[ Page 11045 ]

CONTENTS

Routine Proceedings

Oral Questions

Taped conversations of Attorney-General. Mr. Williams –– 11045

Closing of Canadian consulate in San Francisco. Mrs. McCarthy –– 11046

Taped conversations of Attorney-General. Mr. Gabelmann –– 11046

Independence of the office of Attorney-General. Mr. Gabelmann –– 11046

Closure of Duffey Lake Road. Mr. Rabbitt –– 11047

Independence of the office of Attorney-General. Mr. Gabelmann –– 11047

Mr. Williams

Mr. Miller

Arsenic and lead residues in Wells area. Mr. Vant –– 11047

Vancouver Stock Exchange Amendment Act, 1990 (Bill PR401).

Committee stage. (Mr. Mercier) –– 11047

Third reading

Committee of Supply: Ministry of Regional and Economic Development estimates. (Hon. S. Hagen)

On vote 56: minister's office –– 11048

Hon. S. Hagen

Mrs. Boone

Mr. G. Janssen

Mr. Clark

Ms. Marzari

Mr. Jones

Ms. Cull

Mr. De Jong

Mr. Barlee

Assessment and Property Tax Reform Act, 1990 (Bill 49). Committee stage.

(Hon. L. Hanson) –– 11075

Mr. Blencoe

Mr. Clark

Ms. Marzari

Third reading

Game Farm Act (Bill 9). Second reading. (Hon. Mr. Savage)

Hon. Mr. Savage –– 11084

Ms. Edwards –– 11085

Hon. Mr. Savage –– 11086

Food Products Standards Act (Bill 57). Second reading. (Hon. Mr. Savage)

Hon. Mr. Savage –– 11086

Mr. Barlee –– 11087

Hon. Mr. Savage –– 11087

British Columbia Wine Act (Bill 58). Second reading. (Hon. Mr. Savage)

Hon. Mr. Savage –– 11087

Mr. Barlee –– 11088

Hon. Mr. Savag –– 11088

Health Professions Act (Bill 31). Second reading. (Hon. J. Jansen)

Hon. J. Jansen –– 11088

Mr. Perry –– 11089

Hon. J. Jansen –– 11089

Community Care Facility Amendment Act, 1990 (Bill 43). Second reading.

(Hon. J. Jansen)

Hon. J. Jansen –– 11089

Mr. Perry –– 11090

Ms. Marzari –– 11090

Hon. J. Jansen –– 11091

Health Statutes Amendment Act, 1990 (Bill 61). Second reading.

(Hon. J. Jansen)

Hon. J. Jansen –– 11091

Mr. Perry –– 11092

Hon. J. Jansen –– 11092

Family and Child Service Amendment Act, 1990 (Bill 45). Second reading.

(Hon. Mr. Jacobsen)

Hon. Mr. Jacobsen –– 11092

Ms. Marzari –– 11093

Hon. Mr. Jacobsen –– 11093

Guide Animal Act (Bill 47). Second reading. (Hon. Mr. Jacobsen)

Hon. Mr. Jacobsen –– 11093

Mrs. Boone –– 11093

Hon. Mr, Jacobsen 11093

Labour and Consumer Services Statutes Amendment Act, 1990 (Bill 51).

Second reading. (Hon. Mr. Jacobsen)

Hon. Mr. Jacobsen –– 11094

Mr. Blencoe –– 11094

Mr. Perry –– 11096

Hon. Mr. Jacobsen –– 11097

Solicitor General Statutes Amendment Act, 1990 (Bill 62). Second reading.

(Hon. Mr. Fraser)

Hon. Mr. Fraser –– 11097

Mr. Gabelmann –– 11097

Hon. Mr. Fraser –– 11098

Committee of Supply: Ministry of Solicitor-General estimates.

(Hon. Mr. Fraser)

On vote 61: minister's office –– 11098

Hon. Mr. Fraser

Mr. Clark

Mr. Lovick

TUESDAY, JULY 17, 1990

The House met at 2:03 p.m.

HON. MR. REYNOLDS: Mr. Speaker, I would like to introduce one of Canada's greatest citizens. Dr. Ian McTaggart-Cowan, who has the Order of Canada, is in the gallery this afternoon. Dr. McTaggart-Cowan is one of British Columbia's — and Canada's — outstanding scientists, educators and environmentalists. He is also chairman of the public advisory board to the habitat conservation fund and has been a member since 1981. I would ask this House to make him very welcome here in the Legislature.

MR. PERRY: On behalf of this side of the Legislature, I welcome Dr. McTaggart-Cowan as well. I had the pleasure of studying briefly in his department, where he is a very famous and popular teacher. So it's a pleasure to see him here today.

HON. MR. SAVAGE: It's my pleasure to rise in this assembly today to introduce the High Commissioner for the Kingdom of Lesotho. Would you please welcome His Excellency Raphael Kali.

Also in the precincts today are the husband of my ministerial assistant, Mr. Dave Logie, and their son Michael. Would the assembly please make them welcome.

MR. G. HANSON: Mr. Speaker, I have three guests here in the legislative gallery today: Barbara and Danny Pedrick and their daughter. I wonder if the House would please make them welcome.

MR. PELTON: With the House's indulgence, I have two introductions to make today. First of all, hon. members, our Speaker's brother and sister-in-law are in the gallery today, and I would ask you to extend a very warm welcome to Martin and Sue Rogers.

Also, most of you might know Mrs. Joy De Casseres, who has served our caucus long and well. Her sister, Mrs. Phyllis Murray, is with us today from Hawaii and also her granddaughter, Katie Stevens, from Oklahoma. I wonder if you would extend to these two beautiful ladies a nice warm British Columbia welcome.

MR. VANT: It gives me great pleasure to introduce Sharon Franks and Ryan Nelson from the Quesnel area in the northern part of the great Cariboo constituency. I know the House will give them a warm welcome.

HON. MR. BRUMMET: I know that Jim Fry, the government agent from Fort St. John, is in Victoria for meetings today. I notice he is in the gallery, and I would like the House to make him very welcome.

Oral Questions

TAPED CONVERSATIONS
OF ATTORNEY-GENERAL

MR. WILLIAMS: To the hon. Premier. The Deputy Attorney-General moved quickly and properly, but without ministerial guidance, to investigate the information the member for Esquimalt–Port Renfrew (Mr. Sihota) put before the House, Is it the Premier's view that the deputy took appropriate steps?

HON. MR. VANDER ZALM: I certainly wouldn't want to interfere with the Deputy Attorney-General or the process.

MR. WILLIAMS: The deputy reassigned Mr. William Stewart. Does the Premier consider that appropriate?

HON. MR. VANDER ZALM: As I said, I don't want to interfere with the Ministry of Attorney-General, the deputy or the process.

MR. WILLIAMS: Mr. Premier, there are serious questions of tampering with the justice system. To date you have not responded to the appropriateness of the former Attorney-General's actions, nor have any of your colleagues. Do they not offend you?

HON. MR. VANDER ZALM: As I've said a number of times, there are a number of things that certainly offend me. I'm sure that if a person has said certain things and they are on tape, that person has to come to terms with that for himself or herself — as the case may be —regardless of who was taped. I certainly have the bounds within which I act, perform and respond.

I'm also very offended — and I hope the member has a question about this — with the process used by the opposition in using tapes that were questionably obtained and in making them public as they did. I think that has been tremendously offensive, not only to many members on this side of the House and, hopefully, on your side of the House, but to the public at large. I would hope that perhaps at some point in time you might consider an apology for your actions.

MR. SPEAKER: Just before recognizing the first member for Vancouver East on the next question, I would remind the member that the propriety of discussing this issue is a very delicate one at this time because of the pending investigation. We wouldn't want questions brought up in this House to jeopardize any investigation being carried out at another level.

MR. WILLIAMS: Thank you, Mr. Speaker. I appreciate that.

I guess the fundamental question is around the question of the independence of the justice system. To the Premier again, the actions taken by the hon.

[ Page 11046 ]

member from Esquimalt–Port Renfrew were a process of first seeing the deputy and then appearing before the House. Would the Premier argue that tampering with the justice system should have gone unchecked?

MR. SPEAKER: This is not appropriate for a question.

CLOSING OF CANADIAN CONSULATE
IN SAN FRANCISCO

MRS. McCARTHY: My question is for the Minister of International Business and Immigration. It has been reported that the office of the Canadian consulate in San Francisco is going to be closed by External Affairs. It handles many business and immigration matters and has been the most aggressive office to benefit British Columbia's trade opportunities.

In view of the fact that External Affairs is announcing its closure, could the minister tell this House what he plans to do about it and what representations he plans to make to the federal administration to stop this happening to our trade opportunities in the Pacific Rim and to our opportunities with free trade in the United States?

HON. MR. VEITCH: It's a very important and cogent question. Today I am hand-delivering a message to the Rt. Hon. Joe Clark, the Secretary of State for External Affairs. I want to say that the San Francisco office has indeed been efficient and worked very well on behalf of the people of British Columbia. The federal government intends to move the operation to Los Angeles. Regrettably we have not seen a similar degree of interest, commitment or communication from the Los Angeles office, where fully 71 percent of the entrepreneur and investment visas issued through the Los Angeles office were Quebec cases, and that's a rising trend.

MR. SPEAKER: Order, please.

HON. MR. VEITCH: Mr. Speaker, may I have a chance to answer the question?

MR. SPEAKER: No, you may not have a chance to filibuster the answer to the question. When a question is asked, the answer to the question must be within the scope of the realm of the question. If the minister wishes to get up and recite a number of statistics that the minister was not asked about, then you're outside of the bounds of the realm of the question.

MRS. McCARTHY: On a supplementary, I appreciate that the minister is saying how important that office is, so he's agreeing with me. If External Affairs insists on this action, is the government prepared to put a trade officer from British Columbia to assist them in that endeavour on behalf of trade opportunities in this province?

HON. MR. VEITCH: Very briefly, the closing of the San Francisco office is unacceptable to the province of British Columbia, and we'll take whatever steps are necessary to ensure that the interest of British Columbia is looked after, including dispatching one of our own officers to San Francisco.

TAPED CONVERSATIONS
OF ATTORNEY-GENERAL

MR. GABELMANN: I have a question for the Premier. I was a bit puzzled by his answer earlier. It appears the Premier is prepared to criticize and to prejudge the member for Esquimalt–Port Renfrew. Why is he not equally prepared to...?

MR. SPEAKER: Order, please. The difficulty the Chair has with this matter is that the Chair has been asked to rule on a matter of privilege, and the Chair has this very matter under consideration at this time. Until such time as the Chair has made a decision, discussion on the matter is out of order. It prejudices the entire process under which the Chair is endeavouring to maintain the procedures of the House.

MR. GABELMANN: I understand that if my comments were in respect of the government House Leader's motion and the member for Esquimalt–Port Renfrew's motion.

My question to the Premier is: why has he not been prepared to make comment upon the behaviour of the Attorney-General? It's a different question.

[2:15]

HON. MR. VANDER ZALM: I want to make it very clear that my criticism has certainly not been directed at one person. I think my criticism has been one of process, and I don't even suggest right now that it was necessarily the member for Esquimalt–Port Renfrew. As a matter of fact, it's reported that this matter came before the NDP caucus, and the Leader of the Opposition felt this matter to be too difficult for him to deal with and therefore passed it back to the member for Esquimalt–Port Renfrew. So if there's blame to be had, you all wear the blame — the whole of your caucus.

INDEPENDENCE OF THE OFFICE
OF ATTORNEY-GENERAL

MR. GABELMANN: Mr. Speaker, I want to direct some questions to the Premier regarding the independence of the office of the Ministry of Attorney General. I want to read a quote from Hansard on June 28, 1988, by the former Attorney-General, Mr. Brian Smith. In his resignation statement he was worried that the Ministry of Attorney-General would come under closer control by the Premier's office and "so weaken the independence of the Attorney-General." Later he said: "I also know that this" — the weakening of the independence — "can be accomplished by shifting ministers...."

[ Page 11047 ]

To the Premier: is that why he appointed the second member for Kamloops as the Attorney-General?

CLOSURE OF DUFFEY LAKE ROAD

MR. RABBITT: Mr. Speaker, my question is to the Solicitor-General. Roadblocks by natives and non-natives are appearing in the Pemberton-Lillooet area. With the closure of the Duffey Lake Road and other roads throughout British Columbia, there's the potential for an escalation of the dispute. My question to the minister is: what is the minister doing to ensure that the road will be reopened and to eliminate conflict which could result in a violent confrontation?

HON. MR. FRASER: Mr. Speaker, in the case of road closures, regardless of who puts them up, the usual approach is to find out what the problem is and to try to get it resolved off the public highway system. However, in the event that the roadblock persists, then the normal course of justice must be followed — in other words, the roads must be kept open.

INDEPENDENCE OF THE OFFICE
OF ATTORNEY-GENERAL

MR. GABELMANN: Mr. Speaker, I want to ask another question to the Premier. On June 28, Brian Smith said in his statement: "I fervently hoped that I had established and explained the importance of the neutrality and independence of my office to the Premier. I now believe that I have failed to make that impression." Does the Premier agree that that impression still remains to be made on the Premier and on his government?

HON. MR. VANDER ZALM: I find interference in the criminal justice system wholly inappropriate. If there is anyone or any group that might be labelled with attempting to interfere, it seems to me it's coming from the other side today.

MR. WILLIAMS: Mr. Premier, there is a clear pattern here. Brian Smith felt he could not maintain the independence of the Attorney-General's office with you as Premier, and he left. It is now clear that the independence of the office was not maintained after Brian Smith left. Would you not agree that there is now a need for an independent review of all the major actions of the recent Attorney-General during his tenure?

HON. MR. VANDER ZALM: Again I remind the member there is a process. But let me add this. It doesn't follow that because someone said something or did something, therefore everything following is as he says it to be. If that was the case, then the taping that took place at the NDP national convention would suggest that you are responsible for the taping now, and I don't suggest that.

MR. MILLER: To the Premier. The Premier is the presiding officer of the executive council and is responsible for its actions. Does the Premier consider it his duty to ensure that cabinet does not act beyond the powers given to it by the laws of the province?

HON. MR. VANDER ZALM: I know my role. I wonder if perhaps we could all simply sit back and think of all of our roles, including the member who asked the question. I think we need to discuss together the impact of the actions that we saw in the House by the member who has now seen fit to be absent — the member for Esquimalt–Port Renfrew. I detest taping, tapping, bugging, spying or any type of invasion of the privacy of individuals.

ARSENIC AND LEAD RESIDUES
IN WELLS AREA

MR. VANT: I have an urgent question for the Minister of Environment. The residents of Wells, including the chamber of commerce, are so concerned about the residues of arsenic and lead in the old ball diamond and in the tailings of the Island Mountain gold-mine that they are threatening to blockade this Friday Highway 26, which is the main highway to Wells and Barkerville if there is no action taken regarding these residues of arsenic and lead. Given this, does the Minister of Environment plan to do anything about this rather urgent problem?

HON. MR. REYNOLDS: I can advise the member that we will be announcing a program for remediation sometime this afternoon which will include the capping of public use areas with granule fill, removing access to Jack of Clubs Lake, excavating or replacing soil from residential yards and revegetating those areas.

We will also be working with the Ministry of Health to make sure that proper testing is done in those areas and that this issue is resolved immediately.

Orders of the Day

HON. MR. RICHMOND: I call committee on Bill PR401, in the hands of the member for Burnaby-Edmonds (Mr. Mercier).

VANCOUVER STOCK EXCHANGE
AMENDMENT ACT, 1990

The House in committee on Bill PR401; Mr. Pelton in the chair.

Sections 1 to 4 inclusive approved.

Title approved.

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

[ Page 11048 ]

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill PR401, Vancouver Stock Exchange Amendment Act, 1990, reported complete without amendment, read a third time and passed.

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

ESTIMATES: MINISTRY OF
REGIONAL AND ECONOMIC DEVELOPMENT

On vote 56: minister's office, $352,172.

HON. S. HAGEN: It is my pleasure to present the estimates for the Ministry of Regional and Economic Development. The past year has been a good one for our government's drive to promote sustainable and regional economic development and diversification throughout the province of British Columbia.

It has been another good year for the development of our small business sector. The men and women of B.C.'s small business community are the driving force of our provincial economy. They are the unsung heroes, the people who have a dream and put in the long hours to make it happen.

This government and my ministry are proud of our close relationship with small business. Mr. Chairman, over 95 percent of the new jobs created in our economy last year were generated by small business, and close to 50 percent of the new jobs generated in Canada came right here In British Columbia. That's a tremendous record of success.

In British Columbia today there are over 105,000 small businesses. Each of these operations started as a dream, a dream by an individual, a family, a new Canadian, a young person. Many small businesses are started by women; in fact, women represent nearly one-quarter of all business owners in Canada. According to the Canadian Federation of Independent Business, projections in Canada and the United States suggest that 50 percent of all businesses will be owned by women by the year 2000.

The incredible opportunities the small business sector provides underlines the dynamism of our economy and the ingenuity of our people. That kind of stuff builds strong communities and makes this province the best province in Canada. This government has long recognized the key role small business plays in economic development and diversification. I want to acknowledge the fine efforts of all of the staff of the ministry in helping to make this important objective a reality.

The Ministry of Regional and Economic Development offers many programs and services to create a climate for the growth of small business. This is a service ministry serving all regions of the province and all sectors of our province's dynamic business community, with a special emphasis on small business.

On May 25 I had the honour to address the members of the British Columbia Chamber of Commerce at their annual general meeting in Penticton. I marked the occasion by thanking our various local chambers of commerce for their very valuable contributions to the economic and social well-being of the cities, towns and municipalities around this province.

In addition, I announced three new business incentive programs which flow directly out of the recommendations of our government's task force on small business in B.C. These three new programs are: the business start-up program, the small business assistance program and the business expansion program. They are important for a variety of reasons. As part of our sustainable development effort these programs will create at least 6,000 jobs during the first two years of operation. The programs are regionally differentiated. People up-country get a little more flexibility financially.

The business start-up program has characteristics that are specifically aimed at assisting women. It is also bureaucracy-free, as it will be delivered by the major financial institutions in the province, which together have over 800 branches provincewide. These new programs are going to be a very important part of our economic development equation. I look forward to discussing them in greater detail as we proceed in the debate.

As members of this House are aware, the small business task force was made up of a wide cross-section of people from the small and medium-sized business community. We also had a very good regional representation, again underlying the commitment of this government to take full advantage of the ideas and energy of people from all across this great province. In fact, the programs and services that my ministry offers are specifically designed to build on the ideas and energy of all British Columbians.

For example, under our business information centres program, we work with local chambers of commerce to provide much-needed business information services at the grass roots community level. We have over 75 chambers of commerce enlisted as business information centres. The government has also provided access to government services for all British Columbians by ensuring a prompt, efficient delivery service. My ministry's access centres are one-stop shopping centres for key government services. Access centres have now been opened in Nanaimo, Fort St. John, Chilliwack, Merritt, Cranbrook, Terrace, Dawson Creek, Williams Lake and Prince George.

[2:30]

Another very exciting success story has been our program called Business Opportunities at Your Doorstep — or BOYD. These workshops, developed by business resource teams in each of the communities, give people information on local business opportunities. They also allow local entrepreneurs the opportunity to meet and exchange ideas with people who have specific business expertise.

We've held 17 BOYD conferences around the province with almost 3,000 people attending. They have been held in Port Alberni, Hope, Courtenay,

[ Page 11049 ]

Parksville, the Elk Valley, Nelson, Powell River, Abbotsford, Kelowna, Mission, Sidney, Merritt, Langley, Williams Lake and Quesnel.

Another successful program of our ministry is our Community Organization for Economic Development, which is also known as the COED program. Under this program, communities receive assistance to support community based economic initiatives. During the last fiscal year, over $2 million worth of grants were provided to over 100 communities, 94 of which were outside the Greater Vancouver Regional District. These grants supported 200 projects, 176 of which were in communities outside the GVRD.

Another important initiative of the Ministry of Regional and Economic Development is our home-based business program. The ministry sponsors workshops on starting a home-based business and provides advice on how to market a home-based business product. During the last fiscal year 100 home-based-business seminars were held, which attracted over 3,000 participants.

Each year 15,000 new home-based businesses start up in the province of British Columbia. We want to encourage their success and to introduce even more people to this unique form of enterprise. We are doing this through forums like Market Discovery and the B.C. Creative Art Show at Market Place.

Through another Regional and Economic Development program called Strong Communities in the '90s, selected local communities, which are developing sophisticated mechanisms for economic growth, are being helped to diversify and expand their economies. Nine communities are being assisted under phase one of the program. These communities are Gold River, Maple Ridge, Dawson Creek, Kimberley, Valemount, McBride, Salmon Arm, Nelson, Terrace and Houston.

The ministry's small business venture capital program encourages investment in British Columbia by providing an incentive to the private sector through a tax credit equal to 30 percent of the amount invested up to March 31, 1990. Seventy million dollars has been raised, and some 1,500 jobs have been created or secured.

The employee investment program helps workers to invest in their companies or in work-sponsored venture capital funds. During 1989-90 five companies registered plans representing some 500 employees. For example, the program enabled IWA employees to become owners of West Coast Plywood in Vancouver, thereby preserving 275 jobs.

British Columbians from all regions are working with me, my ministry, my colleagues in caucus and the regional development board to identify and implement initiatives that reflect regional priorities. Regional development means local participation, and that's why we have worked and will continue to work with community leaders throughout this province.

For example, as part of the transportation planning process, over 600 people serve on 50 regional committees, including 64 mayors and 41 aldermen — all from outside the lower mainland southwest region. These committees brought local insight and understanding into the transportation planning process. They met with community groups to determine and assess local transportation priorities. The first year priorities are now being met and projects announced by my colleague the Minister of Transportation and Highways (Hon. Mrs. Johnston) under our Freedom to Move initiative.

As part of the regional development strategy we have established task forces comprised of local citizens in all eight regions. The people in the regions are helping the provincial government to develop the local economy and infrastructure. They are defining that role through their work on various task forces, including task forces on economic development, tourism, health care and education. Thus regional input is providing the blueprint for future action.

All regions have benefited from our government's emphasis on promoting environmentally sound economic growth. Over 30 companies from various regions of the province and representing a cross-section of environmental industries participated in this year's Globe '90 conference.

As well, we provided funding to ensure that we had strong regional representation at the recent Hong Kong trade show from places like Prince Rupert, Victoria and Kimberley.

At the International Trade and Investment Exposition there was representation from North Coast, Mainland-Southwest, Vancouver Island-Coast, Thompson-Okanagan, Kootenay, Nechako and Cariboo.

We also helped more than 70 companies from all parts of the province to participate in Market Discovery.

Another key element of our strategy for economic diversification is our strong support for the TRIUMF kaon project. The TRIUMF kaon project represents enormous potential for Canada in seven separate areas of technology. It represents new advances in industry and medical science, and it represents new jobs and quality opportunities for British Columbians and indeed all Canadians.

I wish to turn to an issue of interest and concern to all members on both sides of the House. This issue is one of great importance to me personally, and that is the relationship between the public's right to know how public funds are expended and the need to protect the confidential nature of companies' proprietary information.

I have been a small business person, and I know that there is some information that you wouldn't want in your competitors' hands. But also being in government, I strongly believe in the public's right to know. One of the ministry's primary objectives is to encourage businesses to locate or expand in British Columbia or to diversify our economy. To do this we provide financial assistance at the margins, which is often called gap financing. Sometimes this is done to preserve jobs and sometimes to attract investment when we are in competition with other jurisdictions.

Let me state that we have sought to stop this type of jurisdictional competition, but other jurisdictions refuse. Therefore, in competing with other jurisdic-

[ Page 11050 ]

tions, often we are not playing on a level field. Other jurisdictions offer much more, so we enter this fray.

But we do so in a very fiscally responsible and prudent way. We provide only the assistance required by necessity. When I became minister eight months ago, the disclosure practice of the ministry was generally limited to the following: the name and nature of the firm's business; the principal amount of the loan or loan guarantee; and the description of the project. Justification for nondisclosure of detailed information about the project was the protection of the commercial interests of the applicant. I might add that commercial lenders generally provide far less information. But I did not find this to be an acceptable degree of public disclosure. As a first step to resolving my concerns, I instructed my deputy to review the practice, both federally and in all other provincial jurisdictions.

Some jurisdictions have legislation dealing with freedom of information; some do not. In jurisdictions where legislation exists, such legislation contains sections that prohibit the release of information that might prejudice the competitive position of the third party. Indeed, the private member's bill introduced by the member of the opposition from Burnaby North both this year and last year recognizes this issue and provides similar exemption. I would refer the members to section 4 of that bill.

With this in mind I instructed my deputy to canvass a body of experts to seek their views. A report was prepared. The experts were: John Fraser, partner with Peat Marwick Stevenson and Kellogg; Stuart MacKay, principal with Peat Marwick Stevenson and Kellogg; Robert Gourley, partner with Deloitte and Touche; Bill Miles, partner with the law firm Ladner Downs; Mark Wexler, professor of policy analysis at Simon Fraser University; and Al Kanji, partner with Peat Marwick Thorne.

The one direction provided by my ministry to the experts was to move toward a more open approach. I'm willing to provide this report to all members of the Legislature. I provided a copy to my critic yesterday. The findings are unanimous. They divide the information into three categories. For ease of discussion the experts called these categories white, grey and black.

White information is information that should be released, and it contains the company name and business, description of the project, loan purpose, total cost of project, amount of assistance and the type of assistance — either loan or loan guarantee.

Grey information should be released using discretion and after agreement to do so is obtained from the proponent. Included would be information on quantitative measure of benefits, qualitative information of benefits, economic costs and net benefits and terms of the loan agreement.

Black is proprietary and should not be released under any circumstances. This includes the legal agreement itself, marketing, financial and other company-supplied information, external and internal reports and correspondence.

At this point I need to explain to the House that the legal expert pointed out that, based on the guidelines in existence when I took over this portfolio, in his opinion it would be unlawful to now release data on existing or past loan or guarantee transactions. In his view the ministry could be in legal jeopardy if it released any information except the name and nature of the firm's business, the principal amount of the loan or loan guarantee and the description of the project, unless the proponent had agreed to more information being released.

My deputy requested clarification of this point, and our legal expert confirmed his view. I requested my deputy confirm this opinion further with staff of the Attorney-General's ministry. While they generally concur, they point out that some statutes require specific disclosure — for example, the Auditor General Act, the Constitution Act and the Financial Administration Act. Of course, we intend to fully recognize these authorities.

I looked at having staff contact all former business cases with a view to negotiating the release of more information. This remains an option. However, in a practical sense, this doesn't seem workable at a time when our new programs are proving so successful that staff resources are being stretched to the limit delivering them.

I will now briefly return to the broader freedom-of-information issue. In addition to my request for expert opinions, I requested that my deputy obtain the assistance of the ombudsman. This was done with the general direction I provided. I will quote one paragraph of the letter from my deputy to the ombudsman:

"The minister is satisfied and staff concur that the onus must be on the project proponent to prove the need for commercial confidentiality at the time of application or at the time of finalizing an assistance package. This means that only the third category of information would be protected once revised ministry guidelines on access to information are in place."

Further, my deputy asked the ombudsman's assistance in helping my ministry draw up appropriate guidelines. To date the ministry has not received a reply. However, it is interesting to note the ombudsman's comments in the 1989 annual report to the Legislature:

"As a general principle, public information should be available to the public. Exceptions should be few in number and subject to discretionary disclosure if there is no reasonable expectation that harm would result. Trade secrets or confidential business information should be exempted from disclosure, except where specific information is severable, or when the public interest regarding health, safety or environmental protection overrides private commercial interest."

I can tell the House the following: developing the guidelines for release is my number one priority, and I am hoping that they will be in place by next month. The guidelines will considerably expand our present practice. Indeed, the onus of confidentiality will be placed on the proponent to prove the reason for not publicly releasing the information, while recognizing some items are and must be confidential.

[ Page 11051 ]

Utilizing the expert adviser's analogy, I expect that in nearly every case the white and grey areas will be released. Only the narrow band of clearly proprietary information will be held in absolute confidence in the future.

[2:45]

To close, I want to say that I'm very proud of the work of British Columbians in diversifying and strengthening our economy. The government and my ministry have been working with people of this province to create the British Columbia economy of the future — people from our small business sector and local and regional governments. We've been consulting British Columbians from all walks of life, listening to and acting on regional concerns and priorities, giving people better access to government services and information, as I've made clear today.

The accomplishments of this ministry are numerous and significant. In fact, the ministry has on two occasions within the last year been recognized for its outstanding service. The ministry was awarded the B.C. Telephone quality service award for the efforts of the government agents branch. This is the first time the award has been received by the public sector. My ministry also received the "project of the year" award from the international Project Management Institute for our work on the medical cyclotron project at TRIUMF.

The Ministry of Regional and Economic Development is all about creating a climate for British Columbians to grow in, to compete with the best in the world and, most of all, to succeed in a rapidly changing world. Thank you.

MRS. BOONE: I don't think I can begin this discussion on this ministry's estimates without going through a little bit of a history in trying to figure out what's going on with this ministry.

In 1988 the program was announced whereby we had the ministers of state and the decentralization process that the government was talking about. At that point we had established eight ministers — eight states — and there was a lot of controversy over that.

As you will remember, the New Democratic Party opposition were opposed to this. We believed that you were instituting another level of bureaucracy. We believed that it wasn't necessary to have eight ministers or the new states; we could achieve regionalization without that.

After that, they still had the eight states but we got down to five ministers. They combined the regions and had some outrageously large areas, such as the minister responsible for the northeast section of the province also being responsible for the Nechako; how they thought that minister could be responsible for that huge area I don't know.

They have finally got it down to eight states and no ministers now. I think this is a clear indication that the government has worked their way down to realizing the error of the original state system — or the minister system — and has come to accept the policy the New Democrats had that we didn't need those extra ministers at all and we could achieve regionalization without those ministers there.

We saw at that point that we had no direction for those ministers. We had ministers running around handing out cheques. That seemed to be their uppermost job: coming into various areas and handing out cheques for things. Numerous committees were set up throughout the province with mandates to work on any number of different projects. But those mandates often were in conflict with the line ministry and often duplicated work that was done by those ministries.

It is clear the whole process did not work, and the government has finally backed down and come to acknowledge that we really didn't need those eight ministers there at all.

If the government was serious about regionalization and about decentralization, they would have given the power to the people in those regions. I have said this for three different years. We already have existing boards. We have school boards; we have regional district boards; we have municipalities. Each and every one of those bodies could manage things and give input. Instead we create another level of bureaucracy to do those things.

Giving them power doesn't mean just saying: "We want you to do something; we want you to come and talk to us." It means giving them the power to have some money to do something. He who holds the purse-strings, as you know, controls what happens. And you have not given any of those regions access to that power. You have said: "We want your input, but we are not going to give you any of those moneys."

