously delivered.

MR. LOVICK: Are you confident of that?

HON. MR. MICHAEL: Yes, Mr. Member, we are very confident that we will see that standard met and, indeed, in many instances not only equal to the past but better.

The second thing that we are looking for in the privatization committee has to do, of course, with cost-effective delivery. We are not just talking about saving a few bucks; we are talking about cost-effective delivery. I think it's incumbent upon any person in government — in fact, it's incumbent upon all MLAs — to have a serious look at cost-effective deliveries. After all, we are elected by our constituents to represent them in this assembly, and we represent all British Columbians in government. I think it's incumbent upon us to be satisfied to the fullest extent we possibly can that a service is being delivered to previous standards, if not a little better, and to also look at cost-effective delivery.

I'll be looking forward to the critiques that come in; I'll be looking forward to the auditor-general's reports; I'll be looking forward to the reports that come in from staff who will be reviewing the initiatives to date to see if these standards are not met. If they're not met, I will be very concerned. I would welcome any good examples that could be put before the committee that we could have a fresh look at and review. We want to be sure that we are doing a good job.

HON. MR. STRACHAN: The member posed some questions about the environmental testing lab and the sale to Zenon, and asked some questions about prices. There was a press kit released at the time we announced that, and I will send it to the member so he has that information available to him, in terms of the arrangement of the sale itself and also the price. I will undertake, as well, during my estimates, as my colleague has said, to discuss the details and operations of the privatized facility.

MR. CASHORE: Mr. Chairman, what I was requesting was not a press kit. I was requesting full details with regard to the contracts involved in the sale of that lab. The people of British Columbia, after all, can be trusted with information. We on this side of the House believe that there's no reason to keep the details of that sale away from the people.

Since the Minister of Environment has decided to participate and support his colleague — which is certainly commendable — I would like to point out to him that this minister, having participated in the process that led to the signing of the Brundtland commission report, has signed a report which upholds the principle of public disclosure and the right of the public to participate and have information available to them so they know what's going on.

Interjection,

MR. CASHORE: Mr. Chairman, I notice that the Minister of Environment doesn't want to hear that. But the fact of the matter is that we're still calling for the details with regard to the sale of the lab, the contracts. In the spirit of the Brundtland commission report, which you say you support, the people of British Columbia can indeed be trusted with that information.

To get to the comments that were made by the Minister of Government Management Services, his initial response to my question outlines the problem that really lies behind this privatization program. The way this privatization program is being put forward is to diffuse accountability away from the kind of mainstream accountability that should exist. When he pleads on one occasion for someone to refer to the Minister of Health (Hon. Mr. Dueck), on another occasion for someone to refer to the Minister of Environment (Hon. Mr. Strachan), this minister, by virtue of those words, is admitting that the accountability process that takes place within their form of privatization is inadequate; that it diffuses responsibility and enables this government to avoid being accountable to the people of British Columbia. I think it's really unfortunate that they would try to govern in such an inappropriate way.

I would also point out that we've come in all seriousness to this Minister of Government Management Services with our questions with regard to what's happening now that some of the consequences of the Pandora's box of privatization have been realized. In coming to him and asking these questions seriously, I would point out that in my role as opposition critic for environment and parks and the ombudsman, I have staff people available to me, one-half the time of a legislative assistant and some research help, but certainly not the complete time of one person. The minister has an entire ministry at his disposal to brief him and to prepare him for the accountability that these estimates are all about. Therefore, we come in good faith that the minister will take our questions seriously and will indeed respond seriously.

I do have a few specific questions that I wish to put to the minister, and they have to do with some of the events that have taken place within the past year. He mentioned "cost-effective delivery" when he was responding to me, and he states that he somehow knows enough about what's going on in the

[ Page 5988 ]

Environmental Lab area to really say that in his heart of hearts he believes we have been receiving cost-effective delivery. Perhaps the minister could fill us in a bit on what he means by that. At the time the sale was announced, it was indicated that the lab would save $1.1 million. It would be interesting to have an accounting of just what exactly was meant by that savings of $1.1 million. I think the people of British Columbia would like to know in what way that was taking place.

