[ Page 5993 ]

CONTENTS

Routine Proceedings

Committee of Supply: Ministry of Government Management Services.

(Hon. Mr. Michael)

On vote 31: minister's office –– 5993

Mr. Williams

Mr. Harcourt

Hon. Mr. Strachan

Mr. Cashore

Mr. Gabelmann

TUESDAY, APRIL 11, 1989

The House met at 10:05 a.m.

Prayers.

HON. MR. RICHMOND: I would ask the House's approval for the Special Committee of Selection to meet this afternoon.

Leave granted.

MR. LOENEN: I wonder if I could have leave to make an introduction.

Leave granted.

MR. LOENEN: On behalf of the member for Oak Bay–Gordon Head (Mr. B.R. Smith), I would like the House to welcome 19 grade 11 students from Lambrick Park Secondary School accompanied by their teacher, Mr. Yeatman. Would the House please welcome them.

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 (continued).

MR. WILLIAMS: Yesterday the minister deposited in the House the many volumes of the Expo land transaction. On reflection, the Manhattan deal between the natives and the people in the new world of America looks like the most prudent real estate arrangement one could have seen, compared to the deal with Li Ka-shing. The volumes tell an extraordinary tale and show that there was a conscious pattern of misleading the Legislature by the people in the Crown corporation regarding the elements of the deal.

MR. MERCIER: Be specific.

MR. WILLIAMS: I will indeed be specific, Mr. Member for Burnaby-Edmonds, who is on the board of BCEC. On the toxic land question, which the public will be saddled with forever and a day under this deal, we don't know the dimensions in terms of responsibility and the burden on the public purse. Under the contract it is abundantly clear that the responsibility is the Crown's, the liabilities are the Crown's. The work of attempting to clean up will be carried out by the Concord Pacific firm, but as a management fee they'll get 3 percent for carrying out the work. It's fairly sweet.

First, I'd like to do an overview of the whole deal and we'll get into the toxic land question subsequently.

Interjection.

MR. WILLIAMS: Well, I think it would be very interesting if the member for Burnaby-Edmonds, whom we rarely hear from in this House other than when he wants to separate, would elaborate in terms of the activities of that board. Indeed, Mr. Member, how happy you are about the other land dealings of B.C. Enterprise Corporation, of which many items were tabled yesterday and which are as questionable as, or more questionable than, the Expo land deal itself. We have a catalogue of land deals that is research for the next year, a catalogue of questionable land deals that will provide us with material over the next year.

First, let's deal with what the former Minister of Economic Development used to say about this deal. The first member for Vancouver–Little Mountain (Mrs. McCarthy) said, in effect, that this was going to cancel the debt on the Expo lands. Well, Mr. Accountant from Burnaby, you know how these numbers work. You know they won't cancel the debt on the Expo lands. Did you stand up and say: "I'd like to correct the minister; she's not really being quite frank here"? No, we didn't hear from that member in that regard. The member from Little Mountain said that the debt was going to be cancelled by this deal. These documents show that the real value of the deal, in 1988 dollars, was under $140 million. It was not a $320 million deal; it was a $140 million deal.

When the average person in British Columbia goes to buy a house and pays a down payment, he or she then takes out a mortgage and expects to pay interest on that. But did you folks, you smart businessmen over there, make that kind of normal deal with the man from Hong Kong? No, you did not. You made a deal where he would never pay interest on the mortgage. I know of no such deal for any citizen in British Columbia anywhere.

MR. PETERSON: My father did that.

MR. WILLIAMS: Come on! That's ancient history.

Look at the schedule of payments: after the $50 million down payment, nothing will be paid until 1995, and finally in the year 2003 they pay the final lump of $100 million.

I know it's a challenge for members on the other side, but let's try to put a 10 percent interest rate on that in terms of what he should have been paying. You put a 10 percent interest rate — and I wouldn't want to complicate it for you by having to compound it; that would be too much of a challenge — on the $270 million, and we're obviously talking about over $300 million saved in not having to pay interest. The public has lost that, Mr. Minister. I don't blame you for not wanting to go on Rafe Mair this morning, because it would have been far more effective having you trying to explain the deal than me criticizing it.

In addition to not paying interest until right through to the year 2003.... Again, when the normal person buys a house, he has his title clouded by the mortgage-holder. That is, you can't sell the house out

[ Page 5994 ]

without paying the mortgage. Everybody understands that. Don't you? I guess not. They can sell the house; we've still got the mortgage, and somebody else might have the land. That's the deal you got. Ho, ho, ho; no, no, no. If that ain't yo-yo economics I don't know what is.

There is a letter of credit from the CIBC — no doubt for which they've got a handsome equity in the entire deal — saying that if Li Ka-shing does not pay the first $10 million instalment on May 11, 1995, we will pay it. That's not a traditional mortgage. That's simply the bank saying that if this guy doesn't pay the bill, we'll pay it. In the meantime, in those intervening years, they can sell off any amount of the land. There is no limitation. They could sell off $400 million worth of land — and I suspect that they might or could — and we would still be waiting for our money till the year 2003. Everything could be sold in the next five years if they wanted to, if they decided to beat it off to some other more high-paying section of the Pacific Rim, and we would be left waiting for payment from the Bank of Commerce. They might well have made hundreds of millions on the deal in the interim, and we wouldn't have been paid out.

[10:15]

That's an interesting angle. No other homeowner in British Columbia could achieve that kind of deal, where they would buy the house and land and then sell it off to somebody else and not have to pay the original owner until the year 2003. Some deal.

The other question is social housing. We are going to have to buy land back if we want people of moderate income living around False Creek. The mayor of Vancouver talked in terms of the city anteing up $20 million out of civic funds to begin buying land for social housing. We have to throw in another $20 million or more — I suspect a lot more — in terms of getting the social housing mix that we want.

Interjection.

MR. WILLIAMS: If you want to attack the mayor of Vancouver, Mr. Member for Burnaby-Edmonds, do so — in your own allotted time.

It's really quite amazing, the entire deal. Let's chronicle the kind of misleading statements made by officers in the Crown corporation, and by ministers, regarding the soil contamination question with which we will be burdened forever.

Prior to the May 11, 1988 closing, Mr. Cameron, the vice-president of BCEC, was reported as saying the cost of toxics and their cleanup on the site was to be shared. That affirmation was echoed throughout the proceedings.

HON. MR. MICHAEL: Is that the best you've got?

MR. WILLIAMS: This junior-level genius from Salmon Arm, across the floor, says: "Is that the best you've got?" We got snookered for half a billion dollars, Mr. Minister. I know it's a challenge to a man who maybe only understands summer home development at Queest Beach, but the lands in False Creek are extremely valuable. They were transferred at a third of the value of downtown land holdings, and values have escalated since then, Mr. Minister. And you say: "Is that the best you've got?"

HON. MR. MICHAEL: Let's hear it.

MR. WILLIAMS: What nerve, what gall, what arrogance, and so little to be arrogant about.

MR. MICHAEL: Tell us how you want to handle it.

Interjections.

MR. CHAIRMAN: Hon. members, can we have order, please. Remarks should be directed to the Chair.

MR. WILLIAMS: Okay. Here are the statements from Mr. Cameron of BCEC at that time, and Mr. Craig Aspinall, who is a prominent member of the Social Credit Party and is now the flack for Concord Pacific. The two of them said the following.... They reported an understanding in the agreement; they're talking about the agreement you tabled yesterday, Mr. Minister.