I have been trying to track down the mandate and the role of this ministry, which is very difficult to do, since they change every year. You never know where the programs are. You never know if the programs are developed. Programs fold; they change names; they change mandates. You don't know who is responsible for any number of different things. In your regions you've got people never sure.... I'm sure that within any given period of time in my office we've got people coming in to say: "Where do I go?"

I do commend you on your access centres, because I think they are good and give us a focus. As an MLA I can say: "Go to the access centre, and I am sure they can give you information." However, we have regional development corporations, access centres, enterprise development corporations; that's only on our side. On the federal side you've got all these other areas. The general public are just so confused they don't know what's going on.

I think it's clear that the Social Credit government's plan for regionalization and decentralization — aside from the access centres, which I like; but that other whole area — has failed. It has not worked, I will quote for you, Mr. Minister, from B.C. Business, July 1990, which shows that the objective of the ministry to regionalize and diversify really has failed dismally:

"Sustained or not, economic development in B.C. has two distinct arenas: the lower mainland and the

[ Page 11052 ]

rest. The B.C. Central Credit Union worries about the next recession's impact on the regions. The Central's newsletter, Economic Analysis, recently looked at the degree to which a lower mainland economy, with about half the province's three million residents, is more diversified, less resource-industry-reliant and more service- and export-oriented than other areas. In the next recession, the regions will suffer relatively more, as 'the costs of an undiversified economy are expected to worsen in coming years'."

That was a warning from the newsletter of B.C. Business. This is after two or three years of what you call "regionalization and diversification."

We're saying that we're no further ahead. We haven't diversified. The regions are still at the mercy of the marketplace out there, because they're still resource-based and we haven't managed to do any of those things. That's really quite a shame, because we are seeing that coming around. My region, of course— and perhaps yours, Mr. Minister — has a heavy resource demand, and without that resource economy....To this day if the forestry industry goes down, so goes our community — it does not matter — as does the community of the member for Alberni (Mr. G. Janssen). We've gone through some good years, but things are starting to slow down and people are a little worried about that right now. The only thing that will hold us through is the thought that we are getting our university there, which will be bringing in some moneys. Other than that, there are still many communities throughout the north, throughout the Kootenays, that are entirely dependent on resources and will fold if there is a change in the resource economy.

The government doesn't seem to be able to understand that regional development requires giving the region the power to make those decisions. I think that's what we have to do. We've seen states being created, and we now see that we've got a new board, and the board is merely made of up of all the people who were previously the ministers of state — just sort of a shifting of the roles over there. You say that this new board ensures that individual regionally based projects are brought to the forefront and completed on a timely basis. I thought the ministers of state were supposed to do that. They weren't able to do it. Why do you suppose...?

Interjection.

MRS. BOONE: Well, the ministers of state are now renamed this new board; they're called a board. This board is supposed to have access to cabinet and do all kinds of wonderful things — get things moving. It hasn't done it, Mr. Minister. You need to give the people out there in the regions the ability to make decisions for themselves and the ability to make those decisions with cash in their pockets. You have to give them some ability there. They can't do those things otherwise.

I've got a little note here: access centres. I do congratulate the government and your staff, because I think you've got top-notch staff working in those access centres, and they do give good service to the public.

There is something that you never mentioned, and something that I don't think any person in regional development can fail to mention: land use conflicts. No regional development can take place in this province unless the land use conflicts are solved — unless we develop a process for dealing with those conflicts. We've seen nothing take place to deal with those things, to give the communities in those areas the ability to make those decisions, to deal with the conflicts that are taking place, in a non-confrontational way; to get people to sit down and try to come to grips with the problems facing their communities, so that you don't have environmentalists and natives and loggers at each other's throats; so that communities are not divided; and so that you can have some kind of development based on those things. Until we as a population can do that, we are not going to be able to solve any development things.

While we acknowledge the needs.... You went on about the guidelines, and I do appreciate the minister giving me advance knowledge of that information. We need the knowledge for the guidelines and the information that can be brought in on loans, and we appreciate that we should be getting more information there. We acknowledge that there are some things that are confidential. We do have some concerns about some of the processes there. I guess, should we not be able to find out about the terms of the loans....

From my information, it looks like you don't think we should be able to find out about the terms of the loans. I think we should. What if a loan fails? That brings into question the whole ability of us as an opposition, or the government, or what have you, to question and to find out what happened to that loan, and to assess the programs to find out if they are good or poor or how they can be improved, or any of those things. If we're not able to get that information after a loan fails, after something has happened — a venture has gone under — then that limits our ability to truly assess a project. We'd like to see some kind of acknowledgment of those things.

It's interesting that the minister brought it up that 50 percent of small businesses are owned by women. I know it's true. You're saying that in the future it will be. I know that most of the successful small businesses are women-oriented. It's for a number of reasons that I found out. They seem to be better planned; women take more time going into things. Maybe it's our cautious nature. We also take less money once we do have a business develop. We don't seem to jump into this business and think that we can earn $40,000 to $60,000 a year.

Unfortunately, what has happened is that we do have something else that's taking place there. A lot of women in businesses are virtually poverty-stricken; they're taking poverty wages in order to sustain themselves. We've got a sort of low-wage ghetto created there.

[ Page 11053 ]

I'd like to question the minister now on a couple of different things. My colleague who is our small business critic will also participate in this area.

[3:00]

First of all, before I get into that, in the special report of November 1988.... There was a special report, and the government talked about its regional development initiatives. You said: "The regional development initiative is guided by five basic principles. Government will maximize the creativity, knowledge and energy of all British Columbians in developing and implementing policy." Sounds good. I don't know whether it is actually happening or not. "Local governments, boards and commissions will be given greater opportunity to contribute directly to the development of provincial government policy and initiatives." I really have to question that. Where was the input from the school boards when it came time for the referendum process? Where was the input from the school boards into the government policy decision-making process at that point? They weren't there.

Where was the input when it came time for a decision on the cancer clinic, for example — the decision to put in two cancer clinics against all information that came out from everybody around, including the Cancer Control Agency? Where is the input that is taking place? I don't see it taking place any more now than it did in the past. I really don't think that that is taking place whatsoever.

I'd like to question you a little bit today about some of your small business programs, because you did mention the new ones. You gave me some information on previous loan guarantees, and I thank you for those. What say did the regions have in the existing loan guarantees? By what process were they developed? What moneys did they come from? To tell you the truth, I've been having a heck of a trying time to track where the moneys came from. It's the seed capital program, isn't it? I'm wondering how much was budgeted in each of the regions for those seed capital projects.

I've been unable to track that stuff down and find out in the books. It's a good way to keep your critic a little confused — changing all the programs and the ministries and moving the budget from place to place. I think you've got the deputy confused too, haven't you, Mr. Minister?

How much was there initially? We've got how much was lent. I'd like to know what the budgets were, and if they overspent their budgets or spent the amount of their budgets.

I'll sit down and let the minister reply.

HON. S. HAGEN: First of all, I'd just like to reply to a few of the comments that the member for Prince George North has made.

I'm really pleased that the member — and I assume that she is speaking with the approval of her caucus — is finally recognizing the fragile nature of the economy of the province of British Columbia. She referred to her region and my region, where indeed we are dependent on the resource sector. But I can tell you this: she pointed to an article; I can point to many articles that state that because of the amount that the province has diversified its economy, many economists say that we may not be hit as hard by a recession as we would have been. However, as one who has studied a bit of economics, I know that for every economist who has one opinion, you can find another who has another opinion. So I'm not sure that that point is worth arguing or carrying on.

The member talked about land use conflicts. There isn't another government in Canada that has done as much on resolving land use conflicts as this government has. We established, first of all, the Clayoquot Sound task force to deal very specifically, in a specific part of the region....

MR. G. JANSSEN: Tell me what they resolved.

HON. S. HAGEN: Talk to the members, Mr. Member for Alberni, and you'll find out what they are resolving. They're still in place. They're still holding discussions. They're not fighting with each other. They're working out their differences — without Big Brother government coming in and imposing something on them, which I know is what the members opposite would be in favour of.

The second major step we've taken is the creation of the Round Table on Environment and Economy.

MR. CLARK: More government.

MR. S. HAGEN: Do you call Ken Georgetti, for instance, more government?

This Round Table, Mr. Chairman, is a very significant and important task force dealing with these very important issues. I agree with the member for Prince George North that they are important, and we are dealing with them. We have brought all the groups to the table to discuss the issues and advise government on policy. So she cannot say we are doing nothing. We have brought very representative people to the table on both of these task forces.

I want to thank her for the constructive suggestions she made about access to information. We have made note of those recommendations, and if you would like to confirm them in writing, we'll take them into consideration when developing the policy. I say that in all sincerity.

With regard to your comments on regionalization, I knew that you would be saying something and trying to belittle the process. But I can tell you — and you should know this, because you attend the meetings in your own region — that there are people all over this province who are very pleased with the process, who have never had as good access to government, who have never had the input to government that they have now.

I challenge you to talk to people like Mayor Al Huddleston of Port Hardy or Mayor Don Lockstead of Powell River. Ask them how they feel about the regional process. I know they like it, because I've spoken to them myself. They think it's a great way to get input. They work with their MLAs, which is very

[ Page 11054 ]

important, and I know the people on the Cariboo regional task force work with you and the other MLAs up there to have their concerns taken to government.

You asked a specific question about something that took place two years ago, I think, about loan guarantees by the regions. I am told — and this is one or two budgets ago, I guess — that the amount budgeted for this program was $50 million over the five years and that it is a bad-debt provision. In other words, if an amount is written off, it will come out of that amount.

MRS. BOONE: What I'm looking for is some information on how much it is for each region. For example — and I think this is indicative of some of the things I've been talking about — you've got the lower mainland southwest badly in need of development money, I would say, which has more than $1,338,000 being spent in it; and the northeast region, which has $20,000. There are some real discrepancies here, and surely if we're looking at regional development, then the reverse should be true. We should be making money available to those areas outside the lower mainland and not necessarily to the lower mainland. How much of that $50 million is divided up, and how is it divided between the regions, or is it just a pot that everybody goes into, and whoever applies may apply from it?

There were indications in the past that there was input from the regional minister of state on that approval process. Is that still in place? Do they go through the board now? Who makes the decision on what is in the best interest for the region?

[Mr. Ree in the chair.]

HON. S. HAGEN: The program that the member for Prince George North is questioning apparently ran for 15 months and did not work as successfully as it was hoped. When I became the minister, I asked the staff to take it apart and see what was good and what was bad about it.

We also had the Task Force on Small Business that was commissioned. It was made up of people from the regions and also from small business. We took their recommendation that the program we had just put into place — the business start-up program — be administered by the banks and the credit unions. The information on the program is available at the banks, credit unions, chamber of commerce offices, MLAs' offices and the regional development board, if there is one in a community. The information is readily available.

When you consider that the brochures have only been out about two weeks, the response has been absolutely overwhelming. It's a very simple program to understand. If you want to start up a business, the steps are pretty easy. The banks are on-side. The banks are participating and are administering it.

MRS. BOONE: I'm pleased to see that the minister said that the seed capital program didn't work, because it was a point I was going to make. It didn't work, and the financial institutions were not participating in it for various reasons. I've had that told to me over the past year or so. I brought that up last year. It didn't work because of the paperwork that was involved in some cases, and also because they were looking for a 100 percent guarantee. Does this new program now give a 100 percent guarantee on those loans?

HON. S. HAGEN: Yes, the program is a $15,000 guarantee on a $15,000 loan, so it's a 100 percent guarantee.

MR. G. JANSSEN: Now the minister says that there's $50 million for a five-year program. If we look at the numbers he supplied to the critic — the MLA for Prince George North — we've used $3,531,000 for 98 loans in a one-year period. That leaves me to believe that if you keep up this kind of pace, you are not going to even utilize a third of the program, $15 million out of the $50 million.

The discrepancy is also that the lower mainland has $1.3 million, while at the other extreme the northeast, as the member for Prince George has indicated, has $20,000. That indicates to me that the programs are not working in a very equitable manner in the province. Certainly government should serve the people of the province equitably.

I know there are not as many people living in one area as there are in another, but as single-industry, resource-based communities tend to modernize their facilities — as has been the case — we see this influx of people leaving these single resource-based communities and moving to the centres of Vancouver. We see massive price fluctuations in housing and in various other costs, many of which impact government, of course.

I'd be interested to know, through the fabled board that replaced the ministers of state, if we are now going to reach out from the lower mainland and encourage people to move back to their communities, give some incentive for the government to create some infrastructure, give some loan guarantees and actually encourage those businesses to move out. This isn't the heavy hand of government working here. This is trying to do away with the two economies that are starting to develop in British Columbia: one that is very effective in the lower mainland, where the unemployment rate is very low; and one in other parts of the province — I'm sure the minister is aware — where the unemployment is very high and the economy is very sluggish.

HON. S. HAGEN: I appreciate the member for Alberni using the question that I gave him, because it will give me an opportunity to respond.

The business start-up program provides, for a $15,000 investment by an individual — or where an individual has $15,000 worth of capital — a $15,000 loan guarantee, which gives an equity of $30,000. That's in the city of Vancouver.

[3:15]

[ Page 11055 ]

If you are outside the city of Vancouver, you only have to put up $7,500 worth of capital to get the $15,000 loan guarantee, and it's specifically designed that way to assist communities that are outside of Vancouver.

On the second program, which is the small business assistance program, there is also a regional part. The direct loans work this way: low-interest loans up to 50 percent of eligible capital costs for a maximum loan of $500,000 and for a term of up to five years; interest on the loan will be at 6 percent per annum. This is not news, by the way. These are on the brochures that I think you have in your offices.

Outside the GVRD, the first $100,000 of the loan will be interest free, so again it's designed to assist businesses outside the greater Vancouver area, and I'll tell you why. I'm sure you know this, but I'll tell you why anyway. Banks look at assets differently in Vancouver, the lower mainland or in smaller communities, and I see a nodding of agreement. I'm not being facetious in what I'm saying; it's just that it's a common known fact. The banks will look at an asset — a building in Merritt, as an example — differently, with a different value if the business is shut down, than a building in Vancouver.

With regard to loan guarantees, the province will provide a guarantee of up to 75 percent of the loan to a maximum provincial liability of $100,000. Outside the GVRD it's 85 percent. Without getting into specifics, the third program — the business expansion — has the same basis to it. For communities outside the GVRD, there is better leverage and more comfort to the banks to offer those people a level playing-field, or the same opportunities that are available in the GVRD.

MR. CLARK: I am interested in several questions regarding the specifics not of what's contained in the package, but what it's going to cost us. Maybe there are some obvious questions that come to mind, given your answers.

How much is the total interest subsidy budgeted for in the next fiscal year? You must have an estimate or a maximum. Let me put it that way. You have a maximum number of loans you can lend out at 6 percent in order to reach your maximum budgeted figure and a maximum of loans at zero percent interest. In other words, that's a cost to the province, and I'm interested in what that cost is. I appreciate it might be difficult to estimate precisely what the cost will be, because you don't know how many loans you're going to give out. Surely you have a maximum budgeted number which you can't exceed.

How much is the total quantum of loan guarantees that you can issue? In order for you to answer that question, I assume you must have an estimated default rate. I'd like to know what the estimated default rate is, and how much you have budgeted for in terms of contingency funds in order to pay for that estimated default rate. Presumably the contingency fund that you have, combined with the default rate, will give you a maximum amount of money that you can lend out this fiscal year.

I'm interested in those three questions in addition to the direct interest subsidy that you have under different programs.

HON. S. HAGEN: I may have to get you to repeat some of those questions, but in answer to your first or second question on the amount of loan guarantees that we're allowed to do, we budget an amount for bad debts. I believe that the percentage we have experienced is something like 8 percent or 9 percent....

I am told that the amount of bad debts that we have experienced is substantially lower than 8 percent or 9 percent, and I understand it's an average of all the programs.

Also, the amount that we have provided in our budget for bad debt provisions for all three programs is $11,525,562. That's all three programs, but because of the rules of the auditor-general, it is a provision for some of the old ERDA loans as well. It's very difficult for me to break it out because they work on a percentage that we have to put into our budget to satisfy them — them being the auditor-general — to make sure that we have enough for write-offs each year. But my information is that we have not used that, which leads me to think that maybe we have not been flexible enough in the past. If we're going to be sort of a lender of last resort, we should probably have a higher write-off rate than the banks do.

MR. CLARK: Having said that, I guess now that you're using the banks and credit unions more to vet the loans, that makes sense in terms of them sharing some of the risk. They still have to go through the same tests.

However, let me just get it right, because presumably, if you budget $11 million for contingency, you must know as a ministry how much you can lend out or can guarantee before you get into a critical phase there. Very crudely, if you've got an $11 million contingency, it seems to me that you're looking at about $100 million in loan guarantees. If you had an 11 percent default rate, presumably that's somewhere in the magnitude of $100 million in loan guarantees that you can issue safely with an $11 million contingency. Do you have a number, a total? I'm not saying you're going to reach it necessarily, but what's the maximum?

HON. S. HAGEN: Okay. Those are good questions, questions I didn't anticipate.

On the first program, the business start-up program, which is the $15,000 one, we have budgeted for $6 million in loans from now until the end of this fiscal year...

Interjection.

HON. S. HAGEN: Loans. That's how many guarantees.

...and $12 million for the following fiscal year. Okay, it's $6 million to the end of this fiscal and $12 million for the next fiscal. So the budget for bad debt

[ Page 11056 ]

would be about 25 percent of that. That's what the auditor-general forces us to set up.

On the second program, the small business assistance program, it's $30 million worth of loans over two years; and on the third one, the business expansion, about $30 million over two years.

MR. CLARK: With respect, it's rather modest, frankly, but I suppose it's the start-up program, and after we get elected we can expand it rather easily.

There's another question there that the minister hasn't answered yet, and that is the direct subsidy, the interest rate subsidy, which is separate and distinct from the loan guarantee. There is a 6 percent interest rate, so presumably there's roughly a 6 percent subsidy for the lower mainland and a 12 percent subsidy, or whatever, outside. What is budgeted for the actual subsidy that the government is anticipating providing in the way of write-downs of interest rates?

HON. S. HAGEN: I'm told first of all to clarify that on the loan guarantees, of course, there is no subsidy amount, because it's at a prime-plus-one rate. On the loans— and I understand what you're asking: the difference between the 6 percent and whatever the market rate is — we do not budget on that basis for that difference.

MR. CLARK: You must budget for that, because, with all due respect, you have to have an estimated cost. What's the cost to the treasury? Or what is the maximum amount that you can write down in order to not exceed your budget? You must have a budget, because these are cost items. They're not even like loan guarantees where there is a bad debt. These are actual costs to the treasury, because the treasury is borrowing money at a certain rate and lending it out at a lower rate or at no rate. There must be an estimated cost in your budget to cover that.

HON. S. HAGEN: That's just being worked out now. The problem is that the question you're asking is not split out in the estimates.

MR. CLARK: That's why I asked.

HON. S. HAGEN: We're just working that out.

The second member for Vancouver East asked a question with regard to how the bad debt amount was established. I can inform you that the input comes from the auditor-general, the staff of the ministry and the staff of the Finance ministry. Through a consensus of those three, the best estimate of the dollar amount is made up. Then we put that into our budget as the amount that is available for write-offs. We have no way of knowing whether that will be used up or not.

MR. CLARK: I just have one more question. The government borrowing power is immense, and better than my personal borrowing power. Therefore the interest rate that the government borrows money for is less than the interest rate than the average citizen can borrow. I wonder whether the subsidy is determined by the difference between the government borrowing rate and the government lending rate in terms of the 6 percent or the zero percent, or whether it's the market rate used in terms of the prime rate or the prime lending rate, or prime plus 1 percent. I'm just interested in whether it's an actual subsidy based on the borrowing cost incurred by the province, and what that interest rate is. You have said 6 percent and zero percent. You give a fixed number, and of course the interest rate is not fixed to the Crown, so the subsidy goes up as the interest rate goes up. I'm just curious as to whether it was the actual cost of the borrowing of the province.

HON. S. HAGEN: Mr. Chairman, through to the member for Vancouver East, it's the difference between the 6 percent and prime — the bank rate, not what the province borrows it at. The reason is that the loan comes from the bank in the case of the second program. The company goes to the bank to borrow the money after the first $100,000.

MR. CLARK: I won't pursue that, but it is an interesting question. I've always been intrigued by the notion of using the borrowing power of the province to effectively lower interest rates at no cost to the taxpayer for, perhaps, business lending. It's an idea which I think has some merit. Alberta has treasury branches and can perform that function more easily than British Columbia.

What you have done is let the banks determine the lending, and in some ways you are subsidizing the banks, when, in fact, the borrowing rate for the province is significantly lower than the bank rate. Therefore you could borrow money at the provincial rate, in turn lend it out and either reduce your subsidy costs or have no costs to the taxpayer and still provide a bit of a break. I am disappointed, frankly, that the government is choosing this route when I think there is a more cost-effective approach.

[3:30]

MRS. BOONE: As I mentioned before, I would like to know how the regions play in this area. You have moneys available to guarantee loans. Is there any division of this money on a regional basis, or so the boards have some kind of a say?

How can you prevent some of the inequalities that take place? For example, the information that you gave me out of.... They've got 36 applications coming from the lower mainland, down to one coming from the northeast. How do you propose to promote the regions when anybody can apply for that funding? Obviously the lower mainland people are going to be the main ones with their hands out, as they always are — the business is there.

How do you promote the regions and make sure it is divided equally? What say do the regions have in determining whether a project is a good project or not?

[ Page 11057 ]

HON. S. HAGEN: Before I answer that, I just want to read some facts into the record here on the project funding from October 1986 to March 31, 1990. I will list the programs with the percentages that went into the regions instead of into the mainland. I think you might find it interesting.

The COED program — 73 percent of the moneys went into the regions, so 27 percent went into the lower mainland; the small business venture capital program — 33 percent went into the regions and 67 percent went into the lower mainland; the industrial development subagreement — 50 percent went into the regions and 50 percent into the lower mainland; the small business incentive subagreement — just over 25 percent went into the regions and 75 percent went into the mainland; financial assistance outside existing programs — in other words, the ones that were done on an ad hoc basis and approved outside the programs —78 percent went into the regions and 22 percent went into the lower mainland; regional seed capital program — 63 percent went into the regions and 37 percent into the lower mainland; the tourist industry development subagreement, which is no longer in place — 58 percent went into the regions and 42 percent went into the lower mainland.

A direct answer to your question — because this is obviously what has driven me, the ministry and the Task Force on Small Business to make the recommendations that they did — was to put a regional emphasis onto the programs, which is exactly what we have done.

In other words, we have different matters of assistance — either loans or loan guarantees — for inside or outside the lower mainland. That's how we expect.... Bear in mind that more than half the population is in the lower mainland, so obviously if you have 50 percent of the population, the chances are you will get 50 percent of the applications.

What we want to do, in order to increase the diversification and give people in the regions at least an equal opportunity, is regionalize the programs — which is exactly what we've done. I think by the results of the first month.... I announced these at the end of May when I was at the chamber AGM. We didn't even have the brochures at that time. I have been speaking at chambers at various places throughout the province. The request for applications for these programs has been very brisk, particularly on the business start-up program. These brochures have only hit the banks and the credit unions, in some cases, in the last week.

It is still fairly new, but my staff tell me the reception has been very good by the chambers of commerce, the small business task force members and the Canadian independent business organization I don't think we've had a negative comment, as a matter of fact, on the programs.

MRS. BOONE: As I asked before, the regions.... The minister of state had a hand in the regional seed capital program and in determining what was acceptable and which ones would go forth. Is there any input from the board? I don't know what you call yourselves now — the regional development board or the new old boys' club of the ex-state ministers. Have you got a pin yet for these guys — the ex-ministers of state? I think probably you should get one. Is there any input from these individuals from the regions into what is an acceptable or advisable program, and which one should be approved or not approved?

HON. S. HAGEN: If you are asking about the business start-up program — the one administered by the banks — those decisions are then made by the banks. You would go into the credit union office and say: "I've got an idea. Here's my business plan. I want to go into business." The bank looks at it, goes through the process and fills out the form. If you are outside of Vancouver, you must have the $7,500. Then you get the other $15,000 with our loan guarantee.

MS. MARZARI: I'm looking at vote 57 here, and I'm tallying it up. It's $73 million or $74 million. Am I correct?

Interjection.

MS. MARZARI: I'm looking at the estimates book. Your total budget is $73.8 million. Basically what you've done today is unveil a total program which takes us into over $100 million worth of loan guarantees and of different programs. Am I correct? I see $30 million for the business expansion program, and the small business venture capital program, $30 million. Am I right? The start-up program is $6 million this year and going to $12 million next year. Am I right?

HON. S. HAGEN: No, with all due respect, the loans will not show in the budget, because the loans are not an expenditure. Only the write-off portion will show in the budget.

MS. MARZARI: So the three programs that you've been addressing — the start-up, the small business venture and the business expansion programs — do not really appear anywhere except for the write-off provision of $11,525,562; that's very specific, Mr. Minister.

Then the other programs that are outlined in the estimates book — economic development, business development and regional development — are all separate programs aside from these small business programs you've just announced. Vote 57 breaks down into economic development, business development, regional development and reserves for doubtful accounts. Now we've covered that $11 million reserve that we're going to kiss goodbye to because we believe in small business and high risk.

Interjection.

MS. MARZARI: Yes.

MR. CHAIRMAN: Order, please. Possibly the member could direct her questions through the Chair.

[ Page 11058 ]

Then when she's finished the questions, she could sit down and allow the minister to answer and not question directly.

MS. MARZARI: Yes, through you, Mr. Chair.

HON. S. HAGEN: Yes, the amounts that you read off — the regional development, business development, economic development and government agents — are all separate areas of the budget.

While I'm standing, I will answer the question that was asked by the second member for Vancouver East on the small business assistance program, which is the one that has the loan subsidy in it. It's expected that over two years we will do about 150 deals, and the cost to the Treasury would be about $1.2 million, assuming the average deal would be about $200,000.

MS. MARZARI: I take it there's no federal involvement here. There's no recapturing or ERDA involvement here. We're saying goodbye to ERDA. That's sort of pulled out. I can see in the estimates that you are not really counting on the federal participation here at all. This is all provincial dollars we're dealing with and its provincial subsidy, Mr. Chairman.

I have a second question then. As you take these provincial dollars through the banks to the local regions, it seems to me by your answer to our critic on economic development that you don't have regional criteria really developed when it comes to going to a particular region of the province that may be undergoing particular strife or bad times. You haven't done an inventory. I'm asking if you have done inventories of what exists in the regions and what they need in terms of capital. Are you working with those regions? Do you have structures in those regions — consultants, groups or chambers — that would assist you in developing some very specific goals for each region in this province and would assist the bank, credit union or whoever you are dealing with in determining how much of a risk they are prepared to take when they venture forth with their venture capital?

HON. S. HAGEN: The answer is yes. I would be pleased to provide you with a regionalized view of the province — region by region. I just want to add that there are times — and I guess the example might be Kimberley — when something happens that really shocks a community and is not anticipated by the community. What we did, first of all, in Kimberley — and you are probably aware of this — was to make them the ninth member of the Strong Communities in the 90s list of winners for this year, because that's a competition between communities. We had one winner from each region, then we added a special program for Kimberley, just because of the state they were in. It has worked extremely well. What I then asked my staff to do — which they are working on now — was to prepare a plan in case something like a Kimberley happened again elsewhere in British Columbia. But in answer to your first question, we would be pleased to provide you with sort of region-by-region capsule and analysis.

MS. MARZARI: I don't know if our critic has asked for that yet, but I think it would be very useful for this House to have the detailed breakdown as to the criteria that are used when you move out to the regions, that will establish how much money you're prepared to invest in a region; and secondly, a careful listing of the priority businesses you might be looking for in each of the regions. You, I gather, are still sticking with the eight regions; you have a winning eight group that won by some form of priority lottery, I assume, that you selected. There must be some criteria by which you selected the winning eight. There must be some criteria by which you're looking at each region and deciding how much money to invest in it. Perhaps you could explain, then, how we go about that.

[3:45]

[Mr. De Jong in the chair.]

HON. S. HAGEN: I'm sorry if I've confused you, We're talking about two different things here. I was talking about Strong Communities in the 90s, which is specifically directed to a community. In the case of Gold River, for instance, in region 1, they competed against maybe three or four other communities and came in with the best proposal, so they won. But that was a specific community within a region.

What I was talking about was.... We have developed, through the Regional Development Board and also through the ministers of state prior to that, an analysis of each region as to what the strengths of the region are and what the needs of the region are. That's what I said I was more than happy to provide. We have not allocated an amount of money per region. The money is there and will go out as the applications come in. I don't know how else you would do it on a fair basis. I think it's the job of the MLA. When somebody comes into your office — and they're not as likely to come into an office, in all due respect, in Vancouver, but certainly outside Vancouver — and says, "We want to know what assistance programs the government has," I would hope you would hand them a brochure and say: "Here's a program; you can go to the bank. Or if it's a No. 2 or No. 3 program, we will assist you in filling out the forms."

MS. MARZARI: Strangely enough, Mr. Chairman, that doesn't really seem to happen so much in the opposition offices, since the opposition offices traditionally haven't been particularly well informed about these programs. Traditionally, if I may say, many of these programs have been fed and nurtured out of the hip pockets of the ministers involved. That is one of my concerns. The parliamentary undersecretaries that were out there with their million-dollar setup, and then up to $8 million each, have now been replaced, we hope, by a responsible, accountable system brought into place by the new Minister of

[ Page 11059 ]

Regional and Economic Development. And we are assuming now that with the comprehensive system of loan guarantees and some venture capital, you're doing a detailed and systematic prioritizing of regions and communities as to the money they need and the capital you have for matching businesses and ventures with banks and credit unions, supplementing where possible with our own guarantees and possibly doing what the second member for Vancouver East (Mr. Clark) has suggested: using preferential rates which the province itself might be able to extend, to carry those dollars a little bit further. We hope that that might be the case.

My office does not deal with these programs. My office has not really been brought up to speed with these programs. I can only hope that these programs are not being funded out of the minister's pocket, which brings me to my questions around accountability. I have a number of questions around accountability. In the last analysis, how do we finally tab these programs? As Chairman of the Public Accounts Committee, I've had tremendous difficulty getting into the intricacies of contracts, loan guarantees and special privileges that have been awarded a number of small business throughout this province. Various reasons have been given. For example, this is a private contract, therefore you don't have access to the inner workings of what their bottom lines look like. Even though public money is involved, they have a private contract with government — an inconsistency in my own mind, but that is an excuse which has been given.

I would ask the minister where the buck stops when it is time to go out and evaluate these loan guarantees, these programs. Does that small business report back to you? Do you have a clause in your contract which makes it possible for you to audit those businesses? That's question number one.

Question number two. When you step out into the community, using your bank, your credit union, your own provincial dollars, do you have ceilings on the amount of money which can be granted at the local level, without it coming back to you or your deputy? And what are those ceilings? And do they differ between types of businesses and types of projects?