It's my understanding that when the lab was sold to Zenon, it was sold for a price of $850,000, and that included all the equipment. I went on a tour of that lab, and I found some platinum crucibles. I forget the actual number, but I understand that the value of those crucibles, if they had had to be purchased at that time, would have been $200,000. I don't know if the members of this House have seen these platinum crucibles, but they look like little ashtrays that have been made out of tins of canned salmon. I would think that if somebody had gone into the lab to rob it, they wouldn't have known that these were very valuable items. Two hundred thousand dollars consisted of a stack of platinum crucibles in a lab that was sold for $850,000. You must think there wasn't very much at all to sell in that lab. But what about the Price Waterhouse evaluation? Price Waterhouse states that the value of the lab is $2.25 million. There's quite a difference between what Price Waterhouse found as the value of the lab and the amount the government allowed it to go for — a bargain-basement price; giving away a resource of the people of British Columbia.

[5:30]

I'd also like you to take note of this question, Mr. Minister. There was an instrument that was part of the B.C. Environmental Lab, and it was called — I've had to practice saying this word — a spectrophotometer.

HON. MR. VEITCH: You watch your language.

MR. CASHORE: Yes, I know I must watch my language, but I think I said it correctly.

The spectrophotometer included the manuals and documentation. I understand that the spectrophotometer went up to B.C. Research, which has been given some of the responsibilities that were divided when the lab was sold. I would like the minister to inform this House, at his earliest opportunity, exactly how much money the people of British Columbia received when that spectrophotometer — which I understand to be valued at well over $100,000 — was sent up to B.C. Research. Did they pay for it? Was it a gift from the government? What exactly was the situation with regard to that?

The minister said he wants it very clear that the private sector can do this type of work, and do it adequately. Yet I would point out to him an article by Margaret Monroe in the Vancouver Sun of March 16. In that article she says: "In a move that points to high-level concern about the impact of Vander Zalm's privatization program, Environment Canada is about to audit how pollution is monitored and measured in B.C." Interesting, isn't it, Mr. Chairman? The senior government has become concerned about the quality of pollution testing in this province, and it is therefore about to audit how it is being measured in British Columbia.

I would like to ask the minister to stand up and explain to the House how it would happen that Environment Canada would develop that kind of concern. Is that a usual thing? Do we see it happening on a routine basis that Environment Canada would become concerned about the way in which a province such as British Columbia monitors?

I think the Minister of Environment is well aware that late last year Doug Sandberg, a 20-year employee of the Environment ministry, quit his job in disgust.

Interjections,

MR. CASHORE: I find I'm having to compete with the opposition House Leader. I find that rather an interesting experience.

Doug Sandberg quit his job in disgust and revealed that the B.C. Research Corporation had not yet started the quality assurance program. According to Mr. Sandberg at the time he quit, the firm had not performed 2,000 industrial pollution tests and 100 audits that should have been done between mid-August and mid-November.

I would like the minister to respond to some of these points I have raised. I'll be very interested in what he has to say.

HON. MR. MICHAEL: Mr. Chairman, I was most interested in what the member for Maillardville Coquitlam (Mr. Cashore) had to say. He really brought a lot of issues to light, and I enjoyed his comments regarding the lab in question. I do want to say to the member that it is certainly not an attempt by me, the Minister of Government Management Services, in charge of privatization, to in any way deflect, procrastinate or not answer questions dealing with privatization. I think, Mr. Member, that we have in fact done the exact opposite. We have given you the opportunity to expand; it is an extremely good example of open government. We are not narrowing or channelling all things dealing with privatization into one ministerial estimate and closing the book. We are giving you the opportunity to ask questions of several ministers, depending on which ministry the item might fall under.

I do want to say further, Mr. Chairman, that the member never has to apologize to this House about pronouncing words wrong; he never has to apologize to me, at least, because I relate to his difficulty. I am just a country boy and a high-school dropout who never had the privilege, like the first member for Nanaimo (Mr. Lovick), as an example, of going on to postgraduate years of higher learning. To be able to have the command of the English language that my friend from Nanaimo possesses is.... Many of us admire that tremendous vocabulary and the eloquence of his delivery. So whenever you are debating my

[ Page 5989 ]

estimates, Mr. Member, you never have to worry about apologizing for how you pronounce words; because I've got to tell you, I make many mistakes as well.

Mr. Member, you need to be criticized a little bit, because you emphasized that our only concern was cost-effective delivery. You repeated that on two or three occasions. I want to correct you: I distinctly — and I repeated myself — gave two main criteria on anything to do with privatization. Those two criteria, very clearly, are quality and service, tied together. We want the standards to be met every bit as well in the privatization initiatives as they were being delivered in the past — not only as well, but we are striving to do it even better. If you check with the various areas across this province.... I would suggest that you go down and talk to the Crown Publications customers. Go have a chat with them right now. You'll find that the turnaround on delivery and service is cut by 50 percent.