Interjections.

MR. CHAIRMAN: Hon. members, I believe I asked for order a few moments ago. Could we have some order, please.

MR. WILLIAMS: Mr. Cameron, vice-president of the Enterprise Corporation and Mr. Aspinall, spokesperson for the Concord Pacific company, stated that there is an understanding in the agreement that called for taxpayers to be responsible for some of the cleanup, along with the buyer.

Mr. Aspinall was not telling the truth; he knew what was in this document. Mr. Cameron was not telling the truth; he knew what was in the document. What do you say about that, Mr. Minister?

HON. MR. MICHAEL: Mr. Chairman, I am really looking forward to this blockbuster attack on the sale of the Expo lands to Concord. Up to now, with all the notes I've been taking, the only thing I've really been able to zero in on is that this government, this Crown corporation and our negotiators did the responsible thing when it came to the cleanup of the Expo lands. This Crown corporation and this government took full responsibility....

AN HON. MEMBER: We're paying.

HON. MR. MICHAEL: Yes, Mr. Member, we're paying. Tell me how it is in normal deals. Give me an example of when it's not done that way.

Who better to take the responsibility than the government, to make sure on behalf of the citizens of British Columbia — the people on the lower mainland and those in the city of Vancouver — that we deliver that land to them environmentally clean? I'm proud of the decision of the government to make sure

[ Page 5995 ]

that that responsibility was not turned over to a private developer, but that it was indeed accepted honourably and justifiably by the vendor, the B.C. Enterprise Corporation.

Mr. Chairman, the member talks about interest free deals. Maybe it's his view — with a very short recall — that this is the only interest-free deal that has ever been negotiated. Well, perhaps the member could reflect a little on the $80,000 deal with the Nanaimo Commonwealth Society. Could he explain to us, perhaps, whether the $2,000-a-month payment over 40 months was interest-free? I'd like to have the answer to that question.

As for the sale of the Expo lands with the requirement that the soil contamination question be looked after by the provincial government and the B.C. Enterprise Corporation, Mr. Chairman, we make no apologies. If that's the greatest blockbuster we have....

I want to say another thing to that member: you are casting a cloud of doubt over some of my staff and the BCEC staff, and over some private sector people serving on committees on land sales of the B.C. Enterprise Corporation. If you've got some facts in that so-called file of yours that you talk about that's so thick, let's lay them on the table and get them straight right now.

Interjections.

MR. CHAIRMAN: Just before we continue, hon. members, I'd once again like to remind you that the temper of debate can get out of control quite easily, as we all know. If you'll address the Chair and if other members will try and keep their remarks to themselves, it would be to the benefit of this House and to the business of the people of this province.

MR. WILLIAMS: Our files may be thick; the agreement may be thick; it's very clear who's thick on the other side of the House.

The question of liability is an interesting one. The minister would have us believe this is the kind of deal people make every day of the week. There was an earlier seller of these lands to the Crown, a company that had a lot of experience in land dealings: the Canadian Pacific Railway company. They sold the land to you, and we, not they, accepted the liability. When you guys are dealing, you take the liability whether it's buying or whether it's selling. That's clever stuff.

I'm sure the Attorney-General (Hon. S.D. Smith) has given you a very thoughtful item on that two-inch by four-inch legal file that he just gave you.

In the United States, where they have been dealing with toxic land questions more effectively for a longer period of time than ourselves, the tradition is that the liability is with the original holder of the land who poisoned the land in the first place. Isn't that a reasonable idea?

HON. MR. MICHAEL: Is that your argument? Is that your case?

MR. WILLIAMS: All I know is that some of that liability should have been the CPR's — and you can laugh away — and some of it should have been B.C. Hydro's. But B.C. Hydro; not the taxpayers in general, not the public in general. You made the deal.

Last session in this House I asked the former Minister of Economic Development: what about the cleanup of the toxic lands? The statement we got from the minister was fudging and misleading. It suggested there would be joint activity in terms of the cleanup, just as the Minister of Environment said. Then you ask him to define a joint program, and it means: "We'll be involved. We'll be so involved that we'll pay all the bills and give them 3 percent to boot." That's not really being frank with the citizens of British Columbia.

If you look at the pattern of statements from Mr. Aspinall, from Mr. Cameron, the vice-president, from the former Minister of Economic Development, from the Minister of Environment, you would have every reason to believe this was probably going to be a fifty-fifty cleanup deal at least. Now the minister shakes his head and says no. He didn't say that last summer, though.

Interjection.

MR. WILLIAMS: Well, I hope the minister can give the full details.

The former minister said that this was going to wipe out the debt. The purchase price, infrastructure costs, buildings on the Expo lands and services on the Expo lands total $365 million. We now know it's $140 million. Write the numbers down, Mr. Minister: $365 million minus $140 million. That comes out at five, and you take the four from the six, and that leaves two; one from the three, that leaves two. That means $225 million that didn't get paid. You can take that 2-by-4 sheet of legal argument that the A-G (Hon. S.D. Smith) gave you and write down $225 million on it, then just for good measure, you should write down the $200,000 handshake for Kevin Murphy — the one that was about $27,000 more than David Poole's. But that involves a decimal, so you put 0.2 — $225.2 million; that's the liability of the Crown. Now you put down the fact that Mr. Li Ka-shing is not paying any interest — that's $300 million that you'd normally get in a real estate deal. You put three zero zero, with the decimal at the end. Then you put down an amount for cleanup of the soil. The range of estimates is $15 million to $400 million. We'll be conservative, because you people like to say that you are conservative, and put down $100 million. Then you put the dot at the end of the two zeros; that's another hundred.

Then, of course, we want social housing, and the mayor of the city of Vancouver has said that it's at least $20 million. I suspect that he's wrong and that he's being conservative there; maybe he's been friendly with you lately. I think we'd have to double that to get closer to the real world. That means we'd put $40 million, with a decimal. If we add all that up, we've got the $0.2 million for Mr. Murphy, zero zero

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zero — that's easy. Then it's five. Then you add the four and the two; that's six. And the three and the one and the two is six. Is that right? Yes. Would you put those numbers down, Mr. Minister? Is that $665.2 million we've lost out of this deal? That's losing.

[10:30]

The natives in Manhattan at least got some beads. They lost the land.... Smart businessmen, indeed. You just have to look around that False Creek rim, downtown south and Yaletown in Vancouver and see what land is trading for. I looked at a recent residual analysis of a site at Drake and Pacific; there's a highrise going up on it now. That's one-quarter of a city block. The residual value there is $15 million, and that's not water frontage, Mr. Minister. You know that when the waterfront is thrown in, it becomes more valuable.

Yesterday you gave us a list of all the lands that the B.C. Enterprise Corporation has sold in the last three years. I asked you how many of them were bid deals. I asked you how many of them were numbered companies. I didn't get those answers; I got some of the answers. But it's abundantly clear that the Expo land deal is simply the tip of the iceberg.

HON. MR. MICHAEL: I guess we can all sit in this House and listen to innuendoes. We're very anxiously awaiting some hard facts, either spoken into the microphone for the record or delivered to the minister in writing, of any questions you might have. I repeat, Mr. Chairman, I am extremely upset that the member is making accusations about sales conducted by what I consider to be people with a high degree of integrity. You, Mr. Member, are tainting those citizens of British Columbia right now by not coming clean and laying on the table what your direct, specific questions are regarding so-called numbered companies or land sales or what have you. If you have a question, put it on the record. Put it in writing. We'll have it researched and we'll get back to you at the very earliest moment. I'll give you that assurance.