Thirdly, can we expect to see a detailed breakdown in your annual report of exactly where that money has gone and how much has gone to each individual business as part of the contract you might make with them, so that in your annual report we will actually be able to see, region by region, where the money has gone? Those are three accountability questions.

HON. S. HAGEN: The quick answer is yes, yes and yes. Yes, there is an audit clause in the contract. In the second case, we don't give grants anymore. This ministry does not give grants. These new programs are loans and loan guarantees.

MS. MARZARI: You give write-offs?

HON. S. HAGEN: We don't give write-offs. The only time a write-off occurs is if the business goes out of business.

Interjection.

HON. S. HAGEN: No, you don't wave goodbye to it at the end of the year; only if it occurs.

Number three: yes, the list will include the firm and the amount of the loan.

MS. MARZARI: My second question had to do with the ceiling of allowable loan that is going to be given at the regional level. Is there a ceiling? Is there some kind of a level at which the minister is not involved? Under what level of loan is the minister not involved? At what point does a loan contract come to your attention or to cabinet attention?

HON. S. HAGEN: The first program is the business start-up program I will not see those, because they are done by the banks. On the second two programs, every deal over $1 million must have an OIC by cabinet.

MS. MARZARI: It doesn't come to cabinet until it's over $1 million. What about those projects that might be $250,000, $300,000 or $500,000? Are they all dealt with by the banks as well, or does your office or your agent have something to do with them?

HON. S. HAGEN: They go to an internal credit committee made up of staff from my ministry.

MS. MARZARI: And you, the minister, wouldn't ask to take a look at items that are under $1 million?

HON. S. HAGEN: They come to me after they've been approved by the staff.

MS. MARZARI: For a veto, if necessary, but not necessarily a veto.

We have made a contract, I think, that the minister will be bringing back to this House a detailed breakdown on regional priorities. The promise has been made that we'll have a look at regional priorities and inventories and what kind of priorities the minister is giving to different regions. I think you committed yourself to that about ten minutes ago.

HON. S. HAGEN: What you've asked for are part of these guidelines, so I have no difficulty sharing that with you.

MS. MARZARI: My last question, then, has to do with what priority the minister has given to women's small business start-up and women's access to venture capital. What we know through not very careful study is that it's very obvious that women's access to capital to start up small businesses has been seriously curtailed by sexism, basically, inside the banking community, and by extra screening processes that seem to be applied to women entering small business.

[ Page 11060 ]

Has the minister developed special criteria, special priorities, around women in the regions, or women simply as a group, moving towards developing small business? And if you have a specific dollar amount set aside for women, I'd be interested in knowing what it is.

HON. S. HAGEN: First of all, I want to ensure that the members opposite have received this kit. It was sent to all MLAs, so I would hope that you got the kit. If you didn't get the kit, please check with my staff or me, and we'll make sure that you get the numbers that you need. You can have as many as you want.

With regard to your question, I'm sorry that you weren't here a little earlier. I referred in my speech to the significance of the business start-up program with regard to women. The reason that this program appeals to me — and I think the appeal is shared by my staff — is that it makes it possible for women to be treated the same as men would be treated when they walk into the bank. It's because of the government guarantee. There's no requirement here for a spouse's guarantee or for credit or anything else. And if you're outside Vancouver, you need the $7,500 just like anybody else. The guarantee is there, and as I mentioned, the statistics are apparent that the success rate of women in business is higher than that for men. By the year 2000, which is ten years away, 50 percent of the businesses in Canada will be owned by women. So one of the appeals of this program is the fact that it would be attractive to women.

No, there is not a dollar amount allocated specifically to women, but I expect that over 50 percent of the take-up of this program will be by women.

MR. JONES: I want to rise and pursue a particular issue with my old friend the former Minister of Advanced Education and now Minister of Regional and Economic Development, who, as is his wont, comes in and reads his introductory remarks in estimates. Although the minister reads well, he knows it's very boring in this chamber and maybe even out of order. But my ears pricked up at one point — and it sounded as if the minister was very keen on this section as well — when he got on to the section about freedom of information.

I'd like to ask the minister a few questions about this initiative. The first would be: could the minister explain how what he described as the white category of information differs from what is presently released and available in terms of access to information?

HON. S. HAGEN: The recommendation of this learned committee is that in the white information normally accessible to the public, the company name and business, the description of the project, the loan purpose, the total cost of project, and the amount and type of assistance be given out. I'm just looking to see what we presently give out. You weren't listening, because I said it in my speech.

MR. JONES: You weren't listening either.

HON. S. HAGEN: I wasn't listening either.

I'm really disappointed in the member for Burnaby North that he wasn't paying attention, but let me reiterate. When I became the minister eight months ago, the disclosure practice of the ministry was generally limited to the following: the name and the nature of the firm's business, or the company name and business; the principal amount of the loan; and the description of the project. So the total cost of the project is new. The type of assistance — loan or loan guarantee — is new. The loan purpose is new.

MR. JONES: And total cost of project.

HON. S. HAGEN: And the total cost of the project — I think I said that.

So I think there are six points in this recommendation, and three of them are additional — or new — to what we are presently disclosing.

MR. JONES: So this new bold initiative that the minister is excited about — and I was excited about momentarily — is adding what I consider to be very little to the public domain of available information. We already know the company name and business, the description of the project and the amount of assistance. So very little is being added. We know now whether it's a loan or a loan guarantee, and I don't know what is so significant about that. It seems that you're in the business of providing loans, so that's really not new information. We're now aware of the total cost of the project, and I think that's useful, but I don't know why that information would not have been accessible in the first place. And we're now aware of the loan purpose. I assume that the loan purpose is for economic development in the province, so I don't see a great deal of new information being provided there. What we're dealing with is an incredibly conservative report in terms of making information available to the public.

[4:00]

I'd like to ask the minister a question. In the black-grey area — the area that may or may not be available to the public — who is going to determine whether this information will be made available?

HON. S. HAGEN: First of all, let me say that after an agreement with the proponent is made to do so, the grey information will also be released. The grey information includes the following: qualitative information on benefits, to be compiled in an information package; the quantitative measure of benefits; the economic costs and net benefits; and the terms of the loan agreement. All those things will be made available after agreement with the proponent is reached.

And let me remind the member from Burnaby North, who I know is very interested in this particular topic, that I said in my speech that the onus of confidentiality will be placed on the proponent to prove the reason for not publicly releasing the information, while recognizing some items are and must be confidential. So the onus will be on the proponent to prove why we should not release the information.

[ Page 11061 ]

MR. JONES: So the real answer to my question is that, in both the grey-grey area and the black-grey area, it really will be up to the government to determine finally whether this information should be disclosed.

For example, in the grey-grey area, "quantitative measures of economic costs and benefits would normally be provided unless disclosure may adversely affect the applicant in the conduct of its business." So there's a caveat there. The grey-grey area may or may not be disclosed, and in the black-grey area further details of the agreement would normally only be accessible where the applicant's business would not be adversely affected, and where the information would not likely be subject to misinterpretation.

So it's really going to be in the ministry's final determination whether this information is subject to misinterpretation, whether the individual's business is going to be adversely affected, or whether it's going to affect the conduct of the applicant's business. So the answer to the question really is that the ministry — in fact, the minister — is going to be the sole arbiter of what information is made public. Is that not correct?

HON. S. HAGEN: First of all, let me say that this report is not the policy. We have not generated the policy yet. We have asked the ombudsman for his help in developing the policy. We asked these learned individuals from the business community, the legal community and the business advisory and academic business management community to give us their views. The only direction that I gave them was a desire to move towards a more open approach. We have had these opinions looked at by various legal experts, and we find our legal experts to be in agreement with them.

What I've done now is ask my deputy to write to the ombudsman to ask him for assistance in developing the policy. As I said to your colleague — and I know that you do have particular views on this — I would encourage you to give me your views either today or in writing, and we will consider them in developing the policy. But the policy is not in place. We have asked for assistance from the ombudsman in developing that policy.

MR. JONES: I've seen this exercise many times with this minister in another movie. The whole process is that we have these nice committees and they come up with nice reports. The initial reaction from the government looks like: "We're really behind this report." I've seen this on a couple of instances, and it's unfortunate that the minister didn't get to carry on with these.

We'll take, for example, the Literacy Advisory Committee. That was a wonderful report with wonderful recommendations which have totally been put on the back burner and now are gathering dust on the shelf. The other one for native Indian learners in the province was good work the minister initiated, but we didn't have an election to shift ministers to do that. We had a cabinet shuffle and not an election, so those things have basically been shelved. I'm a little disappointed.

The minister now seems to be saying: "This isn't policy." He talked initially about white, grey, black, grey-grey-white and all these things, as if he was really behind this. Now he seems to be divorcing himself from this particular conservative report.

If the minister wants to solicit my views, he can do what he's already done and read my private member's bill on freedom of information. It's pretty standard with freedom-of-information legislation across this country and in the federal Parliament. It has major provisions for protection of privacy. But it also has — and this is what the minister seems to have difficulty with — appeal provisions. They all have appeal provisions. My point on the minister being the sole arbiter is that the crux of the problem is that information generated by the people's government really belongs to the people. If for particular reasons the government doesn't want to release information that really should be in the public domain, then there is an appeal process that is the final arbiter of what should or should not be in the public domain. It should not be the Minister of Regional and Economic Development, clearly.

I don't know whether the minister wants to answer any more questions about this report, or whether he's disavowing support for it. Let me ask one, and I'll find out. The real secret stuff, the black information, is the loan agreement itself. On page 6 of the report, the loan agreement is defined:

"The prime document emerging from a successful loan application is the loan agreement. A typical agreement deals with the total cost of the project, the amount of financial assistance, the purpose of the assistance, the terms and conditions, including the repayment schedule, covenants, default clauses" — and I suppose those are performance criteria that are important to the agreement — "as well as agreements to public announcement."

Most of that is really in the white area or the grey area. The total capital cost of the project is already going to be announced. The amount of financial assistance is going to be announced. The purpose of the assistance is going to be announced.

What isn't going to be announced and what is the big secret is terms and conditions. I don't know why the repayment schedule is such a big secret. Covenants and default clauses are protections that I hope the government is putting in in the public interest. Those are there to protect the public purse, to protect the taxpayers' dollars that are going into these loans, and I would think the government would be proud to announce how they are protecting taxpayers' dollars. Agreements to public announcements may be one that gets into the political realm that the government would want to remain secret.

But the report's own definition of a loan agreement sounds to be, by and large, normal kinds of things that, in the public interest, would be made available to the public. After all, we are talking about loans of taxpayers' dollars. They have a right to know. I think they want to be reassured that the

[ Page 11062 ]

government is acting in their best interests and protecting those taxpayers' dollars with the kind of detail that this report says should never be made available to the public.

I wonder if the minister would want to comment on that.

HON. S. HAGEN: First of all, I dislike your comment that I'm stepping back from this report. If I hadn't wanted the report, I wouldn't have asked for it. All I was doing was clarifying with you. You were treating this as policy. I did not want to mislead you or have you misled into thinking that the policy was in place. How could the policy be in place and I ask your colleague for input?

I appreciate the fact that you are very interested in this particular subject. We have been taking down the concerns that you have. We have not developed the policy yet. We are working on developing it.

With regard to the appeal, it will probably end up being to the ombudsman in this case. I'm not sure if that isn't the same as in the private member's bill you have proposed. The appeal is not to the minister. The appeal now, as far as I know, is to the ombudsman.

What we're trying to do is develop a policy that goes as far as it can in providing information, because the funds are public, while at the same time protecting the proprietary rights of the company. It may well come to a point in a deal that we're doing that the company doesn't want to do the deal, because they don't want to disclose some things. Well, that's fine; then the deal won't happen.

MR. JONES: I must admit that I am pleased there are plans for an appeal process, because that is central to the whole concept of public information. There are instances, I'm sure, where there is information in a loan agreement that the government, the ministry, may not want to be made public — who knows for what reasons, and I don't want to speculate. Governments in many instances, and perhaps in instances for good purposes, do not want information made public or do not want information made public at a particular time.

Let me back up to a question I asked earlier. I fully appreciate the minister's comments about this not being policy. What we have is a conservative study commissioned by representatives of a couple of law firms, a couple of management accounting firms and an academic. This is a general thrust that this minister is interested in. There has been criticism in this area of government loans that it is the public purse being used here and that the public has a right to know more about it.

Does the minister have an implementation plan? He said: "Here's the study. We're talking to the opposition; we're talking to the ombudsman." When does this happen? Keep in mind, too, that this is going to be the last full sitting of the Legislature. So when is the public going to be informed about these government loans? When is this information, in whatever form, going to be fully available?

[4:15]

HON. S. HAGEN: As I said earlier this afternoon, my deputy, under my instruction, has written to the ombudsman. We are awaiting a reply from the ombudsman, which we expect in the very near future, and I am told that probably four to five weeks after that reply is received we will be able to put the policy into place.

MR. JONES: Let me just wind up with a few comments to the minister. Dr. Wexler, one of the members of this project team that produced the report, suggested a few things on page 8 of the document that I think are important advice to the government if they are looking at this kind of open-government approach.

He recommends firstly: "Do not try to use or employ freedom of access to government legislation as a policy panacea, particularly if real and basic priority inconsistencies exist in the body politic." It seems to me that the author is suggesting that unless you're really serious about the public's right to know and to access information that affects their tax dollars, there are going to be a lot of problems with this particular approach. I haven't sensed, other than in this particular minister, any real commitment on the part of any member of the government to proceed with the kind of political will necessary to carry through a major policy change of this magnitude.

Secondly, the author suggests: "Do not try, as I believe the briefing package suggests, to implement the freedom of access to public information on a piecemeal basis, to handle specific problems in a ministry." That is exactly what this minister is suggesting to this House is happening at this time. In one small area of government, the loan portfolio, we are being treated to a very conservative approach to freedom of information, totally against the recommendations of one of the authors of this report.

The author makes a number of recommendations. I'll just list one more: "Do not try to implement freedom-of-information guidelines within a civil service not trained to lower its suspicions of outsiders." Very clearly, the kind of mentality I've seen created in ministries of this government really does not lend itself to the open, positive, flexible kind of environment necessary to implement this kind of legislation.

So while I must commend the minister for this initiative, because it's clearly a step in the right direction, it's a very modest step. All I can see it achieves for your government is to make them look bad. If you are the only minister, and this particular area of your ministry wants to demonstrate that you care about the public and their right to know and that you care about their access to information affecting their tax dollars, then by comparison the other ministers of the Crown look abysmally bad.

We had an election in 1986, and the theme of that election from the government's side was open government. This is the first little ray of sunshine in terms of open government that I've seen. I know the minister is a humble person, and he does not wish me to put him on a pedestal. It's a very small pedestal, Mr. Minister; you haven't done much. You've opened

[ Page 11063 ]

the door a tiny crack to freedom of information, but the sunshine is not really flooding the chamber or this government yet.

Very clearly, the attitude of this government has been: we don't want the public to know what we're doing, because we don't want them to know what we're doing wrong. You're fighting that by this little initiative. You're swimming upstream; you're going against the grain, and you're doing something different than what the other ministers of the Crown have been doing. But again, it's a very modest step, and the timing is terrible, because we may well be into an election before even this very conservative and modest policy initiative will have any chance of implementation. So I thank the minister for his time and for this initiative that is clearly in the right direction, albeit very modest.

MS. CULL: I have a very specific issue I want to raise with the minister which is of great interest in my own constituency, and it relates to Camosun's business development centre. Just for the record and to remind the minister, the funding initially came from the Ministry of Advanced Education, Training and Technology. Earlier this year, funding for all the business development centres was cut off without any discussion with them or any explanation.

In question period with the minister responsible, the indication was given that perhaps some of these centres weren't performing quite as well as was desired. But it appears that they were all cut without any review of the relative merits of individual centres.

I want to talk specifically about Camosun's business development centre, because it is a very successful centre in my community. Last year, with a total budget of just over $114,000, of which $82,799 came from provincial grants, the Camosun business development centre was able to assist 39 new businesses to get started in greater Victoria, creating 90 new fulltime jobs and injecting $1.5 million into the local economy. This is successful, I think. I don't think anybody would disagree with the fact that these figures are significant to our community.

Added to that is the unprecedented success rate that this business development centre has had over a three-year period. Over 90 percent of the businesses that they've assisted to get up and running are still up and running three years later, and that is unprecedented. I'm sure the minister has the exact figures, but it seems to me that almost the reverse is true of small businesses elsewhere in the country in, with the failure rate.

Your ministry, Mr. Minister, to its credit, has stepped in to assist Camosun, and I'm very pleased with the actions that have been taken by your staff to this point to assist Camosun to continue providing this very valuable service to the community. Initially it looked like your ministry was not even going to undertake its review until the centre had folded. The funds were going to run out at the end of May. Some juggling has been done within the college budget, and they are now able to limp along until the end of July. But the initial response the college got was that Regional and Economic Development would have a look at it, but not until the funding was gone.

After some discussions with some of your staff and sending them a copy of the business development centre's annual report for last year, they moved very quickly and have started discussions with the college. Mr. Minister, we're very close now, I believe, to a mutually satisfactory resolution with the college, but we're not quite there yet. That's why I'm rising in the House today to bring up this point with you — not so much to ask a question as to ask for your assistance in seeing this through to resolution.

A report done earlier this year by Camosun College recommended that they consolidate their business development centre with their incubation centre. The college agrees with that. They think it would be a wise move, and your ministry staff also agreed it would be a good move.

Part of the reason this would be a good move is that it would allow some cost-savings in administration and overhead. But it is not as much of a cost-saving as your staff seems to think. This is where I would like your commitment to some further assistance to resolve this matter.

I understand that $60,000 has been offered to the college to continue the program for another 12-month period, starting July 1. That is down roughly 25 percent from the grant they received last year. Even with the cost-savings that can be effected by combining the business development centre with the incubation centre, they are just not going to be able to make it. Services are going to have to be reduced. Sixty thousand dollars will barely cover the contract for the one counsellor to continue providing full-time services. I think any reasonable person would agree that, no matter now efficient you are in combining facilities and locations, there is still going to be some overhead, some administration cost that will have to be borne by the program.

There seems to be no dispute as to the value of the service in the community. Certainly in discussions with your staff they recognize that this particular business development centre has been doing a good job. The college is very interested in seeing it keep going. It seems to have a good measure of success in the community and support from the business community. But we're falling short here. I would hate to see a successful program such as this have to close or reduce to half-time, which I have been advised by the college today is the impact of this shortage of funding.

So I ask you, Mr. Minister, if you would commit to looking further into this matter. The funding is going to run out at the end of the month, so we don't have much time. But I think that with just a little further assistance and interest from you, we may be able to come up with something that will serve the community well, serve the college well and serve your ministry well.

HON. S. HAGEN: Before I answer that, I want to apologize to my staff who are here, because I ne-

[ Page 11064 ]

eglected to introduce them to you. Here with me are my deputy minister, Bob Plecas, and two assistant deputy ministers, Kathy Mayoh and Chris Nelson, who have been assisting me this afternoon.

I am very familiar with the issue raised by the member for Oak Bay–Gordon Head, first of all because I was responsible for it in my former ministry, and I have been following the negotiations quite closely. I want to point out that in the Camosun situation, there is a desire to resolve that. We have had ongoing discussions with the principal at Camosun, but unfortunately some holidays intervened. The staff who were on holidays were back yesterday. I am instructing my deputy minister, Bob Plecas, to involve himself with that issue and make sure it is resolved — I can safely say — to the satisfaction of all by the time the funding runs out.

There is no question that the particular program was successful, and I think it will continue to be. It was very much appreciated by the business community in the Victoria area.

MRS. BOONE: I would like to get back a bit more onto the loans here. I guess some of my concerns.... We have gone through the loan structures and your new processes here, which are going to be oriented to the banks, as far as I can see, without input or any involvement of the regions. I would like to go back to a loan made not too long ago to Canfor — a $4.3 million federal-provincial loan, interest-free for five years. A lot of money there, Mr. Minister. A fairly poverty-stricken company to give a low-interest loan to.

I think the taxpayers are concerned when they see moneys being given out which end up as a giveaway of around $2 million from the taxpayers — a gift to Canfor, a very large and very successful company that in the past.... Perhaps if it had been in the early 1980s one might even be able to justify it, because I know a lot of the industries at the time weren't doing so well. But certainly in the past few years these industries have been doing very well.

[4:30]

How does the minister justify that kind of a giveaway of taxpayers' dollars through a low-interest or no-interest loan to a major company such as Canfor, when others are struggling along paying the prime rate or prime-plus in some cases? How do we justify this, given the fact that Canfor is in competition with other companies? How do other companies compete? This is certainly one that we know about, but I am sure there are many others out there as well. Given the fact that this is now going to be put into the hands of the bankers, how does the ministry decide — if there are competing interests out there — that they are going to give assistance to a company and that that company is going to be given a financial advantage by having a low-or no-interest loan?

Can the minister respond and give me his comments on some of those areas?

HON. S. HAGEN: I would be more than pleased to respond to those questions. They are basically the same ones that I asked when my staff brought this deal to me.

What we have here is a perfect example of a provincial government being interested in diversification and in the use of waste wood products and waste wood-fibre. Canfor came to us with a proposal to take waste wood-fibre and make a matting out of it that could be pressed into three-dimensional shapes, and surfaced with cloth, plastic or other materials to produce interior panels for cars, furniture components, pallets and packaging material.

The $800,000, five-year, interest-free loan levered a $13 million project that would not have happened without the provincial government's assistance. Canfor itself has invested $8.7 million in this project. This is a perfect example of a project that has taken a brand-new technology, is transferring that technology and putting it into use building a plant that will take the technology developed in British Columbia and produce a product that will be sold not only in British Columbia, not only in Canada, but around the world, thereby generating export revenues as well as being the first on the market with this product.

As the minister, I was very proud to participate in the announcement of this deal. If we go back to our original discussion at the very beginning of these estimates, we talked about the need for diversification, the need for value-added wood products particularly, and the need to strengthen our fragile economy and make sure that we can survive the downturns that we know are coming. This is a perfect example of job creation, of using technology where the company has invested many dollars just in developing the technology and is now prepared to invest $8.7 million in a $13 million project generating jobs in New Westminster.

MRS. BOONE: I am sure Canfor is not doing this out of the goodness of its heart, and I can assure the minister they are probably going to make a substantial dollar on this. The last I heard, this was a free enterprise party across the way there that believes that businesses should be free enterprise, that they shouldn't be given government money and all kinds of things like this.

This is an $800,000 giveaway to a major company. Yes, a no-interest or low-interest loan is a giveaway to a major company which has financial assets and should be well able to support itself in this kind of venture. You're saying $800,000. If they were that interested in it, I don't think they would have backed down from this kind of development.

I think the general public finds it a little hard to understand and to swallow why people are given this kind of giveaway. As I said, they are going to be making a substantial amount of money off this, they aren't going to be giving it back to the taxpayers, either, and this government is not getting a piece of the action.

So it's just another aspect of what always makes me laugh when I hear people talking about this free enterprise party over there — free enterprise as long as you're putting the dollars into the hands or the

[ Page 11065 ]

pockets of the corporations. It makes no sense to do these things.

HON. MRS. JOHNSTON: Be specific when you make an accusation.

MRS. BOONE: We are specific, Madam Minister; we're talking about Canfor.

I would like to know what other major loans have been given out to companies over — I'll make it easy on you — the past year. What other major no-interest or low-interest loans in the million dollar area have been given out to major companies, and what have they been doing with that money?

We hear that companies are spending a tremendous amount of money in upgrading their mills to make them environmentally clean. Are they getting assistance on that? Are there loans going into those things? Are there loans going into other diversification areas? What loans have been given out, and where have the taxpayers' dollars gone in the past year, Mr. Minister?

HON. S. HAGEN: I find the comments of the member for Prince George North to be very interesting. I wonder if she is opposed to the science and technology development fund that was created by this government a couple of years ago. We have assisted R and D and technology transfer — $10 million in the first year and $15 million in the second year. I wonder if she is also opposed to that kind of R and D.

I wonder if she's aware that forestry companies like MacMillan Bloedel, Canfor and others are spending millions and millions of dollars annually on research and development in this province. I think MacMillan Bloedel spends the most — about $15.7 million this year.

This is not a government giveaway. This is an interest-free $800,000 loan that has triggered a $13 million project which will generate many jobs. When the member states that no money comes back to the government, I wonder if she's aware of where corporate taxes go. Corporate taxes go to the federal and provincial governments to pay for the many social programs we pride ourselves on in this government, so I think her argument is very weak.

Someone has gone to fetch the list of those projects.

MR. G. JANSSEN: Certainly giving a loan to a company to create jobs so the government can have people working, so they can collect taxes, so they can spend that money in the community they are involved in, and so there are spin-off effects.... What are the criteria? Is there a spin-off level that the ministry uses? When you guarantee a loan or when you give somebody like Canfor or MacMillan Bloedel some write-offs, do you look at it and say: "This will be returned to the government over a certain length of time"? Is that taken into consideration? Is the consideration different in each region? Certainly, as we've already discussed in these estimates, conditions do vary from region to region.

HON. S. HAGEN: The specific loan in question was made, of course, before the new programs were in place; it was done under the old program.

With regard to the regional question in new programs, as I've pointed out before, there is a regional aspect to each of the three programs. It's not region by region. That, I guess, could be the next step; I don't know. But certainly we have differentiated between the lower mainland and the other regions of the province outside of the lower mainland and Vancouver Island.

MR. G. JANSSEN: What I'm trying to establish here, Mr. Minister, is what percentage return your ministry looks for when it makes these kinds of investments, if we can call them that. Are they different? Do we say that in one region $800,000 will generate a certain number of jobs and a certain return to the community and to the taxpayer? Is there a standard that we use? Does it differ between Prince George and Vancouver Island? Is that looked at before you enter into these agreements?

HON. S. HAGEN: Certainly those things are taken into consideration. I can tell you that I recognize the difference between a hundred jobs in Vancouver and a hundred jobs in Port Alberni. I pay attention to those sorts of figures.

What we also look at is whether the project has any competition, and whether or not it's value-added. We're very interested in value-added, particularly in wood products. Many criteria have to be met in the business plan, which is gone over by my staff.

MR. G. JANSSEN: So when the studies were done in the regions — and I notice you gave a copy to the member for Vancouver-Point Grey — they took into consideration, I would hope, what types of jobs would be generated. Somehow these incentives that the government is offering are based on those studies.

Obviously the parameters of the studies had to change from region to region. Did you look at them over a one-year term or a five-year term? How far down the road did you look? Or was it different in each region? Did you look, for instance, at a community in the interior, where things may change in a three-year period...? Perhaps they take longer to change in a community such as Prince Rupert. If you're saying you are aware that the regions are different, are they different on a yearly basis, or on a bi-yearly basis?

Do you actually have an economic forecast for each region of the province that the government is involved in? I was hoping that the minister would answer that we do have an economic forecast; that we're looking somewhere down the road in the province of British Columbia.

[Mr. Pelton in the chair.]

[ Page 11066 ]

HON. S. HAGEN: The Ministry of Finance does the economic forecasts for the province. We use that information, but we don't prepare it.

MR. G. JANSSEN: When the studies were done, there was no actual economic forecast done for each region, where you expected to go in a year or in five years' time. You are guaranteeing these loans, or you are giving some incentives to some corporation or some company. We are not looking at where it will take us in a year or two or three. That seems rather blind forecasting to me. I'm certain there's no company in the province of British Columbia that would make an investment without knowing what the end result would be a year, three years or five years from now. I'm sure the Ministry of Finance has an idea of how much money is going to come in this year, next year or the year after. They table their documents in the House along with the budget when we do the budget debate.

I really would suggest to the minister that we have an economic plan in each region. If that hasn't been done, perhaps the minister should be in touch with the economic development officers who operate throughout the province and who may have a good idea — with the volunteer members involved with those commissions — as to where that particular community or area would like to go. There are some areas, such as the minister's own area of Comox, that are heavily involved in tourism and the service sector. There are other areas, such as mine or Prince George, that are involved in heavy industry. Certainly that distinction has to be made.

[4:45]

If some of those jobs in the forest sector, for instance, where we have seen some 20,000 jobs slip away in the last number of years.... Some investment could be made by the Economic Development ministry where they can diversify and move to another type of industry to keep those people employed and keep those areas economically viable. I would suggest to the minister that if it wasn't done in the studies of the regions that were done by the ministry, they should do that so that we have a better understanding and can keep those communities very viable.

The question of the white, grey and black that is now, I understand, in the ombudsman's hands for his comments: in the white areas most of the information will be available, in the grey areas some will be available and in the black area virtually none of the information will be available under the recommendations of the fine people that put that report together. Does that also hold true, Mr. Minister, if the deal goes sour? If the company collapses, for instance, would all the information be made public even out of those black areas where no information was made public while the deal was being put together and while the deal was in effect?

HON. S. HAGEN: In response to the comments made originally by the member for Alberni, I think can simplify the answer by saying that I would be pleased to make available to him the regional economic development information, as I offered to make it available to the member for Vancouver–Point Grey. I'm not sure specifically what he's getting at. I'm quite prepared to offer all that information to you. I'm not sure how useful it will be.

The other comment I'd like to make is that we respond to the private sector. We don't go imposing what we think should be in a region. The regional committees that we've had have done a lot of work on highways, tourism studies or health care studies. We work with the line ministries in putting the regional information into those line ministries.

I can't remember the last point you made. Could you repeat it?

MR. G. JANSSEN: On the original point, the question I wanted to ascertain.... You have indicated that you rely on the private sector to come to you. But if we're talking about economic development, we're not talking about a private sector individual or corporation coming to you or to your ministry and saying, "I have a great idea, and I want to establish a plant in Enderby" — or Kimberley or whatever town it happens to be — and you saying: "That sounds like a good idea; let's do it."

But there must be a plan in place for the entire region as to whether or not that is where that region will be developing itself in the next one-, two-, three or five-year period. That's what I was getting at. That may well be in the information that you have just offered me and which you so kindly gave to the member for Point Grey. The question I have is: is there a one-year or five-year outlook for the different regions, or do you just rely on the Ministry of Finance?

The white, grey and black areas of where the information comes out: in white, virtually all the information comes out; in grey, part of the information; and in black, none. I can understand that confidentiality being required, but if the deal goes sour and the company defaults, will all the information be made public? We are dealing with public money here — taxpayers' money — and they have a right to know if, how, when and why the deal went sour.

HON. S. HAGEN: In answer to that question, the economic forecasts done by the Ministry of Finance are on a short-, medium- and long-term basis.

In answer to the question about companies that go defunct, as you put it, there is a period of time when the company may be in difficulty when we may get involved in trying to find outside investors, somebody else to provide equity or in providing other assistance to the company to keep those jobs secure. If the company goes down, the practice to date has been not to release any information, because the loan then goes to the Ministry of Finance. I would be interested in hearing the member's comments and recommendations as to what he would see released in the way of information on a company that has gone down.