I get the same reports from the Langford sign shop, the same kind of examples. They are bringing about better turnaround, better service, better delivery and better quality, and I'm getting this word from many corners of the province. I think it's important that you take those words of advice. I have to say, though, that when you get into the nitty-gritty, the details, of the lab in question, I must refer those to the Minister of Environment (Hon. Mr. Strachan). You'll have a lot of time, I'm sure, to discuss and debate and question that member at the time.

The member said something about the name Sandberg and about his resigning. It's not a very common name, Sandberg. I can't think of a single Sandberg in my constituency, nor have I had any dealings with a Sandberg. I'm just wondering if the member would answer this question: is this the same Sandberg who ran against the first member for Richmond (Hon. Mr. Vander Zalm) in the last provincial election? I'd be interested to know that, because it's not a very common name. If the answer to that question is yes, he is the same person who ran with the NDP, then perhaps we can monitor and put some weight on his criticism of the government.

I do want to say that I have taken the opportunity to tour several of the privatized divisions within the province. One that I had a tour of was the Kelowna AgriSoil Lab. It's interesting that the member talked about the value of the assets. I was hardly in the door when the team of employees in that division came up to me and said: "Come on in the door. We want to show you some of the high-priced equipment and assets that we have." I can't call the member by name, because it's not parliamentary in the House, but it had to do with your leader and statements he had made. They were sort of wishing he might come up there and have a visit with them someday, and look at this expensive equipment, this so-called computer that they have in their office there. They thought they might be able to cut a deal or perhaps sell it to the NDP caucus, if there's any interest in that particular piece of equipment. Their evaluation of the equipment was that it was not worth too much and could probably be better put to use as a boat anchor.

I think, Mr. Member, that we are opening up a wide debate — open government — giving you the opportunity to question the various ministers. When we get into the areas of privatization, I know the Minister of Health (Hon. Mr. Dueck) will be looking forward to that; the Minister of Social Services (Hon. Mr. Richmond), the Minister of Highways (Hon. Mr. Vant), the Minister of Mines (Hon. Mr. Davis), about all of the areas....

HON. MR. BRUMMET: What about me?

HON. MR. MICHAEL: Yes, I think even the Minister of Education had a small privatization initiative that he brought in.

Hopefully, we'll be able to answer all your questions. When talking about answering questions, let me tell the member, Mr. Chairman, that there has never been a question asked that I've taken as notice, and there's never been a question put on the order paper that I have not given an answer to. I'm looking across to the member for North Island (Mr. Gabelmann). There was a question asked by him late last week; the answer was tabled today. I took it as notice. I get back very quickly, Mr. Member, in answering my questions. If you check my record on that, you will find that the questions are answered forthrightly. And if you want to put something on the order paper, or indeed if the member wishes to write me personally at any time, we'll answer the mail, and we'll set the facts out for you.

MR. CASHORE: I appreciate the minister's remarks with regard to taking questions as notice. I do recognize that on some of these questions you may not have the actual detail at your fingertips, and it is a point well taken. I take it in good faith that you will get the answers back to me as quickly as possible.

Sometimes I think maybe we should have a rating system for all the cabinet ministers with regard to how well they take questions as notice and that sort of thing. I understand that this minister would give himself quite a high mark. It would be interesting to know how his colleagues rate him when they look at that.

Mr. Chairman, the member has pointed out that there are some details with regard to environmental issues that it would be difficult for him to comment on, so I've given him some questions that really do deal with the privatization aspect — and one that he has just avoided. I don't think that you would have to take this question as notice. How can you say the lab will save $1.1 million — and I'm being very specific, using your numbers — when Price Waterhouse evaluates the lab at $2.25 million, and the actual price paid was the bargain-basement price of $850,000?

If that's not good enough, I would refer another government document to the minister. This is from the fall of 1986. It's the Environment News put out by the former Ministry of Environment and Parks, and it's a very nice article describing the lab for what it

[ Page 5990 ]

was, which was really a gem as a resource for environmental protection in British Columbia: "The lab, which operates on a cost-recovery basis, has about $4 million worth of equipment, from thousands of glass tubes, bottles and breakers to sophisticated spectrophotometers." There, I said it again.

[5:45]

That's the government's own internal document that stated about assets. A moment ago the minister was speaking proudly and positively about the assets at an agricultural lab he visited. What about the assets of the Environmental Lab that were sold at such a giveaway price? It's only responsible for the minister to comment on that when he's making his other comments and avoiding dealing with some of these real, specific questions.