You can look at the sales agreement. It was well publicized prior to the tabling of the Concord agreement. It's clearly set out in the agreement. Yes, $320 million; yes, $50 million down; yes, $270 million interest-free starting on something like the seventh or eighth year and paid out at the end of the fifteenth year.

This property was advertised on the open market. It was advertised and publicized well in the city of Vancouver. It was advertised in journals throughout British Columbia. It was in national journals such as the Toronto Globe and Mail, half-page ads. There were ads internationally. Every potential investor in the world was made aware of this tremendous opportunity for economic development in our province in the city of Vancouver, the Expo lands. There were several expressions of interests and several proposals. The negotiation process was conducted by very professional people, the best of lawyers and the best of negotiators, and they concluded a deal with Concord.

Mr. Member, I would like to know whether it would have been all cash up front — the $145 million — or spread over a 15-year period. What else would you have done? Have you examined the economic spinoffs of what this is going to do for the working people in the city of Vancouver, many of them residing in Vancouver East? Have you analyzed the fact that the capital investment on the Expo lands is predicted to be in the range of $2 billion? It has been estimated that the province can expect spinoffs of $8 billion as a result of the sale to Concord — $8 billion. That's the total economic spinoffs. It's also estimated that 28,000 person-years of employment will be taken up on the construction of the facilities on that site; again, many residents of the Vancouver area and Vancouver East.

I repeat that under normal sales terms anywhere that I've checked, we find that the vendor is responsible for any cleaning of the land. We do not apologize for delivering that land completely free of toxic materials. I think it was a right decision for this province to have decided on that particular sales deal. I think it's in the best interests of the citizens and of the city of Vancouver for the provincial government to have accepted that responsibility.

If you have any questions regarding other land sales conducted by the B.C. Enterprise Corporation and my staff and my committees, then I want you to stand up and put them on the record, because, I repeat, you are tainting the reputation of those individuals with your statements in the Legislature today.

MR. SIHOTA: Mr. Chairman, in the heat of the moment, may I have leave to make an introduction?

Leave granted.

MR. SIHOTA: I notice that in the gallery today are a number of grade 8 students from Belmont Senior Secondary School, along with their instructor Mr. Anthony Harrison. This is a special needs class, and they're taking a tour of the gallery. Could all members please join me in welcoming them here today.

MR. WILLIAMS: Mr. Chairman, we can expect a blockbuster, now that the member for Edmonds is advising the minister.

The point is, the kind of sale and arrangement and track that the member for Vancouver–Little Mountain established on this whole deal was virtually a self-fulfilling prophecy. Only a major international player like the players in Concord would have achieved the result that was achieved.

There is no excuse for not breaking those lands up into numerous parcels and leasing them forever. This would be an annual benefit for the people of B.C. in terms of income. There is some $5 billion in trade union pension funds in British Columbia controlled directly by the unions themselves. Any creative government that wanted to provide employment at decent wages might well have involved them in this kind of process.

The cleanup. Mr. Minister, there is a chronicle of lies out of these various players about the cleanup question. You have not answered that at all. You talk

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about the benefits of this project. The benefits could have been so much greater if it hadn't been the kind of track that the member for Vancouver–Little Mountain established. All the players could have been local. It could have involved local trade unions, local realtors, local developers, local architects. The trade unions themselves offered $100 million for the lands between the Granville Bridge and the Cambie Bridge alone.

MR. MERCIER: They didn't put a bid in.

MR. WILLIAMS: Because you set up a system that set this up for the international players.

You talk about the spinoff benefits. Sure, there's going to be employment out of this, but where will the profits go? If they were local folks right in the beginning, then the surpluses would have remained in B.C. The surpluses harvested in British Columbia will be picked up by the consortium from Hong Kong and used anywhere in the world that they want to use them. They can take them to Singapore if wages are 15 cents an hour and that's where they want to go; they can take them to Taipei if wages are 95 cents an hour and that's where they want to go. We could have seen to it that the surpluses were kept in British Columbia, paid decent wages and created long-run employment forever.

On the cleanup question, there's even a new wrinkle. The super-smart member for Burnaby-Edmonds was part of a deal that sold the bed of the ocean to these guys from Hong Kong.

MR. MERCIER: Wrong.

MR. WILLIAMS: Oh, wrong, he says. There are tidal lands, underwater lands, that are part of the deal. Last year you people — the former Attorney-General, the member for Oak Bay–Gordon Head (Mr. B.R. Smith) — brought in legislation to allow the selling of the ocean and a chunk of False Creek to these people. Now, in the detailed soil — toxic mess — agreement that's part of these documents, you talk about building coffer-dams in False Creek to contain the waters so that you can dig around in that poisonous sluice.

Was anybody home when this deal was made? You knew you had a toxic mess on your hands. You knew that if the shoreline was disturbed you had a special problem, and you made a deal that sold the ocean to them. That means you have to put in dams in False Creek. The agreement talks about coffer-dams to contain the waters, and then you work from the land in these reclaimed areas. Anybody who saw the plan knows you're talking about a kind of Venice with islands and waterways and that sort of thing. Charming indeed; interesting and creative indeed; but when you mix it with the toxic waste, you have a monster problem on your hands.

The question of standards. Well now, what about standards? The very fellow who's going to pay the bill is the guy who's going to set the standards.

HON. MR. MICHAEL: So that's the argument. I see.

MR. WILLIAMS: It's one of many. If it looks like the $400 million that some have suggested, does that mean the standards will change? You people didn't address the question of standards before you made the deal, did you? We had a shaking head from the Minister of Environment (Hon. Mr. Strachan) a few minutes ago. We don't now.

You made a deal, not knowing what you were going to do in terms of those poisonous wastes standards; and you come up with the standards after the fact, based on what the bill is. That's no way to run the environment, Mr. Minister.

HON. MR. MICHAEL: Mr. Chairman, I'm still waiting. I've yet to really determine what the member's concern is. The question of the environmental clean-up.... The environment needs cleaning up; the soils are contaminated — admitted facts.

What is the thrust of his argument? Is he arguing that we shouldn't touch the water? That we should leave the soils as they are and give the responsibility on to Concord and Li Ka-shing? Is he critical that we're spending too much of taxpayers' money in delivering the soil to a standard that, I can assure the member, will meet the qualities of any comparable area in the Dominion of Canada? Would he want us to have those standards less so we could get by cheaper? I'm having a bit of difficulty getting a firm grasp on the thrust of the member's attack.

The member talks about this tremendous interest by the trade unions and the $100 million they've got in investment funds.

MR. GABELMANN: Five billion, not $100 million.

HON. MR. MICHAEL: The member made a remark about $100 million. I'm only quoting what he said.

I'm wondering why this group was not up front and centre making their offer and their proposals to the proposal call of the B.C. Enterprise Corporation. Let's put some money on the table, and let's sit down and talk some business. But they weren't there, and I find it strange that the member brings up the matter at this time. He's got a tremendous amount of experience in real estate. He has a track record of making things happen. He is the recently proclaimed entrepreneur of the province.

[10:45]

MR. HARCOURT: A lot more successful than you, I'll tell you.