[ Page 11067 ]

MR. DE JONG: I would just like to get briefly into this debate, since I've been listening to quite a bit of It. I've been involved as this minister's parliamentary secretary for the last two years, and I find it difficult to understand why some of the members of the opposition always want to get in on those areas where there's perhaps some doom and gloom or where some difficulty has been experienced.

Generally I think that this ministry, even though when the system was changed a couple of years ago there were some difficulties encountered by the minister and by the ministry, undoubtedly.... Whenever you make major changes in the operation of a ministry, there will be difficulties. However, I think it's important to understand that even though there have been some difficulties, many good things have happened.

It was only about a year ago when I met with the staff in New Westminster, and they were saying that in that particular government agent's office some 50 new companies were registered each day. That was for a period of six months during that particular year.

It's quite often seen that the government should provide everything. The government should give leadership perhaps, but it doesn't have to provide all the details. From what I experienced through working with this ministry over the last couple of years, there has been a complete change in the application of this ministry and how it works with the people.

I was invited to go to Trail and Castlegar last fall for instance, to present a cheque to the two chambers of commerce. I must say that even within the lower mainland when there is a specific ministry function that I'm invited to, or invited to represent the minister at, often the NDP members are not present at such an occasion. But I must give credit to the member for Rossland-Trail (Mr. D’Arcy), who was in fact present on the occasion of these cheques being presented. Those were cheques to tie those communities in with the business information network, which is very important for any community and any industry to be connected with.

Going back to some of the things that have happened in terms of changes. In the ministry, last fall there were in our community, as well as in many other communities, conferences called "Business Opportunities at Your Doorstep." I'm sure they also happened in some of the NDP-held ridings. Those conferences were there really to provide some ideas to local communities as to what could be done in terms of expansion of businesses or new industries for those particular communities, and they have had great success.

I must also give credit to the minister for sending a task force throughout the province last year to meet with various chambers of commerce, business organizations and such to come up with a better approach to the business of not only providing the leadership but also getting the input back as to what the local communities see as beneficial to them in terms of business expansion or new businesses.

Subsequently we've had really good meetings, and meetings have been established through the ministry offices in New Westminster with all the economic development officers of the municipalities and regional districts throughout the lower mainland. These meetings have been extremely successful. Instead of these folks continuing in isolation, they are now a direct link with the ministry offices in New Westminster and elsewhere.

I know that the meetings in the lower mainland have been very successful in terms of tying the thing together so we get grass-roots ideas into the development opportunities within each community. I'm just curious to know whether such an approach is also planned for other regions throughout the province.

HON. S. HAGEN: I'd like to assure the member for Central Fraser Valley that one of the reasons the process has been so successful in the lower mainland is that he's been very involved in it. I want to assure him that we will continue with this process throughout the province, because there are many areas where it has been well received. As a matter of fact, I can't think of any areas where it hasn't been well received. Everywhere that I go and meet with regional boards, the reception is very positive and people want to get on with new challenges. It's very enjoyable to get out into the province, talk to the people, find out what they want to accomplish and then be part of helping them to accomplish what they want.

I want to take this opportunity to respond to the member for Prince George North (Mrs. Boone), who asked for a selection of loans in excess of $1 million where the disbursements have taken place. I assume you want disbursed loans that have taken place over the last year or so. I'll just run down a list of them.

The Canfor one is $800,000, so it's just under the million.

Interjection.

HON. S. HAGEN: We've already canvassed that one.

These are loans. FMC of Canada for $3 million; North Shore Studios for $4.3 million; West Coast Plywood, which was also an employee share-ownership program, for $4 million; Canadian Chopstick for $1.1 million; Norvik Timber for $3 million; Prince George Wood for $1,125,000; and Woodland Windows for $1 million.

[5:00]

MR. G. JANSSEN: Before the second member for Central Fraser Valley (Mr. De Jong) made his remarks, the minister asked me for some comments, and I'll be more than happy to give them to him. The idea of these estimates, and our duty in this House, of course, is to oversee the tax dollars and the laws of British Columbia.

There is no doubt that under the white-grey-black area of freedom of information — if we can call it that — that is going to be made available.... I have no qualms with that being necessary in order to do business. But when a loss does occur and when taxpayers' dollars are lost, either through guarantee

[ Page 11068 ]

of a loan or through a direct loan, that information should be made completely public. So if even an area that is secretive.... I don't know if that's the right word. In the black area where no information is forthcoming, for whatever reason, if something goes wrong with that loan and if there is a loss of taxpayers' dollars, then I would expect the ministry to make that entire contract public when the appropriate time has passed, when the receivers are finished and so forth, so that the taxpayers know exactly what happened and why the money was lost.

I agree that you can't be right on everything, and when you're in business you take risks and some of those risks aren't going to work out for you. I'm just asking the minister if it's the ministry's intention to make those losses public.

HON. S. HAGEN: I think the member from Port Alberni has made some interesting comments, and yes, I'm prepared to consider those suggestions for the policy. I would just hedge them a bit by saying that, from my experience, there is a period during which an attempt is made to save the company — that becomes the ultimate objective. As I said before, you look around for somebody to invest some capital or do something, because you want to do everything you can to make sure those jobs are protected and stay in place. It doesn't always work, but it sometimes goes on for many, many months — in some cases, over a year. But I'm more than happy to take your suggestion under advisement with regard to.... I think you said that when a company has totally gone down, after an acceptable period of time a total disclosure should be made with regard to the type of loan and other appropriate information. I'm prepared to at least consider it in our deliberations in forming a policy.

MR. G. JANSSEN: Thank you, Mr. Minister. That's the kind of protection I think the taxpayers of British Columbia and members of this House are looking for — that when tax dollars are spent, and sometimes lost, a full review and full disclosure are made.

On that issue I'd just like to bring up a question from last year, when the previous minister — as I'm sure the present minister is aware.... Three Buoys Houseboat didn't make it, and I was sad to see that: 277 small businessmen were left holding the bag, so to speak. The government had advanced $750,000 to Three Buoys Houseboat. We were assured by the previous minister that that money was secured by a marina property at Sicamous Lake. At that time the ministry was still pursuing the $750,000. I wonder whether we have recovered the $750,000 or any part thereof.

HON. S. HAGEN: Interestingly enough, Mr. Chairman, this is a prime example of what we were just talking about. We have not finished dealing with this issue. The company is not down. We are still fighting and working with the company to keep it alive. So it's not finished; it's still alive and breathing

MR. G. JANSSEN: Is the minister telling me that Three Buoys Houseboat is still producing boats — is still going to pay back that loan or a portion of it? Are they in default on payments? Have they made any payments? If that is the case, are they still alive? The original agreement was for $1.5 million, of which the government took back some shares. So is the government still involved in that?

HON. S. HAGEN: No, the company is not still producing boats or houseboats or a combination of the two. However, the company is still being wound up, and the assets are still being distributed. So we don't have the answer to your question at this point.

MR. G. JANSSEN: It does take some time. It's taken a year and a half now, and we're still waiting to see whether or not the marina property at Sicamous Lake will actually return — I think it's valued at $2 million, if I remember correctly — the $750,000 that the ministry advanced to Three Buoys Houseboat some three months before it actually did go under.

Another company — Moli Energy. I gather we were into that, with interest, for some $27 million or $30 million. Is that also within the same purview? I gather we've made a deal with some Taiwanese or some Hong Kong people, if I remember the story correctly, and they took over, and we are going to take back some rights in the future if development of those lithium batteries becomes a reality.

HON. S. HAGEN: Mr. Chairman, just to clarify that for the member, yes, a deal was struck with the largest battery manufacturer in Japan to take over that company. But that account is not in this ministry; it is with the Ministry of Finance.

MR. CLARK: Just very briefly, I'm curious about a loan that was given under your ministry's auspices to Snug Cove Marina. I discussed with one of your staff people the questions around that development, and I was told — and this is not a criticism of your staff in Vancouver, with whom, by the way, I've had very good dealings.... I simply asked for the details on the loan, and I was told that the loan wasn't going ahead. The staff person checked it out and said: "No, it's dead." The day after he told me it was dead, the government issued a press release announcing the loan; and just before the press release was issued, the person I was talking to in your ministry quickly phoned me to say: "I was wrong. It's coming out." So he was kind enough to try and quickly inform me just before the press release hit.

The loan around Snug Cove is an interesting one. I won't go into any detail in these estimates on it, and I don't suggest anything improper. It's just curious that Snug Cove Marina has been declared a destination resort by the Minister of Tourism (Hon. Mr. Michael). There seems to be a lot of federal money for dredging — and now provincial money — and yet at the same time there's a lot of concern among neighbours about the appropriateness of the development.

[ Page 11069 ]

So there are a whole range of questions around the Snug Cove Marina. The questions given to me and the letters issued to me were the reason why I phoned the ministry staff in Vancouver to inquire about the status of the loan. Being paranoid, as all members of the opposition should be from time to time, it didn't strike me as odd, frankly, that the staff would give me one story which was completely opposite to the correct one. I'm not criticizing; it just struck me that the decision was perhaps made elsewhere.

Maybe the minister could, for the record and for my future research, just explain the details on the loan surrounding the Snug Cove Marina and the reasons why a loan was given in spite of the opposition of many residents on Bowen Island, and why it took such a circuitous route to approval. It's safe to say it took several months, probably over a year, during which time it seemed to be dead at various points in the discussion and then suddenly it was approved by your ministry. And then finally I'd like to know what the magnitude of the loan is and the terms and conditions attached to that loan.

HON. S. HAGEN: I am informed that this loan was made under the TDA, or the tourism development agreement, which is a federal-provincial loan. The approval process comes up through a joint federal-provincial committee, of which I'm not a member, I might add. At the time of the approval the application had the approval of the GVRD, and I thought it had the approval of the Islands Trust as well, although I am not sure. I should add that the moneys have not been released, and apparently there is quite a long list of conditions that have to be met by the company and have to be met by others — like the building of a breakwater — to make the deal work.

That's the information I have. I would be pleased to provide you with other information, but it's really a loan that comes from the Ministry of Tourism. We administer it.

MR. CLARK: I'm just curious as to how that works, because obviously you and your staff are familiar with it. Your staff in Vancouver have been, as I said, very good. I'm curious as to how this works. If it's a tourism development agreement loan and it's done by the Ministry of Tourism and a joint federal-provincial committee, what's the involvement of your ministry in these questions? And how much does your staff get involved? Secondly, were there any other applications for money from the same organization under different programs within your ministry? Or is it correct to say it's just this particular loan; that this particular loan was made under this agreement?

HON. S. HAGEN: To answer your second question first, this is the only money from the provincial government that has gone into the deal. There was no other money. I don't know about applications, but there have been no other approvals.

The answer to your first question is that rather than have the staff in a small ministry like the Ministry of Tourism dealing with loans, it is felt to be more efficient to have my ministry do the administration of those loans for a ministry like the Ministry of Tourism. So my staff did the work on the loan, but it comes under the TDA.

MRS. BOONE: I thank the minister for the list of those big loans. I would like to know if there are loan guarantees, if they are low-interest loans or no-interest loans. What I would be really interested in knowing is what criteria the minister uses for approval of these. When these companies came to you, did they do so on the basis of promoting a value-added product, of creating new jobs? Do you assess them in terms of — and I think the member for Port Alberni talked about that — the number of jobs that will be created as per value? What criteria are used to determine that these companies should be given low-or no-interest loans as compared to the many other companies that are out there, some of whom may not be in a position to ask for this much money?

[5:15]

HON. S. HAGEN: First of all, we don't force people to apply. People only apply if they want to apply. If they feel they have a plan that qualifies, then they will apply for government assistance.

One of the tests, of course, is financial need — for a particular project.

Interjection.

HON. S. HAGEN: The member mentions Canfor. The reality on the Canfor deal is that that particular research and technology-transfer project was way down on the priority list of that company. We felt that it was important enough for the economic future of British Columbia to provide that bridging from the provincial government to make the deal happen.

Yes, we could have waited, and sat back in the bushes and said: "Well, in five or ten years, when that comes up high enough on the priority list of what the company wants to do, then they can do it." We felt the government could be a driver here, just like we're a driver in the science and technology development fund; just like we're a driver in matching capital funds for universities. When you are government, a decision has to be made on when you do things.

Another factor that is looked at is the business plan. Where are the markets? Is there a market for the product that these firms are producing? Another thing that's looked at is the competition factor. Is there competition? If there's competition, then we don't do the deal.

There have to be customers. We want to make sure they've done sufficient market research to see that there is a customer base out there. Have they done their work on pricing? Do they know what their costs are? Do they know what the market will bear from a pricing standpoint? Do they have their operation?

[ Page 11070 ]

requirements down? In other words, have they done cash-flow projections? Have they got a business plan?

How many employees? What is their location? Are they part-time or full-time? What skills are required? Is there in-house training? Are the skilled employees there or will they have to be trained? Are franchises, patents, trademarks and licensing agreements in place? Are they going to be needed?

The financial information would be the amount of cash equity. What is the source of cash contributions? What is the amount of the business start-up loan being applied for? Other capital sources would be bank loans, other equity, other funding. We have standard forms that have to be filled out. I don't think they are dissimilar to the forms you would have to fill out at any bank or credit union.

MRS. BOONE: You make the very point: they are not dissimilar, and a lot of this stuff is just information that would show whether they would be a good, viable person to lend to. Surely the ministry has some different information.... You mentioned financial need. Do you ask how many jobs are going to be created for the area? Is it going to diversify? If none of those things happen — if they are not creating new jobs, if they don't diversify — then is there any point in doing it? And you would not approve those things in that case? I see both the minister and his deputy shaking their heads, so we don't have to deal with that.

Well, that gives me a little more information on some things. I think my colleague from Port Alberni wants to continue.

MR. G. JANSSEN: Just briefly on the deal finally struck with the Japanese battery company, I'm not quite sure how much money we had into Moll Energy, including the lost interest. Perhaps the minister could get it to me if he doesn't have it now. Did the Japanese concern take over those loans from the government? Are they running Moli Energy now, or has some other arrangement been made? Or is that one of the black areas we spoke about earlier?

HON. S. HAGEN: I would like to inform the member that that account has not been in this ministry while I have been minister. I go back to November of last year, and I have no idea when it was transferred to the Minister of Finance, but I have never had it in my ministry.

All I would like to say is that as Minister of Regional and Economic Development, I am very pleased that we have a prestigious company like this Japanese one that has gone in and taken over in British Columbia, because I think it is very important that that technology stay in British Columbia. It is very important that those jobs stay in British Columbia. It will open up new and future opportunities with that same Japanese company. But it has not been part of the ministry since I have been the minister.

MR. G. JANSSEN: I sympathize with the minister's dilemma. Is that the scenario that happens with the ministry: when certain loans don't work out or when there is a problem with them, they get transferred to the Ministry of Finance? Is that the usual scenario that occurs, that follows that type of situation? The loan is not working out, so the ministry — perhaps "washes its hands of it" is the wrong term to use — transfers it over to the Ministry of Finance. Or was it never in your purview to start off with?

HON. S. HAGEN: Your latter statement is correct. Those loans were made by the B.C. Development Corporation and rolled over into the Ministry of Finance, so they never were in this ministry.

MRS. BOONE: I'd like to move onto something that is not completed right now: the negotiations currently taking place with China Steel. I go back to an article which says:

"No plant will be built if China Steel does not agree to government demands that it be the most technologically advanced and environmentally safe steel factory possible to build, said Steve Hollett, Assistant Deputy Minister of Economic Development, a division of the Ministry of Regional and Economic Development. The Environment ministry is developing steel mill pollution control criteria which will be the toughest in the world."

I would like to ask the minister what stage these negotiations are at. Has China Steel agreed to the demands of the government with regard to the environmental requirements and criteria? If they haven't agreed to them yet, what stage are they at in those agreements?

HON. S. HAGEN: I'm pleased to respond to that question. The approval process for the China Steel mill has four parts to it. We have now completed stage one. We have entered into stage two. We still have stages three and four to go. The stages get progressively more complex as we go along.

Interjection.

HON. S. HAGEN: Well, this is a major project. This is a very major investment. I remember the guffaws from the other side of the House when this was first announced. I think it's important to recognize that in a major project like this, there are a lot of concerns and a lot of areas that have to be looked at.

One of the things done in stage one was the site location. I'm sure you are aware that there were something like 25 or 27 different sites around the province that were looked at. The reason they were looked at was that the communities asked to be looked at. They telephoned or contacted us and asked to be considered. Those were narrowed down to four, and two were discounted by government for environmental reasons: Roberts Bank and the Cowichan estuary. I'm sure it's obvious to you why they were taken off the list. The two sites that are left on the list are Port Hardy and Prince Rupert, or those areas.

Besides the environmental work — and there's a great deal of environmental work that has to go on — there are also social aspects to this sort of project

[ Page 11071 ]

going into a community. A project like this going into the community of Port Hardy changes it probably to a community like Nanaimo, for instance, when you look at the direct jobs and all the spin-offs. We're still going to look at it. The project review is really a major review process; it's not just a yes, a no or a maybe. I've discussed it quite extensively with the member for North Island (Mr. Gabelmann) to keep him up to speed on it. If the mill can pass the test — and the other test, the social test — then there's a possibility that it can be built. If it can't pass those tests, then it won't be built.

MRS. BOONE: Has China Steel Corp. agreed to the demands of the government? It states here that it won't be built unless they agree to the government demands with regard to the environment — that it be the most technologically advanced and environmentally safe steel factory possible. Has China Steel agreed to that? Have they met those demands yet?

HON. S. HAGEN: The site selection process will be completed by the end of this year. In this next step, stage two, the environmental studies and the other things will be in our hands by September 1. We will have until the end of the year to consider those, and so will the company. If the company then agrees and if we agree, then we move into stage three.

MR. CLARK: I am curious about the steel project. I have done some academic work actually on the periphery of the steel issue. The minister may know that they really aren't building these kinds of nineteenth-century steel mills anymore, and I'm not suggesting you want that. What has happened in the steel industry is a dramatic and radical change, a shift in technology to what are referred to as mini-mills by and large. Mini-mills in the United States, China and elsewhere have had a dramatic impact on the steel business. So you have a very high-tech operation with relatively few employees popping up all around the world. I can't think of a new steel mill employing 4,000 people or the like that's been constructed in the last decade. There has been a dramatic increase in the number of mini-mills, which have taken the increased capacity on the world market. In fact, that has generally been conceded to be the wave of the future in the steel industry.

I am strongly of the view that British Columbia could well be the recipient of a mini-mill that would be high-tech and create lots of work. We're talking hundreds rather than thousands of employees. It would be state-of-the-art technology and therefore, relatively speaking, environmentally benign. I think there's a lot of merit in that.

[5:30]

I find it very difficult to believe that a steel mill of this capacity, with this number of employees, would be built in North America at this time. The only explanation that I can intellectually come up with is that there is an argument for getting into the North American market. That may be one argument. Secondly, there is a problem of expansion of capacity in the host country, Taiwan, because of environmental, labour and other concerns. So the only explanation I can think of is the possibility of cracking the North American market and problems of constraints on expansion there. Even with all of that, I still find it hard to believe that a massive mill of this nature would be justified.

Beyond that, I might say that the Canadian steel industry — which is almost totally back east, of course — is among the most efficient and most productive in the world. The history of these things is that the person who builds the last steel mill is the most efficient and the most productive. Because of the capital costs associated with them, each subsequent steel mill takes a larger share of the market, because it implements the latest technology. That goes on and on. Canada, frankly, is well positioned in the steel industry. We have very efficient, productive mills back east.

I don't want to criticize the government at all for pursuing this objective, for pursuing negotiations; and I'm not, because I'm a big believer in this kind of industrial development. I just find it very difficult to believe that a steel mill of this magnitude, of this type, employing this many people, would even be contemplated for British Columbia, given a host of factors which I'm sure the minister is aware of, rather than a modern mini-mill which would be very useful and would create lots of jobs — probably a fraction of the jobs associated with the mill being contemplated by the government.

I wonder if the minister could deal with my concerns that this appears to be unrealistic in a theoretical sense. While I agree strongly that there's a place for a steel mill in British Columbia, it would seem more appropriate to be pursuing the mini-mill option, which would create several hundred jobs and would give us a market niche in North America for which we have a lot of raw materials and the labour market to deal with it, rather than a mill that.... We are talking 4,000 or 5, 000 employees; we're talking about technology and the kind of production capacity which is not being added in the steel market worldwide, and which hasn't been for some time.

Maybe you could just put my mind at ease about this being a real project, not one that's pie in the sky. Do you think it is realistic for a company to build a steel mill in the 1990s in North America that employs 4,000 or 5,000 people and produces that output of steel? Frankly, I find it difficult to believe.

HON. S. HAGEN: The second member for Vancouver East hasn't said anything that I haven't heard before. I must admit that I raised many of the points he has raised, only I raised them probably a year or a year and a half ago, which is probably when he raised them too.

We had no reason not to proceed to stage two. My deputy was over in the Far East recently and met with officials from this company and other companies and was made aware that two of these large mills — and possibly another one — have been built in Korea over the last six years. I know that when this started

[ Page 11072 ]

out, Canada was in the running with Australia and Malaysia — three countries. Australia has since been taken off the table by the company, so the other country still on the table is Malaysia.

The company has been very open in admitting to us that the reason they're interested in western Canada is the United States market. What they said to us was that because of the free trade agreement, the California market has opened up, which is what they're really interested in.

As the minister, I have no reason to dispute that, and I don't think it would be wise for me to dispute it with them, either. As you know, we're co-funding the studies, and they're done on a progressive basis. I think stage one was $65,000 — that was our share — and their share was also $65,000, which included, by the way, a preliminary market study that satisfied them and us.

I appreciate your comments on the mini-steel mills. I don't have any argument with you, and I can say that we are presently in negotiations with three different companies that are looking at mini-steel mills. But there's no reason why they can't be complementary, and they probably are complementary. Again, I think the number one question in people's minds as soon as you mention the words "steel mill" is environment — which is why we took Roberts Bank off the table.

We're progressing, and I could not stand before you and truthfully say that I didn't believe we should progress. If I didn't believe that, we wouldn't be progressing. As I say, I think the mini-steel-mills can be complementary. I agree with you that with the new technology, it's an entirely different situation. I'm told by my deputy that the biggest rose garden he has ever seen in his life was at one of the steel mills in Korea. I didn't have the opportunity to go over; I hope to at some future date.

Anyway, I don't think we're on a different wavelength with regard to this project. It's a big project. I don't think it would be responsible on my part to say no, I don't think we're going to examine this, because the information that we have generated is useful information and will be useful on future projects.

MR. CLARK: I agree with that approach; I don't have any quarrel with it. I guess the one thing I would ask, though, is whether the ministry is doing any independent analysis or if it is your view that it's a private sector company, and if they say they can make money or there's a market there, then you defer to their expertise in that area, which might well be appropriate.

However, given that the province is doing co-funding, there are lots of questions which might be useful for the province to do independently. For example, at some point the company may come to you and ask for some alleviation of hydro rates or.... You can imagine negotiations which you undertake. It would seem to make sense to me for the ministry to have an independent evaluation of a range of issues so that you're bargaining from a position of strength which is well founded.

There's a huge market for steel; I don't dismiss the market. However, clearly that market is being filled now, so it's a question of whether you can compete with their current suppliers. Anyway, it would be a very useful thing.

Lastly, is there a team of people within your ministry, besides your deputy, specifically assigned the task of looking at the China Steel project, conducting the negotiations and the kind of independent work which I've suggested might be useful?

HON. S. HAGEN: Yes, we have our own team of three, I think, headed by an assistant deputy minister, working on this project.

The answer to your other question is yes, even for the market study that was done on stage one we did an independent, ministry-driven market study. We are also doing independent study.... In fact, in the case of the communities, they may even wish to do a study now or further down the road, and we would be prepared to assist them to do those things.

MRS. BOONE: I'd like to switch gears and ask you just a few questions about GO B.C. When it was originally announced, it was $162 million over four years. The money was placed under the Provincial Secretary, but it was to be run from the regional offices of the ministers of state: $12 million for 1988 and then $50 million for each year for the next three years. It's another of these hide-and-seek games that I'm trying to do to figure out if that money is still there. No, I hear.... I see heads shaking over there.

Interjection.

MRS. BOONE: My colleague asks if I hear them. I hear them.

I'd like to give the minister a chance to respond. If the money is there, is it being administered from the regional offices? If it's not, is there currently any regional input into any of the GO B.C. grants?

HON. S. HAGEN: The basic answer is no. The money is not there, and it's not being administered regionally. However, to be perfectly open with you, I can think of one instance where the regional committee played a role in a GO B.C. grant, and that is the Rendezvous '92 project up on the Alaska Highway. Mr. Chairman, 1992 is the fiftieth anniversary of the Alaska Highway. There's a joint committee up there made up of people from British Columbia, Alberta, the Northwest Territories, the Yukon and Alaska who are doing a project for 1992. They are involving all of the communities along the Alaska Highway. They are encouraging each community to put on events that will encourage tourists to spend some time in each of those communities.

It was raised by the tourism committee up in the Northeast development region. The ministers from up there brought it down to the Regional Development Board as an issue. I can't remember how much it is; over a three-year period, I think the British Columbia contribution to this project is $785,000. As I

[ Page 11073 ]

say, it's a project of five areas: two provinces, two territories and a state. It's a great tourism project.

I don't believe it would have happened without the regional board up there taking it on as a project and saying: "Look, this is important for the northeast. It's important for the Peace River country." It's not only important for that area, it's important for Prince George, for instance. Tourists will be coming up through various parts of British Columbia with campers and trailers, heading for the northeast. It's interesting how something like this catches on because of assistance from the province of British Columbia. The tourism committee up there is now advertising in trailer magazines all over the place. My mother-in-law and father-in-law happen to trailer a lot, and they mentioned that they were going to go to the Peace River country in 1992 to celebrate this fiftieth anniversary of the Alaska Highway. So I think it's going to build into a pretty good event.

That's a long story to say that in that instance we supported an application for a GO B.C. grant. But the first answer is no, we don't administer them regionally, or we don't have them in our budget; we don't have any of the money.

MRS. BOONE: This is really interesting, because, as I said, there was originally $50 million for each of the next three years; that would take you up to '92. It was supposed to be available for the ministers of state to administer, which gave them some moneys to try and promote within their regions. We now don't have any input from the ministers of state or the regions when it comes to loan applications or loan guarantees, which were originally funnelled through them, we were told, so that they could have some input.

Just what does the Ministry of Regional Development do now, Mr. Minister? What do the liaison officers in the regions do? What does the board do now to assist the regions, seeing as how it appears they have no money? Or is there any money at the disposal of the regions now? Do you call them states? No, it's called the Cariboo development region. Is there money available for them to utilize, to develop various projects? If there isn't, what do they do? It seems like you've taken away everything. You've taken away their ministers, you've taken away their GO B.C. grants, you've taken away their ability to have any input into loans. What's left, Mr. Minister?

[5:45]

HON. S. HAGEN: First of all, I haven't taken away anything. I was given a job to do in November, and that's the job I'm doing.

The regional development boards in the regions.... And I must say, they've never been called states. You might have called them states, but nobody else has called them states.

The three functions of the Regional Development Board — which receives this information from the regional development officers, who report to an ADM, to me and to my ministry are: policy, project and priority.

Even though there is no money out there — and there doesn't have to be money — these people volunteered. All of the mayors, aldermen and regional district people serve as volunteers. They meet regularly, and they give us advice. They served a valuable function on the Freedom to Move announcement that the Minister of Highways (Hon. Mrs. Johnston) made. The regional transportation committees are overjoyed because they feel that now government has listened to them, and that it has heard what's needed in the regions. We are getting other reports, as you know, on regional health care up in your area, which we are working on with the Ministry of Health. So the process is ongoing. The volunteers out there — hundreds and hundreds of them; probably close to a thousand people — are doing an incredible job.

I meet on Vancouver Island with the boards on a regular basis and get input and advice. So the program is ongoing. People in the regions feel they really are being listened to by government, with members from both sides of the House participating in the process, and I think it is working very well.

[Mr. De Jong in the chair.]

MRS. BOONE: I am having a little difficulty understanding some of these things. You say there is no money there, yet the health study you talked about was actually funded by the three regions getting together to provide the funding. They had some money they could go to. At the meeting before last, there were people coming to that group to ask for funding for some projects. Now you say they have no money.

Is there money available for those regions to utilize for what they want to do, and how much is there?

HON. S. HAGEN: I am pleased to answer that question. The money that used to be allocated to each of the eight regions has been rolled into the ministry budget. It is still available. If those regions come up with an initiative that they want to undertake, the individuals who serve on the Regional Development Board and who chair those regional meetings will bring that to the table as a recommendation. And if it is agreed, then the initiative will be undertaken.

MRS. BOONE: I am finding this rather fascinating. You've gone from what you call the "regionalized, decentralized process," where you said that ministers could have a say and could make decisions, so they wouldn't have to come.... I remember the previous minister standing there and saying: "We want this so that people can come to me and I can make a decision." Now we've got this process where they don't have a budget out in the regions anymore; it has been pulled back into Victoria. You have a board, and all these people get together to bring initiatives to the minister, and the minister then makes a decision. We're right back where we were three years ago, before this whole process ever began. Why we went through this whole thing.... You pulled every-

[ Page 11074 ]

thing back into Victoria, Mr. Minister. Everything is now a totally centralized process without any ability for the people in those regions to make the decisions there. They still have to get the approval of the minister. It's something that I find really interesting, given the fact that you've been trying like mad to say that this was a decentralized program. It's not so.

MR. BARLEE: About seven months ago your ministry decided to loan $1.1 million to two presumably Canadian companies, General Coach and Okanagan Manufacturers in Penticton and Oliver. This loan was made at an undisclosed interest rate, which I imagine is probably around 3 or 4 percent. Essentially, that was done through their Canadian subsidiary Citair, but Citair is owned by Thor Industries of the United States. I found it rather puzzling at the time, because the last annual report that I had from Thor Industries indicated that their Canadian subsidiaries were making a great deal of money.

At the same time, two Canadian companies — Bigfoot of Armstrong and Trav-L-Mate of Penticton — which were in the same business were unable to obtain loans of a similar nature. Your ministry saw fit to loan $1.1 million at a very advantageous annual rate of interest to an American-owned company, and did not see fit to give the same sort of proposal to Bigfoot and Trav-L-Mate, which are both Canadian companies.

Since that time, evidently — because I raised a bit of a fuss over it — you revisited that situation, which I commend you for. Travelmate elected not to reapply. The interesting thing is that that company used several levers, I think. One was that they were going to relocate to the United States, while a close perusal of their annual report would indicate that their American operations were making a very small profit and their Canadian operations were doing extremely well. So I found that rather puzzling.

Why did your ministry elect to loan this money to an American company, and at first application refuse to loan those moneys to Canadian companies, which are...?

HON. S. HAGEN: Let me make a couple of comments about Citair before I answer that question Citair is a major employer, as the member well knows, in the Oliver-Penticton area — about 200 direct jobs and $15 million worth of purchases annually.