Mr. Minister, you referred to Mr. Doug Sandberg; without coming right out and saying it, you made the inference that he was being political. You didn't come out and use the word "political." You were being careful, but you did refer to the fact that this gentleman had been a candidate in an election and ran against the Premier.

I think the minister would agree with me that one of the traditions and freedoms that we honour in our great democracy here in British Columbia is that people who work in government service are also able to fulfil their responsibilities as citizens. It happens that this individual comes from a different political philosophy, but I don't think it behooves the minister to sully this person's reputation on the basis of the fact that he has been known in his private life to be a member of the New Democratic Party. I would just point that out.

With regard to that, if Mr. Sandberg is acting for political purposes, then I would ask this minister why he was never once criticized for being a political person over the 20 years he worked for that ministry. Why was he asked to remain a government employee in the data standards group — and therefore chosen to be one of those protected from privatization — and resign of his own choice? Why was he promoted to the role of top technical air pollution expert with waste management if he couldn't be trusted or, if he was political...?

I would submit to the minister that this was a valued employee and that there has not been one thing said about Mr. Sandberg since these disclosures that indicates any misbehaviour or misuse of his position during the time he was an employee of that ministry. I have not heard one such criticism, but I've heard these inferences, Mr. Minister, and I don't think it behooves you or your government to try to draw them.

If you can point to something that Mr. Sandberg did during his very worthwhile career with the Environment Lab, if you can point to one thing.... You're certainly able to do so if you feel that will strengthen your position on the lab, but I want to point out that he was a valued employee who was promoted into a very good position within government during the time of the sale of the lab. He was an employee who came to this position not as a politician but as a trained scientist who was committed to his life's work of environmental air-quality protection in British Columbia.

Therefore, with all due respect, I do believe that these questions deserve careful answers, but not in the context of trying to downgrade the individual. I am sure that this individual, who was never downgraded during his very worthwhile career with this ministry.... It would not be appropriate to downgrade him in this House. I take it that the minister will look upon this question as a serious one and start to bring forward some very helpful comment with regard to how this privatized process is going to deal with situations that are not being dealt with appropriately in the province at this time.

Mr. Chairman, let's take a look at this for instance. It was announced in May 1988 and again in August that a quality assurance program carried out by B.C. Research Corp., which is a private company, would begin August 15, 1988. That program was to be paid for by an annual fee totalling approximately $600,000, which would certainly involve this ministry. But it would be collected as audit fees, from the polluting companies under permit. The question to the minister is: did that program start on August 15, 1988? That can be answered yes or no. If the answer is no, had that program started by the time Mr. Sandberg resigned in protest on November 9, 1988?

HON. MR. MICHAEL: I don't want to sound repetitious, but that is clearly the kind of a question one would expect the member to pose under the estimates of the Ministry of Environment. It's far from my knowledge or jurisdiction or area of interest. I think it's something you should pose to the minister at a later date.

I certainly regret it and apologize if there was any inference that the person mentioned by the member — who brought the name to the House originally — Sandberg, was in any way politically motivated when he resigned from his position. I still haven't really been told. I take it that he was the candidate in question. I see the member nodding his head. He never really said that, but I certainly apologize to Mr. Sandberg if there were any suggestions. It was a matter of interest because it is such a strange name. It's not a name you hear everyday on the street. I would also like to apologize if I caused any embarrassment to the member. That certainly was not my intent.

I'm really not prepared to get into any depth in talking about the cost savings. Suffice to say that in the briefing notes and in the information that was announced.... The member made reference to a savings of $1.1 million. He said it as if that was perhaps a very short-term thing, one year or something along those lines. In fact, the original projections as put out by the minister at the time of the sale were that the figure of $1.1 million would be saved over a period of five years, certainly not within the first year. If the member would keep track of all those questions — there are some really good ones in there, some real zingers, some stingers — then when the Minister of Environment (Hon. Mr. Strachan) rises in

[ Page 5991 ]

the House at a later date, he can pass them on to him. With the advanced warning you've given him, he now has the advantage of being able to read up on all of the areas. I know he'll be reading the Blues first thing in the morning, getting all gunned up and coached on what he has to know, and he'll be well prepared for you. We look forward to those estimates, and I'll be interested in hearing the responses as well.

I move that the committee rise, report progress and ask leave to sit again.

The House resumed; Mr. Speaker in the chair.

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

HON. MR. PARKER: Mr. Speaker, in accordance with section 9 of the Ministry of Forests Act, I table the five-year forest and range resource program, 1989-1994.

Hon. Mr. Richmond moved adjournment of the House.

Motion approved.

The House adjourned at 5:55 p.m.