HON. MR. MICHAEL: Yes, perhaps he is. Maybe yes, maybe no. That's a subject for another day over a cup of coffee, Mr. Leader of the Opposition. I would hope, in view of the fact that you're the leader and he's not, that he's not more successful than you. But perhaps that again is a subject for another day.

Perhaps the member could have done some putting together, some parlaying, and got together the

[ Page 5998 ]

union leaders, VanCity and others familiar with construction and put in a bid on this project. I repeat that the opportunity was well advertised in journals throughout the province, the nation and the world, to offer this investment opportunity to developers. Several came forward. Due process was followed and a selection was made. It's my understanding that the offer was by far the best and most secure, with payments being guaranteed by an irrevocable letter of credit with the Canadian Imperial Bank of Commerce.

Perhaps there is criticism that we shouldn't have taken the deal along the lines of $50 million now and hundreds of millions later. If the Minister of Finance (Hon. Mr. Couvelier) was here he would probably somewhat agree with that. He'd like to have all those big dollars in his pocket immediately so he could put some more money in the privatization fund or the BS fund or in general revenue.

Mr. Member, you can't have it both ways. Deals are advertised. Deals are made. Negotiators are hired, there is shortlisting, a process comes into play, alternatives are examined and decisions are made. If you have an argument or a case that the deal that was made with Concord, led by Li Ka-shing, wasn't the best deal that was on the table, with adequate cash and all the frameworks for the negotiating process in place, or if you have any suggestion or evidence that the B.C. Enterprise Corporation did not recommend the best deal to the provincial government and the Minister, then get back on your feet and tell the Legislature the story. Because we're still waiting for this real onward thrust and attack on the previous minister and the BCEC. We want to hear more about what you say. I've been listening very intently up to now, but other than the fact that yes, we're going to pick up the whole cost of the cleanup of the land, I really haven't heard too much today.

MR. HARCOURT: I would like to ask the minister a question about the $50 million which we've received, which is the gross amount and gross in every which way. I'd like to ask the minister: when you deduct the cost of the cleanup of the Expo lands, which he has made clear the Social Credit government is 100 percent responsible for — which is different from what they were saying a few months ago — when you deduct the costs, the BCEC carrying charges of that corporation, from the closure of Expo to the sale, a two-year period, and when you deduct the cost of the province buying back land for at least the 2,000 units of social housing that are required, which we bought for $9 a square foot — I wish the Attorney-General was still here because he talked about that — we, the province of British Columbia, are going to have to buy the land back for $45 a square foot and up.

Mr. Minister, isn't it true that when you deduct just those three costs from the $50 million, the taxpayers of British Columbia will take a bath, will lose money on this deal, given that we're only getting $50 million between now and 1995? Isn't it true that the taxpayers of British Columbia will be taking a substantial loss for sure in the next eight years?

HON. MR. MICHAEL: I'm certainly thankful that we had the foresight and accepted the responsibility on the sale and development of that property to have thorough testing, a thorough analysis of the toxic materials in that soil. I'm thankful that somewhere, somehow, we did that homework. I am thankful on behalf of the residents of this province and all of the users of that property that all those matters were thoroughly examined and thoroughly looked at, with proper evaluation by experts from the Ministry of Environment to determine the quality of that soil.

I am proud of the fact that this government and the B.C. Enterprise Corporation, in their deliberations and negotiations, accepted the responsibility to deliver those lands and soils to the developer to an environmentally acceptable standard. I think it's good business, it's the right decision, and I think it's the decision that the vast majority of the residents of the province of British Columbia would have wished us to have made.

I can assure the member, when all is said and done, that yes, it's going to cost money; there is no question about that. There is no question that it's going to cost a lot of money. But those soils will be delivered to the developer environmentally clean, Mr. Member, Mr. Leader of the Opposition, and we're proud of that.

Perhaps you should tell us how you would have done it, Or perhaps you should stand in this House and tell the members present how you did do it in the development of the properties opposite in False Creek. Stand up in this assembly now and tell us the thorough analysis you did in making sure that those lands which were built on were environmentally clean. I know there are lots of members on this side of the House, Mr. Leader of the Opposition, who would like to hear your comments on that subject.

MR. CHAIRMAN: I would just like to remind hon. members once more before we continue that this debate goes through the Chair. Thank you.

MR. HARCOURT: The minister didn't respond to my question; I am still waiting for an answer. He says it's going to cost lots of money. I assume from that that you are confirming what I said, that when you deduct those three costs I've just outlined for you, the taxpayers of this province, at least for the next eight years, for the $50 million which is all we are going to get between now and 1995 — Mr. Chairman, the minister is confirming; I'd like this a little more explicit — are going to be taking a bath to the tune of millions and millions of net dollars.

The minister has also said that he is very proud of the cleanup efforts that are taking place on the north side of False Creek, that complete studies have been done. Those studies have been analyzed and they will be carried out. I would like to say to the minister that we have been asking for the contract on Expo to be tabled. It is about a year late from when it was originally

[ Page 5999 ]

supposed to be tabled. I would hope that the minister would be a lot quicker in tabling before this House those studies of which he is so proud in terms of the environmental cleanup. I would like a commitment from the minister that he will be able to table forthwith those environmental studies which he has been privy to before this Legislature during his estimates. I would like the minister to be able to give us that commitment.

HON. MR. STRACHAN: It is amazing what you can arrive at when you don't know what you are talking about. Listen, you're from Vancouver, right? This has been reported in the paper. As a matter of fact, I am bringing in a copy of the Sun that really outlines the process. There is a remediation group that we are working with. It includes Dr. Blatherwick; it includes David Boyes. Everything is going public. Much of the first studies was made public December 19. The standards will be made public; they are standards that we have developed in conjunction with the Canadian Council of Resource and Environment Ministers in other Canadian governments. The whole process is going to be made public, and you know it. You are trying to kid us, but that's nonsense. Don't you ever read the paper?

MR. HARCOURT: I see that we now have two ministers making a commitment to table those documents, not just in the Vancouver Sun or the Vancouver Province or with the staff in the city of Vancouver. We're representing the people of British Columbia; maybe I should remind the Minister of Environment of that. He doesn't seem to recognize it very often in his duties. We in this Legislature are representing the people of British Columbia. That's where these documents should be tabled. So I am asking once again, Mr. Chairman, whichever minister wants to do the Alphonse and Gaston routine about who is responsible for this problem: are they making a commitment to table in this Legislature forthwith those documents, so that we can have a look here in this Legislature representing the people of British Columbia, not representing the subscribers to the Vancouver Sun or Province, or the Vancouver health department?

HON. MR. MICHAEL: Mr. Chairman, I am very honoured and pleased that the Leader of the Opposition is here today. I have really missed you in the assembly; it's nice to see you around once in a while. Perhaps if you would spend a bit more time in the Legislature than you have over the last couple of weeks, you could speak in the assembly and would have had this document tabled much sooner than it will be now. You have heard the response from the minister, and it would appear to me that you are going to have your request satisfied in very short order.

I find some of the remarks still so very interesting, coming from the first member for Vancouver East, who has spent years in the planning business. He's a man whose profession is based around the word "planning," a man who has traveled the province extensively in his previous vocation. That he should suggest in this assembly today that we should have broken the Expo lands into a bunch of small parcels is indeed a planner's dream. What a lovely opportunity to put in those fancy bills and charge us all buckets of money to try to unscramble a bunch of small units. Surely the member must be aware that the land was not subdivided to allow small sales, and that we would lose the opportunity to create an overall, comprehensive development which the city council and the mayor wanted.