The project for which the application was received has the potential to create 40 to 50 new jobs. The jobs are Canadian jobs; they're not American jobs. They're people who live in the Oliver-Penticton area. I can tell you that when the member raised this issue just prior to Christmas — when I referred to him as the Grinch who stole Christmas — the telephone calls and letters that I got from the citizens in Oliver and Penticton, the city council and the mayor were very supportive of this decision taken by government.

I should also inform the member that no funds have been disbursed on this loan, because the company has not yet met the conditions required under the application.

MR. BARLEE: I find that rather interesting, because the newspaper says the loan was given. You were stating that 250 jobs are directly attributed to Citair, with another 200 spin-off jobs, and that another 50 to 60 jobs would be created at the two facilities. Of course, those haven't been created, and that company is presently shut down. So it's rather interesting that this was acclaimed in virtually all of the local newspapers. Why was this announcement made when the loan was never given? I find that very puzzling indeed.

HON. S. HAGEN: I'd like to inform the member that it is normal practice that the company draws down the loan after the announcement. In this case they were not able to draw down the loan, because they did not meet the conditions that they said they could meet.

MR. BARLEE: The minister just said about three minutes ago that 250 jobs were directly attributed to these particular plants, with another 200 spin-off jobs, and so on. What were you talking about, when you knew the loan hadn't been made? That seems nonsensical to me. I think you should have come back to these very same papers and radio and TV stations in the area and said: "No, the loan has not been made." You didn't do that.

HON. S. HAGEN: The announcement was that the loan was approved, not that the loan was made.

MR. BARLEE: Well, that certainly isn't the impression of the people in the area. They felt the loan had been made, and so did the other companies who were in the same marketplace. I find the business practices of the ministry deplorable, to say the least.

MR. G. JANSSEN: Just a brief comment. If it is the case that the announcements are made on approval and not when the cheques are handed out, are we to believe that every time we get a little brochure from the minister that says "approved," it doesn't necessarily mean those jobs are being created? Those come out every second week. We see ads on television. Are they also in the same purview — as the member for Boundary-Similkameen is saying? We've approved them, but that doesn't necessarily mean we're giving you the money or that those jobs have been created. Is that the case, Mr. Minister?

HON. S. HAGEN: I would like to inform the members on the other side of the House that this government believes in prudent fiscal management. Yes, there are announcements made, but we just don't stand there and throw the money out. The announcements are made when the timing is appropriate. Companies must meet the conditions of the loan as they are set out. They must meet those conditions before the money is drawn down.

[ Page 11075 ]

MR. G. JANSSEN: The question is, Mr. Minister — and I realize we must practice prudent fiscal management; that's not the question here — do the people of British Columbia believe the advertising you put out from your ministry as to how many jobs you are creating and how much money you are investing in these firms when, as you've just indicated to the member for Boundary-Similkameen in the case of Citair, those jobs were actually not created? Even though that money wasn't lent out, you put out a press release saying it was.

Vote 56 approved.

Vote 57: ministry operations, $73,839,828 — approved.

Vote 58: economic and regional development subsidiary agreements (ERDA), $4 million — approved.

HON. MR. STRACHAN: Mr. Chairman, I move the committee rise, report resolutions and ask leave to sit again.

The House resumed; Mr. Speaker in the chair.

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

[6:00]

MR. SIHOTA: Mr. Speaker, I was not in the House last night, and really haven't been here most of the day, but it has come to my attention.... I have read the comments made by the very learned hon. second member for Delta (Mr. Davidson), who has occupied your chair. With his eagle eye, he obviously made note of my comments yesterday in the House and, it seems to me, appropriately noted words that ought not to have been put forward in the fashion that they were by me.

Mr. Speaker, you may be aware that prior to adjournment yesterday.... I refer to the words "report a crime" and "reported a crime" in three different extracts. I wish to bring to your attention first that in no way should I have indicated that a crime had in fact been committed, as the member for Delta so aptly noted. As I'm sure he also noted, and as you noted in my earlier comments in the House, in referring to the same issue I used the following words: "...report a possible violation of the Criminal Code."

Clearly, the comments I made subsequently ought to have been prefaced by the same type of comments I made initially and the same type of word. Accordingly, in light of the comments made by the learned member for Delta, I wish to withdraw the language that I used, and recognize, of course — and hopefully the House will also recognize — the fact that I had used different language in the beginning of my comments.

I would hope that that withdrawal would be accepted by the learned member for Delta.

MR. SPEAKER: Thank you, hon. member. That concludes the matter.

HON. MR. STRACHAN: I call committee on Bill 49.

ASSESSMENT AND PROPERTY
TAX REFORM ACT, 1990

The House in committee on Bill 49; Mr. De Jong in the chair.

Sections 1 to 3 inclusive approved.

On section 4.

MR. BLENCOE: Section 4 deals with the Assessment Act. The way I read it.... Maybe the minister and his staff can correct me. This is not easy stuff, and it is technical. Over the years I have come to understand a little bit about the Assessment Act.

The valuation for certain purposes — that's not the actual value — is being amended to state that the assessment of, I think, distribution pipelines will be done on the basis of market value, not value as set by the commissioner. Am I correct in that analysis? It allows different values to be set for rail lines not operating at capacity, and allows the fee for appealing to be set at a prescribed level instead of the current $25. First, before I proceed with a question or two, am I on the right track there?

HON. L. HANSON: Well, section 4 deals with a fixed $25 fee and would allow that fee to be flexible by regulation. But, to answer the member's question, the assessment has always been based on market for the utilities.

MR. BLENCOE: Okay.

There is a natural question here vis-à-vis the distribution pipelines. If they won't be valued on the basis of rates set by the commissioner, what basis will be used?

I'm sure this is fascinating stuff to the rest of my colleagues.

HON. L. HANSON: I think I am answering your question, in that the distribution rates were never commissioner's rates. There's an ambiguity there that I suppose you might interpret, but they never were commissioner's rates.

MR. BLENCOE: Another question, then. Under this section, when does a pipeline become a distribution pipeline and cease to fall into the definition under the rest of the subsection of "the pipe lines of a pipe line corporation for the transportation of petroleum, petroleum products, or natural gas"? When does a pipeline become a distribution pipeline under this section?

[ Page 11076 ]

HON. L. HANSON: Mr. Chairman, on the customer's side of a refinery, the transportation is a bulk carrier, and the distribution is the refined product.

MR. BLENCOE: Then do we have different definitions for different pipelines? Is that what you're saying? We have the big pipe, and then we have the smaller distribution sections, and that's what you're redefining? Your staff is nodding yes. Okay, that's fine.

HON. L. HANSON: Mr. Chairman, depending on the purpose that they serve, yes, you're right.

Section 4 approved.

On section 5.

MR. BLENCOE: This also refers to the Assessment Act. This stuff is technical and not always easy to understand. Our interpretation may not be the correct one, or the minister and his staff may have a different view.

My understanding of this section — I hope I'm on the right one — is that it clarifies that the board is allowed to make an order only with respect to the property presently before it, instead of "the subject matter of the appeal." The way I see this is that the effect seems to be to limit the board's ability to correct errors that affect more than one property. Is that an incorrect perception, before I go on?

HON. L. HANSON: Yes, that's correct. The appeal board has in some cases committed the principle behind a decision to properties of a like kind, and this would simply limit that decision to the actual specific property that was appealed.

MR. BLENCOE: The question that comes to mind vis-à-vis my earlier comments.... Maybe it's somewhere else in the act, but my natural question is to wonder if there is a remedy available to the board to correct errors that affect more than the property presently before it on the appeal. Or does every single property owner with a similar error have to appeal the decision? Hopefully the minister and his staff know what I'm trying to get at here. Before, with similar decisions, if they impacted on other properties.... It was broader and you could apply that decision. My concern is the bureaucracy, or elongating the process property by property, when you've already had — I don't know the law, and my colleague is not here — a test case, if you will, that would impact on other properties.

HON. L. HANSON: I think, Mr. Chairman, that the member has the interpretation correct. The appeal board decision would be restricted to the specific property being appealed, but they could ask the appeal board to apply that to all properties of a like kind. But they could not order it.

I suppose part of that justification is that each appeal generally has some very specific reasons for it that are quite often not of a general nature. I would suggest that the option the appeal board still has to ask the Assessment Authority to make that change to all properties, as has sometimes been the case in the past, would not be permitted anymore. I guess the appeal board would in principle ask the Assessment Authority to apply that principle to assessments of like kinds of properties, but it wouldn't be an automatic.... No.

MR. BLENCOE: I'm not going to oppose it. My only concern is that when you have some flexibility and the Assessment Authority believes they have a similar case, they can say that it impacts on other properties. I'm wondering if this has come about because there have been some problems, some challenges, some court cases or something. Maybe that would simplify the discussion, if it's a response to a particular situation.

HON. L. HANSON: When the Assessment Appeal Board deals with a specific property.... There have been some instances where that principle has been applied to a number of other categories of property; really, it isn't an appropriate application. This limits their ability to dealing with the specific appeal before them, but not making a broader application of that —which may not, I guess, be in the interests of everyone involved. Certainly the Assessment Authority can be asked to apply that principle, and I'm sure it would, in the interest of fairness.

Sections 5 and 6 approved.

On section 7.

MR. BLENCOE: This section and the next section are the most contentious.

HON. J. JANSEN: What do you mean?

MR. BLENCOE: My dictionary is here if you want it.

Most of the comments I wish to make refer to the flat tax and what we consider to be rather a bad precedent in introducing such a concept. We discussed that reasonably extensively in second reading. I think there is some justified and valid concern that we're moving into an area that we should move into with trepidation.

[6:15]

The minister said right off the top: "Please be assured that this is not the Margaret Thatcher poll tax concept." But in many respects it's a variation on that theme. The argument for a flat tax is that certain basic municipal services are provided to all properties, regardless of their value. That was the exact rationale used by Margaret Thatcher for introducing.... In the last ten years there has been nothing quite as confrontational. People in the U.K. are fighting each other over what I — and, I think, most people who believe in a fair, just, ability-to-pay process of taxes — consider.... It has split that coun-

[ Page 11077 ]

try right in half, between those who have and those who don't.

My basic, overall, fundamental concern is that not only are we tinkering but we have the potential to benefit those who have substantial land and value, rather than ordinary British Columbians on their little lots. The person owning a very exclusive, expensive piece of land could be paying the same rate of tax as Mr. and Mrs. Average British Columbian living in a bungalow in the east side of Vancouver, in James Bay, in Fairfield or in whatever community.

The Thatcherite poll tax in Britain will result — and is — in a significant shift of the property tax burden to those least able to afford or bear it. Some would say that this is a dramatic shift by the government; that it's very well thought out to benefit those who might seem politically more.... How can I put this?

Interjection.

MR. BLENCOE: Partial — perhaps that is it. It's a dramatic change in how we pay taxes at the local level, and those who can afford it or who are better off are going to benefit to a great degree, whereas those who are of moderate, middle or lower income are going to pay a greater share.

It's certainly not spreading the load. It's potentially dumping the load on the average British Columbian. It is a variation on the poll tax. I know it's on the land and not on the individual, but it's only a subtle difference. I don't know if the minister has really thought that through, because I suspect that if this session had been reasonably normal....

Interjections.

MR. BLENCOE: Under normal circumstances, I suspect this bill would have got a lot more attention by the Legislature and by the public in general. This is a fundamental and revolutionary — not evolutionary — change to the municipal tax system in the province. I think property owners pay enough already, but at least for the last 15 years we've had an assessment system that generally has been based on fairness and on market, and everybody has paid based on actual value. Property owners need to be assured and to have a belief that the government of the day will not ask them to pay more than their fair share. I think the potential under this bill goes the other way; I sincerely feel that.

I don't wish to state that the government is being devious, or whatever, in its shift, but....

HON, J. JANSEN: Shame.

MR. BLENCOE: Heavens! I wouldn't suggest that the current Minister of Municipal Affairs would take that tack, Mr. Chairman.

I don't think the municipal taxpayer really knows what to expect from this bill. We haven't seen the regulations; we don't know what's going to come down. The pertinent details and the important stuff — the beef, if you will — is missing. I want to put these comments on the record, because I have every feeling....

I know it's permissive, and that's how the minister will probably partially respond to me tonight. He'll say: "Mr. Member, you always believed in and talked in this chamber for years about local autonomy and local decision-making." But in this chamber, when we're putting down laws, we have to ensure that they're basically fair, particularly in the area of the municipal tax system. The regulations will come down from cabinet, setting out limits on taxes, the various relationships between tax rates and, I believe, a classification for the flat tax, which could vary dramatically from municipality to municipality, city to city, town to town — and not only from town to town, city to city, or municipality to municipality, but from one street to another' one property to another. Tinkering with the system is not going to resolve your problems.

We've already capped. Last session the former Minister of Municipal Affairs gave municipalities the power to cap. We were opposed to that. We know that perhaps politically it was popular in certain areas of certain cities. But in tinkering with basically a good system — and this doesn't tinker; this is a major change — I think you are asking for trouble. The whole concept of assessment based on market value goes out the window.

I just wonder if the minister has thought it through. I know the UBCM in its wisdom, in a conglomeration of all sorts of suggestions.... This was part of one of their finance recommendations. But this is one area where I don't agree with UBCM, quite frankly. I think they are wrong on this one.

For instance, I am concerned that for whatever reason.... Say a city council or a community is taken over at election time by those who have vested interests in development and real estate or whatever. Can you imagine what they could do with a flat tax in terms of revolutionizing who pays and who doesn't pay? In a way it's a bit scary.

Those are our concerns. Quite frankly, rather than tinkering, rather than band-aiding, we should be taking a fundamental look at how we pay for municipal services. I suggested on second reading that we need the equivalent of a royal commission, because over the years that I have been involved in municipal government and connected to it — it's close to 15 years — paying for local government has become a contentious issue, but we've never really come to grips with it. Local governments, in terms of the services they deliver today, are dramatically different. Many services have nothing at all to do with property anymore. I think we have to find innovative, alternative ways to pay for local government.

The real property tax — my colleague may disagree with me to some degree — I think has no real bearing on ability to pay. I won't go into that, but I have given speeches on it.

I think we need to have a fundamental review. Senior government, i.e. the provincial government, must take a look at sharing more progressive taxes

[ Page 11078 ]

with local government. It has to come. How can they get a greater share? We have revenue-sharing; I know that. But we have to have other ways to take a look at the problem. I don't think this resolves any problems. I think it creates more problems than it's worth, and in the years ahead.... I know it's passing the buck to local government. They will take the heat; they will take the lobbying pressure. But in terms of moving towards a fairer system for municipal taxes, based on more ability to pay or true value, it's moving away from that.

I know I have given another speech in committee, but I feel strongly about this. I would like to hear if the minister has any thoughts on what I have said.

HON. L. HANSON: I really have some difficulty with the member's equating this to a poll tax and to Margaret Thatcher's difficulties as a result of their policy of implementing that. I really have to stretch my imagination to get the similarity that the member is suggesting.

I suppose the member did mention in his remarks that he recognizes it is permissive. The purpose of these options in the bill is to provide flexibility to local government, not to hinder it.

The member suggested that maybe there was some sort of conspiracy to shift the tax burden. I really have difficulty in understanding how you could interpret this bill to say that. In fact, it would require all of those people who were elected at the local level — because it is a permissive option — to enter into some conspiracy to present that tax shift.

I am, and I'm sure the member opposite is also, a believer in local government and their responsibility. I am sure that the UBCM will be interested in the comments the member has.

MS. MARZARI: And you'll be sure they get them.

HON. L. HANSON: Of course I will.

The local governments who have had difficulties with huge shifts in the tax burden within municipalities have seen the benefits of this. I think the member should be aware that it is a permissive option, but it is also a mandatory part of that permissive option that it be a combined value-based tax along with a flat tax, as opposed to a total flat tax.

We do have examples of flat tax now in specific areas where there is an application of the frontage tax and parcel tax principle that we do provide for the cost of certain services that local governments provide. It's simply an opportunity to give local government a larger menu that they can look at to balance that tax shift that may be occurring in a community. But I guess the bottom line of all of this comes back to that simple word "democracy." If we see that local governments are abusing some of the privileges they have, that usually is communicated very quickly at the polls when those people seek re-election. Plus there is the ability for government to ensure through regulation that the application is done in a prudent and reasonable manner.

[6:30]

I know that the member is expressing some concerns he may have. I'll assure the member that we have done a fair amount of study and discussion as to how this might be applied to various municipalities. There is a mechanism within the act that would deal with any unusual applications of the principle behind it.

I think that we are all seeking a fair tax system. For the member's information — and I think he probably already knows — we are intending to circulate in the next 60 to 90 days a number of White Papers dealing with various alternatives to the taxation issue that were gathered as a result of the tour on tax issues, as well as the study of financing local government that was done cooperatively by the UBCM and the provincial government. A number of those issues will be circulated, and I would certainly invite the member to give us his comments on those papers as they are circulated.

[Mr. Pelton in the chair.]

MR. BLENCOE: One of the downsides of this kind of discussion is that I think I provided about three of the minister's points, and they came right back, quite rightly.

Let me put a question to the minister. Every community — my community, my colleague's in Vancouver —has an Uplands or a Shaughnessy, where values are extremely high and which are considered to be an expensive places to live. Every community also has, though, an east side, a James Bay — I don't know what they're called in Cranbrook or Penticton or Osoyoos, but they've all got those areas, right? What would you say if the owner of a small bungalow in James Bay or Fairfield or the east side of Vancouver or Cranbrook or whatever...

MR. VANT. James Bay is where you live.

MR. BLENCOE: No, actually; check with me later.

...had to pay the same flat tax as the millionaire owning property in Shaughnessy or the Uplands?

HON. MR. VEITCH: Come on!

MR. BLENCOE: This is the fundamental point I am trying to make around this bill. You can't hide it; you can't ignore it. You can't say it doesn't exist, because that's what it's about. I ask the minister: what would you say if in my community or in Vancouver — and Vancouver said no to this thing because they think it's crazy — that small eastside bungalow and that Shaughnessy millionaire mansion pay the same tax on the land, the flat tax? Is that fair to you, Mr. Minister? Is that what you want to see happen? You'll say: "My hands are clean, because it's permissive." But, my friend, you are an instrumental part of bringing such a concept to British Columbia. What do you say to that? Do you just walk away and say: "Well, that's up to them"?

The majority of British Columbians live in those small bungalows, in those little homes. They don't

[ Page 11079 ]

live in the Shaughnessys and the millionaire properties. But under your bill that is now permissive — the same flat tax for the millionaire Shaughnessy property as the eastside bungalow, or the Uplands property, the James Bay bungalow, the Fairfield property or the Fernwood property. What do you say to that, Mr. Minister?

HON. L. HANSON: I recognize that the principle may be part of a second reading debate, but I'd like to provide some comments to the member.

I don't think the member can seriously accuse my ministry or this government of suggesting that we would like to shift the heat of taxation issues from government to local government. If you polled the members elected to local councils and regional districts around the province, you would find they not only want that authority but they would demand it.

The question the member raises with me as to.... I've forgotten the exact description of where he said, but suffice it to say that some parts of a community generally have a higher evaluation than others. My experience has been that the numbers of higher-valued improvements in communities are generally much smaller in total than the lower-valued ones.

I would point out to the member that whatever the fee is for a residence for a service — be it $10 for sewage on a monthly basis — that applies to a cottage as well as to a mansion, whether or not it's owned by a millionaire. I'd ask the member another question. He may have a huge mortgage on his residence in James Bay, but the fellow in the other part of the community might own his completely. There are a whole bunch of conditions you could bring into the application of this.

Again, Mr. Chairman, its purpose is not to protect high-priced property, nor would my understanding of local government — I spent a number of years in it — be that local government would even consider a huge property tax shift from one part of the community to the other. If you want to talk about heat.... If you did set off with that philosophy in mind to use the flat-tax system to create a huge shift.... The purpose is not to protect high-priced property but to protect property whose value rises abruptly, regardless of whether the original value was low or high. The exact thing the member is suggesting is a possibility under this is the whole philosophy behind providing it: that is, providing some stability and some uniformity in the application and preventing huge property tax shifts.

I can give the member another example of a community — Kimberley— that didn't have a huge increase in the assessed value of some of its properties. It had a huge decrease in the assessed value of some of its residential properties, and there was a huge tax shift as a result. I don't think the member could describe that situation as mansions...and the relativity of that high-priced millionaire's property that he was suggesting might be the purpose of this.

I really have the greatest confidence in local government. Again, the test at the end of the day is the reaction of the citizens of a community to any tax shift they might bring about through the use of the flat tax or the variable tax.

MR. CLARK: The bill requires the flat-tax option to be used in conjunction with the ad valorem tax. Can you tell me the ministry's view of the percentage weighting the ad valorem will take versus the flat tax? Is there a specific regulatory decision or policy decision made by government that 80 percent, 50 percent or 90 percent of the tax will come from the ad valorem tax?

HON. L. HANSON: We haven't finalized that, but the purpose of this is only to allow a municipality to prevent huge tax shifts. With that ability in the bill, it's a signal to municipalities that the ad valorem or value-based tax is still the main principle behind the application of the tax. I would suggest to the member that if there were evidence that a municipality had an objective to create a tax burden by a distortion of those relationships, the regulation could very easily deal with it.

MR. CLARK: Despite the fact that it's not really in the bill, the minister has stated, for the record, that the main principle of property taxation or municipal taxation in British Columbia continues to be the ad valorem tax, and that the flat tax is meant to be used in conjunction with the ad valorem tax. Presumably — and this is what I'd like a little more clarification on — it will be used in a modest way. In other words, is it fair to say that at all times the ad valorem tax, even in towns that choose the flat-tax option, will be the primary source of revenue for the municipality, and that the flat-tax option, pursued in conjunction with the ad valorem tax, will be a small percentage of the total revenue to the municipality?

I don't have too many questions; maybe I'll give you a few more.

We can do this under another section, but I think there are five cities and towns in British Columbia that have taken advantage of this bill.

Interjection.

MR. CLARK: Six. The minister corrects me.

Could the minister tell us for the record what the percentages are in each municipality — it doesn't have to be exact — that has chosen the flat-tax option? How much of the revenue for that municipality will come from the flat tax, and how much will come from the ad valorem tax?

HON. L. HANSON: We do have that information. I don't happen to have it with me, but I can provide it. It's public information, and I don't see any difficulty in providing it.

The flat tax, of course, is still designed to be a stabilization measure. I'm sure the members opposite would be aware that there probably is some indication — and certainly it will be one of the issues we will address in the White Paper — that there is more of a movement towards a fee-for-service type of

[ Page 11080 ]

charge within local government than there has been in the past for those services that are discernable as a fee-for-service.

It's very difficult to pick some of the things out of the taxation structure, but I don't think there is any question at this point in time, unless we find some consensus on a different taxation as a result of these White Papers we are going to be circulating, that there will be a shift in the main source of revenue from an ad valorem type of tax to a flat tax. We would oppose that; it won't be. The main source of revenue for local government is still the value-based ad valorem tax. It's a stabilization feature that communities could use.

MR. CLARK: I understand, and in my own view there are pretty good environmental reasons to charge by the garbage can, for example. It might be easier to implement certain recycling measures if you had some kind of option like that.

[6:45]

My only fear is that, given that there is a more regressive flat-tax option which introduces a slightly more regressive — depending on how big it is feature to the municipal tax system.... Moving to fee-for-service can have the same impact, because the garbage can will be charged the same fee whether you're poor or rich. It tends to introduce a different element.

I must say I'm reassured by the minister's remarks that the ad valorem tax will, at the very least, be the major tax revenue for the municipalities. I don't want to harp on this. I know the minister has undertaken to give us the information, and I accept that. But I'm interested in a policy question which arises out of this section.

If the minister states in the House that the majority will come from ad valorem tax, that the flat tax is really meant to be an adjunct just to deal with extraordinary things happening in the community, and that there are certain principles there, then it seems to me that there have to be some guiding principles to evaluate proposals by municipalities. It might be desirable, or it might not be, to say: "We're prepared to accept up to 20 percent or 5 percent of your revenue coming from a flat tax" — or some kind of number which gives some guidance to municipalities as to how far down the road they can move with this option.

As the minister knows, on this side of the House many members have very serious objections to the move to a flat-tax option. Those are mitigated somewhat by the retention of the ad valorem tax. We don't want to be alarmists or extremists about it, and we still have concerns about it, but they're mitigated by the retention of the ad valorem tax. They would be mitigated further by some indication by the minister that the magnitude of the flat tax will not be allowed to rise to the extent that it becomes the major source of revenue.

I'm very interested in the minister giving me some indication; he doesn't have to be precise if he doesn't want to. I would think the ministry would have some very clear policies and ideas, not just vague statements — "We want to be flexible on that" — that will guide municipalities in the extent to which they can travel down this road. I get the sense from the tone of the minister's remarks that he's not prepared to accept them moving too far down this road. I would appreciate some understanding of the magnitude he's prepared to accept. Is it 5 percent coming from flat tax, or 45 percent? Could he give me some ballpark figure as to what he sees being allowed by the province?

HON. L. HANSON: Again, I have to go back to the principle behind the discretionary authority we're providing here — that is, to provide a stabilization of a tax system that is already existing. If we had seen that this flat tax was being attempted to be used to shift the tax burden, when in fact the principle behind it is there to prevent a huge shift of the tax burden, you would get a reaction to that — and, I think, a fairly quick reaction.

It's very difficult to give the member opposite an acceptable percentage of the total tax bill that can be collected by a flat tax, because each municipality has a different and unique circumstance. We've looked at 10 percent, 20 percent and various figures. But it's really difficult, because it's not intended to be a method of tax collection, other than a method of stabilization of the application of taxation in municipalities or areas where there are aberrations in the valuation from one year to another.

MS. MARZARI: Let's face it, this is a very sloppy way to approach a very difficult problem. My colleagues have been very kind about the flat tax. I've heard them suggest that it was slightly regressive and that there could be a negative impact. Let me assure you, Mr. Minister, when you said that the UBCM approved it, and therefore we were going along with the LFBCM to provide them with an increased menu to deal with the problems of property tax in municipalities.... The UBCM does not put this flat tax on its agenda with a great deal of glee. I doubt very much there will be any mayors or councillors in this province who take the flat tax as something they have fought hard and long for, and who feel they finally won the major battle.

I think most municipalities in this province, with rising prices and increased assessed values which inflict hardships on certain members of the community, are between a rock and a hard place. They find themselves basically in a very artificial real estate market. They find themselves with an Assessment Authority that cannot keep pace and which hasn't been able to develop new and innovative ways of dealing with municipal services.

Municipalities do not ask for the flat tax as some kind of panacea. I think that we have to approach the whole issue in the way that my colleague from Victoria has suggested. It really is time to strike a commission to take a look at municipal services and municipal financing and at how municipalities and

[ Page 11081 ]

cities can handle their own affairs. What we've done is a knee-jerk reaction.

Last year when Vancouver came to the province and asked for tax-capping, we went along with it. It was conceived and developed in haste, and there didn't seem to be another alternative. The Vancouver city council itself tried to find other ways and techniques of dealing with the tax capping, which ended up being an averaging and not any kind of an ultimate solution.

Neither is the flat tax an ultimate solution. It subsidizes where subsidy may be least needed. It taxes heavily in areas which can least afford it. It is not even a medium solution or a compromise solution to the problems that are besetting cities today. It's a sloppy solution. By putting it into legislation and providing it, along with other things, as part of a menu for municipalities, we downgrade the efforts that this province should be engaged in to find new and innovative ways to finance our cities and municipalities.

It's true that thousands of services now exist for municipal residents. Many of those services are not land-based, such as police, fire and social services provided in cities — well, fire is. The old business of simply setting up a town, building yourself a sewer system and hooking it into a water system is not what our large urban areas are about anymore. It is obvious that we have to seek and find new ways of financing those services.

But a flat tax? I don't know if you've done any social Impact studies or taken a serious look at the impact of a flat tax on a small town or larger municipality, but I guarantee that you will find vast.... If you feel heat now, Mr. Minister, the heat you will feel when communities realize that they are paying a flat tax and that there is no longer any graduated or progressive system of taxation based on square footage of a lot or assessed value of a house.... They will be furious.

The implications of this bill discussed at 7 o'clock, late in the session, we have yet to see. When any municipality even attempts to put this on their menu, this government will be in serious trouble. What we have to do is take a serious look at how we can best service our municipalities and why our markets right now are rather artificial, and a serious look at what the Social Credit government has already done to the infrastructure of municipal taxation by removing the commercial and industrial property taxes some time ago. That threw a skew into the system that was not the only cause of the problems we've got now, but was certainly one of many causes.

What we really need is a serious look at the whole issue, a look at a complete revamping of what we've got now, an upgrading perhaps of the Assessment Authority, which has not been a bad authority. It was unique and innovative in its day. We do not need to come at this serious problem with knee-jerk reactions, which is what a flat tax is.

HON. L. HANSON: Again, that sounded an awful lot like a second reading speech. But in any case, dealing with the issue of flat tax, I don't think anyone — certainly not in my ministry, nor myself — looks at the flat-tax option as a panacea to resolve all the difficulties of local taxation. I mentioned earlier — I can get into the second reading speech, I guess — that we're going to be circulating several White Papers on various taxation issues that have been brought to our attention. I certainly invite the member to provide us with her ideas and comments on the various options that we will be suggesting as possible partial solutions. I don't think there is a magic solution to the concerns the member has raised.

In closing, I guess I have to say that, as a minister, I am not terribly enthusiastic that a flat tax is the answer to our taxation problems. I think it is just a tool that may be able to be used in some circumstances. I suggest that if the fears being expressed by the members on the other side.... I don't think the heat is going to be anywhere but at the local level for a misuse of that taxation. It is a responsibility of the Ministry of Municipal Affairs to assess and monitor the application of that, which I assure the member we will do.

MR. BLENCOE: I think the minister has basically articulated his way out — or what he perceives to be his way out. When this thing does become quite controversial, he will just say: "Well, we just passed the legislation. It's permissive. You go to it and fight over it." I appreciate the minister's fairly good explanation of maybe one or two finer points that may have some merit. My only question is that that tinkering may at the time have some benefit in dealing with some massive fluctuations and trying to bring some stabilization, as the minister says. But what happens when you get back to normal times and you've kicked this thing out of kilter? How do you get it back in? How do you deal with that? That's another fundamental problem. At the time of variations and fluctuations, you try to stabilize, but you knock it out of kilter. How do you get it back in?

[7:00]

HON. L. HANSON: The member's comments are based on an assumption that it would knock it out of kilter. I have some difficulty in making that assumption. The various options that have been discussed may eventually result in this option being repealed. We are talking about or looking at a whole number of things, and we will be circulating in those papers things like averaging and an annual roll — a whole bunch of things that have been suggested in the various studies and submissions that were made to the tax forum. I don't look at this tax to be the be-all and end-all and the answer to all taxation problems. It is an option. I think it is fair and reasonable to give local government the opportunity to use it in some cases where there is a need for stabilization of the tax application because of shifts in values and so on. But I don't look at it as a total answer to the taxation study and the discussion that will go on about it, I'm sure, with great interest.

[ Page 11082 ]

Section 7 approved on division.

On section 8.

MR. BLENCOE: I won't take long. I was interested in the minister's comments, because there seems to be.... It's perhaps somewhat refreshing that he is saying this is not the be-all and end-all of change in the tax system for local government. I hear what he's saying, but I also hear that there may be.... He already knows, obviously. It's his bill and he's not going to say it's flawed. Obviously that's not the name of the game, and that's not how we work in here, though sometimes it's unfortunate.

What he's saying, I think — and the minister can correct me — is that this is interim but we may change it or repeal it or have something radically different. I appreciate that, but my only concern is that this has created all sorts of problems out there, and average Mr. and Mrs. British Columbia are seeing a basic and unfair system in place for even a short period of time. Why bring it before us? Why have it here? If it's interim that...it couldn't create quite dramatic shifts and a perception of unfairness — and in reality if certain councils do use it, I think inappropriately — I just think you're asking for trouble, and I can't see why you would do that.

MR. CHAIRMAN: Shall section 8 pass?

MR. BLENCOE: Do you want to respond?

HON. L. HANSON: I say to the member that I observe that more as remarks than as a question that you wish a response to.

[Mr. De Jong in the chair.]

MR. BLENCOE: The minister is talking about White Papers and maybe some more progressive ways of looking at municipal tax structures. I am wondering if the minister would utilize the standing committee on municipal affairs. It might be a useful tool to have, because this whole area is.... It's not very attractive; it doesn't get much attention, but it's fundamental to our communities. Maybe there's an opportunity to refer some of this for some discussion or for some hearings or consultation. Use that standing committee in a creative way. Since I arrived here it's.... Well, I take it back. It was used to review the Islands Trust, but the report that came down was sort of put aside.

I think that committee could be very useful to you, Mr. Minister, in taking a look at this stuff. I know you are coming forward with these White Papers, but I'd like maybe an all-party standing committee to take a look at this stuff and have some consultation with those affected. What do you think about that?

HON. L. HANSON: I appreciate the member's remarks and certainly will keep that in mind. I guess when we are looking at the tabling of the White Paper it will be between sessions, so whether that will be an option or not that is available to us.... Who knows what the future may hold?

Section 8 approved.

On section 9.

MR. BLENCOE: I will try to get through this as quickly as possible. Part of this section deals with land in municipal boundaries held in trust for an Indian band. I'm just making sure I've got the right section. Yes, I believe so.

Why does land in municipal boundaries held in trust for a native band now have to be held by the Crown in order to be tax-exempt? Previously, my understanding is that the land didn't have to be held by the Crown. I am just wondering what the rationale is for that minor change.

HON. L. HANSON: The intention was always that land owned or held for natives off reserve would not be subject to an exemption. I guess there was some confusion, some ambiguity in the wording that was in place before, and this is to make it very clear that it is subject to taxation; it is not subject to exemption. It's a matter of clarity. I don't think there was every any actual intention that they should be exempt; it's simply to make it clear. It's only off-reserve land, of course.

MR. CHAIRMAN: The second member for Vancouver–Point Grey has asked leave to make an introduction.

Leave granted.

MR. PERRY: I would like to introduce to the Legislature Terry and David Wickstrom, who are related to the member for Oak Bay–Gordon Head (Ms. Cull). And I'd like to make them welcome in the Legislature.

MR. BLENCOE: I have a question — I think it comes under this section — relating to buildings set aside for public worship. When does a building set aside for public worship but not presently in use for that purpose cease to be tax-exempt?

HON. L. HANSON: I'm sorry, I had a little difficulty in hearing that question. I believe the member is asking a question about the exemption for churches. The purpose of this change in the legislation is to make it absolutely clear that the exemption does apply to places of worship that are under construction. There was, I guess, uncertainty.

The church, when it's completed, is exempt; but during its process of building, depending on the timing of the construction, it was not clear that it was exempt. This simply makes that clear. I think it's fairly easy to determine, once a building of that type is started, that it is for a place of worship. It recognizes here that it should be exempt once that

[ Page 11083 ]

process of construction starts. It was always the case before, but it wasn't as clear.

MR. BLENCOE: Let me give you a scenario. What if a number of short-term commercial enterprises are operated out of what was or could be a building for public worship? For instance, if the building becomes a commercial building, what does that do? Does that do anything?

HON. L. HANSON: I believe I'm answering the member's question. When a place of worship is used for two purposes, it has a prorated exemption relative to that use. If a building that is a place of worship is converted to a totally commercial building — for other purposes — then it becomes taxable again. It's not exempt anymore, because it ceases being a place of worship.

It may have been designated as a place of worship at some point in time, but if its use changes — and just because it is built in a style and a manner that makes it seem to be a place of worship, but it is not used for that purpose...the exemption is not there any longer.

MR. BLENCOE: What about the situation...? I recall some years ago having a debate with the current Minister of Transportation and Highways (Hon. Mrs. Johnston) about a Bible college — I forget the name of the place in Surrey. I didn't make notes to myself, it's just come to my memory now. But I recall that in that situation the minister of the day brought forward a bill. They had a large piece of land that had a church on it, but they were operating all sorts of commercial ventures on that property, including, I believe, a printing operation. Because it was technically located on church property — or was classified as part of the church operation — they got tax breaks. As a matter of fact, that little printing operation in Surrey printed Ministry of Municipal Affairs pamphlets and got a tax break. What about that scenario? I just wondered. Does that clear this up? Or does that continue?

People have no problem where you've got a building of worship that is legitimately and actually the church. Every Sunday or Saturday they do their worship. But if part of that land assembly has a number of other buildings that are exempt from taxation because they are seen to be part of the church organization, people have problems with that. They don't mind when it is legitimately used for church purposes, but when you have commercial operations.... There are examples, and I pointed out one in Surrey. I don't know what the circumstances are today, but it certainly was not long ago. Are we dealing with that? I think we've got to have real exemptions from taxation, not ones that are based on very questionable operations.

HON. L. HANSON: I'm not completely familiar with the instance the member is talking about, but I'm advised that it is likely an operation out in the Fraser Valley and is an exemption that was under a special act providing that exemption.

[7:15]

MR. BLENCOE: Without getting into precise specifics, does this deal with the issue I'm concerned about? Are there supposedly church operations that are really running commercial operations?

HON. L. HANSON: Mr. Speaker, the issue the member is talking about is dealt with by a specific act, but that does not cover all places of worship. If there is in fact a commercial operation combined with a place of worship, the tax is prorated under this act. But this change doesn't affect the principle that was in place before: there is prorating of that.

I am sure the member is aware that there is a discretionary authority for municipalities to decide that they can exempt the church and just the land that it sits on, or they can use a formula that says the square footage of the church — which is fairly standard...and land is exempted on that basis.

But if the member has an example where a commercial operation is receiving a disproportionate exemption, I certainly would like to know about it. I think the issue he is talking about is under a special act.

MR. BLENCOE: Mr. Chairman, I didn't bring my entire file on this issue, because this reminded me tonight that this was an issue a year or two ago.

I have a final question on this section; I think it is somewhat controversial, and some might misconstrue my question. I know it has happened that church buildings and the land on which they sit — which for a number of years have received substantial tax breaks and exemptions — are eventually sold for development, and a fair penny is returned and substantial profits are made. Do you foresee — and I don't think it's in here — any way to recoup some of the forgone taxes? For some years they've had breaks, and suddenly they do very well, and the general public sees no benefit in that in terms of them at least paying something on that gain.

HON. L. HANSON: I would imagine that the member is suggesting that there may be a special capital gains tax or something that might be considered to apply to places that have had a long-term exemption or whatever from taxation. There are no plans for this that I have any knowledge of, Mr. Chairman. I think that the purpose or the principle behind the exemption for places of worship doesn't take into consideration those past benefits that may be there. They're given in recognition of the purpose that the property is being used for.

Sections 9 to 26 inclusive approved.

On section 27.

MR. BLENCOE: This is an area that I'm not particularly familiar with. My colleague the forestry

[ Page 11084 ]

critic is not present tonight, so I am going to try to ask a question here.

I'm not that clear, and the staff are here. Maybe I can state what I think this does and then see if I'm on track. My understanding and interpretation of this section is that it clarifies that improvements on land covered by a licence under the Forest Act are still subject to taxation, despite order-in-council 1395-89, which indicates otherwise. Am I on the right track here? Maybe the staff can.... I am? Okay. Then I've got one question.

HON. L. HANSON: Mr. Chairman, yes, the member does have an understanding.... No. 1395-89, 1 believe, was supposed to exempt land, but it accidentally also exempted improvements, and that was not the original intention.

MR. BLENCOE: I think you know what my question is going to be. The impact of that order-in-council would have been fairly significant in some parts of the province. I'm wondering how much taxation revenue was lost due to the deletion of improvements on these lands from the assessment roll. Have you got a figure on that? Was this a major mistake? "Whoops, we're asleep at the switch." I wonder if the minister has any figures on how much revenue was lost due to the deletion of improvements.

HON. L. HANSON: About $85 million worth of assessments were removed in error. The purpose is to correct the error retroactively, and there will be no loss of taxation to the benefiting authorities.

MR. BLENCOE: There has been a loss, but retroactively we're going back to recoup. Is that what you're saying? Is that going to be challenged? I wonder if that's possible.

My question still hasn't been answered. How much revenue did we lose that you hope to recoup? You told me $85 million of assessments; thank you for that, but that didn't answer me.

HON. L. HANSON: I don't know that I have that information in actual dollars of taxation lost, but I can certainly provide that to the member. It will be recouped under this act, so there will be no net loss. A number of major forest companies were the benefactors. I now have some information that says that the $85 million assessment that was missed in error equates to about $2.5 million in taxation.

MR. BLENCOE: Then the minister is saying that they're going to recoup it. Don't they anticipate any problems, headaches or backlash? Because, you know, there was an error. Have you had any indication of...? That $2.5 million back is a fair amount.

HON. L. HANSON: The landowners or those who are liable for the taxation recognized that there was never any intention in the original order to provide that exemption or that windfall, and they have the understanding that they will accept the responsibility. This in fact replaces it.

MR. BLENCOE: Mr. Chairman, that's all I have on this section and other sections. I want to thank the minister for a good level of discussion this evening.

Sections 27 and 28 approved.

Title approved.

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

Motion approved.

The House resumed: Mr. Speaker in the chair.

Bill 49, Assessment and Property Tax Reform Act, 1990, reported complete without amendment, read a third time and passed.

HON. MR. RICHMOND: I call second reading of Bill 9, Mr. Speaker.

GAME FARM ACT

HON. MR. SAVAGE: I'd like to take the opportunity just to give a few explanatory remarks as to the purpose of the bill and why it is before this assembly.

It's to develop a framework that enables the ministry to license game-farmers and to administer game-farming with a proviso, an insurance, that we cover a number of issues. Number one is the promotion of a developing industry. It covers the restricting of species and control over the game farms through record-keeping requirements. It covers protection of environmentally sensitive regions of the province by providing the ability to exclude farming from those particular areas. It protects the wild stocks from adverse effects of game-farming by controlling disease, providing that escapement of farm game is minimized and animal control programs are put in place. It restricts game species to particular regions of the province and gives recognition to the interests of consumers.

The Ministry of Agriculture and Fisheries and the Ministry of Environment will sign a protocol agreement to recognize the ongoing consultation and cooperation between our ministries that will address protection of environmentally sensitive areas of the province from the potential impacts of game-farming. We will also sign a joint agreement on the protection of wildlife, especially from disease.

When regulations are developed to protect the environment and the wild stocks, this will be done, let me assure you, with the consultation of the Ministry of Environment.

There are non-endemic species — namely bison, fallow deer and reindeer — in the Peace River region that will be farmed.

[ Page 11085 ]

The rationale for the legislation is that of administering game-farming through permitting authority that was delegated under the Wildlife Act from the Ministry of Environment. The process will be complex and implies that game-farming is still controlled by the ministry. What we're doing here is saying that it will come under the Ministry of Agriculture and Fisheries, with a consultation process taking place.

The present permit system does not really address the issue of industry promotion, the development of good animal husbandry, or the protection and education of the consuming public. The licensing framework and amendments to other agricultural legislation needed to address these concerns were not in the previous framework. Relevant provisions of the Wildlife Act will be exempted by regulation to ensure that licensed game-farmers are not in fact in violation of the Wildlife Act.

Mr. Speaker, the legislation will allow the minister to license all game-farmers. It will promote good animal husbandry practices among game-farmers, encourage the growth of the industry, prevent harm to wild stocks and minimize any environmental impacts. And, as I stated earlier, it will require consultation with the Ministry of Environment.

I support this bill very strongly and ask that it have speedy passage through this House.

MR. SPEAKER: It would be appropriate for you to move second reading, and then I'll go to the next member.

HON. MR. SAVAGE: I move second reading of Bill 9.

MR. SPEAKER: Thank you. That's a precaution, because on a previous occasion, in a previous parliament, someone forgot to do this, and the whole process had to be reversed.

MS. EDWARDS: Thank you very much, Mr Speaker. We certainly want everything to be in order.

I have a number of things to say on game-farming, as usual, and on the approach of this bill. It has been introduced for first reading three times, and this is the first time it's actually got past that. I'm very pleased that it didn't before, because it had some major problems. In his description of the reasons for the bill, the minister laid out exactly what some of the problems are. One of them, as he says, is that the reason for the Game Farm Act is to promote the industry, to get it going. In anticipation of that, I would see some major problems coming up, because game-farming in this province, where wild game is so important, could have some major negative consequences. I'm not sure whether the minister has taken those into consideration yet.

I recognize that this is a better bill in a number of ways than the one brought in last year. But I still want to put to the minister a warning about some of the things in this bill and the reasons that we believe it is not good legislation.

[7:30]

First of all, the major problem with developing this industry is that it will set up a situation where the demand will be increased. As the demand increases, the industry will push for more, and it will be larger and larger as we go on. There is no particular problem with the game-farm industry if you have a few farms which have species that are not indigenous. That is what we have in B.C. right now. There are some problems with that already, but not a lot. There's a red deer, for example, still at large on the eastern slopes of the Rockies in Alberta. That could create some major problems with interbreeding, the spread of disease and so on. A herd of fallow deer was found to be at large the other day in the Fraser Valley.

The possibility of escape is never erased. Game will, on certain occasions, get away from the ranchers, and the possibility of spreading disease is significant. Even the possibility of spreading disease by taking these animals to market is significant enough to have had the issue brought to me by veterinarians in the province.

When meat begins to be sold, there is always the possibility of increased poaching. That is particularly possible in British Columbia because of the limited number of meat inspectors and the limited areas in which meat inspection takes place. The very fact that there is no provincial meat inspection in one of the major game areas of the province — the southeast corner — indicates that this problem is one that could become larger than we want it to become.

There is still a major market which is increasing and contributing to poaching: the market for body parts of various animals. The more that goes on, the more it increases the possibility of more kills and more poaching, because there will be no check.... If the market becomes big and the number of people available to buy it becomes larger, then it becomes much easier to poach animals and sell them to that market.

It could be, if the minister holds a lid on it, that we won't have the problem of the expansion of this industry onto Crown land. The former Minister of Environment assured me one time that game-farming would not take place on Crown land in this province. However, that was that minister, and he said: "As long as I'm minister." He's no longer minister. There's no such requirement in this act or any indication of that. If the pressure goes on, there is Crown land, and that's where it will happen. That will actually enhance, enlarge and amplify the problem.

One of the major problems with the legislation itself is the problem that this bill puts practically all of the powers into the hands of the minister. As legislation, it has a great tendency to give the minister more power than he probably should have. Under this act the minister personally gets to approve who gets into the business and how much licence fee that person will pay. The minister personally may determine the content of the licences, including their term, and he could set different terms and conditions for different licensees working in identical circumstances in the same part of the province. Or he could

[ Page 11086 ]

vary it any way he wants. The minister personally is the judge of all complaints against a licence. After he has set the terms of the licence, he then judges whether any complaints against it shall be accepted.

Any decisions of the minister are appealable only to the minister's appointees on an appeal board, and those appointees are made after the appeal has been lodged. These people who are appointed will then meet in private. Appeals to the courts are very tightly restricted and can take place only on questions of law and jurisdiction, which means that there is a great opportunity under this legislation for abuse. It is a situation where friends and insiders of the minister could have undue Influence, and it simply is poor legislation on that basis. There is no balance to how that is considered or how it would take place.

There is the anticipation that if this industry expands at all — as the minister seems to want, because he says it's one of the goals of the legislation.... Who in the world is going to regulate this sector? Where is the manpower going to come from? It isn't there now. Who is going to bear the expense of this? Is it going to be covered by the users and, if so, how is that going to work? What provisions are going to be made for adequate parasite-testing for the safe introduction of new species?

The minister says, by the way, that there will be a protocol whereby there will be ongoing consultation with the Minister of Environment. That is not that easy to see in the legislation, and it looks more as though the Minister of Environment has not had the control that many of the citizens of the province asked that he have. Certainly the B.C. Wildlife Federation asked for a control by the Minister of Environment, and I don't see that's there to the extent they expected it to be.

What's going to happen with the escape of wild animals? Who is going to take care of that in this province? How are we going to see that all the problems we've talked of don't occur?

Mr. Speaker, the act itself, if it were to deal with the few game farms in existence right now and deal with the fallow deer, for example, or even perhaps the reindeer, although there are certain specific problems with that.... There have been a lot of problems with the bison. If that were the case, fine. But to introduce a bill that says we want to expand and make it greater is something that poses a danger that is beyond what the people of British Columbia want.

In principle, I would suggest that the bill is poor legislation to do even what the minister wants to do. But the question again is: do we want that in British Columbia?

MR. SPEAKER: Pursuant to the standing orders, the House is advised that the minister closes debate.

HON. MR. SAVAGE: I am quite interested in some of the comments that were made by the member for Kootenay. I would hope that when we get into Committee of the Whole, she will give consideration to asking some of the same questions. I would be delighted to respond.

I don't think we should be fearful of a potential for control of the industry by the fact that there will be fairly stiff regulations. I did mention in my opening remarks that we will be working with the Ministry of Environment, which has professional people on staff, as you're well aware, who can advise, with the cooperation of the Ministry of Agriculture and Fisheries, on how we deal with some of the specific issues you were identifying.

I look forward to when we get into committee. I move second reading of Bill 9.

Motion approved on division.

Bill 9, Game Farm Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

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

FOOD PRODUCTS STANDARDS ACT

HON. MR. SAVAGE: I think this legislation bodes well for the potential to develop standards in food production and processing in this province that will give the opportunity for our food producers and processors to exceed some of the standards that are presently allowed under the Food and Drugs Act (Canada).

What we would like to do here is provide the process in the legislation by which we can put into place regulations that, if they are met by our processing and producing sector, will allow them to have a marketing edge on products that are marketed not only here in British Columbia but throughout the rest of Canada and in several countries throughout the world.

The quality standards that we're talking about will be set by adopting standards of food quality for the content of particular foods or classes of foods. Those will be the ones that we now recognize as those set out under the Food and Drugs Act. We will be establishing standards of food quality for content and classes within the province if none have been set by the Food and Drugs Act.

We will be establishing rigorous premium product standards pertaining to food quality or content for particular foods within this province. The province will only establish standards when it is clear that such standards will benefit the sector to which the standard applies, after full consultation with that sector. The standards set by this bill will not necessarily relate to food safety. This provides a further basis for developing marketing strategies for the B.C. food industry.

The legislation also creates authority to allow persons in the food-manufacturing industry to use a B.C. logo based on the provincial coat of arms to advertise their B.C. products.

[7:45]

[ Page 11087 ]

If I can just refer to the federal government food standards, this part has been developed to enable the adoption of federal standards. Canada has the power to set food quality standards for products moving inter-provincially. The province may make laws to set quality and content standards for food products processed or manufactured and sold within our province. By applying the provisions of this part, the province will be able to adopt federal quality standards for processed or manufactured foods to create a uniform standard for both domestic and national markets that will meet the needs of consumers and assist the food industry. Health and Welfare Canada or Consumer and Corporate Affairs Canada will enforce this part.

Part 2, "Provincial Quality and Compositional Food Standards," would allow the province to set provincial standards for the content and quality of its processed or manufactured food products when no federal quality standards have been set. In the absence of federal standards and where provincial ones are set, no one may offer products for sale unless they meet these standards. Imported and provincial products will be treated alike. The part also provides a mechanism for the province to set premium standards. Such standards may provide opportunities to manufacturers and processors wishing to develop and market premium products.

Part 3. British Columbia produces and harvests high-quality food products, as most of us know. This part provides a means for the manufacturing and processing sector of the food industry to advertise that the products they make are B.C. quality food. Any manufacturer or processor using B.C. products and meeting excellence in processing standards will be eligible to use the B.C. logo incorporating the coat of arms.

Mr. Speaker, I fully support this legislation, and again would hope that it will receive speedy passage through this House. I move second reading of Bill 57.

MR. BARLEE: Our perusal of this bill indicates it's generally a cosmetic bill and perhaps overdue, but it's a reasonable bill. The intention is reasonable. We certainly have no difficulties with the first part, sections 1 to 5, but section 6 provides some difficulties. I have some questions here. For instance, it mentions inspectors. We're chronically short of inspectors in various parts of the agricultural industry The other thing that worries me about the inspector part — and this is sections 7 and 8 especially — is that the powers of the inspector seem to be going beyond what really is required.

MR. SPEAKER: Hon. member, this is very nice but you see, the thing is that this is second reading. When you specifically refer to sections it does call out for something which should be dealt with in committee.

MR. BARLEE: So you want me to give a general....

MR. SPEAKER: I want you to speak specifically to the principle of the bill. I won't try and hold you to it too specifically, because you may decide that you want to discuss all these matters in committee.

MR. BARLEE: We will go over the specifics of it when it comes to the next reading. Thank you, Mr. Speaker. I was slightly ahead of myself, not having done this since last year.

MR. SPEAKER: Pursuant to standing orders, the House is advised that the minister will close debate.

HON. MR. SAVAGE: I look forward to discussing the particular sections within the bill. As the hon. member opposite stated, he may have some concerns, but we'll look at them at the next stage of reading the bill.

I move second reading of Bill 57.

Motion approved.

Bill 57, Food Products Standards Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. RICHMOND: I call second reading of Bill 58, Mr. Speaker.

BRITISH COLUMBIA WINE ACT

HON. MR. SAVAGE: The purpose of this legislation is to establish a wine act for this province, one that we have not had previously. A lot of us can remember the discussion when we went through the free trade agreement, and the structure that was put in place to try to help the wine industry. There was an agreement to buy out some of the vineyards that had varieties which could not be sustained under the free trade agreement, and a $28 million program was put in place. This government steadfastly believed that there was an opportunity in British Columbia — especially in the Okanagan, where we saw that we were producing excellent wines in some of our estate wineries, and even our commercial wineries' specific blends — for the industry to continue and have an opportunity to grow and prosper.

This legislation that will enable the wine industry to develop a premium wine market and have a chance to enhance its competitive position. The B.C. wine industry needs to develop a market in which it can compete without preference.

Bill 58 will create a wine institute which will represent the industry and have the power to set and enforce wine standards for wines that are made of 100 percent B.C. grapes. The institute will have the power to levy grapes and wines produced, as well as to charge fees for testing and for the use of a B.C. wine trademark. The institute will spend the funds raised on promotion, research and education on behalf of the B.C. wine industry. The wine institute will create enforceable standards and allow B.C.

[ Page 11088 ]

wines to be promoted as meeting those high quality standards and to be thus able to charge the higher prices needed to meet production costs.

This industry needs a way to create and enforce premium standards to gain access to the premium market. Grape growers strongly support this initiative as it provides a basis for a strong wine-grape industry in British Columbia.

MR. BARLEE: Generally, my acceptance concurs with the grape growers. I've talked with a number of the individuals concerned, some of whom I assume have been appointed by the ministry. We do not question the intent of the bill.

There is some concern whether or not the grape industry will make a recovery from its decimation of the past two years. Approximately 1,200 acres are now in grapes, whereas originally it was 3,500 acres. I would assume that this bill would be working towards that long-term goal.

MR. SPEAKER: Pursuant to standing orders, the House is advised that the minister closes debate.

HON. MR. SAVAGE: I look forward to discussing this bill, because it is extremely important to the future of the wine industry and especially to the grape growers of British Columbia. Our industry has a good chance. We know very well that excellent grapes are produced in British Columbia, and we will get on with the enactment of this bill to see the quality standards set and our industry flourish. I move second reading of Bill 58.

Motion approved.

Bill 58, British Columbia Wine Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

MR. SPEAKER: With the permission of the House, I will send a fax of this particular information to the agent-general in London, who awaits our passage of this bill.

HON. MR. RICHMOND: I call second reading of Bill 31, Mr. Speaker.

HEALTH PROFESSIONS ACT

HON. J. JANSEN: The Health Professions Act is new legislation to establish self-governing powers for a variety of health professions that are currently unregulated. The proposed bill would provide a mechanism to regulate individuals who offer health care to the public, or who practise in a health-related profession where there is some degree of risk to health and safety of the public.

At the present time, there are large numbers of persons who offer these types of services over whom there is no statutory control. The regulation of these groups would help to protect the public by setting standards for education, training and practice. Implementation of such standards is expected to lead to general improvements in the effectiveness and quality of the overall health system. In the past, government has conferred self-governing powers on professions by separate statutes. However, Bill 31 would enable cabinet to designate specific health professions by regulation as self-governing without the need for further legislation.

The Health Professions Council will review applications for designation and make recommendations to the Minister of Health about the need for designation. As it would with separate statutes, the government will specify by regulation the name of the regulatory body, titles reserved for practitioners and the scope of practice permitted for practitioners.

A new college will be established upon designation of a health profession. Management of each college, including the making of bylaws with respect to the requirements for self-governance, will be the responsibility of the board of that college.

This bill is significant for a number of reasons. It will enable the government to respond more quickly where a need to regulate a health profession has been established. This bill is a more efficient means by which to standardize the regulatory process across a wide range of health professions. This bill signals the determination by government to be more attentive to the exercise of self-governing powers by health professions.

[Mr. Pelton in the chair.]

As I indicated to the House when Bill 31 was given first reading, this legislation was first introduced in July of 1989 as Bill 91, the Health Disciplines Act. Bill 91 was an exposure bill, and the feedback to government indicates that there is considerable support for this legislation.

I would like to point out that many health professions have been very helpful in refining this legislation. Considerable time and effort by many committees and individuals was spent examining Bill 91. As a result, a number of specific comments and suggestions have been incorporated as revisions to the bill that is now before you.

I will briefly summarize the important changes that have been made to significantly improve the legislation. The most obvious change is that the title of the bill is now Health Professions Act instead of Health Disciplines Act. This change will eliminate the likelihood of confusion with references to the discipline committee. As well, the new title will underscore the fact that this legislation is equivalent in a legal and practical sense to the statutes of existing health professions.

The Health Professions Council will now have the authority to deal with applications in a summary manner. Thus, on those occasions where an application has been made previously, designation can be rejected immediately. Conversely, a recommendation for designation may be made immediately where

[ Page 11089 ]

there has already been extensive investigation of a health profession.

The Minister of Health will now be able to refer a matter specifically to the council for investigation in the absence of a formal application. This will ensure that no area avoids examination, particularly where evidence suggests that regulation is required, simply because no group has made application for designation under this act. Any investigation undertaken by the Health Professions Council must be advertised in the British Columbia Gazette and may be made known through other means at the same time.

Upon designation of a health profession, a college rather than a corporation is established. This was done to avoid confusion with health profession corporations used by individuals for income tax purposes, and because of the wider public recognition of colleges as regulatory bodies in the health care sector.

A new provision of this bill guarantees that appointments by the Minister of Health to a college board will not exceed the number of persons elected by the membership of that college.

A college board is now required to file an annual report with the Minister of Health. This reflects the decision by the government to more systematically and intensively monitor the regulatory activities of self-governing professions.

As in Bill 91, cabinet is given the power to make, amend and rescind a bylaw for a college. However, a new precondition requires that 60 days' written notice be given to the board before cabinet exercises its power.

A new statutory reference to the registration committee reflects the importance of the registration process and accords with the statutory recognition given to an inquiry committee and the discipline committee.

Provisions related to the discipline process have been expanded, and there are new provisions. New provisions for health profession corporations have been added. These were not included in Bill 91, but are based on the amendments made last year in Bill 40 to the legislation for optometrists, chiropractors and other health professions.

The impetus for this legislation is protection of the public. By establishing a comprehensive system for the regulation of various health professions, the public will be able to deal with practitioners who are required to meet minimum standards for registration and who are subject to ongoing standards of ethics and competence and to a stringent process of discipline.

The provisions of the Health Professions Act will enhance the relative health and safety of health care consumers in the province. That concludes my remarks at this stage.

[8:00]

MR. PERRY: This is a sensible bill, and the opposition will be pleased to support it. I see shock in the government benches, but there shouldn't be surprise. I'm pleased to acknowledge the friendly gesture of the Minister of Health and also of his predecessor the former Minister of Health, who were generous enough to lend their officials for an hour or so last year and again this year to brief the opposition critic on the contents of the bill. Of course, that facilitates the process of debate in the Legislature and conserves the time of all members.

The only other point I'd like to note at second reading is that I commend the government's approach in consulting those In the health field through the exposure of the bill last year at the close of the legislative session and the deliberate attempt by the government to give maximum opportunity for the public — particularly those affected — to comment on it.

It's interesting to note that members of the relevant professions, as early as February 1985, presented a brief to the Ministry of Health entitled "Health Professionals Legislation." For the record, I'd just like to credit some of the organizations that produced the brief for having drawn the government's attention to this issue a number of years ago. Among those represented were the B.C. Association of Speech-Language Pathologists and Audiologists, the B.C. branch of the Canadian Institute of Public Health Inspectors, the B.C. Dietitians' and Nutritionists' Association, the B.C. Society of Occupational Therapists, the B.C. Society of Respiratory Technologists and the Cardiology Technicians' Association of British Columbia. More recently, the Acupuncture Association of B.C. has been particularly active in working towards this legislation.

I think the minister has already said everything worth saying on this issue, and we'll be pleased to support it.

HON. J. JANSEN: Mr. Speaker, I look forward to further debate and discussion on the bill in committee stage. I now move second reading.

Motion approved.

Bill 31, Health Professions Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. RICHMOND: Mr. Speaker, I call second reading of Bill 43.

COMMUNITY CARE FACILITY
AMENDMENT ACT, 1990

HON. J. JANSEN: The Community Care Facility Act is an important statute, because it contains the requirements for the licensing of all facilities in British Columbia, except hospitals, that offer care — as defined — to clients. Bill 43 contains a number of important changes designed to improve the protection of clients in facilities.

Programs within government that fund facilities licensed under this act are found not only in the Ministry of Health but also in the Ministry of Social Services and Housing and the Ministry of Labour and

[ Page 11090 ]

Consumer Services. These funding programs are mental health, continuing care, services to the handicapped, residential care for mentally handicapped adults, facilities for children in the care of the superintendent of family and child service, and alcohol and drug programs.