[11:00]

The parcel of land in its entirety was advertised nationally and internationally. Everybody had an opportunity to put their offer on the table, including the trade union funds of which you speak. The offers were sorted; they were short listed; there were alternatives set out and analyses done taking all kinds of factors into consideration. The clear winner was the firm selected. I would like the member to give us some of his words of wisdom on the process that was followed and how he would have done it.

One of Canada's most respected commercial investment real estate companies gave the following report, Mr. Chairman, and I will read from the article: "Colliers Macaulay Nicolls Inc. president Kelly Heed said critics who think the province should get more money for the Expo site forget that it consists of raw, unserviced land that does not fetch the same price as serviced property." You're looking at about $1.9 million an acre, which is a pretty skookum number. You then have to develop it to a commercial and residential state, a much different situation than what the member speaks of about examinations of property that he's conducted in the last little while, where it was ready for development instantly.

Needless to say, in looking at the activities that have taken place since this sale about one year ago, they have still not poured the foundation for the first building. Indeed, negotiations are going on and on, and we don't know how long those are going to last. But I can say — and I repeat for the record — that when it comes to the cleanup, we will spend what it takes to clean those lands to an acceptable environmental standard. The Minister of Environment determines those standards. Those standards are determined now, and I think the members opposite and the people of the province — and indeed the planning division and council of the city of Vancouver — will find those standards acceptable.

MR. CHAIRMAN: Just before we proceed, hon. members, the second member for Central Fraser Valley asks leave to make an introduction.

Leave granted.

MR. De JONG: It's my pleasure this morning, together with the first member for Central Fraser Valley (Hon. Mr. Dueck), to welcome to our facilities approximately 55 students, with their teachers, from the Philip Sheffield Elementary School in Abbotsford. Approximately half of them are in the gallery right now, and the others are visiting the museum. I think

[ Page 6000 ]

the other group will be here later on to view the ongoing proceedings of the House. I would ask the House to give them a cordial welcome.

MR. WILLIAMS: I too would like to acknowledge the students from Philip Sheffield. There are some famous failures from Philip Sheffield High in the valley, and there are some famous successes. The Premier and my wife are both from that high school. You can make your own choice in terms of how you would attach the descriptions.

The minister says that breaking the lands up into many pieces is kind of a crazy idea, but if you want to optimize value and return for the people of British Columbia, then that is indeed the way to do it. You know, in terms of your own practice, that breaking it up into smaller parcels makes more money for the owner. In your heart of hearts you know that if you break it up into 50-ft. lots rather than selling two miles of shoreline, you make a lot of money. That's the way it goes. That's the system. But we didn't do that.

HON. MR. STRACHAN: Wrong again!

MR. WILLIAMS: No, no, I'm all too right.

It really doesn't add up. But as a citizen of Vancouver I am pleased that the minister says whatever it costs to clean it up so that it's environmentally safe will be done. Will the minister then advise the House that if the cost is $400 million to clean it up he will happily pay the bill?

HON. MR. MICHAEL: Mr. Chairman, the gross exaggerations — far beyond reason — that can be expressed in this assembly never fail to amaze me. The figure is grossly exaggerated, completely out of the ballpark, and the member knows that; so he doesn't really deserve an answer when he talks about those kinds of figures. It's plain and simple, and I don't think it deserves or requires a lot of debate. The land will be cleaned and delivered to the developer to a standard that is acceptable to the Minister of Environment.

MR. WILLIAMS: How much will you pay?

HON. MR. MICHAEL: It's going to cost money, but we're proud of the fact that we on this side of the House care about the environment. It's going to cost a lot of money — let's get the record straight. Nobody has denied that. But it's going to be cleaned up to an acceptable standard for the citizens of this province.

I just have to set that member straight in one particular area. He sort of touched on something personal, about how it's always better to break things into smaller parcels and you make more money. I'll make that member an offer across the floor that if he is interested in examining books.... He's very good at opening his own up on occasion; I recollect here back in 1976 he had a good look at them. If you want to come in and have a lesson on breaking up properties and making lots of money, Mr. Member, I can tell you it doesn't always work that way. I'm standing in this House today as a living example that it doesn't always work that way. If you would like to get into that subject any further, come on down to the office and we'll have a cup of coffee and talk about some of the past real estate happenings that you and I have both had a bit of experience in. It doesn't always work that way.

I'm still waiting. I do hope that it's going to come out pretty soon, because I'm very anxious to hear about these accusations about the other dealings with the BCEC. I'd like to hear about them, because I repeat that a cloud is hanging over their heads right now.

The member is laughing; he thinks this is funny. He's laughing out loud in this House about the fact that he is tainting the reputation of reputable people in this province. I think it's shameful, and the member should either rise now, apologize to these individuals and withdraw what he said, or put the facts on the table.

MR. WILLIAMS: These debates will carry on for some time, and I think they will be very interesting, Mr. Minister. We'll see.

The question of the contaminated lands. It looks very clear, at this stage of the game, that the Vancouver parks board ain't going to touch them with a ten foot pole. That's what it looks like to me. We have a major park on the east side of these lands that's part of the plan. We have a city parks board that's not going to accept it, at this stage anyway. Are you saying that you're going to see that these lands are cleaned to the point where they are acceptable to the Board of Parks and Recreation for the city of Vancouver?

HON. MR. MICHAEL: Assumptions; conjecture. I don't know where the member gets his information, but I think that it's another example of follow-through on some of the other wild things that he has said in this assembly today. I repeat, Mr. Chairman: the hour is passing, it is now 11 minutes past 11, and I am waiting very anxiously for some evidence on these other land sales that he has put in the area of suspicion — a cloak of doubt.

Perhaps the member would be good enough, if he is not going to lay some evidence on the table here today.... I feel there are other members on that side of the House who are also waiting very anxiously, because they too are concerned about the reputation of citizens, people serving in senior positions, people serving on committees. Many people in this House today are looking forward to some hard evidence of what that member was alluding to. If he is not going to withdraw, if he is not going to put some facts on the table, perhaps the member could assure the House that he will make the same statements outside the House, in the corridor, as he made in this assembly.

MR. CASHORE: I have in my hands a draft of the report on the Pacific Place soils remediation program, evaluation of remedial action alternatives, par-

[ Page 6001 ]

cels 8 and 9, dated January 1989. A few moments ago I heard the minister say that he felt that the first member for Vancouver East (Mr. Williams) was exaggerating when he was commenting on the potential costs of what might be involved in cleaning up the site. I would draw the attention of the minister to this report on page 37, number 7.2, alternative 9(b): "Excavation of contaminated soils and disposal at Arlington, Oregon." It goes on to give a general description of this process, and it comes down to economic analysis.

"Excavation — $4,570,000. Soil stockpiling — $640,000. Soil loading (Truck) — $1,730,000. Hauling to Arlington — $143 million. Disposal charge (Arlington) — $287 million. Backfill placement — $20,470,000. Decontamination — $750,000. Dewatering — $900,000. Water treatment — $300,000. Barrier wall — $3.5 million. Soil water analysis — $3,120,000."

Do you know what the subtotal is, Mr. Minister who says that my hon. friend is exaggerating? The subtotal is $465,980,000. It then goes on to add in: "Engineering and inspection — $3 million. Contingency — $9 million." The grand total is $477, 980,000. I understood the question to be: "If that's what it takes, are you willing to force the people of British Columbia to pay that amount?" We want an answer, Mr. Minister.

HON. MR. STRACHAN: As the member indicated, that was one of the remedies that was explored. There are many. I can assure the Legislative Assembly that although we do examine all remediation processes, I doubt if that is the one we'll be doing.

[11:15]

MR. WILLIAMS: The standards are changing.

HON. MR. STRACHAN: No, no. That's the trucking remedy. The standards are not changing. The standards are published and will be made available. We reckon the costs actually to be $15 million to $17 million. There's no change of standards; the standards have been approved by cabinet.

The member is looking at one worst-case scenario, which is trucking the soil to Oregon. I think it's wise to examine all alternatives, and that doesn't necessarily mean you have to accept them.

MR. GABELMANN: Yesterday the minister indicated he's proud of the fact that when he's asked questions, he always answers those questions. He's indicating by his body language this morning that he's proud of that always. The problem is that when you ask the minister what time it is, he says: "I think it's the twentieth century." That's about as close as he gets to an answer, time and time again. That certainly is true in terms of the question I asked last week and the answer tabled yesterday.

I want to give the House a brief respite from this debate while the minister collects his thoughts and begins to find the answers to some of the questions raised earlier this morning. I want to move on to another topic for a brief while. We'll be back.

Last week in question period I raised the question of what is commonly referred to as the STOB 20 allocation in the supplemental estimates, which this year is in the amount of some $430 million. More precisely, it is — I have to put my glasses on; I'm getting old — almost $426 million.

We're talking here about 25 percent of the cost of salaries and benefits paid out by the provincial government and is being paid out in personal service contracts. I want to say at the outset that some are necessary and appropriate; some are unquestionably — and will always remain — a feature of any government's operation.

I would like some answers from the minister as to whether we are looking at 3,000, 4,000 or 5,000 people — or just what the exact number is — who are on personal service contracts, who for every other purpose are regular employees of government, and who have signed personal service contracts that have, as the contract language, the job description for the regular public service job they are doing. In many cases their contract is word for word the same as the job description.

These are people who have desks in government offices, who have listed telephone numbers, whose names appear in the government telephone book, who do regular work and who, according to the Income Tax Act of Canada, are employees but are not employees as defined by this government, because they are not paid through regular channels but through personal services contracts.

This is to accomplish several purposes. The first is to try to preserve the myth that the government is inexorably reducing the numbers of full-time-equivalent positions in the public service, from approximately 34,000 in '84-85 to a projected 27,000 in this budget. It is also designed to accomplish a union busting goal of government, which is simply to say: "We will reduce the power and effectiveness of our employees' ability to protect their positions and their contracts by setting up this competitive group of public employees who have no protection." This gives management the right to unfettered and unlimited power over employees — and these are employees. I understand that in some cases some of these employees even have superannuation deducted.

Before I go any further, I wonder if the minister is prepared to tell me, first of all, how many personal services contracts are in place today in British Columbia.

HON. MR. MICHAEL: First things first. I am not prepared to interfere or cross lines of jurisdiction and authority, getting into other ministries of government. If you wish to put those questions forward, Mr. Member, you are perfectly at liberty to do so. Far be it for this minister to start talking about the Ministry of Native Affairs, the Ministry of Labour, the Ministry of Crown Lands, the Ministry of Education, of Attorney-General and of Finance. You are going to have to take those up with the respective ministers as their estimates are debated in this House. I have no knowledge, wisdom or foresight to be able to analyze

[ Page 6002 ]

the enormous amount of material contained in those STOB 20s you refer to.

MR. GABELMANN: When I was considering how I might approach this question, I in fact thought about raising the question ministry by ministry, anticipating the minister would attempt to dodge the issue by that kind of mechanism. I chose not to raise the question ministry by ministry but instead to talk about government management, which I thought the minister was responsible for. He now says he's not really, that the ministers all run their own shows.

He has no responsibility for government management, apparently, based on his answer. It's clear, looking at the way the government is being managed these days, that nobody is in charge. I am surprised to find the minister tell us in this House that he isn't in charge either.

I haven't, for example, Mr. Chairman — nor will I — raised the fact that in the Ministry of Forests there is $115 million for salaries of employees, and in that same ministry there is $225 million for personal service contracts in the STOB 20. I'll get into that discussion when we get to the Ministry of Forests.

What I want to find out now from the government is a simple question. In the whole government, not the minister of this, the minister of that, or the minister of the other, which this minister manages — it's the name of his ministry — how many personal service contracts are in existence today? If you can't be precise about today, is it 10,000? Is it 3,000? Which number might be closer?

HON. MR. MICHAEL: Not wanting to be repetitious, if the member has questions dealing with Attorney-General or Forests, be my guest. But I can tell you that if the member is attempting to equate the dollars with FTEs, he's going to have a very difficult time, because it just doesn't work that way. In my ministry, as an example, we have dollars in our section, and I can say that large portions go to such areas as B.C. OnLine and the B.C. Systems Corporation.

The member is well aware — it's been stated previously in this House — that we have undertaken a lot of restructuring efficiencies and a degree of additional privatization at the Queen's Printer. Yes, a fair amount of money goes in the way of services and contracts to printing firms. I am assuming that the vast majority of them, if not all, are located in the Victoria region. For the member to ask me to identify how many employees work in all of these contracted printing firms is somewhat onerous, I think. As well, if the member was listening when I introduced my estimates, I referred to a new division of my ministry: the office of information technology and security. Indeed, a good many dollars are going in that direction.

I don't know what the figure is. I would guess that if you looked at all of the personal service contracts — the small ones, the big ones, the middle ones.... They contain all kinds of things. They contain not only wages, benefits and, perhaps, vehicles, transportation, pens and paper, travel and hotels.... I have no way of examining them, nor any knowledge of all of these.... Suffice it to say that I suspect there are thousands of them. This is a big province. We have three million people. We have a budget of some $13.5 billion, and much of it is spent on contracting for services. We know that's not the way the members opposite would manage the government; they would want more employees, a fatter government. We know the basic figures. We know that as far as FTEs were concerned, there were 39,965 in the province on April 1, 1983.

MR. MILLER: Are you saying there are enough?

HON. MR. MICHAEL: I am telling you today, Mr. Member, that through good management, restructuring, privatization and cost-effective delivery of services to the people of British Columbia, that figure has been reduced to 27,335.

MR. MILLER: Are you saying there's enough?

HON. MR. MICHAEL: I want to say to the member for Prince Rupert, who is shouting out — a member who is soon to have tremendous benefits as a result of an initiative from this ministry in the way of a first-class cruise vessel pulling into his community.... There will be tens of thousands of tourists arriving in his community as a result of our initiative. All that member has done up to now is criticize this government and criticize the initiatives we're putting forward. We're attempting to do positive things for his community and, indeed, for the province of British Columbia.

I realize the member for North Island (Mr. Gabelmann) is probably getting a great deal of pressure from the BCGEU to try and sort this out. I know it's a problem; it's of concern. He's aware, with his past experience with the B.C. Fed — the member and I used to work together quite closely in the late fifties, early sixties — that there's a union grievance pending. He's aware that due process is in full play and that the union, led by Mr. Shields, has put forward a grievance. This will be dealt with properly within due process.

He's also aware that there are federal and provincial laws determining employee-employer contract relationships. For the record, I certainly make no apologies for personal service contracts. In all instances I've examined, I think it's good business. It gives a tremendous amount of flexibility in managing one's workforce. Perhaps the member is somewhat misinformed or perhaps not aware that it's not the Minister of Government Management Services that sets the guidelines on how and when personal service contracts are established. I have to inform the member of the facts of the matter. If he is wishing to get into the matter any deeper, perhaps he should speak to the minister responsible for the establishment of those guidelines and wait for the estimates of the Minister of Finance and Corporate Relations (Hon. Mr. Couvelier).

[11:30]

[ Page 6003 ]

MR. GABELMANN: What the minister is saying to us this morning is that he doesn't have anything to do with running the government management services. I understood he was the minister responsible for the public service in British Columbia. I understood he was the minister responsible for the people who work for the government. But he is saying to us this morning that the government doesn't operate that way, and that there are 20 or so managers who run their own show independent of each other. I didn't know, for example, that there were 20 or so Public Service Commissions in British Columbia; I thought there was one. I even thought I knew the personnel on the Public Service Commission. But the minister is saying he doesn't have these responsibilities, and that I can't ask questions about government management in this House in his estimates. If I can't ask about government policy in respect to FTEs and how they get around giving people union protection as a government policy, which minister can I ask? It is clearly this minister.

Mr. Chairman, I want to ask the minister whether or not the rules governing the establishment of these personal service contracts still include the provision that contracts are to be set up as "pure" as possible to establish an "arm's length" between the contractor and the ministry and to avoid an employer-employee relationship.

HON. MR. MICHAEL: Mr. Chairman, I truly respect and enjoy the questions put forward by the member for North Island. His homework, his delivery and the tone of his questions are, as always, aboveboard and well presented. First-class marks, Mr. Member.

Perhaps he should understand that the minister of whom he is asking the questions does not have all the powers that he thinks the minister has. In this government, Treasury Board and the Minister of Finance have a great deal of say — a tremendous amount of say — about what any minister does or spends in this government. Having had the experience of working in this government, I would not recommend any changes, Mr. Member, because the central control of spending, and guidelines and rules and regulations for expenditure and contracts as set down by the Minister of Finance, keep that lid on spending, whether it be capital, repairs and maintenance, personal service contracts or whatever.

I would certainly commend the Minister of Finance and Treasury Board for the tremendous job they have done in bringing about the economic situation we have with our balanced budget. I would not want it any other way. I repeat, if the member wishes to get into this, that I would like to be able to answer his questions but I can't. They are questions that must be asked of the Minister of Finance, who is responsible for the establishment of the guidelines.

MR. GABELMANN: I want to be sure I understand this correctly. The Minister of Government Management Services, who is responsible for the Public Service Commission, is saying that he and his ministry have nothing whatsoever to do with the rules concerning FTEs, the rules concerning personal service contracts, that all of those questions exclusively reside in the domain of the Ministry of Finance. Is that what I understand?

HON. MR. MICHAEL: For the third time, the figures outlined and shown in STOB 20 do not relate to FTEs. It is an all-encompassing figure. Personal service contracts and the terms and guidelines are set by the Minister of Finance. The details contained in STOB 20, in the various ministries, are the responsibility of the various ministries of government. We have identified what we see as the total FTEs in the current fiscal year, that being 27,335; and yes, the Minister of Government Management Services certainly is responsible for the quality and effective delivery of many things, including pensions, dental plans, life insurance plans, long-term disability, sick leave, extended health care and medical care plan deductions. In all those types of things we serve the cross-section of government and we serve a tremendous number of Crown corporations and government agencies.

I'm not sure whether the member is aware, but in our superannuation society and our pension plan.... It was a shock to me when I saw the figure. We cover some 625 employer groups. We have an active membership slightly in excess of 161,000 people in the province of British Columbia. That's not counting the pensioners. We provide service to a wide range of ministries, municipalities, hospitals, water improvement districts and fire brigades. The list goes on and on.

The Ministry of Government Management Services provides services to other ministries by way of the B.C. Systems Corporation: telephones, data processing and computers. We look after the accommodation requirements of government. We have some 10,000 tenants in the province of British Columbia. We manage 3,500 buildings, 2,500 of which we own ourselves. We provide those types of services to government.

The Minister of Government Management Services looks after the purchasing requirements of government, not only of the ministries but of the B.C. Ferry Corporation. The vast majority of the business is directed through the Purchasing Commission. We're doing a great job; we talked about that yesterday. Government Management Services delivers services to those ministries.

We do it in many other areas. We provide the vehicles. Some 4,800 vehicles are managed by this ministry, again a service to the other ministries in government. Airplanes: we had short discussion about them yesterday; another quality service provided by this ministry.

Regarding STOB 20, Mr. Member, particular questions dealing with that STOB must be directed towards the respective ministries. As for the guidelines as to how you go about it, and the parameters you must stay within regarding entering into personal service contracts, I would respectfully request,

[ Page 6004 ]

Mr. Chairman, that the member address those questions to the Minister of Finance.

MR. GABELMANN: Is the minister telling me and this House that different ministers would have different policies in respect of how contracts were established — that there is no overall government policy? I don't believe that.

The minister told us a bunch of things he does. Let me read from the estimates something else that the minister does and that we are in fact discussing when we discuss these estimates. On page 108: "This subvote also provides for the planning, development and administration of personnel policies...."

I don't think members of this House need to be reminded what this process is that we're in the middle of at this moment. We are determining whether or not we should grant this minister money to carry out his activities, and before we can grant him his money we need to know how he is spending it and why, and what policies govern that expenditure.

We've heard discussion in this province about open government. We haven't seen much of it, but we've heard lots of discussion about it. Open government would include answers to questions that relate to money the minister is asking this Legislature to spend. The money includes expenditures to help plan, develop and administer personnel policies.

The truth of the matter is that a personnel policy of this government is to deunionize the public service — as best they can, given the current collective agreements. That's what the objective is. That's what the goal is, and this minister is the quarterback.

As members of this House know, I am always prepared to back off and say I'm wrong, if I'm in the wrong area, and direct my question to another minister. But when I asked the question of the Minister of Government Management Services in the Legislature last week about STOB 20, the minister didn't stand up and say: "I'm sorry, you should have directed that question to the Minister of Finance (Hon. Mr. Couvelier)." Even upon reflection over a few days, he didn't come back to this House with an answer saying: "That's not my ministry; it's the Ministry of Finance." He filed with the House an alleged answer to my question. I assume from that that the minister takes responsibility for this entire question of personnel practices and policy of the government, and if I'm going to be asked to vote in favour of giving this minister money to carry out his duties, I want to know what his plans and objectives are and what he's doing. I think the public of this province has a right to know how $426 million of its money is being spent and why.

I said at the outset that all of us in this House will acknowledge that there are some expenditures under that item that are appropriate to be there — no question. But when the federal government issues a directive to the Deputy Attorney-General saying, "By September 1989, you'd better start deducting income tax, UIC and CPP from these 'employees'...." In effect, the government of Canada was saying to the government of B.C.: "You're breaking the law." We've got some serious questioning to go through here.

I guess the first question is: does the minister still say that he is not responsible for personnel practices for the province of British Columbia?

[11:45]

HON. MR. MICHAEL: I guess what the member hasn't got clear is the difference between personnel policies and personal service contracts, and I can understand the confusion. If the member wants to talk about personnel policies for government employees, we are in charge of establishing and circulating the guidelines regarding personnel policy.

We are in charge of the negotiating process. We sit down and bargain the contracts with the BCGEU and all of the subs. We also have a policy manual on benefits, leave, discipline and all those things: personnel policy.

I don't know if the member has ever seen — I'm sure he has with his past experience — a personnel policy manual. A personnel policy manual is much different from the personal service contract. Go to a Crown corporation or to a private corporation; go where you want. You'll find that personnel policy is administered by the industrial relations personnel division. They administer it, they supervise it, and they compile it for recommendations to the chief executive officer for approval.

Conversely, when you look at personal service contracts, you're dealing with a brand-new subject. Whether you go to government, Crown corporations or private industry, you will find that in the vast majority of cases, the framework and guidelines for the establishment of personal service contracts are administered by the financial division — for government by the Ministry of Finance and Corporate Relations, and for private industry by the comptrollers.

The member opened up with a bit of confusion and perhaps didn't fully hear. Perhaps he was having a conversation about what I said earlier. He rose and started off by talking about every minister having different guidelines. He perhaps drew that remark from when I said that if he wanted to talk about the specifics, the volume or what was in these STOBs in various ministries, he would have to talk to the various ministries as to what the contents are.

I've tried to explain to the member the main ingredients of the highlight items from my ministry. If he wishes to ask for the highlight areas in other ministries, he should talk to the other ministries. It's the exact opposite of what the member said about every ministry having different guidelines. That's the reason it's got to come from Finance. That's basic to what it's all about. We want to have rules and regulations, conformity and frameworks to work within, and that's the reason the Minister of Finance (Hon. Mr. Couvelier) is in charge of setting out those guidelines. As I said earlier, by and large he's done a great job in setting them out. But the question of whether or not there are people.... Indeed, we admit that there have been instances where we've had to go in and make corrections.

[ Page 6005 ]

AN HON. MEMBER: Oh, oh!

HON. MR. MICHAEL: Yes, we admit that.

I want to tell you something else, Mr. Chairman — to the first member for Vancouver East (Mr. Williams), who just returned to the House. He disappeared for a short time. I'm pleased to see him back now, because we're still awaiting his words of wisdom. I'd be interested in seeing what he said to the press in the corridor in his brief absence from the Legislature.

If there are any further violations, if we're not abiding by the rules.... We have a good union headed by John Shields; they keep an eye on us. As you know, there are grievances pending right now, and if we're doing something wrong and we're found guilty, we'll make corrections. After all, when you have 27,335 employees, plus a number of personal service contracts, there's got to be somewhere along the way that we're not abiding by the exact letter of the law. If there's a mistake, we'll admit it and we'll correct it. We have done it in the past; we'll do it in the future. I am sure the federal government is also very interested in this subject, but we'll listen and look forward to the due process. We will see what happens with the grievance that's been brought about by the BCGEU, and if corrective action is required, then corrections will be made.

MR. GABELMANN: Mr. Chairman, I'm glad the minister took so long in his answer, because his initial patronizing comments were so offensive to me that I might have said some things that shouldn't be said in this place. I think it's just not necessary to be patronizing in the way the minister is.

I don't think the minister knows what's going on in his own ministry. He talks about the union and the public service, and the BCGEU. He should know there are two other unions in the public service: the PEA and the BCNU. He talks about a grievance pending from the BCGEU. He should know that there is already an arbitration board established, with a chairman appointed, for a PEA grievance on this same subject. He doesn't seem to know that, or if he does know it he doesn't think it is important to share it with the House. I think what we in fact have is a minister who does not have a clue about what is going on and is not giving any direction to his ministry.

The minister says I can't raise these guidelines questions about employee-employer relationships with him because they belong to the Ministry of Finance. May I ask the minister, Mr. Chairman, whether GPSD vets or looks at these proposed rules or, as they are called, guidelines for contracts? Does the GPSD have any involvement whatsoever in assessing the appropriateness of these guidelines, first of all?

HON. MR. MICHAEL: Mr. Chairman, in government there is a tremendous amount of communication between one ministry and another. I am sure the member is aware of that. I think it goes without saying that if the Minister of Finance is going to be talking about guidelines for personal service contracts, naturally communication and advice would be sought from the senior staff in my ministry and the personnel services division. I think that is good business; the more that senior civil servants communicate with one another.... They seek advice from professionals in the field. That's good; it's excellent; and I am pleased to report to the House that it's going on.

I do think it is important — and I don't think the member opposite would disagree; I haven't heard him disagree — that the real control of the guidelines of the personal service contracts, the final say, the document that is issued to the various ministries, should certainly be put out under the letterhead of the Minister of Finance.

MR. GABELMANN: I take it that the answer is yes, that the Ministry of Government Management Services through GPSD would involve itself in discussion about the nature of the guidelines affecting contracts.

I asked the minister earlier — unless I missed it, I don't think I got a straight answer or an answer at all — whether or not this quote I read from the guidelines was still the current guideline. Is it still the government's intention — as it's put by various managers — to try to establish the fiction of an arm’s-length relation, when in fact there is no arm's-length relationship?

The minister patronizes me; I try to avoid doing the same to him, but maybe he doesn't understand it. What often happens in government is that the Minister of Finance establishes a set number of employees or FTEs per ministry, per operation, per commission and whatever else, and when you reach that number you can't hire any more employees. You're managing an operation, you're one secretary short and you can't hire another secretary because you've reached your limit. You go out and hire a secretary on a personal service contract. As I understand it, you don't even have to go to Treasury Board with that. You just do it. It's part of your regular management.

It seems to me that if the government personnel philosophy is guided by policies that enable that kind of activity to occur, then we need a full and frank discussion about what the government is intending to do with these policies. Is it designed for public relations purposes, to pretend you don't have as many people working for you as you really do? Or is it designed, in fact, to break the union and to deny these workers the protection of a grievance procedure, the protection of job security and all of the other protections that come with the collective agreement? Which is it? These vast amounts of money — this year $430 million, out of which I would guess some $300 million or more is spent on employee salaries — are designed for which purpose: to make you look better in terms of how many employees you really have, or to union-bust? Which is it?

HON. MR. MICHAEL: I take a great deal of offence to any use by members opposite of the word "union-busting." I think it is a negative and, I would

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go as far as to say, despicable remark. We have protection for the trade unionists in this province, and we have a clear record of the highest number of trade unions and percentage of members of trade unions in Canada, if not in North America. Trade union strength and membership has grown dramatically in the province of British Columbia since the first Social Credit administration in 1952. In all those years we've heard from the members opposite about how this government is trying to union-bust and tear down trade unions and what have you. I suggest that you look at the facts and the records to see that we in British Columbia have the highest average wage. We have good, strong union membership. When you compare that with the NDP province of Manitoba, we stand up alongside them anytime and show the average wage....

By the way, that political party in Manitoba bragged in their last budget that they were province with the lowest wage in western Canada. How shameful to stand up in this assembly and talk about us union-busting.

MR. CHAIRMAN: I'd bring the hon. member's attention to the clock and ask that the appropriate motion be forthcoming, please.

MR. GABELMANN: 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. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 12:00 noon.