The four principal areas of change to the act are, first, that the adult care board and the child care board are being consolidated into one new body — the Community Care Facility Appeal Board. This new board will have the responsibility for hearing appeals from any action or decision taken under the act.

Second, the position of director of licensing is being created. The director will be responsible for managing the licensing process, chairing the new variance committee and taking disciplinary action with respect to licences and certificates issued under the act.

Third, the basic licensing functions are being assigned directly to medical health officers. At present, the act gives these powers to the licensing boards, but in practice these powers have always been delegated to medical health officers.

Fourth, new powers to appoint a public administrator for a facility have been added. These provisions are identical to those contained in the Continuing Care Act passed last year.

There are a number of important features in these amendments to which I would like to draw the attention of the House. As I indicated, the amendments establish a new variance committee to consider applications for exemption from regulations. Representatives of the various government programs that fund community care facilities will decide on applications for exemptions or variations of legislative requirements.

In exercising its powers, the committee may grant an exemption or variation only where the members of the panel agree unanimously that the change is appropriate. To test for exercising these powers contained from the existing provisions, the applicant must show both that there would be an undue hardship to him or her without the exemption and that there would be no increase in the risk to health or safety of clients in a facility if the exemption or variation were granted.

The new appeal process provides further safeguards in connection with the granting of an exemption or variance. Unlike other decisions or actions under the act which may only be appealed by the individual who Is the subject of the decision or action, any person may appeal the granting of an exemption or variation if it can be shown that there is reasonable cause to believe that there would be increased risk to health or safety of clients in a facility.

Mr. Speaker, another important new feature of this act is the power for the director of licensing to act prior to a hearing. The director is authorized to place limits on or suspend a licence or permit where the health or safety of persons would be at risk, pending the holding of a hearing.

Part of the act would add important new obligations to the operator of a community care facility. He or she would be required to ensure that employees are of good character, that the facility is operated in a way that will maintain the spirit, dignity and individuality of facility clients, and that the facility is operated in a way that will promote the health and safety of clients.

These amendments to the Community Care Facility Act strengthen the existing protection for clients and reinforce our commitment to maintaining proper health and safety in facilities.

Bill 43 underscores the intent of the government to maintain adequate protection for facility clients. I'm pleased to be able to bring these amendments forward at this time.

MR. PERRY: This, again, is wholesome legislation — and I take that word advisedly from section 5.4, which I refer to as the wholesome section, suggesting that standards are to be maintained. I'll perhaps come back to that in committee stage, Mr. Speaker.

My colleague the senior member for Vancouver–Point Grey will have some more significant comments to make.

AN HON. MEMBER: Not senior — first. Happy birthday!

MR. PERRY: Forgive me. On the occasion of her birthday, my colleague the first member for Vancouver–Point Grey (Ms. Marzari), also known as the junior member for Vancouver–Point Grey.

Mr. Speaker, I want to take this chance to acknowledge as well, since I forgot to a moment ago, the assistance of the minister's staff, particularly Mr. Lovelace, Mr. Foster and Mr. Moyes, in briefing me on this bill.

MS. MARZARI: The community care facility licensing boards have always, over 20 years, been one of those murky areas of the regulatory regime, which is quasi-political, quasi-community and quasi-bureaucratic. It has always been a coming together of the Ministries of Health, Social Services and Education in the case of child care facilities licensing, and Health and Social Services in the case of senior care facilities.

Times have changed, and now we live in a society where with the de-institutionalization of many people who traditionally have lived their lives, from childhood through to old age, in institutions.... Now that we find those people being returned to the community, hopefully in a wholesome way, times have changed, and the community care facilities licensing has to reflect that fact. There's no sense taking people and partializing them and lumping them into one regulatory regime when they're children and another when they become seniors, or another when they become disabled adults.

I endorse this bill. It probably will do a lot of rationalizing, and finally somebody is saying the buck stops here and we're going to do it in the Health

[ Page 11091 ]

ministry. That's just fine. But we have to be cognizant of the fact that we gain in coordination and consolidation; we gain in the buck stopping somewhere in the community, most notably with the medical health officer — which is where it's usually stopped anyway, but now we ratify that. My fear is that we lose too. What I want is the best of both worlds. I don't want to lose in a number of areas.

One is in the area of child care, day care for children. Child care 15 years ago — I think it was about that long ago — broke away from community care facilities and had its own community care board. That was very much desired by the child care community. The question was asked then: why should child care facilities be judged by the same licensing inspectors as senior citizens' nursing homes? It didn't seem appropriate to have the same board adjudicating on the appropriateness of the licence for both kinds of institutions, just because they happen to be institutions.

[Mr. Speaker in the chair.]

I would like to think that with this reintegration we are not going to lose our community input; that the child care function is not going to be forgotten; that the buck stopping at the medical health officer is not going to entrench the medical model or even the public health model, but will continue to bring in the kind of input that we have been able to develop with the Child Care Facilities Licensing Board we've had thus far over the last number of years.

I'd also like to be assured by the minister that this is going to encourage and perhaps enforce consistency in the application and enforcement of the regulations as they exist. As we know, now the licensing is not consistently enforced throughout the province.

I would like to make sure that there is going to be some check and balance remaining in the function; that there will be open meetings, for example; that minutes and records will be kept; that there will be appropriate appeals that will not just be entirely circumscribed inside the purview of the licensing director; that the board itself will continue to meet; that it will be properly appointed; and that there will be community people on that and not just medical practitioners. Can the minister assure me of these things? It will go a long way to assisting me in endorsing this bill wholeheartedly.

The one last comment I would make is that the assumption is made here that we do not have a comprehensive child care system in this province. We now have, in the last week or so, a new commission which has just been appointed and which will, I hope, bring us toward a rapid expansion of child care facilities. If it does not, then I would hope that a new government will end up bringing forward plans and policies for the expansion of child care. I am making an assumption that somewhere along the line child care is going to need its own licensing authority and will be able to license its own early childhood education teachers and set up its own policies and programs. I am a little concerned there that dragging it all back under one rubric might in the next year or 18 months be undone once again.

However, that is an issue of future policy, an issue we'll have to face when we actually build child care spaces. If the minister could assure me on the previous three concerns, I will feel much happier about this bill.

[8:15]

HON. J. JANSEN: The concerns expressed by the hon. member are legitimate and are addressed in this legislation. We will explain that in more detail as we go into committee. I have certainly shared the concerns that she raised. As you will note as we go through the sections, they are indeed being met.

Mr. Speaker, I now move second reading of this bill.

Motion approved.

Bill 31, Health Professions Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting after today.

HON. MR. RICHMOND: I call second reading of Bill 61, Mr. Speaker.

HEALTH STATUTES
AMENDMENT ACT, 1990

HON. J. JANSEN: Mr. Speaker, Bill 61 contains a number of miscellaneous amendments to the Ministry of Health statutes. These matters are of a housekeeping nature, and in the case of the legislation respecting the various health professions, representatives of the profession have been consulted on the changes.

There are a number of changes contained in Bill 61. First of all, the Chiropractors Act: the definition of "chiropractic" is being amended to permit the use of devices directly related to the chiropractic adjustment. This change follows consultation with the B.C. College of Chiropractors. The second change in this act simply permits the college to make rules with respect to requirements for continuing education.

Under the Dentists Act, the most significant amendment here relates to the authority for the council of the College of Dental Surgeons to appoint more than one dental hygienist or dental assistant to the council. The other item is an administrative change related to the operations of the council.

Under the Health Act, two changes are made to the definitions for purposes of clarification and correction. The maximum penalty for committing an offence under the act is being increased to $2,000 from the present $500. This is consistent with the provisions of the Offence Act and most other statutes. As well, there is clarification that fine revenue goes into consolidated revenue for the province.

Under the Hospital Act there are two principal changes being made: the first change involves consolidation of provisions for rehabilitation and extended-

[ Page 11092 ]

care hospitals under the provisions governing all hospitals designated under the Hospital Act; the second change will enable the Minister of Health, rather than the Lieutenant-Governor-in-Council, to appoint hospital inspectors. Persons appointed are always Ministry of Health staff, and this change will streamline the operations of cabinet.

The Medical Practitioners Act. The most important change here involves the extension of immunity from legal action to a person carrying out duties on behalf of a committee of the college. At the present time, this protection from liability is restricted to physicians only. This protection will now cover laboratory technicians, clerical staff and others who might be exposed to a civil claim for damages.

Other changes are an increase in the penalty for late payment of annual dues and the repeal of an obsolete provision related to the appointment of County Court judges to an inquiry committee.

Under the Mental Health Act, important changes have been made concerning the safeguards for patients under the age of 16 in a provincial mental health facility. In those cases where a person under the age of 16 has been voluntarily admitted to a facility by a parent or a guardian, that person will now have access to the same protections that are available to a person who is involuntarily admitted to a facility. These protections include regular periodic examinations by a physician, entitlement to apply for a review panel and mandatory discharge where the patient no longer meets the criteria for admission.

Under the Naturopaths Act, this amendment provides for the appointment of a lay representative to the board of naturopathic physicians. This change will increase the effectiveness of the board in exercising its responsibilities under the act.

The Nurses (Registered) Act. There are two principal changes being made to this act. The first amendment will allow the graduate nurse appeal board to subpoena witnesses and documents, and will provide immunity from legal actions to members of the board. The second change relates to the use of the title "nurse." A new exemption is established for Christian Science nurses who are working in Christian Science facilities in the province.

The Nurses (Psychiatric) Act. There are a number of matters of a housekeeping nature in this act that have been developed in consultation with the Registered Psychiatric Nurses' Association of British Columbia. The most important of these changes include transfer of some bylaw-making power from the association to the board, establishment of a new professional conduct committee and clarification that appeals in their first instance may be made either to the board or to the Supreme Court. Failure to pay fees on time will now result in cancellation of registration.

The final act is the Seniors Advisory Council Act. The authority to expand the size of this council is being established. The act presently requires that the council be exactly 15 persons, and these amendments will simply permit more than 15 persons to be appointed.

These are all relatively straightforward matters, and I am hopeful that they can be considered quickly during Committee of the Whole.

MR. PERRY: If the other was a wholesome bill, this is a housekeeping bill. Whether it is entirely good housekeeping, I am not sure. I will raise some matters in committee stage, but in general we will support the bill.

MR. SPEAKER: Pursuant to standing orders, the House is advised that the minister closes debate.

HON. J. JANSEN: I move second reading of the bill.

Motion approved.

Bill 61, Health Statutes Amendment Act, 1990, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. RICHMOND: I call second reading of Bill 45.

FAMILY AND CHILD SERVICE
AMENDMENT ACT, 1990

HON. MR. JACOBSEN: Bill 45 addresses recommendation 26 of the justice Reform Committee's 1988 report. The committee was concerned that parents may not always have adequate knowledge of case details in time to prepare for court. The bill requires the superintendent to provide parents of a child with a copy of the report to court, and the particulars if the child is apprehended.

The bill was first tabled as a White Paper on July 10, 1989, to encourage public input. The input process is now completed. The importance and timeliness of Bill 45 is underscored by the fact that the ombudsman's 1989 report refers to case situations which will be positively affected by this bill.

Bill 45 provides an essential balance between a parent's right to information and a child's right to protection. Details of the changes made by the bill are as follows. When a child is apprehended for neglect or abuse, the superintendent must present a written report to the court within seven days. Bill 45 would require the superintendent to provide a copy of that report to the parents before the report is presented in court, when the parents are available to receive such a report. After presentation of the report to court, the court may fix a date for a hearing to determine if the child is in need of protection.

Bill 45 would allow a parent of the child to make a written request to the superintendent for particulars. The superintendent will be required to provide particulars within 14 days. Particulars would include the order the superintendent is requesting, the reason for requesting the order, and the reasons for considering the child to be in need of protection. The superintendent would not be required to include particulars

[ Page 11093 ]

which would be prejudicial to the safety or well-being of a child, would endanger the safety of any person, or would reveal, without consent of the person, the identity of a person who made a report about the child.

If, after the initial request by a parent for particulars, the superintendent requests another order or applies to vary the existing order, the superintendent shall provide the particulars of the new request. If particulars provided are inadequate, the parent may apply to court for more particulars.

The ministry has always advocated being as open and frank with parents as possible. Bill 45 formalizes that practice, and I now move second reading.

MS. MARZARI: Our comment on this bill is: what took you so long? The recommendation was made in 1988. Everybody knows that justice must be done for the child, it must been seen to be done, and it must be felt to be done by the parents.

Interjection.

MS. MARZARI: Yes, this is a new-wave opposition.

The parents of a child who is being taken into custody have to be observed, obviously, and this bill sets us on the path.

Our questions have to do with how you're going to define "where practicable." In section 2 you refer to delivering those documents where practicable. We don't know whether that means geographic accessibility or whether there might be some discretionary power there. If there is discretionary power being used by regional managers or by the superintendent, we want to know what the parameters of that discretion are.

Basically, let's proceed with this bill with all due haste.

HON. MR. JACOBSEN: This amendment act formalizes what the ministry has always advocated as good practice in its policies. It is very important to parents that they have full knowledge of the reasons for their children's apprehension so that they themselves may make proper representation to the hearing in court to determine their child's future.

We will deal with the issues that have been brought up as we go through committee stage. I move second reading.

Motion approved.

Bill 45, Family and Child Service Amendment Act, 1990, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. RICHMOND: I call second reading of Bill 47, Mr. Speaker.

GUIDE ANIMAL ACT

HON. MR. JACOBSEN: This bill is intended to replace the Blind Persons Rights Act by expanding the scope of legislative protection offered in that act to others who rely upon animal assistance.

Our present legislation serves people with visual impairments who use seeing-eye dogs. That legislation, of course, works very well. It is well understood by members of the public that a visually impaired person accompanied by a seeing-eye dog has the right to access any building or public transportation. It is for that reason that we wish to expand those rights to other people who rely on guide animals for assistance. Seeing-eye dogs are familiar and respected animals. As highly trained and intelligent animals, they perform a wonderful service for the people who rely on them.

My ministry issues certificates to people who use seeing-eye dogs which certify that their dogs are properly trained and are allowed to enter and frequent any public place. Those dogs give a new meaning to the word freedom for their owners. They become their close companions, guides and protectors. The use of animals as guides has been expanded greatly in the last few years. Trained hearing dogs now help people with hearing impairments. Dog assistants help people in wheelchairs, and other animals are also trained to help people with different disabilities.

This legislation is very important to the British Columbians who rely on trained guide animals for assistance. Those people should be allowed exactly the same access to buildings, accommodation, restaurants and public transportation as all other British Columbians. This legislation recognizes the needs and rights of people who use guide animals to be allowed free access.

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

MR. SPEAKER: The member for Prince George North.

MR. BLENCOE: The designated speaker.

MRS. BOONE: Yes, I am the designated speaker.

Obviously the opposition has no problems whatsoever with this bill. My colleague from North Island was just saying that there must be an election coming close, because we're getting all these good bills right now. This is a good bill. It's one that certainly will be welcomed by any handicapped person out there who is not visually impaired and does require an animal. We have no problems supporting this.

[8:30]

MR. SPEAKER: The House is advised that the minister closes debate.

HON. MR. JACOBSEN: With the support of everyone for this legislation, I move second reading of the bill.

[ Page 11094 ]

Motion approved.

Bill 47, Guide Animal Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. RICHMOND: Mr. Speaker, I call second reading of Bill 51.

LABOUR AND CONSUMER SERVICES
STATUTES AMENDMENT ACT, 1990

HON. MR. JACOBSEN: This bill amends three statutes: the Residential Tenancy Act, the Motor Dealer Act and the Mobile Home Act. These amendments are designed to give rental protection to families with children and to implement some of the recommendations of the Mobile Home Task Force.

The amendments to the Residential Tenancy Act will have a very significant impact on families who live in or who are seeking rental accommodations. The act will prohibit discrimination against families with children except in buildings which are specifically to be rented by seniors or people with disabilities. This means that restricting residential tenancies to adults only will no longer be allowed except in cases where the tenancies are restricted to seniors and people with disabilities. Rental accommodation can be rented to a specific number of people, but the age of those people cannot be stipulated in the rental agreement. There will no longer be "no children" accommodations with the two exceptions.

Cases of alleged family discrimination will be handled by the British Columbia Council of Human Rights.

Also, renters who become new parents must be given 24 months' eviction notice if the birth of the child puts them in contravention of the number of tenants specified in their tenancy agreement. The eviction, in this case, would not be because there is a child living in the home, but rather because the birth added an additional person to the total number, which would mean the reasonable limit of the tenancy agreement has been exceeded.

The act also amends to prohibit the practice some landlords have been using of requiring liquidated damages when month-to-month leases are terminated with a month's notice.

Also, landlords will have to obtain municipal approval before converting vacant rental units to leases exceeding 20 years. Changes were made to the Residential Tenancy Act regulations last October to prevent landlords from converting rental units with typical-length tenancies to long-term leases of more than 20 years without prior municipal approval. This previous regulation and the new legislative changes allow the municipalities to decide if long-term leases are desirable on a case-by-case basis.

In the case of building demolition or change of use of a mobile-home park, local government is now allowed discretionary power to vary the eviction notice period in the Residential Tenancy Act between two and six months. This will mean that the municipality can decide what is the most appropriate length of notice in their own municipality. Where tenants are evicted because of building demolition or change of use of a mobile-home park, the act is amended to ensure that they are given actual and reasonable moving expenses. These moving expenses have a maximum of six months' rent for manufactured home pads and one month's rent for other tenancies. There is already a provision in the Residential Tenancy Act regulations for moving expenses of manufactured home owners. In these circumstances, the amount is up to a maximum of $1,000. At present this regulation does not apply to other tenancies.

You will be aware that I am using the term "manufactured home" instead of mobile home. In line with one of the recommendations of the Mobile Home Task Force, the term "mobile home" will be replaced with "manufactured home" in all existing and proposed legislation. Therefore the Mobile Home Act will become the Manufactured Home Act and any other legislation, which uses the phrase "mobile home,” such as the Residential Tenancy Act, will be modified accordingly. Homeowners feel that this change in terminology is central to changing the somewhat negative image their homes have in the eyes of the public, municipalities and financial institutions.

In response to another recommendation of the Mobile Home Task Force, manufactured-home park owners will be required to disclose in advance to a prospective buyer if the manufactured home must be purchased from a specific vendor.

Also recommended and included in this legislation is a requirement that manufactured-home park owners who are giving eviction notices to manufactured-home owners because of a change in use of the property must begin the eviction notice period on the same date as a municipal council decision.

The Motor Dealer Act will be amended to require manufactured-home dealers to give fair disclosure of what is included in their selling price.

These legislative changes cover some very important issues for British Columbians. We have addressed many of the concerns of families who are searching for an affordable home and find doors closed to them, or who find themselves the victim of unfair eviction practices. We have also acted on some of the recommendations of the Mobile Home Task Force.

Mr. Speaker, I move second reading of this bill.

MR. BLENCOE: Mr. Speaker, this is a little difficult perhaps for the opposition and me. Generally we agree with the intent and the philosophical approach by the minister on this legislation.

The key issue in this legislation is the section that purports to deal with ending discrimination against families and ending discrimination in rental properties based on family composition.

May I let the House know that this side of the House, on the commencement of this session, considered a private member's bill on this very issue, but

[ Page 11095 ]

we came to the conclusion that this issue is an emotional one, a controversial one and one that, if it's not done properly, reaps misunderstanding and confrontation. I think this bill — because there haven’t been any consultation with the major stakeholders — will cause owners of rental property to seek loopholes as fast as possible. We decided not to introduce legislation for those reasons. We felt it was really important that there be a process of consultation, and that the property owners, the property managers, the tenants, the Council of Human Rights and various people who have jurisdiction or interest in this area be consulted. If you introduce legislation in this area out of the blue, and you just table it without people really understanding your intent, you create more problems than you resolve.

It's unfortunate that the minister has decided to proceed with this legislation. I think it would have been far more useful — we agree with the intent, as I said — if this bill had been an exposure bill or had been put to an appropriate committee for discussion so we could have heard those people who are, for various reasons, feeling alienated and marginalized by the process. The minister has heard from the owners, the tenants and from Human Rights. They were surprised, needless to say, by this bill. They hadn't been approached. They hadn't had the opportunity to give their ideas to resolve this issue. I think this is too important an issue to cloud the principle by controversy and confrontation, and that's what happened.

I've heard from and had letters from those who manage and own property. They quite clearly say that they are going to be forced to find loopholes and exemptions. For instance, in the bill it states that an owner of property can reserve suites for seniors. I can see those owners who weren't consulted feeling aggrieved and basically saying to a prospective tenant: "I'm sorry. My suite is going to be reserved for seniors." There's no follow-up on that. There's no way to monitor that. There's no way to check that. It could intensify the issue that the minister is trying to get at, which is making more accommodation available to families.

This principle is correct. We have to deal with discrimination against families. But I happen to feel that it is so important that there should have been prior consultation to bring people on board so people will understand what the problem is and see what we could agree on with the major stakeholders. In haste, this bill is going to create problems for us. It invites a challenge under the Human Rights Act. We will have all sorts of court proceedings because this bill has not been considered properly.

The bill imposes a fine of $2,000 on the landlord, but human rights legislation tries to fix the wrongdoing by requiring an end to the discrimination and compensation to the victims. In this bill, the landlord doesn't have to stop discriminating. All the landlord has to do is provide two years' notice. That's where I have some problems with the pertinent section. My concern is that we will institutionalize and legalize discrimination.

Under this act, tenancy agreements will have to be signed laying out what the tenant agrees is a reasonable number of people living in the unit. Go beyond that, and the legislation clearly lays out an eviction process. It lays out quite clearly that that can happen.

I have come to the conclusion that this bill will turn many people against families and children, because they don't understand what we're trying to do in the legislation. I've already heard-I'm sure the minister has-from elderly people who don't understand the intent but feel their building is suddenly going to be full of children. It's going to disrupt their lifestyle, and consequently they feel angry, feel they haven't been consulted, and feel that the bill was brought in as an attempt by the government to appear that they are taking some action on housing. It's fraught with problems.

I fear that those families who move into an apartment or a unit under this legislation will be fearful of having children, because they know that if they go beyond the stated amount of what is considered a reasonable number for the unit they are occupying, they will be evicted under this legislation.

[8:45]

The renters will be faced with eviction on the pretext that the landlord needs vacant possession to undertake renovations. There's no municipal control of that section.

In the other areas we have analyzed, the minister has made some changes in the manufactured-home components, as he says, as a reaction to the task force. Unfortunately, it does nothing in the critical areas facing manufactured-home owners. They have been asking for rent stabilization to protect owners from unjustified and unfair increases in pad rentals. This bill does nothing in that area. They wanted a provision for park owners to raise pad rentals to cover operating costs and park improvements and major repairs. They wanted protection for homeowners from unfair evictions, and they wanted reasonable relocation and moving expenses. This bill does nothing in that area.

There are 70,000 families who by choice prefer manufactured homes, and they deserve fair treatment and security. Unfortunately, this bill does not take into account the major issues that the manufactured home owners for a number of years have been asking be dealt with.

I think this bill is well intended, and I hope the minister is sincere in his approach to try to deal with something, but I suspect that what it's really meant to do is to give the impression that action is being taken on the housing situation.

The key issue facing tenants in the province today is the fact that unjustified rent increases cannot be reviewed. There is no mechanism. This bill, I agree, starts to deal with the issue of discrimination against children, but the issue is still affordability. The issue is supply, and the issue is a fair and reasonable way to deal with landlord and tenant disputes, which we don't have today in British Columbia.

[ Page 11096 ]

We have put before this Legislature a bill called An Act to Provide for Rent Stabilization. It's a fair way to hear the concerns of tenants and ask for bona fide reasons from landlords for their rents going beyond CPI. If they have good reason to go beyond CPI, their rents can proceed. The issue for tenants — a million tenants in the province — is the issue of rents they cannot afford. The evidence is there that some owners are now taking advantage of a very tight market and are escalating their rents and putting great hardship on many tenants.

We intend to support the legislation, but I suspect we're going to discover in the weeks and months ahead that really we are amending the wrong act, that we should have been amending the Human Rights Act. I think we'll find that the Council of Human Rights will not have the power to recommend a remedy under this legislation, and we feel that those who are to be impacted by this legislation should have been consulted before it was put on the floor of the Legislature. It's too important an issue to now see an act go into place that is going to see owners of properties try desperately to find ways to get out of it, and there is no question they will be doing that.

There are a number of issues of a more technical nature that we will be raising in committee. We will do that when we come to it.

MR. PERRY: I have a confession to make in your presence, Mr. Speaker. This must be the first time in my brief tenure in the Legislature that the debate has actually influenced me. Sitting here listening to the analytical speech by the second member for Victoria, I've had to alter what I had planned to say.

I had planned to speak generally in favour of this bill. Now I think I'll have to speak more in favour of the minister, because the second member for Victoria has acknowledged something I've observed a number of times in this minister's behaviour in this Legislature: he's a compassionate man. If I may be allowed to make a diagnosis, he is one of the few on the government benches who clearly have a heart — or at least a beating heart. I sometimes even wonder whether the difference is that....

I see the face of the Minister of Environment (Hon. Mr. Reynolds) flushing, and that is meant to signal to me that he also has a heart. Perhaps the difference is that the minister's heart beats forward and some of his colleagues' hearts beat backward. Perhaps the circulation of blood in their brains is from the venous to the arterial side. That perhaps explains some of the reactionary thinking we sometimes see in this chamber.

I want to pay tribute to the intention of the minister, as did the second member for Victoria. Looking at the bill and listening to the debate reminds me of one of my experiences the first time I ever tried to rent an apartment. I won't confess to the ripe age I had attained when I first did that, but I will confess that it was during the first government of M. Robert Bourassa, the current Prime Minister of Quebec, which was a remarkably reactionary government. I had the experience of actually presenting myself to inspect an apartment and being told that I wouldn't be allowed to see the apartment because I was a student. Of course, in those days they didn't make clear that it was only McGill University Students they wouldn't show the apartments to, and it took me four years to learn why.

I've been in that situation, so I know a little bit what it feels like, and I have a lot of sympathy for families that find themselves in the position where they are no longer welcome to live in our society and our cities. The minister has responded publicly, earlier this spring and last winter, to rather extreme situations in which the landlords made it clear that children are not considered people in our society. As we know, many philosophers consider that a society is best judged on how it treats its weakest people: its elderly and its children.

So of course I laud the minister's intent. But the second member for Victoria has pointed out some serious weaknesses in the gap between the intent of the legislation and the ability of government to achieve those goals on behalf of society. I hope the minister will consider what my colleague has said and perhaps consider bringing forward amendments at the committee stage to strengthen the bill, or even consider whether we should violate those precious undemocratic traditions that we sometimes observe in this House and ask the appropriate legislative committee to review this issue; and specifically to review the many bills brought forward by my colleague the second member for Victoria, who has put a lot of thought and a lot of work into consulting with expert authorities in the housing field to propose constructive alternative strategies.

I don't think any of us would claim we have the ultimate wisdom in this field, although we sometimes hope to be close to it. The Legislature, in my view, could serve the public better by reviewing these issues through its committees during the off-season. I would like to make that a recommendation and an invitation to the minister: that he consider assigning the committee some of those tasks, particularly to review the situation in the tightly pressed urban areas like Vancouver and Victoria.

May I make one brief comment about the provisions concerning eviction notice for buildings that will be demolished? I am pleased to see the government finally responding to the voices crying out from the public for action on this issue. I have said many times in this Legislature, including during the minister's recent budget estimate debate, that the public is very disturbed by the recent spate of demolitions of good apartment buildings, and very disturbed by the implications of those demolitions for tenants, particularly the elderly, frail tenants who have occupied buildings for many years, sometimes decades.

It is encouraging to see some action, but I feel it stops short of measures proposed by my colleague the second member for Victoria, which could more adequately deal with these problems. Again, I would like to take this opportunity to encourage the minister to consider employing the appropriate committee

[ Page 11097 ]

of the Legislature to study these issues through a public hearing process once the Legislature has adjourned.

MR. SPEAKER: Pursuant to standing orders, the House is advised that the minister closes the debate.

HON. MR. JACOBSEN: I listened with a great deal of interest to the members opposite discussing the merits of this legislation. I find it really interesting that they would speak against legislation that is specifically for the purpose of providing an opportunity for families to have the same access to rental accommodation as other people in our society have. I understand the suggestions that we should consult on this matter and that we should create, I think, an exposure bill, but the problem exists now. If legislation is going to be brought in, we need to deal with it at this time.

We have consulted in considerable depth with the people who are affected. We understand the difficulties that families have been experiencing. We understand some of the concerns that landlords have; we understand the concerns of other people in society as well. That is why this legislation provides an exemption for seniors, to allow people of advanced years to have an opportunity to choose their lifestyle and to live in seniors' accommodations which are specifically designed and operated for their convenience. It's also the reason that we have put into the legislation a restriction on facilities that are suitable for the disabled. There are not a lot of facilities for the disabled. We believe that those facilities that do exist should be reserved for the use of disabled people.

We've looked after seniors, and we've looked after the disabled. The rest of us are in the midstream of society. Children are as much a part of that society as the rest of us. Therefore they should certainly have the same opportunity to live in accommodation that the rest of us expect and enjoy.

Mr. Speaker, I'm sure we will have some interesting discussions when we get into committee stage, but at this time I'd like to move second reading of the bill.

Motion approved.

Bill 51, Labour and Consumer Services Statutes Amendment Act, 1990, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

[9:00]

HON. MR. RICHMOND: Mr. Speaker, I call second reading of Bill 62.

SOLICITOR GENERAL STATUTES
AMENDMENT ACT, 1990

HON. MR. FRASER: I'm pleased to move second reading of Bill 61. The bill contains amendments to the Criminal Injury Compensation Act, the Motion Picture Act, the Motor Vehicle Act, the Parole Act and the Transport of Dangerous Goods Act.

Emission testing, of course, is of interest to us all. The Motor Vehicle Act will be amended to give authority to make emission testing a part of a vehicle's annual licensing requirements. This enabling legislation is to permit the implementation of a pilot project sometime next year. The actual emission standards are yet to be established for the pilot project to be set up in the lower mainland, where vehicle exhaust is of a serious nature.

Another amendment involves licence plates for collector and vintage vehicles — floater plates, we're calling them. An amendment to the Motor Vehicle Act will permit a single plate to be used on more than one collector or vintage car. Currently, antique licences are issued to vehicles, requiring an owner to possess a plate for each car, even though it may be used only once a year. This way we can now use them more than once. I think it will be seen to be a very interesting and enlightened little move.

One of several amendments to the Motor Vehicle Act will increase the accident reporting level to $1,000. Currently an accident report must be filed if there is a death or injury, or if there is property damage in excess of $400. This amount has not changed since 1981 and no longer represents significant damage to a vehicle. The Motor Vehicle Act will also be amended to make it clear that persons renting or leasing a vehicle can be held responsible for offences such as hit and run and parking violations where it has not been possible to physically identify the driver at the time of the offence.

An amendment to the Criminal Injury Compensation Act will double the maximum lump-sum awards available to victims of crime — a very important and significant change from $25,000 to $50,000. This will represent the highest allowable lump-sum maximum in Canada and will permit the granting of a more meaningful award in certain exceptional and deserving cases.

The Motion Picture Act is being amended to remove existing restrictions which make the issuing of licences by a municipality subject to licensing by the film classifications division. This provision causes difficulties for both municipalities and the film classification branch to properly carry out their respective licensing responsibilities.

The Transport of Dangerous Goods Act will be amended to allow the recovery of any costs to the government where it has been necessary to clean up a spill or discharge of dangerous goods. The provision is also made whereby the Supreme Court may reduce or extinguish the costs identified by the government as being either excessive or unnecessary.

MR. GABELMANN: Unlike the minister, I will try to be in order. This bill is appropriately discussed in committee stage; it has a variety of different sections. The bill has no principle whatsoever, unlike the minister. I would suggest that we will deal with it in detail in committee stage.

[ Page 11098 ]

If I might be somewhat out of order, Mr. Speaker, may I just ask that we deal with this after question period tomorrow afternoon, prior to the estimates of the minister.

MR. SPEAKER: Pursuant to standing orders, the minister closes debate.

HON. MR. FRASER: Mr. Speaker, I move second reading of Bill 62.

Motion approved.

Bill 62, Solicitor General Statutes Amendment Act, 1990, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

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

ESTIMATES: MINISTRY OF
SOLICITOR-GENERAL

On vote 61: minister's office, $267,592.

HON. MR. FRASER: Mr. Speaker, I am honoured to present to this House and to the people of British Columbia the estimates for the Ministry of Solicitor General. I would like to congratulate the Minister of Finance (Hon. Mr. Couvelier) for his second successive balanced budget, which will benefit all British Columbians. I would also like to express my appreciation to my friend and colleague the member for North Vancouver–Capilano (Mr. Ree) for his energy and leadership in heading the Ministry of Solicitor General for the first six months of its existence.

This is a very diverse ministry, but all the people are dedicated to one goal: public safety. We are a large ministry — some 3,000 dedicated public servants — and our areas of responsibility are tough, but we are quietly getting the job done without fanfare.

In outlining our objectives for the coming year, I would also like to review some of the many accomplishments of the year just ended.

In the police community, my ministry has been working with the Union of B.C. Municipalities to review the cost impact on municipal police budgets of the reintroduction of moving fines. If the statistics indicate that there has been a significant cost increase, I will be recommending to my cabinet colleagues that we make some adjustments to the municipalities.

New policing equalization grants were provided to the 12 self-policed municipalities to reduce inequities in police costs among local taxpayers. This relief will provide those municipalities with $6 million this year.

My ministry is chairing a negotiation team of eight provinces and two territories that contract with the RCMP for police services. The existing contract expires in March 1991, and it is important that the provinces, territories and municipalities across the country receive the best possible service at the most reasonable cost.

Mr. Speaker, my ministry is ensuring that the necessary policies and procedures are in place to secure the collective and individual safety of our citizens, and that the police are able to enforce the law fairly, equitably and reasonably — more now than ever before.

Our correction service is the envy of many jurisdictions in North America. Our institutions are secure and fair. Our programs involve the community and show great imagination. We use institutions as a last resort. Our imaginative community programs help many young people avoid incarceration, which is a most significant difference from many other provinces, I note.

As you know, the new 250-bed regional correctional centre in Maple Ridge was recently opened. When the Burnaby women's facility opens in late fall and the new Surrey Pre-trial Services Centre opens in April 1991 — where's my friend from Burnaby? — the outdated Oakalla facility will finally be torn down and the land used for residential and park development. We've been looking for that for a long time. We're also committed to replacing the Willingdon Youth Detention Centre by 1993. The planning of a new facility is underway, and funding has been approved.

Officials from my ministry, together with the Ministries of Attorney-General and Native Affairs, have been conducting a series of consultation meetings with native bands and tribal councils around the province. I might say, Mr. Chairman, that there have been some imaginative programs there involving policing in native communities. Natives represent some 6 percent of the provincial population but some 18 percent of all adults and 20 percent of youths incarcerated in provincial jails. Although we imprison fewer natives than anywhere else in Canada, it is our goal to further reduce the number of natives in provincial prisons through the use of these programs.

Another objective is to improve the provincial capability to respond to emergencies and to recover from them. The provincial emergency program has continued to improve its coordination and response role during the last year. Some achievements are as follows.

With the Ministry of Environment we developed the B.C. oil spill response plan, which was used in Sooke and in Vancouver harbour. A B.C. earthquake plan has been developed and is being reviewed by various federal, provincial and municipal agencies. Earthquake awareness meetings were held around the province, many of which I attended, and were most interesting and informative. PEP was active during the November floods in the Chilliwack River area in the fall and during the flooding in the Okanagan and the north this year. Mr. Chairman, I want to tell all those volunteers how wonderful they were, and what great work they did. They certainly saved lives through their great efforts, and we commend them for that.

[ Page 11099 ]

As a result of internal management review, PEP was reorganized. A new full-time volunteer coordinator position was established, and volunteer training was improved. We had some criticism about that, but we're pleased that it has been improved.

Mr. Speaker, I'd like to take a few minutes to review some of the activities of the motor vehicle branch. The strong provincial economy has attracted many new residents to this province from the rest of Canada and other countries. The branch has been forced to cope with increased demands for drivers' licences and other similar services. This has been done through dedicated staff, the integration of licence offices with some government agents' offices, and new technology, such as the automated driver testing. A new computerized testing system developed In B.C. has been purchased by the state of Oregon and is being considered by the state of California. B.C. is learning and winning again.

The 1990-91 budget contains additional funding in positions, in recognition of the greater service demands being placed on the branch. A major emphasis is on improved traffic safety, and that's highlighted by the increase in the driving prohibition for convicted impaired drivers from six to 12 months. We reinstituted fines in addition to penalty points for moving violations. We have instituted a private vehicle inspection program, and we're very happy with the way that's working with ICBC and the police community — incidentally, with their radar cameras to penalize speeders and to assess the camera's impact on accident and speed reduction. If my trip to Whistler recently was any indication, I think the plan is working.

On July 10, I released discussion papers...

Interjection.

HON. MR. FRASER: I didn't get the ticket.

...concerning future traffic safety initiatives, and I'm already receiving some interesting suggestions.

There have been some rather heartbreaking events in the ministry this year, Mr. Chairman. The tragic truck accident at Horseshoe Bay and the earlier one in Kamloops serve to remind us of the need to maintain a strong commercial vehicle inspection program. I'm happy to say here, as I've said elsewhere, that our standards are among the highest and toughest in North America, but clearly we do rely on everyone to help in that program. As I've said earlier and will repeat, we will do whatever it takes to ensure safe commercial vehicles on our highway.

I wish to say a few words regarding the importance of regulating the gaming industry in B.C. Last year charities received approximately $97 million, a 43 percent increase over the '87-88 amount. Gross revenue was over $418 million. With this amount of money, it's important to ensure that the integrity of the industry is maintained. We have undertaken a number of initiatives to enhance the regulation of the gaming, including the introduction of standard operating procedures for casinos. A mandatory training program for casino volunteers began last year; and financial reporting requirements are being improved to include audit procedures and better information on the use of gaming proceeds. During the same period, the gaming branch increased its staffing from 12 FTEs to 37. As a reflection of the importance this government places on regulation of gaming in B.C., five additional staff members have been added to the branch.

I could go on listing the various important achievements of the ministry during the past year with new initiatives underway, but I will forgo that pleasure in order to discuss my ministry's programs in more detail in response to questions from the hon. members, mentioning, at last, my gratitude to my very dedicated and informed staff.

MR. CLARK: I have three or four issues to canvass with the minister in the absence of our critic; I know he's back tomorrow, so it gives us backbenchers who aren't responsible in this critic area an opportunity to venture into this uncharted territory.

I would like to begin by discussing a case of a constituent of mine with respect to ICBC. I understand that the Solicitor-General is responsible for ICBC; it's moving around a bit. This is a specific case. It's a very complex one, and I know it's unfair of me to canvass this in any detail with the minister in the House, but politics is unfair. You may even be familiar with this, it's such a long and drawn-out fight with ICBC. It has to do with a woman named Gail Joe and the Joe family.

Let me explain what happened. This has been going on now for over ten years, but it's still current and still within the ministry's mandate. I'll put it simply.

[9:15]

A woman was in a car accident. She is charged by the RCMP. ICBC says that she is 100 percent liable. Then she disagrees with that. She fights in the Provincial Court, and all charges against her are dismissed. ICBC refuses even to consider any reaction to that. In other words, I'm quite convinced it was on the basis — at least partly — of the charges that she was deemed to be 100 percent liable by ICBC. She wins in the Provincial Court, and ICBC refuses to adjust the 100 percent liability.

The Joe family spent literally thousands of dollars going to the Supreme Court of British Columbia, where the judge rules fifty-fifty blame. Only after years of effort and tens of thousands of dollars to get the fifty-fifty ruling, does ICBC then respond by dealing with the problem.

In 1987, Stephen Owen, who has investigated this, advises that: "This office determined there were inadequacies in the treatment of your daughter in the investigation of her claim, but that changes in standard practices since that time make it unlikely that these would occur today." As a result of him — just a teacher at Killarney School — spending thousands of dollars tenaciously fighting ICBC, and I mean tenaciously to this day, he's changed the system for the better.

[ Page 11100 ]

However, he's lost thousands of dollars. ICBC have been vindictive and mean-spirited. Admittedly, he is a tenacious individual. The family has been tenacious and fought them for years. They've been treated badly. It's been recognized by the ombudsman. There's a little malice, frankly, on the part of the corporation. The corporation is tired of Mr. Joe and his fighting and is refusing to give them any compensation — legal compensation or other — or any kind of recognition that they were in error, except to say that they won't do it again for anybody else. That's certainly a victory for the public interest.

This is a case on which I could give you files that are feet thick. I know the minister has lots of things on his plate, more and more these days, so that's something I don't necessarily want to do. What I would like him to do, if he could, for me and for the Joe family, if he can, is have his staff once again review the file of Ms. Gail Joe and the Joe family, recognizing what the ombudsman and others have said, and attempt to apologize to the Joes for the treatment. This has never been done.

For a large monopoly corporation, which I think has a higher duty to deal with citizens fairly because of that monopoly situation, to financially.... I personally believe that there should be some financial compensation for the kind of grief, suffering, litigation and years of effort to gain a partial victory, only after the Supreme Court of British Columbia ruled that they were 50 percent rather than 100 percent liable. Even when they won the case with the RCMP, when it was dismissed and the judge at the Provincial Court level said the wrong person was charged, ICBC refused to reconsider their 100 percent liability. That's been rectified, I gather, and I certainly take Mr. Owen's word for that. It has been rectified, and it doesn't exist today. They deal with it differently today. I think it is because of Mr. Joe's actions that that's been the case, and I recognize that and the tenacity with which he pursued this case and, no doubt, the problems it has caused some staff people at ICBC.

I still think that a case can be made for some compensation, and I ask the minister to review this large file. He needn't get the file from me, because I know that there must be lots of people at ICBC who are familiar with the file. Have them review it in light of my comments and with a view to trying to deal with what was a denial of natural justice in this particular instance.

HON. MIL FRASER: I have heard the story for the first time this evening, so I'm not really in a position to give the member much comfort, and certainly I can't assure the member that anything will be done to compensate the Joes, for we all know there are others who have spent great sums of money in courts to rectify wrongs for which there was little compensation.

Notwithstanding that, I have no difficulty reviewing the file one more time.

MR. CLARK: I appreciate that assurance, and to assist the minister I'll send a letter to remind of him of the remarks, or they can just pursue it. I appreciate that. I'll let the Joes know. I know that regardless of the outcome, they will appreciate any review the minister may have, given the length of time they've been fighting this. I'm sure some time to review the case would be in order and understandable.

The second issue I wanted to discuss tonight, as I have this rare opportunity to discuss the Solicitor General’s estimates, is the question of private investigators. This is an area that intrigues me, frankly; not because I'm a fan of detective movies or the like but because several disquieting things have come to light in the course of my being an MLA. I don't want to go into detail about the range of things, but it's an interesting area of civil liberties and of the rights of private investigators versus public investigators.

I want to read, if I can — because it's germane — some very brief comments in the ombudsman's report of August 1988, "Abortion Clinic Investigation, Public Report 13." On page 13 the relevant remarks begin:

"In B.C., the Private Investigators and Security Agencies Act is intended to regulate investigative activities. Section 25 of this act provides for the appointment by cabinet of an advisory board to consider and advise on matters of minimum standards and codes of ethics that should be adopted in the public interest. Such a board has not been established.

"Section 26 of the act empowers the Solicitor-General to make regulations respecting, among other things, standards of training for private investigators. These would seem to be basic requirements of fair and effective regulation in the public interest. Regulations that have been established do not deal effectively with the issue of such standards.

"It is recommended, as a matter of administrative fairness, that an advisory board under section 25 be appointed and that the Solicitor-General reconsider the regulations pursuant to section 26 of the Private investigators and Security Agencies Act so as to deal with the issue of standards of training for private investigators. Such regulatory measures are particularly important when private investigators are providing public services."

Just to go on, very briefly, the ombudsman, in that rather famous case.... The former Attorney-General — not the immediately former one — had a law firm hire private detectives to conduct covert surveillance on abortion rights groups. That was a chapter a couple of short years ago in British Columbia history. The ombudsman made the report. He made five recommendations, and two of them deal with the regulation of private detectives and the role of the Solicitor-General.

Just to summarize. Recommendation No. 3: "An advisory board should be established pursuant to section 25 of the Private Investigators and Security Agencies Act to consider and advise on matters of minimum standards and codes of ethics that should be developed in the public interest."

Recommendation No. 4: "The Solicitor-General should reconsider the regulations pursuant to section 26 of the Private Investigators and Security Agencies

[ Page 11101 ]

Act so as to deal with the standards of training for private investigators."

The question is obvious. Has an advisory board been established pursuant to section 25 of the act? Has the Solicitor-General reconsidered, as the ombudsman suggests, the regulations pursuant to section 26 to deal with the standards of training for private investigators?

HON. MR. FRASER: Mr. Chairman, the ministry has been reviewing a number of recommendations that were made. However, I can assure you that I have had no complaints about private investigators. We certainly do have regulations for private investigators, but there are things still under consideration that haven't been done.

MR. CLARK: Obviously when a very high-profile case like this is conducted — and the minister would agree it was extremely high-profile — and the ombudsman made some very clear recommendations.... I know the minister was not the minister at the time, and that makes it somewhat more difficult, because when it was a high-profile and salient issue of the day, you weren't around to deal with it specifically. Since you have been there, it has been less of an issue.

However, I wonder if the minister can enlighten us as to whether it is his view that an advisory board, pursuant to section 25, is a desirable thing in order to deal with minimum standards and codes of ethics as the ombudsman suggested. Has he given it any thought? Is this the first time he has heard it? Is it advisable? Is he considering such action? Is it under active consideration in his ministry?

HON. MR. FRASER: There are some aspects of what the member requests that are under consideration.

MR. CLARK: Is it your view that the standards of training for private investigators, as pointed out in section 26 of the act, and as pointed out as being inadequate by the ombudsman.... Is it your view that the standards of training for private investigators are inadequate, in fact, and that regulations should be revised to toughen them up?

HON. MR. FRASER: Mr. Chairman, I can advise the House and the member that we're more careful with the private investigator group than we were before. As a consequence of my predecessor's work, the staff and the report, some changes have been made, and others are under consideration.

MR. CLARK: Can the minister give us some idea of when we're likely to see the fruits of these deliberations? It seems to me that it's always rather easy — and I don't mean this in any disrespectful way — when you raise a valid matter of concern and when you have such evidence as the ombudsman of the province making two absolutely crystal-clear recommendations as the result of a very thorough investigation, to say: "Of course, we're looking at them." I'm not trying to say the minister is not looking at them, but it's a rather easy refuge. I wonder if we could get some slightly tighter response from the minister, such as that we're likely to see some results of those deliberations, whether or not those results are changes, in the next few months, the next few weeks or the next few years — if you want to wait until after the next election for us to bring in these recommendations, or if you have some timeframe to guide us so that I'm not up here next year raising the same matter and you're standing up in the fifth year of your mandate saying: "Well, we're looking at them, Mr. Member."

HON. MR.- FRASER: Mr. Chairman, I never like to cramp considerations and deliberations by putting hard dates on things of this nature. The final decision has not been made; therefore I can't give him the date.

MR. CLARK: The report of the ombudsman was issued August 1988. He pointed out clear inadequacies. Frankly, I appreciate the minister saying we haven't had many people complaining, although there may be some reasons for that that I won't speculate on. I was going to say that after two years.... It is a great concern to me that we have private investigators used extensively, I might say, by ICBC, the WCB and public agencies, in addition to lawyers and a whole range of other people who may use private detectives for whatever reason, roaming around British Columbia, when we know that the ombudsman has clearly said that the rules are inadequate — that there's ample room in the act to deal with it by regulation, and it's not being dealt with. He said that very clearly. In the act, an advisory board is contemplated which has never been set up, and he recommends that it be set up.

[9:30]

I appreciate that the minister said he's taking it under advisement, but I don't think it's good enough to wait two years for this industry — not to criticize everybody in the industry — to be exposed.... The government has been exposed to be inadequately regulating an area which I strongly believe should be very tightly regulated by government. Particularly when public agencies like the WCB and ICBC use these agencies, there is a real onus on the government to ensure that they act in a lawful manner, that the regulations and training are up to speed, and that there is an advisory board that deals with these questions.

Frankly, in this particular instance, when the government hired a reputable law firm which in turn hired a security company... Having a reputable agency — a law firm — and the government of the day essentially indirectly hiring this company has clearly shown the inadequacies. How many other companies or individual investigators who are licensed are inadequate? It obviously raises that question, and I personally feel very concerned about it.

Having said that, I will move on to deal with....

[ Page 11102 ]

Interjection.

MR. CLARK: Thank you. I know the member down there, who used to be in cabinet but who Is now way down where the first member for Vancouver–Little Mountain (Mrs. McCarthy) is sitting, is way out of reach of the cabinet, at least for a little while yet.

Interjection.

MR. CLARK: He's way on my left; he's on the far left of the House.

HON. MR. BRUMMET: Nobody on this side is on your left.

Interjection.

MR. CLARK: The Minister of Education is on my far right; that's absolutely correct.

I wanted to turned briefly — because we don't have much time — to the question of youth gangs, which is of interest to me and to my constituents. I don't want to sensationalize this issue in any way or to deal with it in any way other than a very straightforward and, if anything, downplayed manner. However, having said that, there is clearly a perception in South Vancouver, in the minister’s constituency and in my constituency, that youth-related crime is on the increase.

Just half a block from my constituency office there was a shooting fairly recently. It wasn't connected to my constituency office, but just down the street there was a shooting. Right at the boundary of my constituency and the minister's constituency there was a murder about a year ago. In my new constituency, at Commercial and Broadway, there have been several shootings and attempted murders. Obviously this causes great apprehension in the community at large.

I don't in any way want to say that this is an American-style problem, or that we can't walk the streets in my constituency. That's not at all the case. But what I'm interested in, and I'd appreciate some factual information in this regard.... The perception is that not only is there a problem with youth-gang crime, but fairly recently there has again been an increase. I want to ask the minister about some facts in that regard.

Before I let him answer that, it seems to me that there are three critical ways in which you deal with youth-related crime, particularly when there are some problems with English as a second language and other problems that are wrapped up in it. The three ways are clearly education, policing and prosecution. There are other things like immigrant services which are critical as well.

The prosecution, which is not this minister's domain, started under Brian Smith and continued under.... Sorry; it is this minister's domain, but it wasn't last week.

It seems to me that on the prosecution side there have been some useful steps: a separate prosecutor to deal with youth gangs, a fairly good track record. The minister's predecessor, when I raised the question a few weeks ago, indicated that there were ten different prosecutors with expertise in the area, and I think that's useful.

There's been virtually no work done on education, in my view; very modest work. There are still only two Chinese-speaking street workers in the entire province of British Columbia, I believe, and they're both funded largely by a volunteer group called SUCCESS with almost no funding from the government. This is not at all acceptable, given the level of problems in that particular community.

I don't think there's enough done in terms of policing. The policing work that is done with respect to youth gangs.... There have been some moves in Vancouver to place individual police persons at high schools, and that's a useful step.

A lot more work needs to be done in the area of education. That's the primary focus: immigrant services, English as a second language, ethnic street workers. There is a whole range of things: alternative services for youth, particularly in the east side of Vancouver where there is perhaps a greater problem, and other pockets, Surrey and other places. And there needs to be more work done on police. While I appreciate that Vancouver police are not particularly your domain.... I guess that's debatable. But it seems to me there's a need for some preventive police work to deal particularly with youth problems. Putting police in the schools was fine, a good step, but I think we could do more than that. I know that there are limits on budgets and everything else, but the perception is serious and the problem is getting more serious. I don't want to say that there is an alarm or crisis, but there is a problem and it deserves more attention from the government.

Maybe the minister could give us some information, if he has any at his disposal. The perception is that youth-related crime is on the increase in Vancouver. There was some increase, and then it seemed to die down, and now it seems to be again on the increase. As a citizen of East Vancouver — and I know the minister is from South Vancouver — there clearly appear to be, in an anecdotal sense anyway, more shootings and more attempted injuries In the fairly recent past, the past year. I wonder if that is factually correct or if it's just maybe press attention or my own personal sense of it.

HON. MR. FRASER: I would like to assure you and everyone that youth-related activities in crime are a very high-profile concern of this ministry. You might be interested in knowing that there is an interministry committee of Education, Social Services and Housing, the prosecutor's office, our own police force.... It's an ongoing concern of ours which we continue to address with success, in my view.

We have a special police team dealing with youth gangs, or youth-related crime. We are making great efforts. I won't talk for the Minister of Education (Hon. Mr. Brummet) or others, but we are certainly cooperating with other ministries that have contact

[ Page 11103 ]

with youth to ensure that this problem is contained and mitigated.

MR. CLARK: I realize I made a long speech there — rather too long — but I asked a specific question: is there an increase in youth-related crime in Vancouver, statistically?

HON. MR. FRASER: Mr. Chairman, there has been some high-profile coverage, but I'm advised that there's no increase of any significant nature.

MR. CLARK: I appreciate what the minister is saying. I would ask the minister if he could provide for me — he doesn't have to do it here — some statistical evidence to back that up. It would actually assist me in my strong beliefs that this is something we should not sensationalize.

Mr. Chairman, we've been a model of restraint on this side of this House. We've never stooped to sensationalizing these kinds of questions for political gain. But having said that, it is my neighbours' and my own personal sense that there has been an Increase in youth-related crime. The minister is saying that this is a result of rather sensational or high-profile coverage in the press, and if that's the case, that's fair enough. I would appreciate some hard evidence so I could show my neighbours that the government of British Columbia and the police are doing their jobs, and if that is not the case, while there is youth-related crime, it is not on the rise in British Columbia or in Vancouver. That certainly isn't their impression, and it's not my impression. In terms of anecdotal evidence of the number of shootings in my constituency, it has clearly increased in the last year. I would appreciate any evidence the minister could give me to demonstrate that this kind of crime is not on the increase in my constituency or his constituency in Vancouver.

HON. MR. FRASER: Mr. Chairman, let me assure the member that I intend to cooperate during these estimates, and if the information can be provided to assure the member that what I said was correct, then of course we will provide it.

MR. LOVICK: I want to change the subject somewhat, if I might. I have a number of very specific small items.

First, let me start by saying that I'm very pleased to report that the Solicitor-General has been very prompt in answering all correspondence and very thorough in the answers provided. That's certainly appreciated. I'm very pleased to see that regimen in place, if you like. It's nice to know. His predecessor, in fairness, was also operating that way.

I wonder if I could start with a very specific question. This document landed on my desk today I'm referring to something called "Discussion Papers: Traffic Safety Initiatives." It contains two specific reports, I understand.

What's the status of this? Is it a discussion paper that will eventually generate some particular recommendations and changes? Could I get a brief report on that, first of all?

HON. MR. FRASER: I'd be very happy to do that. That report was put out for public discussion and public input. We expect to have all the replies back by September 30 this year.

MR. LOVICK: I'm sorry that I just got it. I haven't had a chance to look at it. Therefore I don't know what areas it does indeed cover. But I recall some months ago there was another rather detailed report. Was it from the British Columbia Safety Council? It was a very detailed analysis with many recommendations specifically concerning things like motor vehicle licensing and driver licensing. Some of the recommendations were rather stringent, at least on the face of it. I'm wondering what the status of that document is. It was presented to the Solicitor-General's ministry, and I'm wondering if it is under discussion at present or if it's just a report.

HON. MR. FRASER: I'll have to do a little research. I don't know what document the member is talking about. I do know about that one, and that's a good one.

MR. LOVICK: I'm a bit surprised by that reaction. I thought I'd defined it closely enough that we could guess. I'm sorry that I don't have my notes here. It was a very elaborate document talking about problems with increased traffic congestion and the attendant difficulty with our existing licensing practices, specifically individual drivers' licences. A significant number of recommendations had to do with more stringent requirements for issuing and for maintaining drivers' licences. Does that begin...? This sounds like rather a fey question; I'm sorry for that. Does that ring a bell? Does the report...?

HON. MR. FRASER: No.

MR. LOVICK: Okay, perhaps I'll go and get the report, and then we can talk about it.

Interjection.

MR. LOVICK: F-e-y. Fey.

It was a very detailed one, as I say. I think that most of us who read the thing did a double take and said: "My God, this is really stringent. This is suggesting almost a draconian kind of approach." But the evidence they presented was that traffic safety problems were reaching epidemic proportions, and that we were dealing with a time bomb about to 90 off, and so forth. I wonder, then, if part of these discussion papers owed their existence to that earlier work, or if there's any connection whatsoever. Could the minister enlighten me on that?

[9:45]

HON. MR. FRASER: Mr. Chairman, I would recommend to the member that he read the report he

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now has in his hand. I'm sure it will cover everything that he's talking about, with whatever report he might have looked at before.

MR. LOVICK: Seldom, if ever, have I been caught in this House not having read a document — I want you to know that. I will attend to that, I assure you.

A little bit of old business, if I may. The minister's predecessor dealt with a number of questions in the last set of estimates, and provided some answers too, suggesting some ongoing attention to particular problems. One of those had to do with the controversy regarding pilot cars. I understand that where that matter was left, the Pilot Car Association was going to make submissions to the ministry regarding whether particular highways had indeed been designated, or could be designated, as requiring pilot car assistance. I'm wondering if the minister can give us any kind of status report on that. Has anything further happened with regard to pilot cars?

HON. MR. FRASER: Mr. Chairman, with respect to pilot cars, that's really dependent on the highway you're using and the vehicle that's being taken along the roads, with respect to the width of the vehicle. That applies on all roads.

MR. LOVICK: Mr. Chairman, I understand that very well, and I'm sorry I didn't make my question clearer. The decision was made by the Solicitor-General's ministry that there would be no further action in terms of modifying legislation to deal with vehicles beyond a certain stipulated width. In other words, the regulations were in place. However, as a result of increased pressure and protests from the Pilot Car Association and truck drivers, what happened is that the ministry agreed and stated — and I could quote the letter, if you wish — that yes, indeed, they were prepared to meet with the pilot car operators to discuss whether certain roads that were especially problematic might be designated as having some special status and therefore over width vehicles on those particular roads would require pilot cars. All I am asking is whether there is any update on that and whether any other decision has been made.

HON. MR. FRASER: I understand your question better now, and I can assure you that meetings did take place. The decision finally made was that the regulations in place were adequate to give us the level of safety we require.

MR. LOVICK: I want to pose a couple of questions, if I might, pursuant to the matter the Solicitor General began with in his introductory comments, namely the overall commitment to public safety; and of course that is understood and accepted.

He also made reference, though, to those two tragic accidents in Kamloops and in Horseshoe Bay. The answer that was provided to the questions implicit in those two incidents is that we have indeed among the highest standards in the world — or in North America, I think was the reference. It's probably true.

The issue —just as it is the issue in highway maintenance or some such thing — is whether the standards mean very much just as standards, or whether we have to have an enforcement mechanism somewhat better than we have. Given the kind of evidence we have had — a couple of rather ugly incidents in the relatively recent past — and given the coroner's inquest in Kamloops and so forth, I am wondering if the minister can tell us whether any thought at all is being given to beefing up the enforcement of those standards.

I don't think too many people question the standards and the quality of the standards, but what about the enforcement? Can the minister enlighten us on that?

HON. MR. FRASER: This is a subject that is very close to me. Safety on the highway, of course, affects us all, and that is why we put so much effort into it.

The fact is that we do, as the member said, have among the highest or best and toughest standards in North America. The issue of whether they are adhered to is of interest because it points out the necessity for the government on behalf of the people to make sure the regulations are upheld.

It is also important to note that on any morning of any day of any week, there are in excess of 100,000 trucks needing to be inspected. That means that before every trip, every driver should inspect his or her vehicle, and that at the end of the trip, the driver should inspect the vehicle. In this way, and only in this way, will there be increased safety on the highway.

We simply cannot inspect 100,000 trucks a day, and no one would expect us to do that. What we do want truck drivers to do — and they are trained to do it in B.C.... We have air tickets, which means that drivers have to know how to adjust the brakes. They all have to know how to do that or they don't get a ticket. They're all required to have a ticket if they use trucks with air brakes. With those air tickets, every driver knows how to adjust the brakes and should do it.

We inspect all commercial vehicles twice a year. It's mandatory unless you've got an approved preventive maintenance program. We will probably increase the auditing of the preventive maintenance programs so that people adhere to our standards.

We are prepared to become very difficult and virtually punitive, if necessary, with those who disobey our rules. As I've said in public and obviously can say here, if it is necessary for us to lift individual drivers' licences to make the highways safer, we will do that. If it's necessary for us to remove commercial motor carrier plates, we're prepared to do that. The consequence, of course, is that it changes people's ability to earn a livelihood. That's a very serious consequence. But public safety on the highway is not something anybody would want to play with. We are concerned about it.

We have standards that are so good that other provinces are adopting them. I know other provinces

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aren't quite as hilly as British Columbia, but they are adopting them. The province of Alberta brought in the air ticket program last November. Alberta is also looking to adopting our inspection standards. We have cooperation with Washington, Oregon, etc., and Manitoba, Saskatchewan and Alberta.

We are very keen on safety, and I'm prepared to talk about it at length. But due to the lateness of the hour, 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 would remind all members that the House sits tomorrow at 2 p.m. Having said that, I move the House do now adjourn.

Motion approved.

The House adjourned at 9:54 p.